I I E E MINISTRY OF LANDS AND NATURAL RESOURCES I SECOND LAND ADMINISTRATION PROJECT (LAP 2) IDA CREDIT NO. 4870-GH, DFTAD GRANT NO. TF 14256 AND GOVERNMENT OF GHANA FUND I I I FINANCIAL STATEMENT FOR THE 13 MONTH PERIOD I 31 JANUARY2019 r I r • I ' I I I E I I MINISTRY OF LANDS AND NATURAL RESOURCES E SECOND LAND ADMINISTRATION PROJECT (LAP 2) IDA CREDIT NO. 4870-GH DFTAD GRANT NO. TF-14256 AND [ GOVERNMENT OF GHANA FUND FINANCIAL STATEMENTS FOR THE 13 MONTH PERIOD I 31 ST JANAURY, 2019 Management Team I Chief Director Professor Bruce Banoeng-Yakubo I Project Coordinator Financial Controller Financial Management Specialist Dr. Benjamin Quaye Mr. John Wallace Koomson Mr. Seidu A. Sarunah I Project Administrator Mr. Kofi AbakaBlankson I Auditors Ghana Audit service I Project Bankers Bank of Ghana I I E I ' I I I I I I I [ • AUDIT SERVICE In case of reply the number and date of the ··l'!ll letter should be ~D/SA/PFMR/4 My Ref No: ............................. . Your Ref No: ........................... . P. 0. Box ............M..96 ...................... . Good Governance • Tel: 233 (0) 302 664920/28/29 Fax: 233 (0) 302 6751495 and Accountability ACCRA Website: www.ghaudit.org 27JUNE 19 .............................................. 20 .......... . INDEPENDENT AUDITORS' REPORT TO THE MINISTRY OF LANDS AND NATURAL RESOURCES SECOND LAND ADMINISTRATION PROJECT (LAP 2) IDA CREDIT NO. 4870-GH, DFTAD GRANT NO. TF 14256 AND GOVERNMENT OF GHANA FUND • Report on the Financial Statements 1. We have audited the financial statements of the Second Land Administration .,.. Project (LAP 2), financed under IDA Credit No. 4870-GH, DFTAD Grant No. TF-14256 • and Government of Ghana Fund for the 13 month period January 31, 2019. These Financial Statements comprise the Statement of the financial position at 31 January, 2019 • Statement of Funds Received, Project cost summary and Statement of Sources and uses of funds for the year then ended and a summary of significant accounting policies and . other explanatory notes . Responsibilities of the Management of Project Coordinating Unit (PCU) Of the • Ministry of Lands and Natural Resources of the Land Administration Project (LAP 2) for the Financial Statements • 2. The Management of Project Coordinating Unit (PCU) Of the Ministry of Lands and Natural Resources of the Land Administration Project (LAP 2) is responsible for the • preparation and fair presentation of the financial statements in accordance with International Financial Reporting Standards for Small and Medium-sized Entities (IFRS • for SMEs) and for such internal control as the Management of Project Coordinating Unit (PCU) determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. 3. The Management of the Project Coordinating Unit (PCU) is responsible for overseeing the Second Land Administration Project (LAP2)' s financial reporting process . • I I I 4. This responsibility includes designing and maintaining adequate financial management arrangements and ensuring that these continue to be effective throughout I the reporting period; maintaining proper accounting records, which disclose with reasonable accuracy at any time of the financial position of the Project; designing, I implementing and maintaining internal controls relevant to the preparation and fair I presentation of the Financial Statements and ensuring that they are free from material misstatements, whether due to fraud or error; safeguarding the assets of the project; I selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. I Auditor's responsibility I 5. Our responsibility is to express an independent opinion on these financial statements based on our audit. We conducted our audit in accordance with I International Standards of Supreme Auditing Institutions (ISSAls) and the guidelines in the Loan Financing Agreement. Those standards require that we comply with the I ethical requirements and plan and perform the audit to obtain reasonable assurance on I whether the Financial Statements are free from material misstatement whether caused by fraud, other irregularity or error. I 6. As part of an audit in accordance with International Standards on Auditing, we I exercise professional judgment and maintain professional skepticism throughout the I audit. We also: I 7. Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures I responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement I [ 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. • 8. 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 Land Administration Project's (LAP2) internal control. 9. Evaluate the appropriateness of accounting policies used and the I reasonableness of accounting estimates and related disclosures made by the Management of Project Coordinating Unit (PCU). 10. Evaluate the overall presentation, structure and content of the financial C statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. 11. We communicate with the Management of Project Coordinating Unit (PCU) ' I regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. f i 12. We believe that we have obtained sufficient appropriate audit evidence to provide a basis for our audit opinion. I I I I Opinion I 13. In our opinion, the Financial Statements for the Land Administration Project present fairly, in all material respects, the financial position of LAP 2 as at 31 January, I 2019 and the results of its operations for the 13 month period is in accordance with the provisions of the Loan Financing Agreement (IDA credit number, 4870-GH) and the I I accounting policies set out in Note 1 of the Project financial statements. I Report on compliance I 14. In addition, Management has complied, in all material respects, with the covenants of the Loan Financing Agreement (IDA credit number 4870-GH and the applicable Government Laws and Regulations, and that the funds received during the I period under audit were used for the eligible purposes for which they were intended and were properly accounted for as at the year ended 31 January, 2019. I Emphasis of Matter Paragraph I 15. Without qualifying our opinion, we draw attention of the Project incurring an amount of USD 3,489,000 on the Ghana Enterprise Land Information System (GELIS) I Consultancy contract, a key activity under component 2. As at the project closure date, 31 January 2019, key deliverables such as the Additional User Acceptance Test, Going I live, Data Acceptance and Sign off in Accra had not been done, even though this huge sums of money had been paid. I Restriction of use I 16. This report is intended solely for the use of the Management of the project, IDA, and the Government of Ghana, and should not be used for any other purpose . • I I . I r • MINISTRY OF LANDS AND NATURAL RESOURCES SECOND LAND ADMINISTRATION PROJECT (LAP 2) • IDA CREDIT NO. 4870-GH, DFTAD GRANT NO. TF 14256 AND GOVERNMENT OF GHANA • STATEMENT OF FINANCIAL POSITION AS AT 31ST JANUARY, 2019 • • Non-current Assets Note 2019 2017 US$ US$ Accumulated Non-Expenditure 2 49,494,003 46,025,152 Current Asset Cash and Bank balances 3 850,808 3,762,609 Advances to Implementing Agencies 4 13,264 47 652 864,071 3,810,261 Current Liabilities Accruals Net Assets 50,358,074 49,835,413 I ii Financed by: IDA long term 5 46,795,103 46,282,984 2,500,919 2,500,919 " I CIDA Long term Government of Ghana 6 7 1,062,051 50,358,074 1,051,509 49,835,412 I . Y~~~ John Wallace Koomson I Financial Controller Chief Director I I I I I MINISTRY OF LANDS AND NATURAL RESOURCES SECOND LAND ADMINISTRATION PROJECT (LAP 2) IDA CREDIT NO. 4870-GH, DFTAD GRANT NO. TF 14256 AND GOVERNMENT OF GHANA I STATEMENT OF SOURCES AND USES OF FUNDS BY COMPONENTS FOR THE 13 MONTHS ENDED 31 JANUARY 2019 I (in US Dollars) I Currency: Notes 2019 US$ 2017 US$ I Sources of Funds Opening balances IDA Designated Account No.1 3,726,710.82 5,075,412.00 IDA Withdrawal Application 512,119.42 5,493,884.82 I Others GoG Counterpart Fund Withdrawal Application 43,526.96 95,349.86 9,694.36 23,112.13 GoG Counterpart Fund I Cash available 4,377,707.06 10,602,103.31 I Less: Uses of funds, by Project Component Component 1 : Strenghtenlng the Pollcy,Legal and Regulartory Framework 8 4,163.18 1,039,481.90 I Component 2 : Decentralizing and Improving Business Service Delivery Processes 9 922,907.15 5,265,807.24 I Component 3: Improved Maps and Spatial Data for Land Admlnstration 10 15,219.24 1,879,764.32 I Component 4 : Human Resource Devleopment and Project Managemnt 11 2,574,803.82 (1,393,211.06) Total Expenditure 3,517,093.39 6,791,842.40 I Net Cash Available 860,613.67 3,810,260.91 I Closing cash balances IDA Special Account GoG project account 823,145.94 28,329.20 3,702,353.60 60,922.35 I Unretired advances in Project Accounts Others Total closing cash balances 13,263.82 46,984.76 (4,125.32) - - - - - 860,613.64 3,810,260.71 I I I ' E MINISTRY OF LANDS AND NATURAL RESOURCES SECOND LAND ADMINISTRATION PROJECT (LAP 2) IDA CREDIT NO. 4870-GH, DFTAD GRANT NO. TF 14256 AND GOVERNMENT OF GHANA I STATEMENT OF SOURCES AND USES OF FUNDS BY CATEGORY FOR THE 13 MONTHS ENDED 31 JANUARY 2019 I ' (in US Dollars) I Currency: Sources of Funds 2019 2017 I Opening balances IDA Designated Account No.1 IDA Withdrawal Application 3,726,710.82 512,119.42 5,075,412.00 5,493,884.82 I Others GoG Counterpart Fund 43,526.96 95,349.86 9,694.36 23,112.13 Withdrawal Application I GoG Counterpart Fund Cash available 4,377,707.06 10,602,103.31 I Uses of funds Component 1 : Strenghtenlng the Policy,Legal and Regulartore Framework I ' 1.1 1.2 Completion of land and land use bills Partnership with the Judiciary 3,872.29 781,281.38 137,951.65 1.3 Specific Supporting Studies 120,248.87 I 290.89 4,163.18 1,039,481.90 I Component 2 : Decentralizing and Improving Business Service Delivery Processes 2.1 2.2 Decentralisation of service delivery Streamlining business procedures 30,161.15 892,746.00 4,154,364.21 1,111,443.03 I Component 3: Improved Maps and Spatial Data for Land Admlnstration 922,907.15 5,265,807.24 I 3.1 3.2 3.3 Developning policies for surveying and mapping and other spatial Preparation of base maps Establishment of Geodetic Reference Network 3,922.47 11,296.77 9,632.93 1,097,832.46 (352,200.09) I 3.4 3.5 Boundary Demarcation Preparation of Land Use plans (282,220.70) 1,258,591.05 47,640.37 3.6 Revaluation of properties I 3. 7 Street addressing and property identification 100,488.30 15,219.24 1,879,764.32 I Component 4 : Human Resource Devleopment and Project Managemnt 4.1 Human Resources Development 1,609,299.52 235,118.39 • • i 4.2 4.3 Gender Equality Mainstreaming Communication and Public Outreach 37,127.42 105,815.65 (3,102.92) !I 4.4 Project Coordination and Management 928,376.88 (1,731,042.18) I 2,574,803.82 (1,393,211.06) Total Expenditure 3,517,093.39 6,791,842.40 Net Cash Available Closing cash balances IDA Special Account 823,145.94 3,702,353.60 GoG project account 28,329.20 60,922.35 Unretired advances in Project Accounts 13,263.82 46,984.76 Others (4,125.32) --- - - - - Total closing cash balances 860,613.64 3,810,260.71 I I I I I I C I I MINISTRY OF LANDS AND NATURAL RESOURCES I SECOND LAND ADMINISTRATION PROJECT (LAP 2) IDA CREDIT NO. 4870-GH, DFTAD GRANT NO. TF 14256 AND GOVERNMENT OF GHANA I STATEMENT OF VARIANCE REPORT BY EXPENDITURE COMPONENT FOR THE 13 MONTHS ENDED 31 JANUARY 2019 I Budget Actual ..................... .. . . . . . . >>:. <%:<< ·>:v-ariarilie .... . . . . . . . . . . . . . .. . . . . . . .. . . . . . . .. .. .. ........... .. .. .. .. .. .. Component 1 : Strenghtening the Policy,Legal and Regulartore Framework . .. ............ ... .. . .... . . ... ·::::::i1~~~1.:.~::: :1-00.W.i~: I 1. 1 Completion of land and land use bills 1.2 Partnership with the Judiciary 1.3 Specific Supporting Studies 246,667.00 6,131,700.00 3,872.29 290.89 si127,s2t.i1 {~~) > .................. >(11;296:.77) > 3.4 Boundary Demarcation I 3.5 Preparation of Land Use plans 3.6 Revaluation of properties 3.7 Street addressing and property identification 123,077.00 .... .. ... .. .. .. .. .. .. .. . . ·-::: :1:23;077-00::: . . . : 0.:00% . .............. .. . . .. . .... ... I 123,077.00 15,219.24 . ....................... . ·.·.·.·.·.·.·.·.·.·.·.·.·.·.·.·.·.·.·.·.·.·.· .·.·.·.·.·.· .. .. .. .. .. .. >(15,21!t24) .. .. .. .. .. .. .. .. .. .. .. ·.·.·.·.·.·.·.·.·.·.·.·.·.·.·.· .. .. .. .. .. .. .. .. .. .. .. .. .. . .. .. .. .. .. ..... ai237% ... .. . .. . .. .... .. . Component 4 : Human Resource Devleopment and Project Managemnt :::::::::::::::::::::::::::::::::::::::::::::: I 4.1 Human Resources Development 4.2 Gender Equality Mainstreaming 4.3 Communication and Public Outreach 1,609,299.52 •••• {1,~.~-Q}·······:····:··:•:• 37,127.42 >(:37J27.4~ > << ·.·.·.·.·.·.·.·.·.·.·.·.·.·.·.·.·.·.· 4.4 Project Coordination and Management 928,376.88 •· >>(9iS:,37~.~) > ·:::::::::::::::::::::::::::::::::::::::::::::: 2,574,803.82 (2,5:74,803;82} << . . . I I Notes to the Financial Statement 1.1 Reporting Entity I (a) (i) Financing Agreement Project Name (LAP-2) I Loan Agreement Number Lender (IDA) IDA Credit No. 4870-GH International Development Association I Date of signature for Project Effect date of Project Amount of Loan 31 March, 2011 8 August, 2011-31 March, 2013 IDA 50 Million I Agency in charge of Project Project Implementing entity Term of project implementation Resources (MLNR) Project coordinating Unit (PCU) 5 years: 31 March 2011 - 31 December I 2017 (ii) Extension of closing date I The closing date provided in Section IV.B.2 of the Agreement is revised to read as February 28, 2018. I (b) Activity: The Second Land Administration Project is a continuation of Phase 1 and intended to implement the key policy actions recommended in the Ghana Land Policy of 1999 to I address critical issues militating against effective Land administration in the country. It also aims to consolidate the gains made under Phase 1 by deepening the reforms, enable the land sector agencies to be more responsive to client, cut down the cost and time of I doing business and providing an enabling environment to reflect the objective of an efficient and transparent service delivery. I (c) Components Component 1: Strengthening the Policy, Legal and Regulatory Framework • Completion of land and land use bills I • Partnership with the Judiciary • Specific Supporting Studies I Component 2: Decentralizing and Improving Business Service Delivery Processes • Decentralization of service delivery I • Streamlining business procedures Component 3: Improved Maps and Spatial Data for Land Administration I • Developing policies for surveying and mapping and other spatial a .. • Preparation of base maps • Establishment of Geodetic Reference Network I • Boundary Demarcation • Preparation of Land Use plans • Revaluation of properties I • Street addressing and property identification I I I Component 4: Human Resource Development and Project Management • Human Resources Development I • Gender Equality Mainstreaming • Communication and Public Outreach • Project Coordination and Management I (d) Project Coordinating Unit The Ministry of Lands and Natural Resources 1s responsible for the overall I management of the project, including; (i) Chairing the National Steering Committee which has strategic and I (ii) oversight responsibility, and Hosting the Project Coordinating Unit (PCU) which coordinates the day-to-day implementation of project activities, including the I preparation the Financial Statements. Funds received are accounted for on cash basis. I 1.2 Accounting Policies The following are the significant accounting policies adopted in the preparation of I these financial statements. a. Basis of preparation I (i) Statement of compliance The financial statements have been prepared in accordance with International FinancialReporting Standard (IFRS). I (ii) Basis of measurement The financial statements have been prepared under the historical cost convention, as modified by the revaluation of investment property, financial I (iii) assets and financial liabilities at fair value. Use of estimate and judgement The preparation of financial statements in conformity with IFRSs requires I management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on I historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of I making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. I The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the I estimate is revised if the revision affects only that period or in the period of the I I I I I rev1s1on and future periods if the rev1s10n affects both current and future I periods. b. Preparation of financial statements I (i) Functional and presentation currencies The financial statements are presented in United States Dollar($) which is the reporting currency for the financial statements. I (ii) Transactions and balances a. Eligible expenditures in local currencies reimbursable by the World Bank have I been translated into US Dollar at the rate of exchange ruling on the date of such expenditures/transactions. • ' b. Balances dominated in local currency are translated into US$ at the exchange rate ruling at the Statement of Financial Position date. All differences arising from movements in foreign exchange rate are dealt with through the Foreign I (c) Exchange Gain or Loss Account. Property, plant and equipment I (i) Recognition and measurement Property, plant and equipment represent the expenditure incurred mainly in acquiring office equipment and motor vehicles for use by the Management Team. I This is measured at the actual contracted cost of purchase. Cost includes expenditures that directly attributable to bringing the asset to the location and I working condition necessary for it to be capable operating in the manner intended by management. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment. I (ii) Subsequent costs Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, when it is probable that the future economic I benefits associated with the item will flow to the Project and the cost of the item can be measured reliably. All other repairs and maintenance expenditures are charged to the statements of receipts and expenditures during I the financial period in which they are incurred. (iii) Depreciation No depreciation is charged in the financial statements. I (d) Donor Funds I (e) Funds received are accounted for on cash basis Donor Expenditure I Expenditure is accounted for on cash basis. The cumulative expenditure is capitalized in the Statement of Financial Position I (f) Project Expenditure I All expenditures incurred for the Project are capitalized in the Statement of I Financial Position I (g) Income Income is recognized on cash basis and credited to the respective donor's I accounts. I I I I I I I I I I • I I MINISTRY OF LANDS AND NATURAL RESOURCES SECOND LAND ADMINISTRATION PROJECT (LAP 2) IDA CREDIT NO. 4870-GH, DFTAD GRANT NO. TF 14256 AND GOVERNMENT OF GHANA I NOTES TO THE ACCOUNTS I FOR THE 13 MONTHS ENDED 31 JANUARY 2019 I NOTES 2 Accumulated Non Capital Expenditure I Opening balance Additions during the period Closing Balance US$ US$ US$ I 1 2 3 Works Goods Non consulting Services 7,263,360 7,379,461 1,501,487 1,484,122 13,939 8,747,482 7,393,400 1,501,487 I 4 5 6 Consulting workshops and studies Recurrent cost 12,038,602 7,408,361 10,433,880 96,508 37,273 1,837,009 12,135,110 7,445,634 12,270,889 I 46,025,151 3,468,851 49,494,002 I 3 Cash and bank balances This is made up of: 2019 2017 US$ US$ I Designated Special Account IDA Special account-GH¢ 810,469 12,677 3,762,609 27,550 GOG 28,329 84,808 I Others( other income, imprest and suspense) (668) 850.808 (668) 3.874.299 I 4 Advanced to Implementing Agencies 2019 US$ 2017 US$ I NPMU (0) (0) Lands Commission 13,939 Town & Country Planning Department 3,922 Office Of The Administartor Of Stool Lands 12,909 29,131 I Accra Metropolitan Assembly Ministry Of Justice 275 80 566 94 Coalition Of Civil Organisations on Land (CICOL) I 5 13,264 47,652 I IDA Credit Fund 2019 US$ 2017 US$ I Opening Balnce Additions Closing Balance 46,282,984 512,119 46,795,103 40,789,099 5,493,885 46 i82.ss~ E . . MINISTRY OF LANDS AND NATURAL RESOURCES SECOND LAND ADMINISTRATION PROJECT (LAP 2) IDA CREDIT NO. 4870-GH, DFTAD GRANT NO. TF 14256 AND GOVERNMENT OF GHANA NOTES TO THE ACCOUNTS FOR THE 13 MONTHS ENDED 31 JANUARY 2019 Notes 6 DFTAD Grant Funds 2019 2017 US$ US$ I Opening Balnce Additions Closing Balance 2,500,919 2.500.919 2,500,919 2.500.919 I 7 Counterpart GoG Fund 2019 US$ 2017 US$ Opening Balance 1,051,509 1,028,397 Additions 10,542 23,112 Closing Balance 1,062,051 1,051,509 • • 8 Component 1: Strengthening the Policy, legal and Regulatory Framework Works & Goods 2019 US$ 2,487 2017 US$ 91,760 4 Consulting 50,494 5 Training, 399,310 6 Recurrent cost 1,677 497,917 • 4,163 1,039,481 I 9 Component 2 : Decentralizing and Improving Business Service Delivery Processes 2019 2017 US$ US$ Works & Goods 13,939 4,274,533 3 Consulting 45,109 5 Training, (520,840) 4 Non consulting 798,771 6 Recurrent cost 908,968 668,235 ·, iii 10 Component 3: Improved Maps and Spatial Data for Land Adminstration 922,907 5,265,807 2019 2017 US$ US$ Works & Goods 842,053 4 Consulting 11,297 886,597 5 Training, (176,429) 6 Recurrent cost 3,922 289,683 Non consulting 37,857 15,219 1,841,904 11 Component 4 : Human Resource Devleopment and Project Managemnt 2019 2017 US$ US$ Works & Goods 1,481,635 (1,858,167) 4 Consulting 133,454 (330,714) 5 Training, 37,273 64,383 Non Consulting 41,254 6 Recurrent cost 922,442 690,033 2,574,804 (1,393,211) C MINISTRY OF LANDS AND NATURAL RESOURCES • SECOND LAND ADMINISTRATION PROJECT (LAP 2) IDA CREDIT NO. 4870-GH, DFTAD GRANT NO. TF 14256 AND GOVERNMENT OF GHANA NOTES TO THE ACCOUNTS FOR THE 13 MONTHS ENDED 31 JANUARY 2019 2019 2017 Notes USD USO • IDA Credits 2 512,119.42 512,119.42 DFTAD(CIDA) Grant 3 GoG Contribution 4 10,542.17 10,542.17 522,661.59 522,661.59 I • I I I I I I [