MINISTRY OF FOOD AND AGRICULTURE (MOFA) GHANA COMMERCIAL AGRICULTURE PROJECT(GCAP) %.CNkL AGRIC(/ 0 0 AUDITED FINANCIAL STATEMENT FOR THE PERIOD ENDED 30TH APRIL, 2022 IDA CREDIT NO. 5077-GH & 6254-GH MINISTRY OF FOOD AND AGRICULTURE (MOFA) GHANA COMMERCIAL AGRICULTURE PROJECT(GCAP) cIAL AGRict * *% AUDITED FINANCIAL STATEMENT FOR THE PERIOD ENDED 30 OTAPRIL, 2022 IDA CREDIT NO. 5077-GH & 6254-GH CONTENTS PAGE Independent Auditors Report 1 General Information 4 Project Background 6 Statement of Project Implementation Unit's Responsibilities 7 Financial Statements: - Statement of Sources and Uses of Funds 8 - Balance Sheet 9 - Notes to the Financial Statements 10 Designated Accounts Statement 14 - Notes to the Designated Accounts Statement 15 Annex i - Schedule of Fixed Assets Register 16 AUDIT SERVICE In case of reply the number and date of the letter should be quoted CGAD/GEN.ADM/21/182 My Ref No: .............................. M . 96 Your Ref N o: ............................ P. . Box ........................................... Good Governance Accra Tel: 233 (0) 302 664920/28/29 andAccountability . . . .............. .. Fax: 233 (0) 302 6751495 10 November 22 W ebsite: www.ghaudit.org ............................................. 20 ......... THE CHIEF DIRECTOR MINISTRY OF FOOD AND AGRICULTURE ACCRA INDEPENDENT AUDITORS REPORT ON THE FINANCIAL STATEMENTS OF THE GHANA COMMERCIAL AGRICUTURE PROJECT FOR THE PERIOD ENDED 30 APRIL 2022 IDA CREDIT NUMBERS 5077-GH AND 62540-GH We have audited the Financial Statements of the Ghana Commercial Agriculture Project (GCAP) funded by the African Development Bank. The project is being implemented by the Ministry of Food and Agriculture through the Steering Committee and the Project Implementation Unit. The Financial Statement comprises of the Statement of Financial Position as at 30 April 2022, the Statement of Sources and Uses of Funds, and Summary of Accounting Policies and explanatory notes as presented by Management of GCAP. Opinion In our opinion, the Financial Statement and its accompanying notes were prepared in accordance with the World Bank Reporting Guidelines. The accompanying Financial Statement presented gives a true and fair view, in all material respects, of the financial position of the Project as at 30 April 2022 in accordance with the Project Appraisal Agreement. Basis of Opinion We conducted our audit in accordance with the International Standards of Supreme Audit Institutions (ISSAI's) and World Bank Reporting Guidelines as adopted by Management to obtain sufficient and appropriate evidence to support the basis for our audit opinion. These standards required that we GCAP Audit Opinion 2021 Page 1 comply with the ethical requirements, plan and perform the audit to obtain reasonable assurance that the Project Financial Statement is free from material misstatements. It also included evaluating the appropriateness of World Bank Reporting guidelines used, the reasonableness of accounting estimates made by the Project Implementation Unit, Ghana Commercial Agriculture Project (GCAP) under the Ministry of Food and Agriculture as well as evaluating the Overall presentation of the Financial Statement. We also examined the underlying Asset Register and confirmed that assets procured have been duly accounted for and were used for the furtherance of GCAP activities during the period under review. We believed that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Our audit was conducted for the purpose of forming an opinion on the Financial Statement as a whole. Management Responsibility for the Financial Statements The Management of the Ghana Commercial Agriculture Project (GCAP) is responsible for the preparation of financial statements that give a true and fair view in accordance with World Bank Reporting guidelines and for such internal control, as management determines 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 the International Standards of Supreme Audit Institutions (ISSAIs). 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. The 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 GCAP Audit Opinion 2021 Page 2 material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial controls relevant to the entity's preparation and fair presentation of financial statements that give a true and fair view and designs audit procedures that are appropriate in the circumstances. 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. BENJAMIN .LCODJOE DEPUTY AUDITOR-GENERAI/CGAD for: AUDITOR-GENERAL GCAP Audit Opinion 2021 Page 3 Ghana Commercial Agriculture Project (GCAP) IDA Credit No. 5077-GH & 6254o-GH Period Ended 3o APRIL 2022 GENERAL INFORMATION Steering Conunittee Members Hon. Yaw Addo Frimpong- Dep. Minister, MOFA - Chairman R. P. Ankobiah-Ag. Chief Director, MOFA - Member Sauda Ahmed, Head, World Bank Unit, MOF - Member Osei Owusu-Agyeman - PC, GCAP - Member Mawuli Agboka - OM, GCAP - Member Richard Twumasi-Ankrah Dir. PPMED-MOFA - Member Ing Wilson Darkwa - Ag. CEO GIDA - Member Seth Osei Akoto - Director, DCS-MOFA - Member Ebenezer Appah-Sampong - Dep. Exe Dir. EPA - Member Frances Kyiamah - Deputy Director, GIPC - Member Amos W. Wuni - Exe.Sec, LC - Member Project Implementation Unit Osei Owusu-Agyeman - Project Coordinator Mawuli Agboka - Operations Manager Ben Johnson - Financial Management Specialist Adu Nyarko Andorful - Social Safeguards Specialist Emelda Adii - Environmental & Safeguard Specialist Geoffrey Anno - Monitoring and Evaluation Specialist Galina Okartei-Akko - Agri-Business Analyst Philip Laryea - Contract Management Specialist Allswell E. Okai - Agricultural Economist Bloomfield Crosby Attipoe - Senior Infrastructure Engineer/Zonal Coordinator 41 Page Ghana Commercial Agriculture Project (GCAP) IDA Credit No. 5o77-GH & 6254o-GH Period Ended 30 APRIL 2022 Project Office Ministry of Food and Agriculture P. 0. Box M 37 Ministries, Accra. Independent Auditors Ghana Audit Service Bankers Agriculture Development Bank (ADB), Accra 5| Page Ghana Commercial Agriculture Project (GCAP) IDA Credit No. 5o77-GH & 6254o-GH Period Ended 3o APRIL 2022 PROJECT BACKGROUND The Agreements The Credit Agreement No.5077-GH was approved in September 2012 and became effective on 8 April 2013. The agreements were signed by the Government of Ghana and the International Development Association (IDA) of the World Bank for foreign exchange facilities of SDR64.5m (US$100m) investment loan and USAID funding of US$45m. The funding will be administered under Public International Organisation grant to the World Bank in conformity to USAID's FORWARD Initiative and primarily to address the food security situation by increasing household incomes, improving the competitiveness of the rice, maize and soya beans value chains and expanding market opportunities for smallholder farmers. The USAID Trust fund was modified to reduce the total amount of the Recipient Executed Trust Fund (RETF) to US$16.95m on 23 February 2018. The Closing date of the USAID TF, which was September 30, 2017 was extended to May 31, 2018 and further extended to January 31. 2019. Ghana Commercial Agriculture Project (GCAP) will contribute directly to the medium term macro- economic growth by leveraging on improved agricultural productivity and production for both smallholder and nucleus farms in selected project intervention areas, the project will expand the opportunities for Ghana's poor to participate in this growth. On 2o November 2015, the project obtained approval and was restructured. As part of the restructuring, there were revisions to the Project Development Objectives (PDO) as well as the main components of the project. The new PDO is stipulated as follows: To improve agricultural productivity and production of both smallholder and nucleus farms in selected project intervention areas with increased access to reliable water, land, finance, and agricultural input and output markets. On 8th May 2018, the project obtained yet another approval for Additional Financing of SDR 34.8m (US$50m) from IDA and was also restructured. The original PDO has been reviewed by removing the reference to "increased access to reliable water, land, finance and agricultural input and output markets" which mainly define the interventions undertaken by the project to achieve the development objectives. Other changes include: (i) simplification of the project structure by merging the existing seven (7) components into four (4). The revised components are as follows: i. Facilitating investment promotion in commercial agriculture 2. Promoting private sector investments and small-holder linkages in selected areas 3. Rehabilitation/modernization of irrigation schemes and reforming of irrigation institutions and management 4. Project management, monitoring and evaluation The closure date of the project has been extended to 3o April 2022 for the IDA Credit. The total funds available as indicated above (IDA USS150 million). 6 1Page Ghana Commercial Agriculture Project (GCAP) IDA Credit No. 5o77-GH & 6254o-GH Period Ended 3o APRIL 2022 Repayment of Credit The Government of Ghana shall repay the principal amount of IDA Credit in semi-annual instalments payable on each 15 January and 15 July, commencing 15 July 2022 and ending 15 January 2052. The facility is an interest free loan however it attracts a 7.5% service charge and a 0.5% Commitment Fee. Statement of Project Implementation Unit's Responsibilities The Project Implementation Unit is responsible for the preparation of the financial statements for the period, which has been prepared in all material respects in accordance with the accounting policies described in note 1 to the financial statement. In preparing these financial statements, the Project Implementation Unit has selected suitable accounting policies and then applied them consistently, made judgements that are reasonable and prudent and followed the cash basis of accounting. The Project Implementation Unit is responsible for ensuring that the Project keeps proper accounting records that disclose with reasonable accuracy at any time the financial performance of the Project. The Project Implementation Unit is also responsible for safeguarding the assets of the Project and taking reasonable steps for the prevention and detection of fraud and other irregularities. Principal Activities The principal activities of the project are set out on page 3 of this report. Financial Results The Statement of sources and uses on page 5 shows net increase in project funds during the year of US$ 13,939 (2020: US$6,666,158) Independent Auditor The Ghana Audit Service has expressed willingness to continue in office as auditors for the project. BY ORDER OF THE PROJECT IMPLEMENTATION UNIT: THE PROJECT COQRUI4TOR V/EG. VALU CHMIN Project Coordinator: VEP VALUE C P MINSTRY OF FOOD & AGRICULTURE Financial Management Specialist: ...............November 2022Pg 71 P a ge Ghana Commercial Agriculture Project (GCAP) IDA Credit No. 5077-GH Financial Statements Period ended 3o APRIL 2022 STATEMENT OF SOURCES AND USES OF FUNDS (All amounts are expressed in US dollars unless otherwise stated) Current Cumulative Cumulative Total to date to 2020 SOURCES US$ US$ USS Balance i January 2020 6,666,158 - Funds received during the year (Note 2) 27,624,731 159,385,306 131,760,575 Adjustments o 0 0 34.200,889 t5,38Z,36 1,1,760,575 USES Category Categories 1 to 1oB & 12 - OLD Catg: 1- CATEGORIES 10B&12 0 42,511,885 42,511,885 excl. 9 & 11 13 Wks/Gds/Non Cons Svcs/Cons Svcs Parts A,Bi-B3,C3,D 13 1,354,037 9,819,196 8,465,159 14 Match Grants for Sub Proj. Parts A3(d),B2(a),B2(b),B2(d) 14 0 512,344 512,344 15 Wks/Gds/Non Cons Svcs/Cons Svcs Parts B3(b),C1,C2,C3 15 1,103,292 32,506,098 31,402,806 16 Seeds Grants under Part B.3(a) of the Project 16 428,246 5,020,178 4,591,932 17 Gds/Wks/Non Cons Svcs/Cons Svcs/Op est Part Ci(a) & Ci(c) 17 310,234 10,318,501 10,008,267 18 Gds/Wks/Non Cons Svcs/Cons 18 31,054,349 52,543,293 21,488,944 Svcs/Op est Part C1(a) & Ci(c) ii Retrench. GIDA/ICOUR Parts F.i and F.2 (Sub 6.1 and 6.2) 11 0 4,607,223 4,607,223 Goods, Consultant's services, Training and Operating Costs from Interest 9 147,073 1,532,649 1,385,576 Accounts Withholding Tax 2,285 0 (2,285) Adjustments(exchange loss on GHS acct) (7,492) 0 7,492 Advance to ICOUR Office (115,075) 0 115,075 Total Uses of Funds (Note 3) 34.276.g50 1.sq,371,367 12oo4418 Net increase in project funds during the year i&m939 m U6d58 8| Page Ghana Commercial Agriculture Project (GCAP) IDA Credit No. 5077-GH Financial Statements Period ended 3o APRIL 2022 BALANCE SHEET (All amounts are expressed in US dollars unless otherwise stated) As at qI December Cumulative to Cumulative date to Dec 2020 Note US$ USS Non-Current Assets Project Expenditure 3 159,371,367 124,979,343 Current assets Cash and Bank Balances 4 13,939 6,666,158 Project Advances 0 115078 13,939 6,78l,236 Total Assets 15985.30 Current liabilities Withholding Tax 5o0 Net assets 159,38,3o6 1.1,76o,57 Represented by: Accumulated Fund 6 15985,0 134 The financial statements on pages 8 to 9 were approved by the Project Implementation Unit on ..... November 2022 and signed on its behalf by: THE PROJECT COORDINATOR Project Coordinator: PERHAN VEG. VAUE CHAIN MINISTRY OF FOOD & ACRICULTURE Financial Management Specialist: 9 Page Ghana Commercial Agriculture Project (GCAP) IDA Credit No. 5o77-GH Financial Statements Period ended 3o APRIL 2022 NOTES (All amounts in the notes are expressed in US dollars unless otherwise stated) 1. Accounting policies The following are the significant accounting policies adopted in the preparation of these financial statements: (a) Basis of accounting The financial statements have been prepared on the historical cost convention in accordance with World Bank financial reporting requirements and in compliance with the credit agreement numbers 5077-GH and 6254-GH on cash basis. (b) Income Income is recognized on cash basis and credited directly to the respective designated accounts. (c) Project expenditure This comprises expenditure incurred under four (4) components and the eight (8) categories of the project which include the administrative expenditure incurred by the PIU. It is recognised when goods and services are paid for. This includes project expenses capitalised at period end. (d) Fixed assets Property, plant and equipment are expensed in the year of acquisition. (e) Foreign currency translation Transactions in foreign currencies (currencies other than the United States Dollar) are converted by the Commercial Bank (ADB Bank) at the rate ruling at the date in which the transaction took place. Current assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the balance sheet date and fixed assets translated at the rate of exchange ruling at the time of acquisition. Gains or losses arising on foreign currency transactions are credited to or charged against recurrent expenditure in the period in which they arise. (f) Cumulative expenditure This comprises expenditure incurred under the four (4) components of the project from inception to date, as well as the three (3) new components following the restructure of the project during the year ended 2015. These seven (7) components were however reduced back to four (4) with seven (8) categories following yet another restructuring of the project in 2018. (g) Advances This comprises funds transferred to Irrigation Company of Upper Region (ICOUR) for project activities under Category 13. This is added to uses of funds Category 13 upon retirement. 10|Page Ghana Commercial Agriculture Project (GCAP) IDA Credit No. 5077-GH Financial Statements Period ended 3o APRIL 2022 NOTES (CONTINUED) (All amounts in the notes are expressed in US dollars unless otherwise stated) 2. Funds received This represents funds received from IDA and interest received on it. 2021 Application number Description Amount US$ Designated Account A Original Financing GCAP (A) 59 Funds received from IDA 2,462,640.87 subtotal (OF) 2,462,640.87 Additional Financing GCAP (AF) 4 Funds received from IDA 15,511,769.o GCAP (AF) 6 Funds received from IDA 9,556,461-46 subtotal (AF) 25,o68,23o.46 Interest DA-A Interest received 59,481.64 DA-C Interest received 34,377-45 subtotal (Interest) ____ ___ ___ ____ ___ ___ ___ ____ ___ ___ ___93,859.09 Total (OF, AF, Interest) J 27,624,730.42 11 Page Ghana Commercial Agriculture Project (GCAP) IDA Credit No. 5077-GH Financial Statements Period ended 30 APRIL 2022 NOTES TO FINANCIAL STATEMENTS (CONTINUED) 3. Project expenditure (All amounts in the notes are expressed in US dollars unless otherwise stated) NOTES TO FINANCIAL STATEMENTS NOTE 3 - PROJECT EXPENDITURE Cumulative Current Year Cumulative to 2020 to date US$ US$ US$ Category Categories 1 to 1oB & 12 - OLD Catg: 1- CATEGORIES 1oB&12 excl. 9 & 11 42,511,885 0 42,511,885 13 Wks/Gds/Non Cons Svcs/Cons Svcs 13 Parts A,B1-B3,C3,D 8,465,159 1,354,037 9,819,196 14 Match Grants for Sub Proj. Parts 14 A3(d),B2(a),B2(b),B2(d) 512,344 0 512,344 15 Wks/Gds/Non Cons Svcs/Cons Svcs 15 Parts B3(b),C1,C2,C3 31,402,806 1,103,292 32,506,098 16 Seeds Grants under Part B.3(a) of the 16 Project 4,591,932 428,246 5,020,178 17 Gds/Wks/Non Cons Svcs/Cons Svcs/Op 17 10,008,267 est Part Ci(a) & Ci(c) 310,234 10,318,501 18 Gds/Wks/Non Cons Svcs/Cons Svcs/Op is est Part Ci(a) & Ci(c) 21,488,944 31,054,349 52,543,293 11 Retrench. GIDA/ICOUR Parts F.1 and 11 F.2 (Sub 6.1 and 6.2) 4,607,223 o 4,607,223 Subtotal (A) 12,588,6o .4.2.50,159 157,838.718 Goods, consultants' services, Training and Operating Costs from Interest Account 9 1,385,576 147,073 1,532,649 Withholding Tax (2,285) 2,285 0 Adjustments - ICOUR OFFICE ADVANCE 115,078 (115,075) 0 Adjustments - Exchange Loss on GHS acct 7,492 (7,492) 0 Subtotal (B) i,ros.861 26,7Q 1,.2649 Total (A+B) g_4 34276,LL 1.5971,67 Total Expenditure (less Advance) 12,97 39 a44a 2gs 159,37136-7 121 Page Ghana Commercial Agriculture Project (GCAP) IDA Credit No. 5o77-GH Financial Statements Period ended 3o APRIL 2022 NOTES (CONTINUED) (All amounts in the notes are expressed in US dollars unless otherwise stated) NOTE 4 Apr-22 DeC-20 US$ US$ ADB IDA Designated Accounts - A 2,915 2,274,289 ADB IDA Designated Accounts - C 348 4,327,979 ADB IDA Sub Designated DA-A Cedi Account 0 0 ADB Interest on Designated Accounts 10,676 63,891 PPF Cedi Account 0 0 Cumulative to Cumulative date to 2020 US$ US$ 5. Creditors Withholding tax due Ghana Revenue 0 0 Authority 6. Accumulated Fund The accumulated fund is financed by: Funds received from IDA 157,825,874 130,295,003 Other sources including interest L.9,432 1,465,576 159.385306 13160,57 13|1P ag e Ghana Commercial Agriculture Project (GCAP) IDA Credit No. 5o77-GH Financial Statements Period ended 30 APRIL 2022 DESIGNATED ACCOUNTS STATEMENT FOR THE PERIOD ENDED 3o APRIL 2022 (All amounts are expressed in US dollars unless otherwise stated) A C TOTAL US$ US$ US$ Balance - 1 January 2021 2,274,289 4,327,979 6,602,268 Transfer from IDA 27,530,871 0 27,530,871 Transfer from DA-C ,915,839 (11,839) 0 Total Funds Available in the Designated Accounts 33,1199949 34131139 Movement: Eligible Expenditures paid during the period. 33,718,084 411,792 34,129,876 Balance at 3o April 2022 2,915 aL 3a The Designated Accounts statement on page 14 was approved by the Project Implementation Unit on ....... November 2022 and signed on its behalf by: Project Coordinator: E O/E- COORDIN4TOR A I 1-RRA V ',-UE CHAIN PROJECT - GPVVrP MINISTRY OF FOOD & A UrLTURE Financial Management Specialist: 14 Page Ghana Commercial Agriculture Project (GCAP) IDA Credit No. 5o77-GI Period Ended 30 APRIL 2022 NOTES (All amounts in the notes are expressed in US$) 1. Accounting policies The following are the significant accounting policies adopted in the preparation of the designated account statement: (a) Basis of accounting The Designated Account Statement has been prepared in accordance with the provisions of the Credit Agreements Nos. 5077-GH and 6254o-GH (b) Opening balance This amount represents prior year closing balances brought forward. (c) Transfer from IDA This represents transfers from the World Bank. Transfers are recognised as income when it hits the designated accounts. (d) Interest earned These amounts represent refunds of transaction charges in the designated accounts during the period under review. (e) Eligible expenditure This is made up of all eligible payments made by the project during the period under review. 15 | Page Ghana Commercial Agriculture Project (GCAP) IDA Credit No. 5o77-GH Period Ended 3o APRIL 2022 Annex 1 - Schedule of Fixed Assets Register GHANA COMMERCIAL AGRIC PROJECT ADDITIONS TO FIXED ASSETS, YEAR 2021 ADDITIONS ITEM ASSETS TYPE DURING THE YEAR USD 1 COMPUTERS 24,879.06 2 FURNITURE & FITTINGS 55,594.31 TOTAL 80,473.37 16 P a g e Ghana Commercial Agriculture Project (GCAP) IDA Credit No. 5077-GH Period Ended 3o APRIL 2022 ADDITIONS IN 2021 COMPUTERS & EXCH ASSESSORIES DESCRIPTION IDENTIFICATION SUPPLIERS USER LOCATION DATE PV No. GHS RATE USD ATLANTIC 2.No HP LASERJET COMPUTERS & LAPTOP PRO LAPTOP REF TO GIDA ELECTRONICS PV COMPUTER COMPUTERS STORES LTD GIDA GIDA OFFICE 11/Aug/21 467/2021 4,285.53 5.80 738.88 SUPPLY AND INSTALLATION OF 19 No. HP LAPTOP COMPUTERS AND COMPU PV LAPTOP ASSESSORIES FOR REF TO GIDA GHANA 467/2021 COMPUTER TSC TEAM GIDA STORES LIMITED GIDA GIDA OFFICE 24/Aug/21 A 122,901.89 5.82 21,117.16 1No. HP SPECTRE LAPTOP & LAPTOP MICROSOFT OFFICE KELLS PROJECT PV COMPUTER 2019 GCAP/OE/PC/001 CONSULT GCAP COORDINATOR 24/May/21 182/2021 17,080.01 5.65 3,023.01 TOTAL 144,267.43 24,879.06 FURNITURE & EXCH FITTINGS DESCRIPTION IDENTIFICATION SUPPLIERS USER LOCATION DATE PV No. GHS RATE USD OFFICE REF TO GIDA OFIS-HUB PV FURNITURE VARIOUS STORES ENTERPRISE GIDA GIDA OFFICE 17-Mar-21 096/2021 311,328.14 5.60 55,594.31 17 | Pa g c Ghana Commercial Agriculture Project (GCAP) IDA Credit No. 5o77-GH Period Ended 3o APRIL 2022 SUMMARY OF FIXED ASSETS COST (USD) VEHICLES & MOTOR BIKES 1,938,272.47 COMPUTERS & ASSESSORIES 248,043.15 FURNITURE & FITTINGS 427,186.74 OFFICE EQUIPT 468,169.50 3,081,671.86 IRRIGATION COST-WORKS COST (USD) KPONG LEFT BANK IRRIGATION PROJECT 32,012,453.18 KPONG IRRIGATION SCHEME 26,404,834.65 TONO IRRIGATION SCHEME 28812,845.00 87,230,132.83 18P a g e