THE UNITED REPUBLIC OF TANZANIA NATIONAL AUDIT OFFICE REPORT OF THE CONTROLLER AND AUDITOR GENERAL ON THE FINANCIAL STATEMENTS OF DAR ES SALAAM METROPOLITAN DEVELOPMENT PROJECT FOR THE FINANCIAL YEAR ENDED 30 JUNE 2018 Controller and Auditor General, National Audit Office, 16 Samora Machel Avenue, P.O. Box 9080, 11101 Dar es Salaam, Tanzania. Tel: 255 (022) 2115157/8, Fax: 255 (022) 2117527 E-mail: ocag@nao.go.tz - Website:www.nao.go.tz December 2018 AR/DMDP /201 7/2018 TABLE OF CONTENTS 1.0 GENERAL INFORMATION ...................................................... 1 1.1 Mandate .......................................................................... 1 1.2 Vision, Mission and Core Values .............................................. 1 1.3 Audit Objectives ................................................................ 2 1.4 Audit Scope ...................................................................... 2 1. 5 Audit Methodology .............................................................. 2 2.0 AUDIT REPORT ON THE FINANCIAL STATEMENTS ........................ 3 11 National Audit Office ML/DMDP/2017 /2018 Abbreviations LGAs Local Government Authorities PAA Public Audit Act No.11 of 2008 Sect. Section ISA International Standards on Auditing ISSAls International Standards of Supreme Audit Institutions RAP Resettlement Action Plan PAP Project affecting People ESMP Environmental and Social Management Plans CDA Capital Development Authorities DMDP Dar es Salaam Metropolitan Development Project PDQ Project Development Objectives CAG Controller and Auditor General GOT Government if Tanzania IDA International Development Association ISA International Standards on Auditing IPSAS International Public Sector Accounting Standards LGA Local Government Authority PO-RALG President's Office , Regional Administration and Local Government lll National Audit Office ML/DMDP /201 7/2018 1.0 GENERAL INFORMATION 1.1 Mandate The statutory duties and responsibilities of the Controller and Auditor General are given under Article 143 of the Constitution of the URT of 1977 (revised 2005), Sect. 10 (1) of the Public Audit Act No.11 of 2008 and in Sect. 45 and 48 (1) of the Local Government Finances Act No. 9 of 1982 (revised 2000) together with Sect. 10 (1) of the Public Audit Act No.11 of 2008. 1.2 Vision, Mission and Core Values Vision To be a highly regarded institution that excels in public sector auditing. Mission To provide a high quality audit services that improves public sector performance accountability and transparency in the management of public resources. Core Values In providing quality services, NAO is guided by the following Core Values: ./ Objectivity: We are an impartial public institution, offering audit services to our clients in unbiased manner . ./ Excellence: We are professionals providing high quality audit services based on standards and best practices . ./ Integrity: We observe and maintain high standards of ethical behavior, rule of law and a strong sense of purpose . ./ People focus: We value, respect and recognize interest of our stakeholders . ./ Innovation: We are a learning and creative public institution that promotes value added ideas within and outside the institution . ./ Results Oriented: We are an organization that focuses on achievement based on performance targets . ./ Team work Spirit: We work together as a team, interact professionally, share knowledge, ideas and experiences. We do this by:- • Contributing to better stewardship of public funds by ensuring that our clients are accountable for the resources entrusted to them; • Helping to improve the quality of public services by supporting innovation on the use of public resources; • Providing technical advice to our clients on operational gaps in their operating systems; • Systematically involve our clients in the audit process and audit cycles; and Providing audit staff with appropriate training, adequate working tools and facilities that promote their independence ©This audit report is intended solely for the information of PO-RALG and the World Bank. However, upon release by the World Bank, it becomes a public record and its distribution may not be limited. National Audit Office ML/DMDP/2017 /2018 1.3 Audit Objectives To obtain reasonable assurance about whether the Financial Statements as a whole are free from material misstatement, whether due to fraud or error and are prepared in accordance with an applicable financial reporting framework; and whether laws and regulations have been complied with. 1 .4 Audit Scope The audit was carried out in accordance with the, the International Standards of Supreme Audit Institutions (ISSAls), the agreed Memorandum of Understanding (MoU) and other audit procedures as were deemed appropriate under the circumstances. This covered the evaluation of the effectiveness of the financial accounting system and internal controls over various activities of the DMDP. The audit was conducted on a sample basis; therefore, the findings are confined to the extent that records, documents and information requested for the purpose of the audit were made available to me. Audit findings and recommendations arising from the examination of the accounting records, appraisal of DMDP's activities as well as evaluation of the Internal Control System which requires management's attention and actions, are set out in the management letter issued separately to the Accounting officer of PO RALG As an auditor, I am not required to specifically search for fraud and therefore, my audit cannot be relied upon to disclose all such matters. However, my audit was planned in such a way that I would have reasonable expectations of detecting material errors and misstatement in the financial statements resulting from irregularities including fraud. The responsibility for detection, prevention of irregularities and the maintenance of an effective and adequate system of internal control rests with the management DMDP. 1. 5 Audit Methodology My audit approach included tests of the accounting records and other procedures in order to satisfy the audit objectives. My audit procedures included the following: • Identify and assess risks of material misstatement, whether due to fraud or error, based on an understanding of the Fund and its environment, including the Fund's internal controls. • Obtain sufficient and appropriate audit evidence about whether material misstatements exist, through designing and implementing appropriate responses to the assessed risks. • Form an opinion on the financial statements based on conclusions drawn from the audit evidence obtained. • Closely following-up on the implementation of the previous year's audit findings and recommendations and instructions issued by the Public Authorities Accounts Committee (PAC) and to ensure that proper actions have been taken in respect of all audit matters raised. 2 National Audit Office ML/DMDP/2017 /2018 2.0 AUDIT REPORT ON THE FINANCIAL STATEMENTS Accounting Officer, President's Office Regional Administration and Local Government, P. 0. Box 1923, DODOMA. REPORT ON THE AUDIT OF FINANCIAL STATEMENTS OF DAR ES SALAAM METROPOLITAN DEVELOPMENT PROJECT FOR THE FINANCIAL YEAR ENDED 30TH JUNE, 2018 Unqualified Opinion I have audited the Financial Statements of the Dar es Salaam Metropolitan Development Project (DMDP) being implemented by PO RALG which comprise the Statement of Financial Position as at 30 June 2018, Statement of Financial Performance, Statement of Cash Flows, statement of changes in equity for the year then ended, as well as the notes to the financial statements, including a summary of Significant Accounting Policies. In my opinion, the accompanying financial statements present fairly in all material respects, the financial position of DMDP as at 30th June, 2018, and its financial performance and its cash flows for the year then ended in accordance with International Public Sector Accounting Standards (IPSAS) Accrual basis of accounting and in the manner required by the Public Finance Act, 2001 revised 2004. Basis for Opinion I conducted my audit in accordance with International Standards of Supreme Audit Institutions (ISSAls). My responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the financial statements section of my report. I am independent of DMDP in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants (IESBA Code) together with the ethical requirements that are relevant to my audit of the financial statements in Tanzania, and I have fulfilled my other ethical responsibilities in accordance with these requirements and the IESBA Code. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion. Information Other than the Financial Statements and Auditor's Report Thereon 3 National Audit Office ML/DMDP /201 7/201 8 My opinion on the financial statements does not cover the other information and I do not express any form of assurance conclusion thereon. In connection with my audit of the financial statements, my responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or my knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work I have performed on the other information that there is a material misstatement of this other information, I am required to report that fact. I have nothing to report in this regard. Key Audit Matters Key audit matters are those matters that, in my professional judgment, were of most significance in my audit of the financial statements of the current period. These matters were addressed in the context of my audit of the financial statements as a whole, and in forming my opinion thereon, and I do not provide a separate opinion on these matters. I have determined that there are no key audit matters to communicate in my report. Responsibilities of Management and Those Charged with Governance for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with IPSASs, and for such 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. In preparing the financial statements, management is responsible for assessing the entity'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 management either intends to liquidate the entity or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the entity's financial reporting process. Auditor's Responsibilities for the Audit of the Financial Statements My 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 auditor's report that includes my opinion. Reasonable assurance is a high level of assurance, but is not a 4 National Audit Office ML/DMDP/2017 /2018 guarantee that an audit conducted in accordance with ISAs 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. In addition, Section 10 (2) of the Public Audit Act No. 11 of 2008 requires me to satisfy myself that, the accounts have been prepared in accordance with the appropriate accounting standards. Further, Section 48(3) of the Public Procurement Act No. 7 of 2011 requires me to state in my annual audit report whether or not the audited entity has complied with the provisions of the Law and its Regulations. Report on Other Legal and Regulatory Requirements Compliance with the Public Procurement Act, 2011 In view of my responsibility on the procurement legislation and taking into consideration the procurement transactions and processes I have reviewed as part of this audit, I state that, except for the irregularities noted, DMDP - procurement transactions and processes have generally complied with the requirements of the Public Procurement Act No. 7 of 2011 and its underlying Regulations of 2013 . • Irregularities on payments of variations of works cost TZS 2,129,524,540.26 without supporting documents to the contractor for the contract with reference number LGA/015/IMC/2015/2016/W/63. • Irregularities on maintaining documents relating to procurement processes. We notated that documents such as Registered Special Power of Attorney, Insurance Covers, and Appointment letters for members of evaluation team, Negotiation Plan and Minutes of Tender Board were not available for audit verification in various procurement activities identified in management letter issued. __ffl , 0 Salhina M. Mkumba Ag. CONTROLLER AND AUDITOR GENERAL 31 December 2018 5 National Audit Office ML/DMDP /201 7/2018 National Audit Office of Tanzania, P.O. Box 9080, 11101 Dar es Salaam, Tanzania. Tel: 255 (022) 2115157/8 Fax: 255 (022) 2117527 Email: ocag@nao.go.tz Copy to: Chief Secretary, State House, P.O. Box 9120, 1 Barack Obama Road, 11400 DAR ES SALAAM. Permanent Secretary and Paymaster General, Ministry of Finance and Planning, Treasury Square Building, P.0. Box 2802, 40468 DODOMA. World Bank Representative, 50 Mirambo Street, P.O. Box 2054, DAR ES SALAAM. 6 National Audit Office ML/DMDP/2017 /2018 THE UNITED REPUBLIC OF TANZANIA PRESIDENT'S OFFICE REGIONAL ADMINISTRATION AND LOCAL GOVERNMENT DAR ES SALAAM METROPOLITAN DEVELOPMENT PROJECT THE UNITED REPUBLIC OF TANZANIA PRESIDENT'S OFFICE REGIONAL ADMINISTRATION AND LOCAL GOVERNMENT FINANCIAL STATEMENTS FOR THE DAR ES SALAAM METROPOLITAN DEVELOPMENT PROJECT FOR THE FINANCIAL YEAR YEAR ENDED 30 JUNE 2018 IDA CREDIT 55850 THE UNITED REPUBLIC OF TANZANIA PRESIDENT'S OFFICE REGIONAL ADMINISTRATION AND LOCAL GOVERNMENT DAR ES SALAAM METROPOLITAN DEVELOPMENT PROJECT FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018 CONTENTS PAGE Project Information 1 Management Report 2 to 5 ,.. Financial statements: 6 Statement of financial position Statement of financial performance 7 Statement of changes in net assets 8 Cash flow statement 9 Statement of comparison of budget and actual amounts - by nature 10 Notes to the financial statements 11 to 19 THE UNITED REPUBLIC OF TANZANIA PRESIDENT'S OFFICE REGIONAL ADMINISTRATION AND LOCAL GOVERNMENT DAR ES SALAAM METROPOLITAN DEVELOPMENT PROJECT PROJECT INFORMATION AS OF 30 JUNE 2018 PRINCIPAL PLACE OF BUSINESS Tanzania Strategic Cities Project, 3rd & 4th Floor, Millenium Towers Building P. 0. Box 31314, Kijitonyama Dar es salaam, Tanzania. BANKERS National Bank of Commerce Ltd, Sokoine Drive & Azikrwe Street P.O. Box 1863, Dar es Salaam, And Bank of Tanzania, P.O.Box 2939, Dar es salaam. ACCOUNTING OFFICER Eng. Mussa I. lyombe, Permanent Secretary, PO-RALG, P.0.Box 1923, Dodoma. AUDITORS The Controller and Auditor General The National Audit Office P. 0. Box 9080 Dar es Salaam Tanzania THE UNITED REPUBLIC OF TANZANIA PRESIDENT'S OFFICE REGIONAL ADMINISTRATION AND LOCAL GOVERNMENT DAR ES SALAAM METROPOLITAN DEVELOPMENT PROJECT MANAGEMENT REPORT FOR THE YEAR ENDED 30 JUNE 2018 1. INTRODUCTION The Government of the United Republic of Tanzania (GoT) has received a credit from the International Development Association (IDA) and grant from the Nordic Development Fund for the Dar es Salaam Metropolitan Development Project (DMDP). The development objective of the DMDP is to improve urban services and institutional capacity in the Dar es Salaam Metropolitan Area, and to facilitate potential emergency response. The project will directly benefit approximately 1,500,000 residents in the broader Dar es Salaam area through improved urban infrastructure and services. Through improvements in basic infrastructure services and access of low-income community upgrading, approximately 100,000 low income households in 40 communities or sub-wards in 13 wards across the 3 Municipal Councils will benefit. The planning and capacity strengthening interventions (improving metropolitan governance arrangements, integrated transport and land use planning, and modernizing own source revenue and GIS systems) will have metropolitan-wide benefits. The PDQ statement "to facilitate potential emergency response" will only be applicable if the contingency component is implemented. The project became effective in July 2015 and is managed through PO-RALG. The project comprises of four components, namely, Component 1: Component 1 - Priority Infrastructure. Component 2: Upgrading in Low-Income Communities. Component 3: Institutional Strengthening and Capacity Building. Component 4: Implementation Support and Monitoring & Evaluation 2 THE UNITED REPUBLIC OF TANZANIA PRESIDENT'S OFFICE REGIONAL ADMINISTRATION AND LOCAL GOVERNMENT DAR ES SALAAM METROPOLITAN DEVELOPMENT PROJECT 2. STATEMENT OF RESPONSIBILITY ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30TH JUNE, 2018. These financial statements have been prepared by the management of the PO-RALG in accordance with the provisions of section 25(4) of the Public Finance Act. No 6 of 2001. The financial statements comply with generally accepted accounting practices as required by the said Act and are presented in a manner consistent with the International Public Sector Accounting Standard (IPSAS). The management of PO-RALG is responsible for establishing and maintaining a system of effective Internal Control designated to provide reasonable assurance that the transactions recorded in the accounts are within the statutory authority and that they contain the receipt and use of all public financial resources by the PO-RALG. To the best of my knowledge, the system of Internal Control has operated adequately throughout the reporting period and that the accounts and underlying records provide a reasonable basis for the preparation of the financial statements for the 2017/18 financial year. I accept responsibility for the integrity of the financial statements, the information it contains, and its compliance with the public finance act No. 6 of 2001 (revised 2004) and the instructions issued by the Treasury in respect of the year under review. ·································································· Eng. MUSSA I. IYOMBE ACCOUNTING OFFICER tl \,7-\1,t) \ \S ·················································· DATE 3 THE UNITED REPUBLIC OF TANZANIA PRESIDENT'S OFFICE REGIONAL ADMINISTRATION AND LOCAL GOVERNMENT DAR ES SALAAM METROPOLITAN DEVELOPMENT PROJECT STATEMENT OF DECLARATION OF THE HEAD OF FINANCE FOR THE PERIOD ENDED 30th JUNE 2018 The National Board of Accountants and Auditors (NBAA) according to the power conferred under the Auditors and Accountants (Registration) Act. No. 33 of I 972, as amended by Act No. 2 of 1995, requires financial statements to be accompanied with a declaration issued by the Head of Finance/Accounting responsible for the preparation of financial statements of the entity concerned. It is the duty of a Professional Accountant to assist the Board of Directors/Governing Body/Management to discharge the responsibility of preparing financial statements of an entity showing true and fair view of the entity position and performance in accordance with applicable International Accounting Standards and statutory financial reporting requirements. Full legal responsibility for the preparation of financial statements rests with the Board of Directors/Governing Body as under Directors Responsibility statement on an earlier page. I Melton E. Nyella being the Head of Finance/Accounting of The President's Office, Regional ... Administration and Local Government hereby acknowledge my responsibility of ensuring that financial statements for the year ended 30th June, 20 I 8 have been prepared in compliance with applicable accounting standards and statutory requirements. I thus confirm that the financial statements give a true and fair view position of The President's Office, Regional Administration Local Government as on that date and that they have been prepared based on properly maint ined financial records. Position: Chief Accou taut Membership No.: NBAA/GA/1552 Date: 17th December, 2018 4 THE UNITED REPUBLIC OF TANZANIA PRESIDENT'S OFFICE REGIONAL ADMINISTRATION AND LOCAL GOVERNMENT DAR ES SALAAM METROPOLITAN DEVELOPMENT PROJECT MANAGEMENT REPORT FOR THE YEAR ENDED 30 JUNE 2018 (Continued) 3. FINANCIAL POSITION a) Property, plant and equipment During the financial year 2017/2018 US Dollar 46,770.00 has been used to purchase Computers and accessories under PPE. b) Cash and cash equivalents Cash and cash equivalents comprise of cash at Bank. The balance of US Dollar 5,968,140.99 is the actual amount of money held at the National Bank of Commerce and Bank of Tanzania at the end of financial year ended June 30, 2018. ~ FlNANC~LPERFORMANCE Revenue a) Transfer from other entities This is the transfer of funds from World Bank who is the financier of the Program. During the financial year, 2017/2018 a total of USO. 38,271,552.52 were received for implementation of program activities. Expenses a) Wages, salaries and employee benefits There were no salaries paid during the financial year 2017/2018. b) Contractual Services Includes Works contracts and supervision consultancies paid directly by PO-RALG on behalf of LGAs. During the year a total of USO 33,381,666/= has been spent in the category. 5. AUDITORS The Controller and Auditor-General (CAG) is the statutory auditor for the project pursuant to the provisions of Article 143 of the Constitution of the United Republic of Tanzania of 1977 (revised 2000), Section 9 - 12 of the Public Audit Act, 2008, and Public Finance Act No 6 of 2001 (revised 2004). MELTON VELLA CHIEF ACC UNTANT Eng. MUSSA I. IYOMBE PERMANTSECRETARY . \l\\L. )20,~ Date .................................... . 5 THE UNITED REPUBLIC OF TANZANIA PRIME MINISTER'S OFFICE· REGIONAL ADMINISTRATION AND LOCAL GOVERNMENT DAR ES SALAAM METROPOLITAN DEVELOPMENT PROJECT STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2018 Notes 2018 2017 USO USO ASSETS Current assets Cash and cash equivalents 14 5,968,141 9,157,312 Receivables and prepayments 16 12,430,162 4,717,737 18,398,303 13,875,049 Non-current assets Property, plant and equipment 17 409,593 477,164 409,593 477,164 TOTAL ASSETS 18,807,896 14,352,213 LIABILITIES Current liabilities Payables 15 2,944,686 744,668 744,668 TOTAL LIABILITIES 2,944,686 744,668 NET ASSETS 15,863,210 13,607,545 NET ASSETS Accumulated surplus/(deficit) 15,863,210 13,607,545 Revaluation surplus TOTAL NET ASSETS 15,863,210 13,607,545 ~ / Permanent Secretary l1 Date lri\1-0 ,~ r1(nJ1,o~~ Date 6 THE UNITED REPUBLIC OF TANZANIA PRIME MINISTER'S OFFICE· REGIONAL ADMINISTRATION AND LOCAL GOVERNMENT DAR ES SALAAM METROPOLITAN DEVELOPMENT PROJECT STATEMENT OF FINANCIAL PERFORMANCE FOR THE YEAR ENDED 30 JUNE 2018 Notes 2018 2017 USO USO Revenue Transfers 7 39,464,271 11,403,026 Finance income 7A 6,401 Gain on foreign currency translation 13 4,553 39,464,271 11,413,980 Expenses Grants and other transfer payments 8 10,351 543,068 Supplies and consumables used 10 3,609,905 1,009,844 Maintenance expenses 11 199,933 Contractual services 12 33,581,666 3,941,936 Loss on foreign currency translation 13 6,684 37,208,606 5,694,781 ·= Share of associates surplus/(deficit) Surplus/(deficit) during the year 2,255,665 5,719,199 "" ~ / Permanent Secretary t1 \ \1. \1..0~ i \1\r1-hv~~ Date Date 7 THE UNITED REPUBLIC OF TANZANIA PRIME MINISTER'S OFFICE· REGIONAL ADMINISTRATION AND LOCAL GOVERNMENT DAR ES SALAAM METROPOLITAN DEVELOPMENT PROJECT STATEMENT OF CHANGES IN NET ASSETS FOR THE YEAR ENDED 30 JUNE 2018 Accumulated Revaluation surplus/deficit Total surplus USO ------- USD ------ - USD Balance at 1 July 2017 7,888,347.00 7,888,347 Changes in accounting policy Restated balance 7,888,347 7,888,347 Changes in revaluation surplus/(deficit) Surplus/(deficit) for the year 5,719,198 5,719,198 Transfer to and from surplus/deficit Balance at 1 July 2018 13,607,545 13,607,545 Changes in accounting policy Restated balance 13,607,545 13,607,545 Changes in revaluation surplus/(deficit) Surplus/(deficit) for the year 2,255,665 2,255,665 Transfer to and from surplus/deficit Balance at 30 June 2018 15,863,210 15,863,210 - Permanent Secretary Date Date 8 THE UNITED REPUBLIC OF TANZANIA PRESIDENT'S OFFICE· REGIONAL ADMINISTRATION AND LOCAL GOVERNMENT DAR ES SALAAM METROPOLITAN DEVELOPMENT PROJECT STATEMENT OF CASH FLOW FOR THE YEAR ENDED 30 JUNE 2018 Note 2018 2017 USO USO Cash flows from operating activities Surplus/(deficit) before taxation 2,255,665 5,719,198 Adjustments for: Expenses Payable 2,200,018 626,512 Receivable and Pre payments (7,712,425) (4,717,737) Depreciation and amortisation 103,991 8,645 Cash generated from operations (3,152,752) 1,636,618 Interest paid Net cash from operating activities (3,152,752) 1,636,618 Cash flows from investing activities Purchase of property, plant and equipment (36,419~ (485,810} Net cash from investing activities (36,419) (485,810) Cash flows from financing activities Development Grants Received - Grants refunded/transferred Net cash used in financing activities Net increase in cash and cash equivalents (3,189,171) 1,150,808 Cash and cash equivalents at beginning of period 9,157,312 8,006,504 Cash and cash equivalents at end of period 5,968,141 9,157,312 ,~, Permanent Secretary Date Date 9 ' ' I THE UNITED REPUBLIC OF TANZANIA PRESIDENT'S OFFICE REGIONAL ADMINISTRATION AND LOCAL GOVERNMENT DAR ES SALAAM METROPOLITAN DEVELOPMENT PROJECT STATEMENT OF COMPARISON OF BUDGET AND ACTUAL AMOUNT FOR THE YEAR ENDED 30th June 2018 Budget approved on the Cash Basis (Classification of Payments by Nature) Actual Amount (A) Final Budget(B) Original Budget Difference(B-A) TZS TZS TZS TZS CASH INFLOWS Transfer from Wold Bank 39,464,271.23 39,464,271.23 39,464,271.23 0.00 TOTAL RECEIPTS 39,464,271.23 0.00 0.00 0.00 CASH OUTFLOWS Payments Property, plant and equipment 0.00 0.00 0.00 0.00 Grants and Other Transfer Payments 0.00 0.00 0.00 0.00 Wages, salaries and employee benefits 0.00 54,720.00 54,720.00 54,720.00 Supplies and consumables used 3,609,905.39 3,970,059.83 3,970,059.83 360,154.44 Maintenance expenses 0.00 85,500.00 85,500.00 85,500.00 Contractual services 33,581,665.78 26,319,240.15 26,319,240.15 (7,262,425.63) TOTAL PAYMENTS 37,191,571.16 30,429,519.98 30,429,519.98 {6,762,051.18) NET CASH FLOWS 2,272,700.07 (30,429,519.98) (30,429,519.98)" 6,762,051.18 ~--- Permanent Secretary ,e Oate \J h'L\ 'lfi) l V ~\U~1Y Iraie 10 THE UNITED REPUBLIC OF TANZANIA PRESIDENT'S OFFICE REGIONAL ADMINISTRATION AND LOCAL GOVERNMENT DAR ES SALAAM METRO POLIT AN DEVELOPMENT PROJECT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018. 1. PROJECT INFORMATION The Dar es Salaam Metropolitan Development Project is a project established by the Government of Tanzania through President's Office, Regional Administration and Local Government. Financing of the project amounts to USO 330.30 million whereby USO 300 million is contributed by IDA credit and USO 5 million from Nordic Development Fund and 25.30 million contributed by the Government of Tanzania. All of the Government of Tanzania financing will be for Resettlement Action Plan (RAP) costs for llala MC, Kinondoni MC and Temeke MC. The Financing Agreement (FA) for DMDP was signed on March 12, 2015 and the Credit became operational on July 2015 after the opening of program bank account at NBC and Bank of Tanzania (BOT). 2. PRINCIPAL ACTIVITIES DMDP Development Objective is to improve urban services and institutional capacity in the Dar es Salaam Metropolitan Area, and to facilitate potential emergency response. The project includes four components as follows: Component 1: Component 1 - Priority Infrastructure. (i) Sub-Component 1a - Priority roads supporting public transit, mobility, and connectivity to low income communities. Construction and improvement of priority sections of local and feeder roads in the urban core areas of the Dar es Salaam Metropolitan Region. (ii) Component 1b: Flood Control and Storm Water Drainage. Improvement of the primary and secondary drainage system around selected river basins of the Dar es Salaam Metropolitan Region, including through bank stabilization, lining, detention ponds, and connections to the secondary network. (iii) Component 1c: Contingency for Disaster Risk Response. Enhancement of preparedness for and provision of rapid response to disaster emergency and/or catastrophic events as needed. Component 2: Upgrading in Low-Income Communities. DMPD upgrading criteria was developed to identify priority communities, targeting: (i) Dense, highly populated (and low-income) areas with poor infrastructure; (ii) Opportunities to connect to the primary road and drainage network financed through DMDP; (iii) Investments that would not further encourage sprawl, but densification. Component 3: Institutional Strengthening and Capacity Building. (i) Component 3a: Improving Metropolitan Governance Arrangement and Systems. The (ii) Component 3b: Improving Own Source Revenue Collection Systems and Mainstreaming Geographic Information Systems (iii) Component 3c: Support for Integrated Transport and Land-use Planning 11 THE UNITED REPUBLIC OF TANZANIA PRESIDENT'S OFFICE REGIONAL ADMINISTRATION AND LOCAL GOVERNMENT DAR ES SALAAM METROPOLITAN DEVELOPMENT PROJECT (iv)Component 3d: Strengthening Operations and Maintenance Systems. (v) Component 3e: Urban Analytics. (vi) Component 3f: Urban Planning Systems. Component 4: Implementation Support and Monitoring & Evaluation This component will enable the key implementing agencies (PO-RALG, DLAs and DART Agency) to execute the project. It will include operational costs for the direct project management and supervision functions, including procurement, accounting, financial management, monitoring and evaluation (M&E), audit of project accounts, meetings and workshops, and impact assessments. 3. AUTHORISATION OF FINANCIAL STATEMENTS The Financial statements for the year ended 301h June 2018 were authorized for issue on 30 September, 2018 by the Permanent Secretary President's office Regional Administration and Local Government. 4. BASIS OF PREPARATION The financial statements have been prepared on a historical cost basis. The financial statements are presented in USO currency. Statement of compliance .... The financial statements of the DMDP have been prepared in accordance with International Public Sector Standards (IPSAS) and comply with the public Finance act 2001. 5. CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES The accounting policies adopted are consistent with those of the previous financial year. 6. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting policies adopted, which are expected to be consistent, are shown below. Foreign currency translation Functional and presentation currency Items included in the financial statements of the project are measured using the currency of the primary economic environment in which the project operates ("the functional currency"). The financial statements are presented in USO, which is the project's presentation currency. Transactions and balances Local currency transactions are translated into USO using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from 12 THE UNITED REPUBLIC OF TANZANIA PRESIDENT'S OFFICE REGIONAL ADMINISTRATION AND LOCAL GOVERNMENT DAR ES SALAAM METROPOLITAN DEVELOPMENT PROJECT recognized in the statement of financial performance. Local currency balances of receivables and payables have been translated at the Bank of Tanzania mean closing exchange rate of TZS 2,281.26/USD ruling at the end of the year 30th June 2018. Cash and cash equivalents Cash and bank balances in the statement of financial position comprise cash at banks and in hand and short-term deposits with an original maturity of three months or less, and is measured at amortized cost. For the purpose of the statement of cash flow, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts. Employment benefits Employee benefits include salaries and other related - employment costs to non-civil servant - project staff on contractual basis. Other staff in the project are Permanent and pensionable staff whose employment benefits are dealt with by PO-RALG head office. Revenue from exchange transactions Revenue is recognised to the extent that it is probable that the economic benefits will flow to the project and the revenue can be reliably measured. Revenue from non-exchange transactions Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Project and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognized: Transfers Transfers are not recognized until there is reasonable assurance that the project will comply with the conditions attaching to them and the fund will be received. Property, plant and equipment The project has adopted the provisions of Section 95 of IPSAS 17 Property Property (PPE). The PPE is stated at cost less Accumulated depreciation and accumulated impairment. Depreciation is calculated on straight line basis over the useful life of the Asset. The annual rates of depreciation which are applied based on Government policy are as defined bellow; Estimated Useful No. Asset category life Yrs 1 Plant and Machinery 15 2 Furniture and fixture 5 3 Office Equipment 5 4 Motor Vehicles Light duty (below 5 tons) s 5 Computer (Desk tops and laptops) 4 The amount of depreciation has been calculated on apportionment basing on the months of purchase. 13 THE UNITED REPUBLIC OFTANZANIA PRIME MINISTER'S OFFICE - REGIONAL ADMINISTRATION AND LOCAL GOVERNMENT DAR ES SALAAM METROPOLITAN DEVELOPMENT PROJECT NOTES TO THE FINANCIAL STATEMENTS (Continued) FOR THE YEAR ENDED 30 JUNE 2018 2018 2017 Actua) Actua) Receipts / Expenditure Receipts / Expenditure USD USD Note 07 Transfer from World Bank Income 38,271,553 11,403,026 Refund From TSCP AF2 1,192,719 Total 39,464,271 11,403,026 Note 07A Finance Income Bank interest and other investment income 6,400.55 6,400.55 Note 08 Grants and Other Transfer payments Transfer of Asset to Temeke MC 10,350.68 543,068.36 Note 10 Supplies and consumables used Accomodation 113,866.77 70,420.10 Advertising and Publication 291,095.01 30,718.31 Air Travel Ticket - Foreign 160,776.73 59,966.68 Air Travel Ticket - Local 9,152.17 Bank Chargies and Commission 942.62 288.61 Computers Software 183,422.71 Conference Facilities 320,212.41 115,709.50 Depreciation Expenses 103,990.52 8,645.08 Diesel 301,470.88 42,120.34 Electricity 5,059.85 467.71 Food and Refreshment 48,329.19 12,748.86 Ground travel (bus, railway taxi, etc) 8,400.00 Mobile charges 4,648.42 Motor vehicles and water craft 201,186.21 Newspaper and Magazines 1,329.34 Office Consumables (papers,pencils etc) 437,943.94 353,248.21 Outsourcing Cost 32,751.60 '""" Per Diem - Domestic 1,091,531.84 246,409.16 Perdiem- Foreign 163,200.00 35,357.00 Posts and Telegraphs 1,841.31 Printing and Photocopy paper 11,068.33 5,929.77 Rent Office Accomodation 16,438.35 Telephone charges 18,694.87 Training Materials 30,000.00 Tuition Fees 75,501.81 14 THE UNITED REPUBLIC OF TANZANIA PRIME MINISTER'S OFFICE - REGIONAL ADMINISTRATION AND LOCAL GOVERNMENT DAR ES SALAAM METROPOLITAN DEVELOPMENT PROJECT NOTES TO THE FINANCIAL STATEMENTS (Continued) FOR THE YEAR ENDED 30 .JUNE 2018 Visa Application Fees 2,224 Water Charges 2,641.02 Total 3,609,905.39 1,009,843.85 Note 11 Maintenance Expenses Maintenance of PPE 199,932.93 Total 199,932.93 Note 12 Contractual Services Civil works 26,290,133.14 2,538,605.46 Consultancy 7,291,532.64 1,403,330.74 33,581,665.78 3,941,936.20 Note 13 Loss on Foreign Currency Transl: Exchange Gain /Loss 6,684 (4,553.04) TZS USO Opening Balance Exe Rate June 2017 2219.05 543,879,213.66 245,095.52 Exe Rate June 201 8 2281.26 543,879,213.66 238,411.76 Translation Loss 6,683.76 Note 14 Cash and Cash Equivalents BOT Cash Account 5,197,388.69 8,122,590.60 NBC DMDP Project - Foreign Acee I 19,489.65 789,626.30 NBC DMDP Project - Local Aecom 651,263 245,095.52 Total 5,968,140.99 9,157,312.42 Note 15 Payables Retention Payable 2,799,188 220,909.27 Staff Claims 2,784.98 Supplies of Goods and consumables 27,342 148,591.19 Utilities 461.58 Withholding Tax 118,156 371,920.83 Total 2,944,686 744,667.85 Note 16 Receivables and Prepayments Advance Payment 12,312,706 4,717,736.74 TSCP 93,875 ULGSP 22,003 Imprest 1,578 Total 12,430,162 4,717,736.74 Note 17 Property, Plant,and Equipment Computers Supplies and Accessories 513,583.74 Depreciation Expenses (103,991) (8,645.08) Four Wheel Driving vehicles 466,519.55 Furniture and Fittings 19,289.95 Total 409,593.22 477,164.42 15 SCHEDULE OF AMOUNT RECEIVABLE FROM TSCP AND ULGSP PVNo Amount Amount Payee Details Project Date Training of social environmental 762 68,520,000 68,520,000 PORALG issues under TSCP TSCP 01/03/2018 Training of social environmental 08/03/2018 763 46,720,000 46,720,000 PORALG issues under TSCP TSCP PO RALG Dar es saalam office expenses was financed by using 17/06/2018 523 19,805,000 19,805,000 PORALG DMDP TSCP Payment for Air tickets to Antelope tours Mwanza,Mbeya,Kilimanjaro, and travel services where there is no project activity 09/11/2017 502 22,080,550.68 22,080,550.68 LTD performed. TSCP Antelope tours Payment for Air tickets to and travel services Mwanza Where there is no project 13/11/207 512 1,301,135.58 760,000 LTD activity in Mwanza TSCP Payment of perdiem to staff Where there is no evidence of 03/10/2017 412 5,500,000 5,500,000 PORALG performing proiect activity TSCP official travel from Dodoma to - Dar es salaam tracking the environmental assessment of Climatic Change (LIC) project 03/10/2017 415 1,000,000 1,000,000 PORALG held at PO RALG Dodoma. TSCP Payment of perdiem to officials and purchasing fuel during 18/10/2017 441 5,000,000 5,000,000 PORALG supervision of TSCP Dodoma. TSCP DMDP Fund used to review 13/02/2018 734 5,000,000 5,000,000 PORALG LGRCIS planning activities. TSCP Perdiem paid to PO RALG staff 13/11/2017 514 7,960,000 6,040,000 PORALG from Dodoma to Dar es salaam. TSCP Perdiem and fuels to officials and drivers from Local Government Authorities which does not 391 73,400,000 33,726,600 PO RALG implement DMDP project TSCP Sub Total 214,152,151 16 DMDP funds used to finance 04/12/2017 559 13,479,600 13,479,600 PO-RALG activities related to ULGSP ULGSP DMDP funds used to finance 04/12/2017 558 13,479,600 13,479,600 PO-RALG activities related to ULGSP ULGSP Payment of perdiem during official journey to Dar es saalam ,Morogoro and Pwani with no evidence of project activities 27/02/2018 724 6,384,000 6,384,000 PORALG performed. ULGSP DMDP Fund diverted to facilitate ULGSP activities. And perdiem paid to officials who travelled for 03/10/2017 408 2,063,500 2,063,500 PORALG Audit activities at Tanga ULGSP Auditing for ULGSP project at Kibaha, Morogoro, Singida, Babati, perdiem paid and Fuel 11/10/2017 429 6,474,000 6,474,000 PORALG using DMDP fund. ULGSP Perdiem and Fuel paid to staff who travelling to Korogwe, Moshi 13/10/2017 433 1,930,000 1,930,000 PORALG for ULGSP activities. ULGSP Perdiem and Fuel paid to staff who travelling to Kibaha, Bagamoyo, and Mkuranga. Igunga DC,Uyui DC,Tabora DC,Auditing 27/02/2018 724 6,384,000 6,384,000 PORALG of development Project. ULGSP Sub Total 50,194,700.00 Total 264,346,850.68 17 SCHEDULE OF RETENTION FOR 2017/2018 DMDP - PROJECT EXCH 2,281.26 S/NO NAME LGA AMOUNT (USD) 1 CHINA RAILWAY SEVENTH GROUP T LTD 330,S65.95 2 HAINAN INTERNATIONAL LTD AND HARi SINGH & SONS LTD 47,027.50 !LALA 3 GROUP SIX INTERNATIONAL LTD 17,028.20 4 NYANZA ROADS WORKS LTD 50,251.90 5 CJRE EAST AFRICA LTD (PACKAGE 1) 800,858.53 6 CJRE EAST AFRICA LTD (PACKAGE 6) 118,287.54 7 CJRE EAST AFRICA LTD (PACKAGE 7) TEMEKE 37,434.08 8 NYANZA ROAD WORKS LIMITED 452,900.17 HARi SINGH AND SONS LTD JV WITH GROUP SIX 9 INTERNATIONAL LTD 55,804.21 10 ESTIM CONSTRUCTION CO LTD (PARKAGE 1) 628,991.76 11 ESTIM CONSTRUCTION CO LTD (PACKAGE 3) Kl NON DON I 130,214.99 12 CHINA CIVIL ENGINEERING CONSTRUCTION CORPORATION 129,822.95 TOTAL 2,799,188 SCHEDULES FOR UN RETIRED IMPREST FOR 2017/2018 DMDP - PROJECT EXCH 2,281.26 S/NO NAME AMOUNT (TZS) UN RETIRED IMPREST (USD) 1 JACKLINE MSHANA 3,000,000 1,315 TOTAL 3,000,000 1,315 18 SCHEDULE OF ADV FOR 2017/2018 DMDP - PROJECT EXCH 2,281.26 S/NO NAME LGA AMOUNT (USO} 1 UWP CONSULTING (Pty) LTD 142,165.49 2 CHINA RAILWAY SEVENTH GROUP T LTD 173,323.71 HAINAN INTERNATIONAL LTD AND HARi SINGH & !LALA 3 SONS LTD 841,258.52 4 GROUP SIX INTERNATIONAL LTD 1,397,277.31 5 NYANZA ROADS WORKS LTD 1,096,046.30 6 KYONGDONG ENGINEERING CO LTD 106,634.99 7 CJRE EAST AFRICA LTD (PACKAGE 1) 147,818.82 8 CJRE EAST AFRICA LTD (PACKAGE 6) 1,373,964.98 9 CJRE EAST AFRICA LTD (PACKAGE 7) TEMEKE 1,409,080.39 10 NYANZA ROAD WORKS LIMITED 778,701.43 HARi SINGH AND SONS LTD JV WITH GROUP SIX 11 INTERNATIONAL LTD 1,166,557.89 12 H.P GAU FF INGENIEURE GmbH & CO 129,306.43 13 ESTIM CONSTRUCTION CO LTD (PARKAGE 1) 556,651.02 14 ESTIM CONSTRUCTION CO LTD (PACKAGE 3) Kl NON DON I 1,248,569.45 CHINA CIVIL ENGINEERING CONSTRUCTION 15 CORPORATION 1,745,349.73 TOTAL 12,312,706.46 19