INTER-GOVERNMENTAL AUTHORITY ON DEVELOPMENT …documents.worldbank.org/curated/en/...REPORT OF THE INDEPENDENT AUDITORS TO INTER-GOVERNMENTAL AUTHORITY ON DEVELOPMENT AND PROJECT MANAGEMENT

INTER-GOVERNMENTAL AUTHORITY ON DEVELOPMENT (IGAD)

IGAD REGIONAL HIV/AIDS PARTNERSHIP PROGRAM SUPPORT PROJECT (IRAPP)

GRANT NO.TF014306

FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 NOVEMBER 2015

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IGAD REGIONAL HTYLAIDS PARTNERSHIP PROGRAM SUPPORT PROJECT

<IRAPP} GRANT NO. TF014306 IMPLEMENTED BY INTER-GOVERNMENTAL

AUTHORITY ON DEVELOPMENT

FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 30 NOVEMBER 2015

Page

1 - 2

3

4 - 5

6

7

8 - IO

11

12

Contents

Background information

Statement of management responsibilities

Report of the independent auditors

Fund accountability statement

Statement of activity in the designated bank account

Notes to the financial statements

Appendix A.2 : Reconciliation of the amounts as received by the Project from

the World Bank with those shown as being disbursed by the World Bank

Appendix A.3: Schedule of withdrawal applications

Appendix A.4: List of assets procured with project funds 13

IGAD REGIONAL HIV/AIDS PARTNERSHIP PROGRAM SlIPPORT PROJECT (ffiAPP> GRANT NO. TF014306 IMPLEMENTED BY INTER-GOVERNMENTAL



BACKGROUND INFORMATION

Organisation

The Intergovernmental Authority on Development (IGAD) superseded the [ntergovernmental Authority on Drought and Development (IGADD) established in 1986 by the then drought afflicted six Eastern African countries: Djibouti, Ethiopia, Kenya, Somalia, Sudan and Uganda. The State of Eritrea was admitted as the seventh member of the Authority at the 4th Summit of Heads of State and Government in Addis Ababa, September 1993.

£GADD was originally conceived to coordinate the efforts of member states to combat drought and desertification. [t then became increasingly apparent that the Authority provided a regular forum where leaders of the Eastern African countries were able to tackle other political and socio-economic issues in a regional context. Realising this, the Heads of State and Government of Djibouti, Eritrea, Ethiopia, Kenya, Sudan and Uganda, at an extraordinary Summit on 18 April 1995, resolved to expand the mandate of IGADD and made a declaration to revitalise IGADD and expand cooperation among member states. The revitalised IGADD was renamed to IGAD.

The Project

In May 2013, the International Development Association (World Bank), acting as an administrator of the trust funds provided by the Foreign Affairs, Trade and Development Canada (FA TDC), awarded £GAD US$ 7,622,380 for the implementation of the !GAD Regional HIV/AIDS Partnership Program Support Project (!RAPP) Grant No.TFOl4306 (the Project). The implementation period of the Project was initially for the period 31 May 2013 to 31 December 2014. This was subsequently extended to 30 June 2015 through a no cost extension dated 19 December 2014.

The Project was designed to help the countries in the !GAD region collaborate on HIV/AIDS interventions for refugees and other cross-border mobile populations (CBMP) to make the efforts of member countries more effective. These efforts are undertaken in partnership with £GAD member countries and with other entities including UNHCR, UNAIDS, UNFPA etc . with funding from the World Bank.

The Project objectives are to:

i) Increase preventative action, and reduce misconception of cross border and mobile populations, refugees, IDPs, returnees and surrounding host communities concerning HIV I AIDS prevention, treatment and mitigation in selected sites in the IGAD member states; and

ii) Establish a common and sustainable regional approach to supporting these populations in the £GAD member states.

The direct beneficiaries of the program are: (a) refugees, IDPs, returnees, and surrounding host communities (in every !GAD country); and (b) vulnerable cross-border and mobile populations. Indirect beneficiaries are those in the region who gain from better health policies, programs, service delivery, and knowledge of the epidemic as a result of cross-fertilization. Capacity building suppo11 would be provided to !GAD to better coordinate the regional effort, in addition to capacity building efforts at the national level for supporting coordination mechanisms.

IGAD REGIONAL HIV/AIDS PARTNERSHIP PROGRAM SuPPORT PROJECT (JRAPP> GRANT NO. TFOl 4306 IMPLEMENTED BY INTER-GOVERNMENTAL



BACKGROUND INFORMATION (CONTINUED)

IRAPP has the following organs:

a) Ministerial Committee on Health and HIV/AIDS (thus including the Ministers in charge of the HIV and AIDS programs in their countries, as in Kenya and Uganda);

b) IRAPP Steering Committee; c) IGAD (Health and Social Services Desk); and d) Program Facilitation Office (PFO).

The Project utilizes IGAD's institutional set up with a PFO in Uganda to facilitate the day-today activities of the Program.

PROJECT MANAGEMENT IGAD Executive Secretary: IGAD Ag. Director Administration and Finance: Programme Manager, Health and Social Development:

PHYSICAL OFFICE AND ADDRESS

IGAD Secretariat, Djibouti Avenue Georges Clemenceau P 0 Box 2653, Djibouti Republic of Djibouti

AUDITORS

KPMG Kenya 8111 Floor, ABC Towers Waiyaki Way P 0 Box 40612, 00100 GPO Nairobi

BANKERS

Bank of Africa Place Lagarde P 0 Box 88 Djibouti

Dahabshil (East Africa Bank) Place du 27 Juin P 0 Box 2022 Djibouti

H.E. Amb. Eng. Mahboub M. Maalim Ali Daher Fathia Alwan

2

!GAD REGIONAL HIV/AIDS PARTNERSHIP PROGRAM SUPPORT PROJECT <TRAPP) GRANT NO. TF014306 IMPLEMENTED BY INTER-GOVERNMENTAL


STATEMENT OF MANAGEMENT RESPONSIBILITIES

Project management is responsible for the preparation and presentation of the financial statements of the !GAD Regional HlV/AIDS Partnership Program Support Project (IRAPP) Grant No. TFO 14306 (the Project) during the period ended 30 November 2015, and notes to the financial statements comprising the fund accountability statement for the period 1 Januaiy 2015 to 30 November 2015, statement of activity in the designated bank account and notes to the financial statements, which include a summary of significant accounting policies and other explanato1y notes on the basis of accounting policies described in Note I.

Management's responsibility also includes: determining that the basis of accounting described in Note 1 is an acceptable basis for preparing and presenting the financial statements in the circumstances, preparation and presentation of the financial statements in accordance with the accounting policies of the Project and for such internal control as management determines is necessaiy to enable the preparation of financial statements that are free from material misstatements, whether due to fraud or error.

Management accepts responsibility for the financial statements, which have been prepared using appropriate accounting policies supported by reasonable and prudent judgements and estimates, in conformity with the requirements of the organisation.

Management is of the opinion that the financial statements have been prepared, in all material respects, in accordance with the basis of accounting described in Note I . Management further accepts responsibility for the maintenance of accounting records, which may be relied upon in the preparation of the financial statements, as well as adequate systems of internal financial control.

In addition, management is responsible for ensuring compliance with the terms of the Project Grant Agreement between Jnternational Development Association (World Bank) and IGAD with respect to the use of funds provided under the grant.

Approval of the financial statements

The financial statements of the Project, as indicated above, were approved by management on 23 December 2015 and are signed on their behalf by:

H.E Amb. Eng. Mahboub Maalim Executive Secretary !GAD

Ag. Director of Administration and Finance IGAD

3

KPMG Kenya Certified Public Accountants 8th Floor. ABC Towers WaiyakiWay PO Box 40612 00100 GPO Nairobi, Kenya

Telephone Fax Email Internet

+254 20 2806000 +254 20 2215695 [email protected] www.kpmg.com/eastafrica

REPORT OF THE INDEPENDENT AUDITORS TO INTER-GOVERNMENTAL AUTHORITY ON DEVELOPMENT AND PROJECT MANAGEMENT

We have audited the accompanying financial statements of the IGAD Regional HIV/AIDS Partnership Program Support Project (IRAPP) Grant No. TFO I 4306 (the Project) set out on pages 6 to 10, which comprise the fund accountability statement for the period 1 January 20 I 5 to 30 November 20 I 5, statement of activity in the designated bank account and notes to the financial statements, which include a summary of significant accounting policies and other explanatory notes. The financial statements have been prepared by Project management in accordance with the accounting policies set out in Note I .

Management's responsibility for the financial statements

Management is responsible for the preparation of these financial statements in accordance with the accounting policies set out in Note 1 and for such internal control as management determines necessary to enable the preparation of financial statements that are free from material misstatements, whether due to fraud or error. Project management is also responsible for determining that the basis for accounting described in Note I is an acceptable basis for preparing the financial statements in the circumstances.

Auditors' responsibility

Our responsibility is to express an 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 relevant ethical requirements and plan and perform the audit to obtain reasonable assurance about 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 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 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.

KPMG Kenya is a registered partnership and a member fi rm of the KPMG network of independent member firms affi liated with KPMG International Cooperative ("KPMG International"). a Swiss entity.

Directors

(British' !

icanadian " I (Spanish • ••1

EE Aholi PC Appleton • BC D'Souza JM Gathecha JI Kariuki DA Leahy ..

4 JG Mirapeix • • • JL Mwaura RB Ndung'u JM Ndunyu AW Pringle'

REPORT OF THE INDEPENDENT AUDITORS TO INTER-GOVERNMENTAL AUTHORITY ON DEVELOPMENT AND PROJECT MANAGEMENT

(CONTINUED)

Basis for Qualified Opinion

Limitation of scope

Project expenditure of US$ 2,500,000 was incurred by UNHCR for implementation of the project and is included in the fund accountability statement. As per the Memorandum of Understanding between IGAD and UNHCR, expenditure incurred by UNHCR shall be audited by UNHCR's Board of Auditors. This expenditure was therefore not subjected to our audit and we were unable to satisfy ourselves as to the validity of these expenses.

Opinion

In our opinion, except for the possible effects of the matters in the basis for qualified opinion paragraph above, the financial statements of the IGAD Regional HIV/AIDS Partnership Program Support Project (IRAPP) Grant No. TF014306 for the period l January 2015 to 30 November 2015 are prepared, in all material respects, in accordance with the accounting policies set out in Note I.

Basis of accounting and restriction on distribution and use

Without further modifying our opinion, we draw attention to Note I to the financial statements, which describes the significant accounting policies. The financial statements are prepared to assist IGAD and Project management comply with financial reporting provisions of the Project. As a result, the financial statements may not be suitable for another purpose. Our report is intended solely for the IGAD Project management and the International Development Association (World Bank), and should not be distributed to or used by other parties.

The Engagement Partner responsible for the audit resulting in this independent auditors ' report is CPA John Ndunyu - P/2100.

Date: 24 December 2015

5

IGAD REGIONAL HIV/AIDS PARTNERSHIP PROGRAM SUPPORT PROJECT <TRAPP) GRANT NO. TFOJ4306 IMPLEMENTED BY INTER-GOVERNMENTAL


FUND ACCOUNTABILITY STATEMENT FOR THE PERIOD ENDED 30 NOVEMBER 2015

I January 2015 to 30 l January 2014 to 31 Note November 2015 December 2014

Opening fund balance

Funds received from the World Bank 2

Other income

Total financing available

Project expenditure

Surplus

Represented by:

Cash and bank balances

Receivables

Creditors and payables

3

4

5

6

US$ US$

2,944,529 939,067

1,074,793 4,488,084

12.926 48 373

4,032,248 5,475,524

(3,934,870) (2.530.995)

211318 2.2441522

27,524 303,361

92,254 2,867,496

( 22,400) ( 226.328)

271378 2.2441522

The financial statements were approved by management on 23 December 2015 and are signed on its behalf by:

H.E Amb. Eng. Mahboub Maalim Executive Secretary IGAD

~Pf-IL"~j Mr.Ali Dk Ag. Director of Administration and Finance IGAD

The notes set out in pages 9 to I 0 form an integral part of these financial statements.

6

STATEMENT OF ACTIVITY IN THE DESIGNATED BANK ACCOUNT

DURING THE PERIOD ENDED 30 NOVERMBER 2015

Account Number: 01102070008

Account Name: I GAD/WORLD BANK ADDITIONAL FINANCING FOR IRAPP

Bank: Bank of Africa

Opening balance as at l January 2015 Transfers from World Bank directly to IGAD during the period l January 2015 to 30 November 2015

Less:

Payments out of designated bank account

Closing balance at 30 November 2015

Note

2

4

The notes set out in pages 9 to l 0 form an integral part of these financial statements.

Amount US$

302,238

1,074,793

( 1,3 71,896)

5.135

7

-· L~~~Wl~

NOTES TO THE FUND ACCOUNTABILITY STATEMENT FOR THE PERIOD ENDED

30 NOVEMBER 2015

1. SIGNIFICANT ACCOUNTING POLICIES

The main accounting policies relevant to preparation of the financial statements are as follows:

(a) Accounting convention

The financial statements have been prepared under the historical cost convention.

(b) Income

Income is recognised when funds are received.

(c) Expenditure

Expenditure is accounted for in the year in which it is incurred.

(d) Receivables

Receivables are recognised in the financial statements when cash payments are made to third parties as advances for project implementation. The balance at the year-end reflects advances that have not yet been accounted for at year end.

(e) Creditors and payables

Creditors and payables are recognised in the financial statements when commitments are made to third parties to be paid at a later date.

( f) Fixed assets

Project assets are expensed in full at the date of acquisition and thereafter tracked through the fixed asset register.

(g) Translation of foreign currency

Transactions in Djibouti Francs or any other currency are translated into US dollars using the exchange rates prevailing at the dates of the transactions.

2. FUNDS RECEIVED FROM THE WORLD BANK

Receipts from the World Bank during the period were as follows:

Date

10 February 2015

I 0 February 2015

12 September 2015

US$

366,572

639,040

69,181

1.074.793

8

NOTES TO THE FUND ACCOUNTABILITY STATEMENT FOR THE PERIOD ENDED

30 NOVEMBER 2015 <CONTINUED)

3. PROJECT EXPENDITURE

Staff costs Other project expenditure

UNHCR Country expenditure

4. CASH AT BANK BALANCES

Designated account Escrow account {note 4 (a) below} Bank of Africa FDJ account Dahabshil account

1 January 2015 to 30 November 2015

US$

267, 162

402,677

2,500,000

765,031

3.934.870

5,135

22,389

27524

(a) The Escrow account holds funds for payment of the audit fee.

1 January 2014 to 31 December 2014

US$

766, 148

1, 153,737

611,110

2!530!225

302,238

(1, 158)

2.281

303!361

9

5. RECEIVABLES

i) Country receivables: These comprise advances to IGAD member states for project implementation that had not been liquidated at period end.

Djibouti

Ethiopia

Kenya

Puntland

Somali land

South Central Somalia

South Sudan

Sudan

Uganda

Subtotal - country receivables

ii) Other Receivables

Uganda PFO

Staff IGAD Migration Project

UNHCR

Subtotal other receivables

Total receivables

1 January 2015 US$

6,297

23,762

133,201

69,181

181

18,323

19,989

24,549

295.483

1 January 2015 US$

5,121

16,821

50,071

2,500,000

2,850,675

2.867.496

6. CREDITORS AND PAYABLES

Accruals Amount due to UNICEF project-funds spent on finance Global Fund Concept

Amounts payable to IGAD

Advances in Liquidated the year in the year

US$ US$ 27,908 34,205

l 02,585 100,592

99,758

18,566 18,566

6,600 75,781

63,461 63,642

105,232 111,417

96,008 104,701

141,442 156,369

561.802 765.031

1 January 2015 to 30 November 2015

US$ 22,400

30 November 2015

US$

25,755

33,443

12, 138

11,296

9,622

92.254

30 November 2015

US$

92.254

1 January 2014 to 31 December 2014

US$

181,332

37,969

7,027

226.328

IO

A.2 Reconciliation of the amounts as received by the Project from the World Bank with those shown as being disbursed by the World Bank

Date

Amounts as per Income Confirmation (disbursed by the World Bank)

US$

16 February 2015

16 February 2015

12 October 2015

366,572

639,040

69,181

1.074.793

A.3 Schedule of withdrawal applications

Withdrawal Application No. Date

Advances to and documentation of designated account

WA13

WA14

WA16

Documentation of prior advances WAIS

WA17

WA18

WA19

16 February 2015

16 February 2015

12 October 2015

16 September 2015

12 October 2015

15 November 2015

3 December 2015

Amounts received by the project

US$

366,572

639,040

69,181

1.074.793

US$

366,572

639,040

69,181

1.074.793

550,481

239,974

237,428

337,806

1.365.689

12

A.4 List of assets procured with project funds

3.1.1 Assets located in Djibouti

Date of Category Identification No. Description of item acquisition Location

Furniture and fittings FF/WB/IRAPP/020 Chair 8/25/2013 Djibouti

Furniture and fittings FF/WB/IRAPP/021 Chair 8/25/2013 Djibouti

Furniture and fittings FF /WB/IRAPP/022 Swivel chair 8/25/2013 Djibouti

Furniture and fittings FF/WB/IRAPP/023 File cabinet 4113/2014 Djibouti Air Conditioner-

Office Equipment OE/WB/IRAPP/006 WestPoint 8/25/2013 Djibouti Air Conditioner-

Office Equipment OE/WB/IRAPP/007 WestPoint 10/02/2013 Djibouti WestPoint

Office Equipment OE/WB/IRAPP/008 REFIGATOR 10/02/2013 Djibouti Air Conditioner-

Office Equipment OE/WB/IRAPP/009 WestPoint 30/09/2014 Djibouti WestPoint

Office Equipment OE/WB/IRAPP/O 10 REFIGATOR 16/04/2014 Djibouti Computer Equipment CE/WB/IRAPP/O 15 Desktop Dell 16/04/2014 Djibouti Computer Equipment CE/WB/IRAPP/O 16 Desktop Dell 16/04/2014 Djibouti Computer Equipment CE/WB/IRAPP/O 17 Desktop Dell 07/10/2014 Djibouti

3.1.2 Assets located in Uganda

Description of Date of Category Identification No. item acquisition Location

LENOVO x240 Computer & Laptop with accessories CE/WB/059 docking station 06/06/2014 Uganda Computer& LENOVOx240 accessories CE/WB/060 Laptop 08/11/2014 Uganda

LENOVOx240 Computer & Laptop with accessories CE/WB/061 docking station 06/06/2014 Uganda

LENOVOx240 Computer& Laptop with accessories CE/WB/058 docking station 06/06/2014 Uganda Computer & HP M401DN accessories CE/WB/062 PRINTER 19/06/20 I 5 Uganda

13

INTER-GOVERNMENTAL AUTHORITY ON DEVELOPMENT …documents.worldbank.org/curated/en/...REPORT OF THE INDEPENDENT AUDITORS TO INTER-GOVERNMENTAL AUTHORITY ON DEVELOPMENT AND PROJECT MANAGEMENT

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