P.O BOX SD 40 Stadium, Accra MINISTRY Digital Address: GA-107-2970 OFKind! quote thirl1Der and dae al cdr! e ne ENERGY YorRe No RF I IL R LIC Or HANA Date 10TH Iunp 2022 THE TASK TEAM LEADER GESTIP WORLD BANK ACCRA OFFICE ACCRA-GHANA GHANA ENERGY SECTOR TRANSFORMATION AND INITIATIVE PROJECT (GESTIP) -AUDITED FINANCIAL STATEMENTS AND MANAGEMENT LETTERS FOR THE YEAR ENDED 31 DECEMBER, 2021 We wNish to inform yoU that the audit of the GESTIP Accounts for the Near ended 31 December 2021 has been completed. We submit herewith copies of the Audited Financial Statements and Management Letter for your attention. please. JAMES DEMITRUS PROJECT COORDINATOR Cc: Ag. Chief Director. Ministry of E'nergy Director Finance, Ministry of Energy Financial Management Specialist. World Bank Chief Director, Ministry of Finance Director ERMERD, Ministry of Finance Head. World Bank Unit. Ministry of Finance Tel: +233 (0) 302 683 961 3 Email : Website: www.energymin.gov.gh WORLD BANK GOVERNMENT OF GHANA GHANA ENERGY SECTOR TRANSFORMATION INITIATIVE PROJECT (G ESTI P) IDA CREDIT NUMBER 63o3-GH FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 B A S IC IN FO R M A T IO N ................................. .................................................... ..................... i P R O JE C T B A C K G R O U ND............................................ ................................................................................ A U D IT O R 'S R E P O R T . ....... .... .... ....... . . ................. ...... ... ... ....... .......... .... -.......... .......... ...... ........... .-......... 1 STATEMENT OF RECEIPTS AND PAYMENTS................................................................ ........................ 3 STATEMENT OF FINANCIAL POSITION .............. ..........................-............................. ...........-..........4 ST A TE M E N T O F C A SH FLO W ............... -........... ................. ................ -...... ..... ........... ...... ......... 5 NOTES TO THE FINANCIAL STATEMENTS................................ ......................... .. ...... .......... 6 N O TE 1. A C C O U N T IN G PO LIC IES.......................... ............. ...................... ........... .................. . -. 6 N O T E 2 . R E C E IP T S ............................................................................................ . -. ..............IPT. 7 NOTE 3. DISBURSEMENT BY PROJECT COMPONENOP ............. ....................................................7 NOTE 4. DESIGNATED ACCOUNT RECONCILIATION STATEMENT.........................................7 NOTE . SCHEDULEOF IT lDR A PPLICAllONS............................................................. 8 N O T E 6. B A N K BA LA N C ES........................................ ...................... ......................... 8 NOTE 7. STATEMENT OF ACCUMULATED FUND ........ .................-.............. ..........................9 NOTE 8. PLANT AND EQUIPMENT ................................. ............ ...................................................N.9 N O T E 9: FIX ED A SSETS SCDLFD L F ............................................ ............ ....... ....... ................ 10 GHANA ENERGY SECTOR TRANSFORMATION INITIATIVE PROJECT (GESTIP) FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 PROGRAMME GHANA ENERGY SECTOR TRANSFORMATION INITIATIVE PROJECT (GESTIP) 12-MONTH PERIOD 01 January-31 December 2021 PRINCIPAL INSTITUTION Ministry of Energy PRINCIPAL OFFICE GEDAP Secretariat Ministry of Energy P. O. Box SD 40 Accra, Ghana PROJECT OFFICERS PROJECT CORDINATING TEAM Project Coordinator Financial Management Consultant Procurement Specialist Communication Specialist Power Specialist/Access Manager Gas Specialist Renewable Energy Expert M&E Expert E&S Safeguards Specialist SUMMARY OF RECEIPTS & PAYMENTS 2021 2019/2020 USS US$ TOTAL RECEIPTS 5,111,534 2,000,000 TOTAL PAYMENTS 3,485,465 989,942 EXCESS OF PAYMENTS OVER RECEIPTS 1,626,069 1,010,058 BANKERS BANK OF GHANA AUDITORS Auditor-General of Ghana Audit Service, P.O. Box M 96 Accra GHANA ENERGY SECTOR TRANSFORMATION INITIATIVE PROJECT (GESTIP) FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 The Ghana Energy Sector Transformation Initiative Project (GESTIP) is being funded with a contribution of USD 20.00 million by the International Development Association (IDA). The Project Development Objectives (PDO) are: i. To strengthen the capacity of the Energy Sector institutions to implement sector reforms; and ii. To improve Energy Sector planning and coordination in Ghana. The project is being implemented by the Ministry of Energy, through the GESTIP Secretariat which is providing management and coordination services. 6i CGAD/GTN.ADM/21/136 M. 96 Accra 30 June 22 INDEPENDENT AUDITOR'S REPORT ON THE FINANCIAL STATEMENTS OF THE GHANA ENERGY SECTOR TRANSFORMATION INITIATIVE PROJECT FOR THE YEAR ENDED 31 DECEMBER 2021 We have audited the Financial Statements of the Ghana Energy Sector Transformation Initiative Project (GESTIP) funded by the International Development Association (IDA). The project is being implemented by the Electricity Company of Ghana (ECG) and coordinated by the Ministry of Energy through the Project Coordination Unit. The Report is intended for the information and use of the Ministry of Energy, Ministry of Finance, Electricity Company of Ghana and the International Development Association. This Report should not be made available to parties not included in this list without our prior consent and we will not be liable for any claim that might be based on this report by such parties. Management Responsibility for the Financial Statements The Management of the Ghana Energy Sector Transformation Initiative Project is responsible for the preparation of financial statements that give a true and fair view in accordance with International Public Sector Accounting Standards and for such internal control, as management determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error and selecting and applying appropriate accounting policies. Auditor's Responsibility Our responsibility is to express an opinion on the financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing (ISA), promulgated by the International Federations of Accountants, Those standards require that we comply with ethical requirements, plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. 1 GHANA ENERGY SECTOR TRANSFORMATION INITIATIVE PROJECT (GESTIP) FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 Basis of Opinion An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risks assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of financial statements 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 entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. The Project Management's policy is to prepare the accompanying Statement on Cash Receipts and Disbursement Basis in conformity with International Public Sector Accounting Standards for Cash Accounting. On this basis cash receipts are recognized when received, and cash expenditure when paid rather than when incurred. Our audit was conducted for the purpose of forming an opinion on the Financial Statement as a whole. Opinion In our opinion, the financial statements present fairly, in all material respects, the financial position of the Ghana Energy Sector Transformation Initiative Project (GESTIP) as at 31 December 2021 and of its financial performance and its cash flows for the year then ended in accordance with International Public Sector Accounting Standards and in the manner required by the Financial Agreement between the Government of Ghana and the IDA. BENJAMIN . CODJOE DEPUTY AUDITOR-GENERAI/CGAD for: AUDITOR-GENERAL 2 GHANA ENERGY SECTOR TRANSFORMATION INITIATIVE PROJECT (GESTIP) FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 ' F T -T\IENT OF RECEIPTS AND PAYIF TS STATEMENT OF RECEIPTS AND PAYMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 Note 2021 2019/2020 US$ Receipts Funds received from IDA 2 5,111,534 2,000,000 Total Receipts 5,111,534 2,000,000 Payments Goods - 139,008 Consultancy Services 3,202,238 548,985 Training/ Conferences 46,306 34,591 Operating Costs 233,921 267,358 Total Payments 3,485,465 989,942 Surplus (Deficit) 1,626,069 1,010,052 Add Opening Cash Balance 1,010,05 - Closing cash Balance 2,636,127 1,01052 3 GHANA ENERGY SECTOR TRANSFORMATION INITIATIVE PROJECT (GESTIP) FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 11S'l IL I 0 1 )I F LAViA 1 - T>IC0\ STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2021 2021 2019/2020 NOTE USD USD NON-CURRENT ASSETS Plant and Equipment 8 139,008 139,008 CURRENT ASSETS Bank and Cash balances 6 2, b127 1,010,058 NET ASSETS 2,775,135 1, RKlPRI1L1N1E1) BY Accumulated Fund 7 2,775,135 1,149,066 ames Demitrus Kwesi Arhin Project Coordinator Financial Management Consultant Date: ~Date: 4 GHANA ENERGY SECTOR TRANSFORMATION INITIATIVE PROJECT (GESTIP) FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 STATEMENT OF CASH FLOW STATEMENT OF CASH FLOW FOR THE YEAR ENDED 31 DECEMBER 2021 2021 2019/2020 US$ US$ Excess of Payments over Receipts 1, 626,069 1,010,058 Changes in Working Capital - - Net cash inflow from operating activities - Cash flow from investing activities: Net Cash Inflow 5,111,534 2,000,000 Opening Cash/ Bank Balance 1,010,058 Net Cash Outflow 3,485,465 (989,942) Cash and Cash equivalent as at 31/12/2021 2,636,127 1,010,058 Analysis of Cash and Cash equivalent: Designated Account 2,636,127 1,010,058 Cash and Cash equivalent as at 31/12/2021 2,636,127 1,010,058 5 GHANA ENERGY SECTOR TRANSFORMATION INITIATIVE PROJECT (GESTIP) FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 \ TES TO THE FINANCIAL STA"EMENTS NOTES TO THE FINANCIAL STATEMENTS FOR THE 15-MONTH PERIOD ENDED 31 DECEMBER 2021 0 LI \ ii CCL~ NT 1NG POLICIES The following are a summary of principal accounting policies adopted in the preparation of the projects financial statements and are consistently applied in the presentation of this report. a) Basis of Accounting These Financial Statements have been prepared on IPSASs modified accrual Basis under the Historical Cost Convention. Assets and liabilities are reflected or disclosed in the financial reports at the cost incurred or price paid at the time of transaction. b) Revenue Revenue is accounted for on cash basis. This means that Revenues are recognized and recorded only when they are received and not when they are earned. c) Expenditure Expenditure is accounted for when they are incurred. d) Foreign Currency Transactions Transactions that are denominated in currencies other than the United States Dollars are translated in United States Dollars at the exchange rate prevailing at the date of transactions. Transactions in the Comprehensive Statement of Receipts and Payments for the year are translated using the average rate. Balances denominated in currencies other than the US Dollars are translated into US Dollars at the rate prevailing at the Balance Sheet date. Gains or Losses resulting from foreign currency are taken into the Income and Expenditure accounts for the year in which they arise. e) The Level of Approximation of Currency/Amount The Level of Approximation of Currency/ Amount is to the nearest US$. f) The Reporting Currency The Currency of reporting is in United States Dollars (USS). 6 GHANA ENERGY SECTOR TRANSFORMATION INITIATIVE PROJECT (GESTIP) FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 Receipts constituted advances into the Designated Account and direct payments by the IDA to Consultants and Suppliers. 2021 2019/2020 FUNDS RECEIVED USD_ USD Funds Received from IDA: 5,172,114 Advance to Designatd Account2,000,000 Direct Pavment 1,939,420 - Special Commitment TOTAL FUNDS FROM IDA 7,111,534 2,000,000 DISBUR DVK'\!N I 1 1-WIE~CT COMP\II-O\L\ PROJECT COMPONENTS 2021 2019/2020 CUMULATIVE USD USD USD 1. Mgt. of Power Sector .. Finncil Fows281,298 238,617 519,915 Financial Flows ___ _____ _____ 2. Sector Planning and 245,655 0 245,655 Coordination 3. Electricity Access 1,501,731 1,852 1,503,583 4, Natural Gas 988,614 0 988,614 5 Project Management 468,168 749,473 1,217,641 TOTAL PROJECT 3,485,466 989,942 4,475,408 COSTS IV 4. D' I j L" I Rt-CCCL RECO C I 10\ ST1 I 11 \ I Designated Account Reconciliation Statement as at 31 December 2021 USD USD Balance as at 1 January, 2021 1,010,058 Add Funds Received during the period 3172114 Total Funds Available 4,182,172 Less Payments from the Designated Account in 2021 1,546,045 Designated Account Balance as at 31 December 2021 2,636,127 7 GHANA ENERGY SECTOR TRANSFORMATION INITIATIVE PROJECT (GESTIP) FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 ____ 3. C7EDLL OF. i \\ 1 11 Rt) A\AlAT 1 \I1 \ Year Amount Paid Total Funds Application Direct under Amount Comments/ ofpic 1m Amount Payment Special Paid into DA Differences Reid pplic Commitment 2019 Advance to Designated Account, 2,000,000 2,000,000 Initial Adv. 2,000,000 Appliation #1 AP PL#6 - __ _ ___ 2021 312,300.00 312,300.00 312,300.00 2021 APPL#7 156,150.00 156,150.00 156,150.00 2021 APPL#9 124,275.00 124,275.00 124,275.00 2021 APPL#10 93,723.66 93,723.66 93,723.66 APPL#1319496 195.3 2021 119,459.36 2021 Advance to Designated Account 3,172,114.00 3,172,114.00 3,172,114.00 _____Application # 14 ______ _____________- _______ 2021 APPI#15 151,710.00 151,710.00 151,710.00 2021 APPL#17 151,710.00 151,710.00 151,710.00 2021 APPL#18 299,190.98 299,190.98 299,190.98 2021 APPL#20 151,710.00 151,710.00 151,710.00 2021 APPL#21 299,191.00 299,191.00 299,191.00 1OTAL 1,939,420.00 5,172,114.00 7,111,534.00 I I'A NK LA LA\ C Bank balances as at 31 December 2021 are indicated below. 2021 2019/2020 US$ US$ Main Designated Account 2,636,127 1,010,034 Sub-Designated Account - 24 TOTAL 2,636,127 1,010,058 8 GHANA ENERGY SECTOR TRANSFORMATION INITIATIVE PROJECT (GESTIP) FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 1;1A\Tl_%I:Xl\ OF ACCULI'IATHiD l,L\[,) This represents the net assets acquired from funds received from IDA at the end of the reporting year. Statement of Accumulated Fund as at 31 December 2021 2021 2019/2020 US$ US$ Cash Balance as at 1 January 2021 1,010,058 - Excess of Payments over Receipts 1,626,069 1,010')58 Cash Balance as at 31 December 2021 2,636,127 1,010,058 Add Non-Current Assets 139,008 139,008 Accumulated Fund 2e775,135 1,149,066 0 1'S. P I A\ X 1 1) F Q LI1T\ II.- I Amount Amount Name of paid as at 31 paid (USD Contractor/ Description of Contract Amount December, Equivalent) SuppLier Contracts Amount Currency paid in 2020 2020 Supply of 2 [0Y TA Tovota 1 GllA\A Landcruiser 734,657 GiC 734,657 734,657 139008 LIMITED Prado-KJ 4WD 9 Ae VE HI C Date of Asset Asset Asset Asset VEHICLE Asset Name of Name Condition Purchase Type Description Cost IdentificationLocation Userfitle Supplier ofAsset Number NUMBER DenitrUS, Toyota Project Toyota Landcruiser G iHs GW-2180- GESTIP PIU, Coordinator, Ghana 29-Jan-20 Vehicle Prado-Kd 4WD 367,328.50 JTEBI 19FJ40K217816 20 MoE, Accra GESTIP Co. Ltd New Kwaku Toyota GESTIP/ESRI Appiah-Adu, Toyota Landcruiser GIHS GW-2171- PIU, MoE, Tech Cord Ghana 2 29-Jan-20 Vehicle Prado-Kd 4WD 367,328.50 JTEBH9FJ105104100 20 Accra ESRP Co. Ltd. New 10