REF: N11.49/VOL.1I/21 28 June, 2024 The Proj ect Coordinutor Sierra Leone Free Edueain' Projec 126 Regent Road SS Camp Regent. Dear Sir. SIMNIISION OF AUDITED FINANCIAL STATEMENT FOR THE YEAR ENDED 31 DECEMER 2023 - SIERRA LEONE FREE ElD CATION PROJEC T \\We fo ha herewith two (2) bouInd cop:es and one (1) unbound copy of the financial stateens fo Xr the above-mtio ned: period for yonur reten::on. Ti o u for yor cooperatLon and that ef yoar saf that culminated in ih: successiu co0ch sIt oP' of te audt pr1OCess. im '/tLi UD IFOR GENERil. Cop ni star. Tn of Basic and Seni r Secondry EducatIon H aqa er I2 Ficr. Freerown City oun KL I P--i- + 7--- 77799 m :-- in fo@-aud-i -rvice-ovsI WI c :e jonson Street Freetwn, Siorra~ Leon r tA h-rii Web: ww .uditserv;cæ.gov.si Sierra Leone Free Education Project (SLFEP) Financial Statements for the Year Ended 31st December, 2023 F unancial Sta[ements for di Sicrna ILonc Free £ducan iPro ect for he Y2r Ended 31st Deceiler, 2022 Contents Page (s) General Information 1 Report of the Independent Auditors 2-4 Background to the Project 5-6 Statement of Management's Responsibilities 7 Consolidated Statement of Cash Receipts and Payments 8 Statement of Cash Receipts and Payments (SLFEP) 9 Statement of Cash Receipts and Payments (NGO Consortium) 10 Notes to the Financial Statements 11 - 16 Financial Staeents Cor the Sierra Leone ree iducacion Project for the Year I -nded 31st iDecembera, 2022 GENERAL INFORMATION Official Address Sierra Leone Free Education Project 126 Regent Road SS Camp Regent Freetown Implementing Ministry The Ministry of Basic and Senior Secondary Education Project Coordinator Ambrose Sesay Bankers Sierra Leone Commercial Bank Siaka Stevens Street Freetown Auditors Audit Service Sierra Leone 11 th& 12th Floor, Freetown City Council Building Lightfoot Boston Street Frectown Sierra Leone .U I Financlal StJ[LmenCts for the Sices eoe I r-c e Education Proicct for thL Year 1 Ended 31st Decembe, 2023 AUDIT OF THE SIERRA LEONE FREE EDUCATION PROJECT PERFORMED BY THE ACTING AUDITOR-GENERAL The Minister Ministry of Basic and Senior Secondary Education New England \ille Freetown Date: 27 June 2024 Dear Sir, Opinion We have audited the financial statements of the Sierra Leone Free Education Project for the year ended 31st December, 2023. These financial statements comprise consolidated and separated statements of cash receipts and payments for the period then ended, and a summary of significant accounting policies and other explanatory information as set out on pages 8 to 16. In our opinion, the accompanying financial statements present fairly, in all material respects, the cash position of the Sierra Leone Free Education Project for the year ended 31" December, 2023, and (of its receipts and payments for the period then ended in accordance with International Public Sector Accounting Standard Cash Basis of Accounting as issued by the International Public Sector Accounting Standards Board and other applicable laws and regulations. Basis for Opinion We conducted tile audit in accordance with the International Standards of Supreme Audit Institutions (JSSAI). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Project in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants (IESBA Code) together with the ethical requirements that are relevant to our audit of the financial statements in Sierra Leone, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the 1ESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. 2 IT FI l1cial Staements for the Sierra Lconc Frce Eiducation ProjQct Nor the Year End2d 31st )ecembcr, 2023 Other Matters Statutory Deductions not Made and Paid Pay-as-you-earn (PAYE) tax and National Social Security and Insurance Trust (NASSIT) contributions were not deducted from salaries of the Project's staff. From re-computations, PAYF not deducted and paid totaled US$225,656 for the period under review. Similarly, NASSIT contributions not deducted and paid totaled US$144,331 for the 2023 financial year. During the 2022 financial year, the same non-compliance was brought to the attention of management. This was done contrary to section 116 of the Income Tax Act of 2000 (as amended) and section 25(1&2) of the National Social Security and Insurance Trust Act of 2001. Responsibilities of Management and Those Charged with Governance for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with the International Public Sector Accounting Standards Cash Basis of Accounting and other applicable laws, regulations, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is responsible for assessing the entity'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 management either intends to liquidate the entity or to cease operations, or has no realistic alternative but to do so. those charged with governance are responsible of overseeing the entity's financial reporting Process. Auditor's Responsibility 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 auditor's 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 for Supreme Audit Institutions 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 International Standards for Supreme Audit Institutions, we exercise 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 max involke collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. 3 IT tIn;mcial Statcnuints for the Sierra Leone Free I acaio I I Project for the Yeav Ended 3tst December, 2023 * 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 E tntity's internal control. * E tvaluate the appropriateness of accounting policies uses and the reasonableness of accounting estimates and related disclosures made by management. * Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence, obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Entity's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to die date of our auditor's report. However, future events or conditions may cause the Entity 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. We communicate with those charged with governance regarding, among other matters, the planned 5cope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on my independence, and where applicable, related safeguards. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or, when, in extremely rare circumstances, We determine that a matter should not be commUnicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. F/ACTING AUDITOR GENERAL Date: ( Zc2 ' 4 IP'T O M |inancia] Statemen1t for the Sierra I lon e I e uc LiU0aton Poject for the Y'ear nded 31st December, 2023 BACKGROUND TO THE PROJECT The Sierra Leone Free Education Project (SLFlEP) (Pl67897) was approved on 29th June, 2020withthe amount of USS50 million equivalent (IDA grant), and became operational on 10th August, 2020. The Project Development Objectives (PI)Os) of the SLFEP arc to improve the management of the education system, teaching practices, and learning conditions. The SLFEP is co- financed through a grant with an amount of US$15.97 million equivalent from the European Union (EU); the Foreign, Commonwealth, and Development Office (FCDO) of the UK; and the Irish Aid through a World Bank administered Sierra Leone education multi-donor trust fund (MDTF), TF073453, which was established in February 2020. Additional Financing (AF) of US$7 million from the Global Partnership for Education (GPE) was provided and the World Bank acting as the Grant Agent. The Grant Agreement was signed in February, 2021. The AF is inclusive of US$0.15 million Grant Agreement supervision fees. The A was provided to address the pandemic impact on the educational system in Sierra Leone as one of the 67 eligible countries. The components of the Project comprise the following; Component 1: Policy, Governance, Accountability, and System Administration (IDA: USS4.65 million equivalent and MDTF: US$1.50 million equivalent). The component aims to strengthen the education system in areas of policy, governance, accountability, and administration. It will support policy and implementation coherence across the education subsector and promote strategic initiatives at the country level. Component 2: Teacher Management and Professional Development (IDA: US$13.6 million equivalent and MIDTF: US$4.4 million equivalent). This component seeks to address the critical teacher quality and workforce management issues facing the country. Both system and school-level interventions will be supported through two subcomponents. These aim to strengthen the capacity of the TSC in managing workforce planning, to maximise the benefits of IT use at local levels for management and CPD, and to strengthen the teaching workforce competence and motivation through cluster-based CPD for primary and JSS teachers. Component 3: School Level Education Development (IDA: US$27.49 million equivalentand MIDTF: USS8.80 million equivalent). This component will focus on support to improve educational delivery among primarty and JSSs. Specifically, through Subcomponent 3.1, the proposed project will fund the provision of performance-based school grants to non-private primary schools (offering the full cycle) and will support efforts to strengthen the engagement and involvement of SMCs in school planning and performance. Through Subcomponent 3.2, the proposed project will aim to improve the teaching and learning environment, ensuring adequate infrastructure. Component 4: Project Management, Coordination, and Monitoring and Evaluation (IDtA US$4.26 million equivalent and MIDTF: US$1.27 million equivalent). This component covers the costs of managing the project as well as the specific activities for monitoring and evaluation (M&E) and learning activitics. 5 LAUP'T Financial Statements for the Sicrra I e o I 're Education Projcct for thc Year Inde 31st Dcember, 2023 Component 5: Contingent Emergency Response Component (CERC) (US$0). This component is included in accordance with World Bank Policy on Investment Policy Financing (IPF), Paragraphs 12 and 13, for rapid response to an eligible crisis or emergency, as needed. Component 6: COVID-19 Education Response. The component will support (i) strategic communications;. (ii) continuous distance education service delivery; (iii) safe school reopening and health and safet- of students; and (iv) effective operations, planning, and policy during and after the COVID-19 crisis. Component 7: Supporting and Reinforcing Foundational Learning for All: (i) Accelerating Foundational Learning Competencies, (ii) Improving Learning Opportunities Catered for OOSC and (iii) Strengthening System to Nonitor 6 IT 5 inanlcial Statmenta for the Sira Leone Fru] 'ducation Project R4111 Cor thu Ycar Ended 31st Duccembur, 2023 STATEMENT OF MANAGEMENT'S RESPONSIBILITIES It is the responsibility of management to prepare Financial Statements for each financial year which should show a true and fair -iCw of the state of affairs of the Project and of its surplus or deficit for that year. In preparing these Financial Statements the lanagement is required to: * select suitable accounting policies and apply them consistently; * make judgements and estimates that are reasonable and prudent; * state whether applicable accounting policies have been followed, subject to any material departures disclosed and explained in the Financial Statement; * prepare the Financial Statements on a going concern basis unless it is inappropriate to presume that the Project will continue its activities. M\fanagement is responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Project. They have a general responsibility for such steps as are reasonably available to them to safeguard the assets of the Project and to prevent and detect fraud and other irregularities. On behalf of Management The Permanent Secretary, The Ministry of Basic and Senior Secondary Education roject Coordinator IT aI ST atemltetis for the Sierra Leol Free Educio[ Pro-ect 0 A for the Year Ended 31st Dcember, 2023 FINANCIAL STATEMENTS FOR THE SIERRA LEONE FREE EDUCATION PROJECT Consolidated Statement of Receipts and Payments as at 31st December 2023 NOTE 2023 2022 Cash Receipts US$ US$ Inflow IDA 2a 4,757,686 19,235,526 Inflow MDTF 2a 6,176,119 - Other Inflows 2b 4,689 22,211 Total Cash Receipts 10,938,494 19,257,737 Cash Payments Resources Expended 3 12,638,878 15,283,798 Cash Advance 4 486,629 456,017 Total Cash Payments 13,125,507 15,739,815 Net Increase in cash (2,187,014) 3,517,922 Cash and Cash equivalent at 1Jan 5,920,562 2,417,909 Exchange Gains/Losses (29,428) (15,269) Cash and Cash equivalent at 31 Dec 5 3,704,120 5,920,562 These Financial Statements were approved on.... .. ............ 2024 ...............Permanent Secretary - (MBSSE) ....................... . .Project Coordinator 8 IT I inmncia Starmn t for the SerrM Iene eI cE ducatinI Project FINANCIAL STATEMENTS FOR THE SIERRA LEONE FREE EDUCATION PROJECT Statement of Cash Receipts and Payments for the year ended 31st December 2023 NOTE 2023 2022 Cash Reeipts US$ US$ Inflow IDA 2a 4,757,686 19,235,526 Inflow MN1DTF 2a 6,176,119 - Other Inflows 2b 4,689 22,211 Total Cash Receipts 10,938,494 19,257,737 Cash Payments Resources Expended 3 12,638,878 14,935,274 Cash Advance 4 486,629 456,017 Total Cash Payments 13,125,507 15,391,291 Net Increase in cash (2,187,014) 3,866,446 Cash and Cash equivalent at 1Jan 5,920,562 2,069,385 Exchange Gains/Losses (29,428) (15,269) Cash and Cash equivalent at 31 Dec 5 3,704,120 5,920,562 These Financial Statements were approved on... 4. ........ ....2024 S...........................Permanent Secretary - (MBSSE) .................... Project Coordinator 9 IT I_______ [ ii I nan cl m Srtements for the Sierra I eonfe ] d uecation Procu flhE rhiE for the Yer Inded 31t December, 2023 FINANCIAL STATEMENTS FOR THE NGO CONSORTIUM Statement of Cash Receipts and Payments for the year ended 31st December 2023 NOTE 2023 2022 Cash Receipts US$ US$ Inflow IDA Cash Payments Resources Expended - 348,524 Cash Advance - 348,524 Net Increase in cash - (348,524) Cash and cash equivalent at 1 Jan. - 348,524 Cash and cash equivalent at 31 Dec. - These Financial Statements were approved on.. .... ..... 2021# .2-&----.Permanent Secretary - (MBSSE) . . ............................Pe m nn.e r tr M S E . ............ .. .. ........ .............Project Coordinator 10 PIT 1,in a ncia Statements for 0he Sierra I one Free I rJLlicin Projec for the Yar Fnded 31st D)cember)i023 NOTES TO THE FINANCIAL STATEMENTS 1. PRINCIPAL ACCOUNTING POLICIES The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the Project's financial statements. a. Basis of accounting The financial statements have been prepared in accordance with the International Public Sector Accounting Standard (IPSAS) Cash Basis. b. Foreign currency transaction Functional and presentation currency The local currency in use in Sierra Leone is the Leones. The Project has however adopted the United States Dollars (US$) as its reporting currency as most of its transactions are denominated in US Dollars. Transactions and balances Foreign currency transactions arc translated into the presentation currency using mid- exchange rates prevailing on the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions denominated in foreign currencies are reflected as an adjustment in the sununary of opening hank balances to closing bank balances. The closing Bank of Sierra Leone mid- rate was used to translate the closing balance of the functional currency (Leones). c. Non-current assets Plant and equipment are expensed on acquisition by the Project. The financial statements therefore have no non-current assets shown. 11 P"T ,- rinan!Ial Strtments For the Sierra Lone Free Fiacirion Pr6ec for the Year I nldcd 31t )eccmber, 20123 NOTES TO THE FINANCIAL STATEMENTS (Continued) Statement of Fund Balance as at 31st Dec. 2023 2 Grants US$ Grant Receivable - IDA 70,000,000 Grant Receivable - TF 6,850,000 Grant Receivable - MDF 16,000,00H Grant Receivable - C11 13,730,000 Total Grants Receivable 106,580,000 Total Disbursement (52,377,969) Amount yet to be disbursed 54,202,031 2023 2022 Amount on Amount Amount 2a Withdrawals during the year WA Charges Received Received USS USS US$ US$ WA/SLFLP/IDA/A/006 4,757,686 4,757,686 WA/SLFEP/MDTF/A/001 6,176,119 6,176,119 Sub Total 10,933,805 - 10,933,805 19,235,526 SLFEP/AP/WA/A/002A (Save the Children - NGO Consortium) - - Ganid 'otal 10,933,805 - 10,933,805 19,235,526 2023 2022 2b Other Inflows US$ US$ Sale of Bids 3,113 22,211 Miscellaneous receipts 1,576 4,689 22,211 Sale of bids rclate to proceeds received from bidders that expressed interest and took part in the request for bids (RFB) for different goods procured in 2023. The Project required bidders to bLV bids as a condition to submit bids for supply of goods urnder the RFB method. 12 IT Financial Stat; e ts 1r the Sh r Ji Leone Free EducitionI PrjeccL V DIVIO for the Yeur Ended 31st DecCnbCr, 2023 Miscellaneous receipts related to revurns deposited in the account iii 2023 3 Resources Expended 2023 2022 US$ US$ Compoicnt 1: Policy, Gonvernance, Accountability and System Administration 1,389,640 872,831 Component 2: Teacher Management and Professional Developmen t 2,309,110 2,584,272 Component 3: School Level Education Development 6,966,257 7,814,722 Component 4: Project Management., Coordination Monitoring and Evaluation 1,582,190 1,711,427 Component 6: COVID-19 Education Response 391,681 2,756,563 12,638,878 15,739,815 4. Advances 2023 2022 TSC TSC US$ USS Opening Balance 456,017 125,078 Additions (Cash Paid) 1,828,623 1,710,189 Sub total 2,284,640 1,835,267 \mnot.t retired (1,798,011) (l,379,25t Closing balance 486,629 456,017 The total amount of resources expended is inclusive of US$486,629 outstanding advances made to Teaching Service Commission. The outstanding advance relates to payments from the project implementation unit (PIU) to the Teaching Service Commission that have not been liquidated at the end of the financial year. 13 IT -P : ]<- tinaci tcments for the Sierra Leone ire Iiucaton Projctr or the 'car I nd 3 1 I e c be:r, 2023 2023 2022 5 Cash and Cash Equivalents US$ US$ Sierra Leone Commercial Bank (USS) 2,116,110 5,533,614 Sierra Leone Conmercial Bank (NLU) 1,588,010 386,948 3,704,120 5,920,562 14 , I Ftiancm SI atcnnts for the Sierra I eo ne I ree IMucai Pro!c irfeor t Year Ended 31st December, 2023 REPORT OF THE AUDITORS ON THE DESIGNATED ACCOUNT STATEMENT, US DOLLAR ACCOUNT NUMBER 003001060322412195 AND SIERRA LEONE LEONES ACCOUNT NUMBER 003001060322112174 DESIGNATED ACCOUNT STATEMENT Account No: 003001060322412195 Depository Bank Sierra L,eone Commercial bank Address Siaka Steven Street, Ireetown Project Number P167897 Currency United States Dollars Account Activity 2023 2022 US$ US$ Opening Balance 5,533,614 1,647,718 Funds received during the period 2a 10,933,805 19,235,526 16,467,419 20,883,244 Amount withdrawn for implementation Amount withdrawn for implementation (1,051,309) (599,631) Amount transfirred to Lecones account (13,300,000) (14,7-501 'it)) Closing Balance as at 31st December 5 2,116,110 5,533,614 15 MU1IT I nanciI Statnemnts r h Sierral n-. ree fiducanon Proc for chc Yefar 1Ended 31s,t Dkcember, 2023 OPERATING ACCOUNT STATEMENT Account No: 003001060322112174 Depository Batik Sierra Leone Commercial bank Address Siaka Steven Street, Freetown Project Number P167897 Currency Sierra Leone Leones Account Activity 2023 2022 US$ US$ Opening Balance 386,948 421,667 Transfer from US Dollar Account 13,300,000 14,750,0( 0 Bid Proceeds 2b 3,113 22,211 Returns deposited in the account 2b 1,576 - 13,691,637 15,193,878 Amount withdrawn for implementation Amount \ithdrawn for implementation (11,587,569) (14,335,64-4) Exchange Gain/(Loss) (29,428) (15,269) Cash Advance 4 (486,629) (456,017 Closing Balance as at 31st December 5 1,588,011 386,948 16