Emergency Food and Nutrition Security Project · 6/30/2018 · information of the the importance...

Emergency Food and Nutrition Security Project

Ministry of Agriculture and Food Security

PROJECT GRANT NO: IDA 1860

ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE FINANCIAL YEAR ENDEDJUNE 3 0th Jun 2018

Prepared in accordance with the Cash Basis of Accounting Method under the International Public SectorAccounting Standards (IPSAS)

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Emergency Food and Nutrition Security ProjectReports and Financial StatementsFor the financial year ended June 30, 2018

Contents1. PROJECT INFORMATION AND OVERALL PERFORMANCE..................................................... .

2. STATEMENT OF PROJECT MANAGEMENT RESPONSIBILITIES..................................................i

3. REPORT OF THE INDEPENDENT AUDITOR ON THE EMERGENCY FOOD AND NUTRITIONSE C U R ITY PR O JE C T .........................................................................................................................OC... .

4. STATEM ENT OF RECEIPTS & PAYM ENTS...............................................................................

5. STATEMENT OF FINANCIAL ASSETS AND LIABILITIES ....................................A.-I..................6

6. STATEM EN T OF CASH FLOW S ........................................................................................................S.7

7. STATEMENT OF COMPARATIVE BUDGET AND ACTUAL AMOUNTS....................................8

8. NOTES TO THE FINANCIAL STATEMENTS ................................. .......................... 9


1. PROJECT INFORMATION AND OVERALL PERFORMANCE

1.1 Emergency Food and Nutrition Security ProjectMinistry of Agriculture and Food SecurityMinistry Complex-Juba South Sudan

Name: The project Official name is Emergency Food and Nutrition Security Project.

Objective: To increase crop productivity and laying the foundation for the recovery of theAgricultural sector in South Sudan.

Address: Project Implementation Unit (PIU)Ministry of Agriculture and Food SecurityMinistries Complex -JubaRepublic of South Sudan

Contacts: The following are the project contacts

Telephone: (+211 938 161 952)E-mail:

1.2 Project Information

Project Start Date: 6tI1 June, 2017

Project End Date: 31st July, 2019

Project Manager: The Manager is Mr. Luka Kiwanuka

Project Sponsor: The project sponsor is International Development Association

1.3 Project Overview

Line Ministry The project is tinder the supervision of Ministry of Agriculture and Food.

Project number P 163559

Strategic goals of the The strategic goals of the project are as follows:project (i) Provide food and nutrition support for the protection of lives and

human capital of eligible beneficiaries(ii) Help farmers to re-engage themselves in agricultural production in

selected drought affected areas in South Sudan

Achievement of The project management aims to achieve the goals through the followingstrategic goals means/components:

(i) Support to human capital and livelihoods protection

(ii) Support to re-engagement in crop and livestock production.

Other important Nearly two years after independent South Sudan finds itself in a volatile

Energency Food and Nutrition Security ProjectReports and Financial StatementsFor the financial year ended June 30, 2018

background situation, facing formidable developmental challenges. The IDA identifiedinformation of the the importance of social protection and initiated the Emergency Food andproject Nutrition Security Project in order to achieve country's developmental

objectives. The project was established by Grant Agreement to IDA D 1860,entered between the Government of South Sudan and the InternationalDevelopment Association, and is implemented by the Ministry ofAgriculture and Food Security. Ministry of Labour, Public Service andHuman Resource Development and the Ministry of Gender, Child andSocial Welfare.

Current situation that The project was formed to intervene in the following areas:the project was (i) Provision of emergency support for immediate food and nutritionformed to intervene security requirements

(ii) Assist farmers to re-engage in crop and livestock production so as tomeet their own food security requirements

(iii) provide youth from poor and vulnerable households with accessto livelihood opportunities

Project duration The implementation period was set as being from 6 'h June 2017 to 31st July2019..

1.4 BankersThe following are the bankers for the current year:

(i) USD Account CFC Stanbic Bank West Yat Branch

(ii) SSP Account CFC Stanbic Bank West Yat Branch

1.5 AuditorsThe project is audited by the South Sudan National Audit Chamber and a private (External) Auditor

1.6 Roles and ResponsibilitiesDistribution of roles and responsibilities is as tabulated below;

Names Title designation Key qualification ResponsibilitiesMathew Gordon Udo Undersecretary Administrator Overseeing the project

activitiesGeorge Leju Lugor Project Coordinator Agric Extension Supervisor/Coordinator

Management of theLuka Kiwanuka Project Manager Crop Agriculturalist project

1.7 Funding summaryThe Project is slated to be implemented over a period of two (2) years with an approved budget ofSDR 36.9M equivalent to US$ 50,000,000

The project funding summary is as highlighted in the table in the next page:

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Emergency Food and Nutrition Securitr ProjectReports and Financial StatementsFor the financial year ended June 30, 2018

Source of funds Donor Commitment- Amount received to date Undrawn balance to- (3011 Jun2018) date (30'"June 2018)

Donor Donor Donor Donor Donor Donorcurrener currenclr currene r currenerv currenqr currencli(A) (A) (B) (B'1) (A)-(B) (A'){'

(i) Grant XDR USD XDR USD XDR USD

IDA D1860 36,900,000 50,000,000 32,211,478 45,456,904 4,688,522 4,543,096

Total 36,900,000 50,000,000 32,211,478 45,456,904 4,688,522 4,543,096

1.8 Summary of Overall Project Performance:The total expenditure budget for the fiscal year was US$ 50,000,000 while the actual (PIU) totalexpenditure was USD 198,984 representing a 0.40% absorption rate.

In the Current fiscal year, US$ 45,456,904 was disbursed against a projected disbursement of US$50,000,000 representing an overall disbursement rate of slightl y over 90.91%.

During the period, US$ 45,257,098 was disbursed to IPs (WFP US$ 25,750,000, UNICEF US$16,250,000 and FAO US$ 3,256,904) for implementation of various programmes under the contract.However, as at the end of the fiscal year 2017/2018, none of these IPs had submitted an auditedaccount/report with regard to these amounts and as such these amounts have been recorded asadvances and imprests in this report.

The contracts have been executed within the budget allocation and through procurement proceduresto attain money value. In term of finances, the project is within the limits provided.

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2. STATEMENT OF PROJECT MANAGEMENT RESPONSIBILITIES

The Undersecretary for the Ministry of Agriculture and Food Security and the Project Coordinator forthe Emergency Food and Nutrition Security Project are responsible for the preparation andpresentation of the Project's financial statements, which give a true and fair view of the state of affairsof the Project for and as at the end of the financial year ended on June 30, 2018. This responsibilityincludes: (i) maintaining adequate financial management arrangement and ensuring that thesecontinue to be effective throughout the reporting period; (ii) maintaining proper accounting records,which disclose with reasonable accuracy at any time the financial position of the Project; (iii)designing, implementing and maintaining internal controls relevant to the preparation and fairpresentation of the financial statement, and ensuring that they are free from material misstatements,whether due to error or fraud; (iv) safeguarding the assets of the Project; (v) selecting and applyingappropriate accounting policies; and (vi) making accounting estimates that are reasonable in thecircumstances.

The Undersecretary for the Ministry of Agriculture and Food Security and the Project Coordinator forthe Emergency Food and Nutrition Security Project accept responsibility for the Project's financialstatements, which have been prepared on the Cash Basis Method of Financial Reporting, usingappropriate accounting policies in accordance with International Public Sector Accounting Standards.

The Undersecretary for the Ministry of Agriculture and Food Security and the Project Coordinator forThe Emergency Food and Nutrition Security Project are of the opinion that the Project's financialstatements give a true and fair view of the state of Project's transactions during the financial year/periodended June 30, 2017, and of the Project's financial position as at that date. The Undersecretary for theMinistry of Agriculture and Food Security and the Project Coordinator for Emergency Food andNutrition Security Project further confirm the completeness of the accounting records maintained for theProject, which have been relied upon in the preparation of the Project financial statements as well as theadequacy of the systems of internal financial control.

The Undersecretary for the Ministry of Agriculture and Food Security and the Project Coordinator forThe Emergency Food and Nutrition Security Project confirm that the Project has complied fully withapplicable Government Regulations and the terms of external financing covenants, and that Projectfunds received during the financial year/period under audit were used for the eligible purposes for whichthey were intended and were properly accounted for.

2.1 Approval of the Project financial statementsThe Project financial statements were approved by the Undersecretary for the Ministry of Agricultureand Food Security and the Project Coordinator for Emergency Food and Nutrition Security Projecton this .................... 2018 and signed by them.

Undersecretary Project Coordinator

Date lb 't 7-Date '! V


3. REPORT OF THE INDEPENDENT AUDITOR ON THE EMERGENCY FOOD ANDNUTRITION SECURITY PROJECT

REPORT ON FINANCIAL STATEMENTSWe have audited the accompanying financial statements of Emergency Food and Nutrition SecurityProject, set out on pages I to 10 which comprise the statement of receipts and payments for thefinancial year/period ended June 30, 2018, and a summary of significant accounting policies and otherexplanatory notes,

3.1 Responsibility for the Financial StatementsThe Undersecretary for the Ministry of Agriculture and Forestry (MAF) and the Project Coordinatorfor Emergency Food and Nutrition Security project are responsible for the preparation and fairpresentation of these financial statements in accordance with International Public Sector AccountingStandards (IPSAS). This responsibility includes designing, implementing and maintaining internalcontrols relevant to the preparation and fair presentation of financial statements that are free from.material misstatement, whether due to fraud or error, selecting and applying appropriate accountingpolicies, and making accounting estimates that are reasonable in the circumstances.

3.2 Auditor's ResponsibilityOur responsibility is to express an independent opinion on these financial statements based on ouraudit. We conducted our audit in accordance with International Standards on Auditing. Thosestandards require that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosuresin the financial statements. The procedures selected depended on our professional judgement,including the assessment of the risks of material misstatement of the financial statements, whetherdue to fraud or error. In making those risk assessments, we considered the internal controls relevant tothe company's preparation and fair presentation of the financial statements in order to design auditprocedures that were appropriate in the circumstances, but not for the purpose of expressing anopinion on the company's internal controls. An audit also includes evaluating the appropriateness ofaccounting polices used and the reasonableness of accounting estimates made by the management, aswell as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our audit opinion,

ii

Emergency Food and Nutrition Security ProjectReports and Financial StatementsFar the financial year ended June 30, 2018

3.3 Opinion

REPORT ON FINANCIAL STATEMENTS

We have audited the accompanying financial statements of EFNSP, set out on pages I to 13 whichcomprise the statement of receipts and payments for the financial year/period ended June 30, 2018,and a summary of significant accounting policies and other explanatory notes.

Responsibility for the Financial Statements

The Undersecretary for the Ministry of Finance and planning and the Project Coordinator for EFNSPproject are responsible for the preparation and fair presentation of these financial statements inaccordance with International Public Sector Accounting Standards (IPSAS). This responsibilityincludes designing, implementing and maintaining internal controls relevant to the preparation andfair presentation of financial statements that are free from material misstatement, whether due tofraud or error, selecting and applying appropriate accounting policies, and making accountingestimates that are reasonable in the circumstances.

Auditor's Responsibility

Our responsibility is to express an independent opinion on these financial statements based on ouraudit. We conducted our audit in accordance with International Standards on Auditing. Thosestandards require that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosuresin the financial statements. The procedures selected depended on our professional judgement,including the assessment of the risks of material misstatement of the financial statements, whetherdue to fraud or error. In making those risk assessments, we considered the internal controls relevant tothe company's preparation and fair presentation of the financial statements in order to design auditprocedures that were appropriate in the circumstances, but not for the purpose of expressing anopinion on the company's internal controls. An audit also includes evaluating the appropriateness ofaccounting polices used and the reasonableness of accounting estimates made by the management, aswell as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our audit opinion.

OpinionIn our opinion the accompanying financial statements give a true and fair view of the state offinancial affairs of the Emergency Food and Nutrition Security Project (EFNSP) for the financialyear/period ended June 30, 201,8 in accordance with International Public Sector Accounting Standards(IPSAS).

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Emphasis of matterWithout qualifying our opinion, we highlight that during the year under review, the Projecttransferred US$ 45,257,098 to implementing partners for implementation of project activities.Although these transfers have correctly been reported in these financial statements as cash advancesand imprests, we were not able to perform the actual audit.

REPORT ON PROJECT PERFORMANCE AND VALUE FOR MONEY ACHIEVEMENT

Based on our audit, we report that nothing came to our attention to indicate substantial non-achievement of value for money objectives. However, we identified a few minor cases of non-achievement of value for money objectives, which have been included in our separate ManagementLetter to the Undersecretary for the Ministry of Finance and planning and the Project Coordinator forEFNS project.

REPORT ON COMPLIANCE WITH APPLICABLE LAWS AND REGULATIONS

Based on our audit, we report that nothing came to our attention to indicate substantial non-compliance with applicable laws and regulations, as well as essential external financing covenants.However, we identified a few minor cases of non-compliance, which have been included in ourseparate Management Letter to the Undersecretary for the Ministry of Finance and planning and theProject Coordinator for EFNS project.

REPORT ON CONTRACTS WITH DEBARRED FIRMS

Based on our audit, we report that nothing came to our attention to indicate that debarred firms, bothby the goveqmcnt and external financiers, were awarded any contracts under the Project during thefinancial ycar/pcriod under review.

Auditor General,REPUBLIC OF SOUTH SUDAN Date

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Safety net and Skills Development ProjectReports and Financial StatementsFor the financial year ended June 30, 2018

4. STATEMENT OF RECEIPTS & PAYMENTS

2017/18Receipts Notes USD

Transfers from IDA 9.1 45,456.904

Total Receipts 45,456,904

Project Expenditure by CategoryGoods, Works, Consulting & Non-Consulting services 9.2 198,984

Total Expenditure 198.984

Surplus/(Deficit) for the period 45257,9

The accounting policies and explanatory notes to these financial statements are an integral part of thefinancial statements.

/Undersecretat{ Project Coord ator

Date Date

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5. STATEMENT OF FINANCIAL ASSETS AND LIABILITIES

2017/18

Financial Assets Notes USD

Cash & Cash Equivalents 9.3

Bank Balances 732

Cash at Hand/Petty Cash 90

Imprests & Advances 45,257.098

Total Financial Assets 4

Represented By;

Cash & Cash Equivalents b/f -

Surplus/Deficit for the period 45.257.920

Total Reserves and Liabilities 45,27- -

The accounting policies and explanatory notes to these financial statements form an integral part ofthe financial statements. The financial statements were approved on....... 2018 and signed by:

Undersecretary Project Coofdinator

Date Date

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6. STATEMENT OF CASHFLOWS

2017/18Statement of Cash Flow for the Period 30th Jun 2018 Notes US$Receipts for operating income:

Proceeds from IDA 9.1 45,456,904Payment from Operating Expense by Category

Goods, Works, Consulting, Consulting Operating cost andTrainings 9.2 (198,984)

Net Cash Flow from Operating Expense 45,257,920

Cash Flow from Investing ActivitiesAcquisition of Assets/Interest earned -

Net Cash Flow from Investing activities -

Cash flow from Borrowing Activities:Proceeds from Foreign Borrowing -

Net cash flow from Financing activities -

Net Increase/ Decrease in Cash and Cash Equivalent 45,257,920

Add : Opening Balance 01/7/2017

Add Adjusting Entry -Expense refunded by UNOPS -

Cash and Cash Equivalent at the end of period 30th Jun 2017 9.3 45,257,920

The accounting policies and explanatory notes to these financial statements form an integral part ofthe financial statements. The entity financial statements were approved on ............ 2018 andsigned by

Undersecretary Project Coordinator

Date Date

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7. STATEMENT OF COMPARATIVE BUDGET AND ACTUAL AMOUNTS

Actual onOriginal Adjust Final Comparable % of

Receipts/Payments Item Budget ments Budget Basis Variance VarianceF=E/C

A B C=A+B D E-D-C

Receipts

Transfer from IDA 50,000,000 - 50,000,000 45,456,904 (4,543,096) (9.09)%

Total Receipts 50,000,000 - 50,000,000 45,456,904 (4,543,096)

Payments

GDS,WRKS,CS,NCS

Category 1 42,000,000 - 42,000,000 - (42,000,000) (100)%

Category 2 7,500,000 - 7,500,000 - (7,500,000) (100)%

Category 3 500,000 - 500,000 198,984 (301,016) (60.20)%

Total Payments 50,000,000 - 50,000,000 198,984 (49,801,016) (99.60)%

Note: The significant budget utilisation/performance differences in the last column are explained in Annex Ito these financial statements.

Undersecretar r Project Coordmator

Date Date

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8. NOTES TO THE FINANCIAL STATEMENTS

SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies adopted in the preparation of these financial statements are set outbelow:

8.1 Statement of compliance and basis of preparation

The financial statements have been prepared in accordance with and comply with InternationalPublic Sector Accounting Standards (IPSAS) with particular emphasis on Cash Basis FinancialReporting uinder the Cash Basis of Accounting.

The financial statements are presented in United States Dollars, which is the functional andreporting currency of the Project and all values are rounded to the nearest one Dollar. Theaccounting policies adopted have been consistently applied to all of the years presented.

The financial statements have been prepared on the cash basis following the Government'sstandard chart of accounts. The cash basis of accounting recognises transactions and events onlywhen cash is received or paid out by the Project

i. Recognition of revenue and expenses

The Project recognises all revenues from the, various sources when the event occurs and therelated cash has actually been received by the Project. In addition, the Project recognises allexpenses when the event occurs and the related cash has actually been paid out by the Project.

ii. In-kind donations

In-kind donations are contributions made to the Project in the form of actual goods and/orservices rather than in money or cash terms. These donations may include vehicles, equipmentor personnel services. Where the financial value of in-kind donations can be reliablydetermined, the Project includes such value in the statement of receipts and payments both asrevenue and as an expense in equal and opposite amounts; otherwise, the donation is notrecorded.

iii. Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and cash at bank, short-term deposits on calland highly liquid investments with an original maturity of three months or less, which arereadily convertible to known amounts of cash and are subject to insignificant risk of changes invalue. Bank account balances include amounts held at the Central Bank of South Sudan and/orat various commercial banks at the end of the financial year/period. For the purposes of thesefinancial statements, cash and cash equivalents also include short term cash imprests andadvances to authorised public officers and/or institutions which had not been surrendered oraccounted for at the end of the financial year/period.

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Emergency Food and Nutrition Security ProjectReports and Financial StatementsFor thefinancial year ended June 30, 2018NOTES TO THE FINANCIAL STATEMENTS (Continued)

SIGNIFICANT ACCOUNTING POLICIES (Continued)

iv. Pending bills

Pending bills consist of unpaid liabilities at the end of the financial year/period arising fromcontracted goods or services during the year/period or in past years/periods. As pending bills donot involve the payment of cash in the reporting period, they are simply disclosed as an Annexto the financial statements. When the pending bills are finally settled, such payments areincluded in the statement of receipts and payments in the year in which the payments are made.

v. Budget

The budget is developed on the same accounting basis (cash basis), the same accountsclassification basis, and for the same period as the financial statements. The Project's budgetwas approved as required by Law and regulations issued by the Ministry of Finance andEconomic Planning, as well as by the participating development partners, as detailed in theGovernment of South Sudan Budget Printed Estimates for the year. A high-level assessment ofthe Project's actual performance against the comparable budget for the financial year/periodunder review has been included in an annex to these financial statements.

vi. Exchange rate differences

The accounting records are maintained in United States Dollars, which is the main currencyused for major payments under the Project. A smaller percentage of payments are howevermade in the South Sudanese Pound (SSP). Those transactions are converted into the UnitedStates Dollars usihg the exchange rates prevailing at the dates of the tranhsactions. Any foreignexchange gains and losses resulting from the settlement of such transactions and from thetranslation at year-end exchange rates of monetary assets and liabilities denominated in thelocal currency are recognised in the statements of receipts and payments.

vii, Comparative figures

This is the first year of operation and hence there are no comparatives.

viii. Subsequent events

There have been no events subsequent to the financial year/period end with a significant impacton the financial statements for the year ended June 30, 2018

10


NOTES TO THE FINANCIAL STATEMENTS (Continued)

8.2 Proceeds from Domestic and Foreign Grant

During the 12 months to 30 June 2018 we received funding from Development Partner in form of Loan

Amount Grantsreceived Grants received as Grantsin donor received direct received

Name of Donor Date received currency in cash payment* in kind Total amount in USD

FY FY2017/18 2016/17

Loans from IDA USS US$ iSs US$ USs

IDA Grant No. D1860 11 Aug 2017 4,100.000 4,100,000

IDA Grant No. D 1860 11 Aug 2017 22,750,000 22,750,000

IDA Grant No. DI860 18 Aug 2017 22.750 22,750

IDA Grant No. D1860 24 Aug 2017 100,000 100,000

IDA Grant No. D1860 24 Aug, 2017 3,256,904 3,256,904

[DA Grant No. D1860 13 Sept 2017 1 9,000 9,000

IDA Grant No. DI 860 26 Sept 2017 12,150,000 12,150,000

IDA Grant No. D860 30 Nov 2017 68,250 68,250

Total - 100,000 42,356,904 - 42,456,904 -

*, The direct payment grants represent payments for goods and services done directly by the donor onbehalf of the project. Projects should ensure that the adequate documents and support document isrequested from the donors to support this grant.

I1

Emergency Food and Nutrition Security Project

Reports and Financial StatementsFor the financial year ended June 30, 2018

NOTES TO THE FINANCIAL STATEMENTS (Continued)

8.3 Category 3 (Goods, Works, Consulting & Non Consulting Services)

2017118Notes US $

Trainings 151,289

Operating Expense 47.695

Total 198.984

8.4 Cash and cash equivalents

2017/18

Notes US S

Cash at Bank 9.3.1 732

Cash at hand 90

Outstanding [mprests & Advances 93.2 45.257.098

Total Cash and Cash Equivalents 45.2571920

8.4.1 Cash at Bank

Bank Account 2017/18us5$

Foreign Currency Accounts

CfC Stanbic Bank [US$ Ace No 02-00000-1471321 657

CfC Stanbic Bank [SSP Ace No 02-00000-147148] 75

Total Bank Balance 732

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NOTES TO TRE FINANCIAL STATEMENTS (Continued)

8.4.2 Outstanding Imprests and Advances

Nneof Officer or Institution i Arnou nt (USS)

MAFS PIU [94.

WFP(Food Distribution 25750,000UNICEF QHealth, Nutrition, WASH, Child Protection) 16,250,000

FAO (Suppo-t to re-engagem-ent in crop & livestockt___ _ ____ _ 3,256904

TOTA__ -45,257.098

8.4.2.1 Implementing Partners' Summary report on Imprests and AdvancesAs at the end of the fiscal year 2017/2018 i.e on 3 0 th June, 2018, no IP had provided an auditedfinancial report extract of the funds advances to them. However, below is a schedule showing usageof the funds advanced to each of them.

MAFS PUI WFP UNICEIF FAO TotalUs$ Us$ US$S| US$ _US$

vances 194 00 256,904 45,257,098194 25,750,000 16250,000 45 257 098

Less ExpenditurePeid ute pe o nt a 25,749,930 11,030,535 3_256_,04 ,40 037.369

25,749,930 11,030,535 3.256.904j 40,037.369Fund/Sub-GrantBalance 1.70 15219,465 - 5,219,729

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