Public Disclosure Authorized Office of the rim. M,2r.~ öa.=.t t Provincial Audit Wing Constitution Avenue slamabad No PA/F AP/Federal/F-l3/ Dated 31-122015 1 The Secretary, Economic A tini Pak Secretariat Block "C- slanabad he Couniry Director, World Bank, 20-A, Shahrah-e-Jamhurial, Sector G-5/1, slamabad Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Subjec: Foreign Aided Projects (FAP) Audit Reports Financial Attest Audit of the following World Bank 'inded Financial Yea 2014-15 has been conducted by this office i ii. ii. prci,jccs for the Financial Attest Audit Report on the Accounts of Second Trade and Transport Facilitation Project (Ministry of Comnierce) DA Cr. 4577- Pak for the F Y. 2013-14 Financial Attest Audit Report on the Accounis of Second Trade and Transport Facilitation Project (Planning Commision) DA Cr. 4577-Pak for the F.Y. 2013-14 Financial Attest Audit Report on the Accounts of Water Secior Capacity Building and Advisory Service Project DA Cr 4437 for he F Y 20(14-15 g. Financial Attest Audit Report on lie Accounits of TreitArv L.ducation Support Project DA Cr No 4886-PK & 4887-PK FEC Foi the i 2014-15 v. Financial Attest Audit Report on the Accounts of Sirengtheni the Forum of Pakistan Ombudsman TFT2310 för the F.Y 2014-15 vi Financial Attest Audit Report on the Accousis of Pakistan Povemi1 Alleviation Rnd DA Cr No. 4599 for the F Y. 2.14-1S 2 Atudit Reports of the above mentioned projecis have been iialized after conduetiig Quality Control Review and are being issued for necessary consuimption of the Gjovernmient and the Development partner i e World Bank EnLcosure: fas Above) Cc li (M111=amd aem Provincial Audit Wing DG Audit Federal Governnent, slarmabad, with the request to issue a copy of the above reports to the project nanagement for ftrther necessary action Master File
1o. /. Financial Attest Audit Report on the Accounts of Second Trade and Transport Facilitation Project (Trade and Transport Facilitation Unit) nternational Development Association Loan No. DA-4577-Pak For the Financial Year 2013-14 * Auditor General of Pakistan slamabad
TABLE OF CONTENTS Abbreviations and Acronyms... PREFACE... E PA RT -... PROJECT OVERVEW...2 AUDTOR'S REPORT TO THE MANAGEMENT...3 FNANCAL STATEMENTS...4 PART-... COVER LETTER TO THE MANAGEMENT LETTER... 6 EXECUTVE SUMMARY... 8 MANAGEMENT LETTER...9 1. NTRODUCTON...... 10 2. AUDT OBJECTVES...J1 3. AUDT... SCOPE AND METHODOLOGY...10 4. AUDT FNDNGS AND RECOMMENDATONS...... 12 4.1 Organization... and Management...12 4.2 Financial Management...13 4.3 Sustainability......16... 5. CONCLUSON......16 ACKNOWLEDGEMENT...... 17 U...... K.........1 U...1........1
Abbreviations and Acronyms AGPR Accountant General Pakistan Revenues EAD Economic Affairs Division ECNEC Executive Committee of National Economic Council GFR General Financial Rules DA nternational Development Association PSAS nternational Public Sector Accounting Standards SSA l nternational Standards of Supreme Audit nstitutions NTCMU National Trade Corridor Management Unit O.M. Office Memorandum PC- Planning Commission- PSD Public Sector Development Programme Rs. Rupees TTFU Trade and Transport Facilitation Unit OfieMmrnu UNCTAD United Nations Conference on Trade and Development lnigcmiso- USD United States Dollar WTO World Trade Organization ulcsco eeomn rgam
PREFACE The Auditor-General conducts audits subject to Article 169 and 170 of the Constitution of the slamic 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 "Second Trade and Transport Facilitation Project (Trade and Transport Facilitation Unit)" under the Loan No. DA-4577-PAK for the Financial Year 2013-14 funded by the nternational Development Association (DA) was carried out accordingly. The Directorate General Audit, (Federal Government), slamabad conducted audit of the "Second Trade and Transport Facilitation Project (Trade and Transport Facilitation Unit)" during December. 2015 for the period 2013-14with a view to reporting significant findings to stakeholders. Audit examined the economy, efficiency, and effectiveness aspects of the "Second Trade and Transport Facilitation Project (Trade and Transport Facilitation Unit)". n addition, Audit also assessed, on test check basis, whether the management complied with applicable laws, rules, and regulations in managing the "Second Trade and Transport Facilitation Project (Trade and Transport Facilitation Unit)". The Audit Report indicates specific actions that, if taken, will help the management realize the objectives of the "Second Trade and Transport Facilitation Project (Trade and Transport Facilitation Unit)". The Report consists of two parts. Part- contains Auditor's Report (Audit Opinion) and Financial Statements. Part-H contains Executive Summary, Management Letter and Audit Findings. The Report has been prepared for submission to the nternational Development Association (DA) in terms of Loan Agreement No.DA-4577-PAK. Dated: 2-.12.2015 (Junaid Mushtaq ureshi) Place: slamabad DRECTOR GENERAL U i
1 PART- N. PROJECT OVERVEW 2. AUDTOR'S REPORT TO THlE MANAGEMENT E 3. FNANCAL STATEMENTS 1 8Pt
PROJECT OVERVEW Name of Project: Second Trade and Transport Facilitation Project (Trade and Transport Facilitation Unit) Sponsoring Authority: World Bank (nternational Development Association) Executing Authority: Loan No: DA-4577-PAK PC- Cost: Rs. 510.000 million Date of Commencement (As per PC-): December, 2006 Actual Date of Commencement: January, 2007 Date of Completion (as per PC-): December, 2013 Dated of Approval by ECNEC: 30.11.2006 Loan Closing Date: December, 2013 The umbrella PC- of Second Trade and Transport Facilitation Project was approved by ECNEC in its meeting held on 30.11.2006 at a cost of Rs. 1,500.000 million consisting of two components, i.e. National Trade Corridor Management Unit (NTCMU) and Trade and Transport Facilitation Unit (TTFU) to be implemented by Planning Commission and Ministry of Commerce, respectively. Later, in 2010 the project cost was revised to Rs. 2,125.000 million due to increase in dollar value from 1 USD = Rs. 60 to Rs. 85. The revised total cost of TTFU component under the was Rs. 510.000 million (USD 6.000 million). The Project was funded by World Bank/DA credit at an interest rate of 0.75%, repayable in 20 years. The objectives of the project are as under: i. National Trade Facilitation Strategy and WTO commitments ii. WTO trade facilitation negotiations and regional corporation mechanisms iii. Trade procedures analysis and corresponding capacity building iv. Trade, transport and transit operations analysis and corresponding capacity building v. Trade information, education and capacity communications vi, Pilot projects vii. Benchmarking performance 2 1 U
AUDTOR'S REPORT TO THE MANAGEMENT Auditor's Report on the Trade and Transport Facilitation Project (Trade and Transport Facilitation Unit) Financial Statements We have audited the accompanying Financial Statements of "Trade and Transport Facilitation Project (Trade and Transport Facilitation Unit)" under the DA Loan No.4577 that comprises Statement of Receipts and Payments together with the Notes forming part thereof for the year ended 31s' December, 2013. Management Responsibility t 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 PSAS, 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 nternational Standards of Supreme Audit nstitutions. 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. t 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 n our opinion: a) The financial statements present fairly, in all material respects, the cash receipts and payments by the project for the year ended 3f1" December, 2013 in accordance with Cash Basis PSAS, Financial Reporting under the Cash Basis of Accounting Standard. b) The expen res have been incurred in accordance with the requirements of legal agreemr. (Junaid ushtaq Q e Director General Directorate General Audit (Federal Government), Benevolent Fund Building, Zero Point, slamabad Dated: 2,2.12.2015 131"1, acodnewtuh eurmnso ea
U U U FNANCAL STATEMENTS F
TRADE AND TRANSPORT FACLTATON PROJECT (TRADE AND TRANSPORT FACLTATON UNT) MNSTRY OF COMMERCE Financial Statement Loan No. DA/4577-PAK Statement of Financial Affairs For the Financial Year 0P "July. 2013-31 December. 2013 Cash in-flow from stakeholders Rupees A- Receipts 2013-14 (July-Dec) 2012-13 Cumulative Cash & Cash Equivalents 17.204.603.18 30.755.018.18 47.959.621.36 at the Year beginning GOP (Counterpart E Financin,) DA (SOE Procedure). - -- DA (Direct Payment)_ - 66.292.106.00 66.292,106.00 ncrease/decrease exchange fluctuation Total Receipts during 17,204,603.18 97,047,124.18 114,251,727.36 the year Cash Outflow B- Payment (Operating Activities) 2013-14 (July-Dec) 2012-13 Cumulative Consulting Services 3,346.043 66.292,106 69,638149 ncremental Operating Cost 6,956.353 13,550,415 20,506.768 and recurrent costs Cash Utilized in Operating 10,302,396 79,842,521 90,144,917 2013-14 (Jul y-dec) 2012-13 Cumulative Cash & Cash Equivalcnts 6.902,207.18 17.204.603-18 i 24.106.810.36 /J)VW N) fftwy.slamnabad (M. Salim Khalid) Deputy Chief (Dev.) Mubammad Salm hald Deputy chief Minitry of Commercet Government of Pakista"
. THE PROJECT TRADE AND TRANSPORTFACLTATON PROJECT (TRADE AND TRANSPORT FACLTATON UNT) MNSTRY OF COMMERCE NOTES TO THE FNANCAL STATEMENT FOR THE YEAR ENDED 31P December, 2013 1.1 The Trade and transport Facilitation Project-2 (Trade and Transport Facilitation Unit (TTFU) is a project of and is effective from P1 December 2007 with the closing date of December 31. 2013. Government of Pakistan (GOP) entered into agreement with "nternational Development Association (DA)". for arranging financing arrangements for the reforms in progress at the project. 1.2 n accordance with Development Credit Agreements DA has sanctioned credit of Special Drawing Rights (SDR) 16.800 Million for the Project. A sum of SDR 12.750 million allocated as part B to this Unit. The expenses are to be met 100% from Loan account.. Significant Accounting Polices Following accounting policies have been applied consistently in dealing with items. which are considered material to the TTF-2 (Trade and Transport Facilitation Unit). Ministry of Commerce financial statements: 2.1 BASS of Preparation The financial statements have been prepared under the PSAS cash basis. 2.2 Accounting convention These financial statements have been prospered under historical cost convention with cash basis of accounting. Accordingly, expenses are recognized. when paid rather incurred. 2.3 Currency The financial statements have been prepared in Pak Rupees except for few disclosures that have been made in notes to the financial statement. These notes have included both the foreign currency as well as their equivalent Pak Rupees as per the SBP exchange rate prevailing on the date of the bank payment. 2.4 Government funds & grant Funds allocated to Project from DA are not recognized till these have been credited in the Assignment Account maintained with the National Bank of Pakistan. Civic Centre Branch. slamabad. (M. Salim Khalid) Deputy Chief (Dev.) slamabad MuhammaO Sali" W Deputy Chte Miuisty of Commerm
1 l e 2.5 foreign exchange transactions Transactions in local and foreign currencies are accounted for in compliance with the Finance Division O.M. NO. F.2 (2 (4)-B.S/2000-1 146 dated 25 Nov 2002. (M. Salim Khalid) Deputy Chief (Dev.) islamabad / 1 Muhammad Salim Khaire Deputy Chief ministry of Commes- Government of Paisiras slamabad
l e TRADE AND TRANSPORT FACLTATON PROJECT (TRADE AND TRANSPORT FACLTATON UNT) MNSTRY OF COMMERCE NOTES TO THE FNANCAL STATEMENT FOR THE PEROD ENDED 31"' DECEMBER, 2013 Notes 2013-14 (July-December) Note-B Receipts & Receipts & Payments against financing sources DA GOP Total US$ Rs. Rs. Rs. O/Balance 226.159.81 17.204,603.18-17.204.603.18 Receipt - - - ' quarter 2 nd quarter - - - _ Total 226,159.81 17,204,603.18-17.204.603.18-2 Paiments USS Rs. GOP Total 1' quarter 27.469.05 2.475.002-2.475.002 nd quarter 90,872.69 7.827.394-7,827.394 3 rd_quarter 4 th quarter ncrease - - C/balance 107,818.07 6,902,207.18-6,902207.18 Total - - - - 3.1 Exchange fluctuation 30-06-2013 A Closing balance on 30-06-2013 was USD (Cash book Balance) 226,159.81 B Exchange Rate according to nterbank Exchange on 30-06-20 13 C Closing Balance in PKR on 30-06-2013 Cash Book 17.204.603.18 E D Closing balance in PKR on 31-12-2013 6,902.207.18 E Exchange Gain (D-D) NA U (M. Salim Khalid) Deputy Chief (Dev.) slamabad Mahammad Salim hlid Deputy Chief Ministry of commerce Government of Pakistan islamabad
l e, TRADE AND TRANSPORT FACLTATON PROJECT (TRADE AND TRANSPORT FACLTATON UNTU) MNSTRY OF COMMERCE Loan No DA/4577-PAK Withdrawal schedule For the Financial Year 01P July. 2013-3]S December. 2013 2013-14 (July-December) Value: USS S # Currency W/A-# _ Categorywise ExpenditureReplenished Total Total U U (M. Salim Khalid) Deputy Chief (Dev.) slamabad Muhammad Salim Khalid Deputy Chief t Government of Pakistan slamabad
.. TRADE AND TRANSPORT FACLTATON PROJECT (TRADE AND TRANSPORT FACLTATON UNT) MNSTRY OF COMMERCE Loan No DA/4577-PAK For the Financial Year 01" July 2013-3 1S December. 2013 SPECAL/DESGNATED ACCOUNT STATEMENT Value: US$ E For year Ending 2013-14 (July-December) Account No. 0154 Depositary Bank National Bank of Pakistan Address Main Branch slarabad Related Loan/Credit No. 4577-PAK Currency us$ Opening Balance on 01-07-2013 226.159.81 Add DA Replenishment Total 226.159.81 Deduct: 118.341.74 SOE Reimbursements Total11]8.341.74 Cash Book Balance As on 31-12-13 107,818-07 Bank Balance As on 3 1-12-2013 107,81807 US 226159.81 (M. Sa$im Khalid) Deputy Chief (Dev.) Ministry of Commkserce slamabad Mivnisnt of ommer isambad Deputy Chief /
Note: 5 ncremental Operating cost and incurrent costs during this year 2013-14 (July-December) Sub Note Detail Amount (Rs.) 5.1 Establishment Charges 3,320,724 5.2 Rent of the Building 614,460 5.3 Project pre investment research. 3.346.043 survey, consultant based research. survey 5.4 Office Management 1.462,664 5.5 Regional conference on 1.558,505 strengthening transport connectively Total 10.302,396 The expenditure for 2013-14 (July-December) has been expended out of funding of World Bank. (M. Salim Khalid Deputy Chief (Dev.) slamabad Muhammad Sal" Khad Deputy Chief ministry of Commerce.oernment of Pakistan slamabad
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TRADE AND TRANSPORT FACLTATON PROJECT (TRADE AND TRANSPORT FACLTATON UNT) MNSTRY OF COMMERCE Loan No DA/4577-PAK List of Assets during 2013-14 (July-December) SiNo. tems Quantity 2 3 4 NL 5 6 7 8 114 / X (M. Salim Khalid) Deputy Ch e f (Dev.) slamabad Muhammad Salim Kh 3 1110 DepUty Chief rdinistry of comwc, i,overnmera of
s Certificate E t is certified that expenditure have been used by the Trade and Transport Facilitation Project (Trade and Transport Facilitation Unit) Loan No. DA/4577-PAK or the Financial Year 01" July 2013-31"' December, 2013 for intended purposed as per loan agreement No.4577 from nternational Development Association (DA) portion for the year 2013-14 (July-December). (M. Salim Khalid) Deputy Chief (Dev.) slamabad Muhammaa Salim Khalo Deputy Chief GovernmeUt of Pakistan slamabad