KU THE WORLD BANK STATE EDUCATION PROGRAM INVESTMENT PROJECT (SEPIP) (UNIVERSAL BASIC EDUCATION COMMISSION (UBEC) FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST DECEMBER, 2018 AUDITED BY OFFICE OF THE AUDITOR-GENERAL FOR THE FEDERATION Plot 273, Samuel Ademulegun Street, Central Business District, Abuja. STATE EDUCATION PROGRAM INVESTMENT PROJECT (SEPIP)-UBEC FINANCIAL STATEMENT FOR THE YEAR ENDED 31" DECEMBER, 2018 -*- *- -- . .. . . . .. . Contents Page Table of Contents Project Information/Profile 3-5 Statement of Management Responsibilities 6 Auditor's Report 7-9 Statement of Financial Position 10 Statement of Financial Performance 1 1 Statement of Cash Flow 12 Statement of Changes in Net Assets/Funds 13 Notes to the Financial Statements 14-17 STATE EDUCATION PROGRAM INVESTMENT PROJECT (SEPIP)-UBEC PROJECT INFORMATION/PROFILE FOR THE YEAR ENDED 31" DECEMBER, 2018. BACKGROUND OF THE PROJECT: The State Education Program Investment Project (SEPIP) is a four-years World Bank assisted programme which commenced in June 2013 with a closing date of 3 1Is of October 2017, however the program has been extended by two years (October 31" 2017 - 31" October, 2019). SEPIP is a pilot project with the following funding breakdown (Naira million). TOTAL GOVERNMENT IDA USD TOTAL I Funding: 59,380.5 36,130.5 23,250.0 383.10 A F: 19,905.0 0.0 19,905.0 100.00 (Source: Project Implementation Manual) The Federal Government of Nigeria disburses these funds to the three participating states of Anambra, Bauchi and Ekiti State through subsidiary financing agreements. This supports the design and implementation of educational activities in these states at basic and secondary education level over the period. The development objectives of State Education Program Investment Project for Nigeria are; 1. Need -based teacher deployment. 2. School-level management and accountability. 3. Measurement of student learning in participating states. The project has two major components: Component I-result based component (USDI25.0 million, NI9, 375.0) a) Improving teacher effectiveness through better deployment and recruitment practices including: 1. Deployment to hard-to-staff schools. 11. Deployment in core subjects areas (English language, Mathematics and Science). III. Female teacher's recruitment. b) Improving regular measurement of student achievement c) Strengthening school-based management committee's participation and Capacity for supporting school management and accountability. d) Supporting stronger partnership with the private sector to improve the relevance oftechnical and vocational schools) with emphasis on skills for employment. 3 STATE EDUCATION PROGRAM INVESTMENT PROJECT (SEPIP)-UBEC PROJECT INFORMATION/PROFILE FOR THE YEAR ENDED 31"' DECEMBER, 2018. Component 2: TECHNICAL ASSISTANCE (USD 25.0 million 3,875 million) Technical Assistance component will finance essential advisory, technical and capacity -building support for participating state's education sector program, as well as for Federal-level coordination monitoring and other key activities in support of the above component. The project is supervised by the National Project Steering Committee under the Chairmanship of the Honourable Minister of Education. MEMBERS OF THE NATIONAL PROJECT STEERING COMMITTEE 1. The Honourable Minister of Education Chairman 2. The Permanent Secretary, Federal Ministry of Education Vice Chairman 3. Representative of the Federal Ministry of Finance Member 4. Director in the Federal Ministry of Education Member 5. Commissioner of Education in all the Participating States Member 6. Representative of National Planning Commission Member 7. Representative of Civil Society Organisation Member 8. Executive Secretary, UBEC or Representative Secretary PRINCIPAL OFFICERS OF SEPIP (UBEC) 1. Umar Iro Project Coordinator 2. Kayode James Accountant 3. Mohammed Gana Auditor 4. Mansur Maccido Procurement 5. Lucy Abuh Finance Officer 6. Julius Adedoja Monitoring and Evaluation 7. Akila Dabara Education Management Information System 8. Moses Oyishe Communication 9. Hussaina Bello Project Assistant 10. Elizerbeth Nwariakwo Secretary 4 STATE EDUCATION PROGRAM INVESTMENT PROJECT (SEPIP)-UBEC PROJECT INFORMATION/PROFILE FOR THE YEAR ENDED 31"" DECEMBER, 2018. - --- .-- - -- . . .. .. -..-. 5 S AUDITORS: OFFICE OF THE AUDITOR GENERAL FOR THE FEDERATION, AUDIT HOUSE, 273 SAMUEL ADEMULEGUN STREET, CENTRAL BUSINESS DISTRICT, ABUJA. Web site: www.oaugf.ng E-mail: info @yoaugf.ng PROJECT OFFICE: UNIVERSAL BASIC EDUCATION UBEC BUILDING No. 7 GWANI STREET, WUSE ZONE 4 ABUJA. Web site: www.ubeconline.com PROJECT FINANCIER: 1. THE WORLD BANK. PROJECT IMPLEMENTING PARTNERS: 1. UNIVERSAL BASIC EDUCATION COMMISSION. 2. STATE UNIVERSAL BASIC EDUCATION BOARDS. 3. LOCAL GOVERNMENT EDUCATION AUTHORITIES SCHOOL. 4. CIVIL SOCIETY ORGANISATIONS. BANKERS: 1. CENTRAL BANK OF NIGERIA CENTRAL BUSINESS DISTRICT, ABUJA 2. ZENITH BANK PLC, UK 5 STATE EDUCATION PROGRAM INVESTMENT PRO,JECT (SEPIP)-JBEC PROJECT INFORMATION/PROFILE FOR THE YEAR ENDED 31-S DECEM BER, 2018 (WORLD BANK ASSISTED - PROJECT ID P122124-WB and P157890) STATEMENT OF THE PROJECT MANAGEMENT RESPONSIBILITES The International Public Sector Accounting Standards (IPSAS) and the Project i1mplemlentation Manual (PIM) require the Project Management Team to prepare financial statement for each financial year that gives a true and fair view of state of financial affairs of the SEPIP-JBEC at the end of the year and of its excess or deficit. The responsibilities include: * Keep proper accounting that disclose, with reasonable accuracy. the financial position of SEPIP-UBE.C and comply with requirement of 1PSAS. * * Vstablish adequate internal control to safeguaird its assets and to prevent and detect fraud and other irregularities in line with Section.5.8.6 of PIM. * Prepare annual financial statements in accordance with IPSAS and Section.5.8.5.1 of PIM, using suitable accounting policies supported by reasonable prudent judgements and estimates, and are consistently applied. The Managemeni Team accepts responsibility for the annual financial statement, which has been prepared using appropriate accounting policies supported reasonable and prudent judgements and estinates, in conformity w\/ith International Public Sector Accounting Standard (OPSAS) as issued by International Public Sector Accounting Standard Board (IPSASB) and the requirement of State Education Program Investment Project -Universal Basic Education Commission (SEPIP-UBIC) Project Implementation Manual. The Management Team is of the opinion that the financial statement gives a truc and fair view of the state of financial atffa irs of SEPIP-LUBEC and of its excess for the year ended 31 st December 2018. The Managment further accepts the responsibility for the maintenance of accounting records that may be relied upon in the preparaton tof the financial statement. as well as adequate system of internal financial control. Nothing has come to the attention of the Management Team to indicate that SEPIP-JBIC will not remain a going concern for at least six months from the date of tis statement. Iro Umar (Project Coordinator) .. Sir M.M. Aule (Diir. Of Finance & Date .. 6 THE AUDITOR-GENERAL FOR THE FEDERATION Audit House, Plot 273, Samuel Ademulegun Street, Central Business District, PM.B. I28, Garki - Abuja, Nigeria. The Project Co-ordinator, State Education Programme Investment Project (SEPIP), Universal Basic Education Commission (UBEC), UBEC Building, Gwani Street zone 4 Wuse, Abuja. AUDIT OF THE STATE EDUCATION PROGRAMME INVESTMENT PROJECT (SEPIP) PERFORMED BY THE AUDITOR GENERAL FOR THE FEDERATION AUDITOR'S REPORT Opinion I have audited the financial statements of State Education Programme Investment Project (SEPIP) for the year ended 31st December, 2018. These financial statements comprise the Statement of Financial Position, Statement of Financial performance, Cashflow Statement and Statement of Net Assets/Equity for the year then ended, and a summary of significant accounting policies and other explanatory information. In my opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Entity as at 31st December, 2018, and of its financial performance and its cash flows for the year then ended in accordance with International Public Sector Accounting Standards (IPSAS). Basis for Opinion I conducted the audit in accordance with International Standards for Supreme Audit Institutions (ISSAls). My responsibilities under those standards are further described in the Auditor 's Responsibilities for the Audit of the Financial Statements Section of my report. I am independent of the entity in accordance with the Code of Ethics for Supreme Audit Institutions together with the ethical requirements that are relevant to my audit of the financial statements and I have fulfilled my other ethical responsibilities in accordance with these requirements and the Code of Ethics. I believe that the audit evidences obtained are sufficient and appropriate to provide a basis for my opinion. Responsibilities of Management and Those Charged with Governance for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with IPSAS, and for such internal control as management 7 determines is necessary to enable the preparation of 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 Entity' s ability to continue 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 project or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the entity ' s financial reporting process. Auditor's Responsibility for the Audit of the Financial Statements My objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes my opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with (ISSAls), will always detect a material misstatement when it exists. Misstatements can arise from fraud or error 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 Financial Audit Methodology (FAM), which is consistent with the Fundamental Auditing Principles (ISSAIs 100-999) of the International Standards for Supreme Audit Institutions, I exercise professional scepticism throughout the audit. I also: * Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for my opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. * Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Entity' s internal control. * Evaluate the appropriateness of accounting policies uses and the reasonableness of accounting estimates and related disclosures made by management. * 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 Entity ' s ability to continue as a going concern. If I conclude that a material uncertainty exists, I am required to draw attention in my auditor' s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify my opinion. My conclusions are based on the audit evidence obtained up to the date of my auditor' s report. However, future events or conditions may cause the Entity to cease to continue as a going concern. * 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 a manner that achieves fair presentation. 8 I communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that I identify during my audit. I also provide those charged with governance with a statement that I have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be brought to bear on my independence, and where applicable, related safeguards. From the matters communicated with those charged with governance, I determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. I describe these matters in my auditor's report unless law or regulation precludes public disclosure about the matter or, when, in extremely rare circumstances, I determine that a matter should not be communicated in my report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. A. M. AYINE, FCA Auditor-General for the Federation June 17, 2019 STATE EDUCATION PROGRAM INVESTMENT PROJECT (SEPIP)-UBEC STATEMENT OF FINANCIAL POSITION AS AT 31ST DECEMBER, 2018 ASSETS NO 2018 2017 TE N N Current Assets Cash and Cash Equivalents 7 8 156,876 40830442 Total Current Assets 8,156,876 40,830,442 Non-Current Assets Property, Plant & Equipment 9 14,063,069 5,472,500 Total Non-Current Assets 14,063,069 5472500 Total Assets 22,219,945 46,302,942 Current Liabilities Payables 8 482885 482,885 NET ASSETS/FUNDS 482,885 482,885 Accumulated Surplus /(Deficit) (184,605,951) (154,185,973) Exchange Difference (26,329,303) (4,158,868) IDA Credits / Funding to date 10 232,672.314 195,847,161 Net Assets / Funds 21,737,060 45,820,057 Total Equity and Liabilities 22,219,945 46,302,942 fro Urnar ( Sir M.M. Aule i IFiu. (Project Coordinator,4..... &Accounts) .......k .... Date Date4J .j Dt.......... 10 STATE EDUCATION PROGRAM INVESTMENT PROJECT (SEPIP)- jBEC STATEMENT OF FINANCIAL PERFORMANCE FOR THE YEAR ENDED 31ST DECEMBER, 2018 NOTES 2018 2017 N N REVENUE N N EXPENDITURE CONSULTANCY 4 630,000 6,586,000 TRAINING & STUDY TOURS I ,595,643 20, 193,600 OPIRATING COST 6 12,721,835 42 73715 7 DlPRLCIAI ION 9 5,472,500 5,472,500 30,419,978 74,989,257 SURIPLUS/ (DE FICIT) FOR TH E YEAR (30,419,978) (74,989,257) STATE EDUCATION PROGRAM INVESTMENT PROJECT (SEPIP)-UBEC STATEMENT OF CASH FLOW FOR THE YEAR ENDED 31ST DECEMBER, 2018 2018 2017 N N Cash Flow from Operating Activities Surplus / (Deficit) for the year (30,419.978) (74,989,257) Items Not Involvino Movement of Cash Depreciation 5.472.500 5,472,500 Depreciation write-back 2 (2,185.394) Exchange Difference (30,488, I72) 29,696,093 Working Capital Changes Payahles - 482,885 Net Cash Flow from Operating Activities (57,621,043) (39,337,779) Cash Flow from Investing Activities Property, Plant and Equipment (I I 877.675) Cash Flow from Financing Activities IDA Credit 36,825,153 71,328,634 Net Cash Changes for the Year 4 1.313.327 9,322 4 Cash and Cash Equivalent at the Beginning at the Year 8,639,761 41,313,3-1 Cash and Cash Equivalent at the End of the Year- Reconciliation of Cash and Cash Equivalents 2018 2017 Special Accounts at year end as per Bank Statement(USD) 26,346 126,346 Exchange Rate at Conversion Date N305.45 / USDl.00 N305 / USDI. Special Accounts (Naira Equivalent) 8,047,508 38,535.679 Draw-Dow Account - Naira Accont 109,368 294,762 Sub-Total 8,156,876 40,830,4- UBEC Funds wrongly Credited to SEIPf TSA 482,885 482,885 Total 41,313,3: 8,639,761 12 STATE EDUCATION PROGRAM INVESTMENT PROJECT (SEPIP)-UBEC STATEMENT OF CHANGES IN NET ASSETS / FUNDS FOR THE YEAR ENDED 31ST DECEMBER, 2018 IDA SURPLUS/ EXCHANGE TOTAL CREDIT (DEFICIT) DIFFERENCE N N N N 2018 As at Ist January 195.847,161 (154,185,973) 4.158,868 45.820.057 For the Year 36,825,153 (30.419978) (30488172) (24.082.997) As at 31st December 232,672,314 (184,605,951) (26,329,303) 21,737,060 For The Year As at 31st December 195,847,161 (154,185,973) 4,158,868 45,820,056 STATE EDUCATION PROGRAM INVESTMENT PROJECT (SEPIP)-UBEC NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST DECEMBER, 2018 1. Principal AccountinL Policies a) Basis of Accounting The financial statements have been prepared under the historical cost convention and in accordance with the accrual basis of International Public Sector Accounting Standards (IPSAS). h) Property, Plant and Equipment They are stated at cost less accumulated depreciation or impairment loss. The initial cost of an asset comprises of its purchase price or construction costs, any cost directly attributable to bring the asset into operation. Within the period, there was no impairment recorded on the Property. Plant and Equipment, hence no basis for revaluation of the assets. Derecognition of Property, Plant and Equipmien An item of Property, Plant and Equipment is derecognized upon disposal or when no fILIre economic benefits are expected to arise from continued use of the assets. Upon disposal or retirement of the property, plant and equipment, the cost and related accumulated depreciation are moved from the financial statements and any resulting gain or loss is recognized arising on derecognition of asset (calculated as the difference between the net disposal proceeds and the carrying amount of the item) is included in the excess or deficit in the period in which the item is derecognised. c) Depreciation Property. Plant and Equipment are depreciated on straight line basis at rates considered adequate to write off their cost over their estimated Lisetul lifle. The rates applied during the year are as follows: Motor Vehicles 25% PPE 25% The website development occurred in November 2018 and as such was not depreciated during the year under review. () Inventories: inventories are assets held in the form of materials or supplies to be consumed or distributed in the rendering of services. Inventories are stated at the lower of costs and net realizable value, determined under first-in. first-out (FllFO) method. Net realizable value is determined by reference to prices existing at reporting date. 14 SEPIP-UBEC financial statement is presented in Naira as the functional currency. Transaction balances: Transactions in foreign currencies are initially recorded at the functional currency spot rate at the date the transaction 11rst qualifies for recognition. Monetary assets and liabilities denominated in f'reign rencies are re-translated at the functional Currency spot rate ofcexchange ruling at the reporting date. Dilferences arising Onl settlement or translation oo monetary items are reco-nized in excess or deficit. Non-monetar items that are measured in terms of historical cost iI a foreign currency are translated using the exchange rate at the dates of the initial transactions. Non-monetary items measured at air value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. f) Employee benefit SEPIP-UBEC is a project that has initial estimated life span of 3 years but has been extended ur aditional two years. The project staffs are drawn from the Universal Basic Education Commission.. The benefit plans in terms of staff'et olUents, pensions and gratUity of staff deployed by UBELC is not the responsi1bili ties of the proJect but handled by the Commission. h) ID1 Loans: The loans are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. It is measured by the functional currency spot rate as at the date it is recognized. 2. Depreciation write back (2,185,394): This amount represents depreciation over-charged over the years. which is now written back in order to present a reasonable fair value of the assets. 15 2018 2017 N N Notes 3. Revenue inflows durin the year No revenue were generated during the year 4.Consultancy Teachers Manageninnt Students Assessment Financial Managenent 630000 6.586,000 Education Management Monitoring & Evaluation Budgetary & Policy Framework Fiduciary - Consultancy, 630,000.00 6,586,000.00 .'Training - - -- Project Management - Training l 595,630 20. 93.600 Project Management- Works OthIers l1,595,630 20,193,600 6.Operational Costs Project Management - Operational Costs 12,721,835 42,737 157 Staf Advances 12,721,835 42,737,157 7.Cash & Cash Equivalents Special Accounts at vear end as per Baik 26.346 26,346 Statement (USD) E1`xchange Rate at Conversion Date N305.45 / tS1) .00 305 / LYSD)100 Special Accounts (Naira Equivalent) 8.047,508 38,535,679 6 Draw-Down Account - Naira Account 109.368 2,294,762 Slib~fotaj 8,156,876 40,830,442 UBEC Funds wronglyv Credited to SEP1Ip 482,885 482,885 TSA- B fkvd Total 8,639,761 41,313,327 8. Pavables UBEC Funds wrongly Credited to SEPIp 482 885 TSA 482,885 482,885 482,885 Notes 2018 2017 N N N 9 Property, Plant & Motor Website Satellite Total TOTA L Equipment Vehicles Cost as at I January 2 I 890,000 - 21,890,000 2 .890,000 Additions During the Year - I I 877,675 l 1,877,675 - Disposals / Write Offs Balance as at 31 December 21,890,000 11,877,675 33,767,675 21,890,00() Depreciation Balance as at I January 16.417,500 - 16417,500 10,9459000 Additions During the Year 5,472,500 - 5.472,500 5,472,500 Write Back (2,1 85394) - (9 8I 394) - Balance as at 31 December 19,704,606 - 19,704,606 16,417,500 Carrying Amount As at December 31 st 2185,394 1 1,877,675 14,063,069 5,472,500 10. Schedule of IDA As at January 195.847,16 l 124,5 18,527 IDA Received During the Year 36,825,153 71.328.634 17 II Effects of Changes in Exchange Difference Special Account 20 18 8,047,508 38535,679 Special Account 2017 (38.535,679) (8-839.586) (30,488,1172) 29,696,093 12. Event After the Reporting Date: There are no material events after the reporting dates that reqired adjustments in accordance with IPSAS 14 18