FOR THE PERIOD ENDED 28TH FEBRUARY 2021 0 Akanji Ibrahim & Co. Chartered Accountants ADAMAWA STATE NIGERIA STATE HEALTH INVESTMENT PROJECT (NSHIP) AUDITED ACCOUNTS FOR THE PERIODENDED FEBRUARY 28th, 2021 Contents CORPORATE INFORMATION .................................................................................. 2 PROJECT OBJECTIVE ............................................................................................... 4 INDEPENDENT AUDITORS REPORT ..................................................................... 6 STATEMENT OF FINANCIAL POSITION ............................................................... 8 STATEMENT OF FINANCIAL PERFORMANCE ................................................... 9 CASH FLOW STATEMENT .....................................................................................10 ACCOUNTING POLICIES ……………………………………………………….. 11 NOTES TO THE ACCOUNTS ..................................................................................12 ANNEX TO THE ACCOUNTS .................................................................................15 1 Akanji Ibrahim & Co. Chartered Accountants ADAMAWA STATE NIGERIA STATE HEALTH INVESTMENT PROJECT (NSHIP) AUDITED ACCOUNTS FOR THE PERIOD ENDED FEBRUARY 28th , 2021 CORPORATE INFORMATION A. PROJECT FINANCIAL MANAGEMENT AND IMPLEMENTATION UNIT: 1. Mr. Abubakar Ibrahim - Head PFMU 2. Mrs. Nenne Daniel Joshua - Project Accountant 3. Mrs. Sarah Daniel - Asst. Project Accountant 4. Mr. Clement Drambi - Finance Officer 5. Mr. Julius Benard - Internal Auditor B. PROJECT IMPLEMENTATION UNIT: 6. Dr. Suleiman Bashiru - Executive Chairman 7. Mr. Adamu Simon - Board Member 1 8. Mr. Hamman Gombeh - Board Member 2 9. Mr. Aliyu Suleiman - Secretary 10.Dr. Paul Margwa - Project Coordinator 11.Mr. Dauda Hammanjam - Procurement Officer 12.Mr. Ibrahim Audu - Information Officer 13.Mr. Bala Lothan - Store Officer 14.Mr. Adamu Mohammed Hassan - Monitoring and Evaluation Officer 15.Eliya Ghaji - Director Admin 16.Nkunihya D. Kwabe - Data Clerk Officer 17.Haruna Maisaje - Waste Manager 18. Mahmood Ibrahim Halilu - Technical Assistant 2 Akanji Ibrahim & Co. Chartered Accountants C. Bankers: i. Zenith Bank Plc. (A/c No: 5070148548) Special Account USD ii. Zenith Bank Plc. (A/c No: 1012656272) Drawdown Account Naira iii. Zenith Bank Plc. (A/c No: 5070305411) Interest Drawdown Account D. Auditors: Akanji Ibrahim & Co. (Chartered Accountants) No. 30 Mubi Road, Sabru House, Jimeta-Yola, Adamawa State. 3 Akanji Ibrahim & Co. Chartered Accountants PROJECT OBJECTIVE The main objective of the Nigerian state Health investment project (NSHIP) is to increase the delivery and use of high impact maternal and child health intervention and to improve the quality of healthcare at selected health facilities in the participating state. Health indicators in Nigeria are poor compared to most countries in Africa. Despite several decades of financial and human capital investments, Nigeria has made limited progress in delivering key health interventions and the country still lack behind in meeting the targets for the Millennium Development Goals (MDGs). With 545 maternal deaths per 100,000 live births in 2008, Nigeria contributes up to 10% of global maternal deaths. Also, quality of health services is sub optimal with less than 50 percent of Nigerians expressing satisfaction with the service in the health sector. It is in the light of the above-mentioned development that the federal government of Nigeria and the World Bank endorsed a Results Based Financing (RBF) project NSHIP. NSHIP comes at an opportune time to demonstrate that RBF approaches can accelerate. This project development objective is to strengthen the health care facilities which consist of two components: Component 1: Result Based Financing i. Will be provided to health facilities based on the quantity and quality services they provide. The project provides for health facility autonomy within the concept of independent running of the facilities with 50% of funds used as operational costs for maintenance and repairs, supplies and other activities while the remaining 50% is to Health workers; ii. Decentralized health facility-based financing provides grants to Health Facilities department based on the performance matrix for their activities 4 Akanji Ibrahim & Co. Chartered Accountants such as timely execution of quality checklists, supportive supervision training and verification of the delivery of health services. Component 2: Technical Assistance (TA) i. Technical Assistance to states. This will fund hiring of consultants to strengthen monitoring and capacity building activities as well as for covering operational costs for day-to-day project management. ii. Technical Assistance for Result Based financing. This will support intensive technical support to build capacity for managing the Result Based Financing (RBF) program, specifically its Performance Based Financing (PBF) compound and its long-term sustainability through rigorous learning. Institutional development, community engagement and dissemination of results. iii. Monitoring and Evaluation. This TA component to be managed by the FMOH aims at collecting data to measure progress on the Result Based Financing component and the project results framework and carry out the impact evaluation of NSHIP 5 Akanji Ibrahim & Co. Chartered Accountants INDEPENDENT AUDITORS REPORT ON THE FINANCIAL STATEMENTS OF THE ADAMAWA STATE NIGERIA STATE HEALTH INVESTMENT PROJECT (NSHIP) (IDA NO. 50940 and 58510) We have audited the accompanying project financial statements of the Nigeria State Health Investment Project for the period ended February 28th, 2021 as set out in pages 8 to 17 prepared on the basis of the accounting policies on page 11. The project is financed by IDA No: 50940 and 58510 RESPECTIVE RESPONSIBILITIES OF THE PROJECT MANAGEMENT AND AUDITORS The project management office and the project financial management unit coordinates the activities of the project and are as such responsible for preparation of the financial statements. It is our responsibility as auditors to express an independent opinion, based on our audit, on these financial statements and to report our opinion to you. BASIS OF OPINION We conducted our audit in accordance with international standards 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 judgments made by the project officers in the preparation of 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 assurance that the financial statements are free of material misstatement, whether caused by fraud, other irregularities or errors. In forming our opinion, we also evaluated the overall adequacy of the presentation of the financial statement. 6 Akanji Ibrahim & Co. Chartered Accountants OPINION In our opinion, the project financial statements give a true and fair view of the financial position of the project and of the cash flow statement of Nigerian State Health Investment Project for the period ended February 28th, 2021 in accordance with relevant International Accounting Standards. The Statements of Expenditure (SOE) are in agreement with the books of the accounts and adequate supporting document has been maintained to support claims to the World Bank for reimbursement of expenditures incurred, and which expenditures are eligible for financing under the credit agreement. The statement of Special Account (SA) of the project have been prepared on the basis of cash deposit and withdrawals for purpose of complying with the credit agreement and give a true and fair view of the beginning and ending balances and the account activity for the period ended February 28th, 2021. 7 Akanji Ibrahim & Co. Chartered Accountants ADAMAWA STATE NIGERIA STATE HEALTH INVESTMENT PROJECT (NSHIP) STATEMENT OF FINANCIAL POSITION (BALANCE SHEET) FOR THE PERIOD FEBRUARY 28th, 2021 2021 2019 NOTE N N ASSETS EMPLOYED Fixed Assets 2 - 629,509,367 CURRENT ASSETS Bank and Cash Balances 3 167,806 (629,509,367) DEVELOPMENT EXPENDITURE Development Capital Expenditure 4 9,101,744,517 - Development Operating Expenditure 5 5,817,125,252 108,915,887 TOTAL ASSETS 14,919,037,575 108,915,887 FINANCED BY:- IDA Credit 6 14,915,917,040 Miscellaneous Income 39,817,016 Exchange Gain 7 3,120,535 69,098,872 14,919,037,575 108,915,887 8 Akanji Ibrahim & Co. Chartered Accountants ADAMAWA STATE NIGERIA STATE HEALTH INVESTMENT PROJECT (NSHIP) STATEMENT OF FINANCIAL PERFORMANCE (RECIEPTS AND PAYMENTS) ACCOUNT FOR THE PERIOD ENDED FEBRUAY 28TH, 2021 2021 2019 NOTE N N RECEIPTS IDA Fund 8 3,480,737,718 92,559,150 Interest Earned 9 1,880,000 1,016 Total Receipts 3,482,617,718 92,560,166 PAYMENTS Goods 10 382,670,900 Training, Workshop & Consultancy 11 556,266,066 Other Operating Costs 12 338,383,707 108,915,888 Incentive to Facilities 13 2,205,129,240 - Total Expenditure 3,482,449,912 108,915,888 Excess of Payments over Receipts 167,806 (16,355,722) 9 Akanji Ibrahim & Co. Chartered Accountants ADAMAWA STATE NIGERIA STATE HEALTH INVESTMENT PROJECT (NSHIP) CASH FLOW STATEMENT FOR THE PERIOD ENDED FEBRUARY 28TH, 2021 2021 2019 N N CASH FLOW FROM OPERATING ACTIVITIES Miscellaneous Icome - 92,560,166 Interest Earned 1,880,000 Total Receipt 1,880,000 92,560,166 PAYMENTS Total for Operating Activities 5,730,936,231 108,915,888 Net Cash flow from Operating Activities (A) (5,729,056,231) (16,355,722) CASH FLOW FROM INVESTING ACTIVITIES Purchase of Assets 382,670,900 - Net Cash flow from Investing Activities (B) 382,670,900 - CASH FLOW FROM FINANCING ACTIVITIES IDA Credit 3,480,737,718 Add Exchange Gain - 1,016 Net Cash flow from Financing Activities (C) 3,480,737,718 1,016 Cash and Equivalent (A+B+C) (1,865,647,613) (16,354,706) Cash and Equivalent at the begining 1,865,815,419 1,882,170,125 Cash and Equivalent at the end 167,806 1,865,815,419 10 Akanji Ibrahim & Co. Chartered Accountants ADAMAWA STATE NIGERIA STATE HEALTH INVESTMENT PROJECT (NSHIP) NOTES TO THE ACCOUNTS FOR THE PERIOD ENDED FEBUARY 28TH, 2021 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES The following significant accounting policies were adopted in the preparation of the financial statement; a) Basis of Preparation The accounts were prepared under the historical cost convention b) Recognition of Gains on Exchange Rate Gains received is recognized on actual basis as and when received c) Cost of Asset Acquisition The cost of asset acquired is written off to the Receipt and payment account in the year of acquisition. d) Foreign Currency Transaction in foreign currency in any given year were converted to naira at the exchange rate ruling at the date of transaction. Outstanding balances on special accounts are reported at their naira equivalent using rates of exchange at the financial year end. e) Stock Stock is fully written off as consumable in the year of purchase. 11 Akanji Ibrahim & Co. Chartered Accountants ADAMAWA STATE NIGERIA STATE HEALTH INVESTMENT PROJECT (NSHIP) NOTES TO THE ACCOUNTS (CONT’D) FOR THE YEAR ENDED FEBRUARY 28TH, 2021 2. FIXED ASSET SCHEDULE Hospital and Plant & Furniture & Motor Vehicle Laboratory Communication Machinery Fittings Total Equipment Civil Work Equipment Cost N N N N N N N As at 1/1/2020 738,714,350 204,392,105 7,630,000 63,673,281 84,230,040 113,654,399 265,134,525 Additions during the year 382,670,900 - - 231,000,000 151,670,900 - - Transfer to Health Facilities and ADSPHCDA 1,121,385,250 204,392,105 7,630,000 294,673,281 235,900,940 113,654,399 265,134,525 As at 28/02/2021 - - - - - - - 12 Akanji Ibrahim & Co. Chartered Accountants ADAMAWA STATE NIGERIA STATE HEALTH INVESTMENT PROJECT (NSHIP) NOTES TO THE ACCOUNTS (CONT’D) FOR THE YEAR ENDED 28TH FEBRUARY, 2021 2021 2019 N N 3. CASH AND BANK BALANCES a. Zenith Bank Plc. Special Account No. 5070148548 USD @ 359 0.00 599,325.37 b. Interest Special Account No.: 5070305411 USD 0.00 0.00 Current Draw Down Account No: 1012656272 167,805.71 (630,108,692.37) 167,805.71 (629,509,367) 4. DEVELOPMENT CAPITAL EXPENDITURE (N9,101,744,517) This represents the cumulated amount expended Consultancy, incentives and Goods to Health Facilities in all the 21 local government areas in Adamawa State from the inception of the project. 5. DEVELOPMENT OPERATING EXPENDITURE (N5,817,125,252) This represents amount expended on salaries, workshops, and other operating expenses that occurs on regular basis which enable the smooth running of the project from the inception of the project. 6. IDA CREDIT (N14,915,917,040) This represents IDA Credit received since inception to February 28th, 2021. 7. EXCHANGE GAINED (N3,120,535) This represents the exchange gained from inception to February 28th 2021. 13 Akanji Ibrahim & Co. Chartered Accountants 8. IDA FUND (N3,480,737,718) This represents amount received from IDA during the year ended 28th February 2021. 9. INTEREST EARNED (N1,880,000.00) This represents this represent the interest earned during the period under review. 10. GOODS AND EQUIPMENT (N382,670,900) This represents the cost of Ambulances acquired during the period ended 28th February 2021. 11. TRAINING WORKSHOP AND CONSULTANCY (N556,266,066) This represents sundry payment for training and workshop during the period under review 12. OTHER OPERATING COST (N338,383,707) This represents the total operating cost during the year ended February 28 th 2021. 13. INCENTIVES TO FACILITIES (N2,205,129,240) This represents incentives paid to various health facilities in the 21 local government areas of Adamawa state. 14 Akanji Ibrahim & Co. Chartered Accountants ANNEX TO THE ACCOUNTS FOR THE YEAR ENDED FEBRUARY 28TH, 2021 RECONCILIATION OF ZENITH BANK PLC. SPECIAL ACCOUNT NO.: 5070148548 Transaction Summary The summary of transactions through the Domiciliary Special Account for the year. USD $ Balance as at 1/1/2020 1,669.43 Add: Lodgments during the year 9,022,870.58 9,024,540.01 Less: Payments during the year 9,024,540.01 0.00 BANK RECONCILIATION STATEMENT AS AT FEBRUARY 28TH, 2021 USD $ Balance as per Bank Statement 0.00 Same as: Balance as per adjusted cashbook 0.00 15 Akanji Ibrahim & Co. Chartered Accountants