STRICTY CONFIDENTIAL THE REPUBLIC OF SOUTII SUDAN 4.NTERNATIONAL DEVELMMEN- ASSOCEkTON (IDA SAFETY NET AND SKILLS DEVELOPMENT PROECT - PROJECT NUMBER IDA 5284 SS FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 301il JUNE 2015 December, 2015 THE REPUBLIC OF SOUTH SUDAN INTERNATIONAL DEVELOPMENT ASSOCIATION (IDA) SAFETY NET AND SKILLS DEVELOPMENT PROJECT PROJECT NUMBER IDA 5284 SS FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30" -JUNE 2015 Table of contents Page No Introduction I Project Summary I Main activities undertaken during the year 2 Report of the Auditor General of South Sudan 2 Statement of cash receipts and payments 4 Significant Accounting Policies 5 Notes to the financial statements 7 Audit and Management issues 9 Page ii THE REPUBLIC OF SOUTH SUDAN INTERNATIONAL DEVELOPMENT ASSOCIATION (IDA) SAFETY NET AND SKILLS DEVELOPMENT PROJECT PROJECT NUMBER IDA 5284 SS FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30TH JUNE 2015 1. Introduction The South Sudan Safety Net and Skills Development Project is funded by the Intenational Development Association and administered by the World Bank. The project agreement was entered into between the Government of the Republic of South Sudan and the International. Development Association and is implemented by the Ministry of Agriculture, Forestry, Cooperatives and Rural Development. 2. Summary of Project Details Donor International Developmeit Association (IDA) Applicant Ministry of Finance & Economic Planning, Republic of South Sudan Project To provide access to income opportunities and temporary employment Development to the poor and vulnerable and put in place building blocks for a social objectives protection system. * Social Protection System aud Project Management * Public Works Project components * Skills Development Sector Agriculture Services, Social Prtection Project activities location South Sudan Project 21stJune2013 to31stDec2017 implementation period Project value The project cost is US$21 million Approved US$ 21,000,000 Financed by International Development Association Financing (JDA). Agreement Signing dates 18 September2014 Implementing 1. Ministry of Agriculture, Forestry, Cooperatives and Rural agencies Development; Ministry of Labour Public Service and Human Resource Development; Ministry of Gender, Child and Social Welfare; S$ 2. International NGOs and/or UN Agenciesv n Pagel 3. Main activities undertaken during the year During the period, the main activity was project preparation. The specific activities included establishment of the institutional structures at National, State, Counties/Municipalities that are necessary for the implementation of the project activities. There was also procurement of consultancy services which included service providers for both public works and skills development components and project staff besides procurements of goods such as project vehicles, motorbikes, office equipment and furniture. Scope of the Financial Audit Review I have performed the procedures enumerated below with respect to the South Sudan Safety Net and Skills Development Project Statement of Cash Receipts and Payments for the year ended 30th June, 2015. * Examined whether the Project has complied with the rules for accounting and record keeping of the Grant Agreement with a view to assess whether an efficient and effective expenditure verification of the Financial Report is feasible and to report important exceptions and weaknesses with regard to accounting, record keeping and documentation requirements so that the Project can undertake follow-up measures for correction and improvement for the remaining implementation period. Consideration of Value was the primary factor used by the Auditor to select expenditure items or classes of expenditure. The Auditor also used appropriate judgment in selection of specific expenditure items or classes of expenditure items so as to cover expenses/areas that are unusual or inherently risky or error-prone. * Exercised professional judgment to obtain sufficient appropriate verification evidence as to whether the expenditure has occurred (reality and quality of the expenditure) and - where applicable - assets exist. The Auditor verified the reality and quality of the expenditure for a transaction or action by examining proof of work done, goods received -or services rendered on a timely basis, at acceptable and agreed quality and at reasonable prices or costs. * Evaluation of the internal control environment in order to determine areas of weaknesses in the internal control system and to obtain assurance that the- transactions for the action are properly authorized checked and approved by the appropriate personnel. Page2 -- REPORT OF THE AUDITOR GENERAL OF SOUTH SUDAN To The Minister of Finance and Economic Planning, Government of the Republic of South Sudan: I have audited the accompanying financial statements for the South Sudan Safety Net and Skills Development Project for the year ended 30th June, 2015 as set out on pages 4 to 8 which comprise the Statement of Cash Receipts and Payments, a summary of the significant accounting policies and other explanatory notes. Management's Responsibility The Project Management and the Ministry of Finance Public Financial Management Unit are responsible for the preparation of these financial statements in accordance with the International Public Sector Accounting Standards (IPSAS), Financial Reporting under the Cash Basis of Accounting and for such internal control as management determines are necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor General's responsibility My responsibility is to express an independent opinion on these financial statements based on my audit. I conducted my audit in accordance with International Standards on Auditing. Those Standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies-used and the reasonableness of accounting estimates made by management as well as evaluating the presentation of the financial statements. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion. Opinion In my opinion, the financial statements give a true and fair view of the revenue collected and expenses paid under this project during the year ended 30th June, 2015 in accordance with the International Public Sector Accounting Standards on cash receipts and disbursements basis as described in note (i); Significant Accounting Policies. Steven Wondu Auditor General South Sudan National Audit Cha ber Juba 2015 . P sOU This report is solely intended for the information and use of the Government of the Republic of South Sudan, the World Bank and International donors participating in the South Sudan Transition Trust Fund. ------ Page 3 THE REPUBLIC OF SOUTH SUDAN INTERNATIONAL DEVELOPMENT ASSOCIATION (IDA) SAFETY NET AND SKILLS DEVELOPMENT PROJECT PROJECT NUMBER IDA 5284 SS STATEMENT OF CASH RECEIPTS AND PAYMENTS FOR THE FINANCIAL YEAR ENDED 30"'r JUNE 2015 201412015 Notes USD RECEIPTS: Contribution 2 1,430,116 Other receipts Interest Income 3 0.00 Total receipts PAYMENTS: Payments as per project Components 4 81,759 Bank charges 5 256 Total payments 82.015 Increase in cash during the period Cash at beginning of the period 0.00 Increase in cash during the period 1.348.100 Cash at end of period 6 1,348,100 The financial statements on page 4 to 8 were approved for issue by the Project Management on ............2015 and si don its behalf by: Undersecreta RD oProject ordinator The accounting policies on pa o 7 and the notes ge 7 and 8 form an integral part of these financial statements. 2 8 at Report of the Independent Au e 2 to3. Page 4 THE REPUBLIC OF SOUTH SUDAN INTERNATIONAL DEVELOPMENT ASSOCIATION (IDA) SAFETY NET AND SKILLS DEVELOPMENT PROJECT PROJECT NUMBER IDA 5284 SS NOTES TO THE FINANCIAL STATEMANTS FOR THE FINANCIAL YEAR ENDED 30TH JUNE 2015 1. SIGNIFICANT ACCOUNTING POLICIES i) Basis of preparation The final financial statements for the Project have been prepared in accordance with International Public Sector Accounting Standards (IPSAS) "Financial Reporting under the Cash Basis of Accounting" on a modified cash basis of accounting. The modified. cash basis comprises of the cash basis of accounting supplemented with additional disclosure items. Under the cash basis of accounting, transactions and other events are recognized if and when cash is received or paid. ii) Reporting entity The financial statements are for the Safety Net and Skill Development Project (SNSDP) of the Government of South Sudan. iii) Reporting currency The Reporting currency is United States Dollars (USD). iv) Foreign currency transactions Transaction in foreign currencies during the reporting period are converted into US dollars at rates ruling on the transaction dates. v) Contribution Contributions comprise where applicable, cash donations made directly to the Project's pooled bank account by the World Bank as well as any payments made Directly to suppliers and contractors by the World Bank, on behalf of beneficiary under the categories defined in the financing agreement and as procured by the Project. Direct contributions to the Project's segregated bank account Contributions made directly to the Project's segregated bank account are recognized upon receipt. Other contributions Any payment made directly to suppliers and contractors are recognized upon payment. Page 5 vi) Payments Payments are made in line with the provisions of the financing agreement. Transactions are only recognized in the financial statements if and when payment is made. vii) Assets Cash and cash equivalents Cash and cash equivalents comprise cash at bank and cash on hand. - Receivables Receivable arising from cash payment that are recoverable from implementing State and third parties, including loans advanced are disclosed in the notes to the financial statements. Fixed assets and inventory Fixed assets and inventory are written off upon purchase. Any amounts on hand at the reporting date are shown at cost in the notes to the financial statements. viii) Liabilities Payables Amounts payable are shown in the notes to the financial statements. [At 30th June 2015 this policy had not been effected]. Accruals Accruals representing goods and services that have been rendered to the project, but for which no invoices have been presented by the suppliers at the reporting date are disclosed in the notes to the financial statements. [As 30th June 2015 this policy had not been effected] Contingent liabilities Contingent liabilities are possible obligations that arise from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the ministries and Government agencies. Contingent liabilities may also comprise present obligation that arise from past events but are not recognized either because it is not probable that an outflow of resources embodying economic benefits or service potential will be required to settle the obligations or the amount of the obligations cannot be measured with sufficient reliability. [At 30Ih June 2015 this policy had been effected]. Any contingent liabilities are disclosed in the notes to the financial statements. [At 30th June 2015 this policy had not been effected]. .--Page 6 Commitments Commitments represent goods and services that have been approved and or contracted, but where no delivery has taken place at the reporting date. Commitments are not recognized in the Statement of Cash Receipts and Payments as liabilities or as expenditure, but rather are disclosed in the notes to the financial statements. [At 30" June 2015 this policy had not been effected]. 2. CONTRIBUTIONS: 2014/2015 USD Designated accounts: IDA 1,190,351 Direct Payments: IDA 239,765 1,430,11(i 3. INTEREST INCOME: 2014/2015 USD Stanbic Bank Juba USD Designated _. Accounts 4. PAYMENTS AS PER PROJECT COMPONENTS 2014/2015 USD Social Protection Systems and Project Management 81,759 Strengthening Conunuity Safety Net 0.00 Project Management 0.00 Total 81,752 5. OTHER PAYMENTS Bank charges 2014/2015 USD CFC Stanbic Bank Juba USD Designated Accounts: Designated Account 256 Total _56 Page 7 - 6. CASH BALANCES 30.06.2015 USD Stanbic Bank Juba USD Designated Accounts: Pools Account 1,077,300 Advances to Line Ministry Account SSP Account 31,035 Total 1,108,335 Direct Payment Advanced by World Bank: Advances to Service Provider - UNOPS 239.765 Total Page 8