Audit Report ofActive Labor Market Project

Grant # TF016138Employment-Technical and Vocational

Education and Training FundAmman - Jordan

for the year 31 December 2015

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TABLE OF CONTENTS

I. Auditor Report

II. Statement of Cash Receipts & Payments

III. Notes to the Financial Statement

IV. Management Letter

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Qazzaz 5& Co.Certed

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INDEPENDENT AUDITOR REPORT

To Employment-Technical and Vocational Education and Training FundAmman, Jordan

We have audited the accompanying special purpose project financial statement comprising ofthe statement of Cash Receipts and Payments of Active Labor Market Project Grant #TF016138 for the year ended 31 December 2015, and the explanatory notes for the periodthen ended.

Management's Responsibility:Management of the project is responsible for the preparation and fair presentation of thisstatement in accordance with international public sector accounting standards, and for suchinternal control as management determines is necessary to enable the preparation of financialstatements that are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility:Our responsibility is to express an opinion on this financial statement based on our audit. Weconducted our audit in accordance with International Standards on Auditing. Those Standardsrequire that we plan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free of material misstatement and about whether Active LaborMarket Project has complied with the laws, regulations, guidelines and provisions governedby the Grant Agreement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statement. An audit also includes assessing theaccounting principles used, as well as evaluating the overall financial statement presentation.We believe that our audit provide a reasonable basis for our opinion.

Our opinion:(a) The special purpose project financial statement presents fairly, in all material respects,the cash receipts and payments of the Project for the year ended 31 December 2015 inaccordance with the International Public Sector Accounting Standards, under the cash basisof accounting(b) Internal control over financial reporting involved in the preparation of replenishments,direct payments and reimbursement can be relied upon to support the related withdrawals forthe period(c) The project was in all material respects in compliance with laws, regulations, guidelinesand provisions governed by the Grant agreement

Other matters:This report is intended solely for the information and use of World Bank, the Government ofJordan, Employment-Technical and Vocational Education and Training Fund and the relatedproject management.

Mohammad Q zzaLicense # 71?4 February 2

Swefieh, Yaqoub Mu'ammar Str. P.O.Box 850037 Amman 11185 Jordan Phone: + 962 6 582 20 50 Fax: + 962 6 581 55 85

Employment-Technical & Vocational Education & TrainingWB Grant P145241 -TF 016138

Statement of Cash Receipts & Paymentsfor the Year ended 31 December 2015

Amounts in USD

Dec 2015Year Cumu-

Financing 2015 lative

Initial Deposit Transferred from WB 500,000

WB to Designated Account (Replenishments) 780,860 780,860

Direct Transfers from WB to Contractors 0

Total Financing 780,860 1,280,860

Expenditures

Category (1)

Goods, Consultants Services, Non Consulting ServicesTraining and Workshops & Operating Cost

619,465 804,997

Job Vouchers 51,652 51,652Total Expenditures 671,117 856,649

Net Fund (Surplus/Deficit) 424,211* The attached disclosures are integral part of this statement

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Active Labor Market ProjectWorld Bank Grant No. TF 016138Employment-Technical and Vocational Education and Training FundAmman - JordanNotes to the Financial Statements31 December 2015

1. General Background

Grant Amount: USD 4,750,000Agreement Date: 28 November 2013 and amended on 7 April 2014Closing Date: 30 June 2017

The Project Development Objective (PDO) is to increase access to career guidance, jobsearch, and on-the-job training among targeted youth. The Project will provide a learningplatform to test a number of initiatives recommended in the National EmploymentStrategy (NES) and learn about their effectiveness toward improving the employability ofgraduates and the unemployed. If successfully carried out, these activities will be scaledup nationally to facilitate access to job readiness and job placement opportunities forselected unemployed male and female graduates.

To create awareness and publicize the objectives of the three project components (School towork, Market Information and Job Search, and Job Readiness and Placement) amongst jobseekers and employers in targeted governorates, a bundled and comprehensivecommunication campaign has been developed utilizing different types of communicationchannels (i.e. advertising, social media, digital marketing, and others). Accordingly onecommunication plan has been developed to cover the three components, while the budgetwill be distributed across three components.

In summary, the four components of the project are as follows:

Component 1: School to Work Program(US$0.73 million or 15.4 percent ofProject costs)

Component 2: Market Information and Job Search Program(US$0.68 million or 14.4 percent ofProject costs)

Component - 3: Job Readiness and Placement Program (JRPP)(US$2.87 million or 60.4 percent ofProject costs)

Component 4: Project Monitoring and Evaluation and Management(US$0.47 million or 9.8 percent ofProject costs)

In July 2015 the World Bank extended the closing date of the project for 18 months to 30June 2017 instead of 31 December 2015.

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2. Summary of Significant Accounting Policies

Basis of Accounting & Reportin :The Employment-Technical and Vocational Education and Training Fund followed andmaintained its accounts under Cash Basis of Accounting in recording the transactions;accordingly project management recognizes funds when received and expenditures whenpaid.As for reporting of this grant project management reports the project operations inaccordance with International Public Sector Accounting Standards, under the cash basis ofaccounting.

Translation of currencies:Functional currency for the project operations is Jordanian Dinars (JOD) and translated intoUnited States Dollars (USD) at the prevailing exchange rate of USD 1 = JOD .709, andmaintains the accounts in USD.The project also reports all transactions in USD.

3. Project Designated AccountAs per the grant agreement; the Employment-Technical and Vocational Education andTraining Fund in Cooperation with Ministry of Planning and International Cooperationopened a designated account with the Central Bank of Jordan. Project Designated AccountNumber is 3204/3660/1 in USD

Initial Deposit:Initial Deposit from the World Bank of USD 500,000 was transferred to the DesignatedAccount in March 2014

Replenishments:During the year of 2015 the World Bank replenished the Designated Account with thefollowing 2 replenishments:

USDApril 2015 326,660November 2015 454,200Total 780,860

Disbursements: Disbursements made from the Designated Account during the period areillustrated below in USD:

Beginning Balance 314,468Add:World Bank Replenishments 780,860Deduct:

Payments for Expenditures (671,117)

Ending Balance 424,211

4. Uses of grant funds per part (component):

During the period expenses made are illustrated below in USD:

Part A School Career Counseling 196,991

Part B Electronic Labor Exchanges 255,445

Part C Job Readiness & Placement 51,652

Part D Project Management 167,029

Total Expenses 671,117

5. Uses of grant funds per Category:

Disbursed Budget Balance

Cateory (1)Goods, Consultants Services, Non ConsultingServices Training and Workshops & OperatingCost 804,997 1,882,030 1,077,033Cate2ory (2)

Job Vouchers 51,652 2,867,970 2,816,318

Total Expenditures 856,649 4,750,000 3,893,351

6. Contract Listing:

The Status of signed contracts under the grant is illustrated in the following table in USD:

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"Report on Accounting Procedures & Internal Control"

Active Labor Market Project

World Bank Grant No. TFO 1613 8

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Qazzaz &Co.an s SODre Irno.m _ 4 5 ar-r

Employment-Technical and Vocational Education and Training FundActive Labor Market ProjectAmman, Jordan

In accordance with international standards on auditing, we performed a study and evaluationof existing internal controls for the purpose of providing a basis for reliance thereon indetermining the nature, timing and extent of the audit tests applied in connection with ouraudit of the project financial statement, the study was not designed for the purpose of makingdetailed recommendations.

Nothing comes to our attention during the course of conducting the annual audit exercise thatrequires us to report on with regard to the project internal controls.

This is intended solely for the use of project management and the World Bank and is notintended for any other purpose.

Finally we wish to express our appreciation for the courtesies and cooperation extended toour representatives during the course of their work.

Very truly yours

Mohammad Qazzaz

4 February 201

Gazua & Cs-

Swefieh, Yaqoub Mu'ammar Str. P.O.Box 850037 Amman 11185 Jordan Phone: + 962 6 582 20 50 Fax: + 962 6 581 55 85

Report on Accounting Procedures, Internal Control Structure:

As per our review we noted no material findings

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