DEDICATED GRANT 1"1ECHANISM PROGRA:M.ME l FINANCIAL REPORT FOR FOR THE EIGHTEEN MONTH PERIOD l ENDED31 DECEMBER 2018 l J J J l l l J l l 1 • I I I DEDICATED GRANT MECHANISM PROGRAMME 1. FOR THE EIGHTEEN MONTH PERIOD ENDED 31 DECEMBER 2018 I INDEX I Pages Programme Information 2 I Abbreviations 3 I Report on the Programme's Activities 4 Statement of Programme Management Team's Responsibility 5 I Independent Auditor's Report 6-8 ! Statement of Receipt and Payment 9 Statement of Financial Position 10 I Note to the Programme Financial Report 11-14 J Appendices J I II Expenditure Details Explanation of Variance l J l J 1 • 1 • I I I DEDICATED GRANT MECHANISM 2. PROGRAMME INFORMATION I I PROGRAMME MANAGEMENT TEAM Dr Winston A. Asante Suzan Hermina Yemidi (Programme Manager) (Country Representative) I Eunice Osei (Country Finance Mar,ager) I REGISTERED OFFICE l louse No 18, Okine Street East Legon I PMBKD II Kanda, Accra I IMPLEMENTING PARTNER Solidaridad Network West Africa I DONOR World Bank I AUDITORS Mazars Chartered Accountants, Nyame Adorn Courts I • 7 & 9 Adonai Lane Adjiringanor, East Legon DTD LG 20014 I P. 0. Box GP 2957 GD 165-5957 Accra I J I • l • I I I DEDICATED GRANT MECHANISM 3. ABBREVIATIONS I G-DGM Ghana Dedicated Grant Mechanism I FIP REDD Forest Investment Program Reducing Emissions from Deforestation and forest Degradation I REDD+ REDD Beyond deforestation and degradation to include forest restoration, Rehabilitation, sustainable management and reforestation. I NSC FCPF National Steering Committee Forest Carbon Partnership Facility I J I J , f;1 ii ' ii J J I J J l , I I I DEDICATED GRANT MECHANISM REPORT ON THE PROGRAMME' ACTIVITIES 4. I FOR THE EIGHTEEN MONTH PERIOD ENDED 31 DECEMBER 2018 Background to the Programme I The Ghana Dedicated Grant Mechanism for Local Communities project (G-DGM) is designed to promote the inclusion of communities reliant on forests in policy formulation and initiatives as well as in other REDD+ I programmes that seek to reduce deforestation and degradation. The project will strengthen the knowledge and practices of over 52 targeted local communities in the in the I Brong Ahafo and Western regions of Ghana in REDD+ (Reducing Emissions from Deforestation and Forest Degradation plus Conservation of Forest Carbon Stocks, Sustainable Forest Management, and Enhancement of Forest Carbon Stocks) processes and sustainable forest management. Synergies will also be fostered with two I other ongoing projects, the Forest Investment Program (FIP), which also operates in these two regions and is linked to this project, and the Forest Carbon Partnership Facility (FCPF) project. I The G-DGM which is funded by the World Bank, is part of its Integrated Forests and Landscape Portfolio, a diverse portfolio comprising several operations (with different sources of financing, including IDA and trust funds). I The G-DGM project will be managed by a national steering committee consisting of representatives of the local communities as well as observers from government and non-governmental agencies. Solidaridad West Africa J will be the implementing agency on behalf of the National Steering Committee. Programme Objectives I i G-DGM seeks to strengthen knowledge and practices of targeted local communities in the Western and Brong Ahafo Regions in REDD+ processes and sustainable forest management. I Programme intervention G-DGM will contribute towards helping the communities better understand REDD+ (Reducing Emissions from I deforestation and Forest degradation plus conservation of Forest, Sustainable Forest management and Enhancement of Forest Carbon Stocks). Key activities will include: • Capacity Building for Local Communities. I • Provision of a demand-driven sub-grants to local communities to promote adaptive and coping livelihoods and sustainable management of natural resources. I Beneficiaries of the G-DGM The main beneficiaries of the Ghana DGM are local communities and their representative community based I organizations in the project Regions. These regions are home to a multitude of communities who are dependent on the surrounding ecosystems in the two regions. The project is expected to directly and indirectly touch the lives of 11,000 adults in 52 communities. J l I I I DEDICATED GRANT MECHANISM 5. STATEMENT OF PROGRAMME MANAGEMENT I TEAM'S RESPONSIBILITY Solidaridad Network West Africa is to prepare project financial report for each financial period which gives a I true and fair view of the state of affairs of the Dedicated Grant Mechanism and of its receipt and payment for that period. In preparing those Project Financial Report Management is required to: I • Select suitable accounting policies and apply them consistently; I • • Make judgements and estimates that are reasonable and prudent; State whether applicable accounting standards have been followed, subject to any material department I • disclosed and explained in the project financial report; and Prepare the project financial report on the going concern basis unless it is inappropriate to presume project will continue I Management is responsible for keeping proper accounting records which disclose with reasonable accuracy at J any time the financial position of the project which enable them to ensure that the project financial report comply with the requirements of the contract. Management is also responsible for safeguarding the assets of the Project I and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The above statements, which should be read in conjunction with the statement of the Auditor's responsibility set J out on pages 6 - 8, are made with a view to showing the respective responsibilities of the management of Dedicated Grant Mechanism and the Auditor in relation to the project financial report. J J I J I I • I I MAZARS I INDEPENDENT AUDITORS' REPORT 6. TO DONORS OF I DEDICATED GRANT MECHANISM Report on the Audit of the Financial Statement I Opinion We have audited the financial statements of Dedicated Grant Mechanism Programme, which comprise, the I statement of receipt and payment, the statement of financial position as at 31 December 2018, and notes to the financial statements, including a summary of significant accounting policies. I In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the programme as at the year ended 31 December 2018, and its financial perfonnance for the period then ended in accordance with International Financial Reporting Standards for Small Medium Entities (IFRS for SMEs) and I in the manner required by the Companies Act, 1963 (Act 179) as amended. Basis for Opinion I We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements I section of our report. We are independent of the Company in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants (IE SBA Code) together with Mazars Code of Conduct for Objectivity and Independence (CCOI), we have fulfilled our other ethical responsibilities in I accordance with the IESBA Code and the CCOI. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. I Key Audit Matters Key audit matters are those matters that, in our professional judgment, were of mosN>ignificance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the I financial statements as a whole, and in fonning our opinion thereon, and we do not provide a separate opinion on these matters. Other Information Our opinion on the financial statements does not cover other information and we do not express any form of I assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our I knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. I , Ill I I· MAZARS I INDEPENDENT AUDITORS' REPORT TO DONORS OF 7. I DEDICATED GRANT MECHANISM I Responsibilities of Management and Those Charged with Governance for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with IFRS, and for such internal control as management determines is necessary to enable the preparation of I financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is responsible for assessing the Company's ability to continue I as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate· the Company or to cease operations, or has no realistic alternative but to do so. I Those charged with governance are responsible for overseeing the Company's financial reporting process. I Aqditor's Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from I material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error I and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with ISA~, we exercise professional judgment and maintain professional I skepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or I error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve J collusion, forgery, intentional omissions, misrepresentations, or the override of internal control; • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that I are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company's internal control; J • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management; I . • Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude J that a material uncertainty exists, we are required to draw attention in our auditor's report to the related . I· MAZARS I INDEPENDENT AUDITORS' REPORT TO DONORS OF 8. I DEDICATED GRANT MECHANISM disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our I conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern; I • Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, ·and whether the financial statements represent the underlying transactions and events in I • manner that achieves fair presentation; and Obtain sufficient appropriate audit evidence regarding the financial information of the entities and I business activities within the company to express an opinion on the financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion. I Report on Other Legal and Regulatory Requirements The programme management team has complied in all material respects, with provision stated in the contract. I The engagement partner on the audit resulting in this independent auditors' report is Ernest Toah Akonor (JnR) (ICAG/P/1220). I . . . . .~.@?.. . . . I For and on behalf of: Mazars (ICAG/F/2019/079) I Chartered Accountants and Business Advisors ·7/9 N yame Adorn Courts, Adonai Lane Adjiringanor, East Legon, Accra I GD-165-5957 PMB LG DTD 20014 P. 0. Box GP 295 I Accra .........................~ ~ . 2 0 1 9 I J J J Ill I I 9. I DEDICATED GRANT MECHANISM RECEIPT AND PAYMENT STATEMENT FOR THE EIGHTEEN MONTH PERIOD ENDED 31 DECEMBER 2018 I (All amount are expressed in United State Dollars unless otherwise stated) I Note 2018 I Receipt Receipt from Donor 4 1,380,071 I Less: Payment I Activity Cost Staff Cost 772,196 235,704 I < Overhead Cost 136,914 1,144,814 I Cash held in Trust 235,257 I I I I Programme Manager I . I )-~r