State of Palestine . State Audit & Administrative Control Bureau President Bureau Mr. Kanthan Shankar Country Director I 4&w West Bank and Gaza Dear Shankar, Sub*ect: The Final Report on The Local Government Improvement Program LGSIP and Local Services for fiscal year 2020 Referring to the above mentioned subject, and after reviewing the response of the Municipal development and lending Fund on the SAACB initial report ,and in accordance with the provisions of the SAACB Law No. 15 of 2014 and its amendments, we attach to you the final report on the local government improvement program and local services LGSIP for fiscal year 2020, in addition to the opinion on the financial statements of the program as of December 31, 2020, and a copy of the amended financial statements. Thank you for your cooperation. Kindest regards, Counselor/ lyad Tayyem President Ramallah - P.0 Box 755 TEL. 02-2972293 -2972290 FAX. 022967716 GAZA t c 1':jjS~ www.saacb.ps &JSY i3 State of Palestine . 0 State Audit & Administrative Control Bureau President Bureau u Jo Independent Auditors' Report To: World Bank, MOF, MOLG, and MDLF. Report on the Audit of Program's Financial Statements Opinion We have audited the Programs' statement of Balance sheet (Fund Balance, Cash Vs Restricted Amounts from Donor) as of December 3 1ST, 2020, Statement of Comparison of Budget and Actual Amount for the Year ended December 31ST, 2020, and a summary of significant accounting policies and other explanatory information. In our opinion, the accompanying statement present fairly, in all material respects, the financial position of "Local Government and Services Improvement Program "-LGSIP -implemented by MDLF and MOLG"as of December 3 1ST, 2020, and its accompanied notes for the year then ended in accordance with the financial reporting provisions explained in the notes to financial statements (note # 2 Summary of Significant Accounting polices) which state the following: "LGSIP financial statements are prepared using the cash Basis of Accounting, which is International Public Sector Accounting Standards -IPSAS" Part 1. Sources of funds are recognized when cash is received and uses of funds are recognized when payments are made" Statement of Comparison of Budget and Actual Amount are prepared using the Commitment Budgetary basis which is the commitments are planning to take in the year whether will pay this commitment within the period or not. Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (ISAs), SAACB Law, and the World Bank Term of Reference. Our responsibilities under those standards and regulations are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the entity (program management) in accordance with SAACB mandate and our Code of Ethics for together with the other ethical requirements that are relevant to our audit of the program's financial statements in Palestine, and we have fulfilled our other ethical responsibilities. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Emphasis of Matter-Basis of Accounting We draw the attention to Note (2) to the financial statements, which describes the basis of accounting. The financial statements are prepared for a one program implemented by MDLF (Municipal Development and Lending Fund) and MOLG (Ministry of Local Government). Our audit opinion is on the implementation of this program and does not reflect the financial position of MDLF and MOLG. As a result, the financial statements may not be suitable for another purpose. Our opinion is not modified in respect of this matter. We draw the attention to closing date of LGSIP has been extended to December 31s', 2021. Our opinion is not modified in respect of this matter. Ramallah - P.0 Box 755 TEL. 02-2972293 -2972290 FAX. 022967716 GAZA 1bcb~jjh p~ :~~SJ~ ~ www.saacb.ps jfS'1 yJ State of Palestine .4 State Audit & Administrative Control Bureau President Bureau it Ju 0J Key Audit Matters > We have no evidence that MoF transferred its share in this program. > MoLG did not effectively follow up the advances given to local councils. MoLG did not close some of large VC advances (60%, 40%) for the 2017, 2018, 2019 and 2020 allocations. Local councils benefited from the advances but MoLG did not close or reconciled them. > There were no accounting closure for 2017 advance (40%)- that utilized 2017 budget provision- .Those advances were granted to the local councils, but still open until the end of 2020, despite the transfer of the funds three years ago. > There were no accounting closure for 2018 advance (60%, 40%)- that utilized 2018 budget provision- .Those advances were granted to the local councils, but still open until the end of 2020, despite the transfer of the funds 2 years ago. > MDLF did not close the program advances that has been acquired as at audit date. > Bank reconciliations and cash management for the program could have been managed in better way. > MoLG did not prepare the activities progress reports of the first sub-activity (Annual Capital Grants to VCs for delivering local services) on a monthly basis, which includes detailed information about the status of the program, achievements and financial data, and did not hand it over to MDLF. > MDLF did not prepare the quarterly interim financial management report for all program components, based on the consolidated financial reports that MDLF should receive from MoLG for the first and third sub-activities (Capacity building and institutional development), and based on the consolidated financial reports prepared by Financial Department at MDLF for the second sub-activity. > The 2020 claims have been entered into the fiscal year 2019 after closing the program, and after release of the audited financial statements. > Spending and advances closing procedures were delayed for some suppliers at Ministry of Local Government. > Some accountants at big village councils did not prepare quarter financial reports for the project, did not have them approved by the management officer and did not attached the banking financial statement with the report. > Payments to some counselors were made without tax invoices and without value added tax deduction from the counselors by MDLF. > Payment requests for some projects are not signed by technical department manager. > General Manager of operations at MDLF does not sign the payment order form for all project payments. > Invoices with value that exceeds 10,000 NIS are not stamped by MDLF at the value added tax department. > The guarantee of proper performance did not cover the complete term of metal solid waste containers supplying project for the high solid waste management council, Hebron and Bethlehem. > MoLG posted the adjusting entries on date Jan l ' 2021 due to closing of the accounting system (Bisan) of fiscal year 2020, where the adjusting entries do not affect the financial statements. Ramallah - P.0 Box 755 TEL. 02-2972293 -2972290 FAX. 022967716 GAZA faeb a saLcbps :v- jjiSJ -u-)b 'www.saacb.ps &fS> J.I State of Palestine State Audit & Administrative Control Bureau 11 President Bureau ,.all Responsibilities of Management and Those Charged with Governance for the Financial Statements. Management is responsible for the preparation and fair presentation of the financial statements in accordance with the financial reporting provision in the notes to financial statements section below, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is responsible for assessing the entity's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the entity or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the organization's financial reporting process. Auditor's Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs and SAACB mandate will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or taken together, they could reasonably be expected to influence the economic decisions of users taken based on these financial statements. As part of an audit in accordance with ISA's and SAACB mandate, we exercise professional judgment and maintain professional skepticism throughout the audit. We also > Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risk, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than the one resulting from error, as fraud may involve collusion, forgery, intentional omission, misrepresentations, or the override of internal control. > Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for expressing an opinion on the effectiveness of the internal control. > Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. > Conclude on the appropriateness of management's use of the going concern basis of accounting and based on the audit evidenced obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the organization's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosure are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the entity to cease to continue as a going concern. Ramallah - P.0 Box 755 TEL. 02-2972293 -2972290 FAX. 022967716 GAZA L1' it abv &fsIi.ul www.saacb.ps :,,3j-47 State of Palestine 0 L State Audit & Administrative 1111) y Control Bureau President Bureau > Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represents the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law and regulations preclude public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Counselor tyd Tayyie' Chairman State Audit & Administrative Control Bureau 29 August 2021 Ramallah - P.0 Box 755 TEL. 02-2972293 -2972290 FAX. 022967716 GAZA taha saach.p~:~JsiI yI. www.saacb.ps 3j] Local Government Units Development and Lending Fund-MDLF Local Governance and Services Improvement Program Co-Funded by the International Development Association & Partnership for Infrastructure Development MDTF And Implemented by Local Governments Units Developments and Lending Fund and the Ministry of Local Government Financial Statements For Year Ended December 31, 2020 Local Government Units Development and Lending Funds-MDLF Local Governance and Services Improvement Program Co-Funded by the International Development Association & Partnership for Infrastructure Development MDTF And Implemented by Local Government Units Development and Lending Fund and the Ministry of Local Government Balance Sheet (FUND Balance, Cash vs. Amount Restricted from Donor) AS of December 31, 2020 All Amounts are in USD Units Assets Note December December December December 312020 312019 31,'018 312017 Current Assets Cash at Bank, maintained by MOLGwithithe 8 3,293,190 4,569,064 2,395,629 522,670 PA's Single Treasury Account and MDLF Total Current ~4~§ Tota Curent3,293,190 4,569,064 2,395,629 522,670 Assets Total Assets 13293190 4.569064 2,395629 522670 Liabilities and Fund Balance Fund Balance 8 3,293,190 4,569,064 2,395,629 522,670 Total Liabilities 4569064 2,395,629 522,670 and Fund Balance I 4 5 - I These Financial Statements were authorized for issuance by MOLG and MDLF management on 18/08/2021 an were signed on its behalf by: Mr. Miuhaninad al Ranzahi Mr. Ra'ed Sharabati Diri'ctor General Director of Financia Department 2 PK Local Government Units Development and Lending Fund-MDLF Local Governance and Services Improvement Project Co-Funded by the International Development Association & Partnership for Infrastructure Development MDTF And Implemented by Local Governments Units Development and Lending Fund and the Ministry of Local Government Statement of Cash Receipts and Payments For the year ended December 31,2020 All Amounts are in USD Units No m December December December Cash BALANCE Cumulative te 31 22 3121 3121 3201 SOURCES OF Cash Amount Received by MOLG - Disbursement Linked Indicators (DLI) 3 4,894,583 5,927,916 3,677,500 2,000,000 16,499,999 Payments Total Sources of Cash 48483 5,927916 3,677,500 2,000,000 16,499,999 USES OF Cash Part 1: Annual Capital Grants for Delivery of 4 2,540,439 2,907,379 1,642,996 1,444,669 8,535,483 Local Services Part 2: Conditional Capital Grants for Capita Gntsr 5 2,496,623 171,104 0. 0. 2,667,727 Investment mn joint Project Part 3: Capacity Support for strengthening Local 6 192,686 272,449 144,681 32,605 642,421 Governance Institutions Part5:Program 7 940,709 403,549 164 56 1,361,178 Management Total Uses of Cash 6,170,457 3,754481 1,804 541 1,477,330 13,206,809 CHANGE IN Cash (1,275,874) 2,173435 1,872,959 522,670 3,293,190 BALANCE ADD Beginning Cash 0~ 4,569064 2 39-529 522.870 BALANCE. Cash BALANCE at Year 3,293,190 4 569064 2a395 629 522,670 3 293 190 END 3 Local Government Units Development and Lending Funds-MDLF Local Governance and Services Improvement Project Co-Funded by the International Development Association & Partnership for Infrastructure Development MDTF And Implemented by Local Governments Units Developments and Lending Fund and the Ministry of Local Government Statement of Comparison of Budget and Actual Amount For the Year ended December 31,2020 All Amounts are in USD Units Not Budget Vs Actual Amount Amount Amount Amount e Receipt 2020 2019 2018 2017 Budget Line Allocation as Approved from MOF 8,000,000 7,000,000 5,500,000 3,397,000 Actual Transferred from World Bank through MOF 4,894,583 5,927,916 3,677,500 2,000,000 Difference Between Budget and Actual 14-a 3.105.417 1.072,084 1,822500 1,397,000 (Receipt) Uses of Funds Budget Line Allocation as8O00 ±L 0 Budgt Lne lloctio as8,000,000 7,000,000 5,500,000 3,397,000 Approved from MOF Actual Uses of Funds Part 1: Annual Capital Grants for Delivery of 10 2,851,142 2,947,022 1,642,996 1,444,669 Local Services Part 2: Conditional Capital Grants for Investment in 11 2,506,126 722.163 0- 0. Joint Project Part 3: Capacity Support for strengthening Local 6 192,686 272,449 144,681 32,605 Governance Institutions Part 5: Program 12 951,000 403.549 16,864 56 Management Total Uses of Funds 6,500,954 4,345,183 1,804,541 1,477,330 Difference Between Budget and Actual ( Uses 14-b 1,499,046 2-654,817 3695459 1,919,670 of Funds ) This Statement was prepared based on MOF allocation to MOLG budget and disbursement based on Commitment Budgetary basis. 4 1 ' Local Government Units Development and Lending Funds-MDLF Local Governance and Services Improvement Program Co-Funded by the International Development Association & Partnership for Infrastructure Development MDTF And Implemented by Local Governments Units Development and Lending Fund and the Ministry of Local Government Notes to LGSIP Financial Statements For the Year ended December 31, 2020 1. LGSIP and its Financing The Palestinian Liberation Organization (PLO), for the benefit of the Palestinian Authority (PA), the International Development Association (the World Bank), acting as an administrator of the Trust Fund for Gaza and West Bank and Partnership for Infrastructure Development MDTF signed a Trust Fund Grant Agreement number TFOA1039 dated March 14, 2016 (the Grant Agreement) and Trust Fund Grant Agreement number TFOA4511 dated March 14, 2017 (the Grant Agreement) whereby the World Bank made a grant, to the PA, in an amount equals to USD 5,000,000 and the World Bank made a grant, to the PA, in an amount equals to USD 13,000,000. to finance part of a program entitled "Local Governance and Services Improvement Program" (LGSIP, the Program). In accordance with the Grant Agreement, LGSIP is to be carried out jointly by Local Government Units Development and Lending Fund (LGUDLF)/ (MDLF hereafter) and the Ministry of Local Government (MoLG), (together the "Implementing Agencies"). hereinafter The objective of the Program is to strengthen the local government financing system and improve local service delivery in Program Villages. The Program is a part of the PA's public-sector reform program as outlined in the National Development Plan 2014-2016 and in the supplemental sector strategies developed by MoLG. The Program consists of the following parts: Part 1: Supporting local services delivery through provision of Annual Capital Investment Grants to eligible Village Councils (VCs) for carrying out activities identified in the Annual Capital Investment Plans (ACIPs). Part 2: Supporting community infrastructure development through the provision of Conditional Capital Investment Grants to eligible Joint Service Councils (JSCs) for carrying out projects identified in the ACIPs jointly developed by two or more VCs (Joint Projects). Part 3: Strengthening the capacity of VCs and JSCs to improve their local governance functions, service delivery, and prepare and implement ACIPs; and strengthening the capacity of relevant agencies at the central level, including, inter alia, MoLG and MDLF, to effectively implement the Program. The following table specifies each category of withdrawal of the proceeds of the Financing (including Disbursement Linked Indicators (DLI) as applicable) ("Category"), the Disbursement Linked Results (DLRs) for each Category (as applicable), and the allocation of the amounts of the Grant Agreement to each Category: - Amount of the Category, including DLI as Financing Allocated applicable DLR as applicable (expressed in USD) DLI 1: Enabling steps to DLR L.: MoLG adopted standardized DLR 1.1: 1,000,000 strengthen local governance Governance Framework for joint local service adopted by MoLG. provision by more than one VC and adopted formula for Annual Capital Investment Grant allocation for VCs/JSCs. DLR 1.2: The MoLG issued Procurement DLR 1.2: 800,000 Instructions for LGUs to follow in procuring local services. DLI 2: Timely communication DLR 2.1: Communication of the ACIG allocation DLR 2.1: 800,000 to VCs of the formula-based to VCs by January 15 and transfer of ACIGs to Annual Capital Investment eligible VCs by January 31, in FY 17. Grant (ACIG) allocations and timely transfer of ACIGs to DLR 2.2: Communication of the ACIG allocation DLR 2.2: 800,000 eligible VCs. to VCs by January 15 and timely transfer of ACIGs to eligible VCs by January 31, in FY 18. DLI 3: Percentage of VCs DLR 3.1: 50% in FY 17. DLR 3.1: 1,000,000 meeting the Program eligibility criteria annually. DLI 7: Capacity building DLR 7.1: Five Year Capacity Development Plan DLR 7.1: 200,000 activities delivered by MoLG prepared in FY 16. based on their Annual Capacity Development Plan. DLR 7.2: Annual Capacity Development Plan DLR 7.2: 400,000 executed in FY 17 Total Amount 5,000,000 The closing date of the Grant Agreement is December 31, 2021. Amount of the Financing Category, including DLI as Allocated applicable DLR as applicable (expressed in USD) DLI 2: Timely communication DLR #2.3 : Communication of the ACIG DLR 2.3: 800,000 to VCs of the formula-based allocation to VCs by January 15 and transfer of Annual Capital Investment ACIGs to eligible VCs by January 31,in FY 19 Grant (ACIG) allocations and timely transfer of ACIGs to DLR #2.4 . Communication of the ACIG DLR 2.4i 800,000 eligible VCs. allocation to VCs by January 15 and transfer of ACIGs to eligible VCs by January 31,in FY 20. DLI 3: Percentage of VCs DLR 3.2: 60% in FY 18. DLR3.2: 1,000,000 meeting the Program eligibility DLR 3.3: 70% in FY 19. DLR3.3: 1,500,000 criteria annually. DLR 3.4: 70% in FY 20. DLR3.4: 1,500,000 DLI 4: Cumulative number of DLR #4.1: 6 joint projects approved in FY 17 DLR4.1: 1,000,000 Joint Projects approved. DLR #4.2: 10 joint projects approved in FY 18 DLR4.2: 1,000,000 DLR #4.3 14 joint projects approved i.n FY 19 DLR4.3: 1,000,000 6 1 ' z L, _ DLR #4.4: 18 joint projects approved in FY 20 DLR4.4: 1,000,000 DLI 5: Aggregated Expenditure DLR 5.1: 30% in FY 18. DLR5.1: 500,000 percentage of approved Joint DLR 5.2: 40% in FY 19. DLR5.2: 500,000 Projects DLR 5.3: 50% in FY 20. DLR5.3: 500,000 DLI 6: Steps to improve DLR #6.1 : Not later than FY 17 , the Recipient DLR6.1: 300,000 transparency and predictability submitted its Transportation Fee reform in the allocation of the directive to its Cabinetof Ministers for Approval Transportation Fee adopted by DLR #6.2: Not later than FY 18 , at least 25% of MOLG annual allocation of the Transportation Fee is DLR6.2: 700,000 disbursed using the criteria set out in the Program Operations Manual DLI 7: Capacity building DLR 7.3: Annual Capacity Development Plan DLR 7.3: 500,000 activities delivered by MoLG executed in FY 18. based on their Annual Capacity Development Plan. DLR 7.4: Annual Capacity Development Plan DLR 7.4: 400,000 executed in FY 19 Total Amount 13,000,000 The project closing date is amended to be December 31,2021 instead December 31, 2020. In addition to the above-mentioned World Bank Grant Agreement, the Program is to be co-funded (expected to be co-funded) from the following partners: Expected Granted Date of Financing Partner Currency Amount Armount Agreement KfW, Frankfurt am Main (KfW) EUR - 8,000,000 March, 6, 2017 Palestinian Authority (PA) USD 2,000,000 - - The Deutsche Gesellschaft fir Internationale Zusarnmenarbeit (GIZ) EUR 700,000 - - The Belgian Development Agency (Enabel, formerly BTC) EUR 800,000 - - European Union (EU) EUR 7,400,000 - - The Swiss Federal Department of Foreign Affairs (FDFA/SDC) USD 3,000,000 - - The PoM is an operational guide for all activities supported under the LGSIP, whether through the Program for Results (PforR) instrument, or through parallel financing, and has been prepared in a manner that is consistent with the rules and regulations of the Government Systems applicable to LGSIP, and in accordance with the requirements and core principles of the World Bank's OP/BP 9.0. As such, MoLG, MDLF, LGUs, and all other Program users shall adhere to the procedures detailed under this PoM, for the implementation of LGSIP activities. The main law, that cover the work: 7 1 , C_ * Local Authorities Law No. (1) of 1997 and its further amendments. * Financial Regulations of Local Authorities for the Year 1999. * Law No. (7) For the Year 1998 Regarding Organizing the General Budget and Financial Affairs and its further amendments. * Decision of the Council of Ministers No. (43) for the Year 2005 Regarding Financial Regulations for Ministries and Public Entities and its further amendments. * The Law by Decree No. 8 of 2014 on Public Procurement and its further amendments. * Decision of the Council of Ministers No. (5) for the Year 2014 Regarding The Regulation on Public Procurement and its further amendments. * The Law by Decree No. 25 of 2016 Regarding The Local Government Units Development and Lending Fund. * The Labour Law No. (7) of 2000. * The Law by Decree No. 8 of 2011 Regarding The Income Tax and its further amendments. * Regulations on Value-Added Tax. 2. Sunnzary of Significant Accounting Policies The financial statement has been prepared in accordance with: - The financial statement has been prepared in accordance with the cash bases IPSAS, Financial Reporting Under the Cash bases of Accounting and comply with the requirements of part I of this standard. - LGSIP Statement of Comparison of Budget and Actual Amount are prepared using the Commitment Budgetary basis which is the commitments are planning to take in the year whether will pay this commitment within the year or not - Presentation Currency- The presentation currency is USD. - These Financial Statements were authorized for issuance by MOLG and MDLF management on 18/08/2021. - The preparation of Financial Statements is the responsibility of MDLF. 3. Amount Received byMoLG - DLI Payineints Amount received represents funds transferred form the World Bank to Ministry of Finance and Planning (MoFP) then channeled by MoFP to MoLG using the PA public disbursement mechanism and comprise: Withdrawal Application (WA) # Date of transfer Amount (USD) LGSLP -1 August 18, 2016 1,000,000 LGSIP -2 October 25, 2017 1,000,000 LGSIP -3 June 10,2018 2,700,000 LGSIP -4 June 28,2018 977,500 LGS1P -5 January 03,2019 1,333,333 LGS[P -6 July 23,2019 4,433,333 LGSIP -7 July 23,2019 161,250 LGSIP -8 June 23,2020 4,755,833 LGSIP -9 June 23,2020 138,750 Total 16,499,999 8 1 1' :- - - 4. Part 1: Annual Capital Grants for Delivery of Local Services This part includes the advances transferred to large VCs as follows allocation for 2017: - Village Councils Advance Liquidation of Advance (VCS) Payment the Advance Balance Kharbatha Al-Misbah 58,265 58,265 - Qibya 54,891 32,935 21,956 A-Ranadin 44,367 26,620 17,747 Handaza and Breidaa 59,346 15,170 44,176 Salem 54,099 31,950 22,149 Al Jib 43,544 25,600 17,944 DarSalah 30,915 22,335 8,580 Shuqba 50,364 30,000 20,364 Saffa 40,903 25,547 15,356 Kafr Ni'ma 41,160 24,704 16,456 Khalet al-Maiyya 47,385 28,430 18,955 Al-Shawawreh 41,841 25,100 16,741 Beit Ur Al-Tahta 48,967 29,380 19,587 Beit Dajan 37,242 22,345 14,897 Abu Al Asja 32,020 0 32,020 Total 685,309 39 286,928 Advance from 2017 -411,777 -79,816 - Advance from 2018 -190,763 -235,200 Advance during 2019 -55,265 0 Advance during 2020 8504 6 This part includes the advances transferred to large VCs as follows allocation for 2018: Village Councils (VCs) Advance Liquidation of the _ Advance Payment Advance Balance 38,044 22,715 15,329 38,780 23,269 15,511 41,292 24.775 16,517 44, 142 27,297 16,845 53,001 31,801 21,200 32,794 0 32,794 62,234 62,234 0 C 22,972 0 22,972 41,490 22,815 18,675 9 0 JAy 25,396 0 25,396 Ji 3l 36,542 0 36,542 62,874 34,584 28,290 44,397 25,722 18,675 JAI yl-- I y28,632 20,000 8,632 21,773 0 21,773 24,532 13,622 10,9L0 45,758 27,441 18,317 28,161 0 28,161 48,915 48,915 0 74,l33 44,000 30,133 38,061 20,002 18,059 40,085 24,052 16,033 45,891 45,891 0 47,439 28,463 18,976 55,287 33,143 22,144 P 61,416 36,700 24,716 y- Y-3 40,562 24,237 16,325 42,345 25,400 16,945 43,191 25,915 17,276 43,785 43,778 7 y» »- 27,545 0 27,545 46,026 31,818 14,208 50,355 30,L15 20,240 51,000 30,697 20,303 56,216 33,869 22,347 58,923 36,007 22,916 Total 1,563989 899,277 664,712 Advance from 2017 -1,032,892 0 - Advance from 2018 -15,511 -23,269 Advance durng 2019 -350,476 -571,289 - Advance during 2020 165,110 304719 This part includes the advances transferred to large VCs asfollows allocationfor2019: Village Councils (VCs) Advance Payment Liquidation of Advance the Advance Balance J92 vi-Å 27,535 0 27,535 CIJ LA- 24,775 0 24,775 17 C>-L- 22,469 0 22,469 ,J:' U-L 22,421 0 22,421 W ~j) JJi . 53,676 53,662 14 10 -LJJ JJ 24,133 0 24,133 CI-U"I 6;JLA U- 31,023 0 31,023 C9Li- C,d 38,059 0 38,059 4-LJ 36,979 0 36,979 38,726 25,099 13,627 31,072 0 31,072 55,120 33,836 21,284 54,810 54,810 0 39,690 39,690 0 1J-LYLf Ckd.- 23,031 0 23,031 -J 32,130 0 32,130 45,360 27,000 18,360 23,161 0 23,161 C»iLys P-- 40,141 20,2 28 19,913 C 39,224 39,224 0 49,131 29,385 19,746 c - 22,858 0 22,858 41,931 25,159 16,772 L 22,027 0 22,027 _Ov, -u C.ý2-~ 63,405 63,405 0 46,458 46,458 0 r 1l 56,430 56,430 0 c-,- uda 32,508 0 32,508 38,373 23,620 14,753 L -0 P22,766 0 22,766 UJJ - 63,486 63,486 0 J 37,179 37,179 0 U"J- 22,340 0 22,340 ..JJ öJ- u 44,075 0 44,075 C4-2 ."! i 56,91 756,917 0 Total 1,323,419 695,588.00 627,831 Advancefrom 2018 -999,040 Advance from 2020 324,379 695,588.00 This part includes the advances transferred to large VCs as follows allocation for 2020: USD Village Councils (VCs) Advance Liquidation of Advance Payment the Advance Balance during the Period rh J3U·Lb 25,099 - 25,099 qj-J J3 LL 24,451 - 24,451 GJJ9La2d UiL 22,761 - 22,761 31,428 - 31,428 11|P I 23,306 - 23,306 24,100 - 24,100 .AI r yo4 23,306 - 23,306 4. CuL *i34,830 - 34,830 jw 38,497 - 38,497 IJI U.\I. 32,513 - 32,513 22,658 - 22,658 38,491 - 38,491 28,166 - 28,166 LL 23,933 - 23,933 ayu.u 32,897 - 32,897 22,513 - 22,513 52.3 24,338 - 24,338 CSi 24,041 - 24,041 22,610 - 22,610 31,628 - 31,628 Li 29,867 - 29,867 &rULsl 21,881 - 21,881 33,318 - 33,318 .as 25,488 - 25,488 4J4.31 ý.l 37,633 - 37,633 32,546 - 32,546 48,440 14,247 34,193 u C 22,259 - 22,259 38,556 - 38,556 22,675 - 22,675 ofG 44,647 - 44,647 Jl A 23,161 - 23,161 23,036 - 23,036 27,518 - 27,518 Advance 982591 14 247 968,344 Advance during 2019 -68344 Advance during 2020 14,247 14.247 • The amount Paid to small VCs for allocation 2017 & 2018 on 2018: 437,682 USD. And the amount Paid to small VCs for allocation 2017 & 2018 on 2019: 1,533,294 USD. • The Amount Paid to small VCsforAllocation 2017-2020 on 2020: 2,009,199 USD. • The anount 14,247 USD related to Salem council recorded as expenditure not advance. 12 [ P a , e 5. Part 2: Conditional Capital Grants for Investment in Joint Project: Project Information Years NO Project VC 2019 2020 Total USD USD USD Supply, install and operate the solar 1 Photovoltaic system of capacity 500 kWp JSC for planning and 112,061 394,535 506,596 for ( Wadi Al Far'a Tyaseer,Al Aqaba, and development/ Tubas Atoof ) Supply of industrial machinery and High JSC for Solid waste 2 Suppont Management- Hebron and 26,410 0 26,410 equipment Bethlehem High JSC for Solid waste 3 Supply & delivery of 4x4 Pickup vehicles. Management- Hebron and 0 223,840 223,840 Bethlehem High JSC for Solid waste 4 Supplying of Solid Waste Steel containers Management- Hebron and 0 276,161 276,161 Bethlehem A Building(Garage and warehouse)for High JSC for Solid waste 5 maintenance and operation for the Management- Hebron and 0 117,118 117,118 equipments Bethlehem Supplying Waste collection truck Electrical platform and pick up car, JSC North Nablus for planning and O 152,000 152,000 supplying GPS (Surveying equipment) development (Nablus)LGSIP- North-NJSC/ -0421027 -01 Supplying Electrical platform and solid Qalqilya /Middle JSC for planning 7 waste truck collection (Qalqilia)LG51P-Q- and0 268,191 268,191 MJSC/ -0621047-01 8 Supplying equipment's (Tulkarem)LGSIP- JSC for Solid Waste Management/ 0 175,900 175,900 TUL JSC/ -0521036-01 Tulkarm Supply, install and operate the solar 9 photovoltaic system of 293 kWp for JSC for Solid Waste 32,633 252,304 284,937 South Salfeet ( Yasoof, Farkha, and Management/Salfit Iskaka) Supply of Construction Equipment's for JSC for Solid Waste 10 West Salfeet ( Masha, Rafat, and Sarta Management/Salfit 0 250,300 250,300 LGSIP-SJSC/ 0722052-02-A Supply of Construction Equipment's for JSC for Solid Waste 11 West Salfeet ( Masha, Rafat, and Sarta Management/Safit 0 77,384 77,384 LGSIP-SJSC/ 0722052-02-B Supply of Construction Equipment's for JSC for Solid Waste 12 West Salfeet ( Masha, Rafat, and Sarta Management/Salfit 0 145,300 145,300 LGSIP-SJSC/ 0722052-02-C Supply of Construction Equipment's for 15C for Solid Waste 13 West Salfeet ( Masha, Rafat, and Sarta Management/Salfit 0 128,600 128,600 LGSIP-SJSC/ 0722052-02-D Supply of Construction Equipment's for JSC for Solid Waste 14 West Salfeet ( Masha, Rafat, and Sarta) Management/SaOfit 34,990 34,990 LGSIP-SJSC/ 0722052-02-E Total 171104 2A96.623 26 2 U3 [) , 6. Part 3: Capacity Support for strengthening Local Governance Institutions This part comprises: Description USD USD USD USD 2020 2019 2018 2017 Preparing development plans - 192,686 219,109 104,620 18,133 Consultants Workshops 53,340 4a 14472_ Total 92 86 4 144681 3205 7. Part 5: Program Management This part comprises: Description USD USD USD USD 2020 2019 2018 2017 Management Fees & Bank Charges 910,045 350,049 82 56 Independent Verification Agent 8,391 8,391 16,782 - Beneficiaries Impact Assessment (Twice - 32,851 - over the project lifecycle) Local Technical Consultant 22,273 1- Total 940 40 16-864 56 8. Fund Balance - End of Period Fund balance, end of period represents the excess of cash inflows over cash outflows as of December 31, 2020, maintained by MoLG within the PA's Single Treasury Account and MDLF. 9. Budget Allocation: All budget allocation based on MOLG request from MOF to Allocated amount to the activity under LGSIP project. 10. Part 1: Annual Capital Grants for Delivery of Local Services - Statement of Comparison of Budget and Actual Amount: Description USD 2020 Expenditures and Payments for 2020 2,540,439 A/P Al Shwawr Accrued payment for 2019 Paid 2020 (16,741) Commitments regarding Small Council 327,444 Tota 2851,142 14 1P 11. Part 2: Conditional Capital Grants for Investment in Joint Project - Statement of Comparison of Budget and Actual Amount: Description USD 2020 Expenditures and Payments for 2020 2,496,623 A/P Masader Co. Accrued payment for 2019 Paid 2020 (327,219) A/P Al Arabia Co Accrued payment for 2019 Paid 2020 (223,840) A/P Al Burj Co. Accrued payment for 2020 78,000 A/P Al Burj Co. Accrued payment for 2020 115,000 A/P Al Burj Co. Accrued payment for 2020 198,000 A/P Masader Co. Accrued payment for 2020 40,258 A/P Al Burj Co. Accrued payment for 2020 72,487 A/P Alm Al Jawaher Accrued payment for 2020 56,817 Total 2,506126 12. Part 5: Program Management Description USD 2020 Expenditures and Payments for 2020 940,709 A/P IVA Accrued payment for 2020 8,391 A/P LTC Co. Accrued payment for 2020 1,900 Total 1 95O-Q 13. Disclosures of Budgetary Basis Comparison with Actual, Period and Scope: -LGSIP Statement of Comparison of Budget and Actual Amount are prepared using the Comnmitinent Budgetary basis. -The approved Budget dated 31/03/2020 and covers I year from 01/01/2020 till 31/12/2020. -The entities included in the approved budget MDLF, MoLG and LGUs finance under the mentioned program. '5 14. Disclosures of difference according to Budget: The following table represent actual amount received from World Bank vs. breakdozvn budget requested from MOF (USD): Amount Amount Amount DL world MOF Budget Bank Difference Transfer DLI 2: Timely communication to VCs of the formula-based Annual Capital Investment Grant (ACIG) allocations and timely transfer of ACIGs to eligible VCs DLR #2.4 : Communication of the ACIG allocation to VCs by January 15 800,000.00 800,0000 and transfer of ACIGs to eligible VCs by January 31,in FY 20 DLI 3: Percentage of VCs meeting the Program eligibility criteria annually. DLR 3.4: 70% in FY 20 1,661,250.00 1,661,250.00 DLI 4: Cumulative number of Joint Projects approved DLR #4.4 : 18 joint projects approved 1,333,333.00 1,333,333.00 in FY 20 DLI 5: Aggregated Expenditure percentage of approved Joint Projects DLR 5.3: 50% in FY 20. 1,500,000.00 -- 1,500,000.001 DLI 6: Steps to improve transparency and predictability in the allocation of the Transportation Fee adopted by MOLG DLR #6.2: DLR #6.2: Not later than FY 18 , at least 25% of annual allocation of the Transportation Fee is disbursed using the criteria set out in the Program Operations Manual DLI 7: Capacity building activities delivered by MoLG based on their Annual Capacity Development Plan. DLR 7.4: Annual Capacity Development Plan executed in FY 19. PA contribution 1,605,417.00 - 1,605,417.002 Total 8,000,000.00 4,894,583.00 3,105,417.00 16 1P * 14-a: 1. [ustification of variance 1,500,000.00 USD: this amount related to DLI 5: Aggregated Expenditure percentage of approved Joint Projects / DLR 5.3: 50% in FY 20, and due the delay of meeting for the mentioned DLI5 we received this amount in 2021 instead of 2020, on the other hand this amount included in approved budget from MOF. 2. fustification of variance 1,605,417.00 USD: this amount related to PA contribution allocated from MOF to LGSIP program budget and still not transferred to MOLG. * 14-b: the followingZ reasons for delay of implementation of components: The Table below represent Conunitment vs. budget based on componenR!USD Budget Line Budget Line Allocation as Actual Variance Approved from MOF Part I: Annual Capital Grants for Delivery of Local 4.24 2.85 1.39 Services Part 2: Conditional Capital Grants for Investment in 2.44 2.51 (0.07) Joint Project Part 3: Capacity Support for strengthening Local 0.38 0.19 0.19 Governance Institutions Part 5: Program Management 0.94 0.95 LO01I Total 8.00 6.50 1.50 *AIm_ounts in nil[ions Justification of variance 1.50 million USD: Due to Coronavirus there was a delay on implementation of sub-projects for Part 1 and 3: 15. VC Balance -General Note (USD) Village Councils (VCs) Advance Liquidation of the Advance Payment Advance during the Balance Period II )i 208,935 151,189 57,746 199,235 121,614 77,621 128,851 79,160 49,691 k o 3±ah 184,610 15,170 169,440 212,946 113,176 99,770 110,551 51,322 59,229 r ! a 1 103,761 22,335 81,426 180,362 90,082 90,280 LLIM 146,994 92,945 54,049 17 | P A-.j 151,770 75,778 75,992 43i 4a 170,912 77,345 93,567 ojmyljJ i uyJ- 112,467 25,100 87,367 Beit Ur Al-Tahta 144,682 86,495 58,187 Öa 139,782 62,575 77,207 - 1 yl 60,652 20,000 40,652 84,381 22,715 61,666 102,570 62,959 39,611 87,094 24,775 62,319 99,195 27,297 71,898 117,644 31,801 85,843 98,199 - 98,199 yi yi 164,136 125,639 38,497 L>IJ 103,941 22,815 81,126 139,489 34,584 104,905 68,240 0 68,240 24,532 13,622 10,910 90,861 - 90,861 :ß yl 74,133 44,000 30,133 85,164 24,052 61,112 132,113 99,553 32,560 122,063 74,921 47,142 163,393 100,186 63,207 i yi 86,581 24,237 62,344 42,345 25,400 16,945 76,129 - 76,129 CNi Yl 109,291 71,042 38,249 LJ'L Uy4. 45,015 - 45,015 U y- 56,430 56,430 - o ai~F> (yds- 59,692 37,179 22,513 44,286 - 44,286 KPJU <541j 21,881 - 21,881 Total 45553082 3 2.547,815 18 1P t e