OFFICE OF THE AUDITOR-GENERAL - World...

REPUBLIC OF KENYA

OFFICE OF THE AUDITOR-GENERAL

REPORT

OF

THE AUDITOR-GENERAL

ON

THE FINANCIAL STATEMENTS OFKENYA WATER SECURITY AND

CLIMATE RESILIENCE PROJECT-(IDA CREDIT NO. 5268-KE)

FOR THE YEAR ENDED30 JUNE 2016

MINISTRY OF WATER AND IRRIGATION

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PROJECT NAMEKENYA WATER SECURITY AND CLIMATE RESILIENCE PROJECT

IMPLEMENTING ENTITYMINISTRY OF WATER AND IRRIGATION

STATE DEPARTMENT FOR WATER SERVICES

PROJECT CREDIT NUMBER: 5268-KE

ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE FINANCIAL YEAR ENDEDJUNE 30, 2016

Prepared in accordance with the Cash Basis of Accounting Method under the International PublicSector Accounting Standards (IPSAS)

Prepredin ccoranc wih te Cah Bsisof ccoutin Mehod nde th Inernaionl Pbli

Kenya Water Security And Climate Resilience ProjectReports and Financial Statements For the financial year ended June 30, 2016

CONTENTS PAGE

1. PROJECT INFORMATION AND OVERALL PERFORMANCE 11

2. STATEMENT OF PROJECT MANAGEMENT RESPONSIBILITIES 2

.3 REPORT OF THE INDEPENDENT AUDITORS ON THE KWSCR PROJECT 3

4. STATEMENT OF RECEIPTS AND PAYMENTS FOR THE PERIOD ENDED 30TH JUNE 2016 4

5. STATEMENT OF FINANCIAL ASSETS AND LIABILITIES AS AT 30TH JUNE 2016 5

6. STATEMENT OF CASHFLOW STATEMENT AS AT 30" JUNE 2016 3

7. STATEMENT OF COMPARATIVE BUDGET AND ACTUAL AMOUNTS 7

8. NOTES TO THE FINANCIAL STATEMENTS 8


1. PROJECT INFORMATION AND OVERALL PERFORMANCE

1.1 Name and registered office

Name: The project's official is the Principal Secretary, State Department for Water Services.

Objective: The project development objectives of KWSCRP-1 are to: (i) increase availability andproductivity of irrigation water for project beneficiaries; and (ii) enhance the institutional frameworkand strengthen capacity for water security and climate resilience for the country.

Address: The project headquarters offices are Nairobi (city), Nairobi County, Kenya.

The address of its registered office is:

Kenya Water Security and Climate Resilience Project,Ministry of Water and Irrigation- Ngong Road,State of Department of WaterMaji HouseP.0 Box 49720 Nairobi

Contacts: The following are the project contacts

Telephone: (254) 2716103E-mail: [email protected]

1.2 Project Information

Project Start Date: The project start date for the project preparation advance was 5th January2012 and Loan Credit 24th October 2013

Project End Date: The project end date for the project preparation advance was 3 1st December2013 and the Loan Credit is 3 1st December 2022

Project Manager: The project manager is Eng. Simon G. Mwangi

Project Sponsor: The project sponsor is Ministry of Water and Irrigation, State Departmentfor Water Services.

1.3 Project Overview

Line Ministry/State The project is under the supervision of the Ministry of Water and Irrigation,Department of the State Department for Water Servicesproject

Project number Credit No. 5268-KE

Strategic goals of the The strategic goals of the project are as follows:project (i) To improve water security and build climate resilience by

strengthening water and climate risk investment planning,preparation, and implementation that is supported by an enhancedinstitutional framework.

Achievement of The project management aims to achieve the goals through the followingstrategic goals means: 1. Increase availability and productivity of irrigation water for

11


project beneficiaries and enhance the institutional framework and

strengthen capacity for water security and climate resilience for the

country.

Other important The project is funded by the Government of Kenya (GOK), International

background Development Association (IDA), KfW, Korea-World Bank Group

information of the Partnership Facility Single-donor Trust Funds Grant and the Beneficiaries.

project The Project total cost is US$ 182.67 million as indicated below and is to be

implemented over seven years.

* IDA (USD213M),* KfW (USD20.1M),* GoK (USD6.5M),* Korea-WB Trust Fund (USD3.5M)* Beneficiaries (USD.2M)The Project has six categories as per the Financing Agreement: Category 1:

Goods, Category 2: Works, Category 3: Consultancy Services, Category 4;

Operating Cost, Category 5 Refunds of Preparation Advance and Category

6: Unallocated

Current situation that The project was formed to intervene in the following areas:

the project was (i) Component 1:Water resource development,formed to intervene SC1.1 Water Sector Investment

SC1.2 Water Investment Pipeline

(ii) Component 2: Effective water sector institution

SC 2.1 Support for Water Sector Transition and Reforms

SC 2.2 Strengthening Water Management and Planning

(iii) Support for Project Implementation.

Project duration The project started on 5h January 2012 and is expected to run until 3 1st

December 2022

1.4 BankersThe following are the bankers for the current year:

(i) Designated Account - Central Bank of Kenya -Account No. 1000214244

(ii) NIC Bank, NIC House - Account No. 1000591738, Nairobi

Auditors

The project is audited by the Auditor General, Office of Auditor General. (P.0 Box 30084

University Way, Nairobi.)

a0


1.5 Roles and Responsibilities

Names Title designation Key qualification ResponsibilitiesDirector Water Storage Coordination of

Eng Robinson K. Gaita and Land Reclamation BSC Civil Engineering the projectOverall Project

Eng Simon G. Mwangi Project Manager BSC Civil Engineering Management

MSC, Procurement and ProcurementFrancis Rotich Procurement officer logistics Management

FinancialAlice Mwaniki Project Accountant MBA, BBA, CPA(K) Management

MBA,BSC,Civil TechnicalEng Peter Muiruri Technical Manager Engineering Responsibilities

1.6 Funding summary

The Project is for a duration of seven years from 2012 to 2022 with an approved budget ofUS$ 236.6 million equivalent to Kshs 23 .92-billion as highlighted in the table below:

Amount reeived to date CoSource of funds Donor Commitment-(301/1016)

'.Donor- s Donor . -- Donor.curreneglID -- irec orny . :

(A) . .(A) - (B) . B) -(A)-(B) (A9-(B)

(H) Loan

IDA 208,930,000 21,122,823,000 12,721,649.82 1,286,158,796.80 190,197,828.44 19,229,000,455

-KFW 20,010,000 2,023,011,000 -- 20,010,000 2,023,011,000(iii) Counterpartfunds

Government of

Kenya 7,660,000 774,426,000 1,483,679.52 150,000,000 6,176,320.48 624,426,000.5Total 236,600,000 23,920,260,000 14,205,329.34 1,436,158,796.80 216,384,148.92 21,876,437,455.8

$/Kshs=101.1

1

Kenya Water Security And Climate Resilience ProjectReports and Financial Statements For thefinancial year ended June 30, 2016

1.7 Summary of Overall Project Performance:

Budget performance against actual amounts for current year and for cumulative to-date:

In 2015/2016 the total budget was Kshs 700,000,000 and the actual expenditure was Ksh595,035,669 which was (85%) of the budget.

1.8 Summary of Project Compliance:As per the Financial Management supervision conducted by the World Bank betweenNovember 21st to 2 4th 2014 in accordance with the World Bank's Financial ManagementPractices Manual issued on March 1, 2010 and Financial Management Policy OP/BP1O.02,the implementing agency was noted to have met World Bank Financial Managementrequirements, GoK financial regulations, fiduciary framework and accountability.

1.9 Response to prior year financial statements qualification

Unreconciled loan disbursementThe loan amount of Kshs 390,616,107 received in the year 2014/2015 from externalresources department was at variance with the special account statement balance of Kshs.429,555,792 resulting to an unexplained difference of Kshs. 38,939,685 resulting to aQualified Opinion.

However,in a meeting held on 2 2 nd April 2016 between Treasury,Project Management andOAG it was realised that the special account statement was prepared and endorsed with thewrong figure of US $ 1,416,675.78 instead of US $ 803,104.19. A revised special accountstatement was prepared and endorsed by authorised representative of Central Bank of Kenyaand External Resources Department,Treasury.

Based on the above, the OAG wrote a clearance letter to World Bank on 3 0th May,2016explaining the circumstances and confirmed the reconciled figures with project's books ofaccounts.

I


2. STATEMENT OF PROJECT MANAGEMENT RESPONSIBILITIES

The Principal Secretary for the Ministry of Water and Irrigation, State Department for Water

Services and the Project Manager for Kenya Water Security and Climate Resilience project are

responsible for the preparation and presentation of the Project's financial statements, which

give a true and fair view of the state of affairs of the project for and as at the end of the

financial year ended on June 30, 2016. This responsibility includes: (i) maintaining adequate

financial management arrangement and ensuring that these continue to be effective

throughout the reporting period; (ii) maintaining proper accounting records, which disclose

with reasonable accuracy at any time the financial position of the Project; (iii) designing,

implementing and maintaining internal controls relevant to the preparation and fair

presentation of the financial statement, and ensuring that they are free from material

misstatements, whether due to error or fraud; (iv) safeguarding the assets of the Project; (v)

selecting and applying appropriate accounting policies; and (vi) making accounting estimates

that are reasonable in the circumstances.


Services and the Project Manager for Kenya Water Security and Climate Resilience project

accept responsibility for the Project's financial statements, which have been prepared on the

Cash Basis Method of Financial Reporting, using appropriate accounting policies in

accordance with International Public Sector Accounting Standards.


Services and the Project Manager for Kenya Water Security and Climate Resilience project are

of the opinion that the Project's financial statements give a true and fair view of the state of

Project's transactions during the financial year/period ended June 30, 2016, and of the Project's

financial position as at that date. The Principal Secretary for Ministry of Water and Irrigation,State Department for Water Services and the Project Manager for Kenya Water Security and

Climate Resilience project further confirm the completeness of the accounting records

maintained for the Project, which have been relied upon in the preparation of the Projectfinancial statements as well as the adequacy of the systems of internal financial control.


Services and the Project Manager for Kenya Water Security and Climate Resilience project

confirm that the Project has complied fully with applicable Government Regulations and the

terms of external financing covenants, and that Project funds received during the financial

year/period under audit were used for the eligible purposes for which they were intended and

were properly accounted for.

Approval of the Project financial statements

The Project financial statements were approved by the Principal Secretary for the Ministry of

Water and Irrigation, State Department for Water Services and the Project Manager for Kenya

Water Security and Climate Resilience project on 2016 and

signed by them.

Principal Secretary Project Manager

2

REPUBLIC OF KENYATelephone:+254-20-342330 P.O. Box 30084-00100

Fax: +254-20-311482E-mail: [email protected] NAIROBIWebsite: www.kenao.go.ke

OFFICE OF THE AUDITOR-GENERAL

REPORT OF THE AUDITOR-GENERAL ON KENYA WATER SECURITY ANDCLIMATE RESILIENCE PROJECT- (IDA CREDIT NO. 5268-KE) FOR THE YEARENDED 30 JUNE 2016 - MINISTRY OF WATER AND IRRIGATION

REPORT ON THE FINANCIAL STATEMENTS

I have audited the accompanying financial statements of Kenya Water Security andClimate Resilience Project (IDA Credit No. 5268-KE) set out in pages 4 to 16, whichcomprise the statement of financial assets and liabilities as at 30 June 2016, andthe statement of receipts and payments, statement of cash flows and statement ofcomparative of budget and actual amounts for the year then ended, and a summaryof significant accounting policies and other explanatory information in accordancewith the provisions of Article 229 of the Constitution of Kenya, Section 35 of thePublic Audit Act 2015 and IDA Credit Agreement No. 5268 dated 29 July 2013between the International Development Association (IDA) and the Government ofKenya. I have obtained all the information and explanations which, to the best of myknowledge and belief, were necessary for the purpose of the audit.

Management's Responsibility for the Financial Statements

The management is responsible for the preparation and fair presentation of thesefinancial statements in accordance with International Public Sector AccountingStandards (Cash Basis) and for such internal control as management determines isnecessary to enable the preparation of financial statements that are free frommaterial misstatement, whether due to fraud or error.

Management is also responsible for the submission of the financial statements tothe Auditor-General in accordance with the provisions of Section 47 of the PublicAudit Act, 2015.

Auditor-General's Responsibility

My responsibility is to express an opinion on these financial statements based onthe audit and report in accordance with the provisions of Section 48 of the PublicAudit Act, 2015 and submit the audit report in compliance with Article 229(7) of theConstitution. The audit was conducted in accordance with International Standardsof Supreme Audit Institutions. Those standards require compliance with ethicalrequirements and that the audit be planned and performed to obtain reasonableassurance about whether the financial statements are free from materialmisstatement.

Report of the Auditor-General on the Financial Statements of Kenya* Water Security and Climate ResilienceProject- (Ida Credit No. 5268-Ke) for the year ended 30 June 2016- Ministly of Water and Irrigation

Promoting Accountability in the Public Sector

An audit involves performing procedure to obtain audit evidence about the amountsand disclosures in the financial statements. The procedures selected depend on theauditor's judgement, including the assessment of the risk of material misstatementof the financial statements, whether due to fraud or error. In making those riskassessment, the auditor considers internal control relevant to the entity'spreparation and fair presentation of the financial statements in order to design auditprocedures that are appropriate in the circumstances but not for the purpose ofexpressing an opinion on the effectiveness of the Project's internal control. An auditalso includes the evaluating the appropriateness of the accounting policies usedand the reasonableness of accounting estimates made by the management, as wellas evaluating the overall presentation of the financial statements.I believe that the audit evidence obtained is sufficient and appropriate to provide abasis for my qualified audit opinion.

Basis for Qualified Opinion

1. Compliance to Project Work Plan ImplementationThe project work plan for the year had proposed to carry out eleven (11) activities atthe approved budget of Kshs.436,512,700 all of which were not undertaken. Theactivities which were not implemented include;No. Item

Budget (Kshs)1 Improved early warning system 35,000,0002 Nzoia Watershed management Program 66,000,0003 MOWASCO Institutional Capacity Improved 50,000,0004 Water supply scoping study (Malewa Dam) 2,000,0005 Pre-reforms program for MOW agreed upon 8,753,0006 Water sector training need assessment 23,454,7007 Pre-reform consensus action plan 61,510,0008 Water resource knowledge based improved 36,000,0009 Procurement and construction of 25 monitoring wells 67,672,00010 100 RGs procured and Installed 22,220,00011 Hydro met network

v52,862,000Total 425,512,700

in the circumstances, the project implementation will be affected by the unexplaineddelay.

2. Unsupported Purchases

The project purchased goods and other assets worth Kshs.25,067,865 fromsuppliers who were not in the pre-qualified list of supplies contrary to the PublicProcurement and Disposal Act, 2005.In the circumstances, the propriety of the expenditure of Kshs.25,067,865 could notbe ascertained

Report of the Auditor-General on the Financial Statements of Kenya Water Security and Climate ResilienceProject- (Ida Credit No. 5268-Ke) for the year ended 30 June 2016 - Minisity of Water and Irrigation2

I

3. Unsupported Foreign Travel Expenditure

The project spent Kshs.20,306,294 in sponsoring a delegation of sixteen officers toMexico on a short course on design and construction of hydraulic structures. itcould not be ascertained how the delegates were identified for the course as mostof them did not come from the water relevant section.

As a result, the propriety and value for money for the expenditure could not beascertained

4. Unsupported Local Travel and Subsistence

The project made payment totalling Kshs.7,251,266 which were not supported withrelevant documents. Further, Kshs.12,478,400 was paid in cash to nine accountantsto carry out a survey whose report was not availed for audit verification. It has notbeen explained why accountants were paid to carry out the research instead ofhiring researchers.

Consequently, the propriety of the expenditure of Kshs.19, .729,666 could not beascertained.

Qualified Opinion

In my opinion, except for the effect of the matters described in the Basis forQualified Opinion paragraph, the financial statements present fairly, in all materialrespects, the financial position of Kenya Water Security and Climate ResilienceProject as at 30 June 2016, and of its financial performnance and its cash flows forthe year then ended, in accordance with International Public Sector AccountingStandards (Cash Basis) and comply with the IDA Financing Agreement No. 5268dated 29 July 2013

In addition, the Special Account Statement present fairly, the transactions for theyear and the closing balances have been reconciled with the books of account.

FCPA Edward R. 0. Ouko, CBSAuditor-General

Nairobi

28 December 20 16

Report of the Auditor-General on the Financial Statements of Kenya Water Security and Climate ResilienceProject- (Ida Credit No. 5268-Ke) for the year ended 30 June 2016- Ministly of Water and Irrigation

3


4. STATEMENT OF RECEIPTS AND PAYMENTS FOR THE PERIOD ENDED 30TH

JUNE 2016

Note Cumulative

2015/2016 2014/2015 to date'

Kshs Kshs Kshs

RECEIPTSTransfer from Government entities 8.1 150,000,000 26,896,647 176,896,647Loan from external developmentpartners 8.2 465,765,334 390,616,107 1,039,003,424

Miscellaneous receipts 8.3 12,615,580 20,283,954 46,353,040

Total receipts 628,380,914 437,796,708 1,262,253,111

PAYMENTSPayment to employees - 4,216,663 6,499,335

Purchase of goods and services 8.4 399,158,147 263,306,963 824,890,077

Acquisition of non-financial assets 8.5 41,528,672 35,005,050 95,346,829

Transfers to other government entities 150,000,000 - 150,000,000Other grants and transfers andpayments 8.6 4,348,850 18,690,35 33,039,155

TOTAL PAYMENTS 595,035,669 321,218,981 1,109,775,396

SURPLUS/DEFICIT FOR TUEYEAR 3334245 116.577.727 152.477,715

The accounting policies and explanatory notes to these financial statements are an integral

part of the financial statements.

Principal Secretary Project Mana er

Date Date

4


5. STATEMENT OF FINANCIAL ASSETS AND LIABILITIES AS AT 30TH JUNE 2016

Note 2015/16 2014115

Kshs Kshs

FINANCIAL ASSETS

Cash and Cash Equivalents

Bank Balances 8.7 144,011,011 116,991,312

Imprests and Advances 8.7 8,466,704 2,141,158

TOTAL FINANCIAL ASSETS 152,477,715 119,132,470

REPRESENTED BY:

Cash and cash equivalents b/fwd 119,132,470 2,554,743

Surplus/Deficit for the year 33,345,245 116,577,727

NET FINANCIAL POSITION 152,477,715 119,132,470

The accounting policies and explanatory notes to these financial statements form an integralpart of the financial statements. The financial statements were approved on2016 and signed by:

Principal Secretary Project Manager

Date Date

5


6. STATEMENT OF CASITFLOW FOR THE YEAR ENDED 3 0 TH JUNE 2016

2015-2016 2014-2015Notes Kshs Kshs

Receipts for operating incomeTransfer from Government entities 8.1 150,000,000 26,896,647Miscellaneous receipts 8.3 12,615,580 20,283,954

Payments for operating expensesCompensation of employees - (4,216,663)Purchase of goods and services 8.4 (399,158,147) (263,306,963)Transfers to other government entities 8.1 (150,000,000) -

Other grants and transfers and payments 8.6 (4,348,850) (18,690,305)Net cash flow from operating activities (390,891,417) (239,033,330)

CASHFLOW FROM INVESTING ACTIVITIESAcquisition of Assets 8.5 (41,528,672) (35,005,050)Net cash flows from Investing Activities (41,528,672) (35,005,050)

CASHFLOW FROM BORROWINGACTIVITIESLoan from external development partners 8.2 465,765,334 390.616,107

Net cash flow from financing activities 465,765,334 390,616,107

NET INCREASE IN CASH AND CASH 33,345,245 116,577,727EQUIVALENTCash and cash equivalent at BEGINNING of the 119,132,470 2,554,743yearCash and cash equivalent at END of the year 152,477,715 1 2470

The accounting policies and explanatory notes to these financial statements form an integralpart of the financial statements. The entity financial statements were approved on

2016 and signed by:

Principal Secretary Project Manage4_J

Date Date

6

Kenya Water Security And Clinate Resilience Project

Reports and Financial Statements For the financial year ended June 30, 2016

7. STATEMENT OF COYPARATIVE BUDGET AND ACTUAL AMOUNTS

Actual on % of

. Receipts/Payments Comparable Variancoriginal Bud et Adjustments Final Budget Basis Variance e

a b c=a+b D e=c-d f=e/c %

J ReceiutsTransfer from

GoverflIenterome 300,000,000 (150,000,000) 150,000,000 150,000,000

Proceeds from

domnestic andforei gandt 2,300,000,000 (1,750,000,000) 550,000,000 465,765,334 84,234,666 (15%)

Miscellancousrece - - 12,615,580 (12,615,580)

Total Recel ts 2,600,000,000 (1,900,000,000 700,000,000 628,380,914 71,619,085 (10%

purchase of goodsand services 2,200,000,0000 (1,700,000,000) 500,000,000 399,158,147 100,841,853 20%

:J Acquisitiofl of non-financial assets 100,000,000 50,000,000 50,000,000 41,528,672 8,471,328 17%

Transfefs to Otherovmerflrlent entities 300,000,000 (150,000,000) 150,000,000 150,000,000 0

Other payments 4,348,850 (4,348,950)

Total Pa meu]ts - 2,600,000,000 (1,900,000,000) 700,000,000 595,035,669 104,964,331 15%

rincip Sec¯et¯arY Proj ect Manager

Date

L7

7


8. NOTES TO THE FINANCIAL STATEMENTS

The principal accounting policies adopted in the preparation of these financial statements areset out below:

8.0 Statement of compliance and basis of preparation

The financial statements have been prepared in accordance with and comply withInternational Public Sector Accounting Standards (IPSAS) with particular emphasis onCash Basis Financial Reporting under the Cash Basis of Accounting. The financialstatements comply with and conform to the form of presentation prescribed by theAccounting Standards Board of Kenya.

The financial statements are presented in Kenya Shillings, which is the functional andreporting currency of the Project and all values are rounded to the nearest one Shilling.The accounting policies adopted have been consistently applied to all of the yearspresented.

The financial statements have been prepared on the cash basis following theGovernment's standard chart of accounts. The cash basis of accounting recognisestransactions and events only when cash is received or paid out by the Project.

i, Recognition of revenue and expenses

The Project recognises all revenues from the various sources when the event occurs andthe related cash has actually been received by the Project. In addition, the Projectrecognises all expenses when the event occurs and the related cash has actually been

paid out by the Project.

ii. In-kind donations

In-kind donations are contributions made to the Project in the form of actual goodsand/or services rather than in money or cash terms. These donations may includevehicles, equipment or personnel services. Where the financial value of in-kinddonations can be reliably determined, the Project includes such value in the statementof receipts and payments both as revenue and as an expense in equal and oppositeamounts; otherwise, the donation is not recorded.

iii. Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and cash at bank, short-term depositson call and highly liquid investments with an original maturity of three months or less,which are readily convertible to known amounts of cash and are subject to insignificantrisk of changes in value. Bank account balances include amounts held at the CentralBank of Kenya and at various commercial banks at the end of the financial year/period.For the purposes of these financial statements, cash and cash equivalents also include

I88


NOTES TO THE FINANCIAL STATEMENTS (Continued)

short term cash imprests and advances to authorised public officers and/or institutionswhich had not been surrendered or accounted for at the end of the financial year/period.

iv. Pending bills

Pending bills consist of unpaid liabilities at the end of the financial year/period arisingfrom contracted goods or services during the year/period or in past years/periods. Aspending bills do not involve the payment of cash in the reporting period, they aresimply disclosed as an Annex to the financial statements. When the pending bills arefinally settled, such payments are included in the statement of receipts and payments inthe year in which the payments are made.

v. Budget

The budget is developed on the same accounting basis (cash basis), the same accountsclassification basis, and for the same period as the financial statements. The Project'sbudget was approved as required by Law and National Treasury Regulations, as well asby the participating development partners, as detailed in the Government of KenyaBudget Printed Estimates for the year. A high-level assessment of the Project's actualperformance against the comparable budget for the financial year/period under reviewhas been included in an annex to these financial statements.

vi. Exchange rate differences

The accounting records are maintained in the functional currency of the primaryeconomic environment in which the Project operates, Kenya Shillings. Transactions inforeign currencies during the year/period are converted into the functional currencyusing the exchange rates prevailing at the dates of the transactions. Any foreignexchange gains and losses resulting from the settlement of such transactions and fromthe translation at year-end exchange rates of monetary assets and liabilitiesdenominated in foreign currencies are recognised in the statements of receipts andpayments.

vii. Comparative figures

Where necessary comparative figures for the previous financial year/period have beenamended or reconfigured to conform to the required changes in financial statementpresentation.

viii. Subsequent events

There have been no events subsequent to the financial year/period end with asignificant impact on the financial statements for the year ended June 30, 2016

9

Kenya Water Security And Clinate Resilience ProjeetReports and Financial Statements For the financialyear ended June 30, 2016

8.1 RECEIPTS FROM GOVERNMENT OF KENYA

These represent counterpart funding and other receipts from government as follows:

2015116 2014115 CumulativeKshs Kshs to-date

Counterpartfunding through Ministryof water and irrigationCounterpart funds Quarter 2 - 20,000,000 20,000,000Counterpart funds Quarter 4 150,000,000 6,896,647 156,896,647

150,000,000 26,6647 176,896,647

Note:The counterpartfunds received were transferred to National Land Commission (NLC)for Resettlenent Action Plan (RAP) at the Lower Nzoia Irrigation Projeet (LNIP)

8.2 LOAN FROM EXTERNAL DEVELOPMENT PARTNERS

During the 12 months to 30 June 2016 wc received funding from development partners in formof loans negotiated by the National Treasury donors as detailed in the table below

IDA Donor Funds 22/09/2015 1,724,881 181,313,334 - 181,313,334 20,000,000

IDA Donor Funds 07/03/2016 2,800,000 284,452,000 - 284,452,000 26,349,300

IDA Donor Funds - 45,086,422

IDA Donor Funds 299,180,385

Total 4,524,881 465,765,334 465,765,334 390,616,107

10

Kenya Water Security And Clinate Resilience ProjectReports and Financial Statements For the financial year ended June 30, 2016

8.3 MISCELLANE OUS RECEIPTS

2015/16 2014/15 CumulativeKshs Kshs Kshs

Other receipts not classifiedelsewhere 12,615,580 20,283,954 46,353,040

12,615,580 20.283,954 46.353,040

The other receipts constitute the following:

2015/16 2014/15 CumulativeKshs Kshs Kshs

Receipts from interest income 4,763,302 2,070,885 7,166,786Fund from Nile Basin Initiative 12,590,305 25,590,305Receipts from Jubilee Insurance 3,477,079 - 3,477,079Refunds from GoK 4,375,199 - 4,375,199Funds from Kenya Italy DebtFor development 3,100,000 3,100,000Refunds - 2,522,764 2,6431671

.11



8.4 PURCHASE OF GOODS AND SERVICES

2015/16 2014/15 CumulativeKshs Kshs to-date

Contracted Professional services 153,642,088 177,066,978 444,427,544Contracted Technical Services 31,935,533 - 31,935,533Utilities, supplies and services 18,228,843 455,570 20,562,901Communication, supplies and services 1,279,998 807,000 2,262,998Domestic travel and subsistence 113,597,658 36,337,475 157,123,910Foreign travel and subsistence 31,551,609 22,801,003 60,001,586Printing, advertising and

- information supplies & services 14,023,308 14,166,509 47,654,423Rentals of produced assets 3,168,749 - 3,168,479Training expenses 558,593 5,847,790 15,391,930Insurance costs 816,423 1,041,573 1,857,996Other operating expenses 22,719,875 2,482,492 30,327,840Routine maintenance - vehicles andother transport equipment 7,635,470 2,300,613 10,174,667

1263,306,9 824,890077

12

Kenya Water Security And Climate Resilience Project

Reports and Financial Statements For the financial year ended June 30, 2016

NOTES TO TIE FINANCIAL STATEMENTS (Continued)

8.5 ACQUISITION OF NON-FINANCIAL ASSETS

2015/16 2014/15 Cumulative

Kshs Kshs to-date

Purchase of vehicles & other transport equipment 32,904,800 29,849,220 78,663,027

Purchase of office furniture & general equipment 8,623,872 5,155,830 16,683,802

I 41u528.672 35,005,0 95_ 629


8.6 Other grants and transfers and payments

2015/16 2014/15 Cumulative

Kshs Kshs to-date

Miscellaneous expenditure 4,348,850 18,690,305 33039155

Total 4,348,850 160539 155

13


8.7 CASH AND CASH EQUIVALENTS C/FWD

2015/16 2014/15

Kshs Kshs

Bank accounts (8.7A) 144,011,011 116,991,312

Outstanding imprests and advances (8.7B) 8,466,704 2141,158

CASH AND CASH EQUIVALENTS C/FWD (Continued)

8.7A Bank Accounts

2014/15 2013/14

Kshs Kshs

Local Currency Accounts

NIC Bank [Alc No 10005917383 144,11,011 116,991.312

Total local currency balances 144,011,011 116,991,312

Total bank account balances 144011.011 116.991312

14


8.7B Outstanding Imprest and Advances

Name of Officer Amount Due Date of Amount Oustandi Outstandi Outstandingtaken Surrender Surrendered ng ng Balance

in 2015/2016 Balance Balance 2013/20142015/2016 2014/2015

Fredrick Walluenda 28,180 30/6/2014 - 28,180 28,180 28,180John Nyaoro 638,941 30/6/2014 - 30,720 30,720 30,720Simon Mwangi 82,000 08/02/2015 - 82,000 82,000Barak Tuju 79,200 17/5/2015 79,200Bernard Mulwa 31,500 15/6/2015 31,500 - - -

David Onyancha 111,500 19/6/2015 111,500 - - -

Emmanuel Bitta 84,000 17/5/2015 84,000 - - -

Fatma Awale 398,040 27/10/2014 398,040 - - -

John Muruka 41,500 12/6/2015 41,500 - - -

Joseph Chirchir 83,500 12/6/2015 83,500 - -

Kevin Okumu 67,200 17/5/2015 67,200Kimanthi Kyengo 73,000 12/6/2015 31,500 41,500 41,500

Maurice Opondo 149,500 15/6/2015 149,500 - - -

Dymphina Odhiambo 14,700 18/6/2015 14,700 - - -

Michael Ochieng 210,000 22/5/2015 210,000Patrick Change 381,600 08/2/2015 381,600 381,600 -

Peter Obaga 67,200 17/5/2015 67,200RoseNgure 25,200 16/6/2015 25,200 - - -

Solomon Oduya 734,316.60 17/6/2015 151,116.6 - - -

Thomas Emonde 31,500 10/6/2015 31,500Albert Mumma 15,300 06/10/2015 _ 15,300 - -

Alice Mwaniki 100,800 01/7/2016 100,800Ann Gicheha 67,200 01/7/2016 67,200 - -

Bob Muathe 203,600 15/3/2016 203,600 - -

DickNyaga 18,900 10/9/2015 18,900 - -

Edwin Wanjala 18,900 10/9/2015 18,900Esther Kiberenge 56,700 01/7/2016 56,700--Esther Njuguna 67,200 01/7/2016 67,200 - -

Francis Rotich 21,939 20/6/2016 21,939 -

George Okoth 100,800 01/7/2016 100,800 -

Godwin Namenya 100,800 01/7/2016 100,800 -

Gure Hussein 737,464 16/5/2016 737,464 -

Irene Wanjiru 100,800 01/7/2016 100,800 -

Jackline Wajala 245,700 30/4/2016 245,700 -

James Munge 91,080 01/7/2016 91,080 -

James Yatich 84,000 15/4/2016 84,000 -

Joseph Machua 56,700 01/7/2016 56,700 -

Joshua Ouma 140,000 10/3/2016 140,000 - -

Judith Chidzugwa 127,200 15/3/2016 127,200 - -

Lazarus Kubasu 68,310 01/7/2016 68,310 - -

Lillian Naliaka 91,080 01/7/2016 91,080 - -

Magdalene Komen 100,800 01/7/2016 100,800 -

Mary Ekai 100,800 01/7/2016 100,800 -

Mary Gathenge 20,000 30/6/2016 20,000 -

Michael Ochieng 126,000 05/10/2015 126,000 - -

Michael Thuita 140,000 03/3/2016 140,000 - -

Nick Othim 300,750 03/10/2015 300,750 - -

Peter Kabebe 67,200 01/7/2016 67,200 - -

Peter Kamatu 91,080 01/7/2016 91,080 - -

Raphael Mwaura 50,400 21/6/2016 50,400 - -

Reuben Ongere 25,200 15/10/2015 25,200 - -

Samuel Mbugua 44,800 10/3/2016 44,800 -

15

jya Water Security And Clinate Resilience Project

fports and Financial Statements For the financial year ended June 30, 2016

Simon Nderitu 16,800 15/10/2015 16,800

jSion Wangombe 28,000 20/2/2016 28,000

Wainaina Mburu 4,430,800 28/3/2016 154,399 4,276,401

11,431,180 2,300,355 8,466,704 564,000 58,900

116

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