FINANCIAL REVIEW FINDINGS

1. Financial Management Systems Observation The Excel Accounting system currently used by the Project management is prone to errors and omissions. It is not a double entry system of accounting as would be generally expected. Therefore, any errors made in posting the amounts in the system cannot be detected effectively. It does not also produce a trial balance, which would easily highlight any differences arising thereon. The IPAA uses MS Excel spreadsheets to do the cash receipts and payments analysis.

Implication

Although we did not uncover any errors of posting, there is a risk that the information could be materially misstated due to inherent problems with the Excel System and the financial information therein. Using the MS Excel spreadsheet to do an analysis is also time consuming and repetition of work and does not fulfil the double entry process.

Recommendation

We recommend that a better and more user-friendly, double entry accounting system be introduced to avoid unnecessary errors inherent with the current system.

2. Project Bank Account Balance Observation Based on the bank statements and the reconciliations provided to us, we noted that the balance at the bank as at the end of the period under audit was USD 137,648. However, based on the Makindu project Financial Report, we noted the Fund Balance as at end of the period under audit was USD (1,115). This then brings about a difference amounting to USD 138,763.

Implication

There is likelihood that the project expenditure has not been timely and adequately captured over the project period to reflect the true and fair view of the projects financial status.

Recommendation

The Project management should establish this difference and ensure that the bank balance is reconciled to the cashbook and reported collectedly in the financial report. 3. Progress Reports Observation Auditors requested to be availed with the project monthly, quarterly and annual analytical progress Reports, as per the requirements stipulated in the Grant agreement. These were not availed, further auditors established that the annual analytical report for the year ended December 2011 had not been prepared.

Implication

This implies poor project direction and supervision. It becomes difficult to track and report on the projects progress and achievements of the projects objectives in a timely manner. Recommendation

The project coordinator must ensure the constitution of an active Project Management Unit. Project reports must be produced on a timely basis to enable better review and oversight function by the stakeholders. .