PROJECT ((STRENGTHENING EVIDENCE-BASED POLICYMAKING FOR EDUCATION SECTOR PERFORMS IN THE REPUBLIC OF BELARUS>

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1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized PROJECT ((STRENGTHENING EVIDENCE-BASED POLICYMAKING FOR EDUCATION SECTOR PERFORMS IN THE REPUBLIC OF BELARUS> Financial statements for the year ended 31 December 2015 Public Disclosure Authorized

2 CONTENTS INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS 3 FINANCIAL STETEMENTS OF THE PROJECT "STRENGTHENING EVIDENCE-BASED POLICYMAKING FOR EDUCATION SECTOR REFORMS IN THE REPUBLIC OF BELARUS", FINANCED BY WORLD BANK GRANT #TF STATEMENT OF PROJECT SOURCES AND USES OF FUNDS FOR THE YEAR ENDED 31 DECEMBER STATEMENT OF USES FUNDS BY PROJECT ACTIVITY FOR THE YEAR ENDED 31 DECEMBER DESIGNATED ACCOUNT STATEMENT FOR THE YEAR ENDED 31 DECEMBER TRANSIT ACCOUNT STATEMENT FOR THE YEAR ENDED 31 DECEMBER STATEMENT OF EXPENDITURE WITHDRAWAL SCHEDULE FOR THE YEAR ENDED 31 DECEMBER NOTES TO THE FINANCIAL STATEMENTS 14 2

3 KPMG, Limited liability company Telephone Dziar2ynskaha avenue Fax premises 53, office 53-2 Internet Minsk Belarus Independent Auditors' Report on Financial Statements Mr. S.A. Vazhnik Director National Institute of Education 16 Korolya St. Minsk, , Republic of Belarus Certificate of state registration is issued under ruling of Minsk City Executive Committee on 24 July 2002 Registration number NL Out ref.: We have audited the accompanying financial statements of the Project "Strengthening Evidence-Based Policymaking for Education Sector Reforms in the Republic of Belarus" #TF (hereinafter - Project) prepared by National Institute of Education, which comprise the statement of project sources and uses of funds, statement of uses of funds by project activity, designated account statement, transit account statement, statement of expenditure withdrawal schedule for the year ended 31 December 2015, and notes to the financial statements. The financial statements have been prepared by management on the basis of cash accounting and in accordance with the relevant guidelines of the World Bank Management's Responsibility for the Financial Statements The Management is responsible for the preparation of these financial statements on the basis of cash accounting and in accordance with the relevant guidelines of the World Bank, as well as for such internal control as management determines necessary to enable the preparation of these special purpose financial statements that are free from material misstatement, whether due to fraud or error. Auditors'Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. 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. KPMG, a Limited liability company and a member firm of Registered in Belarus the KPMG network of independent member firms Registered office: 57 Dziar2ynskaha av affiliated with KPMG International Cooperative (ukpmg premises 53, office 53-2 International., a Swiss entity, Minsk Belarus

4 An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity's preparation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements of the Project "Strengthening Evidence-Based Policymaking for Education Sector Reforms in the Republic of Belarus " #TF for the year ended 31 December 2015 are prepared, in all material respects, on the basis of cash accounting and in accordance with the relevant guidelines of the World Bank. Basis of Accounting Without modifying our opinion, we draw attention to Notes to the financial statements, which describe the basis of accounting. The financial statements are prepared to assist National Institute of Education to comply with the financial reporting provisions of the World Bank. As a result, the financial statements may not be suitable for another purpose. Vasyl Pavien 4 Deputy Audit" c 0, 22 April 2016A, Minsk, Republic ofbela LLC "KPMG" Certificate of state registration is issued by Minsk Municipal Executive Committee under ruling of , Registration number KPMG, a Limited liability company and a memberfirm of Registered in Belarus the KPMG network of independent member firms Registered office: 57 Dziar2ynskaha av affiliated with KPMG International Cooperative < KPMG premises 53, office 53-2 International,), a Swiss entity Minsk Belarus

5 FINANCIAL STETEMENTS OF THE PROJECT "STRENGTHENING EVIDENCE- BASED POLICYMAKING FOR EDUCATION SECTOR REFORMS IN THE REPUBLIC OF BELARUS", FINANCED BY WORLD BANK GRANT #TF Statement of Project Sources and Uses of Funds for the year ended 31 December 2015 (in USD) Actual Planned For the year Cumulative For the ended 31 total amount whole December 2015 project period Opening Cash Balance Project Bank Account. Designated Account - Transit Account (Belarusian rubles in the USD equivalent. on the account in Belarusian rubles) TOTAL _ Add: Sources of Funds Government Funds - - World Bank Funds Direct payments Designated Account TOTAL Less: Uses of Funds Financed by World Bank Component 1: Capacity Development for Evidence-based Policymaking in the General Secondary Education Sector Component 2: Introduction of International Examples and Best Practices of Education Financing Reforms to Government Officials Component 3: Strengthening of Quality Assessment Practices in General Secondary Education

6 Component 4: Implementation Support and Audit Financed by Government - -- TOTAL Closing Cash Balance Project Bank Account Designated Account Transit Account (Belarusian rubles in the USD equivalent on the account in Belarusian rubles) TOTAL Director of the National itute of Education Head of Accounting Department of the National Institute of Education Mr. Sergey A. Vazhnik / Ms. Elena V. Nikitsina The notes on pages from 14 to 16 form an integral part of the financial statements. 6

7 Statement of Uses Funds by Project Activity for the year ended 31 December 2015 (in USD) Project activities Total For the Amount Total Amount reporting payable at the payment per period reporting date still to be procureme (goods/service made nt plan s accepted but not paid)/ 1. Capacity Development for Evidence-based Policymaking in the General Secondary Education Sector Assessment of existing practices of data collection, analysis and use for policy-making in general secondary education (local consultant) Assessment of existing practices of data collection, analysis and use; improvement of the methods of data collection for policy-making in general secondary education in accordance with best international practices (international consultant) Strengthening of information systems for data collection and dissemination on the general secondary education sector (local consultant) Purchase of licenses for software products for data collection and analysis Training and workshops within Component Total for Component Introduction of International Examples and Best Practices of Education Financing Reforms to Government Officials 7

8 Acquaintance of representatives of education system with the corresponding examples of world practice on reforming of financial management system of general secondary education Exploration by key representatives of education system of the Republic of Belarus of experience of other countries in the field of application of alternative funding mechanisms for education Exploration by Belarusian officials of experience of the countries with considerable traditions of the funding mechanism applicable in the conditions of the Republic of Belarus (2 118) Capacity development of specialists of Ministry of Education and subordinated structures in the sphere of use of the specialized English lexicon on introduction of new funding mechanisms of general secondary education Capacity development of state authorities in the sphere of application of alternative approaches to financing of general secondary education in the Republic of Belarus on experimental grounds (local) Capacity development of state authorities in the sphere of application of alternative approaches to financing of general secondary education in the Republic of Belarus on experimental grounds (international) Purchase of computer hardware and software for introduction of modern means of monitoring the effectiveness of the use of funds on the implementation of new 8

9 approaches to funding institutions of general secondary education Training and workshops within Component (19)* Total for Component (19) Strengthening of Quality Assessment Practices in General Secondary Education Acquaintance of representatives of education system with the advanced practice and relevant examples of national systems of an assessment of educational achievements of pupils at the level of general secondary education (international consultant) Analysis of the existing system of quality assessment in general Secondary Education using SABER program "Systems Approach for Better Education Results" (local consultant) Purchase of hardware and software for technical support for the implementation of PISA Participation in the meeting of the Governors of national projects on preparation for carrying out PISA in Technical assistance in the preparation of the Republic of Belarus to participation in the International student assessment systems (such as the Programme for International Student Assessment or the Trends in International Mathematics and Science Study) (international consultant) Training and workshops within Component

10 Total for Component Implementation Support and Audit Project Consultant,for Management Financial Resources Procurement Consultant of the Project Management Group Audit of the project accounts Translator of the Project Management Group International facilitator Publication of the materials Training for National Institute of Education staff in the World Bank's procurement and financial management procedures Adapting an existing accounting program for the project objectives Total for Component Total Project Expenditure Director of the Natio ) Institute ofeducation Head of Accounting Department of the National Institute of Education Mr. Sergey A. Vazhnik Ms. Elena V. Nikitsina * Amount payable at the reporting date (goods/services accepted but not paid) for the Training and workshops within Component 2 in the amount of USD -19 is overpayments for trainings and workshops to be refunded in January The notes on pages from 14 to 16 form an integral part of the financial statements. 10

11 Designated Account Statement for the year ended 31 December 2015 Bank where the special account was opened Currency (in USD) OJSC "Belinvestbank" USD Account Number Opening balance at the beginning of the period - Add: World Bank advances into the Designated account during the period Less: Amount of eligible expenditures paid during the present period Amount of funds transferred to the transit account in BYR Total withdrawals during the period Calculated designated account closing balance Designated account closing balance as at 31 December carried forward to next period - per bank statements Director of the Nationsn tute of Eduction Head of Accounting Department of the National Institute of Edsation Mr. Sergey A. Vazhni i Ms. Elena V. Nikitsina The notes on pages from 14 to 16 form an integral part of the financial statements. 11

12 Transit Account Statement for the year ended 31 December 2015 (in USD) Bank where the transit account was opened Currency Account Number OJSC "Belinvestbank" BYR 1. Opening balance at the beginning of the period - Add: 2. Advance from designated account during the period Less: 3. Amount of eligible expenditures paid during the present period Calculated transit account closing balance Transit account closing balance as at 31 December 2015 carried forward to next period - per bank statements Difference between 4 and 5 (should be zero or explained) - Director of the NatiA Institute of Educqtion Head of Accounting Department of the National Institute of Education Mr. Sergey A. Vazh i Ms. Elena V. Nikitsina The notes on pages from 14 to 16 form an integral part of the financial statements. 12

13 Statement of Expenditure Withdrawal Schedule for the year ended 31 December 2015 (in USD) Number Component 1: Component 2: Component 3: Component 4: Total of Capacity Introduction of Strengthening Implementati SOE applicati Development International of Quality on Support on for for Evidence- Examples and Assessment and Audit withdra based Best Practices of Practices in wal Policymaking Education General in the General Financing Secondary Secondary Reforms to Education Education Government Sector Officials Total Transferred to the Designated Account: (in USD) Number Advance Category 1: Category 2: Category 3: Category 4: Total of Goods Consultants' Training Other applicati services and (audit) on for (including workshops withdra travel and wal per diem) Total Director of the Nation4 tstitute pf Educatid' Mr. Sergey A. Vazhnik Head of Accounting Department of the National Institute of Edu tion Ms. Elena V. Nikitsina The notes on pages from 14 to 16 form an integral part of the financial statements. 13

14 Notes to the financial statements For the year ended 31 December 2015 (All amounts determined in USD if not otherwise stated) Project Description At the request of the Ministry of Education of the Republic of Belarus, the International Bank of Reconstruction and Development ("World Bank") has extended a grant under the Institutional Development Fund (IDF) for the purpose of building government capacity for education sector reforms based on modern approaches to evidence-based policymaking, through improved data collection and analysis, financing and quality assessment. The total grant amount is USD According to the Resolution of Council of Ministers of the Republic of Belarus dated July 31, 2014 No 742 <<On approval of international technical assistance projects >> the project has been entitled as an approved international technical assistance project and has been registered by the Ministry of Economy of the Republic of Belarus as of November 17, 2014, registration No. 2/14/ In conformity with the Grant Agreement dated April 24, 2014 National Institute of Education acts as a Project Implementing Agency. The objective of the Project is to build government capacity for education sector reforms in the Recipient's country based on modern approaches to evidence-based policymaking, through improved data collection and analysis, education financing and quality assessment. The Project consists of the following parts: 1. Component 1: Capacity Development for Evidence-based Policymaking in the General Secondary Education Sector. 2. Component 2: Introduction of International Examples and Best Practices of Education Financing Reforms to Government Officials. 3. Component 3: Strengthening of Quality Assessment Practices in General Secondary Education. 4. Component 4: Grant Implementation Support and Audit. The period of the Project implementation is Significant accounting policies. Basis of accounting Financial statements have been prepared on a cash basis of accounting. Accounting policies were used consistently during the whole period of the Grant use. Accounting data of National Institute of Education form the basis for the financial statements preparation. The project transactions recorded separately from the funds received from other sources of finance of National Institute of Education. Reporting period This report covers the period ofuse of the Grant funds for the year ended 31 December Financial statements currency USD is the currency of the financial statements in accordance with the requirements of the World Bank. Payments made in Belarusian rubles are presented in the financial statements in USD at the actual bank exchange rate at the date of foreign currency sale. 14

15 Funds of the project financed by the World Bank The World Bank provided the Project funds upon requests signed by the authorized representative of National Institute of Education. In the reporting period, financing provided by additions to the initial advance to the designated account of the project opened in OJSC <<Belinvestbank>>, as well as by direct payments. Project accounts Project accounts opened in OJSC <<Belinvestbank>>, which comply with the requirements of the World Bank. Designated account of the project X is opened in USD. Transit project account X is opened in BYR. This account is intended for depositing the ruble equivalent of sold currency from the designated account for further payments. Withdrawal offunds National Institute of Education submitted 6 withdrawal applications during 2015 as shown below: Payment USD Application Date of number numbertype wihrwlcurrency withdrawal Amount equivalent 1 DA-A USD DA-A USD Direct 3 Payment USD DA-A USD - Direct 5 Payment USD Direct 6 Payment USD Total: Financing received: Direct payment Transferred to the designated account Total:

16 Determination of earnings and expenses National Institute of Education keeps its records and prepares its financial statements on cash basis accounting. Cash proceeds are recorded when obtained from the World Bank. Expenses are recorded at the date of withdrawal of funds from the project accounts. The following table shows the Categories of components to be funded under the Grant, Grant allocations for each Category and the percentage of costs of components, which will be financed in each Category: Category Amount of the Grant Percentage of costs to be funds financed (in USD) (1)Goods % (2) Consultants' services % (including travel and per diem) (3) Training and % workshops (4) Other (audit) % TOTAL AMOUNT

17 World Bank Audit Documentation Checklist Name of Loan/Credit: World Bank Loan/Credit # TF Auditors' Report: 22 April 2016 I. Auditors' Report,(Opinion): Check if Included Check if N/A A. Applicable accounting standards noted X B.Applicable auditing standards noted X C.Opinion rendered on all forms of withdrawals: 1. Statement of Expenditures for the year X ended 31 December Designated account X D.All sources of financing for the project are noted X II. Financial statements: A.Revenue Earning Entity (all items are to be filledin): 1. Balance sheet X 2. Cash Flow Statement X 3. Income Statement X B.Non-Revenue Earning Entity (all items are to be filled-in): 1. Balance sheet X 2. Statement on use of funds by Project X components C.If applicable (refer to Loan Agreement): 1.Statement of Expenditure for the year ended 31 December Statement on use of designated account III.Notes to the financial statements X X X IV.Reconciliation between World Bank records and project records V.Management Letter X 17