REPORT ON THE FINANCIAL STATEMENTS OF THE SOLAR PV DEMONSTRATION AND SCALE UP PROJECT FINANCED BY: SIDS DOC GRANT TFOA1671 PREPARED BY: THE PROJECT CO-ORDINATION UNIT OF DEPARTMENT OF ECONOMIC DEVELOPMENT, TRANSPORT AND CIVIL AVIATION FOR THE PERIOD MAY 30, 2016 TO DECEMBER 31, 2019 JUNE 2020 AUDIT OF THE RESOURCES MANAGED DURING THE PERIOD MAY 30, 2016 TO DECEMBER 31, 2019 BY THE MINISTRY OF INFRASTRUCTURE, PORTS, ENERY AND LABOUR UNDER THE SOLAR PV DEMONSTRATION AND SCALE UP PROJECT FINANCED BY WORLD BANK GRANT AGREEMENT NO. TFOA1671. TABLE OF CONTENTS 1 PAGE TRANSMITTAL LETTER SUMMARY Background 1 Scope and Objectives of the Audit 2 Results of the Audit 4 PROJECT FINANCIAL STATEMENTS Auditor's Report 5 Project Sources and Uses of Funds 7 Statement of Cash Balances 7 Statement of Cumulative Investment 8 Notes to Financial Statements 9 Schedules 13 Tables 15 INTERNAL CONTROL STRUCTURE Auditor's Report 18 DESIGNATED ACCOUNT RECONCILIATION Auditor's Report 20 Designated Account Reconciliation 22 COMPLIANCE Auditor's Report 23 STATEMENT OF REQUEST FOR REPLENISHMENT (IFRs) Auditor's Report 25 GOVERN MENT OF SAINT LUGIA Office of the Director of Audit Conway Business Centre, Level 3, Jn. Baptiste Street Castries, Saint Lucia W.L Tel: 758-468-1508;1510;1501 Fax: 758-468-1534 E-mail: audi0gosl.ov.1c Ref. No. GF 5506-204 July 20, 2020 Mr. Ivor Daniel Permanent Secretary Ministry of Infrastructure, Ports, Energy and Labour Union CASTRIES Dear Mr. Daniel, Enclosed, please find the Audit Report on the Financial Statements of the Solar PV Demonstration and Scale-Up Project for the period May 30, 2016 to December 31, 2019. The Project is financed by the International Development Association (IDA) and International Bank for Reconstruction and Development (IBRD) SIDS DOCK Grant No. TFOA1 671. Yours faithfully, Yvonne James DIRECTOR OF AUDIT Enc. "Tmnards Greater Accountabilit" I 1 PROJECT BACKGROUND The Government of Saint Lucia (GOSL) received Grant funds from the Small island Developing States (SIDS) DOCK channelled through the International Development Association (IDA) and International Bank for Reconstruction and Development (IBRD) towards the financing of the Solar PV Demonstration and Scale up Project. The respective Grant Agreements made provision for total funding of United States six hundred thousand dollars (US$600,000). The Project became effective on May 30, 2016 and closed on September 30, 2019. PROJECT OBJECTIVES The objectives of the project are to: (i) demonstrate the use of commercial scale PV system in the Caribbean through pilot projects: and (ii) disseminate the results to contribute to future scale up of such systems. PROJECT COMPONENTS/PARTS The Project consists of the following parts: Part 1: Establishment of a Commercial Scale Rooftop PV Pilot: Provision of technical assistance for: (i) solar PV technical support, including: to structure and implement ownership and operational arrangements; carry out any necessary feasibility work and design of the system; draft the technical specifications for the tender documents and to supervise the installation; (ii) dissemination and training activities; and (iii) supervision and management of Project activities and operating costs. Part 2: Commercial Scale Rooftop PV System: Supply and installation of commercial rooftop PV systems in public buildings in the Recipient's territory. (The location identified for this pilot is the Owen King National Hospital). Institutional and Other Arrangements The Project was executed by the Energy Unit which at Project start resided with the Ministry of Sustainable Development, Energy, Science and Technology (MOSDEST). By Project close, the Project had been reassigned to the Renewal Energy Division of the Ministry of Infrastructure, Ports, Energy and Labour. The project management arrangements were such that the Project Coordination Unit of the Department of Economic Development, Transport and Civil Aviation carry out: (i) Coordination, Implementation, Monitoring and Evaluation of the Project; (ii) Processing of documentation required for disbursement of the Grant proceeds and for procurement activities under the Project; and (iii) preparation and maintenance of the records, accounts and financial statements. 1 OBJECTIVES The purpose of the audit was to express a professional opinion on the financial position of the project at the end of the period audited and to report on the adequacy of the internal controls. With this in mind, the specific objectives of the audit were to: - Issue an opinion as to whether the Project financial statements are prepared, in all material respects, in accordance with the applicable special purpose financial reporting framework. - Issue an opinion as to whether: (a) the expenditures reported are eligible for financing; and (b) grant funds have been adequately reflected in the financial statements used only for Project purposes. - Issue an opinion on the Statement of Request for Replenishment (IFRs) for the period audited as to: (a) the eligibility of the expenditures submitted for replenishment, (b) the adequacy of the control procedures for preparing the IFRs, and (c) the correct use of the grant funds. - Issue a report with respect to the adequacy of the internal control structure of the implementing institution in regard to the project. - Issue an opinion with respect to the implementing entity's compliance with the terms of the grant agreement and applicable laws and regulations (with regard to the financial aspects). - Issuing an opinion as to whether the Designated Account Statement adequately reflects the flow of funds for the Designated Account during the period audited, and the funds has been only for the purposes of the Project. SCOPE The audit covered the period May 30, 2016 to December 31, 2019. The audit was guided by the International Standards of Supreme Audit Institutions (ISSAls) issued by the International Organization of Supreme Audit Institutions (INTOSAI) and conducted in accordance with the World Bank's requirements. To meet the audit objectives our work included the following procedures: - Review of the following documents to become familiar with the Project and its operating environment: * Financing Agreement (SIDS DOCK Grant No. TFOA1671) * Guidelines Selection and Employment of Consultants under IBRD Loans and IDA Credits & Grants by World Bank Borrowers - January 2011 (revised July 2014) * Guidelines Procurement of Goods, Works and Non Consulting Services under IBRD loans and IDA credits by World Bank Borrowers - January 2011 (revised July 2014) * Financial Management Procedures Manual * Procurement Plan * Estimates of the Government of Saint Lucia 2016/17,2017/18, 2018/19, 2019/20 2 * Revised Laws of Saint Lucia, Chapter 15.01, Finance (Administration) Act * Revised Laws of Saint Lucia, Chapter 15.01, Financial Regulations * Revised Laws of Saint Lucia, Chapter 15.01, Procurement & Stores Regulations I- Evaluation of the Project Co-ordination Unit (PCU) internal control structure to assess the extent of compliance with government policies and the requirements of the agreement with the Bank. - Examination of activities undertaken, reports and systems maintained by the PCU during the audited period pertaining to: Cash and Bank Balances Receipt of Funds Uses of Funds (Expenditure) Internal Controls Compliance with Applicable Laws and Regulations 3 RESULTS OF THE AUDIT Project's Financial Statements The Project Sources and Uses of Funds Statement present fairly the financing and expenditure of the Project. For the audited period, total expenditure reported was US$613,834.21 (US$594,407.37 being IDA's contribution and US$19,426.84 being GOSL's contribution). We noted that IDA's expenditure was eligible for financing as per IBRD SIDS DOCK GRANT TFOAI671 and that project funds were used in accordance with the conditions of this financing agreement. 1 Total revenue reported for the period ending December 31, 2019 was US$621,040.87 consisting of US$600,000 being reported as total revenue from IDA for the period while US$21,040.87 was reported as GOSL's contribution. At the end of the financial year the Designated Account reflected a balance of US$$5,592.63 representing World Bank's funds and an amount of US$1,614.03 representing GOSL funds from receipts from Sale of Tender documents. Internal Control Structure In planning and performing our audit, we considered the PCU's internal control structure in order to determine our auditing procedures for the purpose of expressing an opinion on the financial statements. Our evaluation included two levels of control i.e., the general control environment and specific control procedures in various systems. These included: cash and bank balances; receipts of funds; uses of funds (expenditure); compliance with applicable laws and regulations. The internal control structure for the period under audit was assessed and we found the controls to be fair with some improvements required. All financial aspects of the Project undertaken by the implementing entities were controlled and verified by the PCU. However, we noted the following: * Capital expenditure and revenue were not accurately reflected in the Central Government's accounts; * Delays in procurement of activities and allocated cost for turnkey contract was exceeded; * Bank accounts were not closed; * "A" receipts were not issued in numeric sequence; Compliance with Agreement Terms and Applicable Laws and Regulations In order to obtain reasonable assurance as to whether the financial statements were free from material misstatement, we performed tests of compliance to ensure agreement with the terms of the financing agreement and applicable laws and regulations. We noted the following: * Income tax was not deducted from remittances of employees; and * Project Reports were not submitted as required. 4 OVERNMEN OF SAINT LUCIA Offlee of the Director of'Audit Coniwa Business Centre, Level 3, Ji. Baptiste Street Castries, Saint Lucta W.I. Tel: 758-468-1508;1510;1501 Fax: 758-468-1534 E-mail. audiA@ZostZv.k INDEPENDENT AUDITOR'S REPORT ON THE FINANCIAL STATEMENTS To: Permanent Sectetary, Ministry of Infrastructure, Parts, Energy and Labour Opinion We have audited the accompanying Statemen of Sources and Uses of Funds and a summary of significant accounting policies and other explanatory notes for the Solar PV Demonstration and Scae-Up Project executed by the Ministry of Infrastructure, Ports, Energy and Labour, financed by the Internationa Devlopment Association (IDA) and Intemnational Bank for Reconstructior and Development (IBRD) SIS DOCK GRANT TF0A1671 for the period May 30, 2)16 to December 31, 2019 In our opinion, the accompanying special purpose financial statenents for the Solar PV Demonstration nd Scale-Up Project presents ir all material respects, the financial position of the project, in accordance with the basis of accounting described in Note 2, the financial reporting provisions outlined in the respective egal agreements with the Bank and co-financing organization. n addition, expenditure reported were elig ble for financing and grant funds were used only for the project purposes. Basis for Opinion Our audit was guided by he International Standards for Supreme Audit Institutions (18Als) issued by the Internaitiona Organization of Supreme Audit Institution (INTQSA and conducted in accordance with the World Bank Guidelines. Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Financial Statement section f our report. We are independent of the Project in accordance with the Code of Ethics for Auditors in the SAI of $aint Lucia, and we have fulfilled our other responsibilities in accordance with the Code of Ethics. We believe that the adit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Other Matter - Restriction on Use (and Distribution) Basis of Accournting and Restriclern on Distribution and Use We draw attention to Note 2 to the special purpose financial statements, which desenbe the basis of accounting The special purpose financial statements are prepared to comply with the financial reporting provisions of the World Bank. As a result, the financial statements and related auditor's report may not be suitable for another purpose. Our report is intended for the World Bank and Government of Saint Lucia and should not be distnibuted to or used by parties other than the World Bank and Govemnment of Saint Lucia. Should any third party take decisions based on the contents of the report, the responsibility for such decisions shall remain with those third parties Our opinion is not modified in respect of this matter "Towards Greater Accountablhty 5 Responsibilities of Management and Those Charged with Governance for the Financial Statements Management is responsible for the preparation of the financial statement in accordance with the basis of accounting described in Note 2 and financial reporting provisions outlined in the respective legal agreements with the World Bank and other co-financing organizations. This responsibility lniudes: designing, inplementing and maintaining intenal controls relevant to the preparation and fair presentation of the special purpose financial statements that are free from material misstatement, whether due to taud or error; selecting and applying appropriate accounting policies, and 1 making accounting estimates that are reasonable in the circumstances. Those charged with governance are responsible for overseeing the Project's financial reporting process. Auditors Responsibilities for the Audit of the Fmancial Statements Our responsibility is to express an opinion on these special purpose financial statements based on our 1 audit. The ISSAls issued by the INTOSAI and the World Bank's Guidelines, specifically, the Annual Financial Reporting and Auditing for World Bank-Financed Activities require that we comply with eth ical requirements as well as plan and perform the audit to obtain reasonable assurance about whether the specia purpose financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts represented on, ard disclosures in the Financial Statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of mater tenf aial statements whether due to fraud or error. In conducting those risk assessments, the auditor considers intemal controls 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. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by program management, as well as evaluating the overall presentation of the financial statements. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies n intemal control that we identify during our audit. Yvonne James (Ms.) DIRECTOR OF AUDIT Castries, Saint Lucia April 7,2020 " Towards Greater Accountability" 6 , __� �_� �� � _� _ й � '3 4 � t�9 � �, °'уг � � � � а , . � л°�. а � , . �� � � � ш а � , v..а д � э � ~ '�j ,. a�q т b Ф й й й.., й ���..� ro ��� 'U б � ц с � _ G* +cS,� W� й � м » � о а �°а ё'.w � �,. �� N Qi � Ob D9 А s дТ Q � С О 4 � G G С]�....,. ,9 е�+Э � 0�9 - 4рΡ QQ ^'1 YWi � .. _ �� ' � О й �� О�j 1 О Р � • �,� в о о т v�. �у а� 6 �0 �'$ °о А °' °`_ �$.' �°' е . `Q +D b И иг� w� 0 ~ Ji +Q�` � N С .� Т м � 4 � � Гs,.� С a�r р х т о � .и ..,й й �� �°а ^�, b�.6 � �+а. С i� N N� v ОуΡ t- r а, д' �д а � � т� С3 � Ё � � b Сь О, ' о д тг s�o ` �с U ... _�i �:i G о'i CS Vj � � Р ш_' L' д г°�F pQ �С�'�-� °r� - й - Фт �� � `di GП q� .i ё b ё�f ,O Е'� '� � 0'�'. � й w���a о&R� рΡ � с а � b ьУ. � р�у � W 6 49 О Р У. Е�б � О� S� �• '"' b�bC Р�О О'b0 дl �� р. �zJ �г�i V� СрΡ 8 а�+. rv г,у g n' � • � ���е О в�д у О О д•� ц L_ м О� 9 4 '4' � '� n О � С' b и N Й Й� V� L у�., С т� Q i' МPJ �С ',.°а° о а°. '^*й� $ а� '"`� 6 м � � о СП (R W у �� `О � а ��� '^ iR пh W W �� О ь � Ф ��. .ы ,� ,� одел�i,� g � и � .� GyА Еi , х ��да $ и и ы � ° s. `+ у �...... о ы � ��, х L .� а аг V3 б и Йi р L � 4 '� у °" sЗ С а > ы с. я р. � ' ^ с� а о• $ $ � 'ai а ы д � R п а � `ж и й ° й �л' � � ы а� в й й й = .. � ® .� ¢ Е й =, Ё� 9 �� jg, а ,�, ...... � . ё Е $ Е�ц ✓l � '" � ar �,. а °г� ,� � т ОС UW �г3' �i °°а_ 0 " ,4 � е С � ш т'уп -t b а С w � � `о .� � n ё t � � � .'�. '�� б ьн ,i'��ЪЗ v' о� х`с�с"'j � �`" у° ач � � � �' � и 'дЗ �+ V � � F' а` `i' , т '�б � : � `� w_ v � а `� т .ш_. � i _� ц ����д .� �� д ь�,, � г ° 5 0.l С 4 JJ � � � .3 r а. О Е 1'7 Q С 'уэ д г �_ У�! ��. � ' � к� е а� Ct .У � G� � � .�� �4 �"�ш о ы gw F �_.4 U �t: У V ?С3л,г�Q �`�рΡ�.ёй � ¢ .�"ЪV..,�аа0 �•� � о ' а� '- �rv_. о�'и •r�к о J r � 'с_°-�о �,�U �� �� Qti n..y! 4?�и �.у L � ��.�. �, . � tl � ° '� о�ор ° v о о�о`Л д U$ .�1 !: 4ё7д й�Glvi Ёг�'•tn�,R� �.^�.3а.С71.°,г 7Uia.�E� �' .............. � .�.� � � � л.� �� °� �.. � � � ы � О С У и � � Е `о � ы � � ы � � С а � .Q � ` s °о о° © Q �� у .. � У�i о о о о = ь� ,� }+ � �У У и О ' � •= = а CS w � Q Е С С L: , `^ О 0+ U W 5Т� .... О� д б � > > р � м о. о о � - .��. СО о о fl О ° : ""7 у.от .(��г' О ц...� У а С F 4 ОС} �' '� � 'С! и F � .'1. 7 гн у Д� д U Е � � и. �' а�. ь : � U � О о : ' � "" . V ® � � й r�i, а� 9 .::у � 4 оь v. Е r v�. •л й � L т4 *в ~ � У •tVJ 1� .� � � � iы. � .t'.� м р > О у и � 4С Е� �" �_р б? :. �" •д _ � р - � с� � Q £ � � Ё ° � � у �-°-� fs. � а� � � п, аё : : � 'и , б и � , w ' ; г. „а � F' � у W �.оиЕ м "д n b у : : С � С 6i � � > о. ® � Р л �о ' � `у р .. е..._ � � L � �С ; L � � � ,н � � � ' � ь, �' ь .....� г«+ с ч �•-' � ' s оа � н и -� а i с а.д+ `� `'r� � !`� _ ' о а о � ° i 'Oм � �� �° � � г, С � с �� С U м � Е � N� � � м � �а. . � � �, д ° _ � �O -. у �j� � Q q вr 5� �~ и ® ne ,, 4� "' Г.�. `-' 4i } � F�.вr[ t' ^ ,'��. Q о � � � е� rыj •о Gj р�д � а л�' а ё an 'о � p,L . � � ~ w 'L. r � и" СС] � С С7 ..._.� Cr О�+ +�° С � �� у� С а. � $... . м � у ь. е.. 't" �� ц „ау�. ,а W U •а• �е+,. йf а. �' с... ш � б О У � r�.+ �� Д©Z4г°а де, 4 я ё�., fi � i ` GГ Б' `о 9И�i^ ё EN °� $ й �и =л r.�+ +�+ р �м . � � а°С° и ц 6,Q.�� Ф г� � ы bП bfl �' r� � F' � а r �л�� с!1 > .... �,, т С г е �, е 's у r � , � е . ` а F � � ё н � '� U '° w fi t' д а а °' � л � � ......_� � и .С � ы ё � '" а �: ае 'ь'1� � р , � � С � �� е �.. ` � �С� а о�. С7 л. � : � Notes to Financial Statements 1. Period Under Review This report captures activities undertaken by the Project during the period May 30, 2016 to December 31, 2019. 2. Accounting Policies The Project Coordination Unit (PCU) uses the modified cash basis of accounting to account for project transactions. This method is consistent with the accounting policy applied by the Government of Saint Lucia. The financial statements of the Project have been prepared in all material respects in accordance with the special purpose reporting framework as guided by the requirements of the World Bank. 3. Financial Report The Financial Report relates to activities coordinated and the records maintained by the Project Coordination Unit during the period under review. Transactions are recorded in the accounting systems in local currency however for preparing the Financial Statements and the Interim Unaudited Financial Statements the transactions are reflected in US dollars and converted at an exchange rate of 2.6882. 4. Bank Accounts Designated Account As part of the Financing Agreement the Government of Saint Lucia is required to maintain a Designated Account which consists of two (2) bank accounts, (the USD Bank Account # 901407495 and the XCD Bank Account # 901407304). The Bank Accounts are held at the Bank of Saint Lucia. The US Dollar bank account is held as a deposit account for the purpose of receipt of funds drawn against the Grant. Funds are transferred periodically from the US dollar Account to the EC dollar Account to cover eligible expenditures in the local currency. The US dollar Account is also used to enable payments in foreign currencies. Closing Cash Balance The Cash balances as at December 31, 2019 expressed in US dollars includes: LISD Account # 901407495 - USD 2,354.11 (inclusive of US$802.15 representing Net Receipts from Sale of Tender Documents). XCD Account # 901407304 - USD 4,852.55 (inclusive of US$811.87 representing Net Receipts from Sale of Tender Documents) The total balance as at December 31, 2019 is US$7,206-661 Appendix I contains the Bank Reconciliation Statements as at December 31, 2019. lUnutilized advances in the amount of USD 5,549.94 was reftinded to the World Bank in January 2020. 9 5. Sources of Funds SIDS DOCK GRANT TFA1671 During the period under review five (5) Withdrawal Applications were paid. Five Withdrawal Applications were deposited into the Designated Account # 901407495. The Table below shows the details of the transactions. 1 Advance to Oct 2016 - Mar 2017 01 Nov 2016 100,000.00 4 Advance to and Apr - Jun 2017 19 Jan 2018 59,237.73 documentation of designated Account 6 Advance to and Oct - Dec 2017 30 Mar 2018 71,522.21 documentation of designated Account 8 Advance to and Apr - Jun 2018 28 Sept 2018 362,238.34 documentation of designated Account 11 Advance to and Jan - Mar 2019 24 May 2019 7,001.72 documentation of designated Account TOTAL PAID ADVANCE 600,00.00 Other Receipts: Sale of Tender Documents The World Bank allows the Project to charge a nominal fee towards the cost of bidding documents. Such funds are utilized to defray printing and mailing/shipping costs associated with bidding. Funds relating to sale of tender documents pertain to the design, supply and installation of a 200kW photovoltaic system. The balance of the sale of tender documents receipts is reflected in Note 4 above. 6. Uses of Funds The total value of the expenditure for the period under review is US$613.384.21. This expenditure includes training and operating costs defined in the Financing Agreement as: "Training" means the reasonable costs......for training and workshops conducted under the Project, including tuition, travel and subsistence costs for training and workshops for participants, costs associated with securing the services of trainers and workshop speakers, rental of training and workshop facilities, preparation and reproduction of training and workshop materials, and other costs directly related to training course and workshop.... "Operating Costs" means the reasonable costs......incremental expenses incurred on account of Project implementation, consisting of vehicle operation and maintenance, 10 communication and insurance costs, bank charges, rental expenses, freight charges, office (and office equipment) maintenance, utilities, document duplication/printing, consumables, travel cost and per diem for Project staff for travel linked to the implementation of the Project, and salaries of contractual staff for the Project.... The expenditure per Component / Part is detailed below. Part 1: Establishment of a Commercial Scale Rooftop PV Pilot Grant TFA1671 The total expenditure funded by the grant under this component is US$94,407.37 and pertains to consulting services, goods, training and operating expenses as detailed in the table below. GOSL Contribution During the period under review the Government of Saint Lucia contributed US$11,017.57 towards salaries for two Office Attendants and the Driver for the period January 28 to May 31, 2019. Activity Description Name of Amount Paid Suppliers/Consultant US$ Technical Support _____________________________________ Project Manager Jade Hutchinson 42,965.55 Structural Engineer Norman St. Ville 10,601.89 Dissemination and Training Activities Documentary Mediazone Inc 8,090.92 Training and logistics FDL Consult Inc and 20,448.51 other suppliers Training Equipment Future Energy 1,218.40 Caribbean Inc Project Management Office Attendants Lindell Serieux & 8,185.842 Assistance Kirdisia Philgence Driver Stephen Alexander 2,831.726 Operating Costs including office Various Suppliers 11,082.11 supplies, postage, bank charges and meals provided at Project implementation meetings 105,424.94 Total Paid 105,424.94 Part 2: Commercial Scale Rooftop PV System Grant TFA1671 The total expenditure funded by the grant under this component was US$500,000.00 and pertains to the supply and installation of the Solar PV system. GOSL Contribution During the period under review the Government of Saint Lucia contributed US$8,409.27 towards the supply and installation of the Solar PV System and payment of VAT. 2 This expenditure was paid from GOSL Bonds This expenditure was paid from GOSL Bonds 11 VAT in the amount of XCD 80,701.00 was journalised to facilitate the clearance of equipment purchased by FDL Consult Inc. for the supply and installation of the Solar PV system. Activity Description Name of Amount paid Suppliers/Consultant US$ Turnkey contract to Supply and Installation of design, supply and FDL Consult Inc. /High 508,409.27 a Commercial Scale install a 200kW Peak Solar Rooftop PV Pilot photovoltaic system Total Paid 508,409.27 7. Documentation of Eligible Expenditures During the period under review eleven (11) Withdrawal Applications, as detailed below, were submitted to facilitate the documentation of eligible expenditures. Expenditure amounting to USD$200,31 1.01 incurred during the period July to December 2019 was not documented within the period under review. This expenditure was captured via two separate applications # 13 and 14. Application #13 was uploaded into Client Connection on December 18, 2019 and documented on January 7, 2020. Application #14 was uploaded into Client Connection on January 27, 2020 and documented on February 12, 2020. 2 206Oct - Dec 888.38 29 Jun 2017 3 Jan - Mar 2017 327.10 29 Jun 2017 4 Apr - Jun 2017 149.59 19 Jan 2018 5 Jul - Sep 2017 4630.65 29 Mar 2018 6 Oct - Dec 2017 10,842.57 30 Mar 2018 7 Jan - Mar 2018 11,755.39 23 May 2018 8 Apr - Jun 2018 1631.80 28 September 2018 9 Jul - Sep 2018 52,057.44 12 February 2019 10 Oct - Dec 2018 196,436.41 23 May 2019 11 Jan - Mar 2019 75,930.95 24 May 2019 12 Apr - Jun 2019 39,446.06 30 Dec 2019 TOTAL 394,096.34 1. Subsequent Events A payment was made to the St. Lucia Electricity Services Limited in the amount of XCD 36,819.60 (inclusive of VAT) to facilitate interconnection of the 200KW system at the Owen King EU Hospital. This payment was made in April 2020 from GOSL counterpart funding (bonds) and is not included in the financials. 12 SCHEDULE I ESTIMATES CAPITAL EXPENDITURE Estimated Project Cost is XCD$1,612,920.00 Financial Approved Revised Year Department Programme Head Source of Funds Estimates Estimates (XCD) (XCD) 2016-2017 Department of Energy, Science and 5506204 IBRD SIDS DOCK - 3,269.00 Sustainable Technology Grant (3292) Development 2017-2018 Department of Energy, Science and 5506204 IBRD SIDS DOCK 1,556,920.00 1,390,102.00 Sustainable Technology Grant (3292) Development 2018-2019 Department of Energy, Science and 4311202 IBRD SIDS DOCK 1,506,212.00 1,506,212.00 Infrastructure, Technology Grant (3292) Ports and GOSL Bonds - 210,000.00 Energy (1004) 2019-2020 Department of Energy, Science and 43 037 109 067 1BRD SIDS DOCK 500,000.00 713,759.00 Infrastructure, Technology 154(0039) Grant (30292) Ports and GOSL Bonds - 97,387.00 Energy (10004) 13 SCHEDULEII Disbursement Summary SIDS DOCK GRANT TF A1671 IDA US$ Legal Limit 600,000.00 Application # 1 100,000.00 Application # 4 59,237.73 Application # 6 71,522.21 Application # 8 362,238.34 Application # 11 7,001.72 Balance of funds available as at December 31, 2019 0.00 14 1 TABLES 1.1 Table 1 - Consultants' Services Consultancies: Contracts awarded during the period under review. Selection Method Contract Consultancy Consultant Value of No. Consultancy Individual Consultancy (IC) IA Project Manager Jade Hutchinson XCD$34,650.00 Individual Consultancy (IC) Project Manager Jade Hutchinson XCD$80,850.00 2A Structural Engineer Norman St. Ville Individual Consultancy (IC) XCD$16,000.00 2B Structural Engineer Norman St. Ville Individual Consultancy (IC) XCD$12,500.00 3 Consulting Services to Mediazone Production Inc. Selection based on Consultant Document the Solar PV XCD$24,468.75 Qualifications (CQS) Demonstration and Scale up Project 15 Table 2 - Goods Goods: Contracts awarded during the period under review. Selection Contract Description Supplier Value Method No. International 4 Turnkey contract to design, FDL Consult Inc./ XCD$1,366,705.80 Competitive supply and install a 200kW High Peak Solar Bidding (ICB) photovoltaic system 16 Table 3-Training and Non - Consulting Services Training and Non Consulting Services: Contracts awarded during the period under review. Selection ISletod Contract No. Description Consultant Value Method Single Source GRE/SLU/SVG1 Solar PV Training FDL Consult Inc. USD$44,437.504 Selection /Direct Award Amount payable by St. Lucia (TFA1671) was USD$17,212.50 17 GOVERNMENT OF SAINT LUCIA Office of the Director of'Audit Conway Business Centre, Level 3, In. Baptiste Street 5* ~~Castries, Saint Lucia WI,40 1m Tel: 758-468-1508;1510;1501 Fax: 758-468 1534 E-mail audi0,gosLffov.le Re No. GF 5506-204 NDEPENDENT AUDITOR'S REPORT ON NTERNAL CONTROLS To: Permanent Secretary, Ministry of Infrastructure, Ports, Energy and Labour We have audited the accompanying Statement of Sources and Uses of Funds and a summary of significant accounting policies and other explanatory notes for the Solar PV Demonstration and Scale-Up Project entered into by the World Bank and the Government of St. Lucia (GOSL) and executed by the Ministry of Infrastructure, Ports, Energy and Labour, for the period May 30, 2016 to December 31, 2019 and have issued our report thereon. Our aud was guided by the International Standards of Supreme Audit Institutions (ISSAls) issied by the Intemational Organization of Supreme Audit Institutions (INTOSAI) and conducted in accordance with the World Bank's requirements, specifically, the Bank's Guidelines Annual Financial Reporting and Auditing for World Bank-Financed Activities. Those Standards and the World Jank Guidelines require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the project's financial statements are free from material misstatement. In planning and performing our audit, we considered the PCU's intenal controls over its financial reporting, by obtaining an understanding of the policies and procedures that govern intermal controls determining whether these controls had been placed in operation, and assessing control risk and performing tests of the PCU's controls in order to determine our auditing procedures for the purpose of expressing our opini ono the financial statements and not to provide an opinion on the internal controls. Accordingly, we do not express an opinion on the effectiveness of the PCU's internal control over financial reporting because of inherent limitations in any system of intemal control, errors or irregularities may nevertheless occur and not be detected. Also, projection of any evaluation of the structure to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the effectiveness of the design and operation of policies and procedures may deteriorate. For the purpose of this report we have classified significant policies and procedures relative to the PCU's internal control structure in the following categories: 1 Receipts and Disbursements of Funds 2. Cash and Bank Transactions 3. Compliance with Applicable Laws and Regulations 4. Statement of Request for Replenishment (IFRs) "Towards Greater Accountability" 18 The management of the PCU is responsible for maintaining effective intema control over its fnancial reporting. We limited our control testing to those cortrols necessary to achieve the following control bjectives that provide reasonable, but not absolute assurance, that: (1) transactions are properly recorded, processed, and summarized to permit the preparation of the financial statements in accordance with the accounting policies referred to in Note 2 of the financial statements and the World Bank Guidelines and (2) transactions are executed ir compliance with laws and regulations that could have a direct and iaterial effect on the financial statements. A contro deficiency exists when the design or operation of a control does not alow miaagement or employees, in the normal couise of perkr ing their assigned functions, to prevent or detect misstatements on a timely basis A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the PCU's ability to initiate, authorize, record, process, or report financialdata reliably, such that there is more than a ramote likelihood that a misatatement of the PCU's financial statements that is more than inconsequential i not be prevented or detected by PCU's internal control. A material weakness is a significant deficiercy, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected by the PCU's iteral control. Our cosideration of intemal control was for the limited purpose described in the third paragraph of this report and would not necessari y identiij al deficences in ntenal control that might be significanf deficlencies or material weaknesses. Our consideration of the system of intemal control would not necessarily disclose al matters n the system of internal control that might be reportable conditions, and, accordirgly, would nt necessarly disclose all reportable conditions that are also considered to be material weaknesses astlefined above, Though we did not discover any weakness that would be material in relation to the financial statements, we noted deficiendes in operation as detailed in the management letter. Yvonne James (Ms.) DIRECTOR OF AUDIT Castries, Saint Lucia April 7, 2020 "Towards Greater Accountability" 194 44 GOVERNMENT OF SAINT LUCIA ffice of'the Director ofnAudit Conway Business Cene, Level 3, Jn. Baptiste Street Castries, Saint Lucia .W. A Tel: 758-468-1508,*510;1SO1 Fax: 758-468-1534 E-mail. audiOzst.ovJe Ref No. eprk GF 205Q06I-20421 INDEPENDENT AUDITOR'S REPORT ON THE STATEMENT OF DESIGNATED ACCOUNT RECONCILIATION To: Permanent Secretary, Ministry of Infrastructure, Ports, Energy and Labour - Opinlon We have audited the accompanying Designated Account Reconciliation of the Solar PV Demonstration and Scale-Up Project financed und Intemational Development Association (IDA) and intemational Bank for Reconstruction and Development (IBRD) SIDS DOCK GRANT TF0A1671 executed by the Ministryof Infrastructure, Ports, Energy and Labour for the period May 30, 2016 to December 31, 2019. In our opinion, the Designated Account Reconcil ation adequately reflects the flow of funds for the Designat d Account nd the funds were used only for the purposes of Solar PV Demonstration and Scale Up Projat for the period May 30, 2016 to December 31, 2019. Basis for Opinion Our audit was guided by the Intemnational Standards for Supreme Audit Institutions (188Als) assued by the Intemnational Organization of Supreme6 Audit Institution (INTOSAI} and conducted iri accordance witifthe World BanifGuidelines. Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Financial Statement section off ur report. We are independnt of the Project in accordance with the Code of Ethics for Auditors in the SAI of Saint Lucia, and we have fulfilled our othat responsibilities in accordance with the Code of Ethics. We believe that the audit evidence we have obtained is suifficient and appropriate to provide a basis for our opinion. Responsibilities of Management and Those Charged with Governance for the Designated Account Reconciliation Managemetnt is responsible for the preparation of the Designated Account Reconciliation in accordance . with the financial reporting provisions outlined in the respective legal agreemenits with the World Bank arnd other co-finanding organizations. Those charged with governance are responsible for overseeing the Project's financial reporting process. Auditor's Responsibilities for the Audit of the Financial Statements Our objective is to obtain reasonable assurance about whether the Designated Account Reconciliation as a whole are free from matenial 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 ISSAls will always detect a matenial misstatement when it exists. Misstatements can arise from fraud or error and are considered matenial if, individually or in the aggregate, they could reasonably be expected to influence the economic decision of users taken on the basis of these financial statements. "Towards Greater Accountabihty' 20 As part of an audit ir accordance with ISSAls, we exercise professiona judgement and m ntain professional skepticism tlhrouighout the audit. We also: o Identify and assess the risks of material misstatement of the Designated Account Reconciliation whether due to fraud or error, design and perform audit procedures responsible to those dsks, and obtain audit evidence that:is sufficient and appropriate to provide a basis for our opinion The risk of not detecting a material misstatemert resulting from fraud is higher than for one resulting fror error, as fraud may involve collusign, forgery, intentional omissions, nIsrepresentations, or the override of intemnal controls. o Obtai an undersanding of internal control relevant to the audit in order to design audit procedures tuat are appropriate i the circumstances, but rot for the purpose of expressing an opinion on the effectiveness of the Project's intemal cortrol. o Evaluate the overall presentation, structure aid content of the Designated Account Reconciliation, nclding the disclosures, and whether the Designated Account Recnciliation represent the underlying transactions and events in the manner that achieves fair presentation. We communicate wiltlthose clarged with govemance regarding, among other matters, the planted scope and timing of he audit and significant audit findings, including any significant deficinies in internal conto that we identif duing our audit. Yvomne James (Ms.) DIRECTOR OF AUDIT Castries, Saint Lucia April 7, 2020 "Towards Greater Accountability" 21 �� с й � а�ч � яа е`бr °о „� Q�° о`O+ о й ° ° м� о � о с+ а� и о +�, е� � о � а ~ � о о Ед м н ev и .,�'...:. � и h � еУ l �� . . и ы м+ о " � .у+ ;� v � ы � � .L � С. д � � v ц� т �а ® � � tч Q т �v С и ,..� г/� т м, о о � � ..., Z а с 'fl д д Е а а н F ""` ° Я� �..у.. �� L� О с`" т `о <С м .� :.. � ы ь°. ,т^ н7 '� ""` �. r т а : _ � � G�L """ � "а � r"' � � � С. г� � а й � � г°�л z+ т � °` С о �_� � т� U� т С� � С т и у . '� С у �.J Q � О� � '4 О N � �w И т L,�` � д Г!1 � ы О еС ,-i +' й в"' � . � : д Р ы�м н у? С 4 � _ � М *'" � ; . � +-� w U�*�� � �� V ы � д и ы ы у v � N � О � `Ci � w 'д is д'�.+ � • : � 8 Vj fl м � � а �'° сЭG 'у�' е.'д, а � : , _ � � А U � � "� � �ц ы � р � аы � s • �д а+ гrл '� �• R .� � ..��.. •� д т *" аLь � .r е + cV U` � С А.д и "' О t� ы � и а � д � { � .... L � д � т � � � 4 � ы � � � � : , ._� � � а �G � L" 4�. �` � � ы � i • ` � � rt1 " С ы dv � д ` т ++ �' �+ W а ы� Q � +�' ы '� т G �" �; �'I С4 � N 'С Ck � i. �� д а�+ . L'9 i"+ � у � � ,ц � � 'Г� � а� у � М � и� С R ы ы д ы gy tr С i. v д .. 4 Q. t� Е" .-�. Q. р � `�- ы Q' 'г3 С � � � � � а. ы Q С�� и '^а . ' С v ц G' ы� С v �... .b ы 'в.д'+ `+L� �GD � GO ' "0 д � � а � „ы,� ы � � � � b � ы у Q � Q L � v а, х L «� о. � � в 3 с U 'а ii G ы Q 1Z д ++ у� д �.. _.. т т v id.+ С 'С т fl. С т С �, � С т �ь '� � �+ т = т у 'С и и а� х � у а �,� � �с �: � ,� � ё о z о� U о ....� С С ,L р, т С д. у. •у �, � � Е С 0. О т д уд у � w, д С 4� �q у„� ®R �.. т д� � i ы С й д L sm�. � С4 � у й LL ,'�ьо д д С '� .ы ы 3 � :fl � � � 3 � ' � :� �а .�s о о у, aCi .`у G т �, у � Е о ы о а, .�.. � � х, � т6г а. ы С ы R„ +� � v � д �+ �. 'С у � С � 'д ц С .т .a�i й R �`� С G ы у � т •у �. ы д w '�• � ы� ы� д_А С_� 'д J� 7 .ь О � .L� � С ь" с, С � т С/1 ГJ] � т•- С е� С ,� *д С д аг sa ы } д0 � �у д •� рр � Q .С ? 4 � Lг1 U ы G С w � еС �,уд„ Q т L. вт+ й й и � � гл и и м ёб ы в� Е� � ..7 0. С4 СО 4 Оь. 0. С!] .а Е" G ..., ...� ""� сй М д' И `8 r- 00 С� О .�ч , � , � GOVERNMEN rl-, OF SAIN'T'LUCIA Office of the Director of Audit Conway Business Centre, Level 3, Jn. Baptiste Street C,astries, Saint Lucia W.L Tel: 758-468-1508,1510;1501 Fax: 758-468-1534 E-mail. audia,eos1.,qov.1c Ref. No. GF 5506-204 INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH AGREEMENT TERMS AND APPLICABLE LAWS AND REGULATIONS TO: Permanent Secretary, Ministry of Infrastructure, Ports, Energy and Labour Opinion We have audited the Financial Statements of the Solar PV Demonstration and Scale-Up Project entered into by the World Bank and the Government of St. Lucia (GOSL) and executed by the Ministry of Infrastructure, Ports, Energy and Labour, for the period May 30, 2016 to December 31, 2019 and have issued our report thereon. In our opinion, except for the non-compliance described in the management letter, the results of our tests indicate that with respect to the terms, laws and regulations tested, the PCU complied, in all material respects, with the provision of the laws, regulations, and terms of the grant agreement. With respect to terms, laws and regulations not tested, nothing came to our attention that caused us to believe the PCU has not complied, in all material respects with relevant provisions. Basis of Opinion Our audit was guided by the International Standards for Supreme Audit Institutions (ISSAls) issued by the International Organization of Supreme Audit Institution (INTOSAI) and conducted in accordance with the World Bank Guidelines. Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Financial Statement section of our report, We are independent of the Project in accordance with the Code of Ethics for Auditors in the SAI of Saint Lucia, and we have fulfilled our other responsibilities in accordance with the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Responsibilities of Management and Those Charged with Governance for Compliance with Agreement Terms and Applicable Laws and Regulations The PCU is responsible for compliance with the terms of the grant agreement and applicable laws and regulations to enable the preparation of financial statements that re free from material misstatement, whether due to fraud or error. Those charged with governance are responsible for overseeing the Project's financial reporting process. "Towards Greater Accountabliffil" 23 Auditor's Responsibilities for the Audit of Compliance with Agreement Terms and Applicable Laws and Regulations As part of obtaining reasonable assurance as to whether the financial statements are free from material misstatement, we performed test of the PCU's compliance with certain provisions of the grant agreement and applicable laws and regulations. Material instances of non-compliance are failures to follow requirements or violations of agreement terms and laws and regulations that cause us to conclude that he aggregation of misstatements resulting from those failures or violations are material to the financial statements. We communicate with those charged with governance regarding, among other matters, non-compliance with agreement terms and applicable laws and regulations. Yvonne James (Ms.) DIRECTOR OF AUDIT Castries, Saint Lucia April 7, 2020 "Towards Greater Accountability" 24 GOVERNMENT1 OF SAINT LUCIA Office ofthe Director qf'Audit Conway Business Centre, Level 3, J. Baptiste Street Castries, Saint Lucia W.L Tel.* 758-468-1508;1S10;1501 Fax: 758-468-1534 E-mail: audiOzdoestov.Ie Ref No. GF5506-204 INDEPENDENT AUDITOR'S REPORT ON THE STATEMENT OF REQUEST FOR REPLENISHMENT (IFRs) TO: Pernanent Secretary, Ministry of Ifrastructure, Ports, Energy and Lab6 Opinion We have auditedthe Financial Statements of the Solar PYDenonstration and Scale-Up Projec executed by the Ministry of Infrastructure, Ports, Energy and Labour, and financed under the Intemationa Developriort Association (IDA) and International Bank for Reconstruction and Development (IBRD) SIDS DOCK GRANTTF0A1671 for the period May 30, 2016 to December 31, 2019. In our opinion, expenditure reported on the Statement of Requestlo Replenishment was eigible and the control procedures used inithe prepiaration of these statements were adequate as grant funds wer used for the purpose of the Project for the period May 30, 20161t December 31, 2019, in accordarce with the financial reporting provisions outined in the respective legal agreements with the World Bank and other co- financing organisations. Basis of Opinion Our audit was guided by the ntemational Standards for Supreme Audit Institdtions (ISSAls issued by the Intemnational Organization of Supreme Audit Institution (INTOSAI) and conducted in accordance with the World Bank Guidelines. Our resporsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Financial Statement section of our report: We are independent of the Project in accordance with the Code of Ethics for Auditors in the SAI of Saint Lucia, and we have fuilled our other responsibilities in accordance with the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Responsibilities of Management and Those with Governance for the Statement of Request for Replenishmert (WR) Management is responsible for the preparation of the Statement of Request for Replenishment (IFR) in accordance with the provisions outlined in the respective legal agreement with the World Bank and other co-financing organization to enable the preparation of the Statement of Request for Replenishment (IFR) that are free from material misstatement, whether due to fraud or error. This responsibility includes: designing, implementing and maintainiin ternal controls relevant to the preparation and fair presentation of the special purpose financial statements that are free from materal misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. II "Towards Greater Accountability" 25 Those charged wit ovemance are responsible for overseeing the Project sinancigl reporting process. Auditor's Responsibillies for the Audit of the Financial Statoments S ur objective is t ob reä nabIs assurance about Whether thé Stiterfent of Request for Replenishrment (Il)as aiefhöleåref, rom Material risstatement, whether due tå fraud or erräé äd to issueanati4itWorrorthtincludes our opinion., Reasonable assurance ishigh level of assurance, but is not a guarantee li t an tidit conducted in accotdance with ISSAls will always detect a material misstatement wheräit existå. Misstateménts can anse frgm fraud or error and areconsidered material if, individüdlly or In the aggregate,they could reasonably be pectect to influene tiéconomic dcision of users taken on the basi$ Of jhesö financialStatements. As part of an audit in accordance with ISSAls, we exercise professional udgement rialntaln professiong skepticism throughout tik audit We also: o Idehtify and åäs, th gflåks of fiaterial misstatement of the Statement of Réquest for Replenishment, whether due to fraud or error, design and,peiform audit procedureg responsible to those risk; and obtain audit evidence that is sulficient and apjropriate to provide a båäis for our opinion. Yh risk,ofnot detecting a material misstatement resulting fror frauié higher than for one resulting from error, ä fraud may ,involve collusion forgery, inténtional 'niissIohs, misrepreseritations,:pr the override of iniemal controls. o Obtain an und"tåäng of interhal coniroUrelevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose Qfxpressir g ap opinion on the... effeot.venes 91 tipject's intemal centrol. o Evaluate the ovérall présentation, iructure and content of te Staerg$t of Requ for Raplenisþment, includi g the disclosures, and whether the Statelnent of Requgst for Repleniähment represent the underlying trabsactions and events in the manne that achieves fair presentaioå andihe correct u$eo qgrant funds. We commubicts with thdse charged With goverRance regarding, among othe matters the planed