80590 3 0 JUN 2013 Jiangxi provincial Audit Office of the People's Republic of China it Audit Report ft$1~fti (2013) 4% llANGXIREPORT (2013) No.4 Project Name: Jiangxi GEF Provincial Energy Efficiency Scale-Up Project -~~%: TF098703 Grant No.: TF098703 Project Entity: Jiangxi GEF Energy Conservation PMO ~it1f-J.t: 2012 Accounting Year: 2012 Contents $' it yip ~~ J\!. ........... ...... .. ............... .... ......................... 1 I . Auditor's Opinion .. . . ......... . ................... . .. . .. ................... 1 ::::.:, Jij ~ t!i;t })._ Jij ~ tri* iJt a A................................................ 5 II .Financial Statements and Notes to the Financial Statements ............ 5 (- ) ~1ft- -'f!.~j*·· ........................................................ ..... 5 i .Balance Sheet. ........ . .. . ... . .. . ........... . .................................. 5 ( -- )- :JI, 1:""-1 1Jl.- 1 ~ IfJ Y l.J Y"J ALl ;;c<._ ••••••••••••••••••••••••••• •• • ••••• •••••••••• 6 ~~R~~~~a~~~ J!f.l 1lY\. ii .Statement of Implem~ntation of Grant Agreement. .................. .. . 6 ( :=. )-t J:fl 91*? ~)C 3'<::5&................................. ............. .. .......... 7 iii. Special Account Statement. .......................... ....... . .......... 7 Ctm ) Jllt 4} tiL~Jfhi ............ ........ .... .... ..............................8 iv .Notes to the Financial Statements ...................................... .. 12 :=. ' wit:#..~ if-] 1\;J ~lo }ti;X_ ................................... ....... .. .... 16 III. Audit Findings and Recommendations ...................... . ....... .. . 18 ~ 111 'i¥' i+ 1 11. w± J;Jt£f Jt £ ~1~ tx 41 ~ fJ~ ~ 7jj_ $ :Jt r- :0i §I 2o12 - l2 JJ 3 1 rJ ~~~f-fr*&-frt~ ·~P< E roJ~lt~~~xJYi §l t:JL1-r~~~- ~aJ] 1f ~*~~m~?*~~~~§I~W~~*&M~**~ttC%s~~ ~15Vf). -~~~N~**~~*·~·*,••:0i§l~~~fi~~~~ *~ ~*tt~ • *,C~~m~?·a~~W~N*ff~-~,~# t"1f~#i : c1 ) t* R?- 9=' oo et~ ~it* Ji!'J , ~it ~u lt 5fP .2fuyi\§ R~ ;¥~ t:h- Jt 1¥~ ~ * ~~:0i§~~**' #~~~~~ft&~; c2 ) i~ i.l·, ftff ;ft! ~ fP &., :f Et-J fkJ ~ r£ ~tl , IV- 1~ :0i §9lt ~ fft~: .:f #~~f-~~-~w~~~~*~*· ~m~~~~~~rr-~x~Et-J£~~~w*•*~*$#$ £ . ~ffi*~~OOOO****~~oo~•**~Et-J~~~fiJ$#I ~,~~$~~;Jt~ffi·~·*~~4;lt,#~~~fi·#I~I;/_~ ~§9lt~~*~~.:f#ft·*·~~-~~~~. ~~•**w••*~•~••~~~*~~•,am~~J~ .~: if-J 'ffJ itt! Jf • ~ 1fJ:@:JfJ ~ :11:. #H¥!r :!Z~Jl-- • it ;f£ It , :Ii5. 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Auditor's Opinion Auditor's Opinion TO Jiangxi GEr Energy Conservation PMO We have audited the special purpose financial statements (from page 5 to page 15) of Jiangxi GEF Provincial Energy Efficiency Scale-Up Project, which comprise the Balance Sheet as of December 31, 20 12, the Statement oflmplementation of Grant Agreement and the Special Account Statement for the year then ended, and Notes to the Financial Statements. Project Entity and Jiangxi Provincial Finance Department's Responsibility for the Financial Statements The preparation of the Balance Sheet, the Statement of Implementation of Grant Agreement of the financial statements is the responsibility of your entity, while the preparation of the Special Account Statement is the responsibil ity of Jiangxi provincial Finance Department, which includes: (I )preparing and fair presenting the accompanying financial statements in accordance with Chinese accounting standards and system, and the requirements of the project loan agreement; ( 2) designing, implementing and maintaining necessary internal control to ensure that the financial statements are free from material misstatement, whether due to fraud or error." Auditor's Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Government Auditing Standards of the People's Republic of China and International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements arc free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are 3 appropriate in the circumstances, but not for the purpose of expressing an opinion on the eflectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is appropriate and surticient to provide a basis for our audit opinion. O pinion In our opinion, the financial statements identified in the first paragraph present fairly, in all material respects, financial position ofGEF Provincial Energy Efficiency Scale-Up Project as of December 31,2012, its financial receipts and disbursements, the project implementation and the receipts and disbursements of the special account for the year then ended in accordance with Chinese accounting standards and system, and the requirements of the project grant agreement. Other Matters We also examined the withdrawal application from No.I to No.2 and the attached documents submitted to the GEF during the period. In our opinion, those documents comply with the project grant agreement and can serve as basis for grant withdrawaL The audit report consists of the Auditor's Opinion and two more parts hereinafter: Financial Statements and Notes to the Financial Statements, Audit Findings and Recommendations. Jiangxi Provincial Audit Office of the People's Republic of China June 25, 2013 Address: No.209 Dieshan Road, Nanchang City, Jiangxi Province, P.R. China Postcode: 330006 'fel.: 86-079 L-86817626 Fax: 86-0791-86823311 The English translation is for the convenience of report users; Please take the Chinese audit report as the only official version. 4 _, Jilt:%-**,&_ YJt :%- ~* i)t U}J II. Financial Statements and Notes to the Financial Statements (-)j1[-4t~~* i. Balance Sheet ~*~-fjj* BALANCE SHEET 20 12 ~ 12 A 31 a (As of December 31, 2012) ~~~#: ~5~~~~£~••~§~~~~••r~~ ~ ~%: TF098703 Project Name: Jiangxi GEF Provincial Energy Efficiency Scale-Up Project Grant >-lo.: TF098703 -~~fi: nw•~•~••r~§~~~ Jti:[:ft Preoared bv: Jiane.xi GEF Enere.v Conservation PMO Currencv Unit: RMB Vi ~~8!il ~i-~*~iil Ap~l!cahon of Fund Sources of Fund ;w :Z j,J; W:H~~ J;1_A.:ml'.~ r~;.,.·~~ ;:;,vJ~Tf Jil.-l-:~l\Q Stl bJ~Ct Name Begmmng Balance Endmg Balance Subject :-.lame Begmnmg Balance ! Endmg Balance \'i;!J"f :(].;;-); ~\.-."il\ I 0 127.268.2-t 0 5.239,96~ 70 Cash in Bank Gram Rccel\ ed J~L~ [·!!Hi!.il: 0 1.750.00 0 63,3~13-t Cash Pa~-:nl~ fl{H~~!i7~fi~ h:..;;~~ Appropnation of Grant Cour.terpan Fund .rffir·x:ll iC~l'{t.~ 0 5,:!08.205.90 33.940.10 ProJect Exp~ndlturc exchange gam or loss t,;,~ ~~ ::.'\ r.~ Rec.:l\-abk I 'tt¢1iffl.1t11· 'li~*~kit 0 5.337.224.1-t 0 5.337.::!~-J 1-t Total Application of Fund Total Sources of Fund M~Hit~~:i35~ ll}j lt'*-::i&if-.1 ~!~$~(The notes are integral parts of the financial statements) 5 ( ::: ) ~ ~ ~ E1 tiLfi'ti {}t ll~ ~* ii. Statement of Implementation of Grant Agreement STATEMENT OF IMPLEMENTATION OF GRANT AGREEMENT ~ *X ~ f3 t7L fi 'ti {)L ll}3 ~ * 20 12 1f- I 2 Jj 3 I 8 -l! ~ (For the period ended December 31,2012) !ft):§;t.f~: 1IW1:-Jtif:l.l£~~~ ~IIN~'ita~~$:ffi:i::J! ~ ~ ~% : TF098703 Project Name : Jiangx GEF Provincial Energy Efficiency Scale-Up Project Grant 1\o.: TF098703 ~:JR$1ft: 7I ~ ti' fib~ ~X$~~ Jfif § ;fJ.!~ ~ -'-1ft: ~ftiA.~:PJt Preoared bv: Jian{!Xi GEF - Ener{!V Conservation -- - -- ~ PMO ~ -- c --.- - -- - Unit: - - -- -- USDIRMB -- - -- -- --- ! ~>Ef~ *JU:;&1:f{ I ~ ) ~ii·~~tl 'll'D ~£1 Grant Amount Amount of Current Withdrawals Accumulated Amount ofWithdrawals l:!ri.HNi A ~if: iJ}~.U~ili A~iii 1~i.H'!m AL\'; ili Category Grant Currency cUSD ) R~JB Grant Currency \ USD > RMB Gram Currency 4. 2 !f~Hi 1ft:k1}-it 2 012 ~- 12 fJ 31 E ~ $ ~~5]t ~*'A~ Fp 12 7' 268 . 24 jt .. 4. 3 ~A~ #k~it 2012 .1f 12 JJ 31 s ;i-~?btrr%A~ FP 5, 239,962.10 ft., ~~ 2012 ip. 12 !1 31 EJ' Jr{ ·tt~JR GEF ~~*1t 833) 658.85 ~Jt ) SW~#XI~'~ijg 18. 68%. ~-!:f : ~lJu~.Jit~;t;t 162,381.26 ~}G, r~i~~it:\ttJ ~ 8. 34%; 1Jr4m~J.iti!t~ 588,128 . 5 ~Jt, 6~~,t~~J~ 45 . 24%; rff;;-f, ~:S:iJ!f & ~~~J- it~;f~ 52,462 . o1 ~Jt, 6i~~it~~J Er-J 5. 56%; ~lt:I~rr m*-~ '- itfkffiX 20, 145. 74 ~Jt, 6*~+~-~~ ~ 7. 44%., 4. 4 ~ 1t#X~it 2o 12 df 12 JJ 31 E1 ~ iYi 7SJ A ~ Ffi 6 3, 321. 34 7G , i. ~ ~ ri6 ?K .:t 1t ~ %] *~~. 5. ~ J:f-1 J*:? 11: )fJ 'tf ~ * s. 1 J)J~ 0 ~ tk ~ Ji=J !* ,~ -& t£ tp 1-t ~ 11- fW ~ 71- fr , 9* % 7:1 7281111483100000111, rp~if}'g~Jt. 2012 .1f.1fifi ~ J. 1.{]' "' -· 1 225 1 p ?fr. 9, ~ *, .:r. ~ riT! ~t 11t ,*" ft }1 rfti m-v m~ ·¥ ~.I1tf;;<.~ 2 !lfr' I.1 1a' ~ 5-I If§"~, -:!p fip .na. •• ,,,,. ~;z 1 ~ I~ -:.~r. . · ~' ~ -.T- ' ~ 11J' 500 *.t .~~ f:I:J f1~ ~ ~ 1t a~ .1\{1~ ~f.\¥£ )yl~ t)L ~i fj~ ;h }tl;: 1!): 130 3 ~'.J:1·~ ~ t? 1Jf ~. trx t+- -~· ~i~ 4-;j rJi 1f 1t 70 - -~- --- 4 ~, oo rtJJ" n I xT. W1~1 ~r. / pt ~ 3t #'& t~ lp.J 1? ~~.I 5fl t:t # JjJi 40 0- § 1I lN ~ ~{1_, -J·f§ .~,;a: ,fb _iJ~-~x. ~ ~& 4- ~ 1* P.¥- a}~ 'l t m~ r ~r. t:t #. !ffr 5 ~'.I1§~ ~l}ft [;t i :-#l 59!~ ;frJ ;fft r- !f] ·12- f; JjJi § s 30 1~i'-*rffi-~H 495 - ..... -- ( 2 )2 012 .1f- ii W~, 41' ~ :fj ~~ -t :rJl ~ ~ ~ t.!Hlt 1-J GEF :rJl §I rEt.*-*~ 590 7J Jt A ~ $ , tfr ~ -f 9 3. 87 11 ~ ft ( ,WJ ~1! I 1'1§ 1t m~ *[ 20 I 2] 525 -~ jc 14: ), JJ-.1*-:rffi I§ ~tJ -r:: : 1'1~ pf-~ Jtl!IZ. JYl El j}\-f'Ji lf1.1ft 1Ji §1-t ~~ ~~ --·- - YI iN ~ T. .~Y. fP 1§ .~. Jt~' .ilJ 1:. 1r•J , .Er- JY~~' *~~~;pi= j;p'\ ~--~" "'' 1 ~T-1§~ 1ft~~ r Jb ~~.ft r~~~t~FJft iM;t, I.-*. [!1ft 180 _....... 1t~91~ ** *' * r tt lYl 0 t1H¥ ":t-~ .I.1t ~ ~ • oo Y.I llli ~, 1'5' ~j~ .i~ ~~ .~. ~l ~ ~ t~ ~~ - --~ 'I m.r "~' l~ '·~ 1!!:1 - Pl • _!Ul.. ilk '/~ ~ ~A - ·~- -1,/- 2 ~'.1:1'~ ~ :h ~~ J:J;J ~-i~ 1§i §I , 500 ? 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Ilk ~~~*~~~a~~~~rr-p~ ~ ~ * '/. • Jg Jill. • .7(, "EJ 1 · J I'J t. 11P !'L l , -- ..: 5 !(j' Jffdi_ $.} 20 st.·~ 1:r lY11l!lt -It -'I iC illf 1I ~ ~:@. ft t.t ••t~~-~~-~F-&*~~•r 6 ~~ ~WI 'j_ - ;,-(J • 50 ;.pj• ~~/R- ti] Jffi § iT: illT tJfu ~ ~L.1t f;f ~lit , _ ,,~ ·}I· A<- t.t ·t5c .I .:e~ 7 14l' ~ ~r . tfHfl IL.~ f,j 1m. t:4. ~ - t& -jp '"' r?J ~Jt. fJ t: - £ 50 ~' *!Jt15'-·l+ 590 :li : * -f ~L $ ~ ~ fPJ ML 1I flli 41' I 1§ ~ , 1!1' Jl!t ifJcJT Ej t!t 11- CEF ~ § ~ •m~~§W~~~ili,*m~~~~~~•~"*~*"~~~~fi~ *· ~ = a~«~~~~-~~~~~~~~~~~M•~~ ~~~w * EF ~ A~ :rJji § ~L 1f ~ ( 3i 5t- :# ~ Jftl 4 47 7i ~ Jt rJf _xt $ 80 A ~ FP ), JfJ -f G Jt t~ t~ "*I "-t --=- li, ~ m~ .I.1 r * t:. c J;!. ~,I1 %Uf- #i J~ ~J WL j,~ 1fi:- ~ j~\ l.th~ ) t ~, ~ Ji!;j· iEJc!f -t ;~· 1~r ~ ¥1~ ~ * II iv. Notes to the Financial Statements Notes to the Financial Statements !.Description of Project The objective of the Jiangxi GEF Provincial Energy Efficiency Scale-Up Project ( TF098703 ) is that through the implementation of project, to introduce the new energy conservation concept and method from both homeland and overseas and to establish a long-term and sustainable energy conservation mechanism,to strengthen the research in the energy conservation system and policies of the government at the provincial level, to perfect the linancial taxation mechanism for adjusting energy resource price and promoting energy conservation and emission reduction, to enhance the capability of the energy conservation supervision organizations across the province, set up an energy information scheduling and monitoring and information processing and analyzing system,to drive the energy conservation service market construction and supervision management and research to formulate energy efficiency appraisal and management method as well as the propulsion plan for the newly built industrial projects across the province thus to achieve the energy conservation and emission reduction objective; meanwhile, making measures, technology and projects improving energy efficiency popular among the public thus to demonstrate the energy conservation work of the provinces and districts in the whole country. The project agreement was signed andcame into effect on May 17,2011, and will be completed no later than June 30, 2016. The total investment is USD 4,462,100 (equals to RMB 28.0465 million). 2.Coverage of Financial Statements These Financial Statements cover the project-related incomes and expenditures of project implementers throughout Jiangxi Province during the period from Januaty 1, 2012 to December 31, 20 12. 3.Accounting Policies 3.1The financial statements of this project is prepared in accordance with Measures for the Financial Management of Projects Financed by Grants Managed by International Department of the Ministry of Finance and Interim Measures for Accounting ofProjects Financed by Grants Managed by International Department of the Ministry of Finance. 3.21n accounting practice, the Gregorion calendar year is adopted as the fiscal year from January I to December 31. 12 3.3The bookkeeping of accounting will be on the accrual basis by debit-credit double entry approach and take RMB as the standard currency. 4. Notes to Statements Items 4.1 Total Project Expenditure The Total Project Expenditure in 2012 is RMB 5,208,205.90 yuan, which accounts for 18.57% oftotal investment. 4.2 Cash in Bank As of December 31, 2012, the balance of the Cash m Bank 1s RMB 127,268.24 yuan. 4.3 Grant Received As of December 31,2012, the balance converted into RMB is 5,239,962.70 yuan and the total withdrawal amount from GEF Grant is USD 833,658.85, which accounts for 18.68% of Grant,including USD 162,381.26 for consultation (accounts for 8.34% of this category), USD 588,128.5 tor goods (accounts for 45.24% of this category), USD 52,462.07 for workshop, training and tour (accounts for 5.56o/o of this category), USD 20,145.74 for incremental cost (accounts for 7.44% of this category). 4.4 Payable As of December 31,2012, the balance is RMB 63,321.34 yuan, primarily outstanding working capital. 4.5 Exchange gain or loss As of December 31, 2012, the balance is RMB 33,940.10 yuan. S.Special Account 5.1 The Special Account of the Grant is opened at CITIC Nanchang Branch, and the account number and currency is 7281111483100000111 and USD respectively. The Beginning Balance is nil but deposited USD 833,658.85 in this year. The Interest Eatned is USD 182.71. The Amount Withdrawal is USD 823,117.62 and the Ending balanc is USD 10,693.94. 6. Exchange Rate Exchange rate on December 31, 2012 (the People's Bank of China), i.e. USD 1 Equals to RMB 6.2855. 7. Other Paragraphs of Audit Report ( 1 ) In 20 11, Jiangxi provincial provided EE counterpart fund for GEF grant ofRMB 4.95 million yuan, equal to USD 787,500 (refers to document 13 GGXJ.N.Z.[2011] No.208), as follows: Fund for EE Projects of 2011 in Jiangxi Unit: RMB 10,000 Area Implementing Entity Project Name Amount -S.N For preparation of Local Standards of . Energy Consumption Quota for Major 1 JXCTTT JXCIIT Industrial Products and EE Audit for 225 Industrial fixed Assets Investment Projects Jiangxi Energy Conservation Capacity Building of EE Supervision for 2 JXCIIT 130 Supervisior'l Agency 500 key Enterprises 3 JXCIIT Evening News Press· EE Propaganda 70 Chaff Fired Boiler Refonn Technology 4 JXOSTIND Jiangxi Steel Wires Factory 40 Project -·-- Jiangxi Electronic Information Provincial semi-conductor illuminating 5 JXCIIT Products Supervision and Test EC industrial technological quality test 30 Institute and application platform project Total of provincial-level 495 ( 2) In 2012, Jiangxi provincial provided EE counterpart fund for GEF grant ofRMB 5.9 million yuan, equals to USD 938,700 (refers to document GGXJ.NZ.[2012} No.525), as follows: Fund for EE Projects of 2012 in Jiangxi Unit: RMB I0,000 S.N Area Implementing Entity Project Name Amount For preparation of Local Standards of Energy Consumption Quota for ceramics, 1 JXCIIT .JXCIIT copper, monocrystallinc silicon, baked brick, 180 aerated block, and EC Audit for Industrial Fixed Assets Investment Projects Counterpart for national fund for capacity Jiangxi Energy building of Jiangxi Energy Conservation 2 JXCIIT Conservation Supervision !50 Supervision 1\gency, support tor EF. Agency Supervision for 500 key Enterprises Jiangxi Electronic Provincial LED illuminating products Information Products 3 JXCIIT technological quality test and platform 70 Supervision and Test improvement Institute -- 4 JXCIIT Evening News Press Industrial EE Propaganda 70 - 14 - Jiangxi Product Quality Establishment of EE and Building Products 5 Supervision and Test 20 JX PBQTS Test Laboratory Institute - Jiangxi Rare Earth And Rare Jiangxi Jiangwu Haoyun Nimh Battery liAS Powder new products 6 50 Metals Tungsten Sci&Tech Co., I ,td development and application Group - Jiangxi Salts Jiangxi Jinghao Salination Sensible heat recovery and EE water-saving 7 50 Industry Group Co., Ltd. technology reform project - - .. - Total of provincial-level 590 . -- Note: regarding the counterpart fund, JXCIIT, Jiangxi Finance Depat1ment and WB/GEF team agreed to adopt "big counterpart" method, i.e. Jiangxi will provide provincial-level EE counterpart fund for GEF Grant (USD 4.47 million within five years) as the support for EE work within 12th FYP. 15