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EAST AFRICAN COMMUNITY

AUDIT REPORT FOR THE PROJECT - PFM COORDINATION AND HARMONIZATION IN EAST AFRICAN COMMUNITY COUNTRIES FOR 9

MONTHS PERIOD ENDED 31-MARCH-2017

IDA GRANT NUMBER TF01 4974

August 2017

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EAST AFRICAN COMMUNITY (EAC) Public Financia l Management Coordination and Harmonization Project FINANCIAL STATEMENTS FOR THE 9 MONTH PERIOD ENDED 31 MARCH 2017

TABLE OF CONTENTS

EAC Secretariat information

Secretary General' report

Statement of secretariat responsibilities

Declaration of project accountant

Independent auditors' report

Financial statements

Statement of financial performance

Statement of financial position

Statement of cash flows

Statement of comparison of budget and actual expenditures

Special designated account activity

Notes to the financial statements

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Page No.

ii

1-8

9

10

11-13

14

15

16

17

18

19-29

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EAST AFRICAN COMMUNITY (EAC) Public Financial Management Coordination and Harmonization Project FINANCIAL STATEMENTS FOR THE 9 MONTH PERIOD ENDED 31 MARCH 2017

ORGANISATION INFORMATION

Name of organisation East African Community

Name of the project

Chief officers

Registered office

Public Financial Management (PFM) Coordination and Harmonization Project in East African Community Countries

Principal bankers

Auditors

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Mr. Godfrey Magadu

East African Community PO Box 1096 EAC Headquarters Afri ka Mashariki Road Arusha Tanzania

KCB Bank (Tanzania) Limited PO Box 4605 Arusha

INNOVEX Auditors Certified Public Accountants 8 Kiliman i Road Ada estate Kinondoni PO Box 75297 Dar es Salaam Email : [email protected] Web: www.mnovexdc.com

Project Coordinator

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SECRET ARY GENERAL REPORT

1. BACKGROUND OF THE PROJECT The East African Community is implementing a two year EAC - World Bank Public Financial Management Coordination and Harmonization Project in the Partner States which was launched on 4th November 2013 in Arusha Tanzania.

The recipient has received a financial Grant to implement the East African Community Public Financial Management Coordination and Harmonization Project in the Partner States. The project is aimed at reforming the public procurement, public financial accounting/management and oversight practices in the EAC region , critical elements for a successful EAC Monetary Union.

The Grant is administered by the International Bank for Reconstruction and Development International Development Association ("the World Bank") , which is also a financial administrator of the Public Financial Management Coordination and Harmonization Project in the Partner States

The EAC PFM project has been created to assist African countries to respond to the varying public financial management structures at different levels of performances as measured by the Public Expenditure and Financial Accountability (PEFA) indicators

2. PROJECT GOAL The overall aim of EAC-PFM project is to harmonize and coordinate the setting up of PFM standards amongst EAC Partner states to facilitate compliance with monetary and financial cooperation requirements in the EAC treaty as key aspect of becoming a Monetary Union.

3. PROJECT OBJECTIVES The overall aim of EAC-PFM project is to harmonize and coordinate the setting up of PFM standards amongst EAC Partner states to facilitate compliance with monetary and financial cooperation requirements in the EAC treaty as key aspect of becoming a Monetary Union.

The project consists of setting of PFM standards and technical support to implement the standards.

4. PFM GRANT AGREEMENT The agreement of the EAC-Public Financial Management Coordination and Harmonization in East African Community Countries project was signed between East African Community and International Bank for Reconstruction and Development (World Bank) on July 18, 2013. The contract period is three (3) years from the date of countersignature of the agreement.

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SECRETARY GENERAL REPORT

5. PERFORMANCE FOR THE YEAR

Financial position

Property and equipment The carrying value of the project's property and equipment as of March 31 , 2017 decreased by 40% to US$ 2,899 (2016: US$ 4,831 ). The decrease in carrying value of the asset is attributed by depreciation charge during the period amounting to USO 1,932 .

Trade and other receivables The receivables stood at US$ 510 (2016: US$ 160,297) . Account receivable represents outstanding VAT receivable Value Added Tax charged to the purchase of an office computer for the project. The decrease in account receivable by 99.68% was due to decrease in capital revenue grant by US$ 159,787 due to the fact that cred it expenses incurred in the previous year were fully paid by grant received from world bank during the period under review.

Cash and cash equivalents Cash balance stood at US$ 31,587 (2016: US$ 187,857), the analysis is detailed in Note 8.

Trade payables Trade payables stood at US$ 6,362 compared to US$ 348,154 in 2016. The decrease was due to most of the outstanding payment for consulting activities of PFM project were settled during the period under review. At the end of the reporting period there was payable of audit fees amounting to US$ 5,852 and US$ 510 for VAT receivables .

Deferred revenue grant The balance stood at US$ 25,735 (2016; Nil). The increase is due to surplus amount received from World Bank compared to project expenses incurred during the period . The surplus amount has been refunded to World Bank in the subsequent period after the reporting period .

Deferred capital grant The balance stood at US$ 2 ,899 (2016; US$ 4 ,831 ) . The decrease is attributed by the recycled amount for depreciation charge reported on the statement of financial performance for the period under review.

Financial performance

Revenue Grant income released to the income statement stood at US$ 186,060 (2016:US $ 574,322) compared to the actuals grant received from World Bank US$369,032 (2016 US$ 233,506) as shown in Note 3, Note 9 and Note 10.

Consultancy services expenditures Consultancy services expenses decreased to US$ 160,922 in 2017 from US$ 559,975 in 2016. There was expenses reduction because this was the project closure period and the expenses undertaken were for services that had been partly paid in previous periods and these were the

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fina l payments. 5. PERFORMANCE FOR THE YEAR (Continued)

Financial performance (Continued)

Training/workshop expenditures Tra ining/workshops expenses increased to US$ 23,206 compared to the previous year that recorded US$ 12,641. This was caused by cost incurred for travel and mileages cost for consultants involved in the training activation of PFM project.

Depreciation Depreciation expenses increased to US$ 1,932 from US$ 1,706 in 2016 due to the computation of depreciation charges using the project adopted depreciation rate and depreciation method.

6. ACHIEVEMENTS DURING THE YEAR The EAC-World Bank Public Financia l Management (PFM) Coordination and Harmonization closed in August 2016 in the FY 2016/2017. All PFM consultants procured finalized and submitted their del iverables as per their various contracts as per the areas of harmonization below;

Procurement-Policy/Legislation ; Procurement-E-ProcuremenUGreen Procurement; Procurement-Capacity Building ; Accounting & Financial Reporting Internal Aud it; Budget; Public Accounts Committees - PACs; Auditor Quality Assurance; and Professional Accounting Organizations - PAOs; External Audit;

As per the project closure date all expenditures were committed and payments for the deliverables submitted as per the various contrasts were made as part of the project closure.

The matrix below shows the contract obligations for each the ten (1 O) PFM consultants and the outputs delivered to the EAC Secretariat;

T bl Sh a e: f C owmQ status o EA WB PFM Harmonisation Project PFM Harmonization Expected deliverables as at Outputs delivered Deliverables as at 15th Area/Consultant Project Closure date of August, 2016 as per Contract

August, 2016

Procurement - 150 days assignment; Harmonization (Mr. Rogati Anael Kayani) Deliverables as per TORs - Comparison Report on Procurement

include- Legislations; - Baseline Indicators and Gap Analysis

- Comparison Report on Report; Procurement Leg islations; - Harmonized Procurement Standards

- Baseline Indicators and (delivered 21 51 March, 2016)·


EAST AFRICAN COMMUNITY (EAC) Public Financial Management Coordination and Harmonization Project FINANCIAL ST A TEMENTS FOR THE 9 MONTH PERIOD ENDED 31 MARCH 2017


Accounting & Financial Reporting (E&Y and Mr. Thomas Mueller)

Procurement-Contract Management; Curriculum Development; Code of Ethics (Mr. Julius Mulera)

Gap Analysis Report; - Harmonized Procurement

Stand'ards; - Regional Procurement

Policy; and - Draft Regional

Procurement Leaislation. 150 days assignment;

- Gap analysis -questionnaires (01-Accounting & Financial -Reporting Legal Framework Analysis; 02-IPSAS & IFRS;

- 03 - IPSAS & IFRS detailed Conversion) being administered in PSs using local E&Y teams) ;

45 days assignment;

Field work in all PSs done

Budget (Mr. Onesmus 150 days assignment; Ayaya)

Field work in all PSs done.

Public Accounts 150 days assignment; Committees (Mr. Fred Mujuni)

Procurement-Green & E-Procurement (Mr. Rajesh Kumar)

Internal Audit (Mr. Richard Muteesaasira)


40 days assignment;

Field work in all PSs done

150 days assignment;


External Audit (Mr. 150 days assignment;

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EAC Procurement Policy (delivered 31st May, 2016); Draft EAC Procurement Legislation to be validated by relevant stakeholders (delivered 15th August 2016);

Gap Analysis report GGE, TSOE, NTSOE delivered ; Draft Road Map for full implementation per Partner State ( delivered 10th August, 2016) ;

EAC Harmonized Code of Ethics (delivered 15th August, 2016); EAC Harmonized Curriculum ( delivered 15th August, 2016); Technical support on Contract Management (delivered 15th August, 2016) :

- Country Gap Analys is Reports per Partner States (delivered 151h August, 2016) ;

- Technical support to Partner States (delivered 15th August, 2016);

Country delivered 2016) ;

Reports prepared and (delivered 151n August,

- Report on Guidelines on Guidelines on e-Procurement and Green Procurement (delivered 15th August, 20161 ;

- Report on gap analysis Partner States to determine compliance with the International Standards for Professional Practice of Internal Auditing issued by the International Internal Audit Standards Board of the Institute of Internal Auditors (delivered 15th Auaust 2016): Report on gap analysis of each of the Partner States with resoect to

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SECRET ARY GENERAL REPORT

Prakash Narismula) Field work in all PSs done

Auditor Quality Control 67 days assignment; (Protect-A-Partner &

Field work in all PSs done Ms. Marthie Claassens)

Professional 90 days assignment; Accounting Organizations (Mr. John Bosco Natngaare) Field work in all PSs done.

7. PROJECT CLOSURE AND FUTURE PLANS

-

-

-

-

compliance Standards Institutions INTOSAI 2016);

with International of Supreme Audit (ISSAI) issued by

(delivered 15th August,

Roadmap/Action plan to support the SAi 's development based on the Institutional Capacity Development Framework (delivered 151h August, 2016) ; Report on EAC Quality Review Methodology for Practicing Auditors ( delivered 15th August, 2016); Report EAC Audit Manual for Practicing Auditors (delivered 15th August 2016)· Gap analysis Report on for each Partner State compliance with International Education Standards for Professional Accountants (delivered 15th August, 2016); Report on EAC Professional and Technician qualification syllabus framework aligned to JES (delivered 15th August, 2016);

- Report on guidelines for Registered Training Office (RTO); a trainee guideline for use by PAOs;

- Regional Policy for continuous professional development

- Regional Policy for issuance of Audit Practice Licenses and Re-admission of Practicing Auditors (delivered 15th August, 2016) ;

The EAC-World Bank Public Financial Management (PFM) Coordination and Harmonization closed in August 2016 in the FY 2016/2017. All PFM consultants submitted their deliverables as per their various contracts as per the areas of harmonization such as; ProcurementPolicy/Legislation ; Procurement-E-Procurement/Green Procurement; Procurement-Capacity Building ; Accounting & Financial Reporting ; Internal Audit; Budget; Public Accounts Committees - PACs; Auditor Quality Assurance ; Professional Accounting Organizations - PAOs; and External Audit.

The next phase of the PFM project will be aimed towards the comprehensive validation and implementation of the standards developed . The EAC Secretariat is mobilizing resources that will be used to undertake th is implementation .

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8. RISK MANAGEMENT AND INTERNAL CONTROL The EAC Secretariat accepts final responsibility for the risk management and internal control system of the project. It is the task of management to ensure that adequate internal financial and operational control systems are developed and maintained on an ongoing basis in order to provide reasonable assurance regarding :

• The effectiveness and efficiency of operations; • The safeguarding of the project's assets; • Compliance with signed grant agreement and other applicable laws and regulations; • The reliability of accounting records; and • Responsible behaviors towards all stakeholders.

The efficiency of any internal control system is depended on the strict observance of prescribed measures. There is always a risk of non-compliance of such measures by staff. Whilst no system of internal control can provide absolute assurance against misstatement or losses, the project's system is designed to provide the EAC Secretariat with reasonable assurance that the procedures in place are operating effectively.

The EAC Secretariat assessed the internal control systems throughout the 9 months period that ended 31 March 2017, and is of the opinion that they met the accepted criteria .

8.MANAGEMENTSTRUCTURE The Public Financial Management Unit has not been operationalised. The project has only designated the Project Coordinator and is currently utilising the support functions of the EAC Secretariat in terms of finance and procurement.

9. ADMINISTRATIVE MATTERS The secretariat is capable of handling all administrative matters.

10. RELATED PARTIES TRANSACTIONS AND BALANCES The details of related parties' transactions and balances are provided in Note 14 of the notes to the financial statements.

11. EMPLOYEES' WELFARE

Management - Employees' Relationship The project is run by Mr. Godfrey Magadu, the Project Coordinator. The support functions of Finance and Procurement of the EAC Secretariat are being utilized to operationalize the project. The EAC Secretariat is an equal opportunity employer. It gives equal access to employment opportunities and ensures that the best available person is appointed to any given position free from discrimination of any kind and without regard to factors like gender, marital status, tribes, religion, nationality and disability which does not impair ability to discharge duties.

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EAST AFRICAN COMMUNITY (EAC) Public Financia l Management Coordination and Harmonization Project FINANCIAL STATEMENTS FOR THE 9 MONTH PERIOD ENDED 31 MARCH 2017


11. EMPLOYEES' WELFARE (Continued)

Medical assistance The Project Coordinator is a fulltime staff of the EAC Secretariat who is already entitled to those facilities under his current EAC contract.

Persons with disability The recruitment policy of the EAC Secretariat does not discriminate against persons with disabilities, rather the ability to discharge their responsibility.

Employee benefit plan The Project Coordinator is a fulltime staff of the EAC Secretariat who is already entitled to employment benefits under his current EAC contract.

12. GENDER PARITY The project is coordinated by Mr. Godfrey Magadu, one male project staff. There are no other staffs apart from him.

13. RELATIONSHIP WITH STAKEHOLDERS The Secretariat continued to maintain a good relationship with all stakeholders including the donor.

14. ENVIRONMENTAL CONTROL PROGRAMME The East Africa Community (EAC) preserves the environment through tree planting within and outside its offices and is committed to making sure that all internal and external surroundings of its offices are clean .

15. CORPORATE SOCIAL RESPONSIBILITY The East Africa Community (EAC) through PFM Coordination and Harmonisation in East African Countries project values responsible corporate citizenship. However, during the period under review, the secretariat did not undertake any corporate social responsibility activities.

16. ACCOUNTING POLICIES AND CRITICAL JUDGEMENT AND ESTIMATES A summary of key accounting policies is in Note 2 to the financial statements and were consistently applied during the year under review.

17. FIDUCIARY RESPONSIBILITY Members of the secretariat as stewards of public trust always acted for the good of the PFM project rather than for the benefit of themselves throughout the period. Reasonable care was exercised in all decisions taken by the secretariat without placing the PFM Coordination and Harmonisation in East African Countries project under unnecessary risks.

18. SERIOUS PREJUDICIAL ISSUES There were no serious prejudicial issues at the reporting time.


EAST AFRICAN COMMUNITY (EAC) Public Financial Management Coordination and Harmonization Project FINANCIAL ST A TEMENTS FOR THE 9 MONTH PERIOD ENDED 31 MARCH 2017


19. EVENTS AFTER REPORTING PERIOD These are adjusting or non-adjusting events, which have occurred between the reporting date and the date when financial statements are authorized for issue. The details of the events after reporting period are disclosed in the Note 20 of the notes to the financial statements.

20. AUDITORS INNOVEX Auditors were appointed by EAC secretariat as the project's external auditors for the 9 month period ended 31 March 2017 and are eligible for re-appointment. The auditors have expressed willingness to continue in the office for the next phase of the Public Financial Management Coordination and Harmonization Project.

Approved by secretariat for issue in ~ ~ /0~ / ~ot)

Eng. Steven Mlote Deputy Secretary General (Planning & Infrastructure) For: Secretary General

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and signed on its behalf by:

2017

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EAST AFRICAN COMMUNITY (EAC ) Public Financial Management Coordination and Harmonization Project FINANCIAL STATEMENTS FOR THE 9 MONTH PERIOD ENDED 31 MARCH 2017

STATEMENT OF SECRETARIAT RESPONSIBILITIES

The EAC Secretariat is responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position and performance of the project and which enable them to ensure that the financial statements comply with the International Public Accounting Standards. This includes the maintenance of adequate accounting records and internal controls, the selection and application of accounting policies, and safeguarding of the assets of the project. They are also responsible for safeguarding the assets of the project and hence for taking reasonable steps for the prevention and detection of fraud, error and other irregularities.

The EAC Secretariat confirms that suitable accounting policies have been used and applied consistently, and reasonable and prudent judgment and estimates have been made in the preparation of the financial statements for the period from 1s1 July 2016 to 31 March 2017. The EAC Secretariat also confirms that the International Public Sector Accounting Standards have been followed in preparation of the accompanying financial statements of Public Financial Management (PFM) Coordination and Harmonization Project in East African Community Countries

This report marks the end of the Public Financial Management (PFM) Coordination and Harmonization Project in East African Community Countries, the EAC secretariat continues to work with other donors in implements different projects. Nothing has come to the attention of the secretariat to indicate that the East African Community will not remain a going concern for at least the next twelve months from the date of this statement.

Approved by secretariat for issue in __ ~-~ ..... /....a..oq....._f_Q. __ O __ f__.]..___and signed on its behalf by:

Eng. Steven Mlote Deputy Secretary General (Planning & Infrastructure) For: Secretary General

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2017

91 Page


DECLARATION OF THE PROJECT ACCOUNT ANT

The National Board of Accountants and Auditors (NBAA) according to the power conferred , under the Auditors and Accountants (Registration) Act. No. 33 of 1972, 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 EAC Secretariat to discharge the responsibility of preparing financial statements showing true and fair view of the entity financial position and performance in accordance with applicable International Financial Reporting Standards and statutory financial reporting requirements. Full legal responsibility for the preparation of financial statements rests with the rests with the EAC Secretariat as indicated under the statement of secretariat's ' responsibilities on the earlier page.

I C'\Cl)f0,.2,-; t'n/><~J>rl>U. b. th . t t t fE tAf' C . , .. .. . . . .. . .. .. . . . . . . . . . . . . . . . . . . . . .. .. . .. . . . . . . . e1ng e proJec accoun an o as ncan ommurnty-Public Financial Management Coordination and Harmonization Project hereby acknowledges my responsibility of ensuring that financial statements for the 9 month period ended 31 March 2017 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 East African Community-Public Financial Management Coordination and Harmonization Project as on that date and that they have been prepared based on properly maintained financial records .

Signed by

Position

NBAA Membership No

Date

INNOVEX©201 7

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10 1Page

INNOVEX

The EAC Secretary General East Africa Community EAC Headquarters, Afrika Mashariki Road P. 0 . Box 1096 Arusha Tanzania

INNOVEX Auditors 8 Kilimani Road Ada Estate (Near the French Embassy) P.O. Box 75297 Dar es Salaam, Tanzania Mobile: +255 787 747411 Landline: +255 22 2664099 Fax: +255 22 2664098 Email: [email protected] Website: www.innovexdc.com

REPORT OF THE INDEPENDENT AUDITOR ON THE PROJECT FINANCIAL STATEMENTS

Report on the Audit of the Financial Statements

Opinion We have audited accompanying project financial statements and the special designated account for the PFM Coordination and Harmonization Project implemented by East African Community (EAC) Secretariat, for the period from 1 July 2016 to 31 March 2017, which comprises of the statement of financial position , statement of financial performance, statement designated account and statement of cash flows and the explanatory notes.

In our opinion , the financial statements and the special designated account presents fairly , in all material respects , the credit received and the expenses incurred by the Project for the period from 1 July 2016 to 31 March 2017 and its financial position as at the end of the period in accordance with the International Public Sector Accounting Standards.

Basis for Opinion 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 EAC Secretariat 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 our audit of the financial statements in United Republic of Tanzania, and we have fulfilled our other ethical responsibilities in accordance with these requ irements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.


EAST AFRICAN COMMUNITY (EAC) Public Financial Management Coordination and Harmonization Project

INDEPENDENT AUDITORS' REPORT (Continued)

Responsibilities of Secretariat and Those Charged with Governance for the Financial Statements The EAC Secretariat is responsible for the preparation and fair presentation of these financia l 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.

In preparing the financial statements, secretariat is responsible for assessing the project's ability to continue as a going concern , disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Trust or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the project's financial reporting 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 materia l misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with 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. 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 opin ion on the effectiveness of the organisation 's internal control ;

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by secretariat;

• 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 .

We communicate with those charged with governance 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.

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INDEPENDENT AUDITORS' REPORT (Continued)

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when , in extremely rare circumstances , we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements In our opinion , proper accounting records for the project have been kept by the East African Community and the financial statement referred to the preceding paragraph are in agreement with the accounting records and have generally complied with the terms of the financing ag reement with International Development Association (IDA) . There were no internal control weaknesses that came to our attention during the audit.

The engagement partner on the audit resulting in this independent auditor's report is Christopher Mageka.

INNOVEX Auditors Certified Public Accountants Dar es Salaam Christopher Mageka, CPA - PP

INNOVEX©2017

Date ~ 2017

131 Page

EAST AFRICAN COMMUNITY (EAC) Publ ic Financial Management Coordination and Harmonization Project FINANCIAL STATEMENTS

STATEMENT OF FINANCIAL PERFORMANCE FOR THE 9 MONTH PERIOD ENDED 31 MARCH 2017

REVENUE

Revenue from non-exchange transactions

EXPENDITURE Consultants' services

Training/workshop

Depreciation

Surplus/deficit

Budget class Category two

Category three

Category One

N

3

4

5

6

2016/17 USD

186,060

160,922

23:206 1,932

186,060

Res1ated 2015/16

USO

559,975

12,641

1,706

574,322

The notes on pages 19 to 29 form an integral part of these financial statements. The financial statements on pages 14 to 18 were approved by the EAC Secretari t on .. ... Z.tlrJ./ ... ..... ........ .. .... . 2017 and were signed on its behalf by: /,

~] ' e . ng.StevenMlote

Deputy Secretary General (Planning & Infrastructure) For: Secretary General

The independent auditor's report is on pages 11 to 13.


EAST AFRICAN COMMUNITY (EAC) Public Financial Management Coordination And Harmonization Project FINANCIAL STATEMENTS

STATEMENT OF FINANCIAL POSITION AS AT 31 MARCH 2017

ASSETS Non-current assets Property and equipment

Current assets Account receivables

Cash and cash equivalents

Total current assets

LIABILITIES Deferred revenue grant Deferred capital grant Trade payables

TOTAL LIABILITIES

2016/17 Notes USD

6

7 8

9

10 11

2,899

510 31,587

32,097 34,996

25,735 2,899 6,362

34,996

Restated 2015/16

USO

4,831

160,297 187,857

348,154

352,985

4,831

348,154

352,985

The notes on pages 19 to 29 form an integral part of these financial statements. The financial starimen1.s on pages 14 to 18 were approved by the EAC Secretariat on ..... ..... ~~ .... Pq .. ........... 2017 and were signed on its behalf by:

&:pl/!lh/£ ? : Eng. Steven Mlote Deputy Secretary General (Planning & Infrastructure) For: Secretary General



EAST AFRICAN COMMUNITY (EAC) Public Financial Management Coordination And Harmonization Project FINANCIAL STATEMENTS

STATEMENT OF CASH FLOW 'FOR THE 9 MONTH PERIOD ENDED 31 DECEMBER 2016

CASHFLOW FROM OPERATIONG ACTIVITIES

Surplus of income over expenditure Adjustment for: Depreciation

Adjusted for movements in working capital: Decrease/(increase) in accounts receivable lncrease/(decrease) in deferred revenue grant (Decrease)/ increase in deferred capital grant (Oecrease)/increase in trade and other payables Net cash generated from operating activities

Cash flow from investing activities Purchase of property and equipment Net cash outflow to investing activities

Net decrease in cash and cash equivalents Cash and cash equivalents at start of the year Cash and cash equivalents at end of the year

Notes

7

2016/17 USO

1,932

159,787 25,735 (1,932)

(341,792) (156,270)

(156,270) 187,857 31,587

Restated 2015/16

USO

1,706

(159,993) (183,415)

1,770 325,859 (14,073)

(3,475) (3,475)

(17,548) 205,405 187.857

The notes on pages 19 to 29 form an integral part of these financial statements. The financial statements c,n f ages 14 to 18 were approved by the EAC Secretari t on ... ...... . a.R .. 1.01........ .... 201 1 and were signed on its behalf by:

~llb7e?.' Eng. Steven Mlote -Deputy Secretary General (Planning & Infrastructure) For: Secretary General


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STATEMENT OF COMPARISON OF BUDGET AND ACTUAL AMOUNTS FOR THE 9 MONTH PERIOD ENDED 31 MARCH 2017

Budget Actual

PROJECT RECEIPTS USD USD IDA Designated account credits 1,000,000 1,000,000 IDA Direct payments Total 1.000,000 1,000,000

EAC PFM PROJECT EXPENDITURES Category one: Goods 9,000 8,578 Category two: Consultants' services 727,000 718,247 Category three: Training/workshops 264,000 241,588 Total expenditures 1,000,000 968,413

Surplus 31 ,587


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Variance

USD %

422 5% 8,753 1%

22,412 8% 31,587

(31 ,587)

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STATEMENT OF SPECIAL (DESIGNATED) ACCOUNT ACTIVITY FOR THE 9 MONTH PERIOD ENDED 31 MARCH 2017

Opening balance as at 1st July 2015

Total amount deposited by World Bank Total amount deposited of unspent imprest

Deduct: Total amount withdrawn including bank charges

Closing balance per bank statement at the end of period

Unpresented cheques issued out which cleared later

Closing balance per cash book as at end of period

Note

9 (a)

7

2016 TZS

187,857

369,032

556,889

(525,302)

31,587

31,587

2015 TZS

208,405

233,506 1 800

443 711

(248,920)

194.791

6,934

187.857

The notes on pages 19 to 29 form an integral part of these financial statements. The fi nancial statements o~

0 i~ges 14 to 18 ~ere a~proved by the EAC Sec riat

on ... ..... ...... R~.l.. .q······ ····· 2017 and were signed on its behalf by:

~llffa&_2 Eng. Steven Mlote Dep uty Secretary General (Planning & Infrastructure) For: Secretary General


INNOVEX©2017

(ACCA)

18 / Page


NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR 9 MONTH PERIOD ENDED 31 MARCH 2017

1. REPORTING ENTITY The East African Community (EAC) is a regional inter-governmental organization of the five Partner States, namely: the Republic of Kenya , the Republic of Uganda, the Republic of Burundi, the Republic of Rwanda and the United Republic of Tanzania. The East African Community is currently implementing a regional project on Public Financial Management (PFM) coordination and harmonization.

The address of its registered office is as follows: East African Community PO Box 1096 EAC Headquarters Afrika Mashariki Road Arusha Tanzania

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all years presented, unless otherwise stated .

a. Statement of compliance The financial statements have been prepared in accordance with International Public Sector Accounting Standards.

b. Basis of preparation The accompanying financial statements have been presented on an accrual basis of accounting while the budget has been prepared using cash basis of accounting. Accrual basis means a basis of accounting under which transactions and other events are recognized when they occur (and not only when cash or its equivalent is received or paid). Therefore, the transactions and events are recorded in the accounting records and recognized in the financial statements of the periods to which they relate . Accrual accounting allows for revenue to be recognized when earned and expenses to be recognized when goods or services are received , without regard to the receipt or payment of cash. Budgetary accounting allows for compliance with the requirements for and controls over the use of Development Partners budgeted funds.

c. Significant accounting policies The financial statements have been prepared on a going concern basis, they also comply with International Public Sector Accounting Standards for the accrual basis of accounting in as far as the IPSASs so far adopted are concerned; otherwise IASs/lFRSs are still applicable". The following IPSASs which are applicable to the EAC have been adopted:

IPSAS 1: Preparation of financial statements; IPSAS 2: Cash flow statements; IPSAS 3: Accounting policies, changes in accounting estimates and errors; IPSAS 4: The effects of foreign exchange rates;



NOTES TO THE FINANCIAL STATEMENTS FOR THE 9 MONTH PERIOD ENDED 31 MARCH 2017 (Continued)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

c. Significant accounting policies (Continued) IPSAS 09: Revenue from exchange transactions; I PSAS 12: Inventories; IPSAS 17: Property and equipment; IPSAS 19: Provisions, contingent liabilities and contingent assets; IPSAS 20: Related party disclosures; IPSAS 23: Revenue from Non-Exchange Transactions; IPSAS 24: Presentation of budget information in financial statements; IPSAS 31 : Intangible assets; and IPSAS 25 (Employee Benefits) has not been complied with in full because of the need to streamline the current policy on plan assets and obligations and the need to change the policy on the accounting treatment on interest earned on gratuity. The accounting policies have been applied consistently throughout the period .

d. Adoption of new and revised international public sector accounting standards

(i) New IPSASs in issue for the period ended 31 March 2017

The following new and revised IPSASs have been applied in the current year and had no material impact on the amounts reported in these financial statements.

Reference Changes made to the standard

PBE IPSAS 1

INNOVEX©201 7

These amendments have been issued as part of a project to improve presentation and disclosure requirements and: • clarify that an entity should not obscure useful information by aggregating or disaggregating information; and that materiality considerations apply to the primary statements, notes and any specific disclosure requirements in PBE Standards;

• clarify that the list of line items specified by PBE IPSAS 1 for the statement of financial position and statement of comprehensive revenue and expense can be disaggregated and aggregated as relevant. Additional guidance has also been added on the presentation of subtotals in these statements;

• clarify that an entity's share of other comprehensive revenue and expense of equity accounted associates and joint ventures should be presented in aggregate; and

• clarify that entities have flexibility when designing the structure of the notes and provide guidance on how to determine a systematic order of the notes.

Conse uential amendments were also made to PBE IPSAS 30 and

20 IP age




PBE IPSAS

PBE IAS 34. The amendments apply to annual periods beginning on or after 1 January 2016, with early application permitted for NFPs. PS PBEs may apply the amendments early from periods beginning 1 April 2015.

23 The amendments are to permit an entity not to recognise goods in-kind that meet the definition of inventories in PBE IPSAS 12 Inventories if it is not practicable to measure reliably the fair value of those goods at the date of acquisition because the costs of recognising the goods at

Donated Goods (Amendment to PBE IPSAS 23)

the date of acquisition outweigh the benefits. This will often be the case for entities that receive high-volume, low-value second-hand goods in-kind for resale or distribution. In the case where goods in-kind are sold , the entity recognises revenue when they are sold. In the case where such goods in-kind are distributed free of charge, the entity does not recognise revenue. The amendments to PBE IPSAS 23 consequently amend PBE IPSAS 12.

PS PBEs may apply the amendments early from periods beginning 1 April 2016.

(ii) New IPSASs in issue but not yet effective for the period ended 30 June 2016 The Project has not applied the following new and IPSAS that have been issued but are not yet effective. The Project will apply these standards, if applicable, when they become effective. The following standards are amended by this standard . The amendments are effective for periods beginning on or after 1 January 2017, unless stated otherwise


PBE IPSAS 17

PBE IAS 12

INNOVEX©201 7

Changes the scope of PBE IPSAS 17 to include biological assets that meet the definition of bearer plants (e.g., fruit trees). Agricultural produce growing on bearer plants (e.g. , fruit growing on a tree) will remain within the scope of PBE IPSAS 27. As a result of the amendments, bearer plants will be subject to all the recognition and measurement requirements in PBE I PSAS 17, including the choice between the cost model and revaluation model. Entities may apply the amendments on a fully retrospective basis. Alternatively, an entity may choose to measure a bearer plant at its fair value at the beginning of the earliest period presented . Any difference between the fair value used as deemed cost at that date and the previous carrying amount wi ll be recognised in accumulated comprehensive revenue and expense. This amendment is effective for periods beginning on or after 1 January 2018. Earlier application is permitted. Consequential amendments have been made to the scope of PBE IPSAS 13, PBE IPSAS 16 and PBE IPSAS 26. Clarifies the accounting for deferred tax assets for unrealised losses on debt instruments measured at fair value. The amendments clarify

21 IP age


NOTES TO THE FINANCIAL ST A TEMENTS FOR THE 9 MONTH PERIOD ENDED 31 MARCH 2017 (Continued)


PBE Standards on interests in other entities: PBE IPSAS 34 Separate Financial Statements PBE IPSAS 35 Consolidated Financial

that entities need to consider whether tax law restricts the sources of taxable profits against which it may make deductions on the reversal of that deductible temporary difference. Furthermore, the amendments provide guidance on how an entity should determine future taxable profits and explains in which circumstances taxable profit may include the recovery of some assets for more than their carrying amount. Entities are required to apply the amendments retrospectively. However, on initial application of the amendments, the change in the opening net assets/equity of the earliest comparative period may be recognised in opening accumulated comprehensive revenue and expense (or in another component of net assets/equity, as appropriate) , without allocating the change between opening accumulated comprehensive revenue and expense and other components of equity. Entities applying this relief must disclose that fact. These standards were issued to incorporate the equivalent standards issued by the IPSASB into the PBE Standards, which reflect the reforms introduced by I FRS 10, 11 and 12 in the for profit sector in 2011 . These standards replace PBE IPSAS 6 (both the public sector and NFP versions) , PBE IPSAS 7 and PBE IPSAS 8. The new standards:

Statements PBE • Introduce an amended defin ition of control and extensive guidance on control (and continues to require all controlled entities to be consolidated in the controlling entity's financial statements, except as noted below) .

I PSAS 36 Investments in Associates and Joint Ventures PBE IPSAS 37 Joint • Arrangements PBE IPSAS 38 Disclosure of Interests in Other Entities

•

•

Introduce the concept of "investment entity", exempts investment entities from consolidating controlled entities, and requires investment entities to recognise controlled entities at fair value through surplus or deficit instead .

Introduce a new classification of joint arrangements, set out the accounting requi rements for each type of arrangement Uoint operations and joint ventures), and remove the option of using the proportionate consolidation method.

Require PBEs to disclose information on their interests in other entities, including some additional disclosures that are not currently required under PBE IPSAS 6, 7 and 8. Early application of these standards is permitted , as long as all the standards are applied at the same time. 1 January 2019 1 Aoril 2019

i. Early adoption of standards The Organisation did not early-adopt any new or amended standards or interpretations during the financial period under review.

INNOVEX©2017 22 I P a g e



2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

e. Use of estimates The financial statements in conformity with IPSAS 3 - Accounting Policies, Changes in Accounting Estimates and Errors, requires management to make estimates and assumptions that, affect the reported amounts of assets and liabilities and the disclosure of the reported amounts of revenues and expenses during the reporting period . Actual results could differ from these estimates.

f. Donations and grants The financial statements in conformity with IPSAS 23 - Revenue from Non-Exchange Transactions, require management to recognize liabilities from transfers with restrictions (conditions) over the period of which economic benefits will be received from such transfers, with disclosure of such restricted contributions from Development Partners. Most of the assistance given to the Project by the Development Partners is in relation to specific projects or programmes. Hence, they are considered as restricted contributions. Restricted contributions are recognized as Revenue over the periods necessary to match them with the related costs, which they are intended to compensate on a systematic basis. Grants related to assets are presented in the statement of financial position as deferred revenue, which is recognized as revenue on a systematic and rational basis over the useful life of the asset.

g. Foreign currency transactions The financial statements are prepared in conformity with IPSAS 4 - The Effects of Changes in Foreign Exchange Rates that requires management to disclose effects of foreign currency transactions in their financial statements. In accordance with IPSAS 4 and related definition, the presentation currency of the Project, currency in which its financial statements are prepared , is the United States Dollar.

The Project has its Presentation currency, the United States Dollar, and Tanzanian shillings as its functional currency and hence uses the following procedure to translate its foreign currency transactions into the Presentation currency for reporting purpose;

i. monetary assets/liabilities are translated at current exchange rate ii . Non-monetary assets/liabilities measured at historical cost are translated at historical

exchange rate iii. Non-monetary assets/liabilities measured at current value are translated at the exchange

rate at the date when the current value was determined. Owners' interest accounts are translated at historical exchange rate

Revenues/expenses other than those expenses related to non-monetary items (as in (a) (b) above) are translated at the exchange rate that existed when transactions took place (for practical reasons, average rates may be used) (b) expenses related to non-monetary assets, such as depreciation (fixed assets) and amortization (intangible assets) are translated at the exchange rate used to translate the related assets.

INNOVEX©2017 23 JP age



2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

g. Foreign currency transactions (Continued) This procedure above is descriptive of the Temporal Method of translating foreign exchange transactions where the exchange translation adjustment gains/losses are shown in the financial statements usually under the Operating Income/Expenses or Non-operating Income/ Expenses section of the Statement of the financial Performance.

h. Interest earned The financial statements are prepared in conformity with IPSAS 9 - Revenue from Exchange Transactions, requires management to treat such revenue as revenue for the year. Such interest comprises mainly interest from banks, for operating accounts and fixed deposits.

i. Property, plant and equipment The financial statements in conformity with IPSAS 17 - Property, Plant, and Equipment, requires management to treat the assets of the Project as follows - Property and equipment are initially recorded at purchase cost plus direct attributable cost. Where an item of property and equipment comprises major components having different useful lives, they are accounted for separately.

Subsequent expenditures are capitalized only when they increase the current economic benefits and meet the recognition criteria . Expenditure incurred to replace a component of an item of property and equipment is accounted for separately and capitalized while the major replaced component is derecognized. All other expenditure items, which do not meet recognition criteria , are recognized in the statement of financial performance as expenses as they are incurred. Property and equipment are derecognized when no economic benefits are expected from its use or disposal. The disposal methods applied include; sale, or scrapping . Gains or losses on disposal of property, plant and equipment are determined by comparing net disposal proceeds, if any, with the carrying amount. These gains or losses are not considered in arriving at the operating surplus or deficit for the year, instead they are taken to the statement of changes in net assets/equity for the reporting period .

j. Depreciation The financial statements in conformity with IPSAS 1 - Presentation of Financial Statement and IPSAS 17 - Property, Plant and Equipment recognize depreciation in the Statement of Financial Performance. Management charges depreciation to the Statement of Financial Performance on a straight-line basis to write off the cost of property, plant and equipment to their residual values over their expected useful lives. No depreciation is provided on the land. Depreciation for Property and Equipment purchased during the year is apportioned proportionately to the remaining period of the year. Property and equipment acquired during the year is depreciated from the date when it is available for use and cease to be depreciated at earlier of the date that the asset is derecognized.




2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

j. Depreciation (Continued) Annual depreciation rates applied during the financial year are as follows : Computer equipment Telecommunication equipment Office equipment Office furniture

k. Taxation

33.33% 33.33% 25.00% 12.50%

Article 4 Section (1 ) subsection (d) of the Headquarters Agreement between East African Community and the United Republic of Tanzania states that: "The Secretariat, its property, assets, income and transactions shall be exempt from all direct taxation including sales tax and from Customs Duties and prohibitions, restrictions on imports and exports in respect of articles imported or exported by Secretariat for its official use. The Secretariat shall also be exempt from any obl igation relating to payments, withholding or collection of any tax or duty provided that such assets and other property shall not be sold within the United Republic of Tanzania except in accordance with conditions agreed to with the Government". The same treatment is expected to be accorded to property, assets, income and transactions of Projects implemented by EAC.

I. Presentation of the budget information The financial statements in conformity with IPSAS 24 requires management of a public sector entity to show comparison of budget amounts arising from execution of the budget to be included in the financial statements of the entity which are required to , or elect to , make publicly available their approved budget for which they are, therefore, held publicly accountable. The Project prepares its financial statements clearly indicating the actual expenditure in comparison with the approved budgetary provisions and in so doing fully complies with this Standard. The statement of comparison of budgeted and actual amounts has been presented using accrual basis of accounting .

m. Employee benefits Employment contracts provided for gratuity benefit at a rate of 25% of the basic total salaries for the term of employment. The gratuity benefit is charged to the statement of financial performance on accrual basis.

n. Cash and cash equivalents Cash and cash equivalents as referred to in the cash flow statement comprises, cash deposited at banks.




Restated 2016/17 2015/16

3. REVENUE FROM NON-EXCHANGE TRANSACTIONS TZS TZS

Amount released from deferred revenue grant to statement of financial performance (Note 8) 184,128 572,616 Recycled from capital grant (Note 9) 1,932 1,706

186,060 574,322 4. CONSULTANTS' SERVICES

DSA Full or 1 /4- delegates and consultants 11 ,200 Contracted professional services 159,539 547,992 Bank charges 1,383 783

160,922 559,975 5. TRAINING/WORKSHOP EXPENDITURES

Hiring of conference facilities 1,017 Air ticket EAC-staff/lncl mileage 8,999 DSA Full or 1/4- staff 23,206 2,625

23,206 12,641 6. PROPERTY AND EQUIPMENT

Office Computer 31 March 2017 furniture equipment Total Cost USD USD USD At start of period 360 7,593 7,953 Additions At end of period 360 7,593 7,953

Depreciation At start of period 90 3,032 3,122 Charge for the period 34 1,898 1,932 At end of period 124 4,930 5,054

Net book value as at 31 March 236 2,663 2,899

30 June 2016 (Restated) Cost At start of year 360 4,118 4,478 Additions 3,475 3,475 At end of year 360 7,593 7,953

Depreciation At start of year 45 1,371 1,416 Charge for the year 45 1 661 1,706 At end of year 90 3,032 3,122

Net book value as at 30 June 270 4,561 4,831




Restated 2016/17 2015/16

7. ACCOUNTS RECEIVABLE USO USO

VAT receivables 510 1,113 Charlestone 15 World Bank (Note 9) 159,169

510 160,297 8. CASH AND CASH EQUIVALENTS

KCB bank balance 31,587 187,857

Movement of cash and cash equivalents Cash and cash equivalents balance as at 31-March-2017 has been subsequently utilized by EAC secretariat for payment of audit fees and refund to the world bank. The analysis of cash movement and balance as per the date of the reports is shown below:

Cash movement KCB bank balance as at 31 March 2017 Payments Audit fees for the year (1-jul-15 to 31-Jun-16) Refund to world bank Total payments Balance**

19-Jun-17 27-Jul-17

2016/17 USO

31,587

(2,852) (25,657) (28,509)

3,078

2015/16 USO

**The balance will be utilized to pay current period audit fees amounting USO 3000.

9. DEFERRED REVENUE GRANT Balance as at 1 July (159,169) 183,416 Additions during the year (Note 12) 369,032 230,031 Amount released to the statement of financial performance (184,128) (572,616)

25,735 (159,169) 10. DEFERRED CAPITAL GRANT

Balance as at 1 July 4,831 3,062 Additions during the year (Note 12) 3,475 Depreciation recycled to statement of financial performance {1 !932} (1 ,706}

2,899 4,831 11. TRADE PAY ABLES

One off suppliers 190,174 Uganda Travel Bureau 2004 Ltd 7,078 Audit fee 5,852 2,852 Cyberworld 4,100 Other payables 974 The Standard Group 1,154 Ernst & Young 141 ,822 VAT Payable to W orld bank 510

6,362 348,154




12.

13.

Restated 2016/17 2015/16

CASH RECEIPTS FROM WORLD BANK USO USO 1st Installment 12-Aug-16 205,199 117,033 2nd Installment 15-Sep-16 104,706 16,166 3rd Installment 20-Dec-16 59,127 50,205 4th Installment 50,102

3691032 233,506 BUDGET PERFORMANCE RECONCILIATION Total expenditure per statement of budget and actual expenditure 184,128 602 ,469 Total expenditure per statement of financial performance (186,060} {604,174} Difference {1,932} {1 ,706}

The accompanying financial statements have been presented on an accrual basis of accounting , while the budget has been prepared using cash basis of accounting. The difference between the budget performance and statement of financial performance is made up the depreciation charge during the year which is a non-cash item.

14. RELATED PARTY TRANSACTIONS AND BALANCES The related parties are the key management of the project and the members of the Project Steering Committee. There were no transactions and outstanding balances with related parties during the period under review.

15. BUDGET AND ACTUAL EXPENDITURE DURING THE PROJECT PERIOD

Computer Equipment Hiring of Conference Facilities Logistics for meetings(ushers, copying , Security) Air ticket EAC-Staff/lncl Mileage Air ticket EAC-Delegates/ mileage DSA Full or 1/4-Staff DSA Full or 1/4- Delegates & Consultants Contracted Professional SeNicesConsultancy Fees

INNOVEX©2017

Project budget

USO

9,000 65,000

1,000 49,350 55,000 18,395

75,255

727,000 1,000,000

Actual 2017 USO

8,578 63,161

508 33,500 54,091 15,073

75,255

718,247 968,413

Variance USO

422 1,839

492 15,850

909 3,322

8,753 31 ,587

Utilization %

95% 97%

51% 68% 98% 82%

100%

99%

281 Page



16. PRIOR PERIOD ADJUSTMENTS

17.

Prior period adjustment relates to correction of an error relating to overstated expenses and accruals for consultants ' expenses. During the year ended 31st June 2016 there was overstatement of the accruals for consultancy services expenses amounting to USO 29,852 compared to actual payment made to the consultants. The accompanying financial statements have been adjusted to correct overstatement of prior year expenses and accruals by the same amount.

As previously As

reported Adjustment adjusted USO USO USO

Statement of Income and Expenditure Expenses Consultancy expenses 577,844 (29,852) 547,992 Amount released from deferred income (604,174) 29,852 (574,322)

(26,330) (26,330)

Statement of financial position One off suppliers (200,201) 10,027 (190,174) Audit fees (3,000) 148 (2,852) Ernst & Young (161,500) 19,678 (141,822) Deferred current grant 189,022 (29,853) 159,169

(175,679) (175,679) COMMITMENTS All project activities were completed on August 2016, as at the end of the reporting period there was only commitment of USO 3,000 which relates to audit fees of the period starting 01 July 2016 to 31 March 2017.

18. CONTINGENT LIABILITIES There were no contingent liabilities nor contingent assets reported during the year.

19. COMPARATIVES

Wherever considered necessary, comparative figures have been reclassified to conform to changes in presentation in the current year.

20. EVENTS AFTER REPORTING DATE All project activities were fully implemented as at 31 March 2017, events which occurred after the reporting are as follows: • Refund of the surplus balance to world bank amounting USO 25,657 on 27-Jul-17 • Payment of audit fees for the period of 1-Jul-201 6 to 30-Jun-2017 amounting USO

2,852 on 19-Jun-2017


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