WORLD BANK GOVERNMENT OF GHANA GHA4AENERGY SECTOR TRANSFORMATION INITIATIVE PROJECT (GESTIP) IDA CREDIT NUMBER 63o3-GH FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 BA SIC 1N FO R M A TIO N.... ......... ............ ............................ P R O JEC I BA C K G R O L N D ... .............................. ...................................... ...... ....... A U D IT O R 'S RE POORRT .................................. .. ....... ............................................. STATEMENT OF RECEIPTS AND PAYMENTS ......... ................................................................. 3 STATEMENT OF FINANCIAL POSITION...... ......................-....... 1...............................4 ST A T E M E N T O F C A SH FLO .............................. ....................................................................................... 5 NOIES TO [H E FINANCIAL STATEMENTS..................................... ..................................................... 6 N O TE I. A C C O U N T IN G PO LIC IES................ ......................................... ........... ..... ............ 6 N O T E 2 . R E C E P T S ..._............. ........ ........................................... . . .... ........... .......... NOTE 3. DISBURSEMENT BY PROJECT COMPONENTS...............................................................7 NOTE 4. DESIGNATED ACCOUNT RECONCILIATION STATEMENT............................................7 NOTE 5. SUMMARY OF WITHDRAWAL APPLICATIONS........................................_......................8 N O T E 6 . B A N B A L A N C E S ............................ ................................ .................................................... 8 NO E . TA EM NTOFAC U LATED FUND .... .................................................. ........ .9 NO~TE 7STATEMENT OF ACCUMUAE\FN. N O TE 8. PLA N T A N D EQ U IPM E N T ............ ..................... ........... ....................................................... 9 N O T E 9: FIX E D A SSET S SC I IE D U L ... ............................................ ............................................. ... 10 GHANA ENERGY SECTOR TRANSFORMATION INITIATIVE PROJECT (GESTIP) FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 PROGRAMME GHANA ENERGY SECTOR TRANSFORMATION INITIATIVE PROJECT (GESTIP) 12-MONTH PERIOD 1st. January - 31st. December 2022 PRINCIPAL INSTITUTION Ministry of Energy PRINCIPAL OFFICE GEDAP Secretariat Ministry of Energy P. 0. Box SD 40 Accra, Ghana PROJECT OFFICERS PROJECT CORDINATING TEAM Project Coordinator Financial Management Consultant Procurement Specialist Communication Specialist Power Specialist/Access Manager Gas Specialist Renewable Energy Expert M&E Expert E&S Safeguards Specialist SUMMARY OF RECEIPTS & PAYMENTS 2022 2021 US$ USS TOTAL RECEIPTS 5,818,350 5,111,534 TOTAL PAYMENTS 5,251,606 3,485,465 EXCESS OF PAYMENTS OVER RECEIPTS 1,626,069 BANKERS BANK OF GHANA AUDITORS Auditor-General of Ghana Audit Service, P.O. Box M 96 Accra GHANA ENERGY SECTOR TRANSFORMATION INITIATIVE PROJECT (GESTIP) FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 The Ghana Energy Sector Transformation Initiative Project (GESTIP) is being funded with a contribution of USD 20.00 million by the International Development Association (IDA). The Project Development Objectives (PDO) are: i. To strengthen the capacity of the Energy Sector institutions to implement sector reforms; and ii. To improve Energy Sector planning and coordination in Ghana. The project is being implemented by the Ministry of Energy, through the GESTIP Secretariat providing management and coordination services. ii A CGAD/GEN.ADM/23/19 M. 96 Accra 9 June 23 INDEPENDENT AUDITOR'S REPORT ON THE FINANCIAL STATEMENTS OF THE GHANA ENERGY SECTOR TRANSFORMATION INITIATIVE PROJECT (GESTIP) FOR THE YEAR ENDED 31 DECEMBER 2022 We have audited the Financial Statements of the Ghana Energy Sector Transformation Initiative Project (GESTIP) funded by the International Development Association (IDA). The project is being implemented by the Electricity Company of Ghana (ECG) and coordinated by the Ministry of Energy through the Project Coordination Unit. The Report is intended for the information and use of the Ministry of Energy, Ministry of Finance, Electricity Company of Ghana and the International Development Association. This Report should not be made available to parties not included in this list without our prior consent and we will not be liable for any claim that might be based on this report by such parties. Management Responsibility for the Financial Statements The Management of the Ghana Energy Sector Transformation Initiative Project is responsible for the preparation of financial statements that give a true and fair view in accordance with International Public Sector Accounting Standards and for such internal control, as management determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error and selecting and applying appropriate accounting policies. Auditor's Responsibility Our responsibility is to express an opinion on the financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing (ISA), promulgated by the International Federations of Accountants. Those standards require that we comply with ethical requirements, plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. 1 GHANA ENERGY SECTOR TRANSFORMATION INITIATIVE PROJECT (GESTIP) FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 Basis of Opinion 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 judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risks assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. The Project Management's policy is to prepare the accompanying Statement on Cash Receipts and Disbursement Basis in conformity with International Public Sector Accounting Standards for Cash Accounting. On this basis cash receipts are recognized when received, and cash expenditure when paid rather than when incurred. Our audit was conducted for the purpose of forming an opinion on the Financial Statement as a whole. Opinion In our opinion, the financial statements present fairly, in all material respects, the financial position of the Ghana Energy Sector Transformation Initiative Project (GESTIP) as at 31 December 2022 and of its financial performance and its cash flows for the year then ended in accordance with International Public Sector Accounting Standards and in the manner required by the Financial Agreement between the Government of Ghana and the IDA. BENJAMIN O JOE DEPUTY AUDITOR-GENERA[/CGAD for: AUDITOR-GENERAL 2 GHANA ENERGY SECTOR TRANSFORMATION INITIATIVE PROJECT (GESTIP) FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 STATEMENT OF RECEIPTS AND PAYMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 Note 2022 2021 USS US$ Receipts Funds received from IDA 2 5,818,350 5,111,534 Total Receipts 5,818,350 5,111,53 Payments Goods - - Consultancv Services 3,488,690 3,202,238 Training/Conferences 1,532,179 46,306 Operating Costs 264,681 2 33,921 Total Payments 5,251,606 4 6 Surplus (Deficit) 566,744 1,626,069 Add Opening Cash Balance 2,636,127 1,010,058 Closing cash Balance 3,202,871 2,636,1 3 GHANA ENERGY SECTOR TRANSFORMATION INITIATIVE PROJECT (GESTIP) FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2022 2022 2021 NOTE USD USD NON-CURRENT ASSETS Plant and Equipment 139,008 139,008 CURRENT ASSETS Bank and Cash balances 6 3,202,871 2,636,127 NET ASSETS 3,307,935 2,775,1 REPRESENTED BY Accumulated Fund 7 3,341,879 2,775,135 James Demitrus Kwesi Arhin Project Coordinator Financial Management Consultant Date: 4 Date: 5 4 GHANA ENERGY SECTOR TRANSFORMATION INITIATIVE PROJECT (GESTIP) FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 STATEMENT OF CASH FLOW STATEMENT OF CASH FLOW FOR THE YEAR ENDED 31 DECEMBER 2022 2022 2021 US$ US$ Excess of Payments over Receipts 566,744 1, 626,069 Changes in Working Capital - Net cash inflow from operating activities - Cash flow from investing activities: Net Cash Inflow 5,818,350 5,111,534 Opening Cash/ Bank Balance 2,636,127 1,010,058 Net Cash Outflow 5,251,606 3,485,465 Cash and Cash equivalent as at 31/12/2022 3,168,927 2,636,127 Analysis of Cash and Cash equivalent: Designated Account 3,202,871 2,636,127 Cash and Cash equivalent as at 31/12/2022 3,202,871 2,636,127 5 GHANA ENERGY SECTOR TRANSFORMATION INITIATIVE PROJECT (GESTIP) FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 1,1i 10 11 IL FINNXCLAL S I L\TMENTS NOTES TO THE FINANCIAL STATEMENTS FOR THE 15-MONTH PERIOD ENDED 31 DECEMBER 2022 The following is a summary of principal accounting policies adopted in the preparation of the project's financial statements and are consistently applied in the presentation of this report. a) Basis of Accounting These Financial Statements have been prepared on IPSASs cash Basis under the Historical Cost Convention. Assets and liabilities are reflected or disclosed in the financial reports at the cost incurred or price paid at the time of transaction. b) Revenue Revenue is accounted for on cash basis. This means that Revenues are recognized and recorded only when they are received and not when they are earned. c) Expenditure Expenditure is accounted for when it is incurred. d) Foreign Currency Transactions Transactions that are denominated in currencies other than the United States Dollars are translated in United States Dollars at the exchange rate prevailing at the date of transactions. Transactions in the Comprehensive Statement of Receipts and Payments for the year are translated using the average rate. Balances denominated in currencies other than the US Dollars are translated into US Dollars at the rate prevailing at the Balance Sheet date. Gains or Losses resulting from foreign currency are taken into the Income and Expenditure accounts for the year in which they arise. e) The Level of Approximation of Currency/Amount The Level of Approximation of Currencv/ Amount is to the nearest USS. f) The Reporting Currency The Currency of reporting is in United States Dollars (US$). 6 GHANA ENERGY SECTOR TRANSFORMATION INITIATIVE PROJECT (GESTIP) FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 Receipts constituted advances into the Designated Account and direct payments by the IDA to Consultants and Suppliers. 2022 2021 FUNDS RECEIVED USD USD Funds Received from IDA: Adxance to Designated Account 4,158,137 5,172,114 Direct Payment 1,6r0,213 1,939,420 Special Commitment - TOTAL FUNDS FROM IDA 5,818,350 7,111,5341 1. 3, BYBVL\Vi1 PRO 1;(I C-0\110I'N'Is PROJECT CO\IPONENTS 2022 2021 2019/2020 CUMULATIVE USD USD USD 1 gt. of Power SeCtOr 15 1,015,464 281,298 238,617 1,535,379 Financial Flows 2. Sector Planning and . 125,951 245,655 0 371,606 Coordinationi 3. Electricity Access 1,789,306 1,501,731 1,852 3,292,889 4. Natural Gas 479,920 988,614 0 1,468,534 5. Project Management 1,840,965 468,168 749,473 3,058,606 TOTAL PROJECT TOT R5,251,606 3,485,466 989,942 9,727,014 COSTS __ __ _ _ _ _ _ _ E 4 1 HE- I GD ACCOUN RI CONCILIAT ON ST1AEENTI Designated Account Reconciliation Statement as at 31 December 2022 USD USD Balance as at 1 January, 2022 2,636,127 Add Funds Received during the year 4,158,137 Total Funds Available 6,794,264 Less Pavments from the Designated Account in 2022 3,59-1,393 Designated Account Balance as at 31 December 2022 3,202,871 7 GHANA ENERGY SECTOR TRANSFORMATION INITIATIVE PROJECT (GESTIP) FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 ~~~0 W1 [I>(D I I II)Rk:VO \LA\I PLICA 1-10\S c c Advance to Total Funds Appmbo A on Direct Payment Designated Received from Number Amountg Account IDA 22 115,219.83L 115,219.83 115,219.83 2_ 21,121,859,501 21,859.501 121,859.50 24 298,456.10) _ ________ __ __ __ 0 24 _151,710.00 151,710.00 151,710.00 26 187,535.66 187,535.66 187535.66 2 7 -115,219.83 115,219.83 115,219.83 28 562,148.45 0 29 128,209.23 128,209.23 128,209.23 30 111,187.50 111,187.50 111,187.50 31 4,158,137.00 4,158,137.00 4,158,137.00 32 425,851.00 425,851.00 425,851.00 333 303,420 00 303,420.00 303,420 00 TOTAL 1,660,212.55 4,158,137.00 5,818,349.55 Bank balances as at 31 December 2022 are indicated below. 2022 2021 US$ US$ Main Designated Account 3,183,012 2,636,127 Sub-Designated Account 19,859 - TOTAL 3,202,871 2,636127 8 Date of Asset Asset Asset Asset VMIIT Asset Name of Name Condition Identification REG. Purchase Type Description Cost Nocation Userffitle Supplier of Asset Number NUMBER Demitrus, Toyota Project Iovota Landcruiser GI IS GW-2180- GESTIP PilU, Coordinator, Ghialnd 29-jan-20 Vehicie Prado-Kd 4WD 367,32850 J TEBI19140K217816 20 MoE, Accra GESI Co. ltd. Good Kwaku Toyota GISTIP/ESRP Appiah-Adu, Toyota Landcruiser GI V-i GW-2171- PlU, Mol, Telch Cord Ghana 2 29-Jan-20 Vehicle Prado-Kd 4WD 367,328.50 I I-B1191-105104100 20 Accra ESRP Co Ltd Good 10