FINANCIAL AND SYSTEMS AUDIT OF THE CARIBBEAN
REGIONAL COMMUNICATION INFRASTRUCTURE PROGRAMME
(CARCIP)
FINANCIAL AND SYSTEMS AUDIT OF THE CARIBBEAN
REGIONAL COMMUNICATION INFRASTRUCTURE
CREDITS NUMBERS: 5118-VC & 6584-VC
PROGRAMME (CARCIP)
JUNE 2021
CREDITS NUMBERS: 5118-VC & 6584-VC
JULY 2021
Beneficiary subject to audit: Ministry of Finance, Economic Planning, and Information Technology
Country: St. Vincent and the Grenadines
Auditor: BDO LLP
Period subject to audit: 1 January to 31 December 2020
Dates of audit fieldwork: 29 March to 7 May 2021 (Remotely)
The Ministry of Finance, Economic Planning, and Information Technology has requested this report based on the requirement
of the Financing Agreement with the International Development Association (the Agency). The views expressed in this report
are those of the external auditor and in no way reflect the official opinion of the Agency. This report is intended solely for the
information and use of the Agency for the purpose of its control of the use of funds of the project concerned by the audit. It
may be disclosed to those Agency official authorities having regulatory right of access to it. This report should not be used by
any other party or for other than its intended purpose.
Final Report on Financial and Systems Audit of the Caribbean Regional Communication Infrastructure Programme (CARCIP)
TABLE OF CONTENTS
INDEPENDENT AUDITORS’ REPORT – FINANCIAL AUDIT ........................................ 3
1. ENGAGEMENT CONTEXT ...................................................................... 6
2. AUDIT FINDINGS ............................................................................... 9
3. SPECIFIC MATTERS ........................................................................... 10
ANNEXES ...............................................................................................11
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Final Report on Financial and Systems Audit of the Caribbean Regional Communication Infrastructure Programme (CARCIP)
INDEPENDENT AUDITORS’ REPORT – FINANCIAL AUDIT
The Government of St. Vincent and the Grenadines
Ministry of Finance, Economic Planning and Information Technology
Bay Street
Kingstown
St. Vincent and the Grenadines
Unmodified opinion
We have audited the Financial Report for the Caribbean Regional Communication Infrastructure
Programme (CARCIP), for the period from 1 January to 31 December 2020, which is set out in Annex I
of this report.
Our findings are set out in the relevant sections of our report, which is made solely to the Government
of St. Vincent and the Grenadines in order to gain assurance that the Project funding provided has,
in all material respects, been used in conformity with the applicable Contractual Conditions.
In our opinion:
the Financial Report of the Project, including all relevant Designated Account (DA)
reconciliations, the supplementary financial information for the project and the cumulative
investments present fairly, in all material respects, the funds received and the disbursements
made during the period from 1 January to 31 December 2020 in conformity with the applicable
contractual conditions;
the Project funds have, in all material respects, been used in conformity with the applicable
contractual conditions.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs), insofar as these
standards can be applied in the specific context of a contractual audit. Our responsibilities under
those provisions and standards are further described in the ‘Auditor’s responsibilities for the audit of
the Financial Report’ section of this report.
We are independent of IDA and the Entity in accordance with the IESBA Code of Ethics for Professional
Accountants. We have fulfilled our other ethical responsibilities in accordance with these
requirements. We have taken into account all the available evidence presented to us during our
fieldwork, which we finalised on date of closing meeting, and additional evidence and information
provided electronically up to the date of this report. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.
Emphasis of matter
We draw attention to the internal control findings as set out in the relevant sections of our
management letter that represent important control weaknesses with the grant agreement which we
came across during the conduct of our financial audit.
Our opinion is not modified in respect of these matters.
Respective responsibilities of the Entity's management
In accordance with the Contractual Conditions, the Entity’s management are responsible for the
preparation of the Financial Report and for being satisfied that it presents fairly the actual
expenditure incurred and revenue received for the Project in conformity with the applicable
Contractual Conditions.
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Final Report on Financial and Systems Audit of the Caribbean Regional Communication Infrastructure Programme (CARCIP)
Auditor’s responsibilities for the audit of the Financial Report
Our objectives are set out in the Terms of Reference for the audit engagement, and include obtaining
reasonable assurance about whether the Financial Report is free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report that includes our opinion . Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with ISAs will always detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the decisions of users taken on the basis of the Financial Report.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain
professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the Financial Report, 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 our 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 Entity’s internal control.
We communicate with the Entity’s management regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant deficiencies in internal
control that we identify during our audit.
Retroactive financing
In accordance with our Terms of Reference, we conducted an audit of 100% of the expenditures
claimed under retroactive financing.
Retroactive financing is defined as ‘reimbursement by the Bank of any payments made by the
Borrower under the contract prior to loan signing is referred to as retroactive financing and is only
permitted within the limits specified in the Loan Agreement ’.
As per paragraph IV.B.1 of the loan agreement No. 6584-VC signed on 16 April 2020, no withdrawal
shall be made for payments made prior to the signature date, except for withdrawals for eligible
expenditures up to aggregate amounts not exceeding $960,000, and in no case more than one (1) year
prior to the signature date. This means that payments prefinanced by the Entity’s own funds must
not exceed the limit of $960,000, and should be made up to one year prior the signature date of the
Loan Agreement.
The Entity claimed a total amount equaling to XCD 1,788,769 ($658,386) under Retroactive Financing.
This relates to payments made in January 2020 under contract No. 3381/2018 signed with ‘Digicel’
having as subject ‘the installation of new Broadband’ .
We have audited 100% of the expenditures referred to above and claimed under retroactive financing
for the period from 1 January to 31 December 2020, in accordance with our Terms of Reference.
In our opinion, the expenditures claimed for retroactive financing are eligible and were claimed within
the limits specified in the loan agreement.
Other matter
Owing to movement restrictions imposed because of the COVID-19 pandemic, we conducted this audit
remotely on the basis of documents and information provided electronically by the Ministry of
Finance, Economic Planning and Information Technology.
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Final Report on Financial and Systems Audit of the Caribbean Regional Communication Infrastructure Programme (CARCIP)
Distribution and use
This report is intended solely for the information and use of the Government of St. Vincent and the
Grenadines.
Mark Henderson 55 Baker Street
Partner London
For and on behalf of BDO LLP W1U 7EU
6 July 2021
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Final Report on Financial and Systems Audit of the Caribbean Regional Communication Infrastructure Programme (CARCIP)
1. ENGAGEMENT CONTEXT
1.1 Introduction
The financial and systems audit of the Caribbean Regional Communication Infrastructure Programme
(CARCIP) for the period from 1 January to 31 December 2020 was carried out remotely, from 29th
March to 7th May 2021. The audit was performed in accordance with the terms of reference prepared
by the Ministry of Finance, Economic Planning and Information Technology in Kingstown.
1.2 Background
As part of the National ICT (Information and Communications Technology) Strategy and Action Plan,
the Government of St Vincent and the Grenadines has commenced the implementation of the
Caribbean Regional Communication Infrastructure Programme (CARCIP). This project is funded by the
International Development Association and is designed to (i) bridge the ICT infrastructure gaps at the
national and regional levels, (ii) stimulate growth of the IT and IT-Enabled Services sector and (iii)
create an enabling environment that fosters competitive access to ICT infrastructure and the
IT/IT-Enabled Services sector and other applications industry.
The project consists of three components:
Regional Connectivity Infrastructure;
ICT-led Innovation; and
Implementation Support.
The duration of the project was initially of five years, however, and as per a letter from the World
Bank, dated 24 May 2016, the implementation period was extended to six and a half years, with a
closing date of 1st August 2018. A subsequent amendment was then signed on 29 th June 2018, which
extended the project up until 1st February 2020. A new Agreement was signed on 16th April 2020 with
a closing date of 31st December 2020, with additional financing provided.
The originally estimated cost of the Programme was USD 6 million, which was then revised to
USD 9.85m. The total amount provided, as per the financing agreement, is USD 10.8 million, however,
the amount allocated to the entity was limited to USD 9.85 million.
1.3 Audit Objectives
As set out in the terms of reference, the objective of our audit assignment was:
To express a professional opinion on the financial position and performance of the project as
at the end of the period under audit and to report on the adequacy of the project’s internal
controls.
The additional specific objectives of the audit are:
Issue an opinion as to whether the Project ’s financial statements, including all relevant
Designated Account (DA) reconciliations, present fairly, in all material respects, the financial
position of the Project, the funds received and the disbursements made during the period
audited. It should also include the cumulative investments at the end of the period, in
accordance with international accounting standards and the requirements of the respective
agreements with the Bank.
Issue an opinion on whether the supplementary financial information for the Project is fairly
presented, in all material respects.
Issue a report with respect to the adequacy of the internal control structure of the
implementing institution in regard to the Project.
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Final Report on Financial and Systems Audit of the Caribbean Regional Communication Infrastructure Programme (CARCIP)
Conduct the audit of 100 percent of the expenditure claimed under the retroactive financing,
and provide a separate audit opinion about the eligibility of those expenditures.
1.4 Audit Scope
The scope of work of the financial audit covered the expenditure and revenue stated in the Financial
Report of the Project for the period from 1st January to 31st December 2020.
The scope of work of the systems audit covered the design and operating effectiveness of the internal
control system in the period from 1st January to 31st December 2020. The internal control system
subject to audit is described in Annex III to this report.
The scope of work included specific considerations and procedures, which are set out further below:
All Project funds should be used in accordance with the conditions of the relevant financing
agreements, with due attention to economy and efficiency, and only for the purposes for
which the financing was provided;
Goods and services financed should be procured in accordance with the relevant financing
agreement;
The Ministry of Finance, Economic Planning and Information Technology should keep all
necessary supporting documents, records, and accounts in respect of all Project ventures
including expenditures reported via Interim Financial Reports (IFRs) and the Designated
Account (DA). Clear linkages should exist between the books of account and reports presented
to the Bank;
Where a DA has been used, it should be maintained in accordance with the provisions of the
relevant financing agreement;
Conduct audit of all expenditures claimed under retroactive financing, and provide separate
audit opinion about the eligibility of those expenditures; and
The Project accounts should be prepared in accordance with International Accounting
Standards consistently applied, and give a true and fair view of the financial situation of the
Project at the end of the period and of the resources and expenditures for the year ended
on that date.
In carrying out the audit, we reviewed documentation remotely, in order to assess their accounting,
internal control and management procedures. Specifically, the work we carried out included the
following specific considerations and procedures:
Obtaining an understanding of the engagement context
In advance of the audit fieldwork, we reviewed the terms of reference and contacted the entity being
audited to obtain key financial and other data required in order to assist us in the assessment of risk
and audit planning.
The opening meeting for the audit took place remotely on 29th March 2021. The purpose of the
opening meeting was to clarify the objectives of the audit to the contractor, discuss the background
of the contracted activities and discuss any initial issues raised by the auditor or contractor relating
to the organisation and scope of the audit.
Risk assessment and materiality
We assessed the risks of material errors or misstatements in the expenditure and revenue stated in
the Financial Report, whether caused by error or fraud. Where necessary we designed and performed
further audit procedures to address risks identified.
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Final Report on Financial and Systems Audit of the Caribbean Regional Communication Infrastructure Programme (CARCIP)
Sampling and other means of selecting items for testing
We tested 78% of reported expenditure.
Obtaining evidence regarding design of controls and tests of controls
We designed and performed audit procedures, the nature, timing and extent of which were tailored
to the assessed risks of material errors.
We obtained a description of, and carried out a review of, the accounting procedures relevant to the
Project.
Based on our understanding of the accounting systems in place, we undertook substantive testing of
the reported expenditure. We checked compliance with contractual rules as expressed or referred
to in the Financing Agreement and the Project Implementation Manual. We checked individual
amounts claimed against original supporting invoices and documentation.
Substantive procedures
The fieldwork was performed remotely from 29 March to 7 May 2021. Specifically, the work carried
out included the following:
(a) Documentation, filing and record keeping for project expenditure and income
We ensured that the project operated an organised system for filing original numbered invoices
and receipts, which are easily retrievable and specific to the project.
(b) Eligibility of project expenditure and income
We ensured that (apart from where reported to the contrary within this report) all expenditure
and income had been incurred in accordance with the Financing Agreement – for example that it
had been authorised by the appropriate member of staff, that appropriate segregation of duties
had been maintained and that all relevant procedures had been followed.
We vouched expenditure amounts to invoices, bank statements, contracts or similar supporting
documentation, including evidence of outputs. This included testing whether the expenditure
had been generated within the contracted project period.
We confirmed that expenditure was consistent with the pursuit of project objectives as set out
in the Financing Agreement, and that the project budget had not been exceeded.
(c) Accounting / Financial reporting
We reconciled the financial report for the period concerned to data drawn from the accounting
system of the Central Planning Division, to confirm the completeness, existence and accuracy of
expenditure reported.
(d) Procurement
Through a review of tender files and supporting documents, we confirmed that the procurement
procedures had been correctly followed and that the tender process was fair, transparent and
value for money was obtained.
(e) Cash and bank management (treasury)
Banking arrangements were in place to effectively manage the receipt of funds and Designated
Account reconciliations had been prepared.
(f) Grantees
We ensured that the Grantees’ selection process was in accordance to the Business Incubation
and Training Grants Manual.
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Final Report on Financial and Systems Audit of the Caribbean Regional Communication Infrastructure Programme (CARCIP)
2. AUDIT FINDINGS
2.1 Financial Audit Findings
We have not raised any financial findings.
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Final Report on Financial and Systems Audit of the Caribbean Regional Communication Infrastructure Programme (CARCIP)
3. SPECIFIC MATTERS
The additional specific objectives of this audit along with the associated work we performed are as
follows:
Issue an opinion as to whether the Project financial statements, including all relevant
Designated Account (DA) reconciliations, present fairly, in all material respects, the financial
position of the Project, the funds received and the disbursements made during the period
audited. It should also include the cumulative investments at the end of the period, in
accordance with international accounting standards and the requirements of the respective
agreements with the Bank.
We reviewed the Designated Account (DA) reconciliations for the period from January 1,
2020 to April 30, 2021, which were included in the interim financial reports. The cumulative
amount of expenditure at 31 December 2020 reconciled to total project expenditure per the
Project Financial Report (Annex 1) that we were provided. Our opinion with regard to this
objective is provided on pages 3 and 4 of this report.
Refer to Annex IV for the DA reconciliation for the period to 30 April 2021.
Issue an opinion on whether the supplementary financial information for the Project is fairly
presented, in all material respects.
In addition to the Project Financial Report, we were provided with the interim financial
reports for each quarter in from January and up until December 31, 2020. This included
expenditure by activity and sub-activity, analysis of operating expenses, cash flow forecasts
and a procurement-monitoring schedule. This information was consistent with the Project
Financial Report and Designated Account reconciliations. Our opinion with regard to this
objective is provided on pages 3 and 4 of this report.
Issue a report with respect to the adequacy of the internal control structure of the
implementing institution in regards to the Project.
Our assessment of internal controls is included in Annex III and the Audit Report relating to
this is provided in the attached management letter.
For this purpose, the report will be based on an assessment of internal controls, which will
take place at mid-year for each auditable year of Project execution. This will permit early
detection on any internal control issues to provide corrective feedback to the Economic
Planning Division prior to the carrying out of the end-year audit.
Our assessment of internal controls is included in Annex III and the Audit Report relating to
this is in the attached management letter.
Conduct the audit of 100 percent of the expenditures claimed under retroactive financing,
and provide separate audit opinion about the eligibility of those expenditures.
We audited 100 percent of the expenditures claimed under retroactive financing for the
period 01 January to 31 December 2020 and we provided a separate audit opinion about the
eligibility of those expenditures.
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Final Report on Financial and Systems Audit of the Caribbean Regional Communication Infrastructure Programme (CARCIP)
ANNEXES
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Final Report on Financial and Systems Audit of the Caribbean Regional Communication Infrastructure Programme (CARCIP)
ANNEX I - CARCIP CUMMULATIVE FINANCIAL REPORT (AUGUST 2011 – DECEMBER 2020)
Expenditure (Aug Expenditure (Jan Expenditure (Jan Expenditure (Jan Expenditure (Jan 2017 –
Budget Heading Budgeted Amounts Expenditure (July 2018 Expenditure (Jan 2020 – Balance
2011 – Dec 2013) 2014 – Dec 2014) 2015 – Dec 2015) 2016 – Dec 2016) July 2018)
– DEC 2019) DEC 2020)
USD XCD USD XCD USD XCD USD XCD USD XCD USD XCD USD XCD USD XCD USD XCD
Component 1:
Regional
7,069,478 19,004,172 - - 42,526 114,318 51,564 138,614 154,151 414,388 205,449 552,289 2,477,903 6,661,100 4,413,790 11,865,150 (275,905) (741,687)
Connectivity
Infrastructure
Broadband
Network
Consultancy:
Validation, 283,580 762,318 - - - - 141,852 381,327 141,665 380,825 - - 62 166
design &
tendering of
works
Draft legal and
regulatory
67,129 180,457 - - - - 3,179 8,546 61,924 166,464 - - 2,026 5,447
safeguards
consultancy
Goods for IXP 42,526 114,317 - - 42,526 114,318 - - 0 0
Government
Network-Design,
Supply &
Installation of
PBX and - - - - - - - -
associated LAN
& (minimal)
WAN
infrastructure
Installation of
new broadband 6,301,509 16,939,715 - - - - 2,347,447 6,310,406 4,232,378 11,377,478 (278,316) (748,168)
network
Broadband
Network:
312,372 839,718 - - - - 130,457 350,694 181,412 487,672 503 1,352
Supervision of
Installation
Government
1,860 5,000
Electronic Mail 62,363 167,645 - - - - 51,564 138,614 9,119 24,515 - - (180) (484)
Service
Component 2:
ICT Led 2,138,381 5,748,396 17,810 47,876 179,727 483,142 97,431 261,914 537,729 1,445,524 745,519 2,004,103 101,689 273,360 318,142 855,229 140,334 377,248
Innovation
Business
Incubation
Grants and 185,232 497,940 17,810 47,876 49,633 133,423 26,784 72,000 26,784 72,000 20,088 54,000 19,435 52,244 22,757 61,175 1,942 5,221
Training
Manager
Business
Incubation 917,732 2,467,046 - - 3,926 10,554 241,249 648,526 320,590 861,810 53,467 143,729 200,626 539,324 97,874 263,104
Grants
Implementation
and capacity
building support 253,398 681,186 - - 11,992 32,237 61,393 165,038 54,188 145,669 61,915 166,441 44,695 120,150 25,426 68,350 (6,212) (16,699)
for Centre of
Excellence
Equipment for
Centre of 47,223 126,945 - - - - 9,254 24,877 22,207 59,697 20,460 55,000 - - - - (4,698) (12,629)
Excellence
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Final Report on Financial and Systems Audit of the Caribbean Regional Communication Infrastructure Programme (CARCIP)
Expenditure (Aug Expenditure (Jan Expenditure (Jan Expenditure (Jan Expenditure (Jan 2017 –
Budget Heading Budgeted Amounts Expenditure (July 2018 Expenditure (Jan 2020 – Balance
2011 – Dec 2013) 2014 – Dec 2014) 2015 – Dec 2015) 2016 – Dec 2016) July 2018)
– DEC 2019) DEC 2020)
USD XCD USD XCD USD XCD USD XCD USD XCD USD XCD USD XCD USD XCD USD XCD
Technical
assistance for
skills
assessment and 114,176 306,927 - - 114,176 306,928 - - - - 0 0
program
development
Skills
development
620,621 1,668,352 - - - - 193,301 519,632 322,466 866,852 15,908 42,763 69,333 186,380 51,429 138,252
and
certification
Component 3:
Implementation 645,818 1,736,087 105,505 283,619 89,976 241,874 71,896 193,272 95,100 255,648 117,144 314,906 35,352 95,033 54,899 147,580 75,946 204,156
Support
Project - -
196,000 526,887 53,613 144,123 43,639 117,310 45,220 121,561 46,253 124,338 26,981 72,530 - - - -
Coordinator 19,707 52,976
Monitoring and
25,000 67,205 - - - - 2,951 7,932 3,249 8,735 18,800 50,538
Evaluation
Social Safeguard 25,000 67,205 - - - - 913 2,453 1,280 3,440 22,808 61,312
Financial Audit 119,818 322,094 - - 7,374 19,823 14,748 39,646 27,038 72,684 20,337 54,670 43,565 117,111 6,756 18,162
Equipment to
13,543 36,407
support project 30,000 80,646 6,264 16,838 4,831 12,987 - - 418 1,125 4,943 13,289
management
Training for
CPD,ITSD, and 50,000 134,410 8,079 21,718 7,470 20,081 14,796 39,776 15,377 41,336 - - 4,278 11,499
DTST
Operating 49,581 133,285
200,000 537,640 37,549 100,940 26,662 71,673 11,880 31,934.64 18,722 50,329 11,152 29,978 6,387 17,169 38,068 102,332
Expenses
Total* 9,853,677 26,488,655 123,315 331,495 312,229 839,334 220,891 593,800 786,980 2,115,560 1,068,112 2,871,298 2,614,944 7,029,493 4,786,831 12,867,958 (59,625) (160,283)
*
This corresponds to the budgeted amounts as allocated by the Ministry which is below the total amount provided in the loan contract equalling to USD10 million. The negative balance was obtained
comparing the expenditure to the budgeted amounts as allocated by the Entity, but the total expenditure remains below the total amount provided in the contracts with the World Bank.
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Final Report on Financial and Systems Audit of the Caribbean Regional Communication Infrastructure Programme (CARCIP)
Notes to the Financial Report
1. Accounting standards
The financial report has been prepared on a Cash Basis and this accounting policy has been applied
consistently throughout the period. Under the cash basis of accounting, revenues are reported on the
income statement when the cash is received and expenditure reported when cash is disbursed.
2. Basis of measurement
Expenses are recorded in the Financial Report on the basis of Historical Cost.
3. Functional currency
The reporting currency is East Caribbean Dollars (XCD).
4. Estimates and judgements
All expenditure is accounted for on a Cash Basis and has been classified under budgetary headings
that aggregate all costs related to that category, the classification of which is a matter of
Management's professional judgement.
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Final Report on Financial and Systems Audit of the Caribbean Regional Communication Infrastructure Programme (CARCIP)
ANNEX II – SOURCES AND USE OF FUNDS
Sources of funding and revenue - amounts in USD
Actual Actual Actual
Sources of Actual Actual Actual
(Aug (Jan (Jan Total Actual
funding (Jan 2016 (Jan 2017 (Aug 2018 Actual (Jan-
Budget 2011 – 2014 – 2015 – (Aug 2011 –
and – Dec – July – Dec Dec 2020)
Dec Dec Dec Dec 2020)
revenue 2016) 2018) 2019)
2013) 2014) 2015)
World Bank
9,853,677 200,000 336,575 500,000 1,000,000 1,350,000 2,059,991 4,495,082 9,941,648
contribution
Total of
funding
9,853,677 200,000 336,575 500,000 1,000,000 1,350,000 2,059,991 4,495,082 9,941,648
and
revenue
Summary by category / main type of expenditure - amounts in USD
Actual Actual Actual Actual
Actual Actual
(Aug (Jan (Jan (Jan Actual
Expenditure (Jan 2017 (Aug 2018 Total Project
Budget 2011 – 2014 – 2015 – 2016 – (Jan- Dec
category – July – Dec Expenditure
Dec Dec Dec Dec 2020)
2018) 2019)
2013) 2014) 2015) 2016)
Component 1:
Regional
7,069,478 - 42,526 51,564 154,151 205,449 2,477,903 4,413,790 7,345,383
Connectivity
Infrastructure
Component 2:
ICT Led 2,138,381 17,810 179,727 97,431 537,729 745,519 101,689 318,142 1,998,047
Innovation
Component 3:
Implementation 645,818 105,505 89,976 71,896 95,100 117,144 35,352 54,899 569,872
Support
Total 9,853,677 123,315 312,229 220,891 786,980 1,068,112 2,614,944 4,786,831 9,913,302
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Final Report on Financial and Systems Audit of the Caribbean Regional Communication Infrastructure Programme (CARCIP)
ANNEX III – SYSTEMS DESCRIPTION
Cash and Bank Management
A USD account (# 9027), known as the ‘Designated’ account, held with the Bank of St Vincent and the
Grenadines was used to receive the International Development Association funds. Funds are drawn
down periodically into the local XCD account (# 135715), also held with the Bank of St Vincent and
the Grenadines, from where payments in local currency can be made.
Designated Account reconciliations are performed monthly which reconcile with International
Development Association funds received to the funds drawn down into the local account. Monthly
bank reconciliations for the XCD account are also performed.
We were provided with bank statements to evidence the receipts of the USD 2,000,000, USD 948,576,
USD 1,446,505 and USD 100,000 from the International Development Association respectively on 10
June 2020, 24 August 2020, 15 December 2020 and 23 February 2021.
Accounting and Reporting
The Ministry of Finance, Economic Planning and Information Technology was responsible for
maintaining the underlying accounting records and prepared all reports. They use the accounting
software ‘Peachtree’ which allows different projects to be set -up and maintained individually. Project
expenditure is allocated against budget headings, which are monitored using ‘control cards’.
All computers and software used require password entry. The access / restrictions are set based on
role and authority level. This is to strengthen appropriate segregation of duties.
Expenditure
In 2016 Incubation and Training grant agreements were signed between several Grantees and the
Government of St. Vincent and the Grenadines. The majority of the expenditure reported relates to
the implementation of the Broadband Network (Lot 1: Government Wide Area networks, Lot 2:
Broadband Internet Services for schools, community centres and other locations and Lot3: Undersea
Cable System. Expenditure also includes payments to the consultants).
A manual has been developed to guide the process through Business Incubatees from eligible
incubators to access Business Incubation Grants or ICT related Training Grants. This “Business
Incubation and Training Grants Manual” which is dated 29 July 2014 has received the World’s Bank
‘no objection’ on 1 August 2014.
This Manual is divided into four sections:
1. Business Incubation and Training Grants Manual Overview
2. Business Incubation Grants Policies and Procedures
3. Training Grants Policies and Procedures
4. Applicants Procedures
The Manual sets up the steps to be followed from the application to the award process for Grants and
includes the procurement procedures for goods and services that the Grantees need to carry out.
Purchases are generally initiated by a Project Officer who completes a purchase requisition. A
purchase order will then be completed by one of the Administrative staff and approved by a more
senior staff member, such as a Procurement Officer. Upon receipt of the invoice, a 3 way match is
performed (checking the invoice against the purchase order and receipt note) in order to verify the
purchase. One of the Accountants then prepares a payment voucher, which is then reviewed by a
more senior Accountant, and sent to the Project Coordinator for approval. A bank order is then signed
by two of the four bank signatories: The Deputy Director of Planning, the Accountant General, the
Permanent Secretary or the Senior Projects Officer.
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Final Report on Financial and Systems Audit of the Caribbean Regional Communication Infrastructure Programme (CARCIP)
Procurement
The following thresholds were in place (as per the Project Implementation Manual) in order to
determine which procurement procedures should be followed:
Expenditure Category Contract Value (Threshold) Procurement Method
USD Thousands
1 .Works > 3.0 ICB
3.0-250 NCB
< 250 Shopping
2. Goods > 250 ICB
50-250 NCB
< 50 Shopping
3. Services
- firms > 200 QCBS
< 200 QCBS, QBS, FBS, LCS, CQ, SSS
- individuals > 50
Comparison of 3 CVs
< 50
17
Final Report on Financial and Systems Audit of the Caribbean Regional Communication Infrastructure Programme (CARCIP)
ANNEX IV – DESIGNATED ACCOUNT RECONCILIATION 2020
Designated Account Reconciliation Statement Amount USD
1 Total advanced by World Bank (or co-financier) 9,967,933
Less: Eligible expenditure for the period ended 30 Sept 2019 documented by World Bank 3,189,617
2
Less: Cumulative eligible expenditure for the prior periods ended July 31, 2018 documented
4,786,916
by World Bank
3 Present outstanding amount advanced to designated account (1-2) 1,991,400
Balance of USD designated account per bank reconciliation statement as at period end April -
30, 2021
4
Balance of project account per bank reconciliation statement as at period end April 30, 2021 -
5 Plus: Eligible expenditure for the current year documented after the period end 1,595,648
6 Plus: Total amount withdrawn and not yet claimed 66,505
Reason: Supporting documents for expenditure not yet uploaded to client connection
7 Plus: Amounts claimed in previous applications not yet credited -
Application No.
Subtotal of previous applications not yet credited -
8 Less interest earned (11,906)
9 Total Advance accounted for (No. 4 through No.9) 1,650,247
10 Difference (line 3 less line 9) 341,153
Represented by:
10 (a) Exchange loss (1,053)
10 (b) revenue from bid documents 695
10 (c) Ineligible expenditure identified in period 31 December 2020 but related to previous period (1,565)
10 (d) Ineligible expenditure identified in period 31 December 2019 6,209
10 (e) Ineligible expenditure identified in period from 1 January 2017 to 31 July 2018 (155,685)
10 (f) Ineligible expenditure identified in period from 1 January to 31 December 2016 (184,566)
10 (g) Ineligible expenditure identified in period from 1 January to 31 December 2015 (125)
10 (h) Ineligible expenditure identified in period from 1 January to 31 December 2014 (68)
10 (i) Ineligible expenditure identified in period from 1 August 2011 to 31 December 2013 (5,406)
10 (j) Refund from HTERP (2014) 343
10 (k) Refund from PSIP for payment of Gasoline (2015) 67
(341,153)
18
Final Report on Financial and Systems Audit of the Caribbean Regional Communication Infrastructure Programme (CARCIP)
Cumulative at 31
2013 2014 2015 2016 2018 December 2019 December 2020* December 2020
Amount Amount Amount
Amount (USD) Amount (USD) Amount (USD) Amount (USD) Amount (USD)
(USD) (USD) (USD)
1 Total advanced by World Bank (or co-financier) 200,000 336,575 500,000 1,000,000 1,350,000 2,059,991 4,521,368 9,967,933
Balance of designated account as at 31 December 2013 / 2014 / 2015 / 2016 /
2 77,549 103,345 394,680 624,442 909,336 338,980 - 2,448,332
2018/2019/2020
3 Plus: amount of eligible expenditure 117,909 312,161 220,766 602,414 912,512 2,621,153 4,785,266 9,572,181
4 Plus: Total amount withdrawn and not yet claimed - - - 66,505 66,505
Plus: Amounts claimed in previous applications not yet credited at date of bank
5 - - -
statement
6 Less interest earned (887) (451) (644) (1,994) (3,052) (3,186) (1,692) (11,906)
7 Total Advance accounted for (No. 2 through No.6) 194,571 415,055 614,802 1,224,862 1,818,797 2,956,947 4,850,079 12,075,113
8 Difference ( line 1 less line 7) 5,429 (78,480) (114,802) (224,862) (468,797) (896,957) (328,711) (2,107,180)
Represented by:
8 (a) Transaction fees and Bank Charges (23) (39) (23) 85 -
8 (b) Revenue from bid documents - 695 - - 695
8 (c) Refund from HTERP - 343 - 343
8 (d) Refund from PSIP for payment of Gasoline - - 67 - 67
8 (e) Bank balance carried forward 77,549 103,345 394,680 624,442 909,336 338,980 2,448,332
8 (f) Direct payment ** 11,538 14,748 - (26,286) -
Ineligible expenditure identified in period from 1 August 2011 to 31 December 2019
8 (g) (5,406) (68) (125) (184,566) (155,685) 6,209 (1,565) (341,205)
***
8 (h) Exchange loss on amount purchased using USD account (45) (297) (710) (1,053)
Accounts receivable as at De 31, 2019 (18,292) 18,292 0
Total (5,429) 78,480 114,802 224,862 468,797 896,956 328,711 2,107,180
* This includes the balance of the designated account in USD and the balance of the XCD special account. Conversions from XCD to USD were made by using an exchange rate of 2.6882
** The Direct payment amounting to US$26,286 was integrated in the Amounts Received from WB, thus the non reconciling item
*** The amount of US$1,565 relates to the previous period Jul 2018-Dec 2019 which was considered Ineligible by the World Bank.
19
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