I Lao PDR Moblllzing Ethnic Communities for tr lmproved Livelihoods and Wellbeing Project (FunM by lntenafronal Dew,y'ofitent Assciatjon, &ing as adrinis[,Efion ol the Japan S&lat D€vdpomont FuN, tr un&r G'?,nt Nurtbet TF097786) Report of th€ Projecfs Msnagement gnd tt Audibd Finarcial Stat€menb For the ysa. ended 30 S€ptember 201 5 tr :l I I I I I I l I i F Lao PDR Mobilizing Ethnic Communities for lmproved Livelihoods and tI Wellbeing Project - JSDF Grant No. TF097786 t1 tl CONTENTS F Pages General information tI 1 Report of the Projects l\4anagement 3-4 tr Independent auditors' report Statement of receipts and disbu.sementg tt Statement of tund balanco Notes to the financial statemenls 7 -12 F F F F n h j rI Lao PDR Mobilizing Ethnic Communities for lmproved Livelihoods and Wellbeing Project - JSDF Grant No. TF097786 I GENERAL INFORMATION I I Lao POR Mobillzing Ethnic Communitles for lmprov€d Livolihoods and Wellbeing P,oject I '' Lao PDR Mobilizing Ethnic Communities for lmproved Livelihoods and Wellbeing Project ("the Project") is implemented by the Poverq Reduction Fund ("PRF") of the Nalional Leading Board for -l Rural Development and Poverg Alleviation, Prime Minister Office, under the subsidiary grant J agreement signed by the Government of Lao PDR ("GoL") and the PRF on 8 July 2011. The implemenlation ot the Project was approved by the Japan Social Develpoment Fund (JSoF") on I oisbursement Letter dated 22 April 2011, and the Project implementation period commences from | 22 Apnl201'1 to 22 April 2015. The implementation ot the Project was extended to 22 Aptil2016. The overall objective of the Project is to pilot an innovative livelihood focused community-driven I development program in the selected poverty reduction priority districts in Huaphan and J Savannakhet provinces. , The specrfic pans of the Prolect are. I ' a) Formation of Community Sefl-Help Groups and Capacity Building of Local Service Providers; b) Community Asset Creation; I c) Participatory Pro-Nutrition Assessment and Activites; and J Ot lronitoring and lmpact Evaluation of Activities. The Project is managed by the management of PRF. Project activities mainly cover five poverty - -I reduction priority districts in Huaphan and Savannakhet provinces, enabling 28,800 holseholds in ethnrc communrties in rural areas in Lao PDR to improve their livelihoods and wellbeing through group-based activities. J The eligible expenses that will be financed out of the proceeds of the grant arc allocated to the following categorises: - )| Category 1 Goods, Training and Consultancy - Category 2: Incremental Operating Costs Category 3: Sub-grants under Pad (b) ot the Project I - Lsor cranr No. TFo97786 I The Project has been financed by the International Development Association ("lDA"), acting as J administrator of the JSDF. The accompanying financial statements are for the JSDF Grant No. TF097786. _ I JSDF through the IDA signed Grant Agreement No. TF097786 on 22 April 201 1, and Disbursement ' letter datedi2 Apnl 20 1 i agreed by l5A and MoF for fioancing of USd 2.621,500 an respect of the -l Proiect. 'l J I _r l I I] Lao PDR Mobilizing Ethnic Communities for lmproved Livelihoods and I1 Wellbeing Project - JSDF Grant No. TF097786 I] REPORT OF THE PROJECT'S I\4ANAGEI\4ENT I] MANAGEMENT'S RESPONSIBILITIES IN RESPECT OF THE FINANCIAL STATEMENTS The Project's Management is lesponsible for the prepa€tion of the project,s financial statements which comprise the statement of fund balance as at 30 September 2015 and the statement of receipts and disbursements for the year then ended logether with the explanatory notes thereto. 1l In preparing the financial statements, the Project's Management is required to: I] > adopt accounting policies as described in Note 3 to the financial statements and apply them consrstently an accordance with the requirements of JSDF for Government-execlted proiects' ll frnancial statements; > make judgements and estimates that are reasonable and prudent: > maintain proper financial ope€tions and conkols; Il .l > > maintain adequacy of the management shucture and general control environment; ensure that all non-expendable properties are used solely for and by the project, and maintain proper controlover those properties; and I > comply with lhe €lated grant and financing agreements. The Projecfs Management is responsible for ensuring that proper accounting records are kept which disclose, with reasonable accuracy at any time, the funds requested, authorized for, received and disbursed by the Project and to ensure that the accounting records comply with the accounting policies descdbed in Note 3 to the financial statements. The project s Management is also responsible for safeguarding lhe assets ot the project, and for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Project's Management confirms that they have complied with the above rcquirements in preparing the financial statements. APPROVAL OF THE FINANCIAL STATEMENTS j We hereby apprcve the accompanying financial statements as at and for the year ended 30 September 2015 which are preparcd in accordance with the accounting polcies;s described in Note 3 to the financial statements and comply with the related grant and financing agreements. The tinancial statements are prepared to assist the Project's Management in meeting the reportjng requirements of the JSDF. As a result, the financial statements may not be suitabte for any othei DUTDOSe. l rojecl l\ranagement: ng Souvannaphanh lvls. Boualy Sayavong Head of Finance and Admanistration Vientiane, Lao PDR 7 lvlarch 2016 l leY _ Aurld nq. better wtrkm! wm d I l Rele'ence 61 170997/13139403 l INOEPENDENT AUDITORS' REPORT ) To: The Management of Lao PDR Mobilizang Ethnic Communiti6 tor lmproved Livelihood and Wellbeing P.oject, I The Japan Social Develpoment Fund we have audiled lhe accompanying tinancialslalements ol Lao PDR Mobilizing Elhnic Communili€s for lmproved Lvelihood and W€llbeing Projecl !nder Gtanl No TF097786 ( lhe Proiecl ) as sel oul on I pages 5 to 12. whrch comprise lhe stalement of lund balance as al 30 Seplember 2015, lhe slalemenl of .l rece ols and disbursemenls lor lhe year lhen ended and lhe noles lhereto ( the linancial slalemenls ). The financral slalements have been prepared by lhe Projecl s lvlanagemenl in accordance wilh lhe accoLrnlrng policies as described in the Nole 3 lo lhe linanctal slalemenls Managemenl's responsibility ror the linancial stalements The Protect s Managemenl E responsrble for lhe prepa€lion ol lhe financlal slalem€nls in accordance wrth the accounlrng polrcres as described in Nole 3lo lhe linancial stalemenls, and tor such Inlernal control as management delermines rs necessary lo enable the preparalion ol lhe llnancial slatemenls lhal are tree lrom malerial misstalernenl. whether due lo fiaud or error Auditots' re spo ns ib ilily Our responsibillly is lo express an opinion on the financial statements based on our audil. We conducled our audil in accordance with Inlernational Slandards on Audiling Those slandards require lhat we comply with elhical requirements and plan and pedorm the audil lo obtain reasonable assurance aboul whether the financial slalemenls are lree from malerial misstatemenl. An audil nvolves perlormrng procedures to obtain audit evidence about lhe amounls and d|sclosures In the tinancral slalemenls Th€ procedures selected depend on lhe audilors iudgmenl, Including lhe assessmenl of the nsks ol material mEslatemenl of the linancial slalemenls, whether due lo lraud or error In makrng those rsk assessments, the audilors consider inlernal conlrol relevanl to the preparalon ol the frnanclal stalemenls in order to design audil procedures that are appropriale in the circumslances, blt not lor lhe purpose ol expressing an opinion on the eflectiveness ofthe Projecl s inlemalconlrol. An a!dll also Includes eva ualing lhe appropiaten€ss of accounting policies used and lhe reasonableness of accountrng eslimates made by Management, as wellas evaluating lhe overall presentation oflhe We beheve that lhe audil evidence we hav€ obtained is suflicienl and appropriale to provide a bass for In our opinlon lhe financial stalements ol the Protect as at and for the year ended 30 Seplember 20'15 are prepared, In all malerial respects. in accordance with lhe accounling policies as described in Nole 3 lo lhe llnanoal slatements T-1 iJ t f: r) EY I L Accounting policies ancl rcstriction on use l We draw atlention lo Nole 3 to the financial statements, which descibes the accounting poticies adopted L by the Project. a This report is rntended lor the information ofthe Proiect,lhe JSDF and the covernment of Lao pDR and no for other purpose However, upon release by the JSOF, lhis repo( witl be a matter of pubtic record L and its distribution will nol be limited. We do not, in giving this oprnion. accepl or assume responsibitity lor any other purpose orto any other person to whom this report is shown or into whose hands it may come, e)cepl wheae expressly agreed by our prior consenl in wriling. Ea,t r 'J /r-^q Vienliane. Lao PDR 7 March 2016 L I I t I a t 'I [: Lao PDR Mobilizing Ethnic Communities for lmproved Livelihoods and .l Wellbeing Project - JSDF Grant No. TF097786 l STATEI\4ENT OF RECEIPTS AND OISBURSEMENTS for the year ended 30 September 2015 l For the ended year 30 Cuftency: $US For the year l ended 30 l,Jotes Septembet 2015 Septenber 2014 Rsceipts Funds from JSDF 4 1,033,449 637,896 I -1 Total receipts 't,033,,149 637,896 r, DlsburEemenls -l Category 1: Goods, Training and Consultancy Category 2: Incremental Operating Costs 357,954 69,290 424,659 20,0s6 -t Category 3: Sub€rants under Part (b) ofthe Project 910,786 93,635 Total di3bu.sementg 1,338,030 lr (3rx,58i ) n It U lvls. Boualy Sayavong Executive Director Head of Finance and Administration U Vientiane, Lao PDR 7 March 2016 qr F 0 ? ? I q I q ! !?g PDR Mobilizing Ethnic Communities for lmproved Livelihooos and Wellbeing Project - JSDF Grant No. TF097786 STATEMENT OF FUND BALANCE as at 30 September 2015 Cutency:$US 30 Septenber 30 Septembel Notes 2015 2014 l' Opening fund balance 344,044 244,498 Nel (disbursements)/receipts (304,581) 99,546 Closing fund balance 39,463 Reprcsenled by: Cash on hand and cash at banks 37,329 331,582 2,134 12.462 39,463 344,O44 l Souvannaphanh Ms. Boualy Sayavong Executive Director Head of Finance and Administration Vientiane, Lao PDR 7 March 2016 I L t t L t Lao PDR Mobilizing Ethnic Communities for lmproved Livelihoods and Wellbeing Project - JSDF Grant No. TF097786 NOTES TO THE FINANCIAL STATEI\4ENTS t. as at and for the vear ended 30 Seotember 2015 1. t: PROJECT BACKGROUNO Lao PDR Mobilizing Ethnic Communities FOR lmproved Livelihood and Wellbeing Proiect [' Lao PDR Mobilizing Ethnic Communities for lmproved Livelihoods and Wellbeing Prqect (the Project") is implemented by the Povedy Reduction Fund ('PRF') of the National Leading Eoard for Rural Development and Poverty Alleviation, Prime ldinister office. under the subsidiary grant agreement signed by the Government of Lao PDR ( GoL") and the PRF on 8 July 2011 The implementation of the Project was approved by the Japan Social Develpoment Fund ( JSDF") on Disbursement Letter dated 22 Ap.|l2011, and the Prqeci implementation period commences from 22 Aptil2011 lo 22 Aptil2015. The implementation ofthe Project was extended to 22 April 2016. The overall objective of the Project is to pilot an innovative livelihood focused community- driven development program in the selected poverty reduction priority districls in Huaphan and Savannakhet provinces. The specific parts of the Project are: a) Formation ot Community Sefl-Help Groups and Capacity Building of Local Service Providers: b) Community Asset Creation; c) Participatory Pro-Nutrition Assessment and Activites; and d) lronitoring and lmpact Evaluation of Activities The Project is managed by the management ot PRF. Project activities mainly cover five poverty reduction priority districts in Huaphan and Savannakhet provinces. enabling 28,800 households in ethnic communities in rural areas in Lao PDR to improve their livelihoods and wellbeing through group-based activities. The eligible expenses that will be flnanced out of the proceeds of the grant are allocated to the following categorises: - Category 1:Goods, Training and Consultancy - Category 2: Incremental Opelating Costs - Caiegory 3: Sub-grants under Part (b) of the Project JSDF Grant No. TF097786 The Project has been tinanced by the International Development Association ( lDA"), acting as administrator ot the JSDF. The accompanying financial statements are for the JSDF Grant No. TF097786. JSDF lhrough the IDA signed Grant Agreement No. TF097786 on 22 Aptil 2011, and Disburcement letter dated 22 Aptil2011 agreed by IDA and MoF for total financing of USD 2,621,500 in respect of the Project. The Project is expected to be completed by 30 April 2016. t: Lao PDR Mobilizing Ethnic Communities for lmproved Livelihoods and Wellbeing Project - JSDF Grant No. TF097786 NOTES TO THE FINANCIAL STATEIT4ENTS (continued) as at and for the vear ended 30 Seotember 2015 t BASIS OF PREPARATION The Project's financial statements comprise the statement of receipts and djsbursements and ihe statement of fund balance which are expressed in Unjted States Dollars ( USD") These linancial statements are prepared by the Project s management in accordance with q lhe accounling policies as described in Note 3. The Project maintains its accounting records in USD. ! The financial statements are prepared solely to assist the Project s Management in meeting I the repoding requirements of the JSDF SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 3.1. Fun.ls frcm JSDF Funds from JSDF represent f!nd trom JSDF under crant Agreement No. TF097786 which are recognized as.eceipts when cash is debited to the Project s Special Account. 3.2. Disbursemen'js l a Expenditure is recognized when doc!ments substantiating the Projecfs transactions are submitted and approved and payment is made, except for sub-grants to Koum Bans (group of villages) where expenditure is recognized when cash is transferred frorn the Project's bank acco!nts to Koum Bans. I 3.3. Advances I I Advances, which comprise mainly of amounts advanced tor the Project s activities, are recorded as such in the statement of fund balance when paid. When lhe advances a.e liquidated, the related expenses disbursements. a.e recognized in the statement of receipts and I a 3.1. Fixed assels t I Fixed assets procLrred are recognized as expenditures in full in the stalement ot receipts and disbursements when received or when handed-over from the contractors or suppliers upon the respective acceptance and approval by the Project and when payment is made. t: Accordingly, fixed assets are not recognized jn the statement of fund balance at lhe end of fte year. t: The Project mainlains a fixed asset register for conkol and monitoring purposes, which jncludes vehicles, furniture and fittings, computers and office equipment. 3.5. Fo reign ex c hange d ifferences t: Disbursements and withdrawals in foreign currencies other than USD are converted into USD at the actual exchange rates ruling at the dates of Vansactions. Fund balance denoted in foreign currencies are t€nslated into USD at the closing exchange rate at the repoding q: date Foreign exchange differences are recognized in the stalement of receipts and disbursements. t; I t: Lao PDR Mobilizing Ethnic Communities for lmproved Livelihoods and Wellbeing Project - JSDF Grant No. TF097786 NOTES TO THE FINANCIAL STATEMENTS {continued) as at and for the year ended 30 September 2015 4, FUNDS FROM JSDF Cutency: $US For lhe year For the year Wilhdrcwal Application ended 30 ended 30 Date of receipt Septenber 2015 t\: JSDF TF097786 September 201 4 Application No. 019 31 October 2013 53,310 l[; Application No. 020 Application No 021 31 31 October 2013 October 2013 38,002 20.295 tI Application No. Application No. Application No. 022 023 024 13 Novernber 2013 27 Decembet 2013 7 Febtuary 2014 28.316 39,725 24,904 Application No. 025 27 Febtuary 2014 58.276 Application No. 026 22 Aptil2014 23,548 Application No. 027 30 April 2014 29,306 Application No. 028 I July 2014 95,849 Application No. 029 29 August 2014 226,365 Application No. 030 24 October 2014 56,242 Application No. 031 12 November 2014 178 937 Appiicatjon No. 032 26 November 2014 193,637 Applicataon No. 033 22 Decembet 2014 123,051 Application No. 034 20 January 2015 133,138 Application No. 035 16 February 2015 32,117 Application No. 036 02 March 2015 67,O27 Application No. 037 09 March 2015 u,317 Application No. 038 30 March 2015 135.722 Application No. 039 28 April2015 29,261 Total replenishments ot designated accouat no. 0000010056200100 1,033,449 637,896 Lao PDR Mobilizing Ethnic Communities for lmproved Livelihoods and fi Wellbeing Project - JSDF Grant No. TF097786 NOTES TO THE FINANCIAL STATEI4ENTS (continued) qr as at and for the year ended 30 September 2015 5. DISBURSEMENTS q1 Cu ency:$Us Accumulaled Fot the yeat Fot the year 30 onded 30 as at ended 30 September Septembet September [] Total budget 2015 2015 2014 Category 1: Goods, Training and T Consultancy Training, Monitoring costs and Information, qr Education and Communication (lEC) materials 500,000 490,521 91,783 167,955 TI Localconsultancy Internataonal 560,000 545,573 155,826 202,442 54,262 t; consultancy 310,500 338,623 110,345 1,370,500 1,374,717 357,954 124,659 t; Category 2: Incremental Operating Costs Incremental Operating Cosls 118,000 111,719 69.290 20,056 T; 118,000 111,719 69,290 20,056 t; Category 3: Sub-grants Sub-grants under Part (b) of the Project 1,133,000 1,095,602 910,786 93,635 T; 1,133,000 '1,095,602 910,786 93,635 Total disbursement 2,62'1,500 2,582,038 1,338,030 538,350 t; CASH ON HAND ANO CASH AT BANKS t: Note 30 Septembel 2015 Cuffency: $US 30 September 2014 t: Cash on hand Cash in Project's operating accounts at provinces 6.1.1 51 27,472 544 137,280 t: Cash in Designated Account 6. 1.1 9,806 37,329 193,758 331,s82 I: I; l: 10 rrrrrttttttttttllttttt Lao PDR Mobilizing Ethnic Communities for lmproved Livelihooos and 1 Wellbeing Project - JSDF Grant No. TF097786 l NOTES TO THE FINANCIAL STATEMENTS (continued) as al and for the year ended 30 September 2015 'l 6. CASH ON HANO AND CASH AT BANKS (continued) l) 6.1 Cash in Special Account 1 n In accordan^e with the financing agreement of the project, the followtng Desiqnated Account rs maintained In USD al the Bank of Lao pDR. Account No.: 0000010056200100 L Depository; Bank of Lao PDR Address: Yonet Street, Vientiane, Lao p0R t: Related Grant: JSDF Grant Agreement No. TF097796 L Currency: USD The purpose of the Designated account js to receive fund from JSDF on crant Agreement t' No TF097786 for transferring to operatjng accounts and for cerlain direct payments to L supplrers, contaactors and service ptoviders t' The Designated Accounts are non-interest bearing. Movement of the special account is as L follows: t' 6.1.1 Account aclivities L Cu(ency: $US For the yeat ended For the year ended 30 Septembet 2015 30 Septenber 2014 Opening balance 193,758 196,690 JSDF replenishment (wole 4) 1,033,449 637,896 Opening balance of: Cash on hand 544 4,468 Advances 12,462 6,144 I Cash in POect's operating accounts I t, at provtnces 137,2AO .t,377,493 37,196 882,394 t a L Deduct: Total disbursement during the year (fvote 5) Ending balance of: (1,338,030) (538,3s0) Cash on hand /Note 6, I: (s1) l'544) Advances /Nofe 7.) 12,134J 112,462) Cash in Project's operating accounts at provinces (Nole 6, 127,472) (137,280) t: Closing balance fNob 6.7 2,) {1,367,687) 9,806 (688,6361 '193,758 t: t: t; I; 11 T Lao PDR Mobilizing Ethnic Communities for lmproved Livelihoods and t: Wellbeing Project - JSDF Grant No. TF097786 f, NOTES TO THE FINANCIAL STATEMENTS (continued) as al and for the year ended 30 September 2015 r-l] 6. CASH ON HAND AND CASH AT BANKS (continued) Lr 5.1 Cash in Sp€cial Account (continued) r'r Lt 6.1.2 Accountreconciliation Currency: SUS f' tL For the year ended 30 Septenber 2015 For the year encled 30 September 201 4 Amount advanced by JSDF to the Special frl' Account duing the year 250,000 250,000 L1 Amount recovered by JSDF (188,810) Outstanding amount advanced to I Desingaled Account at the end ofthe year Closing balance of Designated Account fNofe 61,tS0 250,000 I 6) Add: Amount wathdrawn but not yet claimed Outstanding amount advanced to (') 9,806 51,384 193,758 56.242 rr' Oesignated Account at the end of the year 61,190 250,000 Lr (') This amount will be replenished through withdrawal applications (W/A) 040 and (W/A) 041 for TF097786. tl 7. ADVANCES Cu ency: $US tl 30 Septembel 30 Septembel I 2015 2014 Advances at Vientiane 4,729 Advances at provinces 2,134 3,733 2,'134 12,162 r' L1 I 8, COMMITMENTS The details of commitments as at 30 September 2015 are as follows: Cu(ency: $US 30 Septenber 30 Septenber t: Loc€lconsultant (") 2015 9,363 2014 't87,908 Total 9,363 187,908 La- ( ) Committed conkact as at 30 September 2015 is for Indochina Research Lao Co., Ltd tl who is engaged to provide consulting service on impact evaluation of livelihood opportunities and nutritional gain. The commitment balance is expected to be cleared within one year trom the reporting date. t; t: