"Global Partnership for Education Project (Early Education Project)" Grant No. TF016201, Grant No. TF016209

Transcription

1 Public Disclosure Authorized Public Disclosure Authorized "Global Partnership for Education Project (Early Education Project)" Grant No. TF016201, Grant No. TF Special purpose project financial statements for the year ended December 31, 2016 and independent auditors' report Public Disclosure Authorized Public Disclosure Authorized

2 "GLOBAL PARTNERSHIP FOR EDUCATION PROJECT (EARLY EDUCATION PROJECT)" GRANT NO. TF016201, GRANT NO. TF TABLE OF CONTENTS Page STATEMENT OF MANAGEMENT'S RESPONSIBILITIES FOR THE PREPARATION AND APPROVAL OF THE SPECIAL PURPOSE PROJECT FINANCIAL STATEMENTS 2 FOR THE YEAR ENDED DECEMBER 31, 2016 INDEPENDENT AUDITORS' REPORT 3-5 SPECIAL PURPOSE PROJECT FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 3 I, 20 I 6: Statement of cash proceeds and disbursements Statement of uses of funds by project components Notes to the special purpose project financial statements

3 STATEMENT OF MANAGEMENT'S RESPONSIBILITIES FOR THE PREPARATION AND APPROVAL OF THE SPECIAL PURPOSE PROJECT FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2016 The following statement, which should be read in conjunction with the independent auditors' responsibilities stated in the independent auditors' report set out on pages 3-5, is made with a view to distinguish the respective responsibilities of management and those of the independent auditors in relation to the special purpose project financial statements of "Global Partnership for Education Project (Early Education Project)", Grant No. TFO 16201, Grant No. TFO (the "Project"). Management is responsible for the preparation of the special purpose project financial statements that present fairly, in all material respects, cash proceeds and disbursements and uses of funds by project components of the Project for the year ended December 3 1, 2016 in accordance with International Public Sector Accounting Standard "Financial Reporting Under the Cash Basis of Accounting" (the "IPSAS") issued by the International Public Accounting Standards Board of the International Federation of Accountants and the World Bank's Financial Management Sector Board's "Guidelines: Annual Financial Reporting and Auditing for World Bank Financed Activities" (the "WB Guidelines"). In preparing the special purpose project financial statements, management is responsible for: selecting suitable accounting policies and applying them consistently; making judgments and estimates that are reasonable and prudent; stating whether IPSAS and WB Guidelines have been followed, subject to any material departures disclosed and explained in the special purpose project financial statements; and preparing the special purpose project financial statements on a going concern basis, unless it is inappropriate to presume that the Project will continue its activity for the foreseeable future. Management is also responsible for: designing, implementing and maintaining effective and sound system of internal control and for revealing risks in system of internal control; maintaining proper accounting records that disclose, with reasonable accuracy at any time, the financial position of the Project, and which enable them to ensure that the special purpose project financial statements of the Project comply with IPSAS and WB Guidelines; compliance with laws and regulations of the Kyrgyz Republic, accounting system of the Project and the requirements of the World Bank; taking such steps as are reasonably available to them to safeguard the assets of the Project; and detecting and preventing fraud and other irregularities. The special purpose project financial statements for the year ended December 31, 2016 were approved and authorized for issue on April 6, 2017 by the management of the Project. Director ~ Nurzat Rysbekova Financial Manager April 6, 2017 Bishkek, the Kyrgyz Republic April 6, 2017 Bishkek, the Kyrgyz Republic 2

4 AKER TILLY BISHKEK 103 lbraimova str. BC "Victory", 7th floor Bishkek, Kyrgyz Republic T: (312) F: (312) contact@bakertilly.kg INDEPENDENT AUDITORS' REPORT To the Management of the Project "Global Partnership for Education Project (Early Education Project)" under the Ministry of Education and Science of the Kyrgyz Republic: Opinion We have audited the special purpose project financial statements of "Global Partnership for Education Project (Early Education Project)" (the "Project") which comprise the statement of cash proceeds and disbursements and the statement of uses of funds by project components for the year ended December 31, 2016, and a summary of significant accounting policies and other explanatory information (the "special purpose project financial statements"). In our opinion, the accompanying special purpose project financial statements present fairly, in all material respects, cash proceeds and disbursements and uses of funds by project components of the Project for the year ended December 31, 2016 in accordance with International Public Sector Accounting Standard "Financial Reporting Under the Cash Basis of Accounting" (the "IPSAS") issued by the International Public Sector Accounting Standards Board of the International Federation of Accountants, and the World Bank's Financial Management Sector Board's "Guidelines: Annual Financial Reporting and Auditing for World Bank Financed Activities" (the "WB Guidelines"). Basis for opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). 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 in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants (IESBA Code) together with the ethical requirements that are relevant to our audit of the financial statements in the Kyrgyz Republic, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the 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 Without further qualifying our opinion, we draw attention to Note 2 to the special purpose project financial statements which describe the basis of accounting. These special purpose project financial statements were prepared for complying with the appropriate World Bank Guidelines and Grant agreement requirements, and therefore are not intended to be a complete presentation of the "Global Partnership for Education Project (Early Education Project)" (the "Project") operations. Other matter The special purpose project financial statements are prepared to assist the Project to comply with the requirements of the World Bank. As a result the special purpose project financial statements may not be suitable for another purpose. 3

5 Management's responsibility for the special purpose project financial statements Management is responsible for the preparation and fair presentation of the special purpose project financial statements in accordance with International Public Sector Accounting Standard "Financial Reporting Under the Cash Basis of Accounting" (the "IPSAS") issued by the International Public Accounting Standards Board of the International Federation of Accountants, and the World Bank's Financial Management Sector Board's "Guidelines: Annual Financial Reporting and Auditing for World Bank Financed Activities" (the "WB Guidelines"), and for such internal control as management determines is necessary to enable the preparation of the special purpose project financial statements that are free from material misstatement, whether due to fraud or error. Auditor's responsibilities for the audit of the special purpose project financial statements Our objectives are to obtain reasonable assurance about whether the special purpose project 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 a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or 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 the special purpose project financial statements. As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: Identify and assess the risks of material misstatement of the special purpose project 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 Project's internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Project's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the special purpose project financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Project to cease to continue as a going concern. Evaluate the overall presentation, structure and content of the special purpose project financial statements, including the disclosures, and whether the special purpose project financial statements represent the underlying transactions and events in a manner that achieves fair presentation. 4

6 We communicate with those charged with governance 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. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. Kubat //,...-~ Certified accountant, FCCA Certificate of auditor of the Kyrgyz Republic # A 0069 Audit Director, Baker Tilly Bishkek LLC "Baker Tilly Bishkek" LLC, License Series A# 0049 issued by the State Committee on Review and Regulation of the financial market of the Kyrgyz Republic 5

7 "GLOBAL PARTNERSHIP FOR EDUCATION PROJECT (EARLY EDUCATION PROJECT)" GRANT NO. TF016201, GRANT NO. TF STATEMENT OF CASH PROCEEDS AND DISBURSEMENTS FOR THE YEAR ENDED DECEMBER 31, 2016 (in US Dollars) Notes For the year ended December 31, 2016 For the period from May 10, 2014 to December 31, 2015 Opening balance 4 287,619 Funds received Grant No. TF ,699,414 Grant No. TFO ,899,414 4,700,000 1,200,000 4,700,000 1,200,000 4,700,000 Total funds received 2,699,414 8,599,414 5,900,000 5,900,000 Other non-operating)ncome ~ ,877 _66,352 66,352 Total receipts 2,714,93_2 8,681,221_ 5,966,352 _l,966,352 Project expenses Goods 7 1,169,645 Consulting services 7 430,896 Operating costs 7 200,320 Trainings 7 127,489 Works 7 76,459 6,057, , , ,068 76,459 4,887, , , ,579 4,887, , , ,579 Total project expenses 2,004,809 7,675,726 5,670,917 5,670,917 Non-operating expenses 5,042 12,858 7,816 7,816 Closing balance 4 992, , , ,619 N:_ Nurzat Rysbekova Financial Manager April 6, 2017 Bishkek, the Kyrgyz Republic April 6, 2017 Bishkek, the Kyrgyz Republic The notes on pages 8-18 form an integral part of the special purpose project financial statements. The Independent Auditors' Report is on pages

8 "GLOBAL PARTNERSHIP FOR EDUCATION PROJECT (EARLY EDUCATION PROJECT)" GRANT NO. TF016201, GRANT NO. TF STATEMENT OF USES OF FUNDS BY PROJECT COMPONENTS FOR THE YEAR ENDED DECEMBER 31, 2016 (in US Dollars) For the year ended December 31, 2016 For the period from May 10, 2014 to December 31, 2015 :omponent I. Expansion of quality re-primary education Expansion of school preparation program Expansion of early education services Support to inclusive education 1,341, ,205 62,507 6,593, ,081 75,310 5,252, ,876 12,803 5,252, ,876 12,803 :omponent II. Improved policy,,rograms and systems effectiveness Improved policy, programs and system effectiveness 247, , , ,636 mponent III. Communication and plementation support Communications and outreach activities Stakeholder monitoring and evaluation Implementation support 27,798 12, ,081 42,300 19, ,215 14,502 6, ,134 14,502 6, ,134 2,004,809 7,675,726 5,670,917 5,670,917 ff Nurzat Rysbekova Financial Manager April 6, 2017 Bishkek, the Kyrgyz Republic April6,2017 Bishkek, the Kyrgyz Republic The notes on pages 8-18 form an integral part of the special purpose project financial statements. The Independent Auditors' Report is on pages

9 "GLOBAL PARTNERSHIP FOR EDUCATION PROJECT (EARLY EDUCATION PROJECT)" GRANT NO. TF016201, GRANT NO. TF NOTES TO THE SPECIAL PURPOSE PROJECT FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2016 (in US Dollars) 1. GENERAL INFORMATION According to the Agreement dated May 10, 2014 between the Kyrgyz Republic, International Bank for Reconstruction and Development (the "IBRD") and the Internationat Development Association (the "IDA") (collectively the "World Bank" or "WB"), acting as a trustee of the Global Partnership for Education Fund and as an administrator of the Education for All Fast Track Initiative Catalytic Fund, the World Bank provided the Grant No. TFO 1620 I in the amount of 8,000,000 US Dollars and the Grant No. TFO in the amount of 4,700,000 US Dollars to the Kyrgyz Republic. The period of duration of the Education for All, Fast Track Initiative, Catalytic Fund Grant identified by trust fund number TFO was completed on October 31, The period of duration of the Global Partnership for Education Grant identified by trust fund number TF will be completed on June 30, The Grants were provided for implementation of "Global Partnership for Education Project (Early Education Project)" (the "Project"). Project purpose The Project Development Objective is to increase equitable access to pre-school education, and to establish conditions for improving its quality. The pre-school institution and its enabling environment are at the core of the project. The Project is to be implemented during and comprises 3 components: 1. Component I: Expansion of Quality Pre-Primary Education; 2. Component II: Improved Policy, Programs, and System Effectiveness; 3. Component III: Communications and Implementation Support; Component I: Expansion of Quality Pre-Primary Education. This component focuses on enhancing access to quality pre-school education, targeting the poor and vulnerable including minority ethnic groups and children with special education needs. The component consists of 3 subcomponents: Subcomponent la: This subcomponent finances expanding school preparation program through development and implementation of an in-service training program for teachers and school management staff; and provision of educational materials, furniture and equipment to primary and kindergarten classrooms. Subcomponent lb: This subcomponent finances supporting interested Ayil Okmotu to develop proposals on establishing up to one hundred community based kindergartens, strengthening the capacity of selected pre-school institutions, provision of education materials, furniture and rehabilitation of sanitary facilities. 8

10 Subcomponent Jc: This subcomponent finances piloting an initiative to integrate children with special education needs into kindergarten and primary schools in one district, design and delivery of an in-service training program for teachers on how to work with children with special education needs, and carrying out outreach activities, and tracking the children with special education needs selected for the pilot initiative and evaluating said initiative. Component II: Improved Policy, Programs, and System Effectiveness. This component focuses on improving policy, programs and system effectiveness. The component finances provision of goods, educational materials, technical assistance and training to improve policies, programs, and system effectiveness aimed at enhancing the quality of pre-school education programs, through revisiting the pre-school curriculum; reviewing of legal and regulatory framework governing pre-school education; publishing and disseminating the early learning and development standards and materials resulting from the revision of the pre-school curriculum; and introducing a pilot early development instrument and a classroom observation of pre-school pedagogical practices. Component III: Communications and Implementation Support. This component finances advocacy and communication efforts, monitoring and evaluation and the operating cost to support implementation. The component consists of 3 subcomponents: Subcomponent JI/a: This subcomponent finances engaging and informing stakeholders on early childhood development and reforms in the education sector. Subcomponent!!lb: This subcomponent finances carrying out independent monitoring and evaluation of the Project. Subcomponent Ille: This subcomponent finances supporting the establishment and operation of the Project Coordination Unit (the "PCU"), including financial Incremental Operating Costs. Duration of the Project is from May 10, 2014 to June 30, PRESENTATION OF THE SPECIAL PURPOSE PROJECT FINANCIAL STATEMENTS Basis of preparation These special purpose project financial statements have been prepared in accordance with the International Public Sector Accounting Standard (the "IPSAS") "Financial Reporting under the Cash Basis of Accounting" issued by the Public Sector Committee of the International Federation of Accountants, and incorporate the following principal accounting policies, which have been consistently followed in all material respects and comply with the World Bank's Financial Management Sector Board's "Guidelines: Annual Financial Reporting and Auditing for World Bank Financed Activities" (the "WB Guidelines"). Under the cash basis approach income (or expenditure) is recognized when cash is received (or paid) irrespective of when goods or services are received or provided. The Project's approved budget disclosed by categories of expenses is not publicly available and as such comparison of budget and actual amounts is not presented. 9

11 These special purpose project financial statements consist of: Statement of cash proceeds and disbursements; Statement of uses of funds by project components; Notes to the special purpose project financial statements, including short description of main statements of accounting policy and other descriptive notes. The reporting currency of these special purpose project financial statements is US Dollars (the "USD"). 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Cash basis of accounting The special purpose project financial statements are prepared on a cash basis of accounting. The cash basis of accounting recognizes transactions and events only when cash (including cash equivalents) is received or paid by the Project. Special purpose project financial statements prepared under the cash basis provide readers with information about the sources of cash raised during the period, the purposes for which cash was used and the cash balances at the reporting date. The measurement focus in the special purpose project financial statements is balances of cash and changes therein. Foreign currency Operations in foreign currency initially are counted in functional currency by the currency exchange rate settled by commercial bank on a date of operation. All payments made in local currency are translated into USD at the exchange rate defined by serving commercial bank, at the date of transaction. Monetary assets and liabilities expressed in foreign currency are converted to functional currency at official exchange rate on a date settled by the commercial bank. Non-monetary items are valued according to their historic cost in foreign currency, which are recalculated on rates of the initial operation date. Cash and cash equivalents Cash and cash equivalents include cash on hand and due from banks, which can be converted to the corresponding amount of cash in the short term. Taxes Calculation and payment of personal income tax and social security contributions from income of local staff and consultants is made in accordance with the requirements and rates of the Tax Code of the Kyrgyz Republic. Project expenses The expenses are recorded in the period when they were actually paid. Sources of funds The funds were provided by the World Bank to the Project by replenishment of designated account or through direct payment to the end supplier of goods and/or services. 10

12 4. CASH AND CASH EQUIVALENTS Cash and cash equivalents as at December 3 I, 2016, and 2015 comprise: Currency December 31, December 31, Designated Account Grant No. TFO 1620 I USO 923, ,240 Transit account Grant No. TFO KGS 171 Interest account Grant No. TFO USO 14,780 14,780 Interest account Grant No. TFO 1620 I USO 35,590 24,108 Interest account Grant No. TFO KGS f6 16 Interest account Grant No. TFO 1620 I KGS 6 2 Tender account Grant No. TF USO 300 Tender account Grant No. TF USO 17,732 19,630 Tender account Grant No. TFO KGS 364 Tender account Grant No. TF KGS 231 Paid out on Grant No. TFO 1620 I USO 8 8, , , FUNDS RECEIVED The funds received were presented by the following reimbursement methods: For the year ended December 31, 2016 Financing method I Grant No. Total Grant No. Grant No. Total sources of financing: TF TF TF Reimbursement of 1,000, ,000 1,900,000 1,833,174 1,833,174 2,033,174 1,402,023 3,435, , , ,240 2,397,977 3,264,217 2,699,414 2,699,414 3,899,414 4,700,000 8,599,414 For the period from May IO, 2014 to December 31, 2015 Financing method / Grant No. Grant No. Total Grant No. Grant No. Total sources of financing: TF TF TF TF ,000, ,000 1,900,000 1,000, ,000 1,900, ,000 1,402,023 1,602, ,000 1,402,023 1,602,023 2,397,977 2,397,977 2,397,977 2,397,977 1,200,000 4JOO,OOO 5,900,000 1,200,000 4,700,000 5,900,000 11

13 6. OTHER NON-OPERA TING INCOME Other non-operating income for the year ended December 3 I, 2016 and for the period from May I 0, 2014 to December 31, 2015 consists of the following: Grant No. TF For the year ended December 31, 2016 Grant No. TF Total Interest income Realization of tender documents 14, ,480 1,045 15, ,525 For the period from May 10, 2014 to December 31, 2015 Grant No. Grant No. TF TF Total Interest income Penalty from a supplier for non-performance of obligations Realization of tender documents 27,673 18,158 45,831 17,500 17,500 3,021 3,021 27,673 38,679 66,352 Interest income is accrued on a monthly basis for outstanding amounts of Designated Account in OJSC "Optima Bank". 7. CUMULATIVE PROJECT EXPENDITURES GOODS Project expenditures by components are presented in the statement of funds by project components. Project expenditures on major categories are presented in the statement of cash proceeds and disbursements. Breakdown of project expenses by categories and donors is presented as follows: For the year ended December 31, 2016 Grant No. Total Grant No. Grant No. Total TF TF TF Furniture 456, ,664 1,092,471 1,652,605 2,745,076 Educational materials 356, , , ,691 1,122,524 Educational toys 243, , , , ,727 Visual materials 92,562 92, ,362 1,304,059 1,472,421 Delivery of textbooks 19,941 19,941 19,941 19,941 Vehicles -- 20,520 20,520 1,169,645 1,169,645 1,924,499 4,132,710 6,057,209 12

14 For the period from May JO, 2014 to December 31, 2015 Grant No. Grant No. Total Grant No. Grant No. Total TF TF TF TF Furniture 635,807 1,652,605 2,288, ,807 1,652,605 2,288,412 Visual materials 75,800 1,304,059 1,379,859 75,800 1,304,059 1,379,859 _ Educational toys 43, , ,082 43, , ,082 Educational materials 765, , , ,691 Vehicles 20,520 20,520 20,520 20, ,854 4,132,710 4,887, ,854 4,132,710 4,887,564 CONSUL TING SERVICES For the year ended December 31, 2016 Grant No. Total Grant No. Grant No. Total TF TF TF Consultancy services 264, , , , ,405 Payroll and related taxes I 03, , ,050 73, ,445 Architect-engineering firm services 54,417 54,417 54,417-54,417 Audit cost 8,987 8,987 8,987 8,987 Other 7,735 7, , , , , ,989 = For the period from May JO, 2014 to December 31, 2015 Grant No. Grant No. Total Grant No. Grant No. Total TF TF TF TF Consultancy services 41, , ,296 41, , ,296 Payroll and related taxes 38,667 73, ,062 38,667 73, ,062 Other 7,735 7,735 7,735 7,735 87, , ,093 87, , ,093 13

15 OPERATING COSTS For the year ended December 31, 2016 Grant No. Total Grant No. Grant No. Total TF TF TF Payroll and related taxes 86,369 86, ,480 29, ,937 PR and marketing 32,394 32,394 43,623 15,184 58,807 Accommodation expenses 23,757 23,757 25,742 3,636 29,378 Transportation 18,323 18,323 19, ,936 Study tour 14,830 14,830 14,830 14,830 Per diems 6,376 6,376 6, ,624 Stationery 5,460 5,460 6, ,344 Fuel 3,014 3,014 4,019 1,062 5,081 Communication 1,020 1,020 1, ,567 Vehicle maintenance , ,811 Access to Toktom electronic database : ,321 1,321 Bank letters of credit 14,778 14,778 Equipment 313 2,046 2,359 Other 7,543 7,543 9,413 3,815 13, , , ,175 73, ,001 For the period from May 10, 2014 to December 31, 2015 Grant No. Grant No. Total Grant No. Grant No. Total TF TF TF TF Payroll and related taxes 39,111 29,457 68,568 39,111 29,457 68,568 PR and marketing 11,229 15,184 26,413 11,229 15,184 26,413 Accommodation 1,985 3,636 5,621 1,985 3,636 5,621 Fuel 1,005 1,062 2,067 1,005 1,062 2,067 Stationery , ,884 Access to Toktom electronic database Communication , ,547 Transportation , ,613 Per diems , ,248 Vehicle maintenance , ,009 Equipment 313 2,046 2, ,046 2,359 Bank letters of credit 14,778 14,778 14,778 14,778 Other 1,870 3,815 5,685 1,870 3,815 5,685 59,855 73, ,681 5()_,_855 73, ,681 14

16 TRAININGS For the year ended December 31, 2016 Grant No. Total Grant No. Grant No. Total TF TF TF Trainings for primary school teachers and school deputy directors 98,450 98, , ,521 _ 380,553 External trainings 22,296 22,296 34,138 6,634 40,772 Trainings for renewal of skills for experts of Psychological, Medical, Pedagogical Consultation 4,019 4,019 4,019 4,019 Trainings for kindergarten teachers 2,724 2,724 2,724 2, , , ,913 23bl_55 428,068 For the period from May 10, 2014 to December 31, 2015 Grant No. Grant No. Total Grant No. Grant No. Total TF TF TF TF Trainings for primary school teachers and school deputy directors 56, , ,103 56, , ,103 External trainings 11,842 6,634 18,476 11,842 6,634 18,476 68, , ,579 68, , ,579 WORKS For the year ended December 31, 2016 Grant No. Total Grant No. Grant No. Total TF TF TF Construction of latrine 76,459 76,459 76,459 76,459 76,459 76,459 76,459 76,459 15

17 8. FINANCIAL POSITION Financial position as at December 3 I, 2016, and 2015 comprise of: December 31, December 31, ASSETS AND EXPENDITURES Cash and cash equivalents 992, ,619 project expenditures 7,675,726 5,670,917 Other non-operating expenditures 12,858 7,816 TOT AL ASSETS AND EXPENDITURES 8,681,291 5,966,352 FINANCING Funds received 8,599,414 5,900,000 Other non-operating income 81,877 66,352 TOT AL FINANCING 8,681,291 5,966, WITHDRAW AL APPLICATIONS Withdrawal applications for the year ended December 31, 2016 comprise: Sources of financing No. Dates Direct Goods and Total payments services, including audit, trainings and operating expenses Grant No. TFOI6201 IO February 9, , , February 24, , , March 24, , , June 29, , , August 9, , , September 9, , , December 16, , , ,240 1,833,174 2,699,414 16

18 10. DESIGNATED ACCOUNT Designated account for the period from January 1, 2016 to December 31, 2016 comprise: Designated Account Currency Bank account Bank Bank's location Grant No. TF US Dollars OJSC "Optima Bank" Grant No. TFOI6209 US Dollars , Zhibek Zholu avenue, Bishkek, Kyrgyz Republic Description US Dollars US Dollars Total Balance as at May 10, 2014 Advances received Reimbursement of expenses Total funds received to a designated account The amount of expenditures paid Transfer to transit account and advances paid to employees Balance as at December 31, 2015 Reimbursement of expenses Total funds received to a designated account The amount of expenditures paid Transfer to transit account and advances paid to employees 1,000, ,000 1,200, ,917 8, ,240 1,833,174 2,053,414 1,138,569 (8,835) 900,000 1,900,000 1,402,023 1,602,023 2,302,023 3,502,023 2,302,023 3,272,940 8, ,240 1,833,174 2,053,414 I, 138,569 (8,835) Balance as at December 31, , , UNDRA WN FUNDS As at December 31, 2016 undrawn funds with breakdown by grants are presented as follows: For the period from May 10, 2014 to December 31, 2016 Grant No. TF Grant No. TF Approved grant amount Disbursed during the period from May 10, 2014 to December 3 I, 2016 Undrawn amount 8,000,000 3,899,414 4,100,586 4,700,000 4,700,000 For the year ended December 31, 2016 Grant No. TF Grant No. TF Funds received as at January 1, 2016 Disbursed in 2016 Funds received as at December 31, ,200,000 2,699,414 3,899,414 4,700,000 4,700,000 17

19 12. COMMITMENTS In the normal course of activities, the Project concludes agreements with suppliers of goods and services in accordance with the established budget and procurement plan. Contract value of obligations valid as at December 31, 2016 was as follows: Counterparty Contract # McMaster University/ Offord Centre for Child Studies "Socium Consult" LLC The Rector and Visitors of the University of Virginia "Baker Tilly Bishkek" LLC "Mosmebel" LLC GPE FTI/CS/SSS-19 GPE _FTI/CS/CQ-22 GPE FTI/CS/SSS-20 GPE_FTI/CS/LCS-29 GPE_FTI/G/ICB-7, Lot.N~ 1,2,3,4 Contract value (in USD) 52,872 86, ,128 35, ,009 Paid up to Remaining December 31, amount to 2016 be paid (in USD) (in USD) 31,617 21,255 17,367 69, ,277 92,851 8,987 26, ,009 "Tilen and Bai" LLC "Build Trade" LLC Counterparty Contract# GPE_FTI/CS/CQ-13 GPE FTI/W/NCB-7 Contract value (in KGS) 6,283,359 5,366,063 Paid up to Remaining December 31, amount to 2016 be paid (in KGS) (in KGS) 3,684,851 2,598,508 5,231, , LEGAL CASES There were no any legal cases related to the Project. 14. GOING CONCERN The period of duration of the Education for All, Fast Track Initiative, Catalytic Fund Grant identified by trust fund number TFO was completed on October 31, EVENTS AFTER THE REPORTING DATE During 2017 until the date of issue of the special purpose project financial statements the World Bank provided financing to the Project as follows: Date Application Grant No. TF March 21, 2017 (reimbursement of expenses) , ,852 As at the date of issue of the special purpose project financial statements no other significant events or transactions happened, except for the events or transactions described above. 18