FINANCIAL ATTEST AUDIT REPORT

Transcription

1 ' FINANCIAL ATTEST AUDIT REPORT ON THE ACCOUNTS OF PUNJAB SKILLS DEVELOPMENT PROJECT FINANCED BY THE WORLD BANK(CREDIT NO 563PK) ~ ~ e INDUSTRIES, COMMERCE AND INVESTMENT DEPARTMENT, GOVERNMENT OF THE PUNJAB FOR THE FINANCIAL YEAR Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Auditor General of Pakistan Islamabad

2 TABLE OF CONTENTS ' List of abbreviations Preface PARTI PARTII Project Overview Auditor's Report Financial Statements MANAGEMENT LETTER COVERING LETTER TO THE MANAGEMENT LETTER EXECUTIVE SUMMARY 1 Introduction 2 Audit Objectives 3 Audit Scope and Methodology 4 AUDIT FINDINGS AND RECOMMENDATIONS 41 Organization and Management 42 Financial Management 43 Procurement and Contracting 4 4 Overall Assessment 5 CONCLUSION ACKNOWLEDGEMENT Page No

3 APD Assistant Project Director DD Deputy Director DDO Drawing and Disbursing Officer Abbreviations and Acronyms ECNEC Executive Committee of the National Economic Council " EEPs Eligible Expenditure Programs GoPb Government of the Punjab OST General Sales Tax HRA House Rent Allowance IC&ID Industry, Commerce & Investment Department IDA International Development Agency INTOSAI International Organization of Supreme Audit Institutions IPSAS International Public Sector Accounting Standards ISSAI International Standards of Supreme Audit Institutions LPC Last Pay Certificate ML Management Letter MTDF Mid Term Development Framework NCB National Competitive Bidding PAD Project Appraisal Document PD Project Director PFR Punjab Financial Rule " PIU Project Implementation Unit PPRA Punjab Procurement Regularity Authority PST Punjab Sales Tax PSDF Punjab Skills Development Fund P&D Planning & Development PIU Project Implementation Unit PSDP Punjab Skills Development Project S&GAD Service & General Administration Department TEVTA Technical Educational Vocational Training Authority WB World Bank 2

4 PREFACE The Auditor General of Pakistan conducts audit, in terms of articles 169 and 17 of the Constitution of the Islamic Republic of Pakistan, 1973, read with Sections 7, 8 & 12 of the Auditor General's (Functions, Powers and Terms & Conditions of Service) Ordinance, 21 This audit of Financial Statements of the Punjab Skills Development Project financed by Government of the Punjab and World Bank for the financial year was carried out accordingly The Directorate General Audit, Punjab Lahore conducted audit of the PSDP during September, 217 for the financial year with a view to report significant findings to stakeholders Audit examined the economy, efficiency and effectiveness aspects of the PSDP In addition, audit also assessed, on test check basis, whether the management complied with applicable laws, rules and regulations in managing the entity The audit report indicates specific actions that, if taken, will help the management realize the intended objectives The report has been discussed with the PSDP Management in October, 217 The report consists of two parts ie PartI contains Auditor's Report (Audit Opinion) and Financial Statements and PartII consists of Executive Summary, Management Letter and Audit Findings "\ The report has been prepared for submission to the World Bank in terms of agreement Dated: Place: Lahore Director General Audit Punjab, Lahore 3

5 PARTI 1 Project Overview 2 Auditor's Report to the Management 3 Financial Statements '\ 4

6 PROJECT OVERVIEW Name of the Project/Programme: Sponsoring Authority: Executing Authority: Grant No (as per PAD) Credit No Project Cost (as per PAD) Principal Grant Amount: Date of Commencement: Date of Completion Date of Closing of Loan Agreements: Grant Utilization Status: PIUPSDP World Bank/IDA IC&ID, Punjab PC2122 (22) 563PK Rs 5, million Total Rs: 5, million (GoPb Rs million + IDA/World Bank Credit Rs: 5,975 million) Amount utilized up Amount utilized during Amount utilized during to from WB Funding from GoP Share Rs18,692,411 Rs29,491,732 Rs552,118,555 Progressive Expenditure up to 36217: Amount utilized upto Rs6,32,698 5

7 AUDITOR'S REPORT Auditor's Report on PSDP Financial Statements We have audited the accompanying Financial Statements of Punjab Skills Development Project that comprises of Statement of Receipts and Payments, Statement of Comparison of Budget and Actual together with the notes forming part thereof for the year ended 3 1 h June, 217 Management's Responsibility It is the responsibility of Project Management to establish and maintain a system of internal controls, and prepare and present the Statement of Receipts and Payments in conformity with the requirements of Cash Basis IPSAS, Financial Reporting under the Cash Basis of Accounting Standard Auditor's Responsibility r The responsibility of the auditor is to express an opinion on the Financial Statements based on the audit conducted We conducted our audit in accordance with International Standards of Supreme Audit Institutions Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Financial Statements are free of material misstatements The audit process includes, examining on a test basis, evidence supporting the amounts and disclosures in the Financial Statements It also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall statement presentation We believe that our audit provides a reasonable basis for our opinion Opinion In our opinion the financial statements to the extent of PIU present fairly, in all material respects, the cash receipts and payments by the project for the year ended 3 1 h June, 217 in accordance with IPSAS Cash Basis of Accounting Standard Matter of Emphasis It is emphasized that the funds transferred to TEVTA and PSDF needs audit verification and scrutiny The production of record in this regard may be ensured during the audit of next financial year because audit is unable to express its opinion on the genuineness of s funds Place: Lahore Date: Director General Audit Punjab, Lahore 6

8 FINANCIAL STATEMENTS FOR THE YEAR ENDED ON 3QthJUNE, 217 ' 7

9 l RECEIPTS Description Grant received from GoPb Loan already available Loan from we (563PK) Direct Payment by the World Bank PAYMENTS From GoPb Assignment Account+SOA From IDA Credit Account Payment from Funds given as Technical Assistance by WB (Imprest Accounts) Amount surrendered In GoPb account Cash at beginning of year lncrease/(decrease) in Cash due to operation (ReceiptPaymentSurrender) lncrease/(decrease) in Cash due to exchange rate Cash at end of year ~~~ DEPUTY DIRECTOR (FM) Deputy Director (FM) Project Implementation Unit Punjab Skills Development Project 1 I & C I Department Notes Statement of Receipts and Payments PIUPSDP for the Financial Year ended June 3, Total~ 16,112, ,93, 674,42,689 63,682, 513,93, 577,612, 96,43,689 96,43,689 38,647, ,93, 552,577,317 8,696, ,93, 522,626,823 29,95,494 29,95,494 54,985,177 54,985,177 96,43,689 96,43,689 66,48,195 66,48, ~ Project Director proiect 1mp1cmentation unit Receipts/ (Payments) controlled by entity 161,788,1 57,12, 14,668,1 18,692,411 1,455, 8,237,411 46,665, 96,43,689 (Amount in Rupees) Payments by external third parties TotalII 148,, 39,788,1 148,, 25,12, 14,668,1 148,, 166,692, ,, 158,455, 8,237,411 46,665, 96,43,689 ~ Punjab Skills Oe"clopment P1 1 eel Go"emment ol the Pun1ab 1ca1 oepartment, Lahr8, ft ~ EC~ Receipts/ (Payments) Payments by external controlled by entity third parties

10 / RECEIPTS Grant Receive GoPb Statement of Cash Flows PIU of Punjab Skills Development Project, Lahore for the financial year ending ( Loan No563PK) Description Opening Balance Loan from WB (563PK) Direct Payment by the World Bank Technical Assistance by (Imprest Accounts) PAYMENTS From GoPb Account From IDA Credit Account Payment from Funds given as Technical Assistance by WB (Imprest Accounts) Amount surrendered/lapsed Increase/decrease in cash due to exchange rate Closing Balance ~s~ Deput), Director (FM) Project Implementation Unit Punjab Skills Davelcpment Project I & C I Department ~ Notes 56 World Bank (IDA) US$ 286, , ,152 (GoPbl 63,682, 63,682, 1,, 1,, 29,95, ,788,1 191,738,594 78,7 161,788,1 161,788,1 29,95,494 29,95,494, Rs 14,668,1 14,688,1 8,237,411 8,237,411 96,43,689 Own Source (GoPb) Rs 57,12, 57,12, 158,455, 158,455, TotalII Rs 161,188,1 57,12, 14,668,1 166,692, ,455, 8,237,411 46,665, 96,43,689 t ~ re f@ r:1 Oirectot P,r> jo:l'' 1mp1em r: nt:it in Un t r un,nb S 1rn1I S Oeve lo prnt!fl\ P1C' l~r~ 'c, o v;, 1 prnen1 ot th e Pun1:,\,,c ~ 1 Oepa:tfll~ nl, L~I)("~ 66,48,195 66,48,195 9,212,3 78,7 Own Source TotalI World Bank (IDA) Rs Rs Rs US$

11 Add: Total Deduct: Description Payments during the Financial year \ PUNJAB IMPLIMENTION UNIT PUNJAB SKILLS DEVELOPMENT PROJECT Bank Reconciliation of Special Account/Imprest Account No NBP Main Branch, Lahore for the financial year Out of IDA, World Bank Loan Account Pak Rs USS 96,43, ,3 96,43, ,3 29,95, ,147 66,915, ,314 66,48, , 1~ G:T Project Dire c to r P ro1;c1 lmplenw rit :it:on Unit Punjab Skills Oe vcto pment Pro1E<c t /, Pak Rs 14,668,1 14,668,1 8,237,411 1,261,96 3,82,695 96,43, USS 1,, 1,, 78,7 957,895 36, ,3 ~ Dep!Jt)' Cirertnr (FM) Project linr kw ri,n Unit Punjab Skills u tov ', ~,nt Project I & C I Oej;artrnent ~~~ DEPUTY DIRECTOR (FMl Closing Balance as per cash book on1716 to Less: Unpresented cheques/uncashed issued Cheques Cancelled Issued Cheques Cancelled Bank Replenishment Opening Balance on to Government ot,he PunJab IC&l Department, Lahore 74, :JTDI I

12 Description Opening Balance on 1716 to Add: Amount transfer by GoP Issued Cheques Cancelled Total Deduct: Payments during the year Returned/Surrendered to GoP Closing Ba+A21ance as per bank statement as on to Less: Unpresented cheques/uncashed Closing Balance as per cash book on 1716 to ~~~, DEPUTY DIRECTOR (FM) Deputy Director (FM) Proj 'ct lmplern E' tion Unit Punjab Skills Dev::;,nt Project I & C I Dsµartmant t PUNJAB IMPLIMENTION UNIT PUNJAB SKILLS DEVELOPMENT PROJECT Bank Reconciliation of Assignment Account No122 NBP Main Branch, Lahore for the financial year Pak Rs USS 63,682, 68,418 63,682, 68,418 8,696,823 83,9 54,985, ,329 _ Project Director Project lmplenwntation Unit Punjab Skills Development Pro1ect Government of th e Pun1ab IC&I Department, Lahore I ' Pak Rs 57,12, 57,12, 1,455, 46,665, USS 545, ,725 99, ,838 ~, bje d 1~TOR

13 SrNo W/App Date 1 1stJuly16 2 1stJun17 ~~ DEPUTY DIRECTOR (FM) De,:, i1t~1 Dir~ctQr {FM) Projf :! /1rp Jernc ;,er Unit Punjab Skil! ; f;,,, ; ~; t Project ti I & C I,jc,µanment PUNJAB IMPLIMENTION UNIT PUNJAB SKILLS DEVELOPMENT PROJECT Withdrawal Application Details of World Bank Funds IDA Credit No563 (21617) Disbursement against Olis in designated account (Non Food AC1) Disbursement against Olis in designated account (Non Food AC1) Total Amount in US $ 6,99,179 6,12,57 12,111,749 AUDITOR, Punjab Skiltc, LJovclopn1vn1 P,oject Government cf the Puniab IC&i Oepdrtment, Lahore Proj ec t Direc t or Proj<::C t lnrn1,:, 11i,m;Jlion Unit Particulars

14 NoPIU/PSDP/23/215 PROJECT IMPLEMENTATION UNIT PUNJAB SKILLS DEVELOPMENT PROJECT 1 Introduction Education and training are generally regarded as essential investments for increasing employment and earnings, and are thus necessary for growth Government of the Punjab's Growth Strategy (215218) envisions that Punjab will become a "secure, economically vibrant, industrialized and knowledgebased [province], which is prosperous and competitive wherein every citizen enjoys high quality life "by 218 The key to achieving this vision is catalyzing employmentintensive growth which places job creation and skills development at the core of the strategy To achieve the goal of doubling the province's GDP growth rate from 35 to 8 percent by 218, the Growth Strategy estimates the need to produce 2 million skilled workers by 218 The World Bank has been engaged in dialogue with the Government of the Punjab for a long time in the area of skills and training that has resulted in the instant proposal for a development project (USD 5 million IDA credit) which support its skills objectives under the Punjab Growth Strategy Accordingly, the Punjab Skills Development Project aims to assist the Government in several focused areas to address some of the major shortterm and medium to longterm skills needs and institutional reforms The areas include increasing number of skilled workers trained, quality improvements in priority sectors, and improvements in certification and testing mechanisms which would pave the way for farreaching institutional reforms in the skills sector The Project is expected to benefit youth who wish to gain job specific skills and training in order to join the labor market, as well as individuals in the labor force who wish to increase their earnings capacity through in service training An estimated 7, trainees will directly benefit from the Project, of which at least 15% will be females Students from poor households are likely to benefit from the Project because of the propoor weightage in competitively selecting Training Providers under the increasing access to training subcomponent of the Project Job placement will be integrated into Project activities to ensure that a maximum number of trainees are placed in jobs after training completion The Project would be implemented over a fiveyear period, from FY216 to FY22 It would be financed through a US$5 million Credit from the li)ternational Development Association (IDA), using an investment Project Financing (IPF) lending instrument, and would have two parts The first part, consisting of Component 1 Results Based Financing, would use a resultsbased financing modality to support the implementation of the Government's Skills sector development objective as articulated in the Punjab Growth Strategy Disbursements would be made to the Finance Department, Government of the Punjab and are Conditional no prespecified results, as measured by disbursement linked Indicators (DLis) The second part of the proposed Project, Components 2 Project Management Monitoring & Evaluation and

15 technical Assistance (TA), would fund essential advisory, technical, monitoring, and capacity building support for the Project Disbursements under Component 2 will be on advance basis Under the Project, Government of the Punjab would implement institutional, quality and relevancerelated reforms necessary to build the foundations for an efficient and dynamic skills sector that caters to industrywide demand; and support increased access to skills training in priority trades 2 Objectives The objective of the Punjab Skills Development Project for Pakistan is to improve the quality, labor market relevance of, and access to skills training programs in priority sectors in the Punjab 3 Scope There are two components to the project, the first component being improving and expanding marketrelevant skills training The objectives of this component are to: (i) strengthen the skills training system; (ii) improve the quality and relevance of skills training; and (iii) increase access to marketrelevant trades The second component is the project management, monitoring and evaluation, and technical assistance The objective of this component is to support project management, monitoring and evaluation (M&E), and technical assistance (TA) to enable the achievement of the DLis and ensure efficient and effective management of project implementation M&E strengthening of the skills development system is embedded within project design and financing for M&E activities will be funded by this component 4 Total receipts Rs 674,42,689/ out of this Rs 16,112,689/ for the Financial Year were controlled by entity and amount of Rs 513,93,/ were transfer to PSDF & PTEVT A 41 Government of the Punjab released an amount of Rs 63,682,/ to Pru and Rupees 513,93,/ million separately released to PIUPSDP for payment to Punjab skills development fund & PTEVTA for onward payments to TSPs against DLI5 42 Pru has the Loan/assistance of Rupees 96,43,689/ by the World Bank as an advance (Budgetary Support) to run PIUPSDP, Government of Punjab 5 The total payment made during the Financial Year are Rs 552,577,317/ 51 Payment made from GoP for the Financial Year are Rs 522,626,823/ out of which Rs 8,696,823 from Assignment Account and Rs 513,93,/ from SDA 52 Punjab Skills Development Project is a budgetary support Project The EEPPs are incurred by PTEVT A, on the basis of that expenditures WB reimbursed funds in accordance with agreed frame work 53 Payments made against Technical Assistance during the Financial Year is Rs 29,95,494/ 54 An amount of Rs 54,985,177/ has been surrendered to GoPb

16 55 Since is the Second Financial Year, therefore Rs96,43,689/ opening balance exists 56 Cash at the end of the year represents amount left unutilized against Technical Assistance Rs 66,48,195/ 5 7 Eligible Expenditure Programs comprises of Employees and training related expenses of PTEVTA The cumulative amount shown is as per PTEVTA ' DD(FM) AUDITOR /~P!J~~: Ofre<"tt>r (FM) rojf vl,,r 'i'' Punjab Ski!! ; ' : Unit I & C I :nt Proje9,t Q ' «Ill Project Director Project Implementation Unit Punjab Skills Development Project Govern,n':!nt of the Puniab IC&I Depurtment, Lahor&

17 Schedule of Fixed Assets Purchased Sr No Description of Supply Diesel Generator Laptops Desktop PCs Printers Multimedia Projector Executive Tables Executive Tables Side Racks Executive Chairs Sofa Sets 2 seater Sofa Sets 2 seater Fire Safe Steel Cabinet Reception Table Work Stations Visitor Chairs Conference Table 13 Persons Speech Rostrum Round Side Table Corner Rack marble Top Photocopy Machine Fax Machine Air Conditioners Quantity (Nos) == DD{FM) Deput "' p, '/,r~ ' tf),, (FM 23 Microwave oven ~ ro1,,;1, ~_i o ) Pun1ab Ski/ ', Unit I & c, ;n! Project Q vcpan,rent C ~ P~O CT I R Projec t Director Pro1ec1 tmpte mcnt;:i ti on Un tt f>unjab Skills Ocvclnpmen1 P1 oie' 't Gover,1,n<>nt 1 t hr Pun1ar 1C I'! Dep,11unent Lahr ' ~ ' ",/ 2, AUDITOR