REPUBLIC OF KENYA OFFICE OF THE AUDITOR-GENERAL Enhancing Accourntabilit REPORT OF THE AUDITOR-GENERAL ON KENYA URBAN SUPPORT PROGRAM (IDA CREDIT NO.61340 KE) FOR THE YEAR ENDED 30 JUNE, 2023 STATE DEPARTMENT FOR HOUSING AND URBAN DEVELOPMENT PROJECT NAME: KENYA URBAN SUPPORT PROGRAM IMPLEMENTING ENTITY: STATE DEPARTMENT FOR HOUSING & URBAN DEVELOPMENT PROJECT GRANT/CREDIT NUMBER: IDA 61340 ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED JUNE 30, 2023 Prepared in accordance with the Cash Basis of Accounting Method under the International Public Sector Accounting Standards (IPSAS) 1 Kenya Urban Support Program Annual Report and Financial Statements for the financial year ended June 30, 2023 Table Conte - Page 1. A cronym s and G lossary of T erms............................................................................................... 2. Project Information and Overall Performancev............................................................-.-.-.-.......iv 3. Statement of Performance against Project's Predctermined Objectives.................................xviii 4. Environmental and Sustainability reporting .............................................................................. xx 5. Statement of Project Management responsibilities...................................................................xxi 6. Report of the Independent Auditor on Financial Statements for Kenya Urban Support P ro g ra m ...................................................................................................................................x x iv 7. Statement of Receipts and Payments for the year ended 30th June 2023.................................... 8. Statement of Financial Assets as at 30"' June 2023 ..................................................................... 2 9. Statement of Cashflow for the year ended 30t' June 2023........................................................... 3 10. Statement of Comparison of Budget and Actual amounts for year ended 30' June 2023........... 5 11. Significant A ccounting Policies................................................................................................... 6 12. N otes to the Financial Statem entss.............................................................................................. 4 1 3. A nnexes s........................................................................................................................................ 3 6 13. Annxes.13 itenya urnan 3upporr rrogram Annual Report and Financial Statements for the fihanciatyear ended June 30, 2023 1. Acronyms and Glossary of Terms KUSP Kenya Urban Support Program CBK Central Bank of Kenya ICPAK Institute of Certified Public Accountants of Kenya IMF International Monetary Fund IPSAS International Public Sector Accounting Standards NT National Treasury PFM Public Finance Management. PSASB Public Sector Accounting Standards Board WB World Bank UIG Urban Institutional Grant UDG Urban Development Grant IDA International Development Association CECM County Executive Committee Member CO County Officer FY Financial year IPF Investment Project Financing IDA International Development Association NEMA National Environmental Management Authority IPDU Integrated Projects Delivery Unit LVC Land Value Capture NPCT National Program Co-ordinating team iii Kenya Urban Support Program Annual Report and Financial Stateients for the financial year ended June 30, 2023 2. Project Information and Ovo-all Performance 2.1 Name and registered office Name The project's official name is Kenya Urban Support Program. Objective The key objective of the project is to establish and strengthen urban institutions to deliver improved infrastructure and services in participating counties in Kenya. Address The project headquarters offices are in Nairobi County, Kenya. The address of its registered office is: The Ministry of Lands, Public Works, Housing, and Urban Development State Department of I lousing and Urban Development P.0 Box 34477-00100 Nairobi Telephone number is (254) 340972 The project also has offices/branches in the 45 counties excluding the counties of Nairobi and Mombasa, and to other eligible urban areas within those counties. Contacts: The following are the project contacts Telephone: Contacts: (254)3 340972 iv AlUFAY99 L/I U4914 L74J"1JUf A A I u6f1 "I" Annual Report and Financial Statements for the financial year ended June 30, 2023 Project information and overall performance (continued) 2.2 Project Information Project Start Date: The project start date is 26 July 2017 Project End Date: The project end date is 31 December 2023 (6 years after effective starting date) Project Manager: The Project Coordinator is Mr Charles K'Onyango Project Sponsor: The project sponsor is through a hybrid of the Investment Project Financing (IPF) and Program for Results (P for R) instruments) from the International Development Association (IDA) and counterpart funds from the Government of Kenya (GoK). 2.3 Project Overview Line Ministry/State Department of The project is under the supervision of the State the project Department of Housing and Urban Development in the Ministry of Lands, Public Works, Housing, and Urban Development. Project number IDA 61340 Strategic goals of the project The strategic goals of the project are as follows: (i) Support for the establishment, operationalization and strengthening of the institutional framework for urban management as part of the national level interventions (Window 1) (ii) Strengthening management and administration of urban finances (including conditional grants) in Window 1 (iii) Provision of support for planning, urban infrastructure, and service delivery in Window I v Kenya Urban Support rrogram Annual Report and Financial Statements for the financial year ended June 30, 2023 (iv) Assist County Governments Address Urban Development and Management Issues as part of the county level interventions (Window 2) (v) Ensure Urban institutions are established and operational (UIG minimum conditions are achieved) in Window 2 (vi) Ensure Urban institutions are performing effectively in delivering urban infrastructure and services (UDG performance standards are achieved) in Window 3 Achievement of strategic goals The project management aims to achieve the goals tirougH LIM fulloWing M3ans: Through instItut1onal arrangements at the national, county and urban board levels Other important background The project key objective is to establish and strengthen t ourban institutions to deliver improved infrastructure and services in participating counties in Kenya. Current situation that the project The project was formed to intervene in the following was formed to intervene areas: Establish and strengthen urban institutions to deliver improved infrastructure and services in participating counties in Kenya Project duration The project started on 26h July 2017 and is expected to run until 31" December 2023. vi iienya uroan3 upport irugram Annual Report and Financial Statements for the financial year ended June 30, 2023 Project Information and Overall Perforance (Continued) 2.4 Bankers The following are the bankers for the current year: i) Central Bank of Kenya- DA Account Haille Sellassie A/c No 1000317876 ii) Central Bank of Kenya- Kshs Account Haille Sellassic A/c No 1000396946 2.5 Independent Auditor The project is audited by the Auditor General, Office of Auditor General, P.0 Box 30084 - 00100 Nairobi. 2.6 Roles and Responsibilities Names Title designation Key Responsibilities qualification Charles K'Onyango Programme Coordinator Registered Overall programme Planner coordination. Solomon Ambwere Deputy Programme Coordinator, Registered Deputy to programme KUSP Head in Urban Planning Planner coordinator, and Urban Management Management of Urban Planning Daniel Sakwa KUSP Head of Institutional Land Management of Development and Management Surveyor component I activities Support Eng.Charles Head of Infrastructure Registered Management of Mutunga Management Engineer Infrastructure Services Patrick Gachanja Head of Grants Management Chief Management of Economist Grants Purity Tharamba Programme Accountant Certified Accounting and Public Financial Management Accountant Mercy Kimani Deputy Head, Urban Planning Urban Management of Urban vi Aenya urban support jrogram Annual Report and Financial Statements for the financial year ended June 30, 2023 and Urban Planner and Planning Management Surveyor - Francis Owade Deputy Head, Infrastructure Architect Social safeguards - -_ Management Simon Wekesa Deputy Head, Institutional Economist Monitoring and Development and Evaluation Management Kenneth Nyaseda Program Environmental Officer Registered Environmental planner Ann Wamuyu Program Finance Officer Finance Finance Monica Odeny Program Procurement Officer Procurement Procurement 2.7 Funding summary The Proiect is for duration of 6 years from 2017 to 2023 with an approved budget of US$ 320 million equivalent to KShs 32,822,400,000 as highlighted in the table below: viii 'С о � W '" � N оо N � о о о� о С> О Q � N � � N � М � м � � �? N � •--� д � � � t�„ � � � �О м � � А � � � � й � � � °O °° И .-ч О О � ^ � � � .М.� N � � � М � N N И � М � � � О �}' tt О О у м М � Z7 V �J � -� N l� G'1 q •� О С� N и � � � N Й М L � � N •--� М �U �ь+ А :i М � и �' О I,7 � � �1, � N � � > 'b � о � � Й С��. � � 'й � у � � .� с�д � � ,b О L, �, V � � • ^' и ОА � S� � � � � са °� �i.� � � N j''�' � с� С � � N Сд � � 4-� С � ° � О� � с>б .� й О сб с>ц �t' с>б � О О N с+--�б рр i� И�.� U N..D �.�'i И.L � V'1 О� r-� Г� [� Ly b � � � � .� � cv � _ � � у > � •� �.v., «. '� � а� .С � Я Nь.� с� -�7 А. �� Ч-ч � С1' С�А О и'д С � � i. О ,� .� у � � -� О ,� О 'д `�-' j � � � � � ' � j � , й й � ,s � � +--� � � . � � О �О � �. � � � Сб � � � �'�' � � � Сб N ��,, N � � aN-+ С/� ` � "' Н р � �t.., L.��..s� й О � � �+-, � c..r '� 'D О о � � .D с.-r н-i ,G сб сб г� N р� сб z са сб О.� �.� > � сб �.� N . i О м а� = С � � '� к v � �' �,' � ' к С и N .� � > � ?1 •,й � '� � 'ГJ � 'CJ � 'b '' U � �-+ �"' CJ U О N. С� '��' ..-U. с�б , U с� ��-, Н О � � � °�`�� W� W� � � у и � у 't7 ,w � й � и � � � � д' � � r .� � 'б у У � � � ? 'у U .� > f-, с~б � у � �'' - j � сиб ^д �-�+ сЛб .. � �J й f].' c�i ¢' с,�''� � � О Е-�+ й .С [� .� .� � .� с'�.. � � й � •r � .� �.., О U bA � '� 4� сиб ,-, С% �• С О й ,b и ,b н .�и, � й •Г1 N � (� . q' � f]. � � � � сб � � � � � � � +' О � Q Ч-� � � й с+�б � N с� О О � Q' b�A N '��' О.� о�г, к '3 � o�b �.•�� й �,� � > �•�, о _ � а�4, R' � у сС U 'д � � � � � � � '� � й � � � � � � ..С� U � ,�.., О N ^С � � � ь�" сб '� ы � С .� 'д � N 'О � � � > � � и с� с�д � 'b � 'b N N � }' � U 'д � й 'гJ � 4� � о о � � >,� � �м� й,�.� � �,�и. � ��..,.� � г�� °�' �•� � �w�,•� С гу � с��' °Н s� Q � од пs � � с�д' N U � с� . � ``� � � у.., °) � `� . г' °� �-. с� ~ ,о о, 'о ._о Q., � р, � -д � � .о � � �.. °},' ..о г� � � .д о ;.� .д � � � и � � � j � 3 д; � � i � � л� � i � : � Q. . � � � � й � гл � � � й � ° � � � � � � С о � � а� � � рд Aenya Urban Siipport Frograin Annual Report and Financial Slatementsfor thefinancial year ended June 30, 2023 4. Environmental and Sustainability reporting 1. Sustainability strategy and profile The Government is committed to sustaining the gains realized under the Kenya Urban Support Program (KUSP). In particular, the State Department for Housing and Urban Development will continue to provide technical support to county governments and their urban entities especially in matters relating to urban management and development. The State Department will also continue collaboration with county governments in provision of' strategic urban infrastructure (including markets) in line with the Bottom-up Econornic Transformation Agenda (BETA) in order to catalyse local socio-economic development and improve service delivery in the urban areas. Additionally, the Government is committed to implementing the Building Climate Resilience for the Urban Poor (BCRUP) initiative of the United Nations to improve the living conditions of the urban poor. Further, the Government intends to develop enabling infrastructure and socio-economic facilities, mostly in urban areas, to support the Affordable Housing Program, thereby augmenting the infrastructure development achieved under KUSP. 2. Environmental performance The Program has in-built mechanisms to ensure adherence to the Environmental Management and Coordination Act (1999) as well as the NEMA regulations in all its infrastructure investment projects. This is to ensure environmental soundness and sustainability. 3. Employee welfare All participating municipalities are required to ensure that their contractors strictly adhere to the provisions of Occupational Safety and Health Act (2007) and the applicable regulations in as far as employee safety and welfare are concerned. Further, other legal requirements on gender equality, mainstrearning of special needs groups (PLWD's, marginalized and vulnerable groups) are adhered to. 4. Market place practices- All procurement activities are undertaken in strict compliance to the Public Procurement and Asset disposal act, 2015 as well as the Bank guidelines to ensure transparency, fairness. xx 1XVIrAyga tit Uig! L7JJpJuI g A I ",51 £11ig Annual Report and Financial Statements for the financial year ended June 30, 2023 5. Statement of Project Management responsibilities The Principal Secretary for the State Department of Housing and Urban Development and the Project Coordinator for Kenya Urban Support Programme are responsible for the preparation and presentation of the Project's financial statements, which give a true and fair view of the state of affairs of the Project for and as at the end of the financial year (period) ended on June 30, 2023. This responsibility includes (i) Maintaining adequate financial management arrangement and ensuring that these continue to be effective throughout the reporting period, (ii)Maintaining proper accounting records, which disclose with reasonable accuracy at any time the financial position of the project, (iii)Designing, implementing and maintaining internal controls relevant to the preparation and fair presentation of the financial statement, and ensuring that they are free from material misstatements, whether due to error or fraud,(iv) safeguarding the assets of the project, (v)Selecting and applying appropriate accounting policies and (v)Making accounting estimates that are reasonable in the circumstances. The Principal Secretary for the State Department of Housing and Urban Development and the Project Coordinator for Kenya Urban Support Programme accept responsibility for the Project's financial statements, which have been prepared on the Cash Basis Method of Financial Reporting, using appropriate accounting policies in accordance with International Public Sector Accounting Standards. The Principal Secretary for the State Department of Housing and Urban Development and the Project Coordinator for Kenya Urban Support Programme are of the opinion that the Project's financial statements give a true and fair view of the state of Project's transactions during the financial year/period ended June 30, 2022, and of the Project's financial position as at that date. The Principal Secretary for the State Department of Housing and Urban Development and the Project Coordinator for Kenya Urban Support Programme further confirm the completeness of the accounting records maintained for the Project, which have been relied upon in the preparation of the Project financial statements as well as the adequacy of the systems of internal financial control. xxi Kenya Urban Support Program Annuital Report and Financial Statements for the financial year ended June 30, 2023 The Principal Secretary for the State Department of Housing and Urban Development and the Project Coordinator for Kenya Urban Support Programme confirm that the Project has complied fully with applicable Government Regulations and the terms of external financing covenants, and that Project funds received during the financial year/period under audit were used for the eligible purposes for which they were intended and were properly accounted for.. xxii -e2rlnual RCeport and Fi al Statements,for thefibancia year ended June 30, 2023 Approval of the Project Financial Statements he Project financial statements were approved by the Principal Secretary for the State Department of H~ousing and Urban Developlent and the Project Coordinator for ]Kenya Urban Support Programme on 2023 and signed by: Mr. Charles M. inga, CBs Charles K'Onyango Purity Tharamba Principal Secretary Project Coordinator Project Accountant ICPAK M/No:32054 xxiii REPUBLIC OF KENYA ,eephone: +254 (20) 3214000 HEADQUARTERS c-mail: info@oagkenya.go.ke Anniversary Towers Website: www.oagkenya.go.ke Monrovia Street OFFICE OF THE AUDITOR-GENERAL P.O. Box 3oo84-00100 Enhancing Accountability NAIROBI REPORT OF THE AUDITOR-GENERAL ON KENYA URBAN SUPPORT PROGRAM (IDA CREDIT NO.61340 KE) FOR THE YEAR ENDED 30 JUNE, 2023 - STATE DEPARTMENT FOR HOUSING AND URBAN DEVELOPMENT PREAMBLE I draw your attention to the contents of my report which is in three parts: A. Report on the Financial Statements that considers whether the financial statements are fairly presented in accordance with the applicable financial reporting framework, accounting standards and the relevant laws and regulations that have a direct effect on the financial statements. B. Report on Lawfulness and Effectiveness in Use of Public Resources which considers compliance with applicable laws, regulations, policies, gazette notices, circulars, guidelines and manuals and whether public resources are applied in a prudent, efficient, economic, transparent and accountable manner to ensure that the Government achieves value for money and that such funds are applied for the intended purpose. C. Report on Effectiveness of Internal Controls, Risk Management and Governance which considers how the entity has instituted checks and balances to guide internal operations. This responds to the effectiveness of the governance structure, the risk management environment and the internal controls developed and implemented by those charged with governance for orderly, efficient and effective operations of the entity. An unmodified opinion does not necessarily mean that an entity has complied with all relevant laws and regulations and that its internal controls, risk management and governance systems are properly designed and were working effectively in the financial year under review. The three parts of the report are aimed at addressing the statutory roles and responsibilities of the Auditor-General as provided by Article 229 of the Constitution, the Public Finance Management Act, 2012 and the Public Audit Act, 2015. The three parts of the report, when read together constitute the report of the Auditor-General. REPORT ON THE FINANCIAL STATEMENTS Qualified Opinion I have audited the accompanying financial statements of Kenya Urban Support Program (IDA Credit No.61340 KE) set out on pages 1 to 43, which comprise of the statement of Report of the Auditor-General on Kenya Urban Support Program (IDA Credit No.6134 KE) for the year ended 30 June, 2023 - State Department for Housing and Urban Development financial assets as at 30 June, 2023, and the statement of receipts and payments, statement of cash flows, and the statement of comparison of budget and actual amounts for the year then ended, and a summary of significant accounting policies and other explanatory information in accordance with the provisions of Article 229 of the Constitution of Kenya and Section 35 of the Public Audit Act, 2015. I have obtained all the information and explanations which, to the best of my knowledge and belief, were necessary for the purpose of the audit. In my opinion, except for the effects of the matter described in the Basis for Qualified Opinion section of my report, the financial statements present fairly, in all material respects, the financial position of the Kenya Urban Support Program (KUSP) as at 30 June, 2023, and of its financial performance and its cash flows for the year then ended, in accordance with International Public Sector Accounting Standards (Cash Basis) and comply with the Financing Agreement between the International Development Association (IDA) and the Republic of Kenya dated 14 September, 2017 and the Public Finance Management Act, 2012. In addition, the special account statement presents fairly, the special account transactions and the ending balance has been reconciled with the books of account. Basis for Qualified Opinion Inaccuracy in the Financial Statements The statement of receipts and payments reflects Kshs.30,709,823,476 and Kshs.30,522,309,950 in respect of total cumulative receipts and payments respectively. However, the funding summary reflects Kshs.30,465,530,774 and Kshs.30,240,206,734 in respect of sources and application of funds respectively resulting to unexplained variances of Kshs.244,292,702 and Kshs.282,103,216 respectively. In the circumstances, the accuracy of the cumulative receipts and payments amounting to Kshs.30,709,823,476 and Kshs.30,522,309,950 respectively could not be confirmed. The audit was conducted in accordance with International Standards of Supreme Audit Institutions (ISSAls). I am independent of the Kenya Urban Support Program Management in accordance with ISSAI 130 on Code of Ethics. I have fulfilled other ethical responsibilities in accordance with the ISSAI and in accordance with other ethical requirements applicable to performing audits of financial statements in Kenya. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my qualified opinion. Key Audit Matters Key audit matters are those matters that, in my professional judgment, are of most significance in the audit of the financial statements. There were no key audit matters to report in the year under review. Report of the Auditor-General on Kenya Urban Support Program (IDA Credit No.6134 KE) for the year ended 30 June, 2023 - State Department for Housing and Urban Development 2 Other Matter 1. Pending Bills Note 1 of other important disclosures and Annex 4a to the financial statements reflect pending accounts payables (pending bills) balance of Kshs.1 1,682,114 owed to suppliers of goods and services as at 30 June, 2023. Failure to settle bills during the year to which they relate to adversely affects the provisions of the subsequent year to which they will form a first charge. 2. Unresolved Prior Year Matters In the audit report of the previous year, several issues were raised under the Report on Lawfulness and Effectiveness in Use of Public Resources and Report on Effectiveness of Internal Controls, Risk Management and Governance. However, the Management has not resolved the issues or given any explanation for failure to adhere to the provisions of the Public Sector Accounting Standards Board templates REPORT ON LAWFULNESS AND EFFECTIVENESS IN USE OF PUBLIC RESOURCES Conclusion As required by Article 229(6) of the Constitution, based on the audit procedures performed, except for the matters described in the Basis for Conclusion on Effectiveness of Internal Controls, Risk Management and Governance section of my report, I confirm that, nothing else has come to my attention to cause me to believe that public resources have not been applied lawfully and in an effective way. Basis for Conclusion 1. Delay in Implementation of Projects 1.1 Construction of Modern Market and Installation of High Mast Flood Lights in Kericho County The Government entered into a contract for the construction of a modern market and installation of high mast flood lights in Kericho County. The contract was signed on 4 January, 2021 for a project duration of two (2) years at a contract sum Kshs.234,970,538. As at the time of the audit in October, 2023, the project was at 70% completion level with total payments to date amounting to Kshs. 112,351,979.53 or 48% of the contract sum. However, the contract period had lapsed in January, 2023 and the completion of the works was nine (9) months late. Further, an audit inspection revealed that the contractor was on site with pending works which included flooring of the three (3) market buildings, painting, finishes and fixtures and installation of high mast flood lights. In the circumstances, the project was significantly behind schedule and value for money for the expenditure incurred on the project may not be realized. Report of the Auditor-General on Kenya Urban Support Program (IDA1 Credit No-6134 KE) for the vear ended 30 .Jie, 2023 - State Department for Housing and Urban Development 3 1.2 Construction of Kitale Business Centre in Kitale Municipality Trans Nzoia County The Government entered into a contract for the construction of Kitale Business Centre in Kitale Municipality. The Contract was signed on 28 May, 2018 for a project duration of one hundred and four (104) weeks at a Contract sum of Kshs.874,280,383. As at the time of the audit in October, 2023, the project was at 91% completion level with total payments to date amounting to Kshs.637,416,093 or 73% of the contract sum. An audit inspection revealed that the contractor has not been on site since August, 2023 and there were pending works including painting works, electrical works, floor finishes and external road works. In the circumstances, the project is significantly behind schedule by more than three (3) years and value for money for the expenditure incurred on the project may not be realized. 1.3 Upgrading of 64 Stadium in Municipality of Eldoret The Government entered into a contract to upgrade the 64 Stadium in Eldoret Municipality. The contract was signed on 9 April, 2021 for a period of sixty (60) weeks at a contract sum of Kshs.1,163,563,926. As at the time of the audit in October, 2023, the project was at 60% completion level with total payments to date at 59% of the contract sum. However, an audit inspection revealed that although the contractor was on site, there were some pending works including the completion of terraces super structure and interior works, paint works, plumbing, electrical works, and completion of the running truck and installation of tartan track. In the circumstances, the project was significantly behind schedule by one (1) year and four (4) months and the value for money for the expenditure incurred on the project may not be realized. 1.4 Construction of Kithomboani Modern Market in Kitui Town (Multi-Year Project) The Government entered into a contract for the construction of Kithomboani Modern Market in Kitui Town which commenced on 25 June, 2019 for a duration of one hundred and twenty (120) weeks at a contract sum of Kshs.351,585,555. An audit inspection carried out in October, 2023 revealed that the contract completion level and total payments were at 85% and 59% (Kshs.208,131,131) respectively. However, there some pending works including flooring and painting, fitting of bulbs, fitting of doors, washrooms and power connection. Further, the project had stalled and the contractor was not on site. The project was significantly behind schedule and value for money for the expenditure incurred on the project may not be realized. 1.5 Development of Afraha Stadium in Nakuru County Review of records revealed that the contract was signed on 15th December, 2020 for a duration of sixty (60) weeks with a completion date of 9th February, 2022 at a contract sum of Kshs.651,821,905. Report of the Auditor-General on Kenya Urban Support Program (IDA Credit No.6134 Kk) for the year ended 30 June, 2023 - State Department /or Housing and Urban Development 4 As at the time of the audit in October, 2023, the project was at 87% completion level with pending works which included pavilion final finishes, running track, tartan installation and completion of the underground water tank. Further, the total payments for the contract was Kshs.606,235,704 or 93% of the contract sum. Although the contractor was on site and the project had been granted an extension to be completed by 20 November, 2023, there has been a delay of one (1) year and eight (8) months. Management did not provide an explanation why the contractor had been paid more money than the actual completed works. In the circumstances, the value for money for the expenditure incurred on the project may not be realized. The audit was conducted in accordance with ISSAI 4000. The standard requires that I comply with ethical requirements and plan and perform the audit to obtain assurance about whether the activities, financial transactions and information reflected in the financial statements are in compliance, in all material respects, with the authorities that govern them. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my conclusion. REPORT ON EFFECTIVENESS OF INTERNAL CONTROLS, RISK MANAGEMENT AND GOVERNANCE Conclusion As required by Section 7(1)(a) of the Public Audit Act, 2015, based on the audit procedures performed, I confirm that, nothing has come to my attention to cause me to believe that internal controls, risk management and governance were not effective. Basis for Conclusion The audit was conducted in accordance with the International Standards for Supreme Audit Institutions (ISSAls) 2315 and 2330. The standards require that I plan and perform the audit to obtain assurance about whether effective processes and systems of internal controls, risk Management and overall governance were operating effectively in all material respects. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my conclusion. REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS As required by International Development Agency (IDA) and the Financing Agreement, I report based on my audit, that: i. I have obtained all the information and explanations which, to the best of my knowledge and belief, were necessary for the purpose of the audit; ii. In my opinion, adequate accounting records have been kept by the Project, so far as appears from the examination of those records; and, iii. The Project's financial statements are in agreement with the accounting records and returns. Report of the Auditor-eneral on Kenya Urhan Support Program (IDA Credit No-6134 KE) jrw the year eiided 30 June, 2023 - Stale DepartmentjforHousing and (rhan Development 5 Responsibilities of Management and those Charged with Governance Management is responsible for the preparation and fair presentation of these financial statements in accordance with International Public Sector Accounting Standards (Cash Basis) and for maintaining effective internal controls as Management determines is necessary to enable the preparation of financial statements which are free from material misstatement, whether due to fraud or error, and for assessment of the effectiveness of the internal controls, risk management and overall governance. In preparing the financial statements, Management is responsible for assessing the Project's ability to continue to sustain its services, disclosing as applicable, matters related to sustainability of services and using the applicable basis of accounting unless Management is aware of the intention to terminate the Project or cease operations. Management is also responsible for the submission of the financial statements to the Auditor-General in accordance with the provisions of Section 47 of the Public Audit Act. 2015. In addition to the responsibility for the preparation and presentation of the financial statements described above, Management is also responsible for ensuring that the activities, financial transactions and information reflected in the financial statements are in compliance with the authorities which govern them, and that public resources are applied in an effective way. Those charged with governance are responsible for overseeing the Project's financial reporting process, reviewing the effectiveness of how Management monitors compliance with relevant legislative and regulatory requirements, ensuring that effective processes and systems are in place to address key roles and responsibilities in relation to governance and risk management, and ensuring the adequacy and effectiveness of the control environment. Auditor-General's Responsibilities for the Audit The audit objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes my opinion in accordance with the provisions of Section 48 of the Public Audit Act, 2015 and submit the audit report in compliance with Article 229(7) of the Constitution. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISSAls will always detect a material misstatement and weakness when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. In addition to the audit of the financial statements, a compliance audit is planned and performed to express a conclusion about whether, in all material respects, the activities, financial transactions and information reflected in the financial statements are in compliance with the authorities that govern them and that public resources are applied in Report oJ the Auditor-General on Kenya Urban Support Program (IDA Credit No.6134 KE) for the year ended 30 lune, 2023 - State Department/for Housing and Urban Development 6 an effective way, in accordance with the provisions of Article 229(6) of the Constitution and submit the audit report in compliance with Article 229(7) of the Constitution. Further, in planning and performing the audit of the financial statements and audit of compliance, I consider internal controls in order to give an assurance on the effectiveness of internal controls, risk management and governance processes and systems in accordance with the provisions of Section 7(1)(a) of the Public Audit Act, 2015 and submit the audit report in compliance with Article 229(7) of the Constitution. My consideration of the internal controls would not necessarily disclose all matters in the internal controls that might be material weaknesses under the ISSAls. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements caused by error or fraud in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Because of its inherent limitations, internal controls may not prevent or detect misstatements and instances of non-compliance. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate. As part of an audit conducted in accordance with ISSAls, I exercise professional judgement and maintain professional skepticism throughout the audit. I also: * Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for my opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. * Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Management. * Conclude on the appropriateness of the Management's use of the applicable basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Project's ability to continue to sustain its services. If I conclude that a material uncertainty exists, I am required to draw attention in the auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify my opinion. My conclusions are based on the audit evidence obtained up to the date of my audit report. However, future events or conditions may cause the Project to cease to continue to sustain its services. * Evaluate the overall presentation, structure and content of the financial statements, including the disclosures and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. Report of the Auditor-General on Kenya Urban Support Program (IDA Credit No. 6134 KE) for the year ended 30 June, 2023 - State Department for Housing and Urban Development 7 * Obtain sufficient appropriate audit evidence regarding the financial information and business activities of the Project to express an opinion on the financial statements. * Perform such other procedures as I consider necessary in the circumstances. I communicate with Management regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal controls that are identified during the audit. I also provide the Management with a statement that I have complied with relevant ethical requirements regarding independence and communicate with them all relationships and other matters that may reasonably be thought to bear on my independence, and where applicable, related safeguards. AUDITOR-GENERAL Nairobi 22 November, 2023 Report of the Auditor-General on Kenya Urban Support Program (IDA Credit No.6134 KE) for the year ended 30.Iune, 2023 - State Department for Housing and Urban Development 8 и �л о ° оо � v И о �� й � а n и М О м �о о� м_ i д�..� 00 г�1 н �� � _ 'С О� [� О 00 I� N М М И �У И О� 7�•С О О О U Й (� N Or0 у С�v �� й. � V' М h .-• N И .в �'� R„ �'`'' Ч � � м N оо о �,� й V.С д и N М � w о о И N г°� v°° �° ° ' `° � �,,, �, '• и М о� ц. � й с, � � v•`'�.I � о с� .-. �д �'� +� ~ 4> е� М N � и о и о� �ч" r1„ ti У И О� �f � �.�..� � �CS w�i � n N й°� � оо ';"'�'� о и'w ;а ,С cv v и v, �t .� �� р� о � v й ,� •v У н Я � �' i �'1 ic � с� � У С � С 'С ' ' i � i � � � ' Cj д �"'' м С Q, C�i �,�.� ° с�д � о о т� w еа � �, м .с г� I � й���� С.в и � i]. `,� � д+" � � �(у С с� о � � � � � � �� оо о оо � о � � оо � �' ,� � С�� .� й м � � ,� О� t-+ •� � р-1 q�,+ � "r ..�. ^ �U [� и :д В, N N � О о и О и О� � • ру C�„i n,U,� ,� �� w� , L г� 0 М N �О и О� t7 V � '� с? С � � �h � "° '� � " '� �v � � � N й а' � � � 4 •� � � �1; с�д д. �.G aCi � ,� cv v in ._' и v ��� а� 1 м N � � « � .� и eV •.. � с, о о � � � � �l у о�о � р �� О н 0�0 PJ { о а О � и n н оо г� о� �д .� ` `. � '� � � о N сич й° о °''"° ���д •,� р. С � � у � � ОС Q� �� � N О N � У С � О Е� �и,, оо .r Е , у С v � М � i; � р� 4� � � � у 'b и i i i , � ��: � С Й � .-ч � � ��� � i i , , и /-�`: р � � � ы 'г7 �, � � л � й . � �ё/,'i � р "� У v � С~ ч.и.. .Q Сй й � �� � � Й� q пг �С � � О о ;� С >' w^ •.` с`• �.^�,,,�, о `_ � � � � � м м и о°о о � ~ ,� и С:� � О И у � ь„ ''"' д^' ^� �о" о; �д й� о t� оо ��. � U � й v О. ы о у ^1 о н гv � гv о ... � Г°�� L' .� С� Ч , у ,� '� ��� о и г- н оо г� о �о �о l-.�- L и °U' � м д�'� � � � � ,�°', о v iч с� о� (�"�.�: .С ° �• V й � � �i ед G � � a�i N � оо о� � � � о �!� ;: С, Аа С4 С О •w �О +1^' '� +ч Е у � � у � � � h � • � � � 1 � � 7 ^ м и оо rn � � С w�, :� � �.,• `r `j :б � ,� гл 4! � �' и д. '`� С`'i .С .+-+ гv о ^' �о v а � : й v, Zг �� гд с� 'L" � ,,, V С � •c��i � � � � � С С •� � � �j +• �+ � � '�`� р •� � �, � ° � � � � � � у� ° � � .� � .� � л � � о � r С � й•° �`; � о С� С� ?`,.+ � � сд и С и CL � � � � � � о � С7 � о с � w � � ,� s�. -С С,r j сА"i *' � к � о°о о о а°i � � г� aui � 4� ' f�i +' ,� � у и О � � Е'О � 3. и С�•'Ч' i.r С/� и � и�+ 0 и ?� V С`�+ '1 L+ а. � О и а� С й'.... �, cR й О Ri Сб � ч � С а й�k1 у � д м г_л w С� V .С .fl. С/] ,� 4i V � �' � и � � � л U � д у О. Сб V U Q� .� Й� � м � ;`� tY F.� � Е�-� л: л�. Q Е� Еу й �, '�� а Са'. с' с.� b а о о A-I&Y$S " f UiLft 0 UPPUrl rrograM A n nual Report and Financial Statenzentsfor thefinancial Year ended Jun e 30, 2023 8. Statement of Pnapcial Assets as at 30"1 June 2023 Description Note 22 002222/22002233 2021/2022 KK ss hh ss Kshs Financial Assets Cash and Cash equivalents Bank Balances I LA 199,840,939 90,222,048 Cash Balances 11. D Total Cash and Cash equivalents 199,840,939 90,222,048 Imprests and Advances 12 Total Financial Assets Represented By Fund Balance Blfwd. 14 90,222,048 239,071,646 Prior Year adjustments :J l 5 - - Surplus/(Deficit) for the Year 109,618,891 (148,849,598) Net Financial Position 199,840,939 90,222,048 The accounting policies and explanatory notes to these financial statements form an integral part of the financial statements. The financial statements were approved on 2023 and signed b .............................. . ...... 4 ......... Mr. Charles M. Hinga, CBS Charles K'Onyango Purity Tharamba Principal Secretary Project Coordinator Project Accountant ICPAK NI/No: 32054 2 Kenya Urban Support Program Annual Report and Financial Statements for the financial year ended June 30, 2023 9. Statement of Cashflow for the year ended 30'h June 2023 Description Notes 2022/2023 2021/2022 Kshs Kshs Cashflow from operating activities Receipts Transfer from government entities 1 74,516,899 147,397,628 Proceeds from domestic and foreign grants 2 Miscellaneous receipts 4 rotal receipts 74,516,899 147,397,628 Payments Compensation of employees 5 Purchase of goods and services 6 (702,825,461) (552,551,416) Social security benefits 7 Transfers to other government entities 9(122,020,000) Other grants and transfers 10 Total Payments (824,845,461) (552,551,416) Net receipts/(payments) (750,328,562) (405,153,788) Adjustments during the year Prior year adjustments 15 Decrease/(increase) in accounts receivable 16 Increase/(decrease) in accounts payable: 17 Net cash flow from operating activities (750,328,562) (405,153,788) Cashflow from investing activities Acquisition of non-financial assets 8 (4,761,680) (19,906,130) Net cash flows from investing activities (4,761,680) (19,906,130) Cash flow from financing activities 3 Kenya Urban Support Program Annual Report and Financial Statements for the financial year ended June 30, 2023 Descriptio;i Notes 2022/2023 2021/2022 Kshs Kshs Proceeds from foreign borrowings 3 864,709,133 276,210,320 Net cash flow from financing activities 864,709,133 276,210,320 Net increase in cash and cash equivalents 109,618,891 (148,849,598) Cash and cash equivalent at beginning of the year 11 90,222,048 239,071,646 Cash and cash equivalent at end of the year 11 199,840,939 90,222,048 The accounting policies and explauiatory notes to these financial statcments form an integral part of the financial statements. The entity financial statements were approved on 2023 and signed 4y: Mr. Charles M. Hinga, CBS Charles K'Onyango Purity Tharamba Principal Secretary Project Coordinator Project Accountant ICPAK M/No:32054 4 섯「· Aenya Urban 5'upportrrogratn Annual Report and Financial Statementsfor thefinancial year ended June 30, 2023 11. Significant Accounf;ng Policies The principal accounting policies adopted in the preparation of these financial statements are set out below: a) Statement of compliance and basis of preparation The financial statements have been prepared in accordance with Cash-basis IPSAS financial reporting under the cash basis of accounting, as prescribed by the PSASB and set out in the accounting policy note below. This cash basis of accounting has been supplemented with accounting for; a) receivables that include imprests and salary advances and b) payables that include deposits and retentions. The financial statements comply with and conform to the form of presentation prescribed by the PSASB, The accounting policies adopted have been consistentiy appiled to aii the years presented. b) Reporting entity The financial statements are for the Kenya Urban Support Program under State Department for Housing and Urban Development. The financial statements are for Kenya Urban Support Program as required by Section 81 of the PFM Act, 2012. c) Reporting currency The financial statements are presented in Kenya Shillings (Kshs), which is the functional and reporting currency of the Project and all values are rounded to the nearest Kenya Shilling. d) Recognition of receipts Kenya Urban Support Program recognises all receipts from the various sources when the event occurs, and the related cash has been received by the Government. 6 Aenya urDan auppon rrogram Annual Report and Financial Statements for the financial year ended June 30, 2023 i) Transfers from the Exchequer Transfer from Exchequer is recognized in the books of accounts when cash is received. Cash is considered as received when payment instruction is issued to the bank and notified to the receiving entity. ii) External Assistance External assistance is monies received through grants and loans from multilateral and bilateral development partners. iii) Other receipts These include Appropriation-in-Aid and relates to receipts such as proceeds from disposal of assets and sale of tender documents. These are recognized in the financial statements at the time associated cash is received. iv) Donations and grants Grants and donations shall be recognized in the books of accounts when cash is received. Cash is considered as received when a payment advice is received by the recipient entity or by the beneficiary. In case of grant/donation in kind, such grants are recorded upon receipt of the grant item and upon determination of the value. The date of the transaction is the value date indicated on the payment advice. v) Proceeds from borrowing. Borrowing includes external loans acquired by the Project or any other debt the Project may take and will be treated on cash basis and recognized as a receipt during the year they were received. 7 Kenya Urban Luppori rrograin Annual Report and Financial Statements for the financial year ended June 30, 2023 Significant Accounting Policies (continued) vi) Undrawn external assistance These are loans and grants at reporting date as specified in a binding agreement and relate to funding for the Project currently under development where conditions have been satisfied or their ongoing satisfaction is highly likely and the project is anticipated to continue to completion. An analysis of the Project's undrawn external assistance is shown in the funding summary. c) Recognition of payments The Project recognises all payments when the event occurs, and the related cash has been paid out by the Project. i) Compensation to employees Salaries and Wages, Allowances, Statutory Contribution for employees are recognized in the period when the compensation is paid. ii) Use of goods and services Goods and services are recognized as payments in the period when the goods/services are consumed and paid for. If not paid for during the period where goods/services are consumed, they shall be disclosed as pending bills. iii) Interest on borrowing Borrowing costs that include interest are recognized as payment in the period in which they incur and paid for. iv) Repayment of borrowing (principal amount) The repayment of principal amount of borrowing is recognized as payment in the period in which the repayment is made. The stock of debt is disclosed as an annexure to the consolidated financial statements. 8 JIU1ityt UYuCtiS Ji4ppVi A 1UgiYLii1 Annual Report and Financial Statements for the financial year ended June 30, 2023 Significant Accounting Policies (continued) v) Acquisition of fixed assets The payment on acquisition of property plant and equipment items is not capitalized. The cost of acquisition and proceeds from disposal of these items are treated as payments and receipts items respectively. Where an asset is acquired in a non-exchange transaction for nil or nominal consideration and the fair value of the asset can be reliably established, a contra transaction is recorded as receipt and as a payment. A fixed asset register is maintained by each public entity and a summary provided for purposes of consolidation. This summary is disclosed as an annexure to the consolidated financial statements. f) In-kind donations In-kind contributions are donations that are made to the Project in the form of actual goods and/or services rather than in money or cash terms. These donations may include vehicles, equipment or personnel services. Where the financial value received for in-kind contributions can be reliably determined, the Project includes such value in the statement of receipts and payments both as receipts and as payments in equal and opposite amounts; otherwise, the contribution is not recorded. g) Cash and cash equivalents Cash and cash equivalents comprise cash on hand and cash at bank, short-term deposits on call and highly liquid investments with an original maturity of three months or less, which are readily convertible to known amounts of cash and are subject to insignificant risk of changes in value. Bank account balances include amounts held at the Central Bank of Kenya and at various commercial banks at the end of the financial year. For the purposes of these financial statements, cash and cash equivalents also include short term cash imprests and advances to authorised public officers and/or institutions which were not surrendered or accounted for at the end of the financial year. 9 Aenya urban 3upport program Annual Report and Financial Statements for the financial year ended June 30, 2023 Significant Accounting Policies (Continued) h) Restriction on cash Restricted cash represents amounts that are limited/restricted from being used to settle a liability for at least twelve months after the reporting period. This cash is limited for direct use as required by stipulation. Amounts maintained in deposit bank accounts are restricted for use in refunding third part deposits. i) Imprests and Advances For the purposes of these financial statements, imprests and advances to authorised public officers and/or institutions which were not surrendered or accounted for at the end of the tinancial year is treated as receivables. This i) iII ccognitior1 of the govcrnm-nt pratc where the imprest payments are recognized as payments when fully accounted for by the imprest or AIE holders. This is an enhancement to the cash accounting policy. Other accounts receivables are disclosed in the financial statements. j) Contingent Liabilities A contingent liability is: a) A possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity; or b) A present obligation that arises from past events but is not recognised because: i) It is not probable that an outflow of resources embodying economic benefits or service potential will be required to settle the obligation; or ii) The amount of the obligation cannot be measured with sufficient reliability. Some of contingent liabilities may arise from: litigation in progress, guarantees, indemnities. Letters of comfort/ support, insurance, Public Private Partnerships, The Entity does not recognize a contingent liability but discloses details of any contingencies in the notes to the financial statements unless the possibility of an outflow of 10 Annual Report and Financial Statements for the financial year ended June 30, 2023 Significant Accounting Policies (Continued) resources embodying economic benefits or service potential is remote. k) Contingent Assets The Kenya Urban Support Program does not recognize a contingent asset, but discloses details of a possible asset whose existence is contingent on the occurrence or non- occurrence of one or more uncertain future events not wholly within the control of the Kenya Urban Support Program in the notes to the financial statements. Contingent assets are assessed continually to ensure that developments are appropriately reflected in the financial statements. If it has become virtually certain that an inflow of economic benefits or service potential will arise and the asset's value can be measured reliably, the asset and the related revenue are recognized in the financial statements of the period in which the change occurs. 1) Pending bills Pending bills consist of unpaid liabilities at the end of the financial year arising from contracted goods or services during the year or in past years. As pending bills do not involve the payment of cash in the reporting period, they recorded as 'memorandum' or 'off-balance' When the pending bills are finally settled, such payments are included in the statement of receipts and payments in the year in which the payments are made. m) Budget The budget is developed on a comparable accounting basis (cash basis), the same accounts classification basis (except for accounts receivable - outstanding imprest and clearance accounts and accounts payable - deposits, which are accounted for on an accrual basis), and for the same period as the financial statements. The Project's budget was approved as required by Law and National Treasury Regulations, as well as by the participating development partners, as detailed in the Government of Kenya Budget Printed Estimates 11 Kenya Urban support rrogram Annual Report and Financial Statements for the financial year ended June 30, 2023 Significant Accounting Policies (Co"tinued) for the year. The Development Projects are budgeted for under the MDAs but receive budgeted funds as transfers and account for them separately. These transfers are recognised as inter-entity transfers and are eliminated upon consolidation. A high-level assessment of the Project's actual performance against the comparable budget for the financial year/period under review has been included in an annex to these financial statements. n) Third party payments Included in the receipts and payments, are payments made on its behalf by to third parties in form of loans and grants. These payments do not constitute cash receipts and payments and are disclosed in the payment to third parties' column in the statement of receipts and payments. o) Exchange rate differences The accounting records are maintained in the functional currency of the primary economic environment in which the Project operates (Kenya Shillings). Transactions in foreign currencies during the year/period are converted into the functional currency using the exchange rates prevailing at the dates of the transactions. Any foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year- end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the statements of receipts and payments. p) Comparative figures Where necessary comparative figures for the previous financial year/period have been amended or reconfigured to conform to the required changes in financial statement presentation. q) Subsequent events There have been no events subsequent to the financial year/period end with a significant impact on the financial statements for the year ended June 30, 2023. 12 11cityllwva tJLyp"Na A 1"4'5t .. Annual Report and Financial Statements for the financial year ended June 30, 2023 Significant Accounting Policies (Continued) r) Prior period adjustments Prior period adjustments relate to errors and other adjustments noted arising from previous year(s). Explanations and details of these prior period adjustments are presented in note xx of these financial statements. 13 Kenya Urban Support Program Annual Report and Financial Statements for the financial year ended June 30, 2023 12. Notes to the Financial Statements 1. Transfers from Government entities These represent counterpart funding and other receipts from government as follows: Cumulative to- Description FY 2022/2023 FY 2021/2022 date (from inception) Kshs Kshs Kshs Counterpart funding through State Department for Ilousing and Urban Development Counterpart funds Quarter 1 Counterpart funds Quarter 2 Counterpart funds Quarter 3 Counterpart funds Quarter 4 74,516,899 147,397,628 4U4,18f/,51) Total (See Annex 3) 74,516,899 147,397,628 404,787,815 Other transfers from government entities Appropriations-in-Aid Total4 14 〕、、件 о и_ � и �- n оо д ^ �о о� �--i � и г� �О и с'� га � 'v o�.i ^м,' г'' vNj^ � � � � � м г- гл о Е и cv о � С -= г'оч м z � � -- - '� С +� су .,. о О „р О С м М "'Су С О г Z О С 'U vл v, � .-+ � сб х N N N Lб У" �О �С N N о��о � Е'" � и � .С � � С � s � о �� � , , , о F. � `� _ �° � и . сд r И `л "О � у и � о � _ б � � � � � �, L .. ,. о � N � � м С м о м О [у N и ' +' � р � ",� о о С.о � С и 0+ � N са >.о.� о � о�о ° о � , N о•ы �� � и о г- у �д roi � °"' � � v cv `о ь- г- ос � � � w � О '-� л � с' •' и � � С С � .� 00 i о �, и с� о� оо С С�- д cv v r s. ^ ,.-� �, � о �:: и °о м м ь� оо о� С Q � �л -- �о •й 'U ,о � > С t� U v и � � н ^ � �" 61 т �' � � � 3 '' `о о о � � r. `'� � f� м еыа .� +� .. о д � � � у cv н U Гr � � L � `. � о о 4/ CL о С '-t О `' � о � � � а� О � Li _ > м а� i .� � А ° b � bq � � ,ti .- � � � � � г� о а� � � и L ,� � = о у ~ �� �+ Qч . "��" У �" � С� :: W �b А ЕСд �~ Я � ULcуΡСΡ,� с А ° � � � �в L � � ы О д О и С n, � `� 4" �° •` °' ? С п� �° � � � � � д � ; �� U � � о о +, � д Z ь. С а о _ � ы ы �, � � � � � С � � ¢ `� � � о � � .°а .�° � � � •`q� z м Г�Н 1 1 � 1 � 1 1 61 .b r� 'С С О � w �+ а' и � � � °- У =° б о о Е ,; о .� U 1 1 1 1 1 1 1 iV � с� а, N й и н у ���j О � х N � %+ О Гу н 1 1 1 1 1 1 1 � а_ � и ш s L У ,� :° о Fo-� ry М г�V � � � � � � � у О � N i, и .д � � О а 'fla У" и ,С N .� � А г � �" � � 'D � (г � �' L � о г �+ и +-. � С � 1 � � 1 1 1 1 � лR � ��U и ^ �� 'С! ,r�, 'L" �„� ^ . и '� v � д w С� i •" ы �"� в+ G, ~ � О � о � " � � � .� � с о � U �ь.� и ,ь+ Й а�+ � � v � � ."с � .у а� � � 3 С+О U �' а и и ОА й ^`� � i�+ �~ ОЛ °� С у гл и `' Z. и м � s 'fl "� � _ ~ у ~ iЧ ^ U � {-. �1-+ 4, '� р � a�i сод `� �р � � С � � -v й �дΡR� sи.. " С� � Г''"�. � N � 4"� й Й С.� С д. F�a>1 � о �С > �; � � а� � �i о '" �� G �DA � [ a�i .J ?, ^ а� � t`�' а •G � �1 .� � � и о, у � у о с� ''' � У у,. у О � -С С р � О �� о А с и < ii. > О Е" `� � z �г � и - - - 1 --- i � � � � � � ы .� Сд и � х , О � ы � L с� о 6 � U N ,� С и � i i i � � i i i � � � N С wСΡ � � � Гв N � о C° гv � м � и � � � � � � � � � � � С,� С � О у � N � 1 о `� гr °" С�+ о м � � а � , � , . , � � � � , � �v � � х� о �� М ии. у е �о � � � � � � а .С � "'~► � � � � � � 1 i � � 1 QJ л � л и и v .р U Х � � с и ~ С � и 61 G GTa С Е, � с� � « °' ,� �"� b а�.+ �4 � 4, i"" � .-. +и Г�'^" � �j � и аиi � С и � С +vч И !] G'" � � ,у С Ч �. � lд G � � у � у �а и с� � V С� � 0 у ы й � b О и V С С � а о °� о � � � �` � > � н RS � а � � � . '�",J' �' й й А 4 � {/1 W v � С1 ь, � U и С ;q ,,, ~ � � С � гиб га b й iд � � и � � � v �` 'О •D 0 с� � О С Q� �� � � гд� О. R. 0. � сд сд � � �,� а '� р, � c�i й � ь.. С С а� � � � � � 4. «�.• � гСд � � • � ' � й n. „� R' � а О � О О О � С С w С 'D п� и N О � ai 0 р О � � ia iд iб А О О � � С3 }' V _С. ' й 3 id � iб С � � д О. ?� � � V U � О О О '� � � •U � Ч • • и и и � Q Z vi А х с� w а ri ci U U :п° О 1 о д ° °° о й `r о о � о '-= °` ? ,-. > и И V �О � r � l� О l� �U о0 � И 00 С) � О _, �О д� � b `. ji О � � � � � ^� О I� Й � р м О� О О И р+ � Q� ,М_, � ^ � ^, N � �I7 -�•+ � Ол0 Ct 7 N �D ,-, рр � N И V � N � м �г+ о г� L� �, � � � � � � ,� л N са � � � � � � � � � м о cv � � г°v а v' о и °` о � N N г^ И � N И И1 С N ,г-� � ар � N '-1 !J --� ЭI Q� гг1 рр � s � � � о� , ^ гл � о' г� о_о N м � и 8 и � ~ � � N � о О � � `l�J� С. � �D N � � '""� о � � м � � N о0 V `р � Q' � (�i � О 00 � � N � И Q� Q� О О � N н О г,� г.� N - о 1 N v � '� о C0 � � ro � �+ � °' .L � � V � .rв � и 1 1 1 1 1 1 1 1 1 1 1 1 1 N 4J ��7.'у � � aS,+ i, С а� о� а С а 'О •С 8 й и � N � О� О о�о р � � � � ,л � г гр �- �^ G� м оо И � � г� � � 00 00 N � � N � � м 00 г`� г�1 � � v,%, н4 � 00 .. .. �6 � � И w�. � �� О о0 г.: „м✓ � � Й О� � Q +�.� '�О � N � 1Ч `� � а � С w � � р iv ei U й � с v +,и,, • � R�., ь• w С у +r С� � и и s а о о v b4 '� � д •� � � U � � � � ш � и`�i и ic .^� � � й ,С й � °' о � � .� с _ и w • v О �У � r�h � й и 'С `� � � и � � �. а. �L'i •� v/ й � •гл ❑ й 'V О. и С i н .� сб и +✓ N � в.� 7 � � С � � д и � о •� � U о U й �д � .., �у � а � а� • и � � � � � а� � •� г7 °� Са. � � ,� С °� . � й а� � �, ...� �,„ � а � > > с,., � й � о�д v • � • � л ia �." О � и с� � с�о Ч-� 0. �' у '° � а~i Е°� с а� � а � 'й дд •�q � ОЛ •У г� � .... n. � О с� � СЛ bbДД С и . GJ у О �О U '�Г'' � � � •й = � �. С '" а � U N � 7 и С U i�q+ �� Z�о А а с°а w � г� й х 5 о w о rz ь �� w Н 1 о w а� � еа � � � .�(/� U� 1�1 1 1 1 1 iV �,иj i� '� о о н � r, и � гг °н �" •� ,л � .t� Е� � � � � � и �ь.+ � N w � .� � о � � ,� Н д., � , , � � � � v w � � � � � � г�, � "b � ,� � о � � cs �, N г� � С. � , � , � � cv г,l �С� О � : �'`� и � � � � � .� � и � � � � � � .� L � А, � W U � � � � � о `� А � р � у�С U � � Oi `� +� ' � � С +и' N b � � � � � � � � и С 1i ,.`л+ � й с�.> у у � О � � � н V � Cr С ✓] а� � ' � � � � сб � 4=-� 4+ � b �� ' й � � � С а й � � r о Gт" гл � •�' v �: а, � � а � � ° 'У с� � �й О а� U э-, �� О О Q„ и й j, С! С и Сл •� � 4: О � "�: � й > � � v ¢' '� r�-� аС� z� А С7� й W� Н о� о � и о о 7 оо rn о оо ;� �а д� о оо ее � .� rn о -� � "`'' `г�°^ rn й о°�о� г� � .b и "J' О "'й � � � N С.� �+ х � � � О м � N �* � о � ° ev _ ° :. � � � й `� �л � О � � с°V Е-� а и � � � � � � ��ч � ^ И Е� а � � и � � � � � м � о w л � `�' � � а о" � м � •° '� � о� � с� � � a�w� ,� м с� о G � � � � о � N � � N � CJ � �О �, о � ,� ,� ,-. � N � .д .s� � � � и � � G"' а � v � � �r С •,у CJ ~ С �_ � > ь.. 4� ^ ' V � � 'д _ р � � � f1' д�д N � � у.и, � � � ' й ,� 'ь+ у �., о С7" nJ S: � й t�. '� � � � V � �' � � О .^�+ � ..�.� v � и с+Jб С и � � � U О +" с� i С � � О � � � �U ' V � (� ы., и � � L1. � � � � N � ,��, � � 4г С V_1 � � о � О ,N� � 3 �'3 о О �Тч `� z "U '-, `� �.., •а 4., �r :� � U а q � с� � и " � й � � �, � � � °' > -° �°ty г, •� � ' �.�. о о� � � Я .q 01 � � ;�; � U N .� , О '� �'i � р„ й � и с> . � ``� �' ��„ •� С1' �гг� ,� и � с� �.. С а' v' � и О д � s�.. V й� w �'г Q' Z о0 А ь� U О 3 '.1�, -N, й Е-� � и С�б � 'О � 0 'ct 'ct р р � � '"'' ^ и �D ,��, й oNO � М � � еб .� � � � Q� N � N N N V и � ' ' .ta и 3 N х о о � а� � � � � cv � � L w � � м и О N � Н О '� - N � � о О О О О л О О О М Г-+ о� о � � .� х � � о '� � � � Zs °о. а "' � � � � аы� � О �" � 'J С� �. 'б N '7'у CCi � О '-' ?, ,,� N .i� U � р н � 1 1 1 � � � д й � .�. � �о х � � 3 � � с� `° � м � � ° N � � `и � о a�i o�i � г`� s � � у д� �° � V с с�'е •^�' ~ � О ,� � л р � а � � М �' Q U � � о � д �О � '�' w О � � � ,.Uб 4, � ;л С� ... +. � .-. � � С о р,� N � � `� � � � j а� . С7 С7 д• 'ZS %� О .� ��ч b ь~+ .-ч > д � � "�" � 3.и. U � и ь� � �-i � С�д �' � �' � А � � " � �' � С 4, � и �'=' и '" � � � � ��'+ о L � � �С7 �С7 � � С +'' (� bП �,� � .� � . . . о ; � � � � � Q ;С с; � Е� � �, о v о � й о � � с й � х � �? с о w й oNO й � м > о й N о � +. Гл О1 N �^ `СУ СС N и N �. г„� � �� сЧ б о и t N И (� М �V � О � �О � N �О N N О� �.нj г� О 00 н а и �t N р О V � � и N V � � � м N � N о -- - - . . . .._..--- .. ._ _ . __ - = о о о � N о � N V1 цJ О О (� гл ��л .�i. G1 .-ч � о0 CV О. � N гл и V � '� М V ^ О ^ � 'JO � � � � и l� � � � м � � Li. V' гл� н С1 1-� � о � � -� и С � Fr � А � � � --- _ _ _ � � '� Lту � � м .° и д � с� .� � � ° � � � � �� �v Н v °� и сд � с7 � :7 � � j � � д � � � � � „ �.. �.. b�• � «� с v v й О с м о � � � ;� � � � 0., �г •,_, С7 U v v i � � .D �а aci -о � � о �L Lt. с Е � _ _ а, 'Ct О а°И� ° о � с с U Q � � • � и с� Сд � Cs � ¢ л � : .°_ i :; .� �.. СЛ и и у � ��_.. Q � у ;.� .� [� �., С3 R. ,.� � И (сд fсд •-' N N U `L С� с ,д ,д � ц, � с i с� � с � ,�„ � -с с :� � � W W � .д et � д � Е х о � � �� � • • � • • .й ~ '� оа,' о ¢ :а U -� 1 1 1 1 1 � I � � ,� С� ,Jии� � b � � � � V N 1 1 1 1 о .� � и N О � ,,иj N н Сб дч � � W 1 1 1 1 и w � � и н � .С� С� � CL м i � i i и N О N и � N �'`1 G .С � и О N � 'О R" � � c�V Сб � ^�б" � � � � '� � � � i i i у и � �. � U и � � .� � � л а� � /�� � ~ F+� :�.�уΡi �!�.� М Vн V � М �� у � � � � R � � N и � °� v � � й U � o�i `� ^С д � q а) +. д сС � � � G и О �д о й � � о �. � �+ � � и � � � (.�.i �1. � N N � � � �J й й '� q'� � � � � � � � р � � о а, .а aR', � а�"i о � ° а°� �. � о � � �� � ч� �� � '.7 � � � '�. � й р � .� �� и й С"� � р н а`'б,+ �� � о А С7 Е-� й� F+ ''�'i Q" �Z .� Kenya Urban Support Program Annual Report and Financial Statementsfor thefinancial year ended June 30, 2023. - Notes to the Financial Statements (Continued) 11. Cash And Cash equivalents Description FY 2022/2023 FY 2021/2022 Kshs Kshs Bank accounts (Note I I A) 199,840,939 90,222,048 Cash in hand (Note I I B) - - Cash equivalents (short-term deposits) (Note I I Q Total 199,840,M40 90 Kenya Urban Support Program has one project account spread within the project implementation area and one foreign currency designated account managed by the National Treasury as listed below: ILA BankAccounts Project Bank Accounts Details FY 2022/2023 FY 2021/2022 Kshs Kshs Forcip,n Currency Accounts Central Bank of Kenya [A/c No. 10003317876] 2051.85 1,232,120.28 Central Bank of Kenya [A/c No. 10003354507] 41.24 41.24 Total Foreign Currency balances -2 1 M LUM61,52 Local Currency Accounts Central Bank of Kenya [A/c No 1000396946] 199,840,939 90,222,048 Total local currency balances 199,840,939 90,222,048 Total bank account balances 25 Kenya Urban Support Program Annual Report and Financial Statements for the finan cial year,ended June 30, 2023 Notes to the Financial Statements (Continued) Special Deposit Accounts The balances in the Project's Special Deposit Account(s) as at 301h June 2023 are not included in the Statement of Financial Assets since they are below the line items and are yet to be drawn into the Exchequer Account as a voted provision. Below is the Special Deposit Account (SDA) movement schedule which shows the flow of funds that were voted in the year. These funds have been reported as loans/grants received in the year under the Statement of Receipts and Payments. Special Deposit Accounts Movement Schedule Description FY 2022/2023 FY 2021/2022 USD USD M/ KENVA URBAN SUPPORT PROGRAMME -IDA 61340 [A/c No 10003178761 1,200,083.1 Opening balance 1,232,120 0 Total amount deposited in the account 4,570,229 2,466,037.1 8 Total amount withdrawn (as per Statement of Receipts & (5,800,297) (2,434,000.00) Payments) Closing balance (as per SDA bank account reconciliation I ,2 attached) (ii) KENYA URBAN SUPPORT PROGRAMME - IDA 61340 IA/c No 1000354507 Opening balance (as per the SDA reconciliation) 41.24 38.24 37,425,835. 00 Total amount withdrawn (as per Statement of Receipts & (37,425,832.00) Payments) Closing balance (as per SDA bank account reconciliation attached) 4L2A (The Special Deposit Account(s) reconciliation statement(s) has (have) been attached as Appendix 1 support these closing balance. 26 Kenya Urban Support Program Annual Report and Financial Statements for the financial year ended June 30, 2023 Notes to the Financial Statements (Continued) 11 B Cash in hand Description FY 2022/2023 FY 2021/2022 KShs KShs Prism Towers Total cash in hand balances There was no cash at the end of the year 11 C Cash equivalents (short-term deposits) Description FY 2022/2023 FY 2021/2022 Kshs Kshs Central Bank of Kenya Total - - There were no short-term deposits at the end of the year 12. Imprests and Advances Description FY 2022/2023 FY 2021/2022 Kshs Kshs Government Imprests Salary advances Total 27 Kenya Urban Support Program Annual Report and Financial Statements for the financial year ended June 30, 2023 Notes to the Financial Statements (Continued) 12A: Breakdown of Imprests and Advances Due Date Balance Balance Name of Officer or Amount of Amount Comaatie Institution Taken S e Surrendered 2022/2023tiv Surrender 2022/2023 FY Kshs Kshs Kshs Kshs Kshs Officer I Officer 2 - Officer 3 Total 13. Deposits and Retention Monies Description FY 2022/2023 FY 2021/2022 Kshs Kshs Retention Deposits Total 14. Fund Balance Brought Forward Description FY 2022/2023 FY 2021/2022 Kshs Kshs Bank accounts 90,222,048 239,071,646 Cash in hand Cash equivalents (short-term deposits) Outstanding inprests and advances Deposits and retention Total 90,222,048 239,071,646 28 Kenya Urban Support Program Annual Report and Financial Statements for the financial year ended June 30, 2023 Notes to the Financial Statements (Continued) 15. Prior Year adjustment Balance b/f FY Adjustments Adjusted balance 2021/2022 (audited b/f financial FY 2020/2021 statements) Description of the error Kshs Kshs Kshs Bank account Balances - - Cash in hand Imprests and advances Deposits and retentions Others (specijy) Total - - 16. Changes in Imprests and Advances Description FY 2022/2023 FY 2021/2022 Kshs Kshs Opening Receivables as at 1st July 2022 Closing account receivables as at 30th June 2022 Change in Imprests and advances - (57,066,293) 17. Changes in Accounts Deposits and Retention m Description FY 2022/2023 FY 2021/2022 Kshs Kshs Deposit and Retentions as at Ist July 2022 - - Closing accounts payables as at 301" June 2022 Changes in deposit and retention - - 29 Kenya Urban Support Program Annual Report and Financial Statements for the financial year ended June 30, 2023 Other Important Disclosures 1. Pending Accounts Payable (See Annex 4a) Balance b/f Additions for Paid during Balance c/f from FY the year the year For FY 2021/2022 2022/2023 Description Ksls Kshs Kshs Kshs Construction of buildings Construction of civil works Supply_of_goods Su _y of services 7,054,118 11,682,114 (7,054,118) 11,682,114 Total 7,054,118 11,682,114 (7,054,118) 11,682,114 2. Pending Staff Payables (See Annex 4b) Balance b/f from . . Balance c/f fYom Additions for Paid during for f FY teyathyerfor FY 2021/20 the year the year 2022/2023 22 Description Kshs Kshs Kshs Kshs Senior management Middle management Union employees Others Total 3. Other Pending Payables (See Annex 4e) Balance b/f Additions for Paid during Balance c/f from FY the year the year for FY 2021/2022 2022/2023 Description _ Kshs Kshs Kshs Kshs Amounts due to National Government entities Amounts due to County Government entities Amounts due to third parties Total 30 Kenya Urban Support Program Annual Report and Financial Statements for the financial year ended June 30, 2023 Other Important Disclosures (Continued) 4. External Assistance FY 2022/2023 FY 2021/2022 Description Kshs Kshs External assistance received as grants - External assistance received as loans - External assistance received in kind- as payment - by third parties Total - a). External assistance relating loans and grants FY 2022/2023 FY 2021/2022 Description Kshs Kshs External assistance received as loans External assistance received as grants Total - b) Undrawn external assistance Purpose for FY 2022/2023 FY 2021/2022 which the undrawn external assistance may be used Description Kshs Kshs Undrawn external assistance - loans Undrawn external assistance - grants Total 31 Kenya Urban Support Program Annual Report and Financial Statements for the financial year ended June 30, 2023 Other Important Disclosures (Continued) c) Classes of providers of external assistance FY 2022/2023 FY 2021/2022 Description Kshs Kshs Multilateral donors Bilateral donors International assistance organization NGOs National Assistance Organization Total d. Non-monetary external assistance FY 2022/2023 FY 2021/2022 Description Kshs Kshs Goods Services Total 32 Kenya Urban Support Program Annual Report and Financial Statenents for the financial year ended June 30, 2023 Other Important Disclosures (Continued) e Purpose and use of external assistance Payments made by third parties FY 2022/2023 FY 2021/2022 Description Kshs Kshs Compensation to employees Use of goods and services Subsidies -_ _ Transfers to other Government entities -_- Other grants and transfers - Social Security benefits -_- Acquisition of assets -- Finance Costs including loan interest - Repayment of principal on domestic and foreign borrowing Other payments Total - __ f External Assistance paid by third parties on behalf of KUSP by Source This relates to external assistance paid directly by third parties to settle obligations on behalf of (the entity This note should tie to line 3 of note 4 on external assistance)). FY 2022/2023 FY 2021/2022 Description Kshs Kshs National government Multilateral donors -_ _ Bilateral donors - - International assistance organization -_- NGOs - - National Assistance Organization Total -__ 33 Kenya Urban Support Program Annual Report and Financial Statements for the financial year ended June 30, 2023 Other Important Disclosures (Continued) 6. Related Party Disclosures Related party disclosure is encouraged under non-mandatory section of the Cash Basis IPSAS. The comprise of related parties to the Project i) Key management personnel including the program director/manager ii) The implementing entity/ministry/ department iii) Other Ministries and Departments. iv) The National Treasury Related party transactions: FY 2022/2023 FY 2021/2022 Kshs Kshs Compensation to Key Management Compensation to the program manager/ director Key Management Compensation others (specify) Total Compensation to Key Management Transfers to related parties Transfers to other govermnent entities Total Transfers to related parties Transfers from related parties Transfers from the Ministry/ department Payments made on behalf of the project by other govt. entities (Insert any other transfers received) Total Transfers from related parties - 7. Contingent Liabilities Contingent liabilities FY 2022/2023 FY 2021/2022 Kshs Kshs Court case xxx against the project Bank guarantees in favour of other govt. entities Contingent liabilities arising from PPPs/ donor agreements Total - 35 и и и и и и и и и и и ci а� а� и N а� г� а� а� а� v � с� с> с> с> с� с� с� v с� с� г� д �о 'о 'о 'о 'о �о 'о �о �о 'о 'о и > > > > > > > > > > > Е .� .S .5 .� .5 .� .� S .� S .� �.. ч.. w �., �... ч.. с... �+-� �.. <..� ч.. 8 о о о о о о о о о о о ° G G а° � с с К а о р U о о о о о о о о о о о �гл �й 'й �й �й �й �й �гл �й 'й 'й и н и н и � и � у и И .� .Е .� .� .� .� .Е .� .� .� .� � л� � д ��л � ..о � 7 7 7 7 7 р о 7 а 7 7 и и и И и и И И и и и � и � � � N N и гJ � N (б (С (д (С (С �С Сд (д (С td (д н✓ r� .- � ы..� м.� ы-� � ы-� ь� н, ь� � � а и с д � �� р � i i � i � � i � � i И сС �> р � L о а ovo о оооо о о orrer � ио�t о оо�о cv И о..н ° }� м г- о �д о м оо о г� о н н а Lz. -� м гл �п о cv г� м�л о о гй г� ^о и�, rn�г� и оо�с�� о v ооооо м °v с°а ° о` �д v --� ni о� о оо �л �о ♦. и � N N �--� .-i �--i Q у n7 � н н ^J ai 7 2� � о и '� м н � � i i i i � i � � � � �+ � О Z'i о � CQ � � � А '+ Q С. S1 .О � - С о� о о о о о о о о о eh � v и о� о о о v о � И о н н � м О �U О г� о0 О I� О н н ~ w' �--� м г�1 И О N I� М И О О N N .С д д и� � и оо � rn� о � о оо х ° б� �D � N О� О о0 �О �D ^' 'bЛ р ~ N N .-ч .--i �--i С ^' ^' �. Е � 04 � т :v � � '� . у о :+ 'b м м м м м м м м м м м � � а и и гv N N N N гч cv cv N N N `�3 �' са.� о оо о о ооо о о о S'. д,н�^,, О `1 N N N N N�V N N N N у С� N N N N N N N N N N N � О.С N N N N N N N N N N N y�j ,_, (, О О О О О О О О О О О �в N N N N N N N N N N N С �i - - - ..� � С � д_ �О '� "С С) � С fZ+ и � � с«, � .v о �+ ° й G °' и ia+ Т'' �и р .L р � и й а' С ^-'�'i и L � �р �1 а� а> � � Сб � и �с С7 С х �--1 гб '�. �" .�G д р "О G су � и U и С'О .� и а� О У �' � о С R. �' ,��, b°д у � и¢, �'�" �' � а� д сд L� � С� р н.. С � j n. .ы.. С � W � � О � L, р гJ 7 сд у�� сд сд � � н � �, � � , � и 3 > °' � ,� 3 � Е~ ь, G Х •b С С и �а а�-о и с� � Е-� � ; д а а � � � � � � � ;с w � � �С �С Q й гл й й д F- '� U а� z w ]С й С7 � а д Е � о U г� � о а � ., г��r ° г°а � Оиог� м � О С � 'D N � G N °' 7 о а, �Н о � w м да.А _ � О N о �v 0 � ° о у� 'Sд о � 'L � ,� о ,� - --- -- � � �� � �� � � й С 1], i � у а+ � Сб О С А U •� - - - � ; С � а � о i а, � � .r � о � `ti ^и- у - -- � � v ,wi„„ � � С и w �� � v � Е а4 а �о ап L о � г C° v � С � о .. с� ., ..� .� w О f'г+ о � о q '� .^и' o��i а°�i аб1i и � � ?� о о о Vj i р а - С�, д с�с W W � � ia � .., ., .., L _ v _ � � G�, .rг г� � , ia v ia са . cv и са н � �, � С С �--� N р С М� р►• �Л �U р и l� оо р О �р � � � � � F � � н � � о �� р еа ai � а`, � а�+ �� 7�' � Q Q Z с. и о. и Е-� и О и С7 о L о " > в`з � ° � N s � � а .� � й � ��., й .s^ о О � с°7 U � U c�i О� О О у О О у О О С.) > v� "" �1 г'�L `" i� О. ` С О � .� о о о � � ° о И М � i �� i � i � О i � о [� vl V'1 � � � V са О � о 11 о 'С а о_ r оо о� а� N `� � о о�о o�i^ й ° ^ ц' о о? N :� � -- м о N � С 1� � � � � � � r � оо О , pN, �� cV l^ � м р М О а� L. г� N [� �! N N N '='� е� N � � � И v � � 'О е.� � а� А N w о �. гЧ �о о �.`�.t о, м cv о � � г. М С и о` м о � ооо о ,� � О q е�а `� о � � н � N � � соч � о ь> � ° � .д ,� t� н оо � о �о � � а `t" � м о v гNч N � �--� ° Е'й �' оо о� г- ос � � Q U РО д с� i Q �, д о о о °о о о оо �. � w, о о о о о о о � � ° о о о о ° о" v � b °о °о � � о � о � ° о° � °о '` � ° са ° cv N о о ° г� � � � о -' t� ,� о ги N ... г� �а � р � .-� � � � 1 � r.� !Ч � С� � ,и а v р � �, и � � и � � � � �r' � У а ++ и Д = �• V � � ь�. и й aCi �у � � � � � у � .. с> G и и> О(у С� ш � bл >' � `� � � q� й � ; о я. °� �° � � о и � � � > � � �� � � � q °л b � У �Е,~,i (7 'G � �.�, и О р � G � Т� � .� С CS Q, р О О р G. р г0 .� О о й � -о � J� � а� �с� �" о '�- с -, ^' Е � о л � � N а, ��`, 'г°� 'e�i =° `� С ° 'и' й = w д а L" � у •v и, г� а� V � Е n. ,� сб '� и ь., � й р ,�, � о о � о са о � о � � s о �,� � 0. [- а а � (-- с, U а гл ¢ F-� О Е- � м - с�д N � N +-�� N � N � г°v а о � о � N ~ N � N � о � о � w � и�., � w � � �, � � .� � о � .�; -° � � 3 3 д ° $ о �'" (-��, !-�..�L.� ,.� � � � �-. +�-' � 'С «� � �,�, N А � V U � 'V bA � � � � Я 'г� _ °' � � � � � х . � G1 � � � � С'Л д b4 р г а � �О �О �_ � г�''. С � � .� И И �"i � � � � i И � j� � ry д �i � � й � [�� и_ V � .С � � ¢' V i � � � р� ,�.� � '�' С' д i м `. � 'b NJ �ч � c' в�i %i �у �-+ "�" � CLi ЧU ,� о д о � � х й 'v� � о � а � 'й Е Q ..�° а о о _� �_ � 1�1 С� '�"А У Т С1 fj.�.� д (� � � о .«, q д ,� � � а a�i � �..., U � и °� � °� � + � � .� � � � � о � �- � � � Q a�i с, sи. � ,и.� � й rл -о � и°.' А � � � � � .� � �а � � и р � +�.� W � ° С �1 О О � й� � � г'' д4 Еу W Е-� Е-� abi м n, � � � с`бi l � � � � � n/�! � � � О � -Гн А 1.�,' � ` � .� и � О С � � � � О и �`" 44i 3.� � !r'С�� О Q, С! С fap С+ +� .s �j ,� О еб С � !,~а О �У � � �.�+ G и > � �а R 'Zt � � г^ ..'""'r С3 о V Г '�.. (�:; � � и �' ,ь' � � � д .�*� i � � о � � � � � � �,� t � о � Z ,у° � � ° � �I�1 С q и [ � 'д � � w �� 1 �� м'о ai > a�i a�i о� о Г�=:� � � ь„ у. о s, .С > U �l �� �� a�i а G4 U' - д О о U --�Э� ' : с � � ,�.-_,.. � '� Q � �1 U Н w `� / �п KenYa Urban Support Prograin 8 Annual Report and Financial Statementsfor thefinancial year elided June 30, 2023 13. Annexes 'Annex 1: Prior Year Auditor-General's Recommendations Timeframe: Reference No. Status: (Pitt a (late on the external Issue / Observations Management comments (Resolved Not opheii Y011 audit Report from Auditor Resolved) expect the issue to be resolved) i) Underfunding: Due to the prevailing fiscal depression, the government may not be able to finance the projections 100% as per the financing agreement. Austerity measures were effected thereby reducing the allocated amounts. However, the total commitment cost of the government remains and will be funded in the Budgetary medium - term as the costs is meant for I control and Monitoring and Evaluation of the project Ongoing perforinance during its useful life. ii) Under-Expenditure It is true that the State Department was not able to utilize 100% of the Approved Budget. This is due to the fact that there were unforeseen events e.g. COVID that affected the Department's operations due to the stringent protocols. i) Of the Kshs. 1,579,673,472 IDA balance, Kshs 450,000,000 was moved from Window I to Window 2 as UIG to support county eligible governments Delayed under KUSP restructuring 2 counterpart effected in June 2021, Ongoing However, the World Bank funding advised that the amount could not be transferred to counties directly as grants, but instead the amount could be utilized on county activities with expenditure and accountability 36 Kenya Urban Su1ppoart Program A iaS entsI the fian cial year ended June j0, 2023 Reference No. Timefram on the external Issue / Observations Status: (Put a date audit Report from Auditor Management comments (Resolved / Not when you Resolved) expect the Issue to be resolved) remaining at the national govemmiinent level, thereby posing implementation challenges, ii) Delays in procurement of some planned consultancy services at national level leading low absorption of Window I funds, iii) Covid-19 containment measures slowed down implementation of Window I activities. iv) Constrained fiscal space limited the allocation of adequate counterpart funds to the program It is true that the department had accounts payables (pending bills) of Kshs. 2,389,600. In compliance with 3 Pthe Public Finance Management Pending bills (National Government) Regulations, Resolved 2015 (42), the State Department ensured that these expenditure items were committed and are being processed through IFMIS. Charles M. Llinga,CBS ChresKOnag Principal Secretary Charles K'Onyango Project Coordinator 37 � а а� б 6 о U tд д г� С б) р +� С � � "�" N о � о� N � я 'о N д � о :° с ''�`� � се н н o�wN � � А с ° ,н о � 6 й д с: О о N 6 о" в м � е, [ � о � � b � : С у и 4� � � ь, ~ � � д С � са о '� AA,U � � � � о L '+'✓ ci F., .а � � � � й О ,� и, а� су с,, � РС1 А � `�' Сб � а � ,,� ~ � V +С С� _ ai � � г� :r �' � с а w � � � w а� � р • �v„ „� > �+ = �., С О С7 ° ;. .,� . � ц. � са � 3' Г' О � i. Г�ч О ^V и о р '° С � '� � � л z й н � д $ $ ° � � р С ty Q � � � а �й �� � б v �v �о q о � и . ёС � . ёд и � и cv '7 ,v V Z � .--� (�J о ° м�t о � Vj �О о й � ор о Е'� �, С а� о � о F о �" ш Н с �.� Q Q й д й � й О й С7 -- - _ - - - -- -- � _ 'F о _ � "D р°q 00 � CQ V 1 �Ci � �в *� v + .-. � о о й �� � + �с �д �л J о ы�.•о t^ � fi � r� .� � v � С � W ^р •р И � U Х •г - --- - ---- --- -- .-- -_ - ---- ,. М � й rv о .s г�-� х г� � г� � ч� : ° � н v с v= v L � ,л � �.., •д в� R - - - -- - - ---- N -- -- - � Г1 �в й � �' .° � � fi _и сС � М � � � с`д о А т гNV � 'ts -к а�.� ьJ � � ф N __ - ___-_ . _-- - -- -_ ',� .. - -_ .- -.-_. ---- _ _ � - -� ------ - �`S .�. ^� � � ° � � � .� � rv �° .. ''� .-ч w и, ry ы ,й м �р �D .Q О О � ° о д' `r V М1 � � гл N �i �i у i•�. t, r N � � р�, ^�о a�i У о а `� � д >- .� ги ... v -- -- - .. �. '� д у � � -- � --- -� - - fi � г�1 - - ,�, �... � � у ... е � у й �л й � ё м � � ° д о �... о � ' :=. О й N �J �, • СЕ 17 �� fi � С! д � (� N � � О и Со-°.Уг,� � � �: . _ - - - - - - - - --- - - --- - � � � - - --- � � � ы ш и � с v О � '�" � U г.� .� ,и од N с� +ы+ С r. N • � � г„ � 'с � N V fi ..� • bD а Vj N �. ' С� `.Z � „N,в � .. N ___ U р> ... .... . _ ..--- �- --� и и - --- �-- -- ---__ . .--. . v � - - - � о � • � Л ап С й � � � •� �, 'ZS �, е� ш �. Q_ 'О ,� �D р v у с °� и � О � � м � '� fi � � � � У vi � � s�"'. р и � О' v' � � � о� � � �Е w � о ._ о q гS н С � С ь�.. � � CS � д � j � • � У � и �CS �. � ... � � � С _ �' и й ,'�� и Q�+ CS i. .�r и с. ш � и � ё� м г� � � ''и л'. О � v 7 Е al С � ,� а� й bП � О а 4 и и � �' _0. � s � сд � �у о � � `� � и и 7 д. � tд �у V N f1. � :� � � СС СП � � '� U U � 1] С V '� � н ы � а � W � � о й on � г.; �' •s �, � � й � � `�° ч4-.и-. F- s ' � о �`�" г�а о о °' � Е�' �� Q в а р г- с � о z с� � � 3 г- �-Х � N N � о �д М � о, °' � а ti � � v � � � � .� V � Ci v � С1 1 в�r ,Q '� � � � `..�'� г� еб = у� '�г'r О7 .ин �+ 'Gд а v ы �+ � � � У' Vi Л С .�. О � ~ +-+ и boq 'v д о �• � сд s�. � .� � �м •' z Cq, � b�D � � д �'" � г� м � и �а t� оо о� � � � О � � � - - - -- - � � � v ` � д � Q д � _�- � ---- --- ы � а � n ы � а � w О и � р � д о � и v д м а N а м о N о, о м т "� ё3 b � b � � � � � � � у �о а � �. F' С .U д � � fi � � � � '� °� � д Ч с. О � W � � � � � � � � � � а а� w а'' о fi �л .ь; +-� n. о° � � � � д V д О � О ы � � а а � � � о � о д `° n�`i а` � � � �г г о w � � � � Z с7 � � � � � � � о о и� > С «� _ Е ��- ,л а О � V � х , � С ;D Е с О ц'� у U W � .� а � й ги� F и а� о � [ �v � � о" �' � М �> � � ¢ с � О � ° сд � са b �р � bn � � � о�, :: ' S � � � о � С � с, � � ° �, w у a�i � � о � С � а � � а� � и . � +о+ � bЛ С о С' .+ N G.1 � р U U 0. .°L.. а� � а w � � � � `' °' Ё й � � й � д'° ° и л � Сб U Li i-- �С' Сд � � � ° �. � д'° й °�' � С й С о ,ь„ � Е А„ ~ а. о � tip о � R� � д U и � +, � С д,., � о а а� .� v х � � {� н � у � С � � � � � � � р о о � Q Q U w` Kenya Urban Support Program A nn ual Report an d Fin ancial Statements for th efin ancial year en ded Jun e 30, 2023 Annex 9: Counties UIG Rcccipts and Expenditure Reports DISHURSEMF OPENTNG NT DURING EXPENDITURE CLOSING County BALANCE TTIF YEAR DURING THE BALANCE Code COUNTY NAME (A) (13) YEAR(C) (D=A+B-C) I Baringo County 11,276,889 1,145,356 11,276,889 1,145,356 2 Bomet County 42,093 1,145,356 2,382,007 (1,194,559) 3 Bungoma County 719,457 1,145,356 1,543,351 321,462 4 Busia County - 1,145,356 - 1,145,356 Elgeyo Marakwet 297,170 1,145,356 1,438,556 3,970 5 County 6 Embu County - 1,145,356 1,814,920 (669,564) 7 Garissa countv 201,381 1,145,356 200,513 1,146,224 8 Hoinabay County - - 1,145,356 1,145,356 9 1 Isiolo County 255,182 1,145,356 1,400,538 10 Kaiiado County 312,298 1,145,356 1,457,653 11 Kakarnega County - 1,145,356 1,145,356 12 Kericho Coun!y 1,145,356 1,145,356 13 Kiambu County - 1,145,356 8,433 1,136,923 14 Kilifi County 8,924,103 1,145,356 8,924,124 1,145,335 15 Kifinyaga County - 1,145,356 603,870 541,486 16 Kisfi County 16,581 1,145,356 1,848,710 (686,774) 17 Kisumu County 108,900 1,145,356 86,160 1,168,095 18 Kitui County 4,396 1,145,356 2,451 1,147,301 19 Kwale County 11,410,933 1,145,356 9,745,838 2,810,450 20 Laikipia County 286,139 1,145,356 271,960 1,159,534 21 Larnu County 21,704,064 1,145,356 15,209,370 7,640,049 22 Machakos County - 1,145,356 - 1,145,356 23 Makueni County 1,975,690 1,145,356 1,846,188 1,274,857 24 Mandera County 1,137,867 1,145,356 1,130,000 1,153,223 25 Marsabit County 21591,675 1,145,356 1,982,740 1,754,291 26 Meru County 363 1,145,356 - 1,145,719 27 Migori County 1,455 1,145,356 1,317 1,145,494 28 Muranga County - 1,145,356 - 1,145,356 29 Nakuru County - 1,145,356 - 1,145,356 30 Nandi County 56,771 1,145,356 1,317 1,200,809 31 Narok County 3,925,863 1,145,356 3,925,863 1,145,356 32 Nyamira County - 1,145,356 979,600 165,756 33 Nyandarua County 9,604,663 1,145,356 51 lp 9 101238,210 34 Nyeri County 5,807,236 1,145,356 3,544,280 3,408,312 47 Kenya Urban Support Program Annual Report and Financial Statements for the financial year ended June 30, 2023 DISBURSEME OPENING NT DURING EXPENDITURE CLOSING County BALANCE THE YEAR DURING THE BALANCE Code COUNTY NAME (A) YEAR (C) (D=A+B-C) 35 Samburu County 1,456,982 1,145,356 1,243,250 1,359,087 36 Siaya County (0) 1,145,356 - 1,145,356 37 Taita Taveta - 1,145,356 1,145,356 0 38 Tana River County 4,149 1,145,356 - 1,149,505 TharakaNithi - 1,145,356 - 1,145,356 39 County Trans Nzoia - 1,145,356 - 1,145,356 40 County 41 Turkana County 12,549 1,145,356 630 1,157,275 Uasin Gishu - 1,145,356 1,077,600 67,756 42 County 43 Vihiga County 24,705 1,145,356 1,168,400 1,660 44 Wajir County 79,664 1,145,356 70,193 1,154,827 45 West Pokot County 14,246 1,145,356 1,133,185 26,417 TOTAL 82,253,462 51,541,000 75,118,878 58,675,584 48 Kenya Urban Support Program Annual Report and Financial Statements r the financial year ended June 30, 2023 Annex 10: Municipalities UDG Receipts and Expenditure Reports DISBURSEM COUN MUNICIPALITY OPENING ENT EXPENDITUR TY DURING E DURING CLOSING CODE THE YEAR THE YEAR (C BALANCE (B) ) (D-A+B-C) I Baringo 74,293,743 1,194,559 23,192,980 52,295,322 2 Bomet 61,690,998 1,194,559 61,083,714 1,801,843 3 Bungoma - 26,887,229 1,194,559 28,081,788 - Bungoma 4 Bungoma - Kimilili 25,931,908 1,194,559 21,336,632 5,789,835 5 Busia 28,095,194 1,194,559 25,566,340 3,723,413 6 Elgeyo Marakwet 43,515,624 1,194,559 38,613,098 6,097,086 7 Embu Countv 49,644,266 1,194,559 6,901,855 43,936,970 8 Garissa 134,007,986 1,194,559 107,463,911 27,738,634 9 Ilomabay 41,806,648 1,194,559 41,806,648 1,194,559 10 Isiolo 80,078,594 1,194,559 60,861,384 20,411,770 11 Kajiado - Kajiado - 43,419,067 43,175,876 243,191 12 Kajiado Ngong 34,608,915 1,194,559 35,547,145 256,329 13 Kakamega - 23,839,210 1,194,559 23,839,210 1,194,559 Kakamega 14 Kakamega- - 1,194,559 - 1,194,559 Mumias 15 Kericho 212,110,813 1,194,559 111,197,160 102,108,213 16 Kiambu - Karuri 57,828,526 1,194,559 54,896,538 4,126,547 17 Kiambu - Kiambu 89,045,179 1,194,559 57,147,315 33,092,423 18 Kiambu - kikuyu 271,700,743 1,194,559 228,985,515 43,909,788 19 Kiambu - Limuru 44,369,019 1,194,559 32,261,105 13,302,473 20 Kiambu - Ruiru 236,092,481 1,194,559 217,086,079 20,200,962 21 Kiambu - Thika 125,611,998 1,194,559 101,799,869 25,006,689 22 Kilifi - Kilifi 63,011,082 1,194,559 64,205,642 - 23 Kilifi - Malindi 162,357,176 1,194,559 163,551,736 - 24 Kirinyaga 11,641,728 1,194,559 9,143,194 3,693,093 25 Kisii 78,375,355 1,194,559 57,172,841 22,397,073 26 Kisumu 1,427,148 1,194,559 1,278,301 1,343,407 27 Kitui - 1,194,559 1,394,565 (200,006) 28 Kwale 31,055,374 1,194,559 21,932,412 10,317,521 29 .aikipia 14,306,870 1,194,559 12,321,055 3,180,374 30 Lamu 27,348,286 1,194,559 20,594,576 7,948,270 31 Machakos - 92,493,649 1,194,559 88,616,750 5,071,459 Kangundo 49 Kenya Urban Support Program Annual Report and Financial Statements for the financial year ended June 30, 2023 DISBURSEM COUN MUNICIPALITY OPENING ENT EXPENDITUR TY DURING E DURING CLOSING CODE THE YEAR THE YEAR (C BALANCE (B) ) (D=A+B-C) 32 Machakos - 94,297,867 1,194,559 5,080,261 90,412,165 Machakos 33 Machakos - 3,652,313 1,194,559 2,523,777 2,323,095 Mavoko 34 Makueni 95,188,337 1,194,559 80,662,790 15,720,106 35 Mandera 21,451,158 1,194,559 - 22,645,718 36 Marsabit 33,891,383 1,194,559 11,561,207 23,524,736 37 Meru 35,735,548 1,194,559 34,909,311 2,020,796 38 Migori - Awendo 78,071,298 1,194,559 63,886,653 15,379,204 39 Migori - Migori 27,511,691 1,194,559 20,470,602 8,235,649 40 Migori - Rongo 37,771,654 1,194,559 25,818,406 13,147,808 41 Muranga 25,909,108 1,194,559 25,909,108 1,194,559 42 Nakuru - Naivasha 293,948,894 1,194,559 193,135,502 102,007,951 43 Nakuru - Nakuru 901,445,162 1,194,559 542,471,467 360,168,254 44 Nandi 139,081,344 1,194,559 104,111,265 36,164,638 45 Narok 2,069,489 1,194,559 - 3,264,049 46 Nyamira 128,458,416 1,194,559 40,771,575 88,881,401 47 Nyandarua 132,860,008 1,194,559 79,815,082 54,239,485 48 Nyeri 5,875,860 1,194,559 3,134,276 3,936,143 49 Samburu 40,813,056 1,194,559 30,561,734 11,445,881 50 Siaya 13,806,165 1,194,559 11,773,705 3,227,019 51 Taita Taveta 3,975,836 1,194,559 4,199,949 970,446 52 Tana River 15,606,002 1,194,559 15,606,002 1,194,559 53 Tharaka Nithi - 1,194,559 1,800 1,192,759 54 Trans Nzoia 120,442,483 1,194,559 92,773,593 28,863,449 55 Turkana 77,704,309 1,194,559 60,920,251 17,978,618 56 Uasin Gishu 78,707,392 1,194,559 72,949,223 6,952,728 57 Vihiga - 1,194,559 - 1,194,559 58 Wajir 68,801,983 1,194,559 66,912,431 3,084,111 59 West Pokot 38,590,598 1,194,559 21,725,031 18,060,126 TOTAL 4,658,843,095 112,703,507 3,372,740,232 1,398,806,370 50 Kenya Urban Support Program Annual Report and Financial Statements for the financial year ended June 30, 2023 Annex 11: Other Support Documents i. Bank Reconciliations statement as at 30t' June 2023 ii. Board of Survey Report iii. Special Deposit Account(s) reconciliation statement iv. GOK IFMIS comparison Trial Balance 51