MINISTRY OF HEALTH - SECOND SERBIA HEALTH PROJECT IBRD LOAN NUMBER 8338YF INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Independent Auditor's report and Summary of funds received, The Summary of expenditures, The Statement of summary reports or IFRs, The Statement of the DA; and a Balance Sheet showing accumulated funds; Annexi and Notes For the period from oi January till 31 December 2017 Belgrade, May 30th 2018 Second Serbia Health Project International Bank for Reconstruction and Development IBRD Loan No. 8338YF Pages Independent Auditors' Report Project Financial Statements Summary of Funds received 2 Summary of Expenditures 3 Summary of Designated Account 4 Statement of Summary reports 5 Balance Sheet 6 Annex 1 - Reconciliation between the amounts shown as receive by the Project from the IBRD and that shown as being disbursed by the IBRD Annex 2 - Management Letter Annex 3 - Representation Letter pwI INDEPENDENT AUDITOR'S REPORT To the Management of Ministry of Health of the Republic of Serbia ,,Second Serbia Health Project" We have audited the accompanying special purpose financial statements for the Project No. 8338 - YF entitled "Second Serbia Health Project" (the "Project") financed under the loan provided by the International Bank for Reconstruction and Development (the "IBRD") which comprise the summary of funds received, the summary of expenditures, the summary of summary reports or IFRs, the statement of the DA; and a balance sheet showing accumulated funds of the Project, for the period ended 31 December 2017, and Note 3 to the special purpose financial statements, describing basis of preparation. The Project special purpose financial statement has been prepared by management of the Ministry of Health of the Republic of Serbia using the cash receipts and disbursements basis of accounting described in the Note 3. Management's responsibility for thefinancial statements Management is responsible for the preparation and fair presentation of these special purpose financial statements in accordance with the cash receipts and disbursements basis of accounting described in the Note 3 to the special purpose financial statements; this includes determining that the cash receipts and disbursements basis of accounting is an acceptable basis for the preparation of the special purpose financial statement in the circumstances, and for such internal control as management determines is necessary to enable the preparation of special purpose financial statements that is free from material misstatement, whether due to fraud or error. Auditor's responsibility Our responsibility is to express an opinion on these special purpose 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 project special purpose financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the project special purpose financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the project special purpose financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company's preparation and fair presentation of the project special purpose 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 Company'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 project special purpose financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. PricewaterhouseCoopers d.o.o., Omladinskih brigada 88a, 11o7o Belgrade, Republic ofSerbia T: +381113302 1oo, F:+381113302 101, www.pwc.rs Business Registration Agency of Republic of Serbia Company ID Number: 17147862, Number of Registration: 709, PIB: 100148170 Bank Account No: 275-0000220016415-04 kept with Societe Generale Banka Srbija AD Bank, Bulevar Zorana Dindida 50a Street, 11070 Belgrade Wholly Owned Company, Subscribed and paid capital: In Money: 3,270,316.68 EUR, In Kind: 56,171.20 EUR pwc Opinion In our opinion, the special purpose financial statements present fairly, in all material respects, sources and application of funds, expenditure details and movements in the Designated Account of the Project financed under the IBRD loan for the period ended 31 December 2017, in accordance with the cash receipts and disbursements basis of accounting described in Note 3. Basis ofAccounting and Restriction on Use and Distribution We draw attention to the Note 3 to the special purpose financial statements, which describes the basis of accounting. The Project special purpose financial statements are prepared for the purpose of reporting of Ministry of Health of the Republic of Serbia on the activities of the project with respect to the funding received for the completion of the Project objectives in accordance with the respective loan agreement. Our opinion is not modified in respect of this matter. As a result, the project special purpose financial statements may not be suitable for another purpose. Our report is intended solely for the use of Ministry of Health of the Republic of Serbia management and IBRD and should not be distributed to or used by any other party. PricewaterhouseCoopers d.o.o., Beograd Beograd, 06. jun 2018. godine I 2If lI i! !1 I� N .. 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F U О � �Я М j � i� 7111 17 STATEMENT OF DESIGNATED ACCOUNT Second Serbia Health Project for the year ended 31 December 2017 International Bank for Reconstruction and Development IBRD Loan No. 8338YF Ex December December pressed in EUR 31,2017 31,2016 17 Opening balance 1,819,220 1,859492 Add: Withdrawal application 780,415 537,o6i Direct withdrawal 1,803,518 7 WB fee - Refund to the bank account - - Interest 7 Total Funds 4,403,154 2,396,553 7 Deduct: Project expenditure payment (1,134,968) (577,333) Direct payments (1,803,518) WB fee Total Project Expenditure Payments (2,938,486) (577,333) Cash balance per Bank's statement 1,464,668 i,8ig,220 Belgrade, 3 oth May, 2018 Finance Specialist PCU Coordinator /71 Dragana Gocevi6 J Bi1jana Kozlo,,ri6 7 5 BALANCE SHEET Second Serbia Health Project for the year ended 31 December 2017 International Bank for Reconstruction and Development IBRD Loan No. 8338YF Expressed in EUR Cumulative December December December 31, 2017 31, 2016 31, 2015 ASSETS IBRD funds 2,000,000 Opening balance Cash on the Designated Account - 1,819,220 1,859,492 Front end Fee 72,750 - - 72,750 Disbursements 1,423,511 780,415 537,061 lo6,035 Direct Withdrawal 1,803,518 1,803,518 - Cash and Cash at Bank 5,299,779 4,403,153 2,396,553 2,178,785 TOTAL ASSETS 5,299,779 4,403,153 2,396,553 2,178,785 Project Expenditures Goods, works, non-consulting services, Operating Costs, Training and consultants' services for the Project (except 1,958,843 1,134,968 577,333 246,542 for goods and works for Part 3(b)(i)), including audit, and for Quality Improvement Sub-grants Goods and works for Part 3(b)(i) 1,803,518 1,803,518 - Front - end Fee 72,750 Premia for Inerest Rate Caps and '750 Inerest Rate Collars - TOTAL PROJECT EXPENDITURE 3,835,111 2,938,486 577,333 319,292 TOTAL ASSETS WB Special Account 1,464,668 1,464,668 1,819,220 1,859,492 TOTAL FUNDS 5,299,779 4,403,154 2,396,553 2,178,785 Belgrade, 30th May, 2018 Fin n pecialist PCU Coordinator Dragana Gocevi6 Biljana Kozlovi6 6 ANNEX 1 RECONCILIATION BETWEEN THE AMOUNTS SHOWN AS RECEIVED BY THE PROJECT FROM THE IBRD AND THAT SHOWN AS BEING DISBURSED BY THE IBRD 7 П �. 1 � Г' � � � ' �о °' �, � и �'" а М _о a�i a�i Z й а� � ) У � и � г� � х д❑ �+'�J R! ш ai � ш д � � ��� � � � � � � � � А и о ° ° � � ���аа о '� � У й � � � � � а� у � � 'о w ° 'у а, �+ � �+ �+ �"1 'х у � � � � �� � а О .� д i � 'b Ф Я � � �у � � н � � д' О � М и н � j 1 С�, о� о� t� О 0 1 � � и � � о�о о�о W f1 � � � � � � f � н н н „у � N N N N ° � N И 0� н � .� о о о н � � а н а ch ! 1 � н о и о � � � н � I I '�'' Ф н н � � I l ° н ,,i � н +б�+ � О О О о N � � А � о о о � .�,5 й+ � р н CV i О � а ° � � ° � �д ` л �, �1 � � � �� а �� � ��' °� о a�i �о � и о� ш с`д Ф и � � � � � � � � � у �,р д д д д +� � .� с. � � w i�i и г �� У д С� о н � � `� л 1 I У ° � У �-+ i� iи-i г.. о � � � � � � �+ °°' ,n ,а ,� � .я .с � � � ,и iи � `� � ^ � � � й '� '� '� '� й � � .н F �'+ о � А .п.��'' � с� � a�i ... ,,,,� '� � � r. �а _� Z ��`� Е"°�' R" � о � � о � й � PROJECT BACKGROUND Second Serbia Health Project for the year ended 31 December 2017 International Bank for Reconstruction and Development IBRD Loan No. 8338YF 1) Project Backgx!ound - General information The Republic of Serbia has received a Loan from the International Bank for Reconstruction and Development in the amount of EUR 29.1 million for the implementation of the Second Serbia Health Project (SSHP). The Loan agreement YF 8338 was signed on 10 July 2014 and the project became effective on 8 May 2015, with the establishment of the Project Coordination Unit (PCU) by the Ministry of Health (MoH). The project end date is 30 September 2019. The main project development objective is to contribute to the health care system improvement in the areas of financing, efficient procurement of medicines and medical devices, health care quality and management of selected priority non-communicable diseases. The project's key beneficiaries are health care institutions in Serbia. The activities that are financed by the SSHP are structured into four components with subcomponents: i. Improvement of Health Financing 1.1: Support Hospital Financing Reforms 1.2: Strengthen Primary Health Care Financing This component will support reforms focused on improving the health care financing (by the Health Insurance Fund (HIF) on the primary, secondary and tertiary health care levels. It will, specifically, finance technical assistance, training and procurement of goods necessary to improve reporting by health care institutions according to diagnosis-related groups (DRG) and to improve the capitation formula. The project will also finance grants to improve the quality of service provision in primary health care centres, as well as technical assistance for the necessary amendments to by-laws and other regulations required for the implementation of the health financing reform. 2. Efficient Purchasing of Pharmaceuticals and Medical Products 2.1: Establish a Centralized Procurement System 2.2: Strengthen Health Technology Assessment 2.3: Improve Medical Equipment Maintenance Systems This component will provide support to the centralized procurement of medicines and medical devices through concluding framework agreements. Improvement of the health technology assessment (HTA) and medical equipment maintenance systems will also be funded by the project. Activities in this field will include: technical assistance, training and procurement of goods, including piloting contracts with companies for maintenance of equipment by the same manufacturers in different health care institutions. 9 PROJECT BACKGROUND Second Serbia Health Project for the year ended 31 December 2017 International Bank for Reconstruction and Development IBRD Loan No. 8338YF 3. Strengthening Quality of Service Delivery 3.1: Strengthen Quality Improvement Systems 3.2: Improve Cancer Management This component will provide support to the reforms focused on the strengthening of the health care quality system, as well as technical assistance and training. In addition, within Component 3, one of the main objectives is quality improvement of cancer care including procurement of linear accelerators for oncology centers throughout Serbia, along with associated equipment and necessary civil works. 4. Monitoring, Evaluation, and Project Management This component will support project management, monitoring and evaluation, as well as audits of the project's financial statements. It will also finance the project's operating costs, including translation, interpretation, equipment, supervision costs and PCU staffing costs. 10 The activities that are financed by the SSHP are structured into four components with subcomponents: Estimated Total Total Total Cod of the activity Cosuads expenditures expenditures expenditures Cumulative il(EUR) 2015 2016 2017 1. Improvement of Health Financing 4,140,000 9,519 59,852 20o,562 269,933 1.1: Support Hospital Financing Reforms 2,840,000 9,519 59,852 192,482 261,853 1.2: Strengthen Primary Health Care Financing 1,3oo,ooo - - 8,o80 8,o80 2. Efficient Purchasing of Pharmaceuticals and Medical Products 3,200,000 459 25,361 81,659 107,479 2.1: Establish a Centralized Procurement System 870,000 459 25,361 81,659 107,479 2.2: Strengthen Health Technology Assessment 1,o80,ooo - - . 2.3: Improve Medical Equipment Maintenance Systems 1,250,000 3. Strengthening Quality of Service Delivery 19,510,000 16,61o 213,756 2,249,621 2,479,986 3.1: Strengthen Quality Improvement Systems 1,550,000 5,310 10,470 125,954 141,734 3.2: Improve Cancer Management 17,960,ooo 11,300 203,286 2,123,667 2,338,253 4. Monitoring, Evaluation, and Project Management 2,18o,ooo 219,955 278,364 406,644 904,963 Project Management 2,120,000 219,955 278,364 4o6,644 904,963 ( Monitoring and Evaluation 6o,ooo - . . TOTAL 29,030,000 246,542 577,333 2,938,486 3,762,361 WB Fee 72,750 72,750 - 72,750 TOTAL funds 29,102,750 319,292 577,333 2,938,486 3,835,111 11 I PROJECT BACKGROUND Second Serbia Health Project for the year ended 31 December 2017 International Bank for Reconstruction and Development IBRD Loan No. 8338YF 2) The Loan Agreement The Loan agreement Number 8338 -YF between the Republic of Serbia and the International Bank for Reconstruction and Development (the "Bank") became effective on 8 May 2015. The Bank agrees to lend to the Borrower, under the terms and conditions set forth or referred to in the Agreement, the amount of twenty nine million one hundred thousand Euros (EUR 29,100,000). The following table specifies the categories of Eligible Expenditures that may be financed from the proceeds of the Loan ("Category"), the allocation of the Loan amounts by Category, and the percentage of expenditures to be financed for Eligible Expenditures in each Category. On 17 September 2015, the Bank approved the reallocation of the funds by Categories as follows, as shown in the table below. The amended Loan Agreement for the Project incorporates the changes related to the Categories of Eligible Expenditures that may be financed from the proceeds of the Loan. The reallocation of the funds would enable the procurement of more linear accelerators, which would directly improve patient access to radiotherapy, reduce waiting lists and the number of interrupted therapies caused by equipment breakdowns. This would also ensure achieving the PDO indicators related to Sub-component 3.2. Improve Cancer Management. Category Amount of the Loan Reallocated Amount Percentage of Allocated of the Loan Expenditures to be (exressed in EUR) (expressed in EUR) financed 1) Goods, works, non-consulting services, Operating Costs, Training and consultants services for the Project (except for goods and works for Part 3 15,617,6oo 11,o67,250 100% (b) (i), including audit, and for Quality Improvement Sub - grants. 2) Goods and works for Part 3 (b)(i) 13,409,650 17,960,ooo loo% (exclusive of Taxes) 3) Front end Fee Amount payable pursuant to Section 2.03 of this 72,750 72,750 Agreement in accordance with Section 2.07 (b) of the General Conditions Total Amount 29,100,000 29,100,000 12 PROJECT BACKGROUND Second Serbia Health Project for the year ended 31 December 2017 International Bank for Reconstruction and Development IBRD Loan No. 8338YF UNDISTRIBUTED FUNDS Undistributed funds received from the International Bank for Reconstruction and Development (IBRD) as of 31 December 2017 is cash on the Designated Account amounting to EUR 1,464,668. PROJECT INCOME AND EXPENDITURE PAYMENTS Project income and expenditure payments for the year ended 31 December 2017 comprise the following: Expressed in EUR 31.12.2017. 31.12.2016. Opening balance 1,819,220 1,859,492 Income Withdrawal Application 780,415 537,o61 Direct payments 1,803,518 WB fee . Total Income 4,403,154 2,396,553 Expense Goods, works, non-consulting services, Operating Costs, Training and consultants' services for the Project (except for goods and works for Part 3(b)(i)), including audit, (1,134,968) (577,333) and for Quality Improvement Sub-grants Goods and works for Part 3 (b)(i) (1,803,518) Front - end fee Total Expense (2,938,486) (577,333) Cash balance per Bank's statement 1,464,668 1,819,220 The refund to the bank account relates to the amounts withdrawn by the Project management staff and returned as a residual amount after coverage of the incurred expenses. 13 PROJECT BACKGROUND Second Serbia Health Project for the year ended 31 December 2017 International Bank for Reconstruction and Development IBRD Loan No. 8338YF AMOUNTS DISBURSED AND OUTSTANDING TOWARD IBRD The disbursed amounts of total Loan Funds, as well as available amounts, as on 31 December 2017 toward IBRD, are presented in the table as follows: Total Funds Distributed amounts Available amounts Expressed in EUR 8338-YF 29,100,000 5,299,779 23,800,221 OTHER Details of the Designated Account of the Project are as follows: Account No.: 01-504636-100193230 Depository Bank: National Bank of Serbia Belgrade Address: Nemanjina 17 Loan Number: 8338-YF Currency: Euro (EUR) 14 PROJECT BACKGROUND Second Serbia Health Project for the year ended 31 December 2017 International Bank for Reconstruction and Development IBRD Loan No. 8338YF 3) Basis of preparation 3.1 General The accompanying special purpose financial statements have been prepared for the purposes of reporting of Ministry of Health of the Republic of Serbia on the activities of the Project with respect to the funding received for the completion of the Project objectives in accordance with the Loan agreement Project No. 8338 - YF entitled "Second Serbia Health Project" from IBRD (International Bank for Reconstruction and Development). 3.2 Accounting Records and Basis of Presentation Funds originated through the IBRD loan are accounted for using the cash receipts and disbursements basis. The Project Financial Statements are prepared in accordance with a comprehensive basis of accounting other than international accounting standards or national standards. The comprehensive basis of accounting is in accordance with the financial reporting provisions of the Loan Contract No. 8338-YF, dated 8th May 2015 between International Bank for Reconstruction and Development (IBRD) and the Government of Serbia ("the Contract"). The financial reporting provisions of the Contract are based on generally accepted accounting principles and practices and relevant IBRD / World Bank guidelines. The Project policy is to present Project Financial Statements on a cash receipts and disbursement basis of accounting. On this basis, revenue is recognized when received rather than when earned, and expenses are recognized when paid rather than when incurred. The Project Financial Statements are presented in Euros (EUR) and all values are rounded to the nearest euro, except when otherwise indicated. Acquisition costs of non-expendable equipment and supplies are expensed on payment. Accordingly, no depreciation charge is required to be set aside. The accounting policies have been applied consistently throughout the period. 3.3 Exchange Rates and Foreign currency differences The expenditures paid in Serbian Dinars (RSD) were converted to EUR at the middle exchange rate of National Bank of Serbia in effect on the date of each payment. The IBRD disbursed the funds to the Republic of Serbia, Ministry of Finance in EUR, which were afterwards forwarded to the project-designated account opened with the National Bank of Serbia (NBS). During the year, the funds were converted into local currency, the Republic of Serbia dinars (RSD), using the NBS middle rate on the date of conversion transactions. The local currency funds originating from the conversion that had been transferred to the Project account open with the Ministry of Finance Treasury Administration in RSD were afterwards used for purchases of goods and services by the Project management in local currency (RSD). For the purpose of presentation in the Project Financial Statements, the amounts have been converted to EUR, the reporting currency of the Project, using the historic foreign currency rate as at the relevant bank conversion transactions; therefore, no foreign exchange gain/losses are reported. 15 PROJECT BACKGROUND Second Serbia Health Project for the year ended 31 December 2017 International Bank for Reconstruction and Development IBRD Loan No. 8338YF CONVERSION IN THE PERIOD 2017 Date of the EUR Bank provision Amount in EUR Amount in RSD conversion 23.02.2017. 123.9241 300 100,000 12,392,410 13.04.2017. 123-755 300 100,000 12,375,500 09.o6.2017. 122.5619 300 100,000 12,256,190 27.06.2017. 121.5051 6oo 200,000 24,301,020 05.09.2017. 119.5905 300 100,000 11,959,050 11.10.2017. 119.4098 300 100,000 11,940,980 14.12.2017. 119-4799 1,500Soo,000 59,739,950 16 ANNEX 2 MANAGEMENT LETTER 17 I 1Ww.pwc.com Ministry of Health - SECOND SERBIA HEALTH PROJECT (IBRD LOAN NUMBER 8338YF) Management letter report 28 May 2018 pwc iJ I I I To the Ministry ofHealth - Second Serbia Health Project Dom zdravlja Savski Venac Second Serbia Health Project (SSHP) Project Coordination Unit / Procurement Office Pasterova 1, 11ooo Belgrade Republic of Serbia 28 May 2018, Dear Management of Ministry of Health, In planning and performing our audit of the financial statements of the Second Serbia Health Project. for the period ended 31 December 2017, we considered its internal control in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on internal control. Our consideration of internal control would not necessarily disclose all matters in internal control that might be significant deficiencies in internal control or deficiencies in the design or in the operation of internal control, as defined under International Standards on Auditing (ISA 265.6) below (and highlighted in the attached detailed report): a. Deficiency in internal control - This exists when: i. A control is designed, implemented or operated in such a way that it is unable to prevent, or detect and correct, misstatements in the financial statements on a timely basis; or I. A control necessary to prevent, or detect and correct, misstatements in the financial statements on a timely basis is missing. b. Significant deficiency in internal control - A deficiency or combination of deficiencies in internal control that, in the auditor's professional judgment, is of sufficient importance to merit the attention of those charged with governance. However, we noted certain matters involving the system of internal control and its operation, and are submitting for your consideration related observations and recommendations designed to help the Company improve the system of internal control and achieve operational efficiencies. As we agreed upon in the engagement letter on April 2017, a full detailed report of the internal control comments and business issues we have identified is included. This report is intended solely for the information and use of the audit committee, board of directors, management, and others within the organization or specified regulatory agency and is not intended to be and should not be used by anyone other than these specified parties If you would like any further information or would like to discuss any of the issues raised, please do not hesitate to contact engagement partner. Yours faithfully, Biljana Bogovac, Engagement partner, PricewaterhouseCoopers d.o.o., Serbia Page 2 of 3 Detailed below is given the observation over particular things to which we as and Auditor have to pay special attention: _Finding: Risk Significance Recommendation Management response: 1 the summary reports There are no findings regarding this n/a n/a (or interim reports) matter that may draw you attention. have been prepared in All reports have been prepared in accordance with the accordance to the relevant financing provisions of the agreement. relevant financing agreement; 2. expenditures have The Audit process is done on sample n/a n/a been made wholly and basis and during our testing and all necessarily for the evidence obtained we are confirming realization of project that all expenditures have been made objectives wholly and necessarily for the realization of the project. 3. information and For the purposes of our Audit all n/a n/a explanation necessary necessary explanations have been for the purpose of the obtained. audit have been obtained 4. supporting records For the purposes of our Audit all n/a n/a and documents supporting records and documents necessary for the necessary have been obtained purpose of the audit have been retained 5. the summary The summary reports over which we n/a n/a reports (or interim have performed our Audit can be reports) can be relied relied upon to support the related upon to support the withdrawal applications related withdrawal applications Page 3 of 3 ANNEX 3 REPRESENTATION LETTER 18 PricewaterhouseCoopers d.o.o. Omladinskih brigada 88a, 11070 Beograd, Serbia Belgrade, Project financial statements for the year ended 31 December 2017 (project 8338 YF) Dear Sirs, We confirm, to the best of our knowledge and belief and having made appropriate enquiries of other directors and officials of Ministry of Health, Republic of Serbia (the "Company"), the following representations given to you in connection with your audit of the Project Financial Statements ("the PFS") for the year ended 31 December 2017, of the Second Serbia Health Project, for the purpose of expressing an opinion as to whether the PFS are properly prepared using the cash receipts and disbursements basis of accounting described in Note 3 (under the section "Basis of preparation" in the PFS). Basis of preparation We acknowledge our responsibility for the preparation of the PFS in accordance using the cash receipts and disbursements basis of accounting described in Note 3. We acknowledge our responsibilities for making accurate and complete representations to you in relation to the PFS and we represent that: * The PFS are prepared using the cash receipts and disbursements basis of accounting described in Note 3; * The PFS are prepared based on the Loan Agreement by IBRD 8338 YF We confirm that the following representations are made on the basis of enquiries of management and staff of the Company with the relevant knowledge and experience and, where appropriate, of inspection of supporting documentation sufficient to satisfy ourselves that we can properly make each of the following representations to you: Form and content We confirm, to the best of our knowledge that the form and content of the PFS complies with the requirements of the IBRD. We confirm that all project staff is under the service agreement and that no any other type of contract related to the project staff. Accounting records All the accounting records have been made available to you for the purpose of the audit and all the transactions undertaken by the Company have been properly reflected and recorded in the accounting records. All other records and related information which might affect the proper presentation of, or necessary disclosure in, the PFS have been made available to you and no such information has been withheld. Fraud We acknowledge our responsibility for the design and implementation of internal control to prevent and detect fraud and error. We have disclosed to you all information in relation to fraud or suspected fraud that we are aware of and that affects the entity and involves: * Management; * Employees who have significant roles in internal control; and * Others where fraud could have a material effect on the PFS. We are not aware of any allegations of fraud, or suspected fraud, affecting the PFS communicated by employees, former employees, consultants, analysts, regulators or others. Misstatements detected during the audit We acknowledge our responsibility for the design and implementation of internal control to prevent and detect error. We confirm that the PFS are free from material misstatement, including omissions. Post balance sheet events We confirm that there have been no circumstances or events subsequent to the period end which require adjustment of or disclosure in the PFS. Other matters There are no other material matters which we believe are relevant to the PFS, which, in our opinion, need to be drawn to your attention. Yours faithfully, PCU oordinator Minister of Health (II