< Grant SPF Number TF0A3307 Special Financial Statements For the period from January 01, 2018 to December 31, 2018 Together with the auditor's report = SPF GRANT Nb TFOA33O7 = 4 SPECIAL FINANCIAL STATEMENTS -a For the period from January 01, 2018 to December 31,2018 -, -a Contents: I - Independent auditor's report 3 -1 Summary of sources and usage of funds 5 -1 - Special Account Statement 6 I Notes to the Special Financial statements 7 I 1 -1 -1 1 -1 1 -5 4 -4 -1 -a -a -, -a -t -a t, -t , ., -a -a -ll. = = 5 = wwwbdo.ua BDO LLC I. Tet.: Fax: +38 044 393 26 87 +380441932691 201-203, Kharkivske Road, 1Oth floor Kyiv I. e-mail: bdo@bdo.kiev.ua Ukraine,02121 Tet.: +38 056 370 30 43 4, Andriya Fabra Str. Fax: 5 +38 056 370 30 45 Dnipro e-mail: dnipro@bdo,com.ua Ukraine, 49000 5 5 t tr INDEPENDENT AUDITOR'S REPORT To the Management of the Ministry for Temporarity Occupied Territories and Persons (..MOT. L t tr We have audited the financial statements of the *Cbnftict Response and Recovery Pitot Capacity Buitding Project" ("Project"), financed and In our opinion, the special financial statements give a true and fair view of sources and usage of funds of the Grant SPF Ns TF 043307 for the period E under the State and Peace Buitding Fund ("$pf"; from 01 January 2018 to 31 December 2018 in accordance with regutations of the lnternational 5 Ns TF 0A3307 for the period from 01 January 2018 to 31 December 2018, which comprise: Bank for Reconstruction and Development I The summary of sources and usage of funds ("lBRD'). E for the period from 01 January 2018 to 31 ln our opinion, the financial statements on Special tr r December 2018; The statement of special account for the account give a true and fair view of the financial position of the Special Account of the Grant SPF tr period from 01 January 2018 to 31 December 2018. Ns TF 0A3307 for the period from 01 January 2018 to 31 December 2018 in accordance with tr regulations of the IBRD. 5 b We conducted our nce with lnternationaI Standards 5 on (lSAs). responsibitities under those standards are further described in the Auditor's Responsibitities for the Audit of the Financial Statements section of our report. We are independent of the MOT in accordance 5 with the lnternationat Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants (IESBA Code) together with the ethical requirements that are retevant to our audit of E financial statements in Ukraine, and we have fulfilted our other ethicat responsibitities in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have obtained is b sufficient and appropriate to provide a basis for our opinion. 5 Responsibitities of Management and Those Charged with Governance for the Speciat 5 financiaI Statements Management is responsible for the preparation and fair presentation of the speciat purpose financial E statements based on regutations of the IBRD, and for such interna[ contro[ as management determines is necessary to enabte the preparation of the special financiat statements that are free from material 5 misstatement, whether due to fraud or error. 5 ln preparing the special financial statements, management is responsibte for assessing the Project's abitity to continue as a going concern, disclosing, as appticabte, matters related to going concern and b using the going concern basis of accounting untess management either intends to tiquidate the Project or to cease operations, or has no reatistic atternative but to do so. 5 Those charged with governance are responsibte for overseeing the Project's financiat reporting process. 5 5 BDO LLC, a Ukrainian LLC, is a member of BDO lnternational Limited, a UK company limited by guarantee) and forms part of the internationat BDO network of independent member fims. 5 BDO is the brand name for the BDO network and for each of the BDO Member Firms. -a !" 5 I" Auditor's Audit of the financial Statements 5 Our objectives are to obtain reasonabte assurance about whether the specia[ financia[ statements as a whote are free from material misstatement, whether due to fraud or error, and to issue an auditor's 5 report that inctudes our opinion. Reasonabte assurance is a high [eve[ of assurance, but is not a guarantee that an audit conducted in accordance with lSAs will always detect a material misstatement 5 when it exists. Misstatements can arise from fraud or error and are considered material if, individuatty or in the aggregate, they could reasonabty be expected to influence the economic decisions of users 5 taken on the basis of these special financial statements. 5 As part of an audit in accordance with lSAs, we exercise professionat judgment and maintain professional skepticism throughout the audit. We also: 5 I ldentify and assess the risks of material misstatement of the special financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain b audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not 5 detecting a material misstatement resutting from fraud is higher than for one resutting from error, as fraud may invotve col[usion, forgery, intentional omissions, misrepresentations, or the override 5 ! of internaI controt. Obtain an understanding of interna[ contro[ relevant to the audit in order to design audit b procedures that are appropriate in the circumstances, but not for the purpose of expressing an 5 opinion on the effectiveness of the Project's internal control. ! Evatuate the appropriateness of accounting poticies used and the reasonableness of accounting 5 r estimates and retated disctosures made by management. Conctude on the appropriateness of management's use of the going concern basis of accounting 5 and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Project's abitity to continue as a going 5 concern. lf we conctude that a material uncertainty exists, we are required to draw attention in 5 our auditor's report to the retated disctosures in the special financial statements or, if such disctosures are inadequate, to modify our opinion. Our conctusions are based on the audit evidence b obtained up to the date of our auditor's report. However, future events or conditions may cause the Project to cease to continue as a going concern. b ! Evatuate the overall presentation, structure and content of the special financiat statements, 5 inctuding the disclosures, and whether the special financiat statements represent the undertying transactions and events in a manner that achieves fair presentation. b We communicate with those charged with governance regarding, among other matters, the ptanned b scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. 5 For and on behalf of BDO Director S.O. Batchenko Kyiv, 25 Aprit 2019 4 SPF GRANT Ne TF 0A3307 SUMMARY OF SOURCES AND USAGB OF FI]NDS For the period from January 01, 201 8 to December 3 l, 201 8 (in USD) Factual from Cumulative 01.01.2018 to 31.12.2018 OPENING CASH BALANCE JSC (USD) 110,015 State Treasury (UAH) 1,267 TOTAL OPENING CASH 177,342 SOURCES OF FUNDS: Crant SPF 545,000 I ,038,519 Refund TOTAL SOURCES OF FUNDS 545,000 1,038,519 Less: USES OF FUNDS BY COMPONENTS Category (1) Goods, works, non- 261,410 583,588 consulting services, consultants' services, Training and Workshops and Operating Costs under Part 1 ofthe Project Category (2) Goods, works, non- 339,739 339,739 consulting services, consultants' services, Training and Workshops and Operating Costs under Part 2 ofthe Project (incl Lrding S ubprojects) TOTAL USES OF COMPONENTS 601,t49 923,327 Add: Exchange d ifference CLOSING CASH BALANCE JSC (USD) (UAII) State Treasury TOTAL CI,OSINC CASH BALANCE >-( ^o I e= I ^o 1-E | ^aD Notes on pages 7 to l0 are the integral parl of these q€-i t tDl '-E,/ SPF CRANT, SPECIAL FINANCIN L STATEMENTS FOR ]'HE PERIOD FROM .IANUARY OI, 20 I8 TO DECEMBER 3I, 2OI8  SPF GRANT Nb TF OA33O7 SPECIAL ACCOUNT STATEMENT For the period from January 01 ,2018 to December g 3I , 201 Accounts # 25204000000008 Bank JSC Address: Kyiv SPF Grant TF 043307 Currency USD Accounts # 35226342096457 35221325096457 Bank State Treasury Address: Kyiv SPF Grant TF 043307 Curreircy UAH (in USD) trom 20.09.2016 to 31.12.2018 L Antount advanced by World Bank 1,005,000 I Less total arnount recovered by World Bank (605,445) 3. EQUALS PRESENT OUTSTANDING AMOUNT 399,555 j. .{mount in Special Account in JSC at 3 1.12.201g 109,597 c', Plus anrount of eligible expenditures documented in application (No. 30-MTor) 82,129 - Plus alnounts claimed in previous applications not yet credited at date of Bank statement: 202,234 8. EQUALS TOTAL ADVANCE ACCOUNTED FOR 393,960 9 Explanation of any discrepancy between totals appearing on Lines 3 and 7 above (e.g. :rerns paid from accottnt but not yet clairned, earned interest.r.ait.d to the account, etc.): Discrepancy 5,595 LSD5'-595 paidlronraccotlrltbutnotyetclaimed(equalstothebalanceol'theuAl-l stateTreasufyaccount-uAHlig,900,66withexchangerate 1 USD:27.435 UAI I; UAH 34606,43 wirhcxchangeratc I USD =2j,435UAH) Notes on pages 7 to l0 are the integral parl of these financial sta SPF CRANT, SPECIAL FINANCIAL STATEMENTS FOR THE PERIOD FROM JANUARY OI, 20 I8 TO DECEMBER 3I, 20 I 8 a a a SPF GRANT J\} TF OA33O7 a NOTES TO THE SPECIAL FINANCIAL STATEMENTS a For the period frorn January 01, 201 8 to December 3 1, 201 8 z 1. Project description e The objective of the Project is to build the capacity of the Ministry for Temporarily Occupied Territories and I Internally Displaced Persons (MOT) to address the development impacts of the conflict. The Project consists of the following parts: Part 1: Capacity Building, Project Management, and Monitoring and Evaluation Strengthening the institutional capacity of MOT to plan, manage, coordinate, implement, and monitor peacebuild ing and recovery efforts. Part2: Piloting activities to respond to the development challenges of displacement and combatant return a) Carrying out of Subprojects to respond to the needs of selected Eligible Beneficiaries in Selected Areas aimed at, inter alia: (i) improving housing infrastructure conditions; (ii) increasing employment opportunities; (iii) enhancing municipal services including, health, social and psychosocial assistance services; and (iv) carrying out community revitalization activities. b) Financing of Operating Costs related to implementation of activities under this Part 2 of the Project. 2. Significant accounting policies Basisfor preparation Special financial statements have been prepared on the cash basis. The accounting policies have been applied consistently during the period of the Grant implementation. Reporting period The reporting period covers the period from January 01,2018 to December 31,2018. Reporling curuency The accompanying financial statements are presented in USD. All transactions are performed in national culrency (hryvnya) and translated into USD at the interbank rate of the sold currency. Special bank account To facilitate the activities performarrce the Recipient has opened and maintains Special account in USD with the JSC and State Treasury of Ukraine (in UAH) on conditions approved by World Bank. Financing of Project The estimated total cost ("Total Cost") of the pilot measure underlying the project appraisal is EUR 3.2 million. ReceiXtts and expendil ures recognition The Pnoject keeps its records and prepares its financial statements under the cash method. Inflows of funds of the World Bank are recorded on special bank accounts as target financing. Expenditure reported in the special financial statements is registered at the date of withdrawal of funds from accounts (payments of the current project the World Bank). =r SPF GRANT, SPECIAL FINANCIAL STATEMENTS FOR THE PERIOD FROM JANUARY OI, 2OI 8 TO DECEMBER 3 ] . 2OI 8 ;, I !r SPF GRANT Nb TF OA33O7 I NOTES TO TIIE SPECIAL FINANCIAL STATEMENTS I For tlre period from January Ol, 2018 to December 31, 20l g I Disbursement Methotls I The following Disbursement Methods may be r-rsed under the Grant: I c) Advance I d) Direct Payment I 3. ! Budget I The following below items can be financed under the Grant receipts, those needs to be used exclusively activities under the fixed categories: for I ln USD I Category Amount of the Grant Allocated Percentage ofExpenditures to be I (expressed in USD) Financed inclusive of Taxes I (l) Goods, works, non- consulting 900,000 t00% services, consultants' services, Training I and Workshops and Operating Costs under Part I of the Project I (2) Goods, works, non-consulting 2,300,000 100% ! services, consultants' services, Training and Workshops, and Operating Costs I under Part 2 ofthe Project (including Subprojects) I t 4. Cost analysis relative to the burlget I Below is presented the table with expenditLrres by categories paid by MOT during the reporting period: I (in USD) I Category Factual Va ria nces from Cumulative from Cu m u lative Cum lative from u I 01.01.2018 to 01.01.2018 to 01.01.2018 to 31.r2.20t8 31.12.2018 31.12.2018 I Category (1) 261,410 583,599 900,000 x (316,412) I Category (2) 339,739 339,739 2,300,000 x (1,960,261) I Total: 601,149 923,327 3,200,000 (2,276,673) I I I SPF GRANT, SPECIAL F]NANCIAL STATEMENTS FOR TIIE PERIOD FROM.IANUARY 01, 20I8 TO DECEMBER I 31,2018 I a e SPF GRANT Nb TF OA33O7 e NOTES TO THE SPECIAL FINANCIAL STATEMENTS a For the period from January 01, 2018 to December 31,2018 a 5. Cost analysis relative to the contracts a Below is presented the table of costs in the context of contracts for the reporting period: a (in USD) e Project component/Su b-borrower Status Actual Category 1 =l Procurement of a vehicle for MOT, Contract # G-l-003-SH dd28.12 Sub-projects Coordinator, Contract # CS-l -001 -lC dd 06 03 16 Closed 33.5 19 I7 Active 4t,456 =r F-irranciaf Managenrent Specialist, Contract # CS-l-002-lC dd 06.02 17 Active 32.794 Procurement Specialist, Contraot # CS-l-003-lC dd 01.02.1 =r 7 Closed , Translator, Contract # CS-l -004-lC dd 06 02 l7 Closed 17,390 Monitoring and Evaluation Specialist, Contract # CS-l-007-lC dd 19 06.17 Closed 9,021 Repairof MOT Kyiv ollice, Contract# W-l-001-SH dd 28 04 t7 Closed 35.7 52 =r Lot l: Irrocurement of oftlce equipnrent (cornputers, printers, and, copiers, onetsk and Kramatorsk, Contract # G-l-001-SH/Ll dd 19 06 for Mor f-ax machines, etc.) 17 Closed 30,724 =r Lot 2: Procurement of antivirus software fbr MOT offlces in Kyiv, field offices - Severodonetsk and Kranratorsk,Contract#G-l-001-SH/L2dd11.07.2017 Closed ldti Procttrentent ol olhcc fitrniture (9 u,orkplaces. safes, chairs, bookcases, etc ) for MOT offices in Ky =r t ottices - Sevcrodonetsk and Kratlatorsk. Contract# G-l-002-SIJ dd l6 06 2017 Closcd 9,998 Equipment for group video corrferences with the possibility ofsimultaneous interpretation, Contract # G-l- 007-sH dd 10.10.2017 48,224 Procurenron t of Ventilation and A ir Cond ition ing Eq u ipment, Contract # G- I -008-SH dd 2 7t 08 I Closed 12.530 =r Lot I: Procurenrent ofaccounting and FM sotlware, Contract# C-I-009-SFVLI dd 04.08.2017 Closed 3,569 Lot 2: Procurenten t of elcctron i c docuntcn t ulanagenrent software. Contract # C- l -009-5 H/L2 dd l 3 t 0 l 7 Act ive 4.36j =r a ol MOT Severodoneck ol'llce, Contract # W-l-002-5H dd 04.08 l7 Repair Workstoimprovcenergyellioiencyandheat-savinginMTOTotlices,Kyiv,Contract#W-t-003-SH/Ll 17 dd C osed closed 5,742 a t5.09 9.871 -003-SH/L2 dd 12.09.17 Closed 2.904 ir -l-009-lc dd 02.01 ProcLrrenrcnt Assistant, Contract # CS-l -01 0-lC dd 23 04 I 8 l8 Active t2.025 t Active 8.30r l\4onitoring and Evaluation Specialist, Contract # CS-l-012-lC dd 06 06 l8 Active 8.999 Procurenrent Specialist, Contraot # CS-l-008-lC dd 0l 02 | 8 Active 6.384 Cond ucti ng trai ni ng on lbreign anguage lcarn ing, Contract # T- I -00 I -CB dd 29.12 I 17 Active 4.667 =r Pro-lect audit, Contract EI N! CS-Aud it-001 -l-CS dd 08 05 20 I 8 Procurenrentol'two vehicles lbr MOT, Contract# G-l-010-SH dd 28 02.18 8,983 I Participation'in training Training of MO-l's personnel/ pro.ject rnanagement unit on financial management, procuremcnts, app icatron of preventive nrcch anisms, Contract # I 8/ I I 80 I 72 dd 23.03 I 8 I 5,338 il Cost of nrissions and acconrmodation Training oIMOT's pe rsonnel/ project management unit on financial nrarlagcnlcnt, procLrrentents, application olpreventive rrechanisnrs ir Conrmunication and outreach dd 23 05.20t8 ist. Contract # CS-l-017-lC dd 03 l2 l8 Services relaled to Support and nraintenance oldata platlbrm/rnonitoring systetn, Contract NeCS-l-007-5H 80t I Conrrnrrn iczrtion and outreaclr sl.. franslator. Contract # CS- I -0 I 4-lC dd 02 07 Contract# CS-l-016-lC dd 03,12 l8 I8 951 805 Active 6,5 85 El ConsultantonSocial andenvironnren -l-0ll-lcdd I0. l0.lg Active 2.g06 E Conrnrun ication and oulreach special ist, Contract # CS- I -005-lC dd 03, I 2. I g Procurenrent Specialist, Contract # CS-l-015-lC dd 18.10 l8 Active 805 E a SPF CRANT, SPECIAL FINANCIAL STATEMENTS 9 e FOR THE PERIOD FROM JANUARY O I, 20 I 8 TO DECEMBER ] I, 20 I 8 E I I SPF GRANT J\b TF OA33O7 I NOTES TO THE SPECIAL FINANCIAL STATEMENTS I For the period from JanLrary 0 I , 201 B to Decernber 3 l, 201 g I 5. cost analysis relative to the contracts (continuation) I (in USD) I Project component/Su b-borrower Status Actual I Procurement of nrobile Severodonetsk and Contract # G-l-005-Stt/Ll dd 3t 07,2018 Closed t Total Category I 5g3,5gg Categorv 2: Cornputer and rrru lti m-d i aiclrftrclrt lnotebook nrultinrcdia pro.jection dcvicc, MFD), Contract fl N V-G- t l-00I-sHdd2808 I8 Otlice firrniture (desk chairs, screen), Contract # NV-C-l-002-5H dd t7 09.201g Closcd 1,94s 82 I Computer equi Household 30 08.18 Closed 2 ! and rlultinredia Contract # KS-G- I -004-5H dd 20. I I 20 I 8 Closed Closed I 1,852 J I Textile (8 itenrs), Conrract # KS-G-l-002-SH dd 23 I t fbr rehabilitation excrcises hall (21 itenrs), contract # KS-c-t-006-sH dd I 2018 l0 l2,20lg Closed 7,990 C osed 0.643 I I tunit(l7 Contract# KS-C-l-007-5H dd t9 I L20l8 Closed 49,777 Furniture (16 iterns), Conrracr# KS-G-l-001-SH dd29 l.20tg I room (2 items), Conrracr # KS-C-l -008-SH dd 20. I I 201 g Closcd t7 214 ! Conr Central ized annunciation tandcomrnLrnicar.ionequiprnent(5items),contract#sL-G-l-002-sHddl0.l220lg Corrtract # SI--C-l-003-Su dd 14,12 2OtB Closed 2,962 C osed 3 r.408 ! ,{udio Contract# KR-G-l-002-5II dd l0 10.2018 C osed 4 Tra tions), Contract # KR-G-t-007-STJ dd 22 t0 2018 I Major repairs (reolacemerrt oll4lggws), Contract # KR-W-1-002-SH dd 06.12.2018 Closed Closed B,Og2 I rttent (rvoodworking) , Conrract # KR-C- | -005-SH dd 02 I I .201 g CIoscd Com and multirnedia equi 6 positions), Contracr# KR-C-t-003-SII dd 17,t0 20tg I t (constrLrction) (14 Contract# KR-G-l-001-SFt dd 13.[ 20ts 3.022 5 itenrs), Conrracr # KR-C-l -004-SH dd 05 I L201 8 I \ led ica 3,08 7 I stand with a ser ol'tools), Contraot # MK-C- l-003-SH dd 24 lO 2}lg Closed 70.5 l3 \lajor overhaul o1'the build tbr acco,,, ol'the I dd29.II.20t8 Active \ledical equipm 6.462 slrl_2 dd 0t. I I I 8,1 63 -: -: -::::ttion kios.k -::::rrion kiosk (3 (3 sers), Contract # PXO-C_ I _C)03_SH dd 23. I 0 20 I g I r umrture and charrs (6 rtems), Contract # PXO_G-l _004_SH dd 02 I 1.201 g Closed - - ..:reqLriprnent (60 scts). Conrraot# PXO_G-l_002-SH dd 22 t220lg I : J:I I.rr lr C,,trlcrurt..c hlrll t ligl _: rs Ulosed 30,345 I ,- ()\lS 1,023 Trral Category 1 -[otal 339.739 Projcct Expentliture 923,327 I I I I SPF CRANI" SPECIAL FINANCIAL STNTEMENTS 10 FOR THE PERIOD FROM IANUARY OI,20I8 TO DECEMBER 3].20I8 I I IBRD Audit Documentation Checklist I Name of Loan/Credit: SPF N Loan/Credit # Grant J\b TF 043307 I Audit Report: For the period from January 01,2018 to December 3 r. 201 8 t I l-ct*.k tr I I rncruoea I I cneck ir Nin I ! I. Audit nion): t I A. Applicable accounting standards noted I B. Applicable auditing standards noted I C. Opinion rendered on all forms of withdrawals: I l. Statement of Expenditures ! 2. I Special Account I D. All sources of financing for the project are noted ! IL Financial rts: ! A. Reveltue E,arning Entity (all of the following are reqr-rired): I L Balance sheet I I 2. 3. Cash Flow Statement lnconte Statement =F EE B. Non-Revenue Earning Entity (all of the following are required): I I. Balance sheet I 2. Sunrntary of Sources and Uses of Funds E= t C. lf applicable (refer to Loan Agreement): . I. Statement of Expenditure (SOE) Statement I 2. Special Account Staternent I IIL Notes to the Financial Statements I IV. Reconciliation befween IBRD records and l t records I V. Mana t Letter I I I . ]: CRA\T SI'ECIAI- FINANClA]- STA'IEMENTS lt :t IIlI] PERIOD I]I{OM.INNUARY ()I, 20IIJ'I'O DECEMBEIT I JI. 20I8 I