Restricted The Republic of the Union of Myanmar Office of the Auditors General of the Union Department of Inspection Ministry of Health and Sports Department of Medical Services and Public Health Financial Year 2015-2016 on Essential Health Services Access Project(EHSAP) under World Bank’s Loan Audit Report Date: 31 January 2017 Restricted Restricted Contents No. Particular Para: Pages: From To From To 1 2 3 4 5 6 1 Foreword 1 - 1 - 2 Management’s Duties on Financial Statements 2 - 1 - 3 Auditor’s Duties 3 4 1 - 4 Auditor’s Opinion 5 7 1 4 Restricted Restricted Audit report relating to financial statements for the period ending 31-03-2016 on Essential Health Services Access Project (EHSAP) under World Bank’s Loan undertaken by Department of Medical Services and Public Health , Ministry of Health and Sports for the financial year 2015-2016 Foreword 1. Financial statements for the period ending 31-3-2016 on Essential Health Services Access Project(EHSAP) under World Bank’s Loan undertaking by Clinic Department and Public Health Department, Ministry of Health and Sports for the financial year 2015-2016 has been audited in accordance with accounting records and evidences produced and generally accepted auditing practices. Management’s Duties on Financial Statements 2. Management is responsible for preparation and fair presentation of the financial statements in accordance with accounting systems under financial manual together with generally accepted accounting principles and such statements that are free from material misstatement, whether due to fraud and errors by virtue of internal control relating to management’s decisions. Auditor’s Duties 3. Auditors are responsible for obtaining reasonable assurance that financial statements are free from material misstatement and had been properly prepared by generally accepted auditing practices in accordance with prescribed auditor’s ethics and so as to produce reasonable auditor’s opinion in line with findings. 4. While auditing assessment has been made on material errors relating to financial figures, statements produced and audit evidences has been acquired on the basis of such assessment’s found. By doing so adequate evidences been obtained so as to produce audit opinion. Restricted Restricted Audit Opinion 5. While auditing financial statements for the period ending 31-3-2016 on part I of Strengthening Service Delivery and Utilization at the Primary Health Care Level of Essential Health Services Access Project (EHSAP) under World Bank’s Loan undertaken by Medical Service and Public Health Department, Ministry of Health and Sports for the financial year 2015-2016, it is found that statements are compiled in accordance with prescribed auditing practices except following weaknesses; (a) Despite the standard of financial practices prescribed by World Bank that estimated expenditures are to be included in the budget for work plans and to open cash book for expenditures under World Bank’s loan, summary on expenses and monthly financial accounts, financial statements had been not compiled due to lack of separate accounts kept for regional/state township’s account and World Bank’s loan has been used for expenditures in proportion with non-emoluments cash flows under each budget head. (b) MM Kyats 834.776 million estimated under component (2) expenditures had been included in consolidated yearly state budget allowed for Medical Services and Public Health Department. (c) Improper withdraw of project expenditures found in regional and state public health department’s expenses, double claims, expenses without vouchers and excess withdrawal of travelling allowances amounting kyats 22.491 million, though reimbursed. (d) Travelling expenses drawn in excess, excess daily wages and transportation expenses made, deficiency of kyats 35.360 million due to insufficient work been reimbursed on physical check, found in project expenditures by (8) regional/state medical services department. Restricted Restricted (e) Kyats 0.200 million had been paid by Demawso township public health Department without delivery of goods. Kyats 0.930 million had been included in the financial year but delivery was made after the financial year from Meisi township public health department. (f) Kyats 0.202 million under budget head 03-14 foods and victuals and 0.223 million under budget head 05-03 reliefs and settlement totaling kyats 0.425 million had been kept in possession by State General Hospital of Kayah State, but had been utilized in April 2016 for patients’ meal allowances and emergency aids for patients prior to budget allowance for 2016-2017 requiring to utilize by financial rules. 6. While auditing financial statements for the period ending 31-3-2016 on component-2 of System Building Capacity Development and Program Support of Essential Health Services Access Project (EHSAP) under World Bank’s Loan undertaken by Medical Services and Public Health Department, Ministry of Health and Sports for the financial year 2015-2016, it is opinion that statements are compiled in accordance with prescribed auditing practices except following weaknesses; (a) Advance Kyats 15.506 million was shown as expenditure in the financial statements for component (2) , however there had no explanation for it until the end of financial year. (b) Only 16.46% of the loan had been implemented. 7. The followings need to be include on preparation of financial statements in accordance with Terms of Reference (TOR). (a) Accounting policies and explanatory notes; Restricted Restricted (b) A Designated Account Reconciliation statement - a reconciliation of funds received with those disbursed by the World Bank; (c) The project’s financial statements, together with explanatory notes and schedules will be prepared by Ministry of Health and sports submit to the Office of the Auditors General of the Union no later than three months after the financial year end i.e. by June 30 each year. Naing Thet Oo Director General Copies: Office copies Inter departmental circular letter Restricted Restricted Restricted Restricted Restricted Restricted Restricted Restricted Restricted Restricted Restricted Restricted Restricted Restricted Restricted