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World Bank Document REPUBLIC OF RWANDA Kigali, on..... ...... .... ... No...2.. /LVEMPII/2017 Public Disclosure Authorized RWANDA ENVIRONMENT MANAGEMENT AUTHORITY (REMA) P.O. BOX 7436 KIGALI TEL +250 252 580101 Country Manager World Bank KIGALI Public Disclosure Authorized Dear Sir, Re: Submission of the Audit Report for the period ended 30Lh June 2017 Please find enclosed the Audit Report for the project entitled Lake Victoria Environmental Management Project Phase II (LVEMPII). This report is for the period ended 30t June 2017. Thank you for your usual collaboration. Sincerely, Public Disclosure Authorized Eng. Coletha U. RUHAMYA Director General Cc: Permanent Secretary/ MoE. KIGALI Public Disclosure Authorized LAKE VICTORIA ENVIRONMENTAL MANAGEMENT PROJECT (LVEMP II) AUDIT REPORT Forthe year ended30 June 2017 LAKE VICTORIA ENVIRONMENTAL MANAGEMENT PROJECT (LVEMP II) AUDIT REPORT FOR THE YEAR ENDED 30 JUNE 2017 TABLE OF CONTENTS 1. INTROD UCTION ..................................................... ........................................................ 2 2. STATEMENT OF RESPONSIBILITIES ........................... ............................................. 4 3. REPORT OF THE AUDITOR GENERAL ....................................................................... 5 4. FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017.....................10 5. REVIEW OF EX PENDITURE ........................................................................................ 2 6. REVIEW OF INTERNAL CONTROL SMTEM ........................................................... 22 7. REVIEW OF CORPORATEGOVERNANCE ............................................................... 23 8. RESULTS FROM FIELD VISITS ................................................................................... 24 9. REVIEW OF PROJECT IMPLEMENTATION ACTIVITIES.......................................33 10. IMPLEMENTATION OF PRIOR YEAR AUDIT RECOMMENDATIONS.................35 A PPEN D IC ES .... ...... ..................... ... ......... ..... .. ................................................... 37 Office of the Auditor General of State Finances 1 LAKE VICTORIA ENVIRONMENTAL MANAGEMENT PROJECT (LVEMP II) AUDIT REPORT FOR THE YEAR ENDED 30 JUNE 2017 1. INTRODUCTION Lake Victoria Environmental Management Project Phase 11 (LVEMP II) builds up from the achievements of LVEMP I and is part of the overall regional integrated approach aimed at conserving the Lake Victoria catchment basin. In Rwanda, LVEMP 11 activities are being coordinated under the Rwanda Environmental Management Authority (REMA) and the parent Ministry is the Ministry of Environment (MoE). The activities however, cut across several line Ministries and Agencies which include the Ministries of Agriculture, Ministries of Environment, Ministry of Infrastructures, Ministry of Local Government, Ministry of Trade and Industry, Water and Sanitation Corporation (WASAC) ltd and former Rwanda Natural Resource Authority (RNRA). The LVEMP II design is consistent with the World Bank's African Plan and is focused on improving governance, strengthening drivers of economic and social growth, enhancing effective public participation and building partnerships in response to the environmental stress. The design is a comprehensive programme aimed at rehabilitation of the lake ecosystem for the benefit of the people who live in the catchment, the national economies of which they are a part, and the global community. 1.1 Basic information Project Name Lake Victoria Environmental Management Project II (LVEMPII) Agreement/Pr IDA CREDIT NUMBER 4973-RW oject Number Parent The Ministry of Environment (MoE) Ministry Districts Rulindo,Gakenke,Ngororero,Karongi,Muhanga,Nyamagabe,Ruhango,Ny where anza,Huye,Bugesera, Ngoma, and Kamonyi LVEMP II is implemented Funding The project's total source of funds is summarized in the table below; sources Source of Amount in Exch. Amount in funds USS rate RWF IDA 15,000,000 599.798 8,996,970,000 GOR 750,000 599798 449,841,750 Project i) Date of signature of loan agreement: 02 09-2011 duration/peri ii) Date of effectiveness- 29 12/2011 od iii) Date of initial closure: 31 12/2016 iv) Expected end date.30 06 2017 extended to 31 December 2017 Reporting Rwanda Environment Management Authority (REMA) organization Lake Victoria Environmental Management Project (LVEMP II) and physical P. 0 Box 7436 address Kacyiru Kigali Main The project key component activities are outlined below: Components/ activities Component 1' Strengthening institutional capacity for managing shared water and fisheries resources. This component will focus on building the capacity and increasing the effectiveness of the existing national institutions to improve the cooperative management of shared trans Office of the Auditor Generalof State Finances 2 LAKE VICTORIA ENVIRONMENTAL MANAGEMENT PROJECT (LVEMP II) AUDIT REPORT FOR THE YEAR ENDED 30 JUNE 2017 boundary natural resources and the lake Victoria Basin, and hence contribute to the achievement of the first project development objective. Component 2: Point source pollution control and prevention. The main objective of this component is to reduce environmental stresses from point source pollution on the rivers, wetlands, and lakes in the Lake Victoria Basin portion of Rwanda, and thus contribute to the achievement of the second project development objective. Component 3: Watershed management. This component seeks to reduce environmental stresses in the Lake Victoria Basin through integrated watershed management including the rehabilitation of degraded wetlands and river banks, and the adoption of on farm soil and water conservation programs on the hillsides Component 4: Project coordination and management. The objective of this component is to provide complementary resources necessary for the effective coordination and communication, and monitoring and evaluation of the project activities. 1.2 Project Management The management who held office during the 12 months period to 30 June 2017 was: No. I Name Designation 1. Eng. Coletha U. RUHAMYA Director Generall REMA Chief Budget Manager) 2. Ms Alphonsine Sheri Coordinator/SPIU NTABANA 3. Ms. Annette Sylvie Project Coordinator / Sector Specialist MUHAYIMANA 4. Mr. Joseph MUGABO Finance Manager/SPIU 5. Mr. Guido SIBORUREMA Accountant Specialist 13 Funding Summary The Project is for a duration of 5 years from 2012 to 2017 and with an approved budget of US$ 15,000,000 from World Bank-International Development Association (IDA). However, on 15 November 2016 it was restructured and became USD 13,098,366. For the year ended 30 June 2017; the remaining balance is shown in the table below: Source of Donor Cumulative Cumulative Undrawn Undrawn funds Commitment Amount Amount received balance to 30 balance 30 received to 30 to 30 June 2017 June 2017 June 2017 June 2011 (in USD) (in 1/SD) (in Frw) (in USD) (in Frw) (A) (B) (A) -(B) Loan IDA 15,000,000* 8,337,833 6,076,444,574 6,662,167 2,920,525,426 Total 15,000,000 8,337,833 6,076,444,574 6,662,167 2,920,525,426 Office of lte Auditor General of State Finances 3 LAKE VICTORIA ENVIRONMENTAL MANAGEMENT PROJECT (LVEMP II) AUDIT REPORT FOR THE YEAR ENDED 30 JUNE 2017 2. STATEMENT OF RESPONSIBILITIES Article 66 of the Organic Law No. 12/2013 of 12/09 2013 on State Finances and Property requires budget agencies to prepare and submit to the Ministry annual financial statements in a period of one month from the end of the fiscal year and submit their annual financial statements to the Auditor General of State Finances not later than 30' September of the following fiscal year. Article 19 of the Organic Law N" 12/2013 further stipulates that the Chief Budget Manager is responsible for maintaining accounts and records of the budget agency, preparing reports on budget execution, managing revenues and expenditures, preparing, maintaining and coordinating the use of financial plans, managing the financial resources for the budget agency effectively, efficiently and transparently. ensuring sound internal control systems in the budget agency and safeguarding the public property held by the budget agency. As Chief Budget Manager, I accept responsibility for the annual financial statements, which have been prepared using appropriate accounting standards applicable to Public entities as determined by Article 99 of the Ministerial Order No. 001 16 10 TC of 26/01/2016 relating to financial regulations. These financial statements have been extracted from the accounting records of LVEMP 11 Project and the information provided is accurate and complete in all material respects. The financial statements also form part of the consolidated financial statements of the Government of Rwanda In my opinion, the financial statements give a true and fair view of the state of the financial affairs of LVEMP II Project I further confirm that LVEMP II Project maintained proper accounting records which can be relied upon in the preparation of financial statements. I also confirm that adequate systems of internal control were maintained and operated effectively during the year to safeguard the assets of the budget agency Nothing has come to the attention of Management to indicate that LVEMP II Project will not continue operating as a going concern for the foreseeable future. Signature: ~4q Name: Eng. Coletha U. RUHAMYA Director General of REMA and Chief Budget Manager Date: Office of the Auditor General of Stale Finances 4 LAKE VICTORIA ENVIRONMENTAL MANAGEMENT PROJECT (LVEMP II) AUDIT REPORT FOR THE YEAR ENDED 30 JUNE 2017 3. REPORT OF THE AUDITOR GENERAL
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