Financial Attesi Atidit Report on Ithe Accounts of National Imimunization Support Project (NISP) Ministry of National Hlealth Services, Regulations and Coordination I BRD Grian t No TF A2189-PAK For the Financial Year 2017-18 Auditor General of" Pa,kistan Islamiabad TABLE OF CONTENTS 1isT OF A BBREV A T O N S ................................................................................................. PREFA C E E.............. ............................................................................... ..................................ii P A R T -] ...... ...................................................................... -.................................... ............... . . P ROJ ECT O V i.E R V l E-W ............................................. -...............................................................2 A UDI)TO S R EL,PO RT TO TI I MA NA G F EM ................................................................3 FIN A N C IA L STA TEEM NTS................................................................................................... 4 PA RT-l 1 .......... I................................................................................................................. ........5 CO V l R IN G L E TTER TO I T [ M A N A (i E M E NT L EETTTE R ..................................................6 EVX EC UT IV E SU M M A RY ........ ....................... ....................................................................7 M A NA GEM LN T LFE T R ............................................................................. .....................8 i. [NTRODUCTO N ..........................................................................................................9 2. AU D IT 013 .1B,iECTTVSES .........................................................................................9 3. A U D lT SCO PE A N D i 1 1 1 Ø DO L 9O G Y .....................................................................9 4. A U D IT F[N DIN G S A N D R 'CO M M EN DA TION S.....................................................9 4.1 i an al Ma...................................................................................... 9 4 .2 Susta.................................................................................................... 1 0 4.3 O verall A ssessm e t .............................................................................................. 10 5. CO N CLUSIO N ......................................................................................................... 10 A CKN OWLFD ELM EN T ....................................................................................................... i LIST OF ABBREVIATIONS AGP Auditor (eneral of Pakistan ECNECl Executive Committee of the National Economie Council IEP>1 E ixpandled Program en o iunizalion FY Financial Year FSs Financial Statemcnts [DA Internatil De velopment A gency [P'SAS International Public Setoir Accounting Standards ISSAls International Standards of Supreme Audit hastitutions MONI[SR&C Ministry of' National l lealtli Services. Regulations and Coordination NISP National limmunization Support Projlect NBP National Bank of Pak istan SSC Federal Steering Conimittec 51> State Bank of Pakistan VPD1) Vaccine Preventable deceases iI Pg I I PREFACE Auditor General of Pakistan conducts audits subject to the Articles 169 and 170 (2) 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 the "National Immunization Support Project (NISP)" under Ministry of National Health Services, Regulations and Coordination (MONHSR&C), Islamabad was carried out accordingly. Directorate General Audit (Federal Government) conducted audit of the project during October, 2018 for the period 2017-18 with a view to report significant findings to stakeholders. Audit examined the economy, efficiency, and effectiveness aspects of the project. In addition, Audit also assessed, on test check basis, whether the management complied with applicable laws, rules and regulations in managing the project. The Audit Report indicates specific actions that, if taken, will help the management to realize the objectives of the project, The report consists of two parts. Part-I contains Auditors Report (Audit Opinion) and Financial Statements, while Part-II contains Executive Summary, Management Letter and Audit Findings. The report has been prepared for submission to the World Bank in terms of IBRD Grant No.TF A2189 - PAK with the Government of the Islamic Republic of Pakistan. I Dated: 10.12.2018 (MAQBOOL AH D GONDAL) Place: Islamabad DIRETO GENERAL ii| Page rU 1. IR(>JEOI OVER V1EW 1 ~ 2. ALJIIT)R'S REI>OiRT'TO THE NIANA(EI.M ENT 1 3. FINANCIAL STATEMENT'S 1 PROJECT OVERVI EW Name: National Iimiunization Support Project (N[SP) Sponsoring Agency: World Bank Executing Agency: Federal 1E 11 Cell, the Departments of 1 lealth of the ProvilnCes 113RD Grant No: TF-A2 189 - PAK PC-I cost: Federal I Share- Rs. 3,746.981 million Provincial Share- Rs.25,568.985 million FFEC Share - Rs. 8,328.706 million Total Rs.37,644.682 million 1Date of Commencement: 01.07.20 15 Auctal Date of Commencement: 01.09.2016 Date of Completion (as per PC-l): 30.06.2020 Dale of approval by ICNC: 08.03.2016 ttilization Status in FY 2017-18: Rs.653.071 million Progressive ExpCnditurC uplo last Nil i FY: 21Page 1 L AUDITOR'S REPORT TO THE MANAGEMENT (Audit Opinion) Mr. Zahid Saeed Secretary Ministry of National Health Services, Regulations and Coordination Islamabad rp Auditor's Report on the National Immunization Support Project (NISP) Financial I Statements We have audited the accompanying Financial Statements of National Immunization Support 3 Project (NISP), IBRD Grant No.TF A2189- PAK, Ministry of National Health Services, Regulations and Coordination, Islamabad that comprises Statements of Receipts and Payments for the year ended June 30, 2018. 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 (CBAS). I Auditor's Responsibility The responsibility of the Auditor is to express an opinion on the financial statements based on 3 the audit conducted. We conducted audit in accordance with the International Standards of Supreme Audit Institutions (ISSAls). These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material 3 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 management, as well as evaluating the overall statement presentation. We believe that our audit provide a reasonable basis for our audit opinion. I Opinion In our opinion: a) The financial statements present fairly, in all material respects, the cash receipts and payments made by the project for the year ended June 30, 2018 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 agreements. (Maqbool Ahmad endal) ?Director General Directorate General Audit (Federal Government) Benevolent Fund Building, Zero Point, Islamabad Dated: 10.12.2018 31 Page � � � � � � Г1�м''f1NCI:"�L, �'l'А'!`1':�-1l+,I�г'С'4 � � � � �` � � �` � Iг � � � � �Ч j:: � г1 � n а�; г Aff, National Immunization Support Project (NISP) Statement of Cash Receipts and Payments under IBRD Grant No. TF A2189-Pak (Assignment Account No.4139059906) For the Periodfrom July 1, 2017 to June 30,2018 (PKR "in Million") 2018 2017 Receipts Payments by Receipts Payments by Payments Third Parties Pavmcnts Third Parties controlled by controlled by the PLjcct - -the Project Nate RECEIPTS Funds recelved pal d d I rectly by th e Worl 6 Bank 648.711 - Advance- received by Ptoject 8 - 523,800 Reimbursement - received by provinces 9 - - TOTAL RECEIPTS 648.711 523.800 PAYMENTS Program Related Payments: 10 - 648.711 - Incremental Opemlin, Cost if 1 637 - Consultants Services 12 2.723 Other Eligible Payment 13 - 4.360 648.711 Operation Related Payments: Advertisement and Publicity - TOTAL PAYMENTS 4.360 648.711 NET RECEIPT/ (PAYMENT) OF PROJECT FUND (4,360) 523,800 INCREASE/ (DECREASE) IN CASH (4,360) - 523,800 CASH AT BEGINNING OF THE YEAR 523.800 - CASH AT END OF THE YEAR 14 519.440 523,800 The annexednares I to 20form an integralpartofthesefinancials$alements. Financial nagement Specialist Nation rogramme Manager (Federal)- NI: I /,VP11'0N1 (EPI/ NISP) ZULFIQAR ALI FINANCIAL MANAGENIENT SPECIALIST DR.SYEDSAQLAINAHMADGILANINI -,,,- E xp.3nded Prog ra mme on Immunizatfon h1h) of Pakistan, National Programe Manager Audit Olficf-f WaFlabad Federal Expanded Prograrn on D.G_ Aud,l (F. Govo ImmunizaWn ft NHSR&C, Isiamabad Islamabad National Immunization Support Project (NISP) Statement of Expenditure For the Period from July 1, 2017 to June 30, 2018 2018 2017 Note PKR "in Million" PKR "in Million" EXPENDITURE Incremental Operating Cost 11 1.637 Consulting Services 12 2.723 - 4.360 - The annexed notes 1 to 20 form an integral part ofthesefinancial statements. Financial nagement Specialist Nation Programme Manager (Federal - N P (EPII NISP) ZULFIAR A FINANCIAL r1ANAEMENT SPECIALIST E r`- P, id 1r,qi n,i, an DR. SYED SAQLAIN AHMAD GILANI uN.5& t ~National Programe Manager Federal Expanded Program on Immunization Mlo NHSR&C, Isamabad National Immunization Support Project (NISP) Statement of Withdrawal For the Period from July 1, 2017 to June 30, 2018 S. Date of Application Type of Amount "in Million., NDoGat oAccount Credited Tp f _____ _____ No. WA No Disbursement US Dollar PKR NBP- A/c Advance to 1 17th Aug. 2018 TF A2189-Pak FG007 No.4139059906 Designated a/c 4.360 0.042 Total 4.360 0.042 The annexed notes I to 20 form an integral part of these financial statements. Financial Ma age ent Specialist Nation I Programme Manager (Federa (EPI/ NISP) FINANCtALMA ExpandedL Pa rS. SYED SAQLAIN AHMAD GILANI National Programe Manager Feder? Eqanided Program on immunizU1o1 M1o N HSR&C, Islamabad M - -7 m - m " m - " m - m - m m - m m :ional Immunization Support Project (NISP) ak Reconciliation Statement under IBRD Grant No. TF A2189-Pak (Assignment Account No.4139059906) the Period from July 1, 2017 to June 30, 2018 PKR "in Million" 2017 2018 Note JlY Auut Senteiber 9gi1LI Novembn r December _anga Febuara March A2D! mov June !ie as per Bank Statement (as on month end) - - - - 523.252 523.191 523.089 523089 522,121 521.660 519.672 519.440 Payments directly made by bank; not recorded in cash book - - - - - - - - - Receipts recorded in cash book; but not recorded by bank - - - - - - - - - - Unpresented cheques - - - - (0.061) (0.102) - - (0A84) (0,105) (0.232) - Receipts credited in bank; but not recorded in cash book - nee as per Cash Book (as on month end) 10 - - * . 523191 523.089 523.089 523.089 521.637 521555 519.440 519440 H MOVEMENT ling Balance - - - - 523.800 523191 523.089 523.089 523089 521.637 521.555 519.440 1 Monthly Receipts - - - - - I Monthly Payments - - - (0.609) (0-102) - - (1.452) (0,082) (2.115) - ng Balance (Balance as per Cash Book) 7 23.191 523.089 523.089 23.089 521.637 521.555 519.440 519.440 innexed notes I to 20 form an integral part of these financial statements. ancial Mana eme pecialist N ional Programme Manager deral) NISP (EPII NISP) 7' "F"2ARALI t 7 1- 7 :s7cLu 1R. SYED SAQLAIN AHMAD GILANI Ep, &. . o, on -nmunation National Programe Manager MIlo NH5R&CrGovernment of Pakistan, Ilamabad Federal Expanded Program on Immunization Mlo NHSR&C, Islamabad I National Immunization Support Project (NISP) I Notes to the Financial Statements For the Period from July 1, 2017 to June 30, 2018 I REPORTING ENTITY The financial statements are for 'National Immunization Support Project'. These financial statements encompass the reporting entity as defined in the Trust Fund Agreement between the Islamic republic of Pakistan (" Borrower") and International Development Association ("IDA"). This Grant Agreement was signed on 31-08-2016 for an amount of US $ 39,680,000. The project closing date is 31-12-2021. The Executing Agency (BA) of the aforesaid project is 'Federal EPI Cell, MONHSRC'. The objective of'National Immunization Support Project (NISP)' is to help the Government of Pakistan (GoP) by increasing the I equitable coverage of services for immunization against VPD, including poliomyelitis, for children between 0 and 23 months in Pakistan. The project shall comprise: 1 1- Strengthening Management, Governance and Stewardship functions ("Component 1"); 2- Improving Service Delivery Performance ("Component 2"); 3- Demand Generation ("Component 3"); 4- Vaccine Supply Chain ("Component 4"); 5- Improving Capacity for increased immunization coverage ("Component 5"); L Financing The financing is made from the Multi donors Trust Funds under International Bank for Reconstruction and Development. Responsible Agency A primary responsibility for overall progress and management of the Multi Donors Trust Funds has been assigned to 'Federal EPI Cell, MONHSRC'. 2 CERTIFICATION BY PROJECT MANAGEMENT ON APPLICATION OF FUNDS Federal EPI Cell, MONHS RC certifies that funds have not been applied/ expenditure have not been incurred for the purposes intended in the loan agreement. 3 ACCOUNTING CONVENTION AND STATEMENT OF COMPLIANCE These financial statements have been prepared in accordance with Cash Basis IPSAS Financial Reporting under the Cash Basis of Accounting. These cash basis accounting recognizes transactions and events only, when cash is received or paid by the entity. 4 REPORTING PERIOD The reporting period of these financial statements is the financial period commencing from July 1 2017 to June 30, 2018. 5 REPORTING CURRENCY The reporting currency of these financial statements is PKR which is Executing Agency's (Federal EPI Cell, MONHSRC) functional and presentational currency. 6 SIGNIFICANT ACCOUNTING POLICIES 6.1 Revenue recognition Revenue is recognized on the date of receipt of money by bank or clearance of cheque, Revenue is recognized on gross basis and any related costs are recorded separately. 6.2 Foreign Currency Transaction Cash receipts and payments arising from transactions in foreign currencies are recognized in PKR by applying to the foreign currency amount, the weighted average exchange rate between the PKR and the US Dollar. For disbursements (payments), the rate of the first tranche would be utilized and likewise, 'First In First Out' would be the basis for convertion in subsequent payment transactions. However, cash balances held in foreign currency is reported using the closing rate. 6.3 Recognition of Expenditure Expenditure is recognized on the date when payment is made or cheque is issued. Financial year to which the payments pertain is determined by the date on which a cheque or payment advice is issued. 6.4 Employee Terminal Benefits Service benefits of deputation employees are accounted for in their respective departments while no service terminal benefits are paid to the contractual employees. National Immunization Support Project (NISP) Notes to the Financial Statements For the Period from July 1, 2017 to June 30, 2018 6.5 Payments by Third Parties 6.5.1 The payments made by third parties do not constitute cash receipts or payments controlled by the project but do benefit the Project as the Project does not receive cash (including cash equivalents) directly from, or gain control of the bank accounts or similar facility established for its benefit by, the third parties. Payments by third parties, if any, are disclosed in the Payments by Third Parties column on the face of Statement of Cash Receipts and Payments and Notes to the Financial Statements. 6.5.2 In pursuance of the Agreement, Payment of US$ 5.861 M equivalent to PKR 653 070 M was made to UNICEF Irecly, by the World Bank for procurement of Cold Chains, 6. External Assistance External assistance was received in the form of Loan and Grant bearing reference IDA Loan No. "5786-PK" and IBRD Grant No.TF A2189 Pak from the world bank under financing Agreements dated 31st August, 2016 for the purpose of "National Immunization Support Project". The following amounts were received by the project during the period. 2017 PKR Note in Million Reimbursement 6.6.1 Advance for Imprest Fund 662 523.800 523.800 6.6.1 This represents funds transferred to the Projects designated Bank Account by the world bank on the basis of Withdrawal Applications submitted by the Project Management. Presently, the reimbursement is zero. 6.6.2 This represents the world Bank's advance disbursement from the Grant amount for deposit to an Imprest Account to be used exclusively for the Multi Donors Trust Funds for eligible expenditures. 6.6.3 Disbursement Procedures such as 'Direct Payment' and 'Commitment' are not used for funds transferred to the project. 6.6.4 There has been no instance of non-compliance with the terms and conditions of the loan and project agreements between the world bank and GoP, which have resulted in cancellation of loan. 6.7 Undrawn External Assistance Undrawn balance of Grant at reporting date represents amount specified in the Grant agreement between the International bank for Reconstruction and Development (IBRD) and GoP that the the world bank will disburse for Project purposes, 2018 USD PKR Note in Million in Million V-U Closing balance 6.8 29.680 3,116.400 PKR.105.0 219.680 3.116.400 6.8 Closing Balance of Grant US $ 34.680 Million (against total committed US$39,680,000) Is converted @PKR 105 per US S for reporting purpose. 7 COUNTERPART FUNDS Govemment of Pakistan (GoP) 7.1 1581.200 29,315.976 as provided in PC-I fiDmg 15089.525 7.1 GOP funding to the Project is US $ 1581.200 million as per Project Appraisal Document (PAD) equivalent to PKR 29,315,976 million as per approved PC-1. 8 Advance of US$ 5.00 M equivalent to Rs.523.800M was received on I0th May 2017 through Withdrawal Application to operate US Dollar Revolving Fund I Assignment Account under Grant No.TF A 2189-Pak during FY 2016-17. The same is credited in the Projects designated account. 9 This receipt is to be received by provinces under Eligible Expenditure. Presently there is zero reimbursement. 10 This reflects program related eligible expenditure. Presently, it is zero expense. E National Immunization Support Project (NISP) Notes to the Financial Statements For the Period from July 1, 2017to June 30, 2018 2018 2017 PKR PKR Note in Million In Million 11 Incremental Operating Cost Expenditure related to support capacity building activities in areas of financial management, procurement, environment and social etc. 1,637 0 0 N 12 Consultants Services 2.723 13 Other Eligible Payment 4.360 - 2018 2017 14 CASH AND BANK / CASH AT THE END OF THE YEAR in Million In Million Cash at Bank 519.440 523.800 3 519.440 523.800 14.1 This Assignment Account No.4139059906 is being maintained in National Bank of Pakistan and designated for the world bank funded project "National Immunization Support Project (NISP)". N 15 EXCHANGE GAIN/ LOSS The rate of exchange applied by the State Bank of Pakistan (SBP) for converting foreign currency into PKR for that tranche at the time of receipt of funds in the SBP from the donor. In case of more than one tranches, the rate applied for each tranche will be used for project reporting purposes and funds received in the first tranche will be utilized first and the utilized balance shall be attributed to the last tranche. Therefore by adopting the aforesaid policy; being issued by the Finance Division, GoP; it does not result any exchange gain/ loss. I I I National Immunization Support Project (NISP) Notes to the Financial Statements For the Period from July 1, 2017 to June 30, 2018 _ 2018 USD 1 PKR 16 PROJECT COST- MOVEMENT Note in Million linAMIlion Total Committed Loan by the world bank's share in total Project 16.1 50,000 5,250.000 Total IDA Trust Funds 16.2 79.600 8,358.000 GoP share in total Project Cost- PKR as reflected in approved cost of PC-I 16.3 1,581.200 29,315.976 Total Project Cost- 'C=(A+B)' 1,710.800 42,923.976 Loan instalment received directly by Provinces- 'D' 5.000 523.800 Total payments by Project- 'E' 5.861 653.070 Cash at bank-'F' 17 5.000 523.800 Loan instalments received by the Project- 'G=(E+F)' 10.861 1,176.870 3 Total withdrawals (loan instalments received)- 'H=(D+G)' 8 15.861 1,700.670 Undrawn total Project proceeds- 'I=C-H' 1,694.939 41,223.306 3 Undrawn foreign loan proceeds-'J=A-H' 6.7 34.139 3,549.330 16.1 Total Committed Loan by the world bank under Loan No.5786 Pak is converted into PKR 105 per US S Iw 16.2 Total IDA Trust Funds under Grant of TF A 2189 Pak is converted into PKR 105 per US $ 16.3 GOP funding to the Project is US $ 1581.200 million as per Project Appraisal Document (PAD) equivalent to PKR 29,315.976 million as per approved PC-I. N 17 CASH AND BANK / CASH AT THE END OF THE YEAR in Million Cash at Bank on 30th June 2018 519.440 519.440 18 CORRESPONDING FIGURES- COMPARATIVE FINANCIAL INFORMATION Comparative financial information are not stated in these financial statements, as the receipts / payments took place in the current financial period. However, the Loan and Project Appraisal Agreements were signed on 31st August 2016 and 17th March 2016 respectively. 19 AUTHORIZATION FOR ISSUE These Financial Statements have been authorized for issue by National Programme Manager EPI/ NISP on 14-09-2018. 20 GENERAL 20.1 Level of Precision Figures in these Financial Statements have been rounded off to the nearest million of PKR, unless otherwise stated. Financial anagement Specialist Nati al Programme Manager (Federal) - NISP (EPI / NISP) ZULFIQAR ALl F1NANCIAL IANAGEMENT SPECIALIST DR. SYED SAQLAIN AHMAD GILANi Expanded Programme on ImmLnizatoun r NHSR&c,Gcovcrnent of p,nan. National Programe Manager IIr ' Federal Expanded Program on Immunization Mlo NHSR&C, Islamabad