Special Purpose Project Financial Statements and IndependentAuditor’s Report For the period January 1 2022- December 31, 2022 VNG International Civil Society Partnership for Resilience Project- TFOB3014 Sint Maarten Special Purpose Project Financial Statements for the period January 1, 2022 - December 31, 2022 VNG International - Civil Society Partnership for Resilience Project - TF0B3014 Table of contents Statement of Management's responsibilities for the preparation and approval of the Special Purpose Project Financial Statements for the period January 1, 2022 - December 31, 2022.................................... 3 Designated Account Reconciliation Statement for the period January 1, 2022 - December 31, 2022.4 Statement of Sources and Uses of Funds for the period January 1, 2022 - December 31, 2022............. 5 Statement of Cumulative Investments for the period January 1, 2022 - December 31, 2022 ................. 7 Statement of Funds disbursed to the CSO's for the period January 1, 2022 - December 31, 2022 ....... 8 Notes to the Special Purpose Financial Statements ...............................................................................................11 Independent auditor's report ............................................................................................................................................15 2 Special Purpose Project Financial Statements for the period January 1, 2022 - December 31, 2022 VNG International- Civil Society Partnership for Resilience Project - TFOB3014 Statement of Management’sresponsibilities for the preparation and approvalof the Special Purpose Project Financial Statements for the period January 1, 2022 - December 31, 2022 Management of International Cooperation Agency of the Association of Netherlands Municipalities (hereinafter “VNG International”) as the recipient of the Grant Number TF0B3014 VNG in connection with Sint MaartenCivil Society Partnership Facility for Resilience Project (“the Project”), acknowledges and understandsthatit has responsibility: for the preparation and fair presentation of the special purpose project financial statements in accordancewith the International Public Sector Accounting Standard: Financial Reporting Under the Cash Basis of Accounting, Termsof the Grant Agreementand Applicable Laws and Regulations, World Bank Guidelines and the Project Operations Manual (“reporting framework”); for such internal control as management determinesis necessary to enable the preparation of the special purposeprojectfinancial statements that are free from material misstatement, whether due to fraud or error; and In preparing the special purpose project financial statements, managementis responsible for: selecting suitable accounting principles and apply them consistently; making judgements and estimates that are reasonable and prudent; stating whether the reporting framework has been followed, subject to any material departures disclosed and explained in the special purpose financial statements; and preparing the special purpose project financial statements on a going concern basis, unlessit is inappropriate to presumethatthe Project will continueits activities for the foreseeable future. Managementis also responsible for: designing, implementing and maintaining effective and sound internal controls and for identifying risks in the internal control system; maintaining proper accounting records that disclose, with reasonable accuracy at any time, the financial position of the Project, and which enable them to ensurethat the special purpose project financial statements of the Project comply with the reporting framework; compliance with laws and regulations applicable in Sint Maarten, accounting system of the Project and the requirements of the World Bank; taking such steps as are reasonablyavailable to them to safeguard the assets of the Project; and Detecting and preventing fraud and otherirregularities. The special purpose financial statements the period January 1, 2022 - December 31, 2022 were approved June “30, 2023 by the VNG International representing, Civil Society and authorized for issue on jus Partnership for oject - TFOB3014 Jeroense,June 30;2023 Special Purpose Project Financial Statements for the period January 1, 2022 - December 31, 2022 VNGInternational- Civil Society Partnership for Resilience Project - TFOB3014 Designated Account Reconciliation Statementfor the period January 1, 2022 - December31, 2022 ACCOUNT NUMBER:NLO8 ABNA 0880 7008 58 with (Bank) ABN AMRON.V. (Expressed in United States Dollars) Cumulative Cumulative 2022 2021 -USD- -USD- 1 TOTAL ADVANCED BY WORLD BANK 1,314,174 1,947,923 2 LESS: ELIGIBLE EXPENDITURE FOR THE CURRENT YEAR ENDED 1,546,770 1,559,279 DECEMBER31, 2022 / 2022 DOCUMENTED BY WORLD BANK LESS: CUMULATIVE ELIGIBLE EXPENDITURE FOR THE PRIOR - - PERIODS ENDED DECEMBER 31, 2022/2022 DOCUMENTED BY WORLD BANK 3 PRESENT OUTSTANDING AMOUNT ADVANCED TO THE (232,596) 388,644 DESIGNATED ACCOUNT(1-2) 4 BALANCE OF USD DESIGNATED ACCOUNT PER BANK 30,546 303,076 RECONCILIATION STATEMENTASAT PERIOD END DECEMBER 31, 2022/2021 BALANCEOF PROJECT ACCOUNTPER BANK RECONCILIATION 163,428 145,985 STATEMENTAS AT PERIOD END DECEMBER31, 2022/2021 5 PLUS: ELIGIBLE EXPENDITURE FOR THE CURRENT YEAR - “ DOCUMENTED AFTER THE PERIOD END DECEMBER31, 2022/2022 6 PLUS: TOTAL AMOUNT WITHDRAWNANDNOTYET CLAIMED - - REASON: 7 PLUS: AMOUNTS CLAIMED IN PREVIOUS APPLICATIONS NOT - - YET CREDITED AT DATE OF BANK STATEMENTS SUBTOTAL OF PREVIOUS APPLICATIONS NOT YET CREDITED - - 8 LESS: INTEREST EARNED - - 9 TOTAL ADVANCE ACCOUNTED FOR (NO. 4 THROUGHNO. 9) 193,975 449,061 10 DIFFERENCE(3 - 9) (22,490) (60,417) 11 EXPLANATION OFANYDIFFERENCE SHOWNIN LINE10 (22,490) (60,417) PLUS: Outstanding balance of advance on VNGInternational's Pool Account (to be transferred to the Designated Account) LESS: Payables at period-end - recipient costs (45,760) (68,250) PLUS: Recipient cost paid - reported in IFR in 2021 68,250 7,833 4 Special PurposeProject Financial Statements for the period January 1, 2022 - December 31, 2022 VNG International- Civil Society Partnership for Resilience Project - TFOB3014 Statement of Sources and Usesof Fundsfor the period January 1, 2022 - December 31, 2022 July 28, Current 2022 2020- Year Source of Financing December Cumulative 31,2021 2022 -USD- -USD- Actual Actual RECEIPTS - World Bank Advance 1,314,174 1,947,923 3,262,097 Reimbursement - - Direct payment - - Total Receipts (A) 1,314,174 1,947,923 3,262,097 EXPENDITURES Component 1: Small Grants to CSO’s for Reconstruction and 879,579 886,124 Resilience 1,765,703 Component2: Capacity Building and TA for local CSO's 246,679 193,478 440,157 - International Team Leader and Communications 78,392 69,215 147,607 - Capacity Building and Training Manager 53,565 87,360 140,925 - Senior Project Manager- Project Director (VNGi) 35,067 20,442 55,509 -Mobilization cost Team Leader(incl hotel and movement costs) 2,530 - 2,530 - Housing allowance Team Leader 8,750 - 8750 - International travel budget Team Leader 4,483 251 4,734 - Short-term local experts ; 1,500 1,500 -Travel, board, lodging for international missions 10,091 10,091 - Travel budgetfor localoffice 2,375 2,100 4,475 - Communications budget and information sessions 10,857 6,254.24 17,111 - Office rent/training and meeting space 27,885 1,878 29,763 - Running costs office/operational costs (training and meeting space) 12,684 4,478 17,162 Component3: Project managementand Coordination 420,511 479,677 900,188 - International Team Leader and Communications 20,955 139,700 160,655 - Local Project Coordinator, Deputy team Leader and ME 63,200 48,000 111,200 5 fy Special Purpose Project Financial Statements for the period January 1, 2022 - December31, 2022 VNG International- Civil Society Partnership for Resilience Project - TFOB3014 July 28, Current 2022 2020- Year . . December Cumulative Source of Financing 31.2021 2022 -USD- -USD- Actual Actual - Grants managerandIT Specialist 20,911 7,130 28,041 - Finance and control Specialist 20,350 37,781 58,131 - Safeguardspecialist(s) 2260 4615 6,875 - Senior Project Manager- Project Director (VNGi) and MT member 31,450 25,160 56,610 - Junior Project Manager (VNGi) 64,445 22.444 86,889 - Housing allowance team leader 16,640 27,039 43,679 - Mobilization costs Team Leader(incl. hotel and movement) ; 6,746 6,746 - International travel budget Team Leader _ 11,257 11,257 - Travel, board, lodging for international missions 18,836 - 18,836 - Travel budgetforlocaloffice 1,541 200 1,741 -External audits - project related 39,163 - 39,163 Running costs office/operationalcosts (training and meeting space) 4,661 20,113 24,774 - Office Rent 14,324 27,000 41,324 ~ Reciptentcasts 101,775 102,490 204,265 Total Expenditures (B) 1,546,770 1,559,279 3,106,049 RECEIPTS LESS EXPENDITURES Net Changein Cash(A - B) -232,595 388,644 156,049 Foreign Exchange Adjustment - - - BANK BALANCES Opening Cash Balances - Designated Account 303,076 - - Project Account 145,985 - - Total Opening Balance 449,061 : ° Closing Cash Balances Designated Account 30,546 303,076 30,546 Project Account 163,428 145,985 163,428 Total Closing Balance 193,975 449,061 193,975 6 Special Purpose Project Financial Statements for the period January 1, 2022 - December 31, 2022 VNG International - Civil Society Partnership for Resilience Project - TFOB3014 Statement of Cumulative Investments for the period January 1, 2022 - December31, 2022 Current Previous mueyeat iod iod Year Feriy perroc’ Cumulative Total Grant Categories 2022 2021 2022 Amount -USD- -USD- -USD- -USD- Actual Actual Actual Actual 1. Non-consulting services, consulting services, administration and managementfee under the Project 667,191 673,155 1,340,346 3,200,000 2. Small Grants underpart 1 of the Project 879,579 886,124 1,765,703 4,000,000 TOTAL 1,546,770 1,559,279 3,106,049 7,200,000 Current year-end cumulative investments outof total grant amount Total Current Year Grant Cumulative Categories Amount 2022 %of total -USD- -USD- Actual Actual % 1. Non-consulting services, consulting services, administration and managementfee under the Project 3,200,000 1,340,346 42% 2. Small Grants underpart 1 of the Project 4,000,000 1,765,703 44% TOTAL 7,200,000 3,106,049 43,1% 7 Special Purpose Project Financial Statements for the period January 1, 2022 - December 31, 2022 VNG International- Civil Society Partnership for Resilience Project - TFOB3014 Statement of Funds disbursedto the CSO’s for the period January 1, 2022 - December31, 2022 2022 Cumulative Current Year -USD- 2021 Cumulative _ Acai -USD- 2022 -USD- Description Actual Actual Fundsreceived from WB Withdrawal applications funds received 1.314.174,38 1,947,922.78 Amounts Disbursed to CSO's Excellence Learning Academy 22,682.25 22,682.25 Sint Maarten Yacht Club 4.230.46 36,000.00 40,230.46 Kids at Sea Foundation 711.22 55,079.10 55,790.32 Be the Change Foundation 819.00 37,976.26 38,795.26 Freegan Food Foundation 2,999.00 56,971.00 59,970.00 Discovery Kidz Playschool/Nursery & Night Care Foundation 13.477,17 30,874.00 44,351.17 Stichting Justitiele Inrichtingen Bovenwinden 1,325.66 40,364.03 41,689.69 RISC Takers Football Club 9,800.00 9,800.00 DOW's Musical Foundation 6,994.26 43,701.40 50,695.66 University of St. Maarten Foundation 3,131.79 37,448.00 40,579.79 SECDA (QW-2) 7,059.30 50,000.00 57,059.30 St. Maarten Senior Citizen Recreational Foundation (QW-2) 4,402,90 17,550.10 21,953.00 AIDS Foundation 33,785.92 33,785.92 Animal Defenders St. Maarten Foundation 19,600.00 19,600.00 Carib Swim Team 43,318,04 43,318,04 Foundation Catholic Education St Maarten 49,650.40 49,650.40 Helping Hands Foundation 50,000.00 50,000.00 K1 Britannia Foundation 48,125.28 48,125.28 Nanny Nurssy 28,439,05 28,439,05 Nature Foundation 39,474.89 39,474.89 Philipsburg Jubilee Library 2,900.00 47,701.42 50,201,41 Reading Rainbow and Early Stimulation Nursery and Afterschool Foundation 31,500.00 31,500.00 SECDA (QW-1) 44,637.60 St. Maarten Senior Citizen Recreational Foundation (QW-1) 11,443.01 11,443.01 Dow Musical Foundation (DMF) 81,988.80 81,988.80 Sint Maarten Aids Foundation (SAF) 61,332.00 61,332.00 Safe Haven Foundation (SHF) 27,503.00 27,503.00 721 Kids Foundation (SKF) 40,731.45 40,731.45 Carib Swim Team (CST) 49,165.71 49,165.71 Kidz at Sea Foundation (KAS) 59,636.00 59,636.00 Special Purpose Project Financial Statements for the period January 1, 2022 - December 31, 2022 VNG International- Civil Society Partnership for Resilience Project - TFOB3014 Cumulative Current Year 2022 : -USD- 2021 Cumulative Actual -USD- 2022 -USD- Description Actual Actual Environmental Protection in Cariben (EPIC) 40,275.10 40,275.10 Sint Maarten Early Childhood DevelopmentAssocation (SECDA) 79,998.50 79,998.50 Hearts United Holistic Care Foundation (HUHCF) 36,105.80 36,105.80 Funtopia Youth Initiative Foundation (FYI) 60,651.00 60,651.00 Stichting Justitiele Inrichtingen Bovenwinden (SJIB) 50,641.68 50,641.68 Stichting Katholiek Onderwijs Sint Maarten (SKOS) 16,279.76 16,279.76 Nature Foundation 21,084.00 21,084.00 Sint Maarten Yacht Club 37,630.00 37,630.00 No Kidding With Our Kids Foundation (NKWOK) 33,152.08 33,153.08 Freegan Food Foundation (FFF) 27,000.00 27,000.00 NewStart for Children Foundation (NSCF) 39,990.00 39,990.00 St Maarten Sea Rescue Foundation (SSRF) 49,714.19 49,714.19 St Maarten Heart and Stroke Foundation 13,989.00 13,989.00 Our Creations St Maarten Arts & Crafts Foundation 5,160.47 5,160.47 Total 879,679.30| 886,023,99 1.765.703,29 Amountsused by CSOsto finance subprojects (as per periodic financial reports submitted by CSPs to and approvedby VNGi. Dow Musical Foundation (DMF) 68,634.50 68,634.50 Sint Maarten Aids Foundation (SAF) 58,382.58 58,382.58 Safe Haven Foundation (SHF) 27,503.00 27,503.00 721 Kids Foundation (SKF) 41,995.70 41,995.70 Carib Swim Team (CST) 47,457.08 47,457.08 Kidz at Sea Foundation (KAS) 76,902.74 76,902.74 Environmental Protection in Cariben (EPIC) 18,203.16 18,203.16 Sint Maarten Early Childhood DevelopmentAssocation (SECDA) 76,917.47 76,917.47 Hearts United Holistic Care Foundation (HUHCF) 28,562.28 28,562.28 Funtopia Youth Initiative Foundation (FYI) 46,515.49 46,515.49 Stichting Justitiele Inrichtingen Bovenwinden(SJIB) 34,830.03 34,830.03 Stichting Katholiek Onderwijs Sint Maarten (SKOS) 16,279.76 16,279.76 Nature Foundation 7,041.14 7,041.14 Sint Maarten Yacht Club 21,000.24 21,000.24 No Kidding With Our Kids Foundation (NKWOK) 20,478.10 20,478.10 Freegan Food Foundation (FFF) 24,553.76 24,553.76 NewStart for Children Foundation (NSCF) 40,718.20 40,718.20 St Maarten Sea Rescue Foundation (SSRF) 50,710.70 50,710.70 St Maarten Heart and Stroke Foundation 4,700.64 4,700.64 Our Creations St Maarten Arts & Crafts Foundation 3,506.22 3,906.22 Excellence Learning Academy 3,409,98 12,815.98 16,225.96 9 oe Special Purpose Project Financial Statements for the period January 1, 2022 - December 31, 2022 VNG International - Civil Society Partnership for Resilience Project - TFOB3014 Cumulative Current Year 2022 ; -USD- 2021 Cumulative Actual -USD- 2022 -USD- Description Actual Actual Sint Maarten Yacht Club 40,230.46 40,230.46 Kids at Sea Foundation 4,668.24 51,122.08 55,790.32 Be the Change Foundation 20,441,26 18,354.00 38,795.26 Freegan Food Foundation 59,970.00 59,970.00 Discovery Kidz Playschool/Nursery & Night Care Foundation 10,633.85 34,558.15 45,192.00 Stichting Justitiele Inrichtingen Bovenwinden 16,256.60 25,433.19 41,689.69 RISC Takers Football Club 9,800.00 9,800.00 DOW's Musical Foundation 6,354.98 44,340.68 50,695.66 University of St. Maarten Foundation 40,579.79 40,579.79 SECDA (QW-2) 5,608.15 51,451.15 57,059.30 St. Maarten Senior Citizen Recreational Foundation (QW-2) 21,953.00 21,953.00 AIDS Foundation 33,785.92 33,785.92 Animal Defenders St. Maarten Foundation 19,600.00 19,600.00 Carib Swim Team 43,315.79 43,315.79 Foundation Catholic Education St Maarten 49,650.40 49,650.40 Helping Hands Foundation 50,000.00 50,000.00 K1 Britannia Foundation 48,124.89 48,124.89 Nanny Nurssy 28,436.80 28,436.80 Nature Foundation 39,474.89 39,474.89 Philipsburg Jubilee Library 50,000.00 50,000.00 Reading Rainbow and Early Stimulation Nursery and Afterschool Foundation 31,500.00 31,500.00 SECDA (QW-1) 44,637.60 44,637.60 St. Maarten Senior Citizen Recreational Foundation (QW-1) 11,443.01 11,443.01 Total 781,725.75 860,577.78 1,642,303.53 Balance held by CSOs (pendingjustification to VNGi) 97,953.22 25,446.21| 123,399.76 10 Special Purpose Project Financial Statements for the period January 1, 2022 - December 31, 2022 VNG International- Civil Society Partnership for Resilience Project - TFOB3014 Notes to the Special Purpose Project Financial Statements for the period January 1, 2022 - December 31, 2022 1.Project Background The objective of the Sint Maarten Civil Society Partnership Facility for Resilience Project (the Project) is to improve the capacity of civil society organizations and provide them with grant resources to implement reconstruction andresilience sub-projects at the community level. The Resources for Community Resilience (R4CR) program officially started on 10 July 2022 with the formalsigning of the agreement between the WB and VNG International (VNGI). The program will last for a period of four years until June 2024. The activities of the Projects consist mainly of the following classified componentsofthe grant: Part 1. Small Grants to CSOs for Reconstruction and Resilience Provision of Small Grants to eligible Civil Society Organizations ("CSOs") to work with communities to generate and implement Subprojects focused on reconstruction and resilience activities, including in the areas, including, inter alia: minor rehabilitation and beautification; indoor and outdoor sports facilities; community service facilities; activities to enhance environmental protection; social care services; youth skills development and employment; and hurricane preparedness activities. R4CR does not finance majorcivil works nor new constructions. Rather, projects financed will constitute those requiring rehabilitation and be of small magnitude. In addition, R4CR will not include any land acquisition nor displacement of populations. Applications will be submitted and screened against predeterminedeligibility criteria. In the period January 2022 until December 2022, the R4CR Project Implementation Unit (PIU) launchedtworegular application rounds(round 4 and 5), while round 3 wasstill ongoing in this period. Project applications are demanddriven and CSOsarefully accountable for project results achieved. The PIU made minor adjustmentto both the Grant Manual (GM) as well as the Project Operations Manual (POM) butthese wereeffectuated beyondthis reporting period (January 2023). In the period 2022-2024 a maximumoffour additional application rounds can be organized provided that the financial resources are sufficient. The PIU has analyzed the results of ‘Quick-Win’ round 1, which was completed in June 2022 and used the outcomes to make minor adjustments to both the Grant Manual (GM) as well as the Project Operations Manual (POM). Part 2. Capacity Building and TechnicalAssistance for local CSOs Provision of capacity building and technical assistance for local CSOs: (a) to design and implement Sub-projects (including in the areas of financial management and reporting, and Project management, supervision, monitoring and evaluation, and progress reporting), and to collect information on the needs of the CSOs to inform the capacity needs assessmentand action planning; (b) systematically develop the capacity of the CSOs based on annualcapacity building plans; and (c) to support the technical needs of the Project and an ongoing coaching program for eligible CSOs. 11 Special Purpose Project Financial Statements for the period January 1, 2022 - December31, 2022 VNG International- Civil Society Partnership for Resilience Project - TFOB3014 Part 3. Project Managementand Coordination Provision of assistance to the Recipient in Project managementand coordination, and in carrying out the day-to-day operation of the Project, including: (a) the Project's administrative requirements, the oversight and managementof the Project's fiduciary and environmental and social requirements, Project planning, monitoring and evaluation (including design and undertaking of qualitative and quantitative evaluations), knowledge management (including reporting and documenting good practices), and coordination and communicationactivities; and (b) support for the operation of the Project Technical Committee, including harmonizing and aligning the activities supported by the Project with otherexistinginitiatives. Managementand coordinationalso involve processes of the grant mechanism orthe project cycle and activities that aim at awareness creation, education and communication. This componentsupportsall other logistical and operational aspects of the R4CR program which ensure that management and oversight of local CSOs function smoothly. In addition, the componentwill supportactivities related to the functionality of the Project Technical Committee (PTC) that provides oversight and coordinates and harmonizesproject activities with other related work on St. Maarten. 1.2 Comparativefigures The figures publishedin this report for the period January 1, 2022 - December 31, 2022 represent the first audited reporting period of VNG International Civil Society Partnership for Resilience Project. 1.3 Summarytotal financing Category Amountof the Percentage of GrantAllocated expenditures to (expressed in be Financed USD) (incl. of taxes) (i) Goods, works, non-consulting services, 3,200,000 100% consulting services, Training and Workshops,and Operating Costs underthe Project (ii) Small Grants under Part I of the Project 4,000,000 100% TOTAL AMOUNT 7,200,000 1.4 Recipient Costs In accordance with the budget agreed between WBand VNG International, it was concluded that the recipient costs (i.e. managementfees) are not dependentonthe total numberofgrants processed and are not being a margin on the volume.It was agreed thatall costs in components 2 and 3 ought to be the base of the managementfee, except for the grantline. All of the lines except the grant line should thus have a managementfee markup,to enable VNG International to do the work. 12 Special PurposeProject Financial Statementsfor the period January 1, 2022 - December 31, 2022 VNG International- Civil Society Partnership for Resilience Project - TFOB3014 1.4 Recipient Costs (continued) Previous Current Year Curent period Cumulative -USD- -USD- -USD- Actual Actual Actual Recipient Costs (18%) 101,774 102,490 204,265 2. Presentation of the Special Purpose Project Financial Statements 2.1 Basis of preparation These special purpose project financial statements have been prepared in accordance with the International Public Sector Accounting Standard: Financial Reporting Under the Cash Basis of Accounting, Terms of the Grant Agreement and Applicable Laws and Regulations, World Bank Guidelines and the Project Operations Manual(“reporting framework”). 2.1.1 Statement of compliance These special purpose project financial statements consistof: - Statementof Designated Account - Statement of Sources and Usesof Funds - Statement of Cumulative Investments - Significant accounting policies and other explanatory information The reporting currencyof these special purpose project financial statements is US Dollars ("USD"). 2.1.2 Basis of measurement These special purpose project financial statements have been prepared on the historical costbasis. 2.1.3 Functional and presentation currency The functional currency is United States Dollars (USD). The amounts expended in Netherlands Antillean Guilder (“NAF”) are converted to United States Dollars (“USD”) at exchangerate of 1.8 NAF for 1 USD. The reporting currency of the project is USD. 2.2. Significant Accounting Policies 2.2.1 Funds received Fundsreceived are recognized on the cash basis that is at the time when are received. 2.2.2 Expenses Expensesare recorded on cashbasis thatis at the time of paymentinstead of whenincurred. 13 Special Purpose Project Financial Statements for the period January 1, 2022 - December 31, 2022 VNG International - Civil Society Partnership for Resilience Project - TFOB3014 2.2.3 Rounding-off The figures have been roundedoff to the nearest wholedigit. 2.2.4 Sourcesof funds The funds were provided by the World Bankto the Project by replenishmentof designated Account, reimbursements, or when possible, through direct payment to the end supplier of goods and/orservices. 2.2.5 Restricted use of funds and otherassets The Credit, Loan and Grant agreementrequire that the funds available in the Designated Accountbe restricted to the Project use only. Any project funds available at the end of the Project should be returned to the World Bank. 2.2.6 Cash and cash equivalents Cash and cash equivalents include cash on hand and due from banks, which can be converted to the corresponding amountofcash in the short term. Cash and cash equivalents consisting of the Project account held at ORCO BANK N.V. and the Designated accountheld at ABN AMRO BANK N.V. Account Number Bank Currency Closing Balance (Closing Balance (31.12.2022) (31.12.2021) 5350890195 ORCO BANK N.V. USD 30,547 145,985 NLO8 ABNA 0880 700858 ABN AMRO BANK USD 163,428 303,076 N.V. 2.2.7 Taxes The Project related taxes and mandatory payments are calculated and paid in accordance with tax regulations applicable in St. Maarten. 2.2.8 Covenants According to the Schedule 2 of the Grant Agreement, VNG International is required to comply with certain conditions. Managementis of the opinion that the Project complies with all conditions included in the Grant Agreement. 2.2.9 Subsequent Events Managementhasevaluated the subsequent events between December31, 2022 and June 29, 2023, the date whenthe Special Purpose Project Financial Statements wereavailable to be issued and there are no subsequent events that would require adjustment or disclosure. There are no subsequent events which require presentation or disclosureto the special purpose financial statements. 14 T: +1 721 543 0614 BDO St. Maarten B.V. F: +1 721 543 0615 P.O. Box 5347, St. E: info@bdo.sx Sparrow Road 4B, Philipsburg www.bdo.sx St. Maarten Independent auditor’s report To: Management and Board of Directors of International Cooperation Agency of the Association of Netherlands Municipalities A. Report on the audit of the Special Purpose Project Financial Statements Our opinion We have audited the Special Purpose Project Financial Statements of International Cooperation Agency of the Association of Netherlands Municipalities (hereinafter “VNG International”, “the entity”) in connection with the Civil Society Partnership for Resilience Project no.TF0B3014 (“the Project”), financed under the agreement concluded between the World Bank and VNG International on July 10, 2020, which comprise: the Statement of Designated Account Reconciliation, Statement of Sources and Uses of Funds, Statement of Cumulative Investments and Statement of Funds disbursed to the CSO’s for the period ended December 31, 2022 and notes, comprising a summary of significant accounting policies and other explanatory information (“Special Purpose Project Financial Statements”). In our opinion, (i) the accompanying Special Purpose Financial Statements of the Project for the period ended December 31, 2022 are prepared in all material respects, in accordance with the International Public Sector Accounting Standard: Financial Reporting Under the Cash Basis of Accounting, Terms of the Grant Agreement and Applicable Laws and Regulations, World Bank Guidelines and the Project Operations Manual; (ii) the expenditures reported are eligible for financing; and (iii) grant funds have been used only for the Project. Basis for our opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Special Purpose Project Financial Statements section of our report. We are independent of VNG International in accordance with the ‘Verordening inzake de onafhankelijkheid van accountants bij assurance-opdrachten (ViO)’ and other relevant independence regulations in the Netherlands. Furthermore we have complied with the ‘Verordening gedrags- en beroepsregels accountants’ (VGBA). We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Registered office St. Maarten. Chamber of Commerce registration number 18395. BDO B.V. is a member of BDO International Ltd, a UK company limited by guarantee, and forms part of the worldwide network of independent legal entities, each of which provides professional services under the name ‘BDO’. BDO is the brand name for the BDO network and for each of the BDO Member Firms B. Emphasis of Matter – Basis of Accounting and Restriction on Distribution and Use We draw attention to Note 2.1 to the Special Purpose Project Financial Statements, which describes that the Special Purpose Project Financial Statements have been prepared by management in accordance with the International Public Sector Accounting Standard: Financial Reporting Under the Cash Basis of Accounting, Terms of the Grant Agreement and Applicable Laws and Regulations, World Bank Guidelines and the Project Operations Manual (“reporting framework”). The Special Purpose Project Financial Statements are prepared to assist VNG International in complying with the requirements of the World Bank and for providing information to the Government of Sint Maarten and National Recovery Program Bureau (“NRPB”) to assist them in evaluating the Project implementation. As a result, the Special Purpose Project Financial Statements may not be suitable for another purpose. Our opinion is not modified in respect of this matter. C. Description of responsibilities for the Special Purpose Project Financial Statements Responsibilities of management of the project and those charged with governance for the Special Purpose Project Financial Statements Management is responsible for the preparation of these Special Purpose Project Financial Statements in accordance with the International Public Sector Accounting Standard: Financial Reporting Under the Cash Basis of Accounting, Terms of the Grant Agreement and Applicable Laws and Regulations, World Bank Guidelines and the Project Operations Manual and for such internal control as management determines is necessary to enable the preparation of Special Purpose Project Financial Statements that are free from material misstatement, whether due to fraud or error. Those charged with governance are responsible for overseeing the financial reporting process of the Project. Auditor’s Responsibilities for the Audit of the Special Purpose Project Financial Statements Our objective is to plan and perform the audit assignment in a manner that allows us to obtain sufficient and appropriate audit evidence for our opinion. Our audit has been performed with a high, but not absolute, level of assurance, which means we may not have detected all material errors and fraud. Misstatements can arise from errors or fraud 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 Special Purpose Project Financial Statements. The materiality affects the nature, timing and extent of our audit procedures and the evaluation of the effect of identified misstatements on our opinion. 16 We have exercised professional judgment and have maintained professional scepticism throughout the audit, in accordance with International Standards on Auditing, ethical requirements and independence requirements. Our audit included e.g.:  Identifying and assessing the risks of material misstatement of the Special Purpose Project Financial Statements, whether due to errors or fraud, designing and performing audit procedures responsive to those risks, and obtaining 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 errors, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;  Obtaining 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;  Evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management;  Evaluating the overall presentation, structure and content of the Special Purpose Project Financial Statements, including the disclosures;  Evaluating whether the Special Purpose Project Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation;  Evaluating whether the expenditures reported are eligible for financing; and  Evaluating whether the grant funds have been used only for the project. We communicate with those charged with governance, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant findings in internal control that we identify during our audit. Sint Maarten, June 30, 2023 For and on behalf of BDO St. Maarten B.V., P.C. Lungu FCCA Ref.: R23.053/nm/PL 17