CLIMATE CHANGE ADAPTATION PROJECT (CCAP) FINANCIAL YEAR 2017

Report No: FIN-2018-58(E) 27 June 2018

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TABLE OF CONTENTS

Auditor General's Report

Financial Statement

Statement of Receipts and Payments

Notes to the financial statement........

I

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L$ :iiii.'etiAIIDITOR GTNTRAI:S OTTITT

AUDITOB GENERAL'S REPgRT

YTATIO0* PROJV,CT

Opinion

We have audited the accompanying financial statement; Statement of Receipts and Payments

for the period ended 31 December 2017 and notes to this statement, which includes a summary

of significant accounting policies and other explanatory information set out in pages 5 to 9, ofClimate Change Adaptation Project financed by World Bank/International DevelopmentAssociation Grant Agreement (CCTF GrantNo. TF019383) as of 17 July 2015.

In our opinion, the financial statement presents fairly, in all material respects, the cash receipts

and cash payments for the period ended 31 December 2017 and cash balances as at the period

then ended in accordance with the International Public Sector Accounting Standard(IPSAS):Financial Reporting under the Cash Basis of Accounting.

In addition, we can provide assurance that:

(a) The funds provided under the Financial Agreement have been utilised for the purposes

for which they were provided;

(b) The Special Account transactions and its balance as at 31 December 2017 have been

presented truly and fairly on the financial statement, in accordance with theIntemational Public Sector Accounting Standard: Financial Reporting under the Cash-

Basis of Accounting, and the cash balance as at 31 December 2017 shown on theStatement of Receipts and Payments reflects the cash balance which is reconciled to

that of the Special Account;

(c) The Financial Monitoring Reports furnished to the World Bank could be fairly relied

upon to support the applications for withdrawals in accordance with the requirements

specified in the Financing Agreement; and adequate supporting documentation have

been maintained to support claims to the IDA, for reimbursement of expendituresincurred and which expenditures are eligible for financing under the FinancingAgreement, and

(d) The Procurement Guidelines of the World Bank have.been complied with in theprocurement of goods and services under the project.

1st Floor, Ghaazee Building, Ameeru Ahmed Magu, Male, Maldives. Tel: +(960) 3323939, Fax: +(960) 3316430, e-mail: info@audit.gov.mv

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs). Ourresponsibilities 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 Project in

accordance with the International Ethics Standards Board for Accountants' Code of Ethics for

Professional Accountants (IESBA Code), and we have fulfilled our other ethicalresponsibilities in accordance with the IESBA Code.

We believe that the audit evidence we have obtained is suffrcient and appropriate to provide a

basis for our opinion.

Responsibilities of management's and those charged with governance for the financialstatements

The Management is responsible for the preparation and fair presentation of this financial statement in

accordance with the International Public Sector Accounting Standard (IPSAS): Financial Reporting

under the Cash Basis of Accounting. This responsibility includes: designing, implementing andmaintaining intemal controls relevant to the preparation and fair presentation of financial statement 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.

Those charged with governance of the project is responsible for overseeing the Project's financialreporting process.

Auditor's 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 auditor's report that

includes our opinion. Reasonable assurance is a high level ofassurance, but is not a 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 theaggregate,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 maintainprofessional scepticism throughout the audit. We also:

o Identiff and assess the risks of material misstatement of the financial statements, whether due tofraud or error, design and perform audit procedures responsive to those risks, and obtain auditevidence 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 elror, as fraud may

involve collusion, forgery, intentional omissions, misrepresentations, or the override of internalcontrol.

o Obtain an understanding ofinternal control relevant to the audit in order to design audit proceduresthat are appropriate in the circumstances, but not for the purpose of expressing an opinion on the

effectiveness of the Project' s internal control.

o Evaluate the appropriateness of accounting policies used and the reasonableness of accountingestimates and related disclosures made by management.

o Evaluate the overall presentation, structure and content of the financial statements, including thedisclosures, and whether the financial statements represent the underlying transactions

a manner that achieves fair presentation.

1st Floor, Ghaazee Building, Ameeru Ahmed Magu, Male, Maldives Tel: *(960)

23323939, Fax: *(960) 3316430, e-mail: i

ln

We communicate with those charged with governance of the project regarding, among other matters,the planned scope and timing of the audit and significant audit findings, including any significantdeficiencies in internal control that we identifo during our audit.

24th June 2018

;t-^^WHassan Ziyath

Auditor General

1st Floor, Ghaazee Building, Ameeru Ahmed Magu, Male, Maldives. Tel: +(960) 3323939, Fax:

J

+(960) 331 6430, e-mail:

MINISTRY OF ENVIRONMENT AND ENERGYCLIMATE CHANGE ADAPTATION PROJf,CT (ccAP) 2017

STATEMENT OF RECEIPTS AND PAYMENTS

FOR THE PERIOD ENDED 31 DECEMBER 2017

NoteFor the periodI Jan 2017 to3l Dec 2017

USD

Receipts

Disbursements from World Bank

Total Receipts

2,714,551

2,114,.551

Payments

Wetlands Conservation 672,091

256,923

434,699

78,301

13g,gg2

1,580,996

3

For the periodI Jan 2016 to31 Dec 2016

USD

Cumulative asat 3l Dec 2017

USD

25,719 3,194,619

25,718 3,lg4,619

Coral Reef Monitoring

Solid Waste Management

Mainstreaming Climate Change intoIsland Development Planning

Project Management

Total PaymentsIncrease/(Decrease) in Cash

Cash balance at the beginning ofthe period

Increase(Decrease) in CashCash balance at the end of theperiod

Mr. Maumoon Khalid(Project Manager)

4

5

6

7

8

197,596

104,763

35,616

51,807

156,592

882,795

367,ggl

484,353

1 30,1 08

362,544

546,352 21227,791

533,555 (520,634) 966,838

433,285

533,555

953,919

(520,634)

966,840 433,285

The Statement of Receipts and Payments was approved by pMU on 24 June 201g.

Signed for and on behalf of the PMU:

Mr. Thaalooth(Financial Expert)

The accounting policies and notes on pages 5 through l0 form an integral part of the Statement ofand Payments.

Higun, Male, Maldives Tel:+(960) 3018300, Fax: +(960) 301830'1, e-mail: secretariat@environment.gov.mvEnergy, Green Building, Handhuvaree

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MINISTRY OT' ENVIRONMENT AND ENERGYCLIMATE CHANGE ADAPTATION PROJECT (ccAP) 2017

NOTES TO THE FINANCIAL STATEMENTSI. PROJECT INFORMATIONKey Hightights

Project Title: Climate Change Adaptation project (CCAP)

Start Date: lTth July 2015

Closing Date: 30th June 20lg

Project Duration: 03 years

Approved Budget: us$4.3r million (worrd Bank Financing: US$4.21)

Funded by: world Bank/International Deveropment Association (IDA)

1.1 Objectives

The main aim of the Project is to provide the Republic of Maldives with the capacity to effectivelymanage environmental risks and threats to fragile coral reefs as well as marine habitats resultingfrom tourism development, increased solid waste disposal, fisheries and global climate change.Accordingly, this Project has two development objectives. The first project Developmentobjective is that a solid waste management system is established and that inhabitants on targetedislands use solid waste management facilities, reducing the risks of contamination associated withaccumulated wastes and sea dumping. The second Project Development objective is to buildhuman and technical capacity for environmental management so thdt the environmental dimensionis integrated in the planning process using information and expertise developed in the project.

1.2 Project components

The project has been designed along with five main components that are expected to contribute todelivering climate resilient island development in the project areas. The project design builds onthe lessons and experiences form projects implemented under ccrF-l

Component 1: Wetlands Conservation

This component aims to establish a protected Wetlandwetlands and biodiversity in the Hithadhoo protected

Area management system to protect theArea (Eydhigali Kilhi and Koattey) of

Hithadhoo island, and Bandaara Kilhi and Dhandimagu Kilhi in Fuvahmulah island; support thedevelopment of ecotourism and other sustainable activities that can contribute to the socio-economic development of the local community; and establish a model for management of theProtected Wetland Area. The component would hnance the establishment of a protectedmanagement system for Hithadhoo Island and Fuvahmulah Island, through: (a) theof Protected Area Management Units (PAMUs); (b) the implementation of zonation andprotection regimes; (b) implementation of an environmental education and

Higun, Male, Maldives. Tel+(960)

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and Energy, Green Building, Handhuvaree 3018300, Fax: +(960) 3018301, e-mail: secretariat@envionment gov mv

MINISTRY OF EI\TVIRONMENT AND ENERGYCLIMATE CHANGE ADAPTATION PROJEC T (CCAP) 2017

program; (c) development of an eco-tourism facility and program; (d) support for local eco-friendlylivelihood activities; (e) support for development of a National wetlands Management StrategyPlan; (g) development of a Project exit strategy and future sustainability options for protected areas;and (h) carrying out of a feasibility study on the designation of Addu City and Fuvahmulah Islandas biosphere reserves or important bird areas.

Component2z Coral Reef Monitoring

This component aims to strengthen the Coral Reef Monitoring Framework for improved decisionmaking and management of coral reefs and related ecosystems. The component will involve privatesector stakeholders (such as tourist resorts, dive centers), as well as the planned pAMU inHithadhoo for coral reef monitoring. The component will finance the scaling up of the coral reefmonitoring system, through: (a) support for newly inducted and existing participating resorts anddive centers, and the PAMU in Hithadhoo Island on field data collection and the use of theCoralDatabase; (b) enhancing the functionality and user-friendliness of the CoralDatabaseplatform; (c) development of policy notes and organization of exchange workshops to enablestrategic mainstreaming of the use of the National Coral Reef Monitoring program; and (d)strategic and technical advisory support.

Component 3: Development of an island level integrated solid waste management

This component will help build the institutional capacity of Addu city and Gnaviyani/Fuvahmulahatolls/island councils to plan an atoll/island level integrated solid waste management program tominimize the environmental risks to marine and terrestrial assets. The component will finance theprovision of support for institutional capacity building for Addu city council, Gnaviyani AtollCouncil, Fuvahmulah Island council, and Hithadhoo Island Council in solid waste managementplanning, by: (a) carrying out of a strategic options study on solid waste management; (b)implementation of an atoll/island level composting program at island waste management centers(IWMCs) in Addu Atoll and Gnaviyani Atoll; (c) capacity building for Island councils, contractors,and the utility company in Fuvahmulah Island and Addu city; and (d) conducting ofcommunications campaigns to encourage community participation in island solid wastemanagement.

Component 4: Mainstreaming Climate change into island development planning

This component aims to build awareness and strengthen local government capacity to addressclimate change adaptation issues relevant to island development and support tertiary leveleducation in environmental management including climate change adaptation and mitigation. Thecomponent will finance the provision of support for the mainstreaming of climate change intoisland development planning, including through: (a) delivery of a training curriculum on climatechange to Atoll Council and Island Council representatives; and (b) provision of scholarships.

Handhuvaree Higun, Mal6, Maldives. Te[+(960)and Erergy, Green Building,

63018300, Fax: +(960) 301830't, e-mait: secretariat@environ ment.gov.mv

MINISTRY OF' ENVIRONMENT AND ENERGYCLIMATE CIIANGE ADAPTATION PROJECT (CCAP) 2017

Component 5: Project Management

This component will support management functions for implementing the project, includingsupport for staff, monitoring, equipment, operating costs, etc. This. will component will finance theprovision of support for Project implementation, management, and monitoring and evaluation.

Project Financing

The project will be implemented over a period of three and a half years from 2015 to 201g. Theproject will be financed by a grant of EUR 3.85 million (US$5.16 million equivalent) from the EUas well as residual resources from the first phase of the ccTF. The project cost of uS$5.3 millionis the sum of EU's additional contribution of EUR 3.85 million and residual resources ofUS$948,182 from the firstphase of CCTF, after subtracting World Bank's agency fee for fundadministration, project management, and project preparation and implementation support. Table Ibelow summarizes project cost by component.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES2.1 Basis of preparation

The Statement of Receipts and Payments are prepared in accordance with the International publicSector Accounting Standard: Financial Reporting under the Cash Basis of Accounting.

2.2 Recognition of Receipts and payments

Receipts and payments are accounted for on cash basis. Receipts are recognised when the MaldivesMonetary Authority (MMA) receives the funds from world Bank to the bank account maintainedfor the project with it. This account is maintained in United States Dollars (USD). payments arerecognised at the time of outflow of cash either from the bank account, or from the cash accountmaintained for cash payments.

2.3 Presentation Currency

The Statement of Receipts and Payments has been presented using the United States Dollars (usD).And all the figures have been rounded to the nearest Dollar.

2.4 Foreign Currency Translation

Receipts and payments in currencies other than the reporting currency (USD) are converted at theMid- Exchange Rate (MMA's published exchange rate less 0.05) existing between the transactioncurrency and USD at the time of the receipt/payment. Cash balances in currencies other than USDas at the end of the reporting period are shown in the financial statement at the exchange rate thatwas prevailing at the last day of the reporting period.

Male, Maldives. Tel:+(960) 301 8300,

7

and Energy, Green Building, Handhuvaree Higun, Fax: +{960) 301830'1, eflail: secretariat@envionnnntgov.mv

MINISTRY OF ENVIRONMENT AND ENERGYCLIMATE CHANGE ADAPTATION PROJf,CT (CCAP) 2017

2.5 Repofiing Period

Financial statement is generally prepared for one year (calendar year). period for which financialstatement is prepared are disclosed on the face of the financial statement.

2.6 Comparatives

In addition to the figures for the financial year ending 3l Decembe r 2017,the financial statement shows thefigures for the period financial year ended 3l Decembe r 2016.

3. Funds Received

tr'or the periodI Jan 2017 to 31

Dec 2017USD

2,114,551

f,'or the periodI Jan 2016 to 31

Dec 2016USD

Cumulative asat 3l Dec 2017

USD

25,719 3,194,619Disbursements (Receipts) from World BankTotal

4, Wetlands Conservation

CBWMP Implementation at FuvahmulahCBWMP Implementation at HithadhooWetlands Coord i nator (fu I l+ime)International Implementation Support andConstruction Su pervisionOperational CostsCivil EngineerAssistant Civil EngineerTotal

5. Coral Reef monitoring

Improvements to functionality andcontinued support for Coral DatabaseHosting Coral DatabaseFull time resoft coordinators at MRC

2,114,551 25,719 3,lg4,619

For the periodI Jan2017 to 3l

Dec 2017USD

253,974

269,319

28,491

21,150

57,821

26,049l6,2gl

tr'or the periodI Jan 2016 to 3l

Dec 2016USD

38,247

13l,g22

27,417

Cumulative asat 3l Dec 2017

USD

292,972

403,509

60,476

21,150

62,45326,04916,297

672 I

For the period1 Jan 2017 to 3l

Dec 2017USD

197,596

For the periodI Jan 2016 to 3l

Dec 2016USD

882,795

97,900

4,90370,965

Higun, Ma16, Maldives Tet+(960) 30'18300,

8

Cumulative asat 31 Dec 2017

USD

I 1,639

5,0006,530

109,53

and Energy, Green Building, Handhuvaree Fax: +(960) 30'18301, e-mail: secretariat@environment.gov.mv

MINISTRY OF ENVIRONMENT AND ENERGYCLIMATE CHANGE ADAPTATION PROJECT (CCAP) 2017

International TechnicalAdvisor

and Strategic

Coral Reef Monitoring Coordinator (full_time)Operational CostsTotal

6. Solid Waste Management

Strategic Options StudyUpgrading of existing WMC inHulhumeedhoo, Addu CityUpgrading of existing WMC in FuvahmulahWaste management supporling equipmentComposting/waste management train in gSol id Waste Management CoordinatorOperational CostsTotal

45,847

21,633

15,675

59,357

23,239

104,204

51,167

15,67 5256,923 104,763 367,992

For the periodI Jan 2017 to 3l

Dec 2017USD

130,629

I l0,g6l

l28,lgg15,600

1,953

28,16019,297

For the periodI Jan 2016 to 31

Dec 2016USD

1,932

33,693

Cumulative asat 3l Dec 2017

USD

130,629

ll0,g6l

l28,lgg15,600

3,995

75,891

lg,2g7434,699 35,616 484,351

7. Mainstreaming climate change into Island Development planning

For the periodI Jan 2017 to 3l

Dec 2017USD

For the periodI Jan 2016 to 31

Dec 2016USD

Cumulative asat 3l Dec 2017

USD

Orientation Course for Atoll and IslandCouncilslntegration into planning and OrientationModulesSponsorship of students for BEM CourseTotal

8. Project Management

Project ManagerFinancial Management Offi cerProcurement OfficerCommunication OfficerCivil Engineer for SWM Component

44,569

26,963

20,936

Ma16, Maldives. TeL+(960) 3018300, Fax: +(960)

9

lg,669

22,755

36,977

7,732 26,401

44.015

22,755

80,95278,301 51,807 t30,l0g

For the periodI Jan 2017 to 31

Dec2017USD

For the periodI Jan 2016 to 31

Dec 2016USD

44,966g,g3l

25,85011 ,7 50

25,067

Cumulative asat 31 Dec 2017

USD

1 08,1 32

22

and Erergy, Green Building, Handhuvaree Higun, 3018301, e-mail:

3

MIMSTRY OF ENVIRONMENT AIID ENERGYCLIMATE CHANGE ADAPTATION PROJECT

Commun i[u Mobi I ization Assi stantFM AssistantOperational ExpensesTotal

(ccAP) 2017

8,41710,917

27,391 39,1 1 g

8,41710,91780,641

13g,gg2 156,582 362,544

Maldives Tel:+(960) 3018300, Fax:

t0and Energy, Green Building, Handhuvaree Higun, Male, +(960) 3018301, e-mait: