~· • 1111 MINISTRY OF ROADS AND HIGHWAYS • TRANSPORT SECTOR IMPROVEMENT PROJECT (TSIP) (PROJECT PREPARATION ADVANCE (PPA)) NO. V0460-GH INDEX TO THE FINANCIAL STATEMENTS Contents Page • Corporate Information 2 Independent Auditors' Report on the Financial Statements Statement of Financing and Expenditure 6 Statement of Financial Position 7 Statement of Cash Flows 8 Notes to the Financial Statements () • • • • • • • • Ill ' • MINISTRY OF ROADS AND HIGHW A VS TRANSPORT SECTOR IMPROVEMENT PROJECT (TSll') (PROJECT PREPARATION ADVANCE (PPA)) NO. V0460-GH Corporate information Project Steering Committee: Chief Director - Ministry of Roads And Highways-Chairman Rep. of Ministry of Finance •• Rep. of Ministry of Roads And Highways Rep. of Ghana Highway Authority Rep. of Ghana Ports And Harbours Authority Rep: of Ministry of Transport · • Rep. of Driver and Vehicle Licensing Authority Rep. of National Road Safety Commission Rep. of Kwame Nkrumah University of Science & Technology Rep. of Government Technical Training Centre Rep. of Department of Urban Roads Rep. of Department of Feeder Roads Rep. of Ghana Maritime Authority Rep. of Volta Lake Transport Company Rep. of Regional Maritime University Rep. of Ghana Airports Company Limited Rep. of Ghana Civil Aviation Authority • Registered office: Ministry of Roads And Highways Opposite Ghana Highways Authority Near Pension House Accra • Auditors: Benning, Anang & Partners Chai:tered Accountants and Management Consultants Abavana House • Abavana Junction 27 Kotobabi Road Accra • Bankers: National Investment Bank Limited • 111111 • . 3 '• BENNING, ANANG & PARTNERS (Chartered Accountants & Management Consultants) Abavana House, ·Abavana Junction Telephone . +233(0)302 235669, 237205, 246626-7 27 Kotobabi Road, Kotobabi Mobile . +233(0)242-206406, 0244-806509 P 0. Box AN 12266 Fax • +233(0)302 246628 Accra-North E-mail • baap1905@hotmail.com Ghana INDKPENDENT AUDITORS' REPORT TO THE MINISTRY OF ROADS AND HIGIIWAYS TRANSPORT SECTOR IMPROVEMENT PROJECT (TSIP) Ill (PROJECT PREPARATION ADVANCE (PPA)) NO. V0460-GII Report on Financial Statements Opinion We have audited the accompanying financial statements of Transp011 Sector !111provc111cnt Project (TSIP), (Project Preparation Advance (PPA)) No. V0460-GH for the year ended 31st December.2018 set out on pages 6 to 12. These financial statements comprise the statement of financial position at 31st December, 2018 the statement of financing and expenditures and statement cash !lows for the year then ended, and a summary or significant accounting policies and other explanatory notes. In our opinion, the Financial Statements· audited by us, which are in agreement with the books of accounts in all material respects and conform with International Financial Reporting Standards ( IFRS). give a true and fair view of the financial position of the Transpo1i Sector Improvement Project (TSIPl. (Project Preparation Advance (PPA)) No. Y0460-GH, as at 31st December, 2018 and of the Financing and Expenditures and the Statement of Cash Flows for the year then ended. Basis of Opinion We conducted our audit in accordance with International Standards on Auditing. Our responsibility under those standards are further described in the auditors responsibilities for the Audit ot' the tinancial statements section of our rcpoti. We are independent of the Transport Sector Improvement Project (TSIP), (Project Preparation Advance (PPA)) No. V0460-GH in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants ( IES BJ\ Code) together with the ethical requirements that arc relevant to our audit of the financial statements in (Ghana). and \vc have fulfilled our other ethical responsibilities in accordance with these requirements and the IESB/\ Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a . basis for our opinion . Project Steering Committee's Responsibility for the Financial Statements Project Steering Committee of TSIP (PPA) under the Ministry of Roads and Highways is responsible fur the preparation and fair presentation of these financial statements in accordance with World Bank • financial repo11ing guide! ines and International Financial Reporting Standards and for such internal control as the Project Steering Committee of TSIP determines is necessary to enable the preparation or financial statements that are Cree from material misstatement, whether due to fraud or error . • 111 preparing the financial statements, the Project Steering Committee of TSIP (PPJ\) 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 Project Steering Committee of • TSIP (PPJ\) ei~her intends to liquidate the Project or to cease operations, or has no realistic alternative but to do so. The Project Steering Committee of TSIP (PPA) 1s responsible for overseeing the Project's financial • reporting process . • BENNING, ANANG & PARTNERS (Chartered Accountants & Management Consultants) INDEPENDENT AUDITORS' REPORT TO THE MINISTRY OF ROADS AND IIIGIIWA YS TRANSPORT SECTOR IMPROVEMENT PROJECT (TSIP) (PROJECT PREPARATION ADVANCE (PPA)) NO. V0460-GII -(continued) • Auditors' Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors· 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 International Standards on Auditing 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 the financial statements. /\s part of an audit in accordance with International Standards on Auditing, we exercise proressional judgment and maintain professional skepticism 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 or 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. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Project Steering Committee . • • Conclude on the appropriateness of the Project Steering Committee'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 co11clude that a material uncertainty exists. we arc required to draw attention in our auditors' report to the related disclosures in the financial statements or. if 1111 such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors' report. However, future events or conditions may cause the Project to cease to continue as a going concern. 1111 • Evaluate the overall presentation, structure and content of the financial statements. including the disclosures, and whether the financial statements represent the underlying transactions and events • in a manner that achieves fair presentation . • 5 BENNING, ANANG & PARTNERS (Chartered Accountants & Management Consultants) INDEPENDENT AUDITORS' REPORT TO THE MINISTRY OF ROADS AND IIIGIIWAYS TRANSPORT SECTOR IMPROVEMENT PROJECT (TSIP) (PROJECT PREPARATION ADVANCE (PPA)) NO. V0460-GH-(continued) , We communicate with the Project Steering Committee 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. • The Engagement Partner on the audit resulting in this independent auditors' report is Festus Eugene Adu Mantey (ICAG/P/1038) • l~a~a,:::ciAG/F/2019/045) Chartered Accountants 1111 Abavana House, Abavana Junction Accra Ghana a..~0.:&. . .~7I. . . 2019 1111 • 1111 . • ·?if!: 6 MINISTRY OF ROADS AND HIGHWAYS TRANSPORT SECTOR IMPROVEMENT PROJECT (TSIP) • (PROJECT PREPARATION ADVANCE (PPA) NO. V0460-GH) STATEMENT OF FINANCING AND EXPENDITURES FOR THE YEAR ENDED 31ST DECEMBER, 2018 Tranasaction Cumulative • Note Balance b/f US$ for the year US$ to date US$ -~ Bank balances at 1-1-2018 293,985 • Direct payments Special Account Deposit 223,806 958,133 895,223 561,460 1,119,029 1,519,593 TOTAL 1,181,939 1,750.668 2,638,622 ~----===--=== EXPENDITURES • Goods Training 3 4 424,815 100,955 453,090 100,955 877,905 Consultancy s 447,612 1,169,932 1,617,544 Operating costs 6 15,527 &_543 42,070 887,954 1,750,520 2,638,474 Bank balances at 31-12-18 293,985 148 148 TOTAL 1,181.939 1,750,668 L638,622 The µpancial stat~ents were approved by the Project Steering Committee Members on ,.~.':-:'~ ... ?.~I.,.. ..... ,. ...... 2019 and signed on its behalf by: • rch;~; ~~~:1 l'c_________"\. Fin:~~~~Jt~· MRH ·····~············ --. -~ • . • I I 7 MINISTRY OF ROADS AND HIGHWAYS TRANSPORT SECTOR IMPROVEMENT PROJECT (TSIP) I I (PROJECT PREPARATION ADVANCE (PPA) NO. V0460-GH) STATEMENT OF FINANCIAL POSITION AS AT 31ST DECEMBER, 2018 ! I CURRENT ASSETS 2018 2017 Note US$ US$ Bank balances 7 148 293,985 Accumulated non-capital expenditure 8 1,750,520 887,954 1.750,668 1,181,939 FINANCED BY: International Development Association (IDA) Credit 9 l.750,668 1,181,939 • '"!I! • The gnancial stats;.ments were approved by the Project Steering Committee Members on J~t~ ....?.:./.f ............... 2019 and signed on its behalf by: · . • ········~····· Finance Director - MRH • ··············· Project A countant • • • • 8 MINISTRY OF ROADS AND HIGHWAYS TRANSPORT SECTOR IMPROVEMENT PROJECT (TSIP) (PROJECT PREPARATION ADVANCE (PPA) NO. V0460-GH) STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31ST DECEMBER, 2018 I FINANCING 2018 US$ 2017 US$ Direct payments 895,223 223,806 Special Accounts Deposit 855,445 958,133 TOTAL FUNDS AVAILABLE 1,750,668 1,181,939 PROJECT EXPENDITURE Goods 100,955 Training 453,090 424,815 Consultancy and training 1,169,933 447,612 Operating cost 26,542 15,527 1,750,520 887,954 • Net cash inflow 148 293,985 Analysis of changes in cash and cash expenditure during the year Opening cash and bank balance 293,985 ii Net cash inflow 294,113 293,9_1L~ • Closing cash and bank balance 148 293,985 Represented by: Cash and bank balances Designated account 148 293,985 148 293,985 • ill • 9 MINISTRY OF ROADS AND HIGIIWA YS TRANSPORT SECTOR IMPROVEMENT PROJECT (TSIP) (PROJECT PREPARATION ADVANCE (PPA)) NO. V0460-GH NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 3'lst December, 2018 I. (a) Project Information I Name of Project Transport Sector Improvement Project (TSIP) (Project Pi·eparation Advance (PPA) Executing Agency: Ministry of Roads and Highways and Ministry of Transport Implementing Agencies: Ministry of Transport (MOT), Department of Urban Road (DUR). I Department of Feeder Road (DFR), Ghana Highway Authority (GHA), Driver and Yt.:hiclc Licensing Authority (DVLA), National Road Safety Commission (NRSC) • •J'i Source of Finance : (i) International Development Association Project Preparation Advance US$2,850,000 l<'inancing Instrument: IDA Credit Number V0460-Gl-l Financing Agreement Date (Initial) : 16th November, 2016 Initial Project Completion Date : December 2017 Project Extension Date (l<'inal): December 2018 • (b) Objective To facilitate the preparation of a pr:oposed project designed to reduce travel time on selected parts of the classified road network and promote safe road transport. (c) Description of the Activities. The Activities for which the Advance is provided consist of the following: • 1. Carrying out an assessment on and preparing bid documents to introduce output and performance based results contracting on a select number of priority trunk and feeder roads. • 11. Preparing designs and bid documents for selected urban roads in poor areas of Tamale and Bolgatanga. 111. Conducting a feasibility study to utilise private garages for vehicle inspections . • 1v. Conducting an assessment study on and preparing bid documents for integration of sothvarc systems of the DVLA. • v. v1. Carrying out an assessment on the capacity of NRSC to manage road safety . Preparing designs and bid documents for the expansion of the pedestrian crossings at selected schools . • v11. Undertaking a socio-economic baseline study for selected rural areas where roads will be improved. viii. Undertaking an agricultural value chain analysis in selected rural areas. ix. Financing of Operating Cost. 1111 1111 \ 10 MINISTRY OF ROADS AND HIGHWAYS TRANSPORT SECTOR IMPROVEMENT PROJECT (TSIP) (PROJECT PREPARATION ADVANCE (PP A)) NO. V0460-GH NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED I 31st Dec~mber, 2018 - (continued) I 2. Significant Accounting Policies The following are the significant accounting policies adopted financial statements. in the preparation of these (a) Basis of preparation (i) Statement of compliance The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS). (ii) Basis of measurement The financial statements have been prepared under the historical cost convention, as modi lied by the revaluation of investment property, financial assets and financial liabilities at fair value. (iii) Use of estimate and judgement The preparation of fimrncial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision af!ects both current and future periods. (b) Presentation of financial statements (i) Functional and presentation currencies The financial statements are presented in United States Dollars (US$) which is the reporting • currency for the financial statements . (ii) Transactions and balances Transactions denominated in currencies other than United States ( US) Do Ila rs arc translated into US dollars and recorded at the rate of exchange ruling at the date of transactions. . Balances denominated in currencies other than US Dollars arc translated into US Dollars at the Balance Sheet date at the rate of exchange on that date. Any gains or losses are dealt with in the statement of Receipts and Payments . • • . l 11 MINISTRY OF ROADS AND HIGHWAYS TRANSPORT SECTOR IMPROVEMENT PROJECT (TSIP) (PROJECT PREPARATION ADVANCE (PPA)) NO. V0460-GII NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31st December, 2018 - (continued) I (c)Property, plant and equipment (i) Recognition and measurement ' Property, plant and equipment represents the expenditure incurred mainly in acquiring • office equipment and motor vehicles for use by the Ministry of Roads and Highways and Ministry of Transport. This is measured at the actual contracted cost of purchase. Cost includes expenditures that are directly attributable to bringing the asset to the location and working condition necessary for it to be capable of operating in the manner intended by management. (ii) Subsequent costs Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, when it is probable that the future economic benefits associated with the item will flow to the Project and the cost of the item can be measured reliably. All other repairs and maintenance expenditures are charged to the statement of sources and uses of funds during the financial period in which they are incurred. (iii) Depreciation No depreciation is charged in the financial statements. (d) Recurrent project expenditure The administrative expenditure incurred by Ministry of Roads and Highways and Ministry of Transport arc classified as recurrent project expenditure. Recurrent project expenditure exclLides consultancy, training and operating cost. (e) Income Income is recognized on cash basis and credited directly to the respective donors account. • • • • \·· ·, .. . MINISTRY OF ROADS AND HIGHWAYS TRANSPORT SECTOR IMPROVEMENT PROJECT (TSIP} (PROJECT PREPARATION ADVANCE (PPA) NO. V0460-GH} 12 'h II NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST DECEMBER, 2018 - (continued} • :;-; - 2018 2017 l 'j.'S US$ US$ Ii 3 Goods 100,955. This is supply of various office equipment ~ Ii 4 Training/Capacity Building 453,Q90 424,815 This is relates to individual officers training outside the country • 1111 and National Road Commision (NRSC). 5 Consultancy 1,169,933 447,612 ~ This relates to various consultancy assessment towards the project. Ii 6 Operating cost 26,543 15,527 ~ • This includes cost of site visit, workshop/conference expenses and other incidental expenses such as station allowance and rental of 11 vehicles to sites. • 7 Bank balances . ·~ IDA-US$ Designated Account 148 293,985 . Tranasaction Cumulative "!! Balance b/f for the year to date 8 Accumulated non-capital expenditure US$ US$ US$ This represents payments for non-capital items the creditors eligibe expenditures and consists of: 11111 Goods 100,955 100,955 •)!i' Training/Capicity Building 424,815 453,090 877,905 111111 Consultancy 447,612 1,169,932 1,617,544 Operating cost 15,527 26,543 1.U27J2 ~ 887,954 1,750,520 2,638,474 111111 2018 2017 . '1! 9 International Development Association (IDA} The International Development Association contribution to TSIP is US$ US$ . ·lit shown in the financial statemensts as follows: Balance at 1st January Disbursed during the year 293,985 1,456,683 1,181939 . .., Balance at 31st December 1, 7 SQ,_fil;.§ 1,l.8.l. 23~ •