Review of Financial Statements - Caribbean Disaster Emergency ...

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