Prostor LIC
Audit & Consulting Co.
INDEPENDENT AUDITOR'S REPORT
To the National Civil Service Agency of Ukraine
To the International Bank for Reconstruction and Development
Opinion
Under the Contract # 9 K dated 03.06.2019 we, the independent audit firm LLC "Audit
company "UHY PROSTIR LTD", have audited the financial statements of the National
Civil Service Agency of Ukraine (NCSA) on Part A "Strengthening Human Resource
Management in Public Administration Institutions" of Strengthening Public Resource
Management Project (the Project) for the period from August 28, 2017 till December
31, 2018 (the financial statements), prepared in accordance with Letter Agreement #
TF0A5324 between the International Bank for Reconstruction and Development
(IBRD), acting as administrator of the grant funds provided by the European
Commission on behalf of the European Union under the EC - World Bank Partnership
Program for Europe and Central Asia Programmatic Single-Donor Trust Fund (EU
Programme for the Reform of Public Administration and Finances (EURoPAF), and the
Ministry of Economic Development and Trade of Ukraine (MEDT), signed by IBRD on
June 26, 2017 and countersigned by MEDT on June 30, 2017 (the Agreement).
In our opinion, the attached financial statements for the period from August 28, 2017
till December 31, 2018 are prepared, in all material respects, in accordance with the
requirements of the Agreement and IBRD.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs).
Our responsibilities under those standards are further described in the Auditor's
Responsibilities for the Audit of the Financial Statements section of our report. We are
independent of NCSA in accordance with the ethical requirements that are relevant to
our audit of the financial statements in Ukraine, and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our
qualified opinion.
Emphasis of Matter - Basis of Accounting and Restriction on Distribution and Use
We draw attention to the note # 2 <<Basis for preparation and submission)) to the
financial statements which states that the attached financial statements have been
prepared on a <cash basis)) - receipts were registered as they are made on bank
accounts: expenses are registered at the date of drawing from accounts.
A t n 4m0,,  H  I nr,na:ina I  -%,-:rk / %1Y ±lct  ducountro ano uIti     r w~u'rg'as
he JHY nctwi,k is a  oirena' at   a nt r at"ntts


Prostor LLC
T-;e=se f-arz  s:aem-ents were prepared in order to meet NCSA' obligations under
tne Acreement As a result, the financial statements may not be suitable for another
purpose Our report is intended solely for NCSA and IBRD and should not be
distributed to parties other than NCSA or IBRD.
Our opinion is not modified in respect of these matters,
Responsibilities of Management and Those Charged with Governance for the
Financial Statements
Management is responsible for the preparation of the financial statements in
accordance with requirements of the Agreement and for such internal control as
management determines is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error,
In preparing the financial statements, management is responsible for assessing NCSA'
ability to continue as a going concern, disclosing, as applicable. matters relating to
going concern and using the going concern basis of accounting unless management
either intends to liquidate the NCSA or to cease operations, or has no realistic
alternative but to do so.
Those charged with governance are responsible for overseeing NCSA' financial
reporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to fraud or
error, and to issue an auditor's report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with ISAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually
or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with ISAs. we exercise professional judgment and
maintain professional skepticism throughout the audit. We also:
*  Identify  and  assess  the  risks  of  material misstatement of the  financial
statements, whether due to fraud or error, design and perform audit procedures
responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a
material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
*  Obtain an  understanding of internal control relevant to  the  audit in order to
design audit procedures that are appropriate in the circumstances, but not for
the purpose of expressing an opinion on the effectiveness of NCSA' internal
control.


* Evaluate the appropriateness of accounting policies used and the
reasonableness of accounting estimates and related disclosures made by
management.
* Conclude on the appropriateness of management's use of the going concern
basis of accounting and, based on the audit evidence obtained, whether a
material uncertainty exists related to events or conditions that may cast
significant doubt on NCSA ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in
our auditor's report to the related disclosures in the financial statements or, if
such disclosures are inadequate, to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date of our auditor's report.
However, future events or conditions may cause NCSA to cease to continue as
a going concern.
We communicate with those charged with governance regarding, among other
matters, the planned scope and timing of the audit and significant audit findings,
including any significant deficiencies in internal control that we identify during our
audit.
Director of
LLC "Audit company "UHY Prostir Ltd"                   Safinskiy V.L
Office # 315, 14 Vasylkivska Str.
Kyiv, Ukraine, 03040
25.06.2019
Register number
I~~ 5-tiF5.        f"TI.


b Part A "Strengthening Human Resource Management in Public
Administration Institutions" of Strengthening Public Resource
Management Project
Summary of Funds Received
TF0AS324
for the Period from 28.08.2017 to 31.12.2018
in EUR
Period
Opening cash balance                                               0,00
DA(EUR)
TA (UAH)
Total opening cash balance                                         000
Sources of funds
International Bank for Reconstruction and
Development                                     150 000,00  _
Total sources of funds                                        150 000,00
Less: Uses of funds by
Category: Goods, Works, consulting services,
Training, and Operating Cost under Part A of the
Project                                          89 480,29
Total funds used                                               89480,29
Closing cash balance
DA(EUR)                                          4600O
TA(UAH)                                          13 61971
Total closing cash balance                                     60_519,71
Director of Finance and Accounting Departement
Tokarchuk T.


Part A "Strengthening Human Resource Management in Public Administration
Institutions" of Strengthening Public Resource Management Project
Summary of Expenditures
TF0A5324
for the Period from 28.08.2017 to 31.12.2018
in EUR
Project Component/Sub-borrower         Status        Period
Category: Goods, works, consulting services, Training, and Operating Cost
under Part A of the Project
Project Manager                               Active       32 563.81
Consultant on bidding documents preparation
Active       13 856,06
HR Consultant on bidding documents preparation
Closed        10496.48
Payroll Consultant on bidding documents
prearaionClosed                                 10 853,09
preparation
Procurement Specialist                        Active
1__  17 691 50
Operating Costs (including bank charges)      Active        4019.35
Total Category                                         1   89480.29
Including payments from DA                                    309,30
Incuding payments from TA                                  89 170,99
Including Direct Payments&LC                                    0,00
Total Project Expenditures                               89 480,29
Direptor of Finance and Accounting Departernent
Tokarchuk T.


Part A "Strengthening Human Resource Management in Public Administration
Institutions" of Strengthening Public Resource Management Project
Summary of Statements of Expenditures
TF0A5324
for the Period from 28.08.2017 to 31.12.2018
in EUR
No.     Ref. number       Date        Amount,            Amount, EUR
UAH
1        3-NCSA       24.04.2018    671 908,03            19 426,92
2        4-NCSA       31.05.2018    1043847,93            31 205,98
3        5-NCSA       10.07.2018     164 847,57           5 087,89
4        6-NCSA       11.09.2018     706 956,19           21 819,63
5        7-NCSA       31,10.2018     110 184,78           3400,77
6        8-NCSA       31.12.2018    276 666,76            8 539,10
TOTAL                  2 974 411,26          89 480,29
Director of Finance and Accounting Departement
/ Tokarchuk T.
ale
a
me
mo
14
h(


Part A "Strengthening Human Resource Management in Public Administration Institutions" of
Strengthening Public Resource Management Project
Statement for Designated Accounts
TF0A5324
for the Period from 28.08.2017 to 31.12.2018
in EUR
Period
1 Opening designated accounts balance at 28.08.2017                          0,00
DA (EUR)                                                   0,00
TA (UAH)                                                   0,00
2 Add cumulative unexplained difference                      0 00
3 IBRD advance payment during the period                                 150 000,00
DA (EUR)                                              150 000,00
TA (UAH)                                                   0,00
4 Deduct Refund to IBRD from DAs during the period           0.00
Amount of eligible expenditures during the reporting
5 period                                                                 89 480,29
DA (EUR)                                                 309,30
TA (UAH)                                               89 170,99
6 Closing designated accounts cash balance                               60 519,71
DA (EUR)                                               46900.00
TA (UAH)                                               13 619,71
7 Difference (1+3-4-5-6) to be explained                                     0,00
Explanation of difference:
Director of Finance and Accounting Departement
/A'  .  Tokarchuk T.
wa


Notes regarding Financial Statements
of the National Civil Service Agency of Ukraine
prepared within the Framework of Part A "Strengthening Human Resource Management in Public
Administration Institutions" of Strengthening Public Resource Management Project (Letter Agreement #
TF0A5324)
for the Period from 28.08.2017 to 31.12.2018
1. Background
The National Civil Service Agency of Ukraine (NCSA) is a central executive body ensuring forming and
implementing state policy in the field of civil service, ensures functioning management over civil service in state
authorities.
Ukraine has received financial assistance from the International Bank for Reconstruction and
Development. acting as administrator of the grant funds provided by the European Commission on behalf of the
European Union under the EC - World Bank Partnership Program for Europe and Central Asia Programmatic
Single-Donor Trust Fund (EU Programme for the Reform of Public Administration and Finances (EURoPAF), in
an amount of EUR 3.030,661 ("Grant") toward the cost of Strengthening Public Resource Management Project,
The Project consists of two parts: Part A "Strengthening Human Resource Management in Public Administration
Institutions" and Part B "Support to PFM Strategy Implementation".
Part A "Strengthening Human Resource Management in Public Administration Institutions" (the Project)
implemented by NCSA and having budget of 1 920 043 EUR is aimed at NCSA's support in the process of
implementing Human Resources Management Information system with the salary calculation module (HRMIS)
in state governing institutions.
The Project will: (i) support the preparation of a software application concept design to specify functional
requirements f the system, its architecture, expected system output, interface between Human Resources
Management Information System (HRMIS)/Payroll system with information systems in the Ministry of Finance of
Ukraine and other national registers: (ii) carrying out analysis to select and implement cost-effective solutions for
hosting, operating and maintaining the HRMIS/Payroll system. as part of system design and preparation of
procurement documents; (iii) support the development of procurement documents for HRMIS/Payroll system: iv)
development (or adaptation, involving customization and parametrization), testing and implementation of
HRMIS/Payroll software application across the targeted users. carrying out training of would-be users and data
migration of basic personnel records, final testing, approval and acceptance of the system; v) support NCSA to
roll out HRMIS!Payroll system to selected civil service entities (according to an agreed plan), through. (a)
undertaking stakeholder analysis to identify change management interventions; (b) developing normative act(s)
regulating the use of the HRMIS/Payroll system. including the alignment with personal data protection clauses in
the current legislation; (c) developing relevant manuals/instructions (d) raising awareness of reforms through
online platforms and other communication activities; (e) establishing arrangements for monitoring and reporting
on implementation of reforms; and (t) establishing a support group and help desk to respond to user enquiries
vi) support Training of trainers and delivery of pilot training of HRMIS/Payroll system users, as part of system
development process.
The Project is a Recipient-executed World Bank-Swedish International Development Cooperation Agency
(SIDA) trust fund and shall be implemented under overall responsibility of the Regulator in close cooperation
with the Ministry of Economic Development and Trade of Ukraine. The Utilities Regulator created a Project
Implementation Unit for day-to-day management and coordination of the procurement, disbursement, financial
management, reporting and other activities related to the Project.
Total Project Budget in 2017-2018 is EUR 150 000,00.
The financial statements under Letter Agreement No. TF0A5324 cover the period from 28.08.2017 to
31,12.2018.
2. Basis for preparation and submission
The financial statements have been prepared by NCSA in order to meet requirements of Letter
Agreement No. TF0A5324.


The financial statements have been made out based on a cash method. which does not guarantee the
::-w-ance with the International Financial Reporting Standards and National Accounting Standards. In
a::dance with this method incoming receivables are shown at the date they are credited to bank accounts
e expenditures are registered at the date they are debited from accounts.
The currency used by NCSA is UAH.
The financial statements of the Project are presented in EUR.
The funds that were actually paid in UAH and the cash balance at the UAH account have been converted
into EUR in financial statements using a commercial rate for selling currency and a FIFO method, except for
currency exchange bank charges, which were converted using a commercial rate of the relevant batch of the
currency sold.
The currency exchange rates are provided below:
Amount in
UAH received
M                    ~     ~~~Amount      Rate of   UHrcie
Date of Currency Sale                           as a result of
sold in EUR  exchange
selling the
currency
01 02.2018                      25 000,00      34,61   865 250,00
2102.2018                      25 000,00       33,2   830 000,00
20.03.2018                      53 100,00       32,4  1 720 440,00
Total:                     --t-103 100,00             3415 690,00
3. Disclosing some details of financial statements
The cost of individual consultants' services in the Contracts and Handover Acts is stated in USA. These
services have been paid in UAH using an official rate of NBU at the date of signing Handover Acts. In the
financial statements the amount, which was actually paid in UAH. has been converted in EUR using a currency
a       selling rate (please see note 2).
The row 'Operating Costs (including bank charges)' includes the value of services of individual consultant
(3 710,05 EUR) on written translation of documents connected with the conduction of assessment of
competitive proposals when selecting the supplier of Human Resources Management Information system in
state authorities (HRMIS). When selecting the supplier of such services no tender selective procedures were
applied - the selection was carried out on the basis of the consultant's qualification.
In addition, bank fee under currency sale transactions in the amount 309,30 EUR was also included in
this line.
Director of Finance and Accounting Departement
2'       -   Tokarchuk T
m
hom


�
�
�
�
�
�
�-..
�
�
�
,-
�
{                         ,�-
� -   -                 �
л У                     �
-  _                    �,,.
-�    =                  -
�                 iF,-
�
г                 �
r
W                 �
�
`
i                              �
�__     i                             �
t                        1�
�Е
ч            `
�     ..   .  ..   ..  ®  . ......и    �   �•J
�                                    �
ri
Ф
-g
�                                    �
и,
у                                    _
�                '                   �
i     �
�
�                                    �
�
r�.
�
r�.
�
�
�
�
�
м+ь
�
�
�
�
�
�
�
�
�
�