Question 1 The Cane Growers Enterprise (CGE) is a government owned enterprise which is legislated to generate its own income which it uses to cover capital and recurrent expenditures. CGE is an agent of the National Agriculture Association. The Young Famers association controls 25% of CGE. Outside of these powers, its government also provides CGE with monthly subventions to cover its recurrent expenditures based on CGE budgetary demands and the legal allocations by the government. CGE uses ISPAP to prepare its financial statements. You were asked by to government to assist CGE with its accounting processes, which involved the recording, generation and preparation of accounting transactions and final accounts as stipulated by the IPSASs. Collaborating with a team of qualified and experienced accountants, you were able to prepare the following accounting information of GCE for the year ended December 2022. 1. Dividend receivable as at 31 December 2021 was $5,000,000 and Dividend receivable as at 31 December 2022 was $2,000,000. 2. CGE receives an annual transfer of $30,000,000 from the National Agricultural Association for the operating of the industry. 3. Service Charge Outstanding as at 31 December 2022 was $500,000. 4. Interest outstanding from Loans to Members as of 31 December 2021 was $2,000,000. Interest receivable at 31 December 2022 was $6,000,000. 5. All membership fees were paid in full. In 2022, twenty (20) members prepaid their membership for eight ( 8 ) months at $15,000 per month. 6. Twenty percent (20%) of the grants were not received at the end of each year. 7. To secure adequate storage in 2022 , payments of $3,000,000 were made in advance. 8. Bond issued in 2021 was issued for $200,000,000. There was a repayment of $50,000 in 2022. 9. All statutory contributions were paid at year end. Required: Prepare the Statement of Financial Performance, Statement of Financial Position and Cash flow for 2022 in line with ISAPS. Expenses should be classified by nature. No comparative data required for the Cashflow. Question 2 Part 1 Explain the budgetary process providing practical examples . Part 2 Explain the difference between Public Private Partnership (PPP) and State- Owned Enterprises (SOEs). Giving three advantages of each investment arrangement. Part 3 The Office of the Auditor General is mandated to conduct audits of all public institutions in Jamaica. It has been observed that the same observations and recommendations were made in the last five years in the Auditor General's Reports concerning increased misuse and misapplication of public funds. The Ministry responsible for local government has decided to engage a consultants firm to review the transparency and accountability of the public funds by the council. The lead consultant in your firm has asked you to conduct this review. The following were found during your review: - The main source of funds for the Council are the grants received from the central government and levies from local businesses operating in the parish. - The Council maintains financial records and prepares financial statements annually which are subject to audit by the Office of the Auditor General. - The Council received a grant of US $20 million for the construction of ten community centers, one each in the ten communities under the control of the Council. This is part of a grant from a donor received by the Ministry. The Council as a sub- recipient signed an agreement in which it committed to adhering to the grant conditions. - The principal grant conditions were: - the maximum amount to be spent on each center is US $2 million - all ten community Centres should be completed . - Contracts to be awarded must be through competitive bidding. - The project should be completed in four years. - The Council completed five (5) centers. The average cost per center amounted to US $3.2 million, totaling US $9 million. The balance of US $4 million from the grant was spent on paying salaries to Council employees who were in arrears. The following information was established concerning the centers constructed: 1. Only three (3) of the centers met the design specifications and were going to be commissioned for use. The work on the other two centers were substandard. 2. The award of the contract to build the centers was not done through competitive bidding. 3. The main contractor resides in the parish and has been working with the Council for the past ten years. This contractor price was viewed as being cheaper than other contractors in the market. 4. Two subcontractors were found to be related to a highly placed employee of the council; however, this was not disclosed. 5. The project was completed in 3 years and nine (9) months. A review of the previous working papers of the last audit of this Council revealed that the risk of material misstatement was assessed to be high. During the audit it was established that the controls over inventory were poor and that there has been no inventory count at the year-end for many years. The audit also found that there were no practical completion certificates or engineer reports for construction projects conducted by the Council. Required: A. Identity and discuss three (3) ethical matters in the scenario above B. Discuss the type of audit the Auditor General may conduct and give practical examples of matters that auditors may consider