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THlE WORLD BANK

YOUTH EMPLOYMENT AND SOCIAL SUPPORT OPERATION(YESSO)

(FEDERAL MINISTRY OF FINANCE)

FINANCIAL STA TEMENTSFOR THE PERIOD ENDED 3 1 ST DECEMBER, 2016

AUDITED BY

OFFICE OF THE AUDITOR-GENERAL FOR THE FEDERATIONPlot 273, Central Business District,

Abuja

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YOUTH EMPLOYMENT AND SOCIAL SUPPORT OPERATION

FINANCIAL STATEMENT FOR THE YEAR ENDED31ST DECEMBER 2016

TABLE OF CONTENTS

CONTENT PAGE

Operation Information Profile 2

Report of Auditors 3

Statement of Financial Position 4

Statement of Financial Performance 5

Statement of Changes in Net Assets / Equity 6

Statement of Cash flow 7

Notes to the Financial Statements 8-13

1

YOUTH EMPLOYMENT AND SOCIAL SUPPORT OPERATION

OPERATION MANAGEMENT TEAM

1. Mr. Peter M. Papka National Coordinator (Up to 3 0 th June 2016)

2. Mr. Andrew David Adejo National Coordinator (From July 2016)

3. Mr. Bamidele 0. Akinola Project Accountant

4. Mr. Anthony N. Kalu Head of Services (Up to 3 0 th June 2016)

5. Mrs. Hajara Umar Sanni Head of Operation

6. Mrs. Roseline Olaomi Team Leader, YESSO NDE

BANKERS: UNITED BANK OF AFRICA PLC.

ZENITH BANK PLC

PROJECT AUDITORS Office of the Auditor General for the Federation.Audit HousePlot 273, Samuel Ademulegun Street,Central Business District,P.M.B. 128, Garki,Abuja, Nigeria.

2

OFFICE OF THE AUDITOR-GENERAL FOR THE E tIONDEPARTMENT

HEADQUARTERS: LAGOS OFFICAudit House, 5, Sir Mobola BPlot 273, Samuel Ademulegun Street, P.M.B. 12503Central Business District, Lagos, NigeriaP.M.B. 128,Garki-Abuja, Nigeria Tel:+234(1) 2632335

0 NIE%0

Ref No ........THE PRINCIPAL OFFICERS (MANAGEMENT),

REPORT OF THE INDEPENDENT AUDIT ON THE FINANCIAL STATEMENT OF THEYOUTH EMPLOYMENT AND SOCIAL SUPPORT OPERATION (YESSO) (WORLD BANKASSISTED)

We have audited the Financial Statements of the Youth employment and Social Support

Operation (YESSO) (World Bank Assisted) for the year ended 3 1st December, 2016 as set out on

pages 4 to 7 which have been prepared on the basis of the Accounting Policies set out in Note 1

on page 8 - 13.

MANAGEMENT'S RESPONSIBILITY FOR THE FINANCIAL STATEMENTSThe Management of the Project is responsible for the preparation and fair presentation of the

Financial Statements in accordance with the International Public Sector Accounting Standards

(IPSAS) accrual and also for instituting such internal controls as the Management determines it

necessary to enable the Financial Statements that are free from material misstatement.

AUDITORS' RESPONSIBILITYOur responsibility is to express an independent opinion on the Financial Statements based on our

audit. We conducted the audit of Youth employment and Social Support Operation (YESSO) inaccordance with the International Standards of Supreme audit Institutions (ISSAls) aspromulgated by the International Organisation of Supreme Audit Institutions (INTOSAI). These

standards require that we comply with ethical requirement, plan and perform the audit so as to

obtain reasonable assurance about whether the Financial Statements free from material

misstatements, whether caused by fraud or other irregularity or error.

The procedures selected for obtaining assurance and evidence to support audit opinion dependson the auditors' judgment, including assessment of the risk of material misstatement of the

Financial Statements. In making those risk assessment, we considered the Internal Control

relevant to Youth employment and Social Support Operation (YESSO) preparation and fair

presentation of the Financial Statements. We also evaluated the appropriateness of the

accounting policies used and the reasonableness of accounting estimates made by Management,as well as the overall presentation of the Financial Statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a

basis for our audit opinion.

OPINIONIn our opinion, the Financial Statements, which are in agreement with the books of account,

present a true and fair view of the financial position of Youth employment and Social Support

Operation (YESSO) (World Bank Assisted) as at 3 1st December, 2016, and of its performance of

its operations, changes in net assets, its cash flows for the year ended 3 1st December, 2016 and

have been prepared in accordance with the International Public Sector Accounting Standards

(IPSAS) accrual, accounting principles generally accepted in Nigeria and in the manner required

by the World Bank.

I. A. AD YEFor: Auditor-General for the Federation

2 1 st June, 2017

YOUTH EMPLOYMENT AND SOCIAL SUPPORT OPERATION (YESSO)

STATEMENT OF FINANCIAL POSITION AS AT 31ST DECEMBER 2016

ASSETS NOTES 2016 2015CURRENT ASSETS N N

Cash and Cash equivalent 3 5,539,696,457 4,703,827,711Receivables 1,171,160 -

Total Current Assets (a) 5,540,867,617 4,703,827,711

NON CURRENT ASSETSProperty Plant and Equipment (b) 4 403,863,165 359,598,435

Total Assets C = (a) + (b) 5,944,730,782 5,063,426,146

LIABILITIES:

Current Liabilities:

Unremitted Taxes 5 22,440,123 8,713,083

Net Assets Fund / EquityIDA credit 8,908,115,195 7,589,934,786Federal government contribution 85,767,110 -

State government contribution 323,194,918 156,210,171Surplus / Deficit for the Year (703,354,670) (2,350,306,003)Accumulated Surplus / (Deficit) (2,691,431,894) (341,125,891)

5,944,730,782 5,063,426,146

Mr. Andrew David Adejo (National Coordinator)................................

M r. Bamidele 0. Akinola (Project Accountant) .............. ......... . ....... ..........

4

YOUTH EMPLOYMENT AND SOCIAL SUPPORT OPERATION (YESSO)STATEMENT OF FINANCIAL PERFORMANCE FOR THE YEAR ENDED 31ST DECEMBER 2016

2016 2015NOTES N N

REVENUEOther receipts 6 7,739,725 1,479,792TOTAL 7,739,725 1,479,792

EXPENDITURE

Operations Development Expenditure:

Non Consulting Services 7 11,266,050 4,050,841Consulting 8 70,884,154 54,576,071Operating Costs 9 565,908,093 267,080,059Training 10 91,485,538 89,309,799Disbursement to States 11 430,648,500 2,006,709,296SOEs Under Processing 32,132,566 24,783,124Cash Transfer / Stipends to Beneficiaries 1,592,090 27,000Depreciation 4 131,594,689 95,081,560TOTAL PAYMENTS 1,335,511,680 2,541,617,750

Surplus / (Deficit) from Operating Activities for (1,327,771,955) (2,540,137,958)

Exchange Gain 624,417,285 189,831,955

Total Surplus / (Deficit) for the Period (703,354,670) (2,350,306,003)

5

STATEMENT OF CHANGES IN NET ASSET / EQUITY FOR THE YEAR ENDED 31ST DECEMBER 2016

ACCUM.FED GOVT STATE GOVT EXCHANGE SURPLUS /

IDA CREDIT CONT CONT DIFFERENCE DEFICIT TOTALfN N N4 N4 N N

Balance as at 1/1/2016 7,589,934,786 - 156,210,171 189,831,955 (341,125,891) 7,594,851,021Additional Fund 1,318,180,410 85,767,110 166,984,748 - - 1,570,932,268

Exchange Gain - - - 624,417,285 - 624,417,285

Surplus / Deficit from

Operating Activities - - - (703,354,670) (703,354,670)

Balance as at 31st Dec 2016 8,908,115,196 85,767,110 323,194,919 814,249,240 (1,044,480,561) 9,086,845,904

6

YOUTH EMPLOYMENT AND SOCIAL SUPPORT OPERATIONSTATEMENT OF CASHFLOW FOR THE YEAR ENDED 3 1 sT DECEMBER 2016.

2016 2015Cash Flow From Operating ActivitiesINFLOWS:Revenue from Exchange Transaction 7,739,725 1,479,792Revenue from Non Exchange Transaction 624,417,285 189,831,955

632,157,010 191,311,747OUTFLOWS:Non Consulting Services (11,266,050) (4,050,841)Consulting (70,884,154) 54,576,071Operating Cost (565,908,093) (267,080,059)Training (91,485,538) (89,309,799)Disbursement to States (430,648,500) (2,006,709,296)SOEs Under Processing (32,132,566) (24,783,124)Cash Transfer / Stipends to Beneficiaries (1,592,090) (27,000)Net Cashflow / Outflow from Operating A (571,759,981) (2,146,072,301)

Cash Flow from Investing ActivitiesAcquisition of Assets 175,859,419 (97,727,335)Net Cash Flow From Investing Activities ( 175,859,419 (97,727,335)Cash Flow from Financing Activities:IDA Credit 1,318,180,410 2,106,021,808Federal Government Contribution 85,767,110State Government Contribution 179,540,626 117,208,171Net Cash Flow From Financing Activities ( 1,583,488,146 2,223,229,979Net Cash Flow for the Year (a)+(b)+(c 835,868,746 (20,569,657)Cash and Cash Equvalent at 1/1/2016 4,703,827,711 4,724,397,368Cash and Cash Equvalent at 31/12/ 5,539,696,457 4,703,827,371

Cash and Bank Balance at 31/12/20 5,539,696,457 4,703,827,711

7

NOTE 1: STATEMENT OF COMPLIANCE WITH IPSASThe financial statements set out above are in compliance with the requirements of the InternationalPublic Sector Accounting Standards (IPSAS), where applicable subject to the statement of accountingpolicies disclosed below.

NOTE 2: STATEMENT OF ACCOUNTING POLICIESThe following are the significant accounting policies adopted in the preparation and fair presentationof the financial statements.

(a) BASIS OF ACCOUNTING

The Financial Statements have been prepared under the historical cost convention. No adjustmenthave been made in respect of effects of inflation and rising prices.

(b) FUNDSAll contribution by the financiers was recognized when received and capitalized as IDA Credit / Fund.Subsequently, the Fund is increased or reduced by surplus or deficit from the Statement of FinancialPerformance.

(c)RECOGNITION OF REVENUE / EXPENDITURERevenue and expenditure are recognised when they become receivable or payable, incurred orearned.

(d) NON CURRENT ASSETS(i) Non Current Assets that are not in use are stated at cost.(ii) Depreciation are charged on all assets in use at applicable rate in compliance with the IPSAS

standard as stated below:

ASSET RATE %i. Plant and Machinery 15ii. Field Equipment 25iii. Office Equipment 25iv. Motor Vehicles 20v. Office Furnitures 20

(e) FOREIGN CURRENCYTransactions in foreign currencies are converted into Naira at the rates of exchange ruling at the dateof each transaction. Balance in foreign currencies are translated into Naira at the exchange ratesruling at the reporting date.

Exchange differences arising from the foreign currency translations are also recognised.(f) DEFFERED TAXATIONNo provision was made for deferred taxation because the Operation is exempted from payment ofincome tax.

8

YOUTH EMPLOYMENT AND SOCIAL SUPPORT OPERATION

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31ST DECEMBER 2016

NOTE 3 2016 2015CASH AND CASH EQUIVALENT f 14

Special Account 4,260,561,406.00 3,554,841,842.16Special Account CBN 91,395,260.00Counter Part Account 77,144,214.47 78,259,252.71Counter Part Account CBN 15,505,028.50Draw Down Account 1,042,497,149.51 1,070,726,616.01Draw Down Account CBN 52,593,398.51TOTAL 5,539,696,456.99 4,703,827,710.88

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NOTE 4

PROPERTY PLANT AND EQUIPMENT SCHEDULE

OFFICEPlant & FIELD OFFICE MOTOR FURNITURE &Equipment EQUIPMENT EQUIPMENT VEHICLE FITTINGS TOTAL

N4 N N N 1 11Cost as at 1/1/2016 60,000 11,266,355 71,704,857 350,140,895 21,507,888 454,679,995Addition During the Year 2,899,785 - 29,724,666 136,675,068 6,559,900 175,859,419Cost as at 31/12/2016 (a) 2,959,785 11,266,355 101,429,523 486,815,963 28,067,788 630,539,414Depreciation Charges:Balance as at 1/1/2016 9,000 2,816,589 17,926,214 70,028,179 4,301,578 95,081,560Charge During the Year 443,968 2,816,589 25,357,381 97,363,193 5,613,558 131,594,689Total as at 31/12/2016 (b) 452,968 5,633,178 43,283,595 167,391,372 9,915,136 226,676,249Carring Amount as at31/12/2016 (C = (a) - (b) 2,506,817 5,633,177 58,145,928 319,424,591 18,152,652 403,863,165

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NOTE 5UNREMITTED TAXES 2016 2015

Unremitted VAT 10,352,808.91 4,279,541.40

Unremitted WHT 12,087,314.52 4,433,541.41TOTAL 22,440,123.43 8,713,082.81

NOTE 6OTHER RECEIPTS N Interest Received from Dollar Bank A/C 7,631,597.00 1,403,938.00Interest Received from Naira Bank A/C 9,563.00 74,104.00Miscellaneous Receipts 98,565.00 304,489.00TOTAL 7,739,725.00 1,782,531.00

NOTE 7NON CONSULTING SERVICES N NPromotional Materials 10,911,050.00 2,054,500.00ID card for Beneficiaries 355,000.00Start Pack to Skill for Jobs Participants -_TOTAL 11,266,050.00 2,054,500.00

NOTE 8CONSULTING N NConsultancy Fees 36,483,724.89 36,657,740.95Wages for Support Staff 20,098,468.96 13,705,181.17External Auditors 54,620.00Production of Jingles 20,000.00 -Advocacy and Sensitization 1,521,700.00 459,000.00Remunerations for Consultancy 10,061,436.42 22,249,940.76Reinbersement for Consultants 2,698,823.58 40,709,025.00

70,884,153.85 113,835,507.88

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NOTE 9OPERATING COST M MTechnical Back Up by FOCU Staff 480,000.00Budget & Work planing Workshop for FOCU Staff - 244,000.00Orientation Training & National Launch 2,058,992.00Review workshop for Finalization of M & E 988,850.00Quarterly Meeting of FOCU & SOCU 732,000.00Assessment of State Govt Preparedness 1,146,000.00Office Space and Other Operational Costs 3,544,825.00 6,423,050.00NDE Skill for Jobs Operations 38,253,922.62 34,604,506.00Sensitization of Communities 2,603,400.00 6,010,700.00Technical Visit to States 13,076,980.92 799,630.00Monitoring the Selection of Beneficiaries 910,180.00Periodic / Quarterly Monitoring of Implementatic 1,188,000.00 4,043,680.00Impact Evaluation of the CCT Program 136,000.00Meals and Refreshment for Sundry Meetings 1,958,400.00 2,720,560.00Stakeholders Consultative Workshop 4,260,900.00 553,800.00Office Maintenance 6,709,730.00 4,413,230.00Vehicle Insurance/ Expenses 20,072,764.00 44,545,543.45Equipment Rental & Maintenance 3,596,740.00 1,686,500.00Utilities 263,806.01 818,906.30Travelling Expenses 76,445,110.54 91,662,068.16YESSO Launch 3,129,000.00Sensitization 1,229,000.00 5,528,900.00Adhoc Staff 4,908,000.00 400,000.00Step down Training/ Advocacy and Sesitization 9,062,225.00 5,536,800.00Unified Registry of Beneficiaries Activities 119,185,985.00 108,976,399.28Redress of Grieviances 600,720.00PIU Staff/ SOCU Operations 6,937,000.00 7,350,500.00Media Promotion 9,429,813.70 7,274,616.50Meetings 20,105,873.00 21,069,445.00Attendance at Meetings outside the State 14,605,850.00 23,098,924.80Advert for Procurement of Goods & Consultancy 1,892,694.33 2,524,640.44Public Awareness 1,529,250.00 2,977,290.00Establishment of M&E Framework 37,800.00 1,526,000.00Routine M&E Activities 666,130.00 2,788,200.00Telephone / Intenet Expenses 9,826,600.00 11,235,930.00Consumables 3,372,530.00 8,113,936.44PFMU Expenses 13,162,725.00 15,912,797.00Selection of Beneficiaries 15,000.00Sensitization Expeses 9,833,715.00 2,125,880.00Orientation 6,744,250.00 140,000.00Study Tour for Project Staff 571,000.00 888,000.00House Numbering 12 4,359,040.00 1,379,880.00

Identification of Potential Poor Household 3,773,400.00 2,938,760.00Visit to Identified Poor House hold 233,740.00 172,000.00Community Gathering to Validate Selected 1,111,500.00Collation into Unified URB 6,908,401.50 4,530,000.00Postage/ Courier 867,279.00 985,408.00Domestication of Generic Operation Manual 124,500.00Reimbersement of Operating Cost 1,234,980.00 4,490,500.00Ancillary Expense 16,550,370.00 4,292,850.00Stationeries 9,034,020.00 11,506,424.39Bank Charges 1,501,216.50 1,472,256.50Overhead 4,173,920.00 2,950,200.00Flexible Accounting Software Maintenance 948,860.00Productivity Allowance 95,856,334.00 39,744,000.00Maintenance of Office Furniture and Fittings 328,200.00 547,550.00Maintenance of Generator 2,523,492.00 89,200.00Environmental and Sound Safeguard 9,542,100.00TOTAL 565,908,093.12 509,528,484.26

NOTE 10TRAINING f4 f4Local Training 92,369,912.00 77,753,430.98Reimbursement for TrainingOverseas Training 884,373.68 41,084,024.71TOTAL 93,254,285.68 118,837,455.69

NOTE 11DISBURSEMENT TO STATES

STATE f4 f4BAUCHI 39,628,456.89 16,210,260.40CROSS RIVER 19,660,839.00 15,031,920.60EKITI 37,469,885.69 12,673,531.70KOGI 55,183,200.35 143,397,908.50KWARA 105,884,126.69 39,866,428.00NIGER 80,542,573.00 29,000,944.00OSUN 61,106,691.68 26,124,187.51OYO 31,172,726.66 17,413,835.00Balance of Disbursement 1,706,990,280.28TOTAL 430,648,499.96 2,006,709,295.99

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