the federal democratic republic of ethiopia audit services ...€¦ · 07/07/2019 · such...

?IU11 M96e- M7AW-A hC7*&~717

The Federal Democratic Republic of EthiopiaAudit Services Corporation

INDEPENDENT AUDITORS' REPORT ONTHE FINANCIAL STATEMENTS OFETHIOPIAN MARITIME AFFAIRS AUTHORITYETHIOPIA TRADE LOGISTICS PROJECTIDA CREDIT NO. 5995-ET

We have audited the accompanying financial statements of Ethiopian Maritime AffairsAuthority, Ethiopia Trade Logistic Project, financed under IDA credit No. 5995-ET, whichcomprise the balance sheet as at 7 July 2019, and the statement of sources and uses of funds forthe year ended 7 July 2019 and a summary of significant accounting policies and otherexplanatory information.

Management's Responsibility for the Financial Statements

Ethiopian Maritime Affairs Authority is responsible for the preparation and fair presentation ofthese financial statements in accordance with the Ethiopian Government's Manual of theFederal Accounting System which is based on a modified cash basis of accounting, and forsuch internal control as management determine is necessary to enable the preparation offinancial statements that are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. Weconducted our audit in accordance with International Standards on Auditing. Those standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether financial statements are free from material misstatements.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgment, including the assessment of the risks of material misstatement of the financialstatements, whether due to fraud or error. In making those risk assessments, the auditorconsiders internal control relevant to the entity's preparation and fair presentation of thefinancial statements in order to design audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an opinion on the effectiveness of theentity's internal control. An audit also includes evaluating the appropriateness of accountingpolicies used and the reasonableness of accounting estimates made by management, as well asevaluating the overall presentation of the financial statements.

2 251-011-5515222 Fax 251-011-5513083 E-mail: [email protected] 2 5720251-011-5535012251-011-5535015.251-011-5535016

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

INDEPENDENT AUDITORS' REPORT ONTHE FINANCIAL STATEMENTS OFETHIOPIAN MARITIME AFFAIRS AUTHORITYETHIOPIA TRADE LOGISTICS PROJECTIDA CREDIT NO. 5995-ET (continued)

We believe that the audit evidence we have obtained is sufficient and appropriate to provide abasis for our audit opinion.

Opinion

In our opinion, the financial statements give a true and fair view of the financial position ofEthiopian Maritime Affairs Authority, Ethiopia Trade Logistics Project, financed under IDAcredit No.5995-ET, as at 7, July 2019, and of its sources and uses of funds for the year thenended in accordance with the Ethiopian Government's Manual of the Federal AccountingSystem which is based on a modified cash basis of accounting.

Report on Other Requirements

As required by the World Bank Guidelines and the terms of reference for financial audit, wereport that, to the extent we can assess:

a) All external financing has been used in accordance with the conditions of the relevantfinancing agreement with due attention to economy and efficiency, and only for thepurposes for which the financing was provided;

b) Goods, works and services financed have been procured in accordance with the relevantfinancing agreement including specific provisions of the World Bank ProcurementPolicies and procedures:

c) All necessary supporting documents, records and accounts have been maintained inrespect of all Project activities;

d) Designated account has been maintained in accordance with the provisions of therelevant financing agreement and funds disbursed out of the account, were used onlyfor the purposes intended in the financial agreement;

e) National laws and regulations have been complied with, and that the financial andaccounting procedures approved for the Project were followed and used;

f) The funds disbursed covered expenditures that are eligible for financing under IDACredit No. 5995-ET;

g) There was a clear linkage between the books of account and the financial statements;

h) Financial performance of the Project is satisfactory.

2

INDEPENDENT AUDITORS' REPORT ONTHE FINANCIAL STATEMENTS OFETHIOPIAN MARITIME AFFAIRS AUTHORITYETHIOPIA TRADE LOGISTICS PROJECTIDA CREDIT NO. 5995-ET (continued)

Furthermore, with respect to the Interim Financial Reports (IFRs) submitted during the periodand listed on page 11, in our opinion,

i) the reports, together with the procedures and internal controls involved in theirpreparation, can be relied upon to support the related withdrawals;

ii) adequate supporting documentation has been maintained to support the expendituresincurred; and

iii) Which expenditures are eligible for financing under IDA Credit No. 5995-ET.

19 November 2019

3

ETHIOPIAN MARITIME AFFAIRS AUTHORITYETHIOPIA TRADE LOGISTICS PROJECTIDA CREDIT NO. 5995-ETBALANCE SHEETAS AT 7 JULY 2019

Note Birr 7 July 2018CURRENT ASSETS

Cash and bank balances 3 55,626,910 21,809,972Accounts receivable 4 26,441,004 9517

82,067,914 21,819,489CURRENT LIABILITIES

Accounts payable 5 1,899,153 222

NET CURRENT ASSET

REPRESENTED BY

FUND BALANCE 6 21.819,2

4

ETHIOPIAN MARITIME AFFAIRS AUTHORITYETHIOPIA TRADE LOGISTICS PROJECTIDA CREDIT No. 5995-ETSTATEMENT OF SOURCES AND USES OF FUNDSFOR THE YEAR ENDED 7 JULY 2019

Cumulative8 November 2016

to7 July 2019

Note 07 July 2018SOURCES Birr Birr Birr

IDA - IFR Procedures 7 69,945,205 96,021,075 26,075,870IDA - Direct Payments 8 21,550,853 21,550,853 -Gain on foreign exchange 2,392,372 3,826,969 1,434,597Other income 2,100 2614 24,54

93,890,530 121,425,511 27,534,981USES

Regulatory and institutionalcapacity support 9 35,541,036 41,256,750 5,715,714

EXCESS OF SOURCESOVER USES 494. 7 21,126

5

ETHIOPIAN MARITIME AFFAIRS AUTHORITYETHIOPIA TRADE LOGISTICS PROJECTIDA CREDIT NO. 5995-ETDESIGNATED ACCOUNT STATEMENT

For period ended 7 July 2019Account number 0100721300009Depository bank National Bank of EthiopiaAddress Addis Ababa, EthiopiaRelated credit IDA 5995-ETCurrency USD

EthiopianUSD Birr

Opening balance -8 July 2018 738,678 20,156,011

Add: Advance received from the 2,479,112 69,945,205World Bank 3,217,790 90,101,216

Gain on foreign exchange - 2,392,3723,217,790 92,493,588

Less: Transfer to Birr account 700,000 19,913,160Expenditure/Payments 703,308 20,074,938

1,403,308 39,988.098

Ending balance - 7 July 2019

6

ETHIOPIAN MARITIME AFFAIRS AUTHORITYETHIOPIA TRADE LOGISTICS PROJECTIDA CREDIT NO. 5995-ETNOTES TO THE FINANCIAL STATEMENTS

1. PR OJECT INFORMATION

The Federal Democratic Republic of Ethiopia and the International DevelopmentAssociation (IDA) entered into an agreement dated 7 April 2017 to finance the TradeLogistics Project. The later agreed to extend to the former a credit in an amountequivalent to SDR1 10,400,000 to assist in financing the mentioned Project. The Projectwill be implemented by the Ministry of Transport through the Ethiopian Maritime AffairsAuthority.

The objective of the Project is to enhance the performance of the Ethio -Djibouti corridorthrough improvements in operational capacity, efficiency and range of logistics servicesat Modjo Dry Port.

The Project consists of three components:

1. Component 1: Improvement of infrastructure at Modjo;

2. Component 2: Enhancing coordination through investments in IT systems; and

3. Component 3: Regulatory and Institutional Capacity Support.

2. SIGNIFICANT ACCOUNTING POLICIES

a) Basis of preparation

These financial statements have been prepared in accordance with the EthiopianGovernment's Manual of the Federal Accounting System which is based on amodified cash basis of accounting.

b) Currency

These financial statements are presented in Birr. Transactions in foreign currenciesare translated into Birr at the approximate rates of exchange prevailing at the datesof the transactions. Foreign currency balances are translated into Birr at theexchange rates ruling at the balance sheet date.

7

ETHIOPIAN MARITIME AFFAIRS AUTHORITYETHIOPIA TRADE LOGISTICS PROJECTIDA CREDIT NO. 5995-ETNOTES TO THE FINANCIAL STATEMENTS (continued)

3. CASH AND BANK BALANCES

7 July 2018Birr Birr

National Bank of Ethiopia Accounts:USD Account no. 01007213000019 52,505,490 20,156,011Birr Account no. 0100721040019 3,113,495 1,647,344

55,618,985 21,803,355Cash on Hand 7,2;5 6L12

4. ACCOUNTS RECEIVABLE


Advance-Sellhorn 1,593,358 -Advance-Lasertech Design 105,965 -Advance-Terberg Benschop 10,932,925 -Advance-Jhon. Achelis & Sohne 10,617,928 -Advance- UNOPS 3,183,358 -National Oil Ethiopia 1,970 -Libya Oil Ethiopia Limited 5,500 -Staff debtors - 9,5l7

5. ACCOUNTS PAYABLE


Pension contribution payable 1,890 -Withholding tax payable 892,945 -Income tax payable 102,164 -VAT payable 902,154 -Sundry - 222

8


6. FUND BALANCE

Birr

Balance as at 8 July 2018 21,819,267Excess of sources over uses 58,349,494Balance as at 7 July 2019

7. IDA - IFR PROCEDURES

Date Dollar Birr

12-31-2018 Transfer to DA 1,479,112 41,474,0053-27-2019 Transfer to DA 1,000,000 28,471,200

ZA722 6.4

8. DIRECT PAYMENT

Date USD Birr

7-7-19 377,681.70 10,932,9257-7-19 366,800.01 10,617,928

9


9. REGULATORY AND INSTITUTIONAL CAPACITY SUPPORT


Wages to contract staff 4,655,191 4,782,041Labor charge 1,162 -Pension contribution 488,603 353,924Office supplies 116,646 14,146Printings 5,940 1,674Fuel and lubricants 75,019 30,512Per diem and room charge 165,554 246,193Office refreshment 36,962 15,661Maintenance and repair of vehicle 39,330 60,927Furniture maintenance 73,954 -Consultancy service 7,864,397Rent 11,564 -Advertising 45,216 130,001Fees & charges 255,465 56,522Telephone expense 14,617 -Training expense 1,059,591Vehicles 6,864,255 -Office equipment & furniture 583,667 1,860Design study 13,183,903 -Miscellaneous expense - 2

35,541,036i 5,715,714

10. DATE OF AUTHORIZATION

The Manager of Ethiopia Trade Logistics Project authorized the issue of these financialstatements on 19 November 2019.

10

ANNEX 1

ETHIOPIAN MARITIME AFFAIRS AUTHORITYETHIOPIA TRADE LOGISTICS PROJECTIDA CREDIT NO. 5995-ETIFR WITHDRAWAL SCHEDULEfor applications submitted during the year ended 7 July 2019

USD Birr

1st quarter IFR 62,105.17 1,702,101.442nd quarter IFR 207,069.08 5,764,616.713rd quarter IFR 360,848.01 10,217,307.344th quarter IFR 620,603.11 17,857,010.19

Total 1,250,625.3 35,541,035.68

11

ANNEX II

ETHIOPIAN MARITIME AFFAIRS AUTHORITYETHIOPIA TRADE LOGISTICS PROJECTIDA CREDIT NO. 5995-ETBUDGET UTILIZATION SCHEDULE (in USD)

RemainingAllocated balance

project Budget Actual from audit Remainingbudget for Audit expenditure period project

(2017-2022) period YTD budget period(B) (C) (D) (E=C-D) (F=B-D)

Improvement of infrastructureat Modjo Port 120,000,000 5,285,851 465,475 4,820,475 119,534,525

Coordination through ITsystem 15,000,000 20,704 - 20,704 15,000,000

Capacity support 15,000,000 1,262,397 1,024,523 237,874 13,975,477

Total 150,000,000 6,568,952 1489,998 5,078,955 148,510,002

12

ANNEX III

ETHIOPIAN MARITIME AFFAIRS AUTHORITYETHIOPIA TRADE LOGISTICS PROJECTIDA CREDIT NO. 5995-ETLIST OF NON-EXPENDABLE ASSETS

Name of Asset Quantity Cost

HP Colour LaserJet printer 2 59,320HP Laser Jet Printer 4 36,000UPS 1500 VA 10 50,000Lenovo Laptop 15 360,000

505,320

13

the federal democratic republic of ethiopia audit services ...€¦ · 07/07/2019 · such...

Documents