n A
IN
0oardination Q
May 11, 2018
To,
s. Yoonhee Kim,
ask Team Leader,
The World Bank, Country Office Nepal,
Yak and Yeti Complex, Kathmandu.
Ref: Urban Governance and Development program: Emerging Towns project (UGDP:ETP); IDA Grant H661
NEP, Credit 4905 NEP: Submission of Audited Project Account of FY 2017/018.
Dear Ms., Yoonhee Kim,
Please, find enclosed Audited project Account of Urban Governance and Development Progran:
Emerging Towns Project (UGDP:ETP); IDA Grant H661 NEP, Credit 4905 NEP: of FY 2017/018.
Thank you so much,
With Best Regards,
Gane$hJ. Krm itffLl4
~cTtto r
Act. .roI t uc t   ilreitor
CC:
*  Office of the Auditor General Office, Pulchowk, Lalitpur.
*  Ministry of Urban Development, SinghaDurbar, Kathamndu.
*  Financial Comptroller General Office, Anamnagar, Kathamndu.
*  Director General, Department of Urban Development and Building Construction, Babarmahal,
Kathamndu.
*  Mr. Yogesh Bom Malla, Financial Management Specialist, The World Bank, Country Office Nepal.


Nen\                        Date: 10th May 2018
INDEPENDEN@AAITOR'S REPORT
The Secretary
Ministry ofFinance
Singh Durbar, Kathmandu
Report on the Financial Statements
We have audited the accompanying Project Financial Statements including Statement of Designated
Account and Statements of Expenditures (SOEs) of the "Urban Governance Development Programme:
Emerging Towns Project" financed by IDA Grant H 661 NEP Credit 4905 NEP as at 16 July 2017 (31
Ashad, 2074) and for the year then ended and a summary of accounting policies and other explanatory
notes.
Management's Responsibility for Financial Statements
Management is responsible for the preparation and fair presentation of the Financial Statements in
accordance with the Government of Nepal (GON) accounting policies and relevant practices. This
responsibility includes: designing, implementing and maintaining internal control relevant to preparation
and fair presentation of project financial statements that are free from material misstatement, whether due
to fraud and error.
Auditor's Responsibility
Our responsibility is to express an opinion on these Project Financial Statements based on our audit. We
conducted our audit in accordance with the INTOSAI (International Organisation of Supreme Audit
Institutions) Fundamental Auditing Principles. Those Principles require that we plan and perform the audit
to Obtain reasonable assurance about whether the financial statements are free of 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.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion.
Opinion
Management letter highlighting areas for improving financial management is attached herewith.
In our opinion, the Project Financial Statements including Statement of Designated Account and
Statements of Expenditures (SOEs) in all material respects, give a true and fair view of the financial
position of the "Urban Governance Development Programme: Emerging Towns Project" as of 16 July
2017 (31 Ashad, 2074), and of the results of its operations and its cash flows for the year then ended in
accordance with GON accounting policies. We also report that funds provided under IDA Grant H 661
NEP Credit 4905 NEP have been utilized for intended purposes.
In addition, with respect to (SOEs, a) adequate supporting documentation has been maintained to
support claims to donors for reimbursement of expenditures incurred; and b) expenditures are
eligible for financing under the above mentioned Loan/Grants.
(Mohadatta Timilsina)
Deputy Auditor General