I I U U Poverty Reduction Fund Project II (IDA Grant No. H685-LA, IDA Credit No. 5677 - LA, TF Grant No. TFOI 2419, SDC and GOL Funding) Report of the Project's Management and Audited Financial Statements I For the year ended 31 December 2016 I IK I I U I I I I I I I I 1 U I Poverty Reduction Fund Project II (IDA Grant No. H685-LA, IDA Credit No. 5677 - LA, TF Grant No. TFO12419, SOC and GOL Funding) U I CONTENTS I Pages General information 1 -2 Report of the Project's Management 3 Independent auditors' report 4-5 Statement of receipts and disbursements 6 3 Statement of fund balance 7 Notes to the financial statements 8-17 I I I I I I I U I U I I I I Poverty Reduction Fund Project II (IDA Grant No. H685-LA, IDA Credit No. 5677 - LA, TF Grant No. TF01 2419, SDC and GOL Funding) GENERAL INFORMATION I The Poverty Reduction Fund Project II The Poverty Reduction Fund Project ("PRF 1") was set up following the Development Credit Agreement No. 3675-LA dated 19 August 2002 between the Government of Lao PDR ('GOL") and the International Development Association (1DA") aiming to assist the GoL in its on-going efforts to alleviate poverty throughout the country. The Poverty Reduction Fund Project II ("PRF Il") is the next phase of PRF IL While the purpose of PRF 11 remains the same as in PRF 1, the overall objective is revised to reflect an increased focus on outcome: to improve the access to and the utilization of basic economic and social infrastructure and services for communities in targeted poverty locations through processes of inclusive community and local development planning, implementation and monitoring. The specific objectives of PRFII are to: U improve delivery of public services at the village level, particularly access to safe and reliable water for consumption and irrigation, resulting in measurable progress toward achievement of the MDGs in the uplands, and o strengthen citizen's engagement in local development and encourage to adoption of responsive and accountable participatory planning, financing and implementation approaches for service delivery. PRFII's activities mainly cover 274 groups of villages ("Koum Ban") in Lao PDR, PRFII is implemented by the Poverty Reduction Fund of the Committee for Planning and Cooperation. On 1 May 2011, the Poverty Reduction Fund has been assigned to be monitored by the National Leading Board for Rural Development and Poverty Alleviation, Prime Minister's Office. Financing PRFII is currently financed by various funds including the IDA, the Swiss Agency for Development and Cooperation ("SDC"), Australian Government and the Government of Lao PDR ("GOL"). On 14 July 2011, the IDA agreed to provide Grant No. H685-LA with an amount of 15,800,000 Special Drawing Rights (equivalent to USD 25,000,000) to finance PRFII through the Financing Agreement signed with the GoL, represented by the Ministry of Finance, on the same date. The Closing Date of the Grant is 31 December 2016. The Swiss Government through the Swiss Agency for Development and Cooperation ("SDC") committed funds in the form of a non-reimbursable Grant of a maximum of USD 17,256,000 to the GoL for financing the PRFIl. The Grant, which is part of SDC's commitment to implement the Seven Socio-Economic Development Plan from 2011 to 2016, will run through until 31 December 2016. I The Ministry of Finance, being represented by the Budget Department of the Government of Lao PDR ("GOL"), issued a Budget payment approval No. 0127898/GOL and Budget payment approval No. A000520/MOF.BD, approved to pay PRF II a budget of LAK 16,000,000,000 and LAK 5,000,000,000 respectively. I I I 1 I U Poverty Reduction Fund Project II (IDA Grant No. H685-LA, IDA Credit No. 5677 - LA, TF Grant No, TF012419, SDC and GOL Funding) GENERAL INFORMATION (continued) Subsequently, the Australian Government agreed to provide co-financing of USD 16,900,000 for additional financial assistance to PRFII through the "Multi-Donor Trust Fund for the Lao Poverty Reduction Fund Support Facility" ("TF") administered by the IDA- The IDA and the GoL signed the Multi-Donor Trust Fund Grant Agreement No. TF012419 on 22 January 2013 This fund is for 37% of goods, works, non-consulting services, community development sub-grants, training and workshops and incremental operating costs of PRFIL The accompanying financial statements are for the IDA Grant No. H685-LA, IDA Credit No. 5677 - LA, TF Grant No. TF012419, the SDC and GOL funding ("the Project"). The Project activities consist of the following components: >. Component 1: Community development sub-grants - Support Koum Ban in planning community and local development activities - Carry out community development sup-projects in villages through the provision of community development sub-grants made available by the Project to Koum Ban committees to finance such sub-projects in accordance with the provisions of the sup-grant agreements Component 2: Local and community development capacity building and learning - Strengthen the capacity of Koum Ban and villages to, inter alia, (a) assess their needs, (b) plan community development sup-projects, and (c) implement and supervise community development sub-projects. - Strengthen the GoL's institutional capacity at the provincial and district levels to. inter alia. improve the quality of service delivery; promote participatory planning, accountability and transparency mechanisms and, facilitate dialogue between provinces, districts and communities and between various sector ministries with other entities supporting rural development. Strengthen, at the central level, (a) the National Committee for Rural Development and Poverty Eradication (NLCRDPE)'s institutional capacity and (b) the PRF's coordination with line ministries and other entities supporting rural development. m -Undertake project monitoring and evaluation activities, i Component 3: Project management - Support the Poverty Reduction Fund in implementing the Project, These three components are implemented in Vientiane, Houaphan, Savannakhet, Xiengkhuang, Saravan, Louangnamtha, Sekong. Attapeu. Phongsaly, Oudomxay and Louangprabang- Component 4: Livelihood and Nutrition - Strengthen mobilizing ethic communities for improved Livelihood and Wellbeing which focus on: (a) formation of community Selft-Help Groups and Capacity Building of Local Service Providers, (b) Community Asset Creation, (c) Participatory Pro-Nutrition Assessment and Activities, and (d) Monitoring and Impact Evaluation of Activities. I I I 2 U I Poverty Reduction Fund Project II (IDA Grant No. H685-LA, IDA Credit No, 5677 - LA, TF Grant No. TF012419, SDC and GOL Funding) REPORT OF THE PROJECT'S MANAGEMENT MANAGEMENT'S RESPONSIBILITIES IN RESPECT OF THE FINANCIAL STATEMENTS The Project's Management is responsible for the preparation of the Project's financial statements which comprise the statement of fund balance as at 31 December 2016 and the statement of receipts and disbursements for the year then ended together with the explanatory notes thereto. In preparing the financial statements, the Project's Management is required to: adopt accounting policies as described in Note 3 to the financial statements and apply them consistently in accordance with the requirements of IDA and SDC for Government-executed projects' financial statements make judgements and estimates that are reasonable and prudent; maintain proper financial operations and controls: maintain adequacy of the management structure and general control environment; ensure that all non-expendable properties are used solely for and by the Project, and maintain proper control over those properties; and comply with the related grant and financing agreements. The Project's Management is responsible for ensuring that proper accounting records are kept which disclose, with reasonable accuracy at any time, the funds requested, authorized for, received and disbursed by the Project and to ensure that the accounting records comply with the accounting policies described in Note 3 to the financial statements. The Project's Management is also responsible for safeguarding the assets of the Project, and for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Project's Management confirms that they have complied with the above requirements in preparing the financial statements- APPROVAL OF THE FINANCIAL STATEMENTS We hereby approve the accompanying financial statements as at and for the year ended 31 December 2016 which are prepared in accordance with the accounting policies as described in Note 3 to the financial statements and comply with the related grant and financing agreements. The financial statements are prepared to assist the Project's Management in meeting the reporting requirements of the IDA and SDC. As a result, the financial statements may not be suitable for any I other purpose. ct Management: m ang Suvannaphanh Ms. Boualy Sayavong Executive Director Head of Finance and Administration Vientiane, Lao PDR 24 March 2017 I I __ U 3 EY Building a bettel 3 ~ working wortM Reference 60826839118847908 INDEPENDENT AUDITORS' REPORT To: The Management of Poverty Reduction Fund Project II; The International Development Association; and The Swiss Agency for Development and Cooperation Opinion We have audited the financial statements of Poverty Reduction Fund Project II ("the Project"), which comprise the statement of fund balance as at 31 December 2016, and the statement of receipts and disbursements for the period from 1 October 2015 to 31 December 2016, and the related explanatory notes, including a summary of significant accounting policies as set out on page 8 to 17- In our opinion, the accompanying statement of fund balance as at 31 December 2016 and statement of receipts and disbursements of the Project for the period from 1 October 2015 to 31 December 2016 are prepared, in all material respects, in accordance with the accounting policies as described in Note 3 to the financial statements. 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 section of our report. We are independent of the Project in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants (IESBA Code) and the ethical requirements that are relevant to our audit of the statement of expenditures in Lao P.D.R, and we have fulfilled our ethical responsibilities in accordance with these requirements and the IESBA Code We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Emphasis of matter - basis of accounting and restriction on distribution and use We draw attention to Note 3 to the financial statements which describes the basis of accounting. The financial statements is prepared to assist the Project's management in meeting the reporting requirements of Donors As a result, the financial statements may not be suitable for another purpose. Our report is intended solely for the information and use of the Project's management and Donors, and should not be distributed to or used by other parties. Our opinion is not modified in respect of this matter. Project management's responsibility for the statement of expenditures The Project's management is responsible for the preparation of the financial statements in accordance with the accounting policies as described in Note 3 to the financial statements and for such internal control as the Project's management determines is necessary to enable the preparation of the financial statements that are free from material misstatement, whether due to fraud or error. Auditors' responsibility I 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. U I * EY Building a better working world 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 nsks, 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 the Project's internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management, Vientiane, Lao PDR 24 March 2017 I ~r I k IP~& y I I I Poverty Reduction Fund Project 1l (IDA Grant No. H685-LA, IDA Credit No. 5677 - LA, TF Grant No. TF012419, SDC and GOL Funding) STATEMENT OF RECEIPTS AND DISBURSEMENTS for the year ended 31 December 2016 C rncy S For the period from 1 October For the year Accumulated as at 2015 to 31 ended 30 Notes 31 December 2016 December 2016 September 2015 Receipts Funds from IDA and TF 4 52,275,835 14,752,602 10,141,195 Funds from SOC 5 17,256,000 3,620,000 3,736,000 Funds from GOL 6 8,540,135 2,588,937 3,956.186 Total receipts 78,071,970 20,961,539 17,833,381 Disbursements Component 1 iCommunity development sub-grants 53,298.920 18,235,592 11,043,295 Component 2 Local and community development capacity building and learning 8,543,226 2,999,240 1,163,636 Component 3: Project T management 13,646,752 4,381,113 2,701,084 Component 4: Likelihood dnutrtion 1,930,389 1,930,389 Total disbursements 7 77,419,287 27,546,334 14,908,015 Net nts)/receipts 652,683 (6,584,795) 2,925.366 ng Souvannaphanh Ms. Boualy Sayavong Execu ve Director Head of Finance and Administration Vientiane, Lao POR 24 March 2017 I I I I 3 6 I I I Poverty Reduction Fund Project II (IDA Grant No. H685-LA, IDA Credit No. 5677 - LA, TF Grant No. TF012419, SDC and GOL Funding) STATEMENT OF FUND BALANCE as at 31 December 2016 Currency: $US 31 December 30 September Notes 2016 2015 Opening fund balance 7,237,478 4,312,112 Net disbursements (6,584,795) 2,925,366 Closing fund balance 652,683 7,237,478 Represented by Cash on hand and cash at banks 8 652,683 7,146,848 Advances 9 -9,3 652,683 7,237,478 vannaphanh Ms. Boualy Sayavong Executive Director Head of Finance and Administration Vientiane, Lao PDR 24 March 2017 U7 I I I I I U I I U Poverty Reduction Fund Project II (IDA Grant No. H685-LA, IDA Credit No. 5677 - LA, TF Grant No. TF01 2419, SDC and GOL Funding) NOTES TO THE FINANCIAL STATEMENTS (continued) 3 as at and for the year ended 31 December 2016 1. PROJECT BACKGROUND The Poverty Reduction Fund Project 11 The Poverty Reduction Fund Project ("PRF I") was set up following the Development Credit Agreement No- 3675-LA dated 19 August 2002 between the Government of Lao PDR ("GoL') and the International Development Association ("IDA") aiming to assist the GoL in its on-going efforts to alleviate poverty throughout the country. The Poverty Reduction Fund Project 11 ("PRF I") is the next phase of PRF I. While the purpose of PRF 11 remains the same as in PRF I, the overall objective is revised to reflect an increased focus on outcome: to improve the access to and the utilization of basic economic and social infrastructure and services for communities in targeted poverty locations through processes of inclusive community and local development planning, implementation and monitoring. The specific objectives of PRFIlI are to: i improve delivery of public services at the village level, particularly access to safe and reliable water for consumption and irrigation, resulting in measurable progress toward achievement of the MDGs in the uplands; and > strengthen citizen's engagement in local development and encourage to adoption of responsive and accountable participatory planning, financing and implementation approaches for service delivery PRFII's activities mainly cover 274 groups of villages ("Koum Ban") in Lao PDR PRFII is implemented by the Poverty Reduction Fund of the Committee for Planning and Cooperation. On 1 May 2011, the Poverty Reduction Fund has been assigned to be monitored by the National Leading Board for Rural Development and Poverty Alleviation, Prime Minister's Office. Financing PRFIl is currently financed by various funds including the IDA, the Swiss Agency for Development and Cooperation ("SDC"), Australian Government and the Government of Lao PDR ( GOL"). On 14 July 2011, the IDA agreed to provide Grant No. H685-LAwith an amount of 15,800,000 Designated Drawing Rights (equivalent to USD 25,000,000) to finance PRFII through the Financing Agreement signed with the GoL, represented by the Ministry of Finance, on the same date- The Closing Date of the Grant is 31 December 2016 The Swiss Government through the Swiss Agency for Development and Cooperation (SDC") committed funds in the form of a non-reimbursable Grant of a maximum of USD 17,256,000 to the GoL for financing the PRFII. The Grant, which is part of SDC's commitment to implement the Seven Socio-Economic Development Plan from 2011 to 2016, will run through until 31 December 2016. On 26 August 2013, the Ministry of Finance, being represented by the Budget Department of the Government of Lao PDR ("GOL"), issued a Budget payment approval No.A004164/GOL, approved to pay PRF 11 a budget of LAK 16,000,000,000. I I Poverty Reduction Fund Project II (IDA Grant No. H685-LA, IDA Credit No. 5677- LA, TF Grant No. TF012419, SDC and GOL Funding) NOTES TO THE FINANCIAL STATEMENTS (continued) 3 as at and for the year ended 31 December 2016 1. PROJECT BACKGROUND (continued) Subsequently, the Australian Government agreed to provide co-financing of USD 16,900.000 for additional financial assistance to PRFII through the 'Multi-Donor Trust Fund for the Lao Poverty Reduction Fund Support Facility" ("TF") administered by the IDA. The IDA and the GoL signed the Multi-Donor Trust Fund Grant Agreement No. TF012419 on 22 January 2013. This fund is for 37% of goods, works, non-consulting services, community development sub- grants, training and workshops and incremental operating costs of PRFII, The accompanying financial statements are for the IDA Grant No. H685-LA, IDA Credit No. 5677 - LA, TF Grant No. TF01 2419, the SDC and GOL funding ("the Project"). 2. BASIS OF PREPARATION The Project's financial statements comprise the statement of receipts and disbursements and the statement of fund balance which are expressed in. United States dollars ("USID"). These financial statements are prepared by the Project's management in accordance with the U accounting policies as described in Note 3. 3 The Project maintains its accounting records in USID. The financial statements are prepared solely to assist the Project's Management in meeting the reporting requirements of the IDA and SDC U 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 3.1. Funds from IDA and TF Funds from IDA and TF are recognized as receipts when cash is credited to the Project's 3 Designated Account. 3.2. Funds from SDC Funds from SDC are recognized as receipts when cash is credited to the Project's bank I account, 3.3. Disbursements U Expenditures are recognized when documents substantiating the Project's transactions are submitted and approved and payment is made, except for sub-grants under components 1 and 2 which is recognized when cash is transferred from the Project's bank accounts to Koum 3 Ban. 3.4. Advances Amounts advanced for Project's activities are recorded as advances in the statement of fund t balance when disbursed. When the advances are liquidated, the related expenses are recognized in the statement of receipts and disbursements. U 9 Uh eotn eurmnso h D n D U Poverty Reduction Fund Project II (IDA Grant No. H685-LA, IDA Credit No. 5677 - LA, TF Grant No. TF012419, SDC and GOL Funding) NOTES TO THE FINANCIAL STATEMENTS (continued) 3 as at and for the year ended 31 December 2016 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 3.5. Fixed assets Fixed assets procured are recognized as expenditures in full in the statement of receipts and disbursements when received or when handed-over from the contractors or suppliers upon U the respective acceptance and approval by the Project and when payment is made, Accordingly, fixed assets are not recognized in the statement of fund balance at the end of the year. I The Project maintains a fixed asset register for control and monitoring purposes, which includes vehicles, furniture and fittings, computers and office equipment. 3.6. Foreign exchange differences Disbursements and withdrawals in foreign currencies other than USD are converted into USD at the actual exchange rates ruling at the dates of transactions. Fund balance denoted in foreign currencies are translated into USD at the closing exchange rate at the reporting date. Foreign exchange differences are recognized in the statement of receipts and disbursements. IT 14. FUNDS FROM IDA AND TF Currency., $US 3For the period from For the year ended I October 2015 to 30 September Withdrawal Application No. Date of receipt 31 December 2016 2015 IIDA H685 -LA Application No. 026 24 September 2015 - 1,002,517 Application No. 029 12 March 2015 - 1,052,988 Application No. 030 02 February 2015 - 515,250 IApplication No. 031 26 November 2014 - 828,447 Application No. 032 16 December 2015 192,850 Application No. 033 21 January 2016 384,288 Application No. 034 12 February 2016 327,223 Application No. 035 22 March 2016 6,029 Application No. 037 03 August 2016 104 -__ ___ 3910,494 3,399,202 Additional funed received from IDA IDA 5677 - LA IApplication No. 001 16 March 2016 2,500,000 Application No. 002 18 April 2016 1,969,895 Application No. 003 14 Junuary 2016 1,834,634 Application No. 004 23 September 2016 1,410,433 IApplication No. 005 19 October 2016 779,550 Application No. 006 08 November 2016 988,957 Application No. 007 10 November 2016 653,123 Application No. 008 19 December 2016 636,853 IAppliation No. 009 08 December 2016 768,895 Application No. 010 16 December 2016 _____11,821 _ 3 ~ ~~~11,554,161 _______ * 10 I U Poverty Reduction Fund Project II (IDA Grant No. H685-LA, IDA Credit No. 5677 - LA, TF Grant No. TF01 2419, SDC and GOL Funding) NOTES TO THE FINANCIAL STATEMENTS (continued) as at and for the year ended 31 December 2016 4. FUNDS FROM IDA AND TF (continued) Currency: $US For the period from 1 October For the year 2015 to 31 ended 30 Withdrawal Application No. Date of receipt December 2016 September 2015 TF 12419 Application No. 018 26 November 2014 - 588,780 Application No. 019 02 February 2015 - 618,422 Application No. 020 12 March 2015 - 302.607 Application No. 021 22 May 2015 - 1147.586 Application No. 022 17 June 2015 1,450,000 Application No 023 03 September 2015 I1313,074 Application No. 024 03 September 2015 1,349,000 Application No. 025 28 September 2015 - 972.524 Application No. 026 21 December 2015 113.194 Application No. 027 21 January 2016 225,560 - Application No. 028 17 February 2016 121,028 - Appication No. 029 22 March 2016 2,230 Application No. 030 18 April 2016 728,591 - Application No. 031 08 June 2016 678,563 - Application No. 032 03 August 2016 418,781 - 3 2,287,947 6,741,993 Total replenishments of designated account No. 0000010092800127 14,752,602 10,141,195 I 5. FUNDS FROM SDC ~Currency: $US For the period from 1 October For the year Withdrawal Application 2015 to 31 ended 30 No. Date of receipt December 2016 September 2015 SDC Funding Oct.14,SOC.RecO2 22 October 2014 - 436,000 Nov 14.SDC.Rec01 25 November 2014 - 2.300,000 May.15-SDC.RecOl 11 May 2015 - 1,000,000 Oct.15.SDC RecO1 19 October 2015 2,000,000 - 3 May.16-SDC,Rec01 11 May 2016 1,620.000 - Total replenishments of operating account No. 0105110119672 3,620,000 3,736,000 U I U I I I Poverty Reduction Fund Project II (IDA Grant No. H685-LA, IDA Credit No. 5677 - LA, TF Grant No. TF012419, SDC and GOL Funding) NOTES TO THE FINANCIAL STATEMENTS (continued) as at and for the year ended 31 December 2016 6. FUNDS FROM GOL For the period Currency: $US from 1 October For the year Withdrawal Application 2015to31 ended 30 No. Date of receipt December 2016 September 2015 Lao POR Government Contribution Oct.14.GOLGOL.01 21 October 2014 - 1,992032 Aug 15.GOLB01 26 Agust 2015 - 1,964154 Sep,16.GOL.001 30 September 2016 1977017 Dec.16.GOL.B12 23 December 2016 611,920 Total replenishments of operating account No. 47100.0ODD01 00320 2,588,937 3,956,186 I I I I I I I I I I I * 12 I Poverty Reduction Fund Project II (IDA Grant No. H685-LA, TF Grant No. TF012419, SDC and GOL Funding) NOTES TO THE FINANCIAL STATEMENTS (continued) as at and for the year ended 31 December 2016 7. DISBURSEMENTS Currency: $US Accumulated For the period from 1 October 2075 to 31 as at 31 December 2016 For the year ended 30 September 2015 Total December budget 2016 IDA and TF SOC GOL Total IDA and TF SDC GOL Total Component 1: Community Development Sub-Grants 1,1 Sub-project 56,618,256 45,767.301 9,688,422 2,283,686 3,951,353 15,923.461 5.760.612 2,145,764 1,955,411 9.861,787 1.2 Equipment - 373,606 185,949 19,246 - 205.195 22,252 7,282 - 29,534 1,3 Water Sub-project (SDC) - 2,817,812 29,880 138,976 - 168,856 - 653,150 - 653,150 1 4 Kum Bans training _ - 4340,201 1,681.223 256,857 - 1,938,080 442.210 56,614 - 498,824 Sub-total expenditure of component 1 56,618,256 53,298,920 11,585,474 2,698,765 3,951,353 18,235,592 6,225,074 2,862,810 1,955,411 11,043.295 Component 2: Local and Community Development Capacity Building and Learning 2.1 Capacity Building 5,099,853 5,099,853 448,601 1.610.057 - 2,058,658 308.569 268,578 - 577,147 2.2 Assessments 1,266,248 1,266,248 396,887 15,251 - 412,138 137,185 - - 137.185 23 Sub-grant monitoring 2,158,319 2,158319 53,804 473.693 - 527,497 232,728 208,166 - 440,894 2.4 Innovation Fund (SOC) 18,806 18,806 - 947 - 947 - 8,410 8,410 Sub-total expenditure of component 2 8,543,226 8,543,226 899,292 2,099,948 2,999,240 678,482 485,154 - 1,163,636 13 mam mm mmmmem m -mm --mem m mmm mmmm Poverty Reduction Fund Project II (IDA Grant No. H685-LA, TF Grant No. TF012419, SDC and GOL Funding) NOTES TO THE FINANCIAL STATEMENTS (continued) as at and for the year ended 31 December 2016 7. DISBURSEMENTS (continued) Currency $US Accumulate For the period from 1 October 2015 to 31 d as at 31 December 2016 For the year ended 30 September 2015 December Total budget 2016 IDA and TF SDC GOL Total IDA and TF SDC GOL Total Component 3: Project Management 3 1 External Audit 94,415 78,253 18 942 - - 18,942 21 580 - 21,580 3.2 Local staff salaries 9,973,337 9,973,337 2,711 175 - - 2,711.175 2,165,303 - - 2.165303 3,3 Equipment 1,980,685 1,980.685 986 108 71,844 - 1,057,952 84.560 168,707 - 253.267 34 Works 238,937 238.936 20,281 54,252 - 74,533 1,129 3,415 - 4,544 3.5 Operation cost 1 376,755 1,375,541 130,684 374,114 13,713 518,511 8,737 241.225 6,428 256,390 Sub-total expenditure of component 3 13,664,129 13,646,752 3,867,190 500,210 13,713 4,381,113 2,281,309 413,347 6,428 2,701,084 Component 4: livelihood and Nutrition 4 1 Assessments 65,117 65,117 65,117 - - 65,117 - 4 2 Staff 406,500 406,500 406.500 - - 406,500 - - - 43 Trainings 373.179 373 179 373,179 - - 373,179 - - - - 4 4 Operating Costs 141,424 141,424 141,424 - - 141,424 - - - 4 5 Sub-Graints 944,169 944.169 944,169 - 944.169 - - Sub-total expenditure of component 4 1,930,389 1,930,389 1,930,389 - - 1,930,389 - - Contingencies - - Total disbursement 80,756,000 77,419,287 18,282,345 5,298,923 3,965,066 27,546,334 9,184,865 3,761,311 1,961,839 14,908,015 14 -m1-M mIM m m M m m m m m - M M m M M Poverty Reduction Fund Project 11 (IDA Grant No. H685-LA, TF Grant No. TF012419, SDC and GOL Funding) NOTES TO THE FINANCIAL STATEMENTS (continued) as at and for the year ended 31 December 2016 8. CASH ON HAND AND CASH AT BANKS Currency: $US 31 December 2016 30 September 2015 IDA and TF SDC GOL Total IDA and TF SDC GOL Total Cash on hand Cash on hand at Vientiane - 859 859 1.400 2 652 4.052 Cash on hand at Provinces . - - - 1,508 1,168 - 2.676 Total cash on hand 859 859 2,908 3,820 6,728 Cash at banks Operating accounts PRF II - Vientiane bank accounts 3,593 - 635,650 639,243 758,230 1,415,562 2,011,768 4,185,560 PRF It - Province bank accounts - 9 - 9 104,677 175,545 870 281,092 Designated account - BoL (Note 8.1) 12,572 - 12,572 2,673 468 - - 2.673,468 Total cash at banks 16,165 9 635,650 651,824 3,536,375 1,591,107 2,012,638 7,140,120 Total cash on hand and cash at banks 16,165 9 636,509 652,683 3,539,283 1,594,927 2,012,638 7,146,848 15 I Poverty Reduction Fund Project II (IDA Grant No. H685-LA, TF Grant No. TF012419, SDC and GOL Funding) NOTES TO THE FINANCIAL STATEMENTS (continued) as at and for the year ended 31 December 2016 8. CASH ON HAND AND CASH AT BANKS (continued) Cash in Designated Account In accordance with the financing agreement of the Project, the following Designated Account is maintained in USD at the Bank of Lao PDR: Account No,: 0000010092800127 Depository: Bank of Lao PDR Address: Yonet Street, Vientiane, Lao PDR Related Grant IDA Grant Agreement No. H685-LA, IDA Credit No. 5677 - LA and TF on Credit Agreement No. TF 12419 Currency: USD The purpose of the Designated Account is to receive fund from IDA on Credit No. H685-LA and TF on Credit No, TF 12419 for transferring to operating accounts and for certain direct payments to suppliers, contractors and service providers, The Designated Accounts are non-interest bearing. Movement of the Designated Accounts during the year is as follows: 8.1.1 Account activities For the period from 1 October For the year 20151o3l ended 30 December 2016 September 2015 Opening balance 2,673,468 1,432,385 Add: I IDA and TF replenishment (Note 4) 14.752602 10141195 Total opening balance of cash on hand and cash at bank (Note 8) and Advance (Note 9) 872440 1,109,184 18,298,510 12,682,764 Deduct: Total disbursements during the year (Note 7) (18,282.345) (9184865) Advances (Note 9) (6625) Replenishments to operating accounts (Note 8) (3,593) (862907) Cash on hand (Note 8) (2,908) Expense on behalf of the SDC 48,009 Closing balance (Note 8) 12,572 2673,468 016 I82850 1,8,6 I Poverty Reduction Fund Project II (IDA Grant No, H685-LA, TF Grant No. TF01 2419, SDC and GOL Funding) NOTES TO THE FINANCIAL STATEMENTS (continued) as at and for the year ended 31 December 2016 8. CASH ON HAND AND CASH AT BANKS (continued) 38.1 Cash in Designated Account (continued) 8.1.2 Account reconciliation Currency: $US For the period I from 1 October For the year 2015 to 31 ended 30 December 2016 September 2015 Amount advanced by the IDA to the Designated Account duing the year 3950,000 3,950,000 Withdrawal of advance by the IDA (1,537930) - Closing balance of amount advanced to Designated Account 2,412,070 3,950,000 Closing balance of Designated Account (Note 8) 12,572 2,673,468 Add Cash balance of the Project's operating account at Vientiane (Note 8) 3,593 758,230 Amount withdrawn but not yet claimed ()2,395,905 511,677 Outstanding advances at Vientiane office (Note 9) 6,625 Currency: $US 31 December 2016ebr21 Adclsin outsVtianigaonedacdt (Note 8, 2 3 ,950,0 83,390,000 2,412,070 3,950,000 Th rplnihmntamun f JS 29590 fr uc 2IAwil9e5 ad i9Jnur 017. I 9. ADVANCES Exoternal audit) 16,625 Adcs ovningaoun adane to 42 9 gat Ac,c6 5,42 ,5950,30 This ails ofnt commitens d routra w r al are apliatos w 1r: a57 - LA Ih S-relnishm e ontans f USO 2or such a w5ll2be 5,3de8i5n u 2017 TotalS1C966t4l 5,384,851ta buildings. spillways and bridges in the provinces which were funded by the Government of Lao PDR ("GOL"). 3 17 I