ANAMBRA STATE GOVERNMENT STATE EDUCATION PROGRAM INVESTMENT PROJE CT (ANSEPIP) (WORLD BANK ASSISTED) AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31st DECEMBER, 2018 CHUKWUEMEKA ORIAKU & CO (CHARTERED ACCOUNTANTS) 73 NNAMDI AZIKIWE AVENUE P.O.BOX 1138 AWKA - ANAMBRA STATE PHONE: 08033892313 E-MAIL: oriaku2000@yahoo.com ANAMBRA STATE GOVERNMENT STATE EDUCATION PROGRAM INVESTMENT PROJECT (ANSEPIp) (WORLD BANK ASSISTED) Table of Contents page Contents 1 Corporate Information 2 Report of the Independent Auditors Accounting Policies 5 Balance Sheet 6 Statement of Expenditure 7 Statement of Receipts and Payments 8 Cash Flow Statement 9 Special Account 10 Notes to the Accounts 11-12 ANAMBRA STATE GOVERNMENT STATE EDUCATION PROGRAM INVESTMENT PROJECT._ANSEPI) (WORLD BANK ASSISTED) OFFICE ADDRESS: Old Central Medical Stores, near Amaku, General Hospital, Awka. CREDIT EFFECTIVENESS: January, 2015 BANKERS: Diamond Bank Plc, Awka AUDITORS: CHUKWUEMEKA ORIAKU & CO (Chartered Accountants) 73 Nnamdi Azikiwe Avenue Awka - Anambra State Phone: 08033892313 E-mail: oriaku20000yahoo.com 2 CHUKWUEMEKA ORIAKU & CO. No. 73 Zik's Avenue, (Opp. Dike Park) P.O. Box 1138 Awka, Anambra State, E-mail: oriaku2000@yahoo.com Phone Nos: 08033892313; 08033201398 REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF ANAMBRA STATE EDUCATION PROGRAM INVESTMENT PROJECT (ANSEPIP) WORLD BANK ASSISTED Report on the Financial Statements We have audited the accompanying financial statement of Anambra State Education Program Investment Project, for the year ended 31 December, 2018, set out on pages 6 to 12 which have been prepared on the basis of significant accounting policies on page 5. The Project Management Responsibility for the Financial Statements The Anambra State Project Financial Management Unit (PFMU) who coordinates the activities of the State Project is responsible for the preparation and fair presentation of' these financial statements in accordance with Statements of Accounting Standards issued by Financial Reporting Council of Nigeria, the International Standards on Auditing (ISAs) and World Bank Guidelines. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fIair presentation of the financial statements that are free from material misstatements, whether due to fraud or error, selecting and applying appropriate accounting policies, and making accounting estimates that are reasonable in the circumstances. Auditor's Responsibility Our responsibility is to express an independent opinion on these financial statements based on our audit. We conducted our audit in accordance with Financial Reportino Council of Nigeria Standards on Auditing issued by the Institute of' Chartered Accountants of Nigeria, the International Standards on Auditing (ISAs) and World B1ank Guidelines. These Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts an( disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risk of material misstatement of the financial statements, 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 financial statements in order to design audit procedures that are appropriate in the entity's internal control. PARTNERS: ORJAU MC., 1CA, MSC: OKECHUKWU D.O., FCA, ACTI, MBA, KSP, G.A. ERHURHU, FCA, MBA An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the project Management. as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Opinion In our opinion, the financial statements give a true and thir view of the state of affairs of the Project's financial position as at 31s December, 2018 in accordance with Financial reporting Council of Nigerian Standards on Auditing issue by the Institute of Chartered Accountants of Nigeria, the International Standards on Auditing (ISAs) and World Bank Guidelines. Report on other Legal Requirements The Company and Allied Matters Act, CAP C20 LFN, 2004 requires that in carrying ot our audit, we consider and report to you on the following matters. We confirm that: a. We have obtained all the information and explanations which to the best of our knowledge and belief, were necessary for the purpose of our audit. b. In our opinion, proper books of accounts have been kept by the project; and c. The Project's balance sheet and statement of receipts and payments are in agreement with the books of account. Statement of Expenditure (SOE) The Statement of Expenditure (SOE) incurred during the financial year on page 7 is in agreement with the books of accounts. Adequate supporting documents have been maintained to support claims to the World Bank for reimbursement of expenditures incurred; and which expenditures are eligible for financing under the Credit Agreement. Special Account The Statement of Special Account (SA) of the Project on page 10 has been prepared on the basis of Cash Deposit and Transfers for purposes of complying with the Credit Loan Agreement. The Statement gives a true and fair view of the Beginning and Ending Balance and the Account Activity for the year ended 3 1 "" December, 20 1 8. ; 0834808 Cliukwuenieka Oriaku & Co kn - eria (Chartered Accountants) // Y' , 4 ANAMBRA STATE GOVERNMENT STATE EDUCATION PROGRAM INVESTMENT PROJECT (ANSEPIP) (WORLD BANK ASSISTED) ACCOUNTING POLICIES The following are the significant Accounting Policies adopted by the Project in the preparation of the Financial Statements. 1. Accounting Concepts: These Accounts have been prepared on Cash Basis ofAcCounting. 2. Accounting Convention: The Accounts are prepared under the historical Cost Convention. 3. Fixed Assets: Fixed Assets are accounted for at Cost and capitalized as an integral part of the Project's Accumulated Development Cost. However, expenditure of Capital natures are isolated and tracked by means of Assets Register. a. In applying the Capitalization Policy, all related (landed) costs and installation costs were included in the acquisition cost of the Fixed Assets items. b. Capital expenditures on Contract works were included on the basis of valuation certificates including retention. c. No depreciation is charged on the Project's Fixed Assets as there are no Rcvenue to be matched against such charges and because the Cash Basis of Accounts is in effect. 4. Project Cost: All costs incurred by the Project are considered Development costs and are therefore deferred to be matched against future benefits. 5. Inventory: Inventory is valued at the lower of Costs and Net Realizable ValuIe. 6. Foreign Exchange: Income and Expenditure items in foreign currency were converted into Naira at the appropriate rate of exchange ruling at the time they arise. Assets and Liabilities existing in foreign currencies were translated into Naira at the rate applicable at the Balance Sheet date. The gains and losses arising on translations arc credited or charged to Reserve in the period they arose. 7. Going Concern: The Project is assumed to continue to operate in the foreseeable ftture. 8. Consistency: There will be consistency of accounting treatment of like items \ithill ch accounting period to the next. 5 ANAMBRA STATE GOVERNMENT STATE EDUCATION PROGRAM INVESTMENT PROJECT (ANSEPIP) (WORLD BANK - ASSISTED) BALANCE SHEET AS AT 31ST DECEMBER, 2018 NOTES 2018 2017 N N ASSETS EMPLOYED Project Cost 814,984,808 374,471,832 Cash and Bank Balances 323,213,224 368,355,020 1,138,198,032 742,826,852 LESS: CURRENT LIABILITIES Bank Overdraft - 1,138,198,032 742,826,852 FINANCED BY IDA Credit 957,271,589 537,316,973 Interest Received (Dollar Account) 4,808,440 4,774,247 Exchange Difference 157,559,169 182,180,698 Other Income, Receipts and Refunds 18,558,834 18,554,934 1,138,198,032 742,826,852 Approved by Project Financial Management Unit on the ........ . ......... and signed on its behalf by ------------------------------------------- Project Manager ----- .----- .----- .- --------------- Head PFM U - ------------- Project Accountant 6 ANAMBRA STATE GOVERNMENT STATE EDUCATION PROGRAM INVESTMENT PROJECT (ANSEPIP) (WORLD BANK - ASSISTED) STATEMENT OF EXPENDITURE FOR THE YEAR ENDED 31ST DECEMBER, 2018 NOTES 2018 2017 N N INVESTMENT COSTS Development Costs la 329,728,833 98,525,785 Investment Cost for the period 329,728,833 98,525,785 OPERATING COSTS Operating Cost lb 110,784,144 16,198,935 1 Operating Cost for the period 110,784,144 16,198,935 Total Cost for the period 440,512,977 114,724,720 7 ANAMBRA STATE GOVERNMENT STATE EDUCATION PROGRAM INVESTMENT PROJECT (ANSEPIP) (WORLD BANK - ASSISTED) STATEMENT OF RECEIPTS AND PAYMENT FOR THE YEAR ENDED 31ST DECEMBER, 2018 2018 2017 N N RECEIPTS IDA Credit 419,954,616 135,125,607 Interest Received (Dollar Account) 34,193 1,446,800 Other Income 3,900 10,680,020 419,992,709 147,252,427 LESS PAYMENTS Development Capital Cost 329,728,833 98,525,785 Operating Cost 110,784,144 16,198,935 440,512,977 114,724,720 Balance for the year (20,520,267) 32,527,707 Balance brought forward 186,174,323 153,646,616 Balance carried forward 165,654,056 186,174,323 8 ANAMBRA STATE GOVERNMENT STATE EDUCATION PROGRAM INVESTMENT PROJECT (ANSEPIP) (WORLD BANK - ASSISTED) CASHFLOW STATEMENT FOR THE YEAR ENDED 31ST DECEMBER, 2018 2018 2017 N N Cashflow from Operating Activities Project cost for the year (440,512,977) (114,724,720) N Change in Working Capital Exchange Difference (24,621,529) 182,180,698 Creditors/Accruals - (746,652) Net Cash Inflow/(Outflow) from Operating Activities (465,134,506) 66,709,326 Cashflow from Investing Activities - - Cashflow from Financing Activities Funds Received 419,992,709 147,252,427 Net Cash Inflow from Operating Activities 419,992,709 147,252,427 s Cash and Cash Equivalent during the year (45,141,796) 213,961,753 Cash & Cash Equivalent at the begining of the year 368,355,020 154,393,267 Cash & Cash Equivalent at the end of the year 323,213,224 368,355,020 9 STATE EDUCATION PROGRAM INVESTMENT PROJECT (ANSEPIP) SPECIAL DOLLAR ACCOUNT FOR THE YEAR ENDED 31ST DECEMBER, 2018 2018 2017 $ $ Depository Bank Diamond Bank Plc Currency: USD Opening Balance 997,229 903,675 IDA Credit 1,246,000 432,569 Refunds/Deposits - 500 Prior Year Adjustments 146 - Interest 3,909 4,484 2,247,284 1,341,228 Deduct Bank Transfers to Draw Down Account 1,216,378 141,344 Training and Others 89,992 202,013 Bank Charges 153 642 1,306,523 343,999 Balance as at 31st December, 2018 940,761 997,229 10 ANAMBRA STATE GOVERNMENT STATE EDUCATION PROGRAM INVESTMENT PROJECT (ANSEPIP) (WORLD BANK - ASSISTED) NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31ST DECEMBER, 2018 2018 2017 N N 1 PROJECT COSTS a Development Costs 329,728,833 98,525,785 b Operational Costs 110,784,144 16,198,935 440,512,977 114,724,720 la Development Cost Students Assessment - Consultancy 12,193,300 - Financial Management - Consultancy 1,637,250 - Teachers' mgt - Consultancy 135,071,650 Summit Management Development Programme - 16,401,600 Anambra State Investment Programme - 10,299,342 Basic Transport Allowance on Management Training - 13,040,275 Basic Transport Allowance on Innovation on Edu. Technology - 22.644,000 ICT, Communication and Office Equipment - Stakeholders Engagement - 9,900,000 Transport Equipment 165,375 Office Furniture and Fittings Project Management - Training & Capacity Building 82,240,058 23,923,368 Technical & Vocation Capacity Building 68,870,100 1,200,000 ICT, Communication and Office Equipment 29,551,100 1,117,200 329,728,833 98,525,785 lb Operational Cost Donation of Educational Material - 670,000 Educational management System Consulting - 3,111,250 Utilities 83,900 30,500 Repairs 504,235 331,290 Upgrading of EMIS Unit State SUBEB - 7,500 SBMS Monitoring/Training 9,890,000 314,175 WAEC 64,201,750 Advertisement - 1,722,000 Bank Charges and Commission 197,207 26,152 Stationaries 525,000 1,170,593 Meetings 15,597,346 4,898,480 InsUrance 3,358,440 873,500 Recharge Card/Internet Services 1,396,252 1,201,453 Imprest and Miscellaneous 13,418,497 523,680 PFMU Running Cost 1,316,745 694,125 Fuelling and Transport 294,772 624,237 110,784,144 16,198,935 11 ANAMBRA STATE GOVERNMENT STATE EDUCATION PROGRAM INVESTMENT PROJECT (ANSEPIP) (WORLD BANK - ASSISTED) NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31ST DECEMBER, 2018 CONTINUED 2018 2017 N N 2 BANK BALANCES Special Dollar Account 316,095,850 359,219,995 Draw Down Account 87,359 1,650,221 Dollar Interest Account 6,920,189 7,374,978 Naira Interest Account 109,826 109,826 323,213,224 368,355,020 3 CREDITORS Bank Overdraft (Draw Down Account) _ 4 RECEIPTS IDA Credit 419,954,616 135,125,607 Interest (Dollar Accounts) 34,193 1,446,800 Other Income 3,900 10,680,020 419,992,709 147,252,427 5 EXCHANGE RATE N N 1 Dollar as at 31/12/2018 336 360 12