AUDITOR GENERAL'S DEPARTMENT accountabiity transparency efficiency I integrity MINISTRY OF LABOUR AND SOCIAL SECURITY PROGRAMME OF ADVANCEMENT THROUGH HEALTH AND EDUCATION (PATH) GOJ/IBRD GRANT NO. TF014258 JAMAICA SOCIAL AND ECONOMIC INCLUSION OF PERSONS WITH DISABILITIES (JSEIPD) PROJECT AUDITED FINANCIAL STATEMENTS PERIOD APRIL 1, 2018 - AUGUST 14,2018 VISION STATEMENT "Promoting a Better Country Through Effective Audit Scrutiny of Government Operations" .-- Ministry of Labour and Social Security P"Im Programme of Advancement Through Health and Education (PATH) Jamaica Social and Economic Inclusion of Persons with Disabilities Project IBRD/GOJ Grant No. TF014258 Period ended August 14,2018 TABLE OF CONTENTS Independent Auditor's Report on Financial Statements 1-3 Audit Report on Statement of Expenditure 4 Statement of Sources and Uses of Funds 6 Statement of Cumulative Investments by Disbursement Category 7 Designated Account Reconciliation Statement 8 Notes to the Financial Statements 9-14 1 AUDITOR GENERALS DEPARTMENT 40 KNUTSFORD BOULEVARD P.O. BOX 455 ANY REPLY OR SUBSEQUENT REFERENCE KINGSTON 5 TO THIS COMMUNICATION SHOULD BE JAMAICA ADDRESSED TO THE AUDITOR GENERAL AND NOT To ANY OFFICER BY NAME Tel. No.: 926-8309/926-5963/926-5B46 AND THE FOLLOWING REFERENCE Fax Number 968-4690 QUOTED:- audzengauditamenerasaR.Om. INDEPENDENT AUDITOR'S REPORT To the Permanent Secretary Ministry of Labour and Social Security Programme of Advancement Through Health and Education (PATH) Jamaica Social and Economic Inclusion of Persons with Disabilities Proiect (JSEIPD) GOJ/IBRD GRANT No. TF014258 Period ended August 14, 2018 OPINION I have audited the accompanying Financial Statements for the Jamaica Social and Economic Inclusion of Persons with Disabilities (JSEIPD) Project, set out on pages 6 to 14, which comprise the Statement of Sources and Uses of Funds as at August 14, 2018, Statement of Cumulative Investments, Designated Account Reconciliation Statement and a summary of the significant accounting policies and other explanatory notes. In my opinion, the Statement of Sources and Uses of Funds, Statement of Cumulative Investments by Disbursement Category, Designated Account Reconciliation Statement and a summary of the significant accounting policies and other explanatory notes are properly prepared in all material respects for the period and the transactions conformed to the terms of the Grant Agreement and complied with the International Public Sector Accounting Standards (IPSAS) Cash Basis. BASIS FOR OPINION The audit of the Project was conducted in accordance with: * Article 1, Section 2.07 (b) of the Standard Conditions for Grants made by the World Bank out of Various Funds dated February 15, 2012; and * International Standards of Supreme Audit Institutions (ISSAls). My responsibilities under ISSAls are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of this report. My staff and I are independent of the Project in accordance with the International Ethics Standards Board for Accountants Code of Ethics for Professional Accountants (IESBA Code) and we have fulfilled our other ethical responsibilities in accordance with the IESBA Code. I believe that the audit evidence obtained is sufficient and appropriate to provide a basis for my opinion. 2 KEY AUDIT MATERS Key audit matters are those matters that, in my professional judgment, were of most significance in the audit of the financial statements of the current period. I have determined that there were no key audit matters to communicate in this report. MANAGEMENT'S RESPONSIBILITY FOR T1IE FINANCIAL STATEMENTS The executing agency, the Ministry of Labour and Social Security, is responsible for the preparation and fair presentation of these financial statements, in accordance with International Public Sector Accounting Standards (IPSAS) Cash Basis. This responsibility includes: designing, implementing and maintaining internal controls relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether, due to fraud or error; selecting and applying appropriate accounting policies that are reasonable in the circumstances. The Ministry of Labour and Social Security is also required to present audited financial statements to the International Bank for Reconstruction and Development (IBRD) also known as the World Bank. The attached financial statements and supplementary financial information which are described hereunder were submitted to me by the Project Implementing Unit (PIU) in accordance with Article 1 Section 2.07 (b) of the aforementioned Standard Conditions of the Grant Agreement to reflect the transactions of the Project from its inception in August 14, 2013 to the ending date on August 14, 2018. Statement 1 Statement of Sources and Uses of Funds Statement 2 Statement of Cumulative Investments Designated Account Reconciliation Notes to the Financial Statements AUDITOR'S RESPONSIBILITY FOR TIE AUDIT OF THE FINANCIAL STATEMENTS My responsibility is to express an opinion on these Financial Statements based on my audit. I conducted my audit in accordance with the auditing standards issued by the International Organization of Supreme Audit Institutions (INTOSAl). Those standards require that I comply with ethical requirements and plan and perform the audit 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 that includes my opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISSAls will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with ISSAls, I exercise professional judgment and maintain professional skepticism throughout the audit. 3 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 that 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. * Obtain an understanding of internal control relevant to the audit 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 Project's internal control. * Evaluate the appropriateness of accounting policies used and related disclosures made by management. * Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Project's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify my opinion. The conclusions are based on the audit evidence obtained up to the date of my auditor's report. However, future events or conditions may cause the Project to cease to continue as a going concern. * 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 that presents a true presentation. I have communicated with the World Bank regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that were identified during the audit. REPORT ON THE ADDITIONAL REQUIREMENTS OF THE WORLD BANK GRANT No. TF014258 I have obtained all the information and explanations, which to the best of our knowledge and belief, were necessary for the purpose of the audit. In my opinion, proper accounting records have been maintained and the Financial Statements are in agreement therewith and give the information required in the manner so required. Auditor General of Jamaica Date 4 AUDITOR GENERAL'S DEPARTMENT 40 KNUTSFORD BOULEVARD P.O. BOX 455 KINGSTON 5 JAMAICA Tel. No.: 926-8309/926-59631926-5846 Fax Number 968-4690 Email; audgen5@cwjamarca com Ministry of Labour and Social Security Programme of Advancement Through Health and Education (PATH) Jamaica Social and Economic Inclusion of Persons with Disabilities (JSEIPD) Project GOJ/IBRD GRANT No. TF014258 Period ended August 14, 2018 AUDIT OF STATEMENTS OF EXPENDITURE (SOE) PROCEDURES In the course of the Audit of the Programme of Advancement through Health and Education (PATH) Jamaica Social and Economic Inclusion of Persons with Disabilities (JSEIPD) Project for the period ended August 14, 2018, I examined the following statements of expenditure submitted to the International Bank for Reconstruction and Development (IBRD) during the financial period under review in support of applications for advance of funds from the Grant Account in accordance with the Grant Agreement: Application Number Date of application USS 16 16,:05-2018 168,604.70 17 02,08-2018 219,459.48 Total 388,064.18 The examination was done in accordance with generally accepted auditing standards and procedures prescribed by INTOSAI and accordingly, included such tests as the verification of the internal control systems and of the accounting records, tests of the origin and eligibility of expenditures, certification and procurement procedures for goods and services, filing of supporting documents and such other auditing procedures as I considered necessary in the circumstances. Opinion In my opinion, the statements of expenditure and the annexes submitted in support of them, together with the internal controls procedures used in their preparation can be relied upon to support the applications for advance in conforming to the requirements of the Grant Agreement. Auditor General of Jamaica Date 5 Ministry ofLabour & Social Security Programme ofAdvancement Through Health & Education (PATH) Jamaica Social and Economic Inclusion of Persons with Disabilities Project IBRD/GOJ Grant No. TF014258 Period ended August 14,2018 Expressed in USD This page is intentionally left blank. 6 Ministry of Labour & Social Security Programme ofAdvancement Through Health & Education (PATH) Jamaica Social and Economic Inclusion of Persons with Disabilities Project IBRD/GOJ Grant No. TF014258 Statement of Sources and Uses of Funds Period ended August 14,2018 Expressed in USD Period Ended Cumulative as Cumulative as Note August 14, at August 14, at March 31, 2018 2018 2018 UsS USS USS RECEIPTS World Bank Designated Account 6 388,064.18 2,719,625.43 2,331,561.25 Total Funds returned to IBRD Trust 6 (24-52.46) (24,52.46) Total Receipts (A) 363,611.72 2,695,172.97 2,331,561.25 Expenditures Skills Development 242,512.58 1,523,754.12 1,281,241.54 Strengthening the Service Delivery of Special Education Needs to Children with Disabilities 270,255.12 766,148.52 495,893.40 Monitoring and Evaluation 89,654.76 112,736.61 23,081.85 Project Administration and Management 42,547.68 292,809.12 250,261.44 Total Expenditures (B) 7 644,970.14 2,695,44837 2,050,478.23 Net Cash Movement (281.358.42) (275.40) 281,083.02 Foreign Exchange Adjustment 891.72 857.98 (33.74) Stale dated cheques written back 360.45 360.45 BANK BALANCES Opening Cash Balances Designated Account 140,110.47 - Project Account 140,938.81 Total Opening Balance 8 281,049.28 - Closing Cash Balances Designated Account - - 140,110.47 Project Account 943.03 943.03 140,938.81 Total Closing Balance 8 943.03 943.03 281,049.28 The financial statements were approved for issue by management o e ary 13, 2019 and signed on its behalf by- Perman tSecreta Project Director Acig. Financial Manager The accompanying notes on page 9 to 14 form an integral part of the statement of sources and uses of funds � °O м��, � о�'о. � н у �С ^� _ � ..�.� 'С N � o�i 00 �С � � � � � N о0 О N � � w г�у С/] � vi п'ь О ; й н� N � N N О U � � ^ N � � N N N 1� � � и tio ^- �"i 'ti .� � оо �с о; оо :+ С N � � n о�о � � � �' 69 N t�д N � � � +' `"� �П и 1� � N �D � 7 й � ,� N U � � С7 � д оо cv �о оо � о � и -• n �о ,� �, c�i vi � 1� I о •L � и N � �т � � � '� V] � � о�0 � � � а д N „'�, c�t гv �о � � � � i U � а� � {. О С-- Z � ++ �+ � �3 a�i а с � Ё й °7 n�i � R � а .о = s � Д:L а�+ °'U � а и � � � G С п 4� �"� U ,� •ьл СС �� _ � � � о � .. а+ .. v z � � .о � a�i а� с � а �О р � Е �•� W и � а� � � ��_ ,� � д or� у�_ '�О и Сд .� � А �„ °' � ¢ б�J С '�.� Q��,'���, • � а+ ,�''•�, U � '� ь +�Э = у у с��а � . °�., °✓ ew х� � о о о �� о д; � гл гл гл L � rs, F у i. У. � �+ р 1Л � б7 i� C�йNQ С ' й � у а ,�; С7 °i� °� с7 � ��Ё�а � ta � t+ р и� � Е"' 1s, Е--� С. , да � � �3� � Vo �о � � ��w � х � ��o��L� � �3 �3 � � D' � т�б СО7 �� и � � � � � ���� � а � DD � СЭ � у 1. � '�'' �' �' ,,., f-� О F�[ aJ � iC is, Cr Cr is. �аи..,д,иw � �� � � � Ministry of Labour and Social Security Programme of Advancement Through Health and Education (PATH) Social and Economic Inclusion of Persons with Disabilities Project IBRD/GOJ Grant No. TF014258 Period ended August 14,2018 Designated Account Reconciliation Statement Expressed in USD USS 1. TOTAL ADVANCED BY WORLD BANK 2,719,625.43 2. LESS: ELIGIBLE EXPENDITURE FOR THE CURRENT PERIOD ENDED AUGUST 14, 2018 DOCUMENTED BY WORLD BANK 643,281.13 LESS: CUMULATIVE ELIGIBLE EXPENDITURE FOR THE PRIOR PERIODS ENDED 2,050A78.24 AUGUST 14, 2018 DOCUMENTED BY WORLD BANK LESS: UNUTILIZED FUNDS RETURNED TO THE IBRD TRUST FUND BANK ACCOUNT 24,452.46 PRESENT OUTSTANDING AMOUNT ADVANCED TO THE DESIGNATED 3. ACCOUNT(1-2) 1,413.60 BALANCE OF USD DESIGNATED ACCOUNT PER BANK RECONCILIATION - 4. STATEMENT AS AT PERIOD END AUGUST 14,2018 BALANCE OF PROJECT ACCOUNT PER BANK RECONCILIATION STATEMENT AS AT PERIOD ENDED AUGUST 14,2018 943.03 PLUS: ELIGIBLE EXPENDITURE FOR THE CURRENT PERIOD DOCUMENTED 5. AFTER AUGUST 14, 2018 1,689.00 6. PLUS: TOTAL AMOUNT WITHDRAWN AND NOT YET CLAIMED REASON: 7. PLUS: AMOUNTS CLAIMED IN PREVIOUS APPLICATIONS NOT YET CREDITED AT DATE OF BANK STATEMENTS APPLICATION NO. SUBTOTAL OF PREVIOUS APPLICATIONS NOT YET CREDITED 8. LESS: INTEREST EARNED - 9. TOTAL ADVANCE ACCOUNTED FOR (NO. 4 THROUGH NO. 9) 2,632.03 10. DIFFERENCE (3 - 9) (1,218.43) 11. EXPLANATION OF ANY DIFFERENCE SHOWN IN LINE 10 Stale dated cheques written back 360.45 Difference represents cumulative Foreign Exchange Adjustment as at August-14-2018 857.98 Net difference - 9 Ministry of Labour and Social Security Programme of Advancement Through Health and Education (PATH) Pt/L{IESocial and Economic Inclusion of Persons with Disabilities Project IBRD/GOJ Grant No. TF014258 Period ended August 14,2018 Notes to the Financial Statements Expressed in USD 1. OVERVIEW The Japan Policy and Human Resource Development (JPHRD) Technical Assistance Program awarded a grant to the Government of Jamaica. The International Bank for Reconstruction and Development (IBRD) is administering the grant. The proceeds of the Grant is US$2.897 Million. The objective of the project is to assist the Ministry of Labour and Social Security (MLSS) to increase the employability and skills development of persons with disabilities living below the poverty line, and improve the service delivery of special education needs to poor children with disabilities. The grant received a one (1) year extension from its original close date of August 14, 2017 to August 14, 2018. PROJECT COMPONENTS The Social and Economic Inclusion of Persons with Disabilities Project consists of four (4) parts: Part I. Skills Development of Persons with Disabilities Developing the skills of persons with disabilities through provision of technical assistance including: I. Conducting a labour market study; II. Assessing training providers and organisations; and Ill. Implementing skills or entrepreneurial training activities for persons with disabilities. Part II. Strengthening the Service Delivery of Special Education Needs to Children with Disabilities Strengthening the service delivery of special education needs to children with disabilities including: i. Delivery of special expertise on child development, physiotherapy, behaviour modification and speech therapy; 10 Ministry ofLabour and Social Security Programme ofAdvancement Through Health & Education (PATH) Social and Economic Inclusion of Persons with Disabilities Project IBRD/GOJ Grant No. TF014258 Notes to the Financial Statements Period ended August 14,2018 Expressed in USD PROJECT COMPONENTS (CONT'D) Part II. Strengthening the Service Delivery of Special Education Needs to Children with Disabilities (cont'd.) ii. Providing equipment and tools, such as adaptive aids, hearing aids, glasses, wheelchairs and special chairs for improved service to beneficiaries; iii. Improving access to Early Stimulation Centres for people with disabilities; iv. Building capacity in child development, child therapy and curriculum development; v. Delivering rehabilitative therapy sessions; and vi. Training and workshops for stakeholders and parents of children with disabilities. Part III. Monitoring and Evaluation Monitoring and evaluating Project activities, including: i. Baseline and end line surveys; ii. Development of a management information system module for tracking beneficiaries' employment and improvement in school readiness for children in place; and iii. Outcome evaluations. Part IV. Project Administration and Management Project Administration and Management activities include carrying out the project's management and implementation support. 2. MANAGEMENT REPORT The Annual Report is submitted by management for the Programme of Advancement Through Health and Education (PATH) for the period ended August 14, 2018. 11 Ministry of Labour and Social Security Programme ofAdvancement Through Health & Education (PATH) Social and Economic Inclusion of Persons with Disabilities Project IBRD/GOJ Grant No. TF014258 Notes to the Financial Statements Period ended August 14,2018 Expressed in USD 3. AUDITING OF THE PROJECT The Project is audited by the Auditor General's Department. Auditor General's Department, 40 Knutsford Boulevard, Kingston 5, Jamaica. 4. The Budget This is the amount allocated based on the Grant Agreement. 5. Summary of Accounting Policies i. Basis of Preparation The Project Accounting Unit (PAU) uses the International Public Sector Accounting Standards (IPSAS) cash basis of accounting to account for the project's transactions. Under this basis, income is recognized when funds are received rather than when requested and expenses are recognized when payment is made rather than when obligations are incurred. Since the main objective of these financial statements is to disclose the sources and uses of funds, it is not necessary to present information adjusted for inflation. ii. Recording of Transactions Transactions are recorded in Jamaican Dollars (J$). However, transactions are converted for preparation of the financial statements to United States dollars (US$). Receipt and expenditure in local currency are translated into US dollars, by applying the commercial bank rate at which the disbursement was received. iii. Foreign exchange fluctuation and bank charges All bank fees and charges for un-disbursed grant funds, as well as losses due to exchange rate fluctuations are not considered eligible project costs and are absorbed by the Government of Jamaica. 12 Ministry of Labour and Social Security "yog Programme of Advancement Through Health and Education (PATH) KP Social and Economic Inclusion of Persons with Disabilities Project IBRD/GOJ Grant No. TFO14258 Period ended August 14, 2018 Notes to the Financial Statements Expressed in USD 6. Source of Funds The amount of US$O.388 Million (cumulatively US$2.719 Million) was received from the World Bank for the period under review. Application Number Date of application usS 16 16/05/2018 168,604.70 17 02/08/2018 219,459.48 Total 388,064.18 In January 2019, PATH returned US$24,452.46 to the IBRD Trust Fund Account. 7. Use of Grant Funding The project invested USSO.645 Million during this period and the cumulative investment amounted to US$2.695 Million. At August 14, 2018, the Project disbursed 93% of US$ 2.897 Million. Graph 1: Disbursement of Grant Funds Distribution of Grants Fund Disbursed m Skill Development 4% U1Strengthening the Service Delivery of Special Education Needsto Childrenwith Disabilities Monitoring and Evaluation 1 ProjectAdministration and Management 13 Ministry ofLabour and Social Security Programme ofAdvancement Through Health & Education (PATH) Social and Economic Inclusion of Persons with Disabilities Project IBRD/GOJ Grant No. TF014258 Notes to the Financial Statements Period ended August 14, 2018 Expressed in USD Graph 2 Analysis of Budget vs Actual Overall budget vs. expenditure 1.80 1.68 1.60 1.52 1.40 1.20 - 1.00 0.80 m Budget E 0.60 S0.40I 0.2 '.29 Actual Expenditure 0.20 0.22.2 00.20 1 2 3 4 Project Categories The percentages of the budgeted grant utilized by each component to date are as follows: Part I. Skills Development of Persons with Disabilities; 90% Part II. Strengthening the Service Delivery of Special Education Needs to Children with Disabilities; 106% Part III: Monitoring and Evaluation; and 56% Part IV: Project Administration and Management. 102% 14 Ministry of Labour and Social Security Programme ofAdvancement Through Health & Education (PATH) Social and Economic Inclusion of Persons with Disabilities Project IBRD/GOJ Grant No. TF014258 Notes to the Financial Statements Period ended August 14,2018 Expressed in USD 8. Closing Cash balances This represents the cash balances at the end of the period for the Designated Bank Account Number 234 361 562 and Project Administrative Bank Account Number 231 094 652. Balance as at Balance as at August 14,2018 March 31, 2018 USS USS Designated Bank Account - 140,110.47 Project Bank Account 943.03 140,938.81 943.03 281,049.28