110717 public disclosure authorized - world bank...category 1 for part a of the project category 2...

Ulaanbaatar 2015

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~ CONFIDENCE -AUDIT

Auditing, Accounting, Trulnln~. Tax Con~ultin~ Ulaanhaatar city. Chingcllci dislrict, 3rd lthoroo,

Capital center, IOth floor 111005 Phone 976-11-32243 I, Fnx 976-70119100

E-muil info@>confidence11udit mn

:!otS' -11 .!o N'!_ oJ / -1130

INDEPENDENT AUDITORS' REPORT

r To: Mr. N.Enkhbold Director of

Part A. Managing Urban Disaster Risk in Mongolia of Improving

Disaster Risk Management in Mongolia Project

We have audited the accompanying balance sheet of "Part A. Managing Urban Disaster Risk in Mongolia of Improving Disaster Risk Management in Mongolia" Project, pursuant to the Grant Agreement (Grant No. TFOI 1184) entered between the International Development Association and Government of Mongolia dated 13 June 2012, as of 25 November 2015 and its statements of source and uses of funds, the statement of expenditures and the special account reconciliation statement for the year then ended.

The preparation and presentation of these financial statements are the responsibility of Project management. Our responsibility is to express an opinion on these financial statements 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 about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating overall financing statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, (A) the financial statements referred above and the disclosures to these financial statements present fairly, in all material respects, the financial position of the "Part A. Managing Urban Disaster Risk in Mongolia of Improving Disaster Risk Management in Mongolia" Project as of 25 November 2015 and the result of operation for the year then ended in accordance with IPSAS; (B) the Borrower has utilized all proceeds of the loan withdrawn from the International Development Association only for purposes of the project as agreed between the International Development Association and the Government of Mongolia in accordance with the Grant Agreement; and no proceeds of the loan have been utilized for other purposes; and (C) the Borrower was in compliance as at the date of the balance sheet of the year of audit with all financial covenants of the Grant Agreement.

In addition:

(a) (1) With respect to Statements of Expenditures, adequate supporting documentation has been maintained to support claims to the International Development Association for replenishments of expenditures incurred; and (2) which expenditures are eligible for financing under Grant Agreement No. TFOl 1184.

(b) (1) The Imprest Account (page 6) give a true and fair view of the receipts collected and payments made during the year ending 25 November 2015; and (2) these receipts and payments support Imprest Account replenishments during the year.

Ulaanbaatar, Mongolia

The Government of Mongolia The Japan Policy and Human Resources Development

Grant N!!TFO 11184

Improving Disaster Risk Management in Mongolia Part A. Managing Urban Disaster Risk in Mongolia

BALANCE SHEET

As at November 25, 2015

Balance items

ASSETS Cash and cash equivalents Cash at bank:

Designated account Operating account

Total cash and cash equivalents Receivable from TF099673 Project Cumulative project expenditures Category 1 for part A of the Project Category 2 for part B of the Project Bank charge Foreign exchange loss Total cumulative project expenditures

TOTAL ASSETS

FUNDS PHRD Grant Interest earned

TOTAL FUNDS

Prepared by:

Note

3

As at Nov 25, 2015 In US Dollars

4,950.96

4,950.96

1,354,908.49

407.33

1,355,315.82

1,360,266. 78

1,358,396. 70 1,870.08

1,360,266. 78

PMU Direcfor

As at Dec 31, 2014 In US Dollars

17,959.09 14,620.57 32,579.66 18,292.55

317,339.91

202.99 190.14

317,733.04

368,605.25

366,735.17 1,870.08

368,605.25


Grant N!!TFO 11184


SOURCES AND USES OF FUNDS

For the year ended November 25, 2015

Current year US Dollars

Previous year US Dollars

FUNDS PHRD Grant Interest earned

TOTAL FUNDS

USES OF FUNDS Category 1 for part A of the Project Category 2 for part B of the Project Bank charge Foreign exchange loss Receivable from TF099673

TOTAL USES OF FUNDS

Surplus of funds over uses

Prepared by:

991,661.53

991,661.53

1,037,568.58

204.34 (190.14)

(18,292.55) 1,019,290.23

(27,628. 70)

( \

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366,735.17 1,870.08

368,605.25

317,339.91

202.99 190.14

18,292.55 336,025.59

32,579.66

Total US Dollars

1,358,396. 70 1,870.08

1,360,266.78

1 ,354,908.49

407.33

1,355,315.82

4,950.96

Number Application type

of WA

Beginning balance

~ WA6 Replenishment WA7 Direct payment

(') WA8 Replenishment 0

WA9 Direct payment ;I :!I

"O a. WA 10 Replenishment • CD ., ;:I

• 0 ! • WA 11 Direct payment Ii WA 12 Direct payment

WA 14 Direct payment WA 13 Direct payment WA 15 Direct payment WA 16 Direct payment WA 17 Direct payment

Deducted from WA 18

advance Total


Grant N!ffFO 11184 Improving Disaster Risk Management in Mongolia

Part A. Managing Urban Disaster Risk in Mongolia ST A TEMENT OF EXPENDITURES (Withdrawals)


Amount claimed in US dollars

Category 1 for Claimed date Credited date

Advance part A of the Total Project

100,000.00 206,784.40 306,784.40 6-Jan-15 23-Jan-15 - 110,555.51 110,555.51

12-Mar-15 24-Mar-15 - 83,708.00 83,708.00 22-Mar-15 26-Mar-15 - 48,497.00 48,497.00 28-Apr-15 21-May-15 - 125,560.00 125,560.00 1-May-15 14-May-15 - 55,539.94 55,539.94 16-Jun-15 24-Jun-15 - 77,400.00 77,400.00 16-Jun-15 24-Jun-15 - 74,295.00 74,295.00 17-Jun-15 24-Jun-15 - 213,664.50 213,664.50 27-Jun-15 16-Jul-15 - 86,851 .00 86,851.00 27-Jun-15 16-Jul-15 - 80,169.00 80,169.00 30-Jun-15 IO-Jul-15 - 53,540.50 53,540.50 28-0ct-15 23-Nov-15 - 41 ,832.36 41 ,832.36

28-0ct-15 5-Nov-1 5 (96,511 . 79) 96,511 .28 (0.51)

3,488.21 1,354,9~ 1,35'8~96.70

~-

Amount credited in Differences US dollars

366,735.17 (59,950.77) 50,604.74 59,950.77 83,708.00 48,497.00

125,560.00 55,539.43 0.51 77,400.00 74,295.00

213,664.50 86,851 .00 80,169.00 53,540.50 41,832.36

- (0.51)

1,358,396. 70


Grant N!!TFO 11184


SPECIAL ACCOUNT RECONCILIATION STATEMENT Account number 340003 7992, with State bank

As at November 25, 2015

1 Total advanced by PHRD 2 Less: Total amount recovered by PHRD 3 Equal present outstanding amount advanced to the special account

4 Balance of special account per attached bank statement as at 2015111125

5 Amount claimed in WA but not yet credited at date of bank statement

6 Interest earned

7 Bank charge

8 Total advance accounted for

9 Difference between total appearing on lines 3 and 8

Explanation of any difference between total appearing on lines 3 and 8

All items should be indicated on the bank statement Operating account /34000381960 MNT/ As at November 25, 2015

Prepared by:

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In US dollars 100,000.00 96,511.79 3,488.21

4,950.96

(1,870.08)

407.33

3,488.21

The Government Of Mongolia The Japan Policy and Human Resources Development

Grant N~ffFO 11184

Improving Disaster Risk Management in Mongolia

NOTES TO THE PROJECT FINANCIAL STATEMENTS


1. Project background

The objectives of the Project are to improve the disaster preparedness of

Ulaanbaatar and to reduce the impact of "dzud" on rural livelihoods. The Project consists of the following parts:

Part A. Managing Urban Disaster Risk in Mongolia A.1. Urban Risk Management and Preparedness in Ulaanbaatar

A.2. A.3.

Part B. B.I.

B.2. B.3.

A.1.1. Carrying out of a detailed disaster risk assessment for Ulaanbaatar, including the mapping of risk areas, the review of existing zoning regulations and land use plans, and the dissemination of information.

A.1.2. Design and development of a database on hazards and vulnerabilities with a GIS system, including demonstration workshops and training for potential users of the database.

A.1.3. Design of the Ulaanbaatar Disaster Risk Management Plan, and capacity building for key actors, including design of pilots demonstration works.

Monitoring and Evaluation Project Management

Managing Climatic Risk in Rural Mone.olia Dzud Management System B.1.1 . Development of an information system for dzud forecasting and

monitoring including carrying out of an initial diagnostic and implementation of recommendation on roles and responsibilities, data collection, and data sharing and consolidation into mapping tools .

B.1.2. Analysis of options and design of a new emergency feed and fodder supply system, including the strengthening of food and fodder production, state procurement, storage and distribution systems, and associated capacity building.

Monitoring and Evaluation Project Management and Administration

Project Exec11tio11 Ge11e1·ally. The Recipient declares its commitment to the objectives of the Project. To this end, the Recipient shall:

(a) carry out Part B of the Project through the Sustainable Livelihoods Program Office within the Ministry of Finance in accordance with the provisions of: (i) Article II of the Standard Conditions; (ii) the "Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants", dated October 15, 2006 and revised in January 2011 ("Anti-Corruption Guidelines"); and (iii) this Article II; and

(b) cause Part A of the Project to be carried out by the Municipality of Ulaanbaatar (MUB) in accordance with the provisions of: (i) Article II of Standard Conditions; (ii) the Anti-Corruption Guidelines; (iii) this Article II; and (iv) the agreement dated the same date as this Agreement between the World Bank and MUB, as such agreement may be amended from time to time ("Project Agreement").

Eligible expenditu1·es.The recipient may withdraw the proceeds of the grant in accordance with "World Bank Disbursement Guidelines for Projects" dated May 2006, to finance Eligible Expenditures as set in the following table. The table specifies the categories of Eligible Expenditures that may be out of the proceeds of the Grant ("Category"), the allocation of the amounts of the Grant to each category, and the percentage of expenditures to be financed for Eligible Expenditures in each Category:

Amount of the Percentage of

Category Grant allocated expenditures to be

(USD) financed (Inclusive of Taxes)

(1) Goods, works, non-consulting services, consultants services, Training and Workshops, and 1,365,000 100% Management fee under Part A of the Proiect

(2) Goods, works, non-consulting I

services, consultants services, I I

Training and Workshops, and 1,365,000 100% Operating cost under Part B of

1

the Project

Total amount 2,730,000

2. Summary of significant accounting policies

a) Statement of compliance

The financial monitoring reports comprise the balance sheet, a summary of source and uses of funds, the statement of expenditure and the special account statement. These financial

monitoring reports have been prepared in accordance with Financial Monitoring Reports for

World Bankjinanced Projects: Guidelines for Borrowers.

b) Basis of preparation

The financial monitoring reports are prepared in accordance with International Public Sector Accounting Standards (IPSASs) issued by the International Public Sector Accounting Standards Board (IPSASB) of the International Federation of Accountants and cash receipts and disbursement basis of accounting has been applied. On this basis, receipts are recognized when received or direct payment to creditors are made rather than when income is earned and disbursements are recognized when paid rather than when expenses are incurred.

c) Basis of measurement

The financial monitoring reports are presented in U.S.Dollar ('USD'). Cash balances denominated in currencies other than USD are translated into USD at year end rates of exchange stated by the Bank of Mongolia. Transactions denominated in currencies other than USD are translated at rates at the dates of the transaction stated by the depository bank. Any gains and losses are reflected in the statement of sources and uses of funds.

d) Basis of presentation

The accounts balances in the Financial Monitoring Reports as November 25, 2015 have been presented on December 31, 2014.

e) Designated account

In according to the Disbursement Letter, the project opened the Designated Account which is one segregated account for the grant financing at the State Bank acceptable to the World Bank. The statement of Designated Account is presented USD.

f) Operating account

The project unit also maintains the operating account in MNT at State bank. The account is used for minor expenditures and replenishment to petty cash.

Part A. Managing Urban Disaster Risk in Mongolia

Part A of the project is implemented in "Ulaanbaatar Services Improvement Project Management Unit" (USIP). The project transfers the budgetary amount (i.e. advance) necessary to cover project incremental operational expense to the bank account of the Project Management Unit (State bank, Account#3400038 l 960). At the end of the reporting period, USIP realizes direct administration expense, related to project's daily activities, at its full amount, as well as, proportional amount of overall administrative expense to be assigned between 3 projects on basis of its usage proportion (e.g. how many percentage of the this expense is spent for administration purpose of that particular project). However there is no applicable regulation for estimating usage proportion, accountant makes the estimation and allocates the expense.

~ Confidence A~dlt LLC Pag• .......... _


Grant N2TFOI l 184


NOTES TO THE PROJECT FINANCIAL STATEMENTS (continued) For the year ended 25 November, 2015

3. Category 1 for part A of the Project The main document of the project state that "Goods, works, non consulting services, consultants' services. Training and Workshop, and operating costs are include category l .11

The project has separately accounted Category I for part A, by following types of expenditures.

Note 25-Nov-15 Consulting service 3a 568,931.32 Goods 3b 672,175.00 Management fee 3c 113,802.17 Total 1,354,908.49

3a. Consulting service As at December 31, 2014 Fifth payment of consultant Rabindra Prasad Osti FMS-0 I Sixth payment of consultant Rabindra Prasad Osti FMS-01 Ceremony and demonstration training on the FDRM Forth payment of Joint venture of argiculture risk study centre CFDR-0 I Fifth payment of Joint venture of argiculture risk study centre CFDR-01 Sixth payment of Joint venture of argiculture risk study centre CFDR-01 Total As at November 25, 2015

3b. Goods As at December 31, 2014 Supply of Emergency respond Equipment for MUB, UB, Mongolia GERE-01 Supply of Emergency respond Equipment for MUB, UB, Mongolia GERE-02 Supply of Emergency respond Equipment for MUB, UB, Mongolia GERE-03 Supply of Emergency respond Equipment for MUB, UB, Mongolia GERE-04 Supply of Emergency respond Equipment for MUB, UB, Mongolia GERE-05 Supply of Emergency respond Equipment for MUB, UB, Mongolia GERE-06 Supply of Equipment Necessary for the Establishment of Emergency Monitoring Room at MUB Emergency Department, UB, Mongolia GERE-07 Total As at November 25, 2015

~ Confidence Audit LLC Page ... d .'!._

31-Dec-14 236,641.00

80,698.91 317,339.91

236,641.00 48,497.00 24,248.00

8,444.96 83,708.00

125,560.00 41,832.36

332,290.32 568,931.32

154,410.00 86,851 .00

112,795.00 86,000.00 82,550.00 69,400.00

80,169.00

672,175.00 672,175.00

Jc. Management fee As at December 31, 2014 PMU Staffs Salary Rental cost Audit fee Office Supply Foreign exchange loss Total As at November 25, 2015

j ~ Confidence ~~dlt LLC Page ........... ..

80,698.91 19,214.54 11 ,887.26

698.62 1,112.70

190.14 33,103.26

113,802.17

110717 public disclosure authorized - world bank...category 1 for part a of the project category 2...

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