Illustrative audit report
AUDITED FINANCIAL STATEMENTS
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- Bu səhifədəki naviqasiya:
- STATEMENT OF CASH RECEIPTS AND PAYMENTS
- STATEMENT OF COMPARISON OF BUDGET AND ACTUAL AMOUNTS
- ENCOURAGED SUPPLEMENTARY STATEMENTS
- Certificate of Cash Position
- Statement of Bank Account Reconciliation
- Annual Budget Performance
- NOTES TO THE FINANCIAL STATEMENTS
- MANAGEMENT LETTER
AUDITED FINANCIAL STATEMENTS
Note: Refer to for consolidated statement of cash receipts and payments.
Note: Refer to for consolidated statement of comparison of budget and actual amounts. ENCOURAGED SUPPLEMENTARY STATEMENTS
Note: The GCF requires certification of cash position at period-end that reconciles to the statement of cash receipts and payments.
Note: This reconciliation is an optional supplementary statement. It may be presented in lieu of the certificate of cash position to provide details of funds flow. Please contact GCF for guidance on bank account reconciliation if the project has a designated account in USD and an operating account in local currency.
Note: This is an encouraged statement to report on utilization and administration of annual work plan and budget. NOTES TO THE FINANCIAL STATEMENTS1. Accounting Policies Reporting scope and reporting entity These financial statements are prepared for [ABC Program] rather than for a specific reporting entity. The objectives of the project are [describe objectives per approved readiness programme or project preparation facility application] and is being funded through a [grant/repayable grant/equity] provided by the Green Climate Fund (GCF). The [delivery partner/accredited entity], [name of Delivery Partner/Accredited Entity] is responsible for the [describe the roles and responsibilities of the delivery partner/accredited entity] of the project [under the guidance and supervision of / in close coordination with] the National Designated Authority, [name of National Designated Authority]. Basis of preparation The financial statements have been prepared in accordance with the [Cash Basis IPSAS “Financial Reporting under the Cash Basis of Accounting"]. The accounting policies have been applied consistently throughout the period. Control of cash Control of cash is considered by reference to control by the [delivery partner/accredited entity]. Any cash that is held in the [designated and operating] bank accounts are controlled by the [delivery partner/accredited entity]. Receipts and payments made through the bank accounts are reported separately as required by the Cash Basis IPSAS. Payments by Third Parties The project may benefit from goods and services purchased on its behalf through cash payments made by third parties. Payments made by third parties do not constitute cash receipts or payments by the [delivery partner/accredited entity] but are disclosed separately under the 'Third Party' column in the Statement of Cash Receipts and Payments. Where the [delivery partner/accredited entity] is aware of any goods or services provided to the project by third parties but do not have reliable information on the value, such information shall be disclosed in the notes to the financial statements. Goods and Services Received The project may receive assistance in the form of goods and services from the [delivery partner/accredited entity] or third parties. The value of such goods and services are determined based on agreed valuation methodology, or the depreciated historical cost of the physical assets at the time of transfer, or the fair value of the goods and services. Where the value of such goods and services cannot be determined due to difficulty or time consuming and costly process, the goods and services are disclosed in a note to the financial statements providing description of the assistance received. Presentation currency The presentation currency is [currency of country]. Other currencies and foreign exchange Where receipts, payments or balances are denominated in currencies other than the presentation currency, these amounts will be shown in the financial statements in the presentation currency in line with the requirements of the [Cash Basis IPSAS]. Foreign exchange gains or losses are recognized, as appropriate. 2. Cash Cash comprises demand deposits and cash equivalents. Demand deposits and cash equivalents comprise balances with banks and investments in short-term money market instruments. There are no cash equivalents held by the project. Receipts from the [grant/repayable grant/equity] are deposited in [name of bank where designated account is maintained] bank account controlled by the [delivery partner/accredited entity]. They are transferred to the operating account with [name of bank where an operating account is maintained] using the spot rate on the date of currency exchange. Cash included in the Statement of Cash Receipts and Payments comprise the following amounts:
3. Authorization Date The financial statements were authorized for publication on [date] by [name, position] of the [competent authority]. 4. Approved budget information The approved budget is developed on the same accounting basis (cash basis) as the project financial statements. The budget reflects plans agreed with the GCF under the same expenditure classification basis and authorized for spending through [delivery partner/accredited entity]’s financial management procedures. 5. External Assistance Sources of funding External assistance is provided to this project in the form of [grants/repayable grants/equity] from the GCF made through cash transfers or deposits under an agreement specifying the purposes for which the assistance will be utilized. It also encompasses amounts transferred from the accounts of the [delivery partner/accredited entity] as its counterpart contribution consistent with external assistance under the [grant/framework] agreement, including those received in the form of third-party payments. There have been no instances of noncompliance with the terms and conditions of the agreements which have resulted in cancellation of external assistance. The amounts of external assistance provided during the period is outlined below.
Goods and Services Received During 20X2, the project received contributions in the form of [describe the in-kind contribution received such as staff time, use of office space, use of vehicle] from the [delivery partner/accredited entity/government/third party] to assist in the [describe the purpose of the in-kind contribution and how it supports completion/development of activity]. The value of the goods and services received [is estimated at USDXXX] based on [describe the basis of valuation such as market or historical cost or cost estimates agreed and provided by delivery partner/accredited entity]. The value of the goods and services received [could not be determined due to difficulty and time-consuming process]. Goods and services received during the year have not been recorded in the Statement of Cash Receipts and Payments, which reflects only cash received (directly or indirectly).
As of [31 December 20X2], the balance of undrawn grant is [USD XXX]. Using the exchange rate on [31 December 20X2] of [Cy XX = USD 1], the undrawn grant is equivalent to [Cy XXX]. 6. Explanation of Variance The Statement of Comparison of Budget and Actual Amounts shows [two] significant variations as set out below:
Consultants services The overspending of [USD XXX] arose due to [provide explanation for the variance]. [This is expected to be offset by the savings in Travel due to travel limitations imposed during pandemic. The variance is x% which is below the 20% threshold.] Workshop/Training The underspending of [USD XXX] was on account of [provide explanation for the variance]. [The savings will be used to deliver online training in-lieu of in-person workshops. The total cost is estimated USD XXX]. 7. Commitments As of [31 December 20X2], the unpaid commitments amount to [USD XXX] or [Cy XXX] equivalent, using the exchange rate of [Cy XX = USD 1]. The unpaid commitments consist of:
MANAGEMENT LETTER[December 31, 20X2] To: [Name, Position] [National Designated Authority/Delivery Partner/Accredited Entity] [Address] MANAGEMENT LETTER [ABC Program] [For the Year Ended December 31, 20X2] Dear [Mr./Mdm.] [Name], We have audited the financial statements of [ABC Program] for the year ended [December 31, 20X2]. The project financial statements were prepared in accordance with the [International Public Sector Accounting Standards Financial Reporting Under the Cash Basis of Accounting (Cash Basis IPSAS)]. The audit was conducted in accordance with [International Standards on Auditing (ISAs)]. These standards require that we plan and perform the audit to obtain reasonable assurance that the project financial statements are free of material misstatements whether due to fraud or error. We also paid particular attention to the project’s compliance with national laws and regulations, matters of governance and compliance with the grant agreement. During the audit, we identified certain weaknesses and issues in the [accounting and internal control systems, including internal controls over the procurement process]. The purpose of this letter is to communicate these matters arising from the audit that we believe warrant your attention. We wish to express our appreciation to all the staff and officers of the [National Designated Authority/Delivery Partner/Accredited Entity] for the courtesy and assistance extended during the audit. [Signature in the name of the audit firm, the personal name of the auditor, or both, as appropriate for the particular jurisdiction] [Auditor Address] Detailed Findings and Recommendations Financial Issues No bank reconciliations performed during the past 6 months. Observation: [Auditor’s detailed description of the audit observation or finding] Risk: [Auditor’s analysis of the impact of the finding on the audited financial statements, internal control systems, project implementation, the donor and the recipient] Cause: [Auditor’s assessment of the cause of the weakness] Recommendation: [Auditor’s recommendations to rectify the finding] Management Response: [Management’s detailed explanation of the observation or finding including its cause, whether it agrees with the auditor’s recommendation, and its action plan13 to address the finding] No fixed assets register maintained for the procured furniture and equipment. Observation: [Auditor’s detailed description of the audit observation or finding] Risk: [Auditor’s analysis of the impact of the finding on the audited financial statements, internal control systems, project implementation, the donor and the recipient] Recommendation: [Auditor’s recommendations to rectify the finding] Management Response: [Management’s detailed explanation of the observation or finding, whether it agrees with the auditor’s recommendation, its action plan to address the finding] Procurement Issues Lack of proper contract management and monitoring Observation: [Auditor’s detailed description of the audit observation or finding] Risk: [Auditor’s analysis of the impact of the finding on the audited financial statements, internal control systems, project implementation, the donor and the recipient] Recommendation: [Auditor’s recommendations to rectify the finding] Management Response: [Management’s detailed explanation of the observation or finding, whether it agrees with the auditor’s recommendation, its action plan to address the finding] No evaluation report for the technical assessment of [contract package] Observation: [Auditor’s detailed description of the audit observation or finding] Risk: [Auditor’s analysis of the impact of the finding on the audited financial statements, internal control systems, project implementation, the donor and the recipient] Recommendation: [Auditor’s recommendations to rectify the finding] Management Response: [Management’s detailed explanation of the observation or finding, whether it agrees with the auditor’s recommendation, its action plan to address the finding] Non-Compliance with National Laws and Regulations Violation of [Section X of the Environmental and Social Policy] Observation: [Auditor’s detailed description of the audit observation or finding] Risk: [Auditor’s analysis of the impact of the finding on the audited financial statements, internal control systems, project implementation, the donor and the recipient] Recommendation: [Auditor’s recommendations to rectify the finding] Management Response: [Management’s detailed explanation of the observation or finding, whether it agrees with the auditor’s recommendation, its action plan to address the finding] Non-Compliance with the Grant Agreement Interim Progress Report is not submitted on time. Observation: [Auditor’s detailed description of the audit observation or finding] Risk: [Auditor’s analysis of the impact of the finding on the audited financial statements, internal control systems, project implementation, the donor and the recipient] Recommendation: [Auditor’s recommendations to rectify the finding] Management Response: [Management’s detailed explanation of the observation or finding, whether it agrees with the auditor’s recommendation, its action plan to address the finding] Recommendations from Prior Years Not Fully Implemented Record keeping and maintenance. Observation: [Auditor’s detailed description of the audit observation or finding] Risk: [Auditor’s analysis of the impact of the finding on the audited financial statements, internal control systems, project implementation, the donor and the recipient] Recommendation: [Auditor’s recommendations to rectify the finding] Management Response (20x2): [Management’s detailed explanation of the observation or finding, the delays in implementation, status of action plan to address the finding] Management Response (20x2): [Management’s detailed explanation of the observation or finding, whether it agrees with the auditor’s recommendation, its action plan to address the finding] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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ABC PROGRAM |
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STATEMENT OF CASH RECEIPTS AND PAYMENTS FOR THE YEAR ENDED DECEMBER 31, 20X2 |
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20X2 |
20X1 |
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[Accredited Entity] |
GCF |
Total |
Total |
Notes | |
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Cy'000 |
Cy'000 |
Cy'000 |
Cy'000 |
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Receipts |
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Funds received from [Accredited Entity] |
XXX |
XXX |
XXX |
XXX |
5 | |
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Funds received from GCF |
XXX |
XXX |
XXX |
XXX |
1, 5 | |
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Interest |
XXX |
XXX |
XXX |
XXX |
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TOTAL |
XXX |
XXX |
XXX |
XXX |
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Payments |
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Project Activities |
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Audio, Visual, & Printing |
XXX |
XXX |
XXX |
XXX |
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Consultant Services |
XXX |
XXX |
XXX |
XXX |
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IT Equipment |
XXX |
XXX |
XXX |
XXX |
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Travel |
XXX |
XXX |
XXX |
XXX |
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Workshop/Training |
XXX |
XXX |
XXX |
XXX |
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Project Management |
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Audit |
XXX |
XXX |
XXX |
XXX |
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Consultant Services |
XXX |
XXX |
XXX |
XXX |
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Office Supplies |
XXX |
XXX |
XXX |
XXX |
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Bank Fees and Charges |
XXX |
XXX |
XXX |
XXX |
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[Accredited Entity] Fee |
XXX |
XXX |
XXX |
XXX |
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TOTAL |
XXX |
XXX |
XXX |
XXX |
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Net increase (decrease) in cash |
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XXX |
XXX |
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Opening cash balance |
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XXX |
XXX |
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Foreign exchange adjustment |
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X |
X |
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Closing cash balance |
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XXX |
XXX |
2 | |
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ABC PROGRAM | |||||||||||||||
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STATEMENT OF COMPARISON OF BUDGET AND ACTUAL AMOUNTS | |||||||||||||||
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FOR THE YEAR ENDED 31 DECEMBER 20X2 | |||||||||||||||
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Budget |
Actual14 |
Difference |
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[AE] |
GCF |
20X2 |
20X1 |
Cumulative |
[AE] |
GCF |
[AE] |
GCF |
Notes | |||||
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USD’000 |
USD’000 |
Cy'000 |
Cy'000 |
Cy'000 |
USD'000 |
USD'000 |
USD'000 |
USD'000 |
USD'000 |
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Project Activities |
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Audio, Visual, & Printing |
XXX |
XXX |
XXX |
XXX |
XX X |
XXX |
XXX |
XXX |
XXX |
XXX |
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Consultants Services |
XXX |
XXX |
XXX |
XXX |
XXX |
XXX |
XXX |
XXX |
XXX |
XXX |
6 | ||||
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IT Equipment |
XXX |
XXX |
XXX |
XXX |
XXX |
XXX |
XXX |
XXX |
XXX |
XXX |
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Travel |
XXX |
XXX |
XXX |
XXX |
XXX |
XXX |
XXX |
XXX |
XXX |
XXX |
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Workshop/Training |
XXX |
XXX |
XXX |
XXX |
XXX |
XXX |
XXX |
XXX |
XXX |
XXX |
6 | ||||
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Project Management |
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Audit |
XXX |
XXX |
XXX |
XXX |
XXX |
XXX |
XXX |
XXX |
XXX |
XXX |
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Consultant Services |
XXX |
XXX |
XXX |
XXX |
XXX |
XXX |
XXX |
XXX |
XXX |
XXX |
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Office Supplies |
XXX |
XXX |
XXX |
XXX |
XXX |
XXX |
XXX |
XXX |
XXX |
XXX |
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[Accredited Entity] Fee |
XXX |
XXX |
XXX |
XXX |
XXX |
XXX |
XXX |
XXX |
XXX |
XXX |
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TOTAL |
XXX |
XXX |
XXX |
XXX |
XXX |
XXX |
XXX |
XXX |
XXX |
XXX |
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1 When the presentation currency is different from the currency of the country in which the entity is domiciled, the reason for using a different currency shall be disclosed. excerpt. section. 1.6.6. Cash Basis IPSAS.
2 Expenditure categories must be consistent with the approved readiness programme, project preparation facility and/or grant agreement.
3 Bank fees and charges should be charged against interest earned.
4 Delivery partner/Accredited Entity fee is the approved fee in percentage over total actual project expenditures.
5 This amount is presented separately from cash receipts and payments and includes the differences, if any, had those cash receipts, payments and balances been reported at end-of-period exchange rates. excerpt. section 1.6.8. Cash Basis IPSAS.
6 Actual amount of expenditures must match the statement of cash receipts and payments and statement of bank account reconciliation.
7 Budget amounts and expenditure categories must be consistent with the approved readiness programme, project preparation facility application and/or grant agreement. If budget revisions have been approved during implementation, such information shall be disclosed in the notes to the financial statements.
8 Actual amounts paid in presentation currency must reconcile with the statement of cash receipts and payments.
9 Indicates the specific financing product provided by GCF, such as grant, repayable grant, or equity.
10 Balances at end of period in presentation currency must reconcile with the statement of cash receipts and payments.
11 Budget amounts and expenditure categories must be consistent with the approved project preparation facility application and/or grant agreement. If budget revisions have been approved during implementation, such information shall be disclosed in the notes to the financial statements.
12 Actual amount of expenditures must match the statement of cash receipts and payments and statement of bank reconciliation.
13 The action plan should include the following information: action to be performed, responsible person/unit, and deadline of completion.
14 Actual expenditures in USD must equal the actual expenditures reported in the Interim Progress Report/Completion Report Section 4 Budget and Expenditure Reporting.
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