EKITI STATE WORLD BANK ASSISTED FADAMA III PROJECT REPORTS AND FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE, 2016 EKITI STATE WORLD BANK ASSISTED FADAMA III PROJECT REPORTS AND FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE, 2016 CONTENTS PAGE Corporate information 3 Auditors' report 4 Accounting policies 6 Balance sheet 7 Special account activity statement 8 Statement of sources and uses of funds 9 Notes to the financial statements 11 Statement of special account 13 Summary of statement of expenditures 14 - Page 1 - EKITI STATE WORLD BANK ASSISTED FADAMA III PROJECT CORPORATE INFORMATION Project Implementation Unit: Mrs. Okunlola O.Yetunde. - Project Coordinator Mrs. Fagbayibo F B - Project Accountant Mr. Peke O.Francis - Training and technical Assistant Officer/Monitoring and Evaluation Officer Mr. Oladimeji E. - Community Dev. & Gender Mr. Olofinbiyi Ebenezer.O. - Procurement Officer Mrs Jimoh A. - Internal Auditor Mr. Olajide J . A - Head PFMU Project Office: Ekiti State Agricultural Development Project Office, Ekiti, Nigeria. IDA Credit NC: 44940 eNI Bankers: ECO Bank Plc Auditors: Baker Tilly Nigeria, Chartered Accountants, Zion House, No. 16, Alaafin Avenue, Opposite Ratcon Construction, Oluyole Industrial Estate, lbadan, Nigeria. _4B BAKERTILLY NIGERIA - Page 2 - Chartered Accountants Zion House, 46 Alaafin Avenue Oluyole Industrial Estate P 0. Box 36808 Ibadan, Nigeria Tel: +234 (0) 8111474671 +234 (0) 8131826784 E-mail: btnib@bakertillynigeria.com WOF THE INDEPENDENT A ebsite: www.bakertillynigeria.com REPORT OFTEIDPNETAUDITORS ON THE FINANCIAL STATEMENTS OF THE EKITI STATE WORLD BANK ASSISTED FADAMA III PROJECT FOR THE YEAR ENDED 30 JUNE, 2016 CREDIT N2 44940 UNI We have audited the accompanying financial statements of the World Bank Assisted FADAMA III Project for the year ended 30 June, 2016 as set out on pages 5 to 13 and prepared on the basis of the accounting policies on page 4. The project is financed by the IDA Credit Number 44940 UNIs Respective responsibilities of the Project Management and Auditors The Project Implementation Unit coordinates the activities of the project and is as such responsible for the preparation of the financial statements. It is our responsibility as auditors to express an independent opinion, based on our audit, on the financial statements and to report our opinion to you. Basis of opinion We have conducted our audit in accordance with International Standard on Auditing and World Bank guidelines. These Standards and World Bank guidelines require that we plan and perform the audit to obtain reasonable assurance that the financial statements are free of material misstatement. An audit includes examination, on a test basis of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the estimates and judgements made by the project officers in the preparation of the financial statements, and whether the accounting policies are appropriate to the project circumstances, consistently applied and adequately disclosed. We planned and performed our audit so as to obtain all the information and explanations, which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free of material misstatements. In forming our opinion, we also evaluated the overall adequacy of the presentation of the financial statements. Opinion In our opinion, donor funds from World Bank have been provided and used in accordance with the conditions of the loan agreement with due attention to economy and efficiency and only for the purposes for which the fund was provided during the year under review. Counterpart funds were not provided during the year under review in accordance with the conditions of the World Bank. Goods and services financed have been procured in accordance with the Development Credit Agreement and Disbursement Letters. All necessary supporting documents, records and accounts have been kept in respect of all project activities, with clear linkages between the books of account and reports presented to the Government BAP World Bank, including expenditure reported via Summary Report. IN L I I \lONAL! - Page 3 - The Designated Accounts have been maintained in accordance with the provisions of the Development Credit Agreement and Disbursement Letter. The Project financial statements have been prepared in accordance with generally accepted accounting principles and practices and relevant World Bank guidelines, and igive a true and fair view of the financial position of the FADAMA III Project as at 30 June, 2016 and for the resources and expenditure for the financial Year then ended. The accounting and overall internal control system to monitor expenditure and other financial transactions are adequate, effective and ensured safe custody of project financed assets. The ledgers are maintained as required by the World Bank as well as a fixed assets register. The Project complied with Article IV financial covenant of the Loan Agreement. Akobi Marcus Kayode FCA FRC/2013/ICAN/00000003486 for: Baker Tilly Nigeria CHARTERED ACCOUNTANTS IBADAN, Nigeria 26 May, 2017 - Page 4 - EKITI STATE WORLD BANK ASSISTED FADAMA III PROJECT STATEMENT OF ACCOUNTING POLICIES The following are the significant accounting policies followed in recording transactions and in reporting the results of operations of the Project: 1. Accounting convention The accounts are prepared under the historical cost convention. 2. Basis of accounting The cash basis was adopted in the preparation of Project's Financial Statements. 3. Fixed assets and depreciation (a) Fixed assets are those intended for use over a YEAR exceeding one accounting year and whose value per unit is not below NIO00,000. (b) Items with respective unit costs below N100,000 are classified as "Special Project Assets" and included in a Special Project Assets Register. (c) In applying the capitalization policy, all related (landed) costs and installation costs are included in the acquisition cost of the fixed asset item. (d) Capital expenditure on contract works will be included on the basis of valuation certificates including retention. (e) No depreciation is charged on the project's fixed assets as there are no revenues to be matched against such charges. 4. Foreign currency Income and expenditure items in foreign currencies are recorded in Naira at the rates ruling at the transaction dates. Assets and liabilities expressed in foreign currencies are converted to Naira at the rates ruling at the balance sheet date and gains or losses on such conversions are credited or charged to reserve in the year which they arise. EKITI STATE WORLD BANK ASSISTED - Page 5- FADAMA III PROJECT BALANCE SHEET AS AT 30 JUNE, 2016 Notes June December 2016 2015 F N Fixed assets 2 46,914,057 46,914,057 Investment costs 3 932,094,904 922,204,603 ADP Component IV 15,049,430 15,049,430 Incremental operating costs 4 217,863,757 217,803,547 Cash and bank balances 5 2,814,837 4,885,320 2-35,728,~024 237,738,297 1,214,736,985 1,206,856,957 Financed by: IDA Special account 6 1,046,367,294 1,038,489,264 State Government counterpart fund 7 155,460,900 155,460,90 Federal Govt. Counterpart Fund 8 150,000 150,000 Local Govt. contribution 9 1,779,898 1,779,898 Miscellaneous Income 10 10,978,893 10,976,895 1,214,736,985 1,206,856,957 PROJECT COORDINATOR L ****E** COO.... ........ ... ............... HEAD- PFMU The accounting policies on page 6 and the notes on pages 11 and 12 form part of these financial statements. - Page 6 - EKITI STATE WORLD BANK ASSISTED FADAMA III PROJECT SPECIAL ACCOUNT ACTIVITY STATEMENT AS AT 30 JUNE, 2016 (US $ ACCOUNT) A/C N- 1683010182540701 - ECO BANK Year 2016 1. Cumulative advances to the end of current 7,863,416.14 reporting year 2. Add/(Subtract): Cumulative adjustment 6,725,027.51 3. Cumulative expenditure to end of last reporting year 6,685,025.67 4. Outstanding advances to be accounted (line I minus line 2) 40,001.84 5. Opening SA balance at the beginning of reporting year 1.84 6. Add/Subtract: Cumulative adjustments (if any) 7. Advances from World Bank during reporting year 4ooo 8. Outstanding advances to be accounted for 40,001.84 (add lines 5 and 7) 9. Closing SA balance at end of current reporting year 0 (as of June 30, 2016) 10. Add/Subtract: Cumulative adjustment 11. Expenditure for current reporting year 40,001.84 12. Add Lines 10 and 11 4,O0.84 13. Activity closing balance (June 30, 2016) 0 14. Difference (if any) less interest on SA 15. Actual SA balance 0 - Page 7 - EKITI STATE WORLD BANK ASSISTED FADAMA III PROJECT STATEMENT OF SOURCES AND USES OF FUNDS FOR THE PERIOD ENDED 30 JUNE, 2016 - IN LOCAL CURRENCY (N) Cash receipts: N IDA fund 7,878,030 Miscellaneous Income Total funding 7,880,028 Expenditure by categories: Consultant services - Consultancy services 9,890,301 Incremental operating costs - Travel and per diem allowance 36,000 Repairs and maintenance 17,750 Bank Charges 1,410 Postage & Telephone Expenses 5050 60,210 Total expenditure 9950,511) Receipts less expenditure Carried forward (2,070,483) Cash and cash equivalent as at 1/1/2016 4A85,320 Cash and cash equivalent at 30/06/2016 2,814,837 Represented by: Closing cash and bank balances: ECO Bank drawdown account 34 ECO Bank Interest account iS84,833 2,814,867 - Page 8 - EKITI STATE WORLD BANK ASSISTED FADAMA III PROJECT NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE, 2016 1. The Project The Federal Republic of Nigeria entered into a credit agreement with International Development Association. The Project Credit Number 44940 UNI became effective in Ekiti State in October 2009. The project development objective is to sustainably increase the incomes of Fadama users - those who depend directly or indirectly on Fadama resources (farmers, pastoralists, fishers, hunters, gatherers and service providers) - through empowering communities to take charge of their own development agenda and by reducing conflict between Fadama users. For the period Cumulative Cumulative June to June December 2016 2016 2015 2. Fixed assets N N N Civil Works - 900,000 900,000 Goods - 46,014,057 46,014,057 - 46,914,057 46,914,057 3. Investment costs Consultancy services 9,890,301 97,993,430 88,103,129 Grants - 834,101,474 834,101,474 13,385,308 932,094,904 922,204,603 4. Incremental operating costs SFCO & Supporting Staff allowance - 78,376,443 78,376,443 Transport & Travelling allowances 36,000 40,096,728 40,060,728 Advertisement, publicity and entertainment - 22,798,821 22,798,821 Printing and stationery - 3,559,845 3,559,845 Staff training and development - 45,680,952 45,680,952 Insurance - 8,055,986 8,055,986 Repairs and maintenance 17,750 5,838,022 5,820,272 PFMU Contribution - 4,472,550 4,472,550 Support to ADP - 932,470 932,470 Fuel and lubricants - 4,362,383 4,362,383 State External Audit Expenses - 967,000 967,000 Bank charges 1,410 133,794 132,384 Bidding printing and postages 5,050 1,704,490 1,699,440 Telephone /Electricity - 884.273 884,273 60,210 217,863,757 217,803,547 - Page 9 - For the period Cumulative Cumulative June to June 2016 2016 2015 N N N 5. Bank and cash balances ECO Bank Counterpart fund account 23,625 ECO Bank Domiciliary account 2 ECO Bank drawdown account 34 2,484,791 ECO Bank Interest account 2,814,833 2,376,902 2,814,837 4,885,320 6. IDA Special account Balance at 1 January, 2016 - 1,038,489,264 1,027,654,264 Drawings during the year 7,878,030 7,878,030 10,835,000 Balance as at 30 June, 2016 7,878,030 1,046,367,294 1,038,489,264 7. Government counterpart fund State Government Balance as at 1 January, 2016 - 155,460,900 155,460,900 Addition During the year _ _ _ - 155,460,900 155,460,900 8. Federal Government Balance as at 1 January 2016 - 150,000 150,000 Addition During the year _ _ - 150,000 150,000 9 Local Govt. Government/ Community contribution Balance as at 1 January 2016 - Addition During the year - 1,779,898 1,779,898 1,779,898 1,779,898 10. Miscellaneous Income Interest received from Naira account 798 5,949,979 5,949,181 Other Income 1,200 3,366,991 3,365,791 Interest received from Special account - 1,661,923 1,661,23 1,998 10,978,893 10,976,895 -Page 10 - EKITI STATE WORLD BANK ASSISTED FADAMA III PROJECT RECONCILIATION STATEMENTS OF SPECIAL ACCOUNT AS AT 30 JUNE, 2016 ACCOUNT NO 1683010182540701 - ECO BANK PLC $ Total amount received from IDA 6,725,027.51 Less: Withdrawal based on eligible expenditure/recoveries 6,725,027.51 Balance as at 30 June 2016 0 - Page 11 - EKITI STATE WORLD BANK ASSISTED FADAMA III PROJECT SUMMARY OF STATEMENT OF EXPENDITURES SUBMITTED FOR WITHDRAWAL APPLICATIONS FOR THE PERIOD ENDED 30 JUNE, 2016 Category of Contract Total amount of Eligible Invoice amount Recoveries invoices covered financing eligible for by application % financing and paid S 6 $ Consultancy 11,506.45 100 11,506.45 11,506.45 Grants and funds 10,707.00 100 10,707.00 10,707.00 Operating 17,786.55 100 17,786.55 178.55 40,000.00 40,000.00 40,000.00 - Page 12 - EKITI STATE WORLD BANK ASSISTED FADAMA III IPROJECT LIST OF ASSETS FROM THE INCEPTION TO 30 JUNE, 2016 S/N DESCRIPTION DATE SUPPLIERS AMOUNT N 1 80 no. of millenous plastic chairs 18/11/2008 Twins Ventures Ent., Ado Ekiti 124,000 2 9 Office Tables/Armless Chairs 31/12/2004 Wood craft fu., Elekute, Ado 240,000 3 Office sign post const. 31/08/2008 Sam. Id. Design, Ikole 27,000 4 Elemax Gen. Set 06/05/2009 CHY Best Electrical, Ado Ekiti 8,800 5 4 Plastic Table 07/03/2009 Twins Ventures Ent., Ado Ekiti 300,000 6 Sonny Data Projector 13/01/2010 CHY Best Electrical, Ado Ekiti 160,000 7 3 imported Steel Cabinet 13/01/2000 Rau Tab. Nig., Ado Ekiti 163,500 8 3 HP Laptop 17/05/2010 BT Micro, 7, Toyin Str., Lagos 654,750 9 40 HP Desk Top Computer 17/05/2010 BT Micro, 7, Toyin Str., Lagos 5,112,007 10 20 HP Lazer Jet Printer 17/05/2010 BT Micro, 7, Toyin Str., Lagos 1,166,000 11 40 Mercury 1500 WA UPS 17/05/2010 BT Micro, 7, Toyin Str., Lagos 1,012,000 12 2 Sharp AR M56 3 Photocopier 17/05/2010 BT Micro, 7, Toyin Str., Lagos 1,177,000 13 HP Scan 5590 Scanner 17/05/2010 BT Micro, 7, Toyin Str., Lagos 82,500 14 Toyota Hilux 4 WDS Eng. 8088200 25/03/2009 Elizade Nitg. Ltd. 4,545,000 15 Toyota Hilux 4 WD Bus 15/11/2010 AT & S Iv. Ltd., Ikeja Lagos 5,761,800 16 3 Toyota Hilux 4 WD Double Pick-up 15/11/2010 AT & S Iv. Ltd., Ikeja Lagos 15,471,000 17 64 Motorcycle Venus for Comm. Facilitators 22/11/2010 AT & S Iv. Ltd., Ikeja Lagos 4,193,200 18 16, 2.5 KVG Gen Set 01/06/2010 Chief Akin Ajayi Tech. Akure 720,000 19 One 18 KVA Diesel Generators 01/06/2010 Chief Akin Ajayi Tech. Akure 2,720,000 20 Pernasonic 10 Digital Video 30/11/2012 37, POWA Computer, Ado. Ekiti 320,000 21 NIKKON 060 Digital Phot. Camera 30/11/2012 37, POWA Computer, Ado. Ekiti 100,000 22 10 Camera Mini Digital 30/11/2012 37, POWA Computer, Ado. Ekiti 295,000 23 Zoom lens (55.2) 30/11/2012 37, POWA Computer, Ado. Ekiti 75,000 24 Tripod Stand 30/11/2012 37, POWA Computer, Ado. Ekiti 35,000 25 Public Address System 30/11/2012 37, POWA Computer, Ado. Ekiti 70,000 26 Samsung Plasma (2) TV Sets 30/11/2012 37, POWA Computer, Ado. Ekiti 98,000 27 CD/DVD Burner 30/11/2012 37, POWA Computer, Ado. Ekiti 60,000 28 CD/DVD Audio House 30/11/2012 90,000 29 12 Acer & HD Laptops 3 TB External Hand Drive 11/10/2013 9iCexpeshun Digital, Marina, 2132,500 4 Users G-Data Internet Lagos. Verizon Tap 3V.0 phone 46,914,057 - Page 13 - EKITI STATE WORLD BANK ASSISTED FADAMA III PROJECT IDA DISBURSEMENT FOR THE YEAR ENDED 30 JUNE, 2016 Withdrawal Description Amount application requested $ EKS- SFCO 062 Cancelled - EKS -SFCO 063 Cancelled - EKS- SFCO 064 Cancelled . EKS- SFCO 065 Cancelled - EKS- SFCO 066 Cancelled 4 EKS- SFCO 067 Replenishment 40,000