NATIONAL AIDS COMMISSION CONSOLIDATED STATEMENT OF RECEIPTS AND PAYMENTS. For the year ended 30 June 2016

Transcription

1 Public Disclosure Authorized NATIONAL AIDS COMMISSION Public Disclosure Authorized NATIONAL RESPONSE TO HIV AND AIDS IN MALAWI CONSOLIDATED STATEMENT OF RECEIPTS AND PAYMENTS For the year ended 30 June 2016 Public Disclosure Authorized Public Disclosure Authorized

2 NATIONAL RESPONSE TO IlV AND AIDS IN MALAWI CONSOLIDATED STATEMENT OF RECEIPTS AND PAYMENTS INDEX Page Commissioners' report I Remuneration's report 2 Statement of Commissioners' responsibilities 3 Independent auditor's report 4 Consolidated statement of receipts and payments 6 Notes to the consolidated statement of receipts and payments 7 Supplementary Information The following pages do not form part of the audited consolidated statement of receipts and payments. Analysis of funding partners 14

3 NATIONAL RESPONSE TO IV AND AIDS IN MALAWI COMMISSIONERS' REPORT The Commissioners of National AIDS Commission (NAC) have pleasure in submitting their report on the consolidated statement of receipts and payments for the year ended 30 June INCORPORATION AND REGISTERED OFFICE The Government of Malawi established the National AIDS Commission (NAC) as a public trust in July 2001 to provide leadership and coordination of the national response to HIV and AIDS. It replaced the National AIDS Control Programme (NACP) that was in operation from 1987 to The Commission was established after Government realized that the response to the HIV and AIDS pandemic required a multi- sector, approach and interface with broader issues of population, economic development and management, social service provision, culture, community development, human rights and gender among others. The address of the Commission's registered office is: National AIDS Commission P. 0. Box Lilonwe 3 PRINCIPAL ACTIVITIES Activities coordinated by National AIDS Commission include: * Prevention * Treatment, care and support * Impact mitigation * Program Management and Coordination * National Policy Coordination and Program Planning FINANCIAL PERFORMANCE The operating results of the Commission are set out in the consolidated statement of receipts and payments, and other accompanying explanatory notes. COMMISSIONERS List of Commissioners who served office during the year are as follows: Paramount Chief Kyungu XXIV Chairperson Full year Senior Chief Ngolongoliwa Member Full year Rev. R. Mangisa Member Full year Dr. A. Mkumbwa Member Full year Mr. C. Kaonga Member Full year Mr. A. Kaponya Member Full year Bishop E.D. Mbewe Member Full year The Secretary to the Treasury Member Full year The Secretary for Health Member Full year The Secretary for Nutrition, HIV and AIDS Member Full year The Secretary for Local Government Member Full year I

4 NATIONAL RESPONSE TO HV AND AIDS IN MALAWI COMMISSIONERS' REPORT COMMISSIONERS EMOLUMENTS MK MK Honoraria per quarter - Chairman 40, ,000 - Member 35, ,000 Sitting allowance - Chairman 25,000 10,000 - Member 20,000 10,000 AUDITORS KPMG Chartered Accountants and Business Advisors Po Box Lilongwe 3 BANKERS Standard Bank Limited Reserve Bank of Malawi PO Box P0 Box Lilongwe Lilongwe National Bank of Malawi Limited P0 Box Lilongwe FDH Bank Limited P0 Box Lilongwe LAWYERS G. Nankhuni & Partners Private Bag B422 Lilongwe3 AlfC COMMISSIONER

5 NATIONAL RESPONSE TO HV AND AIDS IN MALAWI STATEMENT OF THE COMMISSIONERS' RESPONSIBILITIES The Commissioners are required to prepare the consolidated statement of receipts and payments for each financial period that gives a true and fair view of the state of affairs of the Commission as at the end of the financial period and of the surplus or deficit of the Commission for that period. The Commissioners and management confirm that suitable accounting policies have been used and applied consistently, and reasonable and prudent judgments and estimates have been made in the preparation of the consolidated statement of receipts and payments for the year ended 30 June The Commissioners also confirm that applicable accounting standards in accordance with the modified cash receipts and disbursement basis of accounting as described in Note 2 (ii), and financial reporting provisions of the relevant financing agreements have been followed and that the consolidated statement of receipts and payments has been prepared on a going concern basis. The Commissioners and management are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Commission and which enable them to ensure that the consolidated statement of receipts and payments comply with the provisions of the Trustees Incorporation Act of 1962 and the Commission's accounting policies. They are responsible for safeguarding the assets of the Commission and, hence, for taking reasonable steps for the prevention and detection of fraud, error and other irregularities. No matters have come to the attention of the Commissioners to indicate that the Commission will not remain a going concern for at least the ensuing financial year. The Commissioners are of the opinion that the consolidated statement of receipts and payments gives a true and fair view of the state of the financial affairs of the Commission and of its operating results. Approval of the consolidated statement of receipts and payments The consolidated sta rece and payments of the Commission were approved for issue by the Board of Commissioners on 2016 and were signed on its behalf by: OARD C SON COMMISSIONER

6 XPMG Telephone: (255) / Public Accountants and Business Advisors Fax: (265) Nurses Cauncil Building com New Capital City Centre Website: P.O. Box Lilongwe 3, Malawi 90l1 RaAf4S INDEPENDENT AUDITOR'S REPORT TO THE REGISTERED TRUSTEES OF NATIONAL AIDS COMMISSION NATIONAL RESPONSE TO HIV AND AIDS IN MALAWI We have audited the consolidated statement of receipts and payments of the National AIDS Commission National Response to HIV and AIDS in Malawi, which comprise the consolidated statement of receipts and payments as at 30 June 2016 and notes, comprising a summary of significant accounting policies and other explanatory information as set out on pages 6 to 13. Commissioners' and management's responsibility for the consolidated statement of receipts and payments The Commissioners and management are responsible for the preparation and fair presentation of the consolidated statement of receipts and payments in accordance with the accounting policies described in note 2 (i), as required by the reporting provisions of the relevant financing agreements under the memorandum of understanding with donors and for such internal control as management determines is necessary to enable the preparation of the consolidated statement of receipts and payments that is free from material misstatement, whether due to fraud or error. Auditor's responsibility Our responsibility is to express an opinion on this consolidated statement of receipts and payments based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated statement of receipts and payments is free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated statement of receipts and payments. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the consolidated statement of receipts and payments, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the consolidated statement of receipts and payments in order to design audit procedures that are approptiate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated statement of receipts and payments. We believe that the audit evidence that we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the consolidated statement of receipts and payments present fairly, in all material respects, the financial position of National AIDS Commission National Response to HIV and AIDS in Malawi as at 30 June 2016, and of its financial operations for the year then ended in accordance with the modified cash receipts and disbursement basis of accounting as described in Note 2 (ii), and comply with the financial reporting provisions of the relevant financing agreements. 4 Resident Partners: L.M. Gama, H.B. Nyirenda, B.J. Mwenelupembe, J.C. Gondwe, G. Tembo KPMG MaLawI, memw Im of tei KPMG ntwk of Irpwndn meaer Imb uffltad Ih KPMG InlatingW CoOpeive (KPMG kwnmimar). a Swiss tly.

7 Basis of accounting and restrictions on distribution and use Without modifying our opinion, we draw attention to note 2 (ii) to the consolidated statement of receipts and payments, which describe the basis of accounting.the National AIDS Commission National Response to HIV and AIDS in Malawi prepares its consolidated receipts and payments in accordance with the described accounting policies, and to comply with the financial reporting provisions of financing agreements. As a result the consolidated statement of receipts and payments may not be suitable for others purposes. Chartered Accountants Lilongwe, Malawi Date t 2016

8 NATIONAL RESPONSE TO HIV AND AIDS IN MALAWI CONSOLIDATED STATEMENT OF RECEIPTS AND PAYMENTS In thousands of Malawi Kwacha Notes RECEIPTS Funds received 3 62,411,089 51,483,687 Other income 4 1, Foreign exchange gain 4 976, Total receipts 63,388,946 51,686,274 PAYMENTS Prevention 5 3,272,493 2,114,933 Treatment Care and Support 6 55,128,456 44,285,065 Impact Mitigation 966, ,564 Program Management and Coordination 604,992 1,531,914 National Policy Coordination and Program Planning 7 3,604,076 2,918,882 Total payments 63, ,358 Excess of (payments over receipts)/receipts over payments (187,967) 178,916 Accumulated funds as at the beginning of the year 5,376,969 5,198,053 Accumulated funds as at the end of the year 5 REPRESENTED BY: Cash book balances 8 1,820,055 1,457,434 Advances to Grant Management Unit ,401 1,906,510 Advance to the Ebola Preparedness Project 11 2,487,131 1,545,745 Advances to United Nations International Children's Emergency Fund and other partners 12 96, ,360 Advances to the TB in Mines Project 34,349 - Sundry receivables 7, Total 5,189,002 1 The consolidated stat ent recei payments was approved and authorised for issue by the Board of Commissioners, on m pame/2016 and was signed on its behalf by: IRP COMMISSIO ER The notes on page 7 to 13 are an integral part of this consolidated statement of receipts and payments. 6

9 NATIONAL RESPONSE TO IlV AND AIDS IN MALAWI NOTES TO TIE CONSOLIDATED STATEMENT OF RECEIPTS.AND PAYMENTS 1. GENERAL INFORMATION The National AIDS Commission (NAC) was established as a public trust in July 2001 to replace National AIDS Control Program, which was in operation from 1987 to The National AIDS Control Programme was transformed and restructured to become a Commission in order to effectively respond to an expand National HIV and AIDS Programme. The Commission came into being after realising that the response to the HIV and AIDS pandemic required a multi-sectoral approach and interaction between HIV and AIDS and broader issues of population, economic development, human resources development and management, social service provision, culture, community development and gender. Mission statement To provide leadership in planning, organising, coordination and setting standards for the prevention and control of HIV and AIDS in Malawi. Activities of NAC Activities coordination by National AIDS Commission includes: a) Prevention b) Treating, care support c) Impact mitigation d) Program Management and Coordination e) National Policy Coordination and Program Planning Implementation approach HIV and AIDS programmes are implemented by existing public, private and civil society organisations, coordinated by the National AIDS Commission / Secretariat using streamlined procedures. It supports institutions at national and sub-national levels. Partnerships with Community Based Organisations (CBOs), Non-Governmental Organisations (NGOs) and the private sector is encouraged. In mobilising the national response, NAC is guided by four principal implementation approaches that are: a) Expanding people's knowledge about the nature of HIV and AIDS and its impact on individuals, family's communities and national development. b) Strengthening the capacities of individuals, families, communities and institutions to respond to the epidemic in a sustained and effective manner. c) Stimulating interaction between individuals and available programmes and services as a basis for collective action; and d) Developing and sustaining a dynamic institutional framework for planning, delivering and evaluation of IUV and AIDS programmes. 7

10 NATIONAL RESPONSE TO IIV AND AIDS IN MALAWI NOTES TO THE CONSOLIDATED STATEMENT OF RECEIPTS AND PAYMENTS 1 GENERAL INFORMATION (Continued) Fundine The National Response to HIV and AIDS in Malawi is funded under the Memorandum of Understanding (MOU) between the funding partners of the National AIDS Commission and the Government of Malawi. 2. SIGNIFICANT ACCOUNTING POLICIES The principal accounting policies adopted in the preparation of the consolidated statement of receipts and payments are set out below: - (i) (ii) Basis of preparation The consolidated statement of receipts and payments is prepared on a cash receipt and disbursement basis of accounting as modified for the accounting of grants to implementing partners as per note 2(v). Receipts (iii) Receipts represent funding received from various funding partners. Funds are either deposited with the Reserve Bank of Malawi or commercial banks. The Commission makes periodic transfers from foreign currency denominated accounts to local accounts and direct payments to settle foreign payments. Payments Payments are recognized when paid. Except for a few foreign currency transactions which are translated to Malawi Kwacha using prevailing exchange rates, payments are made in Malawi Kwacha through the various operating bank accounts. Allocation of payments to expenditure lines during the period is in line with the annual work plan. (iv) Plant and equipment Plant and equipment bought by the Commission are expensed in the period of purchase and are not depreciated. A register of property, plant and equipment is maintained. (v) Receivables Receivables represent prepayments for goods and services and amounts receivable from employees and GRO's. (vi) Funds disbursed to implementing partners are initially recognized as advances receivable until the amounts are accounted for by the implementing partners at which time an appropriate expenditure is recognized. Income tax National AIDS Commission is exempt from income tax under paragraph b(xi) of the first schedule of the Taxation Act Chapter and therefore no current and deferred income tax is accounted for. 3

11 NATIONAL RESPONSE TO liiv AND AIDS IN MALAWI NOTES TO THE CONSOLIDATED STATEMENT OF RECEIPTS AND PAYMENTS In Thousands of Malawi Kwacha 3. GRANTS RECEIVED Global Fund 55,454,777 44,687,689 World Bank 5,698,565 5,337,331 Southern African Development Community 8,864 - Malawi Government 899,008 L1d9 Total receipts 62,061,214 51, Other funding partners Centre for Disease Control and Prevention 349, , OTHER INCOME Exchange gains 976, ,343 Interest received 1, PREVENTION AND BEHAVIOR CHANGE National Aids Secretariat 2,704, ,871 Grants Recipient Organization ( GRO) 567,678 1,677, TREATMENT CARE AND SUPPORT Purchase of ARVS 53,241,734 43,568,664 Supply chain management agent services 304, ,401 Treatment support activities 1-

12 NATIONAL RESPONSE TO IV AND AIDS IN MALAWI NOTES TO THE CONSOLIDATED STATEMENT OF RECEIPTS AND PAYMENTS In Thousands of Malawi Kwacha NATIONAL POLICY COORDINATION AND PROGRAM PLANNING Programme coordination and management 617, ,914 Programme support 774, ,272 institution support Z,212,246 2,059, CASH AND BANK BALANCES Pooled funding partners 1,006,637 1,358,395 Centre for Disease Control and Prevention 244,760 98,907 Global Fund 563,953 - Southern African Development Community 4,573 - United Nations Development Programme ADVANCES TO PARTNERS Pooled fund UNDP Total Year ended 30 June 2016 Opening balance 2,332,142 3,729 2,335,871 Grants disbursed 2,211,278-2,211,278 Amounts liquidated 3,695,787-3,695,787 Unliquidated as at 30 June 2016 Unliquidated advances Relating to current period disbursements 100,503 Relating to prior periods disbursements 743,401 Total unliquidated advances Unliquidated advances under GMU (note 10) 743,401 Unliquidated advances to UNICEF (note 12) 96,774 Unliquidated advances to UNDP 3,729 Total unliquidated advances 10

13 NATIONAL RESPONSE TO HIV AND AIDS IN MALAWI NOTES TO THE CONSOLIDATED STATEMENT OF RECEIPTS AND PAYMENTS In Thousands ofmalawi Kwacha 9. ADVANCES TO PARTNERS (continued) Year ended 30 June 2015 Pooled fund UNDP Total Opening balance 2,076,644 3,729 2,080,373 Grants disbursed 4,443,523-4,443,523 Amounts liquidated (4.188,025) - (4,188,025) Unliquidated as at 30 June 2015 Unliquidated advances Relating to current period disbursements 1,411,007 Relating to prior periods disbursements 924,864 Total unliquidated advances 23.7 Unliquidated advances under GMU (note 10) 1,906,511 Unliquidated advances to UNICEF 425,631 Unliquidated advances to UNDP 3,729 Total unliquidated advances 10. GRANTS MANAGEMENT UNIT Summary of advances Balance at 1 July 1,901,511 2,043,441 Advances given during the year 2,169,172 3,891,606 Advances brought forward from GROs 83, ,017 Interested earned (1,079) (3,528) Advances liquidated during the year (3,409,579) (4,188,025) Balance at 30 June m43401 Represented by: National Bank of Malawi bank account 18,724 51,407 FDH bank account 111,528 7,535 Grants Recipient Organisation (GROs) closing balances , ,401,906,5 11

14 NATIONAL RESPONSE TO IV AND AIDS IN MALAWI NOTES TO THE CONSOLIDATED STATEMENT OF RECEIPTS AND PAYMENTS In Thousands of Malawi Kwacha 11. ADVANCE TO THE EBOLA PREPAREDNESS PROJECT At the peak of the Ebola epidemic in West Africa, the World Bank decided to utilize the existing HIV/AIDS project resources, systems and structures to expeditiously prepare the country for a possible attack. It therefore authorized the launch of an Ebola Preparedness Project which is being implemented by the Ministry of Health and being finance with HIV/AIDS resources to the ceiling of US$7 million. Details of amounts utilized and transferred to the project account by year end were as follows: Cash book balance - Ebola Preparedness Account 39, ,953 UNICEF procurements advance 1,118,537 1,118,537 Project expenditure 1,329, ADVANCES TO UNITED NATIONS INTERNATIONAL CHILDREN'S EMERGENCY FUND (UNICEF) AND OTHER PARTNERS These represent advances made to UNICEF and other partners for the procurement of drugs and other health products on behalf of the Ministry of Health as well as advances to other partners. The movement of these advances is as below: UNICEF and voluntary pooled procurement advances: Balance at 1 July 429,360 36,932 Advances made / (liquidated) during the year (332,586) 32,428 Balance at 30 June

15 NATIONAL RESPONSE TO HIV AND AIDS IN MALAWI NOTES TO THE CONSOLIDATED STATEMENT OF RECEIPTS AND PAYMENTS In Thousands of Malawi Kwacha 13. Capital commitments There were no capital commitments as at the end of the year requiring disclosure in the consolidated statement of receipts and payments. 14. Contingent liabilities There are a number of legal proceedings by ex-employees against the Commission. If defense against these actions is unsuccessful, the claims and litigation costs could amount to MK 504 million (2015: MK 143 million). 15. Exchange rates and inflation rates The average of the period-end buying and selling rates of the foreign currencies most affecting the performance of the Commission are stated below, together with the National Consumer Price Index, which represents an official measure of inflation United States Dollar (USD) British Pound (GBP) South African Rand (ZAR) Inflation rate 21% 22% As at the signing of this consolidated statement of receipts and payments, the exchange rates had moved on the global market as follows. United States Dollar (USD) 721 British Pound (GBP) 919 South African Rand (ZAR) 50 Inflation rate 21% 16. Subsequent events The current Students Scholarships Fund grant with the Global Fund, which was supposed to end on 30h June, 2016 has been extended to 3 1" December, It is therefore expected that NAC will no longer receive/manage Global Fund resources beyond the expiry of the grant period. The implication of this development is that the Commission's operations and budget as from the 2016/17 financial year will substantially decrease because NAC shall no longer be processing procurement of the health products. The treatment thematic area, which mainly constitutes the cost of ARVs and related products shall significantly decrease. The Commission is waiting for the outcome of the study on the institutional review of the National Response which will inform NAC of possible restructuring options, if any. Since NAC is a Public Trust established by the Government, Government is still committed to continue supporting the Commission. NAC will therefore, put much emphasis on its coordination role and very likely slow down in sub-granting until such a time that any structural reforms are implemented. 13

16 NATIONAL RESPONSE TO HIV AND AIDS IN MALAWI Supplementary information The following pages do not form part of the audited consolidated statement of receipts and payments 14

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19 NATIONAL RESPONSE TO IV AND AIDS IN MALAWI CONSOLIDATED STATEMENT OF RECEIPTS AND PAYMENTS In Thousands of Malawi Kwacha POOLED FUND Opening balance 5,274,201 5,170,349 Received during the year 60,143,926 51,090,219 Interest and other income 1,088 1,855 Foreign exchange gains/(losses) 848, Total Receipts PAYMENTS Prevention 3,272,494 2,114,932 Treatment, Care & Support 54,305,862 44,285,065 Impact Mitigation 966, ,564 Program Management 604,991 1,456,914 National Policy Coordination and Program Planning 2, , Total Payments Excess of Receipts over Payments REPRESENTED BY Bank balance FCDA US$ 856,591 1,123,482 Local MWK 150, ,913 Total 1,383 Receivables MGFCC 3,563 37,920 Advances to GMU 743,401 1,906,511 Advances to UNICEF 96, ,631 Advances to the TB in Mines Project 34,348 - Ebola Preparedness 2.487,132 1,545,745 Grand Total

20 NATIONAL RESPONSE TO HIV AND AIDS IN MALAWI CONSOLIDATED STATEMENT OF RECEIPTS AND PAYMENTS In Thousands of Malawi Kwacha CENTERS FOR DISEASE CONTROL AND PREVENTION (CDC) STATEMENT OF RECEIPTS AND PAYMENTS Opening balance 9&201 RECEIPTS Received during the period 349, ,468 Interest income 164 (1,611) Foreign exchange gains/(losses) 77,253 (9,299 Total Receipts PAYMENTS Sustaining HV ANDAIDS Research agenda - 75,000 National Policy Coordination and Program Planning 281, A94 Total Payments U3 Excess of Receipts over Payments 29.9m Represented by: Cashbook Bank balance - Local 231,863 12,700 Cashbook Bank balance - FCDA 12,897 86,2 Total Mw Is

21 NATIONAL RESPONSE TO IV AND AIDS IN MALAWI CONSOLIDATED STATEMENT OF RECEIPTS AND PAYMENTS In Thousands of Maalvi Kwacha UNITED NATIONS DEVELOPMENT PROGRAMME (UNDP) Opening balance L.86U Total Receipts Excess of Receipts over Payments Represented by: Cashbook balance Advances to other Partners 3, Total 1 3,W