O r ref: 541/291/15/MMK/ARW/MB 22nd June, 2015

Strictly Private and Confidential

Th- Project CoordinatorWest Africa Regional Fisheries Project-WARFP381 Sir Samuel Lewis Road,AberddenFreetown

Dear Sir,

Audited Financial Statements of West Africa Regional Fisheries Project -WARFP for the yearended 3 1st December 2014

W: have recently concluded the audit of the above financial statements and attached is our final

management report on various matters noted by us during the course of our audit.

W- would like to reiterate that the primary purpose of our audit is to express our opinion on the

fi ancial statements. Our examination of the accounting records were carried out on a test basis

and should not be relied upon to disclose errors or irregularities which are not material in relation

to the financial statements. It must be emphasised that our audit work did not include a detailed

re iew of all aspects of the control system, and for that reason, the contents of this letter do notnecessarily include all weaknesses which might have existed in the accounting and controls

sy tem.

We would also like to take this opportunity to thank you and your staff for the co-operation and

as istance received during the course of our audit.

Yours faithfully

king Ws er- Associates

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King Walker and Associates West Africa Regional Fisheries Programme- WARFP

Cha.rtered Accountant Management ReportFor the year ended 31st December 2014

Coi tents Page

Tab e of Content I

SECTION I

Executive Summrnary 2

SECTION II

Control Environment 3

Pre) ious Management Letter Points 4

Statutory Deductions (WITHHOLDING TAX) 4-5

Kin) Walker and Associates West Africa Regional Fisheries Programme- WARFP

Chartered Accountant Management ReportFor the year ended 3 1s December 2014

SECTION I

Executive Summary

This summary relates to the recently concluded audit of the financial statements of the

West African Regional Fisheries Project-Sierra Leone for the year ended 3 1" December 2013.

Shortcomings and /or weaknesses in controls and other issues arising from our review of the Project's

ope-ations are stated in this draft Management Report. Our system of grading this draft Management

Report are as follows:-

Grade A- Observations which are particularly significant and the involvement of

management may be required for their resolute

Grade B- Observations which may have a significant impact on the control environment.

Grade C- Observations which are less significant than Grades A and B but nevertheless

merit attention.

Th matrix below summaries all the issues, and are identified by their relative importance.

Grade Grade Grade

A B C

1. Control Environment

2. Previous Management Letter Points X

3. Statutory Deductions X

72T

King Walker and Associates West Africa Regional Fisheries Programme-WARFPChartered Accountant Management Report

For the year ended 31s December 2014

SECTION II

1. Control Environment

An organization's control environment is the attitude of control that is established by

management, which includes the attitude to awareness of, and actions concerning control. Please

note that maximum benefits will be derived from an effective internal control system designed to

improve the accuracy and reliability of accounting and other information, providing for the early

detection of errors, fraud and other irregularities, and ensuring that management policies are

complied with.

The comments and recommendations that follow though not exhaustive, are essentially some of the

weaknesses found in the internal controls as reflected in the accounting books and records, and are not

necessarily therefore all the weaknesses which may have been uncovered if a special investigation had

been carried out.

Our overall assessment is that the Project generally has adequate controls in place to ensure the

safeguarding of its assets and the timely preparation of reliable management information.

An effective internal control system, when instituted by the management, would ensure the

credibility/reliability of the Project's financial reports and ensure that the assets are properly

safeguarded.

King Walker and Associates West Africa Regional Fisheries Programme-WARFPChartered Accountant Management Report

For the year ended 31t December 2014

2. Previous Management Report.

The 2013 financial year Management Report point raised have been satisfactorily addressed by theProjDct Management Unit.

Management Comment's

Noted

3. Statutory Deductions (WITHHOLDING TAX)

Observation GRADE B

We bserved that there has been no statutory deduction for withholding tax for a number of paymentsmade locally.

RisIlImplicationThe unit has left itself exposed to a potential liability.

WITHHOLDING TAX

Sec ion 129 of the Income Tax Act of 2000 mandated that: "A withholding agent who fails to withhold

tax as required by this Act shall be personally liable to pay to the Commissioner the amount of tax

whi h has been withheld,"i.e for all transactions above Five Hundred thousand Leone (Le500,000)

We give below details of such transactions for withholding tax which were not withheld;

EATE TRANSACTION DETAILS PV/CHEQUE AMOUNT WithholdingNo. (US$) Tax

Deduction(5%)

Being Construction of two(2)bedroom duplex building at Shenge -/1129396 44,389.28 2,219

11. 2.14 Fisheries Outstation12.03.14 Being 90% payment in respect of -/1129396 44,389.28 2,219

rehabilitation of the Konakridefisheries out station

05. 03.14 Being 15% pyt for the Ist quarterly GEF SLL 014/ 9,254.46 463

progress report iro the 1129408construction/rehabilitation offisheries outstations in marine

protectedareas08.04.14 Being payment for the Construction GEF 225 - 55,160.33 2,758

and Rehabilitation of Tombo Letter to theFisheries Outstation and staff Bankquarters

18.04.14 Being payment for invoice no.3 for GEF SLL - 1,996,650the consultancy services towards the 305/1291616 39,933,000

41

King Walker and Associates West Africa Regional Fisheries Programme- WARFP

Chartered Accountant Management ReportFor the year ended 31' December 2014

supervision of construction of Usd 459

fisheries outstation in marine

protected areas

08.q4-14 Being 90% pyt for the Construction GEF 225 55,160.33& rehabilitation of the Tombo Letter to Bank 2,758

Fisheries outstation & staff quarter

02.Q6.14 Advance pyt for the construction of GEF 255 24,032.85

(3) Bedroom duplex at Goderich, Letter to Bank 1,202

Fisheries Outstation13.06.14 90% pyt for the construction & GEF 263 22,664.59

rehabilitation of the Tombo Letter to Bank 1,133

fisheries outstation MFMR

Recommendation

We recommend that in fiture the unit ensures that withholding tax is deducted from all payments in

excess of Le 500,000 as stipulated by legislation.

Management Comment's

Please note that for all these transactions the Project has paid Goods and Services Tax. This we

tho ight was enough on the basis of 'one not paying tax more than once on the same transaction'.

Be Informed that your recommendation has been duly noted and subsequently Withholding Tax will be

paid accordingly in future. We will also makeformal enquiries with the Ministry of Finance and

Ec nonic Development regarding taxation on World Bank funding.

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