WORLD BANK RAPID EMPLOYMENT PROJECT GRANT NOs. H575-SB, TF 095966, TF 096620, D086-SB & D1460-SB FINANCIAL REPORTS FOR THE PERIOD FROM 1ST JANUARY 2018 to 31ST DECEMBER 2018 TABLE OF CONTENTS Page Report of the Executing Agency 1 Auditors report 2 Statement of Cash Receipts and Payments (MID & HCC) 3 Notes to and forming part of the Statement of Cash Receipts and Payments 4 - 6 Statement of Comparison of Budgets and Actuals 7 WORLD BANK RAPID EMPLOYMENT PROJECT GRANT NOs. H575-SB, TF 095966, TF 096620, D086-SB & D1460-SB FINANCIAL REPORTS FOR THE PERIOD FROM 1ST JANUARY 2018 to 31ST DECEMBER 2018 Report of the Executing Agency Under the terms of our contract, we have the mandate from the World Bank and the Ministry of Finance as Executing Agency, to supervise and manage the funds provided for the Rapid Employment Project (Ministry of Infrastructure Development (MID) & Honiara City Council (HCC) funded by the World Bank. We certify that the attached Statement of Cash Receipts and Payments which has been prepared under our supervision presents a true and fair view of the cash receipts and payments of the Rapid Employment Project (MID & HCC) for the year ended 31st December 2018. Dated at Honiara this 31st day of JuPy 20I9 Stephen Maesiola Permanent Secretary Execu epresentatve id m oyme tPoject (MIQ) City C Execu Agency RE ' atetrYe Rapid ployment Pkct ( Morris & Sojnocki CHARTERED ACCOUNTANTS Morris & Sojnocki - 2 - City Centre Building Mendana Avenue Honiara Independent Auditor's Report Solomon Islands postal address Report on the Statement of Cash Receipts and Payments PO Box 70 Of the Rapid Employment Project Tclephone (677) 21851 Facsimile (677) 23342 We have audited the accompanying financial reports the Rapid Employment Project which comprise the Statement of Cash Receipts and Payments for the year ended 31' December 2018, and a summary of significant accounting policies and other explanatory notes as set out on pages 4 to 7. Responsibility for the Statement of Cash Receipts and Payments The Ministry of Infrastructure Development and Honiara City Council (under the Ministry of Home Affairs), as the Executing Agency, and the management of the Rapid Employment Project are responsible for the preparation and fair presentation of the Statement of Cash Receipts and Payments in accordance with International Public Sector Accounting Standards: Financial Reporting under the Cash Basis of Accounting (Cash Basis IPSAS) and the Grant Agreements TF095966 dated I" April 2010, TF096620 dated 30" April 2010, H575-SB dated 2nd July 2010, D086-SB dated 16'h September 2015 and DI46-SB dated 16" December 2016 between Solomon Islands and the World Bank, and for such internal control as management determines is necessary to enable the preparation of a statement that is free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express an opinion on the Statement of Cash 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 whether the Statement of Cash Receipts and Payments is free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Statement of Cash Receipts and Payments. The procedures selected depend on the auditor's judgment. including the assessment of the risks of material misstatement of the Statement, 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 Statement 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. 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 Statement. The audit also involved evaluating the project's compliance with the requirements of the Grant Agreements TF095966 dated V April 2010, TF096620 dated 30h April 2010, H575-SB dated 2" July 2010., D086-SB dated 16' September 2015 and D146-SB dated 16' December 2016 between Solomon Islands and the World Bank. We do not, in giving this opinion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or in to whose hands it may come save where expressly agreed by our prior consent in writing. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion in our opinion: (a) the Statement of Cash Receipts and Payments for the year ended 31" December 2018, presents, in all material respects. accurately the funds received and expenditure incurred of the Rapid Employment Project in conformity with Cash Basis IPSAS and applied on a basis consistent with that of the previous audit period; (b) project funds provided by the World Bank, have, in all material respects, been used in accordance with the conditions of the financing agreement, and only for the purposes for which they were provided and adequate documentation exists to support the expenditure incurred as detailed in the Statement of Expenditure and reported in the Statement of Receipts and Payments. (c) the designated accounts have been used and maintained in accordance with the provisions of the financing agreement and cash at bank balances at 31 December 2018 are correctly stated. MORRIS & SCJNOCK1 Chartered Accountants Date:Al Honiara ,-,- BY Greg Sojnocki PARTNER WORLD BANK RAPID EMPLOYMENT PROJECT (MID & HCC) GRANT NOs. H575-SB, TF 095966, TF 096620, D086-SB & D1460-SB STATEMENT OF CASH RECEIPTS & PAYMENTS FOR THE PERIOD FROM 1ST JANUARY 2018 to 31ST DECEMBER 2018 Notes Receipts I Payments Receipts I Payments 2018 2017 $ $ RECEIPTS External Assistance - Multilateral Agencies World Bank - Grants Received: (I) Proceeds from IDA Funds (00860-001 SB) 3 51,537 2,532,556 (ii) Proceeds from IDA Funds (01460-001 SB) 3 5,719,397 9,608,452 Other Receipts 15 36,261 - TOTAL RECEIPTS 5,807,195 12,141,008 PAYMENTS RAPID EMPLOYMENT SCHEME (RES) Works 4 358,574 2,449,336 Goods 5 590,832 770,827 Technical Assistance 6 1,905,075 3,569,729 Sub-Grants 7 1,584,960 1,496,946 Training 6,251 28,161 Operating Costs 8 275,562 358,466 Total Rapid Employment Scheme (RES) 4,721,254 8,673,465 PRE EMPLOYMENT TRAINING (PET) Goods 2,569 4,222 Technical Assistance 203,122 386,644 Operating Costs 23,079 42,479 Total Operating Costs 228,770 435,345 PROJECT MANAGEMENT Goods 9 227,090 2,699 Technical Assistance 10 266,421 483,249 Operating Costs 11 1,722,794 1,218,399 Total Project Management 2,216,305 1,704,347 TOTAL PAYMENTS 7,166,329 10,813,157 Increase ( (Decrease) in Cash (1,359,134) 1,327,851 Cash at beginning of period 2 1,453,975 126,124 Cash at end of period 2 94,841 1,453,975 This Statement is to be read in conjunction with the Notes to and forming part of the 'Statement of Cash Receipts and Payments' on pages 4 to 6. Assets used under REP including Assets purchase during the period were transferred to CAUSE. 3 WORLD BANK RAPID EMPLOYMENT PROJECT (MID & HCC) GRANT NOs. H575-SB, TF 095966, TF 096620, D086SB & D1460B NOTES TO AND FORMING PART OF THE STATEMENT OF CASH RECEIPTS & PAYMENTS FOR THE PERIOD FROM 1ST JANUARY 2018 to 31ST DECEMBER 2018 ¶ STATEMENT OF ACCOUNTING POLICIES a Basis of Preparation The Statement of Cash Receipts and Payments has been prepared in accordance with International Public Sector Accounting Standards Financial Reporting under the Cash Basis of Accounting (Cash Basis IPSAS). The accounting policies have been applied consistently throughout the enod b Reporting entity The Statementof Cash Receipts and Payments is for the Rapid Employment Project as supervised by the Ministry of Finance in the Solomon Islands The program commenced on 1 April 2010 with the signing of the grant agreement with sie World Bank. This Statement covers the period from 1 January 2018 to 31 December2018. In accordance with the grant agreement, all of the funds are to come from The World Bank. c Reporting Currency The accounts are stated in Solomon Dollars (SBD) as this is the currency used for the grants and all proiect reports. Foreign currency eQuivalents are converted at the rate applicable on the date of transaction. However, budget rguries are converted at the rate of 1 USD = 7 86 SBD which is the average exchanne rate for all funds received in the inancial year 2018. Undisbursed amounts denominated in foreign currencies are converted into Solomon Dollars (SBD) at the rate of SUSD =8 01 SBD which is the exchanqe rate at the firancial Year end 31st December2018 d Fixed assets Capital expenditure is expensed during the year in which the expenditure is made e Budaet Budget information for the grant funding is set out on page 7. 2 CASH Cash is comprised of cash balances, and un-acquitted imprest accounts 2018 2017 $5$ Cash at bank 95,086 1.449.466 Petty cash 108 2,676 PET petty cash - 1,833 95,194 1.453,975 Cash at bank includes 512.881 to be refunded to CAUSE Project. 3 EXTERNAL ASSISTANCE - UNDRAWN As of 31st December 2018, the ol lowin amounts are undrawn I, DISBURSED UNDISBURSED USDIXDR USDIXDR ISB USDiXDR SBD MID Component To Date 2018 To-Date SPF Funds ATF 0959661 USD118600 1USD1186 009. IDA Funds (H5750-SB1 XDR 740,000 XDR 681.080 68 - 2 10323.224 1CR 58.919.32 656,375 PRIF Funds (TF966201 USD2 ,00.000 USD2 07546658 - 15293861 - (USD75 466 581 (604,487) IDA Funds (DOB60-001 S1 XOR 740,000 XDR 705 388 78 R1 537 7726657 111 11.22 365 577 IDA Funds (D1460-001 SB) 11C 640 11CR 825311 76 2771 _07 6 838 815 XDR 14 686 24 163 630 SUB TOTAL 2823444 41,082,293 601 DISBURSED UNDISBURSED HOC Comoonent USDIXDR USDIXDR SBD USDIXDR SAD 2018 To-Date SPF Funds (TF 0959150 USD3 098 231 _ I 23 403 224 USD4 419 35 400 IDA Funds (HC750-SB XDR 140 000 XDR 1.518645 41 1 J ,1 733158 1C 5 4 411' 5431.33 RU Funds2(TF966209 U[ 0.000 USD1 21316628 - 5964024 USD7633 72 615438 FDAunds (D0860-001 SB) XDR 360 000 XDR 394 608.92 - 4 316 702 1X1R 34608 921 (385.5'1 IDA Funds (D1460-0018B) X [11CR 780000 1DR 774,684.70 2.947 490 918 9234 A"DI1Af46 70 (1635911 SUB TOTAL 28 47,490 63,20442 (Si2.677 DISBURSED UNDISBURSED MID & HCC Components USDIXDR_ USDIXOR SED USDIXDR SBD FFundsTFO959661 USD322120250 U3216631 11492018 T 2303104419 3540 IDA Funds M S750-BL _ XDR2,200,000 XDR2_119:726.09 - 27.61,2.392 XOR2P _71911 3,052 PRIF Funds CTF966201 USD3290 000 USD3.288_633 - 24257885 USD1 3671 10.941 IDA Funds 00860-001 SB XDR1100,000 XDRI,099,9986515537 12.04359 XDR2.30 f26 IDA Funds D1460-001 S) XDR1 400,000 X)DRI399.996 5,719,307 1 C027 848 j XDR354 TOTAL 1 1 870,934 1 286,635 Exchange rate- 1USD= 01 SBD 1DR = 1.3907900 The above undrawn amounts are to fund the project up to 2016, The funds can be disbursed to the projects designated accounts by submesion of withdrawal applications by the project and approval by the Word Bank. Each fund has its own cailing and the project's designated accounts currently has a ceiling of2,543897 SBC for REP MID and 3,100.000 BD for REP HCC. All funds are pooled into each projects (REP HCCs & REP MI's) designated account Apart from additional funing of USD 1,290,000 for PRIF and USD 1 400,000 SPF approved in 2014, further additional funding of XDR 1.100,000 fDA was approved in 2015 to fund the project until 2016 In 2016, the closing dates for IDA H575-SB, IDA 00860001 SB were extended to December 31 2018. A further 4th additional funding IDA 0146- SB of XDR 1.4m was approved to funs the project till 31st December 2118. 4 WORLD BANK RAPID EMPLOYMENT PROJECT (MID & HCC) GRANT NOw H575-SB, TF 095966, TF 096620, 0086-SR & D1460-SB NOTES TO AND FORMING PART OF THE STATEMENT OF CASH RECEIPTS & PAYMENTS FOR THE PERIOD FROM 1ST JANUARY 2018 to 31ST DECEMBER 2018 4 WORKS - RAPID EMPLOYMENT SCHEME MID HCC 2018 2017 $5$$ $ Road rehabilitation 274,934 - 274,934 864,445 Road maintenance 83,640 83640 1,584,891 35a,574 - 356,574 2,449.336 5 GOODS - RAPID EMPLOYMENT SCHEME Transport equipment - -.205,000 Safety equipment a clothing 225.744 - 225,744 139221 Tools 336,076 5.097 341,172 45,0685 Materials - 23,916 23,916 381.54 561.819 29,013 590.832 770,827 6 TECHNICAL ASSISTANCE - RAPID EMPLOYMENT SCHEME Salary & wages 656.419 791,644 1,450,063 2,312,627 Allowances and others 169,814 186.906 356.720 963,075 Travel 26,154 73.138 98,292 293,827 853,387 1 051.668 1,905,075 3.569,729 7 SUB-GRANTS - RAPID EMPLOYMENT SCHEME Street& events clean up - 1 500.00 1.00.000 1,330816 Community access & pathway construction - 84,960 84960166,130 - 1,584,960 1.554.496 1,496,946 8 OPERATING COSTS - RAPID EMPLOYMENT SCHEME Fuel & lubricants 35.322 38,237 73.559 103.158 Vehicle repairs & maintenance 134,442 26.926 161.36B 208,859 Vehicle Insurance 1.8925 21,710 40635 4,649 188.689 86,873 275562 358,466 9 GOODS - PROJECT MANAGEMENT Office furniture a equipment 218.639 8,153 226,792 2,100 Office supplies - 298 298 6W 218,639 8.451 227.090 2,699 10 TECHNICAL ASSISTANCE - PROJECT MANAGEMENT Salary a wages 117,074 56,327 173,401 336.429 Allowances and others 20.524 16.555 37,079 70,754 Travel 29,624 26,317 55941 7a,066 167.222 99,199 266421 4834249 11 OPERATING COSTS- PROJECT MANAGEMENT Computer expenses - - 9,005 Electricity 128,975 - 126,975 173,675 Office expenses 61,311 12,538 73,849 104,333 Office stationery 138.379 4,343 142.722 85,000 Telephone expenses 258,550 5,200 263,750 217,082 Repair & maintenance office 56,485 8,172 64.657 807 Vehicle hire (140) 2,550 2.410 29,587 Advertising 18,515 - 18.515 6.300 Printing - 3,200 3,200 - Water 2,520 1.575 4,095 5.266 Bank fees 3.770 4,219 7.989 10,240 Recruitment expenses - 465 465 - Travel - 100 100 213.078 POM preparation 32265 4,856 37,121 Meezino Expenses 544,394 - 544,394 Workshop 1 200 - 1,200 Office renta 424,348 6,956 431.304 364,028 Tool expenses 48 48- 1.670,572 52,222 1722,794 1218399 5 WORLD BANK RAPID EMPLOYMENT PROJECT (MID & HCC) GRANT NOs H575-SB, TF 095966, TF 096620, DD86-SB & D1400-SB NOTES TO AND FORMING PART OF THE STATEMENT OF CASH RECEIPTS & PAYMENTS FOR THE PERIOD FROM 1ST JANUARY 2018 to 31ST DECEMBER 2018 12 EXTERNAL ASSISTANCE - PAYMENTS BY THIRD PARTIES There were no payments by third parties. 13 RESTRICTIONS ON CASH BALANCES AND ACCESS TO BORROWINGS The amounts presented in the budgets are all under the control of he World Bank. Rapid Employment Project only controls 14 OTHER RECIEPTS Other receipts totalling 536, 261 is related to rental bond received from BSP of $23,380 and excess refund of $12,881 received from CAUSE Project for expenses paid by REP project onbehalf of CAUSE Project and needs to be refunded to CAUSE, WORLD BANK RAPID EMPLOYMENT PROJECT (MID & HCC) GRANT NOs. H575-SB, TF 095966, TF 096620, D086-SB & D1460-SB STATEMENT OF COMPARISION OF BUDGETS AND ACTUALS FOR THE PERIOD FROM 1ST JANUARY 2018 to 31ST DECEMBER 2018 Final Budget Actual Variance SBD SBD SBD Amount % CASH INFLOWS (i) Proceeds from IDA Funds (D0860-001 SB) 28,038 51,537 23,499 84% (11) Proceeds from IDA Funds (D1460-001 SB) 4,167,327 5,719,397 1,552,070 37% (iii) Other Receipts 12,720 36,261 23,541 - TOTAL RECEIPTS 4,208,085 5,807,195 1,599,110 38% CASH OUTFLOWS RAPID EMPLOYMENT SCHEME (RES) Sub-grants 795,039 1,584,960 789,921 99% Works - 358,574 358,574 Goods 93,900 590,832 496,932 529% Technical Assistance 1,732,264 1,905,075 172,811 10% Training - 6,251 6,251 Operating Costs 305,460 275,562 (29,898) -10% TOTAL RAPID EMPLOYMENT SCHEME 2,926,663 4,721,254 1,794,591 61% PRE-EMPLOYMENT TRAINING (PET) Goods - 2,569 2,569 Technical Assistance 199,015 203,122 4,107 2% Operating Costs 37,728 23,079 (14,649) -39% TOTAL PRE-EMPLOYMENT TRAINING 236,743 228,770 (7,973) -3% PROJECT MANAGEMENT Goods - 227,090 227,090 Technical Assistance 530,341 266,421 (263,920) -50% Operating Costs 525,960 1,722,794 1,196,834 228% TOTAL PROJECT MANAGEMENT 1,056,301 2,216,305 1,160,004 110% TOTAL PROJECT PAYMENTS 4,219,707 7,166,329 2,946,622 70% NET CASH FLOWS (11,622) (1,359,134) (1,347,512) 7