PACIFIC ISLANDS FORUM SECRETARIAT PACIFIC RESILIENCE PROGRAMME (PREP) SPECIAL PURPOSE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2017 Pacific Islands Forum Secretariat Pacific Resilience Programme (PREP) Special Purpose Financial Statements For the year ended 31 December 2017 INDEX Page No. 1 Identification 2-3 Introduction 4 Statement by Secretary General 5-7 Special Purpose Auditor's Report 8 Statement of Income and Expenditure 9 Statement of Financial Position 10-11 Notes to and forming part of the special purpose financial statements Pacific Islands Forum Secretariat Pacific Resilience Programme (PREP) Special Purpose Financial Statements For the year ended 31 December 2017 Identification PACIFIC RESILIENCE PROGRAMME (PREP) Cost of 2017 Work Programme: FJD 574,214 Funds received during period under review: FJD 183,417 Organisation Linder review: Pacific Islands Forum Secretariat Audit team in charge of the visit: Kaushick Chandra Engagement Leat/er Febriyenmi Moein Engagement Director Robertson Dass Engagement Senior Sheal Gounder Engagement Staff Persons contacted during site visit Ms. Serernana Titoko Finance and Administrative Officer Mr. Mosese Sikivou Regional Coordinator Pacific Resilience Program Mr. Devarisi Sharma Project Accountant Mr. Faletoese Asaua Team Leader Finance Contractual basis for the audit: The contractual basis for the audit is Article 4.09 of the General Conditions annexed to the Financing Agreement Grant Number D075-4P, which establishes that: "the Financial Statements are periodically audited by independent auditors acceptable to the World Bank, in accordance with consistently applied auditing standards acceptable to World Bank." The contractual basis for the implementation of the "PACIFIC RESILIENCE PROGRAMME (PREP)" project includes: a) Financing Agreement no Grant Number D075-4P and its annexes. b) PIFS Grant Agreement PREP GEF TFOAO887 c) General Conditions (Financing Agreement) d) Standard Conditions (Grant Agreement) 1 Pacific Islands Forum Secretariat Pacific Resilience Programme (PREP) Special Purpose Financial Statements For the year ended 31 December 2017 Introduction Projile of the beneficiary The Pacific Islands Forum ("the Forum"), formerly the South Pacific Forum until a name change in October 2000, was founded in August 1971 and comprises 18 Countries and territories in the Pacific. The Forum is the region's premier political and economic policy organization. Forum Leaders meet annually to develop collective responses to regional issues. The Forum's membership has increased from the original seven founding members (Australia, Cook Islands, Fiji, Nauru, New Zealand, Tonga and Western Samoa - now Samoa) to also include the Federated States of Micronesia, French Polynesia, Kiribati, New Caledonia, NiUC, Republic of the Marshall Islands, Palau., Papua New Guinea, Solomon Islands, Tuvalu and Vanuatu. The Forum's administrative airn is the Pacific Islands Forum Secretariat ("the Secretariat"), based in Suva, Fij i.. It acts as the secretariat for Forum-related events, implements decisions by the leaders, facilitates the delivery of development assistance to member states, and undertakes the political and legal mandates of Forum meetings. The Secretariat is funded by contributions from the member governments and donors. The Secretariats' mission is to honor the vision of the Leaders for free and worthwhile lives for all Pacific people through deeper and broader regional cooperation. Reliability of accounting and internal control systems The Finance Section of the Secretariat administers the accounting for the project's expenditure. The Secretariat adopts a fund accounting system, as a considerable part of its annual revenue comprises individual grants or donations for the specified projects. The Secretariat is responsible for the preparation and presentation of the financial statements and the information contained therein, and have determined that the accounting policies used are appropriate for and consistent with the financial reporting requirements of the donor. 2 Pacific Islands Foimn Secretarial Pacific Resilie ntce Programennc (PREP) Specinl Prpose Finiancial Statemlents Vor the year ended 31 December 2017 Objectivesv of the PIo.eci The ovcmi1 objective of)[ Ilie project is to contribuite to sircnhie carly wamning, resilient investments and financial proiceojon of the Poticip atiing Counieiics. Expeced resufts There arc two expected resiults of the project. These are: 1) Ckaryilig out a progiai of activities designed to strengthleni regional coordinlation of Cisasler risk Iinarcing insrance and related instruments 1am111ong Parlicipating runtrues; 2) Developing a outuiial insiurance fiud for ntuiral disaster, incluinu finncing of pieparatov activitios of said notal ninsurance fund. Duration: Tbc duration of project is 21 October 2015 to 30 November 2020 (6 nionthis). As shown il tie attached speckial ptupose financial statemnents for the year ended 31 December 2017 o Project funding received during the period was FJD 183,417 o Project related expenditure totaled FJD 574,214 Signed for and on behalf of the Pacific Islands 1Foru Secrelariat by its duly authorized officer. Meg Taylor, DBE Da e Secretary General Pacific Islands Forum Secretariat 3 Paicific [slands ForumSerart Pacjiñe Rtesilience Programm ue (PREP1) For tlie yea ended 31 Decemiber 2017 STATiMENT BV SECRETS RY GLNERAI In the opinion ofth1e Secretary General: a) the accompanying satemnent of inme and expendtre reects te inme and expendnure oF tH Pacific ResilIene Programme (PREP) Project for the year i ended 3 I DecuiiiL r 2017 ai they are in agreement with the Fincing Agreement Grant NAml D075-4P and the GlobaIlEnvironment Facility Special Cliuate Change Fund (ant Agreemnt OEFSCCF Grant Numubei TFAlAOS7. b) the accomnpanying stateme of kmnial pos in eflet the state of the Projet's affaii rs fo the Paci fic Resilienwe Pogramme (PREP) ProjecA as at 31 December 2017 and they are in agreement with the Financing Agieemeit ran Number D075-4P and the Global En mironment Facility Special Climate Change Fund Grant Agreementl GI/SCCF Grant Numi iber TFA0A0887. Signed for and on behalf of te Pacifie smds Forum Secretariat by its duly authnorized oftlcer. Meg Taylor, DhE Date Scecretary General Pacefi Islands Formnn Seretariat 4 pwc Special Purpose Auditor's Report To the Pacific Islands Forum Secretariat ("Secretariat") Report on the Special Purpose Financial Statements Opinion We have audited the accompanying special purpose financial statements (referred hereafter as "financial statements") of the Pacific Resilience Programme (the 'Project'), which comprise the statement of financial position of the Project as at 31 December 2017 and the statement of income and expenditure for the year then ended and notes to the financial statements, including a summary of significant accounting policies. In our opinion, the accompanying financial statements are prepared, in all material respects, in accordance with the accounting policies as described in Note I to the financial statements. In our opinion, the Secretariat has: - adhered to the contractual requirements of the Financing Agreement - Grant Number D075 -4P and the Global Environment Facility Special Climate Change Fund Grant Agreement - GEF/SCCF Grant Number TFAAO887 - used the project funds exclusively for the purposes of the Project in accordance with the Financing Agreement - Grant Number D075 - 4P and the Global Environment Facility Special Climate Change Fund Grant Agreement - GEF/SCCF Grant Number TFAOAO887 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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence We are independent of the Project in accordance with the ethical requirements of the International Ethics Standards Board for Accountant's Code of Ethics for Professional Accountants (IESBA Code) that are relevant to our audit of the financial statements in Fiji, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. PricewaterhouseCoopers. Level 8 Civic Tower, 272 Victoria Parade, Slva, -i/i. GPO Bax 200, Suva, Fit. T: (679)3313955 /3315199, F: (679) 3300947 PricewaterhouseCoopers is a member firm of PricowaterhouseCoopers International Limited, each member firm of which is a separate legal entity Emphasis ofMatter - Basis of accounting We draw attention to Note I to the financial statements, which describes the basis of accounting. The financial statements are prepared in accordance with the accounting policies described in Note I to the financial statements. As a result, the financial statements may not be suitable for another purpose. Our opinion is not modified in respect to this matter. Secretariat's Responsibility for the financial statements The Secretariat is responsible for the preparation of the financial statements in accordance with the accounting policies as described in Note I to the financial statements, and for such internal control as the Secretariat determine 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, the Secretariat is responsible for assessing the Project'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 the Secretariat either intends to liquidate the Project or to cease operations, or has no realistic alternative but to do so. The Secretariat is responsible for overseeing the Project's financial reporting process. Auditor 's Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole is free from material misstatement, whether 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 the 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 aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with the ISAs, we exercise professional judgement and maintain professional scepticism 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 detecting 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. 6 pwc * Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by Secretariat. o Conclude on the appropriateness of Secretariat's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists 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 a material uncertainty exists, 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. We communicate with the Secretariat 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. Restriction on Distribution or Use This report is made solely to the Secretariat. Our audit work has been undertaken so that we might state to the Secretariat those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Secretariat for our audit work, for this report, or for the opinions we have formed. /f Se Go re- 2&j PricewaterhouseCoopers Suva, Fiji Chartered Accountants 7 Pacific Islands Forum Secretariat Pacific Resilience Programme (PREP) Statement of Income and Expenditure For the year ended 31 December 2017 Fifteen months period ended 31 December 2017 2016 FJD FJD Income Special Client Change Fund Grant 29,000 15,000 International Development Association Grant 154,417 58,105 Total Income 183,417 73,105 Expenditure Advertisement 1,662 - Audit fees - current year 6,496 4,300 - prior year overprovision (205) - Bank fees 120 132 Consultancy cost - consultancy fees 389,458 88,515 - consultants airfares 43,863 - - consultants accommodation 28,259 2,068 - consultants per diems 16,630 401 - consultants security & other 744 234 Hospitality & refreshments - 1,820 Participants airfares 42,532 Participants accommodations 26,969 Participants perdierns 14,868 - Printing & stationery 1,399 568 Workshop training & meetings 1,419 - Total expenditure 574,214 98,038 Deficit for the year (390,797) (24,933) Accumulated deficit at the beginning of the year (24,933) Accumulated deficit at the end of the year (415,730) (24,933) The statement of income and expenditure should be read in conjunction with the accompanying notes to the special purpose financial statements 8 Iaciiic Islands iorlm( ecretariat Pncific eiineorme (PREP,) stateliet fi finiancial positioni As at 31 December 2017 Noles 2017! 2016 FJ) FJD Current assels Cash at Bank 58,02 83,255 Total current asseIs 58 02 83,255 Total asses 58,302 83,255 Current liabilities Aceruals & other payables 2 28 048 5,798 Owing to Pacific Islands Forim Secretriat 3 '144 ,9841 102,390 Total current liabilities 4742032 108,188 Totai liabilities 14,032 108,188 Net liabilities (415,730) (24,933) Iepresented by: Deficit in finds (41 5,730) (24,933) The above gives a i-te and fi View of the position of the Project as at 31 December 2017. Meg Taylor, DBE Date Seeetary General Pacific Islands Forun Secretariat The statement of financial position should be read in conjunction witi the aecompanying notes to the special purpose financial statement. 9 Pac Isl ds Formuini Secrelarhui Pacifte Ri.Iesilience Progranifne. (PREPT) Notes to and forming part of the special purpose fInansial sia aements For the year eniled 31 December 2017 1. Significal accotingilug policies The siginificant accounling policies wh lich have beenl adopted il I piepa rat 1011 etio ol tl lhe 0 spcui11 I purpose filancial sialements are: ia) Basis of accolnting Tho special purpose rnancial stateellints of Iiie PrJet have been prepared un the modiiled Cshi basis of aIccounltinlg. Income is recoglised when it is received. ExpeInd le: is recogiized whenl incur1red (acernal basis). Tie special purpose 1iincial stateieits laive been prrd 011 he hasis of histolical costs. The prject does not require the application of all International Fiinhancial Reporting St and(1rds. b) Foreign curreney transaetions Tle Project's functinnal and presentation currency is Fijian Dollars (PJD). Transactions settled in any curr1eiley other than FJD is sonverted inte FJD at tie exchange rate prevailing at tie date of ie transaction. c) Cash at bank Casl balances liclude cash at bank d) Con tinuity of lite Project The project is for tie duration of 61 iontlis e) Accruals and other payables Aceruals and other payables are recorded at cost and coiprise of audit fec and other payables. f) Owing to Pacific Islands Forum Secretariat (PIFS) Owing to PIFS is recorded at cost and comnprise of expeises incurred by the Project, paid by the Secretariat and yet to be reimbursed by the Project. g) Comparatives amd reporting periods Where necessary, comparative figuires have been classified or regroulped to confhi 111e clanges in presentation in tie cirrent period. The curreit period special purpose financial statements is for ilie year ended 3 1 December 2017 while t11 conparative special purposc financial statements is for the 15 montlis period ended 31 December 2016 from the projects inception. 1(0 Pacific Islands Forum Secretariat Pacific Resilience Programme (PREP) Notes to and forming part of the special purpose financial statements For the year ended 31 December 2017 2017 2016 FJD FJD 2. Accruals and other payables Audit fee - 2017 6,496 - - 2016 4,095 4,300 Provisional tax for consultants fee 17,457 1,498 28,048 5,798 The provisional tax for consultant fee relates to local consultants engaged as part of the PREP project. The provisional tax payable as at 31 December 2017 has been paid subsequently in 2018. 3. Owing to Pacific Islands Forum Secretariat Expenditure paid by PIFS 345,984 2,390 Advance from PIFS 100,000 100,000 Repayment to PIES during the period - - Totals 445,984 102,390 Movement in balance is attributable to: Opening balance 102,390 - Expenditure paid by PIFS 343,594 2,390 Advance from PIFS - 100,000 Repayment to PIES during the year - - Totals 445,984 102,390 11