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In case of reply, the number and date of this letter should be quoted.

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Your Ref. No ................................... .

THE TASK TEAM LEADER

REPUBLIC OF GHANA

LAND ADMINISTRATION PROJECT WORLD BANK OFFICE ACCRA

Dear Madam,

MINISTRY OF LANDS.AND

NATURAL RESOURCES P. O. Box M 212 Accra.

Website: www.mlnr.gov.gh

... ?.~~~. ?~~~! .. ?.~.;lo .......... .

GHANA: SECOND LAND ADMINISTRATION PROJECT: CR. NO. 4870-GH FINANCIAL STATEMENTS AND THEIR RELATED MANAGEMENT LETTER AUDIT: 31 ST DECEMBER 2016

The Consultants Messrs Benning, Anang and Partners have completed the audit of the Financial Statements of the Project for the year ended 31st December 2016.

Attached, herewith, is a copy of the Audit Report and its Management letter for your attention.

Yours faithfully,

HAJI SULEMANA MAHAMA TECHNICAL DIRECTOR {L) FOR: MINISTER

cc: Chief Director, MLNR

National Project Coordinator, LAP-2

Financial Controller, MLNR

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MINISTRY OF LANDS AND NATURAL RESOURCES SECOND LAND ADMINISTRATION PROJECT (LAP 2)

IDA CREDIT NO. 4870-GI-I, DFTAD GRANT NO. TF 14256 AND GOVERNMENT OF GHANA FUND

FINANCIAL STATEMENT

AND

MANAGEMENT LETTER

31 DECEMBER 2016

BENNING, ANANG & PARTNERS (Chartered Accountants and Management Consultants) Abavana House, Abavana Junction 27 Kotobabi Road P. 0. Box AN 12266 Accra-North Ghana

~' ; J. 't ·· \ ?

I

BENNING, ANANG & PARTNERS

Abavana House, Abavana Junction 27 Kotobabi Road, Kotobabi P. 0 . Box AN 12266 Accra-North Ghana

Our Ref: MIS:101 Your Ref:

(Chartered Accountants & Management Consultants)

Telephone : +233(0)302-235669 , 237205, 246626-7 Mobile : +233(0)242-206406 , 244-806509 Fax : +233(0)302-246628 E-mail : [email protected]

21st June, 201 7 The Chief Di rector

Ministry of Lands and Natural Resources

Land Administration Project

P. 0. Box M.212

Accra

Dear Sir,

MINISTRY OF LANDS AND NATURAL RESOURCES LAND ADMINISTRATION PROJECT (LAP 2) IDA CREDIT NO. 4870-DFTAD GRANT NO.TF-14256, AND GOVERNMENT OF GHANA FUND

FINANCIAL STATEMENTS AND THEIR RELATED MANAGEMENT LETTER AUDIT: 31ST DECEMBER, 2016

We have completed the audit of the Second Land Administration Project (LAP 2) for the year ended

31 51 December, 2016 and have the pleasure of forwarding the Financial Statements and their related

Management Letter to you.

Principal ph1ce of business .it which ii list of p.irtn ers' n.ime is available: Abt1Vilnil House, Abavana Junction, 2"/ l(otolu!.1 R,nd, Ku!ot..-bi .<\cu•-Uh.a:,,i

\ ' I)

I

MINISTRY OF LANDS AND NATURAL RESOURCES SECOND LAND ADMINISTRATION PROJECT (LAP 2) IDA CREDIT NO. 4870-GH DFTAD GRANT NO. TF- 14256 AND

GOVERNMENT OF GHANA FUND

2

The Financial Statements and the Management Letter have been bound together for purposes of easy reference and have been shown by the following contents:-

Contents

Corporate Information

Abbreviations and acronyms

Part "A" - Financial Statements

Independent Auditors' Report

Statement of Financial Position

Statements of Funds Received

Project Cost Summary

Statement of Sources and Uses of Funds

Notes to the Financial Statement

Special Accounts Statements

Independent Auditors' Report

PART "B" Management Letter

Preamble of the letter

Content

Project Matters in General

System of Accounting and Internal Control Matters

Current Matters

Matters previously Reported

Acknowledgement

Page

3

4

5

6

10

11

12

12

15

18

26

31

32

33

34

35

36

39

40

I

MINISTRY OF LANDS AND NATURAL RESOURCES

SECOND LAND ADMINISTRATION PROJECT (LAP 2) IDA CREDIT NO. 4870-GH DFTAD GRANT NO. TF- 14256 AND


FINANCIAL STATEMENTS FOR THE YEAR ENDED

Management Team

Chief Director Project Co-ordinator Financial Controller Financial Management Specialist Project Administrator

Auditors

31ST DECEMBER, 2016

Professor Bruce Banoeng-Yakubo Dr: Benjamin Quaye Mr. John Wallace Koomson Mr. Seidu A. Sarunah Mr. Kofi Abaka Blankson

Benning, Anang & Partners

3

Chartered Accountants & Management Consultants Abavana House, Abavana Junction 27 Kotobabi Road, Kotobabi P.O. Box AN 12266 Accra North, Ghana

Project Bankers Bank of Ghana

I

MINISTRY OF LANDS AND NATURAL RESOURCES Sl~COND LAND ADMINISTRATION PROJECT (LAP 2)

IDA CREDIT NO. 4870-Gll, DFTAD GRANT NO. TF- 14256 AND GOVERNMENT OF GHANA FUND

FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 5

T DECEMBER, 2016

ABBREVIATIONS AND ACRONYMS

The following Abbreviations and Acronyms are used .

CIDA

GOG

IDA

LAP

MLNR

MOFEP

NPMU

NRMP

NPSC

PCU

RPSC

RPMU

US$

GHCC

Canadian International Development Agency

Government of Ghana

International Development Association

Land Administration Project

Ministry of Lands and Natural Resources

Ministry of Finance and Economic Planning

National Project Management Unit

National Resource Management Program

National Project Steering Committee

Project Coordinating Unit

Regional Project Steering Committee

Regional Project Management Unit

United States Dollar

Ghana Cedis

4

PART "A" - FINANCIAL STATEMENTS

MINISTRY OF LANDS AND NATURAL RESOURCES SECOND LAND ADMINISTRATION PROJECT (LAP 2) IDA CREDIT NO. 4870-GH, DFTAD GRANT NO. TF 14256 AND


FINANCIAL STATEMENT

31 DECEMBER 2016

BENNING, ANANG & PARTNERS (Chartered Accountants and Management Consultants) Abavana House, Abavana Junction 27 Kotobabi Road P. 0. Box AN 12266 Accra-North Ghana

s

BENNING, ANANG & PARTNERS (Chartered Accountants & Management Consultants)

Abavana House, Abavana Junction 27 Kotobabi Road , Kotobabi P. 0 . Box AN 12266 Accra-North Ghana


Telephone : +233(0)302-235669, 237205, 246626-7 Mobile : +233(0)242-206406 , 244-806509 Fax : +233(0)302-246628 E-mail : [email protected]

INDEPENDENT AUDITORS' REPORT TO THE MINISTRY OF LANDS AND NATURAL RESOURCES SECOND LAND ADMINISTRATION PROJECT (LAP 2) IDA CREDIT NO. 4870-GI-I, DFTAD GRANT NO. TF 14256 AND GOVERNMENT OF GHANA FUND

Report on the Financial Statements Opinion

6

We have audited the financial statements of the Second Land Administration Project (LAP 2), financed under IDA Credit No. 4870-GH, DFTAD Grant No. TF-14256 and Government of Ghana Fund for the year ended December 31, 2016 set out pages 10 to 22. These Financial Statements comprise the Statement of the financial position at 31 December, 2016 Statement of Funds Received, Project cost summary and Statement of Sources and uses of funds for the year then ended and a summary of significant accounting policies and other explanatory notes.

In our opinion proper books of account have been kept and the financial statements, which arc in agreement therewith, give a true and fair view of the state of affairs of the project as at 31 December 2016 and the statement of funds received and the project cost summary for the year then ended in accordance in accordance with the accounting policies on page 16 and are in compliance with IDA Credit No. 4870-GH, DFTAD Grant No.TF 14256 and Government of Ghana Fund.

Additionally, in our opinion: (i) Goods and services financed have been procured in accordance with the relevant financing

agreement (ii) All necessary supporting documents, records and accounts have been kept in respect of all

project activities (iii) With respect to the Statement of Expenditure (SOEs), adequate supporting documentation has

been maintained in respect of expenditures incurred in accordance with the requirements of the Loan Agreement. These expenditures incurred are found not only to be accurate and proper but also that the disbursement method is reliable.

(iv) Adequate internal control policies and procedures have been implemented by the project. (v) Rules and guidelines especially procurement of goods and service and the disbursement

handbook of the Bank have been complied with. (vi) Clear linkages exist between the books of account and the financial statements presented to the

Bank ' ·

(vii) All external funds have been used in accordance with the conditions of the financing agreements, with the due attention to economy and efficiency and only for the purposes for which the financing was provided and

(viii) The Government of Ghana Fund has been provided and used in accordance with the financing agreement, with the due attention to economy and efficiency, and only for the purposes for which the financing was provided.

I

BENNING, ANANG & PARTNERS {Chartered Accountants & Management Consultants)

INDEPENDENT AUDITORS REPORT TO THE MINISTRY OF LANDS AND NATURAL RESOURCES SECOND LAND ADMINISTRATION PRO.JECT (LAP 2) IDA CREDIT NO. 4870-GII, DFTAD GRANT NO. TF 14256 AND GOVERNMENT OF GHANA FUND (continued)

Basis of Opinion

7

We conducted our audit in accordance with International Standards on Auditing. Our responsibili ty under those standards are further described in the auditors responsibilities for the Audit of the financial statements section of our report. We are independent of the Ministry of Lands and Natural Resources of the Land Administration Project (LAP 2) in accordance with the International 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 financial statements in (Ghana), and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our op1111on.

Responsibilities of The Management of Project Coordinating Unit (PCU) Of the Ministry of Lands and Natural Resources of the Land Administration Project (LAP 2) for the Financial Statements The Management of Project Coordinating Unit (PCU) Of the Ministry of Lands and Natural Resources of the Land Administration Project (LAP 2) is responsible for the preparation and fair presentation of the financial statements in accordance with International Financial Reporting Standards for Small and Medium-sized Entities (IFRS for SMEs) and for such internal control as the Management of Project Coordinating Unit (PCU) determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Management of the Project Coordinating Unit (PCU) is responsible for assessing the Land Administration Project (LAP 2) 1 's ability 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 of the Project Coordinating Unit (PCU) either intends to liquidate the Second Land Administration Project (LAP2) or to cease operations, or has no realistic alternative but to do so.

The Management of the Project Coordinating Unit (PCU) is responsible for overseeing the Second

Land Administration Project (LAP2)'s financial reporting process.

I


INDEPENDI~NT AUDITORS REPORT TO THE MINISTRY OF LANDS AND NATURAL RESOURCES SECOND LAND ADMINISTRATION PROJECT (LAP 2) IDA CREDIT NO. 4870-GII, DFTAD GRANT NO. TF 14256 AND GOVERNMENT OF GHANA FUND (continued)

Auditors' Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with International Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.

As part of an audit in accordance with International Standards on Auditing, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting 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 override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Land Administration Project's (LAP2) internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Management of Project Coordinating Unit (PCU).

• Conclude on the appropriateness of the Management of Project Coordinating Unit (PCU) use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Second Land Administration Project (LAP2)'s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors' report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors' report. However, future events or conditions may cause the Second Land Administration Project (LAP2) to cease to continue as a going concern.

8

I

9


INDEPENDENT AUDITORS REPORT TO THE MINISTRY OF LANDS AND NATURAL RESOURCES SECOND LAND ADMINISTRATION PROJECT (LAP 2) IDA CREDIT NO. 4870-GII, DFTA D GRANT NO. TF 14256 AND GOVERNMENT OF GHANA FUND (continued)

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with the Management of Project Coordinating Unit (PCU) regarding, among other matters, the planned scope and timing of the audit and significant audit findings , including any significant deficiencies in internal control that we identify during our audit.

The Engagement Partner on the audit resulting in this independent auditors' report is

Festus Eugene Adu Mantey (ICAG/P/1038),

~ A~~I';:;G/;;:/045) Chartered Accountants Abavana House, Abavana Junction Accra Ghana

.1~.~ ... ?.:::1. ....... 2017 I

I

10


IDA CREDIT NO. 4870-GH, DFTAD GRANT NO. TF 14256 AND GOVERNMENT OF GHANA FUND

STATEMENT OF FINANCIAL POSITION

AS AT 31ST DECEMBER, 2016

Note 2016 2015

US$ US$

Project Expenditure 10 39,249,064 32,850,829

Current Assets Cash and Bank Balances I I 4,431,564 4,732,271

Advances to Implementing Agencies 12 643,848 436,347 5,075,412 5,168,618

Cu rrcn t Liabilities Accruals 13 (6,061) (5,021)

44,318,415 38,014,426 Net Asset

Reprcsen ted By:

IDA Long Term Credit 14 40,789,099 34,485,110 DFTAD Grant 15 2,500,919 2,500,919 Government of Ghana Fund 16 1,028,397 1,028,397

44:318:415 38:014:426

The year 2016 financial statements were approved by the Project Management Team on

J~.-~7 .......... 2017 and signed on its behalf by:

I

Financial Controller

The notes on pages 15 to 22 form an integral part of these financial statements

I

MINISTRY OF LANDS AND NATURAL RESOURCES SECOND LAND ADMINISTRATION PROJl~CT (LAP 2)


STATEMENT OF FUNDS RECEIVED FOR THE YEAR ENDED 31ST DECEMBER, 2016

Note 2016 US$

International Development Agency (IDA) Credits 2 6,303,989 DFTAD (CIDA)-Grant 3 Government of Ghana Contributions 4

Total Funds received during the year 6,303,989

11

2015 US$

9,964,918 1,603,307

27,701

11,595,926

I

Expenditure Category

Civil Works Goods Consulting


IDA CREDIT NO. 4870-GH, DFTAD GRANT NO. TF 14256 AND


PROJECT COST SUMMARY FOR THE YEAR ENDED

31ST DECEMBER, 2016

NOTE 2016 2015 Cumulative to

Expenditure Expenditure 2016

US$ US$ US$

5 1,537,331 1,727,340 3,840,087

6 907,954 2,060,421 7,652,833 7 1,265,792 2,067,792 10,740,834

Training, Workshops and Studies 8 649,733 966,213 8,358,762

Recurrent Cost 9 2,037,425 1,721,657 8,656,548 Total 6,398,235 8,543,423 39,249,064

Analysis of current year's project cost by funding agencies

Category IDA GOG CIDA US$ US$ US$

Civil Works 1,537,331 Goods 907,954 Consulting 1,265,792 Training, Workshops and Studies 649,733 Recurrent Cost 2,037,425 Total 6,398,235

Analysis of Project cost as at 31st December 2015


Civil Works 1,251,420 475,920

Goods 1,692,181 368,240 Consulting 1,691 ,129 376,663 Training, Workshops and Studies 773,407 78 192,728

Recurrent Cost 1,115,659 29,414 576,584 Total 6,523,796 29,492 1,990,135

12

Cumulative to 20 IS

US$

2,302,756 6,744,879 9,475,042 7,709,029 6,619, 123

32,850,829

TOTAL US$

1,537,331 907,954

1,265,792 649,733

2,037,425 6,398,235

TOTAL US$

1,727,340 2,060,42 1

2,067,79~ 966,213

1,721 ,657 8,543,423

I

MINISTRY OF LANDS AND NATURAL RESO URC ES SECOND LAND ADMINISTRATION PROJ~CT (LAP 2)

IDA CREDIT NO. 4870-GH, DFTAD GRANT NO. TF 14256 AND

GOVERNMI~NT OF GHANA FUND

PROJECT COST SUMMARY FOR THE YEAR ENDED

31ST DECEMBER, 2016

Analysis of project costs at 31st December 2016 funding agencies


Civil Works 3,349,083 491,004

Goods 7,094,556 558,277 Consulting 9,903 ,924 269,487 567,423 Training, Workshops and Studies 8,011,204 39,927 307,631 Recurrent Cost 7,423,792 656,172 576,584 Total 35,782,559 965,586 2,500,919

Analysis of cumulative project cost at 31st December, 2015 by funding agencies


Civil Works 1,811 ,752 491,004

Goods 6,186,602 558,277

Consulting 8,638,132 269,487 567,423 Training, Workshops and Studies 7,361 ,471 39,927 307,631 Recurrent Cost 5,386,367 656,172 576,584 Total 29,384,324 965,586 2,500,919

13

TOTAL US$

3,840,087 7,652,833

I 0,740,834 8,358,762 8,656,548

39,249,064

TOTAL US$

2,302,756 6,744,879 9,475,042 7,709,029 6,619,123

32,850,829

I

MINISTRY OF LANDS AND NATURAL RESOURCES

SECOND LAND ADMINlSTRATION PROJECT (LAP 2) IDA CREDIT NO. 4870-GH, DFTAD GRANT NO. TF 14256 AND


STATEMENT OF SOURCES AND USES OF FUND FOR THE YEAR ENDED 31ST DECEMBER, 2016

Opening cash Balances

IDA Designated Account No. l GoG Counterpart Fund CIDA Account Others Unretired advances in Project Accounts

Add : Sources of Funds (Recv during the period) !DA-Withdrawal Application Disbursed GoG Counterpart Fund CIDA Account Cash available

Less: Uses of funds, by Project Component Expenditure Categories

Works Goods Consulting Services Training, workshops & study tour Recurrent cost

Total Expenditure

Net Cash Available

Closing cash balances IDA Special Account

GoG Project Account CIDA Account Unretired advances in Project Accounts

Total closing cash balances

2016 US$

5,168,618

4,682,526 . 49,745

436,347

6,303,989 6,303,989

11,472,607

1,537,331 907,954

1,264,753 649,733

2,037,425

6,397,196

5,075,412

4,420,076 11,488

643,848 5,075,412

14

2015 US$

2, 116, 115

858, 196 (14 ,774) 386,828 885 ,865

11 ,595,926 9,964,918

27,701 1,603,307

13,712,041

1,727,340 2,060,421 2,067,792

966,213 1,721,657

8,543,423

5,168,618

4,682,526 49,745

436,347 5,168,618

MINISTRY OF LANDS AND NATURAL RESOURCES Sl~COND LAND ADMINISTRATION PROJECT (LAP 2) IDA CREDIT N0.4870-GH, DFTAD GRANT NO. TF14256 AND


NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST DECEMBER 2016

1.1 Reporting Entity

(a) (i) Financing Agreement Project Name Loan Agreement Number Lender Date of signature for Project Effect date of Project Amount of Loan Agency in charge of Project Project Implementing entity Term of project implementation

(ii) Extension of closing date

(LAP-2) IDA Credit No. 4870-GH International Development Association (IDA) 31 March, 2011 8 August, 2011-31 March, 2013 IDA 50 Million Resources (MLNR) Project coordinating Unit (PCU) 5 years: 31 March2011-31 March2016

15

The closing date provided in Section IV.B.2 of the Agreement is revised to read as February 28, 2018.

(b) Activity: The Second Land Administration Project is a continuation of Phase 1 and intended to implement the key policy actions recommended in the Ghana Land Policy of 1999 to address critical issues militating against effective Land administration in the country. It also aims to consolidate the gains made under Phase 1 by deepening the reforms, enable the land sector agencies to be more responsive to client, cut down the cost and time of doing business and providing an enabling environment to reflect the objective of an efficient and transparent service delivery.

(c) Components Component 1: Strengthening the Policy, Legal and Regulatory Framework • Completion of land and land use bills • Partnership with the Judiciary • Specific Supporting Studies

Component 2: Decentralizing and Improving Business Service Delivery Processes • Decentralization of service delivery • Streamlining business procedures

Component 3: Improved Maps and Spatial Data for Land Administration • Developing policies for surveying and mapping and other spatial a .. • Preparation of base maps • Establishment of Geodetic Reference Network • Boundary Demarcation • Preparation of Land Use plans • Revaluation of properties • Street addressing and property identification

I

MINISTRY OF LANDS AND NATURAL RESOURCES SECOND LAND ADMINISTRATION PRO.JECT (LAP 2) IDA CREDIT N0.4870-Gll, OFTAD GRANT NO. TF142S6 AND



Component 4: Human Resource Development and Project Management • Human Resources Development • Gender Equality Mainstreaming • Communication and Public Outreach • Project Coordination and Management

(d) Project Coordinating Unit

16

The Ministry of Lands and Natural Resources is responsible for the overall management of the project, including;

(i) Chairing the National Steering Committee which has strategic and oversight responsibility, and

(ii) Hosting the Project Coordinating Unit (PCU) which coordinates the day-today implementation of project activities, including the preparation the Financial Statements. Funds received are accounted for on cash basis.

1.2 Accounting Policies

The following are the significant accounting policies adopted in the preparation of these financial statements.

a. Basis of preparation (i) Statement of compliance

The financial statements have been prepared m accordance with International Financial Reporting Standard (IFRS).

(ii) Basis of measurement The financial statements have been prepared under the historical cost convention, as modified by the revaluation of investment property, financial assets and financial liabilities at fair value.

(iii) Use of estimate and judgement The preparation of financial statements in conformity with IFRSs requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis . Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

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MINISTRY OF LANDS AND NATURAL RESOURCES SECOND LAND ADMINISTRATION PROJECT (LAP 2) IOA CREDIT N0.4870-GII, DFTAD GRANT NO. TFI4256 AND


NOTES TO TIIE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST DECEMBER 2016

b. Preparation of financial statements

(i) Functional and presentation currencies

17

The financial statements are presented in United States Dollar($) which is the reporting currency for the financial statements.

(ii) Transactions and balances a. Eligible expenditures in local currencies reimbursable by the World Bank have been

translated into US Dollar at the rate of exchange ruling on the date of such expenditures/transactions.

b. Balances dominated in local currency are translated into US$ at the exchange rate ruling at the Statement of Financial Position date. All differences arising from movements in foreign exchange rate are dealt with through the Foreign Exchange Gain or Loss Account.

(c) Property, plant and equipment (i) Recognition and measurement

Property, plant and equipment represent the expenditure incurred mainly in acquiring office equipment and motor vehicles for use by the Management Team.

This is measured at the actual contracted cost of purchase. Cost includes expenditures that directly attributable to bringing the asset to the location and working condition necessary for it to be capable operating in the manner intended by management. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment.

(ii) Subsequent costs Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, when it is probable that the future economic benefits associated with the item will flow to the Project and the cost of the item can be measured reliably. All other repairs and maintenance expenditures are charged to the statements of receipts and expenditures during the financial period in which they are incurred.

(iii) Depreciation No depreciation is charged in the financial statements.

(d) Donor Funds Funds received are accounted for on cash basis

( e) Donor Expenditure

Expenditure is accounted for on cash basis. The cumulative expenditure is capitalized . in the Statement of Financial Position

(:f) Project Expenditure Alt expenditures incurred for the Project are capitalized 111 the Statement of Financial Position

(g) Income Income is recognized on cash basis and credited to the respective donor's accounts .

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IDA CRl~DIT NO. 4870-GH DFTAD GRANT NO. TF14256 AND GOVERNMENT OF GHANA FUND


3. DFTAD (CIDA) Grant

Thi s comprises funds received in the followin g withdrawal applications .

2016 2015 Paid thro US$ US$ MFL/LAP2/C005 336,988 MFL/LAP2/C006 219,494 MFL/LAP2/C008 162,898 MFL/LAP2/CO I 0 86,669 MFL/LAP2/CO 11 152,918 MFL/LAP2/CO 12 188,542 MFL/LAP2/CO 13 236,604 MFL/LAP2/CO 14 - 55,482 -

0 1,439,595 Direct Payments: MFL/LAP2/C007 542,410 Refunds during the year - (378,698) -

!l 1,603,307

4. Government of Ghana (GOG) Contributions Withdrawal during the year - 27,70J. -

!l 21,701

I ()

I

S Works


IDA CREDIT NO. 4870-GI-l, DFTAD GRANT NO. TF14256 AND GOVERNMENT OF GHANA FUND


2016 US$

2016 US$

(Cumulative)

2015 US$

2015

US$ (Cumulative)

Construction and renovation of offices 1,537,331 3,840,087 1727340 2,302,756

6 Goods Cross Country Vehicles Pick-up 4 x 4 Vehicles

Buses Saloon Cars Motorcycles

Furniture Office equipment Communication equipment

Other equipment and materials

7 Consulting

Local consulting

International Consulting Services

Professional charges (Audit Fees)

8 Training Local training

Overseas training

Workshops

9 Rccu rren t Cost

132,202

220,266

555,486 907,954

663,978

595,753

6,061

1,336,116 1,503,909

70,376 77,272

50,074

402,258

3,041,406 384,685

786,737 7,652,833

5,251,685

5,473,046

16,103

25,953

161,192

1,724,3 98

148,878 2,060,421

634,973

1,427,798

5,021 1,265,792 10,740,834 2,067,792

121,263

331,035

I 97,435 649,733

1,484,407

1,930,607

4,943,748 8,358,762

316,712 229,461

420,040 966,213

1,336, 116

1,503,909

70,376 77 ,272

50,074

270,056

2,821 ,140 384,685

231,251 6,744,879

4,587,707

4,877,293

10,042 9,475,042

1,363,144

1,599,572 4,746,313 7,709,029

Compensation 185,988 185 ,988

Per diem/ Allowances 80,429 1,510,120 519,393 1,429,691

Vehicles operation and maintenance 291,457 1,351,958 196,059 1,060,501

Equipment operation and maintenance 6,290 163,378 6,925 157,088

Salaries and Allowances 646,314 2,119,834 498,269 1,473,520 Other Allowances 32,579 333,247 108,351 300,668 Stationery, Printing, Supplies and Consumables 69,367 489,700 107,765 420,333 Meeting Expenses 653 ,232 1,868,589 225,653 1,215,357 Miscellaneous (Communications, Adverts, Utilities 257,757 633,734 59,242 375,977 ----'-------'------'------'--2,037,425 8,656,548 1,721,657 6,619,123

20


IDA CREDIT N0.4870-GH, DFTAD GRANT NO.TFI4256 AND GOVERNMENT OF GHANA FUND

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST DECEMBER, 2016

2016

10 Project Expenditure US$ Civil Works 3,840,087

Goods 7,652,833

Co nsultin g (Audit fee inclusive) I 0,740,834 T raining workshop 8,358,762

Recurrent cost 8,656,548

2015 US$

2,302,75 6 6,744,879 9,475,042 7,709,029 6,619,123

39,249,064 32,850,829

11 Cash and Bank Balance !DA Spec ia l account-USO 4,392,526 4,682, 526 !DA Special account-GH<I: 27,550 GOG Account I I 488 49 745

4,431,564 4,732,271

12 Advances to Implementing Agencies Lands Commission 166,234 165,921 Town & Country Planning Department 153,936 O ffice of The Administrator of Stool Lands 237,391 I 17,714 Accra Metropolitan Assembly 6,914 313 Ministry of Justice 17,790 18,220 Coalition Of Civil Organisations on Land (CICOL) 61,583

Project Coordinating Unit (PCU) 787

643,848 302,955

2 1

MINISTRY OF LANDS AND NATURAL RESOU RCES SECOND LAND ADMINISTRATION PROJECT (LAP 2)

IDA CREDIT NO. 4870-Gll, DFTAD GRANT NO. TFI4256 AND GOVERNMENT OF CHANA FUND

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST DECEMBER, 2016

13 Accruals This relates to Profess ional charges (Audit fees)

for the 20 16 audit.

14 IDA long-term credit Balance at I st January

Withdrawal during the year

Balance at 31st December

15 DFTAD/CIDA Grant Balance at I st January Withdrawal during the year

Less amounts refunded


16 Government of Ghana Fund Balance at I st January

Withdrawal during the year


2016 US$

6,061

34,485,110 6,303,989

40,789,099

2,500,919

2,500,919

1,028,397

1,028,397

2015

5,021

24,520,192 9,964,9 18

34,485,110

897,61 2 1,982,005 {378,698)

2,500,919

1,000,696 27,701

1,028,397

I

23




Telephone : +233(0)302-235669 , 237205 , 246626-7 Mobile : +233(0)242-206406 , 244-806509 Fax : +233(0)302-246628 E-mail : [email protected]

INDEPENDENT AUDITORS' REPORT ON THE SPECIAL ACCOUNTS STATEMENT OF MINISTRY OF LANDS AND NATURAL RESOURCES SECOND LAND ADMINISTRATION PROJECT (LAP 2) IDA CREDIT NO. 4870-GII, DFTAD GRANT NO. TF 14256 AND GOVERNMENT 01<' GHANA FUND

Report of the Special Accounts Statement Opinion We have audited the Special Accounts Statement of the Land Administration Project (Ministry of Lands and Natural Resources), set out on page 25 . The Special Accounts were established under IDA Credit No. 4870-GH, and DFTAD Grant No. TF 14256.

In our opinion , the Special Accounts Statement receipts in 2016 have been properly accounted for and the Special Accounts Statement withdrawals in 2016 were made for the purposes of the Project in accordance with the provisions of IDA Credit No. 4870-GH and DFTAD Grant No . TF 14256.

Basis of Opinion

We conducted our audit in accordance with International Standards on Auditing. Our responsibility under those standards are further described in the auditors responsibilities for the Audit of the financial statements section of our report. We are independent of the Land Administration Project (Ministry of Lands and Natural Resources) in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for Profess iona l Accountants (IESBA Code) together with the ethical requirements that are relevant to our audit of the financial statements in (Ghana), and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

The Land Administration Project's Unit responsibilities on the Special Accounts Statement The Administration Project's Unit of the Ministry of Land and Natural Resources is responsible for the overall management of the project, and the preparation and fair presentation of the Special Accounts Statement in accordance with IDA and DFTAD financial reporting guidelines.

Auditors' Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors ' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with International Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate , they cou Id reasonab ly be expected to influence the economic decisions of users taken on the basis of the financial statements.


INDEPENDENT AUDITORS' REPORT ON nm SPECIAL ACCOUNTS STATEMENT OF MINISTRY OF LANDS AND NATURAL RESOURCES SECOND LAND ADMINISTRATION PROJECT (LAP 2) IDA CREDIT NO. 4870-GH, DFTAD GRANT NO. TF 14256 ANO GOVl~RNMENT OF GHANA FUND (continued)

24


• ldenti fy and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting 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 override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that arc appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Land Administration Project's (LAP2) internal control.


• Conclude on the appropriateness of the Management of Project Coordinating Unit (PCU) use of the goi ng concern basis of atcounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Second Land Administration Project (LAP2)'s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors' report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors' report. However, future events or conditions may cause the Second Land Administration Project (LAP2) to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events 111 a manner that achieves fair presentation.

We communicate with the Management of Project Coordinating Unit (PCU) regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.


Festus Eugene Adu Mantey (ICAG/P/1038)

B~ ~~45) Chartered Accountants Abavana House, Abavana Junction Accra Ghana

JLUAi ~J. .. .. ..................... ; ..... 2017


IDA CREDIT NO. 4870-GH, DFTAD GRANT NO. TFl4256 AND GOVERNMENT OF GHANA FUND

SPECIAL ACCOUNT STATEMENT FOR THE YEAR ENDl( D 31ST DECEMBER 2016

2016 2015 IDA IDA US$ US$

Opening Balance at I st January 4,682,526 858, 196

Funds received 6,103,770 9,335,408

Funds available for programme activities 10,786,296 10,193,604

Less Special Account closing Balance at 31st December 4,420,076 4,682,525

Funds applied 6,366,220 5,511,079

Application of Funds Eligible expenses incurred and reimbursed during the year 5,722,372 5,074,732

Funds applied on Project Activities 5,722,372 5,074,732

Discrepancy 643,848 436,347

Discrepancy explained Expenditures yet to be reimbursed

Refund of unutilised balance to CIDA

Advances to Implementing Agencies 643,848 436,347

Total 643,848 436,347

The above Special Account Statement was approved by The Project Management Team on

.~ ... ~7( ..... 2017 and signed on its behalf by:-

....... fhb ....... .

2016 CIDA

US$

Chi~/;i·r~~~·r· .. Financial Controller

201S CIDA

US$ 386,827

I .439,595 1,826,422

1,826,422

1,447,754

1,447,754 378,668

378,698

378,698





Telephone : +233(0)302-235669, 237205, 246626-7 Mobile : +233(0)242-206406 , 244-806509 Fax . +233(0)302-246628 E-mail : [email protected]

INDEPENDENT AUDITORS' REPORT TO IDA CREDIT NO. 4870-GII, DFTAD GRANT NO. TF14256 AND GOVERNMENT OF GHANA FUND MINISTRY OF LANDS AND NATURAL RESOURCES SECOND LAND ADMINISTRATION PROJECT (LAP 2) ON THE STATEMENT OF EXPENDITURES (SOES)/ REQUESTS

Report on the Statement of Expenditures (SOEs)/Rcquests Opinion

26

We have audited the Project Coordinating Unit's financial statements for the year ended, 31 51

December, 2016 and during the course of our audit we examined the Statement of Expenditures (SOEs)/requests submitted to the World Bank /DFTAD/CIDA during the year under review in support of the app lications for reimbursements from the credit, pursuant to IDA Credit No. 4870-GH and DFTAD Grant No. TF 14256.

In our opinion, the Statement of Expenditures (SOEs)/requests submitted, and the supporting documentation submitted with it, together with the internal control and procedures involved in their preparation, can be relied upon to support the applications for reimbursement in accordance with the requirement of the credit agreement.

Basis of Opinion

We conducted our audit in accordance with International Standards on Auditing. Our responsibility under those standards are further described in the auditors responsibilities for the Audit of the financial statements section of our repo1i. We are independent of the Ministry of Lands and Natural Resources Second Land Administration Project (LAP 2) in accordance with the International 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 financial statements in (Ghana), and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

The Project Coordinating Unit Management Responsibilities on the Statement of Expenditures of (SOEs) Request The Project Coordinating Unit is responsible for the preparation and fair presentation of the Statement of Expenditure Request in accordance with World Bank and DFT AD financial reporting guidelines.

Auditors' Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or e1Tor, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with International Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decis ions of users taken on the basis of the financial statements.


lNDEPENDENT AUDlTORS' REPORT TO IDA CREDIT NO. 4870-GH, DFTAD GRANT NO. TF14256 AND GOVERNMENT OF GHANA FUND MINISTRY OF LANDS AND NATURAL RESOURCES SECOND LAND ADMINISTRATION PROJECT (LAP 2) ON THE STATEMENT OF EXPENDITURES (SOES)/ REQUESTS (continued)

27


• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting 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 override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Land Administration Project's (LAP2) internal control.


• Conclude on the appropriateness of the Management of Project Coordinating Unit (PCU) use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material unce11ainty exists related to events or conditions that may cast significant doubt on the Second Land Administration Project (LAP2)'s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors' report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors' report. However, future events or conditions may cause the Second Land Administration Project (LAP2) to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events 111 a manner that achieves fair presentation.

We communicate with the Management of Project Coordinating Unit (PCU) regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.


Festus Eugene Adu Mantey (ICAG/l>/1038)

B~~~~~S) Chartered Accountants Abavana House, Abavana Junction Accra Ghana

~ ..... ?.::J,....2017

MlNISTRY OF LANDS AND NATURAL RESOURCES SECOND LAND ADMINISTRATION PROJECT (LAP 2)

IDA CREDIT NO. 4870-GH, DFTAD GRANT NO. TF14256 AND


ACTIVITY AND VARIANCE REPORT BY COMPONENTS FOR THE YEAR ENDED

31ST DECEMBER 2016

Year to date (Cummulative) a b C d e

Original Variance Variance Allocation Budget Actual (b-c) (d/b)

Uses of funds, by Project Component US$ US$ US$ US$ %

Component I : Strengthening the Policy, Legal and Regulatore Framework 1.1 Completion of land and land use bi! Is 1,830,000 555,000 324,678 230,322 41.50 1.2 Partnership with the Judiciary 1,819,294 6,131,700 173,211 5,958,489 97.18 1.3 Specific Supporting Studies 600,000 100,558 - I 00,558 100.00

Component 2 : Decentralizing and Improving Business Service Delivery Processes 2. 1 Decentralistion of service delivery 6,420,000 491,000 402,293 88,707 18.07 2.2 Streamlining business procedures 14,170,000 3,141,000 139,008 3,001 ,992 95.57

Component 3 : Improved Maps and Spatial Data for Land Administration 3. l Developing policies for surveying and

mapping other: Spatial activities 470,000 120,000 73,563 46,437 38.70 3.2 Preparation of base map 7,910,000 310,002 133,2 18 176,784 57.03

3 .3 Establishment of Geodetic Reference Network 2,260,000 - 67,288 (67,288)

3.4 Boundary Demarcation 1,950,000 - 360,745 (360,745)

3.5 Preparation of Land Use plans 3,560,000 696,923 4,021 692,902 99.42 3.6 Revaluation of properties 4,410,000 49,998 - 49,998 100.00 3.7 Street addressing and property identification 2,380,000 10,000 267,876 (257,876)

Component 4 : Human Resource Development and Project Management 4.1 Human Resources Development 4,400,000 200,000 I ,118.068 (918,068) (459 .03) 4.2 Gender Equal ity Mainstreaming 740,000 62 ,000 9.030 52,970 85.44 4.3 Communication and Public Outreach 849,706 105 ,001 8.664 96,337 91.75 4.4 Project Coordination and Management 4,110,000 961,271 3,315.532 (2,354,261) (244.91)

57,879,000 12,934,453 6,397,196 l 6.537,258

28

Project Life (Cummulative) f g h

Variance Variance

Actual (a-f) (g/a)

USS USS %

708,519 1,121,481 16

1,048,507 780,787 43 48,418 551 ,582 92

4,610,354 1,809,646 28 2,073 ,751 12,096,249 85

459,730 10,270 2

4,490,139 3,419,861 43

831,034 1,428,966 63

606,536 1,343,464 69

1,822,593 1,737,407 49

- 4,410,000 100 1,728,175 651 ,825 27

5.320,983 (920.983) (2 1) 861.762 ( 121.762) ( 16)

732.386 11 7.3~0 : 14 13.910,786 (9.800.786Jj (23 8) 39,2-B,670 18.635.330

Categories


IDA CREDIT NO. 4870-GH, DFTAD GRANT NO. TF14256 AND GOVERNMENT OF GHANA FUND

EXPENDITURE BY CATEGORIES FOR THE YEAR ENDED

31ST DECEMBER 2016

Revised Year

Allocation To Date Project Life (Cum)

Actual Actual Variance

USS USS USS USS

I Goods, Works, Non-Consulting Services, Training and Operating Cost (Part A,B,C,D) 4,126,824 - 3,851,272 275.552

2 Goods for Parts A,B,C (except for Part C.5) and D 8,619,361 1,537,331 4,573 ,288 4,046,073

3 Works for Parts A,B,C (except for Part C.5) and D 4,856,773 907,954 2,956,845 1,899,928

4 Non-Consulting Services for Parts A,B,C (except for Part C.5) and D 17,685,590 - - 17,686,590

5 Consulting Services for Parts A,B,C (except for Part C.5) and D 13 ,166,491 1,264,753 10,821 ,3 14 2,345. 177

6 Training for Parts (except for Part 5 C-Street Addressing) 4,571 ,091 649.733 8,295,812 (3 ,724.721)

7 Operating Cost Parts A,B,C and D 2,790,810 2,037,425 8,745, 139 (5,954,329)

8 Goods, Works, Non-Consulting Services for Part C.5 2,06 I ,060 - - 2,06 1,060

Total 57,878,000 6,397,196 39,243,670 18,635,330

29

Variance 0/ u

6.68

46.94

39. 12

100.00

17.8 1

( 8 1.48)

(2 13.35)

100.00

32.20



MANAGEMENT LETTER

315T DECEMBER, 2016

BENNING, ANANG & PA.RTNERS (Chartered Accountants and Management Consultants) Abavana House, Abavana Junction 27 Kotobabi Road P. 0 . Box AN 12266 Accra-North Ghana

30





Telephone : +233(0)302 235669, 237205 , 246626-7 Mobile : +233(0)302 242 -206406, 244-806509 Fnx : +233(0)302 246628 E-mail : [email protected]

31

21 st June , 2017 The Chief Director Ministry of Lands and Natural Resources Second Land Administration Project (LAP2) P. 0 . Box M.212 Accra

Dear Sir,

Second land Administration Project (Lap 2) IDA Credit No. 4870-Gh DFTAD Grant No.TF14256 Government of Ghana Fund Ministry of Lands and Natural Resources Management Letter Audit: 31 December 2016

1. We have completed the audit of the Financial Statements of the Second Land Administration Project (LAP2) for the year ended 31st December, 2016 in accordance with the Terms of Reference (TOR) which you submitted to us.

2. In accordance with our normal practice and during the course of our audit for the year ended 31 st December, 2016 of the Land Administration Project, we examined the internal controls which Management has established to ensure, as far as possible, the reliability of the Project's records and to safeguard its assets.

3. The examination of the system of internal controls which we carried out cannot be expected necessarily to disclose every weakness. For this reason the matters dealt with in this report are only those which came to our attention arising from or relevant to our audit.

4. As part of reference, we are writing to you to draw your attention to the matters which came to our notice during the examination of the transactions carried out under the IDA Credit No. 4870-G H, DFTAD Grant No.TF 14256 and the Government of Ghana Fund for the year ended 31 st December, 2016 and to offer such suggestions as will help improve the system of internal control.

Principal place of business al wh ich u hsl orpan1~ rs' name is aV11 ilahlc· Ab:w,111,1 House. Abwtm:i Junction. 21 K.:i tc,b.11>' R~.d. Kotobal,1 A .. -crn·G h.-ina

Jill

32

5. For ease ofreference, we have summarized our report under the fo llowing I-l ead ings :-

Content Page

I. PROJECT MATTERS IN GENERAL 33

Reporting Entity 33

Project matters in general 34

SYSTEM OF ACCOUNTING AND INTERNAL CONTROL MATTERS 35

Land Administration Programs Unit 35 General Observation 35 Accounting Manual 35 Procurement Procedures 35 Statement of Expenditure (SOE) 35

II CURRENT MATTERS 36

Project funds borrowed without requisite authorisation (TCPD) 36 Differences in Implementing Agencies balances 36 Non-ascertainment of year end balance (C[COL) 37

III MATTERS PREVIOUSLY REPORTED 38

Log book Irregularities 38 Regional LAP Co-ordinators 38

Inadequate fixed assets register details 39

IV ACKNOWLEDGEMENT 39

I. PROJECT MATTERS IN GENERAL Reporting Entity

6. (a) (i) Financing Agreement Project Name Loan Agreement Number Lender Date of signature for Project Effect date of Project Amount of Loan Agency in charge of Project Project Implementing entity Term of project implementation

(ii) Extension of closing date

(LAP-2) IDA Credit No. 4870-GH lnternational Development Association (IDA) 31 March, 2011 8 August, 2011-31 March, 2015 lDA 50 Million Resources (MLNR) Project coordinating Unit (PCU) 5 years: 31 March 2011 - 31 March 2016

33

The closing date provided in Section IV.B.2 of the Agreement is revised to read as February 28,2018.

(b) Activity The Second Land Administration Project (LAP2) is a World Bank financed Project supported and co-financed by DFT AD with contribution from the Government of Ghana. The project is a Continuation of phase 1 and intended to implement the Key policy actions recommended in the Ghana Land Policy of 1999 to address critical issues militating against effective Land administration in the Country. It also aims to consolidate the gains made under Phase 1 by deepening the reforms, enable the land sector agencies to be more responsive to client, cut down the cost and time of doing business and providing an enabling environment to reflect the objectives of an efficient and transparent service delivery.

(c) Component Component 1: Strengthening the Policy, Legal and Regulatory Framework Completion of land and land use bills Partnership with the Judiciary Specific Supporting Studies

Component 2: Decentralizing and Improving Business Service Delivery Processes Decentralization of service delivery Streamlining business procedures

Component 3: Improved Maps and Spatial Data for Land Administration Developing policies for surveying and mapping and other spatial a .. Preparation of base maps Establishment of Geodetic Reference Network Boundary Demarcation Preparation of Land Use plans Revaluation of properties Street addressing and property identification

Component 4: Human Resource Development and Project Management Human Resources Development Gender Equality Mainstreaming Communication and Public Outreach Project Coordination and Management

34

(d) Pro.ject Coordinating Unit The Ministry of Lands and Natural Resources is responsible for the overall management or the project, including;

(i) Chairing the National Steering Committee which has strategic and oversight responsibility, and

(ii) Hosting the Project Coordinating Unit (PCU) which coordinates the day-to-day implementation of project activities, including the preparation of Financial Statements. Funds received are accounted for on cash basis .

Project matters in general

7. In carrying out the audit of the Second Land Administration Project (LAP2) for the year ended 3151 December, 2016, we ensured that the conduct of our audit was organized around the following areas for which we have presented opinion, pursuant to the IDA Credit No.4870-GI I, DFTAD Grant No.TF-14256 and Government of Ghana Fund.

8. The areas we concentrated the audit assignment on are in respect of:

(i) Auditing of the Project's financial statements via the various Project functions in terms of internal controls and accounting controls more especially concerning:-

i. Accounting systems

ii. Procurement function

iii . Financial control function and monitoring of financial operations.

(ii) Auditing of the statement of Special Accounts by checking the calculations already made on which amounts used against the Special Accounts were based and reconciling the amounts already reimbursed.

(iii) Auditing the Statement of Expenditures (SOEs) which extends to expenditure authorization, expenditure documentation and original vouchers, expenditure recording and verification ensuring that expenditures were made in conformity with the Credit and Grant Agreements.

(iv) Auditing the procurement terms of schedule to the Credit and Grant Agreements to confirm compliance with and implementation of the provisions of the Credit and Grant a Agreements concerning procurement.

9. In cases of non-compliance which result in weaknesses in the course of the audit conducted in the above areas, we are accordingly highlighting them in the subsequent paragraphs of this letter.

35

SYSTEM OF ACCOUNTING ANO INTERNAL CONTROL MATTERS

Land Administration Programs Unit (LAPU)

I 0. The Ministry of Lands and Natural Resources (MLNR) is the executing agency with an oversight implementation responsibility by the National Project Steering Committee.

General Observations

11 . The Special Account Cash Books for IDA Credit No. 4870-GH, DFTAD Grant, J\lo . Tl: 14256 and Government of Ghana Fund have been properly kept. End of year Trial Balances and draft Financial Statements were made available to us for the audit.

Accounting Manual

12. The Land Administration Programs Unit (LAPU) has adopted National Resource Management Programme (NRMP) accounting manual in the implementation of the Land Administration Project in line with MLNR policy.

Procurement Procedures

13. In the course of our audit, we reviewed the procurement procedures to ensure that the IDA procurement guidelines were complied with.

We confirm that at the LAPU, where major procurements take place, at least three invoices or quotations from suppliers were obtained and evaluated before the award of contracts under the price quotation method of procurement to ensure value for money. Other contracts were awarded on the basis of National Competitive Tendering (NCT) and International Competitive Tendering (ICT) which was advertised as required for short listing and evaluation.

14. These procurement procedures which were applied to Goods and Services were in accordance with the IDA and Public Procurement Authority guidelines. The necessary World Bank approvals (No objections) were sought where necessary.

Statement of Expenditures (SO Es)

15. In accordance with the requirements of the Credit and Grant Agreements, we examined and verified summary Statement of Expenditures (SOEs) in respect of eligible expenditures incurred during the year under review. All underlying documents were scrutinized to ensure that the expenditures were properly authorized.

II. CURRENT MATTERS

16. Project funds borrowed without requisite authorisation (TCPO) Criteria

36

According to the Project Financing Agreement funds meant for the project should be specifically used for its activities.

Finding We noted that on the 28th of October, 2016 an amount of GH¢40,000 was transferred (borrowed) by TCPD from the LAP Project account to Sustainable Land and Water Management Project (SL WMP) Account without the appropriate authorization from L/\P Management.

As at 9111 June, 2017 only GH¢ 10,000 has been refunded back into LAP Project Account with the Agency

Cause SL WMP's 2016 GoG funding delayed and that project needed money to support the Strategic Environmental Assessment (SEA) for Special Development framework of the Northern Savanna Ecological Zone, hence funds were borrowed from LAP2 to run the project.

Implication Funds earmarked for specific project work can be diverted to other unauthorized uses at the disadvantage of the project.

Recommendation Monies meant for requisite project work should be used solely for such act1v1t1es. Any emergence short term borrowings from the project fund should by duly authorized by the responsible officials of the Project Co-ordinating Unit.

Management response PCU will follow up with TCPD for the full refund of the unauthorized amount of 30,000 cedis.

17. Difference in Implementing Agencies Balances Criteria Best management practices requires regular reconciliation of balances between the implementing agencies and records kept on agencies at the Project Co-ordinating Unit (PCU).

Finding We noted the following differences in the balances shown per implementing agency on our

. "t t th . VISl 0 e agencies: Balance per Aprox. Balance.s Difference

LAP2 in Dollar noted converted@

4.178 GH¢ GH¢ GIi¢

Land Commission (LC) 166,234.09 98,341.83 67,892.26 Town & Country Planning Dept (TCPD) 153,936.00 32,349.88 121 ,586:l~ Office of Admin. of Stool Lands (OASL) 237,391.39 106,655.23 130,736. 16 Accra Me.tro Assembly (AMA) 6,914.28 352.35 6,561.93 Judicial Service (JS) 17,790.08 9,866.35 7,923.73 Civil Society Coalition on Land (CICOL) 61,583.39 1,672.66 59,911.1~

37

C.iusc Returns forwarded to the PCU were in most cases delayed and schedule officers do not follow up regularly on such returns .

Balances were also not regularly reconciled between the PCU and the agencies .

Implication There would be two separate balances unreconciled, being depicted in two financial records (one for the PCU and other for the agencies). Eventually the PCU would not be portraying the correct balances in the year end financial statement.

Recommendation Management should ensure returns from the agencies are regularly di spatched to the PCU . Furthermore, schedule officer should visit agencies under their transactions and reconci le balances between the agencies and that of PCU

Management response The difference is largely due to expenditures incurred by the Agencies of which the returns arc yet to be submitted to PCU for retirement or documentation.

Finance Unit of PCU will intensify monitoring of project Accounts with Agencies by visiting and carrying out monthly reconciliation as the project is in its final stages of implementation.

'

18. Non-ascertainment of year end balances (CICOL)

Criteria Best accounting practices require that a separate bank account and cash book 1s kept and operated to depict year end bank and cash balances for the project (LAP 2).

Finding We were unable to capture the correct year end bank balance for LAP 2 in the :-ecords of CICOL since three (3) agencies (Oxfam, LAP 2 and International Land Coalition) were all using one bank account by the close of the year 31st December, 2016. Furthermore CICOL's cash book was not operated to depict its year end cash bqlance for LAP 2 unless recalculated from transaction postings in the cash book. · · ·

Cause Management do not see the need for operating a separate bank account for the project and also keeping their cash book to depict closing year end bafances. .

Implication The agency's dealings with LAP 2 (Project Co-ordinating Unit) would not be transparent.

Recommendation A separate bank account should be opened and . operated solely in the name of LAP 2. Furthermore, the cash book operated should depict monthly cash balances and end of year balance. This should be reconciled with the bank balance if they are not the same.

Management response Management will follow up with CICOL for the necessary reconciliations and possible refund of un used Project funds.

'

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III. MATTERS PERVIOUSLY REPORTED

19. Log book Irregularities

Criteria Best management practices requires that the log book is properly and completely filled at any time to ensure monitoring of drivers and fuel consumption.

Finding Review of the log books maintain for these three vehicles, GV 149-14, GM 401 6- 12 and GM 4033-12 (GV 150-14), which were available revealed some irregularities. Notably among them were:

(a) Non completion of column for "Drivers Name". (b) Non completion of column for "Vehicle Number". (c) Speedometer readings recording not regularly entered sequentialiy. ( d) Authorisation of transport officer for the use of vehicles not sighted. ( e) Drivers not signing against their entries in the log book. (t) Departmental head's authoristion not sighted. (g) Wrong usage dates of vehicles (for example 2010/2015 instead of 2016)

Recommendation We recommend that the log book is properly and completely fill up. Furthermore, officials responsible for authorisation and supervision of drivers should also exercise their required mandate.

Current status Partially implemented.

20. Regional LAP Co-ordinators

Criteria Best accounting practices requires that advances granted for carrying out project activities are retired regularly as and when such activities are completed or outstanding balances refunded to the Project Co-ordinating Unit.

Finding Included in advances paid to implementation agencies as at 31st December, 2015 was the t 11 °d t R . l LAP C d' t " o owmg ue o eg1ona o-or ma ors:

US$ Greater Accra Region 2,809.00 Western Region 4,385.96 Upper East Region 4,385.00 Upper West Region 1,585.96 Northern Region 4,048 .82

17,214.74

These balances were still outstanding as at 31st December, 2016 without retirement or refund. Returns received in 2016 indicated that Northern Region, Upper East and West Regions have retired their balances with Western Region retiring only US$548 . However, Greater Accra Region have its 2015 balance still outstanding.

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Recommendation Management should ensure that officials who are allocated advances retire these morncs promptly after completion of project activities or refund outstanding balances.

Current status Supporting documents on expenditures have been received from Western Region. PCU is still following up on supporting retirement documentation from the Greater Accra Region .

21. Inadcq uate fixed assets register details

Criteria Best accounting practices requires that detail information about fixed asset acqu1s1t1on including date of purchase, name of supplier, value of asset and location of asset is kept.

Findings We noted that the assets register maintained by the Lands Commission does not contain adequate information on the assets.

A complete fixed assets register must contain the following information:

(a) Description of the asset (b) Date of purchase ( c) The cost of the asset (d) Depreciation, where applicable ( e) Unique identification code of the asset (f) The location of the asset (g) The date of acquisition of the asset (h) Date of Disposal etc.

Maintenance of fixed assets register has enormous benefits to the Lands Commission. Management will be able to keep track of each fixed asset, ensuring control and preventing misappropriation of assets. It also keeps track of the correct value of assets, which allows for computation of insurance and other related expenses.

Recommendation Management must ensure that proper fixed assets register is maintained and updated regularly.

Current Status The Commission has started updating its register with the available information it obtained from the PCU and estates department upon the transfer of/or acquisition of assets, but needs to intensify efforts.

IV. ACKNOWLEDGEMENT

We would like to take this opportunity to thank the Management and Staff of the Second Land

Administration Project (LAP 2) for their co-operation and assistance during the course of the audit of

the Project's financial statements for the year ended 31 st December, 2016.

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