Ia AUDITOR GENERAL'S DEPARTMENT PRD LOAN CONTRACT NO. 8406 - IM AND DFID GRANT NO. TFOA 1631 STRATEGIC PUBLIC SECTOR TRANSFORMATION PROJECT (SPSTP) FINANCIAL STATEMENTS FOR THE PERIOD OCTOBER 27,2014 - MARCH 31,2016 VISION STATEMENT "Promoting a Beffer Country Through Effective Audit Scrutiny of Government Operations" GOJ/IBRD LOAN CONTRACT NO. 8406 - IM AND DFID GRANT NO. TFOA 1633 - JM STRATEGIC PUBLIC SECTOR TRANSFORMATION PROJECT (SPSTP) FINANCIAL STATEMENTS PERIOD OCTOBER 27,2014 - MARCH 31,2016 TABLE OF CONTENTS Page Number Independent Auditor's Report 1-4 Financial Statements Statement of Sources and Uses of Funds 5 Statement of Cumulative Investments 6 Special Account Statement 7 Notes to Financial Statements 8 - 17 GOJ/IBRD LOAN CONTRACT NO. 8406 - JM AND DFID GRANT NO. TF0A 1633 - JM STRATEGIC PUBLIC SECTOR TRANSFORMATION PROJECT (SPSTP) FINANCIAL STATEMENTS FOR THE PERIOD OCTOBER 27,2014 - MARCH 31,2016 . 1 AUDITOR GENERAL'S DEPARTMENT 40 KNUTSFORD BOULEVARD P.O. BOX 455 KINGSTON 5 JAMAICA Tel. No.: 926-8309/926-5963/926-5846 Fax Number: 968-4690 Email: audgen@auditorgeneral.gov.jm GOJ/IBRD LOAN AGREEMENT No. 8406-JM and DFID GRANT No. TFOA 1633 - JM Strategic Public Sector Transformation Project Period October 27, 2014 - March 31, 2016 AuDrr CERTIFICATE The audit of the Strategic Public Sector Transformation Project (SPSTP) was conducted in accordance with Article II Section 2.07 (b) of the Standard Conditions for Loan between the Government of Jamaica (GOJ) and the International Bank for Reconstruction and Development (IBRD) dated September 3, 2014 and the Department for International Development (DFID) grant agreement number approved on December 22, 2015. MANAGEMENT'S RESPONSIBILITY FOR THE FiNANCIAL STATEMENTS The executing agency, Ministry of Finance and the Public Service, is responsible for the preparation and fair presentation of these Financial Statements, in accordance with International Public Sector Accounting Standards (IPSAS) Cash Basis. This responsibility includes: designing, implementing and maintaining internal controls, relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether, due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. The Ministry is also required to present audited Financial Statements to the IBRD. The attached Financial Statements and supplementary finaicial information which are described hereunder were submitted to me by the Project Implementation Unit (PIU) to reflect the transactions of the Programme from its inception in October 2014 to the close of the financial year at March 31, 2016. Statement 1 Statement of Sources and Uses of Funds Statement 2 Statement of Cumulative Investments by Disbursement Category U Statement 3 Designated Account Reconciliation Statement as at March 31, 2016 Notes to the Financial Statements U I 2 AUDITOR'S RESPONSIBILIY My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with the auditing standards issued by the International Organisation of Supreme Audit Institutions (INTOSAI). Those standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatements. These Statements and the supporting accounting transactions and records were examined in accordance with generally accepted auditing standards recommended by the INTOSAI and accordingly, included such test and other procedures as I considered necessary. I have obtained all the information and explanations which I required. OPINION-FINANCIAL STATEMENTS In my opinion, the appended Statements 1-2 and Supplementary Financial Information reflect a true and fair view of the transactions of the Project for the period under review and the transactions conformed to the terms of the Loan and Grant Agreements. COMPLIANCE WITH APPLICABLE LAWS, REGULATIONS AND FINANCIAL CLAUSES OF THE LOAN AGREEMENT During the period under review, I examined compliance by the Project Coordination Unit of the Executing Agency with the applicable laws and regulations related to the Project's financial activities and with the accounting/financiall management clauses of the Loan Agreement No. 8406-3M. There was general compliance with the following articles contained in the Loan Agreement mentioned: Article III - Section 3.01: Article V of the General Conditions Article III - Section 3.02: Schedule 2 Project Execution Section I Implementation Arrangements Section II Project Monitoring, Reporting and Evaluation Section III Procurement Section IV Withdrawal of Loan Proceeds OPINIoN - GENERAL In my opinion, the PIU maintained an adequate accounting system based on separate and clearly identifiable accounts which enabled the recording, monitoring and reporting of the operations and costs under the programme in accordance with satisfactory accounting/financial/management practices and standards as required by Schedule II Section 2 (B) of the Loan Agreement. 3 AUDff OF THE SPECIAL BANK AccoUNT I have examined the appended Special Bank Account Statement - Statement 3, reflecting the movement in the Special Bank Accounts for the period ended March 31, 2016. The Special Bank Accounts for the World Bank Loan and DIFD Grant bearing account numbers 810150 and 810290 respectively are maintained in United States Dollars in the name of the Ministry of Finance/ Strategic Public Sector Transformation Project Loan Agreement No. 8406-JM and DFID Grant Contract No. TFOA 1633 - JM. My examination was made in accordance with the standards of the International Organisation of Supreme Audit Institutions (INTOSAI) and accordingly included such tests of the accounting records and other procedures I considered necessary. OPINION - SPECIAL BANK AccouNT In my opinion, the Special Bank Account Statement reflects the balance in the Special Bank Accounts at March 31, 2016 as well as the transactions made during the period October 27, 2014 to March 31, 2016 in conformity with International Public Sector Accounting Standards (IPSAS) Cash Basis. Auditor General of Jamaica Date 4 AUDITOR GENERAL'S DEPARTMENT 40 KNUTSFORD BOULEVARD P.O. BOX 455 KINGSTON 5 JAMAICA Tel. No.: 926-8309/926-5963/926-5846 Fax Number: 968-4690 Email: audgen5@cwjamaica.com GOJ/IBRD LOAN AGREEMENT No. 8406-JM and DFID GRANT No. TFOA 1633 - JM Strategic Public Sector Transformation Project Period October 27, 2014 - March 31,2016 AUDIT OF STATEMENTS OF EXPENDYTURE (SOE) PROCEDURES In the course of the audit of the Strategic Public Sector Transformation Project (SPSTP) for the eighteen- month period ending March 31, 2016, I examined the following statements of expenditure submitted to the IBRD during the financial year under review in support of applications for advance of funds from the Loan Account in accordance with the Loan and Grant Agreements: Disbursement Disbursement World Bank DFID TOTAL Request Date Number Amount Amount US$ US$ US$ February13, 2015 B 162,500 162,500 March 31, 2015 1A 421,000 421,000 May 26, 2015 2 14,742 14,742 May 28, 2015 3 423,566 423,566 September 30, 2015 4 809,785 809,785 Total 1,410,593 421,000 1,831,593 The examination was done in accordance with generally accepted auditing standards and procedures prescribed by INTOSAI and accordingly, included such tests as the verification of the internal control systems and of the accounting records, tests of the origin and eligibility of expenditures, certification and procurement procedures for goods and services, filing of supporting documents and such other auditing procedures as I considered necessary in the circumstances. Opinion In my opinion, the statements of expenditure and the annexes submitted in support of them, together with the internal controls procedures used in their preparation can be relied upon to support the applications for advance in conforming to the requirements of the Loan and Grant Agreements. Auditor General of Jamaica _Date  5 GOVERNMENT OF JAMAICA IBRD LOAN #8406-JM/DFID GRANT #TFOA 1633-JM Strategic Public Sector Transformation Project Sources and Uses of Funds - Amounts in US$ For the period October 27, 2014 to March 31, 2016 Note October 27, 2014 to March 31, 2016 omm t at 31st Mar 2015 Sources of Fund: IBRD DFID TOTAL External World Bank& DFID: Designated Account 4 1,410,593 421,000 1,831,593 1,410,593 421,000 1,831,593 Direct Payment - - - Retroactive Financing - Front End Fees 87,50 87I - 87500 Total Receipts (A) 5 k,498093 421,000 1,919,093 1,498093 421000 1,919,093 Uses of Fund by Components: 1. Strengtheaing the Public Investment Management Syste (PIMS) 270,072 - 270,072 270,072 270,072 2. Strengthening the Budget Preparation Process and Results-Based Budgeting 135,003 - 135,003 135,003 135,003 3. Adaptive Public Sector Approaches tp Promote Fiscal Sustainabilty 341,187 - 341,187 341,187 - 341,187 4. Strengthening Property Tax Compliance and Administration - - 5a. Fostering industrial Growth and Trade Facilitation - Technical Assistance to BSJ 110,133 110,133 110,133 - 110,133 5b. Fostering industrial Growth and Trade Facilitation - Technical Assistance to JCA - - 6.Project Management 286,033 - 286,033 286,033 286,033 Front End Fees 87500 87M 87-0 87, TOTAL USES OF FUND 6 1,22929 - 1,229,929 1,229929 - 1.229r929 Sources Less Uses of Fund - Net Change in Cash (A - B) 268,163 421,000 689,163 268,163 421,000 689,163 Foreign Exchange Adjustment BANK BALANCES Opening Cash Balances Designated Account Project Account Total Opening Balance Closing Cash Balances Designated Account 268,163 421,000 689,163 268,163 421,000 689,163 Project Account _ _ _ _ _ Total Closing Balance 7 268,163 421,000 689,163 268,163 421,000 689,163 Approved for issue on behalf of the Strategic Public Sector Transformation Project on 4 , and signed on Its behalf by: Mr. Du n -Project Sager,SP TP Mr. Sheila Wong - Principal Financial OffCd fS The amnonnymg notes onlages 8 17fom an integral pas'tofthe j7nncoal stalemens 6 GOVERNMENT OF JAMAICA IBRD LOAN #8406-JM/DFID GRANT #TFOA 1633-JM Strategic Public Sector Transformation Project Statement of Cummulative Investments - Amounts in US$ For the period October 27, 2014 to March 31, 2016 October 27, 2014 to March 31, 2016 Cumulative as at March 31, 2016 18RD DFID TOTAL IBRD DFID TOTAL EXPENDITURES BY CATEGORY 1. Goods, Consultants' Services, Training and Operating Cost 1,142,429 - 1,142,429 1,142,429 * 1,142,429 2. Front End Fees 87,500 - 87,500 87,500 - 87,500 1,229,929 1,229,929 1,229,929 1,229,929 Approved for issue on behalf of the Strategic Public Sector Transformation Project on and signed on its behalf by: Mr. ns Bryan, ect Inaer, 5 TP Mr he - Principal Finan Officer, MoFPS The accompanying notes on pages 8 - 17 form an integral part of the financial statements GOVERNMENT OF JAMAICA IBRD LOAN #8406-JM/DFID GRANT #TFOA 1633-JM Strategic Public Sector Transformation Project Designated Account Reconcilation As at March 31, 2015 DESIGNATED ACCOUNT RECOfiCILIATION STATEMENT IBRD Loan DFD GRANT - TOTAL FINANERNG Stratelc PublkStor Tensformalion Prolect- IORD Loan d $406JMIDFIDGat TF4OA103IM Account No. 810150 Account No. 810290 US$ WITH, BnkofJamalca 1 TOTAL ADVANCED BY WORLD BANK (OR COFINANCIER) 1,410,593 421,000 1,831,593 2 LESS: TOTAL AMOUNT DOCUMENTED BY WORLD BANK 493.097 - 493,097 3 PRESENT OUTSTANDING AMOUNT ADVANCED TO THE DESIGNATED ACCOUNT (1- 2) 917,495 421,000 1,338,495 4 BALANCE OF DESIGNATED ACCOUNT PER ATTACHED BANK STATEMENT AS OF DATE 31/03/2016 268,163 421,000 689,163 S PLUS: TOTAL AMOUNT CLAIMED IN THIS APPLICATION NO. 7 417,626 - 417,626 6 PLUS: TOTAL AMOUNT WITHDRAWN AND NOT YET CLAIMED - APPLICATION R 6 231,705 - 231,705 REASON: 7 PLUS: AMOUNTS CLAIMED IN PREVIOUS APPLICATIONS NOT YET CREDITED AT DATE OF BANK STATEMENTS SUBTOTAL OF PREVIOUS APPLICATIONS NOT YET CREDITED 8 LESS: INTEREST EARNED 9 TOTAL ADVANCE ACCOUNTED FOR (NO. 4 THROUGH NO. 9) 917,495 421,000 1.338,495 10 DIFFERENCE (3 - 91 11 EXPLANATION OF ANY DIFFERENCE SHOWN IN LINE 10 Approved for issue on behalf of the Strategic Public Sector Transformation Project on and signed on Its behalf by: Mr. ourstan an - P Manager, 5PS P ts, Sheila Wong - Principal Finan1l" car, MoFPS 7he accompanying notes on pages 8 - 17form an integral part ofthefinancial statements STRATEGIC PUBLIC SECTOR TRANSFORMATION PROJECT LOAN #8406-JM/ DFID GRANT #TFOA 1633-JM NOTES TO THE FINANCIAL STATEMENTS EIGHTEEN-MONTH ENDING MARCH 31, 2016 1. IDENTIFICATION On September 3, 2014 the Government of Jamaica (GOJ) and the International Bank for Reconstruction and Development (World Bank) signed loan agreement number 8406JM for US$35,000,000, which became effective on October 27, 2014 and has an end date of January 31, 2020. Additionally, the World Bank acting as Administrators of grant funds provided by the Department for International Development (DFID) under the Jamaica Strengthening Public Investment Management System and Budget Processes Single Donor Trust Fund extended to the Government of Jamaica a grant. This DFID grant agreement number TFOA 1633 JM was approved on December 22, 2015, with an effective date of January 18, 2016 and an end date of September 30, 2016 for an amount of E1,062,907. The US$ equivalent of this original approved British Sterling amount is US$1,597,816. Resources of these agreements are to fund the activities of the Strategic Public Sector Transformation Project, which is being implemented by the Ministry of Finance and Public Service, through the Project Implementation Unit. The loan is repayable in equal semi-annual installments commencing February 2020 and ending August 2043. Interest for the Word Bank loan is at a rate equal to the Reference Rate for the loan currency plus the Fixed Spread and is guided by section 3.02(e) of the General Conditions of the Agreement. Project objectives The Project Development Objective (PDO) is to strengthen public resource management and support selected public sector institutions in facilitating a more enabling environment for private sector growth. PROJECT COMPONENTS The Strategic Public Sector Transformation Project consists of six (6) parts: Part 1: Strengthening the Public Investment Management System (a) Design and implementation of a Public Investment Management System ("PIMS") through: (i) the development of an information technology platform which will provide information of public investment across the public investment cycle and link said information to the Borrower's budget and financial systems; (ii) the migration of the Borrower's web-based database to the PIMS information system; and (iii) the carrying out of capacity building 9 STRATEGIC PUBLIC SECTOR TRANSFORMATION PROJECT LOAN #8406-JM/ DFID GRANT #TFOA 1633-JM NOTES TO THE FINANCIAL STATEMENTS EIGHTEEN-MONTH ENDING MARCH 31, 2016 activities to improve the Borrower's public investment and analytical capacity for implementation of the PIMS. (b) Design and implementation of a public investment management training program for public sector employees through: (i) the design of the public investment management training modules; (ii) training on public investment preparation; (iii) training for project management; and (iv) training on public investment monitoring. (c) Reviewing legislation and carrying out dissemination activities to integrate the PIMS with the Borrower's administrative systems, including: (i) the Borrower's procurement system; and (ii) the Borrower's human resources system. (d) Strengthening the monitoring of public investment through citizen participation, including the carrying out of: (i) external audits of projects; and (ii) public investment performance surveys. (e) (i) Designing a fund for the funding of pre-investment financial and economic analysis and post-investment evaluations of the Borrower's public investments; and (ii) carrying out: (A) pre-investment financial and economic analysis of the Borrower's proposed public investments to identify priority public investments based on the Borrower's long- term development agenda; and (B) post- investment evaluations of the effectiveness of the Borrower's completed public investments. (f) Provision of technical assistance for the implementation of the Public Financial Management Action Plan. Part 2: Strengthening the Budget Preparation Process and Results-Based Budgeting (a) Updating the Borrower's budget manual to include: (i) guidelines to align annual and medium-term budgeting; (ii) procedures for budget preparation and execution; and (iff) guidelines on the new budget preparation cycle. (b) Institutionalizing baseline forward estimates in the Borrower's budget preparation process. T'IKA'T!LUMjt t'Uout.% GdL.0L&% avru10r%J%stLULt Iu a.A.il LOAN #8406-JM/ DFID GRANT #TFOA 1633-JM NOTES TO THE FINANCIAL STATEMENTS EIGHTEEN-MONTH ENDING MARCH 31, 2016 (c) Developing and implementing procedures to: (i) achieve better resource allocation through greater aligning of policy, planning and budgeting in MDAs; (ii) incorporate procurement planning into the planning process and linking procurement plans to the budget process; (iii) set medium-term expenditure ceilings for MDAs; (iv) improve alignment of recurrent budgets with public investment expenditures; and (v) carry out a review of human resources required by the Borrower's budget office. (d) Provision of training on results-based budgeting to the Borrower's staff, selected pursuant to the criteria set forth in the Operational Manual. (e) Carrying out a review of the staffing levels in select MDAs to obtain accurate employee numbers and compensation costs for on-going budget preparation and execution. (f) Establishment of a participatory budgeting process through the carrying out of thematic meetings including citizens, NGO's, universities and business representatives. Part 3: Adaptive Public Sector Approaches to Promote Fiscal Sustainabiity (a) Supporting the Borrower's change management process to implement public sector reforms on the public investment management system, the budget preparation process and results-based budgeting, property tax compliance and administration, and industrial growth and trade facilitation, all through the carrying out of activities selected following the procedures and criteria set forth in the Operational Manual, including: (i) the carrying out of a consultation process within the Borrower's public sector to assess the status of implementation of public sector reforms; (ii) the improvement of the Borrower's communication and feedback mechanisms to strengthen the interrelationships within the Borrower's public sector; (ii) the identification and implementation of activities to support the sustainability of public sector reforms; and (iv) (A) the identification and assessment of activities to address challenges in the implementation of public sector reforms; and (B) based on said assessment, the design and Implementation of a strategy to carry out said activities. 11 STRATEGIC PUBLIC SECTOR TRANSFORMATION PROJECT LOAN #8406-JM/ DFID GRANT #TFOA 1633-JM NOTES TO THE FINANCIAL STATEMENTS EIGHTEEN-MONTH ENDING MARCH 31, 2016 (b) Provision of technical assistance to the Borrower to address public sector reform implementation gaps through the carrying out of activities selected following the procedure and criteria set forth in the Operational Manual, including: (i) the carrying out of an analysis of the Borrower's governance and accountability framework; (ii) the provision of support to assist the Borrower in achieving its public sector reforms related to the Project including change management, as set forth in the Operational Manual; and (iii) the carrying out of an analysis of the Borrower's trade facilitation capacity and mechanism to streamline said process to enhance its efficiency and effectiveness. Part 4: Strengthening Property Tax Compliance and Administration Provision of technical assistance to TAJ and NLA to improve property tax compliance through: (a) the simplification of property tax payment procedures and expansion of property tax payment channels in Selected Areas; (b) the design and implementation of a strategy to collect property tax arrears and enforce property tax compliance; (c) the improvement of the land parcel identification system, through the connection of the land parcel identification system with the TRN; (d) updating the fiscal cadaster through the carrying out of field surveys on Selected Areas to obtain additional relevant information on land characteristics; and (e) upgrading the property tax management system through: (i) improving the management of property tax documents and records; and (ii) improving the coordination between land valuation and land titling functions. 12 STRATEGIC PUBLIC SECTOR TRANSFORMATION PROJECT LOAN #8406-JM/ DFID GRANT #TFOA 1633-JM NOTES TO THE FINANCIAL STATEMENTS EIGHTEEN-MONTH ENDING MARCH 31, 2016 Part 5: Fostering Industrial Growth and Trade Facilitation (a) Provision of technical assistance to BSJ through: (i) the carrying out of a review of BSJ's testing and certification procedures to ensure compliance with the Borrower's international and regional trade agreements and standards, including the WTO TBT and the CROSQ standards; and (ii) the carrying out of capacity building activities to improve BSJ's service orientation. (b) Providing technical assistance to ICA, through: (i) the design of a strategy to ensure coordination among Selected Border Agencies concerning compliance with the WTO ATF, through: (1) integrating the operational processes of Selected Border Agencies; (2) developing a communication strategy to create awareness on said integrated processes; (3) carrying out training for JCA' s and the Selected Border Agencies management and staff on said integrated processes; and (4) developing a framework to simplify fees for import, export and transit operations; and (ii) the strengthening of ICA's capacity to operate effectively and efficiently through: (1) the design of a strategy and provision of training for ICA's gathering, analyzing and disseminating information on JCA's performance; (2) the design and implementation of a training program for ICA's new staff on, inter alia, tariff classification, valuation, search techniques and cargo inspection; (3) the review and improvement of ICA's corporate policies in human resources, finance and corporate services; and (4) the design of an ICT governance framework. Part 6: Project Management Provision of support on Project management to: (i) carry out Project audits; (ii) comply with the financial management and procurement obligations under the Project; (iii) monitor and evaluate Project activities; (iv) provide training and the acquisition of goods required thereof and finance Operating Costs. 13 STRATEGIC PUBLIC SECTOR TRANSFORMATION PROJECT LOAN #8406-JM/ DFID GRANT #TFOA 1633-JM NOTES TO THE FINANCIAL STATEMENTS EIGHTEEN-MONTH ENDING MARCH 31, 2016 MANAGEMENT REPORT The Annual Report is submitted by management for the Strategic Public Sector Transformation Project (SPSTP) for the period October 27, 2014 to year ended March 31, 2016. AUDITING OF THE PROJECT The Project is currently audited by the Auditor General's Department The Auditors, Auditor General's Department, 40 Knutsford Boulevard, Kingston 5, Jamaica. 1. The Budget This is the amount allocated based on the Loan Agreement. 2. Categories of Expenditures The Project was designed with one category covering Goods, consultants' services, Training and Operating Costs with an allocated amount of US$34,912,500. One hundred percent of eligible expenditures falling within this category is financeable by the World Bank loan. The eligible parts of the Components as per the loan agreement are: Parts 1(a),1(b)(iii), 1(b)(iv), 1(d)(i),1(e)(ii), 2 (c)(i), 2 (c)(ii), 2(d), 2(e), 3, 4, 5 and 6 of the Project. In addition to this category an amount of US$87,500 is allocated for Front-end Fee. The DFID grant supports the parts of the components 1 and 2 not eligible under the Loan. The eligible parts of the Components are: Parts 1(b)(i), 1(b)(ii), 1(c), 1(d)(ii), 1(e)(i), 1(f), 2(a), 2(b), 2(c)(iii), 2(c)(iv), 2 (c)(v), 2(f) of the Project. Except where otherwise stated, these financial statements are presented in United States Dollars (US$) and includes only cash receipts and payments of the Strategic Public Sector Transformation Project. The Project has separate Designated Special Accounts for the Loan and the Grant resources which are maintained at the Bank of Jamaica. 14 STRATEGIC PUBLIC SECTOR TRANSFORMATION PROJECT LOAN #8406-JM/ DFID GRANT #TFOA 1633-JM NOTES TO THE FINANCIAL STATEMENTS EIGHTEEN-MONTH ENDING MARCH 31, 2016 3. Significant Accounting Policies The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to during the eighteen- month period. 1) Basis of Preparation The Project Implementing Unit (PIU) uses the cash basis of accounting to account for the project's transactions. Under this basis, income is recognized when funds are received rather than when requested and expenses are recognized when payment is made rather than when obligations are incurred. Since the main objective of these financial statements is to disclose the sources and uses of funds, it is not necessary to present information adjusted for inflation. II) Recording of Transactions Transactions are recorded in dual currency. As the loan is denominated in US dollars, for preparation of the financial statements, US dollar is used. Expenditure in local currency are translated into US dollars, by applying the Central bank rate on the day of the expenditure. The Guidelines and Terms of Reference stipulates that the project financial statements should include separate identification of revenues and expenditures from the bank. III) Fluctuation rate and fees All fees and charges for un-disbursed loan funds, as well as losses due to exchange rate fluctuations are not considered eligible project costs and are absorbed by the Government of Jamaica. Bank charges are defined in the 'Operating Expenditures" of the project and are an approved expenditure to the loan once deemed reasonable. IV) Equipment and other fixed assets Equipment and other fixed assets procured with project resources are recorded at their acquisition cost at the date of purchase. Depreciation is not charged on these assets and is also not reflected in these financial statements. 15 STRATEGIC PUBLIC SECTOR TRANSFORMATION PROJECT LOAN #8406-JM/ DFID GRANT #TFOA 1633-JM NOTES TO THE FINANCIAL STATEMENTS EIGHTEEN-MONTH ENDING MARCH 31, 2016 3. Significant Accounting Policies (cont'd) IV) Exchange Rate for the period Foreign exchange gains or losses arise as a result of the fluctuations of the Jamaican Dollar against United States Dollar. There were no foreign exchange gains or losses as the Project only maintains United States Currency bank accounts. The Special Account for the World Bank Loan and DIFD Grant are maintained at the Central Bank, bearing account numbers 810150 and 810290 respectively. 4. Disbursement methods Disbursement Request Disbursement World Bank Amount DFID Amount Date Number US$ US$ February 3, 2015 1B 162,500 March 31, 2015 1A 421,000 May 26,2015 2 14,742 May 28,2015 3 423,566 September 30, 2015 4 809,785 Total 1,410,593 421,000 This represents the total advances issued by the IBRD for the period ending March 31, 2016. The undisbursed balance of the world bank loan as at March 31, 2016 is US$33,501,907. 5. Source of Funds A) World Bank The amount of USD 1.498 Million (cumulatively USD 1.498 Million) was received from the World Bank for the period under review, this amount is inclusive of front-end fee (USD 0.0875 Million) charged by the Bank. B) DFID Grant The amount of USD 0.421 Million (cumulatively USD 0.421 Million) was received from the World Bank - DFID Grant for the period under review. 6. Use of Loan Funding Total funds invested during the period amounts to approximately USD1.230 Million (cumulatively USD 1.230 Million). 16 STRATEGIC PUBLIC SECTOR TRANSFORMATION PROJECT LOAN #8406-JM/ DFID GRANT #TFOA 1633-JM NOTES TO THE FINANCIAL STATEMENTS EIGHTEEN-MONTH ENDING MARCH 31, 2016 7. Cash availability as at March 31, 2016 The cash available as at March 31, 2016, as expressed in US dollars is: Bank Accounts Total Cash Available US$ Special Account 1 268,163 Special Account 2 421,000 Total Closing Balances 689,163 This represents the cash balances at the end of the period for the Special Bank Account Number (IBRD Loan) 810150 and Special Bank Account Number (DFID Grant) 810290. These Special Accounts are operated by the Bank of Jamaica for the disbursement of loan funds. Funds disbursed by the World Bank for the Project is directly transferred to this account. 8. Expenditures pending Justification The information below represents the SOEs pending submission to the World Bank to document expenditure incurred from special account #810150 during the period of the audit: SOE Application Documented Expenditure Number US$ 6 231,705.40 7 417,626.33 TOTAL 649,331.73 9. Non-Current Assets The total non-current assets at March 31, 2016 was US$318,562. See details in tables below. (a) Property, Plant and Equipment Furniture and Office Computer TOTAL Equipment Equipment Equipment US$ US$ US$ US$ Cumulative Cumulative Balance at March 31, 2016 13,405 156,975 33,156 203,536 17 STRATEGIC PUBLIC SECTOR TRANSFORMATION PROJECT LOAN #8406-JM/ DFID GRANT #TFOA 1633-JM NOTES TO THE FINANCIAL STATEMENTS EIGHTEEN-MONTH ENDING MARCH 31, 2016 9. Non-Current Assets (cont'd) (b) Intangible Assets Computer Software TOTAL US$ US$ Cumulative __ _ Cumulative Balance at March 31, 2016 115,026 115,026 10. Subsequent Event The Project commenced a restructuring exercise in June 2015, which was presented to the Steering Committee on July 28, 2015. The restructuring exercise is being done in consultation with various stakeholders including the World Bank team through several mission visits. The restructuring will eliminate Components 4 and 5b, activities for which other donors support fulfill.