SPF-FUNDED BUILDING CAPACITY FOR EFFECTIVE LOCAL GOVERNANCE PROJECT SPF GRANT NO. TF IMPLEMENTED BY COMMUNITY DEVELOPMENT AND INVESTMENT AGENCY

Size: px

Start display at page:

Download "SPF-FUNDED BUILDING CAPACITY FOR EFFECTIVE LOCAL GOVERNANCE PROJECT SPF GRANT NO. TF IMPLEMENTED BY COMMUNITY DEVELOPMENT AND INVESTMENT AGENCY"

Alvin Henry
5 years ago
Views:

1 SPF-FUNDED BUILDING CAPACITY FOR EFFECTIVE LOCAL GOVERNANCE PROJECT SPF GRANT NO. TF IMPLEMENTED BY COMMUNITY DEVELOPMENT AND INVESTMENT AGENCY SPECIAL PURPOSE FINANCIAL STATEMENTS AND INDEPENDENT AUDITOR'S REPORT For the period from 1 January 2016 to 23 March 2017 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized BISHKEK April 2017

2 SPF-FUNDED BUILDING CAPACITY FOR EFFECTIVE LOCAL GOVERNANCE PROJECT SPF GRANT NO. TF TABLE OF CONTENTS STATEMENT OF MANAGEMENT'S RESPONSIBILITIES FOR THE PREPARATION AND PRESENTATION OF THE SPECIAL PURPOSE FINANCIAL STATEMENTS 3 INDEPENDENT AUDITOR'S REPORT 4-5 SPECIAL PURPOSE FINANCIAL STATEMENTS For the period from 1 January 2016 to 23 March 2017: Page Statement of cash receipts and payments 6 Statement of expenditures per components 7 Notes to the special purpose financial statements 8-15 ANNEX 1. RECONCILIATION BETWEEN THE AMOUNTS SUBMITTED BY THE ARTS AND - DISBURSED BY THE WORLD BANK 16 2

3 STATEMENT OF MANAGEMENT'S RESPONSIBILITIES FOR THE PREPARATION AND PRESENTATION OF THE SPECIAL PURPOSE FINANCIAL STATEMENTS FOR THE PERIOD FROM 1 JANUARY 2016 TO 23 MARCH 2017 The management'of the Community Development and Investment Agency (hereinafter: ARIS) is responsible for the preparation of the special purpose financial statements of "SPFfunded Building Capacity for Effective Local Governance Project" (hereafter: the Project) financed by Letter Agreement that present fairly the Project's cash receipts and payments, and expenditures per components for the period from 1 January 2016 to 23 March 2017, in compliance with the International Public Sector Accounting Standard "Financial Reporting under the Cash Basis of Accounting" (IPSAS-Cash Basis) issued by the International Public Sector Accounting Standards Board (IPSASB) within the International Federation of Accountants (IFAC) and the Financial Management Manual for World Bank Financed Investment Operations (WB Guidelines). In preparing the special purpose financial statements, ARIS's management is responsible for: * Properly selecting and applying accounting policies; * Presenting information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information; * Providing additional required disclosures for the period from 1 January 2016 to 23 March ARIS's Management is also responsible for: * Designing, implementing and maintaining an effective and sound system of internal controls, throughout the Project; * Maintaining adequate accounting records that are sufficient to show and explain the Project's transactions, and which enable them to ensure that the special purpose financial statements of the Project comply with IPSAS - Cash Basis and the WB Guidelines; * Taking such steps that are reasonably available to them to safeguard the assets of the Project and to affirm that funds received have been used in accordance with the Letter Agreement dated 29 December 2014, and World Bank related guidelines, with due attention to economy and efficiency, and only for the purposes for which the financing was provided; and * Preventing and detecting fraud and other errors. The special purpose financial statements for the period from 1 January 2016 to 23 March 2017 were authorized for issue on 4 April 2017 by the ARIS's Management. On behalf of the ARIS's Manageme Arstan Muktarov Executive Director ahat Junusfiova" inancial Manager 3

4 "1UOU-UflF'h4S" ItUn"W "SOS-AUDIT" LTD INDEPENDENT AUDITOR'S REPORT To the management of the Community Development and Investment Agency Opinion We have audited the special purpose financial statements of "SPF-funded Building Capacity for Effective Local Governance Project" (the Project) financed by Letter Agreement SPF Grant No. TF dated 29 December 2014 ("Letter Agreement"), and implemented by Community Development and Investment Agency ("ARIS"), which comprise the statement of cash receipts and payments and the statement of expenditures per components for the period from I January 2016 to 23 March 2017, and notes to the special purpose financial statements, including a summary of significant accounting policies. - In our opinion, 1. the accompanying financial tatements present fairly, in all material respects the cash flows for the period from I January 2016 to 23 March 2017 in accordance with International Public Sector Accounting Standard: Financial Reporting Under the Cash Basis of Accounting, (IPSAS-Cash Basis); 2. funds have been used in accordance with the conditions of the Letter Agreement concluded between the International Development Association (IDA) and the Kyrgyz Republic, and WB Guidelines, with due attention to economy and efficiency, and only for the purposes for which the financing was provided; 3. supporting documents, records and accounts have been maintained to support claims for reimbursement of expenditures incurred. Expenditures included in the withdrawal applications and reimbursed against are eligible for financing under the Letter Agreement; Interim Unaudited Financial Statements (IFSs) issued by ARIS during the reporting period are in agreement with the underlying books of account; 4. The Designated account used has been maintained in accordance with the provision of the Letter Agreement, and World Bank related guidelines; 5. Goods and Services financed have been procured in accordance with the Letter Agreement and World Bank related guidelines. Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (ISAs) as issued by International Auditing and Assurance Standards Board (IAASB) of the International Federation of Accountants (IFAC). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Project and of the ARIS in accordance with the International Ethics Standards Boardfor Accountants' Code of Ethics for Professional Accountants (IESBA Code), and we have fulfilled out other ethical requirements in accordance with IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Emphasis of Matter - Completion of the Project Without qualifying our opinion, we draw your attention to Note 11 of these special purpose financial statements which disclose that the Project was completed as at the repdrting date. -I p bputdw 0037, U SqpwbjLu1. 38/55. -br2 (+37410) , www sosaudit am ;I 1 fnun info@sosaudit am 38/55A Tigranyan 0037 Yerevan, RA Tel (+37410) www sosauditam E mail: info@sosaudil.am

5 11UOU-UflVf'L-S"1 u'me "SOS-AUDIT" LTD Responsibilities of the Management for the Financial Statements Management of the ARIS is responsible for the preparation and fair presentation of the special purpose financial statements in accordance with IPSAS-Cash Basis issued by the International Public Sector Accounting Standards Board (IPSASB) of the IFAC and Financial Management Manual for World Bank Financed Investment Operations ("WB Guidelines"), and for such internal control as management determines is necessary to enable the preparation of special purpose financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility for the Audit of the Special Purpose Financial Statements Our objectives are to obtain reasonable assurance about whether the special purpose financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is high level of assurance, but is not a guaranty that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements arise from fraud and error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these special purpose financial statements. As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional skepticism throughout the audit. We also: * Identify and assess the risks of material misstatement of the special purpose financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. * Obtain an understanding of internal control relevant to the audit 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 internal control. * Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. * Evaluate the overall presentation, structure and content of the special purpose financial statements, including the disclosures, and whether the special purpose financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with management regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. "SOS-Audit" LLC 4 April 2017 anvet zaryan Gnel Khachatryan, FCCA Di ector Auditor -9 B, p bplu0 0037, U ShqpublLuib 38/55 ALb (+37410) , www sosaudit,am t[-.nuw mnto@sosauditam 38/55 A Tigranyan, 0037 Yerevan RA, Tel (+37410) , www scsaudit am; . info@sosauditam

6 1 国国園国目園戸甲 - -,:,-- ノ ;:: ; りj 熱達

7 刪비. 珊. 1 -,,-[[-&--

8 SPF -funded Building Capacity for Effective Local Governance Project Notes to the special purpose financial statements For the period from'i January 2016 to 23 March General infdrination. I. I. The Project In accordance with Letter Agreement dated 29 December 2014, the International Development, Association ("IDA", or "V*113"), acting as administrator of grant funds provided by the State and Peace Building Fund (SPF), provided Kyrgyz Republic a grant in the amount of 1,400,000 United States dollars (). The Project became effective on 19 March The SPF Grant No. TFO was provided for implementation of <SPF-funded Building Capacity J, for Effective Local Governance Project>) (the Project). The Closing date of the Grant expenditures 7 is set 31 Dee 2016 The (as updated). Grace Period for submitting withdrawal application for expenditures incurred before the Closing date is four months following the Closing date. 1. Z The Project objectives The objective of this project is to enhance participatory decision-making and accountability in selected villages in the membe'r Country with respect to local government planning and budgeting, service delivery, and investments. The Project consists of the following parts: Part 1: Strengthening Citizens' Knowledge of Participatory Local Governance Provision of Training and consultants' services for conducting outreach activities, capacity building, and peer-to-peer leaning activities aimed at improving awareness and knowledge of citizens and community based organizations on their roles and responsibilities in local governance. I Part II: Strengthening Functional and Horizontal Interface between Local Government Bodies Provision of Training and consultant' services for carrying out capacity building and peer-to-peer leaning activities for representatives of the legislative and executive branches of local governments. Part III: Implementing Participatory Local Development Provision of Training and consultant' services for designing and preparing Local Development Plans -7, by Local governments. Part IV: Project Management and Monitoring and Evaluation Provision of Incremental Operating Costs and consultants' services for carrying out Project audit, management, and implementation. W 8

9 i. SPF - funded Building Capacity for Effective Local Governance Project Notes to the special purpose financial statements For the period from 1 January 2016 to 23 March The Project Budget and Financing The Project is 100% financed by SPF Grant No. TFO18720, inclusive of taxes. SPF Grant No. Category TF Total (1) Goods, Non-Consulting Services, Consultants' Services (including Audit), Training, and Incremental Operating Costs under the Project 1,400,000 1,400,000 Total 1,00,000 1,400, Project Implementation The Project is implemented by Community Development and Investment Agency (ARIS). The ARIS was established on 15 October 2003 according to the Kyrgyz President's Decree for operating control over the Projects financed by the World Bank. ARIS is an independent legal entity, and it is registered in the legal organizational form envisaged by the legislation of the Kyrgyz Republic for non-for-profit organizations. Co-founders of ARIS are Administration of the President of the Kyrgyz Republic, association of legal entities "Association of local self-government bodies of villages and communities of the Kyrgyz Republic" and "Counterpart-Sheriktesh" public association. The work of ARIS is supervised by the Supervisory Board, which is the superior steering body of ARIS. The ARIS address is: 102 Bokonbayeva Street, Bishkek, the Kyrgyz Republic, J 9

10 SPF - funded Building Capacity for Effective Local Governance Project Notes to the special purpose financial statements For the period from 1 January 2016 to 23 March Summary of significant accounting policies 2.1. Preparation and presentation offinancial statements The special purpose financial statements are prepared in accordance with the International Public Sector Accounting Standard: Financial Reporting Under the Cash Basis ofaccounting (IPSAS-Cash Basis), issued by the International Public Sector Accounting Standards Board (IPSASB) within the International Federation of Accountants (IFAC), and presented in accordance with Financial Management Manual for World Bank Financed Investment Operations. The principal accounting policies applied in the preparation of these special purpose financial statements are set out below. These policies have been consistently applied to all the periods presented. 2.2 Cash basis of accounting Project financing is recognised as a source of project funds when the cash is received. Project expenditures are recognised as a use of project funds when the payments are made. 2.3 Reporting currency The reporting currency of these special purpose financial statements is United States dollars (). The financing received and expenditures made in local currency, Kyrgyz Som (KGS), are translated into based at the exchange rate prevailing at the date of the transaction. The exchange rate defined by the CJSC "Kyrgyz Investment and Credit Bank" is as follows: 31 December 2015: I = KGS. 23 March 2017: 1 = KGS Taxes The taxes are paid in accordance with the tax regulation of the Kyrgyz Republic Budget Expenditure budget is created based on actual accumulated expenditures for the last period plus the updated procurement plans for the Reporting year. 10

11 SPF - funded Building Capacity for Effective Local Governance Project Notes to the special purpose financial statements For the period from 1 'January 2016 to 23 March Summary of Summary Reports and SOEs Payment categories Total Withdrawal Withdrawal (1) Goods, Non-Consulting application application Services, Consultants' No value date Services (including Audit), Training and Incremental Operating Costs under the 4 14.Mar , , Apr , , Jun , , Aug , , Oct , , Oct , , Nov , , Dec , , A 15.Dec , , O.Feb , , Mar , , Total 1,125, ,125, Statement of Designated Account Letter Agreement Bank account number Bank CJSC "Kyrgyz Investment and Credit Bank" Bank location Erkindik blvd. 21, Bishkek, Kyrgyz Republic Account currency Reporting year 1. Opening balance as at , Add: opening discrepancy - 3. IDA advance/replenishment 945, Less: Refund to IDA from DA - 5. Present outstanding amount advanced to DA 1,101, DA closing balance as at Add: Amount of eligible expenditures paid 1,095, Less: interest earned (if credited to DA) - 9. Total advance accounted for 1,095, Closing discrepancy (5)-(9)* 6,000 (*) Escrow account balance for paying final audit service (Note 6). 11

12 SPF - funded Building Capacity for Effective Local Governance Project Notes to the special purpose financial statements For the period from 1 January 2016 to 23 March Statement of Financial Position The Statement of Financial Position discloses assets, liabilities and net assets of the Projects as at reporting date. It is prepared in accrual basis that is transactions are recognized when they occur (and not only when cash is received or paid). Note As at As at 23 Mar Dec 2015 ASSETS Cash 6 6, ,609 Prepayments Total assets 6, ,609 LIABILITIES Payables 11.d 6,000 - Total liabilities 6,000 - NET ASSETS Cumulative income SPF Grant No. TFO ,400, ,510 Other income (accrued interest) 4,160 1,464 1,404, ,974 Cumulative expenses Project expenses 1,400, ,365 Other expenses (bank charges) 3,997-1,403, ,365 Foreign exchange gain/(loss).. Total net assets , Cash Underlying As at As at Currency 23 Mar Dec 2015 Designated Account - 156,145 Escrow account 6,000-6,000 Other 156,145 Interest account 163 1, ,464 6, ,609 (*) All accounts are held at CJSC "Kyrgyz Investment and Credit Bank" (Bishkek, Kyrgyz Republic). 12

13 SPF - funded Building Capacity for Effective Local Governance Project Notes to the special purpose financial statements For the period from 1 January 2016 to 23 March Project Expenditures Budget Execution Cumulative Expenditures as at 23 Mar 2017 Total budget Execution Category % (1) Goods, Non-Consulting Services, Consultants' Services (including Audit), Training, and Incremental Operating Costs under the Project 1,394,000 1,400, % Total 1,394,000 1,400, % 8. Financing Reporting Cumulative as period at 23 Mar 2017 Advances/ (advance recovery) (180,000) Direct Payments -. SOE and Summary Report 1,125,490 1,400,000 Total 945,490 1,400,000 Total financing budget 1,400,000 Percentage of finance provided as at 23 Mar % 9. Schedule of Fixed Assets The schedule of fixed assets procured and received by ARIS for the Project implementation is follows: 1 Jan 2016 Additions Deductions 23 Mar 2017 Office fittings and equipment 20,325 25,073-45,398 Office furniture - 11,697-11,697 20,325 36,770-57,095 13

14 SPF - funded Building Capacity for Effective Local Governance Project Notes to the special purpose financial statements For the period from 1 January 2016 to 23 March Adjustment of opening cumulative expenditures per component Adjustments related to reclassification of some consulting service fee from Project management to other components. The effect of reclassification is presented bellow. Adjusted Cumulative Cumulative as at as at Adjustment A. Strengthening citizens' knowledge and awareness for participatory governance 102,876 64, ,982 Trainings 97,369-97,369 Consultants' services - 64,106 64,106 Goods 5,507-5,507 B. Strengthening functional capacities and skills of local government bodies -. Trainings. Consultants' services. Goods.. C. Implementing Participaitory Local Development - 30,139 30,139 Consultants' services - 30,139 30,139 Trainings.. Goods D. Project Management & Monitoring and Evaluation 195,489 (94,245) 101,244 Consulting services including Audit 74,832 (68,832) 6,000 Trainings.. Goods 25,413 (25,413) Operating Costs 95,244-95,244 TOTAL 298, ,365 14

15 SPF - funded Building Capacity for Effective Local Governance Project Notes to the special purpose financial statements For the period from 1 January 2016 to 23 March Project completion The Project was completed as at 31 December 2016 (the Closing Date), and the Grace period for submitting withdrawal application for expenditures incurred before the Closing date set four months after the Closing Date. However, most transactions were completed as at 23 March 2017 (the Reporting Date). As at the date of signing these special purpose financial statements: a. No expenditures related to the Project were incurred after the Closing Date; the payments made during the Grace period related to expenditures incurred before the Closing Date; b. No withdrawals from grant account were made after Reporting date. c. No expenditures related to the Project were submitted to the WB after the Reporting date; there is no outstanding withdrawal advance balance as at Reporting date (Note 8); d. There were no uncovered prepayments or payables outstanding to contractors related to the Project as at the Reporting Date, except for final audit service; e. The outstanding cash balance at the escrow account as at Reporting Date, will be paid for final audit service, including the related non-resident income tax (Note 6); f. The fixed assets acquired during the Project (Note 9) will be used by the ARIS for implementing other projects. g. We are not aware abdut any pendiig or existing litigations against the Project. 15

16 SPF - funded Building Capacity for Effective Local Governance Project ANNEX 1. RECONCILIATION BETWEEN THE AMOUNTS SUBMITTED BY THE ARIS AND DISBURSED BY THE WORLD BANK For the period from 1 January 2016 to 23 March 2017 Expenditure Category Appi. ARIS WB Difference Advances (advance recovery) 1A (22,917.21) (22,917.21) 12 (151,082.79) (151,082.79) 13 (6,000.00) (6,000.00) (180,000.00) (180,000.00) (1) Goods, Non-Consulting Services, Consultants' 4 149, , Services (including Audit), Training, and Incremental Operating Costs under the Project 5 139, , ,924,07 146, , , , , , , , ,946, , , A 22, , , , , , S1,125, ,125, Total 945, ,

IRRIGATION AND LAND MARKET DEVELOPMENT PROJECT IDA CREDIT NUMBER 5456-GE

Public Disclosure Authorized IRRIGATION AND LAND MARKET DEVELOPMENT PROJECT IDA CREDIT NUMBER 5456-GE Public Disclosure Authorized IMPLEMENTED BY DONORS PROJECTS MANAGEMENT AND MONITORING UNIT (DPMMU)