COMMUNITY RESILIENCE TO CLIMATE CHANGE AND DISASTER RISK IN SOLOMON ISLANDS PROJECT [PHRD] TF012391 FINANCIAL STATEMENTS For the Year Ended 31 December 2015 Table of Contents Page (s) Report of the Executing Agency 2 Auditors Report 3 Balance Sheet 4 Statement of Income and Expenditure 5 Notes to and forming parts of the Financial Statements 6-9 MINISTRY OF ENVIRONMENT, CLIMATE CHANGE, DISASTER MANAGEMENT & METEOROLOGY PO BOX 21, HONIARA, SOLOMON ISLANDS TELEPHONE: +677 23031, FAX- +677 28054 POLICY AND HUMAN RESOURCES DEVELOPMENT (PHRD) TRUST FUND TF012391 FINANCIAL STATEMENTS For the Year Ended 31 December 2015 REPORT OF THE EXECUTING AGENCY Under the terms of my contract, I have the mandate from the World Bank and Ministry of Environment, Climate Change, Disaster Management and Meteorology (MECDM), as the Executing Agency, to supervise and manage the funds provided by Japan Policy and Human Resources Development (PHRD) Trust Fund. The Grant (TF012391) is used to pilot resilience activities in Temotu and Guadalcanal Provinces under the Community Resilience to Climate Change and Disaster Risk in Solomon Islands Project (CRISP). I certify that the attached Balance Sheet and Statement of Income and Expenditure which has been prepared under my supervision presents a true and fair view of Affairs of MECDM - PHRD for the year ended 31st December 2015. Dated at Honiara this - '24t, --day of 2016. QTJ'%Dr. Melchior Mataki Permanent Secretary Executing Agency Representative Ministry of Environment, Climate Change, Disaster Management & Meteorology 2 Morris & Sojnocki CHARTERED ACCOUNTANTS Morris & Sojnocki City Centre Building Mendana Avenue Honiara Solomon Islands postal address Independent Auditor's Report PO Box 70 Telephone (677) 21851 Report on the Financial Statements of the Ministry of Environment, Climate Facsimile (677) 23342 Change, Disaster Management and Meteorology (MECDM) - Japan Policy and Human Resources Development (PHRD) We have audited the accompanying financial statements of the Ministry of Environment, Climate Change, Disaster Management and Meteorology (MECDM) Japan Policy and Human Resources Development (PHRD) which comprise the balance sheet as at 31s" December 2015 and the statement of income and expenditures for the year then ended and a summary of significant accounting policies and other explanatory notes as set out on pages 6 to 9. Responsibility for the Financial Statements The Ministry of Environment, Climate Change, Disaster Management and Meteorology as the Executing Agency, and management of MECDM - PHRD Project Management are responsible for the preparation and fair presentation of these financial statements in accordance with applicable Accounting Standards in Solomon Islands and the Grant Agreement TF012391 dated 24h September 2012 between Solomon Islands and International Bank for Reconstruction and Development & International Development Association, and for such internal control as management determines is necessary to enable the preparation of a statement that is free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with applicable Auditing Standards in Solomon Islands. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements 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 entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. The audit also involved evaluating the project's compliance with the requirements of the Grant Agreement dated 24th September 2012 between Solomon Islands and International Bank for Reconstruction and Development & International Development Association. We do not, in giving this opinion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or in to whose hands it may come save where expressly agreed by our prior consent in writing. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion: (a) the financial statements present fairly, in all material respects, the financial position of the MECDM - PHRD Project as at 31" December 2015 and the results of its operations for the year then ended, in accordance with the accounting policies set out in note I of the financial statements. (b) project funds provided by the World Bank, have, in all material respects, been used in accordance with the conditions of the financing agreement, and only for the purposes for which they were provided and adequate documentation exists to support the expenditure incurred as detailed in the Statement of Income and Expenditures, which can be relied on as a basis for loan disbursement. (c) the designated accounts have been used and maintained in accordance with the provisions of the financing agreement and cash at bank balances at 31" December 2015 are correctly stated. (d) apart from the failure to provide audited financial statements to the World Bank not later than 6 months after the end of the financial year, we have noted no significant internal control weakssses or non-compliance with the financing agreement terms. MORRIS & SOJKOCKI Date: q A J 0 k 2 I6 Ch a cco untants Honiara a d BY GREG J SNOCKI PARTNER 3 CO,,.MMUNITY RESILIENC,ETO CLIMATE !,CHANGE & DISASTER RISK IN SOLOMOQN,ISLA NDS. PROJECT (POLICY AND -HUMAN RESOURCES DEVELOPMENT - PHRD) TF012391 -Dalance Sheet 2015 2014 SBD SBD Notes Assets Current Assets Cash at Bank 3 4,015 241,705 Staff Imprests 4(i) 383,010 Other Advances 4(ii) 1,245,881 109,979 PHRD Receivable-CRISP 4(iii) 24,680 Total Current Assets 1,274,576 734,694 Liabilities Current Liabilities Creditors and Accrued liabilities 5(,ii) 1,013,121 598,689 PHRD Payable-CRISP 5(iii) 28,000 - Total Current Liabilities 1,041,121 598,689 Net Assets 233,455 136,005 Accumulated Funds Accumulated Funds/Retained Earnings 12 233,455 136,005 Total Reserves 233,455 136,005 The Balance Sheet is to be read in conjunction with the notes to and forming part of the accounts on page 6 to 9 4 COMMUNITY RESLIENCE TO CL3MATE CHANGE & DISASTER RISK I SOLOMION ISLANDS PROJECT SRESOURCESD TF )12391_ StatementfIncome& EXPendit Bank Chargesne 3stDe l 2,82 1293 2015 2014 SBD SBD Notes TF012391 TF012391 INCOMIE World Bank - Grants Received 2 3,692,664,537 TOTAL INCOME 3,692,718 2,664,37 EXPENSES Advertising & Publicity P 90,331 Audit Fees 29,250 41,750 Bank Charges 2,822 2,931 Consulting Services 203,060 - Contract Services - Works - 301,825 Grant Assets - Computers/IT - 55,850 Grant Assets - Furniture & Fittings - 32,735 Grant Assets - Tools - 3,918 Hire 900 11,640 Materials - Community Projects 4,667 Meals & Refreshments 2,243 Meetings - 9,158 MV Expenses - Fuel + Service 915 29,362 Office Equipmen 9ses 2,800 1,825 Office Supplies & Stationary - 82,351 Printing & Photocopies 6 10,630 126 Praining Tri Material - 15,750 Printing - Posters, Books, Brochure - 80,720 Recruitment Fees - 1,100 Repair and Maintenance - Buildings - 2,700 Staff Expense - International 7 1,704,031 1,797,686 Staff Expense - National 8 1,355,221 Sundry Expenses 9 9,708 14,089 Telephone & Internet 50 41,701 Training Materials 18,196 - Travel Expense 10 226,575 324,820 Venue Hire 7,200 26,400 With-Holding Tax Expense - 161 Workshops & Seminars Sundry Expense - 13,585 Workshops & Seminars 11 232,003 - TOTAL EXPENDITURE 3,595,268 4,337,735 NET SURPLUS/DEFICIT 97,450 (1,673,198) The Income & Expenditure Statement is to be read in conjunction with the notes to and forming part of the accounts on page 6 to 9. 5 COMMUNITY'RESILIENCE.TO CLIMAT]EI CHANGE & DISASTER RISK IN SOLOMON ISLANDS PROJECT NOTES TO THE FINANCIAL STATEMENTS for the year ended 31st December 2015 1 ACCOUNTING POLICIES a Basis of preparation The financial statements have been prepared in accordance with generally acceptable Accounting Standards using the Accrual Basis of Accounting. The accounting policies have been applied consistently throughout the period. b Reporting entity The financial statements are for the Community Resilience to Climate Change & Disaster Risk in Solomon Islands (CRISP) project-PHRD, which is funded by the International Bank for Reconstruction and Development (IBRD) ('the World Bank') in partnership with the Ministry of Environment, Climate Change, Disaster Management and Meteorology. The principal objective of the PHRD project is to: i. integrate climate change adaption and disaster risk reduction across the recipient's sectors ii. improve climate change adaptation and risk reduction information and communication iii. increase the resilience of rural communities to climate change and natural hazards c Reporting currency The financial statements are presented in the Solomon Islands currency, the Solomon Islands dollar (SBD). d Recognition of Revenue Revenue is recognized when cash is received or a withdrawal application is approved for payment by the Bank within the financial year, although payment is received in the subsequent year e Foreign currency transactions Transactions in foreign currencies are recorded at the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currency are recorded at the exchange rate at the date of the transaction f Fixed Assets Capital Expenditure is expensed during the year in which the expenditure is made. 6 COM UNIYREILINC TOCLIMAT_ CHANGE & DISASTER RISK IN SOLOMON ISLANDS PROJECT. NOTES TO THE FINANCIAL STATEMENTS for the year ended 31st December 2015 2 FUNDING Grant Funding was provided by the International Bank for Reconstruction and Development and the International Development Association (World Bank), acting as administrator of grants provided by the Japan Policy and Human Resources Development (PHRD) Trust Fund to support Disaster Reduction and Recovery through the Increasing Resilience to Climate Change and Natural Hazards Project. During the year, Advances from World Bank and reimbursements of expenditures was recorded. 2015 2014 SBD SBD ADVANCES - GRANT INCOME (TF012391) Advance to Designated Account - - Reimbursement of expenditure during reporting period 3,691,723 2,664,537 Foreign exchange gains from unpaid International fees based on year end rate. 995 - TOTAL ADVANCES 3,692,718 2,664,537 3 CASH AT BANK AND ON HAND Cash Balance with ANZ - Acct# 4934447 4,015 241,705 Total Cash at Bank 4,015 241,705 4 ADVANCES i. Staff Imprest Unacquitted Cash Advances as at 31st December - 383,010 ii. Other Advances Community Investments Sub-Project grant 1,245,881 - iii. Receivable-CRISP Receivable - CRISP TF016425* 24,680 - Total 1,270,561 383,010 *Receivable - CRISP TF016425 balance relates to CRISP 2015 DEC 11 salaries which were charged to PHRD due to insufficient funds in CRISP. CRISP reimbursed the amount in the subsequent period. 7 COMMUNITY RESILIENCE TO CLIMATE.CH ANGE _& DISASTER RISK IN SOLOMON ISLANDS PROJECT TF012391 NOTES TO THE FINANCIAL STATEMENTS for the year ended 31st December 2015 2015 2014 SBD SBD CREDITORS AND ACCRUALS 5 i). Amounts owing to Suppliers & Consultants 117,672 156,616 ii). Accrued Liabilities Other Accrued Liabilities - 22,000 Basic Rate Payable 1,656 3,252 PAYE Tax Payable 808,404 370,901 With-Holding Tax Payable - 32,678 Professional With-Holding Tax Payable 65,366 - National Provident Fund Superannuation [7.5%] 12,014 7,945 National Provident Fund Superannuation [5%] 8,009 5,297 Total 1,013,121 598,689 iii). Payable-CRISP Payable -CRISP TF016614** 28,000 - TOTAL CREDITORS AND ACCRUALS 1,041,121 598,689 6 PRINTING AND PHOTOCOPY Printing and Photocopy 9,330 - Printing - Training Materials 1,300 - TOTAL PRINTING AND PHOTOCOPY 10,630 - 7 STAFF EXPENSES - INTERNATIONAL CONSULTANTS Consultant Fees (Long Term) 956,913 774,170 Consultant Fees (Short Term) 317,984 542,582 Accommodation (Short Term) 26,741 68,190 Living Allowance (Long Term) 201,066 38,760 Perdiem Expenses 16,878 123,420 Accommodation (Long Term) 154,000 100,500 Travel and Transport 30,449 150,064 TOTAL STAFF EXPENSES - INTERNATIONAL CONSULTANTS 1,704,031 1,797,686 *Payable - CRISP TF016614 relates to 2 months accommodation cost for Crisanto Abelgas Afable to be paid by PHRD. Payment was incorrectly raised against CRISP. PHRD reimbursed the amount in the subsequent period. 8 .'OM UNTYRt.ILENCE TO"LMAECANGE &,DISASE RISK I1N SOLOO SAD RJC. (PHRD) TF01239 NOTES TO THE FINANCIAL STATEMENTS for the year ended 31st December 2015 2015 2014 SBD SBD 8 STAFF EXPENSE - NATIONAL CONSULTANTS Salaries 1,044,666 1,166,308 Staff expense - casual 900 - Holiday Leave Passage 16,302 101,440 NPF Contribution (7.5%) 78,350 87,473 TOTAL STAFF EXPENSE - NATIONAL CONSULTANTS 1,140,218 1,355,221 9 SUNDRY EXPENSES Staff Expenses - Sundry 6,360 - Sundry Expenses 3,348 - TOTAL SUNDRY EXPENSES 9,708 - 10 TRAVEL EXPENSE Travel Expense -Accommodation 61,950 51,003 Travel Expense - Airfare 13,920 160,417 Travel Expense - Allowance 69,200 47,703 Travel Expense - Motor Vehicle/Taxi/Boat Hire 68,246 65,697 Travel Expense - Sundry 13,259 - TOTAL TRAVEL EXPENSE 226,575 324,820 11 WORKSHOPS AND SEMINARS Workshops Sundry Expenses 15,000 Workshops and Seminars 217,003 TOTAL WORKSHOPS AND SEMINARS 232,003 324,820 12 ACCUMULATED FUNDS Opening Accumulated Funds 136,005 1,809,203 Current Year surplus/(deficit) 97,450 (1,673,198) TOTAL ACCUMULATED FUNDS 233,455 136,005 9