THE FEDERAL GOVERNMENT OF SOMALIA

SFF-LD FINANCIAL STATEMENTS FOR THE PERIOD FROM JANUARY 1" TO DECEMBER 31,2016

SPECIAL FINANCING FACILITY FOR LOCAL DEVELOPMENTP156257, TFOA1715

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Table of Contents

1. IN T R O D U C T IO N .............. ............................ ....................................... .. . .. .............. 3

1.2 1.1 PROJECT OBJECTIVES ............................. ........ ........... 31.3 1,2 PROJECT SCOPE.. ....................................................... ...32. PROJECT INFORMATION ........... .................................... 4

2.1 KEY PROJECT INFORMATION............................................................... 42.2 PROJECT DESCRIPTION...................... ...................................... 42.3 IMPLEMENTATION STATUS ........................................ ...52.4 ROLES AND RESPONSIBILITIES: ..................... .............. ... 52.5 FU N D ING SU M M A R Y .............................................................................. 63. STATEMENT OF PROJECT MANAGEMENT'S RESPONSIBILITIES .................... 7

4. REPORT OF THE AUDITOR GENERAL ...................................... 8

5 . F IN A N C IA L S T A T E M E N T S ................................................................ ... .. ................ 10

5.1 STATEMENT OF RECEIPTS AND PAYMENTS......................... .... 105.2 STATEMENT OF FINANCIAL POSITION................................. ........ 116. STATEMENT OF BUDGET COMPARISON WITH ACTUALS ...................... 12

7. SOURCES AND USES 0F FUNDS STATEETB U - COMPONENTS (ACTIITES1

8. NOTES TO THE FINANCIAL STATEMENTS ........................ .......... 15

8 .1 G EN E R A L IN FO R M A T IO N .................................................... ..................... . ......... ..... 1 5

8 .2 BASIS O F PREPA RATIO N ............................................ .. ... ... ,............................ 15

8.3 SIG NIFICANT A CCO UNTING PO LICIES .................... ,, .............................. .................. 158 .4 E X C H A N G E R A T E S ....................... .......... ....................... .......................................... 1 6

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1. INTRODUCTION

This is a detailed financial rsport that present the performance status of Special Financing Facility forlocal development (SFF-LD) for the period of October 2016 to December 2016 for the Fourth quarterof year 2016.The project period is the Fourth quarter through preparation and launching reachedprogress for this period. The contents of the report are actual financial results of SFF-LD Projecteffective from the commencement date of the project to the end of this reporting period of 31December 2016.

1.2 1.1 PROJECT OBJECTIVES

SFF-LD is expected to contribute to the broader stabilization enshrined in the Somali compact, but tobe specific the following was identified as the rationale for the program;1. Building legitimate public sector institutions by using government systems and demonstratingthey can work.

11. Helping define the division of roles, responsibilities and capacities between the centralgovernment and the states in the area of development financing1I. Supports recovery efforts for vulnerable population in most war -affected areas

1.3 1.2 PROJECT SCOPE

The Project will support the rehabilitation and reconstruction of damaged and deteriorated communityinfrastructure, such as roads, drainage systems, and public buildings, as well as the (re)constructionof markets. The identification of subprojects is achieved through a rigorous consultative process withcommunity-based stakeholders, who decide on the subprojects to be financed for a specificcommunity. This approach is expected to strengthen cohesion and cooperation among tile communitymembers, create a stronger sense of shared ownership, and joint responsibility for the repair andmaintenance of assets. Finally, the implementation of Government-funded projects through federaland local agencies would increase citizen-government trust, and perceptions of Government reach,competence and accountability.

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2. PROJECT INFORMATION

2.1 Key Project Information

Project Name: Special Financing Facility For Local Development

Project ID: P156257

IDA CreditlGrant No.: TF0A1715

Implementing Agency: Somalia Ministry of Finance- Special Financing Facility forLocal Development (SFF-LD)

Effectiveness Date: 25-Jan-2016

Closing Date : For this year 31 December, 2016

Crodit/Grant Amount: US$ 6.00 Million

Program Duration for this year 365 Days

Closure Period End Date: 31-Dec-2017

Disbursed Amount: US$ 570,475.4

2.2 PROJECT DESCRIPTION

a. Project Components

1. Three components are proposed for the SFF-LD for a duration of 24 months:

Component 1: Small-Scale Infrastructure (US$4.2m): This component will finance small-scale localdevelopment activities in the (pre-1991) regions of the FGS. The Grant amounts to each region willcontinue the previous approach of distribution following an 'equal shares' basis of $700-750,000 perregion. The grants will cover design and supervision costs and the costs of implementation of theworks or activities. Following a process of consultation with the regions, projects will be identified andagreed, based upon a positive list of potential sub-projects. The positive list will be reviewed on arolling basis every six months.

2. Eligible sub-projects would include:

(i) Buildings: Construction or repair of administrative and community buildings(ii) Sanitation: Provision or repair of public sanitation facilities in primary health care or

education facilities where water supply is already available.(iii) Roads: Rehabilitation of local roads (using labor intensive methods only), construction or

rehabilitation of foot paths, culverts and bridges, including street lights.(iv) Health: Construction, repair or extension of primary health care center only in cases where

a health care worker is already present.(v) Education: Construction, repair or extension of existing primary schools where a teacher is

already present. Purchase of furniture or equipment for existing primary schools.(vi) Markets: Construction or repair of public markets.(vii) Livestock: Construction or rehabilitation of livestock dips(viii) Energy: Small-scale, off-grid renewable energy projects (e.g street lights, energy for public

buildings, markets, etc.)

3. Component 2: Program Operations, Capacity Building, and Contingencies(US$1.8m): Thiscomponent will finance costs associated with overall project implementation and additional capacitybuilding activities that will support the strengthening of the Project Implementation Unit (PIU) andproposed new name of the TIU) and the new emerging Interim Regional Administrations. This willhave two subcomponents:

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(i) PIU Operating Costs: will cover the costs of PIU staff for a period of 2 years and day-to-dayoperations, including the salaries and allowances of the PlU members, consultancies required fortechnical assistance, Project Officers at the sub-national level and associated costs with therunning of the PIU including, inter alia, office running costs, program related travel expenses,meetings costs and project assessment and monitoring costs. An annual work plan will be agreedbetween the PIU and the Bank to establish the parameters of the costs and activities to befinanced under this component.

(ii) Capacity Building: Technical assistance and capacity building would including workshops,training and learning-by-doing and would focus on practical aspects of capital investment projectmanagement. Targeted audiences would be FGS Ministries as well as IRAs. Capacity buildingwould include the areas of: M&E, communications and community outreach, and environmentaland social safeguards. The capacity building would include both central and regionalstakeholders and would include both hands-on assistance as well as workshops aimed at buildingcapacity in these areas.

4. Component 3: Emergency Contingency Component (US$0): This component would allow forProject funds to be used to address emergency works or activities resulting from potential naturaldisasters. Somalia is routinely impacted by natural disasters including drought and flooding. If suchconditions arise to a critical level (as determined by the FGS) during the implementation of theProject, funds could potentially be allocated for emergency works or activities resulting from suchnatural disasters. Sub-projects or activities supported under this component would be approved bythe Steering Committee. This component would be similar to contingent components routinelyincluded in IDA funded the Project Operations Manual will outline the specific 'emergency eligibility'criteria for triggering this component.

2.3 IMPLEMENTATION STATUS

PIU prepared a progress report for the period ending December 31, 2016, Please refer to theprogress report accompanied here with the financial report for the same period.

2.4 ROLES AND RESPONSIBILITIES:

The following are the key project implantation team that were concerned with the project activitiesduring the period.

Name Role Position Contact Information

Ahmed Yusuf Mumin Finance Accountant booseeY05Chotmail.compIz(siraaji) Management General change this into qmail

Amina Sheikh Osman Finance Director General aaminasheekh@hotmail.comManagement Ministry of Finance

Abdinasir Ahmed Financial Head of EAFS Abdinasira70Rmail.comConsulting Consultants

Saleiman S Umar Financial Accounting Section dalkasom@,grailcom

Consultant Lead forConsultants

Ali Haji Aden Project Project Coordinator alihaji@sff-ld-mof.soCoordinator

Suad Osman Egal Deputy Project Deputy project suadegal@sff-ld-mofsoCoordinator Coordinator

Ahmed Abdi Adam (Iraad) Budgeting Director of Budget iradabdipihotmail.coniDepartment

Mohamud Abdulkadir Arale Finance Director of External afkaxaajihotmail.comManagement Assistance

Fiduciary Section(EAFS)

Mowliid Mohamed Ali Accountant Head of EAFS dhoofcade@hotmail.comAccounts Section

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Name Role Position Contact Information

Abdinasir Adan Mohamed Financial Financial aldinasir@sfld-mof.soConsulting Management

Specialist

Abdullahi Abdinur Hamud Engineer Engineer sayouniayahoo cor

Abddinur Ali Farah Engineer Engineer Lrin.a ubnus -ff-ld mof.so

Amir Mohamed Siraad M&E M&E Specialist anrsff-ld-mof.so

Najib Abdi Communication Communication ri ff-IdmofsoSpecialist

Habiba Ali Hussein Procurement Procurement habi s rnof soSpecialist

Fatima Abdirahman Ahmed Project Officer Project Officer fi 11w'sff-Id nlofso

2.5 FUNDING SUMMARY

The Project implementation for this year is 24 months from 25 January 2016 to 31 December 2017,with an approved amount of US$ 6,000,000.00

Amount Undrawnreceived up to Balance up to

Source of funds Donor CommitmentDecember 31, December 31,

2016 2016

US$ US$ US$

(A) (B) (A)-(B)

Somalia Muiti-Partner Fund 6,000,000.00 637,291.32 5,362,708.68(MPF) - World Bank

Total 6,000,000.00 637,291.32 5,362,708.68

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3. STATEMENT OF PROJECT MANAGEMENT'S RESPONSIBILITIES

The Project Management is responsible to ascertain that the progress report and financial statementsof the Project for the period ended December 31, 2016 are prepared, in all material respects, inaccordance with the basis of preparation and accounting policies set out in Note 3 to the financialstatements. In preparing these financial statements, the Project Management is required to selectsuitable accounting policies and then apply them consistently in conformity with Cash BasisInternational Public Sector Accounting Standard (Cash Basis IPSAS) and the requirements ofFinancial and Accounting procedure of the State, 1961 as amended,

The Project Management is responsible for ensuring that proper accounting records are kept whichenable the financial statements to be prepared in compliance with the basis of preparation andaccounting policies set out in Note 3 to the financial statements as well as in accordance with theterms of the financing agreement for the State and Peace Building Fund Grant Agreement NumberTFOA1716 between the Federal Republic of Somalia and the International Development Association,The Project Management is also responsible for safeguarding the assets of the Project, and for takingreasonable steps for the prevention and detection of fraud and other irregularities.

The Project Management assumes the responsibility to provide, and has provided, the AuditorGeneral with all accounting records, supporting and other documents, minutes, and any otherpertinent information and explanations, either orally or in writing, necessary for the audit.

Signed on behalf of the Project Management:

Ahmed Yusuf Muumin,Accountant General

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4. REPORT OF THE AUDITOR GENERAL

To: The Project Management

Opinion

We have audited the accompanying financial statements of the project titled "Special FinancingFacility for Local Development P156257, TF0AI715 - FGS funded by the International DevelopmentAssociation (IDA)" which comprise the statement of receipts and payments for the year then endedand notes thereto "the financial Statements" as set bout on pages 10 to 18 The financial statementshave been prepared by the project management in accordance with the basis of accounting describedin the note 8 to the financial statements.

In our opinion, the accompanying financial statements presents fairly the cash receipts and paymentsof the project during the year ended 31 December 2016 in accordance with the cash basis of theInternational Federation of Accountants and in accordance with the accounting policies described innote 8 to the financial statements and comply with the related grant agreement.

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs). Ourresponsibilities under those standards are further described in the Auditor's Responsibilities for theAudit of the Financial Statements section of our report.

We are independent of the International Development Association (IDA) and an independentconstitutional body established by the Federal Government of Somalia (FGS) in accordance with theInternational 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 financialstatements in Somalia, and we have fulfilled our ethical responsibilities in accordance with theserequirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our opinion.

Emphasis of Matter - Basis of Accounting and Restriction on Distribution and Use

Without modifying our opinion, we draw your attention to Note 3 of this Report, which describes thebasis for accounting. The Financial Report is prepared to assist the Federal Government of Somalia(FGS) comply with the specific Financial Reporting requirements of the International DevelopmentAssociation (IDA). As a result, the Financial Report may not be suitable for any other purpose.

Our report is intended solely for the information, distribution and use of the International DevelopmentAssociation (IDA) and the Federal Government of Somalia (FGS).Other Information

The management is responsible for the other information. Other information comprises the informationincluded in the Annual Report, but does not include the financial statements and our auditor's reportthereon.

Our opinion on the financial statements does not cover the other information and we do not expressany form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the otherinformation and, in doing so, consider whether the other information is materially inconsistent with thefinancial statements or our knowledge obtained in the audit, or otherwise appears to be materiallymisstated. If, based on the work we have performed on the other information, we conclude that thereis a material misstatement of this other information of this other information: we are required to reportthat fact. We have nothing to report in this regard.

Responsibilities of the Management and those charged with governance for the FinancialStatements

The management is responsible for the preparation and fair presentation of these financial statementsin accordance with the financial reporting provisions of Schedule 2 of the Grant agreement betweenInternational Development Association (IDA) and the Federal Government of Somalia (FGS) and forsuch internal control as the management committee is necessary to enable the preparation offinancial statements that are free from material misstatement, whether due to fraud or error.

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In preparing the financial statements, the management is responsible for assessing the project'sability to continue as a going concern, disclosing, as applicable, matters related to going concern and

using the going concern basis of accounting unless the management intends to liquidate the project,or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Project Implementation Unit'sfinancial 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 wholeare free from material misstatement, whether due to fraud or error, and to issue an auditor's reportthat includes our opinion. Reasonable assurance is a high level of assurance, but is not a guaranteethat an audit conducted in accordance with ISAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material if, individually or in theaggregate, they could reasonably be expected to influence the economic decisions of users taken onthe basis of these financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgement and maintainprofessional skepticism throughout the audit. We also:

o Identify and assess the risks of material misstatement of the financial statements, whether due tofraud or error, design and perform audit procedures responsive to those risks, and obtain auditevidence that is sufficient and appropriate to provide a basis for our opinion. The risk of notdetecting 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 overrideof internal control.

o Obtain an understanding of internal control relevant to the audit in order to design auditprocedures that are appropriate in the circumstances, but not for the purpose of expressing anopinion on the effectiveness of the entity's internal control.

o Evaluate the appropriateness of accounting policies used and the reasonableness of accountingestimates and related disclosures made by the members.

o Conclude on the appropriateness of the managements' use of the going concern basis ofaccounting and based on the audit evidence obtained, whether a material uncertainty existsrelated to events or conditions that may cast significant doubt on the project's ability to continueas a going concern. If we conclude that a material uncertainty exists, we are required to drawattention in our auditor's report to the related disclosures in the financial statements or, if suchdisclosures are inadequate, to modify our opinion. Our conclusions are based on the auditevidence obtained up to the date of our auditor's report. However, future events or conditions maycause the project to cease to continue as a going concern.

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

We communicate with those charged with governance regarding, among other matters, the plannedscope and timing of the audit and significant audit findings, including any significant deficiencies ininternal control that we identify during our audit.

Mr Ali Abukar Ahmed . cActing Audit r Gener I Villa SomaliaFederal Gov rnm nf Somalia (FGS) MogadishuDate .

5. FINANCIAL STATEMENTS

5.1 STATEMENT OF RECEIPTS AND PAYMENTS

Note Prvios Curen FYCurrent FY -rCurrent FY Cu t FY CumulativeNotes Previous -rvos Current Current FY- so e

year 2015 QPre Reporting Cumulative as,o0DeQ r Quarter 31,2016

RECEIPTS

Somalia Multi- 7 0.00 360,902.23 276,389.09 637,291.32 637,291,32Partner Fund

TOTAL RECEIPTS 0.00 360,902.23 276,389.09 637,291.32 637,291.32PAYMENTS

Other Professional 10 287,733.65 190,762.65 478,496.30 478,496.30fees for PIU 0.00Consultants

Other Professional 29,663.75 15,175.35 44,839.10 44,839.10Services- 0.00Consultancy Firm

Use of goods and 11 0.00 6,673.00 9,780.00 16,453.00 16,453.00services

Travel Expense 0.00 5,090.00 15,605.63 20,695.63 20,695.63

Bank Charges 0.00 5,413.53 4,145.84 9,559.37 9,559.37

Local Workshop 432.00 432.00 432,00

Capital expenditure 12 -- - - -

TOTAL 0.00 334,573.93 235,901.47 570,475.40 570,475.40PAYMENTS

Refund

CASH IN D(A) 13 0.00 26,328.30 40,487.62 66,815.92 66,815.92

LIABILITIES 14 - - - -

TOTAL - - - - -LIABILITIES

Fund balance at 15 0.00 26,328.30 66,815.92 66,815.92 66,815.92end of this period

.. . . . . . . . . . .........Ahmed Yusuf Muunin,Accountant General

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5.2 STATEMENT OF FINANCIAL POSITION

Notes Previous Current FY Current FY - Current FY- Cumulativeyear 2015 - Previous Current Cumulative as of Dec

Quarter Reporting 31,2016quarter

ASSETS

Cash and cash 13 0.00 26,328.30 40,487.62 66,815.92 66,815.92equivalents

TOTAL ASSETS 0.00 26,328.30 40,487.62 66,815.92 66,815,92

LIABILITIES

Liabilities 14

TOTAL LIABILITIES -

NET BALANCE

REPRESENTED - - - - -BY:

FUND BALANCE 15 0.00 26,328.30 40,487.62 66,815.92 66,815.92

Ahmed Yusuf Muunin,Accountant General

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6. STATEMENT OF BUDGET COMPARISON WITH ACTUALS

FINAL ACTUAL OUT ACTUAL BUDGET PERCENTAGEBUDGET TURN US$ OUTTURN VARIANCE VARIANCE

NOTE US$ 2015 US$ 2016 US$ US$MultilateralSources 7 6,000,000.00 0.00 637,291.32 5,362,708.68 89.38%Total Receipt 6,000,000.00 0.00 637,291.32 5,639,097.77 89.38%Expenses

Firm consultantfor detaileddesign andengineeringSupervision 250,000.00 0.00 44,839.10 205,160.90 82.06%Small-ScaleInfrastructure 3,500,000.00 0.00 3,500,000.00 0.00%OperatingCosts 11 1,514,780.00 0.00 525,636.30 1,209,869.82 79.87%

CapacityBuilding 600,000,00 0.00 600,000.00 100%

ContingencyEmergencyComponent 135,220.00 0.00 135,220.00 100%

TotalExpenditure 6,000,000.00 0.00 570,475.40 5,429,524.60 90.49%

A) Budget utilization report by project components

BUDGET UTILIZATION BY PROJECT COMPONENTS

Project Annual Current FY - Current FY- Current FY- BudgetComponents Budget Previous Current Reporting Cumulative Balance

(A) Quarters (B) Quarter (C) (D)=(B)+(C) (E)=(A)-(D)

Small-Scale 4,200,000.00 29,663.75 15,175.35 44,839.10 4,155,160.90Infrastructure

Program Operations, 1,800,000.00 304,910.18 220,726.12 525,636.30 1,274,363.70Capacity Buildingand Contingencies

B) Budget utilization report by expenditure classification

BUDGET UTILIZATION BY PROJECT EXPENDITURE CLASSIFICATION

Project Annual Current FY - Current FY- Current FY- BudgetExpenditure Budget Previous Current Reporting Cumulative Balance(Object Code) (A) Quarters (B) Quarter (C) (D)=(B)+(C) (E)=(A)-(C)

2215 - Office 26,500.00 6,673.00 9,780.00 16,453.00 9,957.00materials and otherconsLImables

2216- Travel 28,000.00 5,090.00 15,605.63 20,695.63 7,304.37expenses

2222- Training 22,925.00 432.00 432.00 22,583.00expenses

2231- Consulting 560,000.00 317,397.40 205,938.00 523,335.40 36,664.60and professional

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BUDGET UTILIZATION BY PROJECT EXPENDITURE CLASSIFICATION

Project Annual Current FY - Current FY- Current FY- BudgetExpenditure Budget Previous Current Reporting Cumulative Balance(Object Code) (A) Quarters (B) Quarter (C) (D)=(B)+(C) (E)=(A)-(C)

fees

2241- Consulting 55,575.00 5,413.53 4,145.84 9,559.37 46,015.63and professionalfees

2314- Other fixed 3,012,000.00 0.00 0.00 0.00 3,012,000.00assets

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7. SOURCES AND USES OF FUNDS STATEMENT BY SUB -COMPONENTS (ACTIVITIES)

Cumulative asPrevious Current FY - Current FY - Current FY- fc asyear 2015 Previous Quarter Current Reporting Cumulative 21 (A) (D)(A) (B) Quarter (C) (B)+ (C)=(D) 2016 (A)+ (D)=

Somalia Multi-PartnerFund (MPF)) World 0.00 360.902.23 276,389.09 637,291.32 637,291.32BankTotal Sources of 0.00 360.902.23 276,389.09Funds (A) 637,291.32 637,291.32Expenditure By Sub -Component(A ctivities - -- -- ------ -------Project managementadoermatnaleCsts 0.00 334,573.93 235,901.47 570,475.40 570,475.40and Operational CostsTotal Expenditure By 0.00 334,573.93 235,901.47 570,475.40 570,475.40Sub - Comp. BClosing CashbalanceFund Source (A - B)Fund balance at 0.00 26,328.30 40,487.62 66,815.92 66,815.92beginning of the eriodTotal Closing CashBalance as of 31 Dec 0.00 26,328.30 40,487.62 66,815.92 66,815.922016

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8. NOTES TO THE FINANCIAL STATEMENTS

8.1 General Information

The principal address of the reporting entity is:Ministry of FinanceVilla SomaliaMogadishuSomalia

8.2 Basis of preparation

These special purpose financial statements have been prepared in accordance with IPSAS FinancialReporting under The Cash Basis of Accounting issued by Public Sector Committee of theInternational Federation of Accountants (IFAC-PSC). They are presented in United States Dollar(US$). The measurement basis used is the historical cost basis except where otherwise stated in theaccounting policies below.

8.3 Significant Accounting Policies

The principal accounting policies adopted in the preparation of these financial statements are set outbelow. These policies have been consistently applied during year, unless otheiwise stated

(a) Reporting entity

The financial statements are for the Special financing facility for local development- SFF-LD(P156257, TFOA1715) implemented by the Federal Government of Somalia (FGS) through TheMinistry of Finance. The transactions to be captured are only those that are controlled by thereporting entity and those controlled by third parties for and on behalf of the reporting entity. Forpurposes of these financial statements there were no third party transactions reported in respect ofthe project activities.

(b) Reporting currency and translation of foreign currencies

The functional and reporting currency is the United States Dollar (US$), which is accepted as legaltender in the Federal Republic of Somalia. Items included in the financial statements are measured inthe currency of the primary economic environment in which the entity operates.

(c) Reporting Period

The reporting period for these financial statements is from Jan 25, 2016 to 31, December 2016.

(d) Payments by Third Parties

During the year ended, the project did not benefit from any goods and services as reported to havebeen purchased on its behalf as a result of cash payments made by third parties during the Period.

(e) Receipts

Receipts represent cash received by Special financing facility for local development- SFF-LD(P156257, TF0A1715) during the period and comprise external assistance from cash disbursementsreceived under Somalia Multi-Partner Fund, The cash disbursements have been recognized asrevenue and included in the financial statements when payments are made from the projectDesignated Accounts (DA) which were operated as a holding accounts to the main Treasury SingleAccount (TSA). The closing balance on the Designated Accounts was also included as revenuereceipts from the World Bank.

(f) Expenses

Expenditure represents outlays of cash made by the project or other agencies for and on behalf of theproject. The expenses comprise Operational expenditure and they are included in the financialstatements when cash is paid out.

(g) Capital items/Non-current assets

During the period of quarter 4 of 2016, there are no capital items that have purchased at projectmoney.

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(1) Foreign currency transactions

Foreign currency transactions denominated in foreign currencies would be converted into UnitedStates Dollars (US$) at the exchange rate ruling on the date of the transaction; realized gains andlosses resulting from these transactions would be recognized in the Statement of Receipts andPayments. Monetary assets and liabilities denominated in foreign currency at the year-end would betranslated at the closing rate of exchange with the resulting exchange gains/(losses) dealt withthrough the Statement of Receipts and Payments. However, for purposes of this accounting policy,there was no foreign currency transactions translated at the reporting date.

(i) Cash and cash equivalents

For the purposes of the statement of cash flows, cash and cash equivalents comprise of deposits heldat Central Bank of Somalia.

(j) Employee benefits

Employee benefits include salaries, allowances and other related-employment costs and these havebeen recognized in the financial statements only when actual payments are made.

(k) Authorization (late

The financial statements were authorized for publication by the Accountant General on my 2, 2017

8.4 Exchange rates

All monetary amounts in the financial statements are expressed in United States Dollars (US$). Theestimated US$ closing rates for major currencies were:

From 25 Jan 2016 to 31December 2016

Somali Shilling 22,500

Great Britain Pound 0.641584

Euro 0.825748

9. Somalia Multi-Partner Fund

The grants received from World Bank under the Somalia Multi-Partner Fund are not repayable infuture. The amounts in the Statement of Receipts and Payments are only recognized when receivedby and are under the control of the FGS and attributed to the project. The amount of externalassistance received for the project in 2016 is as detailed below:

Multilateral Current FY - CurrentSources Previous Current FY Current FY- Cumulative as

year 2015 - Previous Cumulative of Dec 31, 2016(A) Quarter (B) n (B)+(C)= (A)+(D)= (E)

Quarter (C)

Somalia Multi-Partner Fund - 0.00 360,902..23 276,389.09 637,291.32 637,291.32World Bank

Total Grant 0.00 360,902.23 637,291.32 637,291.32Received 276,389.09

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10. Compensation of Consultants

Principally comprises of:

Previous Current FY Current FY - Current FY- Cumulativeyear 2015 - Previous Current Cumulative 31,

2016

(A) Quarter (B3) Reporting3126Quarter (C) (B)+(C)= (D) (A)+(D)= (E)

Other Professional 0.00 287,733.65 190,762.65 478,496.30 478,496.30fees for PlUconsultants

Total 0.00 287,733.65 190,762.65 478,496.30 478,496.30compensation ofemployees cost asof 31 Dec 2016

11. Use of goods and services

Previous Current FY Current FY - Current FY- Cumulative asyear2015 - Previous Current Cumulative of Dec 31, 2016

(A) Quarter (B) ReportingQuarter (C) (B)+(C)= (D) (A)+(D)= (E)

Other office materials 0.00 3,000.00 6,500.00 950000 9,500.00and consumables

Stationary 0.00 3,423.00 1,119.00 4,542.00 4,542.00

News Paper 0.00 250.00 500.00 750.00 750.00

Cleaning materials 0.00 0.00 1,161.00 1,161.00 1,161.00and Services

Advertising and 0.00 0.00 500.00 500.00 500.00publications

Total Use of goods 0.00 6,673.00 9,780.00 16,453.00 16,453.00and services as of31 Dec 2017

12. Capital expenditure -

Capital expenditure - -

13. Cash and cash equivalentsCash comprise of demand deposits. Demand deposits consists of interim period-end project bankbalance held at Central Bank of Somalia (CBS) and the project bank accounts are part of TreasurySingle Account (TSA) as detailed in the below:

Dec 31, 2016 USProject Designated Account No. 1126 DA 66,815.92Total Cash Available as of December 31 2016 66,815.92

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14. Liabilities

There are no liabilities for the period ended December 31, 2016.

15. Fund available as of December 30, 2016 66,816.92

Total liabilities 0.00

FI und balance/surplus fili

16. Designated Accounts (DA) Statement Reconciliation

Opening balances as at 07 March 2016 0.00

Add:

World Bank advances into the DA during the period 637,291.32

Interest earned (if credited into DA) -

Subtotal 637,291.32

Less:

Amount of eligible expenditures paid during the period 560,916.03

Refund to World Bank from the DA during the period

Service charges (if debited into DA) 9,559.37

Subtotal 570,475.40

Add refund 0.00

Closing balance as at December 31, 2016 (Note 15) 66,815.92

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