AGENCY FOR WOMEN AND ‘CHILDREN DEVELOPMENT en rs Cees IMPROVING INTERNAL ORGANIZATIONAL CAPACITY FOR STAFF AND ENHANCED HUMANITARIAN WORKING ENVIRONMENT. FINANCED BY CAPAD IMPLEMENTED BY AGENCY FOR WOMEN AND CHILDREN DEVELOPMENT (AWACD) SOUTH SUDAN AUDIT REPORT FOR THE PERIOD 1 FEBRUARY 2019 TO 31 JANUARY 2021 Aconsultancy mancnea,20a1 | eo CERTIFIED PUBLIC ACCOUNTANTS Juba South Sudan GCEL CONSULTANCY CERTIFIED PUBLIC ACCOUNTANTS MARCH, 2021Agency For Women And Children Deseopmoent South Sudan TABLE OF CONTENTS. Background information .. 1.1 Information about Agency For Women And Children Development (AWACD) South Sudan. 1.2 Description of the Projects 1.3 Project Objectives 1.4 Specific object 1.5 Project financing, 2.0 Scope of engagement. 2.1 Auditor's responsibilities 2.1.1 Summary of results 2.1.2 Restriction on use and limi 2.2 Statement of management's responsibilities. 3.0 Independent auditors" report. 3.1 Opinion 3.1.1 Basis for Opinion 3.2 Project management's responsibility for the financial statements.. 3.3 Auditors’ responsibility... 3.4 Basis of Accounting and Restriction on Distribution and Use 4.0 Financial report... Income and Expenditure Statement... 4.1 Notes to the income and expenditure statement 4.1.1 Significant accounting policies... 4.1.2 Income... 4.1.3 Cash and Cash equivalents css 4.1.4 Taxation. 4.1.5 CurrencyAgen For Women Aud Cll Dencopovnt South Suda “At oor the prod 1 Feb 2019 031 Jarmay 2027 4.1.6 Receipts (Grant Incomes} 4.1.7 Project Expenditures .. 5.0 Report on our review of Project expenditure. 5.1 Introduction: 5.1.1 Respective responsibilities of Project management and the assurance provider. 5.1.2 Scope of our examination.. 5.1.3 Summary of work performed... We conducted interviews with Project management to understand the Project's key acti during the period under review. 5.1.4 Conclusion. 6.0 Audit Findings 6.1 Invoice and Voucher Invalidation ... 6.1.1 Observations ...csceeeeee _ 6.1.2 Implication. 6.2 Failure to automate accounting records and reports. 6.2.1 Observatior 6.2.2 Implications... 6.2.3 Recommendations. 6.3 Shortfalls in document and information filing 6.3.1 Observation... 6.3.2 Implications . 6.3.3 Recommendation: eeAqen Fer Women And Childe Deron Seat San Ans eo or th period 1 Feb 2019 t 31 Jannary 2021 Background information L.1 Information about Agency For Women And Children Development (AWACD) South Sudan. Agency for Women and Children Development (AWACD) is a South Sudan non-profit, non- political, voluntary and independent non-governmental national organization committed to: addressing the issues affecting the Women and Children in South Sudan, region and the World as well as providing a platform for the socio-economic inspiration and empowerment of the vulnerable and deprived local people of South Sudan and beyond through lobbying, mentoring, and networking, strategic alliances, and developing and recognizing the need for a sustainable economic development. Agency for Women and Children Development (AWACD) is a semi-autonomous and charity organization established in February 2016 and fully registered in February 24th 2020 under South Sudan Relief and Rehabilitation Commission (SSRRC) with Certificate of Reg No 2768 as the principal organization in South Sudan charged with the responsibility of coordinating, monitoring, regulating and supervising the activities pertaining the women and children welfares in the country. 1.2 Description of the Projects Agency For Women And Children Development (AWACD) faces capacity challenges in the areas of Board of Directors Governance, financial management and reporting, human resources, ‘communication strategy, procurement and logistics, monitoring and evaluation training, participatory methodology training, strategic plan development and review. All these require strong advocacy initiatives to enhance meaningful change. Conscious of its needs coupled with the desire to be an efficient and an effective organization in delivering on its mandate according to its mission and vision, AWACD has taken the initiative to improve on its capacity by focusing on systems strengthening, and emphasis on advocacy and ‘community engagement initiatives. In order to succeed in this plan, AWACD sought funding from CAPAD (in this referred to as the donor), to implement capacity building projects. ‘The project enhanced AWACD’s operational capacity at institutional and community levels as it relates to advocacy and community engagement. It is important that the organization have strong systems for better accountability end ability to disseminate messages regarding its work to the community, State Government, Donors and other many stakeholders. ‘The current project period under review runs from 1 February 2019 to 31 January 2021. 1.3 Project Objectives The overall project objective was to strengthen AWACD’s Oorganizational, govemance and staff capacity to effectively engage with local authorities and decision makers so as to jointly identify and address communities’ salient needs and priorities.Agency For Women And Chitéren Development South Sudan Aue report forthe period 1 Feb 2019 to 31 January 2021 1.4 Specific objectives: Improve its organizational capacity through enhanced skills in project proposal writing, financial management and internal control systems, procurement procedures. resource mobilization by the board, organizational structure of governance and documentations hence deepening its links with communities and groups that it represents: Increase its capacity to engage constructively with authorities and decision makers as well as purposefully engage in policy making processes; and iii). Form alliances between its self and with other actors to work on issues relevant to the needs and priorities of communities/groups. 1.5 Project financing ‘The total project budget for the entire project period, i.e., 1 February 2019 to 31 January 2021 was US Dollars 50,000.Agency For Women And Children Deselopoent South Sudan Ani report forthe period 1 Feb 2019 to 31 January 2021 2.0 Scope of engagement 2.1 Auditor’s responsibilities GCEL Consultancy has been engaged to address the following specific objectives of the CAPAD project entitled “Improving internal organizational capacity for staff and enhanced humanitarian working cavironment” funded by the CAPAD and implemented by Agency For Women And Children Development (AWACD) South Sudan for the period 1 February 2019 to 31 January 2021. (@) To perform an audit of the project in accordance with International Standards on Auditing (ISA 800 - Special Considerations - Audits of Financial Statements prepared in accordance with Special Purpose Frameworks) in order to provide special purpose audit report on the Project’s financial statements; (b) To report to the project management, fund manager and donor of any findin; significant internal control weaknesses, instances of non-compliance with the provisions of the Grant Contract and laws and regulations and to highlight such instances in a management letter. 2.1.1 Summary of results ‘© Our report on the project’s financial statements is unqualified (Section 4); and * Our conclusion on the project’s use of funds in accordance with the Grant Contract unqualified (Section 6). 2.1.2 Restriction on use and limitation of liability This report is intended solely for Agency for Women and Children Development (AWACD) South Sudan, and CAPAD who have sufficient understanding to consider the report in accordance with the terms of our engagement. Accordingly, the financial report and the related auditor's reports may not be suitable for any other purpose. We do not accept liability or responsibility to anyone other than CAPAD and Agency for Women and Children Development (AWACD) South Sudan who have ‘engaged our services for these reports or the conclusions expressed. 2.2 Statement of management's responsibilities ‘The management of Agency For Women And Children Development (AWACD) South Sudan is responsible for preparing financial statements that reflect a true and fair view of the state of affairs of the CAPAD Funded “Improving internal organizational capacity for staff and enhanced humanitarian working environment” project (the project) implemented by AWACD. It is also responsible for the maintenance of adequate accounting records and internal controls, the selection and application of suitable accounting policies, and safeguarding the assets of the Project. Management accepts responsibility for the financial report presented in Section 5 of this report, which has been prepared using appropriate accounting policies supported by reasonable and prudent Judgements and estimates, in conformity with the requirements of the Project.Asgngy For Women And Children Development Sout Sudan igen Ait rpors for the period 1 Feb 2019 to 31 January 2021 Management further accepts responsibility for the maintenance of the accounting records, which may be relied upon in the preparation of financial statements, as well as adequate systems of internal financial control. Management is of the opinion that the financial report gives a true and fair view of the Project’s financial report for the period | February 2019 to 31 January 2021. afer William Ruach Chany Imoli Paul Martha Executive Director Program Coordinator Agency For Women And Children Development (AWACD) Date: 02 March, 2021Scr consultancy ROCK CITY JUBA SOUTH SUDAN CONTACT, +211 917121611 / +211 924102405 EMAL: gelenseeney@pmeilcom 3.0 Independent auditors’ report 3.1 Opinion We have audited the financial statements of the “Improving intemal organizational capacity for staff and enhanced humanitarian working environment” project funded by the CAPAD and implemented by Agency For Women And Children Development (The Project) for the period 1 February 2019 to 31 January 2021, comprising the income and expenditure statement, a summary of significant accounting policies as set out in Section 5.1 and other explanatory information, In our opinion, the financial statements of the “Improving internal organizational capacity for staff and enhanced humanitarian working environment” project funded by CAPAD and implemented by AWACD for the period 1 February 2019 to 31 January 2021 are prepared, in all material respects, in accordance with the cash receipts and disbursements basis of accounting described in section 5.1 of this report. 3.1.1 Basis for Opinion We conducted our audit in accordance with International Standards on Auditin; responsibilities under those standards are further described in the Auditor's Respons! Audit section of our report. We are independent of the organization in accordance with the International Ethies 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 special purpose financial statements in South Sudan, 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 audit opinion, 3.2 Project management’s responsibility for the financial statements As stated in Section 3, Project management is responsible for the preparation of the Project financial statements on the basis of accounting described in Section 5.1.1, and for such intemal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Project management is also responsible for determining that the basis of accounting described in Section 5.1.1 is an acceptable basis for preparing the financial statements in the circumstances.3.3 Auditors’ responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. ‘An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation of the financial statements 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 entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. 3.4 Basis of Accounting and Restriction on Distribution and Use Without modifying our opinion, we draw your attention to Section 5.1.1 to the financial statements of the “Improving internal organizational capacity for staff and enhanced humanitarian working environment” project funded by CAPAD and implemented by Agency For Women And Children Development (AWACD) for the period 1 February 2019 to 31 January 2021 which describe the basis of accounting. The Project’s financial statements are prepared to assist Agency For Women And Children Development (AWACD) South Sudan to comply with their financial reporting obligations to CAPAD. As a result, the financial statements may not be suitable for any other purpose. Our report is intended solely for Agency for Women and Children Development (AWACD) South Sudan and CAPAD and should not be distributed to or used by other parties without our written approval. MARCH 02,2021, CERTIFIED PUBLIC ACCOUNTANTS Hike Juba South Sudan Geoffrey Oringa GCEL Consultancy Centfied Public Accountants, Juba South Sudan Date: 02 March, 20214.0 Financial report Agency For Women And Children Development (AWACD) Audit report for the period 1 Feb 2019 to 31 Jan 2021 Income and Expenditure Statement Buil 1g Acti C10 Overheads Costs (20%) Grant Income 4.1.6 |_| | a | ae ‘a1.o Organizational Capacity "Development (50%) ‘Advocacy & Constituency | Total Expenditure illiam uf Ruach Chany Executive Director Imoli Martha Paul Program Manager ‘Agency For Women And Children Development (AWACD) Date: 02 March, 2021Agency For Women And Children Development (AWACD) Audit report for the period 1 Feb 2019 10 31 Jan 2021 4.1 Notes to the income and expenditure statement 4.1.1 Significant accounting policies ‘The Principal accounting policies adopted in the preparation of these financial statements are set out below: fa) (b) (©) @ © o Accounting convention The incoine and expenditure statement has been prepared under the historical cost convention, on a cash basis of accounting. Income recognition Income is comprised of disbursements received during the period from the CAPAD. Income is recognized when cash is received. Taxation ‘The project did not receive any taxable income during the period under review. Expenditure Expenditure is recognized when costs are incurred, and cash paid out. Foreign currency transactions Project transactions have been incurred primarily in South Sudanese Pounds (SSP) and US Dollars. For purposes of reporting, the financial statements have been prepared in the reporting currency, the US Dollar. The exchange rates used for the SSP to the US Dollar are based on the Bank rate. Property and equipment The Project did not have any provision for acq using project funds during the period ion of assets. None were purchased 4.1.2 Income The project’s income consists of funds received from CAPAD. No income related to the project, has been left out ofthe project financial report. Grant Income is recognized on a receipt basis. 4.1.3 Cash and Cash equivalents ‘We did not perform any cash counts during the audit assignment since we were appointed after the project had been closed. 4.1.4 Taxation No provision for corporate taxation has been made in these accounts. The organization qualifies for exemption from corporate tax under the provisions of (Laws of South Sudan), Grants and donations are not subject to taxation.Agency For Women And Children Development (AWACD) Audit report for the period 1 Feb 2019 to 31 Jan 2021 4.1.5 Currency ‘The financial statements are presented in USD as the base reporting currency. 4.1.6 Receipts (Grant Incomes) ‘The organization received a total of US Dollars 50,000.00 from CAPAD during the period under audit as per the below schedule: o | Date “T0-Mar-2019 [2r-Sept-2019 16-Mar-2020 [30-Sepi-2020 4.1.7 Project Expenditures ‘The expenditures incurred by Agency For Women And Children Development South Sudan for implementation of the “ Improving internal organizational capacity for staff and enhanced humanitarian working environment” project for the period 1 February 2019 to 31 January 2021 were as per the table below: Budget alge Expenditures usD ALO Organizational Capacity Development (50%) AL10 Conduct tsinings of BoD on leadership and governance including code of conduct | 5 og A129 Conduct Thinings on planning, record management and reporting, M&E, resource mobilization, networking and fundsaising techniques 4108 A130 _ Conduct Staff training on basic excel, financial management , reporting and book- s keeping 1,200 M140. Conduct workshop fora seview on strategie Plan ae A150 Training on communication and development of the communication strategy “L600 ].41.60 | Coaduce Staff Trainings on perticipstory methodologies ia | A179 Workshop to seview the HR policies to include staff recruitment, appraisal, benefits, | AN70 | health and safety 900 | "ALO Staff Salaries i Sub Total (Organizational Capacity Development ) 2400 BLO Advocacy & Constituency Building Activities (30%) 3Agency For Women And Children Development (AWACD) Audit report for the period I Feb 2019 to 31 Jan 2021 Five Inter-communal dialogue on the role of youth and women in peace advocacy ara ae foes 3,408 Water 300 ree wo is transport refund 2,608 cases nea a ‘Translator's incentive 750 Say 219 iia 48 “Awaenens creation on ater communal peacebuilding through media advocacy Tao alk sow 00 incase ved pet = B23 Car hire 4075, Bids Ware 223 (su ‘Total (Advocacy & Constituency Building Activities) oa CRN ES | ESE aisle pate C12 | con for internet services 1300 Cig] cacti en Fo 15 C14 office stationary ee C15 | Bank changes 68 ‘Sub Total (Overhead Costs) 10,500 ‘Total Expenditures i Lt | 10Ageney For Women And Children Development (AWACD) Audit report for the period 1 Feb 2019 to 31 Jan 2021 5.0 Report on our review of Project expenditure 5.1 Introduction We conducted an audit of the project entitled “Improving internal organizational capacity for staff and enhanced humanitarian working environment” (the Project), implemented by Agency For Women And Children Development so as to report on the Project’s compliance with the terms of ‘the Grant Contract between Agency for Women and Children Development South Sudan and CAPAD, with respect to the use of funds provided under the grant for the period 1 February 2019 to 31 January 2021. 5.1.1 Respective responsibilities of Project management and the assurance provider Project management is responsible for ensuring that the use of funds provided by CAPAD is in accordance with the Contract. Our responsibility is to express our conclusion on the Project's compliance with the terms of the Contract with respect to the use of funds provided under the grant for the period 1 February 2019 to 31 January 2021. 5.1.2 Scope of our examination ‘The project audit has been performed in accordance with International Standards on Auditing (ISA 800 - Special Considerations - Audits of Financial Statements Prepared in Accordance with ‘Special Purpose Frameworks). We planned and performed our work to obtain all the information and explanations that we consider necessary to provide sufficient evidence for us to give limited assurance on the Project's compliance with the terms of the grant agreement with respect to the use of funds provided under the grant. Evidence-gathering procedures for a limited assurance engagement are more limited than for a reasonable assurance engagement, and therefore less assurance is obtained. ‘We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our conclusion. 5.1.3 Summary of work performed We conducted interviews with Project management to understand the Project’s key activities during the period under review. We performed the following procedures on a sample basis: ‘* Checked that CAPAD resources and support was used only for the project activities ‘+ Checked that CAPAD resources and support was efficiently and economically utilized + Verified that receipts and expenditure have been properly supported in the form of vouchers; * Verified that the costs were relevant to the Project’s objectives as set out in the Grant Contract; * Checked that the costs were incurred during the period 1 February 2020 to 31 January 2021. aAgency For Women And Children Development (AWACD) Audit report for the period 1 Feb 2019 to 31 Jan 2021 ‘© Tested a sample of costs to invoices and other supporting documents to ensure that they comply with procurement procedures as set out in the Grant Contract and that supplies paid for had been delivered; '* Confirmed that the AWACD cost pool expenses, e.g. salaries and rents, were allocated and were within the pre-determined percentages (budgets): + Checked whether there were instances of non compliance with laws, regulations and instructions from the donor as per the Grant contract. + Checked, including making enquiries with management, whether there were instances of possible fraudulent activities affecting project. 5.1.4 Conclusion Based on our work described above, nothing has come to our attention that causes us to believe that the use of funds provided by the CAPAD to Agency For Women And Children Development (AWACD) South Sudan was not in compliance, in all material respects, with the terms of the Fund Contract, the projects accounting policies and the laws and regulations. Further, nothing has come to our attention that the expenditure has not been necessary, cost-efficient and economical. = -MARCHO2, 2021, CERTIFIED PUBLIC ACCOUNTANTS Cue Juba South Sudan GCEL Consultancy Certified Public Accountants 02 March, 2021 2Agency For Women And Children Development (AWACD) Audit report for the period 1 Feb 2019 to 31 Jan 2021 6.0 Au Findings 6.1 Invoice and Voucher Invalidation 6.1.1 Observations During our audit, we were presented with a number of supporting documentations based on the sample that we selected and forwarded to the IP. However, we noted that the documents and invoices had not been invalidated i.e. stamped “PAID” Invoice invalidation is an important control to ensure that the risks of double payments are climinated., helps the entity when conducting bank and supplier account reconciliations and also helps to identify specific project payments where an IP runs more than one project at the same time e.g, invoices paid out of CAPAD funds would be stamped “PAID BY CAPAD FUNDS’ 6.1.2 Implication ‘© There’s risk that the organization may not be able to track on real time invoives that have been paid against those still outstanding. There's also risk of making ledger reconciliations difficult. ‘* An independent third-party user of the information and documents may not be able to identify expenses paid out of CAPAD Fund or individual project funds easily. 6.1.3 Recommendations Management should always strive to ensure that all invoices/vouchers paid off are invalidated. 6.2 Failure to automate accounting records and reports 6.2.1 Observation During our audit of the Project’s financial statements, we noted that the IP undertakes its accounting, financial analysis and reporting on Ms Excel spreadsheets. ‘A computerized / system-based accounting system eliminates many of the mundane and time- consuming processes associated with manual accounting besides reducing errors and omissions related to manual book-keeping. 6.2.2 Implications © Manipulation of data. In a manual system, anyone can change the financial data as opposed to an accounting software where access can be restricted through enforcement of user rights ‘+ Lack of audit trail thus the integrity of the data cannot be verified. * Continuous and accurate monitoring of the financial position of the project is not guaranteed when using the manual system. ‘* Itis cumbersome and time consuming. A manual system leads to high operational cost. 6.2.3 Recommendations In follow up periods, the IP should consider automating its accounting and finance function, 3BAgency For Women And Children Development (AWACD) Audit report for the period I Feb 2019 to 31 Jan 2021 6.3 Shortfalls in document and information filing 6.3.1 Observation Prudent information management requires that an organization has an effective filing system that allows for casy retrieval of documents. It is also expected that all documents relating to a specific transaction be kept together in a sequential manner as to give a user of such information and documents to seamlessly follow through the documentation, During our audit however, we noted that while the organization kept all documents in files, the documents were not stapled or glued together but were rather in loose sheaf’. 6.3.2 Implications © There is high risk of loss or misplacement of part of documentation relating to a transaction if all documentation relating to a transaction are not stapled or glued together in a sequential manner. © There’s also risk of a user of such information not being able to retrieve such information easily due to mix-ups. 6.3.3 Recommendations ‘The IP should upgrade its filing and document storage/management system, Aconsultancy MARCH 02,2021 y CERTIFIED PUBLIC ACCOUNTANTS Juba South Sudan 14