GHANA EDUCATION SERVICE In case of reply the number and date HEADQUARTERS Of this letter should be quoted P. 0 . BOX M. 45 ACCRA REPUBUCOF GHANA 30TH JUNE, 2017 THE COUNTRY DIRECTOR WORLD BANK GHANA OFFICE ATTN:BOB/CHARLOTTE Dear Sir, GHANA PARTNERSHIP FOR EDUCATION GRANT (GPEG)/GPASS SUBMISSION OF AUDIT REPORT OF FINANCIAL STATEMENT FOR THE YEAR ENDING 31 sr DECEMBER, 2016 I fo rward herewith Report on audit of the Financial Statements and activities of the above mentioned projects for the year ending 3pt December, 2016. -AMANKWA GHANA EDUCATION SERVICE P.O. BOX M45 ACCRA REPUBLIC OF GHANA GHANA PARTNERSHIP FDR EDUCATION GRANT (GPEG) GHANA EDUCATION SERVICE (GES) [IDA GRANT No. TFD1314D-GH] PROJECT FINANCIAL STATEMENTS 31 DECEMBER 2DIS TABLE OF CONTENTS PAGE REFERENCE GENERAL INFORMATION 1 INDEPENDENT AUDITOR'S REPORT ON GPEG FINANCIAL STATEMENTS 2-3 STATEMENT OF FINANCIAL POSITION 4 STATEMENT OF SOURCES AND USES OF FUNDS 5 NOTES TO THE FINANCIAL STATEMENTS 6-8 GENERAL INFORMATION PROJECT BACKGROUND The Global Partnership for Education Fund Grant (GPEG) is a grant from the multi-donor Global Partnership for Education (GPE) allocated to the Republic of Ghana for a three year implementation period . The project supports a decentralized mechanism for more reliable funding of non-salary expenditures in basic education . There are three components: the first provides Sub-Grants to Deprived Districts to support key education objectives. The second component provides sub-grants to schools in the Deprived Districts to complement capitation grant funding . The third component focuses on programme management, institutional strengthening and monitoring and evaluation of project activities. Objective: The Project objective is to improve the planning , implementation and monitoring capacity of ongoing government efforts to decentralize education resources to the district and school levels. The project sought to catalyze funding for education service delivery in the deprived areas in Ghana, which were lagging behind the rest of the country in terms of educational outcomes. Source of funding: The International Development Association (IDA) acting as an administrator of the Global Partnership for Education Fund will provide an amount of USD$75.5 million as a three-year grant facility to the Government of Ghana. The funding arrangement will employs a traditional investment technical grant assistance and management to support the overall program . GPE Grant Amount: USO$ 75. 5 million Component 1: USO$ 42.36 million Component 2: USO$ 22. 06 million Component 3: USO$ 4. 58 million Approval date: 22 November, 2012 Start date: 15 February, 2013 Completion date: 31 August, 2016 Implementing Agency: Ghana Education Service (GES) IMPLEMENTATION COMMITTEE Mr. Enoch Cobbinah , Chief Director - Chairman Mr. Jacob Kor, Director-General , GES - Member Dr. Stephen Adu , Director, Basic Education - Member Dr. Chris Koramoah , Financial Controller GES - Member Mr. Kwame Agyapong , Project Coordinator - Member Dr. Evelyn Oduro, Director of Technical Education - Member Mrs. Beatrice Zalia Ali , Director of Supply & Logistics - Member ADDRESS Ministry of Education P.O. Box M45 Accra AUDITORS Ghana Audit Service Post Office Box MB 96 BANKERS Agriculture Development Bank 1 I AUDIT SERVICE In case of reply the number and date of the letter should be quoted My Ref. No:,,l_r;?.f>!..{P.r!./.~.lJ.9n'll 7/~!, Good Governance Your Ref. No~ ................................ . and Accountability P. 0. Box............. M....91> ................................... Tel: 233 (0) 302 664920/28/29 ....................................8~.<;RA ............................ . Fax: 233 (0) 302 6751495 Website: www.ghaudit.org ......................~~ ..... !.~ .~~!.................20.~!.......... INDEPENDENT AUDITOR'S REPORT TO THE CHIEF DIRECTOR, MINISTRY OF EDUCATION (MoE) REPORT ON THE PROGRAMME FINANCIAL STATEMENTS We have audited the financial statements of the Ghana Partnership for Education Grant (GPEG) under the International Development Agency (IDA) Grant referenced TF01340- GH which, comprises the statement of financial position as at 31 December, 2016, the statement of sources and uses of funds for the year ended 31 December, 2016 which, have been prepared under the historical cost convention and on the basis of the accounting policies set out in Note 1. Management's responsibility for the financial statements The financial statements are the responsibility of the Management of GPEG under the Ghana Education Service, acting as the implementing agency, of the Ministry of Education (MoE). The Management of GPEG is responsible for the preparation and fair presentation of these financial statements in accordance with generally accepted and accounting practice and IDA Grant referenced TF01340-GH as well as for such internal control as management determined is necessary to enable the preparation of the financial statements free from material misstatement whether due to fraud or error. This responsibility includes designing, maintaining adequate financial management arrangements and ensuring that these continue to be effective throughout the reporting period; maintaining proper accounting records , which disclose with reasonable accuracy at any time of the financial position of the Programme ; designing , implementing and maintaining internal controls relevant to the preparation and fair presentation of the Financial Statements and ensuring that they are free from material misstatements, whether due to fraud or error; safeguarding the assets of the programme ; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Auditor's 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 of Supreme Auditing Institutions (ISSAls) and the guidelines in the Grant Financing Agreement. Those standards require that we comply with the ethical requirements and 2 I plan and perform the audit to obtain reasonable assurance on whether the Financial Statements are free from material misstatement whether caused by fraud , other irregularity or error. An audit includes performing procedures to obtain audit evidence about the amounts and disclosures in the Financial Statements. The procedures selected depend on the auditor's judgment, including the assessment of the risk of material misstatement of the Financial Statements, whether due to fraud or error. In making those risk assessments, the aud itor considers internal controls relevant to the entity's preparation and fair presentation of the project 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 entity'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 we have obtained sufficient appropriate audit evidence to provide a basis for our audit opinion . Opinion In our opinion , the Financial Statements present fairly , in all material respects , the financial position of GPEG as at 31 December, 2016, and the results of its operations for the period then ended in accordance with the provisions of the Grant Financing Agreement (Grant referenced TF01340-GH) and the accounting policies set out in Note 1 of the project financial statements. Report on compliance In addition , Management has complied , in all material respects , with the covenants of the Grant Financing Agreement (Grant referenced TF01340-GH) and the applicable Government Regulations , and that the funds received during the period under audit were used for the eligible purposes for which they were intended and were properly accounted for as at the year ended 31 December, 2016. Restriction of use This report is intended solely for the use of the Management of the project, IDA, Global Partnership for Education and the Government of Ghana , and should not be used for any other purpose . Signed by: WINFUL YA ENERAL/PSAD FOR: AUDITOR-GENERAL 3 GHANA EDUCATION SERVICE GHANA PARTNERSHIP FOR EDUCATION GRANT IDA GRANT NUMBER: TF01340-GH STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER, 2016 31 December 31 December 2016 2015 NOTE USO$ USO$ NON-CURRENT ASSETS Non capital expenditure 2 75 ,647 ,939.00 67 ,056 ,753.00 CURRENT ASSETS Bank and cash balances 3 4,629.00 3,572,264.00 Total Assets 75,652,568.00 70,629,017.00 FINANCED BY IDA Designated Grant A/C 4 75 ,500 ,000.00 70,486,631.00 Other Income 5 152,568.00 142,386.00 75,652,568.00 70,629,017.00 Financial C ntroller, GES Prof. Kwasi Dr. Chris Koramoah Date: Date: The attached notes 1 to 10 form an integral part of these financial statements. 4 GHANA EDUCATION SERVICE GHANA PARTNERSHIP FOR EDUCATION GRANT IDA GRANT NUMBER: TF01340-GH STATEMENT OF SOURCES AND USES OF FUNDS FOR THE PERIOD ENDED 31 DECEMBER, 2016 Cummulative Total 2016 2015 2016 NOTE USO$ USO$ USO$ Balance as at 1 January 3,572,264.00 2,877,476.00 0.00 Receipts: Replenishment to IDA Grant 5,013 ,293 .00 23,887,837 .00 75,500,000.00 Designated A/C Other Receipts (Interest earned) 10,258.00 27 ,790.00 152,568.00 Total Project Receipts 8,595,815.00 26,793,103.00 75,652,568.00 Uses of Funds Districts APW Support Grant 6 7,608 ,609.00 15,261 ,665.00 62 ,373 ,985.00 School Grant 0.00 6.113,515.00 6,113,515.00 Monitoring 7 181 ,000.00 509,426.00 1,074 ,149.00 Training and Development 8 32 ,376 .00 592 ,940.00 1,974 ,630.00 Consultancy 9 656 ,985 .00 0.00 656,985.00 Operati ng Cost 10 112,216.00 743 ,293.00 3,454,675.00 Total Project Expenditure 8,591,187.00 23,220,839.00 75,647,939.00 Balance as at 31 December 4,629.00 3,572,264.00 4,629.00 Bank and cash reconciliation analysis as at 31 December IDA GPEG Special US$ A/C 24.00 2,028 ,375.00 24.00 Bank Balances at District Offices 0.00 1,273 ,961 .00 0.00 IDA GPEG Special Cedi A/C 4,605 .00 269,928.00 4,605.00 Bank and cash balances as at 31 December 4,629.00 3,572,264.00 4,629.00 The attached notes 1 to 10 form an integral part of these financial statements. 5 I GHANA EDUCATION SERVICE GHANA PARTNERSHIP FOR EDUCATION GRANT IDA GRANT NUMBER: TF01340-GH NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER, 2016 1. Significant Accounting Policies The following are summary of the significant accounting policies adopted in the preparation of the financial statements: Basis of accounting The financial statements have been prepared on IPSAS cash basis and under the historical cost convention . This means that revenue and expenditures are recognized in the financial statements only when they are receive and paid for respectively . Under the historical cost convention , assets and liabilities are reflected or disclosed in the financial reports at the cost incurred or price paid at the time of transaction . Revenue and expenditure Revenues are recognised when funds are received from IDA and expenditures are accounted for in the year when goods, works and services are incurred and paid. Donor/Financier Funds received are accounted for on cash basis. Foreign currency exchange Transactions that are denominated in currencies other than the United States Dollars are translated in United States Dollars at the exchange rate prevailing at the date of transactions . However, transactions in the sources and uses of funds for the year are translated using the average rate . Bank and cash balances denominated in other foreign currencies are translated into US Dollars at the rate prevailing at the end of the year. Non capital expenditure All non-capital items other than fixed assets for the Project Coordinating Unit shall be treated as fictitious assets in the statement of financial position . School Support Grant - UTDBE This represents expenditure incurred on tuition for UTDBE teachers in deprived districts, facility user-fee cost, modules , and the monitoring and field support of the UTDBE trainees aimed to train untrained teachers already working in basic schools. 6 I 2. Non capital expenditure Opening Additions Closing balance during the year balance 1 January, 2016 31 December, 2016 USO$ USO$ USO$ Districts APW Support Grant 54,764,216.00 7,608,609.00 62 ,372,825.00 School Support Grant UTDBE 6,113,515.00 0.00 6,113,515.00 Monitoring 893,148.00 181 ,001 .00 1,074,149.00 Training and Development 1,942 ,254.00 32 ,376.00 1,974,630.00 Consultancy 0.00 656,985.00 656,985.00 Operating Cost 3,343 ,619.00 112,216.00 3,455,835.00 67,056,752.00 8,591.187.00 75,647,939.00 3. Bank and cash balances This represents available cash and cash equivalents for the continuation of the project and settle any project related liabilities . 2016 2015 USO$ USO$ IDA Grant Designated USO A/C 24.00 2,028,375.00 Bank balances at District Offices 0.00 1,273,961 .00 IDA Grant Designated Cedi A/C 4,605.00 269,928.00 4,629.00 3,572,264.00 4. IDA Grant 2016 2015 USO$ USO$ Balance as at I January 70,486,707.00 46,598 ,870.00 Additions 5,013,293.00 23,887,837.00 Balance as at 31 December 75,500,000.00 70,486,707.00 5. Other income This represents interest earned on bank balance as at the end of the year. 6. District Annual Programme of Work (APW) Th is represents expenditure incurred for the districts to implement their APW which focused on local priority needs but aligned with government strategic priorities . 7 I 7. Monitoring This represents expenditure incurred on Monitoring and Evaluation (M&E) activities to complement data collection on achievement of results on the implementation of the project. 8. Training and Development This represents expenditure incurred on coordination , planning , organizing strategic and regular training sessions for beneficiaries and implementing agencies . 9. Consultancy This represents expenditure incurred on engaging the services of experts to provide unique services during project implementation. 10. Operating cost This represents procurement of goods and services needed for specific activities, and other incremental operating costs towards project implementation . 8 I