* I~~nvirrmy AJ'Y."T 6~¶eAju Tn&h W ?V-1141 FoCav4 MA7114 bC;"&?Il The Federal Democratic Republic of Ethiopia Audit Services Corporation I INDEPENDENT AUDITOR'S REPORT ON THE FINANCIAL STATEMENTS OF THE FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA MINISTRY OF FINANCE ONE WASH NATIONAL PROGRAM We have audited the accompanying financial statements of One WASH National Program of the I Federal Democratic Republic of Ethiopia, Ministry of Finance, financed under IDA Credit No. 53860 ET, ADF Loan No. 2100150031945 and 2100150037344, ADF Grant No. 2100155034517, DFID Grant No. 203766, FINLAND and UNICEF Grants, which comprise the balance sheet as at 7 July 2018, and the statement of sources and uses of funds and the designated account statements for the year then ended and a summary of significant accounting policies and other explanatory information. Responsibility for the Financial Statements Ministry of Finance is responsible for the preparation and fair presentation of these financial statements in accordance with the Ethiopian Government's Manual of the Federal Accounting System which is based on a modified cash basis of accounting and for such internal control as it determines is necessary to enable the preparation of financial statements that 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 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 are 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 appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness 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. S I251-011-5515222 Fax 251-011-5513083 E-mail: ASC@ethionetcom 25720 251-011-5535012 251-011-5535015 251-011-5535016 I FINANCIAL STATEMENTS OF THE FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA MINISTRY OF FINANCE ONE WASH NATIONAL PROGRAM (continued) We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion the financial statements give a true and fair view of the financial position of One WASH National Program of the Federal Democratic Republic of Ethiopia, Ministry of Finance, financed under IDA Credit No. 53860 ET, ADF Loan No. 2100150031945 and 2100150037344, ADF Grant No. 2100155034517, DFID Grant No. 203766, FINLAND and UNICEF Grants as at 7 July 2018 and of its sources and uses of funds for the year then ended in accordance with the Ethiopian Government's Manual of the Federal Accounting System which is based on a modified cash basis of accounting. Reports on other requirements As required by the Loan and Grant Agreements, we report that, to the extent we can assess: - during the year all project funds have been used in accordance with the conditions of the relevant financing agreements and only for the purposes for which the financing were provided; - counter-part funds have been provided and used in accordance with the financing agreement and only for the purposes for which the financing was provided; - goods, works and services financed have been provided in accordance with the relevant financing agreements and disbursement letters; - all necessary supporting documents, records and accounts have been maintained in respect of all Project's activities; - the funds disbursed covered expenditures that are eligible for financing under IDA Credit No. 53860 ET, ADF Loan No. 2100150031945 and 2100150037344, ADF Grant No. 2100155034517, DFID Grant No. 203766, FINLAND and UNICEF Grants; - there was a clear linkage between the books of accounts and the financial statements; - our examination revealed no weaknesses or irregularities in the systems of internal controls over financial expenditure other than those mentioned in the management letter; - designated accounts have been maintained in accordance with the provisions of the financing agreements and funds disbursed out of the said accounts were used only for the purpose intended in the financing agreement; and 2 I I N ALI"fL - JuI Nt1 A fltInA A%. A% Lj A%19.JA '.XAtA ttLI A AAAL FINANCIAL STATEMENTS OF THE FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA MINISTRY OF FINANCE ONE WASH NATIONAL PROGRAM (continued) Reports on other requirements (continued) - with respect to IFR based withdrawal applications submitted during the year ended 7 July 2018 and listed on page 16, in our opinion; a) the reports together with the procedures and internal controls involved in their preparation, can be relied upon to support the relevant withdrawals; b) adequate supporting documentation has been maintained to support the expenditures incurred; and said expenditures are eligible for financing under IDA Credit No. 53860 ET, ADF Loan No. 2100150031945 and 2100150037344, ADF Grant No. 2100155034517, DFID Grant No. 203766, FINLAND and UNICEF Grants; and c) Ineligible expenditures which were identified had been reimbursed either to the Designated Accounts and or the donor partners. 3 January 2019 I I I I I I I I 3 1 I MINISTRY OF FINANCE ONE WASH NATIONAL PROGRAM (OWNP) BALANCE SHEET AS AT 7 JULY 2018 2018 2017 Notes Ethiopian Birr Ethiopian Birr ASSETS Current Assets Debtors 3 463,201,550 457,203,576 Cash and Bank Balances 4 1,700,243,544 665.324,019 2,163,445,094 1,122,527,595 Current Liabilities Creditors 5 386,784,235 616,125,618 NET CURRENT ASSETS 1,776,660,859 506,401,977 REPRESENTED BY Accumulated Fund 6 1.776.660.859 506,401,977 I I The notes on pages 12 to 18 form an integral part of these financial statements. I I I I I 4 I I MINISTRY OF FINANCE ONE WASH NATIONAL PROGRAM (OWNP) IDA CREDIT No. 53860 ET, ADF LOAN No. 2100150031945 AND 2100150037344, ADF GRANT No. 2100155034517, DFID GRANT No. 203766, FINLAND AND UNICEF GRANTS STATEMENT OF SOURCES AND USES OF FUNDS FOR THE YEAR ENDED 7 JULY 2018 I Cumulative From Year ended 4 November 2013 Year ended 7 July 2018 to 7 July 2018 7 July 2017 Ethiopian Birr Ethiopian Birr Ethiopian Birr FINANCING Credit from IDA Q8850 PPA - 114,619,248 - Initial Advance IDA 53860 ET 1,332,403,198 2,943,016,116 597,751,573 DFID Assistance 692,100,640 1,890,117,708 561,143,481 ADF 751,914,645 1,587,527,366 235,805,207 UNICEF Assistance 22,326,134 87,678,690 26,879,643 FINLAD Assistance 16,764,994 29,657,821 12,892,827 Community Contribution 198,773,999 519,627,484 81,293,039 Gain on foreign exchange 8,770,108 35,821,903 6.311.908 TOTAL FINANCING 3,023,053,718 7,208,066,336 1,522,077,678 PROJECT EXPENDITURE Works 1,231,729,713 3,933,440,606 1,310,977,110 Goods 145,107,458 420,694,128 139,319,612 Consultancy services 178,894,228 364,277,809 116,461,578 Training 87,659,989 361,295,429 103,185,433 Operating costs 109,403,448 351,697,505 110.240.322 TOTAL PROJECT EXPENDITURE 1,752,794,836 5,431,405,477 1,780,184,055 EXCESS /(DEFICIT) OF FINANCING OVER EXPENDITURE 19270,258.882 1,776,660859 (25,106,377 I I The notes on pages 12 to I a form an integral part of tiese financial statements. 1 5 I I MINISTRY OF FINANCE ONE WASH NATIONAL PROGRAM (OWNP) DESIGNATED ACCOUNT STATEMENT FOR THE YEAR ENDED 7 JULY 2018 For year ended 7 July 2018 Account number 01001013/00493 Depository bank National Bank of Ethiopia Address Addis Ababa, Ethiopia Related Grant DFID Grant No. 203766 Currency USD Ethiopian USD Birr Beginning Balance - 8 July 2017 81,072.12 1,875,108.96 Advance from DFID 25,628,800.81 692,100,640.00 Fund available for use 25,709,872.93 693,975,748.96 Less: Transfer to Birr account 25,400,000.00 687,985,620.00 309,872.93 5,990,128.96 Add: Gain on foreign exchange - 2,465,249.74 I Ending balance - 7 July 2018 309,872.93 8,455,378.7 I I I The notes on pages 12 to 18 form an integral part of these financial statements. I I I I MINISTRY OF FINANCE ONE WASH NATIONAL PROGRAM (OWNP) DESIGNATED ACCOUNT STATEMENT FOR THE YEAR ENDED 7 JULY 2018 For year ended 7 July 2018 Account number 01001013/000479 Depository bank National Bank of Ethiopia Address Addis Ababa, Ethiopia Related credit IDA Loan No. 53860 ET Currency USD Ethiopian USD Birr Beginning Balance - 8 July 2017 808,093.44 18,690,312.36 Reimbursement From IDA 50,506,896.32 1,324,974,542.76 Fund available for use 51,314,989.76 1,343,664,855.12 Less: Transfer to Birr account 36,375,534.66 938,209,327.92 14,939,455.10 405,455,527.20 Add: Gain on foreign exchange - 2,191,408.33 Ending balance - 7 Jul 2018 14239 5510 407,646,93 I I The notes on pages 12 to 18 form an integral part of these financial statements. I I U I 7 I I MINISTRY OF FINANCE ONE WASH NATIONAL PROGRAM (OWNP) DESIGNATED ACCOUNT STATEMENT FOR THE YEAR ENDED 7 JULY 2018 For year ended 7 July 2018 Account number 01001013/000502 Depository bank National Bank of Ethiopia Address Addis Ababa, Ethiopia Related credit ADF Loan No. 2100150031945 and 2100150037344, ADF Grant No. 2100155034517 Currency USD Ethiopian USD Birr Beginning Balance - 8 July 2017 0.88 20.45 Reimbursement from ADF 27,630,459.20 751,914.644.55 Fund available for use 27,630,460.08 751,914,665.00 Less: Transfer to Birr account 25,590,000.00 696,912,151.00 2,040,460.08 55,002,514.00 Add: Gain on foreign exchange - 674,704.02 Ending balance - 7 July 2018 2,040,460.08 55,677,218.02 I The notes on pages 12 to 18 form an integral part of these financial statements. I * 8 I MINISTRY OF FINANCE, ONE WASH NATIONAL PROGRAM (OWNP) DESIGNATED ACCOUNT STATEMENT FOR THE YEAR ENDED 7 JULY 2018 For year ended 7 July 2018 Account number 01001013/00543 Depository bank National Bank of Ethiopia Address Addis Ababa, Ethiopia Related credit FINLAND Grant Currency USD Ethiopian USD Birr Beginning balance - 8 July 2017 560,916.17 12,973,374.00 Reimbursement from FINLAND 615,362.37 16,764,994.04 Fund available for use 1,176,278.54 29,738,368.04 Less: Transfer to Birr account 555,916.00 14,974,431.33 620,362.54 14,763,936.71 Add: Gain on foreign exchange - 2,163,647.77 Ending balance - 7 July 2018 620,362.54 16,927,584.48 I I The notes on pages 12 to 18 form an integral part of these financial statements. 1 I I I 9 I I W MINISTRY OF FINANCE ONE WASH NATIONAL PROGRAM (OWNP) DESIGNATED ACCOUNT STATEMENT FOR THE YEAR ENDED 7 JULY 2018 For year ended 7 July 2018 Account number 01001013/00507 Depository bank National Bank of Ethiopia Address Addis Ababa, Ethiopia Related credit UNICEF Grant Currency USD Ethiopian USD Birr Beginning balance - 8 July 2017 307,083.00 7,102,492.00 Reimbursement from UNICEF 822,069.96 22.326.134.01 Fund available for use 1,129,152.96 29,428,626.01 Less: Transfer to Birr account 650,000.00 16,538,805.00 479,152.96 12,889,821.01 Add: Gain on foreign exchange - 184,634.15 Ending balance - 7 July 2018 479,152.96 13,074,455.16 I I I The notes on pages 12 to 18 form an integral part of these financial statements. I I I W I 10 I I ONE WASH NATIONAL PROGRAM (OWNP) MOVEMENT IN BIRR POOL FUND ACCOUNT FORTHE YEAR ENDED 7 JULY 2018 For year ended 7 July 2018 Account number 01001010/40662 Account Name One WASH National Program Depository bank National Bank of Ethiopia Address Addis Ababa, Ethiopia Related Credit and Grant IDA Credit No. 53860, ADF Loan No. 2100150031945 AND 2100150037344, ADF Grant No. 2100155034517, DFID Grant No. 203766 and UNICEF and FINLAND Grants Currency Ethiopian Birr Ethiopian Birr Ethiopian Birr Beginning balance - 8 July 2017 6,243,303 Transfer from IDA 900,738,470 Transfer from DFID 687,985,620 Transfer from ADF 696,912,151 Transfer from UNICEF 16,538,805 Transfer from FINLAND 14,974,431 Fund available for use 2.323.392,780 Less: Fund transfer to program implementers Tigray 66,300,000 Afar 70,000,000 Amhara 432,100,000 Oromiya 580,000,000 Somalia 39,000,000 Benshangul 53,566,483 Snnp 453,400,000 Gambela 38,644,065 Hareri 14,000,000 Dire dawa 30,812,000 MoH - MOE 9,179,718 MwIE 63,127,911 WRDF 82,700,000 MoFEC 1,251,740 Total Transfer 1,934,081,917 Bank Service charge 4,975,094 Total Transfer and bank service charge 1,939,057,011 Ending balance 7 July 2018 384,335,769 The notes on pages 12 to 18 form an integral part of these financial statements. I 11 I U MINISTRY OF FINANCE ONE WASH NATIONAL PROGRAM (OWNP) NOTES TO THE FINANCIAL STATEMENTS 1. BACKGROUND The objective of the Project is to increase access to improved water supply and sanitation services for residents in participating woredas, towns and communities in the territory of the Recipient. The project consists of the following parts: Part 1: Rural Water Supply, Sanitation and Hygiene - Construction and rehabilitation of community water supply schemes in participating woredas and towns. - Construction and rehabilitation of water and sanitation facilities in school and health facilities in participating woredas and communities. - Promotion of improved hygiene and sanitation practices in participating communities. - Capacity building to strengthen and sustain the capacity of participating woredas to effectively plan, implement and manage their water supply, sanitation and hygiene facilities. - Capacity building to strengthen and sustain the capacity of participating woredas to effectively operate their water supply and sanitation facilities. - Capacity building for respective water, health and education regional bureaus and woreda offices to create a critical mass of well trained and skilled facilitators to mobilize communities for behavior change and demand creation to sustain changes. Part 2: Urban Water Supply, Sanitation and Hygiene - Rehabilitation and reconstruction of urban.water production, treatment and distribution systems. - Preparation of a National Urban Sanitation Strategy, supporting studies on urban sanitation and priority sanitation investments in participating towns. - Activities to strengthen the capacity of participating water boards/committees and operators to effectively manage their water supply and sanitation facilities. Part 3: Programme Management and capacity Building - Building the capacity of woreda/zoneal/regional staff in surface and ground water assessment, groundwater knowledge and sitting, distribution network design, environmental and social safeguards, water resources management. - Building the capacity of woreda/zoneal/regional collection and MIS/database. - Building the capacity of woreda/zoneal/regional accountants in financial management. - Building the capacity of woreda/zoneal/regional contractors and artisans in construction- methods. A- B d pa o f zomna lAT. P 1MUs1, . .WWsA TT Ti. cotrc mangement and I.JUIIUI% LIA, %,~aja%ILy V1. dVIIaI I IVI%Ja VY TV 10 CLULL I VT %-JO III %wVILLL%.L IIIWU"rM%III%,IL W1xS supervision. I 12 I U - Building capacity of WASHCOs, men, women and youth artisans, HEWs and HAD including follow-up activities. - Strengthening the capacity of established Water Boards in Category III towns in: business planning, asset management, planning, monitoring operators, and oversight of Program implementation. - Train TWUs in routine 0 & M, asset and financial management, customer relations, reducing UAW, etc. - Preparation of standard bidding/contract management/supervisor documents. - Establishment of sub-regional operation and maintenance units and supply chain outlets. - Documentation and scaling up of pilot/demonstration activities. - Support 16 TVETCs/HSCs to offer WaSH courses. - Establish health clubs in schools. - Procure vehicles and vacuum trucks/carts, tool sets, office equipment, water quality testing equipment. The Project is mainly financed by IDA credit No. 53860-ET, ADF Loan No. 2100150031945 and 2100150037344, ADF Grant No. 2100155034517, and DFID Grant No. 203766, FINLAND and UNICEF Grants. I I I I I I I I * 13 I I MINISTRY OF FINANCE ONE WASH NATIONAL PROGRAM (OWNP) NOTES TO THE FINANCIAL STATEMENTS (continued) 2. SIGNIFICANT ACCOUNTING POLICIES The principal accounting policies adopted by the Program, which are consistent with those applied in the prior year, are stated below. a) Basis of preparation These financial statements have been prepared in accordance with the Ethiopian Government's Manual of the Federal Accounting System which is based on a modified cash basis of accounting. b) Currency These financial statements are presented in Birr. Transactions in foreign currencies are translated into Birr at the approximate rates of exchange prevailing at the dates of the transactions. Balances in foreign currencies at the balance sheet date are translated at the rate of exchange prevailing on that date. 11 I I I I I I I * 14 I MINISTRY OF FINANCE ONE WASH NATIONAL PROGRAM (OWNP) NOTES TO THE FINANCIAL STATEMENTS (continued) 3. ADVANCES 2018 2017 Ethiopian Birr Ethiopian Birr Advance payment to: Letter of credit 5,181,461 74,959,906 Contractors 393,370,906 331,963,591 Suppliers 5,137,823 5,468,478 Consultants 10,779,099 9,370,867 Purchase advances 15,710,878 14,392,205 Other advances within Government 9,779,957 19,296,804 Others 23,241,426 1,751,725 463,201,550452057 I 4. CASH AND BANK BALANCES I USD Special Account No 1001012/00479/ 407,646,935 18,690,312 USD Special Account No 1001012/00493/ 8,455,379 1,875,109 USD Special Account No 1001012/00502/ 55,677,218 20 USD Special Account No 1001012/00507/ 13,074,455 7,102,492 USD Special Account No 1001012/00543/ 16,927,584 12,973,374 Ethiopian Birr Pull Fund Account 384,335,769 6,243,303 Other Birr Bank Account 798,425,706 605,084,337 Cash on hand 15,700,498 13,355,072 1,700,243,544 665,324.019 I I I I U I 15 I U U MINISTRY OF FINANCE ONE WASH NATIONAL PROGRAM (OWNP) NOTES TO THE FINANCIAL STATEMENTS (continued) 3 5. ACCOUNTS PAYABLE 2018 2017 Ethiopian Birr Ethiopian Birr Contractors 76,714,766 53,037,869 Other payable within government 166,195,393 278,106,038 Taxes payable 21,900,901 18,454,571 1 Others payable 121,973,175 266,527,140 6. ACCUMULATED FUND Ethiopian Birr Balance at 7 July 2017 506,401,977 Add: Excess of financing over expenditures 1,270,258,882 Ending Balance 7 July 2018 1,7766 7. DATE OF AUTHORIZATION The Director, Channel One Programs Coordinating Directorate of the Ministry authorized the issue of these financial statements on 3 January 2019. I I I W I 16 I U U I MINISTRY OF FINANCE ONE WASH NATIONAL PROGRAM (OWNP) IFR BASED WITHDRAWAL SCHEDULE FOR APPLICATIONS Submitted during the Year ended 7 July 2018 I Withdrawal Equivalent in application No. USD Ethiopian Birr IDA WASH 11-013 12,840,051.38 300,080,988.79 IDA WASH 11-0 14 10,000,000.00 271,589,000.00 IDA WASH 11-015 27,666,844.94 753,304,553.97 IDA SP-001 318,529.75 7,428,655.27 ADB- 7,800,000.00 211,945,500.00 ADB- 3,226,564.80 87,757,722.71 ADB- 2,603,894.40 70,822,021.84 ADB- 14,000,000.00 381,389,400.00 UNICEF- 350,000.00 9,481,885.00 UNICEF- 333,069.96 9,055,206.31 UNICEF- 139,000.00 3,789,042.70 DFID- 25,628,800.81 692,100,640.00 FINLAD- 615,362.37 16,764,994.04 I105,522,118-411 2.815.509.610,63 I I I I I U g I 17 I U � >о l� •=�о�ооСгЛ м - �FС�ми - •� cV � � �с о� и��о оо о� и N О�мй0й д• мо��, �tiдC1I о й��еr�� � й°N� ' � � йоо0о00� N �им� V О О о�й й � �~д�•м '^ N м м � � 3 д' 00 N Г� 01 М l�o�no��C и� �С и cV оо � д' � �., N�DO�00 мN � ��I � оо cv cv и rn� ,.r Е„� .,, м�--� и м оо О N N W w � ����vмi� С�Л� � �оо0�� м о �°•�� � �� ,� и ги �V l�l��d•оо м �� о� cv су n о� � cv � йой�с°V '^� � Е„и,� -д � и��о�оо ои а а1 � � � � � о о � � �I О � момиоо �•� а+ � м оо •--� •--� � cV � � F n~ � n о м А � �� �Сt�мд•l� д•м � �r-�i оои�ио� �;и U и �гi .� � о� �о о�с nисvм� �cv '7�- А �� о� cv cv �о оо � n •� � �с д• о" cV оо � � с��' �I иоомооN n�t � � f� t�oooN� ии �О и мN��� �°•о � � оо и .� .� .� .� �--� Wй Е"'� �Оl�м�д• cV cV о о, оо � �с .� р�А � йnм�N йо W� �, � �с��ои �• о;�•�• о �о, н W c=.I �I й i��й �о � V Ом� �--� nм � а�н , м м м cv � ^ F iC/� 'С t� aaw „ � ^ � н а� �3�о � `�' ^ ^ � owz � 'Э " д � О� � � � � (7р�н о д � � � � аwй � � � � W р"'�А � �о а �z�°aw � .�°° �w д z w д � a�i '� � i z�''�О ��о�i� �с •b W F�Rj � �'+ '�.� О,и с� � О z � а c�i � � � �р й � c�i � � � � � о р и � � о у, х а� � w ьn �� °� �� � � ч� Е�".,, '�VE+ � и о о�•о О� �о UU�дм � '�Оы�у" '� c�iGrG:[�С7 �'�4а й а� z Од4� О й F�-�W W