Public Disclosure Authorized Eaux de Beyrouth et de Mont Liban Etablissemeni Public E.S.M.L Beirut, August 29h, 2016 Public Disclosure Authorized Public Disclosure Authorized Ms. Amal Talbi Senior Water Resources Specialist Mrs. Rima Koteiche Senior Financial Management Specialist Mr. Rock Jabbour The World Bank Lebanon Country Office Beirut, Lebanon Subject: LB-P 103063 Greater Beirut Water Supply Project Final Audit Report and Management Letter for the GBWSP for the year ending December 31", 2015 Dear Ms. Talbi, Kindly find attached to this letter the Final Audit Report and the Management Letter for the GBWSP for the year ending December 31st, 2015. Public Disclosure Authorized Sincerely yours Beirut & eir r sident General Director t Lebanon Water Establishment BEYROUTH - BADARO - RUE SAM[ 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, 2015 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 3-9
(P81_ Y. TAGkWdors Talal Abu-Ghazaleh & Co. Global Company for Auditing and Accounting 4. sai t. ll t. l Societe Civile (R.C. 67) Alliance with Russell Bedford International More than 120 member & correspondent firms and 280 offices in Europe, the Americas & Asia-Pacific zlf'ou 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, 2015. We have also audited compliance with the laws, regulations, guidelines and provisions governed by the Loan Agreement for the year ended December 31, 2015. 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, 2015 and showing cumulative balances as at December 31, 2015 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, 2015; (c) The project was in all material respects in compliance with the laws, regulations, guidelines and provisions governed by the L Agreement. Waref Kumayha (License # 1927) Beirut on August 22, 2016 Sanayeh-Al Mansour Bldg. '"'mn'" -t -i - t Tel.: +961 1 754 222 - FORUM OF FIRNS 1 V ty Y Y :6-.A Fax: +961 1754 222 tagi.com +ik Vat l y :cj P.O.Box: 11-7381, Beirut, Lebanon Tageo.bierut@tagi.com 411IUn L 4, I yr A I
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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, 2015 (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) Financing of equipment associated with the bulk water supply infrastructure including pumps and valves. (d) 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.
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: Designated Account Reconciliation Statement PMU-AWALI: USD 1. Beginning balance of S/A per PMU records 279,850 2. Add: Total replenishment for S/A from the WB 680,257 3. Balance 960,107 4. Less: Total expenditures made for this year 660,290 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 S/A Rep PMU records 299,817 8. Balance of special account per attached Bank Statement as of date 12/31/2015 342,106 9. Less: Total checks issued not yet withdrawn/bdl 42,289 10. Less: Total wire transfer not yet withdrawn - 11. Total amount account after adjustments 299,817 Note 4: Special Designated Account Reconciliation Statement CDR: USD 1. Beginning balance of S/A per CDR records 363,879 2. Add: Total replenishment for S/A from the WB 88,294 3. Balance 452,173 4. Less: Total expenditures made for the year 103,519 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 348,654 8. Balance of special account per attached Bank Statement as of date 12/31/2015 348,654 9. Less: total checks issued not yet withdrawn/bdl - 10. Less: Total wire transfer not yet withdrawn 11. Total amount accounted after adjustments 348,654 6
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Note 6: List of Fixed Assets: Asset ReE No. Asset DgaK[jRjjM Date of Purchase Purchase Value $ PCI FIN Desktop PC Acer + Screen I O-Oct- 10 600.00 PC2 Proc Desktop PC Acer + Screen I O-Oct- 10 600.00 Phonesyst Phone System, Central, Wiring I O-Oct- 10 1,964.84 LJP1005 HP laseriet 10-Oct-10 154.00 OJHP7000 A3 HP laterjet A3 10-Oct-10 280.00 WATCOOLI Water Cooler 22-Dec- 10 165.00 COR Coffee Machine 28-Dec-10 990.00 Laptop PD Toshiba Laptop + Case 31-Dec-10 1,980.00 MeeTABLEI Meeting Table 2-Feb- 11 614.93 AE2013HW 3 Acron Charis 2-Feb- 11 4,640.80 DskP D Desk for Project Coo 2-Feb- 11 1,754.16 HC90/200 High Cabinet 2-Feb- 11 555.29 Darina 4 Chairs 2-Feb- 11 2,239.50 FAX1 Samsung Colored multi-use I -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..tt, L. ALP u (_.da, %