- DO The Government of Sierra Leone Public Sector Reform Unit Pay and Performance Project Financial Statements For the year ended 31 December 2015 CONTENTS PAGE General Information 1 Background Information on the Project 2-4 Management's Responsibility Statement 5 Independent Auditors' Report 6 Statement of Resources and Expenditure 7-8 Statement of Income and Expenditure 9 Statement of Financial Position 10 Statement of Cashflow 11 Notes to the Financial Statements 12 - 13 1 The Government of Sierra Leone Public Sector Reform Unit Pay and Performance Project Financial Statements For the year ended 31 December 2015 GENERAL INFORMATION Office Public Sector Reform Unit 8 Wesley Street Freetown Project Coordinator Ms Sidratu Koroma - Director Public Sector Reform Unit Implementing Agencies HRMO, PSC and Ministry of Finance and Economic Development Project Accountant Accountant General Accountant General's Department Ministry of Finance and Economic Development George Street Freetown Bankers Bank of Sierra Leone Gloucester Street Freetown Auditors BDO Regent House 12 Wilberforce Street Freetown The Government of Sierra Leone Public Sector Reform Unit Pay and Performance Project Financial Statements For the year ended 31 December 2015 BACKGROUND INFORMATION ON THE PROJECT The Pay and Performance Project is a USD 17.0 Million World Bank support programme to public sector reforms in Sierra Leone, being implemented from 2012 to 2015. It's objectives are:- 1. Undertaking pay reforms aimed at improving the competitiveness of the Civil Service, thereby attracting, motivating an retaining competent skills for effective service delivery. 2. Rationalising staffing in the Civil Service by filling existing critical skills gaps through merit-based competitive recruitment, while minimising the numbers of redundant posts and personnel in the service. 3. Minimising waste and inefficiencies by improving the integrity of the payroll and personnel records; harmonising and strengthening pay administration and management systems, and streamlining payroll management procedures, processes and accountability mechanisms. 4. Building the required capacity for driving reforms and effectively managing performance in the Civil Service. 5. Introducing and implementing a robust performance management system that links rewards to productivity. 6. Implementing comprehensive training and staff development programmes aimed at changing work ethics and culture while continuously upgrading capacities and skills in the public service. Project Components The Pay and Performance Project comprises of two main components as follows: Component 1: Support to the Government of Sierra Leone (GoSL's) Public Sector Reform Programme, specifically Pay Reform, Recruitment and Staffing, and Performance Management. Pay reform Implementing Partner: HRMO/MoFED This supports review and implementation of the GoSL's strategy for reforming public sector pay. It recognises that remuneration should be commensurate with the responsibilities of the job, which will require that a comprehensive job evaluation and grading exercise be completed before a competitive pay is introduced in a new pay structure. In addition, the strategy envisages significant decompression of the pay structure, which will allow professionals and managers to be remunerated more competitively, while will allow professionals and managers to be remunerated more competitively, and maintaining an affordable and sustainable public service wage bill in relation to the GoSL's recurrent revenues. The objective of this sub-component are: a) to attract and retain key professional and managerial staff; and b) to motivate all civil servants to perform their jobs to an acceptable standard. 2 The Government of Sierra Leone Public Sector Reform Unit Pay and Performance Project Financial Statements For the year ended 31 December 2015 BACKGROUND INFORMATION ON THE PROJECT (Contd) Three results are sought to achieve these objectives: (a) civil servants are paid more equitably and competitively; (b) the authority to change personnel records and payroll is vested in, and restricted to HRMO (an audit trail will be maintained); (c) the human resource database and the payroll are directly linked. Recruitment and staffing (Implementing Partner: PSC) The objective of this sub-component is to create a capable civil service of the right size and job composition to deliver its core functions assigned by the Government. Four results are sought to achieve this objective: (a) priority vacancies in the GoSL's annual recruitment plans are filled; (b) recruitments are based on appropriate open, competitive and merit-based procedures; (c) promotions are based on open, competitive and merit-based promotion procedures; (d) vacancies are filled within three months. Performance management and accountability (Implementing Partner: HRMO) The objectives of the performance management component are to: (a) improve the performance and productivity of ministries and individual civil servants; (b) increase citizens' trust and confidence in the government; (c) strengthen the accountability of ministries to the executive and citizens. Three results are sought to achieve these objectives: (a) annual staff performance appraisal reports are of an acceptable quality; (b) annual performance reports of civil service managers on performance contracts are of an acceptable quality; (c) ministries' performance is evaluated jointly by the GoSL and non-state actors. Component 2: Technical Assistance (Implementing Partner: PSRU) The Technical Assistance (TA) component will complement the first component by financing selected inputs for which the GoSL has requested more intensive supervision by the Association or for which resources may not be readily available in the GoSL's budget. This component will finance goods, consultancy services, non-consulting services, monitoring and evaluation, training, study tours and workshops. Specific areas identified for financing under this component include: Sub-component 2.1: Strategic Communications Program: Given the importance of effective and continuous information sharing on the reform activities within and outside the government, the GoSL proposes to develop and implement and strategic communication program. The Government of Sierra Leone Public Sector Reform Unit Pay and Performance Project Financial Statements For the year ended 31 December 2015 BACKGROUND INFORMATION ON THE PROJECT (Contd) Subcomponent 2.2: Enhancing Social Accountability The GoSL is already implementing measures to enhance the accountability of the public services. This component will be used to consolidate and improve the quality of some of these ongoing initiatives and to support the implementation of some new ones, including public disclosure PSR-related information, a complaint handling mechanism for recruitment, "Meet the Public" forums on PSR and Citizen's Charters. Sub-component 2.3: Job Evaluation and Labour Market Survey 1. A consulting firm has been contracted to: (i) conduct a comprehensive job evaluation exercise covering all civil service jobs based on an appropriate factor based scheme; (ii) build skills within the civil service to carry out job analysis and evaluation; (iii) obtain comparative pay data for a select number of civil service benchmark jobs; (iv) examine the future demand and supply of skills in the economy which are needed by the civil service; (v) design (a) new pay structure(s) and a new grading structure for the civil service based on the information from the job evaluation and market survey; (vi) develop and implementation for phasing in the new structure in accordance with priorities and wage bill constraints; (vii) prepare administrative, maintenance and appeals procedures; (viii) propose orgainsation and staffing structures to maintain the job evaluation system. Sub-component 2.4: Implementation Support 2. This sub-component will support implementation activities contained within Component 1 to be conducted by the PSRU, HRMO and PSC. Goods and consultancy services would support the immediate needs of new staff in the PSC, the new Performance Management Directorate in the HRMO, the coordination and MEtE responsibilities of the PSRU associated with this project. The PSRU will also engage a procurement specialist on a part-time basis to assist it as the implementing agency for component 2. this sub-component would also support additional consultancies, trainings and workshop as needed. 4 :SK, The Government of Sierra Leone Public Sector Reform Unit Pay and Performance Project Financial Statements For the year ended 31 December 2015 MANAGEMENT'S RESPONSIBILITY STATEMENT Management is responsible for the preparation and presentation of the financial statements, comprising the statement of financial position at 31 December 2015, the statement of income and expenditure, the statement of resources and expenditure and the statement of cashflow for the period then ended and the notes to the financial statements, which include a summary of significant accounting policies and other explanatory notes prepared on the basis of accounting described in note 1 and of such internal control as the director determine is necessary to enable the preparation of financial statement that are free from material misstatement whether due to fraud or error. Approved of the Financial Statements The Financial Statements were approved by Management on ______ 2016 and signed on its behalf by: Director Public Sector Reform Unit 5 The Government of Sierra Leone Public Sector Reform Unit B D O Pay and Performance Project -IB D Financial Statements For the year ended 31 December 2015 AUDITORS' REPORT TO THE MANAGEMENT OF PUBLIC SECTOR REFORM UNIT (PSRU) We have audited the financial statements on pages 7 to 11 which have been prepared under the accounting policies set out on page 12. Respective Responsibilities of the Directors and Auditors The Directors are responsible for the preparation of the financial statements. It is our responsibility to form an independent opinion, based on our audit, and - then report our opinion to you. Basis of Opinion We conducted our audit in accordance with International Standards on Auditing. An audit - includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgements made by the Directors in the preparation of the financial statements, and of whether the accounting policies are appropriate to the Organisation's circumstances, consistently applied and adequately disclosed. We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements. Opinion In our opinion the financial statements give a true and fair view of the state of the project's affairs as at 31 December 2015 and of its results for the year then ended and have been properly prepared in accordance with Generally Accepted Accounting Practices. Freetown Chartered Accountants