World Bank Document · 2018. 12. 1. · HSRP -Health Sector Reform Programme -Lesotho SOURCES AND...

GOVERNMENT OF LESOTHO

AUDIT REPORT

ON THE

ANNUAL FINANCIAL STATEMENTS

OF

SATB AND HSS PROJECTMINISTRY OF HEALTH

GOVERNMENT OF LESOTHOFOR THE YEAR ENDED 31 MARCH 2018

AUDITOR - GENERALP.O. BOX 502

MASERU 100LESOTHO

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HEALTH SECTOR REFORM PROJECTMINISTRY OF HEALTH

GOVERNMENT OF LESOTHOSATB & HSS PROJECT

FOR THE YEAR ENDED 31 MARCH 2018



FINANCIAL STATEMENTS


TABLE OF CONTENTSPAGE

Report of the Auditor GeneralProject Sources and Uses of Funds - MalotiProject Sources and Uses of Funds - US DollarsUse of Funds by Project Activities - MalotiUse of Funds by Project Activities- US Dollars

Notes to the Financial Statements

The accompanying financial statements set out on pages to were approved on

................................................................. 2018 and signed by:

PRINCIPAL SECRETARY DIRECTOR, FINANCEMINISTRY OF HEALTH MINISTRY OF HEALTH

REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS OFSATB AND HSS PROJECT-MINISTRY OF HEALTH


Opinion

Sheeran and Associates, under Section 24 (1) of the Audit Act 2016,have audited the financial statements of SATB and HSS Project (theProject) set out on pages 3 to 12, which comprise the statement ofsources and uses of funds for the year ended 31 March 2018, andnotes to the financial statements, including a summary of significantaccounting policies and other explanatory notes.

In my opinion, the accompanying financial statements present fairly,in all material respects, the financial position of the Project as at 31March 2018, and its financial performance for the year then ended inaccordance with International Public Sector Accounting Standards(IPSAS).

Basis for Opinion

I conducted my audit in accordance with International Standards onAuditing (ISAs). My responsibilities under those standards are furtherdescribed in the Auditor's Responsibilities for the Audit of theFinancial Statements section of my report. I am independent of theProject in accordance with the International Ethics Standards Boardfor Accountants' Code of Ethics for Professional Accountants (IESBACode) together with the ethical requirements that are relevant to myaudit of the Project financial statements in Lesotho, and I havefulfilled my other ethical responsibilities in accordance with theserequirements and the IESBA Code. I believe that the audit evidenceI have obtained is sufficient and appropriate to provide a basis for myopinion.

1

Key Audit Matters

Key audit matters are those matters that, in my professionaljudgment, were of most significance in my audit of the financialstatements of the current period.

There were no key audit matters identified during the course of theaudit.

Responsibilities of Management and Those Charged withGovernance for the Financial Statements

Management is responsible for the preparation and fair presentationof the financial statements in accordance with IPSAS, and for suchinternal control as management determines is necessary to enablethe preparation of financial statements that are free from materialmisstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible forassessing the Project's ability to continue as a going concern,disclosing, as applicable, matters related to going concern and usingthe going concern basis of accounting unless management eitherintends to liquidate or to cease operations, or has no realisticalternative but to do so.

Those charged with governance are responsible for overseeing theProject's financial reporting process.

Auditor's Responsibilities for the Audit of the FinancialStatements

My objectives are to obtain reasonable assurance about whether thefinancial statements as a whole are free from material misstatement,whether due to fraud or error, and to issue an audit report thatincludes my opinion. Reasonable assurance is a high level ofassurance, but is not a guarantee that an audit conducted inaccordance with ISAs will always detect a material misstatementwhen it exists. Misstatements can arise from fraud or error and areconsidered material if, individually or in the aggregate, they couldreasonably be expected to influence the economic decisions of userstaken on the basis of these financial statements.

As part of an audit in accordance with ISAs, I exercise professional

judgment and maintain professional skepticism throughout the audit.

1-i

I also:

* Identify and assess the risks of material misstatement of thefinancial statements, whether due to fraud or error, design andperform audit procedures responsive to those risks, and obtainaudit evidence that is sufficient and appropriate to provide abasis for my opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for oneresulting from error, as fraud may involve collusion, forgery,intentional omissions, misrepresentations, or the override ofinternal control.

* Obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriatein the circumstances, but not for the purpose of expressing anopinion on the effectiveness of the project's internal control.

* Evaluate the appropriateness of accounting policies used andthe reasonableness of accounting estimates and relateddisclosures made by management.

o Conclude on the appropriateness of management's use of thegoing concern basis of accounting and, based on the auditevidence obtained, whether a material uncertainty existsrelated to events or conditions that may cast significant doubton the Project's ability to continue as a going concern. If Iconclude that a material uncertainty exists, I am required todraw attention in my audit report to the related disclosures inthe financial statements or, if such disclosures are inadequate,to modify my opinion. My conclusions are based on the auditevidence obtained up to the date of my audit report. However,future events or conditions may cause the Project to cease tocontinue as a going concern.

* Evaluate the overall presentation, structure and content of thefinancial statements, including the disclosures, and whether thefinancial statements represent the underlying transactions andevents in a manner that achieves fair presentation.

I communicate with those charged with governance regarding,among other matters, the planned scope and timing of the audit andsignificant audit findings, including any significant deficiencies ininternal control that I identify during my audit.

I also provide those charged with governance with a statement thatI have complied with relevant ethical requirements regarding

1- ii

independence, and to communicate with them all relationships andother matters that may reasonably be thought to bear on myindependence, and where applicable, related safeguards.

From the matters communicated with those charged withgovernance, I determine those matters that were of most significancein the audit of the financial statements of the current period and aretherefore the key audit matters. I describe these matters in my auditreport unless law or regulation precludes public disclosure about thematter or when, in extremely rare circumstances, I determine that amatter should not be communicated in my report because theadverse consequences of doing so would reasonably be expected tooutweigh the public interest benefits of such communication.

LUCY LIPHAFA (MRS) OF\CEOF AUDITOR-GENERAL . AD

p.Box 5o2

2LESOTH

HSRP - Health Sector Reform Programme - Lesotho

SOURCES AND USES OF FUNDS - SATB & HSS Project

Year finishing at 31/0312018

Maloti Page 1/2

Sources of Funds

IDA Southern Africa TB & HSS PPA 0 42 2 1

IDA - Southern Africa TB & HSS Proj mac 2200 as

Other Income 27,0 1207

Total Sources of Funds 22.160 2,0o7.826

Total Financing 22,16 2s.067.26

Uses of Funds By Category - PPA

Consultancy Services 15, 3a2 283 2e

Civil Works

Goods I '3'2 ^432'C3

Training

Operating Costs ;',0 75'

Total Uses of Funds By Category - PPA 1.6o4,05 2 444,M2

Uses of Funds By Category - Main Project

Consultancy Services 732 2 11 373.o4

Civil Works 5-,' 7"454

Goods 6. "2

Training 2. s74 3431

Operating Costs 31' 2 7" 21

Total Uses of Funds By Category - Main Project 13 710,325 14.10E16

Total Expenditures 15 314.373 1.,41 275

Receipts Less Expenditures -1 .21 2 3,51 n 720

Foreign Exchange Difference .1- 32 2

Encashement Evolution -16,6t.272 2,025 222

Opening Cash Balances

Opening Cash Balance

Southern Africa TB & HSS - Special A/c m"n'

Southern Africa TB & HSS - Maloti Ac 2.723333

Total Opening Cash Balance 23,36S.142

Total Opening Cash 23345 '42

Net Cash Available 2,625 222 .695,869 292.8G9

Closing Cash Balances

Southern Africa TB & HSS - Special AJc

TomPro Printed on 26/0912018 at 8:34 AM



Year finishing at 31/03/2018

Maloti Paqe 2/2

Southern Africa TB & HSS - Maloti Ac

Total Closing Cash Balances

TomPro Printed on 2610912018 at 8:34 AM




US Dollars (1 USD = 13 LSL) Page 1/2

Sources of Funds

IDA - Southern Africa TB & HSS PPA -99

IDA - Southern Africa TB & HSS Proj 23 *e f.25

Other Income H4 94

Total Sources of Funds 1.557 un.10

Total Financing 1,637 1,833.110

Uses of Funds By Category - PPA

Consultancy Services 1020 ;.C0390

Civil Works

Goods 7 ' 71

Training 163 6.16B

Operating Costs 51 n1

Total Uses of Funds By Category - PPA 121,457 179.996

Uses of Funds By Category - Main Project

Consultancy Services 914441 3 9112

Civil Works 47 4,2

Goods C3 on a on

Training 's '' la a

Operating Costs '9 17n2P

Total Uses of Funds By Category - Main Project I,9n9.923 1,097 195

Total Expenditures 1 191an59 1.267 u 38

Receipts Less Expenditures l,0u52 557126

Foreign Exchange Difference

Encashernent Evolution .1,1799 565,726

Opening Cash Balances SW726

Opening Cash Balance

Southern Africa TB & HSS - Special Alc 1

Southern Africa TB & HSS - Maloti A/c 20>" 57

Total Opening Cash Balance 1 .45419

Total Opening Cash 1.7,419

Net Cash Available u o m

Closing Cash Balances

Southern Africa TB & HSS - Special A/c

1 TomPro Printed on 26/0912018 at 8:35 AM




US Dollars (1 USD = 13 LSL) Page 212

Southern Africa TB & HSS - Maloti Aic 3.n e 4

Total Closing Cash Balances 56nsu s

TomPro Printed on 26/09/2018 at 8:35 AM

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FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH 2018

NOTES TO THE FINANCIAL STATEMENTS

1. SCOPE

The period covered by the financial statements is from I April 2017 to 31March 2018.

The Project Accounting Unit (PAU) maintains accounts in respect of funding provided bydonors.

The accompanying financial statements, cover funding under WORLD BANK-SATB&HSS.

Separate statements have been prepared in respect of each of the donors. A consolidatedset of financial statements has also been prepared to include all donors providing financefor the Health Reforms and for which the Ministry of Health and Social Welfare ProjectAccounting Unit maintains accounts or keeps track of expenditure.

2. BACKGROUND:

The Government of Lesotho is undergoing comprehensive reform of its health sector.This endeavour is being led by the ministry of Health and Social and supported by theMinistry's external partners tluough a sector-wide programme towards coordination andharmonization of all the Health Sector partners, with the objective of theoperational isation of a Sector Wide Approach (SWAP).

In broad terms, the efforts are directed towards achieving universal access to essentialhealth care services, social justice (so that those in greatest needs will be given priority)and equity, such that every person regardless of social standing will receive the sainetreatment.


GOVERNMENT OF LESOTHOSATB & HSS

FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH 2018

NOTES TO THE FINANCIAL STATEMENTS

3. ACCOUNTING POLICIES:

Basis of Accounting

The financial statements have been prepared on the IPSAS Cash basis. On this basisrevenue is recognized when received rather than when earned, and expenses arerecognized when paid rather than when incurred.

Foreign Currenev Translation:

Foreign currency receipts and payments in Lesotho have been translated at the rateruling on the date of the translation.

Monthly Financial Statements are converted to Maloti and/or US Dollar equivalent atthe average rate for the month in which the transactions occur using exchange ratessupplied by the Central Bank of Lesotho for purposes of comparison.

The conversion of the financial statements for the year has been made at the weightedaverage rate for all the monthly transactions throughout the year.

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