Audit Report 30 JUN ~ &[2018 ) 26 P/ Qinghai Provincial Audit Office of the People's Republic of China

Transcription

1 Public Disclosure Authorized Qinghai Provincial Audit Office of the People's Republic of China 30 JUN 2018 P/ Public Disclosure Authorized Public Disclosure Authorized Audit Report 1997~ &[2018 ) 26 QINGH4AI AUDIT REPORT C 20181] NO. 26 Project Name: Qinghai Xining Urban Transport Project Financed by the World Bank : 8319-CN Loan No.: 8319-CN Public Disclosure Authorized Project Entity: Qinghai Xining Urban Transport Project Construction Office Aa : 2017 Accounting Year: 2017

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3 ColltelltS.,., &... l 1.Auditor&5 Opinion......, Financial Statements and Notes to the Financial Statemeflts Balance Sheet....., Summary of Sources and Uses offunds by Project Cornponent Statement oflmplementation ofloanagreement iv.special Account Statement...., v.notes tothe Financial Statements , nl.audit Findings and Recommendations... 22

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7 1. Auditor's Opinion Auditor's Opinion To Qinghai Xining Urban Transport Project Construction Office: We have audited the special purpose financial statements (from page 5 to page 17) of the Qinghai Xining urban transport project financed by the World Bank, which comprise the Balance Sheet as of December 3 1, 2017, the Summary of Sources Uses of Funds by Project Component, Statements of Implementation of Loan Agreement and Special Account Statement for the year then ended, and Notes to the Financial Statements. Project Entity and Qinghai Provincial Finance Department's Responsibility for the Financial Statements The preparation of the Balance Sheet, the Summary of Sources and Uses of Funds by Project Component and the Statement of Implementation of Loan Agreement is the responsibility of your entity, while. the preparation of the Special Account Statement is the responsibility of Qinghdi Provincial Finance Department, which includes: i-. Preparing and fair presenting the accompanying financial statements in accordance with Chinese accounting standards and system, and the requirements of the project loan agreement; ii. Designing, implementing and maintaining necessary internal control to ensure that the financial statements are free from material niisstatement,, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Goverm-nent Auditing Standards of the People's Republic of China and 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. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures s elected depend on the auditor's 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, the auditor considers internal control relevant to the entities' preparation and fair 3

8 presentation 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 appropriate and sufficient to provide a basis for our audit opinion. Opinion In our opinion, the financial statements identified in the first paragraph present fairly, in all material respects, financial position of Qinghai Xining Urban Transport project financed by the World Bank as of December 31, 2017, its financial receipts and disbursements, the project implementation and the receipts and disbursements of the special account for the year then ended in accordance with Chinese accounting standards and system, and the requirements of the project loan agreement. Other Matter We also examined the withdrawal application No.10 to No.16 and the attached documents submitted to the World Bank during the period. In our opinion, those documents comply with the project loan agreement and can serve as basis for loan withdrawal. The audit report consists of the Auditor's Opinion and two more parts hereinafter: Financial Statements and Notes to the Financial Statements, Audit Findings and Recommendations. Qinghai Provincial Audit Office of the People's Republic of China May 22, 2018 Address: No.41 Wusi Avenue, Xining, Qinghai, China Postcode: Tel.: Fax: The English translation is for the convenience of report users; Please take the Chinese audit report as the otily official version. 4

9 11.Financial Statements and Notes to the Financial Statements 1.Balance Sheet BALANCE SHEET (A 5 ofdecember31,2017) Project Name:Qinghai Xining Urban Transport project Financed by the World Bank TObecontinued) 5

10 YN-4AFNUX* t 16 66,963, ,577, Construction Expenditures 43 Total Prepaid and Receivable 10 be Offiet JPP:JE Lk ilutr&*j'a - - t, k 16. Inciading: World Bank Loan 17 Total Payable 44 26,084, ,653, Interest Receivable -TL+:jV;t Aff RAkfta World Bank Loan is Including: World Bank 45 Commitment FCC Receivable Loan Interest Payable ICY. fl tlf r III -V Ift iil 9 )R qk i I t fr A ZV Vt World Bank Loan World Bank Loan Service- 19 Commitment Fee 46 Fee Receivable Payable fil J Marketable Securities World Bank Loan Service I Fee Payable Al 51 P if 21 2, , k Z& -A- it 48 Total Fixed Assets Other Payables LIP' Ift - 1il ,800,00 -L 49 Fixed Assets, Cost Appropriation of Fund Z& Wii- 4fi M fa &A Less: Accumulated 23 Depreciation Retained Earnings so 520, IbUIP, : 2, Fixed Assets. Net I Fixed Assets Pending Disposal 15 J - 26 Fixed Assets Losses in Suspense 111 r -J41 -,Nt ,947,732-04, 814,119, Total Sources offu,d 5 693,947, , Total Application of Fund

11 ii. Summary of Sources and Uses of Funds by Project Component SUMMARY OF SOURCES AND USES OF FUNDS BY PROJECT COMPONENT I *49 t i 2017 * 12 A (For the period ended December 31, 2017) Project Name: Qinghai Xining Urban Transport Project Financed by the World Bank Prepared by: Qinghai Xinin& Urban Transport Project Construction Office Curren Unit: RMBYuan Current Period Cumulative Total Sources of Funds JIHtt3fLt & #1 tcurrent A %it tlgi Ei gltl Current Period Current PeCrrnriod~ ~itil~i ~ ThMI Cumulative Budget cuperiod Period % Life of PAD Cumulative Actual C Actual Completed Completed S115,504, ,459, % 1,529,050, , % 1;r1: it World Bank Loan 115,504, , % 732,000, ,501, % dib vcounterp 0% 797,050, ,300, % Financing 1. slinlnil' Nvunicipal 0% 797,050, ,300, % counterpart fund Domestic Loan 0% Total Application of Funds (by 170,090,023,21 123,438, % 1,091,799, ,800, % Project Compinnt) 1. IJliiM Urban Roads 138,661, ,240, % 1,091,799, ,208, % 2. iajl 11m6f Public Transport 0% 315,316,900,00 4,566, % 3. V, rl0il'6ir Intelligent Transport Management 29,928, % 58,754, , % 4. &tq.jfihijit Institutional Capacity Building 1,500, ,156, % 23,211, , % 5. 1l Other ,950, % ,168, % 6. It fl ItU. Loan interest , % 38,138,700,00 2,439, % 7 Mrif& front-end fee 1,830, ,948, % 2, Difference - -29,979, ,001, f&45t 1 ' t - -36,385, ,577, Change in Receivables 2. SM0 T - -26,568, ,653, Change in Payables 3. 1i Ti I - 33,118, ,738, Change in Cash and Bank 4. A8' Qther -144, ,

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14 iv. Special Account Statement SPECIAL ACCOUNT STATEMENT (For the period ended December 31,2017) ProjectName:QinghaiXiningUrbanTransportProjectFinancedbytheWorldBank CN Loan No CN Prepared by:the FinanceDe 11ent Qinghai Province Depository Bank:Qinghai branch,china Construotion bank AcC0u t NO: Currency:USD. Tobe ontinued) :10

15 Amount Advanced by World Bank B AM: - JWKPA!Y Part B-Account Reconciliation Amount 10,000, Deduct: 2: Total Amount Recovered by WOTId Bank 10,000, Outstanding Amount Advanced tothe Special Account at the End fthisperiod _ jf,n,s Period 4 6,785, Endin Balance or Special Account 5.- lot: Add: Amount Claimed but not yet Credited at the End of this Period Application No. 6. 3,224, Amount Withdrawn but not yet Claimed at the End of this Period 7 Cumulative Service Charges (if not Inrluded in Item 5 or 6) Deduct-. 8,.3,e- V A ( Y A 4, M 9, Interest Earned (If Included in Special Account) 9, 4, 10] 1 Vj A 4, Aj YK) 11 -a &,ff-a nt KI 10,000, Total Advance to the Special Account Accounted for at the End ofthis Period

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17 ,438, % 125,2 40,5 n l,156, ,950, , ,735, ,335, ,577, ,655, ,397, ,751, ,341, ,300, ,501,725, ,653, l,143, ,425, , ,91 9, , ,022, , , &13

18 59, ,547, ,965, ,200, flj 2, ,785, , l4

19 v. Notes to the Financial Statements Notes to the Financial Statements 1. Project Overview The World Bank Loan for Qinghai Xining Urban Transport Project is numbered 8319-CN. The project aims at enabling Xining residents to travel between the city center and the western part of the city in a fast, efficient and safe manner, through strategic improvements to Wusixi Road, a major transport and urban development corridor. The project highlights the ideas of people-first, bus-first and green transport. It is a capital construction project that provides rapid, comfortable and safe public transport, playing a proactive role in ensuring the traffic security of traveling and promoting 'the sound development of local economy. The Project Agreement was signed on March 24, 2014 and became effective on May 21, 2014 and the project loan account is expected to close by September 30, The project has a total investment of RMB 1,529,000, Yuan, of which USD 120,000,000.00, equivalent to RMB 732,000,000 Yuan, is from the World Bank. 2. Consolidation Scope of the Financial Statements Consolidation scope of the financial statements covers the financial statements of the Qinghai Xining Urban Transport Project PMO via WB Loan and its 3 sub-pmos, as well as the Special Account established by the Provincial Financial Bureau. 1 Accounting Policies 3.1 The Financial Statements of the project were prepared according to the requirements of Financial Accounting Methods of the World Bank Financed Projects (Document reference No.: Caijizi [2000] 13) In accounting practice, the Gregorian calendar year is adopted as the fiscal year from January I to December The accrual basis and the debit/credit double entry bookkeeping method are adopted. RMB is used as the recording currency. of bookkeeping. 3.4 The exchange rate adopted in the financial statements was the exchange rate on December 29, 2017 of the People's Bank of China, 15

20 which is USD 1 = RMB Yuan. 4. Explanation of Subjects 4.1 Total Project Expenditure The project expenditure in 2017 was RMB 123,438, Yuan, accounting for 73% of the total investment plan, of which RMAB 125,240, Yuan was for urban road construction, RMB1,156, Yuan was for institutional Capacity Building, RMB-3,950, Yuan was for other, RMB992, Yuan was for loan interest. 4.2 Cash and Bank On December 31, 2017, the balance was RMB 85,738, Yuan, of which the balance of special account (designated account) was converted into RMB 44,335, Yuan. 4.3 Advance and Receivables On December 31, 2017, the balance was RMB 30,577, Yuan. They were mainly used for prepaying RMB 3,655, Yuan of household demolition to Xining Chengbei District Construction Bureau, RMB 9,397, Yuan of land acquisition to the Land Acquisition & Reserve Center of Xining Chengbei District, RMB 4,751, Yuan of engineering charge to No.3 Engineering Company, Ltd of CRCC Harbor & Channel Engineering Bureau Group, and RMB 5,341, Yuan of engineering charge to Beijing YiHualu Information Technology Company, Ltd. 4.4 Project Appropriation Funds The balance on December 31, 2017 was RMB 566,300, Yuan, which was the total of all the counterpart funds at the municipal level. 4.5 Project Borrowings On December 31, 2017, the project borrowing fund from the World Bank was RMB 194,501, Yuan. 4.6 Payables The balance on December 31, 2017 was RMB 52,653, Yuan, of which RMB 1,143, Yuan of supervision charge was payable to Qinghai Baixin Engineering Supervision Consulting Company, Ltd; RMB 1,425, Yuan of supervision charge payable to Cixi Construction Projects Supervision Consultancy Company, Ltd; RMB 16

21 760, Yuan of inspection and testing charge payable to Engineering Inspection & Testing Company, Ltd of Langzhou Jitong University; RMB 9,919, Yuan of performance security payable to No.3 Engineering Company, Ltd of CRCC Harbor & Channel Engineering Bureau Group; RMB 691, Yuan of administration charge payable to Xining Urban Construction and Development Company, Ltd; RMB 2,022, Yuan of survey and design charge payable to No 1 Survey and Design Institute Group Company, Ltd of CRCC and RMB 952, Yuan of consultancy charge payable to Shanghai Kejin Consultancy Company, Ltd. 4.7 Retained Earnings The balance on-december 31, 2017 was RMB 664, Yuan, mainly interest income earned from bank deposits, of which RMB 59, Yuan was from the interest income of special account. 5. Special Account The Special Account of this project has been set up in the China Construction Bank, Qinghai Branch, with the account number of and USD as the currency Unit. In 2017, the beginning balance was USD 4,547,649.9 and in the same year, USD 12,965, was withdrawn; USD 15,200, replenished; USD 2, from interest income. In 2017, the ending balance of the special account was USD 6,785, Statement of Implementation of the Loan Agreement The exchange rate was at the end of 2016 while the exchange rate was at the end of 2017, with a difference of RMB yuan.. in this period of accounting, for engineering, goods, consulting service, training, front-end fee, the RMB amount of special account withdrawals in this year was the total amount after convertion at the exchange rate of and consolidation of the above exchange gains and losses. 17