Review of Financial Statements - Caribbean Disaster Emergency ...
Review of Financial Statements - Caribbean Disaster Emergency ...
Review of Financial Statements - Caribbean Disaster Emergency ...
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Reference: BM09/19/10.2<br />
REVIEW OF FINANCIAL STATEMENTS<br />
FOR YEAR ENDING AUGUST 31, 2008<br />
A. SUMMARY<br />
The <strong>Caribbean</strong> <strong>Disaster</strong> <strong>Emergency</strong> Response Agency operates in an environment<br />
whereby efficiency and effectiveness is necessary for the organization to meet its goals<br />
and objectives. Cost control and budget monitoring are tools that must be instituted to<br />
help the company be sustainable in this current economic environment. In addition, the<br />
organization must actively pursue new project financing and recoup all outstanding donor<br />
contributions where necessary.<br />
In analyzing the audited financial statements for the year ending August 31, 2008 the<br />
following highlights should be noted. The company’s assets decreased by 12.9% whereas<br />
the liabilities rose significantly by 45.7% for the relevant period. In addition, CDERA’s<br />
funding reserves decreased by 20.7%. With regards to revenue and expenditure there has<br />
been an increase <strong>of</strong> 53.1% and 39.7% respectively which has led to excess <strong>of</strong> revenue<br />
over expenditure <strong>of</strong> BDS$115,282.00.<br />
B. BALANCE SHEET<br />
Assets<br />
Overall the assets <strong>of</strong> the agency for the year just ended decreased by BDS$710,095<br />
(EC$958,627) primarily due to significant decreases in Cash and Cash equivalents and<br />
accounts receivables <strong>of</strong> 13.9% and 16.8% respectively.<br />
(i)<br />
(ii)<br />
Cash and Cash Equivalents - decreased by BDS$654,743 (EC$883,902) mainly<br />
due to transfers from accounts such as Hurricane Ivan Relief fund, Turkish fund<br />
Time Account and the <strong>Emergency</strong> Assistant Fund to cover expenses for both<br />
projects and disaster relief.<br />
Accounts Receivable (Net) - includes outstanding contributions from<br />
participating states and funds owed by projects. For the year ending August 2008<br />
receivables have decreased by BDS$129,541 (EC$174,881) or 16.8%. This is<br />
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Reference: BM09/19/10.2<br />
Liabilities<br />
attributed to a 49.6% decrease in sundry receivable such as VAT refunds and<br />
project reimbursements.<br />
Although there was an overall decrease in amounts due to CDERA there was a<br />
significant increase in dues outstanding from participating states. Donor<br />
contribution from participating states is the process by which CDERA funds its<br />
operations. Of the 16 participating states 10 countries were up to date with their<br />
payments at the end <strong>of</strong> the financial year. Outstanding amounts were due from<br />
Antigua & Barbuda, Dominica, Guyana, St Vincent & The Grenadines, Jamaica<br />
and Bahamas.<br />
The outstanding amounts due have increased by BDS$153,188 (EC$206,803) or<br />
22.1%. Of the outstanding balances Guyana and Jamaica accounts for over 72%,<br />
that is BDS$611,263 (EC$825,205), this is significant and all possible avenues<br />
should be used to recover these funds. In reviews <strong>of</strong> these outstanding balances it<br />
was felt that a further BDS$126,539 (EC$170,828) is doubtful.<br />
Accounts payable and accruals represents amounts falling due within one year. For the<br />
financial year ending August 31, 2008 balances outstanding was BDS$614,339<br />
(EC$829,357) which represent a 7.6% increase above that <strong>of</strong> the corresponding period<br />
last year. In addition advance contributions by participating states have increased<br />
significantly from BDS$78,791 (EC$106,367) to BDS$332,428 (EC$448,779) over<br />
420%. There were six (6) countries that made advance payments on their contributions;<br />
Bahamas, British Virgin Islands, Turks & Caicos, Barbados, Jamaica and St Kitts and<br />
Nevis. It should be noted that although Jamaica falls within this category they still carry<br />
arrears on their account.<br />
Fund Balances<br />
(i)<br />
(ii)<br />
Restricted Funds - Fund balances as at the year just ended reflect an overall net<br />
decrease <strong>of</strong> approximately BDS$1,007,367 or 20.7% over the prior year. This<br />
results mainly from a substantial decrease in project funding balances at year end.<br />
Other Restricted Funds - This account contains all project funds within the<br />
CDERA CU’s financial records. The balance at August 31, 2008 was<br />
BDS$2,625,375 (EC$3,544,255) which represents a decrease <strong>of</strong> 27% from last<br />
year. This decrease is attributed to the transfer <strong>of</strong> funds to service project<br />
2
Reference: BM09/19/10.2<br />
commitments, enact programs and <strong>of</strong>fer relevant assistance, which was<br />
considerably more than the approximately BDS$385,858 (EC$520,908) <strong>of</strong> project<br />
funding which was received within the period.<br />
C. STATEMENT OF OPERATIONS<br />
It is noted that for the year under review there has been a positive result in the Statement<br />
<strong>of</strong> Operations that carries forward into the Operating Fund <strong>of</strong> BDS$115,282. In this<br />
period the overall revenue increased by BDS$1,709,283 (EC$2,307,532) or 53% with<br />
only a BDS$1,372,623 (EC$1,853,042) or 39.7% proportionate increase in expenditure.<br />
Project contributions and relief funding accounted for the majority <strong>of</strong> the revenue<br />
increases. The expenditure increases were related to operational and administration<br />
expenses, but primarily, project expenditure which rose in relation to that <strong>of</strong> revenue.<br />
D. CONCLUSION<br />
To maintain its sustainability, CDERA will need to continue its practice <strong>of</strong> control cost<br />
and budget monitoring. The CU will need to put measures in place to recoup arrears from<br />
participation states to enhance liquidity so that the organization adequately funds its<br />
operations.<br />
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