DCG.77/349/02/22 12th December, 2022 The Accounting Officer Ministry of Agriculture, Animal Industry and Fisheries Entebbe REPORT OF THE AUDITOR GENERAL ON THE FINANCIAL STATEMENTS OF AGRICULTURE CLUSTER DEVELOPMENT PROJECT (ACDP) FOR THE YEAR ENDED 30TH JUNE, 2022 I am enclosing herewith a report which I have already sent to the Rt. Hon. Speaker of Parliament in accordance with Article 163 (4) of the Constitution of the Republic of Uganda, 1995 (as amended). John F. S. Muwanga AUDITOR GENERAL Copy to: The Inspector General of Government, Kampala The Hon. Minister of Ethics and Integrity, Kampala The Permanent Secretary/Secretary to the Treasury Ministry of Finance, Planning and Economic Development The IDA/World Bank The Programme Coordinator, Agriculture Cluster Development Project (ACDP) THE REPUBLIC OF UGANDA REPORT OF THE AUDITOR GENERAL ON THE FINANCIAL STATEMENTS OF AGRICULTURE CLUSTER DEVELOPMENT PROECT FOR THE YEAR ENDED 30TH JUNE 2022 OFFICE OF THE AUDITOR GENERAL UGANDA Table of Contents Table of Contents List of Acronyms... O pinion ................ Basis for Opinion...n.i..n... Key Audit Matter 1.0 Implementation of the Approved-udget. Other matter.1 O ther...matter...................................... .............. I0 2.0 Management of the E-Voucher Payment System ystem.10 ............. 10 3.0 Delayed completion of the Agro-Processing Facilies ities..............310 Other Information Management Responsibilities for the Financial Statements tatements.15.......... 14 Auditor's Responsibilities for the audit of the Financial Statents ......-..5... ....... 15 Other Reporting Responsibilitiespnlte1.......................... -, .. ...... ..... 15 Report on the Audit of Compliance with Legislation O pinion .......................... 16 Management Responsibility for the Special Account Statement ......17 Auditor's Responssibility1 Appendices po.. i.. li... ......... Appendix I: Extent of Implementation of Outputs and Acticites. i 8 Appendix II: Findings from Physical Inspections ii List of Acronyms Meaning Acronym ACDP Agriculture Cluster Development Project -EVMA Electronic Voucher Management Agency EVM-S Electronic Voucher Management System FYR IDA International Development Association [iESBA -International Ethics Standards Board for Accountants -fSSls Iter atinaltandrdsof Supreme AuditInstitutions KPIs Key performance Indicators MAAIF Ministry of Agriculture, Animal Industry and Fisheries MOFPED , lnng and Economc Deveopment PAD ProtedtCasal Dument PCU WB n Bank UBAi REPORT OF THE AUDITOR GENERAL ON THE AUDIT OF FINANCIAL STATEMENTS OF AGRICULTURE CLUSTER DEVELOPMENT PROJECT FOR THE YEAR ENDED 30TH JUNE, 2022 THE RT. HON. SPEAKER OF PARLIAMENT Opinion I have audited the accompanying financial statements of the Agriculture Cluster Development Project (ACDP) for the year ended 30th June 2022. The financial statements which comprise of the Statement of Receipts and Payments, Statement of Financial Position, Statement of Fund balances, Statement of Cash Flows, Statement of Special Designated Account Activity and Notes to the financial statements including a summary of accounting policies used. In my opinion, the financial statements of the Agriculture Cluster Development Project for the financial year ended 30' June 2022 present fairly in all material respects the financial performance of the Project and the receipts and payments for the period then ended in accordance with the IDA guidelines and the basis of accounting described under the notes to the financial statements. Basis for Opinion I conducted my audit in accordance with International Standards of Supreme Audit Institutions (ISSAIs). My responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of my report. I am independent of the Project in accordance with the Constitution of the Republic of Uganda, 1995 (as amended), the National Audit Act, 2008, the International Organization of Supreme Audit Institutions (INTOSAI) Code of Ethics, the International Ethics Standards Board for Accountants (IESBA) Code of Ethics for Professional Accountants (Parts A and B), and other independence requirements applicable to performing audits of Financial Statements in Uganda. I have fulfilled my other ethical responsibilities in accordance with the IESBA Code, and in accordance with other ethical requirements applicable to performing audits in Uganda. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion. Key Audit Matter Key audit matters are those matters that, in my professional judgment, were of most significance in my audit of the financial statements of the current period. These matters - were addressed in the context of my audit of the financial statements as a whole and in forming my opinion thereon, and I do not provide a separate opinion on these matters. I have determined the matters described below to be key audit matters communicated in my report. 1.0 Implementation of the Approved Budget Paragraph 2 of schedule 5 of the PFMA requires Accounting Officers to prepare an appropriation account showing the services for which the money expended were voted, the sums actually expended on each service and the state of each vote compared with the amount appropriated for that vote by Parliament. Over the years, I have observed improvements in the performance regarding implementation of the budget but entities still face a number of challenges including 1 COVID, which continue to affect implementation of activities, service delivery and credibility of the budget. It is against this background that budget performance was considered a key audit area during the office-wide planning. I reviewed documents such as work plans, performance reports, conducted interviews and physical inspection in arriving at my findings. The Agriculture Cluster Development Project is mandated to raise on farm productivity, production and marketable volumes of selected Agricultural commodities in specified geographical clusters. The entity had an approved budget of UGX.196,099,513,750 out of which UGX.55,146,758,610 was received and UGX.90,738,625,762 rolled over as opening balance from the previous period implying that UGX.145,885,384,372 was available funds for the year under review. The Project's key deliverables for the financial year under review are detailed in the table below; Tbe1 howing ke deliverables for ACDP for eYa total approved 1 Sub component 4.1 Natonclse 63,034,911,480 32% 2 Sub component 2.2 ACCE- Level Warehousing, Value 35,184,875,00050 addition and marketin 3 Sub component 2.3 am Access Roads and Choke 34,61,057,000 68% 4 §ub component 1,2 Capacity Building for Target 1907110677% Beneficiaries and Farmer 5 Sub component 4.1 National, Cluster and District 9,025,809,447 -82% Coordination 6 Sub component 4.3 Wbbsd Ge-agd IT 7,940,157,989 86% Platforms 7 Sub component 3.2 Agricultural Water Management 7,502,963,544 90% Investment 8 Sub component 3.3 Agricultural Statistics 7.000 048,000 94% 9 Sub component 4.2 Monitoring and Evaluation and 4,234,654,000 96% Impact Evaluation 10 Sub component 1.3 Development of Agricultural Input 2,870,859,000 97% Markets 11 Sub component 3.1 Policy and Regutory Functions 2 415,200,000 98% 12 Sub component 2.1 Capacity Bulding for producer 1,939,922,159 99%o Organizations and Value chain ____________ Access - __ _194,887,599,625 I reviewed the implementation of the approved 2021/2022 budget by the Project and noted the following; No Observation Recommendation 1.1 Revenue Performance Performance of Donor receipts I advised the Accounting Officer to The Project had an approved budget of UGX.196.099Bn out of fast-track the rate of which UGX.145.885Bn was available for spending, resulting in a executing activities This figure is comprised of UGX 90 73Bn as opening bolbnce and additional release of UGX 55 158n 2 shortfall of UGX.50.214Bn. The shortfall represents 26% of the since this determines approved budget. the rate of funds replenishment by the The funds that were not availed were meant to facilitate the donors. implementation of the following activities, which were either partially implemented or not implemented at all. Table 1: Showing activities affected by the budget shortfall N Out-put Activity Budg Purpose o et Amou nt (UGX) (Bns) 1 e- E-Vouchers The funds were meant for Voucher subsidies to 13.486 provision of 67% subsidy to Program 250,000 farmers as Government beneficiaries in contribution to subsidize on 12 project the price of inputs. clusters provided 2 Policy Revolving 3.3 The funds were to help and Fund to increase transitional rate of Regulator farmer groups the e-Voucher beneficiaries y for timely from cycle one to cycle three. Functions input ordering and redemption 3 Monitorin Conduct a 0.502 The funds were to conduct g and study to studies along the input value Evaluatio understand chain to ascertain the stage in n and the critical value chain where quality of impact stages/points agrochemicals is lost so as to Evaluatio of focus effort of regulation and n agrochemical inspection to ensure quality is quality maintained from deterioration producer/importer to final along the consumer. This has hence value chain been roll-over to the current and the financial year. underlying factors leading to the proliferation of counterfeit agrochemicals on the market 4 Farm Certified works The funds were to cater for Access paid for 4.487 payment of rehabilitative Roads rehabilitation works on road chokes and of road chokes (bottlenecks) in ACDP Choke implementing districts to Point enable farmers access markets, agro-processing and bulking centres so as to contribute to the marketing and marketability of the selected project commodities. 5 ACCE- Provision of The funds are disbursed to Level grants to 13.2 matching Grant groups as WarehoU successful 67% Government contribution sing, grantees to cater for construction of Value storage facilities, machine addition shelter and purchase of value and addition machinery. All this Marketin roll-over to the current g financial year for implementation. 6 Farm Engineering Ihe funds are to cater for Access Test on 2,871 testing of materials and 3 Roads Materials & engineering products to and Engineered facilitate enforcement of Choke Products and quality assurance quality Point joint control of ongoing and supervision of completed works so as to ongoing works promote Value for Money achievement. 7 A;gricultur RIo-utine The funds were to cater for al Agriculture 5.037 training of extension workers Statistics Administrative and parish chiefs in the Data System Routine Agriculture operationalize Administrative Data System d in 52 collection tools and support districts (12 data collection. clusters) 8 Monitorin Undertaking These funds were to cater for g and end of project 2.219 project evaluation and Evaluatio evaluations specialized studies aimed at n and and measuring the level of impact specialized transformation made by Evaluatio studies on households towards increasing n project marketable volumes. The outcomes activities are rolled over to the current financial year and are being implemented. 9 Capacity Transfers to To strengthen project Building district Local 2.118 implementation, coordination for Governments committees have been Target for project established and are functional Beneficia operations and at national, cluster and district ries and Salaries for level. The project completed Farmer Community signing of the Memorandum of Organizat Based understanding with all project ion Facilitators districts to guide project implementation at that level. the districts were guided to Iopen project accounts. _____47.22 Performance of GoU receipts According to the approved budget, the Project was supposed to receive UGX.O.700Bn out of which UGX.0.699Bn was warranted, resulting in a shortfall of UGX.0.001Bn representing 99.8% performance. The Accounting Officer explained that the rate of disbursement of funds by the donors was dependent on the rate of absorption and implementation of activities and therefore more funds could not be disbursed while the project still had funds on the Account. 1.2 Absorption of funds I advised the Out of the total available funds of UGX.145.885Bn during the Accounting Officer to financial year, UGX.84.52OBn was spent by the Project resulting ensure that in future in unspent balance of UGX.61.365Bn representing an absorption funds are absorbed level of 57.93%. The unspent funds were still held on the ACDP once availed if the bank account in Bank of Uganda. project objectives are The funds that were not absorbed were meant for the following to be achieved. activities which were either partially implemented or not implemented at all. Furthermore; the Accounting Officer is advised to enhance contract supervision for the case of the 4 Table 3 :Un-implemented activities as a result of Under- un-implemented absorpt on activities under the Out-t At eason/Attrbution two major outputs of (UGX) e-voucher subsidies -Bns- and farm access ovision of E- 15.111 Between January to Mid- roads. Voucher Vouchers June, 2022. The e-voucher Program subsidies to system was shut down due 250,000 to gaps in integrating with beneficiaries in the government payment 12 project gateway at NITA U. The clusters provided project was also in the process of transferring data from the UBA system to the new System operated by Mcash following the expiry of the UBA contract in _ ofth September 2021 E- Payment of the 4.334 The funds were meant for Voucher E-Voucher payment of Agency fees to Program Management M-Cash which had not been - - Aencydone 3 E- Evaluation of the 0.937 The funds allocated are for Voucher e-voucher the quantitative survey Program subsidy program which was rescheduled to take place in the next financial year due to delays in approval of the report. The Ministry will fund the quantitative study of the impact evaluation. 4 capacity Increasing 3.574 Delayed submission of- Building production and supporting documents for productivity of (appointment letters and Target five (05) ACDP requests from districts) to Beneficia commodities enable the payment of ries and among 450,000 salary and other Farmer farmers through remunerations. Organiza DLG support 5 ACCE- Pro-vision -of 2.328 All-1 the funds-had been Level grants to targeted to be disbursed Wareho successful however this did not using, grantees happen due to delays of adltiomachine delivery by addition suppliers. On completion of and construction of the machine marketin shelter by the grantee, the g project advances 30% to the supplier who then is supposed to fabricate the machine, deliver and install it as a precondition to payment of the 70%. Most of the suppliers had not completed this process Fam_Pamet hence th e de1qy Payments for 24.67 Out of the anticipated Farm Access works Access Roads and Choke Roads undertaken on points at community Level and various roads in 7 pilot districts, only 5 Choke implemented pilot districts had some points at under the works paid commun project ity Level 7 Policy Renovation of 0.997 Ongoing renovation works and the national at Kawanda seed laboratory Regulato seed laboratory is at 40 % ry Function 55 8 Agricultu Procurement of 3.106 Activity re-scheduled ral consultant to pending approval of the Water undertake NFASS rollout strategy by Manage feasibility Top Management ment studies, and Investm detailed ent engineering design for 5No. irrigation schemes 9 Agricultu Establishment of 1.335 12 of the selected/granted ral 5No. (3-5 acre) farmers have not provided Water smallholder proof of funding. Whereas Manage coffee irrigation 10 out of the 38 are going ment systems in 9 through the procurement Investm districts. evaluation report. ent ________ 10 Agricultu Operationalize 2.502 Initially the Ministry had ral Routine planned to use service Statistics Agriculture providers for the rollout Administrative using funds allocated by Data System in USAID however this 52 districts (12 proposal was not approved clusters) by USAID. Therefore, the MAAIF Statistics Division is set to rollout training of ______________national level stakeholders. 11 Agricultu Improving 0.527 Field visits were dependent ral Coordination & on approval of the NFASS Statistics Management rollout strategy by Top amongst Management which was agriculture never obtained statistics producing institutions 12 Agricultu Strengthening 0.903 The nine data collection ral capacity for the tool to be administered was Statistics Food and still being digitalized and Agricultural was not ready for roll-out. Statistics System The activity has been rolled over to the current financial Acquisiii_o__nof _ year 13 Web- Acquisition of 1.041 The procurement was based, Soil Testing delayed and the Geo- Services and 14 deliverables were not tagged soil test kits acquired by the year end. ICT from Jabba Platform Engineering s _ Limited As a result of failure to absorb funds; Farmers and other beneficiaries were denied services as indicated below; a) 191,403 farmers have not redeemed inputs even in the extension period b) An evaluation of the e-voucher subsidy has not been undertaken with just a few months to the closure of the project, c) Some grantees have not received money for machinery hence delaying the completion of the value addition facilities d) Smallholder coffee irrigation systems have not been established 6 e) A routine agriculture administrative data system was not operationalized in 52 districts (12 clusters) f) Renovation of the national seed laboratory has not been completed. The Accounting Officer committed to fast track all planned activities to ensure that all funds availed for project implementation are absorbed in line with the project development objective. 1.3 Implementation of outputs and activities I assessed the implementation of one (1) output that had been fully quantified with a total of four (4) activities worth I advised the UGX.63.061Bn and noted that; Accounting Officer to always ensure that * The output was partially implemented. Out of the four (4) activities and outputs activities, two (2) activities were partially implemented, are implemented as while two (2) activities remained unimplemented. Refer to planned. table below for details Non-implementation of planned activities implies that the expected services to the beneficiary farmers were not attained. For example, the project did not implement the following planned activities despite having received the required funds. 1. Evaluation of the E-Voucher Subsidy Program was not carried out despite the project procuring a new contractor and just a few months left to the closure of the project. 2. Integration fees to NIRA and SMS Gateway were not paid. 3. E-voucher subsidies were provided to a total of 49,770 beneficiaries in 12 project clusters instead of 250,000 beneficiaries. 4. E-voucher management agency costs were paid to only UBA and not M-cash Details in Appendix I. The Accounting Officer explained that evaluation of the subsidy program is on-going at data collection stage and the payment of integration fees to NIRA and SMS Getaway were not made because payment is upon receipt of invoices which were not received in the reporting period. They also stated that payment was not made to NIRA because they are exploring the possibility of securing a waiver of the fees, Further, the Accounting Officer explained that the shortfall in the number of beneficiaries provided with inputs arose from expiry of the UBA contract in September 2021 and as such no farmers were served in Season 2022 while the M Cash EVMA costs were not paid within the year because the contract was signed at the close of the year in June 2022. 1.4 Delivery of services from implemented activities I undertook procedures to establish if works/services were undertaken in timely manner, were of expected quality and quantity, and if citizens were getting the 7 expected services. In addition, I assessed if the works/services were delivered at reasonable costs. Below is a summary of my observations, details of which have been provided as Appendix II. Table4: Extent of service delivery from implemented activities No Activity Total Summary of Conclusion Management details expenditu findings regarding response re (UGX) service delivery- 1.4.1 E-Vouchers 32,083,532 Out of the 250,000 * Low number of A new e- subsidies ,384 only 49,770 farmer voucher provided to beneficiaries were beneficiaries management 250,000 provided with thus denying agency (M- beneficiaries in subsidies. I reviewed service delivery Cash) had 12 project the provision of to many eligible been recruited clusters subsidies to the farmers. to improve 49,770 farmers and * Farmers who delivery of noted the following; contributed inputs to funds could not farmers and * There was Poor access inputs instant Transition of and lost one payment of Farmers from Cycle farming season agro-input 1 and Cycle 2 dealers. * There were Delays in receiving of inputs by farmers due to system non- functionality. * Some farmers paid money but never got inputs delivered * Some Agro dealers delivered inputs but were either not paid or took more than six months to 1.4.2 Grants to 16,171,809 Out of the 359 * Idle equipment A power needs successful ,402 grantees to be at sites not assessment grantees provided with funds, being utilized by was provided only 182 were availed beneficiaries undertaken with funding. I denies the the Ministry of reviewed the beneficiaries Energy and provision of matching services Mineral grants to the 182 * Non-functional Development farmers and noted facilities without (MoEMD) and the following; power which cost estimates implies that the developed * Most projects are facilities are not behind schedule functioning as Management * Lack of verifications expected planned to from district * Incomplete reallocate engineers for on- structures that resources going projects are behind within the * In some cases, the construction project to value addition schedule which cater for the equipment was will result in power needs non-operational. delayed service identified in * There were cases delivery the next of Incomplete project works on structures * Grants provided restructuring * No monthly to grantees that pqeorts don't meet the 8 * Beneficiary selection criteria members were not and may end up enrolled on e- as white voucher system in elephants some cases * Delivery notes are not signed by technical personnel 1.4.3 Procure 1,363,271, * Feasibility studies * Delayed Contract consultants, 703 and detailed completion of supervision carry out engineering design feasibility and feasibility for 5No. irrigation studies which management studies, and schemes are on- impacts on committees detailed going. timeliness of had been set engineering * Delayed completion irrigation up to closely design for of feasibility studies schemes track the 5No. irrigation with lot 1 at 55% construction execution of schemes and lot 2 at 40% and hence works and completion delayed service provide bi- delivery weekly reports to management to support timely decision- making and timely payment of certified works 1.4.4 Completed 1,045,566, Review of certified * Slow progress Contract works certified 384 works on the roads of works and supervision for payment - works of Iganga and delays of more and Road works in Kalungu revealed; than one year. management Iganga & * Kalungu works This will result committees Kalungu paid delayed by one in delayed had been set and handed year and 5 moths. service delivery up to closely over to Completion date track the districts. was 9t' April 2021 execution of but by 15t" October works and 2022 works were at provide bi- 98% weekly reports * Iganga works to delayed by one management year and seven to support months. Completion timely date was 31st March decision- 2021 but by 15th making and October 2022 works timely were at 95% payment of certified works 1.4.5 Renovated the Works at the National oSlow The project National seed 728,706,32 Seed Laboratory implementation was at roofing 2 renovation on going progress and stage at 48% * Contract signed in works far and all November 2021 behind schedule measures are and works expected by about 50% being to be completed by and hence undertaken to November 2022. delayed service expedite * The renovation delivery. completion of works at Kawanda the facility. seed laboratory were ongoing with works at 40% completion level by October 2022, 9 1.4.6 Cluster level 682,205,00 Cluster level * Cluster 6 Management Commissioning 0 commissioning and facilities not would ensure and handover handover of 174 commissioned the timely events for all matching grants as planned.- commissioning completed facilities in the 20 delayed service of all Post-harvest districts of Clusters 1, delivery, completed and value 2, 11 and 12 facilities. The addition revealed; Ministry facilities * Non-operational commits to undertaken value addition commission all equipment completed * Lack of power facilities as connections soon as they * No monthly are completed progress reports * Members are not enrolled on e- voucher system The Accounting Officer also indicated that the project had developed an implementation tracking tool with clear milestones and timelines to ensure implementation of activities within the project period and the key areas highlighted are being handled as explained in the table above. I advised the Accounting Officer to enhance supervision and monitoring of project activities to avoid further delays. Other matter I consider it necessary to communicate the following matters other than those presented or disclosed in the financial statements; 2.0 Management of the E-Voucher Payment System 2.1 Avoidable expenditure on procurement of M-Cash Uqanda Limited Paragraph 10.11.3 of the Treasury Instructions, 2017 guides that fruitless or nugatory payments occur as losses if a payment is avoidable and there is no benefit to Government Management procured United Bank of Africa (UBA) on 23rd March 2018 at a cost of UGX.5,999,911,250 to supply, install and Commission the e-voucher payment system through which farmers and MAAIF would make their contributions towards the purchase of inputs. UBA using the same e-voucher payment system would then pay the Agro-dealers once the inputs were supplied to the farmers. UBA was supposed to provide these services from the date of contract signing up to 22nd September 2021 when the e-voucher payment system was to be handed over to MAAIF for direct management and monitoring. Management reviews of the performance of the system indicated that as at June 2021, system functionality stood at 90% which was commendable. Further, management hired a technical assistant to support the process of knowledge transfer to 920 staff from various Local Governments and staff from MAAIF on the use of the system in preparation for the handover of the system by UBA. These facts indicate 10 that management was comfortable with the level of services provided by UBA in regard to supporting the Project to deliver on its objectives. Despite this level of confidence in the performance, management on the 4th June 2021 (with only two years to the end of the ACDP project) procured M-Cash Uganda Limited at a cost of UGX.6,878,901,353 to provide the same services provided by UBA as shown below; Table 6 Showing Deliverables of M-Cash Uganda Limited No Deliverables for M-Cash Audit remarks 1 Provision of platform to support This deliverable is the same as the e-voucher farmers transact- Financial Inclusion platform provided by UBA s ystem 2 Training of Farmers This activity was already included in the deliverables of UBA 3 Enrolment of beneficiary farmers This deliverable was also part of the deliverables of the project 4 Redemption support to farmers This is one of the deliverables of UBA I further observed that the cost of UGX.6,878,901,353 at which M-Cash Uganda limited was contracted was greater than UGX.5,999,911,250 at which UBA was contracted by UGX.878,990,103 yet only two (2) years were left to the closure of the project with most of the work already undertaken by UBA. I did not find justification for procuring M-cash Uganda limited at a cost of UGX.6,878,901,353 with only two years to the end of the project since most of the deliverables were already provided by UBA which management had indicated was performing well. The Accounting Officer explained that although the e-voucher system functionality was rated at 90%, the system was found not efficient hence the delays observed in the attainment of targets. The critical failures of the system included: long time taken to complete the redemption process (field visits showed that this could take a minimum of 8 minutes); lack of performance optimization of the system (the system became unstable whenever traffic increased); consistent failure to verify farmers NINs and lack of sufficient human resources to support the process (UBA had deployed a maximum of two people per district to support the e-voucher activities). The Accounting Officer further stated that M-cash system would help overcome the challenges faced under UBA and also save the ministry additional costs for developing a new efficient system. The Accounting Officer attributed the higher cost of M-Cash' contract to deployment of 290 staff vis-a-vis the 114 staff UBA had deployed. I advised the Accounting Officer to ensure that public funds are spent in a more prudent manner. 2.2 Delayed o2erationalization of the M-cash electronic payment platform Regulation 53 (1-a) of the PPDA regulations states that a contract manager shall be responsible for managing the obligations and duties of the procuring and disposing entity specified in the contract; and Regulation 53 (1-b) requires the contract 11 manager to make certain that the provider performs the contract in accordance with the terms and conditions specified in the contract. Management procured M-Cash Uganda Limited on 4th June 2021 at a cost of UGX.6,878,901,353 to provide an electronic payment platform (Financial Inclusion System) to facilitate electronic transactions between MAAIF, Agro dealers and farmers. According to the contract management records reviewed, the contractor was ready to supply, install and operationalize the system by November 2021. However, I noted that the operationalization of the system was done during June 2022 resulting into eight month's delay before utilization. Interviews with management revealed that the delay was due to the failure by MAAIF to integrate this financial inclusion system to the NITA's payment gateway in time. The delayed operationalization of the Financial Inclusion System adversely affected the operations of ACDP since farmers and agro dealers could not transact during this eight months' period. This in turn affects progress towards achievement of the project objectives and service delivery. The Accounting Officer explained that the payment gateway (developed and operated by NITA) which was responsible for moving money from the farmer and government to the agro-input dealer was availed by NITA in May 2022 and not November 2021 as expected. I advised the Accounting Officer to ensure that contracts are implemented in an efficient and effective manner going forward. 2.3 Failure to refund un-utilized balances I noted that the contract UBA signed with MAAIF to operate the e-voucher payment system on behalf of ACDP expired in September 2021 and was never renewed by the Accounting Officer and by the time of expiry of the contract UBA had a total of UGX.11,172,351,837 as shown in the table below. Table 7: Funds deposited with UBA at the time of exDirv of the contract At the time of writing this report, UBA had only refunded UGX.2,369,655,005 leaving a balance of UGX.8,802,696,837 un-refunded as shown in the table below; Table 8: Total refunds of the funds that were not utilized Details Total due (UGX) Total refunded Un-refunded etais Amounts(UGX)Amount Farmer contribution towards 7,701,421,363 0 7,701,421,363 purchase ofr iputs Government subsidy for 2,500,100,000 2,369,655,005 130,445,000 farmers to purchase inputs_____ _______ Funds due to agro-dealers heldi i ml 0 970,830474 Tota 11 72 31,13 in the UBA virtual Account I Total 11 172 351 837 2 369 655 005 8 802 696 837 This implies that funds meant for provision of inputs to farmers are just held by the service provider which negatively affects service delivery and achievement of project objectives, The Accounting Officer explained that according to the contract, UBA was expected to return all the funds to the respective categories owed. The Farmers contribution were supposed to be sent to the respective account holders and the process entails district local Governments verifying farmers' details before money is transferred from UBA to the farmers' phone numbers which process is still on-going. Also MAAIF sought legal advice on the payment modalities for farmers' balances from the Solicitor General which is yet to be received. The Agro-input dealers' opened physical accounts with UBA where they were the sole signatories to their accounts and the Ministry was yet to receive the end of contract report from UBA in order to ascertain the funds due to them in the UBA virtual Account. Finally, management stated that for the Government Subsidy, UGX.130,445,000 was not refunded by UBA, however at contract closure, a reconciliation would be done to have this outstanding balance cleared. I advised the Accounting Officer to follow up the matter and ensure that these funds are refunded and used for provision of inputs. 3.0 Delayed completion of the Aro-Processing Facilities The Project awarded grants to a number of farmer groups to put up agro-processing facilities as one of the project deliverables. The contracts signed with these farmer groups provided expected completion dates when the processing facilities were expected to be commissioned. Refer to the table below; I undertook physical inspections to assess the progress of completion of these agro processing facilities and noted that the majority of them were behind schedule as shown in the table below; Table 9: Progress of comletion of aairo-rocessin facilities S Grantee Grant Target Expected Remarks Delayed Name Amount completion period as N (UGX) date at 30th ____ MRs) June 2022 1. Magada Multi 315.63 Storage facility, Rice 30P' June Equipment I year Farmers Mill, Generator and Rice 2021 yet to be Association Mill Shelter purchased. Estimated Completion Facility not dateof_30/6/2021 pperational 2. Bugobi- 312.9 Storage facility, Rice 30"' June Equipment 1 year Bukenga Mill, Generator and Rice 2021 yet to be Town Mill Shelter purchased. Council Farmers Estimated Completion Facility not 3date of_ pra 3. Bugiri Agri- 403.557 Storage facility, Seed 30"' June All targets 1 year business Cleaner, Seed solar 2021 fully Institutions dryer (yard), shelter achieved by Development and seed grader the time of 13 Association( BAIDA) Estimated Completion However, date of 30/6/2021 facility not perational 4. Bugiri 416 Storage facility, Seed 36' June Power 1 year District Cleaner, Seed solar 2021 installation Integrated dryer (yard), shelter, valued at Farmers and seed grader and power 83.5M yet ao Agribusiness installation. b Association be Estimated Completion Facility not date of 30/6/2021 o erational 5. Kasita 279.372 Rice Mill, Rice Mill 30' June Rice Ml y Kyowola shelter, storage facility, 2021 valued at Omwavu drying slab, pit latrine GrowersUG67ye Cooperative Estimated Completion procured. Society Ltd date of 30/6/202 1 No electric power connection Facility not - -- operational 6. Buluguyi 309.768 Storage facility, Maize 30"' June No electric 1 year Rice & Maize mill, Maize mill shelter, 2021 power Farmers' drying slab and power connection Cooperative connection estimated Loit Completion date of F iot Liitd30/§/2021 operational __ Delayed completion and operationalization of agro processing facilities results in delayed service delivery and negatively affects the achievement of the project objectives. The Accounting Officer explained that contract monitoring teams have been set up for the Project Coordination Unit to closely monitor progress in matching grants facilities with timelines for completion of activities and commitment by the leadership of groups and districts, The Accounting Officer is advised to fast track completion of the facilities so as to achieve the Project objectives. Other Information The Accounting Officer is responsible for the other information. The other information comprises the statement of responsibilities of the Accounting Officer and the commentaries by the Head of Accounts and the Accounting Officer and other supplementary information. - The other information does not include the financial statements and my auditors' report thereon. My opinion on the financial statements does not cover the other information, and I do not express an audit opinion or any form of assurance conclusion thereon. In connection with my audit of the financial statements, my responsibility is to read the other information and, in doing so, consider whether the other information is materially consistent with the financial statements or my knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work I have performed, I conclude that there is a material misstatement of this other information, I am required to report that fact. I have nothing to report in this regard. 14 Management Responsibilities for the Financial Stateme Under Article 164 of the Constitution of the Republic of Uganda, 1995 (as amended) and Section 45 of the Public Finance Management Act, 2015, the Accounting Officer is accountable to Parliament for the funds and resources of Agriculture Cluster Development Project. The Accounting Officer is also responsible for the preparation of financial statements in accordance with the requirements of the Public Finance Management Act, 2015 and for such internal control as management determines 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 Accounting Officer is responsible for assessing the Project'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 Accounting Officer has a realistic alternative to the contrary. The Accounting Officer is responsible for overseeing the Projects's financial reporting process. Auditor's Responsibilities for the audit of the Finanil Satements My 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 my opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISSAIs will always detect a material misstatement, when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in 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 ISSAIs, I exercise professional judgment and maintain professional skepticism throughout the audit. I 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 my 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 the management. * Conclude on the appropriateness of management's 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 Project's ability to continue as a going concern. If I conclude that a material uncertainty exists, I am required to draw attention in my auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify my opinion. My 15 conclusions are based on the audit evidence obtained up to the date of my auditor's report. However, future events or conditions may cause the Project to cease to continue as a going concern. Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. I communicate with the Accounting Officer regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that I identify during my audit. I also provide the Accounting Officer with a statement that I have complied with relevant ethical requirements regarding independence and to communicate with them all relationships and other matters that may reasonably be thought to bear on my independence, and where applicable, related safeguards. From the matters communicated with the Accounting Officer, I determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. I describe these matters in my auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, I determine that a matter should not be communicated in my report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Other Reporting Responsibilities In accordance with Section 19 (1) of the National Audit Act, 2008, I report to you, based on my work described on the audit of Financial Statements, that; except for the matters raised in compliance with legislation section below, and whose effect has been considered in forming my opinion on financial statements, the activities, financial transactions and information reflected in the financial statements that have come to my notice during the audit, are in all material respects, in compliance with the authorities which govern them. Report on the Audit of Compliance with Legislation In accordance with Section 19 of the NAA 2008, I have a responsibility to report material findings on the compliance of the Project with specific matters in key legislations. I performed procedures primarily to identify findings but not to gather evidence to express assurance. There were no material non-compliance findings that came to my notice during the audit John F. S. Muwanga AUDITOR GENERAL Kampala 12' December, 2022 16 REPORT OF THE AUDITOR GENERAL ON THE SPECIAL ACCOUNT OPERATIONS OF AGRICULTURE CLUSTER DEVELOPMENT PROJECT (ACDP) FOR THE YEAR ENDED 30TH JUNE, 2022 Opinion I have audited the special account statement of the Agriculture Cluster Development Project for the year ended 30"' June, 2022 which is set out in the financial statements. In my opinion, the Project management complied in all material respects with IDA rules and procedures and that the Special Account Statement for the Agriculture Cluster Development Project for the year ended 30th June, 2022 presents fairly in all material respects the account transactions and the closing balance as at 30th June 2022. Management Responsibility for the Special Account Statement Project management is responsible for preparation of the Special Account Statement and its fair presentation in accordance with the requirements of the Government of Uganda Regulations and IDA guidelines. Management is also responsible for designing and implementing internal controls relevant to the preparation of the Special Account Statement that is free from material misrepresentation, whether due to fraud or error and selecting and applying appropriate accounting policies and making accounting estimates that are reasonable in the circumstances. Auditor's Responsibility My responsibility is to express an opinion on the Special Account Statement based on my audit. I conducted the audit in accordance with International Standards of Supreme Audit Institutions and the IDA guidelines on auditing. Those standards and guidelines require that I plan and perform the audit to obtain reasonable assurance about whether the Special Account Statement is free from material misstatements. I believe that the audit provides a reasonable basis for my opinion. John F. S. 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Z � 4" С > и � t_1 '� �р � `'.+ � Т N ° � _ '_' �� � � >s v � и .с� � а � � ш � ш � � 27 � f0 � V N Q1 N (ll N О'S 't''Ш Ш - � ш � z° � � Fc � � v � °' � �с Е у .1 ,� :� ;\ ,� r\ .\ 1- 7л °и = � __ � � � R 3J Е � .° '2 0 � " " 3 - й й_ � У 10 � R � С г0 � � О i ° R а R f0 3 ►- и �'й о >- ,? о а гv а� о °�з N хо ° v_ `r �а г� Су ° � ОС � й '' й о U м _ *, � � ^ а Й � г�v ° у м С С � _ 'о � � 3 � 'й о ц о к 3 к ° Ус� � тс°� � о� � о .7 и и _ г �, �, ,� MINISTRY OF AGRICULTURAL, +ANIMAL INDUSTRY ANI) FISHERIES (MAAIF) A-ricultural (luster Development Project (ACIM) -,5 1ý4 U91 RG ('redit Number. 56110-LJG(ACI)l) RECEIVED ? p D EC l'j49X K PROJECT FINANCIAL STATEMENTS FORTIIE PERIOD ENDED 30`JUNE 2022 2021/22 Table of Contents MANAGEMENT REPRESENTATION LETTER. In tro d u ctio n ........................................... 5. Com ponents of Project......................... ......5 O bjectives of the project ................... ..........5 E xchange rate .........................t........ . 5 Budget Perform a ice ...................... .... . 5 Commentary on the ACDP Financial Statements by the Head of Acounts t Statement of Management Responsibilities ...... . AGRICULTURAL CLUSTER DEVELOPMENT PROJECT (CDP).C.. STATEMENT OF RECEIPTS AND PAYMENTS.. AGRICULTURAL CLUSTER DEVELOPMENT PROJECT (ACA)P)A. STATEMENT OF FINANCIAL POSITION . 10 AGRICULTURAL CLUSTER DEVELOPMENT PROJECT (P) ..10 AGRICULTURAL CLUSTER DEVELOPMENT PROJECT (ACP) .1 STATEMENT OF CASH FLOWS 13 N(YES To THE FINANCIAL STAEMI 'NT ..13 2.0. Notes to accounts ............. .. ..1 2.1. Note 1: Receipts for the Financial Year 2021/22 on designated account. ...........16 2.2. Transfers to ACDP Operational Account ou............. nt16... . . ...........16 2.3. Note 5: Computation of Foreign Exchange Gain/Loss for the period ending June 30"' 2022 16 2 .4 . R ece iv a b les .... ............... ...................... . ......... ... . 16 2.5. Statement of Comparison of budget and actual utilization under the main categories under ACDP for the Year ending June 30" 2022 .......... ..... .17 2.6. Contingent Liability 17 2.7. Currency rnc. ...............18 . .. . ....818 1 Agriculture Cluster Development Project (ACDP) P.0 Box 102 Entebbe, Uganda. N"'h November 2022 The Auditor General Office of Auditor General Kampala MANAGEMENT REPRESENTATION LETTER TIhis representation letter is provided in connection with your audit of the financial statements AGRICULTURE CLUSTER DEVELOPMENT PROJECT for the year ended 30th June 2022 for the purpose of expressing an opinion as to whether or not the financial statements present fairly. In all material respects, the financial position of AGRICULTURE CLUSTER DEVELOPMENT PROJEC" as at 30th June 2022 and the results of its operations and its cash flows for the year then ended in accordance with Section 51 (1) of the Public Finance Management Act 2015 and the Financial Reporting Guide. 2008. We acknowledge our responsibility for the accuracy of the accounting records and the fair presentation of the financial statements and we confirm, to the best of our knowledge and belief the following representations given to you in connection with your duties as auditors of AGRICU1LTURE CLUSTER DEVELOPMENT PROJECT for the year ended 30th June 2022. Accounting policies The accounting policies used by AGRICULTURE CLUSTER DEVELOPMENT PROJECT are as stated in the financial statements and are consistent with those of the previous year. Accounting records and transactions I We as management are responsible for the design and implementation of internal controls to prevent and detect errors, Misstatements and fraud. 2. We have made availablC to you all books of account and supporting documentation and all minutes of meeCtings anid no such information has been withheld. 3. To our knowledge, the financial statements are free of material misstatements including omissions. There are no material transactions that have not been properly recorded in the accountin1 records Underlying the financial statements. 4. We havc no plans that may alter materially the carrying value or classification of assets and liabilities reflected in the 1nancial statements. 5 Except as disclosed in the financial statements. the ICsults of operations for the year were not materially affected by transactions of an extraordinary or abnormal nature or of a sort not IsuaI1ll\ undertaken by AGR ICULTURE ('I.l STER DlVI LOPMElNT PROJPE(T or Items relating to a prior year. 2 6. All transfer payments have been properly and completely accounted for and have been recorded in the proper period. 7. The Appropriation account reflects a complete record ot all expenditure relating to the financial transactions of the budgetary vote under our control as well as all allocated finds (budgeted, adjustments and special authori7ations by the Minister). 8. The budget has been prepared in accordance with the relevant regulations and instructions and is in line with set criteria and objectives. 9. Personnel expenditure represents payments in respect of services which have been rendered to AGRICULTURE CLUSTER DEVELOPMENT PROJECT by employees on the payroll of AGRICULTURE CLUSTER DEVEIOPMENT PROJECT. Assets . We have no plans or intentions that will result in any excess or obsolete inventory. :. AGRICULTURE CLUSTER DEVELOPMENT PROJECT has satisfactory title to all assets, and there are no liens or encumbrances on AGRICULTURE CLUSTER DEVLLOPMENT PROJECT Institute assets in favour of third parties. 1 All assets were maintained and were stored in good condition during the financial year. 4. The current assets in the financial statements are expected, in our opinion, to produce at least the amounts at which they are stated. Adequate provision. in our opinion. has been made against all amounts oVwing to AGRICULTURE CLUSTER DEVELOIPMENT PROJECT which are known and may be expected to become irrecoverable. Liabilities 1 AGRICULTURE CLUSTER DEVELOPMENT PROJECT has complied with all aspects of contractual agreements that could have a material effect on the financial statements in the event of non-compliance. There has been no non-coipliance with reqUirements of regulatory authorities that COUld have a Material Ifct on the financial statements in the event of non - compliance. 2 We have recorded or disclosed. as appropriate, all liabilities. both actual and contingent. and have disclosed in Notes to the financial statements all guarantees that we have given to third parties, We are not aware of any pending or threatened litigation. proceedings. hearings. c laiis or iegotiations which may result in signil[kant loss to AGRICULTURE (USTI`R DEVELOPMENT PROJECT. 3 There have been no events subsequent to period end that requires adjustment of or disclosure in the inancial statements or notes thereto. 3 4. We are not aware of any capital expenditure projects entered into without a legal contract. There w+ere no purchase commitments in excess of normal requirements or at prices in excess of prevailing market prices. Other matters There have been no irregularities involving management or employees that have a significant role in the accounting and internal control systems or that could have a material effect on the financial statements. 2 All known, actual or possible, non-compliance with laws and regulations. the effects of which should be considered when preparing financial statements. have been disclosed to the auditors. ; All the recorded expenditure transactions have been appropriately authorized during the year Under review, except as disclosed to the auditors. 4 According to our knowledge there has been no fraud or suspected fraud affecting the financial statements and the operations of the entitY. E Except as disclosed in the financial statements. no transactions involving management and others requiring disclosure in the linancial statements have been entered into. We confirm the completeness of the information provided regarding the identification of related parties. Tlhe identity of. and balances and transactions with, related parties have been properlN recorded and. when appropriate. adequately disclosed in the financial statements. 6. The required procurements procedures have been followed and no commissions have been received by any employee ofAGRICULTURE Cl ISTFR DEVELOPMENT PROJECT. Maj. Gen. David Kasura KyoImukama Permanent Secretary/Accounting Officer 4 Introduction The Ariculture C(luster Development Project (ACDP) is a five-year Project funded by a loan of USD150, 000.000 from International Development Association (IDA). The project was extended for I8month effective 1" April 2022 to cater for the activities which were not implemented due to COVID-19. DurI ng the period under reporting, the beneficiary districts under the project have been advanced funding and agricultural extension workers trained for effective implementation ol' activities under the cluster districts. ACDP planned activities for implementation have been effectively implemented including the award and commencement of several farm access roads in different districts. The E-Voucher Management System (VMS) account was changed from United Bank for Africa (UBA) to Centenary Bank for effective management of farmers' contribution. redemptions and payment of Agro input dealers. Spending under E-Voucher for period under consideration alone stands at UGX 23.568.784,416 AIriculture Cluster Development Project (ACDP) facilitated training for several farmer's organizations in development o business plans f'or matching grant and as a result. many farmer groups in various districts under ACDP have been advanced grant amounting to UGX 22.08 1.585.638 as at the reporting date. Components of Project The project comprises of four major components which include (a) Support for IIntensincation of O1(F)n-1 Frm PIroduction. (b) Value Addition and Market access. (c) Policy and ReCulatorV flunctions. and (d) Coordination and Managiement, and ICT Platform of MAAIF. Objectives of the project TO raise oil far'm productivity. production, an(d marketable volumes of selected AgricuItural commodities in specilled geo-graphical clusters. Exchange rate For the balance sheet. the ruling rate of' 11 USD to JGX 3754.35 as at 30'1 .11.ine 2022 was applied. an average rate lbor the period of' I USD to UGX 3549.53 for the expenditure. The spot rate on the date ol' transfer was used far any receipt. Budget Perfornance As at the end of the reporting period. ACDP budgeted to utilize UGX 196.099.5 13.750 under the main categories of: (a) SuppOrt for Intensification of' On-Farm Production. (b) Value Addition and Market access. (c) Policy and Regulatory Functions, and (d) Coordination and Management. and 5 ICT Platform of MAAIF. As at 30` June 2022, UGX 84,520,729,269 was utilized representing a 43.1%. Commenitary on the ACDP Financial Stateients by the Head of Accounts For the Financial Nine-montli period ended 30 1June 2022 financial Year 2021/2022. Agricultural Cluster Development Pro ject (ACDP) opened with USD 21,836,986 on the designated account and UGX 13,0 19,265.102 on the operational account. Transfers as at 30` June 2022 amounts to UGX 85.983.780,000 on operational account and of USD 24.000.000 was also received on the USD Designated Funds utilization during the year ended 300 June 2022 aniounted to UGX 84.520.729.269 under the project main categories. As at the 30*' June 2022, the balance on USD Designated account amounted to U SD 13, 177,93 1.69 and operational account closed with UGX 1 1,320.973.3 14 and UG X 3,861,242.843 on E-Voucher remained unutilized 1 take full responsibility för the integrity of these Financial Statements, the financial inlrmation they contain and their compliance with the PFMA 2015. Signed on behalf Ministry of Agriculture Animal Industry and Fisheries (ACDP) Regis Nakweviso Ag. Assistant Commissioner Accounts 6 Statement of Management Responsibilities The Financial Statements attached herewith have been prepared in accordance with the provisions of tie Public Finance and Managenent Act, 2015 (The Act) and International Public Sector Accounting Standards (IPSAS). The financial statements have been prepared on the Cash Basis of Accountmg, and coniply with the generally accepted accounting practice fort the public sector and Ie Piroject Financing Agreement. We are pleased to submit the required financial statements in compliance with the Act and Piroject eianam A igeeiient. We have provided, and we vill continue to provide all the inforation and explanations as may be required i connection with these financial statements. To the best of our knowlecige and belief, these financial statements agree xwith the books of account. ffuch l have been properIy kept. We accept responsibility for the integrity of these financial statements, the financial information Ilie contain and their compliance wnithn Ie terms and conditions of the Loan Agreement and ihe - applicable Gioverninent of Uganda Regu lations. Signed on behalf NIinistrv of Agriculture Animal Industry and Fisheries (ACDP Project) - Maj. l(iý-011ý,a Ma.Gen. David K asura Koua Permanent Secretary/Accounting Officer 7 AGRICULTURAL CLUSTER DEVELOPMENT PROJECT (ACDP) STATEMENT OF RECEIPTS AND PAYMENTS FOR THE PERIOD ENDED TO JUNE 30"* 2022 Details Notes USD) UGjx USD I1 FY 2021/22 FY 2020/21 Opening~ Balan1ce --- \CD 1GXý21.836.986 77.719.360.660 L381.195 5,145,408.947 ACDP (t SD) 3.658,053 13,01 9.265 10 2 36.954.736 137.668,585.508 'Total Opening Balance 25,495,039 90,738,625,762 38,335,931 142,813,994.455 Add: Receipts I eDA Recipts 2,1 15,340.966 54.446.929.250 29.882.270 109,131,245. 33 1 Other Receipts . . . Other receipt- 220,568.750 Complenentaifu tndimg from GOU 699,829.360 2.636.305.098 Sub-o aI1,3,ýo966 55,146.758,610 29,882,270 1 11¯988,11 i9,179 Total Funuds 40,836.005 145,885,384,372 68.218,201 254.802.113.634 Laess: a. Total projeet expenses CONIPONENT 1: Support for Intensification of On-Farm Produetion I I. c- Vouchel Pro2 am . 7.971.69045 28,295.753.645 17,456.778 58.533.890.407 S.2. Capacit\ Building for Target ___ 2 , 40__ Beneticlanes and Farmer Or,anizations 3,771.336 66 13.386,472.42 7.378.38 I 2 I4.2 14.204484 l 1 s Deelopmenc1t of A0\-neultural Input Markets l52.205522 185,304.000 344,636 1.246,010.107 11,795.232 41.867,529,887 25.179,795 81,194,104,998 CO.NIPONENT 2. Value Addition and Miarket Access. 2,1 Capacitý Builing for producer rgam/aions and Value cham1 Access 3 I 42,6 I , I 1 I.509,072 I.068.3 19 ,.862.443,290 2.2 \ai-- i. l Warehousmu n Valuce addiuon and aIetm ro 4.978.789.41 I 7,672,361.913 8.523.427 30.815.944, 54 2.3, 1-arm Access Roads and Choke points atcmmmi eS elO ann676.210.57 2,400.229.644 13.644.989 13.178.239052 at comm uniI\ Levecli 5,968,143 21,184100,629 13.236,735 47,856,626,496 CON lPONEF,NT 3: Poliv, Regilatory and Institutional Support I I Polic. an-d Re ulator\ I-unetuins, 205.296.57 728.706.322 582.02 2 2 \gruluaWaeAangmt 2n emen t n t426,706.38 1,514.607.054 682.770 2.468. 5 14 421 .\, icultural Statstics 147,485,9 523 .505 820 529.482 1,91 4 l I.391 14 Nanaement of FIall Army worm 3 14.526. I 1. 16.420. 531 390.897 1.-I 3.264.124 1,094,015 3,883,239.727 2.186,051 7.903.538.574 CONIPONENT1 4: Coordination and Managemnent, and ICT Platforms 4 I National. (luster and D)istrict 1oo altn 2,556,938.00 9.075.927,882 2.5281 18 9.140.982 191 C oordination 4,2. Mnimtonn- and la ýaluation and Impact 4 N lon 666,55456 2,3(65.955.337 1.089.672 3.939.644.27, 4 s\\ eh-hased. Ge-age 1(1 Pf C1,525,060 10 5.41 ".246,447 1.578.872 5708.3 19. 380 -Plat 8o 8 - 4,748,553 16,855,129,666 5,196,8 9 Expenditure under Complementarv funding from Gou 699,829.360 2.636.305.098 Ineligible expense to DPC 2.4 30,900.000 Total (a+b) 23,605,943 84,520,729,269 45,799,443 158,379,521,015 Net of receipts over expcnditure 16,344,948 61,364,655,103 22,418,758 96,422,92 619 Add: - FoYC1*1,11 Exehangi,e Gain/ Loss _ _ 3,292,128,895 (5,683,966,857) supi pus 17,221,832 64,656,783,997 25,495,038 90,738,625,762 Tie MAAIF ACDP Financial Statements and the accounting policies and notes set out on pages 12 to 14 forn an integial part of these financial statements and xvere approved by management on 30` August 2022 and signed on its behalf by: aj. Gen. David Kasura Kyomukama Regis Nahweviso Permanent Secretary/Accounting Officer Ag. Assistant Commissioner Accounts 9 AGRICULTURAL CLUSTER DEVELOPMENT PROJECT (ACDP) STATEMENT OF FINANCIAL POSITION FOR TH_E YEAR PERIOD_ENDED JUNE 30" 2022 Details FY 2021/22 FY 202121 Current Assets Note USI) UGX ¯ USD ¯UGX Rceivables: -- Casli Balances - Bank Accounts (designated Account) _ 13.177,932 49,474,567.840 21.836.986 77.719.360.660 Bank Accouts LUGX 3.015.428 11,320,973,31 4[ 3.658,053 3,01 9.265,102 E-VOUCIlER _ 1,028.472 3.861,242.843 Total cash balance as at ,Juie 30, 2022 17,221,832 64,656,783,997 25,495,039 90,738,625,762 Total Assets 17,221,832 64,656,783,997 25,495,039 90,738,625,762 Financed by: -- surplus 7.221,832 64,656,783.997 25,495.038 90.738,625.762 Less.- Current 1,1abilities - - ------- - Receipts Ilimother projctis - Reprcsentedb): Fund Balance 17,221,832 64,656,783,997 25,495,038 90,738,625,762 Ilie MAAIF ACDP Financial Statements and the accounting policies and notes set out on pages 2 to 14 lörm an integral part of these 1-nancial statements and were approved by management on 30` August 2022 and signed on its behalf by: Maj.Gen . David Kasura Kyomnukaia Regis NakweviSo Permanent Secretary/Accounting Officer Ag. Assistant Cominfissioner Accounts 10 AGRICULTURAL CLUSTER DEVELOPMENT PROJECT (ACDP) STATEMENT OF FUND BALANCE AS AT JUNE 30' 2022 Detais _ Notes IFY 2021/22 FY 2020/21 Opening Balance U UGX USI) l ACD1P W i) 21,836.986 77.719.360.660 1.381,195 5.145.408.947 ACD13 _SD- 3,658.053 13.019.265.102 36,954.736 137.668.585.508 Total 25,495.039 9_0,738,625,762 38,335.931 142,813,994,455 Add: Reccipts 1 DA Reccipts 2.1 l 5,40.966 54.446,929.250 29.882.270 109.131 .245.3 31 0ther receipts: Refunds - - _ 220,568.750 ('ompileentary funding from GOU 699,829.360 2.636.305.098 -tal Receipts 15.340,966 _ 55146,758.610 29.882.270 1 11.988.1 19.1 79 suib-total 40,836,005 145,885,384.372 68,218.201 254,802,113.634 oe(iLnILoss) Gamt --292.128,895 (5.683 6 .8s7, PK ables - 1otal F unds available for spending- 40.836,005 149,177,513,267 68.218,201 249,118,146.777 l,ess: Pro ject total expenditure 1- CONIPONENT 1: Support for Intensification of On-Fanm Production S1 e- \oucber Prou1m 7,971.690 28.295.753.645 17.456.778 58.533.890,407 l 2 (apacity Building för Iarget Beneficiares and Fame Or2anjtatons 3,771,337 13.386,472.242 7,378.38 1 21.414.204.484 l 3. )ee lopment of Agricultural Input 1 \Markets 52205 185.304,000 344.636 1.246.010.107 11,795,232 41,867,529.887 25,179,795 81,i94,104,998 CONIPONEVT 2. Value Addition and Market Access. 2 1. ( apacity Building for producer )rganisations and Value chain Access 13.143 1.1 1 1,509.072 ],068,319 3.802.443.290 2 " ACCE- l..ec el arehiousing, Value - 2di; And maetinVa 4.978,789 17,672,361.913 8.523,427 30.8 15,944.154 addiioaml AclciestRodsad hoeposa 2 3, larm Accs Roads and (oke points al 676.211 2.400,229.644 3.644.989 13. l 78.23 9. 0 1- 5.968,143 2 1.184,100,029 13.236,735 47,856,6,26496 CONIPONENT 3: Polie, Regulatory and Institutional Support . Polc and Reuuator\ inctions 205297 728.706.322 582.90 2 1107.448.038 \urnculitural Wk,ater \-lanaglement 2 esimen 426,706 1,5 14.607,054 682.770 2. -64 8 5 1 1 - l t\ricultural atistcs 147.486 52 3305.820 529.482 1 .4. l I_M i.A\, Manamccent of Vall Armn worn11. 314,526 1. 1 16,420.531 390.897 l.4 1 3~264 121 1,094.015 3.883,239,727 2.186.051 7.903.538,574 CON ]PON ENT 4: Coordination and Nag1,1,emenjt, and ICT Pllatforms 4 1. National. Cluster and District Coodination 2 556.938 9.075 927882 2 28, 18 9 140 982 I1 V\oniorng and Evaluation and Inpact IA aluation 666.555 2,35.955.337 1,089.672 939.644. 11 4.3\ h a e_o-taged ICT Platforms 1.525,060 __5,41 3.246.447 1.578,.872 5.708.319.380 4,748,553 16,855,129,666 5,196,862 18,788,945,849 ota epditure 43 (83,789,999,909) (45,799,443) 55,743,215.97 \pcnditure under (ompiclentary fundi n 11om (01 (699,829.360) (2.636,305.098R) Inli,gible expense to DPC 2.4 (8230) (30,900,000) T otal Expenditure (23,614,173) (84,520,729,269) (45,799,443) 583 2 7 ¯9,5210 Balance as at June 30, 2022 17,221,832 64,656,783,997 25,495.038 90,738.625.762 RZlepreseted bv: - - - S13177.932 49,474,567,840 21.836,986 77.7 19.360,660 ---m -u - - 1,028,472 3,861.2412,843 L- _ __ 3,015.428 11.320,973.314 3,658.053 13,019.265,102 LSh us _ _ _ __ 17,221,832 64,656,783,997 _ 25,495,038 90,738,62 ,762 Ihe MAAIF ACDP Financial Statements and the accounting policies and notes set out on pages 12 to 14 form an integral part of these financial statements and vere approved by management on 30' ALiust 2022 and signed on its behalf by: . en. David Kasura Kyomukaa Regis Nalweyiso Permanent Secretary / Accounting officer Ag. Assistant Commissioner Accounts 12 AGRICULTURAL CLUSTER DEVELOPMENT PROJECT (ACDP) STATEMENT OF CASH FLOWS FOR TIIE PERIOD ENDING JUNE 30"' 2022 Details Notes FY 2021/22 FY 2020/21 __ _USD ___ UGX USD UGX Receipt on designated account 15.340.966 __54,446.929.50 29.882,270 109.131,245.33 I Total Receipts 15,340,966 54,446,929,250 29,882,270 109,131,245,331 Other receipts ComplementaiN Yindinu fron GOU 699.829.360 2.636.305.098 Olher eecipt-s: Relnds fr-om Kyegegwa 2.6 DLG - 220,568.750 Net Receipts 15,340,966 55,146.758,610 29.882,270 111,988,119,179 Pa\ ilit o.O e-tlg ,V llsl( .4 .1 ý9 Paments for Operatinc Lxpenses 13.312,632 (83,789.999.909 45.799.443 55.743.215.917> Expelnditure under Complementary from GOU (699.829.360 (2.636.305.098) Reccivables >8.230) 30,900.000) Pa\ ables Net cash) from operating activities 2,020,104 (29,373,970,659) (12,840,893) (46,391,401,836) Cash Flows from Investing Activities Purchase of property. plant and equipinent Net cash flows investing activities ¯ Receipts from Financing activities Noncash movements E xchnge Gain I.oss> 2.3 3.292.1 28.895 (5.683.966,857 Cash and cash equivalenis 2,020,104 (26,081,841,765) (12,840,893) (52,075,368,693) At the beginning of theYcar ACDP (UGX l 177.932 49.474.567.840 1,381.195 5.145.408.947 E-VO(I CI iER _ 1.028,472 3.861.242.843 36.954.736 I37.668.585.508 ACDP i(UGX - 3.015.428 11.320.973,314 Net cash and bank balances at the Year cehn 17,221,832 64,656,783,997 25,495,038 90,738,625,762 Tle MAA IF ACDIP 'inancial Statenients and the acconting policies and notes set oti on pages 12 to I 4 form an integral part of these fInancial statements and were approved h manacement on 30' August 2022 and signed on is behalf by: jen, DIavid Kasur om kama Íe Nalneyis Permanent Secretary/Accounting Officer Ag. Assistant Commissioner Accounts 13 AGRICULTURAL CLASTER DEVELOPMENT PROJECT (ACDP) STATEMENT OF SPECIAL DESIGNATED ACCOUNT ACTIVITY FOR TEIIEEAR ENDED JUNE 30`' 2022 Deposit Baik: Bank of Ugamda A/C Noes FY 2021/ FY 2021/'' No:000100088400030 lSD UGN Openling Balance at Juk 21 21,836.986 77.719.360,660 Add: I1 otal_mount depositec b\ IDA 2 1 15, 40.966 54,446.929,2501 Deposit I M3 P Deposit By GOU TOTAl. 37,177.952 132,166,289,910 D1EDt CT: Total amoun w ithdraw n 1iransfer to project Account 24.000.000 -85.983,780.000 PaN ments directl from the Desit-nated $ account 20 70.964 tal ________24,000,020 85,983,850,964 Net Forex Gain/(Loss) 3,292,128,895 (losing Balaince at June, 30 2022 13,177,932 49.474,567,840 The MA AIF ACDP Financial Statements and the accounting policies and notes set out on pages 12 to 14fform an integral part of these financial statements and were approved by management on 30` August 2022 and signed on its behalf by: laj. Gen. David Kasura Kyomukama Regis Naiweviso Permanent Seci-etar-y/Accouiting Officer Ag. Assistant Commissioner Accounts 14 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30"' JUNE 2022 a) Significant accounting policies The principle accounting policies adopted in the preparation of these financial statements are set out below: b) Basis of preparation Ihe Financial statements have been prepared in accordance with International Iublic Sector Accountin2 standards (IIPSAS) with particular emphasis on Cash Basis Financial Reporting under Cash Basis of Accounting. c) Cash Basis of Accounting The cash basis of accounting recognizes transactions and events only when cash (including cash CLIIvalents) is received or paid by the entity. Cash equivalents are defined as short-term. highly i]quid investments that are readily convertible to known amounts of cash and which are subcct to an insigniicant risk of changes iii value. d) Foreign Currency Transactions Cash receipts and payments arising rom transact ions in a foreign currency are recorded in the financial statements using the rulinlg rate of exchange. Cash balances held in foreign currenC arCe reported using the closing rate. Any gains or losses on foreign currency transactions/balances are dealt with in the Statement of Special/Designated Account Activity. e) Budget Vhe budget is developed on the same accounting basis (Cash basis), same classification basis. and for the same Year as for the financial statements. The budget was approved as required by law and I'reasurv Regulat ions as detailed in the Government of Uganda Budget Estimates. 1) Reporting Period. Ihe reportinrg period for this Fi'nancial Statement is within the financial year of the Government of the Republic ofI Uganda which runs from I Jily 2020 to the 30"' June 2022. g) EApenses In general. expenditure is recognized when paid. Expenses relating to liabilities. domestic arrears and any other expensCs incurred but not paid are not accrued iii the financial statements but provided under the statement of comm itments. 15 2.0.Notes to accounts 2.1. Note 1: Receipts for the Financial Year 2021/22 on designated account As at 30* June 2022. a total of USD 20.000,000 on was received on the designated account. 2.2. _ransfers to ACDIPOperational Account )ate Ref. US . ...SD.. Spøt Rate UGX 25-08-21 991 IFIN2123370054 5,000,000.00 3515.13 1 7.575,650.000.00 14-01-22 991 1FIN220140431 5,000,000,00 3,507.87 l 7.539,3;0.000.00 25-03-22 991 1F1N220840 141 10000,000 .00 3. 594 39 35.943,900.000.00 27-06-22 9911FIN221780141 4,000,000MO 1.22 14,924.880000.00 24,000,000.00 85,983,780,000.00 2.3. Note 5: Computation of Foreign Exchange Gain/Loss for tie period ending June 30`' 2022 )ate Ref. Pay ment_Details _SD Spot Rate IIGX Revenue _ __penimg IBalance 01-07-21 181 ACRV830046 ACDP -NIAMIF 21.836,985.69 3.559.07 77,719.360.660.00 ACDP, A_CCOUNTI Revenul e - ---- -- - - 16-07-21 991 FICT203530005 Reccied i om BOt 15,340.966,00 5,549. 12 54,446.929.249 92 -V oiaI 37,177,951.69 ~ 132,166,289,909.92 LM_penditure 16-07-21 Bank lchar,,es ¯ 20.00 3.548.22 70.964.40 25-08-21 991 IFIN212370054 Operations Fund 5.000.000,00 3.5 15.13 l 7,575.650.000.00 14-01-22 991 IFIN220 140431 ) Operations Fund 5.000,000.00 3.507.87 7,539.3501000 0 25-0322 99 IHN2208-0 141 .Olrations Fund 10.000,000.00 3.594.39 35.943,900.000.00 27-06-22 991 1F1N221780141 -. eranrtons Fund 4.000.000.00 3,731.22 14.924,880.000 00 StIhtotal (b) 24,000,020.00 85,983,850,964.40 30-06-22 Subtotal (a-b) 46.182,438.945.52 Net Forex iami,(_1oss) _ 13.177.93 1.69 3,292,128,895 C l os inlg Bahlnce 30-06-22 ¯ ¯ ¯¯ ¯¯13,177.931.69 3.754.35 49.474,567,840.35 Tle period reported foreign exchanige gain of UGUX 3,292,128,895 as indicated in the above schedule due to keeny consistent appreciation of the slilliing against Dollar during the year. 2.4. Receivables ti()X 30.900,000 equ ivalent to USI) 8,23)0 whicli was i neligible expense that was paid to the deput\ project coordinator as a d uty allowance. The refund for the same is being processed from fn GOU. 16 2.5. Statement of Coniparison of budget and actual utilization under the main categories under ACDP for the Year ending Juie 3011 2022 udgt cl \ 'ercentage Expenditure Litiizaitions Project Component/Activitv COIPONENT 1: Support for Intensification of On1-Far m Production Il . e-\ oucher Prouram 63,034,911.480 28.295.753,645 34.739 157,835 44.890 I .2. Capacity Building for Target Beneficiaries and Farmer Ornizations 19,067,141,006 13.386,472242 5.680.668,764 70.210 13. Development of Agricultural Input Markets 2.870.859.000 185.304.000 2,685.555,000 6 450 84,972,911,486 41.867.529,887t 43,105.381,599 49.27% (ONIPONI NEI 2. \'alue Addition and Niarket Access. 2. 1 Capacitv Building 1or producer Or,aniations and Value chain Access 939.922 159 11.509.072 828.413.087 5730 2 2 \CF- L.evel \Varehousin-. Value addition and miarketin, 35,184,875.000 17,672,361.913 l7.512,513.087 50 231 2.n Farn Acess Roads and Choke points at 34,671,058.000 2,400,229,644 32.270.828.356 6 92 71.795 855.159 21.184,100,629 50,611,754.530 29.51% (O\IPONIi 3: Policy, Regulatory and Institutionial Supjpo rt 3.l. Polic\ and Regulator\ Funetions 2,515.918.125 728,706.322 1,787,211.803 28.96 32. ricult,ra ater maement lnvestment 7,502.963.544 1,514.607.054 5,988.356.490 20 19% 3. 3. A''ricultural Statitics 7,000.048.000 523.505,820 6.476,542,180 7.48o 3 - anaeenient of Fall Arm\ worm 1.111.196,000 I _16420. 53 1 2 4 53 1 100 47< 18.130,125,669 3,883,239.727 14.246,885,942 21.42% 0 CONi PON E NT 4: Coordination and Xanmawcinent, and_ICT Platforms 4. I. National. Cluster and District Coordination 9.025.809.447 9,075.927.882 -50.1 18.435 0156` \ 2 Monitoring and .valuation and Impact 4,234.654,000 2,365.955.337 1.868.698,663 55.87' EA aluation 4.). Web-based Ge1o-taed I I Platfors 7.940.157.989 5.41 3246,447 2.52 6.9 l .542 68 1 8" 21.200,621,436 16,855,129.666 4.345,491.770 79.50% CRA N 1)OlAl 196,099.513.750 83,789.999,909 l 12,309,513.841 42.73% 2.6. Contingent Liability A total of 2 Ig 2,067,545.777 was estimated as contingent liability pending a verification of actual frimers who reccived in1puts from varlous distriets. 17 2.7. Currency The financial statements are prescnted in both Uganda shillings (UGX) and US Dollars (USD) l'lie Notes to the accounts lorn an integral part of these Financial Statements. 18