The Federal Democratic Republic of Ethiopia Immi2ration, Nationality and Vital Event Agency 'PC / Reff.Nolw wle lw 1/ Date Lt0 j6L Task Team Leader for HSDG (VERA-CRVS Project) World Bank, Africa Region Ethiopia Country Office Addis Ababa Subject: Submission of Annual Audit Report Please find the attached annual audit report of INVEA - Civil Registration & Vital Statistics Project for the year ended July 7, 2019. If you have any questions and comment regarding the report, please don't hesitate to contact us. Sincerely Yours CC: > Ministry of Finance Addis Ababa > Director General office > Audit Directorate INVEA AUDITORS'REPORT & F NANCIAL STATEMENTS IMMIGRATION NATIONALITY & VITAL EVENTS AGENCY CIVIL REGISTRATION & VITAL STATSTICS PROJECT FOR THE YEAR ENDED 7 JULY 2019 Kokeb & Melkamu Chartered Certified Accountants (UK) & Authorized Auditors f 0116 16 69 56 i 09 11 51 61 46, 0911203778 FAX: 0115522688 1 P.O. Box 33645 Addis Ababa, Ethiopia E-mail:kokmelk@ethionet.et IMMIGRATION NATIONALITY AND VITAL EVENTS AGENCY CIVIL REGISTRATION AND VITAL STATISTICS PROJECT FINANCIAL STATEMENTS AND AUDIT REPORT FOR THE YEAR ENDED 7th JULY 2019 TABLE OF CONTENTS Independe nt A ud ito rs' Repor ...................................................................................1-2 The Statem ent of Financial Position............................................................................ 3 The Statem ent of Sources and Uses of Funds .............................................................. 4 The Statem ent of Designated Account- IDA ................................................................. 5 N otes to the Financial Statem ents ....................................................................... 6-8 Reconciliation of Amounts Received by the Program and Funds Disbursed by the W o rld B a n k .................................................................................................................. 9 Use of funds by project component and subcomponents..........................................10 Fixed asset p ro cu re m e nt ........................................................................................... 1 1 M a nage m e nt lette r.......................................................................................... ....1 2-14 Kokeb & M e ltu /\ut It P CrtneIshI Chartrec! Certified Accountants (UK) INDEPENDENT AUDITORS' REPORT ON THEFINANCIAL STATEMENTS OF IMMIGRATION NATIOALITY AND VITAL EVENTS AGENCY CIVIL REGISTRATION AND VITAL STATISTICS (CRVS) FINANCED BY - THE WORLD BANK (CREDT LNO. 609P-ET Opinion We have audited the accompanying financial statements of Immigration Nationality and Vital Events Agency, Civil Registration and Vital Statistics (CRVS) financed by World bank through credit Number 6090-ET, set out on pages 4 to 10, which comprise the statement of financial position as at 7 July 2019 and notes to the financial statements, including a summary of significant accounting policies. In our opinion, the accompanying financial statements present fairly, in all material respects, (or give a true and fair view of) the financial position of the Company as at July 7, 2019, and (of) its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRSs). Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in Ethiopia, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Responsibilities of Management and Those Charged with Governance for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with IFRSs, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic altern bu t do so. Those charged with governance are responsible for rompany's financial reporting process. Auditor's Responsibilities for the Audit of the Statyets Our objectives are to obtain reasonable assu 1. abUtWt ether the financial statements as a whole are free from material missta" Mthether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if. individually or in the aaorecate. 2 they could reasonably be expected to influence the economic decisions of user taken on the basis of these financial statements. As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: * Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detection a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal control. * Obtain an understanding of internal control relevant to the audit 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 project's internal control. * Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. * Conclude on the appropriateness of management's use of the going concern basis of accounting and basis on the audit evidence obtained, whether a material uncertainty exits related to events or conditions that may cast significant doubt on the project's ability to continue as a going concern. If we conclude that amaterial uncertainty exits, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or if such disclosures are inadequate to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the project to cease to continue as a going concern. * Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statement represents the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit aad' onrifiant audit findings, including any significant deficiencies in internal control that we i d audit. Kokeb & Melkamu Audit Partnershi 0 Addis Abeba Chartered Certified Accountants (UK)1 M 28 November 2019 Authorized Auditors in Ethiopia 1'. 0). I oN 3304~5 Addtis Ah-fl)n F lhiopi Td(,pil mn 25.-,1 95 3 IMMIGRATION NATIONALITY AND VITLAL EVENTS AGENCY CIVIL REGISTRATION AND VITAL STATISTICS PROJECT STATEMENT OF FINANCIAL POSITION FOR THE YEAR ENDED 7 JULY 2019 Currency ETB ASSETS Note CURRENT ASSESTS Cash at Bank 3 29,153,583 Debtor and Prepayments 4 98,925,743 Total Assets 128,079,326 CURRENT LIABILITIES Payables 5 259,188 Represented By Fund Balance 6 127,820,138 TOTAL LIABLITIES AND FUND 128,079,326 4 IMMIGRATION NATIONALITY AND VITLAL EVENTS AGENCY CIVIL REGISTRATION AND VITAL STATISTICS PROJECT STATEMENT OF SOURCES AND USES OF FUNDS FOR THE YEAR ENDED 7 JULY 2019 Currency ETB Notes SOURCES MAIN IDA Grant 30,666,081 IDA- Direct payment 97,852,789 128,518,870 Foreign Exchange Gain 1,406,534 129,925,404 Uses Component 1- Civil Registration & Vital Statistics Goods 7.1 876,254 Operating Costs 7.1 1,229,012 2,105,266 Excess of sources over uses 127,820,138 Fund Balance at end of year 127,820,138 N ~' lh I C .,. C it II 5 IMMIGRATION NATIONALITY AND VITLAL EVENTS AGENCY CIVIL REGISTRATION AND VITAL STATISTICS PROJECT STATEMENT OF DESIGNATED ACCOUNT -IDA FOR THE YEAR ENDED 7 JULY 2019 IDA Credit Account number ,0101681300001 Depository Bank National Bank of Ethiopia Related Credit and grant IDA Credit No. 6090-ET Address Addis Ababa , Ethipoia Currency USD USD BIRR Opening balance brought forward 8 July 2018 Add: Transferred fom IDA- Grant 1,110,000.00 30,666,081.00 1,110,000.00 30,666,081.00 Less: Transferred to Birr account & other expenditures - 120,000.00 - 3,419,936.00 Others _ 990,000.00 27,246,145.00 Add : Gain on forgein exchange 1,406,534.00 Ending Balance 7 July 2019 990,000.00 28,652,679.00 C' h 6 IMMIGRATION NATIONALITY AND VITAL EVENTS AGENCY CIVIL REGISTRATION AND VITAL STATISTICS PROJECT FOR THE YEAR ENDED 7th JULY 2019 Currency: Ethiopian Birr 1. BACKGROUND The Federal Democratic Republic of Ethiopia (GoE) and the International Development Association (IDA) have signed a Financing Agreement (FA) on 17 May 2017 for Civil Registration and Vital Statistics (CRVS). The project covers a period of five years (from July 8, -July 7,).IDA will finance the project by investing 15 million US Dollar. Vital Events and Registration Agency (VERA) is established on 31st December 2012 by the Council of Ministers to register births, deaths, marriages and divorces. Currently VERA is merged with Immigration and Nationality Main Department and now called Immigration, Nationality and Vital Events Agency. One of the major roles of the agency is to coordinate and support the registration of vital events at national level and to centrally organize and keep records of vital events. Civil Registration and Vital Statistics project is established to support overall capacity building and development of CRVS activities. The Project Development Objective (PDO) is to improve the delivery and use of a comprehensive package of maternal and child health (MCH) services. The project is engaged in the areas of modernization of the operation of vital events through IT technology, data collection and documentation of vital events registration activities. The overall objective is to support the Government's efforts to build a Civil Registration and Vital Statistics system through technical assistance, capacity building and procurement of equipment for activities carried out by Vital Events. 2. ACCOUNTING POLICIES Civil Registration and Vital Statistics (CRVS) follows the government's accounting policy of modified cash basis of accounting system. Where, the cash basis of accounting applies except for:- -Revenue and expenditure recognition when aid in kind is received. -Expenditure is recognised:- * When payroll is processed * When goods are received or services are rendered and if payments were effected in advance for tsor ervices rendered. C// T. 7 * Salary related transactions withholdings, VAT and profit tax withholding from suppliers are recognised in the absence of actual cash transaction. -Advance payments are recorded as receivable and charged to expenditure account against valid supporting documents which show the receipt of goods or services. or accomplishments of the purpose of the advance. -Accounting for direct payments will be charged to expenditure. - All other revenues and expenditures are recognized as per cash basis of accounting i.e. revenues and expenditures are recognized, when cash is received and paid respectively. - Fixed Asset purchases are charged to expenses up on purchase &recorded on the Fixed Asset Register Book. Civil Registration and Vital Statistics (CRVS) uses a computerized accounting system which is Peachtree accounting software. The project uses Government of Ethiopia budget calendar for planning, budgeting and reporting purposes i.e. from 8th JUly to 7th July of a given year. 6~, 0 IMMIGRATION NATIONALITY AND VITLAL EVENTS AGENCY CIVIL REGISTRATION AND VITAL STATISTICS PROJECT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 7 JULY 2019 3. CASH AT BANK Designated. Accounts IDA Credit Account USD 28,652,679 Birr Account at Federal 500,904 29,153,583 4. DEBTORS AND PREPAYMENTS UNOPS 97,852,789 MOENCO 1,071,300 Receivables from staff 1,654 98,925,743 5. TRADE AND OTHER PAYABLES Pension contribution 20,700 Withholding Tax Paybles 7,292 Employment income tax payable 35,750 Value Added Tax 195,446 259,188 6. FUND BALANCE Initial deposits 30,666,081 Direct payment 97,852,788 Excess of Sources Over Uses 127,820,138 256,339,007 7. USES OF FUNDS 7.1 Civil Registration & Vital Statistics Goods 876,254.13 Operating Costs 1,229,011.86 2,105,265.99 / x ..- If C6 i111I11 i - -10 IMMIGRATION NATIONALITY AND VITLAL EVENTS AGENCY CIVIL REGISTRATION AND VITAL STATISTICS PROJECT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 7 JULY 2019 8. USES OF FUNDS BY PROJECT COMPONENT AND SUBCOMPONENTS % of Budget Expenditures Cumulative for Financial Year End Utilization Component 1 Planned Actual Variance 1 Civil Registration & Vital Statistics 1.1 Goods 4,567,909.50 876,254.13 3,691,655.37 19% 1.2 Consultant's Services 27,684,300.00 - 27,684,300.00 0% 1.3 Training & workshops 0% 1.4 Works -_0% 1.5 Operating Cost 2,491,587.00 1,229,011.86 1,262,575.14 49% 34,743,796.50 2,105,265.99 32,638,530.51 6% The project shows only 6% achievement. °� rn и и и rn rn rn ° rn и rn о� rn rn rn .- � � и и rn -- � � г� �� � � � � � � � �� � ���� N N N N N Г т v й й й й й й со й й й й й и й г` г�. � о м м м м м v и сд сд rn о� со т � rn и и г� � г� ^ г� ^ г� � � г� и cv ш ш ° � v Г Г v v аи- � с° сд � ти оио оио � � � r`ti a�i т м с`�n ит м м гN Г N �/.ь^� V м й й й й `л й й й й й � ао rn о � ш ш ' � r_ 1� 1_� 1� f� n n n � � � n и и � n � Г"r`�: -�.,,�� V� V V �' 1� 1� � ��;� _�� _ � .( � м с�'7 м М � V '� i�R п'� J __ � О О О О О О О м М М М М С��7 м м м М г/� д' �..а"->>'/ :. � � U U` CJ' о С� � й С7 С7 U` С) U С� U` U` С� С� �• л �; ^,,��` с� с�� �; � у Со О О О О О о О ° о `"' � CV м М_ О О �� '�" ,�Г `�i � V ЭУ �~г,.:п����� ; � U м V '7 7 V V V V' О о N N г� "' г.�t�', : - д' � � уΡуΡуΡ _ W � � 00 N 00 00 OJ OJ 00 � � V V � V' CF V V V" 1I й , й �� .: �''.j`'�•��?:� � � W о0 Ор �^� �- �•, � У w м > > > > > > > > > `� > `� > > > > > � ' '•` � v > д а т а ш д а а ш а а ш� а_ а а а _.. - � n- т т т т т т т т т т т т т т т т т У � с о М о n о и о о о � и о и о т о о о � � с� и о о о г�. и о о о и и о и о и -. __ и и сс, о oi � о о о и о о о ai вi о oi о oi Е и и о�, �r и �л г�i �ri о г� о � � т со � °- с� о и и т rn й � h о°�i й м мо й о�'о � �9 N М М .- о N � Г ^ м N М (О М СО N и N � �. 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