MON(GOL AN NATIOA A\UDIT) OFIR P>ROJECTU N&H \ JV1)1I, NN mik, -011 ( NA1 V ( Os [ IN DEPENDEN l DITOR'S REPORT TO: ENKIBOLD.D HEA D OF STEERING CO ITTI[EE OF CAPACI T YBI ILDING FOR THL NONGOLIAN NATIONAL AI DIT OFFI(L NINAO) PROJECT Opinion Wc have audiled Ilie Financial Statcc ees comprling hl e Balance Sheet, the Statements of Project Sources and Uses o [ the Statenents of Uses of lunds by Project Acui ity. the Disbursenent reports and the )esinated AccounI Statements of Capacitl Btdine bu for the l\AO project funded b\ Supreme Audit lislition 1arpacn D)exelopment Vund (Grant Nw 1 A 1 838) for the year ended December 31, 2, 18 ln our opinion, the Financial Statements of Capacir\ Btulding for the \1\,\O pro'lect as at December 31, 2018, has been accurtely and objecti ely disclosed in accordance with the requirenents of Inlernational Public Sector Accouting Standard 1i IPSA) issued by the Public Sector c(ommittee of Federation of Accountanits the 1inancnL Agreement iGrant Noi iTJA 1 838 the Project implementtion Manual and other relev ant gideliries and procedures Basis for Opinion we conducted our audit in accordance 'ith International Standards on Auditn, (ISAst Out responsibilities under those staidards are fuiher described in he A ///r R'p.i '/u 4he ItI of/h 1/-fUmna/ .NIt aen section of our report \e are independent of the ProJecl in accordance kvith the International Ethics Staindards Board for Accouniants Code of 1Ethics for Professional Accountants (IFSBA Code) tog2ether Nvith the etlhical requirernents that are relexant to our audit of the linancial statements in Mongoa. and xke haxe fulfilled our other ethileal responsibilities in accordance miwith these rcquireients and the ILSBA Code. We behexe that the audit exiderice xe haxe obtained is sufficient and appropriate to pro ide a basis for our opinion. Key Audit Matters KeN audit matten are hus umicis fat, in ou pr ofossonal _udgidment, \kere ol most si-n]i icance in our audit of the financial statements ofilc et ponkld 1hese matter \Nere addressed in the conte\t of our audt of the flnancial statemens as a U hole. and in forming our opinion thereon, and auditor has not detenined the kex matlers that reguired to be diselosing a separate and not prox ide a separate opinion on Ihese mnuites. Responsihilities of Management for Ilie Financial Statements The prolect managernent is responsible for the preparation and fair presentation of the Financial Statements according to the recquirements of the IPSAS. the IDA Financing Agreement. Ilie Grant Ag,reeienit. the Project implemenlation ianual and other relexant instructions and procedures and for such internal control as management determines is necessarx to enable the preparation of financial statements that are frec Crom material miiisstatement, xxhether due to fraud or error. Auditor's Responsibilities for tie Audit of the Financial Statements Our objectixes are to obtain reasonable assurance about whether the financial statements as a xxhole are free from material misstatenent, wxhether duc to fraud or error, and to issuc an auditors report that includes our opinion, Reasonable assurance is a high leel of assurance, but is not a guarantec that an audji conducted in accordance wx mih ISAs vill alxways detect a material misstatenent xhien it exists. Misstatements can arise Iron fraud or error and are considered material misstatenent if indiv idual l or in the aggregate, theY could reasonably be expected to iniluence the economic decisions of users taken on the basis of these financial statemenits. As part of an audit in accordance \x ith ISAs, we exercise professional judgnient and maintain prolessional skepticism throughout the audit. We also: Identify and assess the risks of material rmistatement of the financial statements, whether due to fraud or error. design and perform audit procedures responsixe to those risks, and obtain audit eidence that Is sufficient and appropriate to pm de a basis for our opinion. The risk of not detectin a material misstatement resuffimj from fraud is higlher than for one resulting fr-om error, as fraud max inxoKe collusion, forgery intentional omissions, misrepresentations. or the ox erride of internal control. Obtain an understanding of internal control relexant to the audit in order to design audil procedures that are appropriate in the circumstances, Ex aluate the appropriateness of aceounting pohces used under the prolect and the reasonableness of accouni m 1 estimates and 1elated dit losures made bv manacement rConiclude on the appropriateness of management-s use of the going concern basis of accounting and, ased on the atidli ex idence obtamed, the project deterrnines wxhether a material uncertaintx exists that may east sign ficant doubl on the Project's abi lit to contine as a going concern xw ithin a specified period of time. - Ev aluate the overall presentation. structure and content of the financial statements. including the disclosures, and wxhether the financial statemenis represent the underlying transactions and ex ents in a manner that achieves fair presentation. We communicate with projcet mana-enent recarding, am n other matters. the planned scope and timing of the audit and significant audit findings including any sigil-fieant deficiencies ini internal control that we identi fv during our audit. GENFRAL DIRECTOR OYNNAA. U Date: .. .. "Capacity Buildiig for tile .longolin Nationl Audit Ofirc' Granit N: TFI1 838 Fmnjal Statnements for ile y,ear emded Decemh er 3st. 2018 T he Gove%rnnent of Nlon;golia & SuJreIC AUdit Institution Capacity Devel(iio)ieit Fund G ranti No. TFQ X1838 Caa yBuilding for thle \lonigolia,n National Audit O-ffice ("NJNO" Project: P155305 BALANCE SHEEUT For tte period ended Decemb:er 31, 2018 (in V SD) Note As at 2(118.12.31 As at 2017.12,31 ASSETS 1. Cash and cash equi%alent: 4a 4,996.98 6,003.78 l l Cash on hand g7g 78 1 2 (ash at baiik Designated acFcount-TFOA 183 4.069 5 25 00 2. CumulatNie projecrt e penditures: 4(12,562.29 203,482.05 2 I Trust F tud 41 %22 9 2 34 1. 0 l Goods and no-consuJting sen ices 733 37 13 353 454 2 C onsuham's serv ices I 70 660 S 8 95 0 3 Trmin and workshops i 14.27 35 56242 70 4 increnenial eera,u cosis 3i 88 44 231 g .2 T OTA L XSS E TS 407,559.27 209,485.83 SO R IRE 1. Project funds 40)5,000.00 207,615.71 SAl1 - CDF TiA81838 40.000.00 2076 157 2. Net interest carnings 4b 3,244.10 2,554.95 3. Foreign exchange gain (lossj 4b) (684.83) (684.83) TO1AL %O[RCES OV FlNDS 407,559.27 209.485.83 Approved by Prepared by Ganbolød.TI1s Sa an Hcad of Administration GeneraL Finance of \ I\AO D)epartmecnt ofL MNAO 1mi I)IIIG \ allyxa, 1. X, (0111 NIJ(;.,(1),lj 1, l 0ä INDEPENDENT AUDITOR'S REPORT TO: ENKH1BOLD.D, IIE ) OF STEE RING COMM ITEL OF CAPACITV Bl ILDING FOR TIE NIONGOI,IAN NATIONAL AUDIT OFFICE (NINAO) PROJE(T Opinion We have audited the accompanying Statements of Protect Sources and Uses of Funds of Capacity Building for the INAO) project funded b\ Supreme Audit Institution Capacity Dexelopmenit Fund Grant No: litA 1838 for the yiear ended December 3] - 2)18. In our opinion. the Statements of Project Sources and Uses of Funds of Capacity Building for tle MNAO project for the year ended Deceimber 31 201 8. has been accurately and objectively disclosed in accordance \xitih thc req[uirements of the Financing Agreement irant No: TFOA 1838), the Project implementation manual and other relevant guidelines and procedures. Bassi for Opinion We conducted our audit in accordance with Iniematioal Standards on Audiui NISAst (ur responsibilities under ihose standards are further descibed in the 1ahter b W Respræshdme r the dit, uj th/ s FmIe 1tteeUU section o f our reJpori We are ndependent of the Project in accordance xith the International Ethics Standards Board for \coumnuants Code of lhics tor Prolessional Accountants [6SBA Code togetlher wih the ethical requirements that are relevant to our audit of the financial statements in Mongolia. and kie hase Iuliled our other ethical responsibilities in accordance ith these reuirenents and the IESBA Code We believe that the audit ek idence wke have obtained is sufficient and appropriate to proxide a basis for our opinion. Responsibilities of Management for the Financial Statements The project management is responsible for the preparation and flair presentation of the Statements of Project Sources and Uses of Funds in accordance wvith the IDA Financing Agreement. the Grant Agrecient, the Prolect implementation nanual and other relexant instructions and procedures and for such internal control as manaement determines is necessar\ to enable the preparation of financial statements that are frec from material misstatemnenit w. hether due to fraud or error- Auditors Responsibiliities for tlie Audit of the Project Statements ()ur objectin. es are to obati reasonable assurance about wÅhether the Statemeuts of Project Sources and Uses of Funds as a \k hole are frec front material misstatement, wcfhether duc to fraud or error, and to issue an auditor-s report that includes our opinion. Reasonable assurance is a higb le el of assurance. but is not a guarantee that an audit conducted in accordance xkitl ISAs äill aknvas detect a material risstatement wlien it exsts. Mlisstatements can arise from fraud or error and are coiådered material n misstatemnt t' md idually or in ihe a Cregate they could reasonaby be xpected to influence ihe ecnomic decisions of users taken on the basis of these fiancial stalements We comm iunicate k it h pret iana ement reg ardi n. amon u (ther maiters. the painned scope and tiiiniignu of the audit and signifi-can audit findings ncluding any significant deficiencies in inernal control that we identify during our audit GlNE-RAL [)IRECTOR OYLNAA .U Date: -Capaøity Building for the MoIgoiamn National Audit Offie- Granit No: TF0Ak1838 Fininci Il ten]el,ts for the yea r ended i )eceimber 31st, 2118 S The Go%ernment of ilongolia & Supreme Audit INstiutiJon (apacity Devxeloplmeuit Fund Grant No. TFA1838 (apacitx Building for the M1ongoian National Audit Office ("MNAO") Project: P155305 STATEMENT OF PROJECT SOL RCES ANID USES OF F ND (For the year ended December 31, 2018) (in LSD) Itens (umuu %e to For 2018 Cuniult-Ke to Dre 31. 2018 Dec 31, 2017 SOL RC ES Funds 405,000.00 197,384.29 207,615.71 S A1 - CDF [ FA0 838 40550 0M 197,384.29 207.615 71 Other sources 2,559.27 689.15 1,870.12 Net inteies Carnings 3,244 l6u 8.I 5 2.55495 Forign exhchag gain ( s)(68483 8 TOT AL SOL R CvS OF I ) N 407,559.27 198,073.44 209,485.83 (svS OF Ft NI tSes of Fund: 402,562.29 199,080.24 203,482.05 Gocds and Non consuiiig ser ice 73,37.13 37,742.63 35394.50 Co7su)a(, sn ice I 7607 e) L 702. 44 87.q57.93 Training and Woikshops I 14.27635 58.033.65 5.242.71) Incremental operating costs 35,488.44 1 1.601.52 23.886,Q2 TOT L I -SES OF FL N DS 402,562.29 199,080.24 203,482.05 Surplus of receipts over expendiUure: Cash on hand (878K78) 878 78 Sash ai bank Designaled account -S A-C 4) 96 ( l 282) 1 2 00 TFOA l838 B~e oem c an d casi eW ents 4,996,98 (1.006.80 6,003.78 Appro'ed by Prepared by Gianhold.s Saran, Hiad of Administration Departicnt of \NAO Genei all iancer of \lAO INDEPENDENT , A DITORCS REPORT TO: ENKIIBOLD.D. IIEAD O1; SI I RING ( O\Il I OF CAPACIT1 BU ILDING FOR Tl HLtIONGOLIAN NATIONAL A UDIT OFFICE (NINAO) PRO.JECT Opinion W e ha\e audited 'the acconmpanyingi Statement ofEpenditures (SOEs ) of Capacity Buding for the MNAO projeet funded by Suprene Audit Institution C'apacity Dexelopinent Fund (Grant No: TIFOA 1 838 for the \ear ended December 3 L 2018 In our opinion, the Statement of Expenditures (OE ) of Capacity Building for the MNAO project for the year ended December 3 1 2018. has been accurately and objecti\ el diselosed in accordance with the requirements of the Financing Agreement (Grant No: T1F0A 1 838). te ProJect implementation manual and other relevant guidehnes and procedures. Rasis for Opinion We conducted our audit in accordance wii International Standards on Auditiiin (ISAs. Our responsibilties under ihose standards are íhrther descrlbed in the ? w / ResponsibI/me' fo iiw Alt ä >/ Inqet Stateent section of our report We are independent of the Profject in accordance with the International Ethics Standards Board for \ccountant's Code of Etfhies Ior Professional Accountants (IVSBA Code) tog)ethei mith the ethical requireenits that are rele%,ant to our audit of tlie financial statenents in Mongola and xxe hav,e fullilled our other ethical responsibilities in accordance w\ih these recquirements and the IESBA Code. We believle that the audit ev idence xe ha\ e obtained is suficient and appropriate to proN ide a basis 6ör our opirn[On. Responsibilities of Management for the Financial Statements The project mnagement is responsible for the preparation and fair presentation of the Statement of Expenditures in accordance with the IDA,\ Financing Agreement, the (irant Agreement, the Projeet implementation manual and other relevanlt instructions and procedures and 1or such internal control as management detenmnes is neceswan to enable the preparation of 'inancial staternents that are [rec from material mistatement, wx hether duc to fraud or error Attlitor's Responibilities for the Xudit of the Project Statements Out objecii es are (o obtai reasonable assurance abou w h her the Siatement ofF.\pendi i es as a x hole are hree from material misstatement. x hlhei duc to fraud or error. and to issuC an audito s report that imieludes our opinton Neasonabic awunmie is a higi leel oi assurance. but i, not a guarantec that an audit condueted in accordance x I\SV, xxill alxay s detect a material misstatement when it exists lisstatements can anse from fraud or error and are considered material misstatement if mdi\ iduall or in the alregate tlex could reasonabl be expected to influence the ecotiomic decisions of users taken on the basis of these financial statements. W`e coimunicate wviti pro ject management reparding, among other nimters, Ilie planned scope and timing of the audit and sgLnilcant audit findngs neluding an significant deficiencies in internal control that Nw identify during outr audit GE.NERAL DIRLTOR OYUNAA Dat ,� � �э 96 к ь ь ь ь гг., ь е s е f� hw �. . - ьГ. � .. S Ч f, � ✓ ' ,� ,-~ rt . � ` � i " гЕ N � � ы L ,.. гf• rt е� , � , � �, ti°` . � �; � � ^ � -�5 � � f•1 .r ; � '. .. г.. Э � у. : - rЭ � #.� 1.. Г-- Г-�J Г`� - . г, ,, ,�, -?. "°°' - - Г• � , л �w =.� ь.г, �-i- tf. г'" �.' .�`. � ti+ � 'r, et. � L ' �^ :�. 'r � г� � а'.'� � tГ ` �� �,. ^ � t'-- r 1 °I" ,!, .... 'Р, Г 1 � . ,�, --, ,^Е � у �,.. � � � �� � t � �_ � . �. J'.�, .� � �.., �,�, `' 9 ° f г° � t'rj :'�� _ V Г�-.- г� i С'- . 't-; _.... . �� ® ^..i �+! � ,,.. ,�,. f-.1 ' - - г' Э N �j �. '.l �r w+ ' ® .:г "`7` 1г, lг, г�` � у � - ° _ " С.ь � � .^. .� r р � ,�.. ьг; v, .. дg . ,., - � '� ьС' п п � . ��.. еГ, г�, .^i 'r�, i. 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' W ',, G , � ;5'' {лsь 1 �� ¢ � r � - ^ j Г� °-t w�. ьГ, iл� ьЭС �„ J �� � � � f I' I r'' r?' / С' .r'" а! � �, � � ✓, �I .. �. ` J ! .л' � Т ! i" � � � ьСi � V - � � ` у� г' �' � т` ' ® е� ^ "f ', � `ч ,,. д° � . °.. .>��, rв .. �1:� 4/ � � MR VN1, \CC01 NTl\G, CONSA LTINCI INDEPUNDLINI kl DITOWS REPORT TO: ENKI1BOLD.1), 11LAD 01-- STEESING COMMITTVE 01-7 CAPACITY BUILDING FORTHE MONGOLIAN NATIONALAUD11~0141CE (NINAO) PROJECT Opinion kVe haNc audited ilie,,icconii)any-iii,ý4 Desägnated Statement ol'Capacrty Building, 6or the MNA0 projeet funded by, Supreme Audit lnstittrtý,,n Capacity r)e\clopiiierii Fund (Grani No:Jf OA1838ý flor the year ended December 3L 2018. In our opinion- the Desi.-tviated Account Statenient c)t'C',ipýtcityý Building, I'or- thePVINAO project fim- flie year ended Decernber 31, 2018. lias heen accurately and olýjecti\ely diselosed in accordance xvilh the requirenients o[ the Financing (Grant Xo: 1 K38)_ the Proýject iniplementation manutal and other relc\ ani guidel inc,ý arid procedures. Basis 170r Opinion W'e conducted our audit m mfli International Standards, on Atidning i ISÄSý, (-)Lit- resporisibilitics underthose stan(kirds are INher deseribed in theAmhurå AlVnm%tduwppýl' éS Amhi r4 the /ävem Samum~ section ofour report Wo are independent oftlic Project in accordancc wiiii the ýi,ý,nal 'ýtandards Roard Iii- Accotitilatit's Code ofFtlnes for Prol`csý,ronal Accountants SESBA Code) togellier Nch the ethical recItur . rernews thar are relexant lo our audå of the tämncial statenients ni Nämmha. and Nxe haxe fulfilled our other- elhical respunsibilnies I acetnikuice mih thK!5erequbaH mu andOwIKSHACkte Webebese opinion, Ftesp<)nsibihties of idana2enlent for the lärtandal Sialements Ilie prycel management is responsible är the mrumri mul Sir lweserumti . on of the Designated meomvi Stammw in a~dancc ivirh die IDiN 1-inancing Aý7,recnient, [lic (ii-anl Agiveernerrt. de Projeet iniplernentation vrianual and other rekvant instritetions allt] procedum, and är such internal control as managernent deternaner is nccessar.k to enable flic preparalimi (If financial staternews tMi are dec dom immenal niämmement- xxlietlier due to J-raud or ervor, AudhuiSs Resl)onsibilides for the Audit (if the Project Staternerits Our olýjecti\es are lo obla.in reasonable asstur-ancc abow uhether the Demgnwed Accutuit Statement as a utole ma frec fr-orn material mismaternent uhellier duc to fraud or error- and to issue an audåtoCs repon Sat inJudes our opåln läc~naNc asmixance is a high lexel of assumnce. bta is not a gum-antec Oml an audit conlicted in accordancc m db ISAs mill aksavs deteel kr inalerial tvisstaien-rent mhen ii exists. Misstatements can arise from ['rand or error ankl are considered inaterial misstatement i K indix iduallv or in the aggregate. they, cotäl reasmiably be expected to influence the ecnonie decision, of users taken on tlie basis of these financia statCients, We colmnitlicate 0ith prioect managlent rding. among other matters, the planned scope and timing of the audit and significant audit fint--,- ínclidiniìg ai\ significant deflicencies in internal control that we identiR durine our audit. GENERAL DIRECTOR OYUNAA. Date: fi~ SCapads Building for tle loigolian Naionauldit Offler- Gran~ No: TFOAI838 FI UeCal Statemrints for the year ended December 31st 20 8 The Go%ernment of Alongolia & Supreme Audit Institution Capacity Developmenti F und Grant No. TFOA 1838 C apacity Building for the longoiian National Adtiit Office ("NINAO") Project: 1155305 DESIGNATED ACCOt NT STA T 1ENT For the period ended December 31, 2018 -iin USD) At Dec3_. 2018 A t Dec 31, 2017 Part Å Accotnt transactions Beginning halance 5,125.00 Add: Total anounr deposited by the SA Ä - 10738120 20615 71 CDF for the yea8 Total ineres eaned 09 15 1.59495 Tal bank chwes 1 40 0UM Totat 198,73.44 210,170.66 Deduct: Goods and noii-coisultiin serk ices .7 7423 35 394 50 C'onsltami's sen ices 91, d7j2 44 87, 9579 raining and workshops 003315 557 1335 Inremeal operating Costs 10722.74 729&20 Translfered to petty cash g I b81O Total 198211.46 205,045.66 Closing balance 4.996.98 5.125.101 Part B -,Account reeonciliation Amount advanced by the IDA 75,000.00 75,000.00 Balance of the Designated Account at 4996.98 5.125M0 the end of the Near Add Ampunt Withdrawn and not e6 claimned 7863 Balance of pen cash 878.78 Bank charges 4 00 Total - 71,785.12 Deduct: Toal interest carned 1,244 0 2594 95 Fåreign exchange Joss (084s 83 (684k8å Tota_ 2,559.2 1,910.12 Total advaice to Designated account 2.437.71 75.000.00 Approved by Prepared by Ganhold. Ts Srian. Head of Administration General 1-inancer o MNA) Deparmnent of 0 \ A0 一～～勿―一――一―一－一一―一一一一一『――州 、狗？一！輪‘誹屆雞珍丫 一一－一－―一－-―一―一一一―一－ 〕：、一、一訕一計一二抑 ,!：一＿一計－-----－一討＿一症！ 黑 、！:＿一中 〕〕’一〕一！一！ →一 .，一一Lf「一，一”一l一→ ,r纖了胛淤 ．一『一一→，『一「馴『，一 一一一一一 二亡呂可，×一一！ 亡＿二。一 －一一， 一二。－ 甲L --‘一―--－一－-----－一－－一么－一― 審：果聖奮；方呂寡齋。華翁’彎韋 甲 . ＿一化一、一鄴一革一個面一鄴、一可一。潘 一→浮J 二！織 把； 中鄴一于一方了＿-－一：一‘---－一、’; 不·計 ‘··l一一L· 一． ！斗 莖”&’二’魚焜 一－一 娥卜f喊 → 一－－一才－---―一＿一一一＿三莖 ，… 一、／一。／一、一、／一、一：〕、！、一、一、〕；手； 一 “一―一＋~-－一－戶―－一－-－一―一一馴r一一一－－一一一一一一―一一－－一一―不 、一呈一喜二一：丰一合韋面〕一＿二＿乞一〕，- ，一 一一－ －一―-－一一一一－－一－－一－--－一一一！ i：、〕一’〕：〕二〕’：〕‘ 了 必必＋ 森－·－一一了一―－一－-―一―一―一－-―一一－-- ,‘必鳥＇一〞么 一一－ 二彎丑註造9 e&&Z訪 陶，. --―一―______--－一＿__&&& && 〕＿/:_／、〕：、、：一、＿一〕、座／\! -C'alMcitx Bilildi"2 fot- tile Mojigtilian National Xwlä Officc- G ra 11 t No: T VO k l 838 Notes to the Vinancial for Ilie ýcar entled t)eceiisftk,m- 31s(. 7018 2.NOTESTOT111, FT\ÄNCM,STATEMLNTS 2.1 Project background On Januarý 22, 2016, Ilie Dcýelopnient A-ssociallon and Ilie Gmerninent of X4011-olja (represented bx the Urx of Fnuanec) si,,ticd the Grant ALýi,cciiieiii No. TFOA1838 to ,issist in financing Capacný [3itildiiiý-, I'or the National Audit Officc v-KINAO~) Pr(ýjcct, Tlic Granl aurcement kva,, declared a,, ell-ective 1'rom f chruarx 04 20 16 \k illi the orlulvlal aniolint of UI)S 380.000 and 1111C CIOSi112 date ol'the projeet xxas AuLtist 30, 20 Pvi, During the financial Near ended December 3 1 `. 1~0 18, addlitý>nal financinu, tij,USý `,.000 it) conduct oll-tile~*ob tralninu, 1,61- financial atiditorsand the extension ofpro*cctclomnuý date until tlic ene] of'tlic calendarwar 20 1` 8 \Nas appro d by Ilie International Deyelopment Associalion (-XX`orlj BanV) onluiie 2T'å. 20 18 111 accordancc mtli flie requesi subniitted hy Ilie Minjster o11`inancc. Die e of- the Pro.leel, os to strcwýthcn KINA0's cajxicity - primari 1,, in finaricial ýimflä and audit firin ind okct-ýw ht, 111r4>511--'11 cfc\clý-spiiielit an..1 itill)ICIIICI]titý'<)t) ol'a atij ,-Nx stematic coniiiiiiiiiý-, prolessional dex clopnienl sinncm iogetlier xk Ii h a time-bound action plan tflat is necd,-drlýen_ tallored and flic ProJeet conm--,t,, tWific 1'()lioxkiiiL, Coloponent 1. Conducting a peer ol' W'NAWs financial audit actiiities to pro.-ide än t, objectis-e, third-partv aýý,cosment of its stresigtlis, ike.li,nesses and priority improvement nceds Conduct a pcer re\lew oC 1%1NAO's finaneiii atidit aetjýltics 0 - k an e\perlciicci SAI using ffic INTOSAVs SÅ1 PNIý'riietliodolo,-,-, aý dectued appropnate (USD 65,000 f`hr SM personnel and Ira\cl cosn A pecr rekiexk Ila,, nexer been performed on MNMTs financial atidit capabllftlesý erillealk nceds, and its nianagement suppotis- a pcer rcxicýx conccntratin,ý,. on lts financial attåt capacitvand rclale4ldotiiiiiiis, ýkould Igt-okideatl()biccli\C.third-paii-ýýa,,,ses,,,iiietitc)l i . (s strenoths, makricsses and priontx iniproxement nceds These finoritv, arcas fot- iiilprý)xelllellt \k-ould ihen he incorporated in (lic oi-i,ýiiiizýitioii-s UPI) strategx and (lic re[ekanl kiio\klcd,,e and learning prograni. Component 2. Carr-ing outa coeiil)t-ehensi,,e NINA0 kn(iwletliierit 4. Developing a custonlized traillim-, material taflored to ýMNAO,s cajiacity. tiffillding nceds and dellivering training to MNAO personnell in theareas identified by the aförenientioned asse,mucnts. strategy and action titan lapi Building fot Ilie Ningl ian Nartiomaj Atii n)llh Grmant No: TFO A 1838 Notes to tihe Financial Starmnems i thie eai ened I)e(cmlw 31 . 218 1Dc\Qilpmlt 01 customted framme ny aIcil tiord 1o \1 \( > capacit bldityued dcsrdd in the (PD) stratei and kno edge and ca;nii proc ran and dehir i e lithe adual traning to NIN \( personnel duing most ol the thrc-s ear period of the O"PD progran I SI) 12.u00 fInternational and local consultants, local and retional traing meluding some hui mimmal traxel costs»L While the specilic coent and depth of topies to be cox erd under the trainm program ute laruel to be ldenilied and tallored as per the awefimes to be arried out, an cark indication of capacitk gaps rexeals such areas as \INAC staff knoxx ledge and undestandng of the relevant standards. le. IPSAS and ISSAls (IPSAS implementation guidance and irain is hein dex,eloped and delixered bv IOF: ISSAI trajinu materials ull be translated into the Monriolian lanuage and adapted fto the Moniohan conte\t). quality control. contracti t and managiement of priate aud iirm engagements. and auditn of the consoldated financial statements of the Cox einmet AI the end of prolect period, trafnnt coxerage of e er 90 percenl of the total auditin staff or approximatel 350 atditors is expected Trainin deliecry is expected to inelude mfnoxatise modalhties such as onlne xirtual tramng umnc a neuxli eslablished \VN connection axadable ilroughout MNA) OffiCes. f immze propee costs LINAS l seek to ul/e. translate and custotmze for the local context as necessaty eusn ISSA and other ratnme materials that ma, be ax ailable from IDI or other SA Is. Component 5. Provision of technical assistance to estbilisi an efficient and fully transparent and dociumented procurement process for contracting private audit firms and to strengthen and streanline INAO's private audit firm selection processes ecehnical assistance to establish an efficient and fuly transparent and documented procurement process for contracting pri\are audit firms tSD ?000 for international consultant - local consultait interpreter). As part of the proect. the current MNAO practice of enamging pri\ate audit firms to conduct the annual financial audits of budet entities and state-owx ned enterpri ses on belial C of MNAO iII be analyzed to inprox c documnentation and transparency. Such eftorts i1 be timeix and beneficial as. in addition to budget entities. 1FI-fimnded projects are staring to engage in a similar practice xhere MNA0 carrnes out auditor selection for the projeets but by folioxxitig the IFIS own procurement procedures. 1This proposed project wNill am at strengthening and streamlning MNAO's pris ate audit firm selection processes carried out for budge enttties and I1-fuinded projects. fr these audits conducted by private audit firms MNAO xwilli appl its quality control and quality assurance framexork, hich may need improx ement if identiled as priority areas otcapacity dev elpment as per the continuing professional decelopmenrt strategy and the relexant tramning program. The amount of the grant allocated has been cotmpared nxith the actual disbursemets as of December \mnouni of ther ( aieon11 < Imii Finanmec Actual dishursement _ae r ___ ri iD Allocaied ljiii i11 piet-celkmntn (expressed ini L SD)l (bods ( onsultanis SCI ices 1 rainamu and \\ orkshops and 4' i51 s" mi 4i% tl on 1llercmcntal Opc anlin (, oss 10otal a05i000.>o 100% 405a300.00 ln the 1ramexxork of the Grant \Vgreement for Capacit 13o1d1mf thei Ii m hm National \udi Office (MNA OI Prolect. \IN \() is responsible lövr the ox eall coordnmaion and management of the Projeet implementation. "apacity Building for the Nongolian Nalional Audit Ofice- Grant No: TFA k1838 Noies to the Financial Statemens for the ear ended December 31. 20 i8 Vh Project Steerm Commiee a estalished bv the order ,N·\ X91 in ?017 oftfhe Audnor General of Monolia. The Project Steeringi Committee, led bs the Ad sor Io Auditor General of Nongolia. consists of the following members • Head of le Administration Department of Monao]ian National Audit Office • Head of Strategic Managermntiii Department of Mongolan National Audit Office • Head of Financial Audit Departmnent of onglian National Audiå Office • 1 Head of Perförmance Audit Department of Mongolian National Audit Offiee • 1 ead of Compliane Audit Department of\Moneolian National Audit Office • Director of Dex elopment lämancing Departnient of Mnistry of Finance The Project Steering Committee il need to proside poles giidance and to ensure inter-sectoral coordination and efficient preject acti,es, niid-teri plans fotr the project. detalled plans -or the particuar year, procurement and financial plans based on them, the implementation of the plan and its monitoring reports on a semiainnual basis, to rex iex the projeels annual progress report on the first quitarter of the next sear. and to ensuire that the MNAO has the atihority to monitor their i mplementat ion. 2.2 Summary of significant accountling policies a) Statement of compliance The Financial Statements comprise the Balance Sheei, the Statement of Project Sources and Uses of Funds, the Statement of Expenditiures. the Disbursemen Report and the Designated Accoint Statement. These reports haxe been prepared in the accordance with the requirements and guidelines issued by the World Bank b) Basis of 1)reparation The Financial Statements haxe been prepared in accordance with the International Public Secor Accounting Standards (IPSASs) issned bs the International Auditig and Assurance Standards Board of the International Federation ot' Acc'uiitatits. Cash basis of accounting has been adopied On this basis, receipts are recognized x hen recei ed or direet payment to creditors are made rather than xhen income is carned and disbursements are recoized xxhen paid raiher than wkhen expenses are incurred. e) Basis of measurement The Finrancial Statements are presented in IS Dollan ' SD). Expenditure tiansacons denoininated in currencies otier than U SD are translated at rates of the respectie lund transation from Designated Account to Petty Cash or operating account. \r gains and losses are relleeted in the Statement of Sources and U'ses of unds ( apacitY 13uiilding for thle Mongolian Natiomna Audii Offlce" Grait No: TFOA1838 Noics io the Finanxcial St;ITeIts for th0 year ended Decernber 31st. 2018 (1) Basis of prese1ation The account balances in the Financial Statements as of December 31 2018 ha\ e been compared wxitli such balances as ol December 31 20 17. e) Designated account In accordance wxith the Disbursenient 1Letter of the Girant Agreemenl SACDF Grant No. TFOA838 dated on Januarn 22. 2016. the proct opened the Desjignated Account (DA x Wiich is Ilie seLregated account for the credit financng acceptable to the WVor ld Bank. Tie account has been naintalned at State Bank xwith the account number of 106 Ö37392. of xwhich the denominated currenc is United States dollar 1 SD Ilie pax ments for the elgible c\penditures of procuring goods, international and national consultants sCrx ices,. ri[ni ng and xkorkshops and neremental operatino costs haxe been made from the DesiLnated Accouni Tlie ceilin of the DA is defined as LSD 75000 as per the Disbursenent Letter of the Grant Areement. 2.3 Disbursement progress of SA1- DF Grant No. 11OA838 As at December 3 1. 21018. Ilie Project had receixed USD 40,000 00 1 100%0 ofthe total Lrant througfh the )esiLnated Account as financim- from IDA Grant No. TFOA1838 and had disbursed UISD 402,562 29 ( 99.4% of the total grantr 2.4 Items in the balance sheet a) Cash and cash equivalents Summary of transaction statement of Pettv Cash Account for Ilie xyear ended December 3 1 2018 is as folloxws: Pettv cash account (in USD) As at As at __-Dec 31,2018 Dec 31,2017 Part A- Account transactions Beginning balance 878 78 Add: Transferred from Designated account 1868 1 8 Total 18,681.68 Dedciet Training and xorkshops 529.35 Inciemental operating costs 878 78 16.588.72 Foreign exchange loss 684.83 Total 878.78 17,802.90 Closing balance 878.78 b) Other souirces The balance of other sources Comprises of interest ieoie and forein e\cliange !alm loss. (in U SD) Items Cuiuiati e to Cumulative to Dec 31, 2018 31Dec3, 2017 1 otal interest carned 24 1. 10 2594.95 Foreign e\changie gain [loss 684.83i 684 83) STI AL 2559.27 1,910.12 "Capacity Building for the Nlongolian \mtional Aidit Office- Grant No: TFOA1838 Notes to the Financial Statemiients for the ear ended December 31si. 2018 2.5 ProCurenent contracts For the reporling periodl the Project had entered Into total of t\ enty i-three procurements following the market approach stated by the procurement plan approx ed by World Bank- Procurements are composed of txo contracts in relation to the progcurmnnt o ods., fotr contracts in relation to the conlsultant serv ices, four trainng aciI ities were iplemned and 3 Ineremental operating costs had ineurred which comprises of I I distinet contracts. \Ve ha\ e audited all of the prociureentsic fu goods, conIulLtnt seices, training expenditures and the olter Ineremental operati ng costs as the coniracts deeied natrial to the auditor's opinion These proeureents wýere condueted in accordance with the procurement guidelines issued b the World Bank. 2.6 Fvents after reporting period As at the end of the reporting period, The proleet had dturscd ihe total h gie grant of tJSI) 405,00() althouh hax e not \et submited the supporting documents Ior the disbursenents amounted to l MD S288.3 In total to the \\orld Bank and wýhich had en dratted as \\ \-09 and \\.\-10 b- the projetel