Southern African Development Community Groundwater Management Institute (Registration number 2011/011724/08) Annual financial statements for the year ended 31 March 2021 Southern African Development Community Groundwater Management Institute (Registration number 2011/011724/08) Annual financial statements for the year ended 31 March 2021 General information Country of incorporation and domicile South Africa Nature of business and principal activities To ensure the equitable and sustainable use and protection of groundwater as well as being a centre of excellence in the area of groundwater management Directors Name Appointment date Mr James Sauramba (1 April 2017) Mr. Eelco Lucas (11 December 2018) Prof. John Cantius Mubangizi (11 December 2018) Mr Michael William Marler (26 June 2019) Ms. Zandile Matilda Kabini (26 June 2019) Ms. Ana Isabel Fotine Mponda (24 June 2020) Dr Patrice Kandolo Kabeya (24 June 2020) Mr. George Venance Lugomela (24 June 2020) Resigned date Ms. Maria Amakali (29 January 2021) Business address Southern African Development Community Groundwater Management Institute 205 Nelson Mandela Drive University of the Free State Bloemfontein 9301 Registered office Southern African Development Community Groundwater Management Institute 205 Nelson Mandela Drive University of the Free State Bloemfontein 9301 Postal address P O Box 339 Bloemfontein 9300 Auditors PricewaterhouseCoopers Inc. Registered Auditors Company registration number 2011/011724/08 1 Southern African Development Community Groundwater Management Institute (Registration number 2011/011724/08) Annual financial statements for the year ended 31 March 2021 General information (continued) Level of assurance These annual financial statements have been audited in compliance with the applicable requirements of the Companies Act of South Africa. Preparer The annual financial statements were compiled by: Perle du Plessis (Public officer) Bankers ABSA Bank Ltd Standard Bank Ltd 2 Southern African Development Community Groundwater Management Institute (Registration number 2011/011724/08) Annual financial statements for the year ended 31 March 2021 Index The reports and statements set out below comprise the annual financial statements presented to the shareholder: Page Directors' Responsibilities and Approval 4 Independent Auditors' Report 5-7 Directors' Report 8 Statement of Financial Position 9 Statement of Surplus or (Deficit) 10 Statement of Changes in Equity 11 Notes to the Annual Financial Statements 12 - 14 The following supplementary information does not form part of the annual financial statements and is unaudited: Detailed Income Statement 15 Project reporting: Sustainable Groundwater Management in SADC Members States Project (P127086): 1. Description of the project 16 2. Project financing 17 3. Project expenditure 18 3 Southern African Development Community Groundwater Management Institute (Registration number 2011/011724/08) Annual financial statements for the year ended 31 March 2021 Directors' Responsibilities and Approval The directors are required in terms of the Companies Act of South Africa to maintain adequate accounting records and are responsible for the content and integrity of the annual financial statements and related financial information included in this report. It is their responsibility to ensure that the annual financial statements present the state of affairs of the company as at the end of the financial year and the results of its operations for the period then ended, in conformity with the accounting policy as determined by the company. The external auditors are engaged to express an independent opinion on the annual financial statements. The annual financial statements are prepared in accordance with the accounting policies of Southern African Development Community Groundwater Management Institute and are based upon appropriate accounting policies consistently applied and supported by reasonable and prudent judgements and estimates. The directors' acknowledge that they are ultimately responsible for the system of internal financial control established by the company and place considerable importance on maintaining a strong control environment. To enable the directors to meet these responsibilities, the directors set standards for internal control aimed at reducing the risk of error or loss in a cost effective manner. The standards include the proper delegation of responsibilities within a clearly defined framework, effective accounting procedures and adequate segregation of duties to ensure an acceptable level of risk. These controls are monitored throughout the company and all employees are required to maintain the highest ethical standards in ensuring the company’s business is conducted in a manner that in all reasonable circumstances is above reproach. The focus of risk management in the company is on identifying, assessing, managing and monitoring all known forms of risk across the company. While operating risk cannot be fully eliminated, the company endeavours to minimise it by ensuring that appropriate infrastructure, controls, systems and ethical behaviour are applied and managed within predetermined procedures and constraints. The directors are of the opinion, based on the information and explanations given by management, that the system of internal control provides reasonable assurance that the financial records may be relied on for the preparation of the annual financial statements. However, any system of internal financial control can provide only reasonable, and not absolute, assurance against material misstatement or loss. The external auditors are responsible for independently auditing and reporting on the company's annual financial statements. The annual financial statements have been examined by the company's external auditors and their report is presented on pages 5 to 7. The annual financial statements and additional schedules set out on pages 9 to 18, which have been prepared on the going concern basis, were approved by the directors on 6 August 2021 and were signed on its behalf by: -------------------------------------------- --------------------------------------------- Dr P Kabeya Ms ZM Kabini (Chairperson: SADC-GMI Board) (Chairperson: SADC-GMI Audit Committee) Independent auditor’s report To the Members of Southern African Development Community Groundwater Management Institute Our opinion In our opinion, the financial statements of Southern African Development Community Groundwater Management Institute (the Company) for the year ended 31 March 2021 are prepared, in all material respects, in accordance with the basis of accounting described in note 1 to the financial statements and the requirements of the Companies Act of South Africa. What we have audited Southern African Development Community Groundwater Management Institute’s financial statements set out on pages 9 to 14 comprise: ● the statement of financial position as at 31 March 2021; ● the statement of surplus or deficit for the year then ended; ● the statement of changes in equity for the year then ended; ● the notes to the financial statements, which include a summary of significant accounting policies. Basis for opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence We are independent of the Company in accordance with the Independent Regulatory Board for Auditors’ Code of Professional Conduct for Registered Auditors (IRBA Code) and other independence requirements applicable to performing audits of financial statements in South Africa. We have fulfilled our other ethical responsibilities in accordance with the IRBA Code and in accordance with other ethical requirements applicable to performing audits in South Africa. The IRBA Code is consistent with the corresponding sections of the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants (including International Independence Standards). Emphasis of Matter – Basis of Accounting We draw attention to note 1 to the financial statements, which describes the basis of accounting. The financial statements are prepared in accordance with the company’s own accounting policies to satisfy the financial information needs of the company’s members. As a result, the financial statements may not be suitable for another purpose. Our opinion is not modified in respect of this matter. __________________________________________________________ PricewaterhouseCoopers Inc., 61 Second Avenue, Westdene, Bloemfontein, 9301, P O Box 818, Bloemfontein, 9300 T: +27 (0) 51 503 4100, F: +27 (0) 51 813 1700, www.pwc.co.za Chief Executive Officer: L S Machaba The Company's principal place of business is at 4 Lisbon Lane, Waterfall City, Jukskei View, where a list of directors' names is available for inspection. Reg. no. 1998/012055/21, VAT reg.no. 4950174682 Other information The directors are responsible for the other information. The other information comprises the information included in the document titled “Southern African Development Community Groundwater Management Institute Annual Financial Statements for the year ended 31 March 201,” which includes the Directors’ Report as required by the Companies Act of South Africa. The other information does not include the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and we do not express an audit opinion or any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the directors for the financial statements The directors are responsible for the preparation of these financial statements in accordance with the basis of accounting described in note 1 to the financial statements and the requirements of the Companies Act of South Africa, for determining that the basis of preparation is acceptable in the circumstances and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so. Auditor’s responsibilities for the audit of the financial statements Our 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 our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement 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. As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We 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 our 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 control. ● Obtain an understanding of internal control relevant to the audit 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 Company’s internal control. ● Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. 6 ● Conclude on the appropriateness of the directors’ use of the going concern 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 Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern. We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. PricewaterhouseCoopers Inc. Director: CJ Hertzog Registered Auditor Bloemfontein, South Africa 6 August 2021 7 Southern African Development Community Groundwater Management Institute (Registration number 2011/011724/08) Annual financial statements for the year ended 31 March 2021 Directors' Report The directors submit their report for the year ended 31 March 2021. 1. Incorporation The company was incorporated in South Africa as a non-profit company. 2. Main business and operations The company is established to ensure the equitable and sustainable use and protection of groundwater and to be a centre of excellence in the area of groundwater management. 3. Review of activities The operating results and state of affairs of the company are fully set out in the attached annual financial statements and do not in our opinion require any further comment.Net deficit of the company was R 16 489 4. Going concern The annual financial statements have been prepared on the basis of accounting policies applicable to a going concern. This basis presumes that funds will be available to finance future operations and that the realisation of assets and settlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business. The World Bank granted funding towards the sustainable use and protection of groundwater i.e. the main project(P127086) from the 2014 -2020 financial years. The University of the Free State was appointed as the implementing agency.The Company is dependent on those future fundings from the World Bank in order to continue with its operations. Due to the COVID-19 pandemic, the World Bank granted extention on the project till June 2021. The World Bank confirmed that a second grant was allocated to SADC- GMI from November 2021. The company has reserve funds to continue its operations, accumulated in previous years, as well as the JRS - GDE's Biodiversity - Khakea/Bray Transboundary Acquifer grant until further funding from the World Bank is received. 5. Dividends The company is incorporated as non-profit, thus no dividends are payable. 6. Directors The directors of the company during the year and to the date of this report are as follows: Name Appointment date Resigned Prof. Petrus Daniel Vermeulen (7 April 2016) (24 June 2020) Mr. Trevor Mduduzi Shongwe (17 February 2017) (24 June 2020) Ms. Maria Amakali (17 February 2017) (29 January 2021) Mr James Sauramba (1 April 2017) Dr. Eelco Lucas (11 December 2018) Prof. John Cantius Mubangizi (11 December 2018) Mr Michael William Marler (26 June 2019) Ms. Zandile Matilda Kabini (26 June 2019) Ms. Ana Isabel Fotine Mponda (24 June 2020) Dr Patrice Kandolo Kabeya (24 June 2020) Mr. George Venance Lugomela (24 June 2020) 7. Auditors PricewaterhouseCoopers Inc. will continue in office in accordance with section 90 of the Companies Act of South Africa. 8 Southern African Development Community Groundwater Management Institute (Registration number 2011/011724/08) Annual financial statements for the year ended 31 March 2021 Statement of Financial Position as at 31 March 2021 2021 2020 2021 2020 Notes $ $ R R Assets Current Assets Accounts receivable 2 93,340 14,023 1,384,872 252,161 Cash and cash equivalents 3 310,490 1,291,470 4,606,710 23,223,472 403,830 1,305,492 5,991,583 23,475,634 Equity and Liabilities Equity Retained income 327,853 1,187,494 4,864,312 21,353,766 Liabilities Current Liabilities Trade and other payables 4 75,977 117,998 1,127,271 2,121,868 Total Equity and Liabilities 403,830 1,305,492 5,991,583 23,475,634 The accounting policies and the notes on pages 12 to 14 form an integral part of the financial statements. 9 Southern African Development Community Groundwater Management Institute (Registration number 2011/011724/08) Annual financial statements for the year ended 31 March 2021 Statement of Surplus or (Deficit) 2021 2020 2021 2020 Notes $ $ R R Revenue 7 1,800,907 4,903,657 30,299,454 71,954,611 Other income 8 22,604 46,076 355,317 683,406 Operating expenses (2,683,152) (3,513,948) (47,144,224) (47,660,097) Operating surplus/(deficit) (859,642) 1,435,785 (16,489,453) 24,977,920 Surplus/(deficit) for the year (859,642) 1,435,785 (16,489,453) 24,977,920 Other comprehensive income - - - - Total surplus or (deficit) for the 10 (859,642) 1,435,785 (16,489,453) 24,977,920 year The accounting policies and the notes on pages 12 to 14 form an integral part of the financial statements. 10 Southern African Development Community Groundwater Management Institute (Registration number 2011/011724/08) Annual financial statements for the year ended 31 March 2021 Statement of Changes in Equity Retained Total equity Retained Total equity income income $ $ R R Balance at 1 April 2019 (248,290) (248,290) (3,624,154) (3,624,154) Surplus/(Deficit) for the year 1,435,785 1,435,785 24,977,920 24,977,920 Other surplus or (deficit) - - - - Balance at 1 April 2020 1,187,494 1,187,494 21,353,766 21,353,766 Surplus/(Deficit) for the year (859,642) (859,642) (16,489,453) (16,489,453) Other surplus or (deficit) - - - - Balance at 31 March 2021 327,853 327,853 4,864,312 4,864,312 The accounting policies and the notes on pages 12 to 14 form an integral part of the financial statements. 11 Southern African Development Community Groundwater Management Institute (Registration number 2011/011724/08) Notes to the Annual financial statements for the year ended 31 March 2021 Accounting Policies 1.1 Basis of preparation The annual financial statements have been prepared in accordance with an entity specific basis accounting policy. The annual financial statements have been prepared on the historical cost basis, and incorporate the principal accounting policies set out below. They are presented in South African Rands and American Dollars. 1.2 Foreign currency translation 1.2.1 Functional and presentation currency Items included in the financial statements of the company are measured using the currency of the primary economic environment in which the company operates (‘the functional currency’). The financial statements are presented in South African Rand (R), which is the company’s functional and United States Dollars ($) ('the presentation currency'). 1.2.2 Transaction and balances Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. 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 statement of comprehensive income. 1.3 Furniture and equipment Furniture and equipment is expensed in the year of acquisition. 1.4 Trade payables Trade payable are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. It is classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade and other payables are initially recognised at fair value and subsequently it is measured at amortised cost using the effective interest method. 1.5 Provisions Provision are recognised when the company has a current statutory or constructive obligation as a result of a past binding occurrence which probably will lead to an outflow of resources in the form of economic benefits to meet the obligation and when a reasonable estimate of the amount of the obligation can be made. Provisions are measured at the present value of the expected future expenditure to meet the obligation, discounted at a pre-tax discount rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Provisions are not recognised for future operating losses. 1.6 Revenue 1.6.1 Grants Grants are recognised as income once it is received. 1.6.2 Interest Interest is recognised when it is received The accounting policies and the notes on pages 12 to 14 form an integral part of the financial statements. 12 Southern African Development Community Groundwater Management Institute (Registration number 2011/011724/08) Notes to the Annual financial statements for the year ended 31 March 2021 Accounting Policies 1.6 Revenue (continued) 1.6.3 Other income Other income comprise of income from conference fees, training income and project administration fees and is recognised when the results of the transactions can be measured reliably. 1.7 Expenses Expenses are recognised on the date that it is incurred. 2021 2020 2021 2020 2. Accounts receivable $ $ R R Input VAT receivable from South African Revenue Services(SARS) 93,272 13,840 1,383,872 248,877 Sundry debtors 67 183 1,000 3,285 93,340 14,023 1,384,872 252,161 3. Cash and cash equivalents $ $ R R USD Bank Account 64,544 524,053 957,627 9,423,631 Absa Rand Account 66,760 708,551 990,515 12,741,312 Absa Credit Card Account (358) - (5,315) - Standard Bank Rand Account 179,544 58,865 2,663,883 1,058,530 310,490 1,291,470 4,606,710 23,223,472 Cash and cash equivalents comprise of cash on hand. These are initially and subsequently recorded at fair value. The drawdown in cash from 2020 to 2021 is attributed to planned expenditure to meet commitments from the World Bank project. 2021 2020 2021 2020 4. Trade and other payables $ $ R R Accruals and other liabilities 22,697 83,921 336,757 1,509,077 Provision for audit fee 4,965 3,901 73,658 70,150 Other trade payables 48,316 30,176.57 716,856 542,641 75,977 117,998 1,127,271 2,121,868 5. Income tax expense No provision has been made for 2021 tax as the organisation falls within the classification as an exempted entity for taxation purposes in terms of section 10(1)(cN) of the Income Tax Act. 6. Going concern The annual financial statements have been prepared on the basis of accounting policies applicable to a going concern. This basis presumes that funds will be available to finance future operations and that the realisation of assets and settlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business. World Bank will provide funding to the company until 30 June 2021 under the current grant. The company has been awarded a second contract with the World Bank, commencing November 2021. While the World Bank is the main funder, funds from other funders have been secured for the company to continue with its operations through the reserves accumulated in previous years and the JRS - GDE's Biodiversity - Khakea/Bray Transboundary Acquifer. The cashflow forecasts include both funding from the World Bank and other grantors. The accounting policies and the notes on pages 12 to 14 form an integral part of the financial statements. 13 Southern African Development Community Groundwater Management Institute (Registration number 2011/011724/08) Notes to the Annual financial statements for the year ended 31 March 2021 Accounting Policies 7. Grants received 2021 2020 2021 2020 $ $ R R Grant income was received from different funders and is recognised when it is received World bank grant 1,690,400 4,903,657 28,563,672 71,954,610 GMI GIZ Training Grant 5,644 - 94,159 - JRS - DGE's Biodiversity - Khakea/Bray Transboundary Acquifer 104,863 - 1,641,622 - 1,800,907 4,903,657 30,299,454 71,954,610 8. Other income 2021 2020 2021 2020 $ $ R R Conference fees 9,580 27,627 148,939 411,527 Interest 183 13,803 3,296 203,127 Project administration 8,909 2,946 144,991 42,666 Professional fee income 3,747 - 54,937 - Training income - 1,701 - 26,087 Insurance income 185 - 3,153 - 22,604 46,076 355,317 683,406 9. Consultation fees The increase in consultation fees to R26 666 445 (2020:13 858 589) ia attributed to projects which started in 2020 but deliverables attained and paid in 2021, as approved by the principal funder, World Bank. 10. (Loss) / Surplus for the year A loss of R16 489 453, is recorded as grant income actually received was less than the operating expenses for the period. In 2020, the surplus of R24 977 920 for the year was explained by grant income received by funders exceeding operating expenses for the period. Grant income is recognised when actually received. 11. COVID-19 impact on operations Through management's assessment, although the COVID-19 pandemic limited movement to SADC member states, the company could proceed with it's operations.The going concern assumption is still considered to be appropriate as the principal funder, World Bank engaged with the company to extend the contract period to 30 June 2021, due to the COVID-19 pandemic. The company has been awarded a second contract with the World Bank, commencing November 2021. A contract with JRS - GDE's Biodiversity - Khakea/Bray Transboundary Acquifer has also been secured for the next 3 years. There is sufficient reserves available to bridge the timespan between the contracts. The accounting policies and the notes on pages 12 to 14 form an integral part of the financial statements. 14 Southern African Development Community Groundwater Management Institute (Registration number 2011/011724/08) Annual financial statements for the year ended 31 March 2021 Detailed Income Statement 2021 2020 2021 2020 Notes $ $ R R Revenue Grants received 7 1,800,907 4,903,657 30,299,454 71,954,611 Other income 8 22,604 46,076 355,317 683,406 1,823,511 4,949,733 30,654,770 72,638,017 Operating expenses Auditors remuneration 4,816 3,402 72,599 61,660 Accommodation 18,258 182,748 284,519 2,673,252 Advertisements 14,734 48,485 248,218 703,325 Bank charges 5,964 8,843 94,720 130,682 Board sitting allowances 15,850 11,572 259,008 168,829 Computer equipment and expenses 1,569 1,153 24,409 16,900 Conference expenses 9,962 24,792 154,195 366,630 Consultation fees 9 1,619,647 910,904 26,666,445 13,858,589 Employee costs 270,142 292,561 4,361,884 4,352,080 Entertainment and refreshments - 463 - 6,707 Foreign exchange (gain)/loss (71,493) 280,442 1,998,314 (987,323) Insurance 5,756 9,562 95,669 145,705 Legal fees 10,769 10,933 176,087 161,380 Office alterations - 1,669 - 24,776 Postage and courier - 532 - 7,757 Printing and stationary 2,871 7,824 43,873 115,596 Professional services-UFS 82,057 71,108 1,279,724 1,081,326 Professional services-Other 62,866 383,480 993,867 5,686,435 Small equipment 1,249 6,130 19,890 90,825 Subscriptions and newsletters 7,037 12,333 113,746 188,951 Subgrant projects 586,552 973,899 9,724,643 14,829,600 Telephone & Internet 8,852 12,126 144,446 183,542 Training costs 21,469 2,115 321,626 29,384 Travel cost (Flight and car hire) 4,223 256,874 66,341 3,763,488 2,683,152 3,513,948 47,144,224 47,660,097 (Loss) / Surplus for the year 10 (859,642) 1,435,785 (16,489,453) 24,977,920 Other comprehensive income Total comprehensive (loss) / income (859,642) 1,435,785 (16,489,453) 24,977,920 for the year Unaudited 15 Southern African Development Community Groundwater Management Institute (Registration number 2011/011724/08) Comments to the Annual financial statements for the year ended 31 March 2021 1. Description of the project 1.1 Objectives of the project The project development objective (PDO) is to support sustainable management of groundwater at national and transboundary levels across SADC Member States. The PDO will be achieved by investments in four focus areas: 1 The operationalisation of the SADC Groundwater Management Institute (SADC GMI) as a regional centre of excellence for the region; 2 Strenghthening national and transboundary institutional management of groundwater; 3 Advancing scientific research on groundwater challenges; and 4 Promoting infrastructure solutions for the development of groundwater resources. To achieve and sustain the PDO, the project includes resources for technical capacity-building within and for Members states, mobilisation of long-term finances for SADC GMI, and building ownership and engagement at national level through focal groups, networks, internships and pilot- grants. 1.2 Project Components The project consist of the following 4 components: Component A: Operationalising the SADC Groundwater Management Institute A1 Coordination & administration (incl. Operational staff) A2 Raising awareness, knowledge management and communication A3 Support for National Focal Groups A4 Regional capacity building and training A5 Mobilising and soliciting financing & design of small grants scheme Component B: Strengthening institutional capacity for the sustainable management of ground water in SADC B1 Governance and institutional support consultant B2 Compliance & advocacy B3 Guidelines, standards and management tools B4 Groundwater monitoring and data management B5 Transboundary cooperation Component C: Advancing knowledge on transboundary and national groundwater C1 Support to transboundary Aquifer Management C2 Support the undertaking and dissemination of research on critical groundwater challenges. C3 ICT platform for knowledge sharing Unaudited 16 Southern African Development Community Groundwater Management Institute (Registration number 2011/011724/08) Notes to the Annual financial statements for the year ended 31 March 2021 1.2 Project Components (continue) Component D: Promoting groundwater infrastructure management and development D1 Infrastructure for improved groundwater utilisation management and protection D2 Impact evaluation and learning D3 Operational support for groundwater infrastructure development D4 Support to securing funding and developing partnerships for infrastructure development 1.3 Implementation The SADC Secretariat in Gaborone, Botswana, through the Directorate for Infrastructure and Services ( Water Division), is the custodian of the project and the recipient of the grant. The SADC Member States will take part in developing and implementing the projects through Member State representatives on the SADC Subcommittee on Hydrogeology, alongside focal points, focal groups and networks at national level. The University of the Free State in Bloemfontein, South Africa, will implement the project and host the SADC GMI on behalf of the SADC Secretariat and Member States. A small sub-grants system was established to provide small sub-grant financing to SADC Members States. 2. Project financing The project is financed through a US$8.20 million grant from the Global Environment Facility (GEF) and a US$2 million grant from the Multi-Donor Trust Fund Cooperation in International Waters in Africa (CIWA). The project components financed is as follows: (US$ million) Program Components GEF CIWA TOTAL A Operationalising the SADC GMI 2.0 0.8 2.8 B Strengthening institutional capacity for sustainable groundwater management 1.5 1.5 C Advancing knowledge on transboundary and national groundwater 1.8 1.2 3.0 D Promoting groundwater infrastructure management and development 2.9 2.9 Total 8.2 2.0 10.2 Unaudited 17 Southern African Development Community Ground Water Management Institute (Registration number 2011/011724/08) Comments to the Annual financial statements for the year ended 31 March 2021 Sustainable Groundwater Management in SADC Member States Project (P127086): Project Expenditure report at 31 March 2021 Variance: Expenditure for Total Project Actual spend Project Components & Activity Descriptions the year ending Expenditure to Total vs 31 March 2021 31 March 2021 Committed Committed (USD) (USD) (USD) (USD) A0 - Component A. Operationalising the SADC Groundwater Management Institute 615,851 3,693,552 3,902,500 208,948 A1 - Coordination & administration (incl. Operational staff) 349,495 2,493,682 2,616,000 122,318 A1.1 Office installations, tools and equipment acquisition, operation and maintenance, Software - 34,960 35,000 A1.2 Project Launch - 28,861 29,000 A1.3 Interim Project Set-up and implementation Support (Interim Director) - 127,229 128,000 A1.4 Obtain subsidiary Status for SADC-GMI - - - A1.5 SADC-GMI staff recruitment and placement - 50,411 51,000 A1.6 SADC-GMI Staff 221,088 896,047 1,004,000 A1.7 SADC-GMI Governance through the Board (training, board meetings, etc) 18,734 162,922 166,000 A1.8 Project Coordination -Steering Committee/SADC Secretariat/partners related activities 95 208,107 257,000 A1.9 Update and implementation of SADC-GMI Strategic Business Plan - 98,000 98,000 A1.10 Operations Support Services (Insurance, Travel/Transport, Legal, Printing, Postage,etc) 27,041 274,937 294,000 A1.11 Project financial audits 4,716 26,518 37,500 A1.12 Project reviews/evaluations - 33,716 41,000 A1.13 Project Closure - - - A1.14 Implementation of UFS Hosting Agreement (includes reimbursement of expenses during set- 77,821 401,004 324,500 up) A1.16 UFS Professional Services Rendered to SADC-GMI - 150,971 151,000 A2 - Raising awareness, knowledge management and communication 81,759 694,602 740,500 45,898 A2.1 Recruitment of Communications and Knowledge Management Specialist 36,202 189,388 205,000 A2.2 Development of Awareness and Communication Strategy for SADC-GMI - 43,560 44,500 A2.3 Production and distribution of information and knowledge materials 25,666 59,273 56,000 A2.4 Establish, operate and maintain information management systems and meta databases 7,492 100,871 102,000 A2.5 Collaboration with other international groundwater institutions in knowledge transfer and sharing lessons learnt through seminars, conferences, workshops e.g WaterNet, UNESCO-IHP, IGRAC, 87 212,991 224,000 WRC, ICPs, etc A2.6 Organisation and hosting of project awareness and publicity events 5,878 44,090 50,000 A2.7 Translation and distribution of awareness and knowledge products down to community levels 6,433 44,430 59,000 A3 - Support to National Focal Groups through Sub-Grants 157,611 212,545 234,000 21,455 A3.1 Establishment of National Focal Groups in all SADC Member States 157,611 162,577 176,000 A3.2 Capacity Building and Support to National Focal Groups - 49,968 58,000 A4 - Regional capacity building & training 2,078 246,165 253,000 6,835 A4.1 Undertake Capacity Needs Assessment to determine priority challenges for capacity building - 51,546 52,000 initiatives in Member States A4.2 Delivery of priority training to participants from Member States including internships at IGS etc 2,078 194,619 201,000 A5 - Mobilising and soliciting financing & design of small grants scheme 24,909 46,558 59,000 12,442 A5.1 Development, approval and dissemination of Sub-Grant Manual 24,909 46,525 53,000 A5.2 Development and implementation of a SADC-GMI long term sustainability financing plan - 33 6,000 B0 - Component B. Strengthening institutional capacity for groundwater management  46,589 1,554,093 1,580,000 25,907 B1 - Governance and Institutional Consultant 46,523 147,918 160,000 12,082 B1.1 Recruitment and placement of Governance & Institutional Consultant - 1,936 2,000 B1.2 Governance & Institutional Support Consultant Inputs 46,523 145,982 158,000 B2 - Support for Legal, policy and regulatory frameworks updating and Compliance 66 501,017 502,000 983 B2.1 Undertake Gap Analysis study on the existing legal, policy & regulatory frameworks and 66 480,146 200,000 compliance thereof for groundwater management in the SADC Member States B2.2 Implement a targeted advocacy programme to influence decision makers, practitioners and communities in Member States to address gaps and/or align legal, policy & regulatory frameworks as - 21,963 200,000 well as enforce compliance B2.3 Render Technical Assistance to one pilot Member State to develop a road-map for addressing - -1,092 102,000 gaps in the legal, policy & regulatory frameworks identified through the Gap Analysis study B3 - Guidelines, standards and management tools - 360,036 361,000 964 B3.1 Development of 5 guidelines/standards/tools for effective groundwater management identified - 360,036 361,000 through the Gap Analysis study on the existing legal, policy & regulatory frameworks B4 - Groundwater Monitoring and Data Management - 486,817 488,000 1,183 B4.1 Resuscitation of the SADC Hydrogeological Map - 11,022 12,000 B4.2 Member States status quo analysis of Groundwater Monitoring & Data Management, elabiration of a Capacity Building roadmap and delivery of one training on Groundwater Monitoring and Data - 475,795 476,000 Management including the SADC-Groundwater Information Portal (SADC-GIP) B5 - Transboundary cooperation - 58,304 69,000 10,696 B5.1 Secure formal cooperation with at least two RBOs demonstrating advocacy for integration of - 15,417 23,000 groundwater RBO activities B5.2 Undertake at least 6 joint activities with RBOs to promote integration of groundwater in their - 42,887 46,000 work plans and budgets C0 - Component C-Advancing knowledge on transboundary & national groundwater 973,249 1,777,661 1,817,500 39,839 C1 - Support to Transboundary Aquifer Management 699,091 860,889 899,500 38,611 C1.2 Establish formal arrangements for supporting TBA Management identified - 21,955 92,000 C1.3 Implement 4 activities supporting TBA Management identified (Drought Risk 450k and 2nd TBA 333,523 461,637 399,000 550k) C1.4 Research on Second TBA (Eastern Kalahari) 365,569 377,297 408,500 C2 - Support to Transboundary Aquifer Management - 429,340 446,000 16,660 C2.1 Undertake one research to contribute to regional groundwater knowledge such as deep/shallow - 403,279 417,000 well potential C2.2 Host at least 2 Knowledge Management fora on applications of Groundwater research in the - 5,551 7,000 Member States C2.3 Support researchers to participate in at least 2 external research dissemination events e.g. - 20,510 22,000 WaterNet 2018 Conference or similar platforms C3 - ICT platform for knowledge sharing 274,158 487,432 472,000 -15,432 C3.1 Investigation, design and set up the SADC Groundwater Information Portal 124,160 165,938 150,000 C3.2 Data collection, conversion and uploading on the SADC Groundwater Information Portal e.g. 149,997 321,493 322,000 Grey Literature data D0 - Component D. Promoting groundwater infrastructure mgmt & development  1,009,734 2,768,794 2,900,000 131,206 D1 - Infrastructure for improved groundwater utilisation management and protection 572,304 1,811,689 1,848,000 36,311 D1.1 Support piloting of demonstration infrastructure options including dissemination of results 572,304 1,811,689 1,848,000 D2 - Impact Evaluation and Learning 92,213 250,445 271,000 20,555 D2.1 Follow up study of pilot projects from predecessor project and dissemination of results 92,213 250,445 271,000 D3 - Operational Support for Groundwater Infrastructure Development 202,264 528,235 579,000 50,765 D3.1 Development of Manuals and Guidance tools for groundwater infrastructure including O&M 149,162 307,507 305,000 D3.2 Establish and operationalise framework arrangements to support Member States 12,167 107,392 141,000 D3.3 Infrastructure Consultant 40,935 113,336 133,000 D4 - Support to Securing Funding and Development Partnerships for Infrastructure 142,953 178,425 202,000 23,575 D4.1 Develop and train Member States to guide them on preparation of project proposals and 142,953 178,425 202,000 securing funding for groundwater infrastructure projects TOTAL EXPENDITURE 2,645,423 9,794,100 10,200,000 405,900 Note Expenses incurred are applied to the GEF and CIWA funds, using the 74%/26% principle as prescribed by the funder. Unaudited 18