THE REPUBLIC OF UGANDA REPORT OF THE AUDITOR GENERAL ON THE FINANCIAL STATEMENTS OF THE IRRIGATION FOR CLIMATE RESILIENCE PROJECT IMPLEMENTED BY MINISTRY OF WATER AND ENVIRONMENT FOR THE FINANCIAL YEAR ENDED 30TH JUNE 2021 OFFICE OF THE AUDITOR GENERAL UGANDA TABLE OF CONTENTS LIST OF ACRONYMS............................................................................................................................--3 O p in io n ............................4............................ ........................ ..................................................4............... 4 K e y A u d it M a tte r ..................................................... ............. .................................. .....................................4 * Implementation of the Approved Budget................................ ...................................................-4 O th e r In fo rm a tio n ..................................................................... ................... ....................... .......... ........7 Managem ent Responsibilities for the Financial Statements...............................................................8 Auditor's Responsibilities for the Audit of the Financial Statem ents................................... ..........8 Other Reporting Responsibilities ...................................9........................ ....................... ... ...........9 Report on the Audit of Com pliance with Legislation ........................................9................... 2 LIST OF ACRONYMS Acronym Meaning GoU Government of Uganda INTOSAI International Organization of Supreme Audit Institutions ISSAls International Standards of Supreme Audit Institutions MDAs Ministries, Departments and Agencies Mn -Million MoFPED Ministry of Finance, Planning and Economic Development NAA National Audit Act OAG Office of the Auditor General PFM Public Finance Management PFMA Public Finance Management Act PFMR Public Finance Management Regulations PPDA Public Procurement & Disposal of Public Assets PBS Program Budgeting System BEC Budget Execution Circular PS/ST Permanent Secretary / Secretary to the Treasury TI Treasury Instructions UCF Uganda Consolidated Fund UGX Uganda Shilling ICRP Irrigation for Climate Resilience Project PDU Procurement & Disposal Unit ICT Information & Communication Technology ICPR Irrigation for Climate Resilience Project HR Human Resource 3 REPORT OF THE AUDITOR GENERAL ON THE FINANCIAL STATEMENTS OF THE IRRIGATION FOR CLIMATE RESILIENCE PROJECT IMPLEMENTED BY MINISTRY OF WATER AND ENVIRONMENT FOR THE FINANCIAL YEAR ENDED 30TH JUNE, 2021 THE RT. HON. SPEAKER OF PARLIAMENT Opinion I have audited the accompanying financial statements of the Irrigation for Climate Resilience Project (ICRP) which comprise the Statement of Cash Receipts and Expenditure and Budget Execution Statement for the year ended 30th June 2021, together with other accompanying statements for the year then ended, and notes to the financial statements, including a summary of significant accounting policies. In my opinion, the financial statements of the Irrigation for Climate Resilience Project for the financial year ended 3oth June 2021 are prepared, in all material respects, in accordance with Section 51 of the Public Finance Management Act, 2015 and and in conformity with the Loan Agreement. 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 Code of Ethics for Professional Accountants (Parts A and B) (IESBA Code), 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. * Implementation of the Approved Budget On the 24t of April 2020, Parliament approved the annual budget for MDAs that contained the specific resource envelope allocated to each vote to implement agreed on outputs. Subsequently, the PS/ST issued a Budget Execution Circular that communicated the budget strategy, policy, and administrative issues to guide the budget implementation for the financial year 2020/2021. 4 During my overall risk assessment exercise, I noted that MDAs and LGs are still experiencing challenges in implementing the budgets approved by parliament and policy guidance's issued by PS/ST, which has continued to affect the performance and credibility of the budget negatively. These challenges include; lack of strategic plans that are aligned to the National Development Plans, underperformance of revenue, implementation of off-budget activities, under absorption of funds, insufficient quantification of outputs, partial and non- implementation of outputs, diversion of funds and challenges in budget monitoring and reporting of performance. I am aware that the Covid-19 Pandemic continues to significantly affect the implementation of several activities. Consequently, a number of activities were not implemented due to budget cuts and lockdown measures instituted to control the spread of the pandemic. It is against this background that the implementation of the budget was again considered a key audit area during the office-wide planning for the current audit year. The objective of the Irrigation for Climate Resilience Project is to provide farmers in the project areas with access to irrigation and other agriculture services and to establish management arrangements for irrigation services delivery. To achieve this mandate, the Project planned to implement a number of both recurrent and development deliverables under various programmes. A review of the entity's approved annual work plan and budgets revealed that the Project had an approved budget of USD 13,641,026 out of which USD 6,305,937 (46.2%) was received from the World Bank. The table below shows a summary of the key deliverables of the Project for the financial year 2020/21. Table showing key deliverables for ICRP for the year SN Key deliverables Budget Percentage (USD) of planned ._ expenditure I Sub Component 1.1-Large and Medium scale irrigation 8,378,147 61.42 2 Subcomponent 1.2-Small and Micro scale irrigation 0 schemes 0 3 Subcomponent 1.3-Integrated Catchment Management: 300,000 2.20 Sub Component 2.1-On Farm production and productivity: 7.14 973,444 5 Subcomponent 2.2-Value Addition and Market Linkages- 4.03 Kabuyanda,Matanda,0lweny and Agoro 549530 6 Subcomponent 3. 1 -Institutional Strengthening: 289,689 2.12 7 Sub Component 3.2 Implementation Support 3,150,216 23.09 Total 13,641,026 100 The Project planned to achieve its deliverables through implementation of twenty-two (22) outputs with a budget of USD 13,641,026. I reviewed all the twenty two (22) outputs worth USD 13,641,026 representing 100% of the total budget as summarized in the table below; 5 Table showing planned and sampled outputs Total Number of Number of Total budget of Actual expenditure of % budget Outputs outputs the sampled the sampled output - allocation of sampled outputs (USD) USD sampled outputs in relation to net budget 22 22 13,641,026 40 100 From the procedures undertaken, I noted the following; S/N observation Recommendation 1.1 Revenue Performance- World Bank I advised the The project had an approved budget for the financial year Accounting Officer 2020/2021 of USD 13,641,026 of which USD 6,305,937 (46.2%) was to always prepare disbursed. This resulted into a shortfall of USD 7,335,089. annual Project budgets and work Budget shortfall leads to insufficient funds to enable full plans based on the implementation of the project activities. appropriate period of reporting to Revenue Performance-GoU Contribution enhance assessment of project I noted that the project budgeted for UGX 8,563,000,000 under GoU performance. counterpart funding for the period and all was realized and utilised during the period under review. The Accounting Officer explained that the Project budget and annual work plan are prepared based on the procurements expected to be concluded during the financial year. However delayed conclusion of the procurements and COVID-19 lock downs restricted management to request for all the funds from the donor. 1.2 Under absorption of Funds Received during the Year I advised the Accounting Officer Out of the total receipts for the financial year of USD 6,305,917, to expedite USD 40 was incurred on bank charges by the project, representing procurement an absorption level of 0%. The unspent balance of USD 6,305,897 processes and at the end of the financial year remained on the project account. signing of the The failure to absorb funds may result in slow project progress, project contracts to extension of the project completion date and prevent subsequent ensure that disbursements from the World Bank. implementation fits into the planned The Accounting Officer explained that the projected funds timelines. absorption could not be made as a result of the delayed procurements. However, procurements of major contracts were in advanced stages and absorptions are expected to improve. 1.3 Quantification of outputs/activities I commended the Accounting Officer Section 13 (15, b) of the PFMA 2015 states that a policy statement for complying with submitted by a vote shall contain the annual and three months' regulations 6 work plans, outputs, targets and performance indicators of the work plans. Regulation 11 (3) of PFMR 2016 requires that a vote prepares a work plan that indicates the outputs of the vote for the financial year; the indicators to be used to gauge the performance of the outputs and funds allocated to each activity. To assess the performance of an output, all activities supporting the output must be quantified I reviewed the extent of quantification of outputs and activities for a sample of twenty two (22) outputs with a total of thirty three (33) activities and a budget of USD 13,641,026 and noted that all the 22 outputs with a total of 33 activities were fully quantified as required to enable the assessment of performance. 1.4 Implementation of quantified outputs I advised the I reviewed the implementation of 22 outputs with a total of 33 Accounting Officer activities and noted that only 1 activity (3%) was fully achieved with to address the gaps 27 (82%) partially achieved and 5 activities (15%) not implemented in the procurement at all. Appendix I refers; processes, and fast The only activity fully achieved was the signing of an MOU between track MAAIF and MWE by the two Permanent Secretaries implementation of project activities as Whereas the 27 activities were partially achieved, no payment had planned to enhance been made under donor funding as most were procurements at project initiation stages. implementation Failure to fully implement planned activities delays service delivery to the citizens. The Accounting Officer explained that the procurement Processes had been fast tracked and were in final stages. After signing, activities would be implemented to achieve the outputs Other Information The Accounting Officer of the project 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. 7 I have nothing to report in this regard. Management Responsibilities for the Financial Statements 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 the 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 Project's financial reporting process. Auditor's Responsibilities for the Audit of the Financial Statements 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 judgement and maintain 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 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. 8 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 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 13 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. 9 I have determined that there are no material findings in respect of the compliance criteria for the applicable,suoect matters to communicate in my report. John F.S. Muwanga AUDITOR GENERAL 17th December, 2021 10 APPENDICES Appendix 1: Budget Implementation 2020-2021 Component Key Planned Activities Management Comment Audit Remarks Output Indicator S Procurement of a Bids for works contract were Partially 1.1: -arge an Cotruior construction contractor received in April 2021 and Implemented Medium-scale n works for they are being evaluated. irrigation Kabuyanda schemes earth dam Procurement of a The RFP was issued to the Partially in Isingiro consultant for shortlisted firms on 22Id Implemented construction June 2021. Proposals supervision, submitted on 3r August 2021 and are being evaluated. Procure Individual Procurement approved by Partially consultants as panel of Contracts committee and Implemented Dam Safety Experts TOR was approved the Bank in March 2021. Request for Proposal issued to the Experts on Procure Safeguards REOI received by the Partially supervision consultant. Ministry in April 2021 and Implemented evaluation is ongoing Field data collection exercise Partially Prepare Additional completed, draft report Implemented studies and surveys compiled and shared with for ESIA MWE in June 2021 for comments. The final report to be completed and submitted in July 2021. Procurement of Updated bidding documents Partially Cn uo construction contract were resubmitted to the Implemented Kabuyanda for off-farm net work Bank for a no objection in Off-farm May 2021. Network up to the Block (Contract includes constructio n of 60No. Sanitation Facilities within the command area). 11 Procure consultant for Consultant contract was Partially Constructio preparation of signed in February 2021 and Implemented n of Detailed Design of an inception report Matanda Matanda Irrigation submitted in June 2021. Irrigation Scheme and Scheme in preparation of bidding Kanungu documents. district Procure Dams safety The individual consultants fo Partially panel of experts to the panel of experts contract Implemented review the design were signed in Marc 2021.They await completior of design report for review. Prepare ESIA and RAP Draft ESIA report wa Partially studies submitted to the Bank for Implemented their comments in April 2021 Feasibility Procure consultant to Comments from World Bank Partially Studies for undertake the on the Technical Evaluation Implemented Amagoro feasibility study and report were received in April Irrigation prepare bidding 2021. and are being Scheme in documents. addressed. Tororo District Prepare ESIA for Preparation of TORs was Partially Amagoro irrigation completed and submitted to Implemented scheme the bank for a No-Objection in February 2021. Pilot public Identify specific off- A list of willing off-takers i Not implemented 1.2: Small and support for takers across the being selected from the valu Micro-scale the value chains chain analysis for coffee, irrigation constructio (horticulture & coffee) diary, & horticulture in Mpigi, schemes n of to be part of the Wakiso and Mukono districts. farmer-led programme. Process interrupted by the small and lockdown due to the current micro scale COVID-19 andemic. irrigation Identify the FIs have been identifie Partially schemes participating Financial under Ug IFT and are being Implemented Institutions engaged to participate in FLI. A brochure to guide th Financial Institutions t understand their role in th UGIFT programme has been developed. Started on the process of modifying the brochure developed under UgIFT to guide Financial Institutions understand their role in the FLI -ICRP project. MAAIF to Pre-qualify 17 firms/ irrigation Partially irrigation equipment equipment suppliers were Implemented suppliers (use the pre alified. 12 same prequalification same preFifossicato Pre-qualified firms were displayed and communicated to by MAAIF. Communicated to the participating DLGs about the irrigation equipment suppliers clustered under their districts for further erragements Modify the Irri Track Developed and installed Irri Partially App / MIS for use by track app version 8.1.4 which Implemented selected FI(s) and is already being used by th Local Government LG to collect data. Preparing the ToR for procurement of Service Provider to modify the app for use in FLI under ICRP is on-going. The process of Issuing an addendum to the ongoing contracts to modify app and MIS is on- going. Restoration Procure non Contracts were drafted and Partially Catchment planting consultancy services for forwarded to S.G for implemented Canagment and Supply and clearance in June 2021. maintenanc maintenance of e of 1000 assorted indigenous Ha of seedlings fo Rwoho CFR restoration planting in Rwoho CFR Procure consultant to Combined Evaluation Report Partially Developme prepare of a micro was prepared and submitted Implemented nt and catchment to MWE Contracts committee implementa management plan for in June 2021 for approval. tion of the micro-catchment integrated around Kabuyanda catchment irrigation scheme managemne Procure consultant to nt Combined Evaluation Report Partially interventio catchment was prepared and Implemented nsmanagement plan for submitted to MWE Contracts upstream the micro-catchment committee in June 2021 for from thearound Matanda approval. two new irrigation scheme irrigation schemes around Kabuyanda and Matanda Procurement of a No objection on ToR Partially 2.1 On-Farm Provision of 13 Production and agricultural consultancy firm to received from the Bank on Implemented Productivity extension undertake the 14th July 2021. Eol ready for services to assignment submission for clearance by improve Bank production and productivity in Kabuyanda irrigation scheme Procurement of a No objection on ToR Partially Provision of consultancy firm to received from the Bank on Implemented undertake the 14th July 2021. EoI ready for extension seienso assignment submission for clearance by . e Lot 1: 0/weny Bank improve prcon Lot 2: Agoro and productivity in Agoro and Olweny Irrigation Schemes Procurement of a Consultanc consultancy firm to Submitted the TORs to the Partially y Services undertake the bank for review and Implemented for assignment approval in Aprial 2021 provision of agricultural extension services to improve production and productivity in Nyimur Procurement of a Preparation of the TORs is Not Implemented Consultanc consultancy firm to on going r Services undertake the for assignment provision of agricultural extension services to improve production and productivity in Matanda Irrigation4 14 Scheme 2.2: Value Addition and Market Consultanc Procurement of a Revised ToRs submitted to Partially Linkages y services consultancy firm to the Bank for approval Implemented undertake the In April 2021 for value value assignment chainv developme nt (studies, platforms and linkages) in Kabuyanda Consultanc Procurement of a Revised ToRs submitted tc Partially f consultancy firm to the Bank for approval Implemented y services undertake the In April 2021 for value chain assignment developme nt (studies, platforms and linkages) Matanda Procurement of a Revised ToRs submitted tc Partially consultancy firm to the Bank for approval Implemented y services undertake the for value assignment n April 2021 chain developme nt (studies, platforms and linkages) in Olweny Procurement of a Revised ToRs submitted tc Partially Consultanc consultancy firm to the Bank for approval Implemented y services undertake the In April 2021. for value assignment chain developme nt (studies, platforms and linkages) in Agoro i. Procurement Consultanc or a ToR is currently being Not implemented y Services o l a developed y consultancy for firm to Strengtheni undertake the 15 ng Existing assignment Cooperativ es by UCA in Agoro and Olweny Launching of the A virtual launch of the Not Implemented 3nstiu tional project project was scheduled for Sntitutin Project May 2021 though it was not Strengthening Launch achieved due to the country's total lock down. A new date to be set and communicated. Conduct Project Bi weekly project Partially Pronti coordination meetings implementation progress Implemented meetings are conducted n meetings between the Bank, MWE ._......... and MAAIF. Formulation of the MWE is in the process of Not Implemented Project multi sectoral project formulating the PSC. This Steering Steering Committee committee will be comprised Committee of the PSs or the delegated technical officers from MWE, MAAIF, MoFPED, MoGLSD, MoLG e.tc Sign an MOU between The MOU was cleared by Implemented Memorand MAAIF and MWE by Solicitor General and signed U of the two Permanent by both the Permanent U s Secretaries Secretaries of MWE and ing ing MAAIF. between MWE and MAAIF Procure consultant for TORs were completed and Partially Projie Project baseline study submitted to the Bank in Implemented bsel (gender sensitive) for February 2021 for approval. the ICRP. (gender sensitive) for the ICRP. Procure individual Partially 3.2: Recruitmen consultants to include: implemented Implementatio t of Project Procurement The short listing report for n support Support specialist all the positions was Team Environmental approved by both MWE Individual Contracts Committee and specialist, Social Consultants Safeguards specialist, the Bank in April 2021. M&E Specialist, Agri- Interviews for these 16 Business Specialist positions were delayed by and Project Support the Covid-19 lock down and Officer/Communicatio arrangements are being n Officer. done to have them conducted. 17 MINISTRY OF WATER AND ENVIRONMENT IRRIGATION FOR CLIMATE RESILIENCE PROJECT ANNUAL. FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED) 30" .JUNEF2021 I IRRIGATION FOR CLIMATE RESILIENCE PROJECT - IDA 65650 Ministry of Water and Environment Annual Financial Staternents for the Financial Year ended 30t June 2021 Table of Contents No )escription of Reports and Financial Staternents Page/s B Background Information, Pioject objeetine. Implementation 4~5 arrangements and Actieities progress 3 Statement of Management Responsibiity 6 4 Statement ol K ash reccipts and payments Budget Ixecution Statement 8 6 Accounting policies Notes to tbc accounts 10-22 8 AppCndices lcronymls summary MWEl .. Ministry of Waiter & Environment MAAMF - Ministry of Agriculure, Ani mail Industry and isheies Mi PFED Ministry of inance. Planning and li conomic Developiet WE- 'Water & Environment Sector Working (roup WFP - Water for Production Departnent OU -Menioiranduu of tUnderstanding PSc - Project Steering Coimmittee PST - Proe(ct Support Team M& - Mionitoring and 1v aluation ToR - Terms of Reterence pMI> Catchmlent Management Plan po )Expression of linterest SDR Special Drawing Rigihts PW - Project Impleicienation nit FL Farmer Led lrrigation 긔 Sub component 1.2: Small and micro-scale irrigation ]'his sub-cornponern is responsible for Piloting construction offariner led inicro and small scale irriation schemes in Isingiro, Kanungu. Ruk-ungiri, Tororo, Mukono, Wakiso and Mpi,,i districts. Yhc actiNifics here include] construction of' small water retention facilities and associated head \korksi drilling Of clls and bore holes construction of' small irrigation net- V11orks: support For preparation of' designs, niorinoring and control of works matching grants to facilitate access to irrigation equipment. Sub-component 1.3: Integrated Catchment Management: 'This sub-cornponent is for development and implementation ofintegrated catchnient ituCiNeutiOnS UP-StrCarn from the large-scale irrigation schernes being constructed in KabuVanda and Matanda. 'The actik itics include preparation of' integrated micro-catchrrient management plans implementation of idernificd \ atershed management measures front rificro-catchment management plaris, restoration and reforestation activities. Component 2: Support Services for Agricultural Production and Value-Chain Development: 'This component comprises of two Sub components as follows: Sub- component 2.1: On-farm production and productivity: 'This pro\ ides support to farniers and farmers* groups for production arld PlOdUCtiVit\' improveincrit al the farm lCVCL -1-11C 'Activities include: Creation and strengthen in i, of farmers' grot ips. provide extcrision scrN ices, fact I itate acccss to in puts, p roniote good di sea se inanaocirent: Matching grants to f, cilitate access to inj uts including seeds and agro-chcniicals Matching -rants to f" cilitate access to on-larin irrigation teclinolog : Monitoritu, and supervision of' pr( a ti ties Sub-component 2.2: Value Addition and Market Linkages: '['his provides support to farmers' groups for value chain development and strengthening the establishment of market linkages. The activities include creation and strengthening linkage x,,ith value chain actors in improved post-harvest handling, agro- processing. access to financine services, acce.ss to inaikets and market inforniation: "latching grants to facilitate access to equipment and purchase ol'sinall goods. Component 3: Institutional strengthening and Implementation support: This component has tNvo sub- components that include tile foliowin", Sub-component 3.1: Institutional strengthening: This provides Support for development Of Studies on management models in irrigation, tariff structures and prerequisites f"or firiancial stabilit\ i Capacitv building and trainim-, for irrioation development and ruatiagvinclit, Sub-component 3.2: Implementation Support: Flus provides upport to MWL-PST- for pro ject coordination, unplenicntation. upcrvision, motworino and evaluation including supervision of pro jcct's fidUciar and safeguard aspects. Prouress of Activities: The overall status ofthe pro ject activities is detailed in Appendix 1. Statement of Management's Responsibilities The Management of Irrigation for Climate Resilience Project (ICRP) is responsible for the preparation of the financial statements for the project, which comprise the statement of receipts and payments, the budget execution statement and the notes to the statement, which include a summary of significant accounting policies and other explanatory notes set out on pages 9 to 27. The Management is also responsible for the preparation of the Receipts and Payments Statement and the Budget Fxecution Statement in accordance with the provisions in the Grant Agreement signed between the World Bank/International Development Association and the Government of Ugitanda, and for such internal control as management determines is necessary to enable the preparation of the Receipts and Payments Statement that is free from material misstatement. iether due to fraud or error. Management accepts responsibility for the Receipts and Payments Statement and the notes thereto, which have been prepared using appropriate accounting policies supported by reasonable and prudent judgments and estimates, in conformity wvith the World Bank and GoU financial guidelines and policies. Management is of the opinion that the Financial Statement gives a true and fair view of'the state of financial affairs for the 12 months period ended 30 June 2021. Management further accepts responsibility for the maintenance of accounting records that may be relied upon in the preparation of the financial statements, as well as adequate systems of internal financial control. Approval of Statement of Management Representation: Sufivian lgwahabi FINANCI LMANAGEMENT SPECIALIST DATE Erisa Ngono ASSISTANT COMMISIONER ACCOUNTS DATE Henry Kizito PROJECT COORDINATOR DATE Alfred Okot )ki PERMANET SECRETARY DATE 0MI 긔 긔 Accounting policies - rules and practices adopted b\ Support to I'liese are tile specific ffnlciples bases, Comentions, Preparation ol'Priorit\ Irrigation I-estinctIts 11) t ganda erant in preparing and presenting the financial statements. The principal accounting policies adopted in the preparation of' these financial statements are set out below. These policies have been consistent]\, applied in all years presented, unless otherwise stated (a) Basis of preparation I I hese Financial statements have been prepared in accordance with the International Public Sector accounting standards, which inter alia, include the application of' the cash basis of' recogmition of transactions. (b) Functional currenc-,, and translation of Uganda shillings (i) Presentation currency The reporting and presentation currency is United .;iates Dollar, ,Nhich is tile legally agreed reporting currcncv between the Government of- Voanda and the World Bank. (ii) Translation of transactions in foreign currency The Uganda shillings transactions are/were translated into tile foreign carrencv at the Bank of Uganda rate that was used Mien the f tined States Dollars (USD) ere transferred frout the Designiated Account to the Operational Account. (c) Reporting Period The reporting period for these financial statements is the financial cai ol'the GoNernment, which is from !'I JuIN 2020 to 30" June 202 1. (d) Revenue ReNenuc relates to the funds disbursed by \ orld Bank and is/mas recognized in the period in which tile Ministry of' Water & F-Invironnient!Support io Preparation of' Priorit Irrigation Investments in Uganda received it, (c) Expenditures I,xpenditures incurred b\ the WX F. for impIciricnialion ofthe Support to Preparation of'Priority Irrigation Investments in Uganda arc,\\cre reco-iii7ed in the receipts and pmments staternent in the period theN are,v,erc incurred. (t) Un spent Balances Die un spent balances at the end ofthe f-mancial \car are,N\cre rolled otTto the next financial year. 긔 긔 L기 cousolianeN - Design Reviem> for Nyfiru'r 0 1 0.00 0 00 Cousultancý Updating l-SIA & RAP Studies for O.oo 0.00 'Nviulur 1 Consultanc-, Detailed Feasibilitý saudv ofAmagoro i ý10,000 0.00 0.00 Cousultanc,, - Detailed of Matanda i ý0.000 om 0.00 Consullanev - Detailed Design of Arnagoro 500,000 Om 0.00 Consultancý - ESIA & RAP Studics for Aniagoro -100,000 0,00 O.oo Consullancy - Detailed Design of L'.nengo -100,000 < 0.00 0,00 ConsultaneN ESIA & RAP Studics for Encngo 0 0.00 0.00 0 0.00 O-oo Consultancý IK drologist - Dam Panel of Lxpens før Nvimur. Amagoro & Enengo Designs Consultanc\ - Geologist - Dam Pancl of 11\perl.s for 0.00 0,00 Nvimur. Amauoro Enciwo Designs 0 Consultanc\ - Dam Lm,incer - Dam Panel ofl-.xperts fol. 0.00 0.00 Amagoro & FMengo Designs 0 ConsultaneN 01ýý,cii\, and Aniagoro Sustainable 0.00 i 0.00 managenient 100,000 i Non-consullanev - Rwoho Reaffoiestation 250.000 ().0() 0.00 CCO rollout Kabuvanda and Matanda o o.oo O.Oo Total 8,378,147 (u1 .00-- 011/ý ofthe planned projeci activilics bLICIý'Ct ýýaS SI3C111. Flus,ýýas due to dela,,ed signing ofall contracts. "ote -1 Small and iniero-scale lmgation Schemes Detail Budget (USD) Actual (USD) '%age Desu,n. Construction and Super\ ision ofFanner I -cd Irrigation sysicms in Wakiw, .pi-i and Mukouc 0 0,00 0.00 Total 0.00 0.00 0% oftlie planned proýjeet aelivitie,., hudget was spent. This was due to delayed signing øf all contraets. 긔 긔 긔 l긔 Supervision and monitoring ol, Project implementation 0.00 0.00 by the I)istriet Technieal Sjipport teant (KabuNanda K, Matanda) 24,364 Client operation and supervision expenses (R\voho 0.00 woo Rcafforestation) 0 Client operational and Supervision Vxpenses Om o.00 (WC4gI) Field Monitoring (DI-G) 7.389 Media supplernents (Communication) 35,316 0.00 0.00 Fucl and '1 ransport Costs 10,909 0.00 0,00 Vchicle mannenancc 1,106 0.00 0.00 Officc Supplics & stationer\ 1,9"9 0.00 0.00 Supervision and monitoring ol- RAP 2,909 0.00 0.00 Implernernation by Proicet I cam 3,456 0.00 0.00 Supervision and monitoring k) f Viiviroiiiiietital 0.00 0.00 sate,ward services 3,456 Supervision and monitorin- of social sate guards 0.0o Omo activitics (GBV. GRMs & VvIGFs for Matanda) 3,4ý6 J Support for verification of11APs 0,00 iý 0,00 Other Operational Costs (supplics. inminince, 40.w 0.0o maintenance. travel) 189 Total 3,150,216 0.00 Omo 0% ofthe planned project activitics budget xkas spenl, Fbis xvas duc to delayed signing ofall contracts. ―기 기 긔 引 Appendix 1: Progress of Project Activities component Kev Output Planned Activities iý Status/ Cumulative Output(s) Achieved Indicators -- Julv 2020-lune 2021 Julv 2020-,June 2021 1.1: lýýirge ,nid Cøn%truelion Nvorks Procurement ofa Bids for ýve)rks contract \,ýere reccived in April Medittnr-scale for Kabuyanda > ConstruCtion contractor 1 202 1 anti thev are being evaluated, < irrigýitioll eýirth dýiin in llroeLi?eiiiclltoý a i The RFI> \Nils issited to the sliortlisted firins oil sellernes Isingiro Coristillant før 22"" June 202 1. Proposals subtriitted on 3"' cotisti-tietion Augiist 202 1 and are beilt,-, evaltiated, super\ isi(ýll, Procure Individtild Proetnenierit approved by Contracts cotiiinittee. ýis Parltil 01 i arid TOR wýis apprøved t`he Bank in Marel-i 20: Danl satet\ I XPerts i Re tiest tor Proposal isskied to the lý,xperts oil RI'01 received by the NI iriisti-ý in April 202 1 a alliation is oligoilig Field (lata collection exereise corripleted, draft report coinpiled and shared ývitli MWE in Julie stlielie,ý and 202 1 for Coninielits. ýtirve\s f'or FSIA The final report to be corripleted arid subinitted 202 1. Procttrement of' lýpdýited bidding doeurrients \,ýere resubinitted Constructiori ()f Constnletion contract for tite Bank før a no c)t)jecti(ýti it] May 202 1. Kabti\ýindi n,t \\ork farin Net\wrk tip to i titt: B,lock (Corritraet oft ineludes Coristruction of 60No, Sanitation 1-acilities \ýilliiii tite command area). ProCure c()ii,ý,iiitaiit for Consultart contraet ýýýts siý,tied ebruarv 20.' Consinjetion øl in F preparatiott of and all itiception report stibmitted in June 202 1 Matanda Irri-ation 1 Detailed Desnrt o], l sellerne in Matanda Irrigation Kantingti distriet Seheme and preparation ofbidding Proc(ire Darns safety Hle individual constiltants for tite panel ol'exp, parrel ofexperts to contraets were signed in March 202 a\,,,ý revieýý, the design conipletion tlfdesign report ltir review. Prepare ESIA and Draft ESIA report was sLibmitted to the Bank fý RAP sindies titen- coniments in April 202 1 . . ..... - - ---- 긔 ［기 ―긔 Proeure coii,,,illtaiii fot I OR s yvere cornpleted and submitted to the Bar Projeel bascline Project haselirre studN in I-ebruary, 202 1 I'or approval. studv 6-,ender (ý,ndc, erimtive) Irn- sensitive) tbi- the the ICRP. i c RP. 3.2: i Rceruittneril of' Proctue individual i consultants to include: linplernentatio Project Suppori Proctucirrent Tlic short listing report for all the positions was n suppom Tearn Individiral > specialist, appioved by both MWE Contracis Committec and t} i Consultants Bank in April 1-02 1. Friý,il-(,lllllcllt",11 hacrvicýks for tlie,%e positions were delayed by the specialist, Social Saliegirards ;1)ecialist, Covid- l 9 lock down and arrangernents are being der M&F Specialist. Agri- to have them conducted. Busivicss Specialist and ProJect Supporl > 011-icci-,'(-oniiiitinieatio ii Officer. 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