Office of the Public Disclosure Authorized Public Disclosure Authorized AI Special Sectors Audit Wing Constitution Avenue M Islamabad No.PA/FAP/FG/SSA/F-13/ 6 Dated: 29-12-2016 To, 1. The Secretary, Economic Affairs Division, Government of Pakistan Pak Secretariat, Block "C", Islamabad Subject: 2. /The Country Director, World Bank Resident Mission, 20-A, Shahrah-e-Jamhuriat Sector G-511, Islamabad FOREIGN AIDED PROJECTS (FAPs) AUDIT REPORTS tsl Public Disclosure Authorized Public Disclosure Authorized Financial Attest Audits of the following FAP Audit Reports has been conducted by this office: S.No Name of Projects Development Partners 1 Governance Support Project-FATA MDTF 2, Institutional Capacity Building Ombudsman IDA 3. Tertiary Education Support Project IDA 4 Second Gen ICT Sec Policy & Legal World Bank 5. Social Safety Net Project IDA 6. Social Safety Net T/A IDA Emergency Recovery Project TDPs of FATA Water Sector Capacity Building Indus-21 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 Islamabad through EAD. IDA IDA
Financial Attest Audit Report on the Accounts of Ombudsman IDF: Institutional Capacity Building GrantNo.TF-012310 Federal Tax Ombudsman For the Financial Year 2015-16 Auditor General of Pakistan Islamabad
TABLE OF CONTENTS Abbreviations and Acronyms... i PREFACE... 1... PART-I... PROJECT OVERVIEW... 2 AUDITOR'S REPORT TO THE MANAGEMENT (AUDIT OPINION)...... 3 FINANCIAL STATEMENTS... 4 PAR'l1............ COVER LETTER TO THE MANAGEMENT LETTER...... 6 EXECUTIVE SUMMARY...8 MANAGEMENT LETTER...8 1. INTRODUCTION...... 10 1 AUDIT OBJECTIVES....... 10 3. AUDIT SCOPE AND METHODOLOGY...10 4, AUDIT FINDINGS AND RECOMMENDATIONS.......? 4. Organization Management...12 4.2 Financial Management...26 4.3 Monitoring and Eval nation...27 4.4 Compliance with Loan/Grant Agreement...28 4.5 Sustainability......... 30 4.6 Overall Assessment... S. CONCLUSION....... 19 ACKNOWLEDGEMENT.... 20
Abbreviations and Acronyms AGP Auditor General of Pakistan AGPR Accountant General Pakistan Revenues EAD Economic Affairs Division FR) Federal Tax Ombudsman GOP Government of Pakistan 1I)A International Development Association IDF Institutional Development Fund 101 International Ombudsman Institute IPSAS International Public Sector Accounting Standards ISSAI International Standards of Supreme Audit Institutions NOL No Objection Letter PC-1 Planning Commission-I Its. Rupees USD United States Dollar WB World Bank
PREFACE The Auditor-General of Pakistan conducts audits subject to Articles 169 and 170 of the Constitution of the Islamic Republic of Pakistan, 1973 read with Sections 8 and 12 of the Auditor-General's (Functions, Powers and Terms and Conditions of Service) Ordinance, 2001. The audit of "Ombudsman IDF:InstitutionalCapacity Building" under Federal Tax Ombudsman Grant No.TF-012310for the financial year 2015-16 funded by the International Development Association (IDA) was carried out accordingly. The Directorate General Audit (Federal Government), Islamabad conducted audit of the "Ombudsman IDF: Institutional Capacity Building" in October, 2016 for the period 2015-16 with a view to reporting significant findings to stakeholders. Audit examined the economy, efficiency, and effectiveness aspects of the "Ombudsman IDF: Institutional Capacity Building", In addition, audit also assessed, on test check basis, whether the management complied with applicable laws, rules and regulations in managing the "Ombudsman IDF: Institutional Capacity Building". The Audit Report indicates specific actions that, if taken, will help the management realize the objectives of the "Ombudsman IDF: Institutional Capacity Building". The Report consists of two parts. Part-I contains Auditor's Report (Audit Opinion) and Financial Statements. Part-Il contains Executive Summary, Management Letter and Audit Findings. The Report has been prepared for submission to the International Development Association (IDA) in terms of Grant No. TF-0123 10. Dated: 28.12.2016 Place: Islamabad (MUHAMMAD AJMALGONDAL) DIRECTOR GENERAL
PART-I 1. PROJECT OVERVIEW 2. AUDITOR'S REPORT TO THE MANAGEMENT 3. FINANCIAL STATEMENTS 1
PROJECT OVERVIEW Name of Project: Ombudsman IDF: Institutional Capacity Building Sponsoring Authority: World Bank (International Development Association) Executing Authority: Federal Tax Ombudsman (FTO) Grant No: TF-012310 Project Cost: US$0.445million Date of Commencement: 01.07.2012 Actual Date of Commencement: 01.07.2012 Date of Completion: 30.06.2016 Grant Closing Date: 10.09.2015 21
Syed Khalid Akhlaq Gilani Secretary to the Government of Pakistan Federal Tax Ombudsman Secretariat Islamabad. - ~ Auditor's Report on the Ombudsman IDF: Institutional Capacity Building Financial Statements We have audited the accompanying financial statements of "Ombudsman IDF: Institutional Capacity Building" under Federal Tax Ombudsman IDF Grant No. TF-012310 that comprises Statement of Receipts and Payments together with the Notes forming part thereof for the year ended 3 0 th June, 2016. Management Responsibility It is the responsibility of the 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 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 the International Standards of Supreme Audit Institutions. 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. It 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 our audit provides a reasonable basis for our opinion. Opinion In our opinion: a) The financial statements present fairly, in all material respects, the cash receipts and payments by the project for the year ended 30 'h June, 2016 in accordance with Cash Basis IPSAS, Financial Reporting under the Cash Basis of Accounting Standard. b) The expenditure has been incurred in accordance with the requirements of legal agreeme t. (MUHAM AJMALGONDAL) DIRECTOR GENERAL Directorate General Audit (Federal Government), Benevolent Fund Building, Zero Point, Islamabad Dated: 28.12.2016 3 Z
OMBUDSMAN IDF: INSTITUTIONAL CAPACITY BUILDING GRANT NO.TF-012310 FEDERAL TAX OMBUDSMAN FINANCIAL STATEMENTS FOR THE YEAR ENDED 30TH JUNE, 2016 4
Ombudsman IDF: Institutional Capacity Building FINANCIAL STATEMENT CREDIT NO.TF-12310 STATEMENT OF FINANCIAL AFFAIRS FOR THE PERIOD 01.07.2015 TO 30.06.2016 A-Cash In-flow Description Notes 2015-16 2014-15 Cumulative Amount in Amount in Amount in Rs Rs Rs. Cash & Cash equivalents at the 3 7,350.326 0 year beginning 4,655,156 Released from The World Bank 3 2,710,675 10,979.546 36,661 A1 9 Direct Payments by the World 1,091,998 0 1,091.998 Bank GOP share 0 0 0 Total Cash In-flow 11,152,999 15,634,702 37,753,417 B-Cash Out-flow Others expenditure Consultant Services 4 6,668,825 5.638,083 17,661.171 Goods 5 3,353,810 2,646,293 6,004.903 Training & Capability Building 6 1,130,364 0 14,087.343 Cash Utilization in Other 0 0 0 Expenditure Total Cash Out-flow 11,152,999 8,284,376 37,753,417 Cash and Cash Equivalents at 0 7,350,326 he close of the financial year ~~j rector A~u7 _2 Lre irco
Ombudsman IDF: Institutional Capacity building FINANCIAL STATEMENT CREDIT NO.TF-12310 NOTES TO FINANCIAL STATEMENTS FOR THE YEAR 30"' JUNE 2016 1. THE PROJECT 1.1 The" Ombudsman IDF: Institutional Capacity Building is a project of' Government of Pakistan and is effective from 1/7/2012 with the closing date of 30/6/2016. Government of Pakistan (GOP) has entered into an agreement with "The World Bank" for arranging finance for implementation of Ombudsman IDF: Institutional Capacity Building. In accordance with the grant agreement, The World Bank has sanctioned credit of US$ 445,000 to GOP for the project. The project is being financed in the ratio of 100 percent of total cost by the World Bank.. 2. SIGNIFICANT ACCOUNTING POLICIES Accounting procedure approved (vide) Finance Division letter number [.2(1) BR- 11/2007-88 dated 17/1/201 26/1/2012 and. F.2(l) BR-l1/2007-949 dated 2/08/2013. 2.1 BASIS OF PREPARATION The financial statements have been prepared under the IPSAS on cash basis. 2.2 ACCOUNTING CONVENTIONS 'he financial statements have been prepared under historical cost convention with cash basis of accounting when expense are physically incurred and paid. 2.3 CURRENCY The financial statements have been prepared in Pak Rivees on the exchange rate of the date on which the payments have actually been made and the notional exchange rate on the date the fund were released to the State bank of Pakistan from the World Bank. 2.4 FIXED ASSETS Certified that a set of Video Conferencing costing Rs.2.756,555 and 26 laptops, 26 laeser printers 10 scanners,12 Fax machines and 10 photocopiers(total cost Rs.3,353,810). have been acquired under the Project.. The assets have been supplied to the I member offices of Forum of Pakistan Ombudsmen.
GOVFRNNINET FUNDS AND CREDVFS Funds allocated to project from Donor Agency are not recognized till these have been credited in the Assignment Account No.00175 maintained with the National Bank of Pakistan, Main Branch, Islamabad. 2.5 PROVISIONS Due to cash basis of accounting, no provision is recognized in the financial statements. However, if there is any event, which may have legal or other obligations with contingent financial implications. then it is noticed by a separate disclosure in the note to the financial statement. 2.6 OFFSETTING Neither assets-liabilities nor fund flow & expenditure have been set off in the lineial.statements. Qp$r4Th A*ZA 4-1 r ect Director fr~kk4 f6aa-lxl6tt
Ombudsman IDF: Institutional Capacity Building NOTES TO FINANCIAL STATEMENTS FOR THIE YEAR ENDED 30" JUNE 2016. Note---3 Receipts & Payments against financing resources Note---3.1 Receipts during the year 01.07.2015 TO 30.06.2016 PKR Description The World Bank Goverument Beneficiary Total 1 s of Pakistan Pak Rupees Pak Rupees pak Pak Rupecs Rupees - Opning BaaInce j73,384 7,350,326 0 0 7. 350.326 _ 26,616 2,710,675 0 0 2,710,675 Second Quarter 0 0 0 0 0 hilrd Quarter 10,340 1,091.998 0 0 1.09 199 Lu th Quarter 0 0 0 0 0-- Appreciation <an 0 0 0 0 1 total 110,340 11,152,999 0 0 1 152,999 'e--2 Payments during the year 01.07.2015 TO 30.06.2016 Description National Bank of Pakistan Government Beneficiary Total Jslamabad. of Pakistan U SS Pak Rupees Pak Rupees Pak Pak Rupees Rupees l Quarter 33,881 3,478,174 0 0 3,478,174 Second Quartcr 64,595 6,582.827 0 0 6,82.827 Iiirc Quarter 10,340 1,091.998 0 0 1.091.98 fouth Quarter 0 0 0 0 0 Total 108,816 11,152,999 0 0 11,152,999 Closing Balance 1,524 10 rj 2 ect Director M'; 90&ép& A6z6<
Note 4 EXPENDITURE ON ACCOUNT OF CONSULTANT SERVICES. The expenditure on consultant services is covered under Category-I Of the grant agreement. An amount of Rs.6,668,825/- has been utilized during financial year 2015-16. )escri tion of activity Amount Consultant Services 6,668,825 Total 6,668,825 Note_5 EXPENDITURE ON ACCOUNT OF TRANING & WORKSHOP. The expenditure on purchase of goods is covered under category-2 of the grant agreement, The expenditure incurred under the project is Rs.1,130,364 during financial year 2015-16. Description of Activity Amount Training and Workshop. 1.130.364 Total 1,130,364 Note_6 EXPENDITURE ON ACCOUNT OF PURCHASE OF GOODS. The expenditure on purchase of goods is covered under category-3 of the grant agreement fhe expenditure incurred under the project is Rs.3,353.810 during financial year 2015-16. Description of Activity Amount -ProjIect Management Unit. Islarnabad. 3,3)5 3, 81 Total 133 Director
Ombudsman IDF: Institutional Capacity Building S SCHEDULE OF WITHDRAWAL APPLICATIONS (REPLENISHED) FINANCIAL YEAR 01.07.2015 TO 30.06.2016 GRANT NUMBER TF-12310 W/ Amount Claimed Amount Received Difference Period for Date of Receip App Expenditur ti Ap U5D PKR USD PKR USD PKR Exeniu t in D e NBP 1/07/15 1 07 26,616 2,710,675 26,616 2,710,675 0 0 to 2 1/08/ 31/12/15 2015,Project Director z 1/