IOAC INTGRY. AccoUNTABI,LIT t TRAXSP4*ENCY Our Reference: LW812(b)/217/19 Your Reference: Date: 17th December, 2019 Mr Ringo Fa'oliu Chief Executive Officer Ministry of Infrastructure Nuku'alofa Dear Mr Fa'oliu Final Audit Report: Tonga Cyclone Ian Reconstruction and Climate Resilience Project for the financial period ended 30 June 2019 Please find enclosed is the Project signed accounts together with the Audit Report duly signed. Once again, I would like to thank you and your staff for all the assistance and co-operation during the audit. Yours Sincerely Ken kyr Audit Manager for AUDITOR GENERAL cc: Mrs Balwyn Fa 'otusia, CEO - Ministry of Finance & National Planning / 1 D EC ?019 1W Rec'd Po Box 50, Tupou College Old Boys Building, Nuku alofa, Tonga, South West Pacific Telephone: (676)21-600 | Facsimile: (676) 23-749 | Email: toag,info@audit.gov.to , Website: www.audit.gov.to TONGA CYCLONE IAN RECONSTRUCTION AND CLIMATE RESLIENCE PROJECT (TCIRCRP) FINANCIAL STATEMENT FOR THE YEAR ENDED 30 JUNE 2019 MINISTRY OF INFRASTRUCTURE NUKU'ALOFA TONGA GOVERNMENT OF TONGA MINISTRY OF INFRASTRUCTURE TONGA CYCLONE IAN RECONSTRUCTION AND CLIMATE RESILIENCE PROJECT CONTENTS PAGE NO. Content Page 2 Statement by Chief Executive Officer for Ministry of lnfrastructure 3 Report of Independent Auditor 4 Statement of Receipts and Payments 5 Notes Forming Part of the Financial Statement 6-10 Fixed Asset Registers 11 2 GOVFRNMENT OF TONGA MINISTRY OF INFRASTRUCTURE TONGA CYCLONE IAN RECONSTRUCTION AND CLIMATE RESILIENCE PROJECT STATEMENT BY THE CHIEF EXECUTIVE OFFICER - MINITRY OF INFRASTRUCTURE In my opinion, the accompanying financial statements of the Tonga Cyclone Ian Reconstruction and Climate Resilience Project financed by the World Bank International Development Agency (IDA Grant No. H9620, IDA Credit No. 54770 Trust Fund TF 17580) for the period from 01 July 2018 to 30 June 2019 as set out on pages 5 to 11, give atrue and fair value of the project's status of funds as at 30 June 2019, and the claims and funds for the year then ended. Dated at Nuku'alofa this ..... day of. .......... 2019 INFV~ Mr. Tevita Lavemai (Acting Chief Executive Officer - Minis o u 3 10AC irau,ry AIccouNTABrut, d Thi4TPARENCY INDEPENDENT AUDITOR'S REPORT To the Chief Executive Officer for Ministry of Infrastructure Tonga Cyclone Ian Reconstruction & Climate Resilience Sector Project (TCIRCRP) We have audited the accompanying financial statement of Cash Receipts and Payments and the accompanying notes to the Financial Statements for the Tonga Cyclone Ian Reconstruction & Climate Resilience Sector Project (TRIRCRP) as set out in pages 5 to 11 for the financial period ended 30' June 2019. Management's Responsibility for the Financial Statements Management is responsible for the preparation of the Financial Statement on the cash. basis accounting as accordance with the Public Finance Management Act 2002 and fair presentation of the financial statements in accordance with the International Public Sector Accounting Standards (IPSASs), Financial Reporting under the Cash Basis ofAccounting and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards of Supreme Audit Institutions (ISSAls). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatements. An audit involves 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 risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessment, the auditor considers internal control 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, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also included evaluating the appropriateness of accounting policies used and reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my unqualified audit opinion. Auditor's Opinion In our opinion, the financial statements on page 5 to 11, present fairly, in all material respects, the receipts and payments of the Tonga Cyclone Ian Reconstruction & Climate Resilience Sector Project for the year ended 30' June, 2019 in accordance with Public Finance Management Act 2002 and in accordance with International Public Sector Accounting Standards (IPSASs), Financial Reporting under the Cash Basis of Accounting. SefitaTangi F A(Aust.) Nuku'alofa AUDITOR GENERAL 17' December, 2019 Po Box 50, Tupou College Old Boys Building, Nuku'aiofa, Tonga, South West Pac wtic Telephone: (676)21-600 | Facsimile: (676) 23-749 | Email: toag.info@audit.gov.to | Websitei www.audit.gov.to GOVERNMENT OF TONGA MINISTRY OF INFRASTRUCTURE TONGA CYCLONE IAN RECONSTRUCTION AND CLIMATE RESILIENCE PROJECT STATEMENT OF CASH RECEIPTS AND PAYMENTS FOR THE PERIOD FROM 01 JULY 2018 TO 30 JUNE 2019 .le.a 01 a01a CURRENCY E IOP Opening balance Cash and Cash Equiva lent at the beginning ofperod 871851.51 434,289.54 RECEIPTS IDA H 9620 & 54770 4 & 5 -56999.01 2,208,751.93 TF 17580 6 771988.81 915,D30 31 GoV of Tonga IDA H 962D & 54770 - Re posting 1,107,127 57 TF 17580 - Reposting - 1,107,127 57 Repast ng Total Receipts 714,989.80 3,123,782,24 Cash and Cash Equivalent Availble 1,586,841.31 3,55 8,071.78 PAYMENTS Component: A Wot k contract 7 75950.00 1,206,373.13 SelfSupport Repair -Reimbursement B 53,115.49 SelfSupport Repair- Communities 9 76,914.47 SelfSupport Repair- Materials 10 377,532.76 Goods Total Camponent: A 78,950.00 1,713,935.85 Component: B B.1.A Mobilization Bul IdingAdvice 11 1224430 654,657.61 B.1.B Climate Resilience Training 12 61,725.50 Incremental Operating Cost 14 1,042.64 Total Component: B 1,224,430.00 717,425.75 Component: C Service Contracts / ConsuJtants 15 130,710.59 Incremental Operating Cost 16 25079.63 148,870.54 Less unpresented cheques 30 June 2019 17 - - 2,983.17 Exca nge gain / loss 23,581.72 - 21,739.29 Total Component: C 49,461.35 m 25858.67 Total Payments 1,352,841.35 2,685,220.27 -Transfer backto World Bank -52470.46 Increase / (Decrease) in Cash - 690,322,01 437,551.97 Cash at End ofYear 181,529L50 871,8151.51 Represented byCash at bank asat 30 June 2019 Rate TOP USD IDA-DA -1843767 0.4444 151529.50 80,671.71 GDFR - DA- 1823472 0 TOP - Haapai 0 Total cash at bank (30 June 2019) 18159.50 80,671.71 ~Kw5 GOVERNMENT OF TONGA MINISTRY OF INFRASTRUCTURE TONGA CYCLONE IAN RECONSTRUCTION AND CLIMATE RESILIENCE PROJECT NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENT FOR THE YEAR ENDED 30 JUNE 2019. Note I - General Information The Tonga Cyclone Ian Reconstruction and Climate Resilience Project (TCIRCRP) is a World Bank funded project implementing in the Kingdom of Tonga. The Kingdom of Tonga (Recipient) and the International Development Association - IDA (Association) entered into a financing agreement on 11 June, 2014 whereas the Association agreed to extend a Grant in the amount of three million nine hundred thousand Special Drawing Rights (SDR 3,900,000) and a Credit in the amount of three million nine hundred thousand Special Drawing Rights (SDR 3,900,000) as provided in Section 2.01 (a) and (b) of this Agreement, to assist in financing of the Project; and the Recipient has also requested the Association, acting as administrator of the Global Facility for Disaster Reduction and Recovery (GFDRR) to assist in financing the Project, and the Association, acting in such capacity, has agreed to extend a grant to the Recipient for such purpose in the amount of one million eight hundred thousand United States Dollars ($1,800,000), pursuant to a grant agreement to be signed between the Recipient and the Association. The project development objectives of the project are to restore housing, community facilities, and basic services to the affected population of Ha'apai and strengthen the country's resilience to natural disasters. To achieve that, the project has the following components: Component A: Housing and Key Community Facilities Repair, Reconstruction and Climate Resilience Component B: Technical Assistance and Training for Enhanced Disaster and Climate Resilience This component is funded specifically by the GFDRR Grant. Component C: Project Support The current address for the project is as follows: Ministry of Infrastructure Alaivahamama'o and Bypass road Vaololoa Nuku'alofa. Note 2 - Going Concern Assumption Section IV Part B (ii) of the Financial Agreement, the closing date for the project will be 30 November 2018. 6 GOVERNMENT OF TONGA MINISTRY OF INFRASTRUCTURE TONGA CYCLONE IAN RECONSTRUCTION AND CLIMATE RESILIENCE PROJECT NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENT FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED). Note 3 - Significant Accounting Policies a) Statement of Compliance The project financial statements have been prepared in accordance with the International Public Sector Accounting Standards Financial Reporting (IPSAS) under the Cash Basis of Accounting. b) Basis of Preparation The project financial statements are presented in the Tongan Pa'anga, rounded to the nearest cents. They are prepared on the cash basis accounting as accordance with the Public Finance Management Act 2002 and the Financial Reporting under the Cash Basis of Accounting issued by the International Public Sector Accounting Standard Board in 2007. c) Receipts Receipts are recorded and recognised when money is received in the project's Designated Accounts. d) Payments Payments are recorded and recognised when money is being paid through: i) bank transfers or cheque payments out of the project's Designated account ii) direct payments made to a contractor from the World Bank e) Statement of Budget vs Actual The project implementation closed in June 2018. During 2018-2019, there were no new Contracts except for Contracts signed before 30.6.2018. As such, no Statement of Budget vs Actual. f) Functional and reporting currency Since the project's Designated Account is in Tongan Pa'anga (TOP), the functional and reporting currency is the TOP rounded to the nearest cents. g) Foreign Currency Exchange Rate Translation All currency translation from TOP to USD or USD to TOP, the exchange rate used is from the World Bank Currency Converter as of 30 June, 2019. Any foreign exchange loss or gain is NOT recognised in the Statement of Receipts and Payments as they are ineligible from the World Bank point of view. h) Rule of Origin All goods and works must be provided by nationals of and produced in or supplied from the World Bank member countries and/ or South Pacific Countries unless authorised by the International Development Association (IDA), 4AT 7 \2 -V,)\ TONGA CYCLONE IAN RECONSTRUCTION AND CLIMATE RESILIENCE PROJECT NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENT FOR THE YEAR ENDED 30 JUNE 2019 (CONTINUED). Note 4 - Receipt from IDA (119620) During the reporting period, no withdrawal was done but the DA balance was refunded back WAfrom IDA-H 54470 WA No. Payment Date Amt appprove TOP IDA 54770 Refund 16 November 2018 - 56,999.01 - 56,999.01 - 56,999.01 Total 56,999.01 - 56,999.01 Note 5 - Receipt from IDA 54470 During the reporting period, there were no withdrawal applications from this fund. Note 6 - Receipt from TF 17580 During the reporting period, there were five withdrawal applications from this Trust Fund, two were direct payment: WA No. Payment Date USD Amt recieved TOP ANZ Rate GFDRR 13 31 July 2018 75,337.40 169,069.57 2.244165182 GDFRR 14 24September 2018 63,598.50 145,036.49 2.280501741 GDFRR 15 21 September 2018 146,490.44 334,071.70 2.280501717 GDFRR 17 - Direct 5 March 2019 28,718.19 64,289.66 2.238638995 GDFRR18-Direct 26February2019 26,540.59 59,521.39 2.242655118 Total 34D, 685.12 771,988.81 Note 7 - Component A During the reporting period, the following were actual payments made to contracts under Component A (Housing and Key Community Facilities Repair, Reconstruction and Climate Resilience) of the Project. Contract No. Contractor Date Amount Cumulative W1.4 BB Construction 26/09/2018 27,800.00 27,800.00 r 27,800.00 W1.5 BB Construction 30/10/2018 25,575.00 25,575.00 25,575.00 W1.6 BB Construction 26/09/2018 25,575.00 25,575.00 25,575.00 Total Component A - Works Contract 78,90.00 8 TONGA CYCLONE IAN RECONSTRUCTION AND CLIMATE RESILIENCE PROJECT NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENT FOR THE 1EAR ENDED 30 JUNE 2019 (CONTINUED). Note 8 - Self Support Repair - Reimbursement During the reporting period no payment was made for repair reimbursement Note 9: Self Support Repair - Communities During the reporting period, no payments was made to community halls Note 10 : Self Support Repair - Materials During the reporting period, no payments was made to villages / beneficiaries Note 11 : Component B - Mobilization of Building Advices Contract No, Contractor Amount Curnui,tive Con 31 Final Benefciary Survey Malakai Kaufusi 15,683.98 15,683.98 Con G28 Supply of UAV All Tera NZ 54,289.66 79,973.64 Con 620 Supply of Survey Equip Position Partners 59,521.39 139,495.03 Con G29 Supply Tools Spare Pa rt Zone 55,250.00 194,745.03 Con 30 Design ofNEMOOffice ITS -Tonga 78,556.50 273,301.53 Con 28 Data preparedness UNOPS 145,957.00 419,258.53 Con 26 Housi ig Policy Consultant Precilla Phelp 24,355.55 443,614.08 Con 24 SaferToolkit Consultant Ringo Faoliu 30,720.00 474,334.08 Con 25 ReviseTonga BuildingCode Arup PTYLtd 545,027.00 1,019,361.08 Con 23 lit SaferToolkitCcnsultant Mikael Gardner 134,904.00 1,154,265.08 Con 13 Technical Adviser MOFNP Pita Moala 47,250.00 1,201,515.08 ProjectAccountant -GFDRR Makelasi Moala 22,915.00 1,224,430.08 Total -Mobilization of Building Advices ,24,430.08 Note 12: Component B - Climate Resilience Training During the reporting period, no payment was made for Climate Resilience Training Note 13 : Component B - Reposting During the reporting period, no reposting was made Note 14 : Component B - Incremental Operating Cost Only bank fees for component B Consultants are charged under this component. World Bank treated bank fees as ineligible expenses. 9 TONGA CYCLONE IAN RECONSTRUCTION AND CLIMATE RESILIENCE PROJECT NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENT FOR THE YEAR ENDED 30 JUNE 2019 - CONTINUED Note 15: Component C - Service Contract (Consultants) During the reporting period, no payment was made under this category Note 16 : Component C - Incremental Operating Cost Contract No. Date Amount CumLIative Bank fess & Charges Jul I 8-Jun 19 144.09 144.09 Replacement -Asset Jul 18-Jun19 26,125.00 26,269.09 Communication Cost Jul 18 -Jun 19 1,96571 28,234.80 Motor Expenses Jul 18 -Jun 19 124.80 28,359.60 Office supplies Jul 18 -Jun 19 704.00 29,063.60 Adjustment Jul 18 -Jun 19 - 2,983.97 26,079.63 Total SSRCommunities 26,079.63 Note 17 : Component C - Unpresented Cheque as of 30' June, 2019 There are no unpresented cheques at the end of the financial period. 10 qk. Note 18 -Asset Register TONGA CYCLONE IAN RECONSTRUCTIONAND CUMATE RESLIENCE PROJECT (TCIRCRP) FIXED ASSET REGISTER This registerincludes Payment Date ofPurchal Detailsof Asset Quantity ContractorIOC Location Currency Cost VEHICLES/BICYCLES Project Vehicle P1814 USEDTOYOTA RAV4 2.OL PETROL 5- DOOR 4WD AUTO VAN; MODEL NO.TA-ACA21W:AWPNH-G;VIN,# ACA21- 1 24-Sep-14 0014560-ENGINE 1,AZ-FSE:006296 CHASSIS 1 MOi/TCIRCRP/G1 Ha'apal TOP 17,720.00 ACA21-0014560 Project Vehicle P2815 RECONDITIONED TOYOTA TOWNACE NOAH 2.CL PETROLAUTO 2 24-Sep-14 VAN, MODEL NUMBER: GF-S40G-GRSEK-C; 1 MOI/TC1RCRPjG1 Ha'apai TOP 15,1.00 ViNI 5R40-D232116,EtNGINE5-FE:795B574 CHASSIS S540-0232116 3 15-Oct-14 Bicycles-Black Maxima 4 MOl'TCFRCRPG2VHa'apai TOP 1,150.00 4 26 Sep-16 Toyota hilux TCIRCRP 1 I Hol Nuku'alcfa 69,000.00 5 26-Sep-16 Toyota hilux TCIRCRP 2 1 Ha'apai E,000.00 COMPUTERfSOFTWARE 3 23-May-.14SoftwareforCloudInternet 1 IOC-TSCP HONuku'alofa TOP 4,543.44 2 23-May-14 Software Licenci ng 1 IOC-TSC? HONukL'aIo"a TOP 3,893-65 Consultarts - Ho a 315Jl-45aptopsand6tablets 11 IOC-TSCP Nuku'alofa/Ha'apai TOP 31,2D4C19 4 BC-Jan-15 Desktop PC 2 Contract G11 Haapul TOP 5,120.00 S 3C-Jan-15 Laptop 1 Contract G11 HO Nuku'alofa TOP 2,HW0.00 6 3C-Jan-15 External iard-drive 2 Contract 11 Ha'apa! TOP 83600 7 3C-Jan-15 Moose 6 Contract G11 Haapal TOP 510.00 8 Additos are S Keyboards and 5 UBS 4 Ports 9 Apr-15 Rekcor QuickBooksSctware (Single user) i IOC HO Nuk'alofa TOP ,l'i.00 21-Dec-15 Lap7ops and soiftwares 8 MOi/TCISCRP/G9 Nuku'alofa/Haapa (Consultan TOP 29,490.00 OFFICE EQUIPMENT 1 27-May-14 Mkoble phones forHaapa - TCC 2 IOC-TSCP HO Nuku'alofa TOP 225.20 2 20-Oct-14 Refrigerator IOC HO Nuku'alofa TOP 725.00 3 20-Oct-14 Bailerfor Head Office 1 IOC HO Nuku'alofa TOP 195.00 4 24-Nov-14 Camera forHaapai Office : oC Ha'apai TOP 922.87 5 10-Dec-14 Multi fUnction PhotocopierDocuPrin nV3COO 1 Contract G4 HO Nuku'alofa TOP 15,045.00 Multi function DesktopA3/A4 PrirterColor 6 10-Dec-14 DocuPrint C2020 Copier Printer a Contract G4 Haapai TOP 8,800.0 7 15-Dec-14 Brother- DCPJ125 Printer 1 ICC Haapi TOP 812.05 8 3C-lan-15D estopPrinter- brother 1 Contracti Hapai TOP 755.00 9 30-an-15 Data Projector 1 Contract 311 HO Nuku'alofa TOP 1,960.00 10 ST-Jan-15 Projectorscreen and stand 1 Contract G11 Haapai TOP 494.00 11 FC-Jan-15 White Board 2 Contract G1.A HO Nukalofal Ha'apal TOP BC1.56 12 31an-1i TrimmerCutter 2 Contract G11.A HO NukalofafHa'apai TOP 612.0D 13 31-Jan-15 &nder 2 Contract G11.A HO NuiuaiofafHaapai TOP 1,082.00 14 31-Jan-15 Pirst Aid Kit 1 IOC H.'apai TOP 28C.0D 15 3D-Jan-15 Camera Canon IVUS150 4 Contract Gl Ha'apai/ MOL TOP 3,867.95 16 5-Feb-iS iefrigeratorfr Ha'apai Office 1 Cont-act G11.B Ha'apai TOP 705.00 17 12 Feb-15 Srnobile phones for Building nspecto-s 5 IOC Ha'apal TOI 790.00 18 17 Ajg-16 Air Conditions 2 G11C Ha'apai TO' 5,942.DS 19 B-Sep-15 Vaiumcte,ne- 1 0C Hamapal TOP 275.0 20 2-Sep-16 Mini generator I IOC Ha'apai TOp 299.00 OF FICE FURN 1J RE 1 S-Oct-14 Bookselves 2 10O Ha apal TOP 360.00 2 Nov-14 Single wooden cr%airs 6 IOC Ha apai 3 Nov-14 Long wooden cha rs 4 10C Ha'apai 4 Nov-14 Wooden tables 5 10 Ha apal 5 Nov-14lddesks 6 lOC Haapai 6 Nov-14 Brown single c-airs 6 IDC Ha apal 2 18-Dec-14 Reception desk I1x76f000x300 1 Contract G3 HO Nuk'alofa TOP 2,279.77 3 12-Dec-14 Work5tationCadar3M 4 ContractG3 HO NLku'alofa TOP 11,5184.11 4 18-Dec-14 Fiing CabinetCedar 2 Contract G3 HO Nuk.alofa TOP 2,438.55 5 12-Dec-14 FilingCabinetCedar 1 ContractG3 Haapal 6 1-Dec-24 Locked Cspboard 1.&325x.1n 2 Contract G3 HC Nikualofa TOP 2,858.22 7 12-Dec-14 Loced Cupboard 1.S25x1m S Contract 3 Haapai 8 18-Dec-14 Bookcse large 1.8x325xlrn 2 Contract G3 HO Nukualofa TOP 1,300.56 9 IB-Dec-14 Dffce Chair Buro Image -Blue 19 Contract GE HO Nukualofa TOP 8,842.79 10 18-Dec-14 Office Chair Buro Image -Blue 3 Contract G3 Haapai 11 21-Jan-15 Empty Contaiers for Storage of Asbests Con 2 10C H. apai TOP 10,160.00 12 28-Jan-15 Office Fans 3 lOC Haapai TOP 205.00 SAFETY GEARS 1 2/25/2017 Safety boots IC TOP 1,045.0C TOTAL - FAR 333,69169 11