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' KENYA PRIVATE SECTOR ALLIANCE

The Voice of the Private Sector in Kenya

KENYA YOUTH EMPOWERMENT PROJECT- COMPONENT 2

KENYA PRIVATE SECTOR ALLIANCE

IDA CREDIT NUMBER 4697 - KE

PROJECT FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2014

Prepared in accordance with the Cash Basis of Accounting under the International Public Sector Accounting Standards (IPSAS)

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KENYA YOUTH EMPOWERMENT PROJECT-COMPONENT 2 PROJECT FINANCIAL STATEMENTS IDA CREDIT NUMBER 4697 - KE FOR THE YEAR ENDED 30 JUNE 2014 TABLE OF CONTENTS

Project information and performance

Statement of implementing agency and MoYAS responsibility

Report of the independent auditor

Summary of management letter issues

Statement of receipts and payments

Statement of comparison of budgeted and actual expenditure

Statement of Special (Designated) account activity

Statement of Special (Designated) account reconciliation

Notes to the financial statements

Annexes IDA Funds transferred to Project Account Cash Receipt Reconciliation

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Annex 1 Annex 2

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KENYA YOUTH EMPOWERMENT PROJECT- COMPONENT 2 PROJECT FINANCIAL STATEMENTS IDA CREDIT NUMBER 4697 - KE FOR THE YEAR ENDED 30 JUNE 2014

PROJECT INFORMATION AND PERFORMANCE

1.0 Component 2 - Implementing Agency Details

Kenya Private Sector Alliance (KEPSA) Mamlaka Road Shelter Afrique Building, 2nd floor P. 0 . Box 3556 - 00100 Nairobi Telephone:+254-20-226201 O

2.0 Members of the Project Management during the year

Name

Ehud Gachugu Patrick Waringa Alice Njuguna Josephine Otieno Judy Chege Harrison Ngatia Benson Muchai Eunice Mbului Michael Mutisya Anne Katule Eric Mokebo Eric Osumba Linda Cherep Miriam Otieno Doreen Diki James F. Ochieng Alex Nene

3.0 Project Bank Accounts

Designated Account The Cooperative Bank of Kenya Cooperative House Branch Account No.02120134040700 P. 0 Box 48231 - 00100 Nairobi

4.0 Project Auditor

Designation

Project Director Project Accountant Procurement Officer Monitoring and Evaluation Officer Internship Officer Internal Audit Officer Training Officer Training Officer Data Officer Project Officer - Mombasa Project Officer - Kisumu Assistant Project Officer -Kisumu Assistant Project Officer -Kisumu Assistant Project Officer - Mombasa Assistant Internship Officer Accounts and Administration Assistant Project Assistant

Project Account Equity Bank Limited Equity Centre Branch Account No.0810296215747 P. 0 . Box 75104- 00200 Nairobi

Independent Project External Auditor Baker Tilly Merali's Certified Public Accountants New Rehema House P.O. Box 67486 - 00200 Nairobi

1

Left in July 2014

Left in August 2013 Joined in May 2014

Left in October 2013 Joined in May 2014

Left in November 2014

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KENYA YOUTH EMPOWERMENT PROJECT- COMPONENT 2 PROJECT FINANCIAL STATEMENTS IDA CREDIT NUMBER 4697 - KE FOR THE YEAR ENDED 30 JUNE 2014

PROJECT INFORMATION AND PERFORMANCE (CONT'D)

4.0 Background Information on the Project

The Government of Kenya, with support from World Bank, is implementing the Kenya Youth Empowerment Project (KYEP) over a period of 5 years (2010 - 2015) with a 1 year extension upto 2016. The KYEP is Coordinated by the Ministry of Devolution and Planning (MoDP) previously under the defunct Ministry of Youth and Sports (MoYAS) and comprises three components: Component 1 being an enhancement of the' Kazi Kwa Vijana' Program, component 2 providing private sector internship and training and component 3 focusing on capacity building and policy development within the MoDP.

The Kenya Private Sector Alliance (KEPSA) has been mandated by the Government of Kenya to implement Components 2 and 3, which will provide approximately 10,000 youth with internship and training in both the formal and informal sector. KEPSA will focus on six priority sectors identified in vision 2030 as potential for growth, namely: Finance, ICT, Energy, Tourism, Manufacturing and Micro and Small Enterprise ("Jua Kali").

The main objective of the project is to enhance employability skills among the Kenyan youth. Component 2 of the project is a pilot project that addresses issues of lack of skills and work experience among the youth. It will provide selected youth aged 15 - 29 years; who have a minimum of 8 years of schooling; are out of school for at least a year, and are currently not working, with an opportunity to acquire an internship and training in the private sector. The percentage of interns that hold tertiary qualifications will be capped at 40%. Third party technical training will comprise 50% of the 6 month internship period, with a two-week non-residential life skills training at the beginning of the program in Cycle 1-4 and 6-8. A new design will be introduced in the Fifth Cycle to try and measure the impact of each intervention (Life skills training and workplace experience; technical skills training and work place experience; and work only) and thus life skills will not be compulsory at the beginning of the program.

Date of effectiveness, 18 August 2010

Closing date: 28 February 2016

5.0 Project Objectives: Information as contained in the Project Appraisal Document (PAD)

The proposed Project Development Objective (PDQ) is to support the Government of Kenya efforts to increase access to Youth - targeted temporary employment programs and to improve youth employability.

The specific objective for Component 2 is to improve employability, by providing youth with work experience and skills through creation of internships and relevant training in formal and informal sector (with priority given to the six growth sectors defined by the Kenya Vision 2030).

6.0 Project Components and Costs

Component 2: Goods, Works, Consultant Services and Internship Stipends

Project Cost: USO 15.6 Million

7 .0 Summary of Performance: Information obtained from the physical progress section of the IFR

We conducted our field visit in Nairobi, Mombasa and Kisumu on 11 November to 14 November 2014. During our field visits we verified 15 Employers with a total of 40 interns in Nairobi, 15 Employers with a total of 36 interns

(i) in Mombasa and 20 Employers with a total of 37 interns. We verified physical existence of interns and Employers and enquired into the payment from KEPSA for both interns and Employers. Further, ensured that the interns daily dairies are filled in on a daily basis and signed off by the supervisor in charge usually on a weekly basis.

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KENYA YOUTH EMPOWERMENT PROJECT- COMPONENT 2 PROJECT FINANCIAL STATEMENTS IDA CREDIT NUMBER 4697 - KE FOR THE YEAR ENDED 30 JUNE 2014

PROJECT INFORMATION AND PERFORMANCE (CONrD)

7.0 Summary of Performance: Information obtained from the physical progress section of the IFR (cont'd)

(ii) Employers Meetings

During the period under review, Cycle 3 internship ended on 29 July, 2013 except for Interns who begun their internship late and those who had attended MSE Sector Specific Training (SST) who had to extend by two weeks, a total number of 1411 interns completed their internship in Nairobi (801), Mombasa (350) and kisumu (260) . In Cycle 3, within a month and a half after programme completion, overall 49% had either secured employment or gone for further skills development. A total of 390 (approximately 32%) of the Interns had secured employment. Cycle 4 work place experience ended in December 2013, 42 interns who started their internship late as a result of delayed interviews or employers' request to have the interns delay reporting extended their stay at the work place into January 2014 to cover the full 3 months required. A total of 292 Cycle 3 interns and 676 Cycle 4 interns, dropped from the program at various stages of the programme elements namely: Life Skills Training (LST), Core Business Skills Training (CBST), Entrepreneurship Skills Training (EST) and SST translating to overall attrition rate of 11 % and 22%, respectively, in Cycles 3 and 4. The total number of Cycle 5 applications that were received by the end of the submission deadline was 19,045 (8,553 female). Approximately 75% of the applications were received in hardcopy and 25% via soft copy (e-mail and online applications). The overall gender split of eligible applicants was 45% female and 55% male. Additionally, those with no tertiary education were the majority at 83% (53% secondary and 20% primary level), those with tertiary education (Diploma and Degree) constituted 12% while Certificate level were 5%.

(iii) Monitoring and Evaluation

Management Information System (MIS)

MIS continued enhancing data management for both the training and internship data which are continuously being populated in the MIS. The interns payment list during trainings and internship were also generated from the system. This has led to reduction in the computational errors as well as complaints from Interns receiving less pay as a result of manual generation of the payment lists. The Project is currently carrying out verification and validation of data in order to ensure that system reports are accurate. Data verification in the system has been completed for years 2010/2011, 201112012 and 201212013. The financial year 2013/2014 verification exercise is nearing completion. The system is currently fully operational and the next IFR due in January2015 will be generated from the system.

Cycle 4 Beneficiary Assessment (BA)

During the period under review and with the conclusion of the Cycle 4 interns tracking (Six months after internship completion), comparison was made on interns post programme engagement across the 4 Cycles. Overall an average of 85% of the interns have either secured employment or gone for further skills development within 6 months after internship completion between Cycle 1 and 4. specifically, 76% secured employment and 9% in further skills development. Overall of the employed interns, the proportion of male : female stood at an average of 56% :44% respectively.

Cycles 3 and 4 Programme Outcome Monitoring

During the period under review, Cycle 3 internship ended on 29th July, 2013 except for Interns who begun their internship late and those who had attended MSE Sector Specific Training (SST) who had to extend by two weeks, a total number of 1,411 interns completed their internship in Nairobi (801), Mombasa (350) and Kisumu (260). In Cycle 3, within a month and a half after programme completion, overall 49% had either secured employment or gone for further skills development. A total of 390 {approximately 32%) of the Interns had secured employment. Cycle 4 work place experience ended in December 2013, 42 interns who started their internship late as a result of delayed interviews or employers' request to have the interns delay reporting extended their stay at the work place into January 2014 to cover the full 3 months required. A total of 292 Cycle 3 interns and 676 Cycle 4 interns, dropped from the program at various stages of the programme elements namely: LST, CBST/EST and SST translating to overall attrition rate of 11 % and 22% respectively in Cycles 3 and 4. The total number of Cycle 5 applications that were received by the end of the submission deadline was 19,045 (8,553 female) . Approximately 75% of the applications were received in hardcopy and 25% via soft copy (e-mail and online applications).The overall gender split of eligible applicants was 45% female and 55% male. Additionally, those with no tertiary education were the majority at 83% (53% secondary and 20% primary level), those with tertiary education (Diploma and Degree) constituted 12% while Certificate level were 5%.

Baseline Survey Follow up survey data collection exercise was undertaken between 15th November and 23rd December 2013, with a total of 1692 respondents successfully interviewed out of the targeted 2193 baseline survey respondents hence representing 23% attrition at follow up phase. during the quarter ended 30 June 2014, data cleaning of the end line survey conducted during the previous quarter continued. data analysis is expected to be completed in the next quarter.

Internal Audit

During the fiscal year, the Internal Audit carried out several reviews and spot checks such as; Financial management audit, review of payment of Interns stipend and Employers fees, Core Business Skills Training (CBST) audit, Entrepreneurship skills training (EST) audit, Sector Specific Skill Training (SSST) audit and review of the Microsoft dynamics-Financial Module. The key findings arising from the Internal audit were documented and shared with management and response/action taken.

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KENYA YOUTH EMPOWERMENT PROJECT- COMPONENT 2 PROJECT FINANCIAL STATEMENTS IDA CREDIT NUMBER 4697 - KE FOR THE YEAR ENDED 30 JUNE 2014

STATEMENT OF KEPSAAND MoDP RESPONSIBILTIES

The Kenyan Public Audit Act 2003 requires KEPSA and MoDP to prepare project financial statements, which give a true and fair view of the state of affairs of the project as at end of each financial period and of the operating results for that period. It also requires KEPSA and MoDP to ensure that the proje~t keeps proper accounting records, which disclose with reasonable accuracy the financial position of the project. They are also responsible for safeguarding the assets of the project.

KEPSA and MoDP accept responsibility for the project financial statements, which have been prepared using appropriate accounting policies supported by reasonable and prudent judgements and estimates, in conformity with International Public Sector Accounting Standards (IPSAS) and in the manner required by the Kenyan Public Audit Act 2003. KEPSA and MoDP are of the opinion that the project financial statements give a true and fair view of the state of the financial affairs of the project and of its surplus for the period.

KEPSA and MoDP further accept responsibility for the maintenance of accounting records which may be relied upon in the preparation of the project financial statements, as well as adequate systems of internal financial control.

Nothing has come to the attention of the KEPSA and the MoDP to indicate that the project will not remain a going concern for at least the next twelve months from the date of this statement.

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Approved by KEPSA on ... !5..'.J>k.41.!J8.~ .. ;?.,QJ !f ............... and signed on their behalf by;

Accounting Officer Kenya Private Sector Alliance - CEO

Project Director Kenya Private Sector Alliance - KYEP Component 2

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KENYA YOUTH EMPOWERMENT PROJECT-COMPONENT 2 PROJECT FINANCIAL STATEMENTS PROJECT NUMBER 4697 KE FOR THE YEAR ENDED 30 JUNE 2014 REPORT OF THE INDEPENDENT AUDITOR

Certified Public Accountants 1st Floor New Rehema House, Rhapta Road , Westlands , P.O. Box 67486 - 00200, Nairobi, Kenya

T: + 254 20 444 1384 F: + 254 20 444 2706 M: +254 738 600 209

reception2@meraliscpa.com www. bakerti I lymera Ii s.co. ke

We have audited the accompanying Project Financial Statements and the Designated Account for the Kenya Youth Empowerment Project (KYEP) implemented by Kenya Private Sector Alliance (KEPSA), 'the Entity,' for the period from 1 July 2013 to 30 June 2014. The Project Financial Statements and the Project Designated Account are prepared on cash disbursements basis in conformity with International Public Sector Accounting Standards and the Kenyan Public Audit Act 2003. Expenses are recognized when paid rather than when incurred. The Project Financial Statements and Designated Account are the responsibility of the management of Kenya Private Sector Alliance (KEPSA), Ministry of Devolution and Planning (MoDP) and the Project Director. Our responsibility is to express an independent opinion on the Statements and the Designated Account based on our audit.

We conducted our audit in accordance with the International Standards on Auditing. Those standards require that we plan and perform the audit to obtain reasonable assurance that the Project Financial Statements and the Designated Account are free of 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 judgement, 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 controls relevant to the Entity's preparation and fair presentation 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 company's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Project Management as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion. We have highlighted our summary of management letter issues in p e 6.

In ou opinion, the Proje Financial Statements and the Designated Account presents fairly, in all material res~ t , the credit fund alance brought forward and the expenses incurred by the Project for the implementation peri~ f 1 Jul~ 2 13 to 30 June 2014 in accordance with the financing agreement with International Deve op n Associ ion (IDA) through the Government of Kenya.

Partner Baker Tilly erali's Practising Certificate No. 1213

Date .....•..•• J~\·~·'1. ...... . Baker Tilly Meralis CPA

First Floor, New Rehema House Rhapta Road, Westlands P. 0. Box 67486 - 00200 Nairobi, Kenya

·Kigali Off ice: Centanary House· 4th Floor, P.O.BOX 26 19, Nyaugenge District. Kigali City, Rwanda. M: +250 788 407 373, E: cible_auditors@yahoo.com

·Uganda Office: National Insurance Corporation (NIC) Bui lding· 6th floor P.O. Box 1239. Plot 3. Pinkington Road, Kampala, Uganda. M:+256 752 555 202, E: dativa@utlonline.co.ug

Aff1hale Offices

•Mogadishu Office: E: receplion2@meraliscpa.com, M: +252-615-572257

An independent member of Baker Tilly International 5

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KENYA YOUTH EMPOWERMENT PROJECT- COMPONENT 2 PROJECT FINANCIAL STATEMENTS

PROJECT NUMBER 4697 KE FOR THE YEAR ENDED 30 JUNE 2014

SUMMARY OF MANAGEMENT LETIER ISSUES

No

Inadequate support for payments

2 Payments to interns above actual days entitled

3 Weaknesses in bank reconciliation

4 Omissions in templates used for payment vouchers

5 Inadequacies in interns' attendance records for Kisumu

6 MIS software not put to full use

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KENYA YOUTH EMPOWERMENT PROJECT- COMPONENT 2 PROJECT FINANCIAL STATEMENTS PROJECT NUMBER 4697 KE FOR THE YEAR ENDED 30 JUNE 2014

STATEMENT OF RECEIPTS AND PAYMENTS

Cumulative to 2013/2014 2012/2013 date

Kshs Kshs Kshs

Notes

CASH BALANCE B/F 4 10,458,065 54,283,453

RECEIPTS FOR THE YEAR

IDA funds transferred to Project Account 5 391,252,191 183,516,980 445,535,644

TOTAL CASH AVAILABLE 401 ,710,256 237,800,433 445,535,644

PAYMENTS Project expenditure: Non-current assets 6 1,370,732 4,164,338 5,535,070 Interns' stipends and Employers' fees 120,092, 119 78,735,952 198,828,071 Consultancies 110,694,960 100,078,895 210,773,855 Operating costs 55,177,255 44,363,183 99,540,438

TOTAL PAYMENTS 287,335,065 227,342,368 514,677,433

CASH BALANCE C/F 4 114,375,191 10,458,065 (69, 141,789)

The notes to the accounts form an integral part of these Financial Statements.

The project financial statements were approved by KEPSA on .. .J..SJ.! .. Q. .. /.. ...... 2014 and signed on their behalf by:

Accounting Officer Kenya Private Sector Alliance - CEO

Project Director KYEP Component 2

>;, CARoWt(t kAA1 l2~< I

Name

Name

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Signature

~ v Signature

--, KENYA YOUTH EMPOWERMENT PROJECT- COMPONENT 2 PROJECT FINANCIAL STATEMENTS

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PROJECT NUMBER 4697 KE FOR THE YEAR ENDED 30 JUNE 2014

STATEMENT OF COMPARISON OF BUDGET AND ACTUAL EXPENDITURE

2013/2014 2013/2014 Budget Actual Variance

Notes Kshs Kshs Kshs

RECEIPTS

TOTAL RECEIPTS 432,961,965 401,710,256 31,251,709

PAYMENTS

Project expenditure

Non-current assets 1,745,608 1,370,732 374,876 Payment of Stipends 167,664,000 120,092,119 47,571,881 Consultancies 177,034,801 110,694,960 66,339,842 Operating costs 86,517,556 55,177,255 31,340,302

TOTAL PAYMENTS 432,961,965 287,335,065 145,626,901

SURPLUS FOR PERIOD 4 114,375,191 (114,375, 191)

The surplus of budgeted expenditure over the actual expenditure of 34% (2012/2013: 29%) was mainly due to delay in rolling out Cycle 5 activities which were scheduled to commence in September 2013 but started in February 2014. The delay was caused by lack of factoring adequate funds in the government fiscal budget which was resolved by having a supplementary budget of amounts not factored in the main budget after intervention by KEPSA management and the World Bank.

IDA loan actual amount of Kshs.401 ,710,256 relate to fund balance brought forward from the previous year of Kshs 10,458,005 and the amount received during the year of Kshs 391,252, 191. The surplus of actual amount received over budget of 7% (2012/2013: 26%). This is explained by the Project Design which is such that, request for funds are based on a six monthly forecast of activities.

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KENYA YOUTH EMPOWERMENT PROJECT- COMPONENT 2 PROJECT FINANCIAL STATEMENTS PROJECT NUMBER 4697 KE FOR THE YEAR ENDED 30 JUNE 2014

STATEMENT OF SPECIAL (DESIGNATED) ACCOUNT ACTIVITY

Opening balance as at 1 July 2013

Add:

Total Amount deposited by World Bank

Total Net Funds

Deduct:

Total amount withdraw Annex 2

Closing balance as at 30 June 2014

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USO

1,021,207 .59

5,992,074.00

7,013,281.59

4,166,716.77

4,166,716.77

2,846,564.82

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KENYA YOUTH EMPOWERMENT PROJECT- COMPONENT 2 PROJECT FINANCIAL STATEMENTS PROJECT NUMBER 4697 KE FOR THE YEAR ENDED 30 JUNE 2014

STATEMENT OF SPECIAL(DESIGNATED) ACCOUNT RECONCILIATION

DESIGNATED FUND ACCOUNT RECONCILIATION STATEMENT

Credit No.4697 MOYAS I KEPSA

Bank Account No. 02120134040700 Held with Cooperative Bank of Kenya

1. Amount advanced by World bank

Less:

2. Total amount recovered by World Bank

3. Outstanding amount advanced to Special Account balance

Represented by:

4. Ending Special account balance at 30 June 2014 5. Amount claimed but not credited at 30 June 2014

6. Amount withdrawn and not claimed 7. Services charges not included in 5 & 6 above

Less: 8. Interest earning included in Special Account

9. Total Outstanding advance to Designated Account year ended 30 June 2014 (See note below)

Discrepancy between total appearing in line 3 and 9

USO

11,418,956.41

7,253,897.12

4, 165,059.29

2,846,564.82

1,318,494.47

4, 165,059.29

The information used to prepare this Statement is obtained from Statement of Special Account Reconciliation.

Note: Total amount withdrawn as per Designated Account Total amount as outstanding balance (Line 9 above) Difference (both figures provided by National Treasury/External Resources Department)

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4, 166,716.77 4, 165,059.29

1,657.48

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KENYA YOUTH EMPOWERMENT PROJECT- COMPONENT 2 PROJECT FINANCIAL STATEMENTS PROJECT NUMBER 4697 KE FOR THE YEAR ENDED 30 JUNE 2014

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2014

1 Financial reporting under International Public Sector Accounting Standards (IPSAs)

The preparation of financial statements that comply with International Public Sector Accounting Standards (IPSAS) on the cash basis require the use of estimates and assumptions. Particularly, IPSAS 1 requires that, where applicable, financial statements provide information about an entity's assets, liabilities, net assets I equity, revenue, expenses, and cash flows and prescribes the minimum information that must be presented on the face of the various statements and in the notes. It also requires the project management to;

i. Present any information about the basis of preparation of the financial statements and the specific accounting policies selected and applied for significant transactions and other events and;

ii. Provide additional information which is not presented on the face of the financial statements but is necessary for a fair presentation of the entity's cash receipts, cash payments, cash balances and other statements offinancial position .

2 Significant accounting policies

The principle accounting policies adopted in the preparation of these financial statements are set out below:

a) Basis of preparation

The financial statements have been prepared in accordance with International Public Sector Accounting Standards (IPSAS) with particular emphasis on Cash Basis financial Reporting under Cash Basis of Accounting.

b) Cash Basis of Accounting

The cash basis of accounting recognizes transactions and events only when cash (including cash equivalents) is received or paid by the entity. Cash equivalents are defined as short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

c) Foreign Currency Transactions Cash receipts and payments arising from transactions in a foreign currency are recorded in the financial statements using the average rate at which the funds were disbursed by the Treasury. Cash balances held in foreign currency are also reported using the exchange rate at which the funds were disbursed.

3 Budget

The budget is developed on the same accounting basis (cash basis), same classifications basis, and for the same period as for the financial statements. The budget was approved as required by Law and Treasury Regulations as detailed in the Government of Kenya Budget Printed Estimates .

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KENYA YOUTH EMPOWERMENT PROJECT- COMPONENT 2 PROJECT FINANCIAL STATEMENTS PROJECT NUMBER 4697 KE FOR THE YEAR ENDED 30 JUNE 2014

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2014 (CONrD)

4 Cash balances

Project account balances Cash in hand Advances Outstanding imprests

201312014 Kshs

114,324,629 50,562

114,375, 191

2012 / 2013 Kshs

10,426,837 31,228

10,458,065

Cash comprises cash on hand, demand deposits and cash equivalents. Demand deposits and cash equivalents consist of balances with banks, advances given out pending submission of accountability documents, outstanding imprests and investments in short-term money market instruments.

5 IDA funds transferred to Project Account

6

Total transferred to the Project Account Annex 391 ,252, 191 183,516,980

Statement of non-current assets

Equipment & MIS Software Furniture computer Total

Kshs Kshs Kshs Kshs

Opening balance 1 July 2013 93,256 5,577,120 5,670,376

Additions (as per Statements of Receipts and Payments) 740,390 630,342 1,370,732 Disposals

Closing Balance 30 June 2014 740,390 93,256 6,207,462 7,041 ,108

This schedule includes all assets acquired from the commencement of the Project. The assets are stated at original cost. The existence and beneficial ownership has been verified by the Ministry of Devolution and Planning (Mo DP).

7 Currency The financial statements are presented in Kenya Shillings (Kshs).

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I KENYA YOUTH EMPOWERMENT PROJECT- COMPONENT 2 Annex 1 PROJECT FINANCIAL STATEMENTS PROJECT NUMBER 4697 KE FOR THE YEAR ENDED 30 JUNE 2014

IDA funds transferred to Project Account FY 2013/2014

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Amount as per Transfer from Transfer from

Bank statement - Exchequer to Exchequer to

l Equity Mo DP Mo DP

Date Desctription K.shs Kshs USO

l 08.07.2013 RTGS- MoDP 30,600,265 30,600,265 365,333

l ·' 25.09.2013 RTGS- MoDP 65,000,000

89,274,773 1,021,100

21.11.2013 RTGS-MoDP 24,274,773

03.12.2014 RTGS- MoDP 45,356,527 45,356,527 526,117

J 18.02.14 RTGS- MoDP 182,151,978 182,151,978 2,117,800

03.06.14 RTGS- MoDP 43,868,648 43,868,648 501,700

391,252,191 391,252,191 4,532,049

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KENYA YOUTH EMPOWERMENT PROJECT-COMPONENT 2 Annex 2 PROJECT FINANCIAL STATEMENTS PROJECT NUMBER 4697 KE FOR THE YEAR ENDED 30 JUNE 2014

CASH RECEIPT RECONCILIATION USO

Balance brought forward at 01July2013 1,021,208

Receipt from World Bank during the year 5,992,074

7,013,282

Ending balances (not withdrawn by KEPSA) at 30 June 2014 (2,846,568)

Total amount withdrawn from Designated Account during the year 4,166,714

Total amount received as per Project Account during the year 4,532,049

Difference (see note below) (365,336)

Explanation of the difference

The difference represents the amount disbursed in the previous year (2012/2013) but received in the Project Account in the year under review (2013/2014).