Public Disclosure Authorized Eaux de Beyrouth et de Mont Liban Etablissement Public E. B. M. L Beirut, August 5, 2015 Ms. Amal TALBI Sr. Water Resources Specialist Public Disclosure Authorized The World Bank Bourle House 119, Abdallah Bayhum Street Marfae - Solidere P. 0. Box: 11-8577 BeIrut 1107 2270 Dear Ms. Talbi, Public Disclosure Authorized Subject: LB-Pl03063 Greater Beirut Water Supply Project GBWSP A udit Report and Management Letter for the year ending 31-12-2014 Kindly find attached to this letter GBWSP Audit Report and the Management Letter for the year ending December 31, 2014 for your review. Sincerely yours Beirut & t Lebanon Water Establishment Public Disclosure Authorized eseir re dent Director General Attachment: - Audit Report - Management Letter BEYROUTH - BADARO - RUE SAMI EL SOLH - IMMEUBLE CHIDRAWI - Tel 01 386760-01 386761-01 386762
Audit of the Financial Statement of the "Greater Beirut Water Supply Project Loan Number 7967-LE" Beirut - Republic of Lebanon For the Year Ended December 31, 2014 Talal Abu-Ghazaleh & Co Member of Talal Abu-Ghazaleh Organization
Index Contents: Page Independent Auditor's Report 1 Project Statement of Cash Receipts and Payments by Category 2 Notes to the Project Statement of Cash Receipts and Payments 3-8
Tulal Abu-Ghazaleh & Co. TI-A lobal Company for Auditing and Accounting. j i ll1&. 1 Alliance with Russell Bedford International More than 120 member & correspondent firms and 280 offices in Europe, the Americas & Asia-Pacific clete Civile (R.C. 67).n.Ou;iI 4 S.) Certified Public Accountants Independent Auditor's Report To Messrs. Beirut and Mount Lebanon Water Establishment Beirut - Republic of Lebanon World Bank Loan Number 7967-LE We have audited the accompanying financial statement compromising of the Statement of Cash Receipts and Payments by category of the Greater Beirut Water Supply Project for the year ending and cumulatively as at December 31, 2014. We have also audited compliance with the laws, regulations, guidelines and provisions governed by the Loan Agreement for the year ended December 31, 2014. We conducted our audit in accordance with International Standards on Auditing (ISA). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement and about whether the Greater Beirut Water Supply Project has complied with laws, regulations, guidelines and provisions governed by the Grant Agreement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement. An audit also includes assessing the accounting principles used as well as evaluating the overall statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our Opinion: (a) the Project Financial Statement (PFS) present fairly, in all material respects, the cash receipts and payments of the Greater Beirut Water Supply Project for the year ending December 31, 2014 and showing cumulative balances as at December 31, 2014 in accordance with the International Public Sector Accounting Standards (IPSAS), under the cash basis of accounting; (b) internal control over financial reporting involved in the preparation of replenishments, direct payments, payments through special commitments, and reimbursements i.e. expenditures reimbursed on the basis of statements of Expenditures can be relied upon to support the related withdrawals as of December 31, 2014; (c) The project was in all material respects in compliance with the laws, regulations, guidelines and provisions governed by the Loan Agreement. WarefKumayha (License # 1927) Talal Abu-Ghazaleh & Co, Beirut on July 16, 2015 nayeh-al Mansour Bldg. o J I ' - 1.: +961 1754 222 FORUM O FIRMS + +v a V VY :LLU ix: +961 1754 222 tagi.com +411 1 Vol Y Y :uasti D.Box: 11-7381, Beirut, Lebanon Tagco.bierut@tagi.com kwt1!,_1 j.u I I _v ra I :y.,a
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Note 1: Project Description: Notes to the Project Statement of Cash Receipts and Payment "Greater Beirut Water Supply Project Loan Number 7967-LE" For the the year ended December 31, 2014 (Amounts are expressed in US Dollar) The objective of the Project is to increase the provision of potable water to the residents in the Project area within the greater Beirut region, including those in the low-income neighborhoods of southern Beirut, and to strengthen the capacity of the BML-WE in utility operations. The Project consists of the following parts: Part 1. Bulk Water Supply Infrastructure (a) Construction and construction supervision of bulk water supply infrastructure consisting of: (i) water tunnel conveyors, including related intake, flow regulation and washout structures, and related vent and surge shafts and distribution chamber; (ii) twin transmission pipelines; and (iii) water storage reservoirs. (b) Design, construction, construction supervision and operation of a water treatment plant. (c) (d) Financing of equipment associated with the bulk water supply infrastructure including pumps and valves. Support to CDR for Project management related to the bulk water supply infrastructure through the financing of consultants services. Part 2. Supply Reservoirs, Distribution Network and Metering (a) Design, construction and construction supervision of supply reservoirs and associated pumping stations. (b) Design, construction and construction supervision of water supply distribution networks of pipelines across southern Beirut and parts of the Metn, Baabda and Aley areas. (c) Installation of household water meters in selected areas. (d) Installation of bulk water meters at the reservoirs and distribution chambers. 3
Part 3. Project Management, Utility Strengthening and National Studies (a) Establishment and operation of the PMU, including the financing of Incremental Operating Costs. (b) Capacity building and technical assistance to strengthen BMLWE's capacity, and MOEW's capacity for project oversight, and financing of consultants' services for the BMLWE special purpose audits. (c) Provision of equipment to strengthen BMLWE, such as telemetry or supervision control and data acquisition systems, geographical information system, customer information system and international accounting system. (d) Carrying out high priority national studies on key sector areas, such as wastewater management, utility operations and regulation of the water, sanitation and irrigation sectors, water resource management, water supply augmentation and inter-basin transfers, to be selected with the agreement of the bank, in alignment with the priorities set forth in the National Water Sector Strategy currently under preparation by the Borrower. 4
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Note 3: Desianated. Account Reconciliation Statement PM-U-AWALI: USD I Beginning balance of SJA per PMU records 500,000 2. Add: Total replenishment for SIA from the WB 321,599 3. Balance 821,599 4. Less: Total expenditures made for this month 541,749 5. Less: Difference of PV-amount incurred but not recorded in the PMU records - 6. Less: Bank charges/other payment not financed by this counterpart - 7. Ending balance of SIA Rep PNW records 279,850 8. Balance of special account per attached Bank Statement as of date 12/3/2014 310,599 9. Less: Total checks issued not yet withdrawn/bdl Check # 567147 paid to JCC/WARD 26,816 Check # 567190 paid to HCC 3,933 10. Less: Total wire transfer not yet withdrawn - 11. Total amount account after adjustments 279,850 Note 4: Special Deshmated Account Reconciliation Statement CDR: USD I. Beginning balance of S/A per CDR records 437,453 2. Add: Total replenishment for S/A from the WB 34,683 3. Balance 472,136 4. Less: Total expenditures made for the year 108,257 5. Less: Difference of PV-amount incurred but not recorded in the PMY records - 6. Less: Bank charges/other payment not financed by this counterpart - 7. Ending balance of S/A Rep CDR records 363,879 8. Balance of special account per attached Bank Statement as of date 12/31/2014 363,879 9. Less: total checks issued not yet withdrawn/bdl - 10. Less: Total wire transfer not yet withdrawn - 11. Total amount accounted after adjustments 363,879 6
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Note 6: List of Fixed Assets: Asset Ref. No. Asset Description Date of Purchase Purchase Value S PCI FIN Desktop PC Acer + Screen 10-Oct-10 600.00 PC2 Proc Desktop PC Acer + Screen 10-Oct-10 600.00 Phonesyst Phone System, Central, Wiring 10-Oct-10 1,964.84 LJPl005 HP laser jet 10-Oct-10 154.00 OJHP7000 A3 HP later jet 10-Oct-10 280.00 WATCOOLI Water Cooler 22-Dec-10 165.00 COFI Coffee Machine 28-Dec-10 990.00 Laptop PD Toshiba Laptop + Case 31-Dec-10 1,980.00 MeeTABLE I Meeting Table 2-Feb-ll 614.93 AE2013HW 3 Aeron Charis 2-Feb- 1 4,640.80 DskPD Desk for Project Coo 2-Feb-l l 1,754.16 HC90/200 High Cabinet 2-Feb- 11 555.29 Darina 4 Chairs 2-Feb- 11 2,239.50 FAXI Samsung Colored multi-use 1-Aug-11 676.62 Fax2 Panasonic Fax Mach 2-Feb-14 270.00 Laptops HP-Toshiba-printer 27-Oct-14 5,960.00 Total 23,445.14 8