Cedric D. Flowers Certified Public Accountant Belize FCPF REDD Readiness Preparation Grant No. TF018492 Special Purpose Financial Statements Year Ended March 31, 2022 International Public Sector Accounting Standards (I PSAS) Belize FCPF REDD Readiness Preparation (REDD+) March 31, 2022 Contents Page No. Independent Auditor's Report on Financial Statements I Statement of Financial Position 3 Statement of Sources and Uses of Funds 4 Statement of Cumulative Investment 5 Statement of Designated Account Reconciliation 6 Notes to Special Purpose Project Financial Statements 7 a. General Information 7 b. Grant Description 7 c. Significant Accounting Policies and Basis of Preparation 8 d. Cash and Cash Equivalents 9 e. Commitments and Contingencies 9 Independent Auditor's Report on Statements of Expenditures 10 Statements of Expenditures Summary II Independent Auditor's Report on Compliance with Grant Agreement 12 Summary of Key Compliance Areas 13 Management Letter 15 Cedric D. Flowers Certified Public Accountant P.O. Box 1674 Tel: (501) 227-6161 54 King Street Fax: (501) 227-6160 Belize City Email : cdflowers@btl.net INDEPENDENT AUDITOR'S REPORT To the Board of Directors of Protected Areas Conservation Trust, Fiduciary Managers of: Belize FCPF REDO Readiness Preparation Grant No. TF018492 (REDD+) Report on the Financial Statements We have audited the accompanying special purpose financial statements of Belize FCPF REDD Readiness Preparation Grant which comprise the statement of financial position as of March 31, 2022, the statement of sources and uses of funds for the year ended March 31, 2022, the statement of cumulative investment, the statement of the designated account reconciliation at March 31, 2022, and a summary of significant accounting policies and other explanatory notes (collectively referred to as the "special purpose financial statements"). Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these special purpose financial statements in accordance with International Public Sector Accounting Standard: "Financial Reporting under the Cash Basis of Accounting" and in conformity with the World Bank Guidelines, and for such internal control as management determines is necessary to enable the preparation of special purpose financial statements that are free from misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express an opinion on these special purpose financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal controls relevant to the preparation and fair presentation of the special purpose financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal controls. MEMBER OF The Institute of chartered Accountants of Belize (ICAB) • American Institute of Certified Public Accountants (AICPA) Cedric D. Flowers Certified Public Accountant Independent Auditor's Report (continued) An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the special purpose financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Unqualified Opinion In our opinion, the special purpose financial statements present fairly, in all material respects, the financial position of Belize FCPF REDO Readiness Preparation Grant as of March 31, 2022, its sources and uses of funds for the year then ended, and its cumulative investment and designated account position at March 31, 2022, in accordance with the International Public Sector Accounting Standard: Financial Reporting Under the Cash Basis of Accounting, and the World Bank Guidelines. Certified Public Accountant August 15, 2022 Belize City 02 Belize FCPF REDO Readiness Preparation Grant No. TF018492 Statement of Financial Position March 31, 2022 July 31, 2022 uss Uss ASSETS AND EXPENDITURES Cash and cash equivalents 74,445 1,421 Cumulative project expenditures 3,657,587 3,791,008 Foreign exchange losses 7,380 7,571 Other expenditures TOTAL ASSETS AND EXPENDITURES 3,739,412 3,800,000 FINANCING Financing received 3,173,323 3,233,911 Other receipts (Direct payments by IBRD) 566,089 566,089 TOTAL FINANCING 3,739,412 3,800,000 These special purpose project financial statements were approved and authorized for issue by the management of the Granton I (Oc.-/bb€.r 2022. On behalf of the Grant: On behalf of PACT: Project oordinator Oirector - PACT 03 Belize FCPF REDD Readiness Preparation Grant No. 1F018492 Statement of Sources and Uses of Funds 12 Mths Ended 4 Mths Ended 16 Mths Ended Cumulative at Expressed in US Dollars Mar. 31, 2022 July. 31. 2022 July. 31, 2022 Project End S S S S RECEIPTS FROM WORLD BANK Advances 564,283 60,588 624,871 3,233,911 Reimbursements Other Receipts (Direct payments by IBRD) 377,787 377,787 566,089 TOTAL RECEIPTS 942,070 60,588 1,002,658 3,800,000 PROJECT AND OTHER EXPENDITURES Component 1: Organization Framework and Consultaions 409,940 25,740 435,680 1,447,109 Component 2: Strategy 653,919 67,706 721,625 1,204,182 Component 3: Reference Emission Level 52,268 578 52,846 580,320 Component 4: Monitoring and safeguarding systems 165,816 15,000 180,816 446,151 Component 5: Monitoring and evaluation program 14,428 24,397 38,825 113,246 Foreign Exchange Losses 1,072 191 1,263 7,571 Other Expenditures TOTAL EXPENDITURES 1,297,443 133,612 1,431,055 3,798,579 NET RECEIPTS (DISBURSEMENTS) (355,373) (73,024) (428,397) 1,421 Plus: Beginning Cash Balance, April 1, 2021 429,818 74,445 429,818 CLOSING CASH BALANCE, July 31, 2022 74,445 1,421 1,421 1,421 04 Belize FCPF REDD Readiness Preparation Grant No. TF018492 Statement of Cumulative Investment 12 Mths Ended 4 Mths Ended 16 Mths Ended Cumulative at Expressed in US Dollars Mar. 31, 2022 July. 31. 2022 July. 31. 2022 Project End S S S $ CATEGORY I Goods, Consultants Services, Non-consulting services, Workshops and training, and Operating Costs 1,296,371 133,421 1,429,792 3,791,008 OTHER EXPENDITURES Foreign exchange losses 1,072 191 1,263 7,571 Other TOTAL 1,297,443 133,612 1,431,055 3,798,579 05 Belize FCPF REDD Readiness Preparation Grant No. TF018492 Statement of Designated Account Reconciliation 12 Mths Ended 4 Mths Ended 16 Mths Ended Cumulative at Expressed in US Dollars Mar. 31. 2022 July. 31, 2022 July. 31, 2022 Project End $ $ S $ Designated Account, opening balance 429,818 74,445 429,818 Grant Funds advanced 564,283 60,588 624,871 3,233,911 Reimbursement of expenses Total Funds Available for Disbursements 994,101 135,033 1,054,689 3,233,911 Eligible expenditures paid (918,584) (133,421) (1,052,005) (3,224,919) Foreign exchange losses (1,072) (191) (1,263) (7,571) Other expenditures CLOSING BALANCE 74,445 1,421 1,421 1,421 06 Belize FCPF REOD Readiness Preparation Grant No. TF018492 Notes to Special Puipose Financial Statements For the jear ended March 31, 2022 (expressed in United States Dollars) 1.0 GENERAL INFORMATION 1.2 On March 14, 2017, the Government of Belize (the Recipient) entered into Grant Agreement No.TF018492 with International Bank for Reconstruction and Development (IBRD), acting as Trustee of the Readiness Fund of the Forest Carbon Partnership Facility for financing costs of the Belize FCPF REDD Readiness Preparation (REDD+ Grant). 1.4 By a Subsidiary Agreement dated April 3, 2017, the Recipient, represented by the Ministry of Finance, formalized arrangements with the Protected Areas Conservation Trust (PACT) to carry out the fiduciary functions of the REDD+ Grant on its behalf, in accordance with the terms and conditions set out in the Grant Agreement. 1.6 In accordance with the terms of the Subsidiary Agreement, the Recipient shall make available to PACT, on a non-reimbursable basis, an amount equivalent to three million, eight hundred thousand United States dollars (US$3,800,000), the total amount of the proceeds made available to the Recipient by the IBRD under the Grant Agreement. 1.8 As fiduciary manager for the grant funds, PACT shall apply the proceeds of the grant solely to finance the reasonable costs of eligible expenditures required for the implementation of the Project. 2.0 THE REDD+ GRANT 2.2 The objective of the REDD+ Grant is to assist Belize in carrying out Readiness Preparation Activities through a participatory and inclusive process, in order to strengthen its capacity to participate in future REDD+ carbon payment transactions, i.e. reducing emissions from deforestation and forest degradation, conservation of forest carbon stocks, sustainable management of forest, and enhancement of forest carbon stocks. 2.4 The Grant consists of the following components and funding allocation: ALLOCA1ON IN COMPONENT a. REDD+ Organization Frameworks, Consultation and Grievance Redress 1,597,000 b. Preparation of REDD+ Strategy 1,165,000 c. Development of a National Forest Reference Emission Level and Forest Reference Level 420,000 d. Design of National Forest Monitoring and safeguarding systems 438,000 e. Design of Monitoring and Evaluation Framework 180,000 TOTAL $3,800,000 In-kind contributions to be made by the Government of Belize in support of project activities are projected at US $283,000 over the duration of the project. Such contributions are not measured in these financial statements. 07 Belize FCPF REDD Readiness Preparation Grant No. TF018492 Notes to $pecial Prnpose Financial Statements For the jiear ended March 31, 2022 (expressed in United States Dollars) 2.6 End of Project and Subsequent Events The Closing Date of the Grant is March 31, 2022. These are the final audited financial statements of the REDD+ Grant and reflect activities in relation to the year ended March 31, 2022, the closing date of the Project. During the four-month period following the closing date, the Project management completed payments and settlements of contractual and other obligations which existed at the closing date. Those transactions are incorporated in these financial statements and are reflected separately as transactions for the four-month period ended July 31, 2022. 3.0 SIGNIFICANT ACCOUNTING POLICIES 3.2 Basis of Preparation These special purpose financial statements have been prepared in accordance with the International Public Sector Accounting Standard (IPSAS): "Financial Reporting under the Cash Basis of Accounting" issued by the International Federation of Accountants (IFAC) and incorporate the following principal accounting policies, which have been consistently followed in all material respects and comply with "Guidelines: Annual Financial Reporting and Auditing for World Bank-Financed Activities". 3.4 Cash Basis of Accounting The special purpose financial statements have been prepared on a cash basis of accounting. The cash basis of accounting recognizes transactions and events only when cash is received or paid by the entity. The special purpose financial statements prepared under the cash basis of accounting provide readers with information about the sources of cash, the purpose for which cash was used and cash balances at reporting date. 3.6 Reporting Currency a. The reporting currency is United States dollars (USD). All information is presented in USD, except when otherwise indicated. b. Expenditures made in Belize dollars (BZD) are converted at the exchange rate of one USD to two BZD (US $1 .00 to BZ $2.00). Exchange losses are reported on the statement of sources and uses of funds—although not eligible expenditures under the Grant Agreement. 3.8 Sources of Funds a. Grant funds are provided by the IBRD through advances to a Designated Account of the Recipient established with the Central Bank of Belize to finance eligible expenditures. b. Payments for expenditures are made from an Operating Account held with a local bank.The IBRD may also make payments, at the Recipient's request, directly to third parties for eligible expenditures. 3.10 Method of Withdrawal of Funds The Recipient has established a Designated Account at the Central Bank of Belize in accordance with the Grant Agreement. Withdrawals from the Designated Account are done by the Recipient upon a request initiated by PACT, in accordance with the provisions of the Operations Manual for the Grant. 08 Belize FCPF REDO Readiness Preparation Grant No. 1F018492 Notes to Special Purpose Financial Statements For the year ended March 31, 2022 (expressed in United States Dollars) 4.0 CASH AND CASH EQUIVALENTS Cash and cash equivalents cash comprised the following: March 31. 2022 July 31. 2022 sus sus Central Bank of Belize, Designated Account No.311109 Bank of Atlantic Bank Account No.100282481 (Operating Account) 74,445 1,421 Total 74,445 1,421 5.0 COMMITMENTS AND CONTINGENCIES 5.01 Contracts In the normal course of activities, agreements are concluded with suppliers of goods and services in accordance with the established budget and procurement plan. Existing contract values and other project obligations at March 31, 2022 were as follows: Remaining Party Date of Contract Contract Value Amount to be Paid sus sus a. Julian Cho Society January 17, 2020 70,189 7,910 b. Aseramiento Estrategico November 18, 2020 503,487 50,235 c. Julian Cho Society January 26, 2021 50,000 1,056 d. Ingrid Fernandez February 5, 2021 14,659 9,546 e. Equal Chances August 5, 2021 79,980 3,984 f. TerraPulse Inc. August 19, 2021 100,000 15,000 g. Other Obligations 45,881 5.02 Legal Matters There were no pending or threatened legal claims related to the activities of the Grant. 09 Bdize FCPF REDO Readiness Preparation Grant No. 1F018492 Cedric D. Flowers Certified Public Accountant P.O. Box 1674 Tel: (501) 227-6161 54 King Street Fax: (501) 227-6160 Belize City Email : cdfiowers@btl.net INDEPENDENT AUDITOR'S REPORT ON STATEMENTS OF EXENDITURES To the Board of Directors of Protected Areas Conservation Trust, Fiduciary Manager of: Belize FCPF REDD Readiness Preparation Grant No. TF018492 Report on Statements of Expenditures We have audited the Statements of Expenditures (SOEs) submitted to the International Bank for Reconstruction and Development during the year ended March 31, 2022, and for the four months ended July 31, 2022 following the closure of grant activities—in support of withdrawals of funds under Grant Agreement No. TF018492, which are summarized on page 11. We conducted our audit in accordance with International Standards on Auditing, Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the SOEs can be relied upon to support the application for withdrawals of funds. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. During the sixteen months covered by the audit, eligible project expenditures were made by management but were unclaimed on SOE 22; additionally, there were claims for amounts which differed from amounts paid by the IBRD in respect of SOEs 24, 31 (IBRD ref #30). Adverse Opinion In our opinion, in view of the matters cited in the preceding paragraph, the SOEs as presented by grant management, together with the internal controls and procedures involved in their preparation cannot be relied upon to support the applications for withdrawals of funds under Grant Agreement No. TF018492. Certified Public Accountant August 15, 2022 Belize City MEMBER OF The $nstftute of Chartered Accountants of Belize (ICAB) • American Institute of Certified Public Accountants (AICPA) Statements of Expenditures (SOEs) Summary REDD+ 1F018492 Application Quarter Ended SOE Number Amount uss June 30, 2021 No.22 154,142.06 September 30, 2021 No.24 229,913.86 REDD+ TF018492 Application Period Ended SOE Number Amount uss July 31, 2022 No.31 299,347.37 11 Belize FCPF REDD Readiness Preparation Grant No. 1F018492 "The original is a PDF file with no Text. We were not able to OCR and extract the Text. Error:PDF01"