Regional Office (Senegal, Cabo Verde, Guinea-Bissau, Mauritania, The Gambia)

                                                                   September 24, 2019


M. Alpha Robison
Managing Director NAWEC
Republic of the Gambia


                     The Gambia Electricity Support Project (P152659)
                  Audit Report for the Fiscal Year Ended 31 December 2018


Dear Mrs. Njie:

       We thank you for submitting the audited Financial Statements for the Electricity Support
Project for the fiscal year ended 31 December, 2018 which were audited by the independent firm
PKF.

        The audit was conducted in accordance with international auditing standards issued by the
International Federation of Accountants (IFAC). The audit reports include the auditor’s opinion
on financial statements and the management letter on internal controls.

Based on our review of the audit reports, we kindly ask you to find below our comments which
focus on the following points:

   •   Audit opinions;
   •   Financial Statements;
   •   Internal controls.

Audit Opinions: The auditor expressed an unqualified opinion (clean opinion) on the financial
statements of the project. According to the auditor, the accompanying financial statements give a
true and fair view of its financial performance and its cash flow for the year then ended in
accordance with International Financial Reporting Standards and have been properly prepared in
accordance with project agreement.

Financial statements: The financial statements comprise the statement of financial position, the
statement of profit or loss, the statement of changes in equity, the statement of Cash flow, the
notes to the financial statements including a summary of significant accounting policies and the
list of assets acquired with project funds. During our review, we noted that the statement of
sources and uses of funds was not included in the set of financial statements. We recommend for
subsequent audits to include a statement of sources and uses of funds in the set of financial
statements.
M. Alpha Robison.                         2                                   September 24, 2019

Internal Control: In the management letter, the auditor has highlighted these following
improvement points and has given some recommendations to strengthen the internal control
system:
    - A budget overrun of 44% was noted on various component of the budget such as 1.1 Kotu
       and Brikima power capacity reinforcement, 1.2 Rehabilitation of the Brikama power
       plant, 3.1 Consultancy services and 3.4 Project implementation support. The auditor
       recommends seeking approval from the World Bank in the event of any deviation from
       the budget;
    - For the replacement of damaged equipment at Kotu power station the bidder did not prove
       the authenticity of the information provided. The auditor recommends to always ensure
       that relevant evidence and qualification criteria are provided;
    - Decision to award contract was not provided to the unsuccessful bidders. The auditor
       recommends that project management ensure that all World Bank regulations are strictly
       adhere to.

The auditor has followed up the status of last year recommendations. We noted that some
recommendations were not implemented such as the preparation and validation of an annual work
plan, the preparation of quarterly progress report and the customization of the accounting software
for financial statements printing.

We recommend that you elaborate an action plan to address these improvement points and
continue to focus on the efficiency and effectiveness of the project’s system of internal controls
as these would be helpful in improving the project’s financial management system and enhance
the quality of its reports. A special attention will be given to the effective implementation of
proposed recommendations during our next supervision mission.



                                           Sincerely,



                                         Chris Trimble
                                       Task Team Leader