21 APR 20bh Department of Planning Ministry of Planning and Investment Mainstreaming Disaster and Climate Risk Management into Investment Decisions Financial Statements and Independent Auditors' Report Year ended 30 September 2014 Contents Page Project information 1 Statement of management's responsibilities 2 Report of the independent auditors 3-4 Statement of cash receipts and payments 5 Statement of designated bank account 6 Comparison of budget and actual expenditure 7 Notes to the financial statements 8-14 Project information Project Mainstreaming Disaster and Climate Risk Management into Investment Decisions Funding agencies International Development Association ("IDA") and Policy and Human Resources Development ("PHRD") Duration 1 February 2012 to 30 January 2016 Implementing agency Department of Planning Ministry of Planning and Investment Project director Mr. OuneheauaneChittaphong ( Deputy Director General of Department of Planning) Registered Office Ministry of Planning and Investment Department of Planning SithanNeua Village, Sikhotabong District Vientiane, Lao PDR Tel & Fax 856 21 216719 Auditors KPMG Lao Co., Ltd. Lao People's Demoeratic Republic Peace Independent Democracy Unity Prosperity .........I. ....~ ................... I.................. .............................. ministry of Planning and Investrnent Department of Planning Sithanineuz Village, Sikhotahung District Vi entiane, Lao PDR Tel & Fax +856 2 1 216719 Statement of management's responsibilities It is the responsibility of management to prepare financial statements för the year ended 30 September 20 14, which givea true and fair view of the state of affairs of the Mainstreaming Disaster and Cliimate Risk Management into Investment Decisions Project ("Project") as at the end of ilie period and of the surplus or defleit för that period. ln preparing those financial statements, ianagement is required to: * Seleci siuitable accon ting policies and apply themi consisteintly; • Make j udgments and estimiates that are reasonable and prudent; * Maintain financial records and prepare the financial statements in accordance with the policies and procedures of theMainstream ing Disaster and Cliniate Risk Management into Investient Decisions ProljeCt and e Prepare the financial statenients on the going concern basis unless it is inappropriate to presume that the Project will continue its operations. Project Management of Mainstreaming Disaster and Clirmate Risk Management into Investnient Decisions Project is responsible for, keeping proper accounting records, which diselose with reasonable accuracy, at any time, Ilie financial position ol the Projeet. Members of project nanagement have a general responsibility for taking such steps as are reasonably available to them to sateguard the assets of the Project and to prevent and detect fraud and other irregularities, Project Management confirms that the Projeet has complied with the above requirements in preparing the financial statements. D nmnagenient1k Mr. OunelieuaneChittaphong Ms. ViengngeunSihalatli Deputy Direetor General Deputy Director Department of Planning Division of General Planning M inistry of Planning and Investnient Department of Planning Ministry of' Planning and Investment 5 APR 2G056 P 21 06 APR z 2 KPMG Lao Co., Ltd Telephone + 856 (21) 454240-7 3' - 4th floor, 37 K.P. Tower Fax + 856 (21) 900347 23 Singha Road Email infolao@kpmg.com Ban Phonexay, Saysettha District P.O. Box 6978 Vientiane Capital, Lao PDR Independent Auditors' Report To the Project Management, Department of Planning, Ministry of Planning and Investment We have audited the accompanying statement of cash receipts and payments, the statement of the designated bank account and the comparison of budget and actual payments of the Mainstreaming Disaster and Climate Risk Management into Investment Decisions Project ("the Project") as at and for the year ended 30 September 2014, and notes, comprising of a summary of significant accounting policies and other explanatory information (together "the financial statements"). The financial statement has been prepared by management using Cash Basis International Public Sector Accounting Standard described in Note2. Management's Responsibility for the Financial Statements Project Management is responsible for the preparation of this financial statement in accordance with the Cash Basis International Public Sector Accounting Standard ("Financial Reporting under the Cash Basis of Accounting") described in Note 2, and for such internal control as management determines is necessary to enable the preparation of financial statements that is free from material misstatement, whether due to fraud or error. Auditors' responsibility Our responsibility is to express an opinion on the financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from 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 our judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity's preparation 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 In our opinion, the financial statements as at and for the year ended 30 September 2014 is prepared in all material respects, in accordance with the Cash Basis International Public Sector Accounting Standard described in Note 2. KPMG Lao Co.. Ltd a Company hcensed taider hlie Foreign [nwstncot Law of Lao PDR, sa mtrof KPMG Interalloal. a Swiss oopemi- 3 Basis ofAccounting and Restriction on Distribution and use Without modifying our opinion, we draw attention to Note 2 to the financial statements, which describe the basis of accounting. The financial statements are prepared to provide information to Mainstreaming Disaster and Climate Risk Management into Investment Decisions Project to report to donors. As a result, the financial statements may not be suitable for another purpose. KPMG Lao Co., Lt DAO Vientiane Capital, L R D 06 APR 2015 KPMGU Co.Ltd aCompanylicensndie&rLhe Fomeign Incsnent Law of Lao PDR, is a niembr or KPMG Inlemilional.a Swiss coopraiv 4 Milinistry of Planning and Investiment Departient of Planning Maiinstreaming Disaster and Clifmae Risk Mfanagenent into Investmen Decisions Sfatement of cash receipis and paymnents for the year ended 30 September 2014 Ver ended 30 1 February 2012 to September 2014 30 September 2013 Note LSD JSD Reccipts 3 607,371 191,897 Paynents Consultants' services 559,207 51,675 Goods - 36,959 Incremeital operatirng costs 17,426 9,020 Training and vorkshops 6 52,492 4,998 Total paymenis 629,125 102,652 (Deficit)/Excess of receipts over payments (21,754) 89,245 Fund balance at the beginning of the period 89,245 - Fund balance at the end of the period 67,491 89,245 Represented by Cash un band and at banks 4 62,953 89,245 Advances 4,538 - 67,491 89,245 * p'ing mnes|»mn an integral part of/these/finantcial staieenis)Z vlr, u le ieuaneChittaphong Ms. ViengngeunS ihalath Deputy Director General Deputy Dircetor Departnnm øflanning Division of'General Planning Ministry o' Plan ing and Investmeni Depamrtent of Planning Ministry of Planning and Investnent 9 6 APR 2015 APR 0 6 AR 201 Ministry of Planning and Investment Department of Planning Mainstreaning Disaster and Climare Risk lanagement lnto Investnent Decisions Statement of designated bank account jor the year ended 30 September 2014 Year ended 30 1 February 2012 to September 2014 30 September 2013 Note USI) USD Ieceipts 3 607,371 191,897 Payients Increase in advance (4,538) Payments made out of Project accounts (629,125) (102,652) hnerease in cash on hand (849) I ncrease of eash at Project Liccounts (7,937) Fund balance at the beginning of the period 89,245 - - (553,204) - Excess of receipts over payinenats 54,167 89,245 Reprosenled by Cash at designated bank account 4 54,167 89,245 j eing io/es jor i an integral part of ihese financial stalemen Mr. (äitaphonig Ms. ViengiigeunSihalath Deputy Director General Deputy Director Department of Planning Division of General Planning Ministry of Pkanning and Investment Department of Planning Miniistry of Planning and lnvestment 06APR 2 5 6APR 2015 6 ―、；、、、―、井 I』 I Ministry of Planning and Investment Department of Planning Mainstreaming Disaster and Climate Risk Management into Investment Decisions Notes to the financial statements (continued) for the year ended 30 September 2014 Analysis of variances between actual and budget payments There was no difference in budget plan and actual expenditures due to the budget plan was revised. The budget was revised by tile project management in order: 1) to get the extension for closing of the project by 30 January 2016 (initially planned to close oil 30 January 2015); and 2) to assess the exact availability of funds in the last period before closing of the project Category 1: Consultants' Set-vices During quarter 3in June 2014, the project started recruitment of external audit to perform the audit service and agreed to sign a contract amendinUt with Asian Disaster Preparedness in June2014 to support the topographic survey and soil investigation for pilot sits. This period the actual payment was USD 559,207 related to consultant service for Risk Assessment USD 145,950, Mainstreaming Disaster and Climate Risk Management into Investment USD 145,920, Institutional Strengthening and Capacity Building USD 39,840, Monitoring & Evaluation USD 33,000 and Project Management USD194,497. Category2: Goods During the period was no expenditure due to the procurement of goods completed. Category 3- Civil works The project was in the initial phase of its operations, during the period no budget was allocated to civil work activities. Category 4: Training and Workshop During this reporting periodseveral trainings; were organized. The total expenditure USD 52,492 were allocated for The Technical Working Group (TWG) meeting on Risk Assessment (TWG-RA) of the Mainstreaming Disaster and Climate Risk Management into Investment Decisions Project (MDCID) was held on 21 - 22 November 2013, The Technical Working Group (TWG) inecting on Institution and Capacity Building and Mainstreaming DRM/CRM into Investment Decisions were conducted on 12 -13 November 2013, training for National and Provincial Government officials on Comprehensive Multi-Hazard Risk Assessment in Lao PDR under the. Mainstreaming Disaster and Climate Risk Management into Investment Decisions Project (MDCID) was held oil 17 - 19 February 2014, Training on Strengthening the available Geographic Information System and Disaster Risk Database took place oil 17-21 February 2014, he Technical Working Group (TWG) meeting onon Mainstreaming DCRM into Investment held oil 8 April 2014, training on "Comprehensive multi-hazard risk assessment" have been conducted for provincial and district government officials on 20-23 May 2014,The Technical Working Group (TWG) mecting on Mainstrearning Disaster and Climate Risk Management (DCRM) into Investment was help on I July 2014, Training on GcoNode web-platform for users and administrators was organized oil 14-15 August 2014, National Level Trainings oil "Resilient Infi,astructure Design in Hazard Prone Areas" was conducted on August 28-29, 2014, Provincial Level Training on "Resilient Infrastructure Ministry of Planning and Investment Department of Planning Mainstreaming Disaster and Climate Risk Management into Investment Decisions Notes to the financial statements (continued) for the year ended 30 September 2014 Category 4: Training and Workshop (continued) Design in Hazard Prone Areas" was conducted on September 10-12, 2014, training for artisans on safer construction practice in disaster prone area for Road and Urban Housing Sector was held on 29-30, 2014. Category 5: Incremental Operating Cost The operating expenses were related to implementation of the project activities. During the period the actual expenditure for this category was USD 17,426. 9 Ministry of Planning and Investment Department of Planning Mainstreaming Disaster and Climate Risk Management into Investment Decisions Notes to the financial statements (continued) for the year ended 30 September 2014 These notes form an integral part of, and should be read in conjunction with, the accompanying financial statements. 1. Principal activities The Mainstreaming Disaster and Climate Risk Management into Investment Decisions ("the project" or " TFO1 1271) is the grant fund provided by Japan ("Donor") under the Policy and Human Resources Development (PHRD), the World bank is acting as the administrator of the grant. The Projects was assigned to the Department of Planning, Ministry of Planning and Investment. The program aims to strengthen the institutional authority andimplementation capacity of the Government of Lao PDR at national andsub-national levels to mainstream disaster risk management and clirmatechange adaptation into public infrastructure investments, therebydecreasing the vulnerability of the population and national economy toclimate change and natural hazards. The Project was originally scheduled to close on 30January 2015; however based on the request from Project management tocomplete the project activities the closing date has now been extended to 30 January 2016. The project consists of the following parts: Part A. Risk Assessment: (i) Identification of risks and integration of risk scenario in investment planning and policies to assist in the development of risk maps for the transportation, urban planning and irrigation sectors. (ii) Strengthening capacities in Geographic Information System (GIS) to analyze, interpret, apply and update risk assessment data. (iii) Provide training on risk assessment to relevant staff of Ministry of Planning ("MPP"), Ministry of Public Works and Transportation ("MPWT") and Ministry of Agriculture and Forestry ("MAF"). Part B. Mainstreaming Disaster and Climate Risk Management into Investments Provision of technical assistance to MPI, MPWT and MAF to develop guideline and strategies to mainstream disaster risk management and climate change adaption into the planning cycle and budgeting process based on and international knowledge, including capacity building (i) MPI to develop checklists and procedures that ensure disaster risk management is taken into account during the planning stage of public investment; and (ii) MPWT and MAF to develop building codes, technical standard specifications, manuals for the design and construction of public investment, and monitoring guidelines. Part C. Institutional Strengthening and Capacity Building Provision of technical assistances to build the capacity of the technical staff of MPI, MPWT, MAF and other relevant staff of line ministries at both central and provincial levels through on the job training and workshop, including: (i) enhanced training for MPI to fulfil its mandate in planning and monitoring public investment with disaster risk management; (ii) training on the building codes, the design and construction of resilient infrastructure and effective monitoring mechanism during implementation for engineering from MPWT and MAF at both central and local levels, as well as private sector and local communities. 10 Ministry of Planning and Investment Department of Planning Mainstreaming Disaster and Climate Risk Management into Investment Decisions Notes to the financial statements (continued) for the year ended 30 September 2014 1. Principal activities (continued) Part D. Pilot Projects in two Disaster-Prone Provinces Pilot the disaster-resilient construction practices developed under part B above in two disaster-prone provinces which will be identified in the risk assessment that will be carried out under part A above, through demonstration of said practices in construction and rehabilitation in selected sectors. Part E. Monitoring and Evaluation Provision of technical assistance to MPI, MPWT and MAF to strength their project monitoring and evaluation mechanism, including data collection and analysis, to prepare quarterly project report and to conduct semi-annual and end of project reviews. Part F Project Management Provision of technical assistance to MPI, MPWT and MAF to establish a professional project management team to manage the overall implementation of the project, including preparation of procurement plan, annual work plan, budget, financial management and accounting, audits and monitoring and reporting. As at 30 September 2014, the Project had 2 Staffs: One Project Accountant, and one Project Coordinator. 2. Summary of significant accounting policies The following significant accounting policies have been adopted by the project in the preparation of these financial statements: (a) Basis of financial statements preparation The financial statements, which are expressed in United States Dollars ("USD"), have been prepared in accordance with the Cash Basis International Public Sector Accounting Standard ("Financial Reporting under the Cash Basis of Accounting"). The accounting policies have been applied consistently throughout the period. (b) Fixed assets All purchases of fixed assets are recorded as payments in the statement of cash receipts and payments upon acquisition. The Project maintains a fixed assets register for control purposes. (c) Cash Cash comprises cash on hand and balances with banks. (d) Foreign exchange The Project maintains its accounting records in USD in accordance with the financial agreement. All cash is held in USD. Transactions in currencies other than USD during the period have been translated into USD at rates approximating those ruling at the transaction dates. All exchange differences are recorded in the statement of cash receipts and payments. (e) Accounting reporting period The financial accounting year of the Government of the Lao PDR starts on 1 October and ends on 30 September. 11 Ministry of Planning and Investment Department of Planning Mainstreaming Disaster and Climate Risk Management into Investment Decisions Notes to the financial statements (continued) for the year ended 30 September 2014 2. Summary of significant accounting policies (continued) (f) The Mainstreaming Disaster and Climate Risk Management into Investment Decisions ("TF011271) categories of payments (1) Consultant Services These consist of payments to national and international consultants (individuals or firms). (2) Goods Goods consist of office equipment and furniture, vehicles, and computers and software. (3) Incremental Operating Costs These cover reasonable payments directly related to the Projectmade by an IA's.Advances are requested by IA's from the Project through formal advance request forms. They include consumable materials and supplies, communications (postage, telephone and internet), media and printing services, translation and interpretation services, office space rental and utilities, maintenance of office equipment, operation and maintenance, fuel costs, bank charges required for the Project, administrative support staff, and project staff travel, lodging and per diems. They exclude salaries (including bonuses, fees and honoraria or equivalent payments) of civil servants. (4) Training and Workshops Training and Workshops consists of Training, Workshop, Trainers travel and Accommodation, (g) Comparison of budget and actual payments The approved budget is developed on the same accounting basis (cash basis), same classification basis and for the same period as for the financial statements. The budget does not include un- cleared advances; the comparison of budget and actual payments includes reconciliation with the statement of cash receipts and payments. (h) Receipt recognition Fund receipt from Funding agencies (IDA and PHRD) and administered by World Bankis recognised as receipt when cash is credited to the project's designated account. The World Bank may make direct payments, at the Project's request, directly to a third party for eligible expenditures. (i) Payments recognition Payments incurred in the frame work of the Grant Agreement are recognised on the cash basis of accounting, i.e. when the payments are made. 12 Ministry of Planning and Investment Department of Planning Mainstreaming Disaster and Climate Risk Management into Investment Decisions Notes to the financial statements (continued) for the year ended 30 September 2014 3. Receipts Year ended 30 1 February 2012 to September 2014 30 September 2013 USD USD Direct payments on 15-Sep-2014 171,853 - Receipts on 26-Aug-2014 22,629 Receipts on 23-Jun-2014 18,740 - Direct payments on 28-Apr-2014 85,927 - Receipts on 14-Apr-2014 11,315 - Direct payments on 14-Apr-2014 85,926 - Receipts on 24-Feb-2014 28,373 - Receipts on 18-Oct-2013 10,755 - Direct payments on 18-Oct-2013 171,853 - Receipts on 1-Aug-2013 - 49,597 Receipts on 22-May-2013 - 4,120 Receipts on I 8-Mar-2013 - 5,275 Receipts on 11-Mar-2013 - 6,011 Receipts on 9-Jan-2013 - 14,749 Receipts on 17-Oct-2012 - 85,340 Receipts on 28-Aug-2012 6,805 Receipts on 16-May-2012 - 20,000 Total Receipts 607,371 191,897 4. Cash on hand and at banks Year ended 30 1 February 2012 to September 2014 30 September 2013 USD USD Cash at banks Designated bank account: Bank of Lao 54,167 89,245 Other bank accounts: Operating account 7,937 - Total cash at banks 62,104 89,245 Cash on hand 849 - 62,953 89,245 13 Ministry of Planning and Investment Department of Planning Mainstreaming Disaster and Climate Risk Management into Investment Decisions Notes to the financial statements (continued) for the year ended 30 September 2014 5. Consultants' Services Year ended 30 1 February 2012 to September 2014 30 September 2013 USD USD Risk Assessment 145,950 - Mainstreaming Disaster and Climate Risk Management into Investment 145,920 - Institutional Strengthening and Capacity Building 39,840 - Monitoring and Evaluation 33,000 - Project Management 194,497 51,675 559,207 51,675 6. Training and workshops Year ended 30 1 February 2012 to September 2014 30 September 2013 USD USD InstitLitional Strengthening and Capacity Building 52,298 4,998 Project Management 194 - 52,492 4,998 7. Commitments The Project hasoutstanding commitments with international consultants as follows: Year ended 30 September 2014 USD Asian Disaster Preparedness Centre(ADPC)Project 362,675 Project Coordinator 9,200 Project Accountant and Administrator 3,166 Audit Consultant Service 24,090 399,131 14