SEND-GHANA MAKING THE BUDGET WORK FOR GHANA PROJECT GPSA GRANT #: TF018055 FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31,2018 EGALA & ASSOCIATES CHARTERED ACCOUNTANTS 14 ABEKA ROAD, TESANO POBOX AN 16626 ACCRA NORTH TEL: 0302 - 222199 EMAIL: enquiry@eaaghana.Com SEND-GHANA MAKING THE BUDGET WORK FOR GHANA PROJECT GPSA GRANT #: TF018055 FINANCIAL STATEMENTS DECEMBER 31,2018 Contents Page Corporate information 1 Independent auditors' report 2-3 Statement of sources and uses of funds 4 Project cost summary 5 Statement of financial position 6 Notes to the financial statements 7-9 Independent auditors' report on designated account statement 10- 11 Designated account statement 12 - SEND-GHANA MAKING THE BUDGET WORK FOR GHANA PROJECT GPSA GRANT #: TF018055 FINANCIAL STATEMENTS DECEMBER 31,2018 CORPORATE INFORMATION Board of directors Siapha Kamara Chief Executive Officer Alhassan Y Seini Member Janet Mohammed Board Chair Justina Anglaaere Member Emmanuel Darko Member Registered office SEND-Ghana A 28 Regimanuel Estates Nungua Barrier, Sakumono Accra External auditors Egala & Associates Chartered Accountants 14 Abeka Road, Tesano POBox AN 16626 Accra North Bankers Standard Chartered Bank - EGALA AND ASSOCIATES (CHARTERED ACCOUNTANTS & BUSINESS ADVISORS) BRANCH OFFICE 14, Abeka Road P.O. Box 441 Tesano-Accra Tamale P. O. Box AN 16626 Tel.: 03720-22549 Accra-North, Ghana Fax.: 233 (0) 302 229358 Tel: 233 (0) 30222 2199 Fmail: enquiry@eaaghana.com 233 (0) 302 268~58 www.eaaqhana.corn 233 (0) 302 268424 SEND-GHANA MAKING THE BUDGET WORK FOR GHANA PROJECT INDEPENDENT AUDITOR'S REPORT TO SEND-GHANA Report on the financial statements We have audited the accompanying financial statements of Making the Budget Work for Ghana Project for the year ended December 31,2018 set out on pages 4 to 12. These financial statements comprise the statement of financial position at December 31, 2018, the project cost summary, statement of sources and uses of funds for the year then ended, and a summary of significant accounting policies and other explanatory notes. Project Management's responsibility for the financial statements SEND-GHANA is responsible for the preparation and fair presentation of these financial statements in accordance with World Bank financial reporting guidelines. This responsibility includes: designing, implementing and maintaining internal control 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. 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 International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform our audit to obtain reasonable assurance whether the 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 auditors' judgement, including the assessment of the risks 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 circumstances, but not for the purpose of expressing an opinion on the effectiveness of the project'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 financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. 2 PARTNERS: I. Egala I E.N. o. Dodoo I A. Abugri SEND-GHANA MAKING THE BUDGET WORK FOR GHANA PROJECT GPSA GRANT #: TF018055 INDEPENDENT AUDITOR'S REPORT (CONT'D) Opinion In our opinion, proper books of account have been kept and the accompanying financial statements, which are in agreement therewith, give a true and fair view of the state of the project's financial affairs at December 31, 2018 and of its cost summary, sources and uses of funds for the year then ended in accordance with World Bank financial reporting guidelines and are in compliance with Grant Agreement Number TF018055 and accounting policies. £~~~:c; ;4~·~d~·; ·Ab·~~;i·~· iCAGi·pi1194 Egala & Associates (ICAG/F/2019/135) Chartered Accountants 14 Abeka Road, Tesano POBox AN 16626 Accra North, Ghana 3 SEND-GHANA MAKING THE BUDGET WORK FOR GHANA GPSA GRANT #: Tf018055 STATEMENT OF SOURCES AND USES OF FUNDS FOR THE YEAR ENDED DECEMBER 31, 2018 2018 2018 2017 Notes Current Cumulative Cumulative Year Sources US$ US$ US$ Opening Ba!. 3 8,863 75 Funds received during the year (Page 9) 200,000 849,925 649,925 ----------- ----------- ----------- Total 208,863 850,000 649,925 ----------- ----------- ----------- Uses Operating costs 86,588 404,336 317,748 Consulting 16,274 61,849 45,575 Training 45,245 196,711 151,466 Goods 7,416 7,416 Others 40,527 159,459 118,932 Exchange gain & others (9,821 ) ----------- ----------- ----------- Total 188,634 829,771 631,316 ----------- ----------- ----------- Balance of Project funds 20,229 20,229 18,609 ======= ======= ======= 4 --- SEND-GHANA MAKING THE BUDGET WORK FOR GHANA GPSA GRANT #: TF018055 PROJECT COST SUMMARY FOR THE YEAR ENDED DECEMBER 31, 2018 2018 2018 2017 IDA Current year Cumulative Cumulative expenditure expenditure expenditure to date US$ US$ US$ Operating costs 86,588 404,336 317,748 Consulting 16,274 61,849 45,575 Training 45,245 196,711 151,466 Goods 7,416 7,416 Others 40,527 159,459 118,932 Exchange gain and others (9,821 ) ----------- ----------- ----------- Total 188,634 829,771 631,317 ======= ======= ======= 5 SEND-GHANA MAKING THE BUDGET WORK FOR GHANA PROJECT GPSA GRANT #: TF018055 STATEMENT OF FINANCIAL POSITION AS AT 31ST DECEMBER 2018 2018 2017 Project expenditure Notes US$ US$ Operating costs 404,336 317,748 Consulting 61,849 45,575 Training 196,711 151,466 Goods 7,416 7,416 Others 159,459 118,932 ----------- ----------- 829,771 641,138 ======= ======= Current assets Cash & bank balances 5 20,229 16,759 ---------- ---------- 20,229 16,759 ---------- ---------- Current liabilities Expenses incurred but not claimed 6 7,972 Net assets 850,000 649,925 ======= ======= Represented by International Development Agency (IDA) Grant 4 850,000 649,925 ----------- ----------- 850,000 649,925 ======= ======= The finan~tl~e~s on pages 4 to 9 were approved on behalf of the Project Management .:2.. on .. J:..:'9.1~..~ 2019 and signed on its behalf by: / Director /A~H Director ~ /~~ Name I )~-rV2CMO.tt Namefj7~~ C Name: , . Name: . 6 --- SEND-GHANA MAKING THE BUDGETWORK FOR GHANA PROJECT GPSA GRANT #: TF018055 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 201-8 1. Making the Budget Work for Ghana Project a) Financing agreement A Grant Agreement Number TF018055 was signed between SEND-GHANA and the International Bank for Reconstruction and Development (I BRD)/I nternational Development Agency (IDA) of the World Bank on October 22, 2014 for a grant of eight hundred and fifty thousand United States Dollars (US$850,OOO) to assist in financing the project (Making the Budget Work for Ghana Project). b) Project description The objective of the Project is to improve access and quality of services in priority programs in health and education sectors in approximately thirty (30) poor districts in Ghana by strengthening accountability and transparency in the budget process by 2018. The Project consists of the following three parts: Part one: Establishing Enabling Environment for Social Accountability in Ghana Part two: Integrating Budget Monitoring with Service Delivery Outcomes Part three: Project Management and Knowledge and Learning 2. Accounting policies The following are the significant accounting policies adopted in the preparation of these financial statements. a) The financial statements have been prepared under the historical cost convention. b) The financial statements are presented in United States Dollars (US$) which is the reporting currency for the financial statements. • Transactions and balances Transactions in foreign currencies are converted at the rate ruling on the day the transaction took place. Current assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the statement of financial position date and property, plant and equipment translated at the rate of exchange ruling at the time of acquisition. 7 SEND-GHANA MAKING THE BUDGET WORK FOR GHANA PROJECT GPSA GRANT #: TF018055 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31,2018 Gains or losses arising on foreign currency transactions are credited to or charged against recurrent expenditure in the period in which they arise. Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, when it is probable that the future economic benefits associated with the item will flow to the Project and the cost of the item can be measured reliably. All other repairs and maintenance expenditures are charged to the statement of sources and uses of funds during the financial period in which they are incurred. • Depreciation No depreciation is charged in the financial statements. • Income Income is recognised on cash basis and credited directly to the respective donors account. 8 --- SEND-GHANA MAKING THE BUDGET WORK FOR GHANA GPSA GRANT #: T018055 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2018 3 Adjustment on Opening Balance US$ Closing balance for 2017 18,609 Less: Exchange gain 9,821 Opening balance for 2018 8,788 Add: Charges on transfers for three years not reported on the accounts 75 Actual opening balance for 2018 8,863 Exchange gain unrealised computed in the privious report should not reflect in the bank balance at the bank, that is it has to be deducted from reported balance to get the actual opening balance for the year 2018. 2018 2018 2017 4 International Development Agency Current Cumulative Cumulative (IDA) Grant year US$ US$ US$ Prior year adjustment 75 Receipt from IDA 200,000 849,925 649,925 ----------- ----------- ----------- 200,000 850,000 649,925 ======= ======= ======= Prior year adjustment is the charge bank deducted from funds received for the three years. Each year was US$25 deducted from gross amount received but we reported on the net amount. 2018 2017 5. Cash and bank balances US$ US$ Designated account 20,076 10,257 Operational account (Accra Cedi 2) 153 6,503 20,229 16,759 ------ 6. Expenses incurred but not claimed 7,972 7,972 ----- 9 - EGALA AND ASSOCIATES (CHARTERED ACCOUNTANTS & BUSINESS ADVISORS) BRANCH OFFICE 14, Abeka Road P.o. Box441 Tesano-Accra Tamale P.O. Box AN 16626 Tel.: 03720-22549 Accra-North, Ghana Fax.:233 (0) 302 229358 Tel: 233 (0) 302222199 E-mail: enquiry@eaaghana.com 233 (0) 302 26M58 www.eaaghana.com 233 (0) 302 268424 SEND-GHANA MAKING THE BUDGET WORK FOR GHANA PROJECT INDEPENDENT AUDITOR'S REPORT TO SEND-GHANA Report on the designated account We have audited the Designated Account Statement of Making the Budget Work for Ghana Project for the year ended December 31, 2018 set out on page 12, established under the provisions of the Grant Agreement No. TF018055. Project management's responsibility for the designated account SEND-GHANA is responsible for the preparation and fair presentation of the Designated Account Statement in accordance with World Bank financial reporting guidelines. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of the Designated Account Statement 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. Auditor's responsibility Our responsibility is to express an independent opinion on the Designated Account Statement based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards required that we comply with ethical requirements and plan and perform our audit to obtain reasonable assurance that the Designated Account Statement is free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Designated Account Statement. The procedures selected depend on the auditor's judgment, including the assessment of risks and material misstatement of the Designated Account 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 Designated Account 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 project's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the management, as well as evaluating the overall presentation of the Designated Account Statement. We believe that, the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. 10 I PARTNERS: I. EQala E.N. o. Dodoo I A. AbuQri - SEND-GHANA MAKING THE BUDGET WORK FOR GHANA PROJECT GRANT #: TF018055 INDEPENDENT AUDITORS' REPORT TO (CONT'D) Opinion In our opinion Making the Budget Work for Ghana Project funds received from International Development Agency (IDA) through the Designated Account have been properly accounted for and withdrawals were made for the purposes of the project in compliance with the provisions of the Grant Agreement Number TF018055. Alexander Abugri - ICAG/P/1194 Egala & Associates (ICAG/F/2019/135) Chartered Accountants 14 Abeka Road, Tesano POBox AN 16626 Accra North, Ghana .......................... 2019 11 SEND-GHANA MAKING THE BUDGET WORK FOR GHANA GPSA GRANT #: T018055 DESIGNATED ACCOUNT STATEMENT FOR THE YEAR ENDED DECEMBER 31,2018 2018 2017 US$ US$ Opening balance 10,257 77,439 Add remittances during year 200,000 149,975 Total unutilised remittances 210,257 227,414 Less: Transfers to Cedi account 187,000 195,000 Direct dollar expenses 2,428 21,725 Bank charges 754 432 190,181 217,157 Closing balance 20,076 10,257 ======= 12 - EGALAAND ASSOCIATES (CHARTERED ACCOUNTANTS & BUSINESS ADVISORS) BRANCH OFFICE 14, Abeka Road P.O. Box441 Tesano-Accra Tamale P. O. Box AN 16626 Tel.: 03720-22549 Aceta-North. Ghana Fax.: 233 (0) 302 229358 Tel: 233 (0) 30222 2199 E-mail: enqulry@eaa~hana.com 233 (0) 302 26.8458 www.eaa~hana.com 233 (0) 302 268424 VAT Number: 221 V000006 TIN: C00020 10 16X EAA/ 183/20 19 August 30. 2019 The Country Director SEND-Ghana A 28 Regimanuel Estate Nungua Barrier Sakumono - Accra Dear Sir Report on end of project: GPSA/World Bank Project #: TF018055 as at December 31,2018 1.0 We have completed the audit ofGPSA/WorId Bank Project's financial statements for the year ended December 31,2018 and, in the process, examined the principal internal controls which the directors have established to enable it ensure as far as possible the accuracy and reliability of the company's records and to safeguard its assets. We have also examined the reconciliation of the project's funds at the close of the project to assure ourselves of the accuracy of the balance offunds to be transferred to the World Bank. i) Fund balance After reconciling the project accounts, SEND Ghana returned $20,228.72, being the balance of unspent funds - see reconciliation below: Project funds reconciliation US$ Budget/Project funds received 850,000.O() J usti tied expenses 829,771.28 Balance of project funds 20,228.72 We noted that, the bank effected the transfer of the balance of project funds on July 25, 2019 ii) Reconciliation of project funds in Cedi 2 bank account The project's main bank account was the US$ account into which transfers from the World Bank were lodged. For operational purposes, funds from US$ account were transferred into the Cedi Account No.2. At the end of the project, a reconcil iation was carried out to determine the balance of project funds to be transferred back into the US$ account. PARTNERS: I. Egala I E. N. O. Dodoo I A. Abugrl - iii) Project funds in Cedi 2 bank account GHS GHS Cedi Bank Alc 2 - Reconciled cashbook balance at 3111 120 19 544.10 Add: Cedi Petty Cash balance 839.90 1,384.00 Adjustment for: 810.00 a) Refund wrongly deposited into Cedi Account 1 b) Printing and stationery expense paid from Cedi Account I (921.00) - i.e. Adjustment for indebtedness of Project to Cedi Account I (111.00) Balance offunds transferred to Project US$ Account at 311112019 1,273.00 2.0 Those who served as directors in 2018 We noticed that Emmanuel Darko replaced Mike Dzakuma as a director in 2018. However, we did not obtain the documentation required to support this position. The law requires that anyone who serves as a director for any part of a reporting period be disclosed as a director. Moreover, any retirement or appointment of a director must be effected through completing the appropriate forms at the Registrar-General's Department. Kindly provide evidence to support the changes in your directors. 3.0 Conclusion Please let us know what remedial action, ifany, management intends to take in respect of the above. Meanwhile, we take this opportunity to extend our sincere gratitude to all members of staff who co- operated with us during the course of the audit. Yours faithfully £~~~~ ttartered Accountants 2