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,iceo o    te             itor      e    e al                         4255707
INDEPENDENT AUDITOR'S REPORT                           A.G. Fax: 977-1-4268309
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Ref No: 2076/77,     B,5,                                                                           Nepal
The Secretary
Ministry of Finance                        01
Singh Durbar, Kathmandu
Report on the Financial Statements
We have audited the accompanying Project Financial Statement, Designated Account Statement and Financial
Monitoring Reports (FMRs) including Statement of Expenditures (SOEs) of the Earthquake Housing
Reconstruction Project (EHRP) under National Reconstruction Authority financed by IDA Credit No.5706-NP,
Credit No. 6164-NP, and MDTF Grant No. 0A4783 as at 16 July 2019 (31 Ashadh, 2076) and for the year then
ended and a summary of accounting policies and other explanatory notes.
Management's Responsibility for Financial Statements
Management is responsible for the preparation and fair presentation of the Financial Statements in accordance with
the Government of Nepal (GON) accounting policies and relevant practices. This responsibility includes: designing,
implementing and maintaining internal control relevant to preparation and fair presentation of financial statements
that are free from material misstatement, whether due to fraud and error.
Auditor's Responsibility
Our responsibility is to express an opinion on these Project Financial Statements based on our audit. We conducted
our audit in accordance with INTOSAI (International Organization of Supreme Audit Institutions) Fundamental
Auditing Principles. Those Principles require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of
material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments,
the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial
statements 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 entity's internal control. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of accounting estimates made by management,
as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.
Opinion
Management letter highlighting areas for improving financial management is attached herewith.
In our opinion, the Project Financial Statement, including Designated Account Statement, Financial Monitoring
Reports and SoEs, in all material respects, give a true and fair view of the financial position of the Earthquake
Housing Reconstruction Project (EHRP) under National Reconstruction Authority as of 16 July 2019 (31 Ashadh,
2076), and of the results of its operations and its cash flows for the year then ended in accordance with GoN
accounting policies. We also report that funds provided under IDA Credit No.5706-NP, Credit No. 6164-NP, and
MDTF Grant No. 0A4783 have been utilized for intended purposes.
In addition, with respect Statement of Expenditure (SOE) (a) adequate supporting documentation has been
maintained to support claims to IDA for reimbursement of expenditure incurred; and (b) ex Cenditure are eligible for
financing under the above mentioned IDA Loan/Grants.
(Tabu Ram Gautam)
Deputy Auditor General
email: oagnep@ntc.net.np, info@oag.go.np                                     Web Page: www.oagnep.gov.np