Belize Bel-910-g02-h C-net Audit Report Final

7/21/2019 Belize Bel-910-g02-h C-net Audit Report Final

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Audit of the UNDP Sub-recipient Collaborative Network for People Living with HIV (CNET+)

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UNITED NATIONS DEVELOPMENT PROGRAMME (UNDP)

AUDIT REPORT

21 April 2015

AUDIT OF THE UNDP SUB-RECIPIENT

COLLABORATIVE NETWORK FOR PEOPLE LIVING WITH HIV

(CNET+)

FUNDED BY THE GLOBAL FUND TO FIGHT AIDS, TUBERCULOSIS

AND MALARIA

Global Fund Grant Agreement number: BEL-910-G02-H

Atlas Project number: 60888

Atlas Output number: 86741

Atlas Implementing Agent code: 6544

Country: Belize

Auditor: Moore Stephens LLP

Period subject to audit: 1 January to 31 December 2014

This report is established by request of the UNDP. The views expressed in this report are those of the externalauditor and in no way reflect the official opinion of the UNDP. This report has been prepared solely for use ofthe UNDP for the purpose of the control of the use of funds of the project concerned by the audit. It may bedisclosed to those official authorities having regulatory right of access to it. This report should not be used byany other party or for other than its intended purpose.


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Table of Contents

EXECUTIVE SUMMARY ........................................................................................................................ 3

THE AUDIT ENGAGEMENT .................................................................................................................. 4

AUDIT OPINIONS .................................................................................................................................. 7

STATEMENT OF EXPENSES.................................................................................................................... 7STATEMENT OFASSETS AND EQUIPMENT............................................................................................... 9STATEMENT OF CASH POSITION............................................................................................................ 9IMPACT OF PRIOR YEAR AUDITS RESULTING IN MODIFIED OPINIONS.......................................................... 9

MANAGEMENT LETTER .................................................................................................................... 10

REVIEW OF SUB-RECIPIENT PROJECT IMPLEMENTATION PROGRESS....................................................... 10ASSESSMENT OF THE SUB-RECIPIENTS INTERNAL CONTROL SYSTEM.................................................... 10ORGANIZATION AND STAFFING............................................................................................................ 10SRACTIVITIES MANAGEMENT............................................................................................................. 11REVIEW OF SRSACTIVITIESPROGRESS............................................................................................. 11HUMAN RESOURCES........................................................................................................................... 12FINANCE. ........................................................................................................................................... 12CASH MANAGEMENT........................................................................................................................... 14PROCUREMENT.................................................................................................................................. 14

ASSET MANAGEMENT......................................................................................................................... 15WAREHOUSE MANAGEMENT................................................................................................................ 15INFORMATION SYSTEMS...................................................................................................................... 15GENERALADMINISTRATION................................................................................................................. 16FOLLOW UP ON PREVIOUSAUDITS....................................................................................................... 16

ANNEXES ............................................................................................................................................ 17ANNEX 1.1 STATEMENT OF EXPENSES -SREXPENDITURES........................................................... 17ANNEX 1.2 STATEMENT OF EXPENSES -DIRECT PAYMENTS........................................................... 17ANNEX 2: COMBINED DELIVERY REPORT......................................................................................... 18ANNEX 3: RECONCILIATION BETWEEN STATEMENT OF EXPENSES AND COMBINED DELIVERY REPORT. 26ANNEX 4: AUDIT AREA RATINGS...................................................................................................... 27ANNEX 5: AUDIT FINDING PRIORITY RATINGS.................................................................................... 27


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EXECUTIVE SUMMARY

Moore Stephens LLP entered into a Long Term Agreement (ref. UNDP/BDP/LTA/2013/1) with theUnited Nations Development Programme (hereafter UNDP) on 15 February 2013 to carry out audits

of UNDP Sub-recipients funded by the Global Fund to fight AIDS, Tuberculosis and Malaria. The Sub-recipient Collaborative Network for People Living with HIV (CNET+) was selected for audit as part ofUNDPs 2014 audit plan. The period subject to audit was 1 January to 31 December 2014.

We have issued audit opinions as summarised in the table below and as detailed in the next section:

Statement of Expenses Unqualified

Statement of Assets and Equipment Not applicable

Statement of Cash Position Not applicable

The audit findings are summarised in the table below:

Audit area Overallrating

Number of findings per priorityrating

Financialimpact

High Medium Low

Organization and Staffing Satisfactory - - - -

SR Activities ManagementPartially

Satisfactory- 1 - -

Review of SR Activities Progress Satisfactory - - - -

Human Resources

Partially

satisfactory - - 1 -

FinancePartially

Satisfactory1 1 - -

Cash ManagementPartially

satisfactory1 - - -

ProcurementPartially

satisfactory1 - - -

Asset Management Not applicable - - - -

Warehouse Management Not applicable - - - -

Information Systems

Partially

satisfactory - 1 - -

General AdministrationPartially

satisfactory- 1 - -

Follow-up on Previous Audits Not applicable - - - -

Total 3 4 1 -


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THE AUDIT ENGAGEMENT

Audit Objectives and Scope

The first purpose of the audit was a financial audit to express an opinion on the Sub- recipients

financial statements that includes:

Whether the statement of expenses presents fairly the expenses incurred by the audited Sub-recipient from 1 January to 31 December 2014 in accordance with UNDP accounting policiesand that the expenses incurred were: (i) in conformity with the approved budget; (ii) for theapproved purposes of the Sub-recipient agreement; (iii) in compliance with the relevantregulations and rules, policies and procedures of UNDP; and (iv) supported by properlyapproved vouchers and other supporting documents;

Whether the statement of assets and equipment presents fairly the balance of inventory ofthe Sub-recipient as at 31 December 2014;

Whether the statement of cash position held by the audited Sub-recipient presents fairly thecash and bank balance of the Sub-recipient as at 31 December 2014; and

Whether the result of the prior years auditresulting in a modified audit opinion on the UNDPstatement of expenses had conclusive actions to properly address an audit qualification andthe related net financial impact.

The second purpose of the audit was to express an opinion on the Sub-recipients internal controlsand systems in order to assess:

The reliability and integrity of Sub-recipientsfinancial and operational information;

The effectiveness and efficiency of Sub-recipientsoperations in carrying out its activities;

The safeguarding of assets procured with Global Fund grant funds; and

Compliance with applicable laws, regulations and rules, policies and procedures, as well as

the Sub-recipients agreements.

Our assessment of the internal control system covered the following areas as applicable:

Organization and staffing

Assessment of the overall structure of the Sub-recipients activities for effective work flows andmanagement arrangements, including assignment of authority, accountability and responsibility tostaff.

Sub-recipient activities management

Review of expenses made by the SR and assessment of whether they were in accordance with theSub-recipient agreement, including the work plan and budget, and were in compliance with the UNDPPOPP on Results Management; assessment of the management aspects in terms of financial

management of grant funds and monitoring of implementation towards achieving deliverables set outin the work plan; assessment of the timeliness and accuracy of the reporting to UNDP and to theGlobal Funds Local Fund Agent; assessment of the programmatic oversight of the grants includingmanagement of Sub-sub-recipients when applicable. (The model Sub-recipient agreement regulatesthe engagement of Sub-sub-recipients and the Sub-recipient must meet several conditions before theSub-sub-recipient can be involved. These conditions include positive capacity assessment by theSub-recipient and prior written approval by UNDP. The Sub-recipient must also put in place a systemto monitor performance. Importantly, the Sub-recipient remains fully responsible for all the acts andomissions of the Sub-sub-recipient as if they were the acts and omissions of the Sub-recipient itself.Furthermore, any contract concluded with the Sub-sub-recipient must comply with the terms of theSub-recipient agreement).


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Sub-recipient activities progress

Review of the annual and quarterly work plans, quarterly and annual financial reports, andrequests for direct payments. Assessment of the foregoing in terms of their timeliness andtheir compliance with the Sub-recipient agreement, including the work plan and budget, andthe UNDP Programme Operations Policies and Procedures (POPP) on Results Management.

Review of the quarterly and annual programmatic reports and assessment of them in terms ofcompliance with UNDP guidelines and whether the Sub-recipient met its responsibilities formonitoring described in the Sub-recipient agreement, including the work plan and budget.

Review of whether the Sub-recipient had followed the decisions and/or recommendations ofthe above activities.

Review of the pace of Sub-recipient activities progress and of the causes for any delays.

Human resources

Review of the process for recruiting Sub-recipient personnel and consultants and assessment ofwhether it was transparent and competitive. Assessment of the effectiveness of the recruitment andhiring of personnel and contract administration, performance appraisal, attendance control,calculation of salaries and entitlements, calculation and distribution of performance-related payrollincentives, payroll preparation and payment, and management of personnel records.

Finance

Review of the Sub-recipients accounting records and assessment of their adequacy for maintainingaccurate and complete records of receipts and disbursements of cash and for supporting thepreparation of the quarterly financial report, and review of the records of requests for direct paymentsand ensuring that they were signed by authorised Sub-recipient officials. Review of the adequacy ofthe accounting and financial operations and reporting systems including budget control, cashmanagement, certification and approving authority, receipt of funds, commitment of expenses againstapproved budget and disbursement of funds, recording of all financial transactions in expensesreports, records maintenance and control, cash advances to field offices, Sub-recipient s staff etc.

Cash management

Review of cash funds held by the Sub-recipient (including bank accounts) and procedures forsafeguarding of cash including cash held as advances or imprest in any sub-office or field office.Review of petty cash transactions.

Procurement

Review of the process for procurement/contracting activities of the Sub-recipient and assessment ofwhether it was transparent, competitive and effective. Assessment of whether the equipment andservices purchased met the requirements of the Sub-recipient agreement including:

As applicable, delegations of authorities, procurement thresholds, calls for bids andproposals, evaluation of bids and proposals and approval/signature of contracts andpurchase orders.

Management of obligations, receiving and inspection procedures to determine the conformityof equipment with the agreed specifications and, when applicable, the use of independentexperts to inspect the delivery of highly technical and expensive equipment.

Monitoring of the performance of the contractors.

Evaluation of the procedures established to mitigate the risk of purchasing equipment that didnot meet specifications or if later proven to be defective.

Management and control over variation orders.

Review of the use of consulting firms and the adequacy of procedures to obtain fully qualified andexperienced personnel and assessment of their work before final payment was made.


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Asset management/ inventory

Review of the use, control and disposal of non-expendable equipment and assessment of whether itcomplied with the UNDP POPP on Results Management and assessment of whether the equipmentprocured met the identified needs and whether its use was in line with intended purposes. Review ofthe procedures for receipt, storage and disposal of equipment. Assessment of whether assets

procured with grant funds were adequately recorded, safeguarded (including insurance) andmonitored, including periodic physical verification of their use and existence.

Warehouse management and the distribution system of pharmaceutical and non-pharmaceuticaldrugs

Assessment of whether warehouse management was in accordance with World Health Organizationstandards and whether the distribution system of pharmaceutical and non-pharmaceutical drugs wasaccording to the approved distribution plan.

Information systems

Assessment of the efficiency and security of the information systems established and maintained forgrant funds and their adequacy to meet the management and reporting requirements of the project.

Assessment of whether segregation of duties, as described in the management manual, is respected

in the access to approvals in the financial information systems.General administration

Review of operations not specifically covered above and for which expensess were charged to theproject, covering areas such as travel by Sub-recipient personnel, use and maintenance of projectvehicles, lease and maintenance of office premises.

Follow-up on previous audits

Assessment of the status of implementation of the previous audits recommendations done within thelast three years for the Sub-recipient.


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AUDIT OPINIONS

Independent Auditors Report to UNDP - Financial Audit

Statement of Expenses

Unqualified Opinion

We have audited the expenses recorded in Atlas as set out in the attached Statement of Expenses(the Statement) totalling US$ 43,300.31 for Collaborative Network for People Living with HIV(CNET+) (the Sub-recipient) representing the expenses reported under Global Fund Grant numberBEL-910-G02-H, Atlas Project number 60888 and Atlas Output number 86741 for the period from 1January to 31 December 2014. This Statement of Expenses reflects all disbursements listed in thequarterly financial reports submitted by the Sub-recipient, all direct payments processed by UNDP atthe request of the Sub-recipient and reimbursements to the Sub-recipient. In total these amountsrepresent the actual expenses incurred by the Sub-recipient in accordance with the ContractualConditions as set out in the relevant Sub-recipient Agreement Accelerating the Pace: ReachingMarginalized and Vulnerable Populations with Critical Services signed on 22 April 2013 betweenUNDP and the Sub-recipient, and associated Annual Work Plans.

The Statement of Expenses forms part of the Combined Delivery Report for Atlas Project 60888 andAtlas Output 86741. The Combined Delivery Report includes expenses outside of our audit scope, asshown by the reconciliation in Annex 3.

Respective responsibilities of the Sub-recipient and auditors

The Sub-recipientsmanagement are responsible for the preparation of the FACE forms and otherfinancial records for the Sub-recipients activities and for such internal control as managementdetermines is necessary to enable the preparation of a Statement that is free from materialmisstatement, whether due to fraud or error.

Our responsibility is to express an opinion on the Statement based on our audit. We conducted ouraudit in accordance with International Standards on Auditing insofar as these standards can beusefully applied in this financial audit and its specific compliance context. Those standards requirethat we comply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether the Statement is free of material misstatement.

A financial audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the Statement. The procedures selected depend on the auditors judgment, includingthe assessment of the risks of material misstatement of the Statement, whether due to fraud or error.In making those risk assessments, the auditor considers internal control relevant to the Sub-recipients preparation of its financial reports in order to design audit procedures that are appropriatein the circumstances, but not for the purpose of expressing an opinion on the effectiveness of theprojects internal control. Afinancial audit also includes evaluating the appropriateness of accounting

policies used and the reasonableness of accounting estimates made by management..

Scope of the Audit

The scope of our audit was as set out in our terms of reference and included obtaining evidence forthe amounts and disclosures in the Statement sufficient to express an opinion on it within the scope ofour audit. We have taken into account all the available evidence presented to us during our fieldworkwhich concluded on 16 March 2015 and any subsequent information received. We believe that theaudit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Unqualified Opinion

In our opinion, the attached Statement of Expenses presents fairly, in all material respects, theexpenses of US$ 43,300.31 incurred by the Sub-recipient under the SR Agreement for the period 1

January to 31 December 2014 in accordance with UNDP accounting requirements. The expensesincurred were i) in conformity with the approved budget; (ii) for the approved purposes of the SR


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Agreement; (iii) in compliance with the relevant regulations and rules, policies and procedures ofUNDP; and (iv) supported by properly approved vouchers and other supporting documents.

Emphasis of Matter

Without qualifying our opinion, we draw your attention to audit findings 1 to 8 as set out in the

Management Letter section of our report which identify internal control weaknesses and auditrecommendations to address them which we came across during the conduct of our financial auditand audit of the Sub-recipients internal control and systems.

Mark HendersonPartner

Moore Stephens LLP

150 Aldersgate StreetLondon EC1A 4AB

21 April 2015


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Statement of Assets and Equipment

We noted that the Sub-recipient had no assets or equipment and accordingly a Statement of Assetsand Equipment was not produced.


Statement of Cash Position

We noted that the Sub-recipient did not have a dedicated bank account for SR activities subject toaudit and accordingly a Statement of Cash Position was not produced.

Impact of prior year audits resulting in modified opinions

We noted that the Sub-recipient was not subject to an audit of its Global Fund funded activities in theprior year.


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MANAGEMENT LETTER

The following are addressed in our management letter in the sections below:

Review of Sub-recipient project implementation progress;

Assessment of the Sub-recipients internal control system;

Assessment of each audit area;

Findings in relation to the financial audit; and

Observations and recommendations on an audit area basis.

Review of Sub-recipient project implementation progress

Our audits involved an assessment of the Sub-recipients progress and timeliness in relation totargets, deliverables and planned completion dates in relation to the SR Agreement, work plan andbudget and principles of economy and efficiency.

Based on our audit work carried out at Collaborative Network for People Living with HIC (CNET+), theSub-recipient appears to be implementing planned activities on a timely basis in accordance with theapplicable SR Agreement, work plan and budget in an efficient and well-managed manner.

Assessment of the Sub-recipients internal control system

Our audits involved an assessment of the Sub-recipients internal control system with equal emphasison the:

Effectiveness of the system in providing Sub-recipient management with useful and timelyinformation for the proper management of its activities; and

The general effectiveness of the internal control system in protecting the assets andresources funded through the grant.

Based on our audit work carried out at Collaborative Network for People Living with HIV (CNET+), theSub-recipients internal control system is adequate in providing Sub-recipient management withuseful and timely information for the proper management of its activities and in protecting the assetsand resources funded through the grant.

We draw your attention to audit findings 1 and 8 which detail issues with regards to the Sub-recipients internal control system and make recommendations to improve the strength of thecontrols.

Organization and Staffing

The organization comprises Board Members, an Executive Director and staff. In total there are fourpeople working at the organization including the executive director. The board is comprised of fivemembers.

The coordination of the programme under audit is the responsibility of the executive director Mr. EricCastellanos. The executive director is in charge of finances and performs the role of accountant.

Overall rating: Satisfactory


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SR Activities Management

The activities were carried in accordance with the budget and the annual work plan. Meetings wereheld on a monthly basis with project staff. UNDP staff together with project staff carried out field visits.The organization prepared a report and carried out surveillance or the project activities. We found thatreports were not submitted to the UNDP CO on a timely basis.

Overall rating:Partially satisfactory

Finding n: 1 Title:Reports not submitted in accordance with Grant Agreement

Observation:

Article XI of the Sub-Recipient Agreement states that quarterly financial and technical reportsshould be submitted 21 days after the end of the quarter. We found that the reports weresubmitted late for the first two quarters of 2014 as detailed below:

Period covered Report dueSubmission

date

1 April to June 30 2014 15-Jul-14 10-Aug-14

1 July to 30 September 2014 15-Oct-14 9-Jan-15

We also noted that bank statements and explanation of variances compared to work plans werenot provided with the financial section of the quarterly reports as required by 3 of article XI.

In addition, we also found that the C+Net has not provided UNDP with an annual financial andprogrammatic report nor a final financial report as requested in 6 of the same article.

Priority: Medium

Recommendation:

We recommend CNET+ to take appropriate measure in order to be able to comply with thereporting requirement, in particular, quarterly submission of FACE forms and annual Financialand Programmatic. These reports are important in order for UNDP to adequately manage hisobligations as a PR.

Management comments:

We agree with finding which was a result of unpreparedness to submit those reports in theforms provided to us by the PR. C-NET+ staff needs appropriate training to meet this obligation.

C-NET+ will make sure to have enough time to submit reports on a timely manner and will seekguidance/training from the PR in the filling out of forms and the expected reports in order to

meet our obligations.

Review of SRs ActivitiesProgress

C-NET+ was initiated by a group of Persons Living with HIV (PLHIV) with the aim to improve thequality of their lives and those of their peers. C-NET+ hopes to accomplish this through variousactivities which share information pertinent to PLHIV, education and communication. C-NET+ aims topropel and develop its members individual capabilities while promoting a mutual respect for theirHuman Rights. Seven people founded the network, which was constituted as the first organization ofand for people with HIV in Belize.

Throughout the year CNET+ has worked to provide PLHIV with support groups, living assistance andin educating and providing counselling to those affected by HIV. A review of the FACE forms andQuarterly reports has indicated that the activities were carried out in accordance with the work plan.


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C-NET+ does not carry out activities with Sub- Sub- Recipients. Monitoring and Evaluation is ensuredby an officer from UNDP.

Overall rating:Satisfactory

Human Resources

C-NET+ does not have an HR department. There were no new hires for the year 2014. Payroll isprepared by a senior staff and this was on a part-time basis. There are no staff contact or attendancerecords kept. Staff training was carried out throughout the year.


Finding n: 2 Title:Lack of staff appraisal

Observation:

We noted the SR does not have a system of staff appraisal. Without a staff appraisal process it

is difficult to keep staff member motivated and in line with entity objectives. It is also necessaryto identify capacity for development and training needs.

Priority: Low

Recommendation:

We recommend that the SR carries out staff appraisals to ensure training needs are identifiedand to ensure that staff work towards the goals of the entity.


Note that our Policy and Procedures Manual (annex 1) in pages 8 and 9 describes the system ofstaff appraisal and while this is stated in our manual it was not implemented in 2014.

C-NET+ will ensure to properly calendared the frequency and date of staff appraisal for 2015and this will be properly filed in the staff's files and available for verification when requested. Inaddition we will ensure to close this gap for the 2014 period.

Finance

The Executive Director is in charge of finances and submits the FACE forms. The budget is regularlymonitored by him. Invoices are first verified by staff members then approved by the ExecutiveDirector. Considering the small size of the entity, segregation of duties is considered sufficient.Projects documents are maintained in manual files for each project.


Finding n: 3 Title:Lack of evidence of approval of invoices

Observation:

We noted that expenditure is authorised and verified by local staff, then by the ExecutiveDirector. However, the Executive Director is not always in Belize and his approval was notevidenced on the supporting documents in some cases.

In these cases there was therefore insufficient evidence that costs had been authorised by theExecutive Director.

Priority: Medium


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Recommendation:

We recommend that the SR ensures that the approval of senior staff members is evidenced onall invoices. If the Executive Director is not in Belize, approval by email can be given and theemail can be printed out and attached to the supporting document to evidence approval.


C-NET+ agrees with the observation.

C-NET+ will ensure that recommendation is implemented immediately to properly documentapproval of invoices.

Finding n: 4 Title:Financial management weaknesses

Observation:

Expenditure is listed on an excel spreadsheet per budget line and referenced by the suppliersvoucher number.

We noted the following weaknesses with regard to project financial management:

1. There is no formal accounting system (a basic Excel system is used);

2. Cheque numbers are not mentioned on the list of expenditure. It is therefore difficult for theSR to link project expenditure to a transaction on a bank statement;

3. The project code and budget line are not mentioned on the supporting documents;

4. There is no budget management system in place;

5. A paid stamp is not used.

Whilst we were able to audit project expenditure without identifying any financial errors, without

adequate financial management procedures in place there is an increased risk of errors beingmade in the project financial reports.

Priority: High

Recommendation:

We recommend the SR to ensure that the financial management system is improved to ensurethat all transactions are correctly recorded under the appropriate Project and budget line andthat supporting documents are duly referenced and can be linked to a transaction on the bankstatement.

We also recommend that the SR implement an adequate budget management system enable to

monitor closely project costs and budget consumption in a timely manner and with sufficientdetails.


C-NET+ agrees with the observation but lacks the proper human resource that has experiencein a formal accounting system.

C-NET+ will seek to acquire a proper accounting system and the funds to be able to hirepersonnel with the expertise.

C-NET+ will ensure to implement immediately the mention of cheque numbers on the list ofexpenditures.

C-NET+ will ensure to adopt the practice of documenting the project code and budget line in all

supporting documents.


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C-NET+ will seek financing and training to have a proper management system in place.

C-NET+ will procure a paid stamp to use in accordance with recommendations.

Cash management

The SR currently has one operating account held in the name of CNET+ at the Heritage Bank inBelize. The SR uses this account to process all payments and receive funding from various sources.

The majority of expenditure is paid by cheques. Only two signatories are needed to issue payments.Petty cash is not kept on the premises. There are currently no bank reconciliations performed.

Overall rating: Partially satisfactory

Finding n: 5 Title:Weaknesses in bank and cash management

Observation:

We noted the following weaknesses in bank and cash management:1. The lack of coding means that it is difficult for the SR to link transactions on bank statementsto supporting document;

2. There are no monthly bank reconciliations carried out;

3. There is no funds reconciliation or statement of cash position;

4. There is no cash flow forecast.

Priority: High

Recommendation:

We recommend that the SR notes the payment reference on each supporting document and toperform monthly bank reconciliations and periodic funds flow reconciliations in order to reconcileamounts paid and amounts reported and claimed to the donors and to determine the projectcash balance.


C-NET+ agrees with observation.

C-NET+ will need to seek proper training to carry out this activities since at the moment there inno HR with this expertise or if possible hire someone with this expertise which is dependant inthe availability of funding.

Procurement

CNET does not have elaborate procurement procedures. The procurement process mainly entailsidentifying the products or services that are necessary in order to continue the operations of theorganization and stamping and signing the invoices. There are no requests for quotations sent tovarious suppliers and they do not keep a list of suppliers with who they are used to work. Trainingwas provided by external consultants but we were not provided with any evidence of the selectionprocess of these individuals.


Finding n: 6 Title:Written contracts are not in place.


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Observation:

Services that were provided to CNET were conducted by individuals without having a contract inplace. These individuals services were acquired for training the staff at CNET+.

Risks associated with a lack of a contract can range from non-performance of duties, no

evidence for legal recourse, and no legally binding agreement. Individuals that perform trainingeither have a working relationship with the SR or they are recommended through their otherCNETs partners and contacts.

Priority: High

Recommendation:

We recommend that the SR creates proper contracts with individuals providing services so as tomake clear the deliverables expected and the legal relationship.


C-NET+ agrees with the observation but would like to note that the consultants hired were paiddirectly by PR and we failed to question if a contract should be signed with us or directly with PRwho made direct payment for this services. In addition C-NET+ needs to acquire knowledge inthe elaboration of contracts.

C-NET+ will ensure to seek training to be able to make proper contracts, keep contacts ofproviders and properly document the procurement process following what is outlined in ourpolicy and procedures manual.

Asset Management

The SR does not have any assets relating to project activities.

Overall rating:Not applicable

Warehouse Management

The SR does not have a warehouse for the storage of pharmaceutical and non-pharmaceutical drugs.


Information Systems

There is no IT department at the SR. CNET has laptops running Windows software. They have theMicrosoft word processing suite and access to the internet at the local office. The IT infrastructure isbasic but sufficient to for the size of the project. We were not provided with any explanation on back

up procedures.


Finding n: 7 Title:Lack of back-up procedures

Observation:

The SR could not demonstrate that it has data back-up procedures in place. There is therefore arisk that project data could be lost in the event of a disaster.

Priority: Medium

Recommendation:


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We recommend introduces data back-up procedures. These procedures should include regularback-up of system data and storage of the back-up copy in a secure location away from themain SR office.


C-NET+ agrees with the observation, C-NET+ will research and adapt the best possible back upprocedure for the organization.

General Administration

There is no General administration function as the entity is very small. Daily allowances were paid tothose individuals who attended training. Attendance sheets were signed by all training courseparticipants. Fuel costs are not sufficiently supported.

Finding n: 8 Title:Fuel cost monitoring

Observation:

We noted that fuel costs were only supported by a receipt from a gas station, which just notedthe amount paid. These receipts were duly authorised by the SR but there was no explanationas to what travel and activity the fuel costs are related to. There is no car logbook, there is notravel or mission order stating who is travelling, how and when.

There is therefore a risk that the SR reports expenditure that is not related to the project.

Priority: Medium

Recommendation:

We recommend that the SR improves the management of fuel costs by either:

Adding relevant information on the supporting documentation to enable to make a clear

link between receipts and project activities;

Organise a system of vehicle logbook with record of each travel made and monitoring ofaverage monthly fuel consumption.


C-NET+ agrees with the observation. C-NET+ will implement both recommendations to ensureproper monitoring of fuel cost

Follow up on Previous Audits

No audits have taken place previously.


Mark HendersonPartnerMoore Stephens LLP150 Aldersgate StreetLondon EC1A 4AB21 April 2015


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Annexes

Annex 1.1 Statement of Expenses - SR Expenditures

BZD US$

Travel 6,215 3,108

Sub-contracted activities and procurement 19,000 9,500

Equipment/supplies 638 319

Workshops/training/other events 4625 2,313

Other 25,772 12,885

Total SR Expenditure 56,250 28,125

Annex 1.2 Statement of Expenses - Direct Payments

EASY INN Accomodation for articipants 2,530.00

AUSENCIO FERMIN OLIVERA Consultancy services 2,000.00

KAREN D. SIMPLIS Consultancy Services 2,000.00

MARITZA KARINA VILLANUEVA catering case mgmt 2,023.00

THE ANGELUS PRESS LTD Pymt for supplies & stationery 238.38

FULTEC SYSTEMS

PYMT FOR TONERS & PJ

SCREEN 318.93

C-NET+ REIMBURSMENT FOR TRAINING 565.00REYNALDO D'AUBUISSON ARRIETA Consultancy for Stigma Index 5,500.00

Total Direct payments 15,175.31

Total Project cost 43,300.31

Mark HendersonPartner

Moore Stephens LLP

21/04/2015


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Annex 2: Combined Delivery Report


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Mark Henderson

PartnerMoore Stephens LLP

21/04/2015


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Annex 3: Reconciliation between Statement of Expenses and CombinedDelivery report

US$Combined Delivery Report total (see Annex 2) 1,123,413.74

Less: direct implementation by UNDP (962,465.31)Less: expenditure incurred by other SRs (132,792.43)

Add: Direct payments 15,175.31Total 43,300.31Statement of Expenditure Total 43,300.31Variance -

US$Outstanding NEX advances total (see Annex 2) -

US$Un-depreciated Fixed Assets total (see Annex 2) 1,711.17

Less: relating to UNDP (1,711.17)Total -

US$Inventory total (see Annex 2) -

US$Prepayments total (see Annex 2) -

Commitments listed within the Funds Utilization Statement are outside of our audit scope.


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Annex 4: Audit area ratings

Standard Rating Definition

Satisfactory Internal controls and risk management practices were adequately established

and functioning well. No high risk areas were identified. Overall, the SRsobjectives are likely to be achieved.

Partially Satisfactory Internal controls and risk management practices were generally establishedand functioning, but needed improvement. One or more high and medium riskareas were identified that may impact on the achievement of the SRsobjectives.

Unsatisfactory Internal controls and risk management practices were either not establishedor not functioning well. The majority of issues identified were high risk.Hence, the overall SR objectives are not likely to be achieved.

Annex 5: Audit finding priority ratings

The following categories of priorities are used:

High Prompt action is required to ensure that UNDP is not exposed to high risks. Failure to takeaction could result in major negative consequences and issues.

Medium Action is required to ensure that UNDP is not exposed to risks that are consideredmoderate. Failure to take action could contribute to negative consequences for UNDP.

Low Action is desirable and should result in enhanced control or better value for money.

Belize Bel-910-g02-h C-net Audit Report Final

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