*"NIISLEL-AUDIT" LLC AUDITOR'S REPORT Livestock and Agricultural Marketing Project No.TF014820 Financial statements as of December 31, 2016 Ulaanbaatar 2017 U"NIISLEL AUDIT" LLC c .ic1 - .Certified audit, appraisal and accounting consultancy company INDEPENDENT AUDITOR'S REPORT To: PIU Coordinator Ts.Vanchin Livestock and Agricultural Marketing Project Grant No: TF014820 We have audited the Financial Management Reports comprising the balance sheet, project source and uses of funds by project activity, disbursement report and the designated account statement of Livestock and Agricultural Marketing Project Grant No.TF014820 for the year ended December 31, 2016. The management of Livestock and Agricultural Marketing Project is to prepare the Financial Management Reports on the cash receipts and payments basis in conformity with International Public Sector Accounting Standards (IPSAS). On this basis, cash receipts are recognized when received and cash expenditures are recognized when paid rather than when incurred. Our responsibility is to express an opinion thereon based on our audit. We conducted our audit in accordance with International Standards on Auditing issued by the International Auditing and Assurance Standards Board of the International Federation of Accountants. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the interim financial reports are free of material misstatement. An audit includes examining on test basis, evidence supporting the amounts and disclosures in the interim financial reports. An audit also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall statement presentation. We believe our audit provides a reasonable basis for our opinion. In our opinion, the Financial Management Reports have been prepared in accordance with International Public Sector Accounting Standard issued by the Public Sector Committee of the Federation of Accountants, presented fairly the cash receipts and payments of the project during the year ended December 31, 2016 and furthermore in all material respected, expenditure have applied to the purpose intended in the Grant Agreement, Grant No.TF014820. "Niislel-Audit" LLC Ulaanbaatar city, Sukhbaatar district. Bago toiruu-44 Phone/Fax: 31-89-18 70120095 E-mail info@nHislelaudit-mn The Government of Mongolia The International Development Association Grant No.TF014820 Livestock and Agricultural Marketing Project AUDITED BALANCE SHEET As at December 31, 2016 Balance Items Note At Dec At Dec 31,2015 31,2016/USD/ IUSD/ ASSETS Cash and cash equivalent Cash at Bank: Designated Account 76,812.97 87,955.51 Operating Account 10,331.94 18,690.90 Cash on hand 150.75 295.53 Total cash and cash equivalent 4.1 87,295.66 106931.94 Advance Payments 4.2 9,487.25 12,274.67 Cumulative project expenditures Goods 4.3 1,888,602.73 846,642.64 Works 4.4 145,800.56 6,384.62 Consultant's Services 4.5 1,579,111.74 864,055.01 Non Consultant's Services 4.5 342,812.29 184,305.04 Training 4.6 242,076.57 135,738.84 Operating Costs 4.8 277,910.64 196,884.96 Sub Grants 4.7 3,413,858.64 1,053,453.56 Foreign Exchange Loss 176.43 Total cumulative project expenditures 3b 7,890,173.17 3,287,641.10 TOTAL ASSETS 7,986,956.08 3,406,847.71 FUNDS - Grant 7,922,817.09 3,362,474.66 Interest Earning and Tender revenues 4.9 64,341.61 44,373.05 Foreign Exchange Gain 4.10 (202.62) TOTAL FUNDS P§ 3,406,847.71 U Prepared by:- LIV Financial Management Specialist i__J__ r Nfilel Audit LLC U U it 7,2,L70i332446 "NIISLEL AUDIT" LLC I - Certified audit, appraisal and accounting consultancy company Date:. INDEPENDENT AUDITOR'S REPORT To: PIU Coordinator Ts.Vanchin Livestock and Agricultural Marketing Project Grant No: TF014820 We have audited the accompanying statement Sources and Uses of Funds of Livestock and Agricultural Marketing Project submitted to the World Bank during the year ended December 31, 2016 in support of credit withdrawals under the Grant Agreement, Grant No.TF014820. We conducted our, audit in accordance with generally accepted auditing standards that accordingly included examination, on a test basis, of evidence supporting the amounts and disclosures in the statement of Sources and User of Funds. An audit also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall statement presentation. We believe our audit provides a reasonable basis for our opinion. In our opinion, the statement of Sources and Uses of Funds submitted together with the internal controls and procedures involved in their preparation can be relied upon to support the application for credit withdrawals. "Niislel-Audit" LLC L Uaanbaalar city, Sukhbaatardistrict, Baga toiruu-44 Phone/Fax- 31-89-18, 70120095 E-mail info@nfislelaudit.mn u The Government of Mongolia The International Development Association Grant No.TF014820 Livestock and Agricultural Marketing Project AUDITED STATEMENT OF PROJECT SOURCES AND USES OF FUNDS for theyear ended December 31,2016 Cumulative toCumulative December 31, At De to 2015 31,2016 December /USD/ IUSD/ 31, 2016 IUSD/ SOURCES FUNDS Grant 3,362,474.66 4,560,342.42 7,922,817.09 Net interest earned 44,373.05 17,348.86 61,721.91 Exchange rate loss/gain (176.43) (26.19) (202.62) Income from sale of tender materials 2,619.70 2,619.70 TOTAL FUNDS 3,406,671.28 4,580,28479 7,986,956.08 USES OF FUNDS Advance payments 12,274.67 9,487.25 9,487.25 Goods 846,642.64 1,041,960.09 1,888,602.73 Works 6,384.62 139,415.94 145,800.56 Consultant's services 864,055.01 715,056.74 1,579,111.74 Non Consultant's services 184,305.04 158,507.25 342,812.29 Training 135,738.84 106,337.73 242,076.57 Operating costs 196,884.96 81,025.66 277,910.64 Sub grants 1,053,453.56 2,360,405.08 3,413,858.64 TOTAL USES OF FUNDS 3,299,739.34 4,612,195.74 7,899,660.42 Surplus of funds over uses 106,931.94 (31,910.95) 87,295.66 Prepared by: J. S uk1he ps1ni Financial Management Specialist NiisIef Audit LLC I "1NIISLEL AUDIT" LLC Ci, Certified audit, appraisal and accounting consultancy company Date:. .N . INDEPENDENT AUDITOR'S REPORT H. To: PIU Coordinator Ts.Vanchin Livestock and Agricultural Marketing Project Grant No: TF014820 We have audited the accompanying the Statement of Expenditures (SOEs) of Livestock and Agricultural Marketing Project submitted to the World Bank during the year ended December 31, 2016 in support of credit withdrawals under the Grant Agreement, Grant No.TF014820. We conducted our audit in accordance with generally accepted auditing standards that accordingly included examination, on a test basis, of evidence supporting the amounts and disclosures in the Statement of Expenditures. An audit also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall statement presentation. We believe our audit provides a reasonable basis for our opinion. In our opinion, the Statement of Expenditures submitted together with the internal controls and procedures involved in their preparation can be relied upon to support the application for credit withdrawals. "Niislel-Audit" LLC LJ L Ulaanbantar city, Sukhbaatar district, Baga toimu-44 Phone/Fax; 31-89-18, 70120095 E-mail: info@nis1elaudit.mn 貝 「 鍵 -－・’・・―什・―& ビ 日 L& n !！、、”&．〕 邑 翅 C%ý Cý Le \0 05 cr N.O CN f4 t- r4 cm 00 V) Ch ~ C:ý Cý nr 00 Ca t- 0\ ýO tn cý cj cr 05 00 00 95 0% 1,0 %0 Rn fq 11 ron 00 CN CN m kn en 0\ nr <= CN tn CK 00 en Rn cm nr r- C2 0\ w \0 C> cý ,,: d -: Ln cn trh r_ n * tn C2 åÅ äg tn CL cl en \0 cm t^ v,) = f4 bo \0 . 9 MS 9 "o l CD M rý rn 00 00 cm cý i M r4 en cl c4 00 00 V CD 0 L- en V-i 00 ch r4 o 4T kr; cý MS d 00 1: m F, r- > en 00 kn o s- en Ca u I: %10 vý im z en en z oi .52 c: Ln > 0 tn -c r ;z. cn CS 00 U) Go cm 00 92. V2 CN en Gi 00 tn 2 00 CN Ln M CC it OG 05 C, < kn 0% n cl 00 \0 t^ cm en 't el ý0 -t n i CD ko 6 t- 00 oo %0 rq 00 VI oo Lu u 0 -0 m en ko t- 00 C% CD en - - - - - - - r4 cz Rn NZ t- m 0-, < JD "NIISLEL AUDIT" LLC Ir 1 - Certified audit, appraisal and accounting consultancy company Dale:UR Z9~ 1 INDEPENDENT AUDITOR'S REPORT To: PIU Coordinator Ts.Vanchin Livestock and Agricultural Marketing Project Grant No: TF014820 We have audited the accompanying the Designated Account Reconciliation Statement of Livestock and Agricultural Marketing Project submitted to the World Bank during the year ended December 31, 2016 in support of credit withdrawals under the Grant Agreement, Grant No.TF014820. We conducted our audit in accordance with generally accepted auditing standards that accordingly included examination, on a test basis, of evidence supporting the amounts and disclosures in the Designated Account Reconciliation Statement. An audit also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall statement presentation. We believe our audit provides a reasonable basis for our opinion. In our opinion, the Designated Account Reconciliation Statement submitted together with the internal controls and procedures involved in their preparation can be relied upon to support the application for credit withdrawals. LI-7, "Niislel-Audit" LLC LJ Uloanboatar city, Sukhbastar district Baga toiruu-44 Phone/Fax: 31-89-18, 70120095 E-rnai info@nislelaudit.rnn The Government of Mongolia The International Development Association Grant No.TF014820 Livestock and Agricultural Marketing Project AUDITED DESIGNATED ACCOUNT RECONCILIATION STATEMENT for the year ended December 31, 2016 IL At December3l,2016 /USD/ 1. Total advanced by the World Bank 1,000,000.00 2. Less: Total amount recovered by the World Bank 3. Equal present outstanding amount advanced to the special account 1,000,000.00 4. Balance of special account per attached bank statement as of 2016/12/31 87,295.66 5. Total amount withdrawn and not yet claimed /WA-23/ 267,182.77 6. Amount claimed but not yet credited at date of bank statement /WA-22/ 700,173.31 7. Interest earned (61,721.91) 8. Currency difference 202.62 9. Income from sale of tender (2,619.70) 9. Total advance accounted for 990,512.75 10. Difference between total appearing on lines 3 and 9 9,487.25 Explanation of any difference between total appearing on lines 3 and 9 All times should be indicated on the bank statement Advance payments 9,487.25 9,487.25 MAPIKETWHr Prepared by: Approved y Lives ack and ultural etinn J.Sukh 1 7 TMafSNuItt Fz YrAA1 1ATAP XOT Financial Management Specialist ect U .F I Niislel Audit LLC J/ Livestock and Agricultural Marketing Project Grant N.TF 014820 Financial statements as of Dec 31, 2016 1. Project background The grant agreement No.TF014820 was made between the International Development Association (IDA) and the Government of Mongolia (represented by the Ministry of Economic Development) on dated November 28, 2013 for the implementation of the Livestock and Agricultural Marketing Project with a total amount of USD 11,000,000 (eleven million). The project commenced on February 5, 2014 with an original closing date on January 31, 2017. The closing date of the project was extended in April 2016 to December 31, 2017 as requested by the Government of Mongolia on March 18, 2016. The objective of the Project is to improve rural livelihoods and food security in selected Aimags and Soums through investments in enhanced productivity, market access and diversification in livestock-based production systems. The project, which is proposed to be aligned with the "Soum Program", consists of the following Parts: Part 1 Linking Herders to Markets (1)Meat and Fiber Market Development a. Improving efficiencies along the value chains of selected livestock products, namely; meat, cashmere, and wool, through the creation and enhancement of productive partnerships between producer groups such as herders and farmers, and buyers and/or processors of their product, through provision of technical assistance and training to participants in such value chains. b. Carrying out of an outreach campaign aimed at promoting Project activities to targeted groups of herders, farmers and other participants along selected value chains of meat and fiber products. c. Provision of technical assistance and training, including provision of extension services and assistance with the development of business plans, to herder groups, in order to support them to add value to, and market, their products; d. Provision of Matching Grants to herder groups for investments aimed at enhancing meat and fiber production and marketing, including improved collection, handling, cleaning, sorting, packaging and storage. (2) Dairy Market Development a. Provision of technical assistance and training, including provision of extension services and development of business plans, to small scale herder groups to assist them to market their products to daily plants or for local consumption. b. Provision of Matching Grants to small scale herder groups for investments in pilot milk collection schemes and small-scale dairy processing plants. (3) Pilot Horticulture Production NiisIel Audit LLC Livestock and Agricultural Marketing Project Grant N2.TF 014820 Financial statements as of Dec 31, 2016 a. Provision of Micro Grants to low-income female headed households, unemployed persons, persons, and small scale herders to enable them to diversify their sources of household nutrition and income through investments in horticulture production and processing. b. Provision of technical assistance and training, including provision of extension services and assistance with development of business plans, to small-scale horticulture producers in order to improve their productivity. Part 2. Raising Livestock Productivity and Quality (a) Promoting Animal Health Promoting animal health and productivity by strengthening of disease free zones and provision of veterinary services, including; a. Carrying out programs to control foot and mouth disease and brucellosis including (A) acquisition of animal handing equipment, veterinary supplies and equipment, and cold chain and laboratory equipment; and (B) establishment of animal health inspection posts buffer-zone check points. b. Provision of grassroots veterinary services and herd health management services. c. Provision of training to veterinarians and other animal health professionals and paraprofessionals, in other to enhance their capacity to carry out the activities under this Part 2 of the Project. (b) Animal Breeding and Genetic Improvement Supporting genetic improvement and enhanced breeding management through investments in sheep and goats, dairy cattle and beef cattle, including: a. Establishment, and/or rehabilitation, and equipping of breeding stations; b. Provision of training to Soum livestock officers, artificial insemination technicians, herders and daily farmers; c. Establishment of nucleus herds in order to create a source of genetically improved animals; d. Strengthening of artificial insemination capacity at the soum level through acquisition of equipment and supplies; and e. Provision of genetically improved animals for purchase by herders. (c) Animal nutrition Improving livestock productivity through improved nutrition, including; a. Provision of Matching Grants to herder groups for investment in livestock feed production and processing and feeding programs; and b. Carrying out of participatory on-farm research for demonstration purposes to enable producers at large to better understand the relationship between nutrition, productivity and profitability. Niislel Audit LLC U Livestock and Agricultural Marketing Project Grant N.TF 014820 Financial statements as of Dec 31, 2016 Part 3. Proiect Management M In order to facilitate project implementation and coordination, project management, monitoring and evaluation will be carried out, including technical assistance, project personnel, equipment and other resources needed to carry out activities.As indicated in the project financial agreement, the Ministry of Food, Agriculture and Light Industry has been the implementing agency of the project. With the IDA's concurrence based on the request of the Government of Mongolia dated March 18, 2016, reallocations and amendments were made to the project withdrawal table in April 2016. The governing body of the Project is the Project Steering Committee that is responsible for F11 providing the project with policy guidance, overall supervision and reviewing and approval of the Project annual work plans, budgets, annual reports, procurement plans, and final approval of sub-grant proposals,. The project implementing unit (PIU), as indicated in the Grants Agreement, is responsible for day-to-day management and implementation of the project. The PlU is directed by the Project Coordinator. In 2016 the PIU was operating with 14 staff including Project Coordinator, Grants Manager, Procurement Specialist, Financial Management Specialist, M&E Specialist, Communication Specialist, Finance and Procurement Assistant, Animal Health Specialist, Animal Breeding Specialist, Animal Nutrition Specialist, Geographic Information Specialist, and three support staff (assistant and two drivers). Specifically, the PIU is responsible for (i) hiring project consultants, making a procurement contracts and ensuring that all procurement activities are in accordance with the contract and regulating guidelines, (ii) prepare and evaluate project monitoring report (iii) cooperate with the IDA in accordance with the established contracts, (iv) preparation of project financial documentations, financial statement, designated account report as well as disbursement report. 2. Summary of significant accounting policies a) Statement of compliance The Financial Statements comprise of Balance Sheet, Statement of Sources and Uses of Funds, Statement of Expenditures by Project Component and Special Statement of Designated Account. b) Basis of preparation The financial statements are prepared in accordance with International Public Sector Accounting Standards (IPSASs) issued by the International Public Sector Accounting Standards Board (IPSASB) of the International Federation of Accountants and cash receipts and disbursement basis of accounting has been applied. On this basis, receipts are recognized when received or i direct payment to creditors are made rather than when income is earned and disbursements are Niislel Audit LLC U f3 Livestock and Agricultural Marketing Project Grant X2.TF 014820 Financial statements as of Dec 31, 2016 recognized when paid rather than when expenses are incurred. The project financial activities carried out in compliance with the Financial Management Manual approved by the World Bank. c) Basis of measurement The financial statements are presented in U.S.Dollar (US$). Transactions from the operating account denominated in tugrugs are translated into USD at rates of the State Bank as of the dates of the transaction from the designated account into the operating account. Any gains and losses are reflected in the Statement of Sources and Uses of Funds. d) Basis of presentation The accounts balances in the Financial Reports as December 31, 2016 have been presented on December 31, 2015. e) Designated account In accordance with the Disbursement Letter dated July 3, 2013, the project opened the designated account for the grant funds at the State Bank. The designated account is an USD account. Expenses such as goods, works, services and sub-projects funding are financed from the designated account. The ceiling of the designated account is US$1,000,000 according to the Disbursement Letter. 0 Operating account In accordance with the Disbursement Letter, the project opened an operating account at the State Bank. The Operating Account is in MNT, with a ceiling of equivalent to US$25,000.The co- signatories to the account are the Project Coordinator (PC) and the Financial Management Specialist. The operating account is used to finance small expenditures relating to the PIU incremental operating costs only. Small expenses include, inter alia, utilities, communications and vehicle operating costs and repairs. 3. Disbursement progress 3.aThe reallocation and disbursement of IDA grant are as follows as of December 31, 2016: Category Amount of the Percentage of Actual Grant Allocated Expenditures to be Disbursement (expressed in USD) Financed (inclusive (expressed in of Taxes) USD) (1) Goods, works, non- consulting services, and consultants' an s c s tang 6,034,000 100% 4,76,314.53 services, Training and Incremental Operating Costs (2) Sub-grants 4,966,000 100% of amounts 3,413,858.64 disbursed Unallocated - TOTAL AMOUNT 11,000,000 7,890,173.17 N A Niilel Audit LLtC UJ Livestock and Agricultural Marketing Project Grant M2.TF 014820 Financial statements as of Dec 31, 2016 3.b The Cumulative disbursement of the Project by disbursement categories: Accumulated as Disbursement Accumulated Performance of 31,2015 in 2016 as of31,2016 percentage Goods 2,590,536.68 846,642.64 1,041,960.09 1,888,602.73 72.90% Works 297,209.96 6,384.62 139,415.94 145,800.56 49.55% Consultant's Csevi s 1,963,698.76 864,055.01 715,056.74 1,579,111.74 80.41% Services Non Consultant's N 415,759.12 184,305.04 158,507.25 342,812.29 82.45% Services Training 268,689.63 135,738.84 106,337.73 242,076.57 90.09% Operating Costs 498,095.89 196,884.97 81,025.66 277,910.64 55.79% Sub Grants 4,966,009.96 1,053,453.56 2,360,405.08 3,413,858,64 68.74% Total 11,000,000.00 3,287,464.68 4,602,708.49 7,890,173.17 71.72% 3.c The Cumulative disbursement of the Project by components:# Actual Disbursement Components Total budget disbursement Fluctuation Dsrsent I _disbursement percentage Meat and Fiber Market 2,961,611.03 1,586,971.81 1,374,639.22 53.58% Development 2 Dairy Market Development 1,049,497.85 252,682.47 796,815.38 24.08% 3 Pilot Horticulture 765,752.90 753,927.17 11,825.73 98.46% Production 4 Promoting Animal Health 1,485,501.01 890,843.68 594,657.33 59.97% Animal Breeding and 5 1,506,229.24 1,417,430.12 88,799.12 94.10% Genetic Improvement 6 Animal Nutrition 1,386,984.60 1,662,838.13 (275,853.53) 119.89% 7 Project Operating Costs 1,844,423.37 1,325,479.79 518,943.56 71.86% U Total 11,000,000.00 7,890,173.17 3,109,826.81 71.73% Niislel Audit LLC LI Livestock and Agricultural Marketing Project Grant M2.TF 014820 Financial statements as of Dec 31, 2016 4. Financial statement items 4.1 Cash and cash equivalents The PTU opened the Designated and Operating accounts for the carrying out of project activities. As of December 31, 2016 the cash and cash equivalents are as follows: At Dec 31, 2016 At Dec 31, 2015 (In USD) (In USD) Cash and cash equivalents Cash on hand 150.75 295.53 Cash at bank: Designated account 76,812.97 87,955.51 Operating account 10,331.94 18,680.90 Total 87,295.66 106,931.94 The following expenditures amounting to USD 267,182.77 had not been claimed to the World LI Bank as of December 31, 2016. Cost Category Amount (in USD) Goods - Works 44,664.62 Consultant's Services Non Consultant's Services 4,591.84 Training 1,727.89 Operating Costs 1,398.27 Sub Grants 214,800.15 Total 267,182.77 4.2 Advance Payments Advance payments as of December 31, 2016. Category Amount (in USD) I Refund of unspent amount of fuel for field trip 70.84 2 Livestock classification and selection training cost 6,941.66 3 Personal income tax overpayment 33.04 4 Office lease security deposit 2,217.84 5 Refund of airport ticket payment 223.87 Total 9,487.25 Niislel Audit LLC Livestock and Agricultural Marketing Project Grant X2.TF 014820 Financial statements as of Dec 31, 2016 4.3 Goods The expenditures for Goods incurred in the reporting period were as follows: M Cost items Amount (in USD) The cumulative project expenditure prior to the 846,642.64 reporting period 2 Purchases of Livestock and transport thereof 335,148.62 Portable corrals for VET Service unit 3 63,996.52 4 Supply of equipment 219,562.52 5 Road signs 13,353.54 6 Veterinary office equipment supply 91,527.97 7 Management information processing fee 15,973.93 8 Veterinary cooling equipment supply 114,459.76 9 Supply of refrigerated trucks for VET units 187,937.23 Total 1,888,602.73 4.4 Works The expenditures for Works incurred in the reporting period were as follows: N Cost items Amount (in USD) The cumulative project expenditure prior to the reporting period 6,384.62 2 Construction of VET Service units 5,328.28 3 Construction of permanent winter shelters for 23,170.73 livestock 4 Construction of Animal Health Check Points 18,311.64 Construction of permanent shelters for 80,848.92 livestock 6 Connection to Central Electric Power Grid for 11,756.37 Bulgan aimag check point Total 145,800.56 Niislel Audit LLC U Li Livestock and Agricultural Marketing Project Grant N.TF 014820 Financial statements as of Dec 31, 2016 4.5 Consultant Services The expenditures for Consultant Services incurred in the reporting period were as follows: N Cost items Amount (in USD) The cumulative project expenditure prior to the 1 864,055.01 reporting period 2 TSP (Technical Service Providers) 407,498.08 3 International consultants 37,844.84 Fi 4 Consultant services (PIU staff) 265,703.78 5 Audit fees 4,010.03 Total 1,579,111.74 In overall during the project implementation a total of US$ 1,579,111.74 was paid for consulting services. The expenditures for Non Consulting Services incurred in the reporting period were as follows: N2 Cost items Amount (in USD) The cumulative project expenditure prior to the 184,305.04 reporting period 2 Project Advocacy 72,802.46 3 Project Awareness Campaign 4,904.60 4 Financial and Value Chain Development 5,086.25 5 Cost related to Laboratory research 66,099.09 6 Baseline survey 9,614.85 Total 342,812.29 4.6 Training The expenditures for Trainings incurred in the reporting period were as follows: M Cost items Amount (in USD) The cumulative project expenditure prior to the 1 135,738.84 reporting period 2 Stakeholders' meeting on food and agriculture 16,006.65 sector policy Training on the guidelines for the sub-project 3 implementation 5781 4 Animal health training 11,172.41 Training in France "Animal health and welfare- 5 concepts and tools for international and 24,643.96 European governance" J 6 Study tour on agricultural sales network in 6 Frne1,349.00 France Nilslel Audit LLC U I Livestock and Agricultural Marketing Project Grant N2.TF 014820 Financial statements as of Dec 31, 2016 7 Environmental training 5,154.39 Participation in the International Pasture Conference held in Canada 9 Law introductory training 1,608.48 10 Mid-term review meeting 1,736.69 11 Artificial insemination technicians training 5,855.18 Capacity building training for the animal health check points in western aimags 13 Cooperative building training 6,457.24 fl Training on the improvement of usage of vaccination equipment and cooling room 15 Livestock classification and selection training 2,123.79 1l Discussion of the year-end performance of the 16 749.18 project Total 242,076.57 I 4.7. The sub-projects Principles for the sub-project implementation Financing of the sub-projects are regulated by the manual of the financial management. The proposals of the sub-project are developed by the potential beneficiaries in cooperation with the professional consulting team. The Soum Steering Committees prioritize received proposals on their significance and submit them to the PlU Grants Secretariat. The PIU Grants Secretariat further reviews the proposals from the aspects of financial, market, sales, social and environmental impacts and submits to the World Bank along with the decision of the review of proposals by the Project Steering Committee. Finally the World Bank reviews and approves the proposals. A tripartite and financial agreements are made with the cooperatives and companies that submitted the selected proposals and the financing will be granted for the implementation of sub-projects. The beneficiaries furnish the PIU with procurement, financial and operational reports. Implementation ofthe sub-projects As indicated in the project financial agreement the following amounts were disbursed for the funding of sub-projects: Aimags Number of beneficiaries Amount (in USD) Arkhangai 22 647,688.97 Bayankhongor 17 336,572.45 Govi-Altai 24 833,083.06 Khuvsgul 25 1,100,598.38 Zavkhan 17 495,915.78 Total 105 3,413,858.64 Niislel Audit LLC Eig Livestock and Agricultural Marketing Project Grant K2.TF 014820 Financial statements as of Dec 31, 2016 Expenditure by the components: U Project components Sub components Amount (in USD) Meat and Cashmere Market Development (cIa), 1,080,939.75 Dairy Market Development (cl b), 166,841.54 Pilot Horticulture Production (cl c), 601,422.42 Animal Nutrition (c2c) 1,564,654.93 Total 3,413,858.64 4.8. Operating Costs The expenditures for Operating Costs incurred in the reporting period were as follows: Cost Items Amount (in USD) I The cumulative project expenditures prior to the 196,884.98 reporting period 2 Incremental staff salary 34,989.99 3 Social Insurance Premium paid by the Project 3,936.15 4 Stationary, communication 3,239.44 5 Per diem 16,523.94 6 Other operating costs 22,336.14 Total 277,910.64 U 4.9 Other Sources The balance of other sources comprises of interest income and bidding documents sales revenue. As of Dec 31, 2016 As of Dec 31, 2015 (In USD) (In USD) LInterest income 61,721.91 44,373.05 Bidding documents sales 2,619.70 p ~ ~~revenue __________________________________ 64,341.61 44,373.05 Niisel Audit LLC uso ec3,206A o2e 3,21 Livestock and Agricultural Marketing Project Grant M.TF 014820 Financial statements as of Dec 31, 2016 4.10. Others The balance of others was composed of Exchange rate gain/loss as shown below: As of Dec 31,2016 As of Dec 31, 2015 (In USD) (In USD) Exchange rate gain/loss 202.62 (176.43) Total 202.62 (176.43) In the reporting period, there was an exchange loss amounting to US$26.19. A duplicate transaction of payment was made to the ther-Tayan cooperative in Tseelsoum, Govi-Altai on September 16, 2016. The cooperative reversed the second payment on the same day, however due to exchange rate difference in non-cash transaction, the said difference incurred. 5.Procurement 5.1 Goods fl During the engagement, in order to ensure the project proper implementation certain procurement activities are carried out in accordance with the relevant procedures and guidelines. Below listed five procurement packages were selected randomly for review: 1.Veterinary laboratory and animal breeding equipment (US$216,549) 2.Veterinary office equipment supply (US$104,110) 3.Portable corrals for PVUs and ABU (US$56,168) 4.Refrigerated trucks for VET units (US$170715) 5.Cooling equipment supply (US$216,549) All 5 national competitive biddings were conducted within the given timeframe of the bidding based on the decision of the Bid Evaluation Committee to select suppliers of goods, works and services, and in accordance with the World Bank guidelines (article 2.59 of the guidelines of procurement of goods, works and services) and the best bidders were awarded with contracts. During the reporting period, bid for supply of motorbikes for animal health units for 15 soums was cancelled due to the absence of qualified and experienced bidders. The bid and was re- announced upon the World Bank's approval. 5.2 Consultant Services During the reporting period, 22 contracts were made for the consulting services. Five consultants selected based on the consultants' qualification and 17 hired by other methods of individual consultant selections (PIU specialists in accordance with part LA. 1(b)., schedule 2, Component 3 of the Grant Agreement) in compliance with the Guidelines on the Selection of Consultants Under IBRD Loans and IDA Credits and Grants by the World Bank Borrowers. There was no delayed or cancelled contract and all the consultants completed their tasks within the agreed upon schedule. LN Nise Audit LLC.