SUSTAINABLE LAND MANAGEMENT PROJECT …documents.worldbank.org/curated/en/648751485854005795/...I 2...

I SUSTAINABLE LANDI MANAGEMENT PROJECT (SLMP)

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INDEPENDENT AUDITORS REPORTAND DESIGNATED ACCOUNT

I 7 JULY 2016

T T TMS Plus?+onAhZ;Ft Yt.4-fl &FPWT (Vh.) Chartered Certified Accountants (UK)?+&+94T %&+( (h&'A) Authorized Auditors (Ethiopia)I.4. 0118961752/093003435657 Tel. 0118961752/Fax 011 662 12 704-hh 011 662 12 70 Mob. 0911229425/0930034356/57Y.A.-. 110690 P.O. Box - 110690 e-mail [email protected]

W A l Addis Ababa-Ethiopia

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1 *IT Chartered Certified Accountants (UK) and Authorised Auditors (Ethiopia)

Tel. 251-011 6180638/011-8961751/52 Mob. 0911229425 /0930 034356/0930 034357/0913 135454/ Fax 251-011 6621270/60E-mail:- [email protected] /[email protected] P.O.Box 110690 Addis Ababa - Ethiopia

IINDEPENDENT AUDITORS' REPORT ON THE ACCOUNTS OF THEMINISTRY OF AGRICULTURE AND NATURAL RESOURCES -SUSTAINABLE LAND MANAGEMENT PROJECT (SLMP II) IDA CREDITNo.53180-ET, GEF GRANT No.TF 15868, LDCF GRANT No. 15869 and MDTFGRANT No. 15838

We have audited the accompanying Designated Account of Ministry of Agriculture andNatural Resources - Sustainable Land Management Project (SLMP II) IDA Credit 53180-ET,GEF Grant TFl5868, LDCF Grant No.15869 and MDTF Grant No. 15838 for the year ended7 July 2016.

Managements' Responsibility for the Designated Accounts

The project's Management is responsible for the preparation and fair presentation of the

designated account in accordance with International Financial Reporting Standards and forsuch internal control as management determines is necessary to enable the preparation offinancial statements that are free from material misstatement, whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these designated account based on our audit.We conducted our audit in accordance with International Standards on Auditing and WorldBank guide lines for designated accounts. Those standards require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether the designated account is free from material misstatement.

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

Opinion

In our opinion, the financial statements thereof present fairly, in all material respects, thefinancial position of the designated account of the Ministry of Agriculture and Naturalresources - Sustainable Land Management Project (SLMP II) IDA Credit 53180-ET, GEFGrant TF15868, LDCF Grant No.15869 and MDTF Grant No. 15838 as at 07 July 2016 andthe movements for the year then ended in accordance with International Financial ReportingStandards and are in a reement with the records maintained by the Project.

Chartered tsAddis AbabaAuthorized Au 6 January 2017

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MINISTRY OF AGRICULTURE AND NATURAL RESOURCESSUSTAINABLE LAND MANAGEMENT PROJECT (SLMP II)IDA LOAN No.53180-ET , GEF GRANT No. TF15868, LDCF GRANT No. 15869AND MDTF GRANT No. 15838DESIGNATED ACCOUNT STATEMENT

FOR THE YEAR ENDED 7 JULY 2016

Account number 100071300325Depository Bank National Bank of EthiopiaAddress Addis Ababa, EthiopiaRelated Credit IDA credit 53180-ET, Multi Donor Trust

Fund Grant number TF 015838, GlobalEnvironment Facility Grant number TF 015868and Least Developed Countries Trust FundGrant number TF 015869

Currency USD

IBalance at 8 July 2015 3,179,202.70

Deposit to special account 25,633,606.78Refund from travel 211.00

28,813,020.48

Less: Transfer to Birr account and expenditures 28,302,185.18

IBalance at 7 July 2016 510,835.30

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SUSTAINABLE LANDMANAGEMENT PROJECT (SLMP)

INDEPENDENT AUDITORS REPORT

AND FINANCIAL STATEMENT

7 JULY 2016

I-WOM TM TMS Plus?+o0Ah1AT a %A-fl h'P-tw'* (ehb) Chartered Certified Accountants (UK)?'ft' o ?&4,+(" (h*.&A') Authorized Auditors (Ethiopia)k.h. 011 - 662 12 60! 011 6 18 0638 Tel. 0118961752

4-hi) 011 662 12 70 Mob. 0911 229425/0930034356/57Y.4. . 110690 P.O. Box - 110690 e-mail [email protected]

MA M AfA'1 ?Lk,? Addis Ababa-Ethiopia

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I IT * usChartered Certified Accountants (UK) and Authorised Auditors (Ethiopia)Tel. 251-011 6180638/011-8961751/52 Mob. 0911 229425 /0930 034356/0930 034357/0913 135454/ Fax 251-011 6621270/60

E-mail:- [email protected] /[email protected] P.O.Box 110690 Addis Ababa - Ethiopia

INDEPENDENT AUDITORS' REPORT ON THE ACCOUNTS OF THEMINISTRY OF AGRICULTURE AND NATURAL RESOURCES -I SUSTAINABLE LAND MANAGEMENT PROJECT (SLMP II) IDA CREDITNo.53180-ET, GEF GRANT No.TF 15868, LDCF GRANT No. 15869 and MDTFGRANT No. 15838

We have audited the accompanying financial statements of Ministry of Agriculture andNatural Resources - Sustainable Land Management Project (SLMP II) IDA Credit 53180-ET,GEF Grant TF15868, LDCF Grant No.15869 and MDTF Grant No. 15838 set out on pages 3to 10, which have been prepared under the historical cost convention and in accordance withthe accounting policies specified on page 6.

Managements' Responsibility for the Financial Statements

The project's Management is responsible for the preparation and fair presentation of thesefinancial statements in accordance with International Financial Reporting Standards, and forsuch internal control as management determines is necessary to enable the preparation offinancial statements that are free from material misstatement, whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit.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 toobtain reasonable assurance about whether the financial statements are free from materialmisstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor's

judgment, including the assessment of the risks of material misstatement of the financialstatements, whether due to fraud or error. In making those risk assessments, the auditorconsiders internal control relevant to the entity's preparation and fair 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 effectiveness of theentity's internal control. An audit also includes evaluating the appropriateness of accounting

policies used and the reasonableness of accounting estimates made by management, as wellas evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion, the financial statements together with the notes forming part thereof presentfairly, in all material respects the financial position of Ministry of Agriculture and NaturalResources - Sustainable Land Management Project (SLMP II) financed under IDA Credit53180-ET, GEF Grant TF15868, LDCF Grant No.15869 and MDTF Grant No.15838 as at 7July 2016 and of its sources and u ear then ended in accordance withInternational Financial Reportd agreement with the recordsmaintained by the project.

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I In addition, with respect to Interim Financial Reports submitted during the year ended 7 July

2016, in our opinion.

* the reports, together with the procedures and internal controls involved in

their preparation, can be relied upon to support the relevant withdrawals; and

* Expenditures are eligible for financing under IDA Credit 53180-ET, GEFIGrant TF - nt No.15869 and MDTF Grant No.15838.-% 'OL Accouflta

TMS Addis AbabaCha ered Certi editS§ 6 January 2017Authorized Auditors

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MINISTRY OF AGRICULTURE AND NATURAL RESOURCESSUSTAINABLE LAND MANAGEMENT PROJECT (SLMP II)IDA LOAN No.53180-ET , GEF GRANT No. TF15868, LDCF GRANT No. 15869AND MDTF GRANT No. 15838BALANCE SHEETAS AT 7 JULY 2016

Currency: Ethiopian Birr

CURRENT ASSETSNotes 2015

Receivables 3 77,644,036.37 71.943.013Cash on hand and at bank 4 12,284,080.57 68.552,483

89,928,116.94 140.495,495

CURRENT LIABILITIES

Creditors 5 2,236,004.74 511.138

NET CURRENT ASSETS 87,692,112.20 139.984,358

REPRESENTED BY:

Fund balance 6 87,692,112.20 139.984,358

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MINISTRY OF AGRICULTURE AND NATURAL RESOURCESSUSTAINABLE LAND MANAGEMENT PROJECT (SLMP II)IDA LOAN No.53180-ET , GEF GRANT No. TF15868, LDCF GRANT No. 15869AND MDTF GRANT No. 15838STATEMENT OF SOURCE AND USES OF FUNDSFOR THE YEAR ENDED 7 JULY 2016

Currency: Ethiopian BirrNotes

SOURCE OF FUND2015

IDA Loan 286,956,017.31 238.323.899GEF Grant 46,262,426.55 40.819.740LDCF Grant 27,883,001.49 40,819,740MDTF Grant 188,111,703.50 66,876,155

549,213,148.85 386.839.534Government Grant 11,154,792.19 10.975.318Gain on foreign exchange 1,773,696.70 2,761,918

562,141,637.74 400,576,770

PROGRAMME EXPENDITURE

Integrated water shed 7 393,526,744.94 298,016,872Capacity building 8 90,816,794.80 75.598.679Rural land administration 9 37,287,839.26 25.141.169Project management 10 92,802,504.18 59,670,174

614,433,883.18 458,426,893I DEFICIT OF INCOME OVER EXPENDITURE (52,292,245.44) (57,850,123)

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MINISTRY OF AGRICULTURE AND NATURAL RESOURCESSUSTAINABLE LAND MANAGEMENT PROJECT (SLMP II)IDA LOAN No.53180-ET, GEF GRANT No. TF15868, LDCF GRANT No. 15869AND MDTF GRANT No. 15838NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 7 JULY 2016

Currency: Ethiopian Birr1. BACKGROUND

The objective of the project is to reduce land degradation and improve land productivity in selectedwatersheds in targeted regions. The project consists of the following parts.

Part A: Integrated Watershed and Land ManagementScaling up and adoption of appropriate sustainable land and water management technologiesand practices by smallholder farmers and communities in selected watersheds and woredas.

Part B: Institutional Strengthening, Capacity Development and Knowledge Generationand ManagementI Strengthening and enhancing capacity at the institutional level and building relevant skillsand knowledge of key stakeholders including the Government agencies, research organizationsand academia involved in the sustainable management of natural resources, as well as the

private sector, community leaders and smallholder farmers.

Part C: Rural Land Administration, Certification and Land use

Improvement of tenure security of smallholder farmers through support of the ongoingprogram of the government providing land certificates to landholders, by enhancing ruralland certification and administration and local level participatory land use planning atwatersheds or kebeles.

Part D: Project ManagementProvision of technical assistance and operating costs.

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Currency: Ethiopian Birr

2. ACCOUNTING POLICIES

The principal accounting policies adopted by the project, are as stated bellow:-

2.1 Basis of preparationThese financial statements have been prepared in accordance with the Ethiopian Government's Manualof the Federal Accounting System based on a modified cash basis of accounting.

2.2 Basis of accountingCash basis of accounting is used in matching the source and expenditure of fund with a double entryaccounting system.

2.3 CurrencyThese financial statements are presented in Birr. Transaction in foreign currency are translated in to Birrat the approximate rate of exchange prevailing at the date of transaction. Cash balances denominated inforeign currencies are translated in to Birr at the exchange rates ruling at the balance sheet date.The closing rate as at 07 July 2016 was Birr 21.8308 for a USD.

2.4 Fixed assetsFixed assets are treated as project expenditure at the time of purchase without applying the rule ofdepreciation.

2.5 Income and expendituresCollection are recorded when actually received and expenditure are recognized when payments areeffected.

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Currency: Ethiopian Birr3. RECEIVABLES

2015

Project advance 65,101,754.62 71.901.996Staff advance 47,060.86 41,016Sundry debtors 12,492,446.87Purchase advance 2,774.02 -

77,644,036.37 71.943,013

4.CASH ON HAND AND AT BANK

USD Account 11,151,943.27 65,446,431BIRR Account 732,737.30 3,106,052Cash on hand 399,400.00 -

12,284,080.57 68,552,483

5. CREDITORS

Sundry creditors 72,972.66 483,934Income tax payable 12,222.67 1,763VAT Payable 205,156.46 24.279Withholding tax payable 23,217.75 1.161Pension payable 4,050.00 -

Provident fund 1,039.50Payable to Ethiopian Gov't (note 5.1 below) 1,917,345.70 -

2,236,004.74 511.138

5.1. The balance repressentes expenditures paid from the Goverenement budget in Tigray Region.

6. FUND BALANCE

Balance brought forward 139,984,357.64 197.834,481

Add: Excess of expenditure over income (52,292,245.44) (57,850.123)87,692,112.20 139.984.358

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Currency: Ethiopian Birr7. INTEGRATED WATER SHED

2015Vehicles, plant and machinery 21,697,124.45Fuel and lubricants 215,407.40 72,182Other materials 1,667.92 1-555Preview -224,802Repair and maintenance 370.95 509Local training 230,494.78 995.970

Regional expenditure 358,046,230.02 296.72 1.854Loading and unloading 4,843.29Perdiem and transport 811,468.98Fees and charges 47,912.54Wage 12,070.00Contracted proffessional service 12,459,154.61 -

393,526,744.94 298,016,8728. CAPACITY BUILDING

Local training 5,871,962.14 5.102,906Foreign training 979,006.78 2,015.717

Regional expenditure 73,918,492.12 68.437,291Car rent 248,625.00Knowledge generation and management 9,798,708.76Preview 24.02 7Transportation 7.128Advertisement 1,350Bank charge - 10,260

90,816,794.80 75.598.679

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9MINISTRY OF AGRICULTURE AND NATURAL RESOURCESSUSTAINABLE LAND MANAGEMENT PROJECT (SLMP II)IDA LOAN No.53180-ET, GEF GRANT No. TF15868, LDCF GRANT No. 15869AND MDTF GRANT No. 15838NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 07 JULY 2016

Currency: Ethiopian Birr9. RURAL LAND ADMINSRTATION 2015

Vehicles, plant and machinery 543,789.00Training 499,747.61Wages to casual staff - 3.780Fuel and lubricants 18,946.34 44.507Travel and perdiem 109,081.00Preview 251,587Transportation 8,380Repair and maintenance 760Contracted professional service 1,162,213.73 4,031,9 16Bank charge 300Regional expenditure 34,954,061.58 20.799.940

37,287,839.26 25,141,169

10.PROJECT MANAGEMENTSalary 3,914,139.01 2.669.182Wages to casual staff 13.500Uniform - 19.818Office supplies 536,233.33 404.393Printing 27,823.30 83,287Fuel and lubricants 306,008.89 636,072Preview 778,056Transportation 188,418.00 190,941Entertainment 22,963.82 119.383Repair and maintenance 1,013,986.41 744.027Contracted professional service 635,719.60 413.794Advertisement 186,513.00 282.010Insurance 164,118.82 9,627Loading unloading 3,346Fees and charges 9TMS " 990,997.72 1,1 1,014Telephone k/* 67,122.89 8778Local training 4o 1,099,234.79 951.41)Foreign training r 13,431.00 111.763Purchase of fixed assets 449,725.87 1.186.225

Regional expenditure 81,446,848.48 49.544,969Foreign institution contributions -08,579Perdiem 739,219.25 _

92,802,504.18 590.17.04

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Currency: Ethiopian BirrWithdrawalApplication Equivalent in

Number USD Birr

SLMP II IFR 07 12,146,196.95 254,503,938.04SLMP 11 IFR 09 13,487,409.83 288,584,165.04

25,633,606.78 543,088,103.08

Direct payment 286,968.00 6,125,045.77

Total 25,920,574.78 549,213,148.85

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Annex -I

MINISTRY OF AGRICULTURE AND NATURAL RESOURCE -SUSTAINABLE LANDMANAGEMENT PROJECT (SLMPII)LIST OF MATERIAL PURCHASEDFOR THE YEAR ENDED 07 JULY 2016

Sr Date of GRNNo Type of Asset purchase Qty Unit price Cost of Asset Number

1 Toyota Tsusho Corporation 18/6/16 315 175,748.00 55,360,620.00 2722122 Wind Shield 27/6/16 315 891.25 280,743.75 2722133 Helmet 27/6/16 315 764.01 240,663.15 2722134 Mailbox 27/6/16 315 949.37 299,051.55 2722135 Dell 7020 Desk top CORIS 10/5/2016 4 22,930.00 91,720.00 1201836 Stapler Medium 10/5/2016 5 390.00 1,950.00 1201837 Puncher Medium 10/5/2016 5 190.00 950.00 1201838 Digital Photo Camera 10/5/2016 11 3,500.00 38,500.00 164933

TV Stand 102*40*68*cm9 MDF+Glass+Metal 10/5/2016 1 4,600.00 4,600.00 120205

10 Hitach refrigerator R-T240EUNSLS 1 10,994.00 10,994.00 120203

1 I Samsung TV CS 21K 40 1 15,500.00 15,500.00 12020412 Hard Disk 142 3,829.50 543,789.00 120219

13 Sony Camera 20.1 1 2,300.00 2,300.00 12011614 Camera Memory 8 GB 1 180.00 180.00 12011615 Galaxy 56 EDGE Mobil Apparatus 23/11/15 1 17,250.00 17,250.00 164918

16 Sony LCD Projector DX -102 9/1/2016 1 15,525.00 15,525.00 16492117 Lenovo Er 431 Laptop 1 26,980.00 26,980.00 12015318 Calculator DJ -120 2 480.00 960.00 164934

19 Workstation 7 37,680.37 263,762.5920 Leather Chair 1 10,335.05 10,335.0521 Managerial table 1 19,500.00 19,500.0022 Three Door Shelf 5 8,500.00 42,499.9823 Medium Chair W/ARM-YS402(Back) 15 2,702.50 40,537.50

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Annex- II

I MINISTRY OF AGRICULTURE AND NATURAL RESOURCESSUSTAINABLE LAND MANAGEMENT PROJECT (SLMP II)IDA LOAN No.53180-ET, GEF GRANT No. TF15868, LDCF GRANT No. 15869AND MDTF GRANT No. 15838LIST OF VISITED IMPLEMENTING AGENCIES AND WOREDASFOR THE YEAR ENDED 7 JULY 2016

ContactRegions Name of woredas Name of Bureaus Person

Tigray RPCU Regional SLM CU Gebreyohanes

EndamokeniGanta afeshumAferhome

Amhara RPCU Co-ordination Unit Tilahun

Fagita

Laygaint

Gagusa shekuda

Wallda

Jabitekenan

Mekit

GonjikollaBasokbenGozamenYilemana Densa

Oromia Welemera MeseretDegemAbotaKuyuEjereKersaAberga 4 C*ff9dWenchiMalimuJarso

g AjaraSebeta e.Auditors

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Annex- II

MINISTRY OF AGRICULTURE AND NATURAL RESOURCESSUSTAINABLE LAND MANAGEMENT PROJECT (SLMP II)IDA LOAN No.53180-ET, GEF GRANT No. TF15868, LDCF GRANT No. 15869AND MDTF GRANT No. 15838LIST OF VISITED IMPLEMENTING AGENCIES AND WOREDASFOR THE YEAR ENDED 7 JULY 2016

SNNP RPCU Co-ordination Unit AyderAngechaSoroMierab AzernetGumerTenbaroBoloso BombeKindo didaye

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SUSTAINABLE LAND MANAGEMENT PROJECT …documents.worldbank.org/curated/en/648751485854005795/...I 2...

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