1Moq \~oJu 0 3 JAN 2020 WORLD VISION INTERNATIONAL BURUNDI (WVIB) MATERNAL CHILD NUTRITION ENHANCEMENT (MCNE) PROJECT FUNDED BY: JAPAN SOCIAL DEVELOPMENT FUND (JSDF) THROUGH INTERNATIONAL DEVELOPMENT ASSOCIATION (IDA) JSDF GRANT N °: TFOA4858 AUDIT REPORT AND FINANCIAL STATEMENTS FOR THE PERIOD FROM 1q JANUARY 2018 TO 30TH JUNE 2019 • 'f IBDO December 2019 WORLD VISION INTERNATIONAL BURUNDI MATERNAL CHILD NUTRITION ENHANCEMENT PROJECT AUDIT REPORT AND FINANCIAL STATEMENTS FOR THE PERIOD FROM 1sr JANUARY 2018 TO 30TH JUNE 2019 CONTENTS 1. GLOSSARY OF ABBREVIATIONS 2 2. PROJECT BACKGROUND 3 3. OBJECTIVE OF THE AUDIT 3 4. SCOPE OF THE AUDIT 4 5. STATEMENT OF MANAGEMENT RESPONSIBILITY 5 6. INDEPENDENT AUDITOR'S REPORT 6 7. FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30™JUNE 2019 9 7.1 . STATEMENT OF FINANCIAL POSITION AS AT 30THJUNE 2019 9 7 .2. STATEMENT OF REVENUE AND EXPENDITURES AS AT 30T HJUNE 2019 10 8. NOTES TO THE FINANCIAL SATEMENTS 11 9. INDEPENDENT AUDITOR'S REPORT ON DESIGNATED ACCOUNT AS AT 30 JUNE 2019 15 APPENDIX 1: BUDGET EXECUTION REPORT AS AT 30 JUNE 2019 18 APPENDIX 2: LIST OF ASSETS PURCHASED FROM THE PROJECT FUNDS AS AT 30 JUNE 2019 19 • WORLD VISION INTERNATIONAL BURUNDI MATERNAL CHILD NUTRITION ENHANCEMENT PROJECT AUDIT REPORT AND FINANCIAL STATEMENTS FOR THE PERIOD FROM 1sr JANUARY 2018 TO 30THJUNE 2019 1. GLOSSARY OF ABBREVIATIONS BIF Burundian Francs BRB Banque de la Republique de Burundi FENACOBU federation Nationale des COOPEC du Burundi FGLs Family Group Leaders GMP Growth Monitoring and Promotion IAASB International Auditing and Assurances Standards Board IDA International Development Association IFAC International Federation of Accountants ISA International Standards of Auditing JSDF Japan Social Development Fund MAL Ministry of Agriculture and Livestock MoH Ministry of Health MoU Memorandum of Understanding NGO Non-Governmental Organization PDH Positive Deviance/Hearth PFSs Project Financial Statements PIU Project Implementation Unit , SIDC Secure Identi fication Credentials ToR Terms of Reference USO United States Dollars ' VSLA Village savings and Loans Associations WB World Bank 2 WORLD VISION INTERNATIONAL BURUNDI MATERNAL CHILD NUTRITION ENHANCEMENT PROJECT AUDIT REPORT AND FINANCIAL STATEMENTS FOR THE PERIOD FROM 15r JANUARY 2018 TO 30™JUNE 2019 2. PROJECT BACKGROUND The Government of Burundi has received a Trust for Japan Social Development Fund (JSDF) through International Development Association (IDA) to fund Maternal Child Nutrition Enhancement (MCNE) Project implemented by World Vision International Burundi on behalf of the Government of Burundi. The initial funding number is TFOA4858 of USD 2.73 million for three years. Maternal Child Nutrition Enhancement Project operate in Nutrition, Food Security and VSLA in MAKAMBA and GIHOFI Health District in MAKAMBA and RUTANA Provinces in the Republic of Burundi. The agreement for Maternal Child Nutrition Enhancement Project was signed on May 2nd, 2017 between World Vision International Burundi and the World Bank. The project has received the effectiveness Letter on July 25th, 2017 and the closing date of project is February 15th, 2020. The main objective of the project i s to increase the production and consumption of micronutrient- rich food through targeted groups in the health District of GIHOFI and MAKAMBA. The project has three Lo111µ011ents: , • Mobilize communi ties to improve nutrition practices; • Increase the production of micronutrient-rich foods, • Project management and Administration, Monitoring and Evaluation and sharing of lessons learned. ' 3. OBJECTIVE OF THE AUDIT The objective of the audit of the Project financial statements (PFSs) is to enable the auditors to express an independent professional opinion on the financial statements of the Project for t he period from 1st January 2018 to 30th June 2019 and to ensure that the funds granted to the Project have been used for their intended purposes. 3 WORLD VISION INTERNATIONAL BURUNDI MATERNAL C HILD NUTRITION ENHANCEMENT PROJECT AUDIT REPORT ANO FINANCIAL STATEMENTS FOR THE P ERIOD FROM 1sr JANUARY 2018 TO 30TH JUNE 2019 4. SCOPE OF THE AUDIT The audit of the Project will be conducted in compliance with the International Standards on Auditing (ISA) issued by the International Federation of Accountants (IFAC) and will include tests and audit procedures and the checks that the auditor considers necessary to the circumstances. The auditor will ensure that: a) All resources of the Bank have been used in accordance with applicable funding agreements, in the interests of economy and efficiency, and solely for the purposes for which they were provided; b) Acquisitions of goods and services financed have been subject of contracts awarded in accordance with applicable funding agreements based on World Bank procurement procedures and were properly recorded in the books; c) All necessary accounts and records have been kept under the different operations relating to the project (including expenses covered by expense reports or financial monitoring reports). In the case of disbursements based on financial monitoring report, the auditor will verify that reports during the period covered by the audit are consistent with the funding agreements, sincere, reliable and fairly show the requested transactions refund; d) Designated Accounts are managed in relation to the provisions of funding agreements; e) Project accounts have been prepared on the basis of the systematic application of ' the National Accounting Plan standards and give a true and fair view of the financial position of the Project at the end of the year in question and the resources received and expenditures made during the year ended are updated; T f) The overall financial performance of the Project is satisfactory; g) Project assets are real and properly assessed and ownership of the Project or beneficiaries of these assets is determined in accordance with the financing agreement; h) Any ineligible funds expenditure in claims identified in the audit if paid from Designated Account. These expenses will be subject to a separate note in the audit report. 4 BDO Tel: +250 738 304070 Tel: .-250 788 309 225 rwanda@bdo-ea. com BOO EA Rwanda Ltd Career Centre Building, gt• Floor, KG 541 st Road wv,w .bdo-ea .com P.O. Box 6593 Kigali · Rwanda 5. STATEMENT OF MANAGEMENT RESPONSIBILITY The Project Implementation Unit (PIU)'s is responsible for the preparation of Maternal Child Nutrition Enhancement (MCNE) Project's financial statements. Financial statement shall compare actual activity for the current reporting period with the agreed budget for the same period. If applicable, cumulative activity from inception of the program should be compared with cumulative agreed budget. The notes to the financial statements shall contain additional explanatory information that specifies the basis of accounting used (cash or accrual). Project Implementation Unit' s responsibility includes the accountability of funds channelled to its partners and must ensure in the report that all funds are subject to annual audit and that World Vision International Burundi has acted on the information in the audit reports. Important deviations should be highlighted in the reports to International Development Association the (World Bank). The Management's responsibility includes designing, implementing and maintaining internal controls relevant to the preparation of the financial statements. The Management are of the opinion that the financial statements of MCNE Project are in accordance wit h International Development Association's condition for financial reporting as stipulated In the Agreement between International Development Association and World Vision International Burundi signed on May znd, 2017. Management accepts responsibility for the maintenance of accounting records that may relied upon in the preparation of financial statements. , These Financial statements have been extracted from the accounting records of World Vision International Burundi and the information provided is accurate and complete in all material respects. Finance & Support Services Director World Vision Int ernational Burundi Moses OWUOTH 5 IBDO Tel: +250 738 304070 Tel: +250 788 309 225 rwanda@bdo-ea. com BOO EA Rwanda Ltd Career Centre Building, sth Floor, KG 541 st Road www.bdo-ea.com P.O. Box 6593 Kigali • Rwanda 6. INDEPENDENT AUDITOR'S REPORT To the Management of World Vision International Burundi Report on the Financial statements of Maternal Child Nutrition Enhancement (MCNE) Project Qualified Opinion Wr h:wi:- ullditcd the ,tatcmcnb of fundJ received and expenditure, incurred of Mntcrnnl Child Nutrition Enhancement (MCNE) Project of World Vision International Burundi for the Eighteen ( 18) months period ended 30th June 2019 and notes to the financial statements including a summary of significant accounting policies. In our opinion, except for the effect of the matters described in the basis for qualified opinion section of our report, the accompanying financial statements are prepared, in all material respects, in accordance with the financial reporting provisions of Section 2.07 of the Standard Conditions of the agreement on cooperation between World Vision International Burundi and the Japan Social Development Fund (JSDF) through International Development Association (IDA) of World Bank. 1 Basis for Qualified Opinion • We noted expenditures of USO 81,531 from May 2017 to 31st December 2017 not audited as at 30th June 2019; • We noted difference of USO 19,673 between the quarterly Interim Financial reports send to World Bank USO 1,342,704 and the related list of transactions USO 1,362,377 as at 30 June 2019; • We noted weaknesses in the procurement procedures done by WVIB/MCNE Project of USO 76,381 as at 30 June 2019, (details on appendix 2 of the Management letter). We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the financial statements section of our report. We are independent of the organisation in accordance with the ethical requirements that are relevant to our audit of the financial statements and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion. Emphasis of Matter - Basis of Accounting We draw attention to Note 8.1 of the financial statements, which describe the basis of accounting. The financial statements are prepared to assist in complying with the financial reporting provisions of the agreement referred to above. As a result, the financial statements may not be suitable for another purpose. Our report is intended solely for World Vision International Burundi and the Japan Social Development Fund (JSDF) through International Development Association (IDA) and should not be 6 IBDO Tel: +250 738 304070 Tel: +250 788 309 225 rwanda@bdo-ea. com BDO EA Rwanda Ltd Career Centre Building, 8th Floor, KG 541 st Road www.bdo-ea.com P.O. Box 6593 Kigali - Rwanda distributed to or used by parties other than World Vision International Burundi and the Japan Social Development Fund through International Development Association. Our opinion is not modified in respect of this matter. Responsibilities of Management and those charged with Governance for the financial statements Management is responsible for preparation and fair presentation of the financial statements in accordance with the financial reporting provisions of Section 2.07 of the Standard Conditions of the agreement on cooperation described in note 8.1, and for such internal control as management determines is necessary to enable the preparation of a financial statement that is free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is responsible for assessing World V ision International Burundi's ability to continue as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting unless management either intends to liquidate the Organisation or to cease operations, or has no realistic alternative but to do so. Auditor's Responsibilities for the Audit of the financial statements Our objectives are to obtain reason;ihle ;iss11rnnc:P ;ihout whPthPr thP fin;:inri;il <;t;:itPmPntc; ;:ic; ;:i whnlP are free from material misstatement, whether due to fraud or error, and to issue an auditor's report l that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with lSAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with ISAs, we exercise professional 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 of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control; • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Organization's internal control; • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by World Vision International Burundi management; • Conclude on the appropriateness of World Vision International Burundi management 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 Maternal Child Nutrition Enhancement Project's ability to continue its activities as set out in the agreement.; • If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are 7 IBDO Tel: +250 738 304070 Tel: +250 788 309 225 rwanda@bdo-ea. com BOO EA Rwanda Ltd Career Centre Building, 8th Floor, KG 541 st Road www.bdo-ea.com P.O. Box 6593 Kigali - Rwanda inadequate, to modify our opinion; • 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. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the project to cease to continue as a going concern; • We communicate with World Vision International Burundi management 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. BOO EA Rwanda Ltd Career Centre Building, 8th Floor KG 541 st Road P.O Box 6593 Kigali - Rwan~ ' Em~ (PC/CPA0007/0014) Managing Partner 8 , WORLD VISION INTERNATIONAL BURUNDI MATERNAL CHILO NUTRITION ENHANCEMENT PROJECT AUDIT REPORT ANO FINANCIAL STATEMENTS FOR THE PERIOD FROM 1sr JANUARY 2018 TO 30™JUNE 2019 7. FINANCIAL STATEJ.\EHTS FOR THE PERIOD rnDED 30TH JUNE 2019 7.1. STATEMENT OF FINANCIAL POSITION AS AT 30™ JUNE 2019 Description Financial Period Financial Period ASSETS 31/12/2018 30/06/2019 Notes USO USO Fixed assets 8.2 70,607 70,607 Project Realisation 8.3 820,415 1,292,629 Cash & Cash Equivalents 8.4 57,614 116,122 Receivables 8.5 340 81,798 TOTAL ASSETS 948,976 1,561,156 EQUITY & LIABI LITIES Transfer rrom IOA 8.6 'H3,675 1,544,174 Other Revenues 8.7 91 87 Payable to WVIB 8.8 15,210 16,895 TOTAL EQUITY & LIA BILITIES 948,976 1,56i ,156 • The financial statements are approved by management ata meeting held on 2019, andsigned on its behal f by: Finance & Support Services Dfrector , Wor ld Vision International Burundi r.::::.- ni~;__,\ ~A/./J.! /.ilvt ! Moses OWUOTH 9 WORLD VISION INTERNATIONAL BURUNDI MATERNAL CHILD NUTRITION ENHANCEMENT PROJECT AUDIT REPORT ANO FINANCIAL STATEMENTS FOR THE PERIOD FROM 1ST JANUARY 2018 TO 30THJUNE 2019 7.2. STATEMENT OF REVENUE AND EXPENDITURES AS AT 30lli JUNE 2019 Description Financial Period Financial Period 31/12/2018 30/06/2019 REVENUES Notes USO USO Transfer from JOA 8.6 933,675 1,544, 174 Other Revenue 8.7 91 87 TOTAL REVENUES 933,766 1,544,261 EXPENDITURES BY COMPONENTS 1: Mobilize communities to improve nutrition practices 8.9 472,476 670,290 2: Increase the production of micronutrient- rich Foods 8.10 221,406 445,093 3: Project management and Administration, M&:E and sharing of lessons learned. 8. 11 197,140 247,853 TOTAL EXPENDITURES 891,021 1,363,236 • SURPLUS Represented by : 42,745 181,026 • Cash ft Cash Equivalents 8.4 57,614 116,122 Receivables 8.5 340 81,798 Payable TO WVIB 8.8 (15,210) (16,8950) Net Balance as at 30 June 2019 42,745 181,026 The notes on pages 11 to 14 are part of the audit report. 10 WORLD VISION INTERNATIONAL BURUNDI MATERNAL CHILD NUTRITION ENHANCEMENT PROJECT AUDIT REPORT AND FINANCIAL STATEMENTS FOR THE PERIOD FROM 15r JANUARY 2018 TO 30rn JUNE 2019 8. NOTES TO THE FINANCIAL SATEMENTS 8.1. ACCOUNTING POLICIES 8. 1. 1. Basis of preparation The principle accounting policies adopted by the management in the preparation of financial statements are set out below: The Financial statements have been prepared in accordance with the financial reporting provisions of Section 2.07 of the Standard Conditions of the agreement on cooperation between World Vision International Burundi and the Japan Social Development Fund through International Development Association of World Bank and the US Generally Accepted Accounting Principles where applicable. WVIB uses Accrual Basis of accounting. 8.1. 2. Currency Presentation of Currency The Financial statement are prepared and presented in USO. Foreign Currency Transfers from International Development Association (IDA) of World Bank to World Vision lntemiltionill R1mm