MUINISTrY P.O. Box PMB 60, Ministries, Accra OF Digital Address: GA- 298 -2662 SANITATION AND WATER Kndly quote this number and date on all correspondence My Ref No PCU/GAVA/GENIEAP/231333 REP UB LI COFG 11IANA RfESO URCES Your Ref No - - - - - - - - Date - 28th June 2024 GAMA Sanitation and Water Project- Additional Financing IDA Credi No. 67810-GH Audited Accounts for the 12 Months Ended 31st December 2023 We forward herewith copy(ies) of the audited accounts of GAMA Sanitation and Water Project- Additional Financing for 12 months ended 31st December 2023 for your information and retention. Please acknowledge receipt. NOAH TUMFO CHIEF DIRECTOR JO 8 FOR: MINISTER Distribution: The Hon. Minister Ministry of Finance Accra (World Bank Desk) The Controller and Accountant-General Controller and Accountant-General's Dept Accra The Auditor General Audit Service Accra The Task Team Leader GAMA Sanitation and Water Project World Bank Accra The Chief Director Ministry MSWR The Managing Director Ghana Water Company Ltd Accra Tel +2 33 (0) 302 630 907 Email. info@msw r.gov.gh Website www msw r. gov gh GREATER ACCRA METROPOLITAN AREA SANITATION AND WATER PROJECT-AF IDA CREDIT NO. 67810-GH FINANCIAL STATEMENTS AND MANAGEMENT LETTER 31ST DECEMBER, 2023 bEB BENNING, ANANG & PARTNERS (Chartered Accountants and Management Consultants) Abavana House, Abavana Junction 56 Kotobabi Road P. 0. Box AN 12266 Accra-North Ghana hbnflBENNING, ANANG & PARTNERS (Chartered Accountants & Management Consultants) Abavana House, Abavana Junction Telephone +233(0)302 235669, 237205, 246626-7 56 Kotobabi Road, KotGPOBAbi Mobile +233(0)302 244-806509 P. 0. Box AN 12266 Fax baapl905@hotmail.com Accra-North E-mail Ghana GA-022-0442 TIN No. C0003734072 Our Ref: MIS:101 Your Ref: 26th June, 2024 The Project Coordinator Project Coordinating Unit Ministry of Sanitation and Water Resources Within the Premises of Institute of Local Government Studies (ILGS) Ogbojo Near Madina New Road Estate Accra, Ghana Dear Sir, GREATER ACCRA METROPOLITAN AREA SANITATION AND WATER PROJECT-AF IDA CREDIT NO. 67810-GH FINANCIAL STATEMENTS AUDIT: 31sT DECEMBER, 2023 We have completed the audit of the Financial Statements of the Greater Accra and Greater Kumasi Metropolitan Area Sanitation and Water Proj ect-AF for the year ended 31st December, 2023 and have the pleasure of forwarding the Financial Statements and their related management letter to you. Yours faithfully, Benning, nang & Partners Chartered Accountants BENNING, ANANG & PARTNERS \CHARTERED ACCOUNTANTS Principal place of business at which a list of partners name Ls available: Abavana House, Abavana Junction, 56 Ktobabi Road, Kotobabi, Accra-Ghana JKB GREATER ACCRA METROPOLITAN AREA SANITATION AND WATER PROJECT-AF IDA CREDIT NO. 67810-GH FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST DECEMBER, 2023 Table of Contents Page Corporate Information 1 Report of Project Management Team 3 Independent Auditors' Report on the Financial Statements 4 Statement of Income and Expenditure 8 Statement of Sources and Uses of Funds 9 Statement of Financial Position 10 Notes to the Financial Statements 11 1 GREATER ACCRA METROPOLITAN AREA SANITATION AND WATER PROJECT-AF IDA CREDIT NO. 67810-GH GENERAL INFORMATION Steering Committee Members: Minister, Sanitation and Water Resources Hon. Cecilia Abena Dapaah (Resigned 22nd July 2023) Minister, Sanitation and Water Resources Hon. Freda Prempeh (Relieved 17th February, 2024) Hon Chinnia Issahaque Deputy Minister, Sanitation and Water Resources Noah Tumfo Chief Director, Sanitation and Water Resources Harold Esseku World Bank Representative Dr. Clifford Braimah Managing Director, Ghana Water Company Ltd Yvonne Quansah Ministry of Finance, External Resource Mobilization and Economic Relations Division (ERMER) Nelly Mireku Ministry of Finance, WB Unit Selected GAMA MMAS: Hon. Elizabeth Kwatsoo Tawiah Sackey Accra Metropolitan Assembly Hon. YahanneAshitey Tema Metro Assembly Hon Elizabeth Kaakie-Matnn Ga East Municipal Assembly Hon Mordecai Quashie Ledzokuku Municipal Assembly Hon Jennifer Dede Adjabeng La Nkwantanan Madina Municipal Assembly Hon. Abubakar Sadick Ahmed La Nkwantanan Madina Municipal Assembly Hon. Joshua Nii Bortey Krowor Municipal Assembly Hon. Solomon Niikoi La Dade-Kotopon Municipal Assembly Hon. Aminu Mohammed Zakari Ayawaso North Municipal Assembly Hon. Samuel OkoeAmanquah Kpone Katamanso Municipal Assembly Hon. Anna Adukwei Addo Tema West Municipal Assembly Hon. Clement Wilkinson Ga West Municipal Assembly Hon. Patrick Kumor Weija Gbawe Municipal Assembly Hon. D. A. Nii-Noi Adumuah Adentan Municipal Assembly Hon. Simon Sekyere Ga North Municipal Assembly Hon. Joseph Nyarni Stephen Ga South Municipal Assembly Hon. Mohammed Bashiru Ga Central Municipal Assemble Hon. Hajia Salma Sani Mohammed Ayawaso East Municipal Assembly Hon. Boye Laryea Okaikoi North Municipal Assembly Hon. George C. Blay Ablekuma West Municipal Assembly Hon. Mariama Amui Ablekuma Central Municipal Assembly Hon. Kofi Ofori Ablekuma North Municipal Assembly 2 GREATER ACCRA METROPOLITAN AREA SANITATION AND WATER PROJECT-AF IDA CREDIT NO. 67810-GH GENERAL INFORMATION (continued) GKMA: Samuel Pyne Kumasi Metropolitan Assembly Abraham Antwi Oforikrom Municipal Assembly Kennedy Kwasi Kankam Asokore-Mampong Municipal Assembly Samuel Oduro Frimpong Ejisu Municipal Assembly Akwannusa Gyimah Asokwa Municipal Assembly Maxwell Ofosu Boakye Suame Municipal Assembly Lord Inusah Lansah Old Tafo Municipal Assembly Richard Agyenim Boateng Kwadaso Municipal Assembly IsaacBaasan Yaw Regional Coordinating Council, Kumasi Rev. Emmanuel Addo Ghana Education Service/R-SHEP Benard SenanuKlove CONIWAS Nana KusiAbabio Oyokohene, Kumasi Border MMAs Opoku Agyeman Bonsu Kwabre East Municipal Assembly Christian Adu Poku Afigya Kwabre South District Assembly Joseph Kwesi Asuming Bosomtwe District Assembly Prince Karikari Atwima Kwanwoma District Assembly Rebecca Yeboah Atwima Nwabiagya North District Assembly Kwesi Karikari Achamfour Afigya Kwabre North District Assembly Kwaku Kyei Baffour Bekwai Municipal Assembly Michael Amoah Awuku Atwima Nwabiagya Municipal Assembly Project Management Team: Ing. George Asiedu Project Coordinator Stephen Ekow Graves Project Accountant Samuel Oteng Procurement Specialist George Bright Awudi Environmental Safeguard Specialist Emmanuel Acquah Social Safeguards Specialist Gabriel Engmann Sanitary Engineer Kwadwo Antwi Gyasi Sanitation Specialist Emmanuel Addai Knowledge Management Expert Kingsley Amoako-Attah Monitoring and Evaluation Officer Address: Project Coordinating Unit (Ministry of Sanitation and Water Resources) Institute of Local Government Studies Ogbojo -East Legon Accra Ghana Digital Address: GM-040-9656 3 GREATER ACCRA METROPOLITAN AREA SANITATION AND WATER PROJECT-AF IDA CREDIT NO. 67810-GH GENERAL INFORMATION (continued) Auditors: Benning, Anang & Partners (Chartered Accountants & Management Consultants) Abavana House, Abavana Junction 56 Kotobabi Road, Kotobabi P. 0. Box AN 12266 Accra-North Ghana Bankers: Bank of Ghana (PCU/MSWR) Ecobank Ghana PLC (PCU/MSWR) National Investment Bank Limited (Ghana Water Company Limited) 4 GREATER ACCRA METROPOLITAN AREA SANITATION AND WATER PROJECT-AF IDA CREDIT NO. 67810-GH REPORT OF THE PROJECT MANAGEMENT TEAM OF THE GREATER ACCRA METROPOLITAN AREA (GAMA) SANITATION AND WATER PROJECT-AF The Project Management Team has the pleasure in submitting their report and the audited Financial Statements of the Greater Accra Metropolitan Area (GAMA) Sanitation and Water Project-AF for the year ended 31st December, 2023. Statement of Project Management Team's Responsibilities The Project Management Team is responsible for ensuring that the Financial Statements of the Project are prepared, in all material respects, in accordance with the adopted accounting policies. In preparing these Financial Statements, the Project Management Team has selected suitable accounting policies and then applied them consistently, made judgements and estimates that are reasonable and prudent and followed the accounting policies described on Note 1 to the Financial Statements. The Project Management Team is responsible for ensuring that the Project keeps proper accounting records that disclose with reasonable accuracy at any time the financial position of the Project. The Team is also responsible for safeguarding the assets of the Project and taking reasonable steps for the prevention and detection of fraud and other irregularities. Principal activities The principal activities under the Project are stated as follows: * Provision of environmental sanitation services to priority low income areas of Greater Accra Metropolitan Area and Greater Kumasi Metropolitan Area. * Expansion of the water distribution network in Greater Accra Metropolitan Area and Greater Kumasi Metropolitan Area and improvement in Operational Efficiency. * Planning, improvement and expansion of environmental sanitation services. * Project Management and Institutional strengthening. Financial results The income statement shows an excess of income over expenditure of US$12,952,742. BY ORDER OF THE PROJECT MANAGEMENT TEAM: Project Coordinator rdinator.Signat.Signature. ...... .. 2024 5 BENNING, ANANG & PARTNERS b a a pt (Chartered Accountants & Management Consultants) Abavana House, Abavana Junction Telephone +233(0)302 235669, 237205, 246626-7 56 KotGPOBAbi Road, KotGPOBAbi Mobile +233(0)302 244-806509 P. 0. Box AN 12266 Fax +233(0)302 246628 Accra-North E-mail baapl905@hotmail.com Ghana GA-022-0442 TIN No. C0003734072 Our Ref: MIS:101 Your Ref: INDEPENDENT AUDITORS' REPORT TO THE MINISTRY OF SANITATION AND WATER RESOURCES AND GREATER ACCRA METROPOLITAN AREA (GAMA) SANITATON WATER PROJECT-AF Report on the audit of the Financial Statements Opinion We have audited the accompanying Financial Statements of Greater Accra Metropolitan Area Sanitation and Water Project-AF for the year ended 31st December, 2023 set out on pages 8 to 16. These Financial Statements comprise the Statement of Financial Position at 31st December, 2022 the Statement of Income and Expenditure and Statement of Sources and Uses of Funds for the year ended, and summary of significant accounting policies and other explanatory notes. In our opinion, the Financial Statements audited by us, which are in agreement with the books of accounts in all material respects and conform with International Financial Reporting Standards (IFRS), give a true and fair view of the Financial Position of the Greater Accra Metropolitan Area Sanitation and Water Project-AF, as at 31st December, 2022 and of the Statement of Income and Expenditure and the Statement of Sources and Uses of Funds for the year ended. Basis of Opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Greater Accra Metropolitan Area Sanitation and Water Project-AF in accordance with the International Code of Ethics for Professional Accountants (including International Independence Standards) (the Code) issued by the International Ethics Standards Board of Accountants (IESBA) and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Emphasis of matter - Basis of accounting and restriction on distribution and use We draw attention to Note 1 to the Financial Statements, which describes the basis of accounting. The Financial Statements are prepared to assist the Project Coordinating Unit, in complying with the financial reporting provisions of the contract referred to above. As a result, the Financial Statements may not be suitable for another purpose. Our report is intended solely for the Ministry of Sanitation and Water Resources (MSWR) and the World Bank and should not be distributed to or used by parties other than the Ministry of Sanitation and Water Resources (MSWR) and the World Bank. Our opinion is not modified in respect of this matter. Project Steering Committee's Responsibility for the Financial Statements Project Steering Committee of Greater Accra Metropolitan Area Sanitation and Water Project-AF under the Ministry of Sanitation and Water Resources is responsible for the preparation and fair presentation of these Financial Statements in accordance with World Bank financial reporting guidelines and International Financial Reporting Standards and for such internal control as the Project Steering Committee of Greater Accra Metropolitan Area Sanitation and Water Project-AF determines as necessary to enable the preparation of Financial Statements that are free from material misstatement, whether due to fraud or error. 6 IVfflBENNING, ANANG & PARTNERS (Chartered Accountants & Management Consultants) INDEPENDENT AUDITORS' REPORT TO THE MINISTRY OF SANITATION AND WATER RESOURCES AND GREATER ACCRA METROPOLITAN AREA (GAMA) SANITATON WATER PROJECT-AF - (continued) In preparing the Financial Statements, the Project Steering Committee of Greater Accra Metropolitan Area Sanitation and Water Project-AF is responsible for assessing the Project's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Project Steering Committee of Greater Accra Metropolitan Area Sanitation and Water Project-AF either intends to liquidate the Project or to cease operations, or has no realistic alternative but to do so. The Project Steering Committee of Greater Accra Metropolitan Area Sanitation and Water Project- AF is responsible for overseeing the Project's financial reporting process. Auditors' Responsibilities for the Audit of the Financial Statements Our 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 auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with International Standards on Auditing will always detect a material misstatement 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 the Financial Statements. As part of an audit in accordance with International Standards on Auditing, we exercise professional judgment and maintain professional skepticism throughout the audit. We 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 our 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 the reasonableness of accounting estimates and related disclosures made by the Project Steering Committee. * Conclude on the appropriateness of the Project Steering Committee'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 auditors' report to the related disclosures in the Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors' 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 achieves fair presentation. 7 h if BENNING, ANANG & PARTNERS (Chartered Accountants & Management Consultants) INDEPENDENT AUDITORS' REPORT TO THE MINISTRY OF SANITATION AND WATER RESOURCES AND GREATER ACCRA METROPOLITAN AREA (GAMA) SANITATON WATER PROJECT OF GHANA-AF - (continued) We communicate with the Project Steering Committee regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Other Reporting Requirements In accordance with the Terms of Reference for this audit, we also confirm that the programme expenditure was: * Incurred in conformity with the Financing Agreement, approved programme work plan and budgets; and * Supported by approved payment vouchers and other supporting documents. The Engagement Partner on the audit resulting in this independent auditors' report is Festus Eugene Adu Mantey (ICAG/P/1038) Benning, Anang & Partners (ICAG/F/2024/0 NNING, ANANG & PARTNERS Chartered Accountants CHARTERED ACCOUNTANTS Abavana House, Abavana Junction Accra Ghana ......... ...../..2024 8 GREATER ACCRA METROPOLITAN AREA SANITATION AND WATER IDA CREDIT NO. 67810 - GH STATEMENT OF INCOME AND EXPENDITURE FOR THE YEAR ENDED 31ST DECEMBER, 2023 PCU GWCL TOTAL TOTAL IDA IDA 2023 2022 Note US$ US$ US$ US$ Income 2a 25,100,000 24,334,332 49,434,332 25,520,223 Other Income 2b 240 117,826 118,066 822,451 25,100,240 24,452,158 49,552,398 26,342,674 Expenditure Category 1: Component 1 3a 17,428,207 - 17,428,207 11,038,345 Component 3 3b 1,018,722 - 1,018,722 1,051,558 Component 4 3c 4,301,016 4,301,016 7,227,659 Category 2: Component 2 3d - 13,773,217 13,773,217 3,805,066 Category 3: - Foreign exchange loss 78,494 - 78,494 36,942 Total Expenditure 22,826,439 13,773,217 36,599,656 23,159,570 Surplus/(deficit) 2,273,801 10,678,941 12,952,742 3,183,104 The notes on pages 11 to 16 are integral part of these Financial Statements. 9 GREATER ACCRA METROPOLITAN AREA SANITATION AND WATER PROJECT - IDA CREDIT NO. 67810 w GH STATEMENT OF SOURCES AND USES OF FUNDS FOR THE YEAR ENDED 31ST DECEMBER, 2023 PCU GWCL TOTAL TOTAL IDA IDA 2023 2022 Note US$ US$ US$ US$ Sources 4 30,286,104 29,001,430 59,287,534 32,540,010 Uses Category 1: Component 1 Sa 17,261,124 - 17,261,124 10,699,792 Component 3 5b 1,018,722 - 1,018,722 1,051,558 Component 4 5c 4,468,072 - 4,468,072 7,248,458 Category 2: Component 2 5d - 13,773,218 13,773,218 3,805,066 Category 3: 5e - - - Total Uses 22,747,918 13,773,218 36,521,136 22,804,874 Available fund balance 7,538,186 15,228,212 22,766,398 9,735,136 Represented by: Cash and Cash equivalents 7 7,538,186 15,228,212 22,766,398 9,735,136 7,538,186 15,228,212 22,766,398 9,735,136 The notes on pages 11 to 16 are integral part of these Financial Statements. 10 GREATER ACCRA METROPOLITAN AREA SANITATION AND WATER PROJECT IDA CREDIT NO. 67810 - GH STATEMENT OF FINANCIAL POSITION AS AT 31ST DECEMBER, 2023 PCU GWCL TOTAL TOTAL IDA IDA 2023 2022 Assets Note US$ US$ US$ US$ Project expenditure 6 57,783,178 20,662,443 78,445,621 41,784,834 Cash and cash equivalents 7 7,538,186 15,228,212 22,766,398 9,735,136 Total Assets 65,321,364 35,890,655 101,212,019 51,519,970 Liabilities Account Payables 8 200,344 - 200,344 60,693 Net Assets 65,121,020 35,890,655 101,011,675 51,459,277 Financed By: IDA 9 64,100,000 35,554,555 99,654,555 50,220,223 Other Income 9 1,021,020 336,100 1,357,120 1,239,054 Accumulated Fund Balance 65,121,020 35,890,655 101,011,675 51,459,277 The Financial Staternents on pages 8 to 16 were approved by Project Management Team on\J. .. .2024, Chief Director, MSWR: Signature: Project Accountant: &f f / Signature: Managing Director (GWCL): iJiozb Signature / -7 - A L Chief Manager, Finance (GWCLU \ + U-lb 7onature: The notes on pages 11 to 16 are integral part of these Financial Statements. 11 GREATER ACCRA METROPOLITAN AREA SANITATION AND WATER PROJECT-AF IDA CREDIT NO. 67810-GH FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST DECEMBER, 2023 NOTES TO THE FINANCIAL STATEMENTS PROJECT BACKGROUND 1.1 Reporting Entity The Greater Accra Metropolitan Area (GAMA) Sanitation and Water Project-AF is a four-year project funded by the World Bank to increase access to improved sanitation and improved water supply in the Greater Accra Metropolitan Area (GAMA) and Greater Kumasi Metropolitan Area (GKMA), with emphasis on low income communities and to strengthen management of environmental sanitation in the GAMA and GKMA. The project was signed on November 12, 2020 and became effective on 21st April, 2021 and would end in 31s" December, 2024. The project's objectives come under the following components. Provision of environmental sanitation services to priority low income areas of the GAMA and GKMA The objectives of this component is to increase the access to environmental sanitation and water supply services in low income areas of the GAMA and GKMA with a strong focus on liquid sanitation. Expansion of the water distribution network in the GAMA and GKMA and improvement in operational efficiency The objective of this component is to improve and expand the water distribution network in order to provide piped water to the targeted people living in low income communities in the GAMA and GKMA. Planning, improvement and expansion of environmental sanitation services The objective of this component is to develop integrated GKMA-wide plans for liquid and solid waste management and drainage, and to finance critical elements to improve collection, treatment and disposal of waste water and septic sludge. Project Management and Institutional strengthening This component will provide technical assistance (TA) to GAMA and GKMA municipal, metropolitan assemblies and national institutions, including the promotion of private sector initiatives. It will also support the development of social accountability mechanisms aimed at applying pressure on those responsible for the services to ensure they are properly operated and maintained. 12 GREATER ACCRA METROPOLITAN AREA SANITATION AND WATER PROJECT-AF IDA CREDIT NO. 67810-GH FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST DECEMBER, 2023 NOTES TO THE FINANCIAL STATEMENTS - (continued) 1.2 Accounting policies The following are the significant accounting policies adopted in the preparation of these Financial Statements: a. Basis of preparation The Financial Statements have been prepared on the historical cost convention in accordance with the World Bank Financial Reporting Guidelines and in compliance with the Credit Agreement Number 67810-GH and on modified cash basis of accounting. b. Income Income is recognized when received into the respective designated accounts. c. Project expenditure The expenditure incurred from the grant fall under specific components and categories. Expenditure represents payments for goods and services rendered to the programme, based on the approved Annual Work Plan (AWP). It is recognised when actual payments are made. d. Fixed assets Fixed assets represents the expenditure incurred in acquiring property and equipment for use by the Project Coordinating units and Ghana Water Company Limited. Fixed assets are expensed in the year of acquisition. e. Foreign currency (i) Fundamental and presentation currency The Financial Statements are presented in US Dollars (US$) which is the functional currency of the programme. (ii) Transactions and balances Transactions in local currencies are translated to US Dollars (US$) at the appropriate rates of exchange prevailing on the date of the transaction. Gains or losses arising from foreign currency transaction are credited to or charged against expenditure. f. Receivables This represents advances given to staff for the implementation of activities which are unretired at the end of the period. g. Non capital expenditure These comprise of cumulative project expenditure incurred on Works, Capacity Buildings and Consultancy which has been capitalised. h. Funds received and expenditure i. Funds received are accounted for on cash basis. ii. Expenditure is accounted for on cash basis. The expenditure is capitalised in the Statement of Financial Position. 13 GREATER ACCRA METROPOLITAN AREA SANITATION AND WATER PROJECT - AF IDA CREDIT NO. 67810 - GH FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST DECEMBER, 2023 NOTES TO THE FINANCIAL STATEMENTS (continued) PCU GWCL TOTAL TOTAL IDA IDA 2023 2022 2 a) Income USS US$ US$ US$ International Development Association 25,100,000 24,334,332 49.434,332 25,520,223 25,100,000 24,334,332 49,434,332 25,520,223 2 b) Other Income Beneficiary Contribution - - 691,078 Opening balance - - Interest Received 240 117.826 118,066 131,373 240 117,826 18,066 8222 ,451 3 Expenditure Category 1 a. Component 1 Household Toilets- 30,000 Nr in GKMA, 12,000 HHT in GAMA 7,244,533 - 7,244,533 4,614,203 Institutional Toilets: 30 units in GAMA and 120 units in GKMA 10,183,674 10,183,674 6,424,142 17,428,207 - 17,428,207 11,038,345 b. Component 3 Construction of Simplified Sewerage System 135,195 - 135,195 73,230 Processing of Sludge from Digesters - - - Preparation of Plans for Improvement of Drainage Services 883,527 - 883,527 978,328 Cost overrun on Parent Project - - 1,018,722 - 1,018,722 1,051,558 c. Component 4 Strengthening of WASH sector Institutions 920,502 - 920,502 1,343,262 Project Management 1,320,466 - 1,320,466 1,592,684 Behaviour Change Communication and Knowledge Management 16,174 - 16,174 151,034 Capacity Building (Training) 736,220 736,220 1,631,603 Operational Management - - - PCU 1,210,654 - 1,210,654 1,053,321 CBT/EHSD/MSWR 48,358 - 48,358 325,522 MMA'S 15,242 - 15,242 175,303 Conferences, Workshops and Seminars 4,772 - 4,772 104,162 Education/Sensitization - - - Equipment 28,628 - 28,628 850,768 4,301,016 - 4,301,016 7,227,659 Category 2 d. Component 2 Improvement in Operational eticiency (GWCL) - - - Improvement in Distribution network - 13,773,217 13,773,217 3,805,066 Provision othouse Connections - Support for Low-Income Customers Support unit - - - - - 13,773,217 13,773,217 3,805,066 14 GREATER ACCRA METROPOLITAN AREA SANITATION AND WATER PROJECT - AF IDA CREDIT NO. 67810 - GH FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST DECEMBER, 2023 t NOTES TO THE FINANCIAL STATEMENTS (continued) IDA IDA 2023 2022 4 Resources US$ US$ US$ US$ Bank balance as at 1st January 2023 5,185,864 4,549,272 9,735,136 6,511,875 Prior year adjustment - - - (314,539) Other balances as at 1st January 2023 Fund balances at the MMAs Other receivables as at 1st January 2023 - - - Sources during the year Funds received in the year (Note 2a) 25,100,000 24,334,332 49,434,332 25,520,223 Exchange gain - - - - Other-Income (Note 2b) - - 240 - 117,826 118,066 8 2 2 , 4 5 1 Total 30,286,104 29,001,430 59,287,534 32,540,010 5 Expenditure Category 1 a. Component 1 Household Toilets- 30,00ONr in GKMA, 12,000 HHT in GAMA 7,172,592 - 7,172,592 4,278,478 Institutional Toilets: 30 units in GAMA and 120 units in GKMA 10,088,532 10,088,532 6,421,314 17,261,124 - 17,261,124 10,699,792 b. Component 3 Construction of simplified sewerage systems 135,195 - 135,195 73,230 Processing of sludge from digesters - Preparation of plans for Improvement of drainage services 883,527 - 883,527 978,328 Cost overrun on Parent Project - - 1,018,722 - 1,018,722 1,051,558 c. Component 4 Strengthening of WASH sector institutions 920,502 920,502 1,327,219 Project Management 1,320,466 - 1,320,466 1,592,684 Behaviour Change Communication and Knowledge Management 16,174 16,174 151,034 Capacity Building (Training) 736,221 736,221 1,631,603 Operational Management - - PCU 1,377,709 - 1,377,709 1,090,263 CBT/EHSD/MSWR 48,358 - 48,358 325,422 MMA'S 15,242 - 15,242 175,303 Conferences, Workshops and Seminars 4,772 - 4,772 104,162 Education/Sensitization - - - Equipment 28628 -28,628 850,768 4,468,072 - 4,468,072 7,248,458 d. Category 2 Component 2 Improvement in Opreational Efficiency (GWCL) Improvement in distribution network 13,773,218 13,773,218 3,805,066 Provision of house connections Support for low-income customer support unit - - - - 13,773,218 13,773,218 3,805,066 e. Category 3 - - - . Total uses 22,747,918 13,773,218 36,521,136 22,804,874 15 GREATER ACCRA METROPOLITAN AREA SANITATION AND WATER PROJECT - AF IDA CREDIT NO. 67810 - GH FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST DECEMBER, 2023 NOTES TO THE FINANCIAL STATEMENTS (continued) PCU GWCL TOTAL TOTAL 6 Project Expenditure IDA IDA 2023 2022 Capital Expenditure US$ US$ US$ US$ Civil Works- Construction 36,152,185 4,957,871 41,110,056 20,340,239 Pipes and Meters - 6,004,426 6,004,426 3,599,118 Motor Vehicles 2,390,170 543,642 2,933,812 2,933,811 Office Equipment 478,892 74,221 553,113 511,003 Office Furniture 63909 15012 78,921 78,921 Total capital expenditure 39,085,156 11,595,172 50,680,328 27,463,092 Non-Capital Expenditure Consultancy 5,775,555 7,201,964 12,977,519 4,745,197 Fees-Contract Staff 1,272,200 - 1,272,200 839,000 Fees-Admin Staff 2,195,521 244,679 2,440,200 1,427,578 Training 3,293,781 - 3,293,781 2,508,091 Fuel 414,687 364,485 779,172 477,850 Vehicle running and maintenance 363,745 24,753 388,498 224,650 Office maintenance costs - - - (Building and equipment) 62,782 16,447 79,229 28,466 Workshops, meetings and conferences 1,272,301 497,135 1,769,436 977,037 Office running costs 475,211 535,443 1,010,654 674,987 Printing and Stationery 368,113 - 368,113 228,519 Allowances (T&T and per diem) 1,047,399 21,406 1,068,805 690,169 Rent 91,500 - 91,500 91,500 Permit & license 31,898 64,532 96,430 91,247 Bank Charges 1,617 63,401 65,018 19,931 Advertisement 174,882 - 174,882 138,236 Education and Sensitization 1,488,076 - 1,488,076 980,006 Communication Expenses 73,615 33,026 106,641 78,563 Cost overrun on parent project - Electricity 30,309 - 30,309 19,453 Audit fees 87,482 - 87,482 48,709 Exchange Loss/(Gain) 177,348 - 177,348 32,553 Total non-capital expenditure 18,698,022 9,067,271 27,765,293 14,321,742 Total Project Expenditure 57,783,178 20,662,443 78,445,621 41,784,834 7 Cash and Cash equivalents GAMA Project Cash Wallet 30,650 - 30,650 42,458 IDA Designated Account 5,627,021 - 5,627,021 2,464,233 IDA Imprest Account 156,524 - 156,524 369,104 MSWR-GAMA AF Cedi Account 1,723,991 - 1,723,991 2,310,069 MSWR-GAMA Dollar Account - - - NIB Designated Account - 15,038,967 15,038,967 4,526,272 NIB Dollar Account - 188,944 188,944 33 NIB Cedi Account - 301 301 22,967 7,538,186 15,228,212 22,766,398 9,735,136 16 GREATER ACCRA METROPOLITAN AREA SANITATION AND WATER PROJECT - AF IDA CREDIT NO. 67810 - GH FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST DECEMBER, 20223 NOTES TO THE FINANCIAL STATEMENTS (continued) PCU GWCL TOTAL TOTAL IDA IDA 2023 2022 8 Account Payables USS US$ US$ US$ Alaska Kantoung 95,141.00 95,141 Toilet Engineers 8,818.00 8,818 Ghana Oil Company Limited 12,626.00 12,626 Big Simons 63,123.00 63,123 Amansia Company Ltd - - - 1,617 Benning, Anang and Partners 20,636 - 20,636 20,636 Bronz and Powers Ghana Ltd - - - 16,043 Civil and Environmental Engineering Services - - - 4,714 Sanshie E. Bonsu Co. Ltd - - - 8,655 Scaffold Construction Works Ltd - - - 1,821 Supersteps Group Ltd - - - 4,380 Training Research and Networking for Dev't - - - 1,807 Wilhemina Addo Anyane - - - 1,020 200,344 - 200,344 60,693 9 Finaned by IDA 64,100,000 35,554,555 99,654,555 50,220,223 64,100,000 35,554,555 99,654,555 50,220,223 IDA Balance at 1st January 39,000,000 11,220,223 50,220,223 24,700,000 Additions during the period 25,100,000 24,334,332 49,434,332 25,520,223 Balance at 31st December 64,100,000 35,554,555 99,654,555 50,220,223 Other income Balance at 1st January 1,020,780 218,274 1,239,054 416,603 Additions during the period 240 117,826 118,066 822,451 Balance at 31st December 1,021,020 336,100 1,357,120 1,239,054 17 GREATER ACCRA METROPOLITAN AREA SANITATION AND WATER PROJECT-AF IDA CREDIT NO. 67810-GH MANAGEMENT LETTER 31ST DECEMBER, 2023 BENNING, ANANG & PARTNERS (Chartered Accountants and Management Consultants) Abavana House, Abavana Junction 56 Kotobabi Road P. 0. Box AN 12266 Accra-North Ghana 18 BENNING, ANANG & PARTNERS (Chartered Accountants & Management Consultants) Abavana House, Abavana Junction Telephone +233(0)302 235669, 237205, 246626-7 56 Kotobabi Road, Kotobabi Mobile +233(0)302 244-806509 P. 0. Box AN 12266 Fax +233(0)302 246628 Accra-North E-mail baapl905@hotmail.com Ghana GA-022-0442 TIN No. C0003734072 Our Ref: MIS:101 Your Ref: 26th June, 2024 The Project Coordinator Project Coordinating Unit Ministry of Sanitation and Water Resources Within the Premises of Institute of Local Government Studies (ILGS) Ogbojo Near Madina New Road Estate Accra, Ghana Dear Sir, GREATER ACCRA METROPOLITAN AREA SANITATION AND WATER PROJECT-AF IDA CREDIT NO. 67810-GH MANAGEMENT LETTER AUDIT: FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST DECEMBER, 2023 1. We have completed the audit of the Financial Statements of the Greater Accra Metropolitan Area Sanitation and Water Project-AF for the year ended 31st December, 2023 in accordance with the Terms of Reference (TOR) which you submitted to us. 2. In accordance with our normal practice and during the course of our audit for the Greater Accra Metropolitan Area Sanitation and Water Project-AF for the year ended 31st December, 2023, we examined the internal controls which Management has established to ensure, as far as possible, the accuracy and reliability of the Project's records and to safeguard its assets. 3. The examination of the system of internal controls which we carried out cannot be expected necessarily to disclose every weakness. For this reason the matters dealt with in this report are only those which came to our attention arising from or relevant to our audit. 4. As part of our terms of reference, we are writing to you to draw your attention to the matters which came to our notice during the examination of the transactions carried out under the IDA CREDIT No. 67810-GH for the year ended 31st December, 2023 and to offer such suggestions as will help improve the system of internal control. 5. Observations emanating from the audit highlighted in this management letter were discussed with the Management Team whose responses have been reflected in this report. Principal place of business at which a lst of partners name is avallable: Abavana House, Abavana Junction, 56 Kolobabi Road, Kotobabi Accra-Ghana JKB 19 For ease of reference, we have summarised our report under the following headings:- Table of Contents Paragraph 1. PROJECT MATTERS IN GENERAL 20 II. SYSTEM OF ACCOUNTING AND INTERNAL CONTROL MATTERS: (i) GENERAL OBSERVATIONS 24 - Executive Summary 27 (ii) MATTERS ARISING IN CURRENT YEAR 30 Project Coordinating Unit 30 Ghana Water Company Limited 30 Metropolitan and Municipal Assemblies: 30 * Kpone Katamanso Municipal Assembly 31 * Ablekuma North Municipal Assembly 32 * Ga West Municipal Assembly 33 * Ga Central Municipal Assembly 34 * Kumasi Metropolitan Assembly 35 * Asokore-Mampong Municipal Assembly 36 * Ejisu Municipal Assembly 37 * Asokwa Municipal Assembly 38 * Oforikrom Municipal Assembly 39 * Suame Municipal Assembly 40 * Old Tafo Municipal Assembly 41 * Kwadaso Municipal Assembly 42 * Atwima Kwawoma Municipal Assembly 43 * Atwima Nwabiagya Municipal Assembly 44 * Kwabre East Municipal Assembly 45 * Bosomtwe Municipal Assembly 46 * Ghana Water Company Limited - Kumasi 47 III. ACKNOWLEDGEMENT 47 20 1. PROJECT MATTERS IN GENERAL 6. In carrying out the audit of the Greater Accra Metropolitan Area Sanitation and Water Project- AF for the year ended 31st December, 2023, we ensured that the conduct of our audit was organised around the following areas for which we have presented opinion, pursuant to the IDA CREDIT No. 67810-GH. Background of the Greater Accra Metropolitan Area (GAMA) Project-AF GAMA Sanitation and Water Project-AF is a four-year project funded by the World Bank to increase access to improved sanitation and improved water supply in the Greater Accra Metropolitan Area (GAMA) and Greater Kumasi Metropolitan Area (GKMA), with emphasis on low income communities and to strengthen management of environmental sanitation in the GAMA and GKMA. The Project consists of the Original Projects as modified below: Provision of Environmental Sanitation Services to Priority Low Income Areas of the GAMA and GKMA Increasing access to environmental sanitation services and water supply in low-income areas of the GAMA and GKMA, including: (a) Construction and upgrading of new domestic toilets in: (i) Selected areas in Accra; and (ii) Additional areas in Accra and Kumasi; (b) Construction of institutional environmental sanitation and water supply facilities in schools, health centers and other public areas; (c) Designing pilot activities for installation of latrines, toilets and sewerage systems in selected communities; (d) Improving drainage in flood prone communities; and (e) Establishing and strengthening the social accountability mechanisms to report service delivery, all through the provision of works, technical advisory services, and acquisition of goods. Expansion of the Water Distribution Network in the GAMA and GKMA and Improvement in Operational Efficiency Improving and expanding the water distribution network to low income communities in the GAMA and GKMA, including: (a) The installation of distribution mains, booster pumps, water meters and other facilities required for water supply, all through the provision of works, technical advisory services, and acquisition of goods (b) The installation of house connections for water supply for: (i) Selected areas in Accra and (ii) Additional areas in Accra and Kumasi; and (c) The preparation of a water supply master plan for GKMA, including a study on the options for efficient and sustainable long-term supply of water GKMA. Supporting: (a) Operational efficiency improvements in Ghana Water Company Limited (GWCL), including updating network modelling, network zoning and network configuration; expanding the bulk metering for new areas and integrating them with the existing system; provision of domestic meters; and (b) Reduction of non-revenue water in selected areas in GAMA. 21 Planning, Improvement and Expansion of Environmental Sanitation Services Supporting: (a) The development of integrated GKMA-wide plans for the liquid and solid waste management and drainage; and (b) Improvement of waste water or septage treatment and disposal, including: (i) Rehabilitation of dysfunctional local sewerage and waste water treatment systems and construction of the relevant processing plants; (ii) Developing the design of large and small septage treatment plants; and (iii) Strengthening the capacity of the municipal authorities to manage environmental sanitation services, all through the provision of works, technical advisory services and acquisition of goods. Project Management and Institutional Strengthening Strengthening the institutional and technical capacity for Project management implementation, monitoring and evaluation, through the provision of technical advisory services, training operating costs, and acquisition of goods, including strengthening the capacity of the GAMA and GKMA MMAs for, inter alia, project management, integrated planning of sanitation services with active community participation, oversight and enforcement of environmental sanitation regulations and by-laws, including the establishment of monitoring, regulatory, and social accountability mechanisms. Strengthening the capacity of the Ministry of Sanitation and Water Resources' (MSWR's) Environmental Health and Sanitation Directorate (EHSD) to, inter alia, provide strategic sanitation, leadership and training to key staff of the Waste Management Department in GAMA and GKMA and elsewhere, assist said departments in implementing community-level interventions, strengthen the sanitation monitoring system, regulate environmental sanitation service providers, and mediate a dialogue between the MMAs and other key stakeholders for the establishment of sustainable arrangements for operating and managing sanitation facilities shared between the MMAs. Strengthening the capacity of the relevant staff of the Ministry of Finance to support long-term engagement and donor coordination in the sector. Strengthening the capacity of the MSWR's Project Coordinating Unit (PCU) to, inter alia procure and supervise the implementation of larger infrastructure serving more than one MMA, guide the establishment and management of an output-based subsidy fund, procure and supervise the production and supervise the production of integrated master plans for liquid waste, solid waste drainage, and procure and supervise the development and implementation of a hygiene an sanitation behaviour change. Strengthening the capacity of Ghana Water Company Limited (GWCL) for, inter alia, the establishment of a special services unit to engage low income communities in participatory review, selection, implementation and oversight of water services, manage implementation of bulk water supply and related services. Strengthening the capacity of the local private sector actors' participation in the provision of access to sanitation to low income communities, including carrying out an assessment to develop microfinance and other credit systems to assist households with sanitation facilities. Strengthening the social accountability mechanism within the MSWR, and developing social accountability mechanisms within MMAs, GWCL and relevant agencies and entities for improved levels of service. Strengthen the institutional capacity of MSWR: (a) To undertake preparatory activities including carrying out necessary studies and provision of needed goods; and (b) To oversee and manage water and sanitation services. 22 * Financial Statements and internal controls systems The audit was aimed at enabling us to express an independent opinion on the project's Financial Statements, hence the financial report issued in a separate volume, includes our opinion on the Financial Statements. During the audit, we also reviewed certain aspect of the project's internal control systems. This report contains our observations together with our recommendations on ways to remedy the weaknesses noted from the internal controls review. You will appreciate that our review of controls is limited to the extent necessary to enable us to express an opinion on the project's Financial Statements. We cannot, in practise, examine every operating activity or accounting procedure in the project management, nor can we substitute for management's responsibility to maintain adequate controls at all levels of the component's operations. Our work cannot, therefore, to be expected to identify all weaknesses in your systems and procedures, which a special investigation directed at those systems and procedures might reveal. Report circulation The report has been prepared for use by management of the Ministry of Finance, Controller and Accountant General's Department, Auditor General's Department, Project Coordinating Unit (MSWR), Ghana Water Company Limited (GWCL) and the World Bank. It forms part of a continuous dialogue between us and it is not intended to include all matters that came to our attention during the course of our audit. It would therefore be inappropriate for this report to be availed to a third party. Should such a third party obtain a copy without our prior written consent, we would not accept any responsibility for any claim that might be raised based on it. Synopsis of management comments Our observations have been fully discussed with the management of the Project Coordinating Unit (PCU), GWCL, and the MMAs, for their cooperation during the audit. Summary of matters communicated to the project management team Auditors' responsibilities under International Standards on Auditing We are responsible for forming and expressing an opinion on the Financial Statements that have been prepared by management with the oversight of those charged with governance. Planned scope and timing of the audit These were included in our Audit Plan presented to the Project Management Team on May 18, 2024. There have been no significant changes to the areas of audit focus set out in our original Audit Plan. Significant accounting policies, including auditor's judgement about the quality of accounting principles The significant accounting policies have been summarised in Note 1 of the Financial Statements. There have been no changes in significant accounting policies or their application. There were no complex or non-standard transactions during the period. Other information in documents containing audited financial information As of the date of this report, we are still progressing with our review of the Financial Statements of the GAMA Sanitation and Water Project-AF. To date, we have not identified any material inconsistencies or misstatements of fact with the audited Financial Statements. Material uncertainties Through discussions with management, and our review of the Financial Statements, we are not aware of any material uncertainties that cast doubt on the Project's ability to continue as a going concern. Audit adjustment There were no audit adjustments. 23 Control weaknesses All control weaknesses have been agreed with the Project Management Team. No significant matters have arisen, the details of which we feel necessary to draw to your attention. Disagreements with Management There have been no disagreement with management on accounting, auditing or other reporting matters: * No restrictions were imposed on the approach and extent of our work; * Full access was provided to all records, documents and other supporting information which we required; and * We were able to gain full access and co-operation from the officers and employees of the PCU, GWCL and the MMAs. Risk of Fraud We have evaluated instances of actual and suspected fraud cases that have been brought to our attention by management. Further, we have reviewed manual journal entries, circulated confirmations and incorporated an unpredictable element in our audit procedures. Based on our work, we are not aware of instances of fraud or illegal acts detected or suspected, which would have a material impact to the GAMA Sanitation and Water Project-AF's Financial Statements for the year ended 31st December, 2023. We request that the Project Management Team inform us if they are aware of any fraud or suspected frauds which have not otherwise been communicated to us during the course of the audit. Independence Our internal quality control procedures require that we confirm to you, as Management, our continued independence from influence that would make our opinion subjective. Independence requirements cover not only the personal independence of our staff but also the other work that the firm may perform for you. We confirm that we are not aware of any matters or relationships that may be thought to bear on our independence. We confirm that in our professional judgement Benning, Anang & Partners is independent within the meaning of regulatory and professional requirements and the objectivity of the audit team is not impaired. Summary of uncorrected misstatements All misstatements identified in performing the audit have been corrected and reported to management. 7. The areas we concentrated the audit assignment on are in respect of:- (i) Auditing of the Project's Financial Statements via the various Project functions in terms of internal controls and accounting controls more especially concerning:- (a) Accounting systems (b) Procurement function (c) Financial control function and monitoring of financial operations (ii) Auditing of the utilisation of the denominated Special account by checking the amounts used against the Special Account and reconciling the amounts already disbursed. (iii) Auditing of the Statement of Expenditure (SOE) which extends to expenditure authorisation, expenditure documentation and original vouchers, expenditure recording and verification ensuring that expenditures were made in conformity with the Credit Agreement. 24 II. SYSTEM OF ACCOUNTING AND INTERNAL CONTROL MATTERS: (i) General Observations 8. The Greater Accra Metropolitan Area Sanitation and Water Project-AF complied with the Credit Agreement requirement that separate bank accounts and records should be maintained for funds received from the IDA. The PCU-MSWR accounts were maintained at the Bank of Ghana and Ecobank Ghana PLC. The disbursements at BoG are transferred through the GIFMIS platform. Ghana Water Company Ltd maintained their accounts with National Investment Bank. The cash books and other accounting records have been properly kept. Key Judgements and Accounting Estimates In preparing the Financial Statements, management does not make use of estimates and assumptions. The Financial Statements have been prepared on the historical cost convention in accordance with the World Bank Financing Reporting Guidelines and in compliance with the Credit Agreement Numbers 67810-GH and on modified cash basis of accounting. Internal controls over Financing Reporting Our perspective on the Project Coordinating Unit's control environment Background and Context The internal control system embodies policies and procedures adopted by management of the project to assist in achieving management's objective of ensuring, as far as practicable, the orderly and efficient conduct of its business, including adherence to management policies, safeguarding of assets, the prevention and detection of fraud and error, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information. The objective of the review was to verify the effectiveness of control systems in place to improve accountability and minimise financial risks as well as the extent of non- compliance with those procedures. The PCU prepares financial reports in accordance with the Public Financial Management Act 2016 (Act 921) and the World Bank's Financial Reporting Guidelines. Financial transaction initiation, authorisation and processing is guided by the Guidelines. We deem the control environment of the PCU to be adequate for its size. See the details below: * Steering Committee * Project Management Team * Internal Audit Internal Controls over Financial Reporting Our Perspectives on the Project Coordinating Unit's control environment: * Control Environment * Risk Assessment * Monitoring of Control * Information and Communication * Control activities Project Coordinating Unit (PCU) We reviewed the financial management systems in place at the PCU to ensure that good financial controls exist. An effective accounting and financial management system provides assurance that all accounting transactions are accurately and completely recorded and that the resultant financial reports generated from the financial management system can be relied on for decision making. During our review, we also sought to assess if the financial management system in place has the capacity to fully account for funding received to the donors' satisfaction. 25 Metropolitan and Municipal Assemblies (MMAs) The MMAs are expected to comply with the following: * Have a separate bank account for the project at the time the grant is approved; * Submit quarterly progress reports on activities and financial reports which spell out the activities done in any given period and the total costs expended; * Keep proper financial records of their activities to facilitate reporting and accounting for funds and for audit purposes; and * Submit narrative and financial report upon completion of the project on the outcome and impact of the programme. We also reviewed financial reports to verify the accuracy and completeness of the reports by the MMAs. The observations and recommendations based on the work done are presented in the subsequent pages of this report. In the table below, we present the comments from our evaluation of the various aspects of the financial management system in place: Area of Comments assessment Control Environment The project has an active independent Steering Committee that meets every quarter to discuss the status of project implementation and to address challenges affecting it. We reviewed minutes of Steering Committee meetings. The activities of the project is guided by various manuals and project documents. There is an established reporting line and appropriate supervisory roles. Our review of minutes of meeting of the Steering Committee indicates a commitment to integrity and ethical values hence the control environment is appropriate. Risk Assessment On monthly basis, the MMAs are required to submit Financial Statements to the PCU. The report provides information on the total funds received for the month as well as the expenditure incurred. The project has sufficient clarity to enable the identification and assessment of risks relating to the project objectives. Section 30 (Project Risk Assessment and Mitigation-Annex 3) of the Project Appraisal Document highlights the various risk identified with the related mitigation measures. Additionally, the World Bank carried out a Mid-Term Review of the project during the period under review. Additional risks identified have been highlighted in the World Bank's report. Monitoring of control The project selects, develops, and performs on-going evaluation to ascertain whether various component of the project are being implemented as planned and also to ascertain whether internal controls present are working. Our assessment of the monitoring activities indicates that it is adequate for the implementation of the report. Information and The PCU is able to generate relevant information to support the Communication functioning of the Project. The information and communication flow within the programme is adequate. All disbursments to the MMAs, as well as other expenses are recorded in Sun Accounting Systems, the accounting software the project uses. Control Activities The project selects and develops control activities that contribute to the mitigation of risk to the achievement of objectives to acceptable levels. The project deploys general activities over technology (Sun Systems) to support the achievement of the project objectives. 26 Area of Comments assessment All accounts staff have unique password to access the accounting system. The system is able to keep trail of all activities in it. There is an adequate segregation of duties in the accounts department. There are 3 groups of signatories to the project accounts and all payment vouchers must be approved and authorised by the Project Accountant and the Chief Director before payments are effected. There are adequate segregation of duties in the Project Coordinating Unit. a. Disbursements from the Designated Account with Bank of Ghana requires three levels of mandate as follows: i) Ministry of Finance ii) Ministry of Sanitation and Water Resources iii) Project Coordinating Unit. b. Disbursements from the Operations Account with Ecobank Ghana PLC requires two levels of mandate as follows. i) Ministry of Sanitation and Water Resources ii) Project Coordinating Unit c. Disbursements from the World Bank to the Designated Account with Bank of Ghana requires three levels of mandate as follows. i) Ministry of Sanitation and Water Resources ii) Ministry of Finance iii) Controller and Accountant General 28 Flow of funds from World Bank The funds flow in relation to the GAMA Sanitation and Water Project-AF. The IDA CREDIT (i.e. Grant No.67810-GH) The financing agreement was signed between the World Bank and Ministry of Finance and Economic Planning on behalf of the Government of Ghana. Funds from the World Bank are transferred to the Project in United States of America Dollars (US$) via specific accounts maintained with Bank of Ghana in the name of GAMA Sanitation and Water Project-AF. The funding is aimed at providing support for specific components spelt out in Grant Agreements. A presentation of funds is as follows: IDA released US$25.10 million to PCU and US$24.33 million to GWCL of which expenditure of US$22.7 million for PCU and US$13.8 million for GWCL respectively during the year under review. PCU: Funds from IDA are received into a Designated Accounts with Bank of Ghana maintained in US Dollar Account. The project's operational account is held with Ecobank Ghana PLC and maintained in Ghana Cedi. Funds are transferred from the US Dollar account with Bank of Ghana to the Ghana Cedi account for purposes of making payments in the local currency using GIFMIS. GWCL: The funds from IDA is received in the National Investment Bank Dollar account of GWCL The project's operational account is held with National Investment Bank and maintained in Ghana Cedi. Funds are transferred from US$ account for the Ghana Cedi account for purposes of making payments in the local currency. All costs incurred under the GAMA Sanitation and Water Project-AF are under the IDA Funds classified under two categories. These categories are reclassified under four major components. Expenditure during the year under review. Category 1 PCU US$22,747,918 Component 1 Component 3 Component 4 Category 2 GWCL US$13,773,218 Component 2 29 10. We confirm that:- (a) Major procurement contracts were awarded on the basis of International Competitive Bidding (ICB) and National Competitive Bidding (NCB) which were advertised as required for shortlisting and evaluation. These procurement procedures applied to goods and services were in accordance with IDA and Ghana's Public Procurement Act guidelines. 11. Expenditures incurred during the period under review were eligible. All underlying documents were scrutinised to ensure that the expenditures were properly authorised. Statement of Expenditures (SOEs)/Statement of Justificationlinterim Financial Report/ Interim Financial Report 12. In accordance with the requirements of the IDA, we examined and verified summary Statement of Expenditures (SOEs)/Interim Financial Report in respect of eligible expenditures. All underlying documents were also scrutinised to ensure that the expenditures were properly authorised. 30 (ii) MATTERS ARISING IN CURRENT YEAR 13. Project Coordinating Unit There were no adverse findings during the year. 14. Ghana Water Company Limited There were no adverse findings during the year. 15. Overview of work performed at the MMAs Metropolitan and Municipal Assemblies As part of our audit for the year ended 31st December, 2023, we visited 4 Metropolitan Assemblies (MMAs) within the Greater Accra Metropolitan Area (GAMA) and 12 in the Greater Kumasi Metropolitan Area (GKMA). The MMAs visited are: * Kpone Katamanso Municipal Assembly * Ablekuma North Municipal Assembly * Ga West Municipal Assembly * Ga Central Municipal Assembly * Kumasi Metropolitan Assembly * Asokore-Mampong Municipal Assembly * Ejisu Municipal Assembly * Asokwa Municipal Assembly * Oforikrom Municipal Assembly * Suame Municipal Assembly * Old Tafo Municipal Assembly * Kwadaso Municipal Assembly * Atwima Kwanwoma Municipal Assembly * Atwima Nkwabiagya Municipal Assembly * Kwabre East Municipal Assembly * Bosomtwe Municipal Assembly * Ghana Water Company Limited - Kumasi We present below our approach and methodology of work done at the MMAs: Planning We performed the following: * Submitted list of documents required for review on 8th May, 2024; and * Held entrance meeting with each MMA (20t' May, 2024 - 3 June, 2024) Execution We reviewed documents such as: * Cashbooks * Bank reconciliation statements * Payment vouchers together with supporting documents of expenditure * Fixed assets register We also performed physical verification of fixed assets. Completion and Reporting We performed the following: * Held exit meetings with management * Obtained management comments to issues raised Finalised reports 31 16. Kpone Katamanso Municipal Assembly Field visit Location Type of Facility IRame of Beneficiary Remarks 1. Kpone 1 No.4-Seater sanitation facility Kpone Polyclinic Completed 2. Kpone 1 No.4-Seater sanitation facility Kpone Methodist A Completed 3. Zenu 1 No.12-Seater sanitation facility Zenu cluster of Completed schools (2&4) 4. Zenu 1 No.12-Seater I sanitation facility Zenu cluster of Completed schools (1&3) 5. Zenu 1 No.12-Seater sanitation facility Zenu cluster of Completed schools (5&6) 6. Zenu 1 No.12-Seater sanitation facility Zenu cluster of Completed schools (1,2&3 JHS) 7. Zenu I No.12-Seater sanitation facility Zenu cluster of Completed schools (4,5&6 HS) No material adverse findings 32 17. Ablekuma-North Municipal Assembly Field visit Location Type of Facility Name of Beneficiary Remarks 1. Ablekuma Construction of storm drain at Ebenezer Methodist Completed North Ebenezer Methodist Church in Church Municipal Ablekuma North Municipal Assembly Assembly 2. MaCharthy Rehabilitation of 18-seater MaCharthy Hills Completed Hills Institutional toilet facility and Basic School waste management No material adverse findings 33 18. Ga West Municipal Assembly Field visit Location Type of Facility Name of Beneficiary Exception noted 1. Doblo Gonno Construction of drainage Ga West Municipal Completed structures at Doblo Gonno in Assembly Ga West Municipal Assembly 2. Achiaman Construction of storm drainage Ga West Municipal Completed structures at Achiaman in Ga Assembly West Municipal Assembly No material adverse findings 34 19. Ga Central Municipal Assembly Field visit Location Type of Facility Name of Beneficiary Remarks Joma 0.9m and 0.6 storm drain Ga Central Municipal Completed Assembly No material adverse findings 35 20. Kumasi Metropolitan Assembly Field visit Location Type of Facility Name of Beneficiary Remarks 1. Sokoban (i) No. 14-Sanitation facility J.A. Kuffour Senior Completed High School 1 (ii) No. 14-Sanitation facility J.A.Kuffour Junior Completed High School 2 2. Asafo (i) No. 5 seater sanitation Awere M/A Cluster of 80% complete facility schools (ii) Rehabilitation of existing Awere M/A Cluster of 80% complete 10-seater sanitation facility schools 3. Dua Asi (i) 1 No.5-seater sanitation St. Hubert Roman 85% complete facility Catholic KG & Primary (ii) 1 No.11-seater sanitation St. Hubert Roman 85% complete facility Catholic JHS 4. Krofrom (i) Large Digester with seat Frank Dua Completed Colombia (ii) Large Digester with seat Kofi Karikari Completed 5. Amakom (i) Standard Digester Francis Asabre Completed (ii) 2 No. stand alone with Francis Asabre Completed large disgester 6. Amakom 2 No. stand alone with large Martha Buckman Completed digester No material adverse findings 36 21. Asokore Mampong Municipal Assembly Field visit Location Type of Facility Name of Beneficiary Remarks 1. Asokore 1 No.11-seater sanitation Asokore Mampong Completed Mampong facility MA JHS (A&B) 2. Asawase 1 No.9-seater sanitation facility Nasiriya Islamic Completed Basic School 3. Sepem 1 No.11-seater sanitation Sepem Timpon Completed facility Schools (JHS) 4. Sepem 1 No.11-seater sanitation Sepern Timpon KG Completed facility block 5. Asokore (i) 1 No. 15 Seater sanitation Ibadul Rahan SHS 95% completed Mampong facility Boys (ii) 1 No. 11 Seater sanitation Ibadul Rahan SHS 50% complete facility Girls Household Toilet Facilities 6. Sawaba 5 No. standard bio digester Munira Alhassan Completed 7. Adukrom 3 No. stand alone with large Farouk Suleman Completed digester 8. Asokore Stand alone with digester Efua Kyaa Completed Mampong Old Town 9. Parkoso Stand alone with large digester Rose Offin Complete No material adverse findings 37 22. Ejisu Municipal Assembly Field visit Location Type of Facility Name of Beneficiary Remarks 1. Ejisu 1 No.11-seater sanitation Ejisu Islamic Primary/ Completed facility JHS 2. Kwaso 1 No.5-seater sanitation facility Kwaso Health Centre Completed 3. Ejisu 1 No.15-seater sanitation Ejisu Model School Completed I facility 4. Ejisu Aso 1 No.24-seater sanitation Ejisu Model School Completed facility . Household Toilet Facilities Completed 5. Serwaa 1 No. stand alone with large Emmanuel Yeboah Completed Ekuraa digester Frank 6. Serwaa 1 No. stand alone with large Aninu Completed Ekuraa digester 7. Kokobra 2 No. Stand alone with large Yaa Owusuaa Completed digester 8. Kokobra 1 No. Stand alone with large Daniel Owusu Completed digester No material adverse findings 38 23. Asokwa Municipal Assembly Field visit Location Type of Facility Name of Beneficiary Remarks 1. Kaase 1 No.19-seater sanitation Kaase Primary (A&B) Completed facility and Municipal Assembly JHS 2. Dompoase 1 No.19-seater sanitation Dompoase Primary Completed facility (A&B) and Municipal Assembly JHS 3. Kaase 1 No.7-seater sanitation facility Kaase Kindergarten Completed School 4. Kaase 1 No.9-seater sanitation facility New Bethel Completed Presbyterian Basic School Household Toilet Facilities 5. Kaase I stand-alone household toilet Kofi Freeman Completed facility 6. Kaase 1 stand-alone household toilet Nana Adjoa Mprego Completed facility 7. Ahinsan 1 stand-alone household toilet Samuel Sowah Completed facility 8. Ahinsan 2 stand-alone household toilet Samuel Adu Completed facility 9. Ahinsan 3 No.stand-alone household Mensah Awuji Completed toilet facility 10. Dompoase 1 stand-alone large digester Maame Adwoa Completed Amma 11. Dompoase 1 stand-alone with large Yaa Owusua Completed digester No material adverse findings 39 24. Oforikrom Municipal Assembly Field visit Location Type of Facility Name of Beneficiary Remarks 1. Anwomaso 1 No.11-seater sanitation Anwomaso JHS Completed facility 2. Appiadu 1 No.11-seater sanitation Appiadu RC Primary Completed facility . 3. Oforikrom 1 No.11-seater sanitation Oforikrom M/A JHS B Completed facility 4. Oforikrom 1 No. stand-alone household Ismalic School of Call Completed toilet facility 5. Appiadu 1 No. 11 seater sanitation Appiadu RC JHS Completed facility Household Toilet Facilities 6. Kotey I digester with seat Osei Yaw Completed 7. Kotey 2 stand-alone with large Rebecca Mensah Completed , _ _ digester 8. Kodie Krom 1 stand-alone with large Daniel Aban Completed digester 9. Kodie Krom 1 No. 11 seater sanitation Mrs. Grace Nsiah Completed facility No material adverse findings 40 25. Suame Municipal Assembly Field visit Location Type of Facility Name of Beneficiary Remarks 1. Maakro 1 No.10-seater sanitation St. John's of the Completed facility Cross R/C Primary and JHS 2. Maakro 1 No.15-seater sanitation Maakro M/A KG Completed facility 3. Adadiem 1 No.11-seater sanitation Adadiem M/A JHS Completed facility 4. Suame 1 No.11-seater sanitation Ghana Muslim Mission Completed facility Basic School Household Toilet Facilities 5. Abusuakruwa 1 stand-alone household toilet Samuel Kwaku Gyabi Completed facility 6. Abusuakruwa 2 stand-alone household toilet Akua Kwatey Completed facility 7. Abusuakruwa 1 digested with seat Lucy Boakye Completed 8. Abusuakruwa 1 stand alone with large Josephina Appiah Completed digester 9. Agogosu 2 stand-alone household toilet Ruth Brenya Completed facility 10. Agogosu 2 stand-alone household toilet Oduro Completed facility 11. Kronum 1 stand-alone with large Yaa Manu Completed | digester No material adverse findings 41 26. Old Tafo Municipal Assembly Field visit . Location Type of Facility Name of Beneficiary Remarks 1. Old Tafo 1 No.11-seater sanitation Al-Azaria Islamic Completed facility School 2. Old Tafo 1 No.11-seater sanitation Old Tafo Methodist Completed facility School 'B' 3. Old Tafo 1 No.4-seater sanitation facility Rockanje Presby Completed Experimental Primary 4. Old Tafo Renovation of 8-seater Rockanje Presby Completed sanitation facility Experimental JHS 5. Old Tafo 1 No.5-seater sanitation facility Old Tafo Municipal Completed Health Directorate 6. Old Tafo 1 No.7-seater sanitation facility Old Tafo Municipal Completed Education Directorate 7. Tafo 1 No.15-seater sanitation Pankrono R/C Basic Completed Pankrono facility School 8. Tafo 1 No.19-seater sanitation Tafo Pankrono MA Completed Pankrono facility Primary A Household Toilet Facilities 9. Pankrono 1 stand-alone with large Mr. Samuel Afriyie Completed digester Asamoah 10. Pankrono 1 stand-alone with large Kwabana Bonsu Completed digester 11. Adabraka 1 stand-alone with seat Ibrahim Seidu Completed 12. Abedi 1 stand-alone with large Iddrisu Mohammed Completed digester 13. Abedi 1 stand-alone standard digester Lydia Boadu Completed No material adverse findings 42 27. Kwadaso Municipal Assembly Field visit Location Type of Facility Name of Beneficiary Remarks- 1. Apatrapa 1 No.11-seater sanitation Apatrapa R/C JHS Completed facility 2. Apatrapa I No.5-seater sanitation facility Apatrapa Health Completed Centre 3. Kwadaso 1 No.15-seater sanitation Prempeh College Completed facility Experimental M/A Primary B JHS 4. Kwadaso 1 No.11-seater sanitation Kwadaso M/A Primary Completed facility School 5. Kwadaso 1 No.15-seater sanitation Prempeh College Completed facility Experimental M/A Primary A/KG Household Toilet Facilities 6. Kwadaso 2 large digester with seat Regina Mensah Completed 7. Kwadaso 2 large digester with seat Emmanuel Amankwah Completed 8. Nsiah Asare 1 stand-alone Kokroko Steven 1 Completed 9. Nsiah Asare 1 standard digester with seat Hon. Pynne Debrah Completed 10. Edwenase 1 standard digester with seat Nana Nkansah Ababio Completed 11. Edwenase 1 standard digester with seat Augustina Akaaba Completed 12. Edwenase 1 large digester with seat Augustina Akaaba Completed No material adverse findings 43 28. Atwima Nkwawoma Municipal Assembly Field visit HOUSEHOLD TOILET FACILITIES Location Type of Facility Name of Beneficiary Remarks 1. Dida 1 stand alone digester Samuel Kuffour Completed 2. Dida 1 stand alone digester Osei Kojo Completed 3. Dida 1 stand alone digester Andrews Osei Mensah Completed 4. Foase 1 stand alone digester Steven Aboagye Completed Agyeman 5. Foase 2 stand alone digester Alexander Adiya Completed 6. Foase 1 large digester with seat Francis Ayamonga Completed 7. Foase 1 stand alone with large Alanuri Jennifer Completed _ _ .. digester 8. Foase 1 stand alone with large Asibi Sakazabri Completed digester . 9. Trabuom 1 stand alone with large Kwabena Acheampong Completed digester 10. Nweneso 1 stand and digester with seat Augustine Amoah Completed 11. Nweneso 2 standard digester with seat Sule Salam Completed 12. Yabi 1 stand alone with large Amankwah Nketiah Completed digester No material adverse findings 44 29. Atwima Nwabiagya Municipal Assembly Field visit HOUSEHOLD TOILET FACILITIES Location Type of Facility Name of Beneficiary Remarks 1. Mpasatia 1 large digester with seat Grace Asare Completed 2. Mpasatia I stand alone digester Hagar Owusu Completed 3. Mpasatia 1 stand alone digester Jerome Kunkola Completed 4. Mpasatia 1 stand alone digester Yaw Sarpong Completed 5. Atwima Wioso 1 large digester with seat Steven Abeka Completed 6. Atwima Wioso 1 large digester with seat Atsu Teko Completed 7. Atwima Wioso 1 large digester with seat Kwame Otchere Completed 8. Atwima Wioso 1 standard digester with seat Ernest Antwi Completed 9. Toase 1 large digester with seat Hajia Fusena Issifu Completed 10. Toase 1 stand alone with large Hajia Fusena Issifu Completed digester 11. Toase 2 stand alone with large Joseph Attkora Manu Completed digester Aaron 12. Toase 1 large digester with seat Thomas Okrah Completed 13. Toase 1 large digester with seat Thomas Okrah Completed 14. Gyqnkoba 1 large digester with seat Kyeremanteng Completed 15. Nkawie 1 stand alone with large Augustine Nsiah Completed digester 16. Nkawie 1 standard digester with seat Augustine Nsiah Completed No material adverse findings 45 30. Kwabre East Municipal Assembly I Field visit HOUSEHOLD TOILET FACILITIES Location Type of Facility Name of Beneficiary Remarks 1. Mamponteng 1 stand alone digester Anane Yeboah Completed 2. Mamponteng 1 stand alone digester Charles Agyeman Completed 3. Mamponteng 1 stand alone digester Ellen Dufie Sarpong Completed 4. Mamponteng 1 stand alone with large Kofi Afriyie Completed digester 5. Mamponteng 1 stand alone Sarah Asare Completed 6. Aboaso 1 large digester with seat Nana Yaw Broni Completed 7. Aboaso 1 large digester with seat Nana Dabo Akotene Completed 8. Aboaso 1 standard digester with seat Ofori Amoafo Completed 9. Aboaso 2 stand alone digester Abdul Basit Completed 10. Ntonso 2 standard digester Mohammed Lukman Completed 11. Ntonso 2 standard digester Cardil Mohammed Completed 12. Ntonso 1 standard digester with seat Fati Bukari Completed 13. Ntonso 1 standard digester with seat Mohammed Nasir Completed 14. Asonomaso 2 stand alone with large Esther Fordwo Completed digester 15. Asonomaso I stand alone with large Esther Fordwo Completed digester No material adverse findings 46 31. Bosomtwe District Assembly Househol Field visit HOUSEHOLD TOILET FACILITIES Location Type of Facility Name of Beneficiary Remarks 1. Jachie 1 standard digester Thomas Mensah Completed 2. Jachie 1 stand alone standard digester Abena Bea Completed 3. Abidjan Nkwanta 4 standard digester Tahuru Yayah Completed 4. Aputuagya 1 standard large digester Akua Completed 5. Feyiase 1 standard alone digester Adolf Adarkwa Completed 6. Feyiase 1 large digester with seat Michael Nkrumah Completed No material adverse findings 47 32. Ghana Water Company Limited - Kumasi Field visit PIPE LAYING Location Description B Remarks 1. Suame 110mm - 160mm hdpe pipeline 90% complete 2. Krofrom 110mm - 160mm hdpe pipeline 95% complete 3. Moshie Zongo 110mm - 315mm - 400mm hdpe pipeline 80% complete 4. Pankrono 110rmm - 160mm - 200mm hdpe pipeline 87% complete NEW SERVICE CONNECTIONS Location Type of Facility Name of Beneficiary Remarks 1. Apire New service connection Mercy Nsiah Completed 2. Apire New service connection Victoria Asamoah Completed 3. Apire New service connection Hannah Owusu Completed 4. Apire New service connection Osei Kwabena Completed 5. Kokoben New service connection Lydia Boateng Completed 6. Kokoben New service connection Gifty Serwaa Completed 7. Kokoben New service connection Philip Acquah Completed 8. Kokoben New service connection Amoah John Completed 9. Kokoben New service connection Isaac Mensah Completed 10. Kokoben New service connection Atta Kofi Completed 11. Afretia New service connection Mensah Quartey Completed 12. Afretia New service connection Geroge Adjei Completed No material adverse findings III ACKNOWLEDGEMENT 33. We would like to take this opportunity to thank the management and staff of the Greater Accra Metropolitan Area Sanitation and Water Project-AF for their co-operation and assistance during the course of the audit of the Project's Financial Statements for the year ended 31st December, 2023. Yours faithfully, UNNI~ AN AN IPA T N L7 -1 s W~1RTMEDn ACCOUNTAN 1-8