REPUBLIC OF KENYA OFFICE OF THE AUDITOR-GENERAL Enhancing Accountability REPORT OF THE AUDITOR-GENERAL ON KENYA INFORMAL SETTLEMENT IMPROVEMENT PROJECT (IDA CREDIT NO.4873-KE) FOR THE YEAR ENDED 30 JUNE, 2019 STATE DEPARTMENT FOR HOUSING AND URBAN DEVELOPMENT PROJECT NAME: KENYA INFORMAL SETTLEMENT IMPROVEMENT PROJECT IMPLEMENTING ENTITY: STATE DEPARTMENT FOR HOUSING AND URBAN DEVELOPMENT PROJECT ID: P113542 CREDIT NUMBER: 4873 ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED JUNE 30,2019 Prepared in accordance with the Cash Basis of Accounting Method under the International Public Sector Accounting Standards (IPSAS) Kenya Informal Settlement Improvement Project Reports and Financial Statements 319 For the financial year ended June 30, 20 PAGE CONTENTS .i 1. PROJECT INFORMATION AND OVERALL PERFORMANCE...............-...........x 2. STATEMENT OF PROJECT MANAGEMENT RESPONSIBLITIES......................x 3. REPORT OF THE INDEPENDENT AUDITORS ON THJE KISIP ...........ECT...... 3 4. STATEMENT OF RECEIPTS AND PAYMENTS FOR TBlE PERIOD ENDED 30TH JUNE 2019.1............ 5. STATEMENT OF FINANCIAL ASSETS AS AT 30TH JUNE 2019.......................2.... ........ .. 6. STATEMENT OF CASHFLOW FOR THE PERIOD 30TH JUNE 2019........... 7. STATEMENT OF COMPARATIVE BUDGET AND ACTUAL AMOUNTS... 8. NOTES TO THE FINANCIAL STATEMENTSATEMENTS................-----... . . . I 22 9. OTHER IMPORTANT DISCLOSURESC........LOSURES.....................................23 10. PROGRESS ON FOLLOW UP OF AUDITOR RECOMMENDATIONS ..... Kenya Informal Settlement Improvement -project Reports and Financial Statemfents F,or the financial year endediJune 30, 2019 1. PROJECT INFORMATION AND OVERALL PERFORMANCE 1.1 Name and registered office N ame: Th roet's official name is KenyaifmlSetmntmpoe ntPje. Oa ect: he projkey obJect've of the project is to improve 1iving conditions of informal settlements in selected Counties in Kenya. Address: The project headquarters office is located in Nairobi County, Kenya. The address of its registered office is: Ardhi House, 1st Ngong Avenue, Nairobi Contacts: The following are the project contacts. P. O. Box 30119, 00100 Nairobi 1.2 Project Information Project Start Date: The roject start date is 01.07.2011 Project End Date: The roject end date is 30 112019 Project Manager: The roject manager is Mrs Peris Man 'ira. Project S onsor: The ro'ect s onsor is IDA, AFD, SIDA and GoK. 1.3 Project Overview Line Ministiy/State The project is under the supervisiol of the State Department for De artment of the roject Housing and Urban Development. Project number P113542,TF:18327 Strategic goals of the The strategic goals of the project are as follows: project (i) Strengthening institutions and programme management (ii) Enhancing tenure security (iii) Investing in infrastructure and service delivery (iv) Plannin for urban growth Achievement of strategic The project management aims to achieve the goals through the goals following means: (i) Strengthening institutions and programme management; (ii) Enhanced land tenure; (iii) Building of roads, floodlights, water and sewerage, and waste i Kenya Informal Settlement Improvement Project Reports and Financial Statements3029---- For the financial year ended June 3,21 tes, t dies and planning on preventing informa settlements in future oec dortat The project completed its seventh year of imp ementation. background information of 1.4 Bankers The following are the bankers for the curent year: Duretsiata nt t E uity Bank Limited Deignte afounmedt (H ad Office, Equity Centre Branch AccountNo. 0810295112857 Central Bank of Kenya AccountNo. 1000339888 Project Account: Cooperative Bank of Kenya Upper Hill Branch AccountNo. 01141161460400 Auditors Auditor General Office of the Auditor General Anniversary Towers, University Way P.O. Box 30084 Nairobi 1.5 Project Governance The rojct'sgovrnace fameork equresthe stakeholders to uphold the highest professional, ethcal moal ndegaUstndrds THis isranchivdtruhefcvesggaonfdteswh Manuals. ii Kenya Informal Settlement Improvement Project Reports and Financial Statements For the financial year ended June 301, 2019 1 The Project Steering Committee (PSC) This Committee is responsible for overseeing the implementation of the Project, approving Thes an-alte wo rpnsbdet and ensuring that the activities are in compliance with the the annual work plan and budget,anesum donor and government policies. 2. International Development Association These are the project sponsors. They are responsible for reviewing and approving the project's withdrawal applications expenditure justifications, no objection requests, reviewing and approving the annual work plan and budget, expenditure category reallocation request, and participating in implementation support missions. 3. The Parent Ministry The parent ministry ensures that the Project's budget is captured in its development projects and disburses the government counterpart funding. The ministry reviews and tracks the Project's annual work plan and budget against the set targets and makes the approvals. The parent ministry also oversees the execution of the project coordinating team. 4. The Auditor The Supreme Audit Institution in Kenya, that is, the Office of the Auditor General, is mandated by the Constitution of Kenya Chapter 12, Part 6, Article 229 which establishes the Office of the Auditor General. Chapter 15, Article 248, Section 3 and Article 249, Section 2 (a) and (b) and section 10 of the Public Audit Act, 2015 provide for the independence of the Office of the Auditor General. The Auditor General is mandated to audit all national government entities, which include government development projects and present these statutory financial statements to the Parliament. This facilitates the submission of the audited report to the project's sponsors by 31 December each year. 1.6 Roles and Responsibilities This team is based in Nairobi and is responsible for the project management and coordination functions. The PCT comprises of the Project Coordinator and a team of Technical Officers. The PCT is also supported by other administrative staff. These key staff, who form the project coordinating team that is involved in the day to day management of the project and its implementation are: iii Kenya Informal Settlement Improvement Project Reports and Financial Statements For thefinancial year ended June 30, 2019 Names Title desivination Ke ualification Res onsibilities PeNs Mang'ira Project Coordinator M.A. Planning, Overall programme SDS Physical Planning Registered Planner; coordination. Member AAK, KIP Stella Gitimu Head of Component 1 MBA, BA Land Manage component DD Slum Upgrading E conomiCs ISK 1atvte George Arwa Head of Component 2 MA Envirosnental Manage component SAD Survey Management Bsc Land 2 activities Survey BA Urban Planning ISK, AAK Julius Mugwika Head of Component 3 Msc Civil Engineering Manage component SPSE (S) MIEK 3 activities Wagura Theuri Project Accountant BA (Econ), CPA(K) Financial PHO Management 1.7 Funding summary The Proect duration is five years (from 2011 to 2017) with a further extension to November 2019. The financing budget of US$ 157.3 Million equivalent to KES 15 Billion as highlighted in the table below: Below is the funding summary: Doo Dno Dno (i) Grant SIDA $8,300,000 847,179,454 8,300,000 847,179,454 0 0 (ii) Loan IDA $10,00, 9,246,336,439 95,769,644 9,233,836,439 120,000 12,500,000 --0 AFD C35,000,000/ 4,000,000,000 23,930,000 2,431,646,000 16,070,000 1,568,354,000 $40,000,000 (iii) Counterpart funds Government of S10,000,000 1,010,000,000 9,858,138 909,058,301 1,625,542 140,941,699 Kenya Total 158,300,000 15,103,515,893 137,857,782 13,421,720,194 17,815,542 1,721,795,699 iv Kenya Informal Settlement Improvement Project Reports and Financial Statements For the financial year ended June 30, 2019 1.8 Summary of Overall Project Performance: 1.8.1 Budget performance against actual amounts for current year and for cumulative to- date During the year under review, the Project received KShs 2,118,310,132 and incurred expenditure of KShs 2,067,715,347. The cumulative receipts and expenditures are Kshs. 13,627,572,998 and Kshs. 12,645,511,911 respectively. Receipts & Payments Utilization Revenue Utilisation Bar Graph 19000 96qfi00a ,00,000,000Receipts in Kss illion 1 Final Budget 1,000,000,000 500,000,000 200,000,00 50,000,000 Proceeds from Domestic Receipts from Loan from External Miscellaneous receipts and Foreign Grants Government of Kenya Development Partners Payment Utilization Bar Graph 2,500,000,000 Payments 17 2,00,000000in Kshs Million 1,500,000,000 1,000,000,000 125,172,774- 500,000,000 - - 130,000,000 - Compensation Use of goods Transfers to Other Grants Social Security Acqu isitin of of employees and services Other and Other Benefits Non-financial Government Payments Assets Entities v Kenya Informal Settlement Improvemem rruir-c', Reports and Financial Statements '~For the fin ancial year ended June 30, 2019 1.8.2 Highlights of project performance on the Results Framework The period 2018-2019 was a year of enhanced actualization of various infrastructure investment menu and tenure regularization interventions targeted under KISIP. with eleven (11) urban areas - Mombasa, Nairobi, Machakos, NTakuru/Naivasha, Eldoret Phase I and 11, Kitui, Embu, Malindi (Kilifi), Kisumu, Kericho benefitting from infrastructure and th.e remaining four (4), Garissa, Nyeri, Kiambu and Kakarrega benefitting from planning and survey. Socio -economic surveys for Kakamega and Kisumu phase I were completed hence preparing the settlements for infrastructure under KISIP Phase II. * * Contracts for civil works and consultancies for tenure regularization which commenced in 2014 realized fruits in 2018-2019 financial year with 755 titles being issued in Nyeri County and 78 informal settlements in Lots 1 -4 being at various various stages of planning and survey, 25,440 beneficiaries are expected; 67 socioeconomic reports have been prepared, 78 LPDPs prepared, 67 approved and 37RIMs amended. By June 2019, 33 civil works contracts were at various stages of completion in 10 counties and tenure regularization being underway in 92 settlements within 17 counties. * Infrastructure projects are complete in Mombasa, while ongoing and at various levels of completion in Nakuru, Eldoret, Nairobi, Machakos and Naivasha. The scope consists of settlement access roads and footpaths; drainage canals, water and sanitation projects; and high mast floodlighting projects. Additional works have also commenced in Kisumu, Kericho, Embu, Kitui, Malindi and Eldoret phase II. * Completed infrastructure projects include: 11 number ablution blocks; 5,352 number piped water connections; 50.13 km of sewer pipeline constructed; 46.98 km of drainage canals constructed 51 number high mast constructed; 41 Km of footpaths have been constructed. One of the key highlights of the year was the commencement of infrastructure works in the counties of Kisumu and Kericho which have since progressed well. The projects commenced in May 2017 and by June 2019, they are at 99% completion save for a few items being addressed. Project development objective and the expected outcomes The project development objective, PDO was revised following the additional financing to improve living conditions in informal settlements in selected urban centers in selected counties in Kenya. Data on these indicators will be issued progressively as KISIP completes infrastructure invcstments under construction. Preliminary data and findings for the reporting period are presented below. However, direct and indirect beneficiaries continue to be determined as projects get completed and reported on accordingly. vi Kenya Injormal L'eruenem r Reports and Financial Statements SFor the financial year ended June 30, 2019 a. People benefiting from improved tenure security (number);1, Under KISIP 78 settlements are at various stages of tenure regularization under Lots 1, 2, 3 & 4 contracts which will have 127,200 people as direct project beneficiaries from tenure. This has been realized because 25,440 titles have been earmarked for issuance, with each title benefitting an average of 5 persons. b. Direct project beneficiaries (number); A total of 1, 361,320 people are benefitting from tenure and infrastructure components of KISIP. This is because some infrastructure services target similar audiences - water connections, sewer connections, high mast lighting and roads. c. Female beneficiaries (percentage, core supplement); The project has endeavoured in its infrastructure and tenure options to ensure gender parity in projects. Currently, 680,660 number of females, translating to 50% of females are benefitting from KISIP projects; this has been validated by socioeconomic surveys by various components. d. People in informal settlements provided with access to improved drainage infrastructure under KISIP (Number). Access to drainage facilities were prioritised by comnmunities in all Counties owing to constant flooding and need for storm water management;. storm water drainage canals were constructed in Mombasa, Embu, Kericho, Kitui, Kisumu, Eldoret, Nakur, Machakos, Naivasha and Nairobi. This has benefitted approximately 1,000,000 people in these urban areas. e. Number of People in urban areas provided with access to all-season roads within a 500-meter range under KISIP (number). Investments in access road network consist of settlement main access roads connecting the settlements and trunk roads, settlement roads providing access within the settlements, walkways and footpaths. In 2018/2019 FY, 98.2 km of settlement access roads and 79.549 km of footpaths constructed benefitting 1,000,000 people. f Number of people in urban areas provided with access to improved water sources under KCISIP (number). Construction of 110 km of water pipeline has been completed with 7,306 water connections done to date; 11 Water Kiosks have been constructed in providing additional access to water. This has enabled 234,120 people to have access to water sources which are safe and clean. 21 ablution blocks have been completed under the project. vi Kenya Informal Settlement improvement T nJ,Lu Reports and Financial Statements For the financial year ended June 30, 2019 Implementation challenges and recommended way forward 1. Complex tenure security Interpretation ofKSPn tiea rol tain arrangements and operational legislation on roles and a more actv roei delays occasioned by changes responsibilities of key supervision in land surveying information actors in land management Involvement of the relevant continue to negatively county officials in affect delivery of results. identification and verification of list of beneficiaries. 2. Lack of clearly defined Effective engagement of Continuous engagement of engagement strategy as a County teams in planning the various counties and result of constitutional phases of the project communities in the transition. This resulted in the remaining time. envisaged municipal agreements not to be signed. In effect: a. Counties do not have clearly defined roles and work-plans for KISIP activiti es. b. Engagement with Counties has remained loose and is not tied to concrete performance standards. 3. Delayed preparation of Consultants hired to The project's social Resettlement Action Plan undertake the RAPs. Safeguards and Community CRAP) for planning and survey Development Experts to ensure consultants prepare a well-documented disclosure and resettlement action plan for implementation. KISIP has a social safeguards mechanism that works effectively to avoid conflicts viii Kenya Informal setmlement improvemmiLL i iUJiL Reports and Financial Statements For the financial year ended June 30, 2019 1.9 Summary of Project Compliance: The Program has ensured that all its activities carried out are within the laws of the Republic of Kenya and that all regulations and procedures have been followed. Among the regulations include the Enviro nmental and Social Impact Assessment (ESIA) for which authority was issued for the implementation of the project. In cases of inconsistency between the GOK Regulations and those of the donors, the latter have been applied. ix Reports and Financial Statements For the financial year ended June 30, 2019 2. STATEMENT OF PROJECT MANAGEMENT RESPONSIBILITIES The Principal Secretary for the State Department for Housing and Urban Development and the Project Coordinator for Kenya Informal Settlement Improvement Project 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 quarter ended on June 30, 2019. 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. The Principal Secretary for the State Department for Housing and Urban Development and the Project Coordinator for Kenya Informal Settlement Improvement Project accept responsibility for the project's financial statements, which have been prepared on the Cash Basis Method of Financial Reporting, using appropriate accounting policies in accordance with International Public Sector Accounting Standards. The Principal Secretary for the State Department for Housing and Urban Development and the Project Coordinator for Kenya Informal Settlement Improvement Project 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 period ended June, 2019, and of the project's financial position as at that date. The Principal Secretary for State Department for Housing and Urban Development and the Project Coordinator for Kenya Informal Settlement Improvement Project 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. The Principal Secretary for the State Department for Housing and Urban Development and the Project Coordinator for Kenya Informal Settlement Improvement Project 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 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 Principal Secretary for the State Department for Housing and Urban Development and the Project Coordinator for Kenya iformal Settlement Improvement Project on 4*' t-ce@,( 2019 and signed by them. Principal Secretary ject Coordinator Project Accountant: Name: Charles M. Hinga e Peris Mang'ira Name: Wagura Theuri ICPAK No: 13047 X REPUBLIC OF KENYA Telephone: +254-(20) 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 3oo84-00100 Enhancing Accountability NAIROBI REPORT OF THE AUDITOR GENERAL ON KENYA INFORMAL SETTLEMENT IMPROVEMENT PROJECT (IDA CREDIT NO.4873-KE) FOR THE YEAR ENDED 30 JUNE, 2019 - STATE DEPARTMENT FOR HOUSING AND URBAN DEVELOPMENT REPORT ON THE FINANCIAL STATEMENTS Opinion I have audited the accompanying financial statements of Kenya Informal Settlement Improvement Project (IDA Credit No.4873-KE) set out on pages 1 to 23 which comprise the statement of financial assets as at 30 June, 2019, and statement of receipts and payments, statement of cash flows and the statement of comparative budget and actual amounts for the year then ended, special account statement and a summary of significant accounting policies and other explanatory information in accordance with provisions of Article 229 of the Constitution of Kenya, Section 35 of the Public Audit Act, 2015 and the Financing Agreement No.4873-KE dated 23 May, 2011 between the International Development Association (IDA) and the Republic of Kenya. 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 Informal Settlement Improvement Project as at 30 June, 2019, and of its financial performance and its cash flows for the year then ended, in accordance with International Public Sector Accounting Standards (Cash Basis) and comply with the Financing Agreement. In addition, the Special Account Statement present fairly, the special account transactions and closing balance has been reconciled with the books of account. Basis for Opinion The audit was conducted in accordance with International Standards of Supreme Audit Institutions (ISSAls). I am independent of Kenya Informal Settlement Improvement Project 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 audits 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 of the Auditor-General on Kenya Informal Settlement Improvement Profect, (IDA Credit No. 4873-KE)for the year ended 30 June, 2019 - State Department for Housing and Urban Development iii. The Project's financial statements are in agreement with the accounting records and returns. 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 such maintaining effective internal control as Management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error and for its assessment of the effectiveness of internal controls, risk management and overall governance. In preparing the financial statements, Management is responsible for assessing the Project's ability to continue to sustain 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 liquidate the Project or to cease operations. Management is also responsible for the submission of its 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 financial reporting process, reviewing the effectiveness of how the Project monitors 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 overall 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 that 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 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 audit is planned and performed to express a conclusion about whether, in all material respects, the activities, financial transactions and information reflected in the financial statements are in Report of the Auditor-General on Kenya Informal Settlement Improvement Project, (IDA Credit No. 4873-KE) for the year ended 30 June, 2019 - State Department for Housing and Urban Development 3 compliance with the authorities that 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 review of compliance, I consider internal control in order to give an assurance on the effectiveness of internal controls, risk management and overall 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 that 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 that 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 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 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. * 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 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 to sustain its services. If I conclude that a material 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 to continue to sustain 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 that achieves fair presentation. Report ofthe Auditor-General on Kenya Informal Settlement Improvement Project, (IDA Credit No. 4873-KE)for the year ended 30 June, 2019 - State Department for Housing and Urban Development 4 Key Audit Matters Key audit matters are those matters that, in my professional judgement, are of most significance in the audit of the financial statements. There were no key audit matters to report in the year under review. 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, I confirm that, nothing 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 The audit was conducted in accordance with ISSAI 4000. The standard requires that I comply with ethical requiremets and plan and perform the audit to obtain assurance about whether the activities financial transactions and information reflected in the financial statements are in compliance, in all material respects, with the authorities that 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()(a) of the Public Audit Act, 2015, based on the audit procedures performed I confirm that, nothing has come to my attention to cause me to believe that internal controls, risk management and governance were not effective. Basis for Conclusion The audit was conducted in accordance with ISSAI 2315 and ISSAI 2330. The standards require that I plan and perform the audit to obtain assurance about 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. REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS As required by the International Development Association (IDA), I report based on my audit that:- i. 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; ii. In my opinion, adequate accounting records have been kept by the Project, so far as appears from the examination of those records; and, Report of the Auditor-General on Kenya Informal Settlement Improvement Project, (IDA Credit Nbo. 487-KE)for the year ended 30 June, 2019 - State Department for Housing and Urban Development 2 * 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 that are identified during the audit. I also provide Management with a statement that I have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on my independence, and where applicable, related safeguards. Na a AUDITOR-GENERAL Nairobi 09 September, 2020 Report ofthe Auditor-General on Kenya Informal Settlement Improvement Pro/ect, (IDA Credit No. 4873-KE) for the year ended 30 June, 2019- State Department/or Housing and Urban Development 5 iunya infj ormaLt aernent improvement Froject Reports and Financial Statements For the financial year ended June 30, 2019 4. STATEMENT OF RECEIPTS AND PAYMENTS FOR THE PERIOD ENDED 30TH JUNE 2019 Cumulative Note to- 2018/19 2017/18 date(Restated) Receipts and Payments Receipts and Payments payments made by payment made by controlled by third controlled by third the entity parties the entity parties KShs KShs KShs' KShs KShs RECEIPTS Transfer from Government entities 150,000,000 - 174,880,000 - 909,058,301 Proceeds from domestic 8.4 847,179,454 and foreign grants - - 539,923,936 - Loan from external development partners 8 1,896,986,000 - 2,440,365,640 - 11,665,482,439 Miscellaneous receipts 8.6 71,324,132 - - - 205,852,804 TOTAL RECEIPTS 2,118,310,132 - 3,155,169,576 - 13,627,572,998 PAYMENTS Compensation of 8.7 employees Purchase of goods and 8. services 125,172,774 - 93,303,918 - 605,209,727 Social security benefits 8.9 - - - Acquisition of non- 8.10 1925,7476,767 financial assets 1,942542,5733,168,476,767 - 11,942,206,803 Transfers to other 1 government entities - - - - 373,272,002 Other grants and transfers and payments TOTAL PAYMENTS 2,067,715,347 - 3,261,780,686 - 12,920,688,532 SURPLUS/(DEFICIT) 50,594,785 - (106,611,110) - 706,884,466 The accounting policies and explanatory notes to these financial statements are an integral part of the financial statements. Principal Secretaly r ect Coordinator Project Accountant: Name: Charles M. Hinga e: Pcris Mang'ira Name: Wagura Theuri ICPAK No: 13047 1 ., . ....- . .- ,, 11,,pfh,wvoimeni rroject Reports and Financial Statements For the financial year ended June 30, 2019 5. STATEMENT OF FINANCIAL ASSETS AS AT 30TH JUNE 2019 Note 2018/19 2017/18 FINANCIAL ASSETS (KSs KShs Cash and Cash Equivalents Bank Balances 8.13.A 706,884,466 656,289,681 Cash Balances and e n Cash Equivalents (short-term deposits) 8.13.C a o Total Cash and Cash Equivalents Accounts receivables - Imc rest and Advances 8.14 0 0 TOTAL FINANCIAL ASSETS 0,8,6 5,8,8 REPRESENTED BY Fund balance b/fwd 8.15 656,289,681 '762,900,791 Prior year adjustments 8.16 Suplus/(Deficit) for the year 505475 (166110 NET INANIALPOSIION706,884,466 656,289,681 The accounting policies and explanatory notes Lo these financial statements form an integral part of th financial statements- The financial statements were approved on O e- 2019 Prmncipal Secretary ect CoordinatorPrjcAconat Name: Charles M. Hinga e: Peris Mang'ira Name: Wagura Theuri ICPAK No: 13047 2 iienyi i nruormtui oemenenr improvement Project Reports and Financial Statements For the financial year ended June 30, 2019 6. STATEMENT OF CASHFLOW FOR THE PERIOD 30TH JUNE 2019 2018/19 2017/18 Not e KShs KShs Receipts for operating activities Transfer from Government entities 8.3 150,000,000 174,880,000 Proceeds from domestic and foreign grants 8.4 - 539,923,936 Miscellaneous receipts 8.6 71,324,132 221,324,132 714,803,936 Payments for operating activities Compensation of employees 8.7 Purchase of goods and services 8.8 (125,172,774) (93,303,918) Social security benefits 8.9 Transfers to other government entities 8.11 Other grants and transfers 8.12 Adjusted for: Change in Imprests & Advances Adjustments during the year 8.16 (125,172,774) (93,303,918) Net cash flow from operating activities 96,151,358 621,500,017 CASHFLOW FROM INVESTING ACTIVITIEES Acquisition of Assets 8.10 (1,942,542,573) (3,168,476,767) Net cash flows from Investing Activities (1,942,542,573) (3,168,476,767) CASHFLOW FROM BORROWING ACTIVITIES Proceeds from Foreign Borrowings 8.5 1,896,986,000 2,440,365,640 Net cash flow from financing activities 1,896,986,000 2,440,365,640 NET INCREASE IN CASH AND CASH EQUIVALENT 50,594,785 (106,611,110) Cash and cash equivalent at BEGINNING of the year 656,289,681 762,900,791 Cash and cash equivalent at END of the year 706,884,466 656,289,681 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 1 t-C 2019 and signed by: Principal Secretary r ect Coordinator Project Accountant: Name: Charles M. Hinga e: Peris Mang'ira Name: Wagura Theuri ICPAK No: 13047 zKcuyut ifn irriut k3ntement improvement rroject Reports and Financial Statements For the financial year ended June 30, 2019 7. STATEMENT OF COMPARATIVE BUDGET AND ACTUAL AMOUNTS Actual on Budget % of Original Comparable Utilization Utilizatio Receipts/Payments Item Budget Adjustments Final Budget Basis Difference n a b c=a+b d e=c-d f=d/c % Receipts Transfer from Government 200,000,000 - 200,000,000 150,000,000 -50,000,000 75% entities Proceeds from domestic and - - - - - - foreign grants Proceeds from borrowings 2,000,000,000 (100,000,000) 1,900,000,000 1,896,986,000 3:014,000 100% Miscellaneous receipts - - - 71,324,132 71,324,132 0% Total Receipts 2,200,000,000 (100,000,000) 2,171,324,132 2,118,310,132 3,014,000 98% Payments Compensation of employees 0% Purchase ofgoods and 130,000,000 - 130,000,000 125,172,774 4,827,226 96% services Social security benefits - - - - 0% Acquisition of non-financial 2,070,000,000 (100,000,000) 1,942,542,573 27,457,427 99% assets 1,970,000,000 Transfers to other 0% government entities Other grants and transfers - - - - - 0% Total Payments 2,200,000,000 ( 100,000,000) 2,100,000,000 2,067,715,347 32,284,653 99% Note: The significant budget utilisation/performance differences in the last column are explained in Annex 1 to these financial statements. Principal Secretary ect Coordinator Project Accountant: Name: Charles M. Hinga me: Peris Mang'iraNaeWguaT ur ICPAK No: 13047 4 -1 __ -_ _" -1F U VVftrt'V 7 UL1 Reports and Financial Statements For the financial year ended June 30, 2019 8. NOTES TO THE FINANCIAL STATEMENTS The principal accounting policies adopted in the preparation of these financial statements are set out below: 8.1. Basis of Preparation 8.1.1. 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 conform to the form of presentation prescribed by the PSASB. The accounting policies adopted have been consistently applied to all the years presented. 8.1.2. Reporting entity The financial statements are for the Kenya Informal Settlement Improvement Project under National Government of Kenya. The financial statements encompass the reporting entity as specified in the relevant legislation PFM Act 2012. 8.1.3. 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 Shilling. 8.2. 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 Government. *Transfers from the Exchequer Transfer from Exchequer is be 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 is received through grants and loans from multilateral and bilateral development partners. 5 lenya Injormal Settlement Improvement Project Reports and Financial Statements For the financial year ended June 30, 2019 SIGNIFICANT ACCOUNTING POLICIES (Continued) Donations and grants 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 - - - -t , mprovement Project Reports and Financial Statements For thefinancialyear ended June 30, 2019 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 pay sbent. 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 monley 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 no[ 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 investmenlts 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 uiertyu injurmat, 3etement inprovement project Reports and Financial Statements For the financial year ended June 30, 2019 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 AIE holders. This is an enhancement to the cash accounting policy. Other accounts receivables are disclosed in the financial statements. 1) 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. h) Third party payments Included in the receipts and payments, are payments made on its behalf by to third parties in form of loans and grants. These payments do not constitute cash receipts and payments and are disclosed in the payment to third parties column in the statement of receipts and payments. During the year no loan disbursements were received in form of direct payments from third parties. 8 Re - . ----- w,- "Pu-memtrroject Reports and Financial Statements For the financial yeap ended June 30, 2019 SIGNIFICANT ACCOUNTING POLICIES (Continued) i) 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. j) 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. k) Subsequent events There have been no events subsequent to the financial year/period end with a significant impact on the financial statements for the year ended June 30, 2019. 1) 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 -rtyu n iut oitrmemn improvement Froject Reports and Financial Statements For the financial year ended June 30, 2019 NOTES TO THE FINANCIAL STATEMENTS (Continued) 8.3. RECEIPTS FROM GOVERNMENT OF KENYA These represent counterpart funding and other receipts from government as follows: Counterpartfunding through State Department for Housing and Urban Development Counterpart funds Quarter 1 - 145,000,000 Counterpart funds Quarter 2 120,000,000 235,000,000 Counterpart funds Quarter 3 - 121,569,780 Counterpart funds Quarter 4 150,000,000 54,880,000 407,488,521 150,000,000 174,880,000 909,058,301 Other transfers from government entities Appropriations-in-Aid Total 150,000,000 174,880,000 909,058,301 10 .it, rm, oattwmen Improvement Project Reports and Financial Statements For the financial year ended June 30, 2019 NOTES TO THE FINANCIAL STATEMENTS (Continued) 8.4. PROCEEDS FROM DOMESTIC AND FOREIGN GRANTS During the 12 months to 30 June 2019 we received grants from donors as detailed in the table below: Grants Received from Bilateral Donors (Foreign Governments) 0__ 0 0 Grants Received from Multilateral Donors SInternational Organizations SIDA 539,923,936 Grants Received from Local Individuals and organisations Total 1539,923,936 Reports and Financial Statements For thefinancial year ended June 30, 2019 NOTES TO THE FINANCIAL STATEMENTS (Continued) 8.5. LOAN FROM EXTERNAL DEVELOPMENT PARTNERS During the 12 months to 30 June 2019 we received funding from development partners in form of 1o; negotiated by the National Treasury donors as detailed in the table below: Bilateral Donors (Foreign Governments Loans Received from Multilateral Donors (International or anisations) International Development1,0;564 Association (IDA)19075,4 French Development 5/3 1/2018 18,610,000 1,896,986,000 534,660,000 Total 18,610,000 1,896,986,000 2,440,365,640 8.6. MISCELLANEOUS RECEIPTS TOTAL RECEIPTS Cumulative to- date FY 2018/19 FY 2017/18 KShs KShs Kh Property income Sales of goods and services Administrative fees and charges Fines, penalties and forfeitures Voluntary transfers other than grants - Other receipts not classified elsewhere 71,324,132 - 205,852,804 71.32A4A132 - ---8-----04 'This receipt was an amount received from an encashed performance guarantee. 12 --.,..- .Lf.,, Improvement Project Reports and Financial Statements For the financial year ended June 30, 2019 8.7. COMPENSATION OF EMPLOYEES 13 - -. .... e,,ml ImprovementProject Reports and Financial Statements For the financial year ended June 30, 2019 NOTES TO THE FINANCIAL STATEMENTS (Continued) 8.8. PURCHASE OF GOODS AND SERVICES KShs KShs KShs Kh Utilities, supplies and 13,910:061 KShs KShs services 13,910061 14,499,421 78 708,595 Communication, supplies 6,373,486 6,373,486 8,287,365 36,563,38 and services 6 8 Domestic travel and 41,809,559 41,809,559 55,424,719 265,901,10 subsistence 9* Foreign travel and 5,976,662 subsistence 5,976,662 5,976,662 Printing, advertising and - 1,104,614 1,104,614 2,079,320 36,811,191 information supplies & services Rentals of roduced assets - Trainin ayments 44,865,983 44,865,983 230,000 123,785,976* Hospitality supplies and 668,500 44,500 1 23,785,976* services 668,500 177,400 4,443,430 Insurance costs 0 w retae to i e a8yr cr o Specialized materials and0 148,214302 services Other o eratin ayments Routine maintenance - 10,463,90-9 1,6,011261 5,3,7 vehicles and other transport 1,6,0 11261 5,3,7 een ment Routine maintenance-- other assets Exchange rate losses/gains (net) Total 125,172,774 125,172,774 93,303,918 6520,2 *The cumulative amount was restated to include 1st ad 2"nd nilyasjhc a roeul been excluded a iaca er hc a roeul **the sum totals corrected 14 R- --r- -'=CIIrul roject Reports and Financial Statements For1 the financial year ended June 30, 2019 NOTES TO THE FINANCIAL STATEMENTS (Continued) 8.9. SOCIAL SECURITY BENEFITS No payments for social security benefits 8.10. ACQUISITION OF NON-FINANCIAL ASSETS Pucas f uldnsKShs KShs KShs KShis KShs Construction of buildings Refurbishment of buildings Construction of roads Construction of civil works 1,477,218,625 1,477,218,625 2,095,945,626 8,669,438,993* Overhaul & refurbishment of construction and civil works Purchase of vehicles & other transport e ui ment Overhaul of vehicles & other transport e ui ment Purchase of household furniture & institutional e ui ment Purchase of office furniture & general 107,544,562 107,544,562 48,989,355 242,013,164*** e ui ment Purchase of specialised plant, e ui ment and machine Rehabilitation & renovation of plant, e ui ment & machine Purchase of certified seeds, breeding stock and live animals Research, studies, project preparation 357,779,386 357,779,386 1,023,541,786 2,948,276,286** desi & su ervision Rehabilitation of civil works Ac uisition of strate ic stocks Ac nisition of land Total 1,942,542,573 1,942,542,573 3,168,476,767 11,942,206,803 *The cumulative amount was restated to include the expenditure paid through direct payments which had been erroneously been excluded **The cumulative amount was restated to include 1st and 2'd financial years which had erroneously been exclUded ***the sum totals corrected 15 --.rt xe mut ovimeement improvement -rroject Reports and Financial Statements For the financial year ended June 30, 2019 NOTES TO THE FINANCIAL STATEMENTS (Continued) 8.11. TRANSFERS TO OTHER GOVERNMENT ENTITIES During the 12 months to 30 June 2019, we transferred funds to reporting government entities as shown below: KShs KShs KShs KShs KShs Transfers to National Government entities Athi Water Services - 203,237,099 Board Coast Water Services - 71,200,000 Board Lake Victoria North 98,834,903 Water Services Board Transfers to County Government TOTAL -_-_- _373,272,002 We have confirmed that the beneficiary institutions have received the funds and have recorded these as inter-entity receipts. We have attached these duly signed confirmations as an Appendix to the financial statements. 16 -' (I;Lytt iryurmau 3emement improvement Project Reports and Financial Statements For the financial year ended June 30, 2019 NOTES TO THE FINANCIAL STATEMENTS (Continued) 8.12. OTHER GRANTS AND TRANSFERS AND PAYMENTS There were no other grants and transfers and payments 8.13. CASH AND CASH EQUIVALENTS CARRIED FORWARD Bank accounts (Note 8.13A) 706,884,466 65 6 2896 81 mahi hand (Note 8. 13B) Cash equivalents (short-term deposits) (Note 8.13C) Total 706,884,466 656,289,681 The project has 1 number of project accounts spread within the project implementation area and 2 number of foreign currency designated accounts managed by the National Treasury as listed below: 17 - igu- ir ri ovittemenr Improvement Project Reports and Financial Statements For the financial year ended June 30, 2019 NOTES TO THE FINANCIAL STATEMENTS (Continued) 8.13. A Bank Accounts Project Bank Accounts Foreign Currency Accounts No foreign currency accounts Total Foreign Currency balances Local CurrencV Accounts Co-operative Bank of Kenya [A/c No ... 01141161460400] 704,334,466 653,739,681 Others ( amount held by Bank as collateral) 2,550,000 2,5-50,000 Total local currency balances _706,884,466 656,289,681 Total bank account balances 706,884,466 656,289,681 18 "'- "uttnent Improllement Project Reports and Financial Statements For the financial year ended Jine 30, 2019 NOTES TO THE FINANCIAL STATEMENTS (Continued) Special Deposit Accounts The balances in the Project's Special Deposit Account(s) as at 30th June 2019 are not included in the Statement of Financial Assets since they are below the line items and are yet to be drawn into the Exchequer Account as a voted provision. 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. SpeialDeosi AcoutsMovement chedule (i) Equity Bank Limited [A/c NO:08102951128571 Opening balance 725,363,739 Total amount deposited in the account 12,364,5 1,720,265,837 Amount withdrawn (as per Statement of Receipts & Payments)-Grant (539,923,936) amount withdrawn (as per Statement of Receipts & Payments)- Loan (1,905,7053640) Total amount withdrawn (as per Statement of Receipts & Payments) (2,445,629,576) Closing balance (as per SDA bank account reconciliation attached) 12,364,58 0 (ii) KISIP-CKE 1055 01 J [A/c No 10003398881 Opening balance (as per the SDA reconciliation) 148,920,864 0 Total- amount deposited-in-the-account- 1,909,135418. 680,248,977 Total amount withdrawn (as per Statement of Receipts & Payments) -1,896,986,000 534,660,000 Closing balance (as per SDA bank account reconciliation attached) 161070283 45,58977 The Special Deposit Account(s) reconciliation statement(s) has (have) been attached as Appendix i support these closing balances. NB; The difference between opening balances is due to exchange rate movements 8.13. B Cash In Hand There was no cash at hand as at 30.06.2019 19 - -.V-.. -&r,,1tUfL, Inprovementrroject Reports and Financial Statements For the financial year ended June 30, 2019 NOTES TO THE FINANCIAL STATEMENTS (Continued) 8.13. C Cash equivalents (short-term deposits) Co-Operative Bank of Kenya [A/C No ......] Total [Provide short appropriate explanations as necessary] 8.14. OUTSTANDING IMPRESTS AND ADVANCES Total 8.15. FUND BALANCE BROUGHT FORWARD Cd 706,884,466 656.289,681 Cash equivalents (shrt-tem epsis Outstandmng unprests and advances Total706,884,466 656,289,681 20 1eflya illurmFt k3ilnuit IfipruVcrffwl1 tUfjvct Reports and Financial Statements For the financial year ended June 30, 2019 NOTES TO THE FINANCIAL STATEMENTS (Continued) 8.16. PRIOR YEAR ADJUSTMENT Bank accounts Cash in hand Cash equivalents (short-term deposits) Receivables - Outstanding Imprests Total 21 Kenya Infornal Settlement Improvement Project Reports and Financial Statements For the financial year ended June 30, 2019 9. OTHER IMPORTANT DISCLOSURES 9.1 PENDING ACCOUNTS PAYABLE (See Annex 2A) No Pending accounts payable 9.2 PENDING STAFF PAYABLES (See Annex 2B) No pending staff payables 9.3 OTHER PENDING PAYABLES (See Annex 2C) No other pending payables 22 Kenya Informal Settlement Improvement Project Reports and Financial Statements For the financial year ended June 30, 2019 10. PROGRESS ON FOLLOW UP OF AUDITOR RECOMMENDATIONS The following is the summary of issues raised by the external auditor, and management comments that were provided to the auditor. We have nominated focal persons to resolve the various issues as shown below with the associated time frame within which we expect the issues to he resolved. 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Q у �.i � i: • v ..ч ��U у }�-i �U О � � -*С.�. � U y�j р Q � � �' U 'ГJ -i�+ С� с~б ��' гС' А bД ч и N ►� й� W г� (У� С! Г!i � О `" � "'� : �-"'i : н � � � ^�Э � н