project financial statements and quarterly reporting
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Transcript of project financial statements and quarterly reporting
Project Financial Statements & Project Financial Statements & Quarterly ReportsQuarterly Reports
Dec 2010
IntroductionIntroduction
Project Accounting and Audit procedures should be based on best market
practice as per IFAD underlying guidelines. These provide accountability
and credibility as to use of funds
IFAD guidelines require all projects to maintain accounts & records
(separately or within a basket fund)
These accounts should be audited by an independent auditor on an
annual basis within a set timeframe (normally 6 months)
Where possible, national systems should be used
IFAD has a fiduciary role to ensure that its funds are used for the purpose for which intended
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Project Financial Statements (PFS)Project Financial Statements (PFS)
ObjectiveObjective
• To provide information about the financial position, performance and resource flows of a project
Basis of PreparationBasis of Preparation
• Prepared in accordance with:– International Financial Reporting Standards (IFRS) (www.ifrs.org)
– International Public Sector Accounting Standards (IPSAS) (accruals or cash basis) (www.ipsas.org)
– National standards, if minimum disclosures are provided
• These standards define what & how to report
• Cash (when money is actually spent/ received) or accruals (when legal commitment incurred irrespective of cash) basis, as long as consistently applied
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Minimum best practice disclosuresMinimum best practice disclosures
⇉ Expenditures – by category/component as per legal agreement,
preferably with comparison to budget
⇉ Inflows and Uses of funds – separate disclosure of inflows from
different sources
⇉ Notes to the Accounts – including accounting standards used,
details of bank balances, fixed assets, counterpart funding
⇉ Statement of WAs –in USD and/or SDR, annual and cumulative
⇉ Status of funds in SDR – cumulative
⇉ Special account statement & reconciliation
Project Financial Statements (PFS)Project Financial Statements (PFS)
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Financial Accounting & ReportingFinancial Accounting & Reporting
► Income & Expenditure Statement – by category/component as per legal agreement, plus resource flows, review actual costs versus budget
► Special account & Bank reconciliations – all accounts
► Fixed assets, Training plan, Withdrawal Applications - received/ claimed
Monthly accounting/ reportingMonthly accounting/ reporting
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Other tipsOther tips
► Consolidate data from districts with PMU
► Back up & Business continuity plans
► Adequate filing systems - legally, project records need to be maintained for 10 years post closing
Financial Accounting & ReportingFinancial Accounting & Reporting
► Discussion of Project Progress against AWPB - highlights/ learning tips
► Sources & Uses of Funds Statement
► Uses of Funds by Project Activities (supports the Sources/Uses of Funds)
► Physical Progress Report - physical outputs
► Physical Progress Report - status of large works and services
► Procurement Monitoring Report - narrative and tables
► IFAD has no prescribed formats for Quarterly Reports - World Bank FMR Formats are recommended
Quarterly reportingQuarterly reporting
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World Bank FMR Format
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Example of an education project with significant construction activities, equipment purchases & training. The Sources & Uses of Funds Statement includes a cash forecast for the next 6 months, to facilitate project planning & monitoring. Physical progress is monitored by units of output, where practical, & by contract/work progress for construction activities.
► Discussion of Project Progress
► Sources & Uses of Funds
► Uses of Funds by Project Activity
► Physical Progress Report
► Procurement Reports
► Procurement Monitoring Tables
Source: WB FMR Pages 17-24 (Annex A Sample)
Discussion of Project Progress
Sources and Uses of Funds
Uses of Funds by Project Activity
Physical Progress Report
Procurement Reports
Procurement Monitoring Tables
Sample Quarterly Reports Format (World Sample Quarterly Reports Format (World Bank)Bank)
• Project information and performance
• Statement of project management responsibilities
• Report of the independent auditor
• Statement of income & expenditures/ receipts & payments (by category)
• Statement of income & expenditures/ receipts & payments (by component)
• Balance sheet (if accruals basis)
• Statement of comparative budget & actual amount
• Statement of Special Account Activities & Reconciliation
• SOE – Withdrawal Application Statement – annual & cumulative
• Status of funds (in SDR)
• Notes to the Financial Statements
IFAD Project Financial Statements (PFS) Formats – IFAD Project Financial Statements (PFS) Formats – Annual reportingAnnual reporting
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PFS Formats
1. Basis of reporting
- In accordance with the underlying accounting principles of reference the notes to the financial statements of an entity should:
• Present any information about the basis of preparation of financial statements
• Provide additional information which is not presented on the face of financial statements
2. Significant Accounting Policies
- Basis of Preparation
- Cash Basis of Accounting
- Foreign Currency Transactions
PFS – Notes to the Financial StatementsPFS – Notes to the Financial Statements
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Suggested Minimum Disclosures:
3. Budget – basis of budget
4. Cash/Fund Balances
5. Direct Payments
6. Government Counterpart Funds
7. Other Donor Funds
8. Other Receipts
9. Non-current Assets (for disclosure purposes only)
10. Yearly Procurements
11. Allocation & Use of the Financing proceeds
12. Reconciliation of Funds Disbursed by IFAD & Funds Received by the Project
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PFS – Notes to the Financial StatementsPFS – Notes to the Financial Statements
Expenditure by components & categories per legal agreement
Expenditure by Financier
Ability to print Financial Statements according to Govt/IFAD/IPSAS accounting policy
Advances utilisation by Service Providers & staff duly aged to facilitate follow-up
Bank balances held by service providers
Commitments beyond actual billings/ invoices
Budgetary control information to ensure expenditures do not exceed set limits
Bank reconciliation using the system
Receivables in form of replenishment applications in transit & any refunds that may be due from Government
Withdrawal application form automatically produced by the system
Contract & Procurement plan monitoring
Accounting Software for IFAD Projects Accounting Software for IFAD Projects
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Capacity Analysis
Thank YouThank You