REPUBL[C Of KENYA FFICE OF THE AUDITOR-GENERAL REPORT OF THE AUDITOR-GENERAL ON TUE FINANCIAL STATEMENTS OF AFR[CA CENTRE OF EXCELLENCE (ACEII) PTRE PROJECT FOR THE YEAR ENDED 30 JUNE 2018 Project Name: AFRICA CENTRE OF EXCELLENCE (ACEII) PTRE PROJECT linplcmnenting Entit: MOI UNIVERSITY PROJ ECT GRANT/CREDIT NUMBER: P151847 ANNV AL REPORT AND FVNANCIAL STATENIENTS FOR TIE FINANCIAL YEAR ENDED JUNE 30, 2018 Prepared n aecordance w ih he Casi Basis of Accounting Metliod under the International Public Sector Accounting Standards (IPSAS) M V101IUiVEKS/T A FRIC] CETRE OFEXCELLIEXCE (.CELL) I'TRE Projecr Reports ami Financial Sfalemenis For the financial year enledl June 30, 2018 CONTENTS PAC 1. PROJ ECT INFORMATION AND OVERALL PERFORMANCE ... ......... 2 i) STATEMENT OF PROJECT MANAGEMENT RESPONSIBILITIES ... 9 ii) STATEMENT OF RLCEIPTS AND PAYMENTS FOR lTlE YEAIR E-ND [D 30 N UN 2018.. iii) STATEMENT OF FINANCIA L ASSETS AND LIA BIL[TIlS AS AT 30» JUN E 20 18 .............. . .. 11 2. STATEMENT OF COMPARATIVE BUDGET AND ACTUAL AMUNS ...... .13 v) NOTES TO THE FINANCIAL STATEMENTS . ........... ......... 4 PROGRESS ON FOLLOW UP OF AUDITOR RECOMMENDATIONS . . ..... 20 11 1 l»I Uni>erity, .!!!ca CenVre o/ Lxe,ence (AC1E!) PIRL Projet Repurtv and fnancial Safemelnts Fo»r thiejinancia/er ded June 30, 2018 . PROJEVt (Nt RIATUON ANI) OVERA, L PERFORIANCE 1 .1 Name vud registered office Nanie: The prroject's ffici-al name is Africa Centre of Excellence (ACEJI) Phytochemicals, Textiles and RenewahLe E-nergy (PIRE) Projeet Objective: The key objecive of the project is to advance technology development and innovation in Phytochenica]s, textiles and Renewable Energy through delivery of quality post graduate train ng and collaborative resea reb in regional prioritv areas. Address: Moi Universi Margaret Thatcher Library, Main Campus P.0 Box 3900 -- 30100 ELDORET Contacts: -T e Col lok wiw re the projeet contacts Telephone: 125,) 736 138770. 771 336911 E-mail : if mtiiii.ac. nu ptreeeji j@gmailI.comn Website: wwwv.mu,aece 1.2 Projectc Infito rmiation Projec_ Stur Date: The project start date is i July 2017 Projeel End Dae' T leproiject end date is 30 June 2022 Piojeca1Cee: The prjeet manager is Prof Ambrose Kiprop Projget_Spotisor: The prjeet sponsor is the World Bank 1.3 Projeet verivew Line Ministry/State The project is under the supervision of the Ministry of Education Department of thc: prject Projeet numbe «r [Pf5 1847 Moi Uniersity, Africa Centre of Exäcellence (4 CEII) PTR E Project Reporis and Financial Statements For thefinancial year ended June 30, 2014 Strategic goals of Ilie The strategic goals of the project are as follows: project i) To strengthen education capacity exceItnce i 1ermis of quality of postgraduate training ii) To strengthen research capacity excllenec md oureach service in Phytochemicals, Textile and RunewVabl ncgy iii) To strengthen innovation and teebrology deelopmient in the industrial and manufactturing seclors iv) To strengthen sLstiainability of researcl and , training through enhancement of facihities. A ciemt of The projeet management aims to achieve lie goals thl roLigh1 the following strategic goals means: i) Admitting and training PhD and MSc siucents in areas of manufacturing involving Analytical Chemistv Textile, Industrial Engineering and Renewable Energy. ii) Enhancing learning environment by improvirig 1eaching, research facilities and ICT upgrading. iii) Re-tooling facultv on curriculum delivery and supervision. iv) Improving industrial and private sector linkage wii slakehoiders to ofler more internship places for students v) Offering extension and outreach services lo ite crnriiiiuiity. vi) Holding annual Imeetings with partners to discuss proect progress and evaluation. vii) Undertaking joint publications vith )tilers. viii) Organiz ig student an id staff exchälp activ is. ix) Embracing use of visiting meinmbers of fäculty who are based in the diaspora and other adjunct professor. Other important The manufacturing sector is envisaged under Kenya. Vision 2030 as a key background driver to economic growth with an annual growti ratc el 10% projected. information of Ilie To make Kenya a dynarnie industrial nation by yea.r2030, a high number of project diversified skilled personnel in science, technology, engineering and iathematics (STENI) are necessary. As in dustriatiliztion advanecs, the energy demand is expected to rise correspoidingly, requiring betler energy management with new technologies in energy generatiol and distribution. Sustainable industrialization requires hi skilled work renepable of introdueing novel manufacturing tech nologies and energy alternatives for sustainable development. The Centre is attempling to adJress the need in rmanufacturing technologies for textile, pliytochenicals and renewable energy in the country. 3 Ali University, Africa Centre of Excellence (ACEI) PTRE Projecl Reports and Financial Statements For t efimancial year ended June 30, 2018 Current situation that The Africa Centre of Excellence in Phytochenicails, Textile and Renewable the project was Energy (PTRE) at Moi University, was established k focus on MSc and formed to intervene PhD training, mentorship, short courses and researel in areas of textiles. industrial Engineering, phyochenicals and renewable 1Energy. Inadequacy in personnel with advanced training in ihese areas/sectors hinders fast industrialization of Kenya. Tliese scc.tors are key to improving the manufacturing sector which contributes to onyI 10% of Kenyan Gross Domestie Product. This Centre shall provide Doctoral and Masters Degiees training, while conducting research focused on Textile Engineering Industrial Engineering, Analytieal Chemistry and Renewable Energy. Project duration The project started on I" July 2017 and is expecled to run ui1t.1 30 June 2022. 1.4 Bankers The folowing are the bankers for the current year: (i) Kenya Commercial Bank P. O Box 560 -30100 ELDORET 1.5 Auditors The project is audited by: Office of the Auditor General, Anniversary Tow\ers, University Way P.0. Box 30084, GOP 00100 Nairobi, Kenya 1.6 Roles and Responsibilities List tie different people who will be working on the project. TIhis list would include the project manager and all the key stakeholders who will be involved with the project ALso, record their role, their positions, and their contact information, Nanies ] Title designation Key_ualifica i esönsi)iite Prof. Simeon Mining Director - Research Phi.1). Coordiriator P&Q Prof Am_brose Kiprop Centre Leader Ph.. (er).e ade Dr. Rose Ramkat Deputy Centre Ph.D. )epnty Cenire Lcader Leader Dr. Jackson Cherutoi Coordinator Ph.i). P- - hy1ocbeinieals Dr.Korir K. Kiptiemi Coordinator Ph.D. Dr.] redrick Nyanwala Coordinator Phi,¯l [ ScPo Dr. Charles Nzila Coordinator Ph.D Semirs atid conferences 4 M I lirsÅILY éic Cetr of R C L'nce OCER) PiRE Project Rep orts and ina ncial Statemntsn cöar enedJne 30, 2018 Dr. fLt eJeirlc Coordinator Ph. Short courses and inkig Mak_Fa__ tos Ñ idÏIr o an Master in Proj ect General atinistratonni Communication Planning and communication Officer I Management Mr. KirwaChr Accountant BBM - Financial Services ---- Finance ,CPA(K) vetrOkello Procurement Officer BiXA Dip PrcenntSrcs ,el rrocurernent Sev e Purchasing and -- - ___Supplies MSa Secretary Seeret Ser 17 Funding st IImmary The Project is fbr duration of four years from 2017 to 2022 with an approved budget of JS$ 600,000 equivalent to Kslis. 600 rnillion as highlighited in the table below: Below is ie funding srnmar - † - - - (i) Atra t edI- - J World ulss600,00o160,00,0o00 US$1 11,854 1 111,854,.166 _48,16 8.6,0 Bank/Minisiry o] jy; Edu eat in i (ii) Attrlcte:- Funds ADB Bank -- -N-b19,299.450 Office-6095 - Glasgow Un --i--- - 4-86, 9251i Giasgow Universty - - - () nuternaLjy - - -- enerated funds _S tiidleni' 1 56,34 - _ application les .156-340 Investnit incon1 c, - -5~ --12 -. -- - 0,00 1 - - 1695,342 __- 7__ - {Total 60- o mo' 0 0000< 111,854 134,833,796 488,1464 816,0 600,000 600,000,000 i 5 A i nir itl/ea Centre of IKrcellec: iCl.lJJ) JP?E Project Reports and nancial Stemne,nts For the fin (ncir y.ear cirred June 30, 2#18 8 SuIwary ofOverafl Vroject Performance: The Africa Centre of Excellence in Phytochemicals, Textile and Renewable Energy at Moi University was [atnchcd on 14"' September 2017 at Sirikwa Hotel, Eldoret. The launch was attended by national, regional and International partners who represented the partner institution * Dr. K. CIelule (KlItDI, Kenya). * Pro M. S. Elaraih (University of Gezira, Sudan), * Dr. liby Nyoni (Ni tional University of Science and Technology, Zimbabwe), * Pro 1? ChachIa Nyaigotti--Chacha (Commission for University Education. Kenya), * Ms. Yvonne Kirena (Biogas International), * Prof j). K. Some (University of Eldoret), * Dr. iidezi Chweva (Kenya School of Government). * Dr. Wilson Bahu (Busitema University), * Dr. Maurice Bolo (Scinnovent Center) and * Mol University repiesentatives from various sections. In addition, ACTIVIT1] pS DIRING THE YEAR * Org-niz(ed i Management and Leadership workshop that involved regional and national particpints oil 10 - 17"' October 2017. * In O:b>ber/Novenber 2017, engaged the Schools of Engineering and Biological and Physical Sciences, to. conduct a tracer study and received a positive responses from a sampIe size of two lundred and li dty respoident 1from the industry and the response will be used to develop shoil cAn seS that are in deniand. Partif)'Itod in the Initer niversity Council for East Africa/Regional Facilitation Unit (FRU) of E,ster aid Southern Africa Higher Education Centers of Excellence Project (ACEII), neeting to build and strengthen partnership between ACEI. The meeting was held in Kiga(i, Rwanda under ihe theme "Engagino private Companies to be in the Centre Governance Advisory bodies of ACE's Project" on 18t" to 19t" October 2017 and was attended by Nalional and R,:gional Higher Educations agencies, Vice-Chancellors and the host Center leadern project coordinators * iThe Centre Leader , Deputy Centre Leader and the Finance Officer attended the joint ACE &II works|hop between 7"' to 91"' November 2017 in Accra. Ghana for collaborative networks and pn`cnta L'on of] Project progress * The C entre Leader attended an international Conference on Petro-Chemistry and Chemical Engineering on 13'" to 14 Novenber 2017 and presented a published paper on "Biological Productiorn of Bio-hydrogen from Organic Substrates" in Atlanta U.S.A * Organized a student orientation to familiarize the regional and national students on vanous Jnivcrs ity academic and social requirements on 16"' November 2017 * Carrild ot a sensil iation workshops for the University staff and the surroundin: cx, 6 foi University, Africa Centre of Excellence (ACE1) PTRE Project Reports and Financial Statements For the financial year ended June 30, 2018 on the importance of research in manufacturing sector on 13D 14 [ecember 2017 • Held its first Short Course programme Development and Curricullum, deivery im June 2018 at Sirikwa Hotel and hosted a professional talk by Mr. -larness Mogorigo of Association of Energy Professional East Africa (AEPEA) * The Centre entered into a collaborative Memorandim ol' Uiderslinding with NOCART. AEPEA, BIOGAS International and University of Gezira, Sudan and hmve bad a series of exchange visits by the ACEJI Coordinators * The Centre has organized a series of training, nalional and inteinatioial seminars, workshops for direct and support staff being the essential drivers for the success of this project. * The Centre has offered Scholarship in MSc and PhD in Anialytical Chemirstry, Malerial and Textile Engineering and Energy Studies. Thcse progranms have attracted students from Kenya, Malawi, Zambia, Uganda, Ethiopia and Sudan. In addiiion to the above, the project has renovated few of the University houses to be used by the supported students and laboratories to improve on research and other acadenie uLeLC From left: Partners during the ACE launch (Philippe GERARDIN, Professor from Université de Lorraine and Prof. S. Elarabi from University of Gezira), Pro. Ambrose Kiprop (Center Leader) and Dr. Rose Ramkat (Deputy Center Leader) 7 Moi Un iit, A»Icra Cen!re otfExcellence (ACEl) PTRE Project Reports and F finan cial Snatemenis For thefinancial year ended June 30, 2018 ät ;N tP# ' IT"Mh Participants anuriag PTRU La1unchI at Sirikwa Hotel 13 and 14 September 2018 Univers it- Minagemient, Partners, ACE[I PTRE Team aind othekr participant during training on Progý-rammte Developmient and Curriculum Delivery ~ t ~8 1~ Moi University, Africa Centre of Excellence (ACEII) PTRE Project Reports and Financial Statements For the financial year ended June 30, 2018 i) STATEMENT OF PROJECT MANAGEMENT RESPONSIBIL [I ES The Vice Chancellor for the University and the Centre Leader for the Afrca Centre of Excellence (ACEIL) Pliytochemicals, Textiles and Renewable Energy (PTRE) Project arc rsponsible for the preparation and presentation of the Project's financial statements, which give i true and fair view of the state of affairs of the Project for and as at the end of the financial year (period) ended on June 30, 2018. This responsibility includes: (i) maintaining adequate financial managenient arrangement and ensuring that these continue to be effective throughout the reporting period; (ii) maintaining proper accounting records, which disclose with reasonable accuracy at any time the financial position of the Project; (iii) designing, implementing and maintaining internal controls relevant to the preparation and fair presentation of the financial statement, and ensuring that they are free from material misstatements, whether due to error or fraud; (iv) safegua-ding the assets of the Project; (v) selecting and applying appropriate accounting policies; and (vi) making accounting estimates that are reasoiable in the circumstances. The Vice Chancellor for the University and the Centre Leader for Africa Centre of Excellence (ACEII) Phytochemicals, Textiles and Renewable Energy (PTRE) Project accept respons ibility for (he Project's financial statements, which have been prepared on the Cash Basis Method of Financial Reporting, using appropriate accounting policies in accordance with International Public Sector Accoi ning Standards. The Vice Chancellor for the University and the Centre Leader for Africa Cente' f Excellence (ACEII) Phytochemicals, Textiles and Renewable Energy (PTRE) Project are of the opinion that the Project's financial statements give a true and fair view of the state of Project's transactions during the financial year/period ended June 30. 2018, and of the Project's financial position as at that date. The Vice Chancellor for the University and the Centre Leader for Af-ica Centru of Exellencc (ACEl) Phytocliemicals, Textiles and Renewable Energy (PTRE) Plroject further confirn the completeness of the accounting records maintained for the Project, which have been relied upon in the 'preparation of the Project financial statements as well as the adequacy of the systems ofinternul financial contiol. The Vice Chancellor for the University and the Centre Leader for Africa Centre .f Excellence (ACEII) Phytochernicals, Textiles and Renewable Energy (PTRE) Project confirm that the Pioject has complied fully with applicable Government Regulations and the terms of external financing covenants, and that Project funds received during the financial year under audit were used for the eligible purposes for which they were intended and were properly accounted for. Approval of the Project financial statements The Project financial statements were approved by the Vice Chancellor For the University and the Centre Leader for Africa Centre of Excellence (ACEIII) Phytochemicalu, Textiles and Renewable Energy (PTRE) Project on 2018 and sigi ied by them. Vice ChancS or Centre Le/der 9 REPUBLIC OF KENYA TcJcphoTpe: 4 254 -203i22y0 R 0. Boxz '300834-00100 OFFICE OF THE AUDITOR-GENERAL REPORT OF THE AUDITOR-GENERAL ON AFRICA CENTRE OF EXCELLENCE (ACEII) PTRE PROJECT FOR THE YEAR ENDED 30 JUNE 2018 REPORT ON THE FINANCIAL STATEMENTS Opinioi I have audited the accompanying financial statements of Africa Centre of Excellence (ACEll) Phytochemicals, Textiles and Renewable Energy (PTRE) Project set out on pages 10 to 22 which comprise the statement of financial assets and liabilities as at 30 June 2018, and the statement of receipts and payments, statement of cash flows and statement of comparative budget and actual amounts for the year then ended, and a summary of significant accounting policies and other explanatory information in accordance With the provisions of Article 229 of the Constitution of Kenya and Section 35 df the Public Audit Act, 2015 and the Financing Agreement dated 27 October 2016 between the Government of Kenya and Moi University. I have obtained all the information arid explanations which, to the best of my knowledge and belief, were necessary for the purpose of the audit In my opinion, the financial statements present fairly, in all material respects, the financial positlon of Africa Centre of Excellence (ACEII) PTRE Project as at 30 June 2018, and of its financial performance and its cash flows for the year then ended, in accordance with International Public Sector Accounting Standards (Cash Basis) and comply with the enabling Act. Basis of Opini6n The audit was conducted in accordance with International Standards of Supreme Audit Institutions (ISSAls). I am independent of Africa Centre of Excellence (ACEII) PTRE Project in accordance with ISSAI 30 on Code of Ethics. I have fulfilled other ethical responsibilities in accordance with the ISSAI and in accordance with other ethical requirements applicable to performing audits of financial statements in Kenya. I believe thiat,the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion. Key Audit Matters Key audit maiters are those matters that, in my professional judgment, are of most significanc6 in the audit of the financial statements. There were no Key Audit Matters to report in the.year under review. Report of:Ihe 4iidilw -(;ei?end of.7!? F 1(m ia SlI l teI ; w )lHs q0/ -?cu Cei/ttre ()I EACellCc' K (A ("F11 iw h/? I". Other Matter 1.1. Budgetary Control and Performance 1.2. Budget Absorption During the year under review, Africa Centre of excellence (ACE II) PTRE Project had a total budget of Kshs. 119,769,567 against actual expenditure of Kshs,52,095,618 resulting in under absorption of Kshs. 82,486,634 as summarized below: Item Budget Actuals Under 2017-2018 2017-2018 Expenditure (Kshs) ___(jKshs) (Kshs) Set up institutional framework for 27,227,025 14,939,503 12,2137,522 commencement of the ACE Strengthen education capacity 28,256,944 15,577,486 12,679,458 excellence-quality and productivity . Education capacity and development 2,798,075 159,700 2,638,375 impact Strengthen research capacity 55,069,007 15,193,660 39,875,347 excellence-quality and productivity Observation of best practice in ACE 51,625 51,625 financial operation Observation of best practices in ACE 51,625 51,625 procurement operation Donor attracted research expenses 21,127,948 6,225,266, 14,902,682 Total 119,769,567 52,095,618 82,486,634 The under expenditure of the approved budget is likely to have negative impact on delivery of goods and services and the overall achievement of project objectives and goals. REPORT ON LAWFULNESS AND EFFECTIVENESS IN USE OF PUBLIC MONEY Conclusion As required by Article 229(6) of the Constitution, based on the procedurEs performed, except for the matter described in the Conclusion on Compliance aid Effectiveness section of my report, I confirm that, nothing else has come to my attention to cause me to believe that public money has not been applied lawfully and in an effective way. 2 Basis for Conclusion 1.0 Receipts 1.1 Teri Deposits The stateMent of receipts and payments for the year ended 30 June 2018 reflects total receipts figure of Kshs 134,833,796 which includes miscellaneous receipts figure of Kshs 1,851,681 out of which an amount of Kshs 1,695,342 as disclosed under not( 2.3 to the financial statement is in respect of interest income. Available information revealed that the interest income of Kshs.1,695,342 was interest in respect of payment by Kenya Commercial Bapk on a term deposits of Kshs. 80,000,000 invested in the Kenya Commercial Bank by the University contrary to article 11 Section 2.05 of the subsidiary grant agreement between the government of Kenya and Mcli University dated 27 October 2016 which states that the proceeds of the Grant.shall be applied exclusively for the financing of Moi University's respective part of the project ir accordance with this Grant Agreement. In addition, no procurement records were availed for audit review to confirm that the investment was competitively sourced and the University got the best interest. Further, no evidence was provided for audit review to confirm that the investment was approved by the University Council. Consequently, the managemTlent was in breach of subsidiary grant agreement and the general disbursement guidelines for World Bank Projects. My responsibility is to express a conclusion based on the review. The review was conducted in accordance with ISSAI 4000. The standard requires that I comply with ethical requirements and plan and perform the review so as to obtain limited assurance as to whether the activities, financial transactions and information reflected in the financial statements are in compliance, in all material respects, with the authorities that govern them. A review is limited primarily to analytical procedures and to inquiries, and therefore provides less assurance than an audit. I have not performed an audit, and, accordingly, express my conclusion in the form of limited assurance, which. is consistenI with the more limited work I have performed under this compliance review. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a bais for my conclusion. Re/ht! //h 1, iii i . ni ' ll?ii thi" f iwacital ,Sl(&iiwwors .lt fi , ica CeLnirhL o/Tvvl!i LU/ Il, h u REPORT ON EFFECTIVENESS OF INTERNAL CONTROLS, GOVERNANCE AND RISK MANAGEMENT SYSTEMS Conclusion As required by Section 7 (1) (a) of the Public Audit Act, 2015 based on the prbcedures performed, except for the matter described in the Conclusion, on Effectiveness of Internal Controls section of my report, I confirm that, nothing has comne to my attention to cause me to believe that internal controls, risk managenent and overall governance were not effective. Basis for Conclusion As required by Section 7 (1) (a) of khe Public Audit Act, 2015; bitsed on the procedures performed, I confirm that, nolhing has come to my atterition to cause me to believe that internal controls, risk management and overall governanice were not effective. My responsibility is to express a conclusion based on the roview- The review was conducted in accordance with ISSAI 1315. The standard require that I plan and perform the review so as to obtain iiniteo assurance as to whether effective processes and systems of internal control, risk management and governance was maintained in all material respects. The matters reported are limited to the deficiencies identified during the audit that I have concluded are material to be reported. I have not performed an audit, and, accordingly, express my conclusion in the form of limited assurance, which is consistent with the more limited work I have performed under this review. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my conclusion. Responsibilities of Management and Those Charged with Governance Management is responsible for the preparation and fair presentation of these financial statements in accordance with International Public Sector Accounting Standards (Cash Basis) and for maintaining effective 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 and for its assessment of the effectiveness of internal control. In preparing the financial statements, management is responsible for assessing the Africa Centre of Excellence (ACEII) PTRE Project ability to continue to sustain services, disclosing, as applicable, matters related to sustainability of services and using the applicable basis of accounting unless the managernnt either intends to liquidate the Africa Centre of Excellence (ACEII) PTRL Project or to cease I/ 1,ot d. rI I/ I/n ,-,lor-hL?,17'? 1 "W hMc/?' FiinI M'jrd/ ,Se :r v f/C /7?1 II/Ye rdf W 'e/40" r -410J? ' -(WI reth n operations, or have no realistic alternative but to do so. Management is also responsible for the submission of the financial statements to the Auditor-General in accordane:e with the provisions of Section 47 of the Public Audit Act, 2015. In addition to th responsibility for the preparation and presentation of the financial statements described above, management is also responsible for ensuring that the activities, financial transactions and information reflected in the financial statements are in compliance wilh Ihe authorities which govern them, and that public money is applied in an effoctive manner. Those charged with governance are responsible for overseeing the Africa Centre of Excellence (ACEII) PTRE Project financial reporting process, reviewing the effectiveness of how the entity monitors compliance with relevant legislative arid regulatory requirements, ensuring that effective processes and systems are in place to address key roles and responsibilities in relation to governance and risk management, and ensuring the adequacy and effectiveness of the control environmht. Auditor-General's Responsibilities for the Audit The audit objectives are to obtain reasonaule assurance about whether the firan&ial ,tatemenls as a whole are free from material misstatement, whether due to fraud or error, arid to issUe an auditor's report that includes my opinion in accordance with the provisions of Section 48 of the Public Audit Act, 2015 and submit the audit report in compliance wili Article 229(7) of the Constitution. Reasonable assurmnce is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISSAls willlalthays detect a material misstatement and weakness 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 decisiQns of users taken on the basis of these financial statements. In addition to the audit of the financial statements, a compliance review is planned and perfornmeld to express a conclusion with limited assurance as to whether, in all material respects, the activities, financial transactions and information reflected in the financial statements are in compliance with the authorities that govern them in accordance with the provisions of Article 229(6) of the Constitution and submit the audit, report in compliance with Article 229(7) of the Constitution. The nature, timing and extent of the? compliance work is limited compared to that designed to express an opinion with reasonable assurance on the financial statements. Further, in planning and performing the audit of the financial statements and review of compliance, I consider internal control in order to give an assurance on the offectiveness of internal controls, risk management and governance processes and systems in accordance with the provisions of Section 7 (1) (a) of the Public Audit Act, 2015 and submit the audit report in compliance with Article 229(7) of the Constitution. My consideration of the internal control would not necessarily disclose all matters i L IL 30 dt rJ i C the internal control that might be material weaknesses under the 1,SAls A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low revel. the risk that rrsstatements caused by error or fraud in amounts that would be maerial in relation to the financial statements being audited may occu r and riot be netC;lEid wilhin a timE!ly period by employees in the normal course of peuiormiing tholQrr assigned funa ti ons. Because of its inherent limitations, internal control may not prev(,nt or detec.t misstatements and instances of non-compliance. Also, projecti6ns of any evaluation of' effectiveness to future periods are subject to the risk that contrOls may,become inadequate because of changes in conditions or that the degree ofcorpliance with the Africa Centre of Excellence (ACEII) PTRE Project policies and procedures may deteriorate. As part of an audit conducted in accordance with ISSAls I exercise professional judgement and maintain professional skepticism throughout the audit. I also: codetiify a yd assess the risks c ma[eriai isstatement or ree oiilamcia) sPatei)entsf whether due to fraud or error, design and perform audit procodures responsive to those risks, and obtain audit evidence that is sufficient and apprfpiialle to provide a basis for my opinion. The risk of not detecting a material misstatement resulting firom fraLid is higher than for one resulting frcn error, aS ffZIud rr¶ay:I involve, Collusion, forgery, intentional omnissions, misrepresentahioris, or the OVErr-ide Of internal control, * Evaluate the appropriateness of account Ing policies used and ther reasnableness of accounting estimates and related disclosures made by the mna genient * Conclude on the appropriateness of the management's ise of the going concern basis of accounting and, based on the audit evidence obtained(,' Whether a material uncertainty exists related to events or conditions 1hat may c;asl s;ignificant doubt on the Africa Centre of Excellence (ACEII) PTRE Project ability to( c:ontinUE' as a going concern or to sustain its seivices. If I conclude t hat a Material uncertainty exists, I am required to draw attention in the aUditor.' report to the related disclosures in the financial statements or, if such dii$closuies are inadequate, to modify my opinion. My conclusions are .bas_e d on the aUdit evidence obtained up to the date of my audit report. However, fUtUre evenits or conditions may cause the Africa Centre of Excellence (ACEIl) [rrF\)EE- Project to cease to continue to sustain its services. *Evaluate the overall presentation, structure and conltenrt of. thE! financial statements, including the disclosures, and whether the financial wlatements RVI,)t "" i 7 tof i Ao , 1 Gs It, fl'u/n too d F1irrf, 'i,7/ So, o",,' a. t4,0 (6.~, ,,,# v 4v, i 4( ; i' p . to i W ot ,J Jw,N 6 represent the underlying transactions and events In a manner that achieves fair presentation Obtain sufficient appropriate audit evidence regarding the financial information and business activities of the Africa Centre of Excellence (ACE1I) PTRE Project to express an opinion on the financial statements. * Perform Such other procedures as I consider necessary in the circumstances. I corflmmunricate with the management. regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficienciet; in internal control that are identified during the audit. I also provide management with a statement that I have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on my independence, and where applicable, related safeguards. FCPA Edward R. 0. Ouko, CBS AUDITOR-GENERAL Nairobi 28 December 2018 C I I I, 'I i t, (Iwfl -G;wra t ll II I' } ii (hz - i ?1CUlSIUIt&LMLtuN.A of .4 _L;v I (Y1YC1C IceltIC1' A iSEHi rl "Inletc 30.1lIi 0 7 Mlt itüéy'Je.T Ctre O/IExce//ence (C?/I) 9R P 'ect Reports and hiuicial StaI;tiem s riiet. For1efinrmeiaaipear euled June 30, 2018 m- STAT'MPNT fr gcedcs l i Uincistic. 2.2 and foreign ants 2 1,127.948 2 1, 127.948 Miscefllneois cceijts 2.3 1 1,682 - - 1,85 682 TOTAL RECEI ] S [34,833,796 134,833,79 PAYMEK's -- Purchase of e ood s an -el 2.4 services 6- 440 006 263 Acquisition ofnon 2.5 financial asseis 12,089,352 - - - 12 089.352 TOTAL PAYMENTS 52,09i,615 52,095,615 SURI>L(US .8 2 7 , -M 82738,181 8,31 The accounting poic and explanatory notes to these financial st ements are an integ{l 1ll of the ainncial satemn 1 Vice Chancel (elire Leader DepUtV Vice Chancello Fi " ProfIsaac Ko Prof Arbrose Kiprop Prof Daniel Tarus ICPAK Member No./ 10 5loi (niversity, Ifrica Centre of Excellence (ACEH) PTRE Projec Reports and Financial Statements For thefinancial year ended June 30, 2018 STATEMNT OF FINANCIAL ASSETS AND LIABILITIES AS AT 30J"' NE 2018 FINANCIAL ASSETS NOTF 2017-,[ 1 20[6-2017 Cash and Cash Equivalents Cash and Bank Balances 2.6 - 80.695t 58 liprests and Advances 2.7 2.0426>00 82,738,18 t REPJtŒSENTED BY: Funds Balances B/fwd Priur Year Adjustments Sui plus fo rte Year -82738 8,I~ 2.8 NET FINANCIAL POSITION 82,738,181 The Accounting policies and explanatorv notes to these financial stalements Jorm an inlegra part of the Financial Statement. The Financial Statements were appi-oved on .... 2018 and signed by: Vice Chancellor Centre Leader Dep113 Vice C'I1uric441or, Finance Prof. Isaac S Kosgey Prof. Ambrose Kiprop Prof. Daniel IL 'ariis- iCPA K Menber Number:1I&ýA t. 11 Moi University, Africa Centre of Excellence (4 HTEl) PTRE Project Reporis and Financial Statements For ihe financial year ended June 30, 2018 2.3 MISCELLANEOUS RECEIPTS FY,2017/18 s' - , . ontolld .bv ,onitrolled Cash i ypa fI i rdce KSsKShs KShs 156,339 - 1561 - Intere,'t Incomle 1.695 342 695 Toa1,851 68 - 85 81J 2.4 PURCHAS5E OF GOODS AND SERVICES .- - ---..--i --207/iSi 2016/171 ______ ixi-i.Kshs KshsJI~ I.U L ( p Jo stitult onal Framework 1 49 cStren theingl EduLcatnional Capamcity Lxcellcte 15>75,506 - 3.0 Education Capacity and Development 159,700 - 4.0 Siengtn Research and Cipacity Excellence 715 1 5.0 Doonijr aittfted ruscaach expenses 6,225,26 Total 40,006,263 2.5 ACQUISITION OF NON-FINANCIAL ASSETS .2.0 1ý -2 o ir7 ir t 1. p Ul 1HSIL. uonal Framework 3447 7 2.0 Strengthen n ducational Capacity Excellence 50 980, 4.0 S a cesearch and Capacty Excellence -9< 1 2,089,352 I17 -&1j--L----/l---&-1―·―es&I―《』―/tt『 ∼ 너/[/!편 l &.[T-l,&&- ,「 1 8 Moi ifniversity, Africa Centre of Excellence (,ICEI» PTREProf.'e.f1 -Repoils and 1,-inancial Statements f-or thefinancialyear ended June 30, 2018 NOTVS TO THE FINANCIAL STATEMENTS (Confinoed) 2.8 VUND BALANCE BROUGHT FORWARD ø ............. d-. Bank ý,tccomils 80,695,58 1 111.595,000 Outslanding imprests and advances 0,12,600 Total 8-1 33,519 il 1,59s,ooo 8ýJN1NIARV 0F FIXED ASSET REGISTER urch, a,,kes/Additio al' in the yenT, i4t tlie øst 0 1,7 8 2o 1,7/1 -2 1) 71118 motor veý11de 7,400,000 7,400,000 office c(1111p111c11t, 4,689,352 furnitureand 1,089,352 Total 12,089,352 -12,089,352 1 19 :С { , � �� � С + � :�� i 1� . . �. ..... jl ............... г� .3� � � ��� ;,. .. . , ..����. с� r ' ьп � �� t� а) � С) +� U� �$ .�) ��. � � � '�,. cF ' , ' �; У+1 ier LY сч '��+ г�� ' �'� � �� � � i �j � �� r � 1 I � и ь I ,�� �+Н � . . . ,. �и 4J i� V �. f- � �, �. � r� ц .е� I � п� , ' � N � � , t�Ji � � 1�+ ..�. . f ' . . ;� i �г� у � � I �� J , �, t�j 'Л � � ' . . � � !~ � Г�У � � � ,.�� i,� , -i� C�i �р ..'�"' 0.э � � � � :) С`-.` � }� ti � , �� � � � - :� , i! t'.'7 ', !' п j [� � � `� г� л� •',h - � -". '" � �. � � С� � �J 0 у � ``) � _ ~, ' а... С) � ' �� �у � . � . � � � _ ' � �+] �' ~� ..; � . ^v ч � 3„ ^ /СЭ ' .. .�„�'°^` "+я �°. I r-м С3.. `� �': � 4._.�i ,-3 v, С ��I �' ,� :` `' ! � `_1 ., м� .,,q � "'+r � �ц .� f гj :; "�'ы' ы Э С/� `�-' ^.� ; w � Сг r� � , � �% �., . LL) .-� . ~ ;.� � ; ✓ г�� ь-� � "' ��' .,. � � :;-� I .i г�� �`., й. �ч � � ✓ `� 9 : �в ��т ` � � 'w,1 ""У � Г1у �--г 1 � ……仁… lä z4 . > lzý bj z3 rf, 50 t-i i 13 rý r D