AUDIT OF FINANCIAL STATEMENTS FOR THE WEST AFRICAN REGIONAL FISHERIES PROGRAM WARFP-SL FOR THE 1 5 MONTH S' PERIOD E VDE D 31 MARCH2022 West Africon Regional Fsheries Program WARFP-SL Finoncial S ino Lá(I Statements for the 15 nonths' peric d nded 31" Murch 2022 General Information Report of the Auditors 2 4 Statement of Management's Responsibilities 5 Statement of Cash Receipi and Payment (By Component) 6 Notes to the Financial Staternents 7- 14 Designated Account Statement 15 - 16 West African Regional Fisheries Program WARFP-SL Financial 5 tStements for the 15 months'period ended31" March 2022 General Information Office 13A Howe Street Freetown Team Lead Mr. Alpha I Sesay Bankers Union Trust Bank (Sierra Leone) Limited Auditors Audit Service Sierra Leone I ph & 12H" Floor New Freetown City Council Building Wallace Johnson Street Freetown WestAfrcon Regional Fisheries Program WARFP-SL Financio Statements for the 15 months 'period ecnded 31" March 2022 Audit of the WTVest African Regional Fisheries Program performed by the Auditor General Addressee: Th Hlonoable MIliser 1 Tiuae Date: Dear Sir Unqualified Opinion 1 have audited the inancial statements of the Wesi African Regional Fisheries Program for the i5 months period ended 3I1 Aarnbj, 2022. These financial statements comprise a statement of ash)rweipt aplm, et for the fifteen moiths' peiod, and a sunmar\ of significant accounting policies and other explanatorN information as set out on pages 7 to 14. In my opinion, the inancial sraten-ints present fair, in all material respects, statemet of resoilces and payments by Component, for the fifteen months period ended 31 Maich, 2022 in accordance wirb the International Public Sector Accounting Standard (IPSAS) under the cash basis of accounting. I further report that: - In respect of the Designated Account Statement: * \Vithdrawals from the Designated Account during the period under revicw were made for chgible expenditurc; * The Designated Account of the project has been maintained in accordance with the provisions of the financing agreement; * AdeqUate internal controls were mnintained within the project and were appropit for this disbursement mechanism; and * Correct exchange rate(s) were used to convert local currency expenditures United States Dollars. Basis for Opinion We conducted otir aUdit in accordance with the International Standards of Supreme Audit Institutions (ISS I). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We arc indepetident of the Project in accordance with the International Ethics Statidards Board for Accountants' Code of Ethics for Professional Accountants (IESBA Code) together with the ethical requiremcnts that are relevant to our audit of the financial statements in Sierra Leone, and have fulfilled our other ethical responsibilities in accordance with tiese requirements and the 2 West African Regional Fisheries Program WARFP.5L Financial Statements for the 15 months' pericd ended 31' March 2022 IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key Audit Matters Key audit matters are those matters that, in our professional judgment, 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 wviholc, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For the period under review, there were no key audit matters identified. Responsibilities ofAIanagement and Those Charged vith Governance for the Financial Statements Management is responsible for the preparation and fair presentation of these finaniu l statements and 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. Those charged with governance are responsible for overseeing the entity's financial reporting process. Auditor's Responsibiity for the Audit of the Financial Statements ly objectives are to obtain reasonable assurance about whether the financial statements is a whole are free from material misstatement, whether due to fraud or error and to issue an auditor's report that incldes my opinion, Reasonable assurance is a high level of assurance, but is not a guarantee that an audit cOnducted in accordance with International Standards for Supreme Audit Institutions will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken oil the basis of these financial statements. As part of an audit in accordance with International Standards for Supreme Audit Institutions, I exercise professional scepticism 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 resutting from fraud is higher than for one resulting from crror, as fraud ma- I nvolve collIsion, forgery, intentional omissions, misrepresentations, or the override of internal controls. * 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 exprcssing an opinion on the effectiveness of the Entit.v's internal control. 31 West African Retinal Fisheries Progrn WARFP-SL Finoncio! S 'Staternents for the 15 rnnths'perio en ded 31 Marc 2022 * Evaluate the approprness of accounting policies used and the reasonableness of accouitig estirnates and related disclosures made by managemnt • Clonclude on te appropriateness of manageinnt's uise of the going concem basis of accounting and, based on the audit evidence, obtained, whether a rmateriial uncertainty exists related to events or conditions that may cast signifCcant doubt on the Lntitvs abiljtv to continc as a going conie3rn. If 1 coneloude that a material uncertainty exists. I am required to draw attention in my auditor's report to the related disclosures in the financial statmenits or, if su8h disclosures are iiiadequate, to modify mv opinion. NI conclusions are based on the audit evidence obtained up to the date of my auditor's report. 1 lowever, future events or conditions may canse the Entitv to cease to continue as a, going concern. Slvaluatc the overall presentation, structure and content of the financial stitemnts, including the disclosures, and wheither the financial statements represent the underlying transacions and events in a inanner that achieves fair presentation. 1 communicate with those charged wii governance regarding, ainong other matters, the planned scope and nimng of the audit and significant audit findings, ineluding any significaiii defciencies in internal control that 1 identift durinir my audit. I also provide those charged with governance with a statenent that I have complied with relevant ethical requirements regarding independence, and to comimunicate with them all relationships and other matters that may reasonably be thought to bear on my independence, and xw-here applicable, related safeguards. From the rmatters communicated with those charged with governance, I deternine those matters that wxere of most signiicance in the audit of the financial statements of the current period and are therefore the key audit inatters. I describe these miatters in my audiror's report unless law or regulation precludes public diselosure about the mantter or, when, in extremelv rare circumstances, I deterinine that a matter should not be comiunicated in my report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest be ts of such communication. F/ACTING DITOR GENERAL Date: 4 West African Regional Fisheries Prooam WARFP-SL Financial SI fi LStatements for the IS months' period ended 31 Maorch 2022 STATEMENT OF MANAGEMENT'S RESPONSIBILITIES It is the responsibility of management to prepare Financial Statements for each financial year which should show a true and fair view of the state of affairs of the Project and of its surplus or deficit for that year, In preparing these Financial Statements, the Nlanagement is required to: * select suitable accounting policies and apply them consistently: * make judgements and estimates that are reasonable and prudent; * state whether applicable accounting policies have been followed. subject to any material departures disclosed and explained in the Financial Statement; * prepare the Financial Statements on a going concern basis unless it is inappropriate to presume that the Project will continue its activities Management is responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Project. They have a general responsibility for such steps as are reasonably available to them to safeguard the assets of the Project and to prevent and detect fraud and other irregularities. On behalf of Management Principal Deputy Financial Secretary Chairman-1VRFP-SL National Steering Committee Team Lead - 4Q<-SL 5 PIT West Afric6n Pegi o Fisheries Program WARFP-SL Financial Statements!or 7 15 months' period ended 31" March 2022 STATEMENT OF CASH RECEIPT AND PAYMENT (BY COMPONENT) 15 Months Note period ended 31st March 2022 US$ USS FUNDING RECEIVED: Designated Account Replenishment 4 481,230.74 456,707.93 Direct Payment 649,301.00 - 1,130,531.74 456,707.93 PAYMENTS Component 1: Governance (119,400.62) (328.494.53) Component 2: Reducing Illegal. unreported & unregulated fishing (338,575.14) (197.599.57) Component 3: Increasing the contribution of marine fish resources to (756,929.84) local economies (1.595.45) Component 4: Project Management, M&E & Regional Coordination (83,069.95) (91,985.15) (1,297,975.57) (619,674.71) Increase/(decrease) in Cash (167,443.81) 162,966.78 Opening Bank Balance: IDA Designated Account 90,626. 10 295,523.69 Leones Account 76,835.92 34,905.11 167,462.02 330,428.80 Closing Bank Balances IDA Designated Account - 90,626,10 Leones Account 18.20 76,835.92 18.20 167,462.02 These Financi tements were approved on...... .....................................2022 ........... ..... ... ...... Principal Deputy Financial Secretary .................. .......... ...... Chairman-WAFRP-SL National Steering Committee ............... . ......... Team Lead-WAFRP-SL 6 West African Regional Fisheries Program WARFP-SL Financial Statenents for the 15 months' period ended 31" March 2022 NOTES TO THE FINANCIAL STATEMENTS 1. Project description The development objective of the Project is to strengthen the capacity of the Recipient to govern and manage targeted fisheries, reduce illegal fishing and increase local value added of fish products. The Project consists of the following pails: Part A: Good Governance and Sustainable Management of Fisheries Towards increasing the economic profitability and environmental sustainability of the fisheries resources of Sierra Leone. investment under component I strengthens and modernizes the regulatory framework for industrial fisheries by introducing total allowable catches and by Increasing the level of license fees and penalties for infringements. i. Governance of Fisheries a) The finalization by MFMR and implementation of an appropriate fisheries policy and regulatory framework, through the provision of legal arid policy advisory services and training, b) The development., implementation and maintenance of a system for the registration of all small-scale vessels. c) The carrying out of a program to strengthen the capacity of MFMR. IMBO and other research institutions to assess the status of fish stocks, conduct fisheries research and to collect and analyze fisheries statistics, all through the provision of technical assistance and training. d) The establishment of a systen of information arid analysis within the MFMR for the management of fisheries. linked to the regional information platform to be introduced by CSRP under Part A.l (f) of the project, e) (i) The completion and implementation of an appropriate fisheries management plan for the coastal deniersal and shrimp fisheries outside of the Inshore Fxclusion Zone settin TACs for sustainable exploitation of these fisheries, with allocation mechanisms involving long-time licensing and appropriate fees. for industrial vessels linked to long- time licensing process: and (ii) the carrying out of an analysis by MFMR aimed at setting a TAC for coastal shrimp fisheries and establishing an allocation mechanism involving long-term licensing and increased fees. 1) The development and introduction by CSRP within the Regional Coordination Unit. ofa system of regional information and analysis for the management of the participating Countries' fisheries, such system to include the key biological. economic and social statistics regarding fisheries. 7 West African Regional Fisheries Program WARFP-SL Financial ; S f to IStatements for the 15 months' period ended 31' March 2022 NOTES TO THE FINANCIAL STATEMENTS (Continued) ii. Fisheries Co-Management a) The establishment ofa co-management community centre in each Co-managed MPA; aid b) The establishment and ongoing operation of a co-management association in each Co- managed MPA. including the provision of technical assistance to the association and communities in order to develop and ensure community-level discussion, as wvell as the development, dissemination and monitoring of Co-iianaged MPA Management Plans. iii. Alternative Livelihoods Carrying out of a program of incentives designed to ensure environmentalix and economically sustainable management of fisheries within the co-managed MPAs, such incentives to include: (i) provision of legal fishing nets at a discount in exchange for illegal nets, provision on demand-driven basis of small infrastructure. fish processing ovens and/or other equipiient or supplies. and/or training. upon compliance with continued use of legal fishing nets; (ii) training local level waste and hyrene management and monitoring. water quality and local eco-system monitoring: and (iii) transparent community-based reporting on, and monitoring by the Recipient of. compliance with the use of such nets. iv. Social Marketing, Communication and Transparency a) The design and implementation by MFMR of locally accessible conimunication straggles. consultations and marketing campaigns to improve public knowledge of the new fisheries policies developed under the project. b) The carrying out ofa training program to facilitate the development of an active network of local journalists within the region to cover and report on the fisheries management issues and progress with program implementation, such program to include the provision of small equipment and travel expenses for network journalists. Part B: Reduction of Illegal Fishing Illegal fishing is one of the most important sources of revenue loss to the people of Sierra Leone (estimated about USS 30 million annually). To deal with lUU fishing and help those responsible to make the necessary changes (by understanding the broad range of activities requiring attention), it will be helpful to appreciate 1UU fishing as part of the corruption in fisheries which could be traced starting from within fisheries institutions until it reaches the fishing waters. 8 West African Regionol Fisheries Progrom WARFP-SL Financiol Statements for the 15 months'period ended 311 March 2n22 NOTES TO THE FINANCIAL STATEMENTS (Continued) i. Enabling Environment a) The development of an appropriate and sustainable regulatory and institutional framework and plan for the civilian-led monitoring of the recipient's coastal fisheries resources and the civilian-led surveillance and management of fishing along the recipient*s coast. and the carrying out of a training program lbr prosecutors to increase understanding of the recipient s fisheries laws and regulations: and b) The carrying out by CSRP of a progran of technical assistance for the participating countries to facilitate their development and implementation of financial mechanisms to provide stable and adequate support for the long-term operating costs of the fisheries surveillance system in their respective territories. ii. Monitoring, Control and Surveillance Systems The carrying out of a program designed to ensure the appropriate and sustainable civilian-led surveillance of fishing activities along the recipient's coast. consisting of: a) 1The development of a sustainable surveillance strategy and plan for the Fisheries Protection Unit. and provision of training, technical assistance and office equipment. for the operations of such unit. b) The construction of a fisheries monitoring center to be operated by the Fisheries Protection Unit and provision to such center of a communication systems satellite-based vessel monitoring system, data reception platform. computer systems and office automation material and vehicles; and the construction of coastal stations along the coast of the recipient and the provision for each coastal station of communication and computer systems, office supplies, vehicles, and a replication of the vessel monitoring system data reception platform located at the Fisheries Protection Unit. c) The development and operation of civilian-led sea and aerial patrols of fishing activities along the recipient's coast, through the provision of equipment. technical assistance and Trainin. iii. Strengthened Regional Collaboration for Monitoring, Control and Surveillance of Fishing The carrying out by CSRP of a training program to assist the Participating Countries in their implementation of the Fish Catch Certification Scheme and their preparation of bilateral cooperation agreements, and the performance of periodic reviews and audits by an independent group of experts, of the fisheries surveillance activities financed under the project. 9 West African Regionot Fisheries Program WARFP-5L Financial Statements for the 15 months' period eided 31' Morch 2022 NOTES TO THE FINANCIAL STATEMENTS (Continued) Part C: Increasing the Contribution of Marine Fish Resources to the Local Economies Fish products fiom Sierra Leone are not certified to health standards for the international fish market (particularly) in Europe because of lack of a quality standards institutional capacity. Therefore, the participation of Sierra Leone in international fish trade is limited. i. Establishment of fish landing Site Clusters: a) The construction of a fish landing site cluster at Konakrce Dee, such cluster to include inter alia. water supply, electricity. refuse recycling systems, rehabilitated access roads, a fish sorting shed, a hygiene block and septic tank, an ice plant. cold storage Iacilities, drv-docking equipment. common service centres and extension services such as a fishery material store, fuel and gas supplies. net and crates repair, and training in the maintenance of the cold chains. b) The provision of technical assistance for the preparation of a tender for the concession of the above the infrastructure. ii. Fish Product Trade Infrastructure, Information Systems: The development and implementation of a system of quality control and proactive trade information services for fish products, aimed at supporting increased value addition and the expansion of exports of these products from West Africa, such systeni to include: a) The creation of a proactive fisheries trade information system housed at the CSRP for targeted supply chains in each Participating Country and training on the establishment of traceability systems, to support the quality control system to be developed under part C.2(b) of the project. b) The development of a quality control system consisting of a certified public laboratory and a competent sanitary authority as well as the development of relevant protocols and standards for product quality and traceability. Part D: Coordination, Monitoring and Evaluation and Program Management The West African Regional Fisheries Program will be coordinated, monitored, evaluated and managed fi-om the Fisheries Management Coordination Office (FMCO). i.) Technical Assistance for National Implementation The Preparation of Annual Work Plans, including updating of procurement plans and related budgets: and project management. monitoring and evaluation, through technical assistance. ii.) Operating Cost for National Implementation The provision of Operating Costs. training, goods to the PCU for the implementation of the Project 10 West African Regonal Fisheres Proram WIARFP-5L Financial Statements for the 15 months' period ended 31' March 2022 NOTES TO THE FINANCIAL STATEMENTS (Continued) iii.) Regional Coordination The carrying out of a program by CSRP to: (i) facilitate the harmonization of fisheries policy among the participating countries: (ii) monitor and evaluate Program investments and share information and results throughout the participating Countries: (iii) implement ongoing communication activities to raise awareness about the program and implementation progress; and (iv) provide implementation support to each of the Participating Countries. including the coordination of regional procurement. 2. Withdrawal of grant proceeds The amount of Grant and Credit shall be credited to an account to be opened by GEF on their books in the name of WARFP (Grant A/c) and withdrawals may be made there from the recipient in accordance with the provisions for expenditure in respect of the reasonable component cost of goods and services required for the activities to be financed out of the proceeds of the grant and Credit. (a) The following table sets out the categories/component of expenditure to be financed under the proceeds of this Credit: Component Amount of Credit Percentage of Expenditures Allocated expressed in to be Financed (inclusive of (S) taxes) (1) Strengthening Good Governance and Sustainable 1,400,000 35% Management of the Fisheries (2) Reducing Illegal, Unreported and Unregulated 1,200,000 30% Fishing (3) Project Management, Monitoring and Evaluation, 450,000 11.25% and Regional Coordination (4) Increasing the Contribution of the Fish Resources to the Local 950,000 23.75% Economy Total Amount 4,000,000 100% West African Regiona Fisheries Program WARFP-St Financial Statements for the 15 months' period ended 31' March 2022 NOTES TO THE FINANCIAL STATEMENTS (Continued) c) Withdrawal Conditions; of the Grant and the Credit (i) Notwithstanding the provisions of Part A of this Section, no withdrawal shall be made for payments made prior to the date of this Agreement, except that withdrawals up to an aggregate amount not to exceed $500.000 equivalent may be made for payments made prior to this date but on or after January 1, 2009. Under category ()I unless: (1) the Fisheries Protection Unit has been formally established in form and substances satisfactory to the Association; and (ii) the Fisheries regulation has been modified in form and substance satisfactory to the Association to ensure its consistency with the provisions of UNCLOS: or Under Category (4) until the Association shall be satisfied, based on evidence satisfactory to it, that the Regional Steering Committee and the Regional Coordinating Unit shall have both been established in accordance with the provisions of section I.A.2 of the Schedule to the Project Agreement: and the CSRP has adopted the Regional Operational Manual and Regional Administrative and Financial Manuals in accordance with the provisions of section I.C of the Schedule to project Agreement. 3. Summary of significant accounting policies The principal accounting policies applied in the preparation of these financial statements are set out below: these policies have been consistently applied during the period under review. 3.1 Basis of preparation The financial statements have been prepared in accordance with International Public Sector Accounting Standard (Cash Basis) as issued by the International Public Sector AcCounting Standard Board Foreign currency transactions (a) Functional and presentation currency The local currency in use in Sierra Leone is the Leones. The Project has however adopted the United States Dollars (US$) as its reporting currency as most of its transactions are denominated in US Dollars. 12 West Africon Regional Fisheries Progrm VARFP-SL Financial Statements for the 15 months' period ended 3 March 2022 NOTES TO THE FINANCIAL STATEMENTS (Continued) (b) Transactions and balances Foreign currency transactions are translated into the presentation currency using mid exchange rates prevailing on the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions denominated in foreign currencies are reflected as an adjustment in the summary of opening bank balances to closing balances 3.3 Non-current assets Non-current assets are written off on acquisition by the Coordinating Unit. The financial statements therefore have no non-current assets. 3.4 Income Funding from the Trust Fund is recognised on a receipt basis and budgetary allocation does not accrle. 13 West African Regionol Fisheries Progrrn WARFP-SL Fitncial Statements for the 15 months'period ended 31 March 2022 NOTES TO THE FINANCIAL STATEMENTS (Continued) Additional disclosures 15 Months period ended 2020 31" March 2022 USS USS 4 Replenishment Replenishment 005 - 456707.93 Replenishment 006 331.240.71 - Replenishment 007 149,230.74 - 481,230.74 456,707.93 6 Cash and cash equivalents IDA Designated ACCOLt - 90.626.10 Leones Account 18.20 76.835.92 18.20 167,462.02 7 Cash paid to suppliers & employees Expenditure 1,190,108.59 619,674.71 14 West African Regiona Fisheries Prooram WARFP-SL Finan cial Statements for the 15 months' perioi ended 31" March 2022 DESIGNATED ACCOUNT STATEMENT FOR THE FIFTEEN MONTHS PERIOD ENDED 31" MARCH 2022 Account No. 4001215057394150.00 Depository Bank Union Trust Bank Address: Howe Street, Irectown, Sierra Leone Grant Agreement No AF. P156759 Currency United State Dollars 15 months period ended 31st March 2022 USS Account Activity Opening Balance I" January 2021 90.626.10 Initial deposits Receipts into Designated Account 481.230.74 571,856.84 Disbursements: Amount withdrawn for implementation (85,806.93) Amount transferred to Leones Accounts (486,049.91) Balance as at the end of the period 15 West African Regional Fisheries Program WARFP-SL Finorciol Statements for the 15 months' period ended 31" March 2022 DESIGNATED ACCOUNT STATEMENT FOR THE FIFTEEN MONTHS PERIOD ENDED 31st MARCH 2022 Account No. 004001210057394126 Depository Bank Union Trust Bank Address: [lowe Street, Freetown, Sierra Leone Grant Agreement No AF, P156759 Currencv Leones 15 months period ended 31st March 2022 us$ Account Activity Opening balance lI January 2021 76,835.92 Transfer from The US Dollar Designated Account 486,049.91 562,885.83 Disbursements: Amount withdrawn for implementation (562,867.63) Balance as at the end of the period 18.20 16