'Z/~:~':'.,-- World Bank Resident Mission, 20-A, Shahrah-e-Jamhuriat '<~~~J) ~:;/ Sector G-5/1, Islamabad. FOREIGN AIDED PROJECTS (FAPs) AUDIT REPORTS

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1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized / No.PA/FAP/FG/SSAF-13/ 1 t> To, Subject: this office: 1. The Secretary, Economic Affairs Division, GovermnentofPakistan Pak Secretariat, Block "C", slamabad Office of the Auditor-General of Pakistan Special Sectors Audit Wing Constitution Avenue slamabad Dated: , r:.:f) --,-.. f?..,_/ "". - vf>.,/.. ':>;,.,<f/' /,,,-~ ;/ /. '{ :5'\ /, 1 ~,r.,,, '\::.,,. /.', : -r~,,-, "1 \,O' /' ~,: -,... y-, ('.) c. - ' ~ -1."'l -._... - t(., \.... ~ 1 \ :- -' ' (,r,l, / ~.' \,... ~' " i......,-..,.,.:~,?> 2he Country Director, 'Z/~:~':'.,-- World Bank Resident Mission, 2-A, Shahrah-e-Jamhuriat '<~~~J) ~:;/ Sector G-5/1, slamabad FOREGN ADED PROJECTS (FAPs) AUDT REPORTS j Financial A,ttest Audits of the following F AP Audit Reports has been conducted by $.No Name of Projects Development Partners 1. Governance Support Project-FATA MDTF 2. nstitutional Capacity Building Ombudsman DA 3.,/ Tertiary Education Support Project DA 4. Second Gen CT Sec Policy & Legal World Bank 5. Social Safety Net Project DA 6. Social Safety Net TA DA 7. Emergency Recovery Project TDPs of FATA DA 8. Water Sector Capacity Building lndus-21 DA 9. Economic Revitalization of KPK and FATA World Bank 2. Certificate/Financial Attest alongwith the Audit Report containing therein the management letter (ML) on the same is attached herewith. The referred is hereby issued simultaneously to the Government (EAD) and to the World Bank Resident Mission slamabad through EAD.

2 flli77~ Financial Attest Audit Report on the Accounts of Tertiary Education Support Project D A Credit No PK Higher Education Commission for the Financial Year Auditor General of Pakistan slamabad

3 TABLE OF CONTENTS Abbreviations and Acronyms... i PREFACE ii PART PROJECT OVERVEW AUDTOR'S REPORT TO THE MANAGEMENT (Audit Opinion)... 3 FNANCAL STATEMENTS... 4 PART COVER LETTER TO THE MANAGEMENT LETTER EXECUTVE SUMMARY MANAGEMENT LETTER NTRODUCTON... O 2. AUDT OBJECTVES AUDT SCOPE AND METHODOLOGY AUDT FNDNGS AND RECOMMENDATONS Financial Management...: Sustainability Overall Assessment CONCLUSON ACKNOWLEDGEMENT

4 Abbreviations and Acronyms CBAS DL ED EEP ECNEC HEC HEis DA NTOSA PFP S SAT MTDF NRPU PhD PSDP PERN SOR TESP TPV rrs oss Cash Basis of Accounting Standard Disbursement Linked ndicator Executive Director Eligible Expenditure Programme Executive Committee ofnational Economic Counci l Higher Education Commission Higher Education nstitutions nternational Development Association nternational Organization of Supreme Audit nstitutions nterim Placement of Fresh PhD international Standards of Supreme Audit institutions Medium-Term Development Framework National Research Program for Universities Doctor of Philosophy Public Sector Development Program Pakistan Education Research Network Special Drawing Rights Tertiary Education Support Project Third Party Validation Tenure Track System Overseas Scholarships

5 PREFACE The Auditor-General of Pakistan conducts audits subject to Articles 169 and 17 of the Constitution of the slamic Republic of Pakistan, 1973 read with Sections 8 and 12 of the Auditor-General's (Functions, Powers and Terms and Conditions of Service) Ordinance, 2. The audit of the Tertiary Education Support Project (TESP) under Higher Education Commission DA Credit No PK for the Financial Year funded by the nternational Development Association (TOA) was carried out accordingly. The Directorate General Audit (Federal Government), slamabad conducted audit of the Tertiary Education Support Project in October, 2 l 6for the financial year 215-l 6with a view to reporting significant findings to stakeholders. Audit examined the economy, efficiency and effectiveness aspects of the Tertiary Education Support Project. n addition, Audit also assessed, on test check basis, whether the management complied with applicable laws, rules and regulations in managing the Tertiary Education Support Project. The Audit Report indicates specific actions that, if taken, will help the management realize the objectives of the Tertiary Education Support Project. The.!port consists of two parts. Part-1 contains Auditor's Report (Audit Opinion) and Financial Statements. Part-11 contains Executive Summary, Management Letter and Audit Findings.. The report has been prepared for submission to the nternational Development Association (DA) in tenns of DA Credit No.4886-PK. Dated:. '"l Place: slamabad (MUHAMMAD AJMAL GONDAL) DRECTOR GENERAL ii

6 PART- PROJECT OVERVEW AUDTOR'S REPORT TO THE MANAGEMENT (Audit Opinion) FNANCAL STATEMENTS 1 1

7 Name of Project: Sponsoring Authority: Executing Authority: DA Credit No: PC- Cost Date of commencement Actual date of commencement Date of completion (As per PC-T) Date of approval Loan Amount: Loan Closing Date: Loan Utilization Statues in Financial Year Progressive expenditure upto PROJECT OVERVEW Tertiary Education Support World Bank (nternational Development Association) Higher Education Commission 4886-PK Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable SOR million Rs million Rs million 2

8 Dr. Arshad Ali, Executive Director, Higher Education Commission, Sector H-9, slamabad Auditor's Report on the Tertiary Education Support Project Financial Statements We have audited the accompanying Financial Statements of Tertiary Education Support Project, Higher Education Commission of Pakistan!DA Credit No.4886-PK that comprise Statement of and Payments together with the Notes forming part thereof for the year ended June, 216. Management Responsibility t is the responsibility of the project management to establish and maintain a system of internal controls, and prepare and present the Statement of and Payments in conformity with the requirements of Cash Basis PSAS, Financial Reporting under the Cash Basis of Accounting Standard. Auditor's Responsibility 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 wi th the nternational Standards of Supreme Audit nstitutions. These standards require that we plan and perform the audit to obtain reasonable assurance 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. ft also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall statement presentation. We believe that the audit evidence, we have obtained is sufficient and appropriate to provide a basis.for qualified audit opinion. Basis for Qualified Audit Opinion The project management have not provided bank statement to ascertain the balance and expenditure. Further more the refund rnadc by the different universities was not being shown in Financial Statement. n our opinion, except for the possible effects of the matter described in the Basis for Qualified Opinion: a) The financial statements present fairly, in all material respects, the cash receipts and payments by the project for the year.ended 3th June, 2 6in accordance with Cash Basis PSAS. Financial Reporting under the Cash Basis of Accounting Standard. b) has been incurred in accordance with the requirements. of legal (MUHAM AJMAL GONDAL) DRECTOR GENERAL Directorate General Audit (Federal Government), Benevolent Fund Building, Zero Point, slamabad. Dated:. 2.J

9 TERTARY EDUCATON SUPPORT PROJECT FNANCAL STATEMENTS FOR THE YEAR ENDED 3TH JUNE, 216 4

10 ., ~ 2: Higher Education Commission Tertiary Education Support Project Statement of Cash & Payments For the Year Ended June 3, 216 FY FY rruoees n Million l (US$ n Million l CRuoees n Million 1 CUS $ n Million l Payment by Payment by /Payments Payment by /Payments /Payments Payment by /Payments Third Third Controlled by Third Parties Controlled Controlled Third Parties Controlled Parties Parties HEC) by HEC) byhec) by HEC) Cummulatlve Upto rrupees n Million) (US $ n Million) Payment by /Payments /Payments Payment by Third Controlled Controlled by Third Parties Parties by HEC) HEC) RECEPTS leceipts From DA 2,36i ~~ NL NL NL l 1_893 NL NL NL NL NL NL NL NL Direct Payment by World Bank NL. NL NL - NL NL NL eceipts from HEC & Direct Payment by HEC otal 5L927 53,291 NL J NL 37,497 NL 58 41, NL NL NL 1,683 1,18 1L NL NL NL NL 6,498.3 NL NL ecurrentgrant to_llniversities & Centers Build in: 3,296._7 Q_ , L ,291 NL NL NL NL NL NL NL 9.24 NL 1.65 NL 4.62 NL NL 4.26 NL NL 18.6 NL NL NL NL NL 41, NL 1.78 NL 7.34 NL 3.9 NL 352 NL 1.57 NL 47 4,719.3 NL NL NL 7.22 NL NL NL 1,44.4 NL 1.56 NL 86,271.9 NL NL NL 1.27 NL 1,683 1,18 Net Payments Net ncrease/decrease in Cash,Cash at the Beginning of the Year ncrease/decrease in Cash Cash at the End of the Year 53,291 53, ,39 41, ,683 1,18 1,683 1,18 4 / babbir Program Offic ancial Management) _ am Audit Officer D.G. Audit (F. Govt) lslc1m ab::i d