$ ESS lxiflC OF 300VSD Project Name: Rapid Results Health Project Implementing Entity: Ministry of Health PROJECT GRANT/CREDIT NUMBER: TRUST FUND NUMBER: TF012272, IDAS H9210& V0210 AND CREDIT NOS., Q9000, Q9190 AND IDA54010& D1250 ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED JUNE 30, 2018 Prepared in accordance with the Cash Basis of Accounting Method under the International Public Sector Accounting Standards (IPSAS Rapid Results Health Project Reports and Financial Statements For the financial year ended June 30, 2018 CONTENTS PAGE I. PROJECT INFORMATION AND OVERALL PERFORMANCE................................................................i 2. STATEMENT OF PROJECT MANAGEMENT RESPONSIBILITIES..................................................... iv 3. REPORT OF THE INDEPENDENT AUDITORS ON TH]E RRHP PROJECT ........................................... v 4. STATEMENT OF RECEIPTS AND PAYMENTS FOR THE PERIOD ENDED 30TH JUNE 2018 .,....... 1 5. STATEMENT OF FINANCIAL ASSETS AND LIABILITIES AS AT 30TH JUNE 2018..........................2 7. STATEMENT OF COMPARATIVE BUDGET AND ACTUAL AMOUNTS.............................................4 8. NOTES TO THE FINANCIAL STATEM ENTS..........................................................................................5 9. PROGRESS ON FOLLOW UP OF AUDITOR RECOMMENDATIONS .................................................11 Rapid Results Healh Project Reports and Financial Statements For tie financial year ended June 30, 2018 1. PROJECT INFORMATION AND OVERALL PERFORMANCE 1.1 Name and registered office Name: The project's office is in the Ministries Complex, Juba. Objective: The key objectives of the project are to improve the delivery of High Impact Primary Health Care Service in the states of Jonglei and Upper Nile and to strengthen coordination and monitoring and evaluation capacities of the Ministry of Health. Address: The project headquarter offices are in Juba (city), Jubek State, South Sudan. The address of its registered office is: Ministry of Health Ministerial Complex P.O.Box 88 Juba Contacts: The following are the project contacts Telephone: (211)(0) 177800278 Website: www.go.ss 1.2 Project Information Project Start Date: The project start date is 20 April 2012 Project End Date: The project end date is 30 April 2019 Project Manager: The acting project manager is Dr Jimmy Abirigo Project Sponsor: The project sponsor is International Development Association (IDA) 1.3 Project Overview Line Ministry/State The project is under the supervision of the Health Ministry. Department of the project Project number P127187 Strategic goals of the The strategic goals of the project are as follows: project (i) to improve the delivery of High Impact Primary Health Care Service in the states of Jonglei and Upper Nile (ii) to strengthen coordination and monitoring and evaluation capacities of the Ministry of Health Achievement of The project management aims to achieve the goals through the following strategic goals means: (i) Delivery of High Impact Primary Health Care Services (ii) Development of the Capacity of the Ministry of Health (iii) Purchase and distribution of pharmaceutical commodities Current situation that The project was formed to intervene in the following areas: the project was (i) Delivery of High Impact Primary Health Care Services formed to intervene (ii) Development of the Capacity of the Ministry of Health (iii) Purchase and distribution of pharmaceutical commodities Project duration The project started on 20 April 2012and is expected to run until 30 April 2019 1.4 Bankers The following are the bankers for the current year: Stanbic Bank, West Yat Branch, Juba 1.5 Auditors The project is audited by the Auditor General, South Sudan National Audit Chamber 1.6 Roles and Responsibilities The following are the key staff working on the project: Names Title designation Key qualification Responsibilities Dr.Loi Thuou Loi Project Coordinator Project Coordination Dr.Kulcwaj Nyawello Project Manager Master, Tropical medicine Project Management Dr.Jimy Abitigo Health Planner Master, Public Health Health planng Daniel Thon State Technical Advisor Master, Health Management State's coordination Samuel Akani Procurement Specialist MA, Population Studies Procurement Jackson Karanja Finance Specialist MBA Financial Management Ato Lydia Beatrice Finance Officer BBA Accounting Taban Nickson Procurement Officer B.Com Procurement 1.7 Funding,summary The Project is for a duration of six years from 2012 to 2018 with an approved budget of US$ 103,000,000 which was equivalent to SSP 14,435,429,400 as at 30 June 2018. ii Below is the funding summary: Amount received to date - Undrawn balan Source of? funds Donor Commitment- 3..08(00 08 30.6.2018 (30 06 2018) DonorSSP Donor SSP Donor currency currency currency (A) (A') (B) (B') (A)-(B) (i) Grant International Developmeint 10 273 201 075.94 19,698A4 Assoiatio 93,000,000 13,033 931 400 73,301,575 Association (ii) Loan International Development 10.000.000 1.40 .498,000 9,238704 1,294,802,518 761 29 Association (iii)Counterpart funds Government of the Republic of South - - Sudan Total 103,000,000 14,435,429,400 82,540,279 20,459,72 1.8 Summary of Overall Project Performance: Budget performance. The project achieved an adverse variance of 30% during the year. This was mainly due to late submission of reports by the Coordination and Service Delivery Organisation (CSDO) and Monitoring and Evaluation firm leading to delayed disbursements. Physical progress. The Project renewed the contracts and paid the Coordination and Service Delivery Organisation (CSDO) and M&E firm and had the Staff contracts renewed. The Staff were trained on HRIS/SSEPS and attended training on Geospatial mapping, financial control and internal audit, and World Bank financial procedures. Value-for-money achievements. The Project achieved value for money in all its activities during the year Implementation challenges and recommended way forward. Political instability and slow disbursement of funds by the World Bank 1.9 Summary of Project Compliance: There were no significant cases of non-compliance with applicable laws and regulations, and essential external financing agreements/covenants, iii 2. STATEMENT OF PROJECT MANAGEMENT RESPONSIBILITIES The Undersecretary for the Ministry of Health and the Project Coordinator for the Rapid Results Health Project are responsible for the preparation and presentation of the Project's financial statements, which give a 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 management 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) safeguarding the assets of the Project; (v) selecting and applying appropriate accounting policies; and (vi) making accounting estimates that are reasonable in the circumstances. The Undersecretary for the Ministry of Health and the Project Coordinator for the Rapid Results Health Project accept responsibility for the 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 Accounting Standards. The Undersecretary for the Ministry of lealth and the Project Coordinator for the Rapid Results Health 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 Undersecretary for the Ministry of Health and the Project Coordinator for the Rapid Results Health Project further confirm 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 of internal financial control. The Undersecretary for the Ministry of Health and the Project Coordinator for the Rapid Results Health Project confirm that the Proiect has complied fully with applicable Government Regulations and the terms of external financing covenants, and that Project funds received during the financial year/period 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 Undersecretary for the Ministry of Health and the Project Coordinator for the Rapid Results Health Project on 2018 and signed by them. Underse retary Project Coordinator iv 3. REPORT OF THE INDEPENDENT AUDITORS ON THE RAPID RESULTS HEALTH PROJECT REPORT ON FINANCIAL STATEMENTS We have audited the accompanying financial statements of the Rapid Results Health Project, set out on pages I to 12 which comprise the statement of receipts and payments for the financial year/period ended June 30, 2018, and a summary of significant accounting policies and other explanatory notes. Responsibility for the Financial Statements The Undersecretary for the Ministry of Health and the Project Coordinator for the Rapid Results Health Project are responsible for the preparation and fair presentation of these financial statements in accordance with International Public Sector Accounting Standards (IPSAS). 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. Auditor's Responsibility Our responsibility is to express an independent opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. 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 depended on our professional judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we considered the internal controls relevant to the company's preparation and fair presentation of the financial statements in order to design audit procedures that were appropriate in the circumstances, but not for the purpose of expressing an opinion on the company's internal controls. An audit also includes evaluating the appropriateness of accounting polices used and the reasonableness of accounting estimates made by the management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Basis for Disclaimer of Opinion The total expenditure for the period under review was USD 12,522,376 and out of this, USD 10,995,765, 88%, was disbursed to the Coordination and Service Delivery Organization - IMA and we could not verify how the said amount was spent. V Opinion Based on the significance of the matters described in the Basis of Disclaimer of Opinion Paragraph, I have not been able to obtain appropriate and sufficient audit evidence to provide a basis for an audit opinion. Accordingly, I do not express an opinion on the financial affairs of the Rapid Results Health Project for the financial year/period ended June 30, 2018. REPORT ON PROJECT PERFORMANCE AND VALUE FOR MONEY ACHIEVEMENT Based on our audit, we report that nothing came to our attention to indicate substantial non- achievement of value for money objectives. However, we identified a few minor cases of non- achievement of value for money objectives, which have been included in our separate Management Letter to the Undersecretary for the Ministry of Health and the Project Coordinator. REPORT ON COMPLIANCE WITH APPLICABLE LAWS AND REGULATIONS Based on our audit, we report that nothing came to our attention to indicate substantial non- compliance with applicable laws and regulations, as well as essential external financing covenants. However, we identified a few minor cases of non-compliance, which have been included in our separate Management Letter to the Undersecretary for the Ministry of Health and the Project Coordinator. REPORT ON CONTRACTS WITH DEBARRED FIRMS Based on our audit, we report that nothing came to our attention to indicate that debarred firms, both by the government and external financiers, were awarded any contracts under the Project during the financial year/period under review. Auditor General, REPUBLIC OF SOUTH SUDAN Date vi Rapid Results Health Project Reports and Financial Statements For the financial year ended June 30, 2018 4. STATEMENT OF RECEIPTS AND PAYMENTS FOR THE PERIOD ENDED 30TH JUNE 2018 2018 2017 Note US$ US$ RECEIPTS Proceeds from domestic & foreign grants 8.3 12,119,254 5,903,542 Loan from external development 8.4 483,565 3,522,204 partners Total receipts 12,602,819 9,425,746 PAYMENTS Component A-Delivery of High Impact Health Care Services 8.6 10,995,765 8,806,513 Component 13- Development of the Capacity of the Ministry of Health 8.7 1,526,610 656,745 TOTAL PAYMENTS 12,522,376 9,463,258 SURPLUS/DEFICIT FOR THE 80,443 -37,512 YEAR The accounting policies and explanatory notes to these financial statements are an integral part of the financial statements. Undersecretary Project Coordinator Date Date 5. STATEMENT OF FINANCIAL ASSETS AND LIABILITIES AS AT 30TH JUNE 2018 2018 2017 Note US$ US$ FINANCIAL ASSETS Cash and Cash Equivalents Bank Balances 8.12A 72,319 31 Imprests and Advances 8.12D 20,650 12,495 TOTAL FINANCIAL ASSETS 92,969 12,526 REPRESENTED BY: Cash and cash equivalents b/fwd 12,526 50,038 Surplus/Deficit for the year 80,443 -37,512 NET FINANCIAL POSITION 92,969 12,526 The accounting policies and explanatory notes to these financial statements form an integral part of the financial statements. The financial statements were approved on 2018 and signed by: Undersecretary . Project Coordinator Date Date 2 6. STATEMENT OF CASHFLOW FOR THE PERIOD ENDED 30TH JUNE 2018 Receipts from operating income Transfer from Government entities - Proceeds from domestic and foreign grants 12,119,254 5,903,542 Miscellaneous receipts - - Payments from operating expenses Compensation of employees -614,350 -464,786 Purchase of goods and services -11,908,026 -8,998,472 Net cash flow from operating activities -12,522,376 -9,463,258 CASHFLOW FROM INVESTING ACTIVITIES Acquisition of Assets - Net cash flows from Investing Activities -403,122 -3,599,716 CASHFLOW FROM BORROWING ACTIVITIES Proceeds from Foreign Borrowings 483,565 3,522,204 Net cash flow from financing activities 483,565 3,522,204 NET INCREASE IN CASH AND CASH 80,443 -37,512 EQUIVALENT Cash and cash equivalent at BEGINNING of the year 12,526 50,038 Cash and cash equivalent at END of the year 92,969 12,526 The accounting policies and explanatory notes to these financial statements form an integral part of the financial statements. The entity financial statements were approved on 2018 and signed by: Undersecre ary Project Coordinator Date Date 3 7. STATEMENT OF COMPARATIVE BUDGET AND ACTUAL AMOUNTS Actual on Original Adjustme Ataon% of Receipts/Payments Item Origa djs Final Budget Comparable Variance Budget ntsss Variance Basis a B c=a+b d e=d-c f=e/c % Receipts Proceeds from domestic& foreign grants 17,492,566 12,119,254 (5,373,312) Proceeds from borrowings 483,565 - 483,565 483,565 0% Total Receipts 17,976,131 0 17,976,131 12,602,819 -5,373,312 -30% Payments as per categories 0 Component A 14,758,854 14,758,854 10,995,766 -3,763,088 -25% Component B 3,217,277 3,217,277 1,526,610 -1,690,667 -53% Component C 0 0 0 0% Total Payments 17,976,131 17,976,131 12,522,376 -5,453,755 -30% Note: The significant budget utilisation/performance differences in the last column are explained in Annex I to these financial statements. Undersecretary Project Coordinator Date Date 4 8. NOTES TO THE FINANCIAL STATEMENTS The principal accounting policies adopted in the preparation of these financial statements are set out below: 8.1 Statement of compliance and basis of preparation The financial statements have been prepared in accordance with and comply with International Public Sector Accounting Standards (IPSAS) with particular emphasis on Cash Basis Financial Reporting under the Cash Basis of Accounting. The financial statements are presented in United States Dollars, which is the functional and reporting currency of the Project and all values are rounded to the nearest one Dollar. The accounting policies adopted have been consistently applied to all of the years presented. The financial statements have been prepared on the cash basis following the Government's standard chart of accounts. The cash basis of accounting recognises transactions and events only when cash is received or paid out by the Project. i. Recognition of revenue and expenses The Project recognises all revenues from the various sources when the event occurs and the related cash has actually been received by the Project. In addition, the Project recognises all expenses when the event occurs and the related cash has actually been paid out by the Project. ii. In-kind donations In-kind donations are contributions made to the Project in the form of actual goods and/or services rather than in money or cash terms. These donations may include vehicles, equipment or personnel services. Where the financial value of in-kind donations can be reliably determined, the Project includes such value in the statement of receipts and payments both as revenue and as an expense in equal and opposite amounts; otherwise, the donation is not recorded. iii. Cash and cash equivalents Cash and cash equivalents comprise cash on hand and cash at bank, short-term deposits on call and highly liquid investments with an original maturity of three months or less, which are readily convertible to known amounts of cash and are subject to insignificant risk of changes in value. Bank account balances include amounts held at the Central Bank of South Sudan and/or at various commercial banks at the end of the financial year/period. For the purposes of these financial statements, cash and cash equivalents also include short term cash imprests and advances to authorised public officers and/or institutions which had not been surrendered or accounted for at the end of the financial year/period. 5 SIGNIFICANT ACCOUNTING POLICIES (Continued) iv. Pending bills Pending bills consist of unpaid liabilities at the end of the financial year/period arising from contracted goods or services during the year/period or in past years/periods. As pending bills do not involve the payment of cash in the reporting period, they are simply disclosed as an Annex to the financial statements. When the pending bills are finally settled, such payments are included in the statement of receipts and payments in the year in which the payments are made. v. Budget The budget is developed on the same accounting basis (cash basis), the same accounts classification basis, and for the same period as the financial statements. The Project's budget was approved as required by Law and regulations issued by the Ministry of Finance and Economic Planning, as well as by the participating development partners, as detailed in the Government of South Sudan Budget Printed Estimates for the year. A high-level assessment of the Project's actual performance against the comparable budget for the financial year/period under review has been included in an annex to these financial statements. vi. Exchange rate differences The accounting records are maintained in United States Dollars, which is the main currency used for major payments under the Project. A smaller percentage of payments are however inade in the South Sudanese Pound (SSP). Those transactions are converted into the United States Dollars using the exchange rates prevailing at the dates of the transactions. Any foreign exchange gains, and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in the local currency are recognised in the statements of receipts and payments. vii. Comparative figures Where necessary comparative figures for the previous financial year/period have been amended or reconfigured to conform to the required changes in financial statement presentation. viii. Subsequent events There have been no events subsequent to the financial year/period end with a significant impact on the financial statements -for the year ended June 30, 2018. 6 8.2 RECEIPTS FROM GOVERNMENT OF THE REPUBLIC OF SOUTH SUDAN There were no counterpart funding and other receipts from government during the year. 8.3 PROCEEDS FROM DOMESTIC AND FOREIGN GRANTS During the 12 months to 30 June 2018 we received grants fiom donors as detailed in the table below: Amount Grants Grants Grants Name of Donor Date received received received as received Total amount in Usd received in donor direct in kind in cash pamet kind ___________ currency paymout* U$ USS US$ Us$ USS Grants Received from Bilateral Donors (Foreign Governments) Insert name of foreign Xxx Government Grants Received from Multilateral Donors (International Organisations) International Development 5,903.542 Association 374,361 11,744,893 12,119,254 Total 374,361 11,744,893 - 12,119,254 5,903,542 8.4 LOAN FROM EXTERNAL DEVELOPMENT PARTNERS During the 12 months to 30 June 2018 we received funding from development partners in form of loans negotiated by the National Treasury donors as detailed in the table below: Amount Loans Loans Date received as Name of Donor e in loan received d Total amount received direct currency in cash US$ US$ Loans Received from Bilateral Donors (Foreign Governments) Insert name of foreign Government Loans Received from Multilateral Donors (International Organizations) International Development 61,570 421,995 483,565 3,522,204 Association Total 61,570 421,995 483,565 3,522,204 8.5 MISCELLANEOUS RECEIPTS There were no miscellaneous receipts during the year 7 8.6 COMPONENT A 2018 2017 Us$ US$ Consultancy 10,995,765 8,806,513 Total 10,995,765 8,806,513 8.7 COMPONENT B 2018 2017 Uss USS Consultancy 1,014,556 464,786 Non Consulting 29,668 Training 197,911 83,804 Operating costs 284,475 108,155 1,526,610 656,745 8.10 Transfers to other government entities During the 12 months to 30 June 2018, no funds were transferred to reporting government entities. 8.12 CASH AND CASH EQUIVALENTS CIFWD 2018 2017 US$ US$ Bank accounts (Note 12A) 72,319 31 Outstanding imprests and advances (Note 12D) 20,650 12,495 92,969 12,526 2018 2017 US$ US$ 8 A Bank Accounts Foreign Currency Accounts Stanbic Bank A/c 020000002304 72,319 31 Total Foreign Currency balances 72,319 31 Local Currency Accounts Stanbic Bank - - Total local currency balances - - Total bank account balances 72,319 31 Cash in hand There was no cash in hand as at 301h June 2018 Cash equivalents (short-term deposits) There were no short-term deposits as at 301h June 2018 Outstanding Imprests and Advances Name aofficer or Amount Due Date of Amount Balance Instfiution Taken Surrender Surrendered 2018 David Ojulong 3000 1678.18 1,322 Dr.Moses Tiel 3271 0 3,271 Dr. Moses Deng 3271 0 3,271 Beatrice Ato 4000 7.12.16 0 4,000 Ato Lydia Beatrice 2136 24.7. 17 512 1,624 Dumic Enock Maper 2560 7.8.17 1238 1,322 Juan Faith 2560 7.8.17 1238 1,322 Sadia Cosmas 2560 7,8.17 1238 1,322 Nyiker Carizona 2560 7.8.17 1238 1,322 Ato Lydia Beatrice 260 11.9.17 200 60 Saladin Malek Deng 4180 25.9.17 3734 446 David John William 4180 25.9.17 3724 456 Faith Elinana Ngalamu 4180 25.9.17 3724 456 Carazon Joseph 4180 259. 17 3724 456 9 20,650] Above imprest balances were declared ineligible and the MOH paid them back in July 2018. 13 PENDING BILLS (Annex 2A) 2018 2017 US$ US$' Supply of services 5,738 5,738 14 PENDING STAFF BILLS (Annex 2B) 2018 2017 USS US$ Permanent employees - management 0 5,267 Permanent employees - others 62,610 50,930 62,610 56,197 15 OTHER PENDING PAYABLES (Annex 2C) There were no other pending bills as at 30h June 2018 10 ………价 l〕〕〕一！劍 Rapid Results Health Project Statement ofBudgel Performance For the year ended fune 30, 2018 ANNEX I - VARIANCE EXPLANATIONS - COMPARATIVE BUDGET AND ACTUAL AMOUNTS Final Actual on Budget % of Utilisation Budget Comparable Utilisation Variance to Final Comments on Variance Basis Variance Budget a b c=a-b d=c/a % RECE11PTS DURING THE YEARIPERIOD External financing 17,976,131 12.522 376 5,453,755 30% Comments are as per shown below per component Total receipts 17,976,131 12,522,376 5,453,755 30% ' TW Y-IT44TIMOD Variance mostly due to the Component A 14,758 854 10,995,766 3,763,088 25% CSDO not paid in full Variance mostly due to tiie M& E finn not fully paid, Component B 3,217,277 1,526,610 1,690,667 53% budgeted goods procured and some workshops not having taken place Component C 0 0 0 0% Total payments 17,976,131 12,522,3 76 5,453,755 30% Explain all variance beyond 50% nese were due to some activities budgetedfor nol takingplace and the M&Efirm not beingfully paid by end qf the year ANNEX 2A - ANALYSIS OF PENDING BILLS Original Date Amount Outstanding Outstanding Supplier of Goods or Services Paid Balance Balance Comments Amount Contracted To-Date 2918 20x0 A B c d=a-c - - - - - -- - It -2. 3. Sub-Total Grand Total ........ . ANNEX 2B - ANALYSIS OF PENDING STAFF BILLS Date Amount Outstanding Outstanding Name of Staff Job Group Original Payable Paid Balance Balance Comments Amount Contracted To-Date 2018 20x0 a B c d=a-c 1 Taban Nickson Kenyi 3,000 3,000 Paid in FY 19 Daniel Thon 10,000 10,000 Paid inFY 19 3. Jackson Karanja 37,500 37,500 Paid in FY 19 4. Jimmy Abirigo 9,110 9,110 Paid in FY 19 5. At Lydia Beatrice 3,000 3,000 Paid in FY 19 Sub-Total 62,610 62,610 Grand Total i 62,610 62,610 12