Report No: FIN-2023-46(E) 22 June 2023 SUSTAINABLE FISHERIES RESOURCES DEVELOPMENT PROJECT MINISTRY OF FISHERIES, MARINE RESOURCES AND AGRICULTURE FINANCIAL YEAR 2022 TABLE OF CONTENTS AUDITOR GENERAL’S REPORT...................................................................................................... 1 STATEMENT OF RECEIPTS AND PAYMENTS.............................................................................. 4 NOTES TO THE FINANCIAL STATEMENT .................................................................................... 5 c AUDITOR GENERAL’S REPORT TO THE MINISTRY OF FISHERIES, MARINE RESOURCES AND AGRICULTURE ON THE FINANCIAL STATEMENT OF SUSTAINABLE FISHERIES RESOURCES DEVELOPMENT PROJECT Opinion We have audited the Project’s financial statement of the Sustainable Fisheries Resources Development Project financed by the World Bank/International Development Association (IDA). This financial statement comprises of the Statement of Receipts and Payments for the financial year ended 31 December 2022 and notes to the financial statement, which includes a summary of significant accounting policies and other explanatory information set out in pages 05 to 08. In our opinion, the accompanying financial statement presents fairly, in all material respects, the cash receipts and cash payments for the financial year ended 31st December 2022 and cash balances as at the year then ended, in accordance with International Public Sector Accounting Standard: Financial Reporting under the Cash Basis of Accounting. In addition, we can provide assurance that: (a) The funds provided under the Grant have been utilised for the purposes for which they were provided and; (b) The Procurement guidelines of the World Bank have been complied with in the procurement of goods and services under the project. 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 Statement section of our report. We are independent of the Management in accordance with the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants (Including International Independence Standards) (IESBA Code). We have fulfilled our other ethical responsibilities in accordance with the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Responsibilities of the Management and those Charged with Governance for the Financial Statement The Management is responsible for the preparation and fair presentation of this financial statement in accordance with the International Public Sector Accounting Standard (IPSAS): Financial Reporting under the Cash Basis of Accounting. This responsibility includes designing, implementing and maintaining internal controls relevant to the preparation and fair presentation of financial statement that Auditor General’s Office | Chanbeylee Villa, 1st Floor | Majeedhee Magu | Male’, Republic of Maldives +960 332 3939 | info@audit.gov.mv | www.audit.gov.mv -1- are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Those charged with governance of the project is responsible for overseeing the project’s financial reporting process. Auditor’s Responsibilities for the Audit of the Financial Statement Our objectives are to obtain reasonable assurance about whether the financial statement 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 statement. As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:  Identify and assess the risks of material misstatement of the financial statement, 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 Project’s internal control.  Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.  Evaluate the overall presentation, structure and content of the financial statement, including the disclosures, and whether the financial statement represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governance of the project 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. Review of the Project’s Progress Without qualifying our opinion, we draw attention to the following management issue observed from our review of the project’s progress. We observed that with the approval of the World Bank, seven of the original indicators/ targets were revised during May 2022. And except for one indicator (Viability demonstrated for out-grower farms of groupers (or other species equivalent in value) all the revised indicators of the project was fully delivered before the project was closed on 31st December 2022. Table under Management response shows the actions agreed regarding revised indicators/ targets in the Implementation Completion and Result Report of June, 2023. Majeedhee Magu | Male’, Republic of Maldives Auditor General’s Office | Chanbeylee Villa, 1st Floor | 2 +960 332 3939 | info@audit.gov.mv | www.audit.gov.mv -2- Management response Original Indicator and Revised indicator and Status (Jun 2023) – Management Response Target Target Project Development Objectives Indicators Value of production from Revised indicator achieved. mariculture supported by Mariculture established Original indicator/target dropped but likely to be the project (Target: US$9 and operational achieved by December 2024. million) Direct project beneficiaries Direct project beneficiaries Exceeded both original and revised target for total (of which share of female (of which share of female number of beneficiaries. beneficiaries) (Target: 1800 beneficiaries) (Target: Achieved the target share of female beneficiaries. (20 percent female) 3600 (20 percent female) Intermediate Outcomes Indicators Objective 1 Key policy or legal Key policy or legal Exceeded original target. instruments updated in instruments updated in Achieved revised target. Maldives (Target: 6) Maldives (Target: 16) Achieved revised indicator. Fishing trips covered with On-Board Vessel Electronic Original indicator dropped due to inability operate electronic observation Observation System during the COVID-19 years, partially achieved, and (Target: 6,000) established and operational likely to be achieved during 2024. Intermediate Outcomes Indicators Objective 2 Viability demonstrated for Mariculture Research and out-grower farms of sea Achieved revised indicator. Development Facility is cucumber (or other species Partially achieved original indicator (impacted by completed and operational equivalent in value) (Target: impacts of COVID-19). (Target: 5) 250) Viability demonstrated for Viability demonstrated for out-grower farms of out-grower farms of Nearly achieved revised target (95% achieved). groupers (or other species groupers (or other species Small fraction of original target achieved, likely to be equivalent in value) (Target: equivalent in value) achieved by 2024. 200) (Target: 20) Production of fingerlings by Operational capacity for Achieved revised Indicator. Original indicator’s the hatchery (Target: 2 production and supply of target likely to be achieved by 2024. million) fingerlings in place 22 June 2023 Hussain Niyazy Auditor General Majeedhee Magu | Male’, Republic of Maldives Auditor General’s Office | Chanbeylee Villa, 1st Floor | 3 +960 332 3939 | info@audit.gov.mv | www.audit.gov.mv -3-