"NIISLEL-AUDIT" LLC Public Disclosure Authorized AUDITOR'S REPORT No.5039-MN Financial statements as of December 31, 2016 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Ulaanbaatar 2017
"NIISLEL AUDIT" LLC 1CuJA 1 - Certified audit, appraisal and accounting consultancy company Date:. INDEPENDENT AUDITOR'S REPORT To: PMU Director N.Bayartogtokh Credit No: 5039-MN We have audited the Interim Financial Reports comprising the balance sheet, project source and uses of funds by project activity, disbursement report and the designated account statement of Credit No: 5039-MN for the year ended December 31, 2016. These reports are the responsibility of the project. Our responsibility is to express an opinion thereon based on our audit. We conducted our audit in accordance with International Standards on Auditing issued by the International Auditing and Assurance Standards Board of the International Federation of Accountants. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the interim financial reports are free of material misstatement. An audit includes examining on test basis, evidence supporting the amounts and disclosures in the interim financial reports. An audit also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall statement presentation. We believe our audit provides a reasonable basis for our opinion. The management policy of is to prepare the Interim Financial Report on the cash receipts and payments basis in conformity with International Public Sector Accounting Standards (IPSAS). On this basis, cash receipts recognized when received and cash expenditures are recognized when paid rather than when incurred. In our opinion, the Interim Financial Reports have been prepared in accordance with International Public Sector Accounting Standard issued by the Public Sector Committee of the Federation of Accountants, present fairly the cash receipts and payments of the project during the year ended December 31, 2016 and, in all material respects expenditure have applied to the purpose intended in the Financing Agreement, Credit No: 5039-MN NIISL A ILC Ulaanbaatar city, Sukhbaatar distict, Baga toiruu-44 Phone/Fax: 31-89-18, 70120095 E-mail: info@nislelaudit.mn
The Government of Mongolia The International Development Association Credit N: 5039-MN BALANCE SHEET as at December 31,2016 ASSETS At Dec 31, At Dec 31, 2016 2015 Cash and cash equivalent: Cash at bank: Designated account 782,321.29 368,441.00 Sub-Account - 15,734.62 Management fee account 19,941.71 7,932.20 PMU Debt Card Account 471.15 Cash on hand MNT 55.47 190.31 Total cash and cash equivalents 4 802,789.62 392,298.13 Cumulative project expenditures Subsidies under part-a of the Project 4,525,257.44 4,525,257.44 Good, Work, Consultants' services, Training and Workshops, and Operating Costs under the Project 5 4,240,041.51 3,707,319.98 Management Fee under Part C(3)(b) of the Project 6 1,408,024.27 1,129,017.28 Other expenditure 7 62,078.05 61,500.38 Subtotal cumulative project expenditures 10,235,401.27 9,423,095.08 TOTAL ASSETS 11,038,190.89 9,815,393.21 FUNDS IDA's fund 10,962,528.78 9,749,675.69 Net interest earned 8 26,915.67 18,147.83 Tender Income 8 873.45 873.45 Foreign exchange gain 8 1176.75 Other Income. 46,696.24 46,696.24 TOTAL FUNDS 11,R38!190.89 9,815,393.21 "Niislel-Audit" LLC Prepared by: '' M g v A0 atun 4ayartogtokh MU Account t PM.A:Dfrector
3JI - "NIISLEL AUDIT" LLC Certified audit, appraisal and accounting consultancy company Date:. INDEPENDENT AUDITOR'S REPORT To: PMU Director N.Bayartogtokh Credit No: 5039-MN We have audited the accompanying statement Sources and Uses of Funds of Ulaanbaatar Clean Air Project submitted to the World Bank during the year ended December 31, 2016 in support of credit withdrawals under the Financing Agreement, Credit No: 5039-MN. We conducted our audit in accordance with generally accepted auditing standards that accordingly included examination, on a test basis, of evidence supporting the amounts and disclosures in the statement of Sources and User of Funds. An audit also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall statement presentation. We believe our audit provides a reasonable basis for our opinion. In our opinion, the statement of Sources and Uses of Funds submitted together with the internal controls and procedures involved in their preparation can be relied upon to support the application for credit withdrawals. [I 7- NIS D LLC Ulaanbaatar city, Sukhbaatar distdct, Baga loiruu-44 Phone/Fax: 31-89-18, 70120095 E-mail: info@niislelauditmn
The Government of Mongolia The International Development Association Credit K&: 5039-MN Ulaanbantar Clean Air Project PROJECT SOURCES AND USES OF FUNDS Forthe year ended December 31, 2016 (in USD) Cumulative to For 2016 Cumulative to Dec 31, 2016 Dec 31, 2015 FUNDS IDA's fund 10,962,528.78 1,212,853.09 9,749,675.69 Net interest earned 26,915.67 8,767.84 18,147.83 Foreign exchange gain 1,176.75 1,176.75 - Tender Income 873.45-873.45 Other Income 46,696.24-46,696.24 TOTAL FUNDS 11,038,190.89 1,222,797.68 9,815,393.21 USES OF FUNDS Subsidies under part-a of the Project 4,525,257.44-4,525,257.44 Good, Work, Consultants' services, Training and Workshops, and Operating Costs under the Project 4,240,041.51 532,721.53 3,707,319.98 Management Fee under Part C(3)(b) of the Project 1,408,024.27 279,006.99 1,129,017.28 Bank Service Charges 2,382.73 1,023.05 1,359.68 Tender expenditure 1,659.99-1,659.99 Foreign exchange loss 12,164.23 (445.38) 12,609.61 Other expenditure 45,871.10-45,871.10 TOTAL USES OF FUNDS 10,235,401.27-9,423,095.08 Surplus of funds over uses 802,789.62 410,491.49 392,298.13 Prepared by: Approved by: J.Batbuyant N.Bayartogt PM AccountantP ector "Niislel-Audit" LLC A
"NIISLEL AUDIT" LLC g Certified audit, appraisal and accounting consultancy company Date:.. INDEPENDENT AUDITOR'S REPORT To: PMU Director N.Bayartogtokh Credit No: 5039-MN We have audited the accompanying the Statement of Expenditures (SOEs) of Ulaanbaatar Clean Air Project submitted to the World Bank during the year ended December 31, 2016 in support of credit withdrawals under the Financing Agreement, Credit No: 5039-MN. We conducted our audit in accordance with generally accepted auditing standards that accordingly included examination, on a test basis, of evidence supporting the amounts and disclosures in the Statement of Expenditures. An audit also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall statement presentation. We believe our audit provides a reasonable basis for our opinion. In our opinion, the Statement of Expenditures submitted together with the internal controls and procedures involved in their preparation can be relied upon to support the application for credit withdrawals. NIISLE D LLC Ulaanbaatar city, Sukhbaatar district, Baga toiruu-44 Phone/Fax 31-89-18, 70120095 E-maik info@niislelaudit. mn
The Government of Mongolia The International Development Association Credit N2: 5039-MN STATEMENT OF EXPENDITURES (IDA Withdrawals) Forthe year ended December 31, 2016 (In SD) WA Application Claimed credited Amount Amount Numbers type date date claimed credited Difference Up to December 31, 2015 (WAl-19) 10,361,649.52 9,749,675.69 611,973.83 WA-191 Replenishment 16-Feb-2016 25-Feb-2016 611,973.83, 611,973.83 WA-20 Replenishment 14-Jun-2016 27-Jun-2016 436,628.79 436,628.79 - WA-21 Replenishment 11-Oct-2016 01-Nov-2016 164,250.46,. 164,250.46 - _WA-2-2-J.plenishment- -28-Mar-201-7- -1-1-Apr-201t7-210,794.45- -240r794,45 - For the reporting period 2016(WA20-22) 811,673.70 811,673.70 - Up to December 31, 2016 (WA1-22) 11,173,323.22 11,173,323.22-1. The expenditure of USD 611,973.83 expensed in 2015, was claimed and credited through WA-19 in 2016. 2. The expenditure credited through WA-22, which is amounting USD 210,794.45 expensed in 2016, but was claimed to World Bank in 2017. Prepared by: J.Batbuyant PMU Accountant Approved by: N.Bayartogtokh PMU Direc,,. LiJ "Niislel-Audit" LLC
7-1- -1 CN 0 [-r Ok^ -- e t e. t"5-4 k -\ Nle to JO M e ci 1* e =n.=- N Ln ON *q N -- 3 r. o -. ON a O Nt rr e-- -- m c Ln 14 m f 05 <.- %f< - o - - - r - 0 j 40 :- k- * in Cd0 - - - -- - - E r.r. o..f.< O Q Ou gc cc.o Jt- -jq. -- e - - - ca ca ej fl. ½., o - 3- > X I CN e- f 0 r hmw.r. 0. 1. L.,0 t i_ u G> 4n kl k.-- - e m t. N 2 *a :5. d. nt 7,3o 1-<~ ' L ca -O>3- ICD D -a Il 6. Ge01-C SO f ono r--- 'l wcen a en - c5cj oötn.m Mo 10610, - r Ti l*^- - 2 t 41 ÉEZ ~j Wé luu - N 00 CN \4r- rl är- 9=4> 0> 4> r. La-~~ ci,~i- r of' 2~ viir
"NIISLEL AUDIT" LLC Certified audit, appraisal and accounting consultancy company Date:.. INDEPENDENT AUDITOR'S REPORT To: PMU Director N.Bayartogtokh Credit No: 5039-MN We have audited the accompanying the Designated Account Statement of Ulaanbaatar Clean Air Project submitted to the World Bank during the year ended December 31, 2016 in support of credit withdrawals under the Financing Agreement, Credit No: 5039-MN. We conducted our audit in accordance with generally accepted auditing standards that accordingly included examination, on a test basis, of evidence supporting the amounts and disclosures in the Designated Account Statement. An audit also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall statement presentation. We believe our audit provides a reasonable basis for our opinion. In our opinion, the Designated Account Statement submitted together with the internal controls and procedures involved in their preparation can be relied upon to support the application for credit withdrawals. NIISLEL T C Ulaanbaatar city, Sukhbaatar distdct, Baga toirvu-44 Phone/Fax: 31-89-18, 70120095 E-mail: info@niislelaudit.mn
The Government of Mongolia The International Development Association Credit X: 5039-MN DESIGNATED ACCOUNT STATEMENT for year ended December 31, 2016 (In USD) At At Dec 31, Dec3l,2016 2015 I Total advanced by the IDA 1,000,000.00 1,000,000.00 2 Less: Total amount recovered by the IDA 3 Equal present outstanding amount advanced to the special account 1,000,000.00 1,000,000.00 Balance of special account per attached bank statement of date 782,321.29 5 Total amount withdrawn but not yet claimed 203,164.34-6 Amount claimed but not yet credited at date of bank statement 7 Interest earned (18,608.91) (18,147.83) 8 Bank charge 1,760.89 1,359.68 9 Total advance accounted for 968,637.61 963,626.68 10 Difference between total appearing on lines 3 and 9 31,362.39 36,373.32 Explanation of any difference between the totals appearing on lines 3 and 9 All items should be indicated on the bank statement Sub-Account - 15,734.62 Management fee account 19,941.71 7,932.20 PMU debt cart account 471.15 Cash on hand MNT 55.47 190.31 Tender Income (873.45) (873.45) Other Income (46,696.24) (46,696.24) Tender Expenditure 1,659.99 1,659.99 Foreign Exchange Loss 10,987.48 12,609.61 Other expenditure 45,871.10 45,871.10 Amounts over claimed WA-2 (54.82) (54.82) 31,362.39 36,373.32 Prepared by: J.Batbuyant PMU Accountant Approved by: N.Bayartogtokh PMU Director L " "NillAuiUk
NOTES TO THE INTERIM FINANCIAL REPORTS 1. Project background The objectives of the Project are to enable consumers in ger areas to access heating appliances producing less particulate matter emissions and to further develop selected medium-term particulate matter abatement measures in Ulaanbaatar in coordination with development partners. The Project consists of the following parts, subject to such modifications thereof, as the Recipient and the Association may agree upon from time to achieve the objectives of the Project. Part A. Ger Area Particulate Matter Mitigation Implementation of a stove replacement program and a low pressure boiler replacement program, including: (1) Provision of capital subsidies to eligible households for the purchase of selected heating appliances, including stoves (beginning September 2013 or upon completion of the stove component of the Millennium Challenge Corporation's Energy and Environment Project, whichever comes earlier), stoves for heating walls and low pressure boilers from eligible stove and pressure boiler producers and suppliers, and stove replacement; (2) technical support to stove and a low pressure boiler suppliers, including; (a) goods, technical assistance, and Operating Costs for the Stove Emissions and Efficiency Testing Laboratory; (b) technical assistance and equipment for technical advice in addressing problems with the design and production of the stoves and low pressure boilers; (c) technical assistance in the development of emissions standards for stoves and low pressure boilers; (d) market development support and technical assistance to design and implement adjustment to the stove replacement program and for accommodating low pressure boilers; and (e) technical assistance in the establishment of a system of monitoring the quality of products supported by the Project; (3) monitoring and evaluation; and (4) training for knowledge exchange. Part B. Central Ulaanbaatar Particulate Matter Mitigation (1) Mitigation of fugitive dust from lack of city greening Preparation of an action plan for city greening, and preparation and implementation of pilot, including: (a) assessment of greening programs in Ulaanbaatar, evaluation of options and development recommendation to improve greening, (b) preparation of a pilot project including support for bid document preparation; and (c) investment support for the supply and installation of grass and other eligible plants and trees in Ulaanbaatar on a pilot basis. (2) Mitigation of dust from power plant emissions and ash ponds Carrying out of feasibility study for:(a) the installation of improved emission controls in Ulaanbaatar's combined heat and power plants; and (b) the mitigation of dust from power plant ash ponds, the study of their environmental impacts, and recommending cost effective solutions. (3) District heating feasibility study and knowledge building "Niislel-Audit" LLC UJ AO
I (a) Carrying out of feasibility study for rehabilitation and sustainable expansion of district heating in Ulaanbaatar. (b) Complementary training on district heating policy, regulation and management. (4) Affordable housing policy technical assistance (a) Carrying out of assessments of current policies, laws and practices for affordable housing provision in Ulaanbaatar, evaluation of effectiveness towards meeting policy objectives, and introduction of lessons from international experiences on affordable housing. (b) Development of an affordable housing strategy for Ulaanbaatar. Part C. Public Awareness Raising, Program Coordination, and Project Management (1) Air quality monitoring, management and analysis (a) Air quality monitoring and analysis equipment, including for the Ulaanbaatar Air Quality Agency. (b) Training urban air quality analysis and management. (2) Program Coordination support (a) Consultants' services to assist Ulaanbaatar's air pollution program coordination, including to maintain links with stakeholders, collect, synthesize and archive information on air quality for use by decision makers and the public; and provide to support to air quality working groups or coordination mechanism to improve effectiveness and sharing of information. (b) Training on air quality management and policy-making. (3) Project management, public awareness, and monitoring and evaluation. (a) Assistance to the development of a communication program for the Project. (b) Management Fee for Project management services. (c) Monitoring and evaluation. The Closing Date is June 30, 2017. The following table specifies the categories of Eligible Expenditures that may be financed out of the proceeds of the Financing ("Category"), the allocations of the amounts of the Financing to each Category, and the percentage of expenditures to be financed for Eligible Expenditures each Category: Amount of the Financing Percentage of epentre ob Category Allocated (expressed in Finan.dius of SDR) Financed (mnclusive of Taxes) (1)Subsidies under part-a of the Project 4,470,000.00 100% (2)Good, Work, Consultants' services, 3,940,000.00 100% Training and Workshops, and Operating Costs under the Project (3)Management Fee under Part C(3)(b) 900,000.00 100% of the Project (4)Unallocated 370,000.00 TOTAL AMOUNT 9,700,000.00 "Niislel-Audit" LLC
2. Summary of significant accounting policies a) Statement of compliance The financial statements of the project comprise the Balance Sheet, Summary of Source and Uses of Funds, and the Designated Account Reconciliation Statement. The formats of these reports are agreed with the World Bank. b) Basis of preparation The financial statements are prepared in accordance with International Public Sector Accounting Standards (IPSASs) issued by the International Public Sector Accounting Standards Board (IPSASB) of the International Federation of Accountants and cash receipts and disbursement basis of accounting has been applied. On this basis, receipts are recognized when received or direct payment to creditors are made rather than when income is earned and disbursements are recognized when paid rather than when expenses are incurred. c) Basis of measurement The financial statements are presented in U.S.Dollar (USD). Cash balances denominated in currencies other than USD are translated into USD at year end rates of exchange stated by the Bank of Mongolia. Transactions denominated in currencies other than USD are translated at rates at the dates of the transaction stated by the depository bank. Any gains and losses are reflected in the Statement of Sources and Uses of Funds. d) Basis of presentation The accounts balances in the financial statements as December 31, 2016 have been presented on December 31, 2015 e) Bank accounts and cash I LI In according to the Disbursement Letter, the project opened the Designated Account which is one segregated account for the loan financing at the Ulaanbaatar City Bank acceptable to the World Bank. LI "Niislel-Audit" LLC 0 42
NOTES TO THE PROJECT FINANCIAL STATEMENTS 3. Disbursement progress In the year of account, 1,212,853.09 USD worth investment was made on behalf of the International Development Association, and a total of 10,962,528.78 USD investment was received, and bank interest income worth 26,915.67 USD was assumed. 4. Cash and cash equivalents 2015.12.31 2016.12.31 Designated account 368,441.00 782,321.29 Sub-Account 15,734.62 - Management fee account 7,932.20 19,941.71 PMU Debt Card Account 471.15 Cash on hand MNT 190.31 55.47 Total 392,298.13 802,789.62 5. Good, Work, Consultants' services, Training and Workshops, and Operating Costs under the Project Expenditure 2015.12.31 For 2016 2016.12.31 Goods 405,250.99 94,911.82 500,162.41 Works 235,350.13 17,154.32 252,504.45 Consultants' services 2,893,818.01 367,779.69 3,261597.70 Training 119,582.14 34,551.81 154,133.95 Operating costs 53,319.11 18,323.89 71,643.00 Total 3,707,319.98 532,721.53 4,240,041.51/ 6. Management Fee under Part C(3)(b) of the Project Expenditure 2015.12.31 For 2016 2016.12.31 Public Awareness Raising Cost 139,195.43 6,778.91 145,974.34 Stationary Cost 4,952.73 1,155.07 6,107.80 Transportation and Fuel Cost 24,010.43 10,231.26 34,241.69 Rental cost 98,154.54 36,439.25 134,593.79 Communication and Telephone 7,405.04 1,840.24 9,245.28 Cost Office Supply and Administration 21,485.42 4,463.78 25,949.20 Cost PMU Staffs Travel Cost 32,282.02 39,306.49 71,588.51 Advertisement Cost 3,229.32 1,519.44 4,748.76 Auditing 4,292.71 3,771.71 8,064.42 PMU Staffs Salary 705,427.33 173,500.84 878,928.17 L Purchase furniture's for PMU 25,096.48 25,096.48 Staffs Purchase a Vehicles for PMU 63,485.83 63,485.83 L Total 1,129,017.28 279,006.99 1,408,024.27 [] "Nilslel-Audit" LLC Ui
7. Other Expenditure 2015.12.31 For 2016 2016.12.31 Bank Service Charges 1,359.68 1,023.05 2,382.73 Tender Expenditures 1,659.99 1,659.99 Foreign Exchange loss 12,609.61 (445.38) 12,164.23 Other expenditures 45,871.10 45,871.10 Total 61,500.38 577.67 62,078.05 8. Other income 2015.12.31 For 2016 2016.12.31 Interest Income 18,147.83 8,767.84 26,915.67 Tender Income 873.45 873.45 Foreign Exchange Gain - 1,176.75 1,176.75 Other Income 46,696.24-46,696.24 Total 65,717.52 9,944.59 75,662.11 9. Procurement of contracts In the year of account, 6 new contracts were signed, contract payments worth 231,923.85 USD from the previous year was made, and training expenses worth 34,551.81 USD was spent. Auditing inspections in accordance with international standards inspected all contracts and preliminary documents pertaining to the supplier selection and purchasing procedures and established that no violations were made. 10. Event after year end The project's end date has been extended to June 30, 2018 as requested by the Ministry of Finance. L" U "Niislel-Audit" LLC