REPUBLIC OF VANUATU DEPARTNIENT OF CLIIATE CHANGE Ministry of Climate Change and Natural Disasters Private Mail Bag 9054, Port Vila a Telephone: (678) 22160; Email: docc@vanuatu.gov.vu; All corresyozdonrs directed to the Director FINANCIAL STATEMENTS FOR THE FOREST CARBON PARTNERSHIP FACILITY (FCPF) - READINESS PREPARATION PROJECT FCPF GRANT No. TF 019203 (VANUATU) For the Period Ended 30 September 2022 REPUBLIC OF VANLUATU DEPARTMENT OF CLIMATE CHANGE Ministry of Climate Change and Natural Disasters I Private Mail Bag 9054, Port Vila Telephone: (678) 22160; Email: docc(9vanuatu gov.vu; All correspondents directed to the Direcror Table of Contents Auditors Report 2-3 Statement of Cash Receipts and Payments 4 Statement of Comparison of Budget and Actual 5 Statement of Accounting Policies and Notes 1. Accounting Policies 6-7 2. Cash Receipts 8 3. Cash Payments 8- 10 4. Cash Balance 10 5. Budget 10- 11 6. Commitments 11 7. Imprests 11 8. Property Plant & Equipment 12 9. Related Parties 12 10. Creditors 12 11. Authorization Date 12 1 partners CHARTERED ACCOUNTANTS AND BUSINESS ADVISERS Independent Auditors' Report to the members of Forest Carbon Partnership Facility (FCPF) - Readiness Preparation Project Grant No. TF 019203 (Vanuatu) The Auditor-General is the auditor of the Forest Carbon Partnership Facility (FCPF) - Readiness Preparation Project. The Auditor-General has appointed Law Partners to undertake the audit of Forest Carbon Partnership Facility (FCPF) - Readiness Preparation Project pursuant to Section 24(1) of the Expenditure Review and Audit Act [CAP 2411. Audit Opinion We have audited the accompanying financial statements of the Forest Carbon Partnership Facility (FCPF) - Readiness Preparation Project for the period ended 30 September 2022 consisting of the statement of cash receipts and payments, statement of comparison of budget and actual amount and accompanying notes set out on pages 4 to 12. In our opinion, the financial statements for the period ended 30 September 2022 as described above present fairly in all material respects, in accordance with International Public Sector Accounting Standards - Financial Reporting under Cash Basis of Accounting and the projects administration complies with relevant Vanuatu legislation and regulations. Basis for Opinion We have conducted our audit in accordance with International Standards on Auditing. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the Financial Report section of our report. We are independent of the project in accordance with the ethical requirements of the Accounting Professional and Ethical Standards Board's APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial statements in Vanuatu. We have fulfilled our other ethical responsibilities in accordance with the Code. Key Audit Matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Responsibilities of members for the financial statements The members of the project are responsible for: * the preparation and fair presentation of these financial statements and the information they contain, in accordance with International Public Sector Accounting Standards: Financial Reporting under Cash Basis of Accounting; * implementing necessary internal controls to enable the preparation of the financial statements that gives a true and fair view and is free from material misstatement, whether due to fraud or error; and * assessing the project's ability to continue as a going concern. This includes disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless they either intend to cease operations or have no realistic alternative but to do so. PRINCIPALS mai Ftawpartnersvauatuxon JONATHAN LAW VICKI JOE LAW PARTNERS HOUSE LRI BONGALON PO BOX 212 2 PORTVILA I VANUATU www L partnersVanUatu.com TEL-+678 1'9 law parners CHARTERED ACCOUNTANTS AND BUSINESS ADVISERS Independent Auditors' Report to the members of Forest Carbon Partnership Facility (FCPF) - Readiness Preparation Project Grant No. TF 019203 (Vanuatu) (Continued) Auditors' responsibilities for the audit of the financial statements Our objective is: * to obtain reasonable assurance about whether the financial statements as a whole is 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 International Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise friom fiaud or error. They 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 the International Standards on Auditing, we exercise professional judgement and maintain professional scepticism throughout the audit. A further description of our responsibilities for the audit of the financial statements is located at the website https://www.ifac.ori/system/files/publications/files/ISA-700- Revised 3.pdf. This description forms part of our auditor's report. LAW PARTNERS Alipate La'au Chartered Accountants Partner (Qualified auditors under Section 130 of the Port Vila Companies Act No. 25 of 2012 of the Republic 30 June 2023 of Vanuatu) 3 REPUBLIC OF VANUATU DEPART1ENT OF CLIMATE CHANGE ' Mlinistry of Climate Change and Natural Disasters Private Mlail Bag 9054, Port Via Telephone: (678) 22160; Email: docc7Zvanuatu.go% vu: AIl correspopnders directed to the Director GOVERNMENT OF VANUATU DEPARTMENT OF CLIMATE CHANGE FINANCIAL STATEMENTS FOR THE FOREST CARBON PARTNERSHIP FACILITY (FCPF) READINESS PREPARATION PROJECT (FCPF GRANT NO. TF 019203) FOR THE PERIOD ENDED 30 SEPTEMBER 2022 STATEMENT OF CASH RECEIPTS AND PAYMENTS Expressed in Vonuatu Votu Notes 2022 2021 Cumulative CASH RECEIPTS 2 Direct Payments 38,175,499 18,781,029 156,318,458 Designated Account 39,119,125 67,237,996 505,240,176 TOTAL CASH RECEIPTS 77,294,624 86,019,025 661,558,634 CASH PAYMENTS Category 1 3 84,507,717 104,969,690 656,376,769 Component 1- Institutional Strengthening 24,488,332 36,236,496 257,976,479 Component 2 - Strengthening Stakeholder Engagement Process 1,462,400 3,133,800 77,321,007 Component 3 - Development of REDD + Strategy 3,813,000 1,229,700 86,595,161 Component 4 - Establishing National Forest Monitoring System 54,743,985 64,369,694 234,484,122 TOTAL CASH PAYMENTS 84,507,717 104,969,690 6S6,376,769 CASH RECEIPTS LESS CASH PAYMENTS (7,213,093) (18,950,665) 5,181,865 IMPRESTS 7 (6,076,600) (7,417,000) - NET CHANGE IN CASH (1,136,493) (11,533,665) 5,181,865 ADD OPENING CASH BALANCE AS AT 1 JANUARY 6,318,358 17,852,023 - CLOSING CASH BALANCE AS AT 30 SEPTEMBER 4 5,181,865 6,318,358 5,181,865 These statements are to be read in conjuction with the accompanying notes and accounting policies 4 т р1 р1 о� � г� оо п и N н и и гV т ш и ш п со т и о ш v и и т гv и n n n v о v rn о г� rv н� о о н n � ш�D tD �ti v v г� �-i п т Й .ч V v tc" � r, n n п v а со г� т оо т v и ro г. � т М М И т н п м н н и .-i V v т ¢ ш ш' й � о г� о г� й,ч й гч v v ш' � ии й й N н и rv п v т со и т N� .� � ш оо оо оо м т г� оо п и и� и т а оо Е т а а а м гv и и о ш а п и о � v о о о и т о? г� �о и г� а� ' и v n о и т oi oi а; г.i й г� v �i й т ni м т о а; .-i н н и ео о и и и со и и т и н v о о о v v о и оо ш н и и ro н о Е ш ш ш v й й N°п' v т.`�ч й й ппi ш •у ш�о ш гV �ч н rv�о � со оо м о и и о о о о о о м м и ,ы и и т о н со о о о о о о т т и .�� й о о М н о ГV о0 гу N � Ор � и т ry т lL1 '� с 00 СО 1� �О oi О l0 V V N N О V 1� О �� �,ч н и о и оо ш т т и ы v н и и N N N М и N сГ О1 Q1 М и М н N Q1 ± ,�'� �о rv rv м гп г� � т м т й о й о м ао � н н т н н н ш т н ы в s л ;'� N N°т т�°г�° о о° о °о `F о й о о и v и т� w w� п�� i. й й ш �'� � ai ai Ф чi ri т пi пi р1 oi ai oi о ,� .. ,t1, а�,� н и м т v м т г� гч и и r,���� . г� Т, о о т гv т rv н н г� гv м т й ... а ш й а ш й ш пi пi �i �i СΡ� с+о Со о м н н �D о.�Ч н н - г т т м и т т о о о о о о п т т оо оо т т ш о о о о о о т ао и � о о о и и rv оо о о и и о и о � ш г� г� �: г� .-i v й ro оо г�i rv о гri n" ы i т т м м v и rv ш г� rv � .� � ro т 0 � 'о rv н ro и и и v н�-± о и и а и и W в Q �� оо оо oi rv м т � г� п о й v оо д 0 � т и т т с rv rv н ы W и � и N �-- .ч н н .�-� н и '�' i д °� а й о Е1 ,�7 р •- � q т г и и м т о т о о о о � о о м м Q х � �; ш Q й и и г� и n т о о о� о� о н n т и и v и г�+ а о и и о о м а о � 4 м т � с v а н ai й и о п � п г� � �i м U � С(д. -. о g 'ы .�. го rv и ы а v и о м т со оо м н н 0 � и ш С7 р о о ао ш т т о о о н н о� оо гЧ � �"' ,р �'1' р Q он �°у 7 � > гтv й н и V а н н.ч м м й �и{' �: `Ч а С 7'д Z1 ьi '� т о ш д П, 4 F О и' р Ь в \ �'" U �'�' t+ р`� � о v v n г� гv о о о о о и г� м �о (у .7 рр � г7 С� г � г� г� г� .ч м и п о о о о w н т Q �, О и и n м v оо v с� о � о т n о �.Л О W Д р W � г ш z а N� й т о W � н й й �-мi .-mi v о н Е U � U (Д 4� � а v о rv гу и v о о v v w оо п и и с С а � N � г� � v п V о �-i .ti ^i т п v n � ~� и д� G '�` � О n а г� n w rv,-. ы и ао - о � W,�, � г! а ш у и`� -'°о н � �� � i и^ 0 -- ш О о о о и г� т о о о о о и о т !", д и у = �- т т т о� т о о о о о о т т а�у у г н н н ro н г; о о о о о N н v ��аГ Q � 4�0 � О � � oi oi pi �: й rv о о о о о�-i л о � н н м rv ы о о о о о т н W W р ,ь ш � т м м н г� а о и и о о и т � А� и ,у Q L° °о о° °о °т .тч ы н н гv гп г� е оо с и О м Й ,ч н н н с � .СрΡ, ` а '�' и v .+ rv т а и и п оо т о � г ui й ui vi ui vi vi vi ui � н � а ;, е v _ � У � о L Е л`, с �а ,_. о 3 _ о с � � с Ш т 'r а о Е � о �о ,_. й � v т т •� � С v (р У,С �р П1 Ш о С _ / L у лп � v �, о a�i +• ш � к �.� ш 3� с -! . и и Е р� Е v с а и О°' `° � т у р о С о т+ о v о„о. �з L � U L�- С � Ш �. Г1 �h 01 ��G С К � � 10 N �� а � N'� s а' Е LL.�- О О у`°_, `= � и оп о о� С i0 `1 Й.� -р � С V у С. р. т Q и С ш С� N й С v''' П! Q'р -р С � о* т� г�р -�О Е У N с L �-j � о а> т а т ш � •� р г о Кп с� о`о � с= а Е а « s о а с'с т 3 ш о л р v ш - � r ш ш� о гп ''�' г ;.° ш � с о_а `^ сп Е О" о. ,- ш Q и g '> � F' 3 � '^ � 'i ' n rv ` й пf п,¢ с V' Ш О l7 v •у Q'� Z й й� й Q� Q й г� v== Н у и с.� г� м с н г� с н г� т е т и т а т а,-i н н а пi rv а пi пi rvi а а � й� й й й й �° � г P-EPUBILIC OF'VAINUAYU DEPARTNIENT OF CLIMATE CHANGE Ministry ofClimate Change and Natral Disasters Private Mail Bag 9054, Port Vila Telephone: (678) 22160; Email: doccIF-variuatu.gov.,. ; .411 correspondents directed to the Director Statement of Accounting Policies and Notes 1. Accounting Policies Basis of Preparation The financial statements of the project have been prepared in accordance with the requirement of the Public Finance & Economic Management Act (Cap 244) which includes the requirement to comply with generally accepted accounting practice. The financial statements have been prepared in accordance with Cash Basis IPSAS "Financial Reporting under the Cash Basis of Accounting". There have been no changes in accounting policies during the period. Reporting Entity These financial statements are prepared specifically for a project that is managed by the Department of Forestry (DoF), supported in its fiduciary aspects by the Project Management Unit (PMU) of the Vanuatu Department of Climate Change (DoCC). The project is funded through grants totaling US$6, 100,000 from the Readiness Fund of the Forest Carbon Partnership Facility (FCPF), and implemented through the World Bank. The DoF and DoCC form part of the Government of Vanuatu (GoV). Under a grant agreement dated 31 March 2010, between GoV and the World Bank's International Bank for Reconstruction and Development (IBRD), an amount not exceeding US$200,000 was provided for formulating the REDD+ Readiness Preparation Proposal (R-PP). (REDD+ means reducing emissions from deforestation and forest degradation, conservation of forest carbon stocks, sustainable management of forest, and enhancement of forest carbon stocks). Subsequent to the formulation of the R-PP, FCPF agreed to provide funding to move ahead with preparation for REDD+ readiness. To this end, GoV, with the support of the World Bank, SUccessftilly secured this second grant of US$3,600,000 from FCPF to address these needs. In May 2018, this Grant Agreement was amended to allocate an additional US$2,500,000 to enable it to carry out additional activities of the Readiness Preparation. Under the Grant Agreement, only one Category of expenditure is provided for, as follows: Type US$ Category I Goods, non-consulting services, consultants' services, Training and 6,100,000 Workshops, and Operating Costs. Total 6,100,000 The allocation of expenditure is therefore managed through Components and sub-components. The grant agreement, and amendment, identified the budget activities according to the following four components to be implemented under the project: 1 Institutional Strengthening This includes activities to a) establish the National REDD+ Unit and supporting the REDD+ Technical Committee, b) support the National Advisory Board on Climate Change and Disaster Risk Reduction (NAB) and its Project Management Unit (PMU), and c) establish the provincial REDD+ Committees. All this support is done through providing financial, technical and human resource support. 6 REPUBLIC OF VA_NUATU DEPARTMENT OF CLIMATE CHANGE Ministry of Climate Change and Natural Disasters V Private Mail Bag 9054, Port Vila Telephone: (678) 22160; Email: docc@vanuatu.gov.vu; All correspondents directed to the Director 1. Accounting Policies (continued) 2 Strengthening Stakeholders Engagement Process Activities under this component include a) strengthening participatory structures at the provincial and area council level to support stakeholder engagement in REDD+ process and b) assessing feedback and grievance redress mechanisms at the national and decentralized levels, and supporting their strengthening for REDD+. 3 Development of REDD + Strategy Activities under this Component include a) supporting analytical work to inform REDD+ strategy options, b) undertaking Strategic Environmental and Social Assessment (SESA) and preparing Environment and Social Management Framework (ESMF) and c) conducting consultation and participation on key issues related to REDD+. 4 Establishing a National Forest Monitoring System This includes the carrying out of a program of activities to establish and finalize a national forest monitoring system, including: a) developing and operationalizing a measuring, reporting, and verification system, including finalizing forest inventories; b) capacity building and strengthening of the forest monitoring system, including upgrading the database system; and c) developing and operationalizing a safeguards information systems. The project's accounting is fully integrated within the Government's Smart Stream system with additional data capture and reporting functions to accommodate the project's requirements such that payments are allocated against the respective Component, and reported accordingly. The Project commenced operations during the third quarter of 2015, although the official commencement date was 10 April 2015 (the date of the grant agreement). The end date of the Project was initially extended to 31 May 2022, and subsequently another four months up to 30 September 2022 ("grace period") was allowed in order to settle the final payments incurred up to 31 May 2022. Accounting Period IPSAS cash accounting standards require that general purpose financial statements be prepared at least annually (IPSAS cash para 1.4.1). These financial statements cover the nine-month period from I January to 30 September 2022, up to the end of the project, and are the final financial statements for the project. The balance of undrawn grants as at 30 September 2022 is US$ 191,384, which is approximately VUV 23 million. This, together with the cash balance of VUV 5,181,865 (to be refunded to WB), represents the unspent project funds at the end of the project. Currency Reporting Currency The reporting currency is Vanuatu Vatu (VUV). Foreign Currency In-country payments made in foreign currencies and reported in these financial statements have been converted to VUV by the National Bank of Vanuatu at the applicable rate as of the date of transaction. The in-country fund receipts transferred fi-om the World Bank were all in VUV. The grant mentioned above is denominated in US$. Withdrawals are charged against the grant, in the grant currency, based on exchange rates applied by the World Bank. Cash and Cash Equivalents Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash, which are subject to an insignificant risk of changes in value. 7 REPUBLIC OF VANUATU DEPARTNIENT OF CLIMATE CHANGE Ministry Of Clinate Change and Natural Disasters Private Mail Bag 9054. Port Vita ' Telephone: (678) 22160; Email: docc@5vanuatu.gov-vu; ' All correspondernts directed to the Director 2. Cash Receipts (VUV) Designated Account World Bank value date 3 March 2022 11,561,727 World Bank value date 9 May 2022 27,557,398 Total (VUV) 39,119,125 Direct Payments UNIQUE FORESTRY US$ 142,385.20 WB value date 29 March 2022 15,848,775 ALUBAT LTD PTH VANUATU VUV 5,386,730 WB value date 1 April 2022 5,386,730 UNIQUE FORESTRY US$ 142,385.20 WB value date 7 July 2022 16,939,994 Total (VUV) 38,175,499 The Designated Account (DA) is the local, entity-managed, account; funds are transferred from World Bank periodically, from which payments are made. Direct Payments are made by World Bank directly to the supplier/consultant, based on the official request of the authorized signatories of the project. DoF receives the funds, which are managed by the Vanuatu DoCC/PMU, through the centralized Smart Stream system. Under this arrangement DoF does not control the funds; however, they carry out the implementation of the project. PMU makes payments on their behalf after appropriate authorization and documentation provided by DoF. Variance with Data in Smart Stream The Cash Receipts for 2022 in VUV in these financial statements is reconciled with the data in Smart Stream as follows: Per Smart Stream (Revenue) (As per Vision report) 39,119,165 Per Financial Statements 77,294,624 Variance (38,175.459) The variance relates to the following: Direct Payments 2022, not yet taken up in Smart Stream 38,175,499 DA transfer 3 March 2022, incorrect amount in Smart Stream (40) Total 38,175,459 3. Cash Payments The overall total of payments is given in the Statement of Cash Receipts and Payments. Further details are given in the table below. 8 REPUBLIC OF VANUATU DEPARTMENT OF CLIMATE CHANGE Nlinistuxv of Climate Cliatige zmd Natural Disasters Private Mail Bag 9054, Port Vila Telephone: (678) 22160; Email: docc@vanuatu.gov.vu; * All corresponrdenits directed to the Director 3. Cash Payments (continued) SUMMARY OF PAYMENTS Expressed in Vanuatu Vatu Notes 2022 2021 Cumulative Component I Institutional Strengthening 24,488,332 36,236,496 256,352,962 1.1 REDD+ Unit and TC 14,071,462 19,992,518 168,720,667 REDD+ Technical Specialist 5,776,195 7,782,300 74,395,591 Outreach and Extension Officer - 1,538,253 11,454,912 Smartstream System Development & Implementation - - 756,000 Technical Conrnittee Meetings - 929,880 1,854,840 Website Designer - - 180,000 Property Plant & Equipment 8 1,389,469 245,181 14,144,996 Training & Workshops 1,978,060 1,302,340 20,469,086 Operating Costs 4,927,738 8,194,564 45,465,142 1.2 Support to NAB& PMU 10,416,870 16,243,978 67,144,437 Procurement Officer - - 11,139,968 Structural Engineer - - 1,800,000 Cartoonist - - 234,000 Assistant Finance Officer - - 2,788,600 ProjectAudit 900,000 875,000 3,050,000 Project Manager 4,229,640 4,411,560 10,027,200 Procurement Officer 2 - 2,186,800 9,994,600 Procurement Advisor 462,901 627,501 2,679,704 Finance Officer 1,432,500 4,170,000 13,507,500 Financal Management Adviser 3,391,829 3,973,117 11,922,865 1.3 Provincial REDD+ Committees - - 20,487,968 Training & Workshops - - 11,556,565 Operating Costs - - 233,040 Renovation of Forestry Extension - - 8,698,353 Component 2 Strengthening Stakeholder Engagement Process 1,462,400 3,133,800 77,321,007 2.1 Strengthening Decentralization Structures 1,462,400 3,133,800 46,137,765 Training & Workshops (Farmer Association) - - 1,535,000 Training & Workshops (TAC CB) - - 5,685,680 Training & Workshops (TAC Coordinator) - - 720,000 CSO Coordinator - - 4,181,200 Training & Workshops (CSO) 1,462,400 3,133,800 34,015,885 2.2 Assessment& Strengthening of FGRMs - - 31,183,242 Institutional Specialist - - 16,468,540 Legal Draftsman- 9,331,247 Training & Workshops (TAC Coordinator) - - 4,842,255 Travel Expenses- 541,200 Component 3 Development of REDD+ Strategy 3,813,000 1,229,700 102,613,174 3.1 Analytical Work for Strategy Options - - 3.2 SESA Process & ESMF Development - - 62,141,066 Strategic Environment and Social Assessment - - 46,440,235 SESA Training &Workshop- - 5,700,830 3.3 Consultation and Participation Activities 3,813,000 1,229,700 60,372,109 Awareness materials (design & development) 805,000 29,500 6,305,525 Media awareness producer - 300,000 1,173,573 VBTC - - 792,880 Training & Workshops 56,000 - 19,026,183 Media Awareness - - 140,625 Property Plant & Equipment 8 - - 15,918,013 Media awareness production - - 2,320,110 Printing of materials 2,952,000 900,200 4,695,200 Component 4 Establishing National Forest Monitoring System 54,743,985 64,369,694 220,189,626 Inventory, MRV, Database etc 32,788,769 15,905,650 81,220,649 Database Officer - 104,000 2,840,000 NTFP - - 9,436,650 Redd+ Strategy - 2,875,379 7,154,243 Training & Workshops 2,662,050 43,557,300 96,335,050 Field Materials 86,067 683,122 2,751,692 Property Plant & Equipment 8 9,984,401 611,750 10,596,151 Technical Reports 3,513,654 632,493 4,146,147 Safeguard Information System 4,469,044 - 4,469,044 MRV Support Officer 1,240,000 - 1,240,000 Total 84,607,717 104,969,690 666,376,769 9 REPUBLIC OF VAINUATU DEPARTMENT OF CLILMATE CHANGE Ministry of Climate Change and Natural Disasters Prixate Mail Bag 9054, Pot Vila Telephone: (67S) 22160; Email docc@.vanuatu.gov.v-u; All correspondenrs directed to the Director 3. Cash Payments (continued) Variance with Data in Smart Stream The Cash Payments for 2022 in VUV in these financial statements is reconciled with the data in Smart Stream as follows: Per Smart Stream (Expenses) (As per Vision report) 36,636,400 Per Financial Statements 84,507,717 Variance (47,87 1,317) The variance relates to the following: Direct Payments 2022, not yet taken up in Smart Stream 38,175,499 Imprests added in Smart Stream in 2021, but included in 2022 Financial Statements 7,572,200 Journals not yet taken up in Smart Stream 1,150,000 Difference to be identified 973,618 Total 7,871,317 4. Cash Balance The closing cash balance in these financial statements is taken up as follows: Balance in the GoV Smart Stream ledger as at 30 September 2022 5,631,845 Journals to be taken up in Smart Stream (449.980) Total 5,181,865 5. Budget The 2022 budget was developed for all the components and sub-components for this project, on the same accounting basis (cash basis) as for the financial statements. It encompasses the same entities as the financial statements. The lifetime budget in VUV as per these financial statements is based on the total funding available, in equivalent VUV. The lifetime budget is monitored against the likely amount of VUV to be generated from the US$ grant, to ensure that the grant is not over-committed. There is no budget for Cash Receipts. There was a net outflow of cash during 2022, with the actual cash receipts being lower than the actual payments and the payments budget. The drawdowns from the grant are made to ensure that there are sufficient funds available to meet payment commitments on an ongoing basis, and as the actual payments were lower than budgeted, there was no need to draw down additional funds from the grant. 5.1 Explanation Variance Component 1.1 This small overall variance relates to changes in actual requirements for the technical specialist and operating costs. 5.2 Explanation Variance Component 1.2 This variance relates to the lower than budgeted expenses incurred for the procurement adviser. 5.3 Explanation variance Component 1.3 The budget for training and workshops allocated under this sub-component was no longer required and therefore not used in the current year. 5.4 Explanation Variance Component 2.1 Actual cost of trainings and workshops under this sub-component was lower than expected. 10 REPUBLIC OF VANUATU DEPART.1NENT OF CLINIATE CHANGE liniistry of Climate Change and Natural Disasters PrivMate Nail Bag 9054. Port Vila Telephone: (678) 22160; Email: docc@Zvanuatu.gox-.x-u; All correspondenits directed to the Director 5.Budget (continued) 5.5 Explanation Variance Component 2.2 There were no planned activities and no expenses for 2022. 5.6 Explanation Variance Component 3.1 There were no planned activities and no expenses for 2022. 5.7 Explanation Variance Component 3.2 There were no planned activities and no expenses for 2022. 5.8 Explanation Variance Component 3.3 Actual cost of printing of materials budgeted for was lower than expected. 5.9 Explanation Variance Component 4 Less cots incurred as a result of no longer requiring the input of 2 consultants and lower costs of trainings and workshops initially budgeted for. 6. Commitments The outstanding (unpaid) contract commitments, as at 30 September 2022 is NIL, due to the closure of the project 2021:VUV 60,271,580) as detailed by component in the following table. 2022 2021 Component 1 - 22,161,295 Component 2 - Component 3 - - Component 4 - 38,110,285 TOTAL - 60,271,580 7. Imprests As at 30 September 2022, there were no unretired imprests (2021: VUV 6,076,600), as per the detailed table below. IMPRESTS SUMMARY FOR THE PERIOD ENDED 30 SEPTEMBER 2022 Cumulative Net Cumulative Date of Balance Imprests Retired Refund Movement Balance Name Advance 31/12/21 2022 2022 2022 2022 30/09/22 ABM (Fuel) various 250,000 250,000 (250,000) ELLEN MAKIN 11/05/21 762,400 762,400 (762,400) JAMES SAMUEL 29/06/21 2,106,600 2,106,600 (2,106,600) REXON VIRA 10/08/21 743,200 743,200 (743,200) PHYLLIS KAMASTEJA 25/08/21 700,000 700,000 (700,000) SAMSON LULU 13/10/21 641,200 641,200 (641,200) NANCY ERNEST 15/12/21 873,200 873,200 (873,200) TOTAL IMPRESTS 6,076,600 - ' 6,076,600 (6,076,600) - 11 REPUBLIC OF VANUATU DEPARTMENT OF CLIMATE CHANGE Ministry of Climate Change and Natural Disasters Private Nvail Bag 9054, Port Vila . . Telephone: (678) 22160; Email: docc@vanuatu.gov.vu; * All cor-espopidents directed to the Director 8. Property Plant & Equipment Payments for Property Plant & Equipment (PPE) are charged fully as disbursements under the respective Component, and included in the Statement of Cash Receipts and Payments, at cost; these are recorded in a PPE Register, for the purposes of inventory control. 2022 2021 Cumulative Motor Vehicles - 2,990,000 IT Equipment 5,507,140 245,181 11,578,002 Office Furniture - 1,365,156 Building Extension - 3,543,536 Other Assets - 123,730 NFI Tools 5,866,730 611,750 18,921,554 TOTAL 11,373,870 856,931 38,521,978 There are no fixed assets purchased on hire purchase schemes and no depreciation is being charged. 9. Related Parties There were no related party transactions during the period. The ultimate owner of the project is Vanuatu Government through the Department of Forestry, as set out in the Grant Agreement. 10. Creditors As at 30 September 2022, there were no unpaid invoices (2021: VUV 2,719,218). 11. Authorization Date The financial statements were authorized for issue on 0 June 2023 by Mr Mike Sam Waiwai on behalf of DoF and the Department of Climate Change. Mr Mike Sam Waiwai Mrs Esline GARAEBITI Director DoCC DG MOCC 12