BAUCHI STATE WORLD BANK ASSISTED THIRD NATIONAL URBAN WATER SECTOR REFORM PROJECT REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER, 2015 BAUCHI STATE WORLD BANK ASSISTED THIRD NATIONAL URBAN WATER SECTOR REFORM PROJECT REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER, 2015 CONTENTS PAGE Corporate information 3 Auditors' report 4 Accounting policies 6 Balance sheet 7 Statement of sources and uses of funds 8 Notes to the financial statements 9 Special Account Activity Statements 10 Statement of Special Account I Summary of statement of expenditures 12 IDA Disbursement 13 - Page 3 - BAUCHI STATE WORLD BANK ASSISTED THIRD NATIONAL URBAN WATER SECTOR REFORM PROJECT CORPORATE INFORMATION Project Implementation Unit: Eng. Aminu Aliyu Gital - Project Coordinator Ibrahim M Abubakar - P1roject Accountant Shehu Yahaya Jalarn - CM&S Abubakar Aliyu Fate - M&E Engr.Abdulrnumin Mailafiya - W&SS Bala Ibrahim Dan Alfa - Procurement Officer Muhammed Suleiman Darazo - Internal Auditor Idris D. Bello - E& S Aliyu Musa Danbam - Social Safeguard Shehu A. Kobi - Head PFMU Project Office: Bauchi State Water and Sewage Corporation, Third National Urban water sector reform project Bauchi, Nigeria. IDA Credit N2: 54160 UNI Bankers: Diamond Bank Plc Auditors: Baker Tilly Nigeria. Chartered Accountants. Zion House, No. 16. Alaafin Avenue, Opposite Ratcon Construction, Oluyole Industrial Estate. lbadan. Nigeria. hA KE R TL-WgeYzi NIGERIA Chartered Accountan Zo House 463 Alaafin Aven C e Industri f Estat P)OBox 3808 bad> an N igeria +234 (0) 8131826784 EFrnaIl btib@bakertillynigeia Websate www bake rti lynigeria com REPORT OF THE INDEPENDENT AUDITORS ON THE FINANCIAL STATEMENTS OF THE BAUCHI STATE WORLD BANK ASSISTED THIRD NATIONAL URBAN WATER SECTOR REFORM PROJECT FOR THE YEAR ENDED 31 DECEMBER, 2015 CREDIT N 54160 UNI We have audited the accompanying financial statements of the World Bank Assisted NUWSRP 3 Project for the year ended 3 1 December, 2015 as set out on pages 7 to 13 and prepared on the basis of the accounting policies on page 6. The project is financed by the IDA Credit Number 54160 UNI. Respective responsibilities of the Project Management and Auditors The Project Implementation Unit coordinates the activities of the project and is as such responsible for the preparation of the financial statements. It is our responsibility as auditors to express an independent opinion, based on our audit, on the financial statements and to report our opinion to you. Basis of opinion We have conducted our audit in accordance with International Standard on Auditing and World Bank guidelines. These Standards and World Bank guidelines require that we plan and perform the audit to obtain reasonable assurance that the financial statements are free of material misstatement. An audit includes examination, on a test basis of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the estimates and judgements made by the project officers in the preparation of the financial statements, and whether the accounting policies are appropriate to the project circumstances, consistently applied and adequately disclosed. We planned and performed our audit so as to obtain all the information and explanations, which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free of material misstatements. In forming our opinion, we also evaluated the overall adequacy of the presentation of the financial statements. Opinion In our opinion, donor funds from World Bank have been provided and used in accordance with the conditions of the loan agreement with due attention to economy and efficiency and only for the purposes for which the fund was provided during the year under review. Goods and services financed have been procured in accordance with the Development Credit Agreement and Disbursement Letters. All necessary supporting documents, records and accounts have been kept in respect of all project activities, with clear linkages between the books of account and reports presented to the Government and World Bank, including expenditure reported via Summary Report. - Page 5 - The Designated Accounts have been maintained in accordance with the provisions of the Development Credit Ag.reement and Disbursement Letter. The Project financial statements have been prepared in accordance with generally accepted accounting principles and practices and relevant World Bank guidelines, and give a true and fair view of the financial position of the NIJWSRP 3 Project as at 31 December, 2015 and for the resources and expenditure for the financial year then ended. The accounting and overall internal control system to monitor expenditure and other financial transactions are adequate, effective and ensured safe custody of project financed assets. [he ledgers are maintained as required by the World Bank as well as a fixed assets register. The Project complied with Article IV financial covenant of the Loan Agreement. Akobi Marcus Kayode F A FRC/2013/ICAN/00000003486 for: BAKER TILLY NIGERIA CHARTERED ACCOUNTANTS IBADAN, Nigeria 18 May, 2016 - Page 6 - BAUCHI STATE WORLD BANK ASSISTED THIRD NATIONAL URBAN WATER SECTOR REFORM PROJECT STATEMENT OF ACCOUNTING POLICIES The following are the significant accounting policies followed in recording transactions and in reporting the results of operations of the Project: 1I Accounting convention The accounts are prepared under the historical cost convention. 2. Basis of accounting The cash basis was adopted in the preparation of Project's Financial Statements. 3. Fixed assets and depreciation (a) Fixed assets are those intended for use over a YEAR exceeding one accounting year and whose value per unit is not below N100,000. (b) Items with respective unit costs below N100,000 are classified as "Special Project Assets" and included in a Special Project Assets Register. (c) In applying the capitalization policy, all related (landed) costs and installation costs are included in the acquisition cost of the fixed asset item. (d) Capital expenditure on contract works will be included on the basis of valuation certificates including retention. (e) No depreciation is charged on the project's fixed assets as there are no revenues to be matched against such charges. 4. Inventory Inventory is valued at the lower of cost and net realizable value. 5. Debtors Debtors are stated after making specific provision for debts considered doubtful of recovery. 6. Foreign currency Income and expenditure items in foreign currencies are recorded in Naira at the rates ruling at the transaction dates. Assets and liabilities expressed in foreign currencies are converted to Naira at the rates ruling at the balance sheet date and gains or losses on such conversions are credited or charged to reserve in the year which they arise. - Page 7 - BAUCHI STATE WORLD BANK ASSISTED THIRD NATIONAL URBAN WATER SECTOR REFORM PROJECT BALANCE SHEET AS AT 31 DECEMBER, 2015 Notes 2015 Incremental operating costs 2 1,886,630 Cash and bank balances 3 794,95,84 Net current assets 79682,4 796,802,454 Financed by: IDA Special account 4 796,000,000 Other Income 5 802,454 796,802,454 PROJECT COORDINATOR j.I.. HEAD - PFMU The accounting policies on page 6 and the notes on pages I I and 12 form part of these financial statements. - Page 8 - BAUCHI STATE WORLD BANK ASSISTED THIRD NATIONAL URBAN WATER SECTOR REFORM PROJECT STATEMENT OF SOURCES AND USES OF FUNDS FOR THE YEAR ENDED 31 DECEMBER, 2015 - IN LOCAL CURRENCY (N) Cash receipts IDA 796,000,000 Other Income Total funding 796,802,454 Expenditure by categories: Incremenital operating costs - Advertisement and publicity 1,886,630 1,886,630 Total expenditure 1,886630 Receipts less expenditure 794,915,824 Cash and cash equivalent as at 1/1/2015 Cash and cash equivalent at 31/12/2015 794,915,824 Represented by: Closing cash and bank balances: Special Account 792,856.157 Draw down Account 1 700,568 Interest Account 359,099 794,915,824 - Page 9 - BAUCHI STATE WORLD BANK ASSISTED THIRD NATIONAL URBAN WATER SECTOR REFORM PROJECT SPECIAL ACCOUNT ACTIVITY STATEMENT AS AT 31 DECEMBER, 2015 (US S ACCOUNT) A/C No 0045437547 - DIAMOND BANK PLC Year 2015 $ 1. Cumulative advances to the end of current reporting year 4,000,000 2. Cumulative expenditure to end of last reporting year 3. Outstanding advances to be accounted (line I minus line 2) - 4,000,000 4. Opening SA balance at the beginning of reporting year 5. Add/Subtract: Cumulative adjustments (if any) 6. Advances from World Bank during reporting year 4,0 4,000,000 7. Outstanding advances to be accounted for (add lines 4 and 6) 8. Closing SA balance at end of current reporting year (as of December 31. 2015) 3.987,823.95 9. Add/Subtract: Cumulative adjustment - 10. Expenditure for current reporting year 20.235.89 I1. Add Lines 9 and 10 12. Activity closing balance (December 31, 2015) 3.987,823.95 13. Difterence (if any) less interest on SA 4.029.92 14. Actual SA balance 3,983.794.03 - Page 10 - BAUCHI STATE WORLD BANK ASSISTED THIRD NATIONAL URBAN WATER SECTOR REFORM PROJECT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER, 2015 1. The Project The Federal Republic of Nigeria entered into a credit agreement with International Development Association. The Project Credit Number 54160 UNI became effective in Bauchi State in February. 2015. The project development objective are to increase access to improved water supply services in Bauchi , to improve the financial viability of existing water utilities in the state and to increase the investment planning capacity of the State. For the year Cumulative 2015 2015 NN 2. Incremental operating costs Advertisement and publicity 1,630 IM6j630 1,886,630 1,886.630 3. Bank and cash balances Special Account 792,856,157 Drawdown account 1,700,568 Interest Account 359,099 794,915.824 4. IDA Special account Balance at I January, 2015 - Drawings during the year 796,000.000 796,000.000 Balance as at 31 December. 2015 796,000,000 796,000,000 5. Other Income Interest on Account 801,954 80 1954 Miscellaneous Income 500 500 802,454 802.454 - Page I1 - BAUCHI STATE WORLD BANK ASSISTED THIRD NATIONAL URBAN WATER SECTOR REFORM PROJECT STATEMENT OF SPECIAL ACCOUNT AS AT 31 DECEMBER, 2015 ACCOUNT N2 0045437547 - BANK: DIAMOND BANK PLC $ Fotal amount received from IDA 4,000,000 A.dd: Interest received 4,029.92 4,004,029.92 Less: Withdrawal applications based on eligible expenditure 20,235.89 Balance as at 31 December. 2015 3,983,794.03 �� N � с3 С1. ;а с� С Es; �О `о 11 � ,и ° ^ ^ 11 с/� �" иС�., , U оо оо I1 О р гл и д- ct 11 р � � � а;� II �С � `� U � � ал о о I1 А"' � ч° .° �G � � �1 � ° и � о о 11 �„ � � .Q с� й �д �� W ,?' й•_� 6:, о�о о�о 11 О � о а со оо i i � �� а � ~ � �" � � wa �° �о а� йа �� �_.�° � да А�" г�ои ., я хо �,� W� �� �,W �� �А а W '� А °� с � го�, � ii Е-+ � W а v� о о i 1 Q� W Z � й. и �о �О 11 JW ��-' W �� С�'. о�о о�о 11 Е-� Z Е-+ 0.! и� �� 11 Е�� AW � �� � � W � �, �� кх U� W �� W Е-� ^а о ��� о о � I QO �"г� е�а-'-' �.° оо ii аа � О О >, � а с ��, ��, � � F" F., (1r и°° и �о �г? 11 `� Z � Е и а �� �� 1I д � � � ``" � � 1I � о �� � � V о и Н � � � и G�, о � в � L � � '�' О � С.) С/: 4., О �' �� О - � г� и �- � � С3 t1. U С - Page I BAUCHI STATE WORLD BANK ASSISTED THIRD NATIONAL URBAN WATER SECTOR REFORM PROJECT IDA DISBURSEMENT FOR THE YEAR ENDED 31 DECEMBER, 2015 Amount Amount Requested paid N N 001 Initial Advance 4,000,000 4,000,000 4,000,000 4,000,000