AFRICAN UNION COMMISSION PROJECT FOR BUILDING CAPACITY FOR A RESULTS-ORIENTED ENGAGEMENT BETWEEN AFRICAN UNION COMMISSION AND REGIONAL ECONOMIC COMMUNITIES, FINANCED BY WORLD BANK UNDER IDF GRANT NO. TF014039 STATEMENT OF RECEIPTS AND EXPENDITURE FOR THE YEAR ENDED 31 DECEMBER 2015 A.W. THOMAS L.P. CHARTERED CERTIFIED ACCOUNTANTS A.W. Thomas L. P. Chartered Certified Accountants (Authorized Auditors - fPd #4qjl- A+'qCF) 21 June 2015 Mrs. Assietou Sylla Diouf, Director, Programming Budgeting, Finance and Accounting African Union Commission Addis Ababa Dear Mrs. Diouf, We now enclose the audit report dated 9 May 2016 on the Statement of Receipts and Expenditure, Internal Control, and Compliance of African Union Commission concerning World Bank supported economic development areas project entitled Building Capacity for a Results Oriented Engagement between the African Union Commission and Regional Economic Communities financed by World Bank under IDF grant no. TF014039 for the year ended 31 December 2015. The audit report contains the following sections: * Report of Independent Auditor on the Statement of Receipts and Expenditure; * The Statement of Receipts and Expenditure; * Report of Independent Auditor on Internal Control; * Report of Independent Auditor on Compliance; We are grateful to African Union Commission's management and staff for the assistance and courtesy extended to our representatives during the conduct of the audit. Yurs P.O. Box 1162, Addis Ababa Ethiopia Telephone: 251 (0)11 552 5575, Fax: 251 (0)11 552 4855 E-mail: awthomasIp@gmal.com Partners: A.W. Thomas, Melaku Abeje and Seid Abdela A.W. Thomas L. P. Chartered Certifed Accountants 9 (Authorized Auditors - 7+#S#A4l- A4e39 AFRICAN UNION COMMISSION PROJECT FOR BUILDING CAPACITY FOR A RESULTS-ORIENTED ENGAGEMENT BETWEEN AFRICAN UNION COMMISSION AND REGIONAL ECONOMIC COMMUNITIES, FINANCED BY WORLD BANK UNDER IDF GRANT NO. TF014039 FOR THE YEAR ENDED 31 DECEMBER 2015 2. Independent Auditor's Report on the Statement of receipts and expenditure 2.1 The Report African Union Commission Addis Ababa We have audited the project's Statement of Receipts and Expenditure and the accompanying supplementary financial information of African Union Commission concerning the World Bank Supported Economic Development Areas Project "Building Capacity for a Results Oriented Engagement Between African Union Commission and Regional Economic Communities"-financed by the World Bank under IDF Grant No. TF014039 for the year ended 31 December 2015. This financial statement is the responsibility of management. Our responsibility is to express an opinion on this financial statement based on our audit. We conducted our audit in accordance with International Auditing Standards. An audit includes examining, on a test basis, evidence relevant to the amounts and disclosures in the financial statement. It also includes an assessment of the significant estimates and judgments made by the management in the preparation of the financial statement, and of whether the accounting policies are appropriate to the project's circumstances, consistently applied and adequately disclosed. We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statement is free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statement. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statement referred to above presents fairly in all material respects, the financial position of African Union Commission World Bank Supported Economic Development Areas Project -IDF Grant No. TFO 14039 for the year ended 31 December 2015 and the results of its operations for the year then ended in accordance with the accounting policies adopted by the project, consistently applied. This report is intended for the information of African Union Commission and the World Bank. However, upon release by the World Bank, this report is a matter of public record and its distribution i P i4ea. A.W. ma L.P. Addis Ababa Chartered'CerifiedTAccotmtanits 9 May 2016 P.O. Box 1162, Addis Ababa Ethiopia Telephone: 251 (0)11552 5575, Fax: 251 (0)11 552 4855 E-mail: awthomaslp@gmaiLcom Partners: A.W. Thomas, Melaku Abeje and Seid Abdela 10 AFRICAN UNION COMMISSION PROJECT FOR BUILDING CAPACITY FOR A RESULTS-ORIENTED ENGAGEMENT BETWEEN AFRICAN UNION COMMISSION AND REGIONAL ECONOMIC COMMUNITIES, FINANCED BY WORLD BANK UNDER IDF GRANT NO. TF014039 FOR THE YEAR ENDED 31 DECEMBER 2015 2.2 STATEMENT OF RECEIPTS AND EXPENDITURE Currency: USD 2014 Notes Receipts Transfer from World Bank 2.2.3 200,000.00 Expenditure Stakeholder consultations and development of a results oriented engagement framework 311,526.57 - Pilot test of results orientated engagement and knowledge outreach 332,561.00 9,884 Capacity development, communication, and project monitoring and evaluation 194,922.00 - Bank charge 6.00 - - Total expenditure 839,015.57 9884 (Deficit) of Receipts over Expenditure (639,015.57) (9,884) Fund balance 31.12.14 140,109.84 149,994 Fund balance 31.12.15 (49- .a1 Represented By: Cash at bank 2.2.2 307,598.27 149,994 Accounts payable (806,504.00) (9J884) 498,20.73) 141 11 AFRICAN UNION COMMISSION PROJECT FOR BUILDING CAPACITY FOR A RESULTS-ORIENTED ENGAGEMENT BETWEEN AFRICAN UNION COMMISSION AND REGIONAL ECONOMIC COMMUNITIES, FINANCED BY WORLD BANK UNDER IDF GRANT NO. TF014039 FOR THE YEAR ENDED 31 DECEMBER 2015 2.2.1 Notes to the statement of receipts and expenditure a. Basis of accounting The Commission is using a computerized accounting system and has adopted the International Public Sector Accounting Standards starting from 2014. b. Remittance of funds Advances from World Bank were received at regular intervals as per the withdrawal applications made by the AUC. Advances were received on 28 October 2013 and 9 October 2015 amounting to USD 150,000 and USD 200,000 respectively and the balance is deposited in a designated account opened with the Commercial Bank of Ethiopia. c. Fixed assets Fixed assets are expensed in the year of purchase. d. Income and Expenditure Income is recognized when cash is actually received and expenditure when it is incurred. 2.2.2 CASH AT BANK The project opened a designated account in USD with the Commercial Bank of Ethiopia at African Union Branch. 2014 USD Account- 1000056731958 375.27 .]M.99A 2.2.3 TRANSFER FROM WORLD BANK Transfer from World Bank 200&000 0 - AFRICAN UNION COMMISSION PROJECT FOR BUILDING CAPACITY FOR A RESULTS-ORIENTED ENGAGEMENT BETWEEN AFRICAN UNION COMMISSION AND REGIONAL ECONOMIC COMMUNITIES, FINANCED BY WORLD BANK LOAN UNDER IDF GRANT NO. TF014039 FOR THE YEAR ENDED 31 DECEMBER 2015 ANNEX - I General description of accounting and audit methodology Before starting ;he audit work, the audit program was developed. An Entrance Conference was held on 23 March 2016 at the African Union Commission office in the presence of the Commission's representatives. The schedules and documents supporting the Statement of receipts and expenditure were kept at African Union Commission office in Addis Ababa and the field audit work was conducted there. Detailed audit work was performed by us for the year ended 31 December 2015. An exit conference was held on 28 April 2016 at the premises of African Union Commission in the presence of the Commission's representatives.