REPUBLIC OF KENYA ~AGlii OFFICE OF THE AUDITOR-GENERAL EnhaincingI Accorab v REPORT OF THE AUDITOR-GENERAL ON KENYA URBAN WATER AND SANITATION OBA PROJECT FUND FOR LOW INCOME AREAS FOR THE YEAR ENDED 30 JUNE, 2020 WATER SECTOR TRUST FUND 4I WateFund MINISTRY OF WATER, WATER SECTOR TRUST FUND SANITATION AND IRRIGATION KENYA URBAN WATER AND SANITATION (KUWAS) OBA PROJECT FUND FOR LOW INCOME AREAS P132979 IMPLEMENTED BY WATER SECTOR TRUST FUND (WSTF) PROJECT GRANT/CREDIT NUMBER TF 016395-KE ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED JUNE 30, 2020 Prepared in accordance with the Cash Basis of Accounting Method under the International Public Sector Accounting Standards (IPSAS) ALJVYA URBAN WATER AND SANITATION (KUWAS) OBA PROJECT Reports and Financial Statements For the financial year ended June 30, 2020 CONTENTS PA 1. PROJECT INFORMATION AND OVERALL PERFORMANCE..... 2. STATEMENT OF PERFORMANCE AGAINST PROJECT'S PREDETRMINED OBJECTIVES ' 3. CORPORATE SOCIAL RESPONSIBILITY STATEMENT/ SUSTAINABILITY REPORTING...........................viii 4. STATEMENT OF PROJECT MANAGEMENT RESPONSIBILITIESSPONSIBLITIES.................. ................ .................. i 5. REPORT OF THE INDEPENDENT AUDITORS ON THE OBA PROJECT 6. STATEMENT OF RECEIPTS AND PAYMENTS FOR THE PERIOD ENDED 30TH JUNE 2020....................... 1 7. STATEMENT OF FINANCIAL ASSETS AS AT 30TH JUNE 2020. 8. STATEMENT OF CASHFLOW FOR THE PERIOD 30TH JUNE 2020 9. STATEMENT OF COMPARATIVE BUDGET AND ACTUAL AMOUNTS 10. NOTES TO THE FINANCIAL STATEMENTS. 11. PROGRESS ON FOLLOW UP OF PRIOR YEAR AUDITOR'S RECOMMENDATIONS.................................... 14 1 KENYA URBAN WA TER AND SANITATION (KUWAS) OBA PROJECT Reports and Financial Statements For the financial year ended June 30, 2020 1. PROJECT INFORMATION AND OVERALL PERFORMANCE 1.1 Name and registered office Name: The project's official name is Kenya Urban Water and Sanitation (KUWAS) OBA Project Fund for Low Income Areas, Objective: 'The key objective of the project is to increase the number of people in low income areas with access to improved water supply and sanitation services in Kenyan towns and cities. Address: The project headquarters offices are Nairobi (city), Nairobi County, Kenya. The address of its registered office is: CIC Plaza Mara Road PO Box 49699-00100 Nairobi, Kenya Tel: 254-20-272 0696 Contacts: The following are the project contacts Telephone: 254-20-272 0696 E-mail: ismail.shaiye@waterfund.go.ke Website: www.waterfundgo.ke 1.2 Project Information Project Start Date: 01/12/2014 Project End Date: 3___ 30/11/2020 Project Manager: Fidelis Tamangani Project Sponsor: World Bank 1.3 Project Overview Line Ministry of Water and Sanitation. Ministry/State Department of the project _1 Project number F 016395-KE Strategic goals of The objective of the program is to improve the operating efficiency and financial the project performance of WSPs, and to extend access to unserved consumers. Once the projects are complete and pre-agreed targets set for the project have been achieved, the WSPs will be eligible for up to 60 percent subsidy of the KENYA URBAN WATER AND SANITATION (KUWAS) OBA PROJECT Reports and Financial Statements For the financial year ended June 30, 2020 commercial loans borrowed. The subsidies are disbursed towards partial loan repayment. In recognition of the need to reduce grant financing for commercially viable water utilities and in order to introduce a new business model to water financing, the Result Based Financing (RBF) programme is supporting water utilities that are investing in water supply and sanitation improvement projects in the low- income and underserved rural and urban areas in Kenya. The Water Service Providers (WSPs) are able to leverage loans from local financing institutions, which are then subsidised at a percentage of the project cost on attainment of agreed deliverables. Achievement of The projects to be implemented by the water utilities are pre-financed with strategic goals commercial loans from domestic lenders in Kenya on market terms for construction of water supply and sanitation services infrastructure. The loans will support investments linked to the following: * Construction/expansion of water and sewer networks to reach unserved consumers; * Rehabilitation/improvement of existing networks e.g. the non-revenue water reduction programme; * Water and/or sewer connections to households and public points; and * Water and sewer treatment facilities. After completion of their projects, the water utilities are incentivised through applying one-off subsidies provided under the RBF sub-programmes for up to 60%. To facilitate the uptake of the RBF subsidies, the water utilities' projects are pre- financed with commercial loans from local lenders. The RBF programme is currently working with four commercial banks, namely Sidian Bank, Kenya Commercial Bank (KCB), Co-operative Bank and Housing Finance, which have access to a 50% guarantee provided by USAID. Other banks, including Equity Bank, Family Bank, CBA and ABC Bank, have also been approached by the Water Fund and have shown interest in financing the water utilities under the programme. Ill KENYA URBAN WATER AND SANITA TION (KUWAS) OBA PROJECT Reports and Financial Statements For the financial year ended June 30, 2020 Other important The Results-Based Financing (RBF) investment programme is a commercial background financing facility that became operational in WSTF in December 2014 after the information of Government of Kenya signed a Grant Subsidiary Agreement with the German the project Development Bank (KfW) and the World Bank. The Swedish International Development Agency (SIDA) provided a grant for 11.835 million USD through the World Bank Output-Based Aid (OBA) project. Over the last few years, Kenya has been classified as lower middle income country- This comes with the consequences reduced support and official development assistance. This has precipitated the dwindling resources in the water sector against the need for increased water and sanitation access. The foregoing background therefore calls for innovative financing to meet the needs in the sector. As a result, the World Bank having piloted the programme initially scaled it up starting 2014 with WSTF identified as the Executing Agency. The programme targeted the most vulnerable residents of low income areas of urban cities, towns as well as peri-urban areas. The programme therefore mobilized resources and implemented 10 projects that are addressing sanitation and water challenges. Current situation The program has also disbursed subsidies to the five projects for those that are that the project ongoing and those fully completed totalling KShs. 160.89 million by 30 June was formed to 2019. An additional 9 water utilities are currently accessing technical assistance intervene funding in excess of KShs. 35 million for project proposal development, after which they will be eligible to access commercial loans from local lenders. The 9 projects are estimated to cost in excess of KShs. 1.5 billion and will access subsidies of over KShs. 850 million after fully achieving the pre-agreed targets. The RBF program has reached out to a total of 11,172 households or 54,573 people in low income areas with improved water and sanitation services. The primary beneficiaries reached are categorized as 66,735 people accessing individual water connections, 6,578 people accessing water kiosks and 420 people accessing yard taps. The program is targeting to reach at least 120,000 people with access to clean water and sanitation services by 30 November 2020. Project duration The project started on Ist December 2014 and is expected to run until 31 March 2021. 1.4 Bankers National Bank of Kenya National Bank Building Harambee Avenue, Nairobi P.0 BOX 72866-00200 Nairobi iv KENYA URBAN WATER AND SANITATION (KUWAS) OBA PROJECT Reports and Financial Statements For the financialyear ended June 30, 2020 1.5 Auditors Office of the Auditor General. Anniversary Towers, University Way P.O. Box 30084 0100 Nairobi. 1.6 Roles and Responsibilities Names Title Key qualification desiunation Keypo qualiicatinie es Programme Masters in Business Tamangani Manager Administration, * Baseline Study & Reporting * Verification of Satisfactory Bachelor of Science Natural Provision of Outputs ArsoureMngm t& * Assess compliance with project A e rules and procurement and safeguards requirements * Preparation of Outputs Panue Nyas'trs G Bus s D_ Verication Report Procurement Purchasing and Supplies * Support Project Procurement Officer Processes MSC Procurement and Logistics Bachelor of Commerce - - - -____Marketing enor Certified Public Accountant Karanja Finance (CPA - K) * Preparation of project financial OfficerZl P cstatements and reporting. Masters in Project Planning and Management Bachelor of Commerce, 1.7 Funding summary Svi four o 6 y sr20 to Nnv bert2020bwith an approved budget of US$ 1183 euialnttoKSs ,l3,0 OAhihlihte d inteuale s below:uemntan Below is the funding summary: V KENYA URBAN WA TER AND SAINITA TION (KUWAS) OBA PROJECT Reports and Financial Statements For the financial year ended June 30, 2020 (i Grant 1.8 Summary of Overall Project Performance: Since inception of the program in December 2014, the OBA program has supported nine (9) water and sanitation improvement projects valued at KShs. 1.27 billion. A total of 14 WSP have accessed technical assistance funding amounting to Kshs. 66.96 million for the development of bankable proposals and projects supervision by June 30, 2019. Out of the 14 projects, 9 viable projects have a loan portfolio valued at Kshs. 1.27 billion. The loans are disbursed through four commercial banks namely Sidian bank (Kshs. 224 million), Co-op bank (Kshs. 935 million), Family bank (Kshs. 109 million). Summary of Overall Project Performance (continued) The program has also disbursed subsidies for completed and on-going projects worth Kshs. 332 million as at June 30, 2019. Four out of the nine financed projects have been completed and have accessed the full RBF subsidies valued at Kshs. 159 million. The on-going five projects, have also received partial advance subsidy disbursements totalling to Kshs. 172 million. The five projects are expected to be fully completed by November 30, 2020 and will access additional subsidies for Kshs. 525 million. The OBA program has to date benefited a total of 11,172 low income households or 54,573 people with access to clean water. By November 2020, the projects are expected to have reached out to 120,500 people or 24,100 households accessing clean water supply and sanitation services. 1.9 Summary of Project Compliance: The project is in compliance with the financing agreement, country laws and regulations. There were no instances of non-compliance during the period. vi KENYA URBAN WATER AND SANITATION (KUWAS) OBA PROJECT Reports and Financial Statements For the financial year ended June 30, 2020 2. STATEMENT OF PERFORMANCE AGAINST PROJECT'S PREDETRMINED OBJECTIVES Section 81 (2) (f) of the Public Finance Management Act, 2012 requires that, at the end of each financial year, the Accounting officer when preparing financial statements of each National Government entity in accordance with the standards and formats prescribed by the Public Sector Accounting Standards Board includes a statement of the national government entity's performance against predetermined objectives. The project development objective (PDO) is to increase the number of people in low income areas with access to improved water supply and sanitation services. The primary beneficiaries of the OBA Fund are 120,500 residents of low income areas who are gaining access to water and sanitation services through individual water and sewerage connections, public water and or public sanitation services (water kiosks and public toilets) constructed near or within their areas of residence. Output Number of Target people targeted Number of water connections made under the project 14500 72,500 Number of community water points 40 8,500 Number of sewer connections made under the project 7,906 39,500 Progress on attainment of Strategic development objectives For purposes of implementing and cascading the above development objectives to specific sectors, all the development objectives were made specific, measurable, achievable, realistic and time-bund (SMART) and converted into development outcomes. Attendant indicators were identified for reasons of tracking progress and performance measurement: Below we provide the progress on attaining the stated objectives: Huehol Cwanectiom EHelaiesc @iJ 4 Pblic W.tr koski Bice ie r 268 Yaw ia I &Le&cians wf 60 WSI achieved to 5 peole/HH Achined p"ople;l/, s adiev Eo;ivard ia Muang'a South 1 2,310 11,550 14 4,004 7 420 Murang'a Town 1,285 5,140 1 286 Nol Turesh 4,009 20,015 8 2,288 Nawasha 1,596 7,980 10 2,860 Muran'a South lI 3,031 15,155 Matha 1,417 7,085 KjLuODu 1,345 6,725 Subtotal 14,993 73,680 33 9,438 7 420 INXen 2,963 14,815 mbU 4,186 20,930 Subtotal 7,149 35,745 - - - vii KENYA URBAN WATER AND SANITATION (KUWAS) OBA PROJECT Reports and Financial Statements For the financial year ended June 30, 2020 3. CORPORATE SOCIAL RESPONSIBILITY STATEMENT/ SUSTAINABILITY REPORTING The implemented water supply and sanitation improvement subprojects are assessed on their operational performance through a sustainability test. This is done by reviewing data of at least 80% of the households connected due to the subprojects, which may include:- a) bills issued for services provided and b) the amount paid for the bill, on time_ The aim is to determine if the beneficiaries are accessing the service, that water supply or sanitation services are reaching them. The ability to pay for the water bill and well as the sewerage bill is assessed for profitability check of the WSPs. Since the WSPs are pre-financed by the commercial banks, the sustainability test is also to verify if the WSPs are collecting enough revenue to be able to repay 40% of the loan after the full payment of the 60% OBA subsidy. viii KENYA URBAN WA TER AND SA NITA TION (KUWAS) OBA PROJECT Reports and Financial Statements For thefinancial year ended June 30, 2020 4. STATEMENT OF PROJECT MANAGEMENT RESPONSIBILITIES The WSTF management are responsible for the preparation and presentation of the Project's financial statements, which give a true and fair view of the state of affairs of the Project for and as at the end of the financial year (period) ended on June 30, 2020. This responsibility includes: (i) maintaining adequate financial management arrangement and ensuring that these continue to be effective throughout the reporting period; (ii) maintaining proper accounting records, which disclose with reasonable accuracy at any time the financial position of the Project; (iii) designing, implementing and maintaining internal controls relevant to the preparation and fair presentation of the financial statement, and ensuring that they are free from material misstatements, whether due to error or fraud; (iv) safeguarding the assets of the Project; (v) selecting and applying appropriate accounting policies; and (vi) making accounting estimates that are reasonable in the circumstances. WSTF Management accept responsibility for the Project's financial statements, which have been prepared on the Cash Basis Miethod of Financial Reporting, using appropriate accounting policies in accordance with International Public Sector Accounting Standards. Management are of the opinion that the Project's financial statements give a true and fair view of the state of Project's transactions during the financial year/period ended June 30, 2020, and of the Project's financial position as at that date. Management further confirm the completeness of the accounting records maintained for the Project, which have been relied upon in the preparation of the Project financial statements as well as the adequacy of the systems of internal financial control. Management confirm that the Project has complied fully with applicable Government Regulations and the terms of external financing covenants, and that Project funds received during the financial year/period under audit were used for the eligible purposes for which they were intended and were properly accounted for. Approval of the Project financial statements The Project financial statements were approved by the Chief Executive Officer, Project Manager and the Acting ChiefManager Financefor Kenya Urban Water and Sanitation (KUWAS) OBA project on iSJE~. - -2020 and signed by them. ICil Fahmy MShie Frot Manager Ag. Chief Manager Finance Ismail Fahmy M. Shaiye Fidelis Tamangani Samwel Gitau Mbugua ICPAK Member Number: 2868 ix REPUBLIC OF KENYA Telephone: +254-(2o) 3214000 HEADQUARTERS E-mail: info@oagkenya.go.ke Anniversary Towers Website: www.oagkenya.go.ke Monrovia Street OFFICE OF THE AUDITOR-GENERAL P.O. Box 30084-00100 E ihancing Acco _!bity NAIROBI REPORT OF THE AUDITOR-GENERAL ON KENYA URBAN WATER AND SANITATION OBA PROJECT FUND FOR LOW INCOME AREAS FOR THE YEAR ENDED 30 JUNE, 2020 - WATER SECTOR TRUST FUND REPORT ON THE FINANCIAL STATEMENTS Opinion I have audited the accompanying financial statements of Kenya Urban Water and Sanitation OBA Project Fund for Low Income Areas set out on pages 1 to 19, which comprise the statement of financial assets as at 30 June, 2020, and the statement of receipts and payments, statement of cash flows and statement of comparative budget and actual amounts for the year then ended, and a summary of significant accounting policies and other explanatory information in accordance with the provisions of Article 229 of the Constitution of Kenya and Section 35 of the Public Audit Act, 2015. I have obtained all the information and explanations which, to the best of my knowledge and belief, were necessary for the purpose of the audit. In my opinion, the financial statements present fairly, in all material respects, the financial position of Kenya Urban Water and Sanitation OBA Project Fund for Low Income Areas as at 30 June, 2020, and of its financial performance and cash flows for the year then ended, in accordance with International Public Sector Accounting Standards (Cash Basis) and comply with the Public Finance Management Act, 2012 and Financing Agreement No.TF016395-KE between International Development Association and the Republic of Kenya dated 5 September, 2014. In addition, the special accounts statement presents fairly the special accounts transactions and the closing balance has been reconciled with the book balances. Basis for Opinion The audit was conducted in accordance with International Standards of Supreme Audit Institutions (ISSAls). I am independent of Kenya Urban Water and Sanitation OBA Project Fund for Low Income Areas Management in accordance with ISSAI 130 on Code of Ethics. I have fulfilled other ethical responsibilities in accordance with the ISSAI and in accordance with other ethical requirements applicable to performing audit of financial statements in Kenya. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion. Report ofthe Auditor-General on Kenva [rban Water and Sanitation OBA Project Fundfjr Low Income Areasfor the year ended 30 June, 2020 - Water Sector Trust Fund Key Audit Matters Key audit matters are those matters which, in my professional judgment, were of most significance in the audit of the financial statements. There were no key audit matters to report in the period under review. Other Matter Budget Control and Performance The statement of comparative budget and actual amounts reflects final receipts budget and actual on comparable basis of Kshs.433,000,000 and Kshs.209,801,523 respectively resulting to an under-funding of Kshs.233,198,477 or 53% of the budget. Similarly, the Project performance was limited to the receipts realized and therefore spent an amount of Kshs.211,084,205 or 48% out of the approved budget of Kshs.433,000,000. The underfunding affected the planned activities which in turn may have impacted negatively on service delivery to the public. REPORT ON LAWFULNESS AND EFFECTIVENESS IN USE OF PUBLIC RESOURCES Conclusion As required by Article 229(6) of the Constitution, based on the audit procedures performed, except for the matter described in the Basis for Conclusion on Lawfulness and Effectiveness in Use of Public Resources section of my report, I confirm that, nothing else has come to my attention to cause me to believe that public resources have not been applied lawfully and in an effective way. Basis for Conclusion Irregular Award of Contract by Kisumu Water and Sewerage Company As disclosed in Note 10.6 to the financial statements, the statement of receipts and payments reflects an expenditure of Kshs.1 70,531,079 under other grants, transfers and payments which includes an amount of Kshs.30,566,687 subsidy payment to Kisumu Water and Sewerage Company Limited, a water service provider. A review of utilization of the transfer of subsidies at the water service provider revealed flaws in the procurement process as detailed in ensuing paragraphs. Kisumu Water and Sewerage Company Limited contracted a construction firm on 25 July, 2017 to undertake construction works of a water supply pipeline and water reservoirs at a cost of Kshs.98,186,004 vide tender No.KWS/01/RBW/2016-2017 for a contract period of one (1) year subsidized by the Project. However, review of the procurement process leading to the award of the contract revealed that the winning bidder had not met requirements set out in the tender documents for award of the contract as follows: - (i) Criteria No.3 required the bidder to demonstrate access to or have available liquid assets, unencumbered real assets, and a line of credit sufficient to meet the construction cash flow requirement estimated at Kshs.50,000,000 net of the Report of the Aluditor-General on Kenva Urban Water and Sanitation OBA Project Fund for Low Income Areas for the year ended 30 June, 2020 - Water Sector Trust Fund 2 bidder's other commitments. However, the awarded bidder did not attach line of credit from any bank despite having attached financial statements showing net cash outflows of Kshs.31,220,001, Kshs.35,410,342 and Kshs.60,411,484 in 2015, 2014 and 2013 respectively. (ii) Criteria No.5 required details of the contractors' representative and key personnel. However, during evaluation and verification of bid documents it was revealed that the winning bidder attached Curricula Vitae (CVs) of personnel who were not certified by the representative of the Company as per the requirement, and notably an environmental specialist resume and declaration as the contractor's representative and key personnel in form PER-1 were missing. (iii) Criteria No.6 required bidders to demonstrate possession of specified construction equipment. However, scrutiny of bid documents revealed that the winning bidder did not demonstrate possession of construction equipment specified in the tender documents including; a concrete mixer 0.5m3/min, survey equipment, a vibrator and an air compressor with jack hammer (30m3/min at 10 BARS). In view of the above, it was not possible to confirm whether the winning bidder qualified technically to be awarded the contract, and whether expenditure of Kshs.98,186,004 under the contract was incurred lawfully and in an effective way. The audit was conducted in accordance with ISSAl 4000. The standard requires that I comply with ethical requirements and plan and perform the audit to obtain assurance on whether the activities, financial transactions and information reflected in the financial statements are in compliance, in all material respects, with the authorities which govern them. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my conclusion. REPORT ON EFFECTIVENESS OF INTERNAL CONTROLS, RISK MANAGEMENT AND GOVERNANCE Conclusion As required by Section 7(1)(a) of the Public Audit Act, 2015, based on the audit procedures performed, except for the matter described in the Basis for Conclusion on Effectiveness of Internal Controls, Risk Management and Governance section of my report, I confirm that, nothing else has come to my attention to cause me to believe that internal controls, risk management and overall governance, were not effective. Basis for Conclusion Delays in Project Implementation The Project commenced on 1 December, 2014 with the expected completion date set at 30 November, 2020. However, as at the time of the audit in October, 2020, the Project had absorbed an amount of Kshs.607,776,950 of the total donor commitment funding of Kshs.1,183,500,000, which accounts for 51%. It was not confirmed how Management intends to implement the rest of the activities within the remaining timeframe. Report of the Auditor-General on Kenya Urban Water and Sanitation OBA Project Fund for Low Income Areas for the year ended 30 June, 2020 - Water Sector Trust Fund 3 In view of the above, the objectives of the Project may not be achieved and the intended beneficiaries may take longer to derive benefits from the Project. This raises doubt on the governance structures in place and capacity of Management to implement the Project to achieve the intended purpose. The audit was conducted in accordance to ISSAI 2315 and 2330. The standards require that I plan and perform the audit to obtain assurance on whether effective processes and systems of internal control, risk management and overall governance, were operating effectively, in all material respects. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my conclusion. Responsibilities of Management and those Charged with Governance Management is responsible for the preparation and fair presentation of these financial statements in accordance with International Public Sector Accounting Standards (Cash Basis), and for maintaining effective internal control as Management determines is necessary to enable the preparation of financial statements which are free from material misstatement, whether due to fraud or error and for assessment of the effectiveness of the internal control, risk management and overall governance. In preparing the financial statements, Management is responsible for assessing the Project's ability to continue sustaining services, disclosing as applicable, matters related to sustainability of services and using the applicable basis of accounting unless Management is aware of the intention to terminate the Project or cease operations. Management is also responsible for the submission of the financial statements to the Auditor-General in accordance with the provisions of Section 47 of the Public Audit Act, 2015. In addition to the responsibility for the preparation and presentation of the financial statements described above, Management is also responsible for ensuring that the activities, financial transactions and information reflected in the financial statements are in compliance with the authorities which govern them, and that public resources are applied in an effective way. Those charged with governance are responsible for overseeing the Project's financial reporting process, reviewing the effectiveness of management's systems for monitoring compliance with relevant legislative and regulatory requirements, ensuring that effective processes and systems are in place to address key roles and responsibilities in relation to governance and risk management, and ensuring the adequacy and effectiveness of the control environment. Auditor-General's Responsibilities for the Audit The audit objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report which includes my opinion in accordance with the provisions of Section 48 of the Public Audit Act, 2015 and submit the audit report in compliance with Article 229(7) of the Constitution. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISSAls Report of the Auditor-General on Kenya Urban Water and Sanitation OBA Project Fund for Low Income Areas for the year ended 30 June, 2020 - Water Sector Trust Fund 4 will always detect a material misstatement and weakness when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. In addition to the audit of the financial statements, a compliance review is planned and performed to express a conclusion on whether, in all material respects, the activities, financial transactions and information reflected in the financial statements are in compliance with the authorities which govern them and that public resources are applied in an effective way, in accordance with the provisions of Article 229(6) of the Constitution, and submit the audit report in compliance with Article 229(7) of the Constitution. Further, in planning and performing the audit of the financial statements and audit of compliance, I consider internal control environment in order to give an assurance on the effectiveness of internal controls, risk management and governance processes and systems in accordance with the provisions of Section 7(1)(a) of the Public Audit Act, 2015 and submit the audit report in compliance with Article 229(7) of the Constitution. My consideration of the internal control would not necessarily disclose all matters in the internal control which might be material weaknesses under the ISSAls. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level, the risk that misstatements caused by error or fraud in amounts which would be material in relation to the financial statements being audited, may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Because of its inherent limitations, internal control may not prevent or detect misstatements and instances of non-compliance. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the Project's policies and procedures may deteriorate. As part of an audit conducted in accordance with ISSAls, I exercise professional judgement and maintain professional skepticism throughout the audit. I also: * Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence which is sufficient and appropriate to provide a basis for my opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. * Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Management. * Conclude on the appropriateness of the Management's use of the applicable basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions which may cast significant doubt on the Project's ability to continue sustaining its services. If I conclude that a material Report of the Auditor-General on Kenya Urban Water and Sanitation OBA Project Fund for Low Income Areasfor the year ended 30 June, 2020 - Water Sector Trust Fund 5 uncertainty exists, I am required to draw attention in the auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify my opinion. My conclusions are based on the audit evidence obtained up to the date of my audit report. However, future events or conditions may cause the Project to cease sustaining its services. * Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner which achieves fair presentation. * Obtain sufficient appropriate audit evidence regarding the financial information and business activities of the Project to express an opinion on the financial statements. * Perform such other procedures as I consider necessary in the circumstances. I communicate with the Management regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control which are identified during the audit. I also provide Management with a statement that I have complied with relevant ethical requirements regarding independence, and communicate with them all relationships and other matters which may reasonably be thought to bear on my independence, and where applicable, related safeguards. ay a AUDITOR-GENERAL Nairobi 15 December, 2020 Report of the Auditor-General on Kenya Urban Water and Sanitation OBA Project Fundfor Low Income Areas for the year ended 30 June, 2020 - Water Sector Trust Fund 6 KENYA URBAN WATER AND SANITATION (KUWAS) OBA PROJECT Reports and Financial Statements For the financial year ended June 30, 2020 6. STATEMENT OF RECEIPTS AND PAYMENTS FOR THE PERIOD ENDED 30TH JUNE 2020 Note 2019/2020 2018/2019 Cumulative _ _ _ _to-date Receipts and Payment Receipts and Payment payment s made payment s made controlled by by third controlled by third the entity parties by the entity parties KShs KShs KShs KShs KShs RECEIPTS Proceeds from domestic and Poroedsn fromt do10.3 209,801,523 - 64,705,876 - 607,776,950 foreign grants TOTAL RECEIPTS 209,801,523 - 64,705,876 - 397,975,427 PAYMENTS Compensation of employees 10.4 13,623,320 - 4,988,360 - 39,143,460 Purchase of goods and services 10.5 26,929,806 - 38,057,297 - 165,326,988 Other grants and transfers and pyents a10.6 170,531,079 - (2,530,829) - 331,422,807 payments TOTAL PAYMENTS 211,084,205 - 40,514,827 - 535,893,255 SURPLUS/(DEFICIT) (1,282,682) 24,191,049 - 71,883,695 The accounting policies and explanatory notes to these financial statements are an integral part of the financial statements. Chief Executive Officer Project Manager Ag. Chief Manager Finance Ismail Fahrny M. Shaiye Fidelis Tamangani Samwel Gitau Mbugua ICPAK Member Number: 2868 KENYA URBAN WA TER AND SANITATION (KUWAS) OBA PROJECT Reports and Financial Statements For the financial year ended June 30, 2020 7. STATEMENT OF FINANCIAL ASSETS AS AT 30TH JUNE 2020 Note 2019/2020 2018/2019 KShs FINANCIAL ASSETS Cash and Cash Equivalents Cash Balances 10.7 71,883,695 73,166,377 Total Cash and Cash Equivalents 71,883,695 73,166,377 TOTAL FINANCIAL ASSETS 71,883,695 73,166,377 REPRESENTED BY Fund balance b/fwd 10.8 73,166,377 48,975,328 Surplus/(Deficit) for the year (1,282,682) 24,191,049 NET FINANCIAL POSITION 71,883,695 73,166,377 The accounting policies and explanatory notes to these financial statements form an integral part of the financial statements. The financial statements were approved on I /U6\iCo,?y2020 and signed by:- Chief Executive Officer Project Manager Ag. Chief Manager Finance Ismail Fahmy M. Shaiye Fidelis Tamangani Samwel Gitau Mbugua ICPAK Member Number: 2868 2 KENYA URBAN WATER AND SANITATION (KUWAS) OBA PROJECT Reports and Financial Statements For the financial year ended June 30, 2020 8. STATEMENT OF CASHFLOW FOR THE PERIOD 30TH JUNE 2020 2019/2020 2018/2019 Note KShs KShs Receipts for operating activities Proceeds from domestic and foreign grants 10.3 209,801,523 64,705,876 Payments for operating activities Compensation of employees 10.4 13,623,320 4,988,360 Purchase of goods and services 10.5 26,929,806 38,057,297 Other grants and transfers and payments 10.6 170,531,079 -2,530,829 Net cash flow from operating activities (1,282,682) 40,514,827 CASHFLOW FROM INVESTING ACTIVITIES Acquisition of Assets - Net cash flows from Investino, Activities CASHFLOW FROM BORROWING ACTIVITIES Proceeds from Foreign Borrowings Net cash flow from financing activities NET INCREASE/(DECREASE) IN CASH AND CASH (1,282,682) 24,191,049 EQUIVALENT Cash and cash equivalent at BEGINNING of the year 73,166,377 48,975,328 Cash and cash equivalent at END of the year 71,883,695 73,166,377 The accounting policies and explanatory notes to these financial statements form an integral part of the financial statements. The entity financial statements were approved on A.)_i___e_ 2020 and signed b Chief Executive Officer Project Manager Ag. Chief Manager Finance Ismail Fahmy M. Shaiye Fidelis Tamangani Samwel Gitau Mbugua ICPAK Member Number: 2868 �: 1 � ,О О \ о � ,., о \ \ ' � ОО � ��. И ОО ..''., G1 � � U V � .C1i М......... д' 7 N � � �� о � Сб i i о v= й •� -° t� t� оо � cv о� ; " � � �о и � r с� � оо оо cv �л = - -С � о� с� �д �о �.,_ � �--� �О 00 ', М Q� _',�� �U м М `J � �О � й I � N N � l� N i1 � z' � .N.i ,,,, ' � � �^�,, � � ,� г•�J •r`,- О �--� о0 -_ м М ................... О �О G� И �О � � И И .................... М 00 О N � 00 С N N С� .._: �-i м � -- � С v i: v О О N N м о0 Q у � 00 00 �б G1 И О � L ^"G G� Gy М �О О �-. r � �С ,-. L О О N l� �--� .� - _� г� с� с� •- i� у�Л - .� � к _ ^ д U � � � s� +- о о о о о о Q- � у_ у �� о о о °и °и о � � �С�� гл °� cG °о °о м � о�о °о '" •= у�/ � U 3 Е-� =� �г� м гл �� v � �о м ' � � а�., 'Z с м М' .-. l � М I � b0 U � Гг �..... 7� м 7 �.. ' Q Vl � О....... о' О О О С о О О О О О О д о о о о о о й о о о о о о � ,_,� у о о с� t� �r о о о оо и �r о Q i S' М М � �О о � � � G� G� оо О �--� � � С� r � � • - � � � f �t' О г,� ¢ с°�i � I � = у � о о о о о о � �� �д � � у о о о °и °и о с� "` - � � Е-� °! о о и ri сч о `.'`_' Г.• с� О W � °о °о � � � °о � r-tt-••--�- �`� с� Q � � � N N �. � ........ � �О N ... U (, �' ,� .... ,�,, и = U ._ j � •L F � О � � ? О � �. г�, z � � � � � N Ly и tг �, N � _ � ` � и о [�Q, ° , � °л aCi � � М а _ С _и ч ��� � _ � у � � •� � � �� � � и Q- О � V `° �' � ; � '`�' у , Гт� -� и � С � Q � `' С Ш s.�. � -_G 4', �.1 � U �' й � J �, [� _ О 4,_, � L, N �•у � Z � и f2. � С = с� сб � С � W � � � � � U � � � о ч-�, и � ', _+.�_ О � .� _ п о гг и °' � J W и О � �ь+ _ � � Q � � [� у�`'� � �+ С О� � � b_Д > .Гв �+ , У � С' � � � � � �а� � `}' � .гв и а Е'� �. 4. г, и сб о >, N�и,• а� ,� н�. С L� Г/1 С. и и � �' °1 N � Сб �' С к сб `' у и �' � 'F-�i G� N � bA p-I F" и [та w � о � а •� � � sг „ �. � � _. � 4� L .и U о � �� L,� � °� �? а� с� ��� с; а Г� а ЕС-� а U а О ЕС-� Z й. `�. U� KENYA URBAN WA TER AND SANIIA I-ION (KUWAS) OBA PROJECT Reports and Financial Statements For th efinancial year ended June 30, 2020 10. N OT ES TO THE FINANCIAL STATEMENTS The principal accounting policies adopted in the preparation of these financial statements are set out below: 10.1 Basis of Preparation 10.1.1- Statement of compliance and basis of preparation The Financial statements have been prepared in accordance with Cash-basis IPSAS financial reporting under the cash basis of Accounting, as prescribed by the PSASB and set out in the accounting policy note below. This cash basis of accounting has been supplemented with accounting for; a) receivables that include imprests and salary advances and b) payables that include deposits and retentions. The financial statements comply with and confon-n to the forin of presentation prescribed by the PSASB. The accounting policies adopted have been consistently applied to all the years presented. 10A.2 Reporting entity The financial statements are for the 013A Project under National Government of Kenya. The financial statements encompass the reporting entity as specified in the relevant legislation PFM Act 2012. 10.1.3 Reporting currency The financial statements are presented in Kenya Shillings (KShs), which is the functional and reporting currency of the Project and all values are rounded to the nearest Kenya ShillingZ:>* 10.2 Significant Accounting Policies a)Recognition of receipts The Project recognises all receipts from the various sources when the event occurs and the related cash has actually been received by the Govemment. *Transfers from the Exchequer Transfer from Exchequer is recognized in the books of accounts when cash is received. Cash is considered as received when payment *instruction is issued to the bank and notified to the receiving entity. *External Assistance External assistance 's received through grants and loans from multilateral and bilateral development partners. 5 KENYA URBAN WATER AND SANITATION (KUWAS) OBA PROJECT Reports and Financial Statements For the financial year ended June 30, 2020 SIGNIFICANT ACCOUNTING POLICIES (Continued) Donations and 2rants Grants and donations shall be recognized in the books of accounts when cash is received. Cash is considered as received when a payment advice is received by the recipient entity or by the beneficiary. In case of grant/donation in kind, such grants are recorded upon receipt of the grant item and upon determination of the value. The date of the transaction is the value date indicated on the payment advice. Proceeds from borrowing Borrowing includes Treasury bill, treasury bonds, corporate bonds, sovereign bonds and external loans acquired by the Project or any other debt the Project may take on will be treated on cash basis and recognized as a receipt during the year they were received. Undrawn external assistance These are loans and grants at reporting date as specified in a binding agreement and relate to funding for the Project currently under development where conditions have been satisfied or their ongoing satisfaction is highly likely and the project is anticipated to continue to completion. An analysis of the Project's undrawn external assistance is shown in the funding summary * Other receipts These include Appropriation-in-Aid and relates to receipts such as proceeds from disposal of assets and sale of tender documents. These are recognised in the financial statements the time associated cash is received. b) Recognition of payments The Project recognises all payments when the event occurs and the related cash has actually been paid out by the Project. * Compensation of employees Salaries and Wages, Allowances, Statutory Contribution for employees are recognized in the period when the compensation is paid. * Use of goods and services Goods and services are recognized as payments in the period when the goods/services are consumed and paid for. If not paid for during the period where goods/services are consumed, they shall be disclosed as pending bills. * Interest on borrowing Borrowing costs that include interest are recognized as payment in the period in which they incurred and paid for. 6 KENYA URBAN WATER AND SANITATION (KUWAS) OBA PROJECT Reports and Financial Statements For the financial year ended June 30, 2020 SIGNIFICANT ACCOUNTING POLICIES (Continued) * Repayment of borrowing (principal amount) The repayment of principal amount of borrowing is recognized as payment in the period in which the repayment is made. The stock of debt is disclosed as an annexure to the consolidated financial statements. * Acquisition of fixed assets The payment on acquisition of property plant and equipment items is not capitalized. The cost of acquisition and proceeds from disposal of these items are treated as payments and receipts items respectively. Where an asset is acquired in a non-exchange transaction for nil or nominal consideration and the fair value of the asset can be reliably established, a contra transaction is recorded as receipt and as a payment. A fixed asset register is maintained by each public entity and a summary provided for purposes of consolidation. This summary is disclosed as an annexure to the consolidated financial statements. c) In-kind donations In-kind contributions are donations that are made to the Project in the form of actual goods and/or services rather than in money or cash terms. These donations may include vehicles, equipment or personnel services. Where the financial value received for in- kind contributions can be reliably determined, the Project includes such value in the statement of receipts and payments both as receipts and as payments in equal and opposite amounts; otherwise, the contribution is not recorded. d) Cash and cash equivalents Cash and cash equivalents comprise cash on hand and cash at bank, short-term deposits on call and highly liquid investments with an original maturity of three months or less, which are readily convertible to known amounts of cash and are subject to insignificant risk of changes in value. Bank account balances include amounts held at the Central Bank of Kenya and at various commercial banks at the end of the financial year. For the purposes of these financial statements, cash and cash equivalents also include short term cash imprests and advances to authorised public officers and/or institutions which were not surrendered or accounted for at the end of the financial year. Restriction on cash Restricted cash represents amounts that are limited/restricted from being used to settle a liability for at least twelve months after the reporting period. This cash is limited for direct use as required by stipulation. Amounts maintained in deposit bank accounts are restricted for use in refunding third part deposits 7 KENYA URBAN WATER AND SANITATION (KUWAS) OBA PROJECT Reports and Financial Statements For the financial year ended June 30, 2020 SIGNIFICANT ACCOUNTING POLICIES (Continued) e) Accounts receivable For the purposes of these financial statements, imprests and advances to authorised public officers and/or institutions which were not surrendered or accounted for at the end of the financial year is treated as receivables. This is in recognition of the government practice where the imprest payments are recognized as payments when fully accounted for by the imprest or ALE holders. This is an enhancement to the cash accounting policy. Other accounts receivables are disclosed in the financial statements. f) Pending bills Pending bills consist of unpaid liabilities at the end of the financial year arising from contracted goods or services during the year or in past years. As pending bills do not involve the payment of cash in the reporting period, they recorded as 'memorandum' or 'off-balance' items to provide a sense of the overall net cash position of the Project at the end of the year. When the pending bills are finally settled, such payments are included in the statement of receipts and payments in the year in which the payments are made. g) Budget The budget is developed on a comparable accounting basis (cash basis), the same accounts classification basis (except for accounts receivable - outstanding imprest and clearance accounts and accounts payable - deposits, which are accounted for on an accrual basis), and for the same period as the financial statements. The Project's budget was approved as required by Law and National Treasury Regulations, as well as by the participating development partners, as detailed in the Government of Kenya Budget Printed Estimates for the year. The Development Projects are budgeted for under the MDAs but receive budgeted funds as transfers and account for them separately. These transfers are recognised as inter-entity transfers and are eliminated upon consolidation. A high-level assessment of the Project's actual performance against the comparable budget for the financial year/period under review has been included in an annex to these financial statements. 8 KENYA URBAN WA TER AND SANITA TION (KUWAS) OBA PROJECT Reports and Financial Statements For the financial year ended June 30, 2020 SIGNIFICANT ACCOUNTING POLICIES (Continued) h) Exchange rate differences The accounting records are maintained in the functional currency of the primary economic environment in which the Project operates, Kenya Shillings. Transactions in foreign currencies during the year/period are converted into the functional currency using the exchange rates prevailing at the dates of the transactions. Any foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the statements of receipts and payments. i) Comparative figures Where necessary comparative figures for the previous financial year/period have been amended or reconfigured to conform to the required changes in financial statement presentation. j) Errors Material prior period errors shall be corrected retrospectively in the first set of financial statements authorized for issue after their discovery by: i. Restating the comparative amounts for prior period(s) presented in which the error occurred; or ii. If the error occurred before the earliest prior period presented, restating the opening balances of assets, liabilities and net assets/equity for the earliest prior period presented. 9 KENYA URBAN WA TER AND SANITA TION (KUWAS) OBA PROJECT Reports and Financial Statements For the financial year ended June 30, 2020 NOTES TO THE FINANCIAL STATEMENTS (Continued) 10.3 PROCEEDS FROM DOMESTIC AND FOREIGN GRANTS During the 12 months to 30 June 2020 we received grants from donors as detailed in the table below: Grants Received from Bilatera Donors W d 08 -July Bank 2019 128,26.42 13a091t433 - 13,091,433 World 068 Nov Bank 2019 127,91.64 13,277,8563 World 29 January---32785 Bank 20___ 1,000,000 101,556,963- - 10 1,556,963 World 09 April --- Bank 2020 120,875.46 12,221,607 -- 221,607 World 24 April Total _2 ,__ 2,3 20 8 , 3,62 10.4 COMPENSATION OF EMPLOYEES This relates to salary cost and per diem allowances pald to the program manager during the period. Description Prog_ram manager salary 86 000 Program manager gratuity 3,2000 -e diem- _-__903,3)20 To-a -3,623,320 10 KENYA URBAN WATER AND SANITATION (KUWAS) OBA PROJECT Reports and Financial Statements For the financial year ended June 30, 2020 10.5 PURCHASE OF GOODS AND SERVICES Cum ulative FY 2019/2020 to- date Payments made by the Payments Entity in made by Total Cash third parties -Payments KShs KShs KShs KShs independent verification agent 4,415,000 - 4,415,000 23,739,502 Publicity and workshop 476,100 - 476,100 7,964,634 Administrative overheads 4,274,852 - 4,274,852 18,755,356 Capacity building for subproject design and implementation 17,763,854 - 17,763,854 114,867,496 Total 26,929,806 - 26,929,806 165,326,988 10.6 OBA SUBSIDIES FOR WATER AND SANITATION SUBPROJECTS This relates to subsidies issued to water service providers during the period as follows:- 25 July 2019 1 Thika Water and Sanitation Company (7,149,114) 31 December 2019 Naivasha Water Sewerage & Sanitation Company 28,637,667 31 December 2019 Kisumu Water and Sewerage Co. Ltd 30,566,687 29 January 2020 Nyeri Water and Sewerage Company 45,912,624 09 March 2020 Mathira Water company 21,043,513 06 April 2020 Naivasha Water Sewerage & Sanitation Company 29,370,342 09 April 2020 Muranga South Water and Sanitation Limited 22,149,360 170,531,079 Subsidy amount of Kshs 7.1 million paid to Thika Water and Sanitation Company in 3 1 May 2018 was refunded during the period. 11 KENYA URBAN WA TER AND SANITATION (KUWAS) OBA PROJECT Reports and Financial Statements F or hefinancialyear ended June 30, 2020 10.7 CASH AND CASH EQUIVALENTS CARRIED FORWARD --71,883,695 The project has 2 number of project accounts spread within the project implementation area and I number of foreign currency designated accounts managed by the National Treasury as listed below: 10.7 A Bank Accounts Project Bank Accounts SoealFo Curre Acconts Thentbalan in theny rojct' Speia Deoi Acon()a2t3 ue22 r o iocal ein Currency f-ancis yeto be d 1urwn,c in o eEceuenconta oepoiin Natona Bnk f enya [A/C No 3311001] 40662 National Bank of Kenya [A/C No 33 11002] 4,166 Total local currencby s7,886 01 Totallanc- 71,883,695 Special Deposit Accounts Teublane in th rjcts SeilDeposit Account(s) as at 30" June 2020 are not yet to be drawn into the Exchequer Account ms tvte epwtholneitesondar Below is the Special Deposit Account (SDA) movement schedule which shows the flow of funds that were voted in the year. These funds have been reported as loans/grants received in the year under the Statement of Receipts and Payments. 12 KENYA URBAN WATER AND SANITATION (KUWAS) OBA PROJECT Reports and Financial Statements For the financial year ended June 30, 2020 Soecial Detosit Accounts Movement Schedule (i) A/C Name [A/c No 1000228121] Opening balance 0.71 Total amount deposited in the account -3,288,141 Total amount withdrawn (as per Statement of Receipts & Payments) (2,547,029) Closing balance (as per SDA bank account reconciliation attached) 741,112 10.8 FUND BALANCE BROUGHT FORWARD Total 8,97,3g -_ � �, О � � = а' у тs к � ш � � ° � �, 3 � �. ^ о � .� о . � z Q- N ^ .v -G 3 . _ _ _ _; � 1 -а_ с > = 1 О � у n, 3 > ° ° О z. � � � � СС 3 w �, - . . _ _ . гл � � Z и ,--� - � � 4--� о �, � �, . � ��� - � �� А ° о - с �с с� й -. . йд � � z � � - ¢�гs. ; � � � а� -_ __._- _ _ __ У у F � � � о �� � �_ � . � 3 � и '+. N Z и U с�б � О � � = W � о -° ^ �.� у ш i �-1 -а Ш '_' �' ' � О � с>б N С 1 fj �--� � и N � � � � � � �-с � L � > � i C�j и-С 'G �'и t�„ �� й i V О о о Г��м = о�, од и� � W � = _ �, -а с =- °� :, -° � � ' � � и _ =- С � � сиб � �О о ? У .� V ,_ cr-б . г- и ш� �, О_ cYi й't'+ �у Q� сб N bq L N> ° N N N�. Q' s.. й ^ Ш сLб .; _� р � с��б � �... С1 � �, и - � пу с О>, -т s. F-' о�,, � W у и =� Q. ��°" L о" � � �+ ° о � ° ° � � � о.. ° � ' Q � � . � � �, � � � О �, � � i � ._ _ ч.. ._ и � о � > _ --- _ � � � � � - .= о � .а ¢ ° �i О Д,i й -�-+ `*" N С-° � Т-J' �' , � N Г�1 сб > � а� � О = О N � г��, С'.. � О у., Г "L7 ° и �-' 'У � и� г, . ,. �+ �' � и ° _ ° О -а L U ^ � Lp О и • � � Q р^ р"' °°� _ � а� � � од у 3 s.. `а- z, а� о> � гг� � й р С � fl- и О� О� '� у� � и О� о>' � � у .� � � 3 ^ � °.- n. � L ,� 3 о л � с. Q � � � О �и д и а� � ° s.и, р � > N v .� � �, -' : v, а, ,� О о о и� Е о о > . О� и и° �'1. Z у � � � >> и � J vi � - `л � о > О >, 4-. � О.у„ у ь� с�б N 4н , и сб i�б .�, "б �' .° U о i. ° � I Q" v � �' f1' • � bЛ и N и � �'� �� •�, CL С'1' N и-Т' s_' Vj � ГгI � � � р С � �> сб и � � С � а) � '"_' У � :у О 'Г' 1 � �, � ' z � с� � � � О � 3 . � LN ' V У О � � � U р., � � .-_. � сб : � �G у � Ш � � - i Г � ° +-' сб � � � � � � М '� N �6 � � � j сб � f2. � � vi гл '+. �. � � ,� г/� � � °и й � ч° � � г� о 3 � а� � о _' �а ^ � '� о °- у , � � v W ^ � � i � � � � � � ° ° � � ,� о � .� � о Q� и ' v ш ❑ � о •- о а� с с° � s тs �-° -: Q�v � а рр ��� � С� ._ Е- у ч-. Е- -в ч� L�._ n. Z�г. У с� Z т.. с� �' ., � � - - -- -- _ _ . - j � � р 3 с � � � а � а� � j и у � О i а Ч"' S,и - - � у,' C�i '�ч �--� Е--{ �� д- I I --.__ __ _ __ _ _ _ � � j ' � � i � � � :� � � о � о � � z � Z ,., i _.-; --------- --- __ _ _ ---=------ _ I � � � > � 1 о о � у i 1 . �' I . _ ! I � �_ = � с� = �д � С� � � U =� �- t ' _ � � � у у - ьд� � од� =' � - ¢�г1. Q�s, � _.__ - -- _ �� О•� � N� � у и ( � �' ,� j ''"' �Ш сб О у = '"' > 'п - I � s.°�, � • � N 'б �и.+ ^� у � "' у � й � � �-• ш n. � и � � ~ • `=' � Т' � � у и и > � ! 'б О пУ �. > г- N : г' � ч.�. �' и�_й U bЛ � L' � � � и О����`л I bA ;� - �' � v � '� г,_,-�- � � 1 � � � W �,�pq � � и � -G � � 3 � v = � , V „ ,.. �, � . _ Ш s., •_r, О и W - � С.� р V •U _ Г' У с� О U N�� � О � ,р у `�'' � й •� � ; Ш •О �' ra� � .= = � 4=� �' и N I. =- v' '"- 5Л , г-� О� � сб _ �_ сб у `~' � 4� с^б� "б � � � Е," � �+' � �р ^ • сС s-^р Lp �и L О" = Q ' сб � s.`�. сб - � QT�j с-Гб � гU-^ '"� � _ = р � ру� _' � � � о�-.� J � ° = � � Г У � � :� � � s.. и. s., � �- �� й � � с � � L�� � � a�i го� � � s' � ^ � а? n. � '-,�� к' � -с I Q ( Г, L. iZ `! t+ч ....... и � L' L�--� - S� и N..U П$ � ьS __ .__-__-_ .. ._. ____ .- _-______ ._._. ...... . .._. .____.�.-� � -L � � � � � � � +� � � : L1 и � CCi >l � ' � п � и � �� � � � I О N �wи ��� �- �, �,� � � �, � � �' � I и • � • �' с>б -� ,-`-_, ы L й 3 = у > �' N i й ш о�� о r bл L о� ° о ���>, •,� о �С о" _ � � :� -в ' с� и �_ о - Гт� � °о � а_n I. '� М�. .N, . п, и�'б 'о N О Т' и N �' •U рД м� �]" о : � _ Ш С . � г- и � л S� р� к с� • � Q, � ш а� � ш гцi � � � s. ш и - и � � у � С'" ш 3 � с� -� � ' fl- � J � � р � " ' " � й U � � 0 � _ �' � о � � ° у с� � ', ° с,-- � '- °' �' � °'. � � � �� у У `� � Е•� о� z„ '� �� о i Сд о �� °�� � оо •`-�� с� i �С ..", а' � � .: о.� и N'_' a�i �� й�р ; г°�j � с�б � G� ч=, о0 м м j О � � vj у .� . � 3= а� 3° �� и� с ' д ш� и N а� оо �о vi -с -= � �+ v Г� .� � и � и О. � ^� S� v' со >_ � �О l N G� ! �•v С ...... й � I bA >� N �� N и U � С ' СС N сб :�, � - � О� �-- .. .. е G у � � ; С� У� О О� й:-� �� : г�Уi «�б ьи.. о l� с=-б О l � � N' S С' r+ �.� О '� р сUб У� s_ й N�,' 4�. О �'� `� � i и Q- � гл vi к' vi . Z �• v �� о V ! у Сг, р- сб М сб S� п. ш�• s, ���,� '� й�'_ й й� й� •„ - Q�г, � � п.� ;G,� с`�iLи лй и� � n. 1Гт�Е- °L'��� ° 3��1 �`._L; � --- � _ - ---- - --- __ _ - - , � � �' ' j � � � ; � , Q�y � i �. � w _ _ ; i CU у�' О - � с`? � м � � � i � � � ( � р ' � � � � � � � 1 �•' �. ; о а- о Q ; z � Z � � ; ----_ -_ � i � i й °' > � > о ° и �' N � � - _ __ i '+-. � i 4? у' N • N � I. _ U 5А U U � ' г-���- � • � , ^ � � � _ ' О сб Q G Сг, � L'-' � у bД и � L, и � : � .,� У у L �. ш � с> � р у.� и �в � � 3, Ш� с�`� �.Д "� � 3 У � =_ � °' '� ° ° = � � У ° � �-� ; и п. � Q 3 � и у= z с ш с� у� �, ч° д �д " � о_-С ° � «.°! и�.� ._ С � С Q^ р �� � L�i ° � ' i.. р -о �" � � � о ° ° г, ° =' ._ U х , и гз'й у-� ��О �. � ,-'r� у-� � йQ �^j � п� dr s.�, +-р' � �' N°�'�-� i� О и= � W..Ui; w _ У `� � � °� � i �О � � о � -°�, 5д у � р ,� -о � . �О `- �; s' Lj з N .--� г- � '�-. = •_ М ' '� �. Q и �., о� i � s.�'., ° о� 3=' ° сс ° с i iYi ;� � и Q- � и � �° О^ N� р С г� = и 3 р г N •- "б а' � a�i ��" �� � � 3 с'-' �'� ч°_ Е� �� л � � � _, � � � .� � � ° � о р а� о р �, у .= л -° � й: ' ^ � р � ш � i й � к �'' � �' � '= ш � р � у : О 1 й С° и� , ,� р ° � � ° �� � � '� � � о а� о i й �о о -� fl' � �_ -�; Q г- � сб t+, � L, и Е-� г� �+. L 3 сг гг од а� � U � � � ' _ _.---- _ _ _ __..._: _. _ ,.-_ - , _ � ....-- ' .7 � с� -о а' ' '�С� ' ; .� •� о и �' � ._ сб ° � ° i ',� о i и ° ^ о • С � i ^ � '-' и �,' � �', N ;у й•� b�д �� и 3 _иг-..:�� й У� о = О N , � с � � �° � 4- � � � о � 1 � � р � . с � �, -о � � 3 � � О � �� С, � 4ч � С й'г7 �� У G' �"" р N � N N bЛ .•�� 1 ,� м� • V ! yS r� • и'6 � сб � t� � У}' У у i- рД С � . � ~ s� �.. ' W с � � � й � � � о � L � � У � � ' 3 +- ; � у � .�.. � i с с й � с� ' � j ` �' ~ '� • � °-� � о � � р . r s.. � . � � � ; О F." и � � � ' :❑ > z, и� -� О � L, О 'О р у N q J � � [� : р � � р У � . � : bA рО -� О� � � � � й � `''"" ,� � iV., �I '�, �, � о � � и у 3 � .� -о � Е-. са ._, � � � Q w� � j й � 3.У � N У i� о.° ° о� о й� �� с.� о 1 Гл L �1 СО _ N д �; 7 М� s- О�'� i].. s, [,�� у L �. � �, �� Сг. N•� 1 й М � У с�б О Уб сб N р� j bp ' �' �v у - '_' � �г оо .� ш .-, fl.. � у cv � � � = о и � : � � � с i Q�� � � й a�i �.� ш �, v !� �, .�.� ш у- й о °� а� � О �¢'�п �� v й � Хп' ��.� й а� ; С й LO ш О О N сиб ш О Lt1 � � �; Q� � � i,�" wc� � 3`_с', У j'гi�х'r�.C1 р �cv 3 3ч;U� � � а � �_ _ - - - � � - -- _ -- � r ,r ; � � '� 1 1 Q � у i ' 1 >. � � - - � а. _ - ' ' � I � � � - - ; �r . . ; �• --_ ---- ; __.._.---.. � � j � ---- -- -----_.- _ ---- ; i I � 1 � 1�,� - - -- _. _ _ _ _ -- -- �, ч� _ 1 о и ш `'-' � -и�, .� -о � о � к � � � > о о � � У� �� 3 � г � Г.. ^ � � >, bД сС � " � � и и й � � +� й � � = ¢ о � � ' 3 � • ° � � = � -. с`�i � °� - о � о � � о сС = ' � � '�.. vi р'� ;� г, +� м ,� ^ '""' � р N U ^ О � � � : � О � и � г�'- `- � � � v - О и О � � сб . р �� а� i •�, �, fl.. � N сс -. и с� �, сб ,_, >С � +-� 1 v � `'�' � = � +-� С р о >_, � � � р • � > � сб р 4. � О ; _ О � О � �V � � У � � = � рд р � ш � _ сС � � ц� � � v � �9 _ и й � О ш���.� � й� и'> �° а �� к у� 4 v' � 1 о _ > и . 3 J '' = Г- � � ш ?� _ = 4 �_ � � о � -в ..r -С о � ' _ . - о � ,-о с ш � с о � ч°_ � Q J � � - о = � 'с L °л " � ' ? о - °-'I � _ � � ч., л � rr-, U ^ '+. � w У � -G � U сб � и N � О у ^ �' � L1 С+-' С N и N N� �' и Х' ,� = �.д о s. 1 ....... � О о � `� Q и'G сС 'G 'Г> сб сб N �--� � ° � L7. ��; � �- f1 "�+ > s.T. � С Ш N �_ �� � '- L1. = Ti N • J о О,�'- - О г- . � С/� сб сб сб > U."� bA iJ F-' U сб j _ _. _. --- -. -... -- -...__ _ _ . - � _ . _ -: � � ,� у � � � `" � ° : � 3 Z р � L ш � N L]. С О с� а� , р � О� р�� о о Q. с" �°о i [� N '- ' L = -°'с a�i с °- � Г о о сС о ш. о_ > с, о М � � J у с ,_ м в и � •с� � �, � `,�-� о уо � cv � � _ � Q� сб � о 3_� и ч- Г�' >' у v � 4-, bA �• а� и � Q � '� О Е а� 4- L1 г., ш N vi � � � � О С' О о с� U-�Г, й`- г`уу`_' `'U О � V 4^ С � i �"'"' �"G Q С � • N С о О С N i2 О � . �� у � Е ш О ш' р� О с� �'-'., ',_, с� �а - С с �' О , � .Ч .i, � о �_ � � � � � � � �- '� 'а✓ ._ � Сб С U й и N N bД s" - � Q r � > о- о > > ° ° � J °�' с � i �.. �, � д � ш ш,z е.. L � � о�, � . ; 1 Q�У�� • . . • • • F- п.n.�-о � � ; � � - -- - _-- �� j � � � н у � у � _ - � ��w 1 � tkr у Ё _.... � 1 I I . .. ......"_"____-' __ _ " . . __. . .. . . ,. .. ,.� � I � _..._ . .,. ._. ...__ --....... . I I I - i - i - 1 -.._ � CCi с�б bд -G и _ '� � U s. ,�_ = о¢- � а� сс . r Q ?_°� `� о = с� � °- 3 3 -� ' � � L ш ° � �' � к � z ° � � 3 :� �° -�., �' L. � � '' а" � � � fог, � й ' и „ сС 'L `б � � � ' 3 � '_' и -�в 3 U Q � •^ -о i � п � -С ' i. с� ш у :� у � - �- � и г+, +� ; . � о � у.1 >.; и . о � у 'У о J 4. сб ^ U сб � �, А'' и" й л'� °' у�°'-' а о�=' ч-. �� и•° � с о�' �' С� Q � _� fl., z Е- � . °- . � ° Q "' � °�' о й � � � -� `� �, � i W - � 3 � � � n. � � � � � � п а> > `-' '� � ; �- оо '� `� s � о � � � Q,' � а� ш о � 5л ° � ч и � � � °Д � ; _. О о • � a�i � � � � сд � г� � -о у • и � � �-' о . � о �. � о � 4. �.� ., Т W >^ О л г" . у i- и ��_= 4ч Г� �^� I _ _ _ � � _ �I Q ° 3 Q, J° к �' ш� � о 3° г� с °� ���� bл ��.: �. О У � _ �--� т ' ' .......�..... � � Q' � О z � о � Q L ' ^ fl.' ° й � °' � � � ' Sд о�д! Q с.� 3 аэ к с� i � L]. и+, а, � N ' s:. U V > � � U � С � сб U S� сС 'G С J О О р и С сб сб г. � п.� О й_ L гл° � о°�.' й°� z �° Са fl, aV =п ч° ��� -- -- _ _ ; � � - i о ` о � �' �' I � н�j - i � � у � у � 4 � � � Q � � � � � � � i � ti _ j ; � � � � •� •, � � � �� �С Гу �' ' т � � - _ --- - - ___ .��. С � 1 �� Q л у >. � � _ � � 4' о - - ' � � � i ' � у � ro с� Z � � ' о �' I � ч � � � О и N ' � � � - U � � с� = 'L � ----- --- __- _._ С � Ь: О '°G � N � i: С ь-+ Ф � °й Т N р � I � су'б й U о . одш opcV U И � V О � О о ��-+ У г-. -� f"' � �; О - � � � .о и i ., �, � �; � ш и i с� � �, � n. р '� `� � � � ,_ ; • ;- - ; � _, � ' � � � L о О � � р � � " � � I � • � � о � ,�,�i� �о - � ё F- пг .� 3 cv , ----_ _ _... __ � ____ - -- ® � � °._° }. � ш а� � � - .п � U о о-� У а�°i .� с > I � о о� си с г� - �у 4. �, � �, � � Е О о � � � тs W о �? � о � � ч- � � � -� � �' N J �' N о 3 У Q й+оч сиб L� и�� U�� i _. � М _ ', � й � � � к > о °_' 3 ° n. � ° о о .� � о � ' �' 3 n. ° fl- J °' � � .� � � �? � � " о -� .,��' � � о � °J ш "б � � ° +� � °' .� ' °' � С � °и' и � О � у ", ! � ш = � тJ � о '_' � ш �. ~ рА � с�- с� .'б Lг. q 1 д 3.� �-г� о�� 3-� ш 3 с ш к 3 с n. � � � ' - � � й с ед `� �' о �. � тs � � � � а� t � � � � j � � � � О •и � � п3 сб = сб � aj s. j� и L ;. � L О N � и �', � 4i j о с� � С со м:� О О� �"G �f]., 4� � z. � � � � � ro и о,� ., с о �._. о 3 � ��, �.: v '.. С }''-' С'- о ш С N>' �' п3 и� � с_�б '6 bд � I U у - •и � О сб N �'' ,ь- у � .L' сб п., °�, �' � .::г � � � � 0 U � о о о й � 3 о � 3 � � � � "� -° I , ' � � •� ; � .� � ш , � � �о � r' a�i � � Q -ty `б a�i `б � � � •., . Гу � . ;W F- W > о Е � ° ° � � ° � � � � ° �' � .., .. _ _--; -- -- _ j � '� ' ' ' _. _ __ � у i Q , � �' о - - � � � � � г� �L � � -._ , � � ,.: � I I �_ , , - -.- 1 �. - '. .�-. Э � '.:. I � �.-..__�..-.,-.�. �. �,��.-.._,-.�-. ь , ° � ��''J сс � у � р ..�., � 3 у ° с: �2:�".:�::���.�,,:^•;...� s.K'. U �,О � f].. н� N i-_. �, , � -° � � � • � � , ���� :. �_ • � � � � .� о о и _о ��"'� �, ; � 3� � пг ё� о-� � о у о�'- а. - N � у ._ К � : г `� � � . у у n' г-Ci� � _� � bЛ О ! � �'f!� - N � � О tx-• � � п5 -Г3 у �й .� �' г!�`�,�ё:;� Л к' -в Е- ayi 3 И � �. � .� •> а� ��} `�'�"} о у �' ayi � и � у �� � � n, �' �'�дt ��1k}�.� -� ао .д у ° 3 � г�" 3 � И о '' �" �`+п�',хц � у� �' v' О� -� и и•� О О � • у �- �� 3 � ,о ..с а •о � о° _о � J ч- � 'L .о л � �Э � v' v N ° � О cj -� '� и � . � i � с� � � i�.�,I'! и � ,,.:� � р � � � О � � -С �Л 'v� � � I . � �� °_' а� у с� •� й i >, 3 � �. '� -�О `�:, ° � � с ;с > > а.., .� о й г � � � •� � У �� ... у � . г й �Q.. 3 � р -G . � � и у ` •? Q � г�у �тl��1 С{ -��'� v . � . � у ^б � N °� U ° L > сиS `' �' � , � 'D z т;{'�� ` !� S�с � � Q-� о �•� °� `° 3 со•� `O � л 1� - �; �"'',1 '+" V Сб . � � у " , U � � �' � ''И-' о � � � � � г,�, �� у fl- '' � у са N ,С у _° у ° у N � �' � -гз � � ��`� �1 ` `�`� �Е�---оri УЕ�-�U � °-'�о � �.у� Л 1 д, я_ ,'� � _ Q � а., � С.� .� � 3 � �_�- � � - � � �� � � ,�е о0 I ° о � .��.... Q � � `j' � � 7 G1 о0 F�' � м Е-у -� ,..�,.. � QU' ы��д�``� - 1 г,,,� „�.а, . -.�\ -� � ^ .__.,_ ��_.._._.�.-.� � ��� � � � ^ �� ��- � д � а•"v� � 7 ,о � Еу пп"���i � � � � W �"�: а' j � - ^ � cv м `.' ,� а;--�'`� .-: М и � к ...г � N ^ q � �� � �L% � �`1 � � � �-�-�-.-� � � � � �+� F�„ �`�� V^ И м р_ о �а � ��Э м м о О i,,,y г..� м Т г - �-. оо о о м N � � � � ..�: � � � c�v ��а 1 с1 р� м п rуΡ о о �' � • � уц•�о� .£5 . N N N о �, ._ . :� --- ,.- _--�-.-��_ � �`.� о о° � � . � о о о � � U г4rн О о И N г ��� � О _ ,,,,, м � М t � - � � �� z ����л м 7 ,� � о w р ��� - . . � _ -�- -- ... � N � ;���� _ ���� _. Q _� � � у z ��'��� � -� � у � а �������� •� � ti а •,� � q у � ц, �+�} � i'"stц � И � � у � �1 ��:���4�� -Г И у .�,�t�: с у U � Gj д W :� � � � � > �'Z, С Z :� � е�ы�.� •� О N � �»г4�.L И И Q' � ,-у� � '� ` у "� � � а� � С �," '"'^ k�,:,г7., � � � � У.С а frik.'"�.'�'�`� р 4-, И � j�" � � r"`�'�г� 1 т' и р Ti r: � ++ _ р 'v L" � ,���;д О О О � С С� '"у � :з ';i `''^ �й vr ��� s � � i � W � а'� Й;� w�� �.. � � а � ��� � � а, у � р ..' z ' �. ` ��' ' о � с� � � �i �i � Z U � cs-,~б О:� О � д' _- _ �; а ад ' Е-+ См U а _ _ _._ ,.... , �-� �� - �, ,о 1 и �.. .� � L1 -� ., о и � s.�. , О L. v 1 '' � • � �г ; i" ,�.., � О -D ' ' С С ' О � � и .-- r .. N р� N . .iг:.;_ �а�� �L1 ^ 'О °° :.ат Я � и . . г �)' �ц р � S.� ,� �о�. �t, ° ',� 'л U о � .� V > и �' �'i * ", � и с Н л r��ц' -�'i �N � N ��г � � О � ' t,,.�'�м и � с�С }3�� ��. XJ - пi о С:-, ��r'F�+fFC" д� 3 -� � ��� � � � �� +�.. Е�- 3 °а �� - � С��� о \ ".•�'. о � G1 . � У"� � О � � �� ..;� � �,.'�. У. � �.�, 3.�I �+"t; .и м..b:J- '�.мi.� � � . j � �� �r,��r. � I и ��.::д г,�, cv о� �,..:� , �r t � � 4?.'�р �� \О � :'.�".. :J �' м О^,. �.г� � сб � ., N F9, � ..� и v � k .1��.;ч�._. �.. � >��".,,-. .' � и � k с. -:а �? 'Е о� с°� с� � ��L }��� � � �а 5Ч м, ор � ы :' С.. �' и о :гл.'� :�� о � ��s� .� � �'f�.� � � ^" N � •.�� о о -.. . о о � s-ь� и о , . � � � ц:,..:: s- cv о �;�"�_ о�о .,оо� л- :Г � гt, �д м д� � " � м � �, �����1 � м � ��' � , �,��� � У � � i;�,�м� �, . Е' ычЭti СС3 �� . � 1 -� м,� ` �° { У, '�" ��� . (б Е $h��� P�r' и iI� .. L . _ �' и �`. � f1�r*":дй] � рΡ(���. Г7. �.f СLб iH'�,�-r.y. � �4�*., -а И r- � ++ ,,..� �1��:;� г сб � и �+ У � � G .� � а � � � _��: �. .� ��� о � .