BAKER TILLY LIBERIA FORESTRY DEVELOPMENT AUTHORITY Independent Auditors' Report and Financial Statements for the year ended June 30, 2014 Biodiversity Conservative through Expanding the Protected Area Network Project (EXPAN) Grant No. TF097657 Ministry of Finance Project Financial Management Unit an independent member of BAKERTILLY Assurance j Tax Advisory I NT ERN ATI10NAL EXPAN Grant No. TF097657BAETIL . BAKER TILLY Independent Auditors' Report.andFinanci.d Statements LI BERIA TABLE OF CONTENTS CONTENTS PAGE GENERAL INFORMATION 1 AUDITORS' REPORT 2 STATEMENT OF RECEIPTS & PAYMENT 4 STATEMENT OF FUND BALANCE & CASH STATUS 5 STATEMENT OF FINANCIAL POSITION 6 NOTES TO THE FINANCIAL STATEMENTS 7 AUDITORS' REPORT ON STATEMENTS OF EXPENDITURE 12 SUMMARY OF STATEMENTS OF EXPENDITURE 14 AUDITORS' REPORT ON DESIGNATED ACCOUNT 18 PROJECT DESINATED ACCOUNTS RECONCILIATION 19 MANAGEMENT LETTER 20 EXPAN Grant No. TF097657 -w Independlent Auditors'Reportmnd Fininci.il Srtremnts BAKER TILLY For thec vvar ended.1jime 30, 2014 LIBERIA GENERAL INFORMATION PROJECT MANAGEMENT TEAM Project Financial Management Unit: Dr. Christopher Sokpor, Unit Manager Project Financial Management Unit (PFMU) Dr. Salia Hussein Senior Project Accountant Subozu Kollie Senior Assistant Project Internal Auditor Registered Office: Project Financial Management Unit (PFMU) Ministry of Finance Broad and Mechlin Street Liberia Project Implementation Unit: Jerry Yonmah Project Coordinator Forestry Development Authority (FDA) Lorpu Sangai Finance Office Project Location: Forestry Development Authority (FDA) Paynesville, Liberia Bankers: United Bank for Africa (UBA) P .O. Box 4523 Broad Street Monrovia Auditors: Baker Tilly Liberia Limited Cetified Public Accountants Kings Plaza 2n1 - 4th Floors Broad Street Monrovia 1 BAKER TILLY LIBERIA King Plaza 21d - 4th Floors Broad Street P. O. Box 10-0011 1000 Monrovia 10 Liberia Tel.: +231 (0) 886 514 965 Fax: + 1 905 469 0986 Email: info@bakertillyliberia.com Website: www.bakertillyliberia.com AUDITORS' REPORT To The Management, Partner and Donors Forestry Development Authority We have audited the accompanying financial statements of GEF/MSP Grant NO. TF 097657 comprising the project statement of financial position as at June 30, 2014 and 2013 and the related Statements of Receipts and Payment and Statement of Changes in Fund Balance & Cash Status for the years then ended. These financial statements are prepared in accordance with the accounting policies and other explanatory notes as set out on pages 7 to 11. Management's Responsibility The Project's management is responsible for the preparation and fair presentation of these Financial Statements in accordance with Cash Basis International Public Sector Accounting Standards (IPSAS) and in the manner required by the Project Grant Agreement. This responsibility includes: designing, implementing, and maintaining internal control relevant to the preparation and fair presentation of the Financial Statements that are free from material misstatement, whether due to fraud or error. Auditor's 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. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates (if any) made by management as well 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 basis for our audit opinion. Partners: G Fonderson (Executive Chairman). T. Josenh (Managing Partner) An independent member of Baker Tilly International BAKER TILLY LIBERIA Opinion In our opinion, the financial statements give a true and fair view of GEF/MSP Grant no. TF097657 as at June 30, 2014 in accordance vith International Public Sector Accounting Standards (IPSAS). (Certified Pub cAccountants) Monrovia 3 E'XPAN Grwnt No. TF097657 iulependent Audlitors' Report ud Finnici;d Statements BAKER TIL LY For the _ycar endedt1jue30, 2014 LIBERIA STATEMENT OF RECEIPTS AND PAYMENTS In United States Dollars Notes 2014 2013 Receipts Opening Balance 51,359 117,932 GEF/MSP Grant received 4 207,485 360,106 Others 5 (3,600) 3,600 Total Receipt 255244 Payment Goods Works, Training &Cons. Serv. 6 75,961 390,235 Operating costs 7 75,329 40,044 Total Payment Excess of receipt over payment 51359 The notes on pages 7 to 1I are integral part of these projectJinandal repots. 4 EXPAN Grant No. TF097657 Independent Auditors'Report and Financial Statements BAKER TILLY For the year endedjune 30, 2014 LIBERIA STATEMENTS OF FUND BALANCE AND CASH STATUS In United States Dollars Notes 2014 2013 A. FUND BALANCE: Balance of Project Fund 51,359 117,932 Add: Total Receipts during the period 4 207,485 360,106 Add: Others 5 (3,600) 3,600 Total fund available for operations 25244 481,38 Less: Total payments during the period 15120 43.279 Total Payment Balance of project funds at the end of the year 19 -4 B. CASH STATUS: Cash on hand Cash at bank 8 10,94 103,359 Difference between A and B The notes on page 7 to 11 are integral part othexe projectfinancial reports. 5 EXPAN Granrt No. TF097657 Independent Auditors'Reportand Financhd Statements BAKER TILLY For the year ended_tune 30, 2014 LIBERIA STATEMENT OF FINANCIAL POSITION AS AT JUNE 30,2014 In United States Dollars Notes 2014 2013 ASSETS Cash and cash equivalent 8 1394 51,359 Total Assets FUND BALANCE GEF/MSP Grant a133 Accumulated Fund Balance The financial statements on pages 4 to 6 were approved by the Project Management Team on 2014 and were signed on their behalf by: Christopher Sokpo Jer * -Yanmah PFMU Manager Project Coordinator-EXPAN The notes on pages 7 to 11 are integral pan oj these projetfinancial reports. 6 EXPAN Grmnt No. TF0976357 - Independent Auditors' Report and Financial Statemients BAVRTLL a AKER, TILLY For the yea-r endedfune 30, 2014 LIBERIA NOTES TO FINANCIAL STATEMENTS 1. Background and Information of the Project On 15 March 2011, the International Bank for Reconstruction and Development (IBRD), a World Bank Representative, acting as an Implementing Agency of the Global Environment Facility (GEF), signed a Grant Agreement (GEF/MSP Grant No. TF097657) with the Government of Liberia to provide US$950,000 for the following activities: 1. strengthening the Forestry Development Authority Conversation Department (FDA-CD); ii. creation of New Protected Area (PAs) and Community Mapping; iii. development of Community Livelihood Program around Protected Areas (PAs); and iv. project Management The aim of the project is to contribute to the conservation of Liberia's biodiversity, providing better representation of ecosystems within Liberia's current protected area network and enabling active conservation and sustainable use of biodiversitv with local communities. 2. Use of Grant Proceeds The table below sets out the categories of items to be financed out of the grant proceeds, the allocation of the amounts of the grant to each category and the percentage of expenditures for items to be financed in each category: Amount of Grant allocated % of expressed in expenditure Category US$ to be financed Goods, works and consultants' services under the project 860,000 100 Operating costs 90,000 100 Total All categories of expenditure shown in these financial statements are fully financed by the World Bank through the International Bank for Reconstruction and Development (IBRD). 7 EXPAN Grant No. TFO976.57 Independent Auditors' Reportand Financial Statements BAKER TILLY For the yca-r endedfune 30,20-14 LIBE RIA NOTES TO FINANCIAL STATEMENTS (continued) 3. THE AUDIT \We have been engaged by the Forestry Development Authority to audit the financial statements, on GEF/MSP Grant No. TF097657, prepared by the PFMU under the Ministry of Finance in accordance with the terms of reference annexed to our contract. 3.1 Audit Objectives The aim of the audit is to certify and express an opinion on the following: i. the project financial statements and related notes to these financial statements. ii. the statements of expenditure (SOE) - for the year ended 30 June 2014; and iii. the Statement of Designated Account as at 30 June 2014. 3.2 Audit Scope The scope of this audit covered the expenditure stated in the Statements of Expenditure of the Project for the year ended 30 June 2014. This includes payments from funds transferred by IBRD for the project and direct payments processed by the IBRD at the request of the FDA. 3.3 Audit Process and Methodology We assessed the risks of material errors or misstatements in the expenditure stated in the SOE, whether caused by error or fraud. Where necessary we designed and performed further audit procedures to address risks identified. This work involved an assessment of the risks that: i. the SOE is not reliable i.e. that it does not present, in all material respects, the actual expenditure incurred for the Project in conformity with applicable Contractual Conditions; ii. the Project funds provided by the IBRD have not, in all material respects, been used in conformity with applicable Contractual Conditions; iii. fraud and irregularities can occur or have occurred which have an impact on Project expenditure and which are not detected and corrected in a timely manncr, and iv. the relevant Contractual Conditions of the Project are not complied with 8 EXPAN Grant No, TF097657- Independent Auditors' Report and Financiad Starents BAKER TILLY For the year ended]une30, 2014 LIBERIA NOTES TO FINANCIAL STATEMENTS (continued) 4. Significant Accounting Policies Basis of accounting The financial statements have been prepared in accordance with the Cash Basis International Public Sector Accounting Standards (IPSAS) and in the manner required by the Project Grant Agreement as required by the World Bank's Operating Policies and Procedures and PFMU's Financial Management manual. This implies that all expenditures are expensed whether they are revenue or capital in nature and income is recognized when funds are received from the World Bank. Reporting currency Financial reports have been presented in United States Dollars. Transactions denominated in other currencies are translated into United States Dollars and recorded at the rate of exchange ruling at the date of transactions. Balances denominated in other currencies are translated into United States Dollars at the rate of exchange prevailing on the reporting date. Differences arising from the translation are reported in the statement of receipts and payments. Goods and works Goods and works (fixed assets) are expensed on acquisition, but a comprehensive fixed assets register is maintained to account for and monitor those assets. Grant Grant from GEF through World Bank is held in a deferred income account when received and are only recognized in the Project's income statement when utilized. Grant Receipt 30 June 30 June In United States Dollars 2014 2013 EXPAN/MOF/003 (4th September 2012) 33,048 EXPAN/MOF/004 (15th October 2012) 123,143 EXPAN/MOF/005 (24th October 2012) 136,000 EXPAN/MOF/006 (14h December 2012) 66,889 EXPAN/MOF/007 (14th February 2013) 1,027 EXPAN/MOF/008 (24th September 2013) 48,214 - EXPAN/MOF/009 (4th December 2013) 74,439 - EXPAN/MOF/010 (16th January 2014) 11,064 - EXPAN/MOF/01 1 (19th March 2014) 10,740 - EXPAN /MOF/0 12 (9h May 2014) 63,028 - 9360106 9 EXPANCGranti'No. TF097657 Independent Auidito)rs'Reportand Fin.anci.d Statements BAKER TILLY For the Ycar ended]urne 30, 2014 LIBERIA NOTES TO FINANCIAL STATEMENT (continued) In United States Dollar 5. Others The amount of US$3,600 included in the financial statement as part of project receipt represents a refund of - the project coordinator's salary for the period under review 6. Goods, Works, Training & Consultancy Service 30 June 30 June 2014 2013 Consultant Fees 36,563 7,600 Goods, Works and Training 7. Operating cost Vehicle operating and maintenance 1,955 940 Fuel 28,451 - DSA, hotel accommodation 13,875 7,455 Air fare, vehicles hire 8,020 8,538 Utilities 10,160 6,334 Refreshment 4,760 Advertising and Publication - 2,250 Audit Fees 2,837 5,674 Staff support cost - 600 Bank Charges 2,271 2,253 Rent 3000 6000 7324 8. Cash and cash equivalents Bank balance 103,955 10 EXPAN Grant No. TF0976-57 InidependetAuiditors'Report aind FinanicidStatements BAKER TILLY For the year ended june 30, 2014LIE A LIBERIA NOTES TO FINANCIAL STATEMENT (contnued) In United States Dollarr 8. Cash receipts from IDA grant 30 June 30 June 2014 2013 IDA grant 207,485 360,106 9. Cash paid Goods Works, Training &Consultancy Service 75,961 390,235 Operating cost 40,4 151290 BAKER TILLY LIBERIA King Plaza 2n1 - 41h Floors Broad Street P. O. Box 10-0011 1000 Monrovia 10 Liberia Tel.: +231 (0) 886 514 965 Fax: + 1 905 469 0986 Email: info@bakertillyliberia.com Website: www.bakertillyliberia.con AUDITORS' REPORT ON STATEMENTS OF EXPENDITURE To The Management, Partner and Donors Forestry Development Authority We have audited the Statements of Expenditure (SOE) of GEF/MSP Grant No. TF097657 for the year ended 30 June 2014 submitted to the World Bank to request for fund and in support of application for reimbursement of expenditure in accordance with the Grant Agreement dated 15 March 2011 as set out on pages 14 to 17. Management's Responsibility The Project's management is responsible for the preparation and the fair presentation of these Statements of Expenditure in accordance with Cash Basis International Public Sector Accounting Standards (IPSAS) and in the manner required by the Project Grant Agreement. This responsibility includes: designing, implementing, and maintaining internal control relevant to the preparation and fair presentation of the Financial Statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express an opinion on these Statements of Expenditure based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply vith ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates (if any) made by management as well 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 basis for our audit opinion. Partners: G. Fonderson (Executive Chairman). T. Josech (Managing Partner) An independent member of Baker Tilly International BAKER TILLY LIBERIA Opinion In our opinion, the Statements of Expenditure, along with the supporting summary sheets and information submitted are reliable and in respect of withdrawals for the purpose of the program in accordance with the provisions of GEF/MSP Grant No. TF 097657. (Certified Public Accountants) Monrovia 13 EXPAN Grant No. TF097657 I Independent Auditors' Report ndFinancid Stateets -0 BAKER TIL LY For the year endedfune 30, 2014 LIBERIA SUMMARY OF STATEMENT OF EXPENDITURE June 30 In United States Dolary 2014 a. WITHDRAWAL APPLICATION 1 Borrower reference: EXPAN/MOF/008 Opening Balance at June 30 2013 51,359 IDA Grant 1 102,261 Second statement of expenditure 1 (48,214) Prior year withdrawal application 20 Represented in cash balance at September 30 2013 105,386 Summary Statement of expenditure In United States Dollarn Category Description 1 Goods, Wrks, TR & Cons. Serv. 43,609 2 Operating Cost 4,605 Total b. WITHDRAWAL APPLICATION 2 Borrower reference: EXPAN/MOF/009 Date: October 31, 2013 Unspent Balance at September 30 2013 105,386 IDA Grant 2 48,214 Second statement of expenditure (IDA Grant 2) (74,439) Proceed from Sale of bid document (3,600) Represented in cash balance at October 31, 2013 75g% Summary Statement of expenditure Category Description 1 Goods, Wrks, TR & Cons. Serv. 73,922 2 Operating Cost 517 Total 74A42 14 EXPAN Grant No. TF097657 Independent Auditors'Report and Financiad Statemients BAKER TIL LY For the year endedfine 30, 2014LIE A LIBERIA Statement of expenditure (continued) C. WITHDRAWAL APPLICATION 3 Borrower reference: EXPAN/MOF/010 Date: December 31, 2013 In United States Dollars Unspent amount at October 31, 2013 75,561 IDA Grant 3 74,439 Second statement of expenditure (IDA Grant 3) (11,064) Represented in cash balance at December 31, 2013 13,936 Statement of expenditure (continued) June 30 2014 In United States Dollars Category Description 1 Goods, Wrks, TR & Cons. Serv. 10,456 2 Operating Cost 608 Total d. WITHDRAWAL APPLICATION 4 Borrower reference: EXPAN/MOF/011 Date: February 28, 2014 In United States Dollars Unspent amount at October 31, 2013 138,936 IDA Grant 4 11,064 Statement of expenditure (IDA Grant 4) (10,740) Represented in cash balance at February 28, 2014 15 EXPAN Grant -No. TFO976'57 independent Auditors'Report and Financid Starenwents BAKER TILLY Mor the year ended fune 30, 2014 L ER ________________________LIBERIA Statement of expenditure (continued) Summary Statement of expenditure June 30 2014 Category Description 1 Goods, Wrks, TR & Cons. Serv. 10,617 2 Operating Cost 123 Total MM e. WITHDRAWAL APPLICATION 5 Borrower reference: EXPAN/MOF/012 Date: April 30, 2014 In United States Dollars Unspent amount at February 28, 2014 139,260 IDA Grant 5 10,740 Statement of Expenditure (IDA Grant 5) 46,028) Represented in cash balance at April 30, 2014 Summary Statement of expenditure Summary Statement of expenditure Category Description 1 Goods, Wrks, TR & Cons. Serv. 62,827 2 Operating Cost 201 Total 16 -EXPAN Grant N'o. TF097657 A dependent Auditors'Rtport wnd Financijl Statenwars BAKER TILLY &or the year ended junc 30, 2014LlBRI LIBERIA Statement of expenditure (continued) f. WITHDRAWAL APPLICATION 6 Borrower reference: EXPAN/MOF/013 Date: June 30, 2014 In United States Dollars Unspent amount at February 28, 2014 86,972 IDA Grant 6 63,028 Statement of Expenditure (IDA Grant 6) (45,446) Outstanding Expenditure (600) Represented in cash balance at June 30, 2014 Summary Statement of expenditure Category Description 1 Goods, Wrks, TR & Cons. Serv. 44,608 2 Operating Cost 838 Total 17