I I I I I I I HEALTH PROFESSIONALS EDUCATION AND TRAINING FOR HEALTH SYSTEM REFORMS PROJECT Financing Agreement No. 5441-VN Grant Agreement No. TF0A1658 AUDITED FINANCIAL STATEMENTS I For the year ended 31 December 2018 I I I I I I I I I Health Professionals Education and Training for Health System Reforms Project Financing Agreement No. 5441-VN and Grant No. TF0A1658 I I I I CONTENTS Page PART I INDEPENDENT AUDITORS' REPORT ON THE FINANCIAL STATEMENTS Report of the Project Management Unit 3 Independent Auditors' Report on the Financial statements 4-5 Audited Financial statements Statement of Funds and Expenditures 6 Statement of Funds balance 7 Statement of Designated Accounts 8-9 Statement of Withdrawals and Reconciliation of Funds 10-11 I Notes to the Financial statements 12-21 PART II INDEPENDENT AUDITORS' REPORT ON 22-23 THE INTERNAL CONTROL SYSTEM PART III INDEPENDENT AUDITORS' REPORT ON 24-25 I THE COMPLIANCE PART IV MANAGEMENT LETTER 26-31 I2 I I I I I I 2 I I Health Professionals Education and Training for Health System Reforms Project Financing Agreement No. 5441-VN and Grant No. TF0A1658 REPORT OF THE PROJECT MANAGEMENT UNIT The Health Professionals Education and Training for Health System Reforms Project ("the Project") presents this report and the Financial Statements of the Project for the year ended 31 December 2018. The Project The Project is funded by the International Development Association (IDA) under the Financing Agreement No. 5441-VN dated 17 July 2014 and European Union (EU) under the Financing Agreement No. DCI-ASIE/2013/024-370 dated 04 December 2014 replaced by the Grant No. TF0A1658 dated 28 March 2017 between the Government of the Socialist Republic of Vietnam and the World Bank. The Project Management Unit Members of the Project Management Unit ("the PMU") in the period and to the reporting date are: Mr. Nguyen Ngo Quang Director Mr. Ha Anh Duc Deputy Director Mr. Nguyen Hong Son Deputy Director Mrs. Nguyen Thi Bich Chief Accountant Auditors The auditors of AASC Limited have taken the audit of financial statements of the Project. Responsibilities of the Project Management Unit The Project Management Unit is responsible for preparing the project financial statements, including Statement of Funds and Expenditures, Statement of Funds balance, Statement of Designated Account and Statement of Withdrawals and Reconciliation of Funds, which comply with the accounting policies described in the attached Notes to the Financial Statements. The Project Management Unit assures that the accounting policies are appropriately selected and consistently applied. The Project Management Unit assures that the accounting records were fully maintained to prepare the financial statements in accordance with the applied accounting policies and to disclose, with reasonable accuracy at any time, the financial position of the Project. The Project Management Unit is also responsible for maintaining an effective internal control as management determines necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and comply with relevant laws, regulations and other provisions of the funding agreement that could have a direct and material financial effect on the Project financial statements. On 6Ihalf of the Project Management Unit., UNyen Ngo Quang Hanoi, 28 June 2019 I I 3 I 1 Iaasc No.: 280619.004/BCTC.FIS2 INDEPENDENT AUDITORS' REPORT ON THE FINANCIAL STATEMENTS To: The Project Management Unit of The Health Professionals Education and Training for Health System Reforms Project Opinion We have audited the accompanying financial statements of the Health Professionals Education and Training for Health System Reforms Project ("the Project") which comprise Statement of Funds balance as at 31 December 2018, Statement of Funds and Expenditures, Statement of Designated Account, Statement of Withdrawals and Reconciliation of Funds for the year then ended, and Notes to the Financial Statements, including a summary of significant accounting policies. I In our opinion: The accompanying Financial Statements give a true and fair view, of the financial position of the Project, including the balance of the Designated Accounts as at 31 December 2018, funds received and expenditures incurred, movements of the Designated Accounts for the year then ended in accordance with the basis of the principal accounting policies described in the Notes to the Financial Statements and the provisions of the Financing Agreement No. 5441-VN dated 17 July 2014 and Grant No. TF0A1658 dated 28 March 2017; In addition, with respect to Statements of Expenditure, adequate supporting documents have been fully maintained to support to the replenishment requests submitted to the World Bank. The expenditures are eligible and in right purposes of the Financing Agreement No. 5441-VN dated 17 July 2014 and Grant No. TFOA1658 dated 28 March 2017. Emphasis of Matter We would like to draw readers' attention to Note 2a which describes that the Grant No. TFOA1658 was closed on 31 January 2019 and its account was closed no later than 30 April 2019. Thus, for management purpose, the accompanying Financial Statements have been prepared to include this Grant's activities from 01 January 2018 up to 30 April 2019, while the Financing Agreement No. 5441-VN was reported for the full year from 01 January 2018 to 31 December 2018. Our opinion is not qualified in respect of this matter. Basis of Opinion We conducted our audit in accordance with International Standards on Auditing ("ISAs"). Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Financial Statements section of our report. We are independent of Project Management Unit in accordance with the international Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants ("IESBA Code"), and we have fulfilled our other ethical responsibilities in accordance with the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Responsibilities of Management for the Financial Statements The Project Management Unit is responsible for the preparation of the financial statements in accordance with the principal accounting policies described in Notes to the Financial Statements, and for such internal control as management determines is necessary to enable the preparation of I financial statements that are free from material misstatement, whether due to fraud or error. T: (84)24 3824 1990 1 F (84)24 3825 3973 i Le Phung HieU, Hanoi, Vietnam A member of International HANG KIM TOAN AASC 4 I I In preparing the financial statements, management is responsible for assessing the Project's ability to continue as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting unless management either intends to cease operations, or has no realistic alternative but to do so. Auditor's Responsibilities for the Audit of the Financial Statements 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. As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: r 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 risks, 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. I ~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. Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Project's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors' report to the related disclosures financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors' report. However, future events or conditions may cause the Project to cease to continue as a going concern. Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with the Project Management Unit regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. AASC Limited Do Manh Cuong Nguyen Pham Hung Dleputy General Director Auditor in-charge CPA Registered No.: CPA Registered No.: 0744-2018-002-1 2893-2015-002-1 I Hanoi, 28 June 2019 I 5 I Health Professionals Education and Training for Health System Reforms Project Financial Statements Financing Agreement No. 5441-VN and Grant No. TF0A1658 Year ended 31 December 2018 STATEMENT OF FUNDS AND EXPENDITURES For the year ended 31 December 2018 Accumulated Year ended Accumulated Note to 31/12/2017 31/12/2018 to 31/12/2018 VND VND VND I. Funds 1 Funds received from the World Bank 3 117,345,458,638 212,219,955,652 329,565,414,290 2 Counterpart funds 4 7,198,571,938 4,519,779,111 11,718,351,049 3 Other funds - Foreign exchange rate differences 1,924,724,310 5,084,177,780 7,008,902,090 126,468,754,886 221,823,912,543 348,292,667,429 II. Expenditures 1 Work - 4,885,215,500 4,885,215,500 2 Goods 11,730,600,857 5,043,337,363 16,773,938,220 3 Training and Workshops 17,568,533,695 187,104,142,235 204,672,675,930 4 Consultants' Services 10,269,371,368 10,237,913,663 20,507,285,031 5 Incremental Operating Costs 20,502,406,705 6,055,534,930 26,557,941,635 5 60,070,912,625 213,326,143,691 273,397,056,316 Ill. Surplus 66,397,842,261 8,497,768,852 74,895,611,113 6 Health Professionals Education and Training for Health System Reforms Project Financial Statements Financing Agreement No. 5441-VN and Grant No. TF0A1658 Year ended 31 December 2018 STATEMENT OF FUNDS BALANCE As at 31 December 2018 31/12/2018 31/12/2017 VND VND Surplus / (Deficit) Surplus as at beginning 66,397,842,261 66,699,407,474 Surplus / (Deficit) in the year 8,497,768,852 (301,565,213) Surplus as at closing 74,895,611,113 66,397,842,261 Represented by: 1 Current assets 102,437,585,160 73,389,845,801 Cash on hand 874,241,947 87,738,418 Cash at bank 6 83,340,683,257 62,936,898,737 Advances to staff 44,301,423 66,601,000 Other receivables 7 1,727,571,802 - Advances to contractors 8 16,450,786,731 10,298,607,646 Current liabilities 27,541,974,047 6,992,003,540 Payables to contractors 9 13,709,778,523 5,279,563,614 Payables to employees 200,521,144 252,254,512 Tax payables and statutory obligations 1,475,346 16,682,244 Other payables 10 13,630,199,034 1,443,503,170 Net worth 74,895,611,113 66,397,842,261 I7 I I I I I I I Health Professionals Education and Training for Health System Reforms Project Financial Statements Financing Agreement No. 5441-VN and Grant No. TF0A1658 Year ended 31 December 2018 STATEMENT OF DESIGNATED ACCOUNT For the period: from 01/01/2018 to 31/12/2018 Account No. 01101370002375 Bank: Vietnam Maritime Commercial Joint Stock Bank Address: Sky City Tower Building, 88 Lang Ha, Dong Da, Hanoi Agreement No. IDA 5441-VN PART A: ACTIVITIES Note USD USD Opening balance 1,315,948.04 Add: Amounts deposited by the World Bank 6,000,000.00 Amounts recevied from the settlement for PPMU 9,617.60 6,009,617.60 Deduct: Amounts withdrawn (5,450,115.25) Amounts tranfered from TFOA1658 Designated account (26,278.65) I (5,476,393.90) Closing balance 1,849,171.74 PART B: RECONCILIATION 1. Amount advanced by the World Bank 3,013,154.34 2. Add: Amount supplemented by the World Bank 6,000,000.00 3. Deduct: Amount recovered by the World Bank (1,890,328.54) 4. Present outstanding amount advanced to 7,122,825.80 5. Closing balance 1,849,171.74 6. Add: Amounts withdrawn and not yet claimed (1) 5,273,654.06 I 7. Total advances accounted for 7,122,825.80 3 (1) Including USD Amounts withdrawn and not yet claimed at CPMU 3,418,641.62 Cash on hand at CPMU 7,537.16 Cash at current account VND 634.61 Advances to staff at CPMU 1,437.36 Advances to contractors 621,358.75 Amounts advance for SPMUs 1,224,044.56 5,273,654.06 I * 8 I I Health Professionals Education and Training for Health System Reforms Project Financial Statements Financing Agreement No. 5441-VN and Grant No. TF0A1658 Year ended 31 December 2018 I STATEMENT OF DESIGNATED ACCOUNT For the period: from 01/01/2018 to 30104/2019 Account No. 01101370002432 Bank: Vietnam Maritime Commercial Joint Stock Bank Address: Sky City Tower Building, 88 Lang Ha, Dong Da, Hanoi Grant No. TFOA1658 PART A: ACTIVITIES Note USD USD Opening balance 1,311,610.08 0 Io Add: Amounts deposited by the World Bank 4,655,000.00 Amounts tranfered from IDA 5441 - VN Designated Account 26,278.65 Amounts collected from PPMUs 59,890.68 Others 2,336.99 4,743,506.32 I Deduct: Amounts withdrawn (4,811,057.34) Amounts refunded the World Bank (1,244,059.06) (6,055,116.40) Closing balance - PART B: RECONCILIATION 1. Amount advanced by the World Bank 1,500,000.00 2. Add: Amount supplemented by the World Bank 4,655,000.00 3. Deduct: Amount recovered by the World Bank (4,910,940.94) 4. Amount refunded to the World Bank (1) (1,244,059.06) 5. Present outstanding amount advanced to - 6. Closing balance - 7. Total advances accounted for - I (1) The amount refunded the World Bank on 26/04/2019 was USD 1,244,059.06. The actual amount received by the World Bank was USD 1,243,693.56. The difference of USD 365.50 was bank charge. I I I I 1 9 I Health Professionals Education and Training for Health System Reforms Project Financial Statements Financing Agreement No. 5441-VN and Grant No. TF0A1658 Year ended 31 December 2018 STATEMENT OF WITHDRAWALS AND RECONCILIATION OF FUNDS Financing Agreement No. 5441-VN For the year ended 31 December 2018 I Withdrawal applications Amount Amount received No. Date Currency claimed Date Amount Variances Note (a) (b) (b)-(a) Designated account Advance 6,000,000.00 6,000,000.00 0009 26/04/2018 USD 4,000,000.00 16/05/2018 4,000,000.00 0014 06/11/2018 USD 2,000,000.00 07/12/2018 2,000,000.00 I Replenishment 1,890,328.54 - (1,890,328.54) 0007 13/03/2018 USD 485,362.57 - (485,362.57) 0010 24/07/2018 USD 260,594.62 - (260,594.62) 0011 24/07/2018 USD 441,008.30 - (441,008.30) 0012 09/09/2018 USD 387,486.91 - (387,486.91) 0013 30/10/2018 USD 98,379.73 - (98,379.73) 0015 11/12/2018 USD 217,496.41 - (217,496.41) Total amounts 7,890,328.54 6,000,000.00 (1,890,328.54) (1) (1) Recovered by the World Bank I I I I * 10 I I Health Professionals Education and Training for Health System Reforms Project Financial Statements Financing Agreement No. 5441-VN and Grant No. TF0A1658 Year ended 31 December 2018 STATEMENT OF WITHDRAWALS AND RECONCILIATION OF FUNDS Grant No. TF0A1658 For the year ended 30/04/2019 Withdrawal applications Amount Amount received No. Date Currency claimed Date Amount Variances Note (a) (b) (b-a) Designated account Advance 4,691,000.00 4,655,000.00 (36,000.00) (1) TFO2 16/04/2018 USD 2,756,000.00 05/06/2018 2,720,000.00 (36,000.00) TFO5 30/10/2018 USD 1,935,000.00 20/11/2018 1,935,000.00 Replenishment 4,910,940.94 - (4,910,940.94) (2) TFO3 30/10/2018 USD 33,515.66 - (33,515.66) TF04 11/12/2018 USD 113,991.93 - (113,991.93) TFO6 21/03/2019 USD 145,735.21 - (145,735.21) TFO7 21/03/2019 USD 735,743.89 - (735,743.89) TFO8 28/03/2019 USD 389,925.39 - (389,925.39) TFO9 21/03/2019 USD 720,901.67 - (720,901.67) TF10 28/03/2019 USD 989,139.30 - (989,139.30) TF11 28/03/2019 USD 1,738,559.44 - (1,738,559.44) TF12 28/03/2019 USD 43,428.45 - (43,428.45) Total amounts 9,601,940.94 4,655,000.00 (4,946,940.94) I (1) Deducted by the World Bank (2) Recovered by the World Bank I I I I I I I I 11 I I Health Professionals Education and Training for Health System Reforms Project Financial Statements Financing Agreement No. 5441-VN and Grant No. TF0A1658 Year ended 31 December 2018 NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2018 1. Background I The Health Professionals Education and Training for Health System Reforms Project (HPET) is funded by the International Development Association (IDA) under the Financing Agreement No. 5441-VN dated 17 July 2014 and European Union (EU) under the Financing Agreement No. DCl- ASIE/2013/024-370 dated 04 December 2014 replaced by the Grant No. TF0A1658 dated 28 March 2017 between the Government of the Socialist Republic of Vietnam and the World Bank. Total original IDA loan and Grant fund are SDR 68,600,000 (equivalent to USD 106 million) and EUR 7,428,500 (equivalent to USD 7,753,000). The adjusted IDA loan is USD 86 million (according to the Ministry of Health's Official Letter No. 1130/BYT-KH-TC dated 10/03/2017 on the adjustment of the total investment decision of HPET project using World Bank loans). The main objective of the Financing Agreement No. 5441-VN is to improve the quality of health professionals education, strengthen management competencies of the Recipient in the health sector, and improve the competencies of primary health care teams at the grass-roots level. The Project consists of the following components: Part 1: Improving the Quality of Health Professionals Education. (a) Improving the Quality Assurance System of Health Professionals Education; (b) Supporting Measures to Meet the Standards of Health Professionals Education. Part 2: Strengthening Management Competencies in the Health Sector. (a) Strengthening Health Management Training; (b) Improving Policy Making in Human Resources for Health. Part 3: Improving Competencies of Primary Health Care Teams at the Grass-roots Level. (a) Training Primary Health Care Teams at the Grass-roots Level; (b) Improving Trained Primary Health Care Teams Access to Basic Equipment According to the National Benchmarks. Part 4: Project Management. The objective of the Grant No TF0A1658 is to support the implementation of Part 3(a) of the Project including the improvement of the competencies of the primary health care teams at the grass-roots level. The Financing Agreement No. 5441-VN officially came into operation since 30 October 2014 and is expected to close on 31 December 2020. The Grant No. TFOA1658 dated 28 March 2017 was closed on 31 January 2019, disbursement before 31 March 2019. The Project is managed by Project Management Unit of Health Professionals Education and Training for Health System Reforms Project (CPMU) and its office is located at Rooms No. 101- 104, Van Phuc building, No. 02 Nui Truc, Ba Dinh, Hanoi and 15 School of Project Management I Unit ("SPMU"), including: SPMU Address Thai Binh University of Medicine and 373 Ly Bon Street, Thai Binh city, Thai Binh Pharmacy province Ho Chi Minh University of Medicine 217 Hong Bang Street, Ward 11, District 5, Ho Chi and Pharmacy Minh City Thai Binh Medical College 290 Phan Ba Vanh Street, Quang Trung Ward, Thai Binh City, Thai Binh Province I 12 I I Health Professionals Education and Training for Health System Reforms Project Financial Statements Financing Agreement No. 5441-VN and Grant No. TF0A1658 Year ended 31 December 2018 SPMU Address Lam Dong Medical College 16 Ngo Quyen Street, Ward 6, Da Lat City, Lam Dong Province Danang University of Medicine and 99 Hung Vuong Street, Hai Chau 1 Ward, Hai Chau Pharmacy District, Da Nang City Hai Phong University of Medicine 72A Nguyen Binh Khiem, Dang Gia Ward, Ngo and Pharmacy Quyen District, Hai Phong City Hanoi Medical University 1 Ton That Tung Street, Kim Lien Ward, Dong Da District, Hanoi City Quang Nam Medical College 3 Nguyen Du Street, An My Ward, Tam Ky District, Quang Nam Province Phu Yen Medical College 270 Tran Hung Dao Street, Ward 6, Tuy Hoa City, Phu Yen Province Quang Ninh Medical College 5 Hai Son Street, Hong Hai Ward, Ha Long City, Quang Ninh Province Hai Duong Medical Technical 1 Vu Huu Street, Thanh Trung Ward, Hai Duong University City, Hai Duong Province Thai Nguyen University of Medicine 284 Luong Ngoc Quyen, Quan Trung Ward, Thai and Pharmacy Nguyen City, Thai Nguyen Province Hue University of Medicine and 6 Ngo Quyen Street, Vinh Ninh Ward, Hue City, Pharmacy Thua Thien Hue Province Bach Mai Medical College 78 Giai Phong, Phuong Mai Ward, Dong Da District, Hanoi City Hanoi Medical College 35 Doan Thi Diem, Quoc Tu Giam Ward, Dong Da District, Hanoi City Part 2 of the Project was implemented in 02 Schools ("SPMU"), including: Hanoi University of Public Health and Public Health Institute of Ho Chi Minh. Part 3(a) was implemented in 15 Province Health Departments ("PPMU"). 2. Principal Accounting Policies I a. Basis of accounting Annual accounting period commences from 1st January and ends at 31st December. Due to the Grant No. TF0A1658 was closed on 31 January 2019 and the last disbursement could be made before 31 March 2019 as well as its account was closed no later than 30 April 2019, the Financial Statements for the year ended 31 December 2018 have been prepared for the full year from 01 January 2018 to 31 December 2018 in the connection with the Financing Agreement No. 5441-VN, but from 01 January 2018 to 30 April 2019 for the Grant No. TF0A1658. Due to this issue, followings are related implications: State of Funds and Expenditures for the year ended 31 December 2018 included funds and expenditures of the Grant No. TF0A1658 in the period from 01 January 2019 to 30 April 2019, which were VND (28,552,524,348) (Note 3) and VND 1,866,201,659 (Note 5) respectively; and Statement of Funds balance as at 31 December 2018 included zero balane of the Grant No. TFOA1658 as at 30 April 2019. Therefore, the balances presented at Note 6 to 10 are of the Financing Agreement No. 5441-VN. The financial statements are prepared in accordance with the requirements of the World Bank and presented in Vietnam Dong (VND), except for the Statement of Designated Account and Statement of Withdrawals and Reconciliation of Funds, which are prepared in United State Dollar (U SD). The principal accounting policies are summarized as below: 13 I Health Professionals Education and Training for Health System Reforms Project Financial Statements Financing Agreement No. 5441-VN and Grant No. TF0A1658 Year ended 31 December 2018 b. Foreign currencies Funds received from the World Bank in foreign currency is translated into VND using the exchange rates announced by the Ministry of Finance at the date of receiving the funds or at the date of direct payment made to contractors/suppliers. Transactions in foreign currencies are translated into VND using the actual exchange rate at the date of transaction announced by the Vietnam Maritime Commercial Joint Stock Bank. All differences on foreign exchange are recorded into exchange rate differences account and presented as other funds on Statement of Funds and Expenditures. c. Funds and Expenditures Funds: - Funds received from the World Bank are recognized when remittance made into the Designated Account or direct payment made to contractors/suppliers; - Counterpart funds are recognized when payments are made directly from the State Treasury to contractors/suppliers of the project or funds are withdrawn to the Project Management Unit for settlement of project's activities including any payments under current year plant until the next 31/1. Expenditures are recorded when they are actually occurred. d. Designated account and its interest Designated Accounts are the deposit account in USD opened at the Maritime Commercial Joint Stock Bank for the Project's activities. Payments made via Designated Account are for eligible expenditures of the Project in accordance with the provisions of the Financing Agreement No. 5441-VN dated 17 July 2014 and Grant No. TF0A1658 dated 28 March 2017. There is no interest with deposit account in USD under the prevailing rule. In case of incurring bank charges, the PMU will plan to settle by the counterpart funds (according to Circular No.11 1/2016/TT-BTC dated 30 June 2016). 1 3. Funds received from the World Bank Year ended 31/12/2018 Accumulated to 31/12/2018 Equivalent Equivalent USD to VND USD to VND Financing Agreement 6,000,000.00 135,408,000,000 9,805,731.61 219,090,458,638 No. 5441 - VN Designated account 6,000,000.00 135,408,000,000 9,805,731.61 219,090,458,638 N - Advance 6,000,000.00 135,408,000,000 9,400,000.00 210,153,700,000 - Replenishment - 405,731.61 8,936,758,638 Grant Agreement 3,410,940.94 76,811,955,652 4,910,940.94 110,474,955,652 No. TFOA1658 Designated account 3,410,940.94 76,811,955,652 4,910,940.94 110,474,955,652 - Advance 4,655,000.00 105,364,480,000 6,155,000.00 139,027,480,000 - Refunded to the (1,244,059.06) (28, 552,524,348) (1,244,059.06) (28,552,524,348) Word Bank (*) 9,410,940.94 212,219,955,652 14,716,672.55 329,565,414,290 (*) Refunded the World Bank on 26/04/2019 14 I I Health Professionals Education and Training for Health System Reforms Project Financial Statements Financing Agreement No. 5441-VN and Grant No. TFOA1658 Year ended 31 December 2018 4. Counterpart funds Year ended Accumulated 31/12/2018 to 31/12/2018 VND VND CPMU 2,671,345,578 9,435,762,676 SPMU 1,848,433,533 2,282,588,373 - Ho Chi Minh University of Medicine and Pharmacy 148,768,000 582,922,840 - Danang University of Medicine and Pharmacy 146,064,660 146,064,660 - Quang Nam Medical College 124,825,400 124,825,400 - Hai Duong Medical Technical University 149,993,946 149,993,946 - Hue University of Medicine and Pharmacy 1,028,781,740 1,028,781,740 - Bach Mai Medical College 249,999,787 249,999,787 4,519,779,111 11,718,351,049 5. Expenditures Year ended Accumulated 31/12/2018 to 31/12/2018 VND VND Expenditures covered by: Financing Agreement No 5441-VN 96,253,546,287 147,728,223,367 Grant No. TF0A1658 (*) 112,170,933,544 113,536,827,340 The Counterpart funds 4,901,663,860 12,132,005,609 213,326,143,691 273,397,056,316 (*) Including VND 1,866,201,659 of expenditure incurred from 01 January 2019 to 30 April 2019 under the Grant No. TF0A1 658. The Financing Agreement No. 5441-VN dated 17/07/2014 finances 100% (inclusive of taxes) of eligible expenditures includings goods (including transportation), works, services, incremental operating costs (excluding salaries, salary allowances, and salary supplements of the Project's civil servants), training and workshops, and output based payments according to the MOU's entered into under part 2 and 3(a) of the Project. 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Cash at bank 31/12/2018 31/12/2017 VND VND At CPMU 42,124,276,304 59,007,562,547 Designated account IDA 5441 - VN (USD) 41,654,618,869 29,544,349,446 Interest account of Designated account IDA 5441-VN (USD) 8,539 8,539 Designated account TFOA1658 (USD) - 29,446,957,906 Current account (VND) 458,814,146 10,436,856 Interest account of Current account (VND) 10,834,750 5,809,800 At SPIVIUs 36,800,330,572 3,929,336,190 Thai Binh University of Medicine and Pharmacy 2,240,382,046 397,783 Ho Chi Minh University of Medicine and Pharmacy 8,662,548,457 368,096,445 Thai Binh Medical College 1,297,610,310 1,294,974 Lam Dong Medical College 1,698,699,371 105,923,818 Danang University of Medicine and Pharmacy 785,664,362 195,956,802 Hai Phong University of Medicine and Pharmacy 921,425,152 249,206,100 Hanoi Medical University 373,212,705 319,795,861 Quang Nam Medical College 1,981,401,552 222,264,900 Phu Yen Medical College 1,780,019,818 220,872,938 Quang Ninh Medical College 668,385,056 257,625,225 Hai Duong Medical Technical University 1,282,127,014 130,844,428 Thai Nguyen University of Medicine and Pharmacy 1,290,049,135 267,391,410 Hue University of Medicine and Pharmacy 8,623,655,523 1,367,400,606 Bach Mai Medical College 674,926,731 222,264,900 AN' Ha Noi Medical College 5,870,851 - Hanoi University of Public Health 1,301,242,741 - Public Health Institute of Ho Chi Minh 2,213,109,748 - if At PPMUs 5,416,076,381 - Health Department of Dien Bien province 47,806,702 - Health Department of Dong Thap province 966,928,621 - Health Department of Gia Lai province 647,159,531 - Health Department of Ha Giang province 18,985,709 - if Health Department of Khanh Hoa province 2,123,020,467 Health Department-of Kon Tum province 18,807,437 - Health Department of Lai Chau province 248,607,462 - Health Department of Lam Dong province 1,097,142,046 - Health Department of Lao Cai province 2,074,693 - Health Department of Nam Dinh province 14,113,382 - Health Department of Son La province 56,095,262 Health Department of Thai Binh province 68,994,271 Health Department of Yen Bai province 106,340,798 83,340,6 621936189 J 18 Health Professionals Education and Training for Health System Reforms Project Financial Statements Financing Agreement No. 5441-VN and Grant No. TF0A1 658 Year ended 31 December 2018 7. Other receivable 31/12/2018 31/12/2017 VND VND Receivables from Grant TF0A1658 funds (*) 1,567,241,301 - Health Department of Gia Lai province 197,246,835 - - Health Department of Lao Cai province 162, 267,300 - - Health Department of Ha Giang province 481,127,290 - - Health Department of Kon Turn province 726,599,876 - Bank interest 5,529,322 Others 154,801,179 1,727,571,802 - (*) Grant TFOA1 658 funds has refunded the Financing Agreement No. 5441-VN in March 2019 8. Advances to contractors 31/12/2018 31/12/2017 VND VND At CPMU Hanoi Medical University 8,041,640,000 6,481,600,000 Hai Phong University of Medicine and Pharmacy 3,807,000,000 638,255,000 AASC Limited Company 1,525,717,000 - Can Tho University of Medicine and Pharmacy 1,388,520,000 - Health Department of Lam Dong province 13,804,690 49,962,690 Hue University of Medicine and Pharmacy 1,589,760,000 1,409,400,000 Pham Ngoc Thach University of Medicine - 957,753,600 Thai Nguyen University of Medicine and Pharmacy - 371,460,000 Health Department of Lao Cai province - 165,348,000 Public Health Institute of Ho Chi Minh - 90,808,356 Health Department of Khanh Hoa province 82,575,000 Health Department of Ha Giang province 24,653,000 Health Department of Gia Lai province - 24,004,500 Health Department of Nam Dinh province - 2,787,500 Others 84,345,041 16,450,786,731 10,298,607,646 19 Health Professionals Education and Training for Health System Reforms Project Financial Statements Financing Agreement No. 5441 -VN and Grant No. TF0A1 658 Year ended 31 December 2018 9. Payable to contractors 31/12/2018 31/12/2017 VND VND At CPMU 3,017,613,276 3,195,472,614 Hanoi Medical University 970,200,000 Thai Nguyen University of Medicine and Pharmacy 70,470,500 - Mrs. Vu Viet Nu 294,259,185 321,249,500 Hue University of Medicine and Pharmacy 284,400,000 - Mrs. Nguyen Thi Thanh Ha 261,750,800 Quang Ba Trade and Tourism Service JSC 230,320,000 Mrs. Le Thi Thanh Huong 229,059,200 3 Lam Dong Medical College 82,996,316 Mrs. Hoang Thi Phuong 153,225,000 Mr. Khuong Anh Tuan 153,225,000 Mrs. Nguyen Thanh Huong 153,225,000 Mrs. Nguyen Khanh Phuong 134,482,275 Ecole des hautes estudes an sante publique - 224,390,000 Hanoi University of Public Health - 1,164,993,775 University of Melbourne Revenue Account - 240,786,975 Others - 1,244,052,364 At SPMUs 6,323,672,191 2,084,091,000 Thai Binh University of Medicine and Pharmacy 392,504,600 255,520,600 Ho Chi Minh University of Medicine and Pharmacy 575,346,100 1,686,103,400 3 Thai Binh Medical College - 11,885,000 Lam Dong Medical College 947,560,650 - 0A Hai Phong University of Medicine and Pharmacy - 90,807,000 Hanoi Medical University - 39,775,000 Phu Yen Medical College 747,227,400 - Hue University of Medicine and Pharmacy 1,598,559,000 - Bach Mai Medical College 1,072,113,819 - Ha Noi Medical College 140,690,000 - Public Health Institute of Ho Chi Minh 849,670,622 - At PPMUs 4,368,493,056 Health Department of Lam Dong province 2,548,424,256 Health Department of Khanh Hoa province 1,820,068,800 13,709,778,523 5,279,563,614 20 I I Health Professionals Education and Training for Health System Reforms Project Financial Statements Financing Agreement No. 5441-VN and Grant No. TFOA1658 Year ended 31 December 2018 10. Other payables 31/12/2018 31/12/2017 VND VND At CPMU 1,727,881,272 1,252,530,429 Hanoi Tax Department 308,665,215 13,600,000 Nghi Tam Trading and Travel Services JSC 194,533,000 167,607,000 Mrs. Nguyen Lan Huong 121,985,000 8,100,000 Thien Ha International Tourism and Investment 43,850,000 35,150,000 Investment Consultant Co.,Ltd Bank interest 22,458,047 - Da Lat Tourism Service JSC - 72,250,000 3 Doan an dieu duong 295 - 353,400,000 Insurances - 12,426,420 Others 1,036,390,010 589,997,009 At SPMUs 9,337,078,016 190,972,741 Ho Chi Minh University of Medicine and Pharmacy 1,250,397,789 190,908,139 Danang University of Medicine and Pharmacy 1,906,077 64,602 Hai Phong University of Medicine and Pharmacy 1,203,255,500 - Hai Duong Medical Technical University 8,548,500 - Thai Nguyen University of Medicine and Pharmacy 963,773,865 - Hue University of Medicine and Pharmacy 5,821,379,500 - Bach Mai Medical College 252,412 - Ha Noi Medical College 87,564,373 - At PPMUs 2,565,239,746 Health Department of Dong Thap province 1,386,507,546 - Health Department of Thai Binh province 1,178,732,200 13,630,199,034 1,443,503,170 11. Subsequent events There have been no significant events occurring after the reporting date, which would require adjustments or disclosures to be made in the financial statements. 12. Corresponding figures The corresponding figures are the financial statements for the period ended 31 December 2017 which were audited by AASC Limited. 13. Approval of the Financial Statements The finanolal statements were approved by Project Management Unit for issuance on 28 June 2019. Nguyen go Quang Nguyen Thi Bich I Director Chief Accountant Hanoi, 28 June 2019 I 21 1 I aasc I No.: 280619.004/BCTC.FIS2 I INDEPENDENT AUDITORS' REPORT ON THE INTERNAL CONTROL SYSTEM To: The Project Management Unit of The Health Professionals Education and Training for Health System Reforms Project We have audited, in accordance with International Standards on Auditing, the financial statements of the Health Professionals Education and Training for Health System Reforms Project ("the Project") for the year ended 31 December 2018 and issued the auditors' report thereon dated 28 June 2019 expressing an opinion on those financial statements. In connection with our audit of the financial statements, we also examined the effectiveness of internal control over compliance with requirements that could have a direct and material financial effect on the financial statements as well as the internal control over financial reporting for the year I ended 31 December 2018. Responsibilities of the Project Management Unit The Project Management Unit is responsible for maintaining an effective internal control over compliance with requirements that could have a direct and material financial effect on the financial statements as well as the internal control over financial reporting. Auditor's Responsibility Our responsibility is to express an opinion on the effectiveness of internal control based on our 3 examination. Our examination was conducted in accordance with the International Standard on Assurance Engagements (ISAE) 3000 (Revised). That standard requires that we comply with ethical requirements and plan and perform our procedures to obtain reasonable assurance about whether, in all material respects, the Project has maintained an effective internal control over compliance with requirements that could have a direct and material financial effect on the financial statements as well as internal control over financial reporting. Our examination included obtaining an understanding, testing, and evaluating the design and operating effectiveness of the internal control, and performing other procedures as we considered necessary in the circumstances to obtain sufficient appropriate evidence to provide a basis for our opinion. Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not to be prevented or detected on a regular basis. In addition, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis I for our opinion. I T: (84)24 3824 1990 1 F: (84)24 3825 3973, 1 Le Phung HieU Hanoi, Vetnarn A member of International HANG K19M TOAN AAsc 22 I I I Auditors' opinion In our opinion, the Project has maintained an effective internal control over misstatements that could have a direct and material financial effect on the Project financial statements for the year ended 31 December 2018. AASC Limited I I __ Doluanh Cuong Nguyen Pham Hung Deputy General Director Auditor in-charge CPA Registered No.: CPA Registered No.: 0744-2018-002-1 2893-2015-002-1 Hanoi, 28 June 2019 I I I I I I I I I I I * 23 I I aasc I No.: 280619.004/BCTC.FIS2 I INDEPENDENT AUDITORS' REPORT ON THE COMPLIANCE To: Project Management Unit of Health Professionals Education and Training for Health System Reforms Project We have audited, in accordance with the International Standards on Auditing, the financial statements of the Health Professionals Education and Training for Health System Reforms Project ("the Project") for the year ended 31 December 2018 and issued the auditors' report thereon dated on 28 June 2019 expressing an opinion on those financial statements. In connection with the audit of the financial statements, we also performed procedures on the Project's compliance with the Financing Agreement No. 5441-VN dated 17 July 2014 and Grant No. TFOA1658 dated 28 March 2017, law and regulations that have a direct and material effect on I the Project's financial statements for the year ended 31 December 2018 ("the Requirements"). Responsibilities of the Project Management Unit The Project Management Unit is responsible for complying with the Requirements applicable to the Project. Auditor's Responsibility Our responsibility is to express an opinion on the Project's compliance with the Requirements based on our procedures. We limited our tests of compliance to the Requirements, and we did not test compliance with all laws and regulations applicable to the Project. We performed our work in accordance with the International Standard on Assurance Engagements (ISAE) 3000 (Revised). That standard requires that we comply with ethical requirements and plan and perform our procedures to obtain reasonable assurance about whether, in all material respects, the Project has complied with the Requirements. An assurance engagement to report on the compliance with the Requirements at the Project involves performing procedures to obtain evidence about whether the Project's activities are free of material non-compliance with the Requirements, including obtaining an understanding of the internal control relevant to the Project's compliance with the Requirements. The procedures selected depend on the auditors' judgment, including the assessment of risks that the Project does not comply with the Requirements and whether such non-compliance could have a direct and material financial effect on the Project's financial statements. Our procedures included testing the compliance with the Requirements we consider necessary to provide a reasonable assurance that the Requirements are complied by the Project. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. I I I T: (84)24 3824 19901 F: (84)24 3825 397 1 L6 P t Hieu, Hano. Vieina[ A member of International HANG KiiM TOAN AASC 24 I I I Auditors' opinion In our opinion, the Project has complied, with the Requirements that could have a direct and material financial effect on the Project's financial statements for the year ended 31 December 2018. AASC Limited to Manh Quong Nguyen Pham Hung Deputy General Director Auditor in-charge CPA Registered No.: CPA Registered No.: 0744-2018-002-1 2893-2015-002-1 Hanoi, 28 June 2019 I I I I I I I I I I 25 I