Financial Statements 31 December...

Reproductive and Child Health Project Phase II(RCHP2)

World Bank IDA AGGF Grant TF 096812 IDA H8770, HRITF1 5054

Government of Sierra LeoneIntegrated Project Administration Unit,

Ministry of Finance and Economic Development

Financial Statementsfor the year ended 31 December 2015

22 July 2016This report contains 18 pages SIEggALS

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Reproductive and Child Health Project Second PhaseWorld Bank IDA AGGF Grant TF 096812 IDA H8770, HRITF15054

Financial statementsfor the year ended 37 December 2075

Contents Page

General information 1

Background information on the project 2-4

Management's responsibility statement 5

Independent Auditor's Report 6-7

Statement of resources and expenditure 8(World Bank Funding)

Statement of income and expenditure 9

Statement of financial position 10

Statement of cash flows 11

Note to the financial statements 12-15

Report of the Auditors on the Special Account Statement 16

Integrated Project Administration Unit (IPAU)- SpecialAccount Statement -Account No. 17-011736619-01 17

Ministry of Health and Sanitation (MOHS) -Special AccountStatement- Account No: 001-116754-03-00-01 18



General information

Office Project Coordinating UnitIntegrated Project Administration Unit (IPAU)Ground Floor, Treasury BuildingGeorge StreetFreetown

Project Coordinator Alpha I Sesay

Bankers Sierra Leone Commercial BankSiaka Stevens StreetFreetown

Rokel Commercial Bank (SL) LimitedSiaka Stevens StreetFreetown

Auditor KPMGChartered AccountantsKPMG House37 Siaka Stevens StreetFreetown



Background information on the project

On 11 October 2013, an agreement was signed between the Republic of Sierra Leone (the(Recipient) and the International Development Association (the Association) for the purpose

low of providing additional financing for activities related to the original project. The original projectwas an Africa Catalytic Growth Fund (ACGF) grant of US $20 million equivalent approved on18 June 2010. The Association agreed to extend to the recipient a grant of an amountequivalent to eight million seven hundred thousand Special Drawing Rights(SDR 8,700,000).

Purpose and Activities

The main objective of the Project is to increase utilization of a package of essential healthservices by pregnant and lactating women and children under the age of five.

The Project constitutes the second phase of the Program, and consists of the followingparts:

Part 1 Strengthening Service Delivery

(i) Local Council Grants ("LC Grants)

Provision of LC Grant to Local Councils to finance specific development projects (Subprojects) for the provision of core basic services in the health sector, including rehabilitationof health facilities, as elaborated in the respective LC annual work plans andbudgets.

(i) Performance-Based Financing Service Grants ("PBF services Grants")

Carrying out of specific development projects through the provision of PBF Services Grants toHealth Services Providers for delivery of Packages of Essential Health Services ("PEHS)comprising of preventive and curative services, such services to include, inter alia, primaryhealth care and preventive services for pregnant women, delivery and post-mortem care andimmunization for children under the age of five, and family planning services ("PEHS Subprojects).

(iii) Purchase and Distribution of long lasting impregnated nets

Local Council Grant Administration

(i) Carrying out of a program of activities aimed at building capacity of the Local GovernmentFinance Department for supervision and monitoring of implementation of Part 1(a) of theProject, including provision of training in medical waste management to Local Councils'environmental committees.

(ii) Carrying out of a program of activities aimed at improving the capacity of Local Councilsand the eligible Health Service Providers ("HSPs") for implementation of the PEHSSubprojects, including ,among others, the external verification of delivery of PEHS byHSPs Subprojects under respective PEHS Subprojects.

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Background information on the project (Contd)

Part 2 Capacity Building

(a) Carrying out of a program of activities aimed at strengthening the capacity of the MoHSfor supervision, monitoring and evaluation of the Project.

(b) Carrying out of a program of activities aimed at strengthening the capacity of NjalaUniversity and University of Sierra Leone for provision of pre-service and postgraduatemedical training.

(c) Carrying out of the following program of activities:

(i) strengthening the organizational and management capacity of MoHS, including,the establishment of an integrated health project administration unit within saidMoHS;

(ii) operationalisation of the Health Services Commission;

(iii) carrying out of a comprehensive review of the legislative and regulatoryframework for the health sector with a view to identifying gaps and makingrecommendations;

liv) strengthening health management information systems; and

(v) carrying out of a comprehensive review of health sector financing, including ,among others, sustainability of the free health care initiative and development ofa social health insurance scheme, all through the provision of technical advisoryservices , operating costs and training for the purpose.

Withdrawal of Grant Proceeds

The Recipient may withdraw the proceeds of the Grant in accordance with the provisions of(a) Article Ill of the Standard Conditions; (b) the Particular Methods of Procurement of Goodsand Works; (c) the Particular Methods of Procurement of Consultant's services and (d) suchadditional instructions as the World Bank may specify by notice to the Recipient (including the"World Bank Disbursement Guidelines for Projects" dated May 2006, as revised from time totime by the World Bank and as made applicable to this Agreement pursuant to suchinstructions), to finance Eligible Expenditures as set forth in the table in the paragraph (a)below.

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Background information on the project (Contd)

Withdrawal of Grant Proceeds (contd)

The following specifies the categories of Eligible Expenditures that may be financed out of theproceeds of the Grant ("Category"), the allocations of the amounts of the Grant to each Category,and the percentage of expenditures to be financed for Eligible Expenditures in each Category:

ACGF % ofAmount of the expenditure toGrant allocated IDA H8770 HRITF1 5054 be financed

expressed in expressed in expressed in (inclusive of taxes)Category US$ US$ US$ US$

1 Goods, works, consultants' services Such % as shall beTraining and Operating Costs specified in thefinanced by LC Grants under Annual Work Plan forPart 1 (a)(i) of the Project. 5,290,000 3,060,000 - the respective Fiscal Year

2. Goods, works, consultants' services 100% of amountfor PBF Services Subprojects under of PBF services GrantPart 1 (a)(ii) of the Project. 5,700,000 5,000,000 5,000,000 disbursed expenditure

3. Goods and Services for Part 1 (a)(iii)of the Project 6,700,000 3,000,000 - 100%

4. Goods, consultants' services, Trainingand Operating Costs under Part 1(b)of the Project 1,500,000 1,000,000 - 100%

5. Goods, consultants' services, Trainingand Operating Costs under Part 2(a)of the Project 500,000 - 100%

6. Goods, consultants' services, Trainingand Operating Costs under Part 2(b)of the Project 310,000 - - 100%

7. Technical Assistance - 940,000 - 100%

Total 20,000,000 13,000,000 5,000,000

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Management's responsibility statement

Management is responsible for the preparation and presentation of the financialstatements, comprising the statement of resources and expenditure, the statementof income and expenditure, the statement of financial position at 31 December 205and the statement of cash flows for the year then ended and the notes to the financialstatements, which include a summary of significant accounting policies and otherexplanatory notes in accordance with the basis of accounting described in note 1 ofthese financial statements and for such internal control as management determine isnecessary to enable the preparation of financial statements that are free from materialmisstatement whether due to fraud or error.

Approval of the financial statements

The financial statements were approved by management on .5. .2 ... 2016and signed on its behalf by:

Chairman, roject Technical Steering Project Co bnatorCommittee

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i KPMG Sierra Leone Tlep -hoe +232-22-222061/2KPMG HOUse Tlfx +232-22-22814937 Siaka Stevens Street Ei pmig kpmg-s1 comP 0 Box '100 Inte:ret. w kpng comFreetownSiefra Leone

Independent Auditor's report to the Government of Sierra Leoneand the International Development Association (IDA)

We have audited the accompanying financial statements of the Reproductive andChild Health Project Second Phase which comprise the statement of resources andexpenditure and the statement of financial position as at 31 December 2015, and cashflows for the year then ended and a summary of significant accounting pol icies andother explanatory information as set out on pages 8 to 1 5.

Management's responsibility for the financial statements

Management is responsible for the preparation and presentation of these financialstatements in accordance with the basis of accounting described in note 1 to thefinancia statements and for such internal control as management determines isnecessary to enable the preparation of financia statements that are free from materialmisstatement whether due to fraud or error.

Auditors' responsibility

Our responsibility is to express an opinion on these financia statements based on ouraudit. We conducted our audit in accordance with International Standards on Auditingand the World Bank Guidelines for Project Audit. Those standards require that wecomply with ethical requirements and plan and perform the audit to obtain reasonableassurance whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amountsand disclosures in the financial statements. The procedures selected depend on ourjudgment including the assessment of risks of material misstatement of the financiastatements whether due to fraud or error. In making those risk assessments, weconsider internal controls relevant to the entity's preparation and presentation of thefinancial statements in order to design audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an opinion on the effectivenessof the entity's internal control. An audit also includes evaluating the appropriatenessof the accounting policies used and the reasonableness of accounting estimates madeby management, as well as evaluating the overall financial statement presentation.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our opinion.

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KPMG

Independent Auditor's Report to the Government of Sierra Leone andInternational Development Association (IDA) (continued)

Opinion

In our opinion, the financial statements present fairly in all material respects, the financialposition of the Reproductive and Child Health Project Second Phase financed by theInternational Development Association as at 31 December 2015 and of its financialperformance and its cash flows for the year then ended in accordance with the accountingpolicies as stated in note 1 of the financial statements, and the World Bank Guidelines forProject Audit.

In addition, in our opinion the accompanying special/designated account statement onpages 17 and 18 presents fairly, in all material respects, the funds received anddisbursements made from the special /designated account of the project for the yearended on 31 December 2015, in accordance with the accounting convention as describedin the note above.

Restriction of use

These financial statements have been prepared in accordance with the basis of accountingdescribed in note 1 for the purpose of determining the financial position of theReproductive and Child Health Project Second Phase for use by the management of theproject, the World Bank and the Government of Sierra Leone and the financial statementsand related auditor's report may not be suitable for another purpose. Our report is intendedsolely for the management of the Reproductive and Child Health Project Second Phase foruse by the management of the project, the International Development Association (IDA)and the Government of Sierra Leone and should not be distributed to or used by partiesother than the management of the Reproductive and Child Health Project Second Phasefor use by the management of the project, the International Development Association (IDA)and the Government of Sierra Leone.

Freetown Chartered Accountants

Date: 25

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Statement of resources and expenditure (World Bank Funding)for the year ended 31 December, 2015

Notes 2015 2014USD USD

ResourcesOpening balanceIPAU Special Account 914,290 1,216,103MoHS Special Account 2,052 57,535

916,342 1,273,638

World Bank cash disbursement:

IPAU Special Account 2 2,207,057 9,914,699MOHS Special Account 2 939,821 1,398,100

3,146,878 11,312,799

Other incomeInterest earned 139 134

Other receipts 287 1,415

426 1,549

Total resources 4,063,646 12,587,986

ExpenditureInput based financing 5 (603,394) (2,911,962)Performance based financing 6 (1,681,806) (7,120,204)

Supervision (M& E) 7 (642,603) (473,713)Medical training 8 (136,949) (981,419)

Local councils administration 9 (440,418) (184,346)

Technical assistance (38,648)

Total expenditure (3,543,818) (11,671,644)

Balance as at 31 December 519,828 916,342

Sh

These finan ate ents were approved on ... ...-........... 2016

.............. ..... Chairman, Project Technical Steering Committee

............ ................ . . ...... Project C oordinator

The notes on pages 12 to 15 are an integral part of the financial statements

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Statement of income and expenditurefor the year ended 31 December

Notes 2015 2014USD USD

IncomeRelease from deferred income 4 3,543,818 11,671,644

3,543,818 11,671,644

Expenditure

Input based financing (603,394) (2,911,962)

Performance based financing (1,681,806) (7,120,204)

Supervision (M& E) (642,603) (473,713)

Medical Training (136,949) (981,419)

Local Councils Administration (440,418) (184,346)

Technical Assistance (38,648)

(3,543,818) (11,671,644)

Result for the year

These financial statements were approved on . ...... ....... .2016

. ......... Chairman, Project Technical Steering Committee

.P.Project Coordinator

The notes on pages 12 to 15 are an integral part of these financial statements

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Reproductive and Child Health Project Phase I (RCHP 2)World Bank IDA AGGF Grant TF 096812 IDA H8770, HRITF15054


Statement of financial positionfor the year ended 37 December

2015 2014Notes USD USD

Assets

Cash and cash equivalents 3 519,828 916,342

Total assets 519,828 916,342

Funding and liabilities

Deferred income 4 519,828 916,342

Total funding and liabilities 519,828 916,342

These financial statements were approved on ..... ..... I ............ .2016

... ............. Chairman, Project Technical Steering Committee

................. Project Coordinator


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Reproductive and Child Health Project Phase II (RCHP 2)World Bank IDA AGGF Grant TF 096812 IDA H8770, HRITF15054


Statement of cash flowsfor the year ended 37 December

2015 2014Notes USD USD

Cash flows from operating activities

Cash paid to council and suppliers 4 (3,543,818) (11,671,644)

Net cash flows from operating activities (3,543,818) (11,671,644)

Cash flows from financing activities

Funding received 2 3,146,878 11,312,799interest received 139 134Other receipts 287 1,415

Net cash flows from financing activities 3,147,304 11,314,348

Decrease in cash for the year (396,514) (357,296)

Cash at beginning of the year 916,342 1,273,638

Cash and cash equivalents at 31 December 3 519,828 916,342

These financial statements were approved on ............. 2016

..... . ....... Chairman, Project Technical Steering Committee

........... Project Coordinator


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Reproductive and Child Health Project Phase I1 (RCHP 2)World Bank IDA AGGF Grant TF 096812 IDA H8770, HRITF15054


Notes to the financial statements

1. Significant accounting policies

The principal accounting policies applied in the preparation of these financial statementsare set out below. The policies have been consistently applied unless otherwise stated.

1.1 Basis of accounting

The statement of resources and expenditure is prepared on the basis of cash accountingwhereby income is recognised on the receipt of cash and cash equivalents and expenditureis recognised on the disbursement of cash and cash equivalents.

1.2 Foreign currency transactions

(i) Functional and presentation currency

The functional currency is the local currency in Sierra Leone which is the Leone. TheProject has however adopted the United States Dollars (US$) as its presentationcurrency as most of its transactions are denominated in US Dollars. Transactions in allother currencies are therefore considered to be foreign currency transactions.

(ii) Transactions and balances

Foreign currency transactions are translated into the functional currency using the midexchange rates prevailing on the dates of the transactions. Foreign exchange gainsand losses resulting from the settlement of such transactions denominated in foreigncurrencies are recognised in the Project Income and Expenditure Account.

1.3 Non-current assets

Plant and equipment are expensed on acquisition by the Coordinating Unit. The financialstatements therefore have no non-current assets.

1.4 Income

Funding from the World Bank is held in a deferred income account when received and onlyrecognized in the Project's Income and Expenditure Account when utilised.

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Reproductive and Child Health Project Phase I (RCHP 2)World Bank IDA AGGF Grant TF 096872 IDA H8770, HRITF15054


Notes to the financial statements (continued)

2. Contributions received

2015 2014USD USD

RCHP/TF 06 - 699,099RCHP/TF 07 - 699,001MoHS/RCHP2/003 - 1,476,754RCHP/TF 08 - 942,869RCHP/TF 09 - 653,683MoHS/RCH P2/P4A - 5,999,891MoHS/RCH P2/005 - 420,751RCHP/12 - 420,751RCHP2/04 2,207,057 -MoHS/RCH P2 /010 469,834MoHS/RCH P2/011B 469,987 -

3,146,878 11,312,799

3. Cash and cash equivalents

2015 2014USD USD

Rokel Commercial Bank (SL) Limited IPAU) 395,729 914,290Sierra Leone Commercial Bank Limited (MoHS) 124,099 2,052

519,828 916,342

4. Deferred income2015 2014USD USD

Opening balance 916,342 1,273,638World Bank funding 3,146,878 11,312,799Interest 139 134Other receipts 287 1,415

4,063,646 12,587,986Released to Income and Expenditure Account (3,543,818) (11,671,644)

Balance carried forward 519,828 916,342

Represented by:Cash and cash equivalents 519,828 916,342

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4. Deferred income (continued)

Deferred income represents the unspent balance of World Bank funding received at theend of the year.

5. Input based financing

2015 2014USD USD

Quarter 1Quarter 2 - -Quarter 3 507,768 511,962Quarter 4 95,626 -Ebola - 2,400,000

603,394 2,911,962

6. Performance based financing2015 2014USD USD

Bo District Council 142,870 284,987Bombali District Council 101,294 137,051Bonthe District Council 175 114,657Kailahun District Council 109,511 183,073Kambia District Council 72,049 133,576Kenema District Council 118,316 274,214Koinadugu District Council 44,023 190,716Kono District Council 62,060 133,751Western Area District Council 89,299 894,947Tonkolili District Council 118,811 261,920Pujehun District Council 66,003 138,739Moyamba District Council 105,710 193,338Port Loko District Council 134,319 259,085PCMH 184,218 -Ola During Children Hospital 199,255Other activities 53,481 -PBF external verification 80,412 320,150Ebola 3,600,000

1,681,806 7,120,204

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Reproductive and Child Health Project Phase // (RCHP 2)World Bank IDA AGGF Grant TF 096872 IDA H8770, HRITF75054



7. Supervision (M & E)2015 2014USD USD

Surveys 216,657Training - 91,227Technical assistance 432,629 -Policy coordination & supervision 192,308 -Operating cost 17,666 158,788Goods and services - 7,041

642,603 473,713

8. Medical training2015 2014USD USD

Specialists, lectures and institution - 191,278Vehicle and equipment 133,868 744,565Operating cost 3,081 45,576

136,949 981,419

9. Local council administration2015 2014USD USD

Motor vehicle - -Bank charges 14,536 1,868Communication 4,147 5,080Printing and stationery 22,450 8,901Training and capacity building 194,491 48,366Travelling - 23,921Consultancy fee 75,000 34,699Exchange gain/loss - (1,309)Audit fees 14,672 8,713Office supplies 71,418 34,458Minor equipment 14,247 3,514Salaries and allowances 29,457 16,135

440,418 184,346

10. Commitments

Commitments at the reporting date was Le 38,553,750 in respect of fees for the audit ofthe project financial statements for the year ended 31 December (2014: nil)

11. Contingent liabilities

Contingent liabilities at the reporting date were nil (2014: nil)

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KPMG Sierra Leone Telephone +232-22-222061/2KPMG House Telefax +232-22-22814937 Siaka Stevens Street Email: [email protected] 0. Box 100 Internet wwwkprng.comFreetownSierra Leone

Report of the Auditors on the Special Account StatementUS Dollar Account numbers 17-011736619-01 and 001-116754-03-00-01

We have audited the accompanying Special Account statements numbered 17-011736619-01and 001-116754-03-00-01 as set out on pages 17 to 18 established under the provisions of theIDA Programmed for the period 1 January 2015 to 31 December 2015. The Project'sManagement is responsible for the preparation and presentation of the Special Accounts. Ourresponsibility is to express an opinion on the Accounts based on our audit.

We conducted our audit in accordance with International Standards on Auditing. Thosestandards require that we plan and perform the audit to obtain reasonable assurance that theSpecial Account statements are free of material misstatement. We believe that our auditprovides a reasonable basis for our opinion.

In our opinion, the Special Account statements give a true and fair view of the financial positionas at 31 December 2015.

Freetown Chartered Accountants

Date:1

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f>' K< P0>3 0 > r Pr, r t r1e C' D D I



Special Account Statement

Integrated Project Administration Unit (IPAU)Account No. 17-011736619-01Depository Bank Rokel Commercial Bank (SL) LimitedAddress Freetown, Sierra LeoneRelated Grant Agreement TF 096812Currency United States Dollar

Part A - Account Activity2015 2014USD USD

Opening balance - 1 January 914,290 1,216,103Add: Replenishments 2,207,057 9,914,699Less: Amount withdrawn (2,725,618) (10,216,512)

Closing balance 31 December 395,729 914,290

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Special Account Statement

Ministry of Health and Sanitation (MoHS)Account No. 001-116754-03-00-01Depository Bank Sierra Leone Commercial Bank (SL) LtdAddress Freetown, Sierra LeoneRelated Grant Agreement TF 096812Currency United States Dollar

Part A - Account Activity

2015 2014USD USD

Opening balance - 1 January 2,052 57,535Add: Replenishments 939,821 1,398,100Add: interest 139 134Add: other receipts 287 1,415Less: Amount withdrawn (818,200) (1,455,132)

Closing balance 31 December 124,099 2,052

a1

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