GHANA SOCIAL OPPORTUNITIES PROJECT NATIONAL COORDINATING OFFICE MINISTRY OF LOCAL GOVERNMENT & RURAL DEVELOPMENT June 29, 2015 The World Bank, Ghana Country Office, Accra. ATTN: Mr Suleiman Namara / c Task Team Leader, GSOP, Ghana SUBMISSION OF GHANA SOCIAL OPPORTUNITIES PROJECT (IDA CREDIT NO. 4735-GH) FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2014 Please find attached our Financial Statement and Audit Manangement Letter for the year ended December 31, 2014. Yours faithfully, Robert Austin National Coordinator MINISTRY OF LOCAL GOVERNMENT AND RURAL DEVELOPMENT (MLGRD) GHANA SOCIAL OPPORTUNITIES PROJECT (GSOP) IDA CREDIT NO. 4735-GH FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST DECEMBER, 2014 EGALA ATITSO & ASSOCIATES CHARTERED ACCOUNTANTS 14 ABEKA ROAD, TESANO P0 BOX AN 16626 ACCRA NORTH TEL: 0302 - 222199 FAX: 0302 - 229358 MINISTRY OF LOCAL GOVERNMENT AND RURAL DEVELOPMENT (MLGRD) GHANA SOCIAL OPPORTUNITIES PROJECT (GSOP) IDA CREDIT NO. 4735-GH FINANCIAL STATEMENTS as 31ST DECEMBER, 2014 TABLE OF CONTENTS Contents Page Corporate Information 1 Independent auditors' report 2-3 Statement of Sources and Uses of Funds 4 Notes to Statement of Sources and uses of Funds 5 Project cost summary 6 Analysis of Expenditure by Project Activity 7 Statement of Financial Position 8 Notes to the financial statements 9 - 16 Independent Auditors' Report on Designated Account Statement 17 - 18 Designated Account Statement 19 Independent Auditors' Report on Interim unaudited financial statements 20- 21 Interim unaudited financial statements 22 L L L C L MINISTRY OF LOCAL GOVERNMENT AND RURAL DEVELOPMENT (MLGRD) GHANA SOCIAL OPPORTUNITIES PROJECT (GSOP) IDA CREDIT NO. 4735-GH FINANCIAL STATEMENTS L 31ST DECEMBER, 2014 CORPORATE INFORMATION L National Coordination Office Robert E Austin - National Coordinator Kwabena Adusei Poku - Chief Financial Controller George Kwadwo Osei Ababio - Chief Infrastructure Engineer Emmanuel Amoa Mante - National Safeguard & Climate Change Specialist William Y Amuesi Kodwiw - Monitoring & Evaluation/MIS Specialist L Desmond Duametu - National Capacity Building Specialist Registered Office : Ghana Social Opportunities Project National Coordination Office Ministry of Local Government & Rural Development L Postal address P0 Box CT 3742 Cantonments - Accra External Auditors Egala Atitso & Associates Chartered Accountants 14 Abeka Road, Tesano P 0 Box AN 16626 Accra North Bankers Ghana Commercial Bank Limited High Street Branch P 0 Box 2971 Accra L k EGALA, ATITSO & ASSOCIATES (CHARTERED ACCOUNTANTS & BUSINESS ADVISORS) 14, Abeka Road Tesano-Accra P. O. Box AN 16626 BRANCH OFFICE: P. O. Box 441 Accra-North, Ghana Tel: 233 (0) 302 222199 Tamale Fax: 233 (0) 302 229358 Tel: 03720 - 22549 E-mail: enquiry@eaaghana.com MINISTRY OF LOCAL GOVERNMENT AND RURAL DEVELOPMENT (MLGRD) GHANA SOCIAL OPPORTUNITIES PROJECT (GSOP) INDEPENDENT AUDITORS' REPORT TO THE MINISTRY OF LOCAL GOVERNMENT AND RURAL DEVELOPMENT (MLGRD) Report on the financial statements We have audited the accompanying financial statements of Ghana Social Opportunities Project (GSOP) for the year ended 31st December, 2014 set out on pages 5 to 22. These financial statements comprise the statement of financial position at 31st December, 2014, the project cost summary, statement of sources and uses of funds for the year then ended, and a summary of significant accounting policies and other explanatory notes. Project Management's responsibility for the financial statements The National Coordinating Office (NCO) of GSOP under the Ministry of Local Government and Rural Development is responsible for the preparation and fair presentation of these financial statements in accordance with World Bank financial reporting guidelines. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error, selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Auditors' responsibility Our responsibility is to express an independent opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform our audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors' judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the 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 project'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 audit opinion. MINISTRY OF LOCAL GOVERNMENT AND RURAL DEVELOPMENT (MLGRD) GHANA SOCIAL OPPORTUNITIES PROJECT (GSOP) IDA CREDIT NO. 4735-GH INDEPENDENT AUDITORS' REPORT (CONT'D) Opinion In our opinion, proper books of account have been kept and the accompanying financial statements, which are in agreement therewith, give a true and fair view of the state of the project's financial affairs at 31st December, 2014 and of its cost summary, sources and uses of funds for the year then ended in accordance with World Bank financial reporting guidelines and are in compliance with Credit Agreement Number 4735-GH and accounting policies. Signature:............. .. ........................ ............ Partner signing & membership number: IDRIS EGALA - ICAG/P/1168 Name of Firm: EGALA ATITSO & ASSOCIATES - ICAGIFl20151135 CHARTERED ACCOUNTANTS, ACCRA, GHANA Date: .... vo ............... . MINISTRY OF LOCAL GOVERNMENT AND RURAL DEVELOPMENT (MLGRD) GHANA SOCIAL OPPORTUNITIES PROJECT (GSOP) IDA CREDIT NO. 4735-GH STATEMENT OF SOURCES AND USES OF FUNDS FOR THE YEAR ENDED 31ST DECEMBER, 2014 2014 2014 2013 IDA Current Year Cumulative Cumulative SOURCES US$ US$ US$ Funds received during the year (Page 5) 7,171,347 70,121,628 62,950,281 Total 7,171,347 70,121,628 62,950,281 USES Category Goods, Consultants' services & training 1 3,072,974 18,782,162 15,709,188 Civil Works under Part B 2 10,646,737 32,395,487 21,748,750 Cash transfers under Part C 3c - 12,500,000 12,500,000 Total 13,719,711 63,677,649 49,957,938 Balance of Project funds (6,548,364) 6,443,979 12,992,343 L MINISTRY OF LOCAL GOVERNMENT AND RURAL DEVELOPMENT (MLGRD) GHANA SOCIAL OPPORTUNITIES PROJECT (GSOP) IDA CREDIT NO. 4735-GH NOTES TO THE STATEMENT OF SOURCES AND USES OF FUNDS FOR THE YEAR ENDED 31ST DECEMBER, 2014 Withdrawal 2014 2013 Application number Description US$ US$ S.18 Interim unaudited financial statement 7,171,347 S.11 Interim unaudited financial statement - 4,999,317 S.14 Interim unaudited financial statement - 11,920,223 S.15 Interim unaudited financial statement - 5,000,000 S.16 Interim unaudited financial statement - 10,410,040 Total 7,171,347 32,329,580 Reconciliation of Project funds balance Notes as at 31st December, 2014 Balance on designated account, cash & bank balances 8 4,398,018 9,946,701 Advances to Districts not yet retired 6 2,063,083 3,251,750 Project advance at NCO, MoFEP, RCO's & Districts 7 133,249 32,554 6,594,350 13,231,005 Less: Payables & other liabilities 9 5,075 (33,110) Other incomes 4 (330,117) (224,960) Exchange loss/(gain) 4 174,671 19,408 Actual balance of Project funds at 31st December, 2014 6,443,979 12,992,343 Balance of Project funds as per statement of sources & uses of funds 6,443,979 12,992,343 9L,7 (310 4L3017 2490 4 7,711,0 L SMINISTRY OF LOCAL GOVERNMENT AND RURAL DEVELOPMENT (MLGRD) GHANA SOCIAL OPPORTUNITIES PROJECT (GSOP) L IDA CREDIT NO. 4735-GH L PROJECT COST SUMMARY L FOR THE YEAR ENDED 31ST DECEMBER, 2014 L 2014 2014 2013 IDA Current year Cumulative Cumulative Category expenditure expenditure expenditure to date US$ US$ 1 Goods, Consultants' services & training 3,072,974 18,782,162 15,709,188 2 Civil works under Part B 10,646,737 32,395,487 21,748,750 3c Cash transfers under Part C - 12,500,000 12,500,000 Total 13,719,711 63,677,649 49,957,938 -~r ~ ~ ~r--~ U- U-- r- r r-, U-1 r-, r-, r-, r, Ir-, r7-, r-- MINISTRY OF LOCAL GOVERNMENT AND RURAL DEVELOPMENT (MLGRD) GHANA SOCIAL OPPORTUNITIES PROJECT (GSOP) IDA CREDIT NO. 4735-GH ANALYSIS OF EXPENDTIURE BY PROJECT ACTIVITY FOR THE YEAR ENDED 31ST DECEMBER, 2014 Goods Civil works Cash Current year 2014 2013 Consultants' Works under transfer Total Cumulative Cumulative services & Part B under expenditure expenditure expenditure training Part C ect Activity 1 2 3c US$ US$ US$ iponent 1 anal Social Protection Strategy - - 117,500 117,500 iponent 2 )ur Intensive Public Works (LIPW) - 10,646,737 - 10,646,737 32,395,487 21,748,750 iponent 3 lihood Empowerment Against Poverty (LEAP) - - 12,500,000 12,500,000 iponent 4 acity Building 757,101 - 757,101 5,740,525 4,983,424 iponent 5 ect Management & Coordination 2,315,873 - 2,315,873 12,924,137 10,608,264 3,072,974 10,646,737 - 13,719,711 63,677,649 49,957,938 7 MINISTRY OF LOCAL GOVERNMENT AND RURAL DEVELOPMENT (MLGRD) GHANA SOCIAL OPPORTUNITIES PROJECT (GSOP) IDA CREDIT NO. 4735-GH STATEMENT OF FINANCIAL POSITION AS AT 31ST DECEMBER, 2014 2014 2013 Project Expenditure Notes US$ US$ Investment 3 50,783,383 39,379,545 L Recurrent project expenditure 4 10,715,423 8,357,021 Property, plant & equipment 5 2,023,398 2,015,820 63,522,203 49,752,386 Current Assets District advances 6 2,063,083 3,251,750 Receivables - Project advances 7 133,249 32,554 Cash & bank balances 8 4,398,018 9,946,701 6,594,350 13,231,005 L Current Liabilities Payables & other liabilities 9 (5,075) 33,110 Net Current Assets 6,599,425 13,197,895 Net Assets 70,121,628 62,950,281 Represented by International Development Agency (IDA) Loan 10 70,121,628 62,950,281 The financial statements on pages 4 to 14 were approved on behalf of the Project Management on.... '. ......... 2015 and signed on its behalf by: National Coordinator Chief Financial Controller GSOP GSOP MINISTRY OF LOCAL GOVERNMENT AND RURAL DEVELOPMENT (MLGRD) GHANA SOCIAL OPPORTUNITIES PROJECT (GSOP) 6. IDA CREDIT NO. 4735-GH NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST DECEMBER, 2014 I Ghana Social Opportunities Project (GSOP) (a) Financing Agreement A Credit Agreement Number 4735-GH was signed between the Government of Ghana and the International Development Agency (IDA) of the World Bank on 8th September, 2011 for a credit in an amount up to the equivalent of fifty- eight million four hundred thousand Special Drawing Rights (SDR58,400,000) to assist in financing the Ghana Social Opportunities Project (GSOP). The total estimated cost for Ghana Social Opportunities Project amounts to US$89.10 million. International Development Association (IDA) total credit is US$88.60 million while the Government of Ghana is providing US$0.50 million. b) Project Description The objectives of the project are: i) to improve targeting in social protection spending; ii) increase access to conditional cash transfers nationwide; iii) increase access to employment and cash-earning opportunities for the rural poor during the agricultural off-season, and; iv) improve economic and social infrastructure in target districts. The Project consists of the following five components; Component One: Rationalise National Social Protection Policy Component one would provide support to the government to help redirect its social protection expenditures to the most effective areas and reduce those in less effective activities through the provision of technical assistance, studies and training. Component Two: Labour Intensive Public Works (LIPW) This component involves the development and implementation of quick- response mechanisms against seasonal poverty, external shocks, including floods and droughts, during a crisis and maximizing local employment by providing short-term paid employment opportunities to selected rural poor households to finance cost of LIPWs, including: i) rehabilitation and maintenance of rural feeder and access roads; ii) rehabilitation of small dams and related public infrastructure; and iii) other works, including, construction of schools and clinics, dugouts, soil and land conservation works for catchment protection and tree planning on communal lands. Q MINISTRY OF LOCAL GOVERNMENT AND RURAL DEVELOPMENT (MLGRD) GHANA SOCIAL OPPORTUNITIES PROJECT (GSOP) IDA CREDIT NO. 4735-GH NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST DECEMBER, 2014 L Component Three: Livelihood Empowerment Against Poverty Programme (LEAP) The objective of this component is to support the government's efforts to carry out the full rollout of LEAP programme by: i) strengthening its management and administration; ii) providing technical assistance to improve targeting; and iii) providing cash transfers to beneficiaries under LEAP. L Component Four: Capacity Building r This component is to strengthen capacity at the national and local levels to implement the National Social Protection Strategy (NSPS) in selected districts, with the view of enabling a gradual scaling-up and targeting at the national level by: i) establishing a LIPW supportive policy and institutional framework; ii) building capacity to support LIPW implementation of: r rehabilitation and maintenance of roads; * rehabilitation of small dams and water storage infrastructure; * other works, including construction of schools, clinics, dugouts, soil and land conservation works for catchment protection and tree planting and communal lands; iii) building capacity: * to support implementation of LEAP; * for disaster risk management; and * at the district and regional levels; and iv) other activities and pilot programmes that could become necessary during implementation to support the overall objective of strengthening of safety nets and proving safety ladders. 10 L MINISTRY OF LOCAL GOVERNMENT AND RURAL DEVELOPMENT (MLGRD) GHANA SOCIAL OPPORTUNITIES PROJECT (GSOP) IDA CREDIT NO. 4735-GH r NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST DECEMBER, 2014 Component Five: Project Management and Coordination The institutions, structures, and capacities of the Government of Ghana serve as the foundation for project management and coordination. This component provides technical assistance, vehicles, equipment and other operational support to the L government to carry out the coordination, administration, monitoring, evaluation and audit of the Project. c) Repayment of Credit The Government of Ghana shall repay the principal amount of IDA Credit by semi- annual installments payable on June 1 and December 1, in each year, commencing Junel, 2020 and ending December 1, 2044. The principal amount of the credit repayable from June 1, 2020 to December 1, 2029 shall be 1.25% of the principal amount withdrawn, and thereafter, each installment shall be 2.5% of the principal withdrawn until the last instalment is paid on December 1, 2044. d) End of Project In accordance with the Project Appraisal Document the project implementation shall start on June 1, 2010 and end on December 31, 2015. However, the expected effectiveness date was September 1, 2010 and expected closing date is June 30, 2016. L 2 Accounting Policies The following are the significant accounting policies adopted in the preparation of these financial statements. a) Basis of Preparation i) Statement of compliance The financial statements have been prepared in accordance with International Financial Reporting Standard (IFRS) and its interpretations adopted by the International Accounting Standards Board (IASB). ii) Basis of measurement The financial statements have been prepared under the historical cost convention, as modified by the revaluation of investment property, financial assets and financial liabilities at fair value. F 11 L r L MINISTRY OF LOCAL GOVERNMENT AND RURAL DEVELOPMENT (MLGRD) GHANA SOCIAL OPPORTUNITIES PROJECT (GSOP) IDA CREDIT NO. 4735-GH NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST DECEMBER, 2014 iii) Use of estimate and judgement The preparation of financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods. b) Presentation of financial statements i) Functional and presentation currencies The financial statements are presented in United States Dollars (US$) which is the reporting currency for the financial statements. ii) Transactions and balances Transactions in foreign currencies are converted at the rate ruling on the day 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 property, plant and equipment 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. c) Property, plant and equipment i) Recognition and measurement Property, plant and equipment represents the expenditure incurred mainly in acquiring office equipment and motor vehicles for use by the National and Regional Coordinating Offices. This is measured at the actual contracted cost of purchase. Cost includes expenditures that are directly attributable to bringing the asset to the location and working condition necessary for it to be capable of operating in the manner intended by management. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment. L L MINISTRY OF LOCAL GOVERNMENT AND RURAL DEVELOPMENT (MLGRD) GHANA SOCIAL OPPORTUNITIES PROJECT (GSOP) IDA CREDIT NO. 4735-GH L NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST DECEMBER, 2014 ii) Subsequent costs Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, when it is probable that the future economic benefits associated with the item will flow to the Project and the cost of the item can be measured reliably. All other repairs and maintenance expenditures are charged to the statement of sources and uses of funds during the financial period in which they are incurred. iii) Depreciation No depreciation is charged in the financial statements. d) Investment The expenditure incurred on the target groups' and beneficiaries' project activities other than the coordinating units' recurrent expenditure is capitalised as investment. This comprises expenditure incurred on Institutional Strengthening and Capacity Building. National Social Projection Strategy, Labour Intensive Public Works, Livelihood Empowerment Against Poverty Programme and Project Management and Coordination. e) Recurrent Project Expenditure The administrative expenditure incurred by the National Coordinating Office in Accra and the Regional Coordinating Offices are classified as recurrent project expenditure. Recurrent project expenditure comprises salaries and wages of project staff, occupancy cost, motor vehicle running and maintenance expenses, post and telecommunications, advertisement, printing and stationery expenses. f) Income Income is recognised on cash basis and credited directly to the respective donors account. L MINISTRY OF LOCAL GOVERNMENT AND RURAL DEVELOPMENT (MLGRD) GHANA SOCIAL OPPORTUNITIES PROJECT (GSOP) IDA CREDIT NO. 4735-GH L NOTES TO THE FINANCIAL STATEMENTS L FOR THE YEAR ENDED 31ST DECEMBER, 2014 2014 2013 L 3 Investments US$ US$ Goods, consultants' services & training 5,887,898 5,130,797 Civil works under Part B 32,395,485 21,748,748 Cash transfer under Part C - 1st Schedule 2,500,000 2,500,000 - 2nd Schedule 5,000,000 5,000,000 - 3rd Schedule 5,000,000 5,000,000 50,783,383 39,379,545 L 4 Recurrent Project Expenditure Goods, consultants' services & training 10,870,868 8,562,573 Exchange equalisation 174,671 19,408 LInterest income (330,117) (224,960) Other income L 10,71-5,423 8,357,021 L 5 Property, Plant and Equipment Office building 6,948 6,827 Motor vehicles 1,708,987 1,708,987 L Furniture, fittings & fixtures 22,098 22,098 Office equipment 285,365 277,908 2,023,398 2,015,820 5 86 District Advances These represent funds advanced directly from National Coordinating Office (NCO) to districts for project activities that had not been retired by the year end. The funds have been classified according to the Regional Coordinating Offices (RCOs) that supervise sub-projects in the respective districts. 2014 2013 L US$ US$ Tamale Regional Coordinating Office/Districts 283,520 742,574 Wa Regional Coordinating Office/Districts 684,195 553,837 LBolga Regional Coordinating Office/Districts 464,146 912,714 Kumasi Regional Coordinating Office/Districts 430,110 550,030 Accra Regional Coordinating Office/Districts 201,112 492,595 otal ve icles ,06,8 351,7 50 6 TDitric advances2,6,832570 L MINISTRY OF LOCAL GOVERNMENT AND RURAL DEVELOPMENT (MLGRD) GHANA SOCIAL OPPORTUNITIES PROJECT (GSOP) L IDA CREDIT NO. 4735-GH L NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST DECEMBER, 2014 2014 2013 7 Receivables - Project advances This represents project advances at NCO, RCO'S and Districts as follows: US$ US$ NCO - Project advance 46753.22 176 NCO-Epayment advances to GHIPSS 39,794 - Accra RCO - Project advance (24) (24) Bolga RCO - Project advance 23,708 25,514 Tamale RCO-Project advance 718 718 Wa RCO-Project advance 22,300 6,170 133,249 32,554 L 2014 2013 8 Cash and Bank Balances Petty cash Bank balance Total cash Total cash at 31/12/14 at 31/12/14 & bank & bank US$ US$ US$ US$ NCO designated account 4,207,753 4,207,753 9,875,812 NCO cedi account - 129,812 129,812 35,769 NCO petty cash 107 - 107 43 RCO Tamale cedi account - 14 14 11,582 RCO Tamale petty cash 291 - 291 2 RCO Wa cedi account - 4,080 4,080 5,335 RCO Wa petty cash 275 - 275 378 RCO Bolga cedi account - 44,937 44,937 11,928 RCO Bolga petty cash account 345 - 345 474 RCO Kumasi cedi account - (62) (62) 319 RCO Kumasi petty cash 3 - 3 7 RCO Accra cedi account - 9,516 9,516 4,105 RCO Accra petty cash account 947 - 947 947 1,969 4,396,049 4,398,018 9,946,701 2014 2013 9 Payables and other Liabilities US$ US$ PAYE (4,547) (13) Withholding tax (808) (8) Audit fees - - Accounts Payable-Tamale RCO 279 33,131 (5,075) 33,110 MINISTRY OF LOCAL GOVERNMENT AND RURAL DEVELOPMENT (MLGRD) GHANA SOCIAL OPPORTUNITIES PROJECT (GSOP) IDA CREDIT NO. 4735-GH NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST DECEMBER, 2014 2014 2014 2013 10 International Development Agency Current Cumulative Cumulative (IDA) Loan year US$ US$ US$ IDA credit 7,171,347 57,621,628 50,450,281 IDA credit - Livelihood Empowerment Against Poverty Programme - 12,500,000 12,500,000 7,171,347 70,121,628 62,950,281 4- EGALA, ATITSO & ASSOCIATES (CHARTERED ACCOUNTANTS & BUSINESS ADVISORS) 14 , Abeka Road Tesano-Accra P. O. Box AN 16626 BRANCH OFFICE: Accra-North, Ghana Pamal. BTel: 233 (0) 302 222199 Tel: 03720 - 22549 Fax: 233 (0) 302 229358 E-mail: enquiry@eaaghana.com INDEPENDENT AUDITORS' REPORT TO THE MINISTRY OF LOCAL GOVERNMENT AND RURAL DEVELOPMENT (MLGRD) Report on the Designated Account We have audited the Designated Account Statement of Ghana Social Opportunities Project (GSOP) for the year ended 31st December, 2014 set out on page 19, established under the provisions of the Credit Agreement No. 4735-GH. Project Management's Responsibility for the Designated Account National Coordinating Office (NCO) of Ghana Social Opportunity Project (GSOP) under the Ministry of Local Government and Rural Development is responsible for the preparation and fair presentation of the Designated Account Statement in accordance with World Bank financial reporting guidelines. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of the Designated Account Statement that are free from material misstatement, whether due to fraud or error, selecting, and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Auditors' Responsibility Our responsibility is to express an independent opinion on the Designated Account Statement based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards required that we comply with ethical requirements and plan and perform our audit to obtain reasonable assurance that the Designated Account Statement is free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Designated Account Statement. The procedures selected depend on the auditor's judgment, including the assessment of risks and material misstatement of the Designated Account Statement, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the Designated Account Statement 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. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the management, as well as evaluating the overall presentation of the Designated Account Statement. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. 17 MINISTRY OF LOCAL GOVERNMENT AND RURAL DEVELOPMENT (MLGRD) GHANA SOCIAL OPPORTUNITIES PROJECT (GSOP) IDA CREDIT NO. 4735-GH INDEPENDENT AUDITORS' REPORT TO (cont'd) Opinion In our opinion Ghana Social Opportunity Project (GSOP) funds received from International Development Agency (IDA) through the Designated Account have been properly accounted for and withdrawals were made for the purposes of the project in compliance with the provisions of the Credit Agreement Number 4735-GH. Signature: ...... Partner signing & membership number: IDRIS EGALA - ICAGlP/1168 Name of Firm: EGALA ATITSO & ASSOCIATES - ICAGIF/2015/135 CHARTERED ACCOUNTANTS, ACCRA, GHANA Date: . 18 MINISTRY OF LOCAL GOVERNMENT AND RURAL DEVELOPMENT (MLGRD) GHANA SOCIAL OPPORTUNITIES PROJECT (GSOP) IDA CREDIT NO. 4735-GH DESIGNATED ACCOUNT STATEMENT FOR THE YEAR ENDED 31ST DECEMBER, 2014 2014 2013 US$ US$ Opening balance as at 1 st January, 2014 9,875,812 4,078,970 Add: Remittances during the year (Page 5) 7,171,347 27,329,580 Interest income 3,181 5,905 Total Unutilised Advance 17,050,340 31,414,455 Designated account closing balance as at 31st December, 2014 4,207,753 9,875,812 Withdrawals (See Note below) 12,842,587 21,538,643 Note: Withdrawals represent funds transferred to NCO, RCOs and the districts and are analysed as follows: a) Disbursement of funds to NCO, RCOs and Districts i) National Coordinating Office (NCO) 2,628,184 3,162,215 ii) Regional Coordinating Offices (RCOs) 689,902 1,447,497 iii) District Assemblies (DAs) 9,524,501 16,928,931 12,842,587 21,538,643 b) Disbursement of funds by category i) Category 1 3,109,846 4,163,306 ii) Category 2 9,732,741 17,375,337 12,842,587 21,538,643 c) Disbursement of funds by Project Component i) Component 1: National Social Protection Strategy 243,346 89,861 ii) Component 2: Labour Intensive Works 9,732,741 17,375,337 iv) Component 4: Capacity Building 476,680 947,667 v) Component 5: Project Management Support 2,389,820 3,125,778 12,842,587 21,538,643 The above Desig ated Account Statement was approved by the Project Management on .7j ...2015 and signed on its behalf by: - - - -C hief.Finanial .C ontrl le C'hief'F FinancialCont'rolle EGALA, ATITSO & ASSOCIATES (CHARTERED ACCOUNTANTS & BUSINESS ADVISORS) 14, Abeka Road Tesano-Accra BRANCH OFFICE: P. O. Box AN 16626 Accra-North, Ghana Tel: 233 (0) 302 222199 Fax: 233 (0) 302 229358 Tel: 03720 - 22549 E-mail: enquiry@eaaghana.com INDEPENDENT AUDITORS' REPORT TO THE MINISTRY OF LOCAL GOVERNMENT AND RURAL DEVELOPMENT (MLGRD) GHANA SOCIAL OPPORTUNITIES PROJECT (GSOP) IDA CREDIT NO. 4735-GH Report on the Interim Unaudited Financial Statements During the course of our audit of the project accounts under Credit Agreement No. 4735-GH for the year ended 31" December, 2014, we examined Interim Unaudited Financial Statements submitted to the World Bank during the period in support of applications for reimbursement from the credit, pursuant to Credit Agreement No. 4735-GH. Project Management's Responsibility for the Statement of Expenditure/interim Unaudited Financial Statements National Coordinating Office (NCO) of Ghana Social Opportunity Project (GSOP) under the Ministry of Local Government and Rural Development is responsible for the preparation and fair presentation of the Interim Unaudited Financial Statements in accordance with World Bank financial reporting guidelines. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of the Interim Unaudited Financial Statements that are free from material misstatement, whether due to fraud or error, selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Auditors' Responsibility Our responsibility is to express an independent opinion on the Interim Unaudited Financial Statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards required that we comply with ethical requirements and plan and perform our audit to obtain reasonable assurance that the Statement of Expenditure/ Interim Unaudited Financial Statements is free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Interim Unaudited Financial Statements. The procedures selected depend on the auditor's judgment, including the assessment of risks and material misstatement of the Interim Unaudited Financial Statements, whether due to fraud or error. to. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the Interim Unaudited 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 project's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the management, as well as evaluating the overall presentation of the Interim Unaudited Financial Statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. 20 MINISTRY OF LOCAL GOVERNMENT AND RURAL DEVELOPMENT (MLGRD) GHANA SOCIAL OPPORTUNITIES PROJECT (GSOP) IDA CREDIT NO. 4735-GH INDEPENDENT AUDITORS' REPORT (cont'd) Opinion In our opinion, the Interim Unaudited Financial Statements submitted, summarized on page 22, and the supporting schedules and information submitted with them, together with the internal controls and procedures involved in their preparation, can be fairly relied on to support the applications for reimbursement in accordance with the requirement pursuant to the Credit Agreement Number 4735-GH. Signature:......... . ............................... Partner signing & membership number: IDRIS EGALA - ICAG/P11168 Name of Firm: EGALA ATITSO & ASSOCIATES - ICAG/F/2015/135 CHARTERED ACCOUNTANTS, C GHANA Date. . 21 MINISTRY OF LOCAL GOVERNMENT AND RURAL DEVELOPMENT (MLGRD) GHANA SOCIAL OPPORTUNITIES PROJECT (GSOP) IDA CREDIT NO. 4735-GH STATEMENT OF EXPENDITUREIlNTERIM UNAUDITED FINANCIAL STATEMENT FOR THE YEAR ENDED 31ST DECEMBER, 2014 International Development Agency(IDA) Expenditure documented Advance to per interim unaudited designated account financial statement per interim unaudited Withdrawal financial statement Application Number US$ US$ S.17 3,781,828 - S.18 3,169,074 7,171,353 S.19 3,908,638 - S.120 3,635,306 TOTAL 14,494,846 7,171,353 The Statement of Expenditure/Interim unaudited financial statements was approved on behalf of the Project Management on... . . 2015 and signed on its behalf by: ............................... 4./..,....... National Coordinator Chief Financial Controller GSOP GSOP