"OD BURTGEL AUDIT" LLC AUDIT REPORT MULTI-SECTORAL TECHNICAL ASSISTANCE PROJECT IDA CREDIT MN4777-MN Audited financial statements as at December 31, 2016 Ulaanbaatar city Lj OD BURTGEL-AUDIT AUDITING, WARRANT, ACCOUNTING, CONSULTING INDEPENDENT AUDITOR'S REPORT TO: PMU MANAGER BATMUNK-LD MULTI SECTORAL TECHNICAL ASSISTANCE PROJECT We have audited the Financial Statements comprising the Balance Sheet, the Statement of' Project Sources and Uses of Funds, the Statement of Expenditures. the Disbursement report and the Designated Account Statements of Multi Sectoral Technical Assistance Project funded by International Development Association (Credit No: 4777-MN) and Government of Mongolia for the year ended December 31, 2016. These reports are the responsibility of' the project. The project management's responsible for the preparation and presentation of the Financial Statements in accordance with the requirements of the International Public Sector Accounting Standards, the IDA Financing Agreement, the Project Handbook and other relevant instructions and procedures. These responsibilities include responsibility for the establishment, implementation. and application of' internal controls relating to the preparation and presentation of Financial Statements without material misstatement that may arise from fraud and error. We will be responsible for making a conclusion on the Financial Statements based on our audit work. We conducted our audit 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 perl'or the audit to obtain reasonable assurance about whether the Financial Statements ports are free from material misstatement. An audit includes examining on test basis, evidence supporting the amounts and disclosures in the Financial Statements. 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 out' audit procedure provides a reasonable basis for audit opinion. The management policy of Multi Sectoral Technical Assistance Project is to prepare the Financial Statements on the cash receipts and payments basis in conformity with International Public Sector Accounting Standards (IPSAS). On this bases cash receipts recognized when received and cash expenditures are recognized when paid rather than when incurred. OA EYPTF3T Auditor's opinion In our opinion. the Financial Statements of the Multi Sectoral Technical Assistance Project, December 31, 2016, has been accurately and objectively disclosed in accordance with the requirements of International Public Sector Accounting Standard issued by the Public sector Committee of the Federation of Accountants. Financing Agreement (IDA Credit 4777- MN), project guide and other relevant guidelines and procedures. U7 Yw T P XOT GENERAL DIRECTOR T AA,U U X1K A T' O0l BYPTr3n AYJlmT 7 "Mltei-Secton iI Teclhninl Assistnice Piroljecd,4 Credil No: 4777-MN Financial Stal'éiien(s for Ilie year ended Decemnler 31, 2016 The Goverment of Mongolia The nie rna Deioal Dvelopmnit Association Credit 2N4777-MN M ulti-Secior.i Tecliiical Assistance Project 13ALANCE SHEET For the year ended December31, 2016 Cumiulative to Cumulative to Dec 31, 2016 Dec 31, 2015 ASSETS Cash and cash etqiivalent: 4 1,059,734.29 1,003,970.91 Cash on hand Cash at bank Öperating account 129,695.65 83.909.29 Designaled account 930,038.64 920,06 [.62 Cunulative project expendituires: 10,943,959.44 9,631,979.85 Goods 1,0 12,180.14, 816,905.45 Consultant serviccs 6, 168,644.04 5,209.860.89 Training and Workshops 3,640,2 14,53 3,502.054.09 Operating costs 122,920.73 103.159.42 TOTAL ASSETS 12,003,693.73 10,635,950.76 SOURCES IDA Funds 11,868,845.67 10,529,263.42 Otlhersources 4 134,848.06 106.687.34 TOTAL SOURSES OF FUNDS 12,003,693.73 10,635,950.76 Prepared by: Approve1 by: Mrs. B.Undannaa Mr. D.Batmunkh PMU Senior FMS PMU Manager 3 "OD 3UIITGEL AU DIT" LLC . 102 EYPTr3n OD BURTGEL-AUDIT AUDITING, WARRANT, ACCOUNTING, CONSULTING INDEPENDENT AUDITOR'S REPORT TO: PMU MANAGER BATMUNKH.D MULTI SECTORAL TECHNICAL ASSISTANCE PROJECT We have audited the accompanying the Statement of Project Sources and Uses of Funds reports of Multi Sectoral Technical Assistance Project Funded by International Development Association (Credit No: 4777-MN) and Government of Mongolia for the year ended December 31, 2016. The project management is responsible for the preparation and presentation of the Statement of Project Sources and Uses of Funds report in accordance with the requirements of the IDA Financing Agreement, the Project landbook and other relevant guidelines and procedures. These responsibilities include responsibility for the establishment, implementation, and application of internal controls relating to the preparation and presentation of the Statement of Project Sources and Uses of Funds report without material misstatement that may arise from fraud and error. We will be responsible for making a conclusion on the Statement of Project Sources and Uses of Funds report based on our audit work. We conducted our audit in accordance with International Standards on Auditing issued by the International Auditing and Assurance Standards Board of tile International Federation of Accountants. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the Statement of Project Sources and Uses of Funds report is free from material misstatement. An audit includes examining on test basis, evidence supporting the amounts and disclosures in the Statement of Project Sources and Uses of Funds reports. We believe our audit procedure provides a reasonable basis for audit opinion. Auditor's opinion In our opinion, the Statement of Project Sources and Uses of Funds ofthe Multi Sectoral Technical Assistance Project, December 31, 2016. has been accurately and objectively disclosed in accordance with the requirements of the Financing Agreement (IDA Credit 4777- MN), project guide and other relevant guidelines and procedures. L YJ1AA BA T PX GENERAL DIRECTO YUNAA-U xx. 2 [~ Vljfj 065j54 U i r~Eg;7I N-2 oawYP-w3 'OP "NMulli-Serloral Technl AssisIlnre Projecl" Credig No: -1777-MN fFiln cal S(ttemnt s 'or lite Nenr citled December 31, 2016 The Governmenit of Mongolia The literationall Deve lopmnienit Association Cre dit N94777-M N M uelti-Secloral Technical Ass istance Pmject STATEM ENT OF PROJECT SOURCES AND USES OFFUNDS For flh ycar ended Decembeir 31, 2016 (in USD) Cumulative to For 2016 Cunulative to Dec 31, 2016 Dec 31, 2015 SOURCELS IDA Funds 11.868,845.67 1.339.582.25 10,529,263.42 Other sources 134.848.06 28.160.72 106,687.34 TOTAL SOURSES OF FUNDS 12,003,693.73 1,367,742.97 10,635,950.76 fL USES OF FUNDS: 10,943,959.44 1,311,979.59 9,631,979.85 Goods 1.012.180.14 195,274.69 816.905.45 Consu!tant services 6, 1 68,644.04 958.783.15 5.209.860.89 Training and Workshops 3,640.214.53 138.160.44 3,502.054.09 Operating costs 122.920.73 19.761.3I 103.1 59.42 TOTAL USES OF FUN )S 10,943,959.44 1,311,979.59 9,631,979.85 Surplus of receipts over expenditmre: 1,059,734.29 55,763.38 1,003,970.91 Casl on hand Cash at bank Operating account 1 29.695.65 45,786.36 83,909.29 Designated account 930.038.64 9,977.02 920.061.62 [3alance ofcash and cash equivalents 1,059,734.29 55,763.38 1,003,970.91 L Prepared by: Approved by Mrs. 13.Undarmaa Mr. D.Batmunkh PMU Senior FMS IMU Manager fL i Li "0 BURTGEL AUDI)T" LLC 04 GYPTrng OD BURTGEL-AUDIT AUDITING, WARRANT, ACCOUNTING, CONSULTING INDEPENDENT AUDITOR'S REPORT TO: PMU MANAGER BATMUNKI-I.D MULTI SECTORAL TECHNICAL ASSISTANCE PROJECT We have audited the accompanying the Statement of Expenditures of Multi Sectoral Technical Assistance Project funded by International Development Association (Credit No: 4777-MN) and Government of Mongolia for the year ended December 31, 2016. The project management is responsible for the preparation and presentation of the Statement of Expenditures in accordance with the requirements of the IDA Financing Agreement. the Project Handbook and other relevant guidelines and procedures. "Thes responsibilities include responsibility for the establishment, implementation. and application of internal controls relating to the preparation and presentation of a Statement of Expenditures without material misstatement that may arise from fraud and error. We will be responsible for making a conclusion on the Statement of Expenditures based on our audit work. 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 Statement of Expenditures is Free from material misstatement. An audit includes examining on test basis. evidence supporting the amounts and disclosures in the Statement of Expenditures. We believe our audit procedure provides a reasonable basis for audit opinion. Auditor's opinion In our opinion, the Statement of Expenditures of the Multi Sectoral Technical Assistance Project, December 3172016, has been accurately and objectively disclosed in accordance with the requirements of the Financing Agreement (IDA Credit 4777-MN). project guide and other relevant guidelines and procedures. EN AYhAA T N OT G DIREC1o U A l EYPTr3fal AY LT "Miulli-SclorI Ieclhnical Assislå,nce Project" Crelit No: -1777-MN fihinncial Staieriieiis for Ilie y enr ended Decemher 31, 2016 Tie Government of Mougolin Thec International Dev,elopmencit Association Credit ,N4777-M N Multi-Seeloni Techlnicaml Assistafnce 1oect STATEM ENT OF EXPEN DITURES (IDA WilIIdnmils) For Ilie yeareidedDeecmnber31, 2016 VA Appliention C:inimed Credited date Amtjunt claimed Amnount Difference Niunihers type dalc emdied Upi o December 31, (WA 1-54) 10,529,263.42 10,529,263.42 - WA-551 Repkiiishnent 2016.01.19 102.716.43 102,716.43 - WA-56 Replenishment 2016.02.04 2016.02.25 215,712.34 215,712.34 - WA-57 Replenisinent 2016.03.01 2016.03.16 130,413.90 130,413.90 - WA-58 Replenishnnl 2016.04.01 2016.04.12 167,499.89 167,499.89 - WA-59 Replenishnrnl 2016.05.03 2016.05.13 128,578.97 128,578.97 - WA-60 Repleisiinnt 2016.06.03 2016.06.21 85,565.45 85,565.45 - WA-61 Replenishnnt 2016.07.04 20 16.07.26 113.666.92 113.666.92 - WA-62 Replenishnimt 2016.08.02 2016.08.19 102.718.78 102.718.78 - WA-63 Replenishnent 2016.09.06 2016.09.14 101,742.61 101,742.61 - WA-64 Repiiieiit 2016.10.03 2016.10.21 81,325.67 81,325.67 - WA-65 RepleniLshnient 2016.11.01 2016.11.04 56,932.29 56,932.29 - WA-66 Replenishmenlt 2016.12.01 2016.12.15 52,709.00 52.709.00 - For Ilie reporting period 2016 (WA 55-66) 1,339,582.25 1,339,582.25 - Up to Decemher 31, 2016 (WA 1-66) 11,868,845.67 11,868,845.67 - [.The expendliure ofUSD 102.709.43 expensed in 2015, was cleimed and credited lirough WA -55 in 2016. Prepared by: Approvet -by: Mis. B,.Uiidarna Mr. D.Batmunklh PMU Seior FMS PMU Manager D01) BUITGEL AUD1" LLC ogEYPTr3n ] AYDOT [i ten wOr C> r- irý rC,1 - r- C> o e- ø e o r . c. rJ n ri s r4 N i- t o tr o i sl Go r. I'- e æ' N- O-ko- e en e On (li ' 4 n ~ ~ ~ ~ ' n fn,eNNN or so r-'n t- CC k n N nl7 en o rI lis-e no n in ri o 'n qn -, r] C- 0 ri oI4 - r- -- i- n n m - n - - - - ,- --0 -r - - - n -.. - r- .- . - - - & oN en e r CorI -n O , unN et ~ ~ - io -, rC3r r eornr-orueoN0enu- JAMi4ý k.fi,.oo'c'nln r,. ':in:Onn ciCrric - CC ~~~~0 =r r0rI O In l Or- -8 U E meo--: -r : r u e--:lG 0' o uc~~\ 5 c,cw o s N m. re rq r v% c, kn %0 ;-o - ý ej - en nr ru o ru ru- - -i©©,,rru -J r r r -ro - e- 6 - < r e< rocurneient Agency Improving government procurement tirough (i) strengthening the regulatory framework of the Government Procurement Agency (GPA); (ii) provision of training to stafl of GPA (iii) facilitation of use of' e-procureient and disclosure of procurement information to the public. Component F. Initiating and Supporting Ilie Pensions' Reform Agenda and Developing Policy Options Supporting reform efforts by developing policy options and implementation guidelines. As well as defining strategy for transition mechanisms and the legal changes necessary to establish a multi-pillar pension system that provides adequate retirement benelts to the Mongolian elderly. 2. Summnai'y of significant accouniting policies a) Statemeat (f compliance Tihe Financial Statements comprise the Balance Sheet, Ilie Statement of Project Sources and l Jses of Funds. the Disbursement Report, the Designated Account Statement. These reports have been prepared as agreed with the World Bank. b) Basis of pi'eparatioi Tlie Financial Statements are prepared in accordance with International Public Sector Accounting Standards (IIPSASs) issued by the International Auditing and Assurance Standards Board of tlie International Federation of Accountants. Cash basis of accounting has been adopted. On this basis, receipts are recognized when received or direct payment to ereditors are made ratlier than when income is carned and disbursements are recognized when paid rather than wihen expenses are incurred. The Project has own Financial Management Manual which has been accepted by the World Bank and its financial management system is being operated consistently in accordance with this financial manual. 7lThe Project utilizes financial sofiware named "Info Systems. which is designed for accounting of proJect ac,tivity. ,"oD BURTGIL AUDIT LLC u ~og~ BYPTnn 1 "NI I i-Secloral Technical Assisl-mace Project" Credit No: 4777-MN Finnmcini Stalements for Ihie yeir ended Decembher 31, 2016 e) Basis of measurement The Financial Statements are presented in US Dollar ("USD") Transactions denominated in currencies other than USD are translated at rates at the dates of the transactions stated by the depository bank. Any gains and losses are reflected in the Statement of Sources and Uses of Funds. Il d) Basis of presentation The Account balances in the Financial Statements as of December 31, 2016 have been compared with such balances as of December 31, 2015. e) Designated account In according to the Disbursement Letter dated August 4. 2010, the project opened the Designated Account which is one segregated account for the credit financing acceptable to the World 13ank. The ceiling of the designated account is USD 1,000,000 (one million USD). Account number of the DA is 499185699 and it is maintained in USD at the Trade Development Bank. The payments for the eligible expenditures of procUring goods' and international consultants' services are paid from the Designated Account. f) Operating account As specified in the Disbursement Letter. the project opened the Operating Account (OA) which is one segregated account for the credit 1inancing acceptable to the World Bank. The cciling of the designated account is USD 150,000 (one hundred 111fy thousand USD). Account number of the OA is 499185700 and it is maintained in USD at the Trade Development Bank. The payments for the expenditures of training and incremental operating costs and local consultant service have been paid from the Operating account, 3. Disbursement progress a) Disbursement of IDA Credit 4777-MN As of December 31. 2016, the project had received $11,868,845.67 ( 98.90% of the total credit) through the DA as financing from IDA Credit 4777-MN and had disbursed $10.943,959.44 (91.12% of tli total credit). 4. Items in the balance sheet a) Cash and cash equivalents Summary of transaction statements of Operating Bank Accounts and Petty Cash Accounts for the period between January 1, 2016 and December 31. 2016 are indicated as follow: "ol) BURTGEL AuiT" LLC oasYP : OL IT "M ill i-Secltorl 1Technical AsSiNince Project" Credit No: 4777-MN uinwicial Slalemenis for the %ear ended December 31, 2016 1. Operating Bank Account of IDA Credit 4777-M N [tems At Dec 31, 2016 Beginning balance 83.909.29 Add: From IDA Designated accouft 955,282.24 Total interest earned 922.82 Foreign exchange gain Net tender material sale revenue (91.66) Total 956,113.41) Deduct: Cumulative project expenditures: Goods Consultant services 754,336.96 Training and Workshops 128,455.63 Operating costs 16.903.39 Total 899,695.98 H LAdvance to petty cash 10.63106 Tota' amount withdinmi 910,327.04 Ending balance 129,695.65 2. Petty Cash Account of IDA Credit 4777-MN Items At Dec 31, 2016 Beginning balance Add: From IDA Operating account 10,631.06 Foreign exchange gain Net tender material sale revenue Total 10,631.06 LU Dedu Lct: Cunulavtie project expenditures: Goods - Consultant sCIvicCs Training and Workshops 9,704.81 Operating costs 926.25 Total amount withdntwn 10,631.06 Ending balance 0 "1) IUTGEL AUDIT" LLC i 0AMYTra "Muilt-Sectr" Technical Assistnice Project" Firwnncii Statements for ine year enIded )ecr 31,2016 Credit No: 4777-MN b) Other sources The balance of other sources comprises of interest income, foreign exchange gain/loss and net tender material sale revenue. Ite nis At Dec 31, 2016 (USD) Interest income 134,640.19 Foreign exchange gain/loss Net tender material sale revenue 207.87 Total 134,848.06 Below expenditure of USD 75,113.77 had not been claimed to the World Bank by the year end December 31. 2016. However. it was claimed to the World Bank in January 2017 and replenished to the in January 2017. Category _Amount in USD Goods 1,311.85 Consultant services 63,927.27 Training and Workshops 7,826.63 . Operating costs 2.048.02 TOTAL 75,113.77 5. Procurement contracts For the reporting period the Project made 105 Procurement contracts through shopping. IC, CQS, LCS and SSS methods. 12 contracts were signed to procure goods and 93 contracts were signed to procure consultants' service. We are audited 12 (100%) procure goods and 29 (31.2%) consultant service's contract. These procurements were conducted according to (he procurement Guidelines issued by the World Bank. Lj "D01) 1IURTGEL AUI)IT" LLC 016YPTr3