REPUBLIC OF TURKEY PRIME MINISTRY

Undersecretariat of Treasury

INDEPENDENT AUDITOR'S REPORT

On

1ST ANBUL SEISMIC RISK MITIGATION AND EMERGENCY PREPAREDNESS PROJECT'S ,..."'''n

FINANCE

ilyas BALOGLU Riistem OZ Ahmet Tugrul OZTURK Senior Treasury Controller Junior Treasury Controller Junior Treasury Controller

03, 14

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TABLE OF CONTENTS

l. EXECUTIVE Sl!MMARY

2. FINANCIAL STATEMENTS OF THE PROJECT

2. L Independent Auditor's Report

Statement of Sources and Uses of Funds

Statement of Cumulative Investments

2.4. Statement of Requests for Reimbursement (SOE Statement)

2.5 Statement of Special Account

2.6 Notes to the Project Financial Statements

I

EXECUTIVE SUMMARY

EXECUTIVE SUMMARY

A. Project Summary:

To transform Istanbul in the next 10-20 years into a city more resilient to a major earthquake, Istanbul Seismic Risk Mitigation and Emergency Preparedness (ISMEP) Project had been prepared by the Turkish Government. The Istanbul Seismic Risk Mitigation and Emergency Preparedness (ISMEP) Loan Agreement (Loan No. 4784-TU) was signed by the Republic of Turkey and the International Bank for Reconstruction and Development on October 18, 2005. and became effective as of February 3, 2006. The project closing date, which originally was March 31,2010, was first extended to December 31,2011. Following a second extension, the closing date was determined as December 31. 2012. Due to ever-expanding scope of the project as well as unanticipated increases, a second agreement was signed between the Republic of Turkey and the World Bank on August 4, 2011 for an additional loan (Loan No. 8033-TU). Istanbul Special Provincial Administration - Istanbul Project Coordination Unit (IPCU) was responsible for the implementation and monitoring of the Project, which is expected to be completed by December 31, 2014. In accordance with the removal of Istanbul Special Provincial the law no 6360. published in official gazette dated Dec 06. 2012, IPCU is responsible for the Governorship of Istanbul as of March :J.O, 2014.

The overall goal of the ISMEP Project is to save lives and reduce the social, economic and financial impacts in the events of future earthquakes. The specific objective of the Project is to improve fhe city of Istanbul's preparedness for a potential earthquake through enhancing the institutional and technical capacity tor disaster management and emergency response, strengthening critical public facilities tor earthquake resistance. and supporting measures for better enforcement of building codes and land use plans.

The Project is composed of four parts:

Part A: Enhancing Emergency Preparedness

Part B: Seismic Risk Mitigation tor Priority Public Facilities

Part C: Enf(Jrcement of Building Code

Part D: Project Management

According to the project financial statements, EURO 21.416.889,89 was disbursed in this auditing period. So, total amount disbursed from the project resources (including front and fee) has reached to EURO 27.209.432,04 by December 31, 2013.

B. Objectives of Audit:

The objectives of our audit are:

a) To an opinion on whether the financial statements, prepared as of December 31, 3 and the year then ended, a true and lair view of the f1nanciai position

of the Project in accordance with the cash receipts and disbursements basis accounting,

To d"''"rmine~ as of December 3!, material with 8033-

20 13, wh,etlter procedures of

!PCU complied, in Loan Ai';re<cment numbered

I

c) To examine whether adequate supporting documentation has been maintained to support claims to the World Bank for reimbursements of expenditures incurred with respect to SOEs and evaluate eligibility of these expenditures f(x financing under the World Bank Loan Agreement No. 8033-TU.

C. Scope of Audit:

We have performed an audit of fmancial statements of the ISMEP as of December 31. 2013 and for the year then ended in accordance with the cash receipts and disbursements basis of accounting. We have also performed a compliance audit on whether Project activities are in line with loan agreement and related World Bank guidelines.

Our audit was conducted in accordance with the International Standards on Auditing published by International Federation of Accountants.

There was no limitation in our scope for the Projecf s audit.

D. Audit Results:

For the financial statements of project; our audit resulted with an unqualified opinion.

In addition, as of December 31, 2013. the IPCU has complied, in all material respects. with the rules and procedures of the Loan Agreement.

With respect to SOEs, adequate supporting documentation has been maintained to support claims to the World Bank tor reimbursements of expenditures incurred; and these expenditures are eligible for financing under the World Bank Loan Agreement No. 8033-TlJ.

E. Management Recommendations:

A management letter was issued to the attention of IPCU, dated June 03, 2014 in which we indicate the weaknesses in internal control system that do not have material effects on our opm10n.

I

FINANCIAL STATEMENTS OF THE PROJECT

I

REPUBLIC OF TURKEY PRIM.E MINISTRY

U ndersecretariat of Treasury

INDEPENDENT AUDITOR'S REPORT

TO THE ISTANBUL GOVERNORSHIP- ISTANBUL PROJECT COORDINATION UNIT

We have audited the accompanying Statements of Sources and Uses of Funds, Statements of Cumulative Investments, Statements of Requests for Reimbursement (SOE Statement) and Statement of Special Account of the Istanbul Seismic Risk Mitigation and Emergency Preparedness (ISMEP) Project's Additional Finance as of December 31, 2013, and for the period then ended. and a summary of significant accounting policies and other explanatory information. The financial statements have been prepared by Istanbul Governorship (Istanbul Project Coordination Unit-!PCU) based on relevant provisions of the Loan agreement No.8033-TU

Management's Responsibility for the Financial Statements

!PCU is responsible for the preparation and fair presentation of these financial statements in accordance with the relevant provisions of the Loan agreement No.8033-TU. and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit, and to detennine whether IPCU has complied with, in all material respects, the requirements of the Loan agreement No.8033-TU. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement and whether IPCU has complied with, in all material respects, the requirements of the Loan agreement No.8033-TU.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. ln making those risk assessments, the auditor considers internal control relevant to the entity's preparation and lair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not fclr the purpose of expressing an opinion on the effectiveness of fhe entity's internal control. An audit also includes evaluating the appropriateness of accounting policies and reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we obtained is sut1icient and appropriate to provide a basis for our audit opinion.

I

Opinion

In our opinion;

a) The accompanying Statements of Sources and Uses of Funds, Statements of Cumulative Investments, Statements of Requests tor Reimbursement (SOE Statement) and Statement of Special Account present fairly, in all material respects, the financial position of the !SMEP Project accounting policies and as of December 3L 2013 and tor the period then ended in accordance with the provisions of the Loan agreement No. 8033-TU

b) IPCU, as of December 31, 2013 has complied with, in all material respects, the requirements of the Loan agreement No.8033-TU

c) With respect to SOEs, adequate supporting documentation has been maintained to support claims to the World Bank for reimbursement of expenditures incurred, and these expenditures are eligible lor financing under the Loan agreement No.8033-TU

Basis of Accounting and Restriction on Distribution and Use

Without modifying our opinion, we draw attention to Note 2 to the financial statements, which describe the basis of accounting. The financial statements are prepared to assist IPCU to comply with the financial reporting provisions of the Loan agreement No.8033-TU. As a result, the financial statements may not be suitable tor another purpose. Our report is intended solely tor !PCU, Undersecretariat of Treasury, and World Bank, and should not be distributed or used by ofher parties.

Mustafa G0LE$EN (Audit Partner) . . Vice-Chainnan

Senior Treasury Ahmet Tugrul ()ZT0RK

Junior Treasury Controller

1-SOL'RCES OF FC'illS A·(lon:mmcnt ('nntributions B~< )th'"r Sources of Funds C,tBRD Loan

!"f)ircct !~nymcnts 2<"lpena! Account

Advance bl SOE c) Summary Sheet

ll-1\~:l\mds to Spc~:Ja! Accmm! E ~Ot!wr Smm.:cs: 1---L:xd"ta!lg.c Rate Differcnn' Total Funds Received

!1-l SES OF Fl rms ;\~Enhancing Fmcrgcncy Prcpan:dncss H- St'i.mK Risk l\--htig_ation for Public Facilities ( '.f:.nf~trccmcrH of Building; Codt~s D-Prn!CC! Management

Tvtal P'rojctt investments

C~L-;h at the bt::~gmning of the period

Spccw! ,\cumnt Vnk!fhank Cash at hand

t'<L'-'h the end uf the pcnod Special Account Vak1fhm)k ('ash Ht hand

-ISTANBUL GOVERNORSHIP ISTANBUL PROJECT CORRDINATION UNIT

8033-TR ISMEP PROJECT STATEMENT OF SOURCES AND USES OF FUNDS-

As of December 3'1, 2013 and for the year then ended (EURO)

Actual Planned

Notes 2013 ( :umulative VTil Cumulative

(7) 19.896.722,52 33.189.894,07 0,00 0,00

19.896.722,52 33.189.894,07 (Ill) 0,00 Ill 000.000410

9.1:{77.440.47 15 .566.157.,43 10.019282.05 7.623.7.16_1)4

0,00 0,00 0,00 OJIO 0, 00 0.00

19.896.722,52 33.189.894,07

2.364.950,02 2.364.950,02 2.307.600Jl0 2.307.600.00 17176.268<77 22.968.810,92 16821 000,00 22.613.542,15

177.766,40 177.766AO 175 000,00 175 000,110 1.697.904.70 1.697.904.70 1.610500.110 1.6 I 0 500,00

2!.416.889,89 27.209.432,04 20.914< I 00,00 26.706.642.15

7.500.()29,40 0,00

7.407.000,76 0,00

(6) 93.62K64 0,00

0,00 0.00

(5) 5.980.462,03 5.980.461,03 5.754.016,89 5.754JJI6.89

/) (6) 226.445,14 226445.14

' 0.00 O,t.Kl

/ C~ j/ ,.,., ¥ •" ,-' ' _,._,.,,...

-~-~:;;;~aztm' ~k-ha·;·,-' -~-;~~~---~ GOnay~~MiR /// Project Di ctor Depy.ty Go ernor

/ / I '--·

Variance

VTil Cumulative

57.350,02 573503)2 J55.26V7 355 268,77

2.766,40 2.766AO 87404)0 87.404,70

502.789,89 502.789.89

l~l;o...'Vf:STME:\TS BY PR()JECr COMPONF:XrS l -Investments A- l:nhannng Emcrgencv Prepar~·-dncss

l~Wurko:A'innds

2·Constll!ancy S('!YIJ;es

SubTotal

B~ Stsmtc Rnk Mitlp:utton t!x Pnbh'c htcd!tws ! , Wmk'i--GO<Kb 2,Cm~ulbmc).· ServH.:<.es

Sub Total

( ·Enfort·t•mt.mt of Buddmg Codes l~\J!.imks·(l\x)(h

:;.{ 'otb\dtdJJCy s~~fVICCti

Sub Total

Total Investment Costs

Z·Rct:nrring Costs D·Pwic<) Manup,t~rncnt

Total Recurring Costs

Pro' ect lnnstmcnts

H- tNVESTME;\iTS B\' Stm~CATE<;ORff:S

Category ~a me 1·\Vmks··Guods :; ... consu!fltt1CY Sernct::s 3·Pm)CCt Man;Jg<:nwnt

Total

-'IBUL;>>?' 0 "RNC; 2

ISTANBUl PROJECT CORRDINA TION UNIT 8033-TR ISMEP PROJECT

TABLE OF CUMULATIVE INVESTMENTS-WB As of December 31 ,20'13 and for the year then ended (EURO)

Actual l,lanned

2013 Cumullltive YTll

2 !72AS2)l 2 l72A823l 2_! !6.000.,00 192.467,71 192 467,7! 191 600,00

2.364.950,02 23M.950,02 2.307.600,00

15.253. l13AJ 2! .045.655 .. 58 HJ.n\5 000.00 ! 923.!55,34 ! <J23.!SS,34 36J}00,00

17.176.268,77 22.968.810,92 16.821.000,00

OJ)O 0,00 90 OOOJlO !77 7(,6,40 f 77 766,40 l\5 000,00

177.7(,6,40 177.76(,,40 175.000,00

19.718.985,19 25.511.527,34 19.303.()00,00

1.697 904,70 I .697_90430 161050000 1.697.904,70 1.697.904,70 1.610.500,00

21.416.889 89 27.209.432,04 20.914.100.00

At·tuul Planne-d YTD Cumulative YTD

! 7 425.595.74 23 21S.l37,K4 I X.99l JlOOJXl 2.293 389,45 2 293 3.S:4A5 312 600,00 L6Y7 904 70 1Nr!_004 70 1.610.500 00

21.4!.0.889 89 27.209.432,04 20.914.JOO,Oll

/"_"'~,.., ,?' u ,/'~~""""'-·~"

Cumulative

2 ! !6 000,00 !Yl 600,00

2.307 .MHI,OO

22577 542J 5 .)6.000,00

22.613.542,15

90 000,00 85 (){)(),{)()

175.000,00

25.096.142,15

l .610.500 ()0

J .610.500,00

26.70(,,642,15

{'umulutive 24 783 542,[5

3rl~::),00 1.6rtL lO,Qtk

26.706.1)42,15

/ /~,o~ Gonq/;zo1MIR L:: ... ;:;/ Kaz1 Ok a ~LGIN

/ Project ctor Depyty Gofernor

Variance

YTD Cumulative

56 4S2J l 56.4SL :1! S67)l H67.7l

57.350,02 57.350,02

·I 5JlJUJ6,57 "\ 53! 886,57 ! 1::87.!55)4 1 SN7 15534

355.268,77 355.268,77

·YO.OOO,OO ·90.00CUJU n 7A6,40 92 760.40

2.766,40 2.76(),40

415.385.19 4l5.385,lt)

87.404,70 87.40,UO 87.404,70 87.404,70

502.789,89 502,789,89

Vurianct• V'fl) Cumulative

! 565' 404,26 . ! 565 404,26 l 98(} 789,45 ! 9i>O 7.S9,45

157.404 70 ?l7A04 70 502.789,89 502.789 89

1-Rratit,r~d Applicati{ms

ISTANBI 'L GOn;RNORSIUP !STANllCL PROJECT COORIHNATION I' NIT

8033-TR ISMEP PROJECT SOE WITUilRAWALTA.BLE FOR EXI'ENSE STATEMENTS

For the Period Ending on 31.12.2013 In Et:RO

Fund Lses On Cat(>l'{}P.' Basis HJlt<' of Applkationj;\.pplieation

Number ~~1ork~und ~Goods lechnkal S ><vices

~~··onsultancy ~~?c.n~. Op. Services 'osts

IITnallocah~{l rrolal

05Jl2 201J 3 250 '\83,65 0,00 74.60B,94 325192.59 24(!5 20U 4 1 994.%2.24 ! !5 92U6 463.374,94 2574 25834 0907 :Wl:J. c 908 Wf3A! !49.742,29 .US.l\65,43 l 384 501.13 !6 09 20U 6 l 651(420,76 55.9S9Jl0 274 9!5,70 l Y89 32.'i,46

! l 20!J I 2 23!.B4,78 4! 391_16 321 t70,4J 2 594.N6,:n 10 LUOLl g 8.38 300.67 38 ll-\4,30 !3288!,61 !.009.366,5S

O.(Ul 0.00 9.877.440.47

JJ.,Pending: Applkatinns Fund l!st~s On ( 'ategorv Basis

tuat;-~r Appfiution A"PI}li;;tJ.;~~;ks: and !Goods !;'onsultancy 1:ncre. Op. llJnalloca-tcd !Total ~·· • ~·· :'\gmbcr _ Ttchnjl'lli St'r':'.ici.'S Services Costs

0,00 O,IUl O,IXJ 0,00 0,00 o,rm

Totul application dt~manded during the year /''1

O.!Kl 1},877./40.4h

!Paid Amount

325 !92 .. 59 2 574 25iU4 1384501,!3 l 9B9 325,46 2 594. 796,.n ! 009 366,5B

l'aid Amount

0,00

t;j::;;~ (-{? ' ~-I I I "',/

~/-~;~~~···· Gunay o~n:,:R nE IN t Director Deputy ;a4rnor

I

Jnatc of Payment

h.02 20U }!())20!3 !I07 20!1 25 09.20!1 2fU l 20!3 19 !2 20!3

Date of 1 •• ,.

..

SUMMARY SHEET

l·Realiz£d Applieatious

Oate of Applkatkm !Applicatinn [\Vorks and !Numb r IT•l"hl 'Nl!Scrvi''

l 2 .395.54'),4! 24 DS<W! J 4 OJJO 09 ::ot_; 5 2.:178.86::_53 UHl9 ~1.0 !3 " I !!1 X7U4 J::.!! 20 t3 7 I ! 74. l69J.l]

ltU2 2013 " I JS6 762,43

8.3!7.210.64

0,00

Total application demanded during thv- )'car

Fund tses On ('ate •ol~ Basis

!Goods !Consultancy !to. ne. Op. I !servi es leo ·ts

OJlO 409.202,77 58.240,00

342 210,71 390_826,44

501 591,49

o.oo 0,00

0,00 0,00 0,00

0 (H} 1.702.071 41 000

I t.1nallocated ]Total

0.00

0,00

2.3())- 545,4 I 409 202_77

2.337.102,53 !A54 081,95

!.564'/95A7 ! 85N.353512

0,00

,.,

2.345 545Al 409_202_77

2 337.)02,53 lA:'>4.0Kl,95 l 564 995A1 1 858 353.92

0,00

000 t0JH9.tk2,oi5 10.019.282 05

I GUnayod~;' Deputy (3'6vfnor

( I

l

I Date of Payment

L'dJ2 20U 3!.05 20]} !7.07 2013 25JN 2013 2tU l 20U !9122013

ISTANBUL GOVERNORSHIP

ISTANBUL PROJECT COORDINATION UNIT

ISMEP 8033 TR

SPECIAL ACCOUNT STATEMENT (SA)

SPECIAL ACCOUNT NO: 94 64 32 014 As of 31 December 201 3

(in EURO)

1- Opening Balance 7.407.000,76

2~ Transfers to Special Account (01.01.2013-31.12.2013) 19.896.722,52

a) Direct Payment 0,00

b) Advance Payment 0,00 c) Advance Deduction H 0,00

d) SOE Method 9.877.440,47

e) Summary Sheets 10.019.282,05 f) Other 0,00

3~ Returns to Special Account 0

I· SOURCES 27.303.723,28

4- Withdrawal for Expenses 21.549.706,39 (01.01.2013- 31. 12.2013)

5~ Paid Commissions

II -Total Usages l'lf549.706,39

1111 -Ending )$.754,016,89

Kazun G6khan ELGiN GOnav.dDEMIR

i

REPUBLIC OF TURKEY 1ST ANBUL GOVERNORSHIP

ISTANBUL PROJECT COORDINATION UNIT (IPCU)

8033-TR ISTANBUL SEISMIC RISK MITIGATION AND EMERGENCY PREPAREDNESS PROJECT

ADDITIONAL FINANCE

NOTES TO THE PROJECT FINANCIAL STATEMENTS

(31.12.2013)

1. OBJECTIVES AND NATURE OF THE PROJECT

To transform Istanbul in the next I0-20 years into a city more resilient to a major earthquake Istanbul Seismic Risk Mitigation and Emergency Preparedness (!SMEP) Project had been prepared by the Turkish Government. The World Bank and the Turkish Government signed a Loan Agreement (4784-TU) in the amount of Euro 310.00 million (US$400.00 million equivalent) on October 18, 2005 for the funding of ISMEP. The agreement became effective on February 3, 2006. Istanbul Special Provincial Administration, Istanbul Project Coordination Unit (IPCU) is responsible for the implementation of this project. Loan Agreement (4784-TU) closing date 31 December 2012.

Republic of Turkey Council of Minister's Decree Number 201111410 dated February 8, 201I,The World Bank and the Turkish Government signed a Loan Agreement (8033-TR) in the amount of Euro 109.8 million on August 04,2011 for the funding ofiSMEP.

The overall goal of the proposed project is to save lives and reduce the social. economic and financial impacts in the event of future earthquakes. The specific objective of the project is to improve the city of Istanbul's preparedness for a potential earthquake through enhancing the institutional and technical capacity for disaster management and emergency response, strengthening critical public facilities for earthquake resistance, and supporting measures for better enforcement of building codes and land use plans.

2. MAIN ACCOUNTING POLICIES

a} IPCU accounts the project-related operations on the basis of cash. Accordingly, revenues are received when the loan is transferred to the special accounts, and expenditures arise when a payment is made. Payments made to suppliers are expensed at the date of payment. However, tax withdrawals from suppliers are accrued in bank accounts and expensed on the date of the payment of these taxes one month later.

b) lPCU is responsible for payments, accountings, records and all financial reports on the project­related activities, resources and expenditures within the framework of the Project. Those records and accounts are prepared for the special accounts to be held the auditors to

Bank. in accordance with the conditions to the Bank, in year.

I

c) IPCU procured an accounting sotlware program, Financial Management System ("FMS"), to follow up the payments and accounting records of the project, Data entry to FMS is conducted based on the payment dates. The transactions recorded in local currency (Turkish Lira- TL) are converted to the EURO using the exchange rate prevailing at the date of withdrawal in accordance with Central Bank's official bid rates for Euro. Since these rates are entered daily to FMS, conversions from TL to. EURO are automatically held. FMS sotlware was developed in compliance with Accounting Standards, For each accounting record, an automatically numbered wage receipt is taken. Receipts, invoices, contracts and payment orders are filed and archived regularly, Below there is a list of the reports received from FMS:

i. Project Resources and Fund Use

11. Use of Funds on the base of Project Activities

111. Cash Withdrawals

IV. Special Account Table {based on Euro)

d) There is one special account under the investment framework of the project, opened in the Central Bank. As of December 31, 2013. a total amount of EURO 33.189.894,07 has been used from the World Bank account.

3. RESTRICTIONS CONCERNING THE USE OF THE FUNDS AND OTHER ASSETS

In accordance with the Loan Agreement signed between Turkish Government and the Bank, use of those resources in the Special Account is limited to the project objectives. Those resources still unused at the end of the Project will be returned back to the Bank, in compliance with the related financing agreement. Records shall be kept on the project resources and those assets procured through the project resources during the project and the subprojects.

4. VARIANCES FROM THE PLANNED AMOUNT

IPCU is carrying out a revision on the distribution of the expenses over the years under the scope of the project and variations from the planned amount and the current and cumulative planned amounts are changing as well. In 2013, project investments realized 502.789.89 Euro above the planned amount.

I

5. CASH AVAILABLE AT 31 DECEMBER 2013

Cash available at 31.12.2013 is as tollows.(Euro)

···········-- .......... _ .......... -~···· fllll!ls._ .. --~ .Q!~e.r-J?IIIl<I.S.t .... !()tlll _____ ~ i Special Account __ 5.754.016,89.c 0.00 1 5.754.016.89' I Commercial Bank Current Ac 0.00 ! 0.00 i • . 0.00 I I Commercial Bank Tax Ac. 226.445,14 I 0.00' 226.445,14 J

I Commercial Bank Pavment ac. +-------'-O.:.:O..c04

' _____ .c0:.:·.::.oo4 , _____ __:0c:..O=-O=-ii

c-~~~:~~:~~~n~~~;~~~~;~~c·t.; -- -- ----~:~E__ -~:~~l --- :~:~~j I Cash t 0.00 , 0.00 '1 0.00 I I Toplam 5.980.462,03 I 0.00 ! 5.980.462,03 I

6. Withdrawals from special account for VAT, Income taxes, and Stamp Duties are made in accordance with the contract payments spontaneously. For that purpose, three accounts are established in Vak1fbank for each tax type and all tax payments are made from these accounts after the tax accrual statement is obtained from tax office. As a result no FX differences occur in financial statements.

In Tax Accounts at Vaktfbank there are accrued but not yet paid taxes. These balances are not expensed in financial statements since still in bank accounts as of 31.12.2013. Total tax liabilities are 226.445,14 Euro as of3l.l2.2013.

7. In 2013, 19.896.722,52 Euro sources withdrawn to TCMB account from the World Bank. During the accounting records of the withdrawn money, a mistaken record made on 15.02.2013. In this record all Money categorized as SOE instead of distributing the amount between SOE and summary shett. For that reason the amount in the SOE tables and accounting records differs between categories although the total amount is the same. This record shall be corrected by a correction record in 2014.

8. Contracts of Technical Assistance to IPCU also shown under the Component C. The reason for this, fhe category at which the loan agreement provided outside like, individual consultant, technical consultant to IPCU attaches under the short-term consultancy contracts. For this reason. it is shown D (Project Management) under the Component C. In components based categories it is shown under consultancy services.

9. In accounting records, the account 63!.0 1.003 has been used to record Deloitte's Consultancy services although the account is classified under goods in accounting records actual expenses classified under consultancy in FMR's. This account shall be taken to consultacny in 2014.

10. ln Fund Uses Table. an amount record

the cmTeicllt>n

WB as SOE but it was •·crnrrlPrl

I

2012. In 2013 this amount credited to advance and debited to SOE account. However. this amount was not shown in tables in order to be in accordance with SOE tables.

//./ c:::e· ;c·· ~ ~ If/~ / / . I . /

/)5:ll'z1m Gtkban ~GiN 'i Director

/} ~/--

.. ~ /~. Giinav OZDEMIR Dep~tfqovernor . /

I jl • {