7Alyafi Group Ambition.Drive.Progress. Financial Statements of Projects Funded By the International Bank For Reconstruction and Development - Grant #TFOA283 (Additional Grant for the Emergency National Poverty Targeting Program "NPTP") And Auditor's Report Presidency of the council of Ministers Year Ended December 31, 2018 Contents Page Independent Auditor's Report 3 Statement of designated Account of Project Funded by the International Bank For . Reconstruction and Development - Grant #TFOA283 4 (Additional Grant for the Emergency National Poverty Targeting Program) Statement of Project Expenditures of Project Funded by the International Bank For Reconstruction and Development - Grant #TF0A283 5 (Additional Grant for the Emergency National Poverty Targeting Program) Cumulative Statement of Project Expenditures of Project Funded by the International Bank For Reconstruction and Development - Grant #TFOA283 6 . (Additional Grant for the Emergency National Poverty Targeting Program) Notes to the Financial Statements/ Project Expenditures 7 Alyafi Group Ambition. Drive.Progress. Independent Auditor's Report Lebanese Republic Presidency of the Council of Ministers World Bank Grant #TF0A283 (Additional Grant for the Emergency National Poverty Targeting Program) Beirut - Lebanon We have audited the accompanying financial statements comprising of the statement of Special Account, Project Expenditures, and Statement of Expenditures of Project Funded by the International Bank for Reconstruction & Development, Grant#TF0A283 for the year ending December 31, 2018. The Project financial statements are the responsibility of the Lebanese Republic Presidency of the Council of Ministers. Our responsibility is to express an opinion on these financial statements based on our audit. We have also audited compliance with the laws, regulations, guidelines and provisions governed by the Grant Agreement for the year ended December 31, 2018. We conducted our audits in accordance with International Standards on Auditing. Those Standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and about whether the "Additional Grant for the Emergency National Poverty Targeting Program" has complied with the laws, regulations, guidelines and provisions governed by the Grant Agreement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion: a) The accompanying Financial Statements present fairly, in all material respects, the cash receipts and payments of the Additional Grant for the Emergency National Poverty Targeting Program for the year ending December 31, 2018 is in accordance with the International Public Sector Accounting Standards(IPSAS), under the cash basis of accounting; b) Internal control over financial reporting involved in the preparation of replenishments, direct payments, payments through special commitments, and reimbursements i.e. expenditures reimbursed on the basis of Statements of Expenditures can be relied upon to support the related withdrawals as of December 31, 2018; c) The project was in all material respects in compliance with the laws, regulations, guidelines and provisions governed by the Grant agreement. April 2, 2019 Alyafi Group Mowafak Al Yafi, Ph.D Managing Partner Presidency of the Council of Ministers Additional Grant Emergency National Poverty Targeting Program "NPTP" Financial Statements 31 December 2018 4 Statement of Designated Account (TF0A283) Note Toa Balance as ofJanuary 1, 2018 500,000 Add: World Bank replenishments - Deduct: WFP amount paid by special commitments Individual consultant 3 12,201 Firms 3 48,602 Sub-total 60,803 Balance December 31, 2018 439,197 Presidency of the Council of Ministers Additional Grant Emergency National Poverty Targeting Program "NPTP" Financial Statements 31 December 2018 5 Statement of Project Expenditures Total Note USD Individual Consultant 3 12,201 Firms 3 48,602 60,803 See accompanying notes to the financial statements. Presidency of the Council of Ministers Additional Grant Emergency National Poverty Targeting Program "NPTP" Financial Statements 31 December 2018 6 Cumulative Statement of Project Expenditures Total Note USD Individual Consultant 4 12,201 Firms 4 48,602 Administration cost for WFP 4 113,305 Social Assistance WFP 4 6,699,953 6,874,061 See accompanying notes to the financial statements. Presidency of the Council of Ministers Additional Grant Emergency National Poverty Targeting Program "NPTP" Financial Statements 31 December 2018 Notes to the Financial Statements 1. PROJECT BACKGROUND: The objective of the Project is to expand the coverage and enhance the social assistance package of the National Poverty Targeting Program (NPTP) to Lebanese affected by the Syrian crisis and all Lebanese households under the Extreme Poverty Line, as well as to assess the effectiveness of a NPTP graduation pilot. The Project consists of the Original Project, as amended (includes a new Part III as set out below): Part I: Administration of NPTP Provision of technical assistance for carrying out a program of activities aimed at ensuring the efficient administration and implementation of the NPTP; such activities to include, inter alia. a) Supporting the NPTP management team in the MOSA and the PCM; b) Recertification of applicants including refining the NPTP application forms and proxy-mean testing questionnaire; c) Upgrading the NPTP management information system; d) Refining the grievance and redress mechanism for improved efficiency and transparency; e) Monitoring and evaluating of the NPTP implementation, including evaluating the business processes of the NPTP , and implementation of short quantitative and qualitative surveys; f) Carrying out an outreach campaign to enroll new Beneficiaries particularly in the poorer and remote areas; g) Providing training to Beneficiaries in the use of Food Vouchers , and providing technical assistance to the NPTP Project Unit in managing, assessing and monitoring the implementation of the e-card Food Voucher program; h) Provision and maintenance of the e-cards for the Food Vouchers; i) Capacity building and training for NPTP staff and social workers in the implementation of the NPTP; j) Provision and maintenance of information technology and other equipment for the NPTP k) Provision of Allowances for the NPTP social workers to enable them to carry out their tasks and enhance their productivity; and 1) Strengthening the capacity of the Fiduciary Operations Team to carry out the Project's fiduciary responsibilities, through the recruitment of procurement staff, a financial management specialist and an internal auditor. Part II: Social Assistance: Supporting an e-card Food Voucher program for the provision of basic food needs to Lebanese affected by the Syrian crisis and Lebanese households under the Extreme Poverty Line. Part III: NPTP Graduation Pilot Pilot a graduation program to promote increased and sustainable levels of income among the poorest NPTP beneficiary households, to improve their overall relative poverty levels, through provision of self- employment opportunities and delivery of a comprehensive package of services to male and female members of targeted NPTP households. Presidency of the Council of Ministers Additional Grant Emergency National Poverty Targeting Program "NPTP" Financial Statements 31 December 2018 , The following table specifies the categories of eligible Expenditures that may be financed out of the proceeds of the grant ("Category"), the allocations of the amounts of the grant to each category, and the percentage to be financed for eligible Expenditures in each category: Percentage of Amount of the grant Expenditures to be Allocated Financed Category (expressed in USD) (inclusive of taxes) (1) Goods, Training, Operating Costs, non- consulting services, under part I (a), (e) ,(g), (b), (i) and III of the Project 3,300,000 100% (2) Food Vouchers under part II of the Project 6,700,000 100% Total amount 10,000,000 Presidency of the Council of Ministers Additional Grant Emergency National Poverty Targeting Program "NPTP" Financial Statements 31 December 2018 10 4. DETAILS OF CUMULATIVE EXPENDITURES TF0A2803 Cumulative Expenditures paid for the Additional Grant for the Emergency National Poverty Targeting Program up to year 2018 are detailed as follows: Amount Amount financed financed from from finan from grant Category/Component Description grant grant proceeds proceeds proceeds (100%) (100%) (100%) Cumulative 2017 2018 Individual consultant Christelle khalil Program Sub-Coordinator - 12,201 12,201 Amount paid from special account - 12,201 12,201 Direct Payment - - j Total - 12,201 12,201 Firms AL Yafi Group External Finanacial Auditor - 3,768 3,768 Consultancy assignment for carrying out 26,145 26,145 Content SARL market analysis in NORTH _ Consultancy assignment for carrying out 18,689 18,689 Content SARL market analysis in BEKAA - Amount paid from special account - 48,602 48,602 Direct Payment - - - Total - 48,602 48,602 Category 1 component part of 1 Administration cost for WFP 113,305 - 113,305 Amount paid from special account -j- - Direct Payment 113,305 - 113,305 Total 113,305 - 113,305 Category 2 component 2 Social Assistance (WFP) 6,699,953 - 6,699,953 Amount paid from special account - - _ - Direct Payment 6,699,953 - 6,699,953 Total 6,699,953 - 6,699,953 Total 6,813,258 60,803 6,874,061 Presidency of the Council of Ministers Additional Grant Emergency National Poverty Targeting Program "NPTP" Financial Statements 31 December 2018 5. CUMULATIVE NTCIANT EXPENDITURE The cumulative drawings and payments made in this account since inception up to December 31, 2018 are detailed as follows: Beginning Cumulative Balance Movement Balance 2017 2018 2018 ILD 11D US World Bank initial deposit 500,000 - 500,000 Direct Payments 6,813,258 - 6,813,258 7,313,258 - 7,313,258 Deduct: Payments for project expenditures funded by the Grant: Administration cost of WFP 113,305 - 113,305 Social Assistance WFP 6,699,953 - 6,699,953 Consultants' services - 60,803 60,803 6,813,258 - 6,874,061 Balance - December 31, 2018 500,000 (60,803) 439,197