COMMUNITY GOVERNANCE AND GRIEVANCE MANAGEMENT PROJECT P147005 MINISTRY OF PROVINCIAL GOVERNMENT AND INSTITUTIONAL STRENGTHENING AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST DECEMBER 2017 Community Governance and Grievance Management Project P147005 Ministry of Provincial Government and Institutional Strengthening Statement of Certification for the year ended 31st December 2017 In our opinion, the attached Financial Statements and Notes on pages 2 - 12 for the Year Ended 31st Year Ended 31st December 2017 are based on properly maintained financial records and present fairly, in all material respects, the information required by section 2.06 of the Standard Conditions for Grants made by the World Bank out of various funds, dated February 15, 2012 For and on behalf of the Community Governance and Grievance Management Project, Ministry of Provincial Government and Insitutional Strengthening Stanley Pirione Project Director S nat u Date: -7 Ravin Dhari Project Coordinator Signature: Date: 2roCG--1 P0 Box 939 p . Honiara fl o oSolomon Islands Certified Practising Accountants Tel : +677 25822 Independent Auditor's Report To the Project Director of Community Governance & Grievance Management Project We have audited the accompanying financial statements of Community Governance & Grievance Management Project comprising the Financial Position report as at 31 "t December 2017 and the Financial Performance report and statement of cash flows for the year then ended and the related summary of accounting policies and other explanatory notes on pages 7 to 10 of the financial statements. Responsibility of the Project Director The Project Director is responsible for the preparation and fair presentation of the financial statements in accordance with the accounting policies in note 2 to the financial statements and section 2.06 of the Standard Conditions for Grants made by the World Bank out of various funds, dated February 15th, 2012. This responsibility includes designing, implementing and maintaining internal controls relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error, selecting and applying appropriate accounting policies and making accounting estimates that are reasonable in the circumstances. Responsibility of the Auditor Our responsibility is to express an opinion on these financial statements based on our audit. We have conducted our audit in accordance with applicable Auditing Standards in Solomon Islands. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether these financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement due to fraud or error. In making those risk assessment, the auditor considers internal controls relevant to the entity's preparation and fair presentation of the financial statements, 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 the Project Director, as well as evaluating the overall presentation of the financial statements. We do not, in giving this opinion, accept or assume responsibility for any other purpose or to any other persons, to whom this report is shown or into 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 the basis for our audit opinion. Certified Practising Accountants Opinion In our opinion: (a) The accompanying financial statements are in agreement with the books of account kept by the Community Governance & Grievance Management Project and are properly drawn up: i. So as to give a true and fair view of the financial position of the CGGMP as at 3l18 December 2017 and of its financial performance and its cash flows for the year then ended; and Comply with: ii. Standard Conditions for Grants Made by the World Bank Out of Various Funds, dated 15'h February, 2012; iii. The Grant Agreement TF: 018206, dated 5th November, 2014; iv. The Disbursement Letter dated the same as the Grant Agreement; v. The World Bank Guidelines for Projects, dated l" May, 2006; vi. The Project Operations Manual, as required under Annex 2.2 of the agreement; and vii. In accordance with the provisions of the International Public Sector Accounting Standards (IPSAS), where applicable; and viii. In accordance with the accounting policies set out in Note 1 to these financial statements. 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 for the year ended 31" December 2017, and Proper books of accounts have been kept by the CGGMP as far as it appears from the examination of those books. / BAORQ 4F CERTIFIED PRACIWS , IC1)U#ANT Baoro Laxton Koraua CPA Principal Date 3 Community Governance and Grievance Management Project P147005 Ministry of Provincial Government and Institutional Strengthening Statement of Financial Position for the year ended 31st December 2017 Account Description Note 2017 2016 2015 SBD SBD SBD ASSET Current Asset Cash and Cash Equivalents 6 1,552,921 1,020.629 Total Cash and Cash Equivalents 1,552,921 1,020,629 Total Current Asset 1,552,921 1,020,629 Total Asset 1,552,921 1,020,629 Equity Retained Earninings 1,020.629 2,316,189 Total Surplus/(Deficit) for the Period 532,292 1,295,560 Total Surplus /(Deficit) for the Period 1,552,921 1,020,629 Total Equity 1,552,921 1,020,629 Name: Community Governance and Grievance Management Project ID: P147005 [A: Ministry of Provincial Government and Institutional Strengthening Statement of Financial Performance for the year ended 31st December 2017 Account Description Note 2017 2016 SBD SBD FINANCING Grant Proceeds from the World Bank 7 5,546,330 1,157,455 Miscelnous Income 3,000 Total Grant Proceeds from the World Bank 5,549,330 1,157,455 Total Financing 5,549,330 1,157,455 Expenditure Components Component 1: Revitalizing Government Community Linkages 8 1,146,968 126,850 Component 2: Strengthening Community Officers Capacities 9 1,177,202 796,659 Component 3: Project Management Evaluation and Learning 10 2,692,868 1,529,507 Total Components Expenditure 5,017,038 2,453,015 Total Expenditure 5,017,038 2,453,015 Net Cash Flows 532,292 - 1,295,560 Community Governance and Grievance Management Project P147005 Ministry of Provincial Government and Institutional Strengthening Statement of Comparision of Budget and Actual Amounts for the year ended 31st December 2017 2017 Actual on 2017 Original Comparable 2017 Account Description and Final Budget Basis Difference SBD SBD SBD USD Revenue Grant Proceeds from the World Bank 8.950.000,00 5-546330 (3.403.670) - 425,458.76 Misc Income - 3.000 3,000 375 Total Grant Proceeds from the World Bank 8,950,000 5,549,330 (3,400,670) - 425,083.76 Total Revenue 8,950,000 5,549,330 (3,400,670) - 425,083.76 Expenditure Components Component 1: Revitalizing Government Community Link 2.070.000 1.146.968 923,032 115.379.00 Component 2: Strengthening Community Officers Capaci 2,780000 1.177.202 1.602.798 200,349.75 Component 3: Project Management Evaluation and Learn 4. 100 000 2.692.868 1.407.132 175.891,50 Total Components Expenditure 8,950,000 5,017,038 3,932,962 491,620.25 Total Expenditure 8,950,000 5,017,038 3,932,962 Net Cash Flows - 532,292 532,292 Note: Statement of USD Comparision of Budget and Actual Amounts Original Budget 2017 Actual ds Disbursed to t Funds Avialble US$ US$ US$ US$ Approved Funding 3,080,000.00 627,130 1,389,320 1,690,680 Community Governance and Grievance Management Project P147005 Ministry of Provincial Government and Institutional Strengthening Statement of Changes in Net Asset/Equity for the year ended 31st December 2017 Accumulated Account Description Surplus/Deficit) SBD Equity Balance as at 31st December 2016 1,020,629 Changes in Net Equity in 2017 Total Surplus!(Deficit) for the Period 532,292 Balance as at 31st December 2017 1,552,921 Community Governance and Grievance Management Project P147005 Ministry of Provincial Government and Institutional Strengthening Statement of Cash Flow for the year ended 31st December 2017 2017 2016 SBD SDB Cash Flow from Operating Activities Receipts Grant Proceeds from the World Bank 5,546,330 1,157,455 Mise Income 3,000 Total Receipts 5,549,330 1,157,455 Payments Component 1: Revitalizing Government Community Linkages 1,146,968 126,850 Component 2: Strengthening Community Officers Capacities 1,177,202 796,659 Component 3: Project Management Evaluation and Learning 2,692,868 1,529,507 Total Payments 5,017,038 2,453,016 Net Cash Flow from Operating Activities 532,292 - 1,295,560 Cash and Cash Equivalent at the Beginning of the Period 1,020,629.00 2,316,189 Cash and Cash Equivalent at End of Period 1,552,921 1,020,629 Community Governance and Grievance Management Project Pl 47005 Ministry of Provincial Government and Institutional Strengthening Notes to the Financial Statements for the year ended 31st December 2017 1 General Information The Community Governance and Grievance Management Project, Project ID: P147005, development objective is to strengthen community grievance management capabilities and enhance the effectiveness of linkages with government in targeted communities. On November 5, 2014, the Solomon Islands Government and the World Bank signed a Grant Agreement for a grant of USD3.08 million, Grant No. TF018206, to assist in financing this project. It became effective on November 5, 2014 and the closing date is on the 30' April 2019. The Grant Recipient Agency shall be the Ministry of Finance and Treasury, and the Implementation Agency shall be the Ministry of Provincial Government and Institutional Strengthening for the overall coordination and implementation of the project in accordance with the legal agreement between the World Bank and Solomon Islands Government 2 Significant Accounting Policies a Basis of Preparation The financial statements have been prepared in accordance with Cash Basis IPSAS Financial Reporting under the Cash Basis of Accounting. The accounting policies have been applied consistently throughout the period. b Cash Basis ofAccounting The cash basis of accounting recognizes transactions only when cash is received and paid by the Implementation Agency c Reporting Currency The financial statements are presented in the Solomon Islands currency, the Solomon Islands dollar (SBD$). d Foreign Currency Transactions Transactions in foreign currencies are recorded at the exchange rate at the date of the transaction. 3 Component Reporting The reporting format is based on the three components of the project, and the nature of the expenses are reported in notes 9 - 12 4 Budget The budget is developed on the same accounting basis (cash basis), same classification and for the same period as the financial statements 5 Grant Proceeds from the World Bank These funds are received from the World Bank from the Withdrawal Application are submitted for reimbursement and transfer to the Designated Account No. 5218004 at ANZ Bank Community Governance and Grievance Management Project P147005 Ministry of Provincial Government and Institutional Strengthening Notes to the Financial Statements for the year ended 31st December 2017 6 Cash Cash comprises cash on hand and cash equivalents. Cash equivalents comprise balance at ANZ Bank 2017 2016 SBD SBD Cash Balance as at ANZ Bank 1,551,921 1,019,629 Cash Balance as at On Hand 1,000 1,000 1,552,921 1,020,629 Cash Details Account No. 5218004, Operating Account, ANZ Bank 1,551,921 1,019,629 Petty Cash Standing Imprest 1.000 1 ,0 0 0 1,552,921 1,020,629 2017 2016 SBD SBD 7 Grant Proceeds fton World Bank Ist Withdrawal Application - Advance 2nd Withdrawal Application - January - July Payments 3rd Withdrawal Application - August - November Payments 4th Withdrawal Application - Dec-May Payments 5546,32989 1,157,455 Total Withdrawal Application 5,546,329.89 1,157,455 2017 2016 SBD SBD 8 Component 1: Revitalizing Government Community Linkages C1 - Airfare 139,541.00 46,595 Cl - Accommodation 128,003.00 11,680 Cl - Allowance 78,717.20 7,300 Cl - Fuel 5.824.00 Cl - Motor Vehicle Fare & Hiring 63,285.00 27,720 Cl - OutBoard Motor Fare & Hiring 3,700.00 3,660 Cl - Consultation & Awareness 27,634.00 2,390 Cl-Training & Workshop 96,513.00 27,505 Cl-Comm & Gender Strategy 149,585.91 Cl -Office Equipment 219,918.00 Cl - Office Supplies 33,256.00 CI- Governance Mapping 200,990.63 Total Component 1: Revitalizing Government Community Linka2es 1,146.968 126,850 Community Governance and Grievance Management Project Pl47005 Ministry of Provincial Government and Institutional Strengthening Notes to the Financial Statements for the year ended 31st December 2017 2017 2016 Note SBD SBD 9 Component 2: Strengthening Community Officers Capacities C2 - Airfare 121,915.00 145,746 C2 - Accommodation 180,018.00 109,999 C2 - Allowance 124,210.00 85,290 C2 - Fuel 8,519,00 4,330 C2 - Motor Vehicle Fare & Hiring 130,159.00 100,635 C2 - Outboard Motor Fare & Hiring 11,090.00 28,911 C2 - Training & Workshop 84,922.90 82,936 C2 - Office Supplies 29,350.00 20,754 C2- Curriculum Material 44,940.25 C2-Monitoring & Evaluation 44,961.00 4,800 C2 - Uniform 118,331 50 62,260 C2- Supervision & Mentoring 83,243.81 C2- Mobile Pnones 115.500 C2 - Storage Equipment 35,480 C2- Safety Equipment 12 6,780.00 C2 - Log Book & training equipment 12 127,450.00 C2 -Provincial Support 61,311.36 Total Component 2: Strengthening Community Officers Capacities 1,177,202 796,641 2017 2016 SBD SBD 10 Component 3: Project Management Evaluation and Learning 03 - National Consultant Fees 14 643,172.59 482,529 C3 - Employer NPF Contribution 14 61,294.27 44,473 C3 - Holiday Pasage 14 117,000.00 27000 C3- NPF Payable 15 55,209.55 27,277 C3- Receivable 15 - 6,000 C3 - PAYE Payable 15 279,300 108,038 C3- HCC Payable 15 2,955.76 C3 - International Consultant Fees 16 567,473.27 157,858 C3 - International Consultant Air fare 16 25,773.16 9,445 C3 - International Consultant Accom 16 49,513.73 101,516 C3 - International Consultant Per Diem 16 150,919-74 55,077 C3 - Motor Vehicle Fuel, Fare & Hiring - 6,971 C3 - Project Steering Committee 54,225.00 89,940 C3- Training and Workshop 99,696.50 61,975 C3 - Bank Charges 2,088.01 1,172 C3 - Office Supplies 45,130.00 57,028 C3 - Office Equipment 13 54,282.00 18,660 C3- Monitoring/ Evaluation 81,425.00 132,629 C3 - Accounting Software 800.00 4,200 C3- Auditing fee 60,950.00 44,000 C3 - Office Rental 244,260.00 C3 - Telecommunication & Advertisement 97,400.00 93,720 Total Component 3: Project Management Evaluation and Learning 2,692,868 1,529,507 Community Governance and Grievance Management Project P147005 Ministry of Provincial Government and Institutional Strengthening Notes to the Financial Statements for the year ended 31st December 2017 2017 2016 Note SBD SBD 11 Fixed Assets Cl - Office Equipment 8 219,918.00 Cl - Training Equipment Total Component 3: Project Management Evaluation and Learning 219,918 0 12 Fixed Assets C2 - Storage Equipment - 35,480 C2 - Training Equipment - C2 - Office Equipment 9 127.450.00 18,660 C2- Safety Equipment 9 6.780,00 C2 - Mobile Phone 115,500 Total Component 3: Project Management Evaluation and Learning 134,230 169,640 13 Fixed Assets C3 - Office Equipment 10 54.282.00 (73- Training Equipment Total Component 3: Project Management Evaluation and Learning 54,282 0 2017 2016 SBD SBD 14 National Consultants Costs C3 - National Consultant Fees 10 643.17259 482.529 C3 - Employer NPF Contribution 10 61.294.27 44.473 C3 - Ilol iday Pasage 10 117.000 00 27,000 Total National Consultants Costs 821,466.86 554,002 2017 2016 SBD SBD 15 National Consultants Payroll Deductions C3 - Employee NPF Contribution 10 55.209.55 27.277 C3 - PAYE Payable 10 340.972.82 108.038 C3-1 ICC payable 10 2.955.76 C3 - Receivable & Recovery 10 - 6.500 Total National Consultants Payroll Deductions 399,138.13 141,815 2017 2016 SBD SBD 16 International Consultants Costs C3 - International Consultant Fees 10 505,799,97 157.858 C3 - International Consultant Air Fare 10 25,773.16 9.445 C3 - International Consultant Accom 10 49.513 73 101.515 C3 - International Consultant Per Diem 10 150,919.74 55.077 International Consultants Costs 717 nfA KA 171 QC