* "NIISLEL-AUDIT" LLC AUDITOR'S REPORT E-Health Project No.5489-MN Financial statements as of December 31, 2016 Ulaanbaatar 2017 "NIISLEL AUDIT" LLC .-' Certified audit, appraisal and accounting consultancy company oate: #&9 0P dq INDEPENDENT AUDITOR'S REPORT To: PIU Coordinator D.Tumurtogoo E-Health Project Credit No: P131290 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 E-Health Project Credit No:P131290 for the period from August 17, 2015 to December 31, 2016. The management of E-Health 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 for the period from August 17, 2015 to December 31, 2016 and furthermore in all material respected, expenditure have applied to the purpose intended in the Financing Agreement, Credit No:P131290. "Niis Au L Ulaanbaalar city, Sukhboatar district, Baga toinu-44 Phone/Fax: 31-89-18, 70120095 E-mail: info@nlis1elaudit.mn LI 1J, Government of Mongolia International Development Association Credit No: P131290 E-HEALTH PROJECT AUDITED BALANCE SHEET For the period from Aug 17, 2015 to Dec 31, 2016 2015.08.17 2016.12.31 USD USD ASSET 1. Cash Cash on hand 4.a 6.80 In banks: Designated account IDA5489 4.a - 468,334.66 Operating account IDA5489 4.a 4,078.48 Total cash 472,419.94 Project accumulated disbursement - - Category I - Consultant service for Part 5 4.b - 65,839.62 Goods for Part 5 4.1b - 22,354.32 Incremental operation cost for Part 5 4.b - 4,429.62 Category 2 Consultancy and Training -Part 1-4 Non Consultancy Part 1-4 Total Expenditures 92,623.56 TOTAL ASSET - 565,043.50 Financing IDA Funds 5489 560,000.00 Interest earning 5,043.50 TOTAL FINANCING - 565,043.50 Prepared by: A Oved.by Mrs. ..Ak e M P Codnt.......... Financial officer Acting Project Coordinator "NIISLEL AUDIT" LLC Certified audit, appraisal and accounting consultancy company INDEPENDENT AUDITOR'S REPORT To: PIU Coordinator D.Tumurtogoo E-Health Project Credit No: P131290 We have audited the accompanying statement Sources and Uses of Funds of E-Health Project submitted to the World Bank the period from August 17, 2015 to December 31, 2016 in support of credit withdrawals under the Financing Agreement, Credit No: P131290. 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. ri U/ -NiWel-/uditLLC Ulaanbaafar city, Sukhbaatar distct, Baga toiruu-44 Phone/Fax 31-89-18, 70120095 E-mail: info@nislelauditmn Government of Mongolia International Development Association Credit No: P131290 E-HEALTH PROJECT AUDITED SOURCES AND USES OF FUNDS For the period from Aug 17, 2015 to Dec 31, 2016 Accumulated Accumulated H balance, as of 2016 balance, as of 2015.08.17 2016.12.31 B inncngUSD USD USD Financing IDA Funds 5489 560,000.00 560,000.00 Interest earning 5,043.50 5,043.50 Total Financing - 565,043.50 565,043.50 Disbursement from Financing Category I Consultant service for Part 5 - 65,839.62 65,839.62 Goods for Part 5 Incremental opeartion cost for Part 5 Total Disbursement 92,623.56 92,623.56 Disbursement balance 472,419.94 472,419.94 Cash on hand Cash on hand 6.80 6.80 In banks: 68,334.66 Designated account IDA5489 4846 4,078.48 Operating account IDA5489 Total cash and cash equivalents 472,419.94 472,419.94 Prepared by: 1Approxed by: Mrs... . .. .. balance,l asfce of 20 6b l nefso Finacia offcerActing Project C oordinator 2050.1i06.23 USLUD S U 6,0.0 50000 U ,4.05035 -U6,4.0 55035 -U5896 5896 - 234.22,343 "Nil SLEL AUDIT" LLC .11, - Certified audit, appraisal and accounting consultancy company INDEPENDENT AUDITOR'S REPORT To: PIU Coordinator D.Tumurtogoo E-Health Project Credit No: P131290 We have audited the accompanying the Statement of Expenditures (SOEs) of E-Health Project submitted to the World Bank the period from August 17, 2015 to December 31, 2016 in support of credit withdrawals under the Financing Agreement, Credit No: P131290 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. IN -NiiAel-Adt 1 Ulaanbaaar city, Sukhbaatar district, Baga toirvu-44 Phone/Fax: 31-89-18, 70120095 E-mail: info@niislelauditmn Ul Government of Mongolia International Development Association Credit No: P131290 E-HEALTH PROJECT AUDITED SUMMARY OF APPLICATION FOR WITHDRAWAL For the period from Aug 17, 2015 to Dec 31, 2016 Number Types Requested Financed Requested Financed Difference of WA date date amount amount Credit No: P131290 . . . WA 01 Re-financing 2016.08.18 2016.08.25 500,000.00 500,000.00 - WA 02 Re-financing 2016.08.22 2016.09.06 60,000.00 60,000.00 - FY of 2016 (WA 1-2) 560,000.00 560,000.00 - Up to 2016.12.31 (WA 1-2) 560,000.00 560,000.00 - Prepared by: . Approved by: Mrs. .. ;rMr. ........ Financial Officer Project Coordinator tiý 19 4-> CDD 0 ~ ~ C144 e] et ri r o c d 001 ej : .6 ......... . ....... "NIISLEL AUDIT" LLC ICfi -I . Certified audit, appraisal and accounting consultancy company Date. .4 INDEPENDENT AUDITOR'S REPORT To: PIU Coordinator D.Tumurtogoo E-Health Project Credit No: P131290 LJ We have audited the accompanying the Designated Account Statement of E-Health Project submitted to the World Bank the period from August 17, 2015 to December 31, 2016 in support of credit withdrawals under the Financing Agreement, Credit No: P131290 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 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 Statement submitted together with the internal controls and procedures involved in their preparation can be relied upon to support the application for credit withdrawals. LJ LJ Utaanbaafar city, Sukhbaatar district, Baga toiuu-44 Phone/Fax: 31-89-18, 70120095 E-mail info@niisfelaudit.mn L Government of Mongolia International Development Association Credit No: P131290 E-HEALTH PROJECT AUDITED STATEMENT OF DESIGNATED ACCOUNT For the period from Aug 17, 2015 to Dec 31, 2016 2015.08.17 2016.12.31 USD USD Part A- Account transactions Beginning balance . . Add: 566,675.78 Financing from IDA for the financial period 560,000.00 Interest income 6,675.78 Consultancy and training cost return Deduct: Total disbursement 2,629.03 Transferred to operating account 95,712.09 Advance for consultancy and training cost Bank comission Ending balance - 468,334.66 Part B- Adjustment of Account Pre-financing from IDA Ending balance of designated account for the financial year Add: Disbursed but not requested 92,623.56 Exchange rate loss 1,790.56 Operating account ending balance 4,078.48 Petty cash ending balance 6.80 Other payment Deduct: Interest earning 6,834.06 Exchange rate income Other income Other liabilities L Designated account Pre-financing amount -560,000.00 Prepared by: Approved by: ...........M r. . A UFinancial Officer Project Coordinator 0 .. 8 6,340 Government of Mongolia International Development Association Credit No: P131290 E-HEALTH PROJECT AUDITED STATEMENT OF OPERATING ACCOUNT For the period from Aug 17, 2015 to Dec 31, 2016 2015.08.17 2016.12.31 USD USD Beginning balance - - Add: Withdrawn from special account 95,712.09 Interest income 138.27 Exchange rate gain Other income Disbursement return Deduct: Total disbursement 89,620.58 Transferred to petty cash 392.68 Transferred to special account Transferred to card account Disbursement of interest income Bank comission Exchange rate loss 1,758.62 Ending balance 4,078.48 Prepared by: Ajiroved by: Mrs. . r. ...... Financial officer rect Cor dinator L L U Government of Mongolia International Development Association Credit No: P131290 E-HEALTH PROJECT AUDITED STATEMENT OF PETTY CASH For the period from Aug 17, 2015 to Dec 31, 2016 2015.08.17 2016.12.31 USD USD Beginning balance Add: Withdrawn from operating account Disbursement return 392.68 Exchange rate gain Deduct: Total disbursement 373.94 Interest income disbursement Mission&trip prepayment Exchange rate loss 11.94 Not yeat claimed Ending balance 6.80 Prepared by: ApproVed by: Mrs.. . Mrs.g. ..-Mr...... Financial Officer Project Coordinator L E-Health Project Credit No: IDA5489 Financial Statement as of December 31, 2016 NOTES TO THE FINANCIAL REPORT 1. PROJECT BACKGROUND The "E-Health Project" agreement was established between the Government of Mongolia and the International Development Association of the World Bank on June 18, 2015. The total credit amount is SDR 12,700,000 (equivalent to USD 19,500,000). The Project became effective on August 17, 2015 and it will be closed on September 30, 2020. The objective of the Project is to improve integration and utilization of health information and e-health solutions for better health service delivery in selected pilot sites. The Project consists of the following parts: A I Part 1 E-health Foundational Activities 1.1 Enterprise Architecture development Adopting of a national enterprise architecture framework and developing a domain specific enterprise architecture adapted to the health sector, including analysis of the current business processes at health facilities and subsequent development of required elements of the enterprise information system. 1.2 Health data standards Establishment of a suite of health data standards to form the common language required for the diverse computer systems in the Recipient's health sector to interoperate, including subscription to use of major health data exchange standards. Part 2 Clinical Data Collection, Access and Sharing 2.1 E-health portal and viewer Development of a basis for standardized data exchange between healthcare providers and data access for users, including development of: (a) the computer architecture; (b) a web- portal application and links that would enable the electronic health information system to become fully functional over time; and (c) security infrastructure for the portal to assure appropriate levels of privacy and confidentiality. 2.2 Health Information Exchange Platform Development of health information exchange platform (HIEP) to (a) facilitate messaging, enhanced continuity-of-care and referrals; and (b) enable information exchange with other services, notably those related to health insurance and health services utilization reporting and epidemiology. Niislel-Audit LLC E-Health Project Credit No: IDA5489 Financial Statement as of December 31, 2016 2.3 Analysis and Implementation of Picture Archiving and Communication System (PACS) Development of a central archiving and communication environment for digital medical images, upgrade of selected facilities to enable use of digitally acquired imagery (mini PACS), and upgrade of local networks to be able to share digital imagery. 2.4 IT infrastructure, maintenance and support and Pilot Tests (a) Acquisition and installation of the servers required for the HIEP and for pilot testing the clinical and imaging data exchange mechanisms developed under Parts 2.1 and 2.2 of the Project. (b) Carrying out pilot tests of the clinical and imaging data exchange mechanisms developed under Parts 2.1 and 2.2 of the Project. Part 3 National Health Information Center 3.1 NHIC standards and applications Establishment and operation of a national health information center to oversee e-health including: (a) defining, disseminating and enforcing health data standards; and (b) supporting the design and creation of specialized e-health applications. F 3.2 Health data statistics Establishment and initial operation of the health information dashboard, including acquisition and installation of computer hardware, database management software, and analysis tools for a health data warehouse system. Part 4 Institutional Strengthening and Capacity Building Carrying out of training and capacity building activities as follows: (a) Provision of user training to improve the computer literacy of health service [L providers; and (b) Provision of information technology technical training to improve the information technology skills and competencies of staff of NHIC. Part 5 Project Management Provision of support for Project implementation, supervision, monitoring and evaluation, including provision of technical assistance and training. Niislel-Audit LLC . ...9 .. E-Health Project Credit No: IDA5489 Financial Statement as of December 31, 2016 The eligible expenditures that may be financed out of the proceeds of the Financing and allocations of the amounts of the Financing to each category along with the percentages are as follows: Amount of the Amount of the Percentage of Financing Financing Expenditures to Category Allocated Allocated be Financed (in SDR) (in USD) (1) Goods, Non-Consulting Services, 750,000 1,100,000 100% Consultants Services, and Incremental Operating Costs for Part 5 of the Project (2) Goods, Non-Consulting Services, and 11,950,000 18,400,000 100% Consultant Services for Parts 1,2,3 and 4 of the Project TOTAL AMOUNT 12,700,000 19,500,000 The Project Steering Committee, chaired by the Minister of Health, provides oversight and strategic policy advice and guidance to the Project Management Unit (PMU). The PMU within the Ministry of Health is responsible for the project implementation, including overall management, financial management, monitoring, and reporting. The PMU consists of Project L Coordinator, Financial Management specialist, IT specialist, Clinical specialist and Implementation and procurement specialist. L N L E-Health Project Credit No: IDA5489 Financial Statement as of December 31, 2016 2. SUMMARY OF SIGNIFICANT POLICIES The financial statements comprise the following reports: 1. Balance sheet I Financial reporting 2. Statement on Use of Funds 3. Statement on Use of Funds by Components 4. Statement of Designated Account Statement PMU prepares and presents its sources and uses of fund under the cash basis of accounting, as defined in the International Public Sector Accounting Standards (IPSAS) which is issued by the International Federation of 2 Basis of presentation Accountants (IFAC). The Project Implementation Manual has a financial management part which is agreed with the Bank and specifies about the project accounting records and financial reporting. The project's reporting currency will be USD. MNT incurred costs shall be converted to USD by using the daily 3 Reporting measurement. rate of the Bank of Mongolia. The account balances in the financial statements as of 4 Basis of Presentation December 31, 2016 have been compared with such balances as of August 17, 2015. "Info Systems" accounting software is used to keep record 5 Accounting software and report the project transactions. Income is recognized when cash is received. Income 6 Income consists of the World Bank's financing and bank account interest earnings. [L Disbursement is recognized when paid rather than expenses 7 Expenditure aeicd. are incurred. A. Designated account As per the Disbursement Letter of the Financing L 8 Bank account and cash fund Agreement IDA Credit 5489-MN, the Project shall maintain one segregated USD account at the financial institution acceptable to the Bank with the ceiling limit of ._____ L LUSD1 million. Four disbursement methods (advance, Niislel-Audit LLC L E-Health Project Credit No: IDA5489 Financial Statement as of December 31, 2016 reimbursement, direct payment and special commitment) are available for and can be used by the Project. B. Operating Account In accordance with such Disbursement Letter, the Project shall maintain Operating Account (OA) in MNT with ceiling of equivalent to US$30,000. The OA shall be used to pay eligible expenditures of small training and incremental operating expenditures with an approval from the PMU. C. Petty Cash As specified in section 5.6 of Project Implementation Manual, a certain amount of cash withdrawn from the OA as required for immediate payments can be used as Petty cash. However ceiling should not exceed MNT 500,000 and use of petty cash is to be approved by the Project Coordinator. The Guidelines for Procurement of Goods, Works, and Non-Consulting Services of the World Bank should be adhered for procuring goods, works and services. Following methods should be used for Goods: 1. International Competitive Bidding >=US$1000,000 2. National Competitive Bidding =US$5000,000 2. National Competitive Bidding