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NATIONAL AUDIT OFFICE
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My No. Your No. Date
The Secretary
Ministry of Irrigation
Report of the Auditor General on the Financial Statements of the Climate Resilience Multi
Phase Programmatic Approach Project for the year ended 31 December 2023
1. Financial Statements
1.1 Qualified Opinion
The audit of the financial statements of the Climate Resilience Multi-Phase
Programmatic Approach Project (CResMPA) for the year ended 31 December 2023
comprising the statement of financial position as at 31 December 2023 and the statement
of financial performance and cash flow statement for the year then ended, and notes to
the financial statements, including material accounting policy information was carried out
under my direction in pursuance of provisions in Article 154(1) of the Constitution of the
Democratic Socialist Republic of Sri Lanka read in conjunction with provisions in the
Loan agreement No: 8996-LK dated 17 September 2021 entered into between the
Democratic Socialist Republic of Sri Lanka and the International Bank for
Reconstruction and Development(IBRD).
In my opinion, except for the effects of the matters described in the Basis for Qualified
Opinion section of my report, the accompanying financial statements give a true and fair
view of the financial position of the Project as at 31 December 2023, Statement of
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Financial Performance and its cash flows for the year then ended in accordance with Sri
Lanka Public Sector Accounting Standards
1.2 Basis for Qualified Opinion
The Commitment charges amounting to Rs.72 million and loan interest
amounting to Rs. 33million charged by the International Development
Association during the year under review had not been disclosed in the financial
statements. As a results, project expenditure shown in the financial statement had
been understated by Rs. 105 million.
I conducted my audit in accordance with Sri Lanka Auditing Standards (SLAuSs). My
responsibilities, under those standards are further described in the section of Auditor’s
Responsibilities for the Audit of the Financial Statements appeared in my report. I
believe that the audit evidence I have obtained is sufficient and appropriate to provide a
basis for my opinion.
1.3 Responsibilities of Management and those charged with governance for the
Financial Statements
Management is responsible for the preparation of financial statements that give a true and
fair view in accordance with Sri Lanka Public Sector Accounting Standards and for such
internal control as management determine is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to fraud or
error.
Those charged with governance are responsible for overseeing the Project’s financial
reporting process.
1.4 Auditor’s Responsibilities for the audit of the financial statements
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NATIONAL AUDIT OFFICE
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My objective is to obtain reasonable assurance about whether the financial statements as
a whole are free from material misstatement, whether due to fraud or error, and to issue
an auditor’s report that includes my opinion. Reasonable assurance is a high level of
assurance, but is not a guarantee that an audit conducted in accordance with Sri Lanka
Auditing Standards 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 these financial statements.
As part of an audit in accordance with Sri Lanka Auditing Standards, I exercise
professional judgment and maintain professional scepticism 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.
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 management.
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.
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I communicate with those charged with governance regarding, among other matters,
significant audit findings, including any significant deficiencies in internal control that I
identify during my audit.
1.5 Report on Other Requirements of the Lending Agency
As required by the International Bank for Reconstruction and Development(IBRD),
I state the followings:
a. funds provided had been utilized for the purposes for which they were provided,
b. Statements of Expenditure (SOE) submitted could be fairly relied upon to support
the applications for reimbursement in accordance with the requirements specified
in the Loan Agreement,
c. initial deposit/opening and closing balances, withdrawals from and
replenishments to the Special (Dollar) Account had been truly and fairly
disclosed in the books and records maintained by the Project and the balance as at
31 December 2023 had been satisfactorily reconciled with the accounting records
of the Central Bank of Sri Lanka as at that date,
d. Financial covenants laid down in the Loan Agreement had been complied with.
Auditor General
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