AUDIT REPORT ON THE ACCOUNTS AND THE FINANCIAL fileECAUTEF Sprl – Rapport d’audit des comptes de...

ECAUTEF Sprl – Rapport d’audit des comptes de la Pharmacie Centrale Chrétienne de HEAL AFRICA ‘PCC’ exercice 2014

Ecautef Sprl, http : www.ecautef.com

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AUDIT REPORT ON THE ACCOUNTS AND THE FINANCIAL STATEMENTS OF THE CHRISTIAN CENTRAL PHARMACY OF

HEAL AFRICA FROM THE 1st OF JANUARY 2014 TO DECEMBER 31, 2014, ENDED 31 DECEMBER 2014

Ecautef, for personalized Solutions

February 2015



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To the President of the General Assembly Legal Representative of Heal Africa Goma - DR Congo Goma, 06 February 2015

Mr President, Please find enclosed our audit report and the financial statements of the Christian Central Pharmacy of Heal Africa from the 1st of January 2014 to 31 December 2014, ended 31 December 2014. Best regards.

GHOMDIM Désiré

Certified Accountant

Associate Regional Director



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CONTENTS

I – REMINDER OF THE OBJECTIVES, SCOPE OF THE MISSION AND METHODOLOGY USED II – AUDITORS’ REPORT III –FINANCIAL STATEMENTS OF THE PCC

TABLE I: BALANCE SHEET OF THE CHRISTIAN CENTRAL PHARMACY OF HEAL AFRICA AS AT 12/31/2014

TABLE II: PROFIT AND LOSS ACCOUNT FROM 01/01/2014 TO 12/31/2014

IV – NOTES AND COMMENTS ON THE FINANCIAL STATEMENTS



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I– REMINDER OF THE OBJECTIVES, SCOPE OF THE MISSION AND METHODOLOGY USED



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II-1. Reminder of the objectives of the mission

Under the terms of reference, the audit of the accounts of the Christian Central Pharmacy of HEAL AFRICA 'CCP' from the 1st January 2014 to 31 December 2014, ended 31 December 2014, has a number of objectives, namely:

1) Review of the financial regularity, by controlling and evaluating the accuracy,

exhaustiveness and sincerity of various accounting transactions of the Christian Central Pharmacy of Heal Africa 'CCP', either in full or by survey, as required and as assessed risk before and during the audit;

Review of compliance with the goals of the CCP, by monitoring and evaluation of transactions (income and expense); 2) Consideration of conducting business in an economical and efficient way, by the control

and evaluation:

a) By minimizing the costs of resources used for the activities, while ensuring an appropriate quality,

b) By the comparison of expenditures against the accounting and financial statements and eventual spread explanations.

3) Opportunity, relevance and functioning examination of the Internal Control System, by the control and evaluation of:

a) The internal organization (structures, functions, tasks, skills, responsibilities, methods, procedures, etc.)

b) The existence, respect and enforcement of laws, regulations, directives, c) The resources protection and assets, d) Preventing errors and frauds, e) The quality and reliability of the data processing system.

4) Checkingthe level of implementation of recommendations made in previous audit reports, if exists, and their impact on the quality of the financial management of the CCP;

5) Recommendations on the aspects found to be still weak or non-conformity with generally accepted accounting principles.

This is to allow us to express a free opinion, independent and professional on the Christian Central Pharmacy of HEAL AFRICA ‘CCP’ account at the end of the period ended31 December 2014.



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I-2. Audit methodology

a) Start-up meeting

Our work started with a starting meeting which took place in the presence of all the executive team of HEAL AFRICA.

b) Receipt of documents

After the start-up meeting, the accounting and administrative documents of the project were made available to us. These documents included:

Balance sheet,

Profit and loss,

The previous audit report ;

The bank vouchers ;

The bank statements ;

The bank reconciliations ;

So on. c) Mission progress

During our work, we have carried out:

The verification of all the income and expense vouchers documents at our disposal;

The audit of financial statements

The review of the internal control system. d) Restitution meeting

The debriefing meeting of the conclusions of our work was conducted in the presence of all the members of the executive team of the HEAL AFRICA.



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II – AUDITORS’ REPORT (OPINION OF INDEPENDENT AUDITORS)



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For the attention of the President of the General Assembly, Legal Representative of Heal Africa

Mr President, We have audited the financial statements (pages 13 to 14) of the Christian Central Pharmacy of HEAL AFRICA ‘CCP’ from the 1st of January 2014 to 31 December 2014, ended 31 December 2014.

These financial statements are the responsibility of the management of the project. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we plan and perform audit to obtain reasonable assurance whether the financial statements are free of material misstatement. Our audit includes examining, on a test basis, evidence supporting the data presented in the financial statements. The audit also includes assessing the accounting principles used and significant estimates made by management, as well as the presentation of the financial statements in their entirety. We believe that our audit provides a reasonable basis for our opinion. The policy of the Christian Central Pharmacy of HEAL AFRICA consists:

- Prepare the financial statements on the operative reporting model at HEAL AFRICA; - Keep the accounts according to international accounting standards recognized.

Through our works, we would like to let you know as follows:

1/ Bank account balances

- The balance of the BIC bank accounts of Christian Central Pharmacy of HEAL AFRICA is USD 25,431.56 while the balance of the bank statement for the same period amounted to USD 10,431.56, rather, a difference of USD 15,000, representing the withdrawal in the account of the pharmacy by imitation of the authorized signatures. However, no minutes of observation nor monitoring of the situation was available during the mission;

- The balance of the bank account TMB showed on the 'Balance Sheet' is USD 145.06. Furthermore, we have noted the internal correspondence authorizing the closure of the account to avoid running charges. The total deposit of USD 202.00 was made to close that account. However, no bank statement or a letter to the TMB for closing this account was available during the mission.

2/ Balance of the funds

The balance of the funds of the Central Pharmacy of HEAL AFRICA as listed in the audit report to 12/31/2013 is USD 57,421.02 which was to be equal to the opening balance at 01/01/2014. However, neither cash book norminutes of the cash control certifying that balance to 12/31/2013 was available in order to permit us to confirm that balance. Moreover, the minutes of the cash



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control and the operation cashbook on12/31/2014 were made available for us and nothing was mentioned in the balance sheet at the same date. 3/ Third parties accounts (Accounts payable & Account receivable)

The account balances of receivables and payables in the amounts of USD 179,252.51 and USD 109,059.71 have not been confirmed on 12/31/2014. 4/ Stock inventory

The value of the medicines included on the balance sheet amounted to USD 237,369.15 at 12/31/2014. In addition, the inventory sheets gave to us were not valued in order to help us confirming this amount. In addition, some medicines and medical devices were not included on the inventory sheets to 12/31/2014 despite their existence on the shelves or in the warehouse. 5/ Fixed assets

The capital assets of the Christian Central Pharmacy of Heal Africa have not been valuated and entry in the balance sheet of Pharmacy on 12/31/2014. In our opinion, subject to the above facts, we certify that:

(A) The financial statements and the accompanying documents attached thereto and have also been audited, present fairly, in all material respects, the financial position of the CCP and the results of its operations for the period ended 12/31/2014;

(B) The CCP has used all the products for the needs of the Central Pharmacy of Heal Africa; and no product has been used for another purpose;

(C) The CCP has met, at the balance sheet date of the audit period, all financial partnership covenants agreements signed with the hospital, customers and suppliers.

Moreover, we confirm that:

In terms of expenses, all appropriate supporting documents were maintained to support the use of funds and (2) which expenses are permitted.

Goma, 06 February 2015

GHOMDIM Désiré

Certified Accountant Associate Regional Director



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III–FINANCIAL STATEMENTS



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HEAL AFRICA

Health, Education, Action, Leadership Development

PHARMACIE CENTRALE HEAL AFRICA

B.P 540 Gisenyi Rwanda

Table 1

Balance Sheet As of December 31, 2014

ASSETS Account

N° Entitles Gross Value

Amort.& Prov VNC 2014

Recall 2013

Current Assets 25,576.61 0.00 25,576.61 75,675.80

56 - Banks 25,576.61 0.00 25,576.61 18,254.78

57 - Cash 0.00 0.00 0.00 57,421.02

Accounts Receivable 182,681.44 0.00 182,681.44 1,141.95

53 - PCC Cash Rotation 3,428.93 0.00 3,428.93 0.00

46 - Accounts receivable 179,252.51 0.00 179,252.51 1,141.95

Other current Assets 237,369.15 0.00 237,369.15 217,648.27

30 - Medicines stock 237,369.15 0.00 237,369.15 217,648.27

TOTAL ASSETS 445,627.20 0.00 445,627.20 294,466.02

LIABILITIES AND EQUITY

Account N° Entitle Amount

Rappel 2013

I - Current Liabilities 109,059.71 29,787.17

- Accounts payables

109,059.71 29,787.17

II - Other current Liabilities

4,120.31 10,388.27

- Cash rotation Hospital

3,149.35 0.00

- Gift in kind

970.96 10,388.27

III - Equity

332,447.18 254,290.58

- Consolidated capital

20,970.95 20,970.95

- Opening balance Equity

8,921.40 90.30

- Retained Earnings

233,229.33 104,994.48

- Net Income

69,325.50 128,234.85

TOTAL LIABILITIES AND EQUITY 445,627.20 294,466.02



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HEAL AFRICA

Health, Education, Action, Leadership Development

PHARMACIE CENTRALE HEAL AFRICA

B.P 540 Gisenyi Rwanda

Tableau 2

PROFIT & LOSS JANUARY THROUGH DECEMBER 2014

Account N° Description NOTES 31/12/2014 31/12/2013

1. INCOME

70 - Sales

896,258.86 870,293.46

71 - Local Production

4,285.00 18,123.74

74 -Various products and profits

2.94 0.00

TOTAL INCOME

3 900,546.80 888,417.20

2. EXPENSES

60 Cost of goods sold

747,190.35 692,814.46

61 Materials and supplies consumed

3,577.09 11,405.62

62 Transportation used

2,249.05 857.97

63 Other services used

4,516.93 6,276.44

64 Various products and profits

1,373.38 7,697.37

65 Staff costs

70,518.15 41,052.47

66 Taxes

0.00 0.00

67 Interest and bank charges paid

1,796.35 78.02

TOTAL EXPENSES (2)

4 831,221.30 760,182.35

3. NET INCOME (3=1-2) 5 69,325.50 128,234.85



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IV– NOTES AND COMMENTS ON THE FINANCIAL STATEMENTS



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NOTE 1 – Audited Entity

Under the terms of reference of the mission, we audited the accounts and the financial statements of the Christian Central Pharmacy of HEAL AFRICA 'CCP' from 01/01/2014 to 12/31/2014, so to decide on the financial situation of the CCP on 12/31/2014. The Christian Central Pharmacy of HEAL AFRICA is responsible for the preparation of financial statements for the period ended 12/31/2014.

NOTE 2 – Accounting principles used by the CCP

The financial statements have been prepared on the operative reporting model at HEAL AFRICA. The accounting policies set up by the Christian Central Pharmacy of HEAL AFRICA are broadly consistent with internationally accepted accounting standards.



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A – BALANCE SHEET ANALYSIS

A .1– ANALYSIS OF ASSETS

1) Checking/Saving (Available values) 12/31/2014 12/31/2013

a) Presentation of the balance sheet 25 576.62 75 675.80

International Credit Bank ‘BIC’ 25 431.56 18 109.72

International Bank of Africa in Congo ‘BIAC’ 145.06 145.06

Cash box 0.00 57 421.02

b) Comments of control

The whole amount of USD 25 576.61 on 12/31/2014 consist of:

USD 25 431.56available in the International Credit Bank ‘BIC’ account.

However, we noted that the balance of the bank statement in the BIC at the same period is rather USD 10,431.56, then, a difference of USD 15,000.00 corresponding to the amount withdrawn in the account by imitating signatures.

However, neither certified or official report nor document for people involved in this missing was available during the mission.

USD 145.06available in the International Bank of Africa in Congo ‘BIAC’ account.

In addition, we noted that this balance has remained the same since 2013. We have not received a bank statement on 12/31/2014 in order to decide on the reality of this balance as the bank charges for 2013 has not been mentioned. However, the use of vouchers we noted a service note Ref. 25 / DCF / HEAL AFRICA / 14 calling for the closure of this account by the payment (see advance to justify No. 235 of 05.07.2014) in the amount of USD 202.00.

However, no account closing letter addressed to the BIAC has been available to us since this account gives a balance in the accounts of Pharmacy as at 12/31/2014

0, 00 USD available in the cash box of the Pharmacy of Heal Africa as at 12/31/2014.

It should be noted that the cash balance of the CCPas at12/31/2013 was USD 57,421.02 as included in the audit report for the year 2013. However, we have noticed no cash book retracing the operations of the fiscal year 2014 leaving a zero balance at 12/31/2014.

The service explanations, we noted that the amount of USD 57,421.02 rather corresponded to 'CCP Cash rotation - Project' registered as having on hand as at 12/31/2013. The Available values increased from USD 75,675.80 in 2013 to USD 25,576.62 in 2014, an absolute decrease in relative value of USD 50,099.18 and 66.20%.



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2) Accounts receivable(realizable values) 12/31/2014 12/31/2013

a) Presentation of the Balance sheet 182 681.44 1 141.95

PCC Cash Rotation 3 428.93 0.00

Accounts receivable 179 252.51 1 141.95


The whole amount of USD 182 681.44USDis consisted of:

USD 3,428.93 representing the debt of the projects to the pharmacy as at 12/31/2014. Cross-check done from the financial statements of the projects, we noted that this amount appears in liabilities as CCP debt.

USD 179,252.51 to the value of the sundry debtors as at 12/31/2014 which details are given in the table below:

INITIAL BALANCE 311.45

IRISH AID 1,045.00

WAR WOUNDED EXPIRED 923.62

CBM IRISH AID 31.27

CBM IRISH PILOTE 667.30

GREAT MOTHER / VAD 132.81

HALC 143,506.76

PROVINCIAL HOSPITAL NORTH KIVU 154.00

MMR ECI2 1,769.30

OUTREACH GYNECO 524.42

outreach /AIRICH AID KIROTCHE 736.59

EXPIRED PRODUCTS 130.90

CAP PROJECT DECEMBER 2014 1,398.24

CAP PROJECT NOVEMBER 2014 99.00

CBM IRISH AID PROJECT -4,378.00

CBM/P2328 PROJECT 2,239.75

MMR CBM/IDJWI SOUTH PROJECT 25.30

P2328 DECEMBER 2014 PROJECT 1,937.40

PTME/GS PROJECT 6,808.01

TUNAWEZA GBV PROJECT 1,944.04

TUNAWEZA/AIDS PROJECT 17,070.28

PTME/JTN 700.70

SOCO 107.75

UNPFGIFT 935.00

USHINDI 431.62

TOTAL 179,252.51



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Note that the thirds accounts receivable balances presented in the 'Balance Sheet' of Christian Central Pharmacy as at 12/31/2013 were not confirmed as at 12/31/2014. The realizable values increased from USD 1,141.95 in 2013 to USD 182,681.44 in 2014, so an increase in absolute value of USD 181,539.49 and 15,897.32% in relative value. 3) Other current Asset (Stocks) 12/31/2014 12/31/2013 a) Presentation of the Balance sheet 237 369.15 217 648.27

Stocksof medicines 237 369.15 217 648.27


The amount of USD 237 369.15 USD Represents the Stocks of medicines on12/31/2014.

Furthermore, we noted during the inventory mission conducted at the Central Pharmacy of Heal Africa that drugs included on the inventory sheet were not valued as at 12/31/2014, which does not allow us to decide on the value of drugs after accounting entry for the pharmacy as at 12/31/2014.

In addition, we noted that some drugs contained in the shelves and in the deposit were not included on the sheets at our disposal. The realizable values increased from USD 217,648.27 in 2013 to USD 237,369.15 in 2014, so an increase in absolute value of USD 19,720.88 and 9.06% in relative terms.

A.2– ANALYSIS OF LIABILITIES (LIABILITIES &ORNERS EQUITIES)

1) Account payable 12/31/2014 12/31/2013

a) Presentation of the Balance sheet 109 059.71 29 787.17

Accounts payables 109 059.71 29 787.17


The amount of USD 109,059.71 consists of receivables to third parties following the details below:

AFIA BORA -1,200.00

SHALINA -662.10

ASRAMES -578.33

BDOM GOMA 3,350.00

DISTRIPHARMA 150.00

EDINOKI 3,141.21

GMCL-RDC 22.50

HEURE DE LA GLOIRE -315.00



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PHARMACIE LA NOBLESSE 28,707.11

MEDIPHAR 22,002.80

MOON PHARMA 12,832.46

OPHAGOMA 12,081.10

PHARMACIE DE L'ESPOIR 341.50

PROJET CLUB FOOT 2,100.00

THANKS PHARMA 10,227.50

TUEPHAR 3,280.00

VUTSUPHAR 1,550.00

ZENUFA 11,969.90

SHALINA DON 59.06

TOTAL 109,059.71

Note noted that the balance of USD 109,059.71 as presented in the financial statements of the Christian Central Pharmacy of HEAL AFRICA includes a sum of USD 2,755.43 corresponding either to supplier’s advances or payments made without prior records of invoices . Such as:

The restatement of this balance sheet item reveals a real balance of debts to suppliers of USD 111,815.14. Note that the credit balances of thirds accounts presented in the 'Balance Sheet' of Christian Central Pharmacy as at 12/31/2014 were not confirmed as at 12/31/2014.

Furthermore, the credit balances of thirds accounts presented in the 'Balance Sheet' of Christian Central Pharmacy as at 12/31/2014 were not confirmed as at 12/31/2014. 2) Other current Liabilities 12/31/2014 12/31/2013

a) Presentation to the balance sheet 4 120.31 10 388.27

Cash rotation Hospital 3 149.35 0.00

Gift in kind 970.96 10 388.27


This item whose value is USD 4,120.31 includes:

AFIA BORA 1,200.00

SHALINA 662.10

ASRAMES 578.33

HEURE DE LA GLOIRE 315.00

TOTAL 2 755,43



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USD 3,149.35 corresponding to debt of the Central Pharmacy to the hospital as at 12/31/2014. The Cross-check done from the financial statements of the hospital, we noted that this amount appears on the assets of the hospital as CCP debt.

USD 970.96 of drugs value received as donation as at 12/31/2014 in the table below:

Description Amount 2014 Recall 2013

Action Aid International 70.50 485.67

Australian Heal Patient 107.78 107.78

War wounded donation 103.13 103.13

CICR 72.26 922.85

CIMRES 51.59 551.59

Container I 97.21 2,063.26

Italian cooperation 56.80 156.80

Australian gift 0.00 1,705.29

Gift Crash Hewa Bora 16.99 116.99

USA gift 66.25 66.25

Gift from French Gov. 21.61 21.61

Handicap International 68.90 68.90

Health Partners International 33.14 1,742.78

MONUSCO-Donation 42.01 590.00

Moon pharma Donation 28.95 99.36

MSF/Holland 45.50 604.86

WHO 23.88 223.88

PTME/Global Strategies 1.00 1.00

Return Outreach 5.90 5.90

Shalina Donation 25.48 139.34

Gift in Kind - Other 32.08 0.00

USAID/IMA 0.00 240.82

Health area Goma 0.00 370.21

TOTAL 970.96 10,388.27

The realizable values increased from USD 10,388.27 in 2013 to USD 4,120.31 in 2014, so a decrease in absolute value of USD 6,267.96 and 60.34% in relative value. 1) Equity (liability in short-term) 12/31/2014 12/31/2013

a) Presentation to the balance sheet 332 447.18 254 290.58

Consolidated capital 20 970.95 20 970.95

Opening balance Equity 8 921.40 90.30

Retained Earnings 233 229.33 104 994.48

Net Income 69 325.50 128 234.85

b) Comments de control



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This item which the value is USD 332 447, 18are consisted of:

USD 20,970.95 corresponding to 'consolidate capital automatically generated by the software;

USD 8,921.40 representing the 'Opening Balance Equity automatically generated by the software;

USD 233,229.33 of Retained Earnings for profit generated in previous periods;

Net Income of USD 69,325.50 for the difference between revenues and expenses for the year 2014.

The Short-term liabilities increased from USD 254,290.58 in 2013 to USD 332,447.18 in 2014, so an increase in absolute value of USD 78,156.60 and 30.74% in relative value.

Note that the total assets of the Christian Central Pharmacy of HEAL AFRICA rose from USD 294,466.02 in 2013 to USD 445,627.20 in 2014, so an increase of USD 151,161.18 in absolute value and 51.33% in relative value.

B – ANALYSE DE PROFIT AND LOSS ACCOUNT

Note 3– ANALYSE DES RECETTES 12/31/2014 12/31/2013

a) Presentation 900 546, 80 888 417, 20

Sales 896 258,86 870 293,46

Local product 4 285,00 18 123,74

Various products and profits 2,94 0,00

b) Comments of control This item which the value is USD 900 546, 80 is consisted of:

USD 896,258.86 representing the total sales of drugs and medical devices during the period;

USD 4,285.00 in sales of local products as at 12/31/2014;

USD 2.94 of various products and profits for the period.

The revenue for the period increased from USD 888,417.20 in 2013 to USD 900,546.80 in 2014, so an increase of USD 12129.60 in absolute value and 1.37% in relative value.



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Note 4– EXPENDITURE ANALYSIS

12/31/2014 12/31/2013

a) Presentation 831 221.30 760 182.35

Cost of goods sold 747 190.35 692 814.46

Materials and supplies used 3 577.09 11 405.62

Transportation used 2 249.05 857.97

Other services used 4 516.93 6 276.44

Other expenses and losses 1 373.38 7 697.37

Staff cost 68 643.90 41 052.47

Taxes 0.00 0.00

Interest and bank charges paid 1 796.35 78.02


This item which the value is USD 831 221, 30is consisted of:

USD 747,190.35 representing the value of goods sold during the period;

USD 3,577.09 of values of materials and supplies used including:

- Computer AntivirusPCC : 50.00 USD ;

- Computer : 512.00 USD ;

- Office supplier : 3 015.09 USD.

USD 2 249.05 of de transportation used including :

- Travel fees : 858.00 USD ;

- Local transportation : 1 349.05 USD ;

- Other transportation used : 42.00 USD.

USD 4 516.93 for other services used including :

- Antivirus for computer : 75.00 USD ;

- Bottle of water : 10.55 USD ;

- White sugar rack : 60.00 USD ;

- Office design of PCC : 186.00 USD ;

- Communication : 1 145.00 USD ;

- Internet : 1 200.00 USD ;

- handling : 401.54 USD ;

- Restoration : 1 122.24 USD ;

- Other services used : 316.60 USD.

USD 1 373.38 for various expenses and losses including :

- Cancelling a check book number : 17.40 USD ;

- Fees for notarized work contract : 40.00 USD ;

- Social Contribution / fire : 300.00 USD ;

- Expired products : 1 015.98 USD.



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Note, however, that the Minutes of the observation expiry as well as the destruction were not available for us to confirm the amount on expired products.

USD 70 518.15 for the staff costs including :

- Staff training : 480.00 USD ;

- Attendance fee for the inventory year 13 : 60.00 USD ;

- Staff wage : 62 513.52 USD.

- Staff medical care : 7 464.63 USD.

USD 1 796.35 for the Interest and bank charges paid including :

- Bank charge : 1 771.35 USD ;

- Registration fees : 25.00 USD ;

Note 5– ANALYSIS NET INCOME

12/31/2014 12/31/2013

a) Presentation 68 643.90 128 234.85

Total income 900 546.80 888 417.20

Total expenses 831 902.90 760 182.35


This statement gives a result of USD 68643.90 equal to the excess of revenues over expenses during the period.

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