REPORT ON THE JAPANESE GRANT PHRD OF MINISTRY OF LABOR, FAMILY, SOCIAL PROTECTION AND ELDERLY JAPANESE GRANT PHRD (TF010417) RELATED TO PROJECT FOR IMPROVED POLICY- MAKING AND INSTITUTIONAL FRAMEWORK FOR PERSONS WITH DISABILITIES 31st of DECEMBER 2015 MINISTRY OF LABOR, FAMILY, SOCIAL PROTECTION AND ELDERLY JAPANESE GRANT PHRD (TF010417) RELATED TO PROJECT FOR IMPROVED POLICY- MAKING AND INSTITUTIONAL FRAMEWORK FOR PERSONS WITH DISABILITY PROJECT 31 DECEMBER 2015 - all the amounts are expressed in USD, unless otherwise stated Summary 1. STATEMENT OF RESOURCES AND APPLICATION OF FUNDS........................12 3. FINANCIAL STATEMENT OF THE LOAN.............................................................15 4. PROJECT COMMITMENTS ..................................................................................... 15 5. ACCOUNTING POLICIES AND RECORDS...........................................................17 6. BANK ACCOUNTS UTILIZED WITHIN THE PROJECT, STATEMENT OF DESIGNATED ACCOUNT ............................................................................................... 18 2 BAKER TILLY INDEPENDENT AUDITOR'S REPORT TO THE MINISTRY OF LABOR, FAMILY, SOCIAL PROTECTION AND ELDERLY (THE MINISTRY) - PROJECT MANAGEMENT UNIT (PMU) - PROJECT FOR IMPROVED POLICY- MAKING AND INSTITUTIONAL FRAMEWORK FOR PERSONS WITH DISABILITIES Report on the Financial Statements of the Project 1. We have audited the accompanying financial statements of the Project for Improved Policy - Making and Institutional Framework (,,The Project") for period Gist of January 2015 until 31st December 2015. The Project is financed through the Japan PHRD technical assistance grant through the International Bank for Reconstruction and Development (IBRD) concluded on 251 of April 2012 with the subsequent addenda and it was financed by Japanese Grant for technical assistance no. PHRD TFO10417. The audited financial statements for the period 01st of January 2015 until 31st December 2015 consist of: Statement of Resources and Expenditures, Statement of Expenditures, Statement of the Loan Account, Statement of the Designated Account and other explanatory notes. Board ofAdministrators' Responsibilityfor the Financial Statements 2. Management is responsible for the preparation of these financial statements in accordance with the financial reporting provisions of the grant agreement, 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. Auditors'Responsibility 3. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Audit Standards issued by the Chamber of Auditors of Romania which are based on International Standards on Auditing and in accordance with the appropriate World Bank guidelines. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. 4. 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 3 BAKER TILLY evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Ministry, as well as evaluating the overall presentation of the financial statements of the Project. 5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our unqualified audit opinion. Unqualified Opinion 6. In our opinion, the financial statements of the Project: Improved policy- making and institutional framework for persons with disabilities for period 01stof January 2015 until 31St December 2015 are prepared, in all material respects, in accordance with the financial reporting provisions of the grant agreement updated with all subsequent amendments. Emphasis of matters 7. Without qualifying our opinion, we draw attention to the following: a) As mentioned in Note 4 ,,Subsequent Events", letter a) ,,Contingencies", the agreement no.1/05.02.2014 concluded between the Ministry and JV European Profiles-Greece as the leader of the association for consultancy services for the development and implementation of harmonized criteria for evaluation of persons with disability and for a unified institutional structure, ended as of 04.07.2016, deadline established by Addendum no. 3/04.11.2015. The implementation stage of the contract is described as follows: a. European Profiles-Greece represented by SCA Trandafir & Asociatii sent the Invitation to Conciliation/Prior Complaint no. 541/29.07.2016 invoking the non-compliance by the Ministry with the contractual terms and the refusal to amend the Contract; b. According to the Prior Complaint, the total value of the services which European Profiles- Greece put in discussion is at least of USD 420.861,82 and it refers to: i. USD 410.909,00 for the services undertaken under the agreement, out of which the amount of USD 105.155 issued by invoice no. 874/28.11.2014 was not recorded in accounting, as related deliverables were not accepted; ii. USD 4.636,22 for penalities calculated for late payment of the advance, for which invoice no. 113B/ 10.07.2014 was issued, but were not recorded in accounting, as related deliverables were not accepted; iii. USD 5.316,60 representing other services which were not invoiced; iv. At this request, the Ministry replied by letter no. 5283/DP/16.08.2016 stating that ...... the invitation to conciliation is pointless". c. The Ministry did not make any estimation regarding the amounts that could be requested by the court in case of potential future litigation or the probability of loss in such case; 4 BAKER TILLY d. The performance guarantee issued by Bank Guarantee Letter no. 473436/18.02.2014 has expired without being enforced by PMU for inadequate services. b) During 2014 the Ministry has registered itself with Romanian fiscal authorities as VAT payer and calculated VAT on the remuneration and reimbursable costs invoiced by the consultant and paid it to the state budget. This actions in respect of VAT may expose the Ministry to certain sanctions and/or penalties from fiscal authorities depending on their interpretation of the VAT regulations, especially since in accordance with Art. 38.1 of the Contract, the declaration and payment of indirect taxes is the responsibility of the Consultant. The total value of the VAT and VAT treatment are presented in Note 3. In accordance with management's recommendations and comments made to the financial statements as per December 2014, we did not receive any additional information regarding VAT tax treatment in the current year. c) As mentioned in the Note 4. ,,Subsequent events", letter b) ,,Duration of Grant Agreement", World Bank acting as the administrator of the grant funds (World Bank - IBRD) notified on 24h of October 2016 the Beneficiary (Romania) regarding the extention for 12 months, until 25t of October 2017 of the grant agreement PHRD TF010417. With regard to this extention of the period the Beneficiary has not yet approved the notification received from PMU. d) As mentioned in the Note 1 "Legislation and the fiscal environment in Romania" to the financial statements, the legal system from Romania is affected by macroeconomic factors which include influences of the worldwide economic changes. As a result of this, the Romanian Government might change the fiscal and monetary policy. Due also to the above mentioned aspects there might be a negative impact on the evolution of the Project. e) The Project Financial Statements were prepared for complying with the Grant requirements and with the appropriate World Bank guidelines, and therefore are not intended to be a complete presentation of the Project's operations. 5 BAKER TILLY Other matter 8. This report, including the opinion, has been prepared for the use of the Project Management Unit from Ministry of Labor, Family, Social Protection and Elderly and submission to the International Bank for Reconstruction and Development and should not be used for any other purposes beside those meant for a financial audit report. Within the boundaries of the law, we do not, in giving this opinion, accept or assume responsibility for any other purposes or to any other person to whose knowledge this report may come to. Auditor: BAKER TILLY K ITOU AND PARTNERS S.R.L. Bucharest, 1 November 2016 3 BAKER TILLY KLITCU AND PARTNERS 6 BAKER TILLY LISTA OF ABBREVIATIONS MLFSPE - Ministry of Labor, Family, Social Protection and Elderly PMU - Project Management Unit, established within MLFSPE for improved policy- making and institutional framework for persons with disability project IBRD - International Bank for Reconstruction and Development Loan - the Loan Agreement (TF010417) related to project for improved policy- making and institutional framework for persons with disability project MoPF - Ministry of Public Finance BRD - Romanian Development Bank to which PMU has opened special account 7 MINISTRY OF LABOR, FAMILY, SOCIAL PROTECTION AND ELDERLY JAPANESE GRANT PHRD (TF010417) RELATED TO PROJECT FOR IMPROVED POLICY- MAKING AND INSTITUTIONAL FRAMEWORK FOR PERSONS WITH DISABILITY PROJECT 31 DECEMBER 2015 - all the amounts are expressed in USD, unless otherwise stated GENERAL INFORMATION Reporting entity The Loan Agreement is implemented by MLFSPE by means of the PMU within the entity. Loan Agreement Order Nr.852 of 19.06.2012 approved the publication of the letter signed in Washington on 28 February 2012 and in Bucharest on April 25, 2012 between Romania and the International Bank for Reconstruction and Development on granting financial assistance worth US $ 1,715,000 from the Japanese non refundable Fund PHRD for technical assistance (TF010417) to support disabilities and development: project for improved policy and institutional framework in assisting people with disabilities. By convention no. 1115 / 13.07.2012 signed between MOPF as a beneficiary of the grant and MLFPSE as implementing agency and the final beneficiary of the grant, MOPF delegates to MLFSPE responsibility for carrying out activities financed by the grant and the management and use with maximum diligence and efficiency of grant amounts. The use of non-refundable financial assistance amounts will be made by using a distinct operational account in US dollars, called the Special Account. Charges and bank fees related to opening and conducting operations through the Special Account shall be paid from the interest rates paid in account of interest and charges opened at the same commercial bank at which the Special Account was opened. If these interest rates do not cover the charged amount, charges and bank fees will be covered from amounts provided for this purpose in the state budget through the budget MLFSPE. Last date for withdrawal of amounts of grant under the Convention will be April 25th, 2015, or such later date to be determined by mutual agreement between MOPF and IBRD and will be immediately official communicated to MLFSPE. On April 21, 2015, the World Bank agreed to extend the closing date of the project until 25 October 2016. The program objective is to support Ministry of Labour, Family and Social Protection and Elderly (MLFSPE) to achieve more effective protection of persons with disabilities through better assessment of disability itself and providing better information on disability in order to develop their dedicated policies. 8 MINISTRY OF LABOR, FAMILY, SOCIAL PROTECTION AND ELDERLY JAPANESE GRANT PHRD (TF010417) RELATED TO PROJECT FOR IMPROVED POLICY- MAKING AND INSTITUTIONAL FRAMEWORK FOR PERSONS WITH DISABILITY PROJECT 31 DECEMBER 2015 - all the amounts are expressed in USD, unless otherwise stated The project implementation The project consists of the following components: Part 1 - Strengthening the capacity to develop and implement harmonized criteria for disability assessment and unified institutional structure. Support for MLFSPE in view of: (i) assessment of the current system of disability pensions and disability allowances; (ii) development of proposals for harmonized evaluation criteria (medical or functional) and description of business processes required to implement the related criteria and application guide; (iii) preparing a proposal for unified institutional structure training of staff in country; (iv) improving National Electronic Register of Persons with Disabilities Part 2 - Implement in 3-4 regions (counties) the pilot model of delivery of services using harmonized evaluation criteria / unified institutional framework. Support for MLFSPE in view of: (i) implementation in 3-4 regions, pilot projects focused on new criteria for disability and assessment tools and plan for revised; (ii) organizing workshops and local training for the preparation and implementation of pilot projects Part 3 - Monitoring and evaluation. Support for MLFSPE in view of: (i) the conduct of the monitoring and evaluation of pilot projects; (ii) implementation of the new way of providing services focused on institutional structure unified and harmonized criteria for medical evaluation. Part 4 - Public information campaigns. Support for MLFSPE in view of informing the public about the new set of criteria / institutions dedicated to people with disabilities through various media. Part 5 - Management and Administration Project. Support for MLFSPE in view of execution of general project management. 9 MINISTRY OF LABOR, FAMILY, SOCIAL PROTECTION AND ELDERLY JAPANESE GRANT PHRD (TF010417) RELATED TO PROJECT FOR IMPROVED POLICY- MAKING AND INSTITUTIONAL FRAMEWORK FOR PERSONS WITH DISABILITY PROJECT 31 DECEMBER 2015 - all the amounts are expressed in USD, unless otherwise stated Loan allocation Categories of eligible expenditure that can be financed from GEF funds, amounts allocated from non-reimbursable financial assistance to each category of expenditure and the percentage of expenditure financed as eligible expenditure in each category are as follows: description The amount of the Percentage of expenditure Category loan allocated (USD) to be financed 1) Goods 150,000 100% 2) Consultancy services (including, among others, consulting for project management), training in the 1,545,000 100% country, workshops and audit 3) Operating costs 20,000 100% 10 MINISTRY OF LABOR, FAMILY, SOCIAL PROTECTION AND ELDERLY JAPANESE GRANT PHRD (TF010417) RELATED TO PROJECT FOR IMPROVED POLICY- MAKING AND INSTITUTIONAL FRAMEWORK FOR PERSONS WITH DISABILITY PROJECT 31 DECEMBER 2015 - all the amounts are expressed in USD, unless otherwise stated GOVERNMENT OF ROMANIA - MINISTRY OF LABOR, FAMILY, SOCIAL PROTECTION AND ELDERLY JAPANESE GRANT PHRD (TF010417) RELATED TO PROJECT FOR IMPROVED POLICY- MAKING AND INSTITUTIONAL FRAMEWORK FOR PERSONS WITH DISABILITY Project Financial Statements for the period 01 January 2015 to 31 December 2015 11 MINISTRY OF LABOR, FAMILY, SOCIAL PROTECTION AND ELDERLY JAPANESE GRANT PHRD (TF010417) RELATED TO PROJECT FOR IMPROVED POLICY- MAKING AND INSTITUTIONAL FRAMEWORK FOR PERSONS WITH DISABILITY 31 DECEMBER 2015 - all the amounts are expressed in USD, unless otherwise stated 1. STATEMENT OF RESOURCES AND UTILISATION OF FUNDS 1.1 Statement of the Japanese Grant of the Ministry of Labor, Family, Social Protection and Elderly as at 31 December 2015 - not disbursed amounts Date of approval 25 April 2012 31-Dec-15 Approved loan 1.715.000 Disbursements used by the MLFPSE (178.526) Loan amount not disbursed 1.536.474 Japanese Grant 31-Dec-15 Opening disbursed amounts 0 Disbursed in the period 350.000 Closing disbursed amounts 350.000 Loan approved 1.715.000 Un-drawn amounts 1.365.000 Japanese Grant - Total 1.715.000 Drawn amounts by MLFSPE during the period 350.000 Not disbursed amounts in balance as at period 1.365.000 end 12 MINISTRY OF LABOR, FAMILY, SOCIAL PROTECTION AND ELDERLY JAPANESE GRANT PIIRD (TF010417) RELATED TO PROJECT FOR IMPROVED POLICY- MAKING AND INSTITUTIONAL FRAMEWORK FOR PERSONS WITH DISABILITY 31 DECEMBER 2015 - all the amounts are expressed in USD, unless otherwise stated 1.2 Statement of the Japanese Grant of the Ministry of Labor, Family, Social and Elderly as at 31 December 2014 - disbursed amounts Sources of funds - Sources Accumulated transferred sources until during Japanese Grant Contribution 01-Jan-15 31-Dec-15 31-Dec-15 Category 1 0 0 Category 2 0 0 Category 3 0 0 Advance received 0 350.000 TOTAL 0 350.000 1.3. Summary of Funds Received and Uses of Funds as at 31 December 2015 Cumulative 01-Jan-15 a 31-Dee-15 at 31-Dec-2015 Opening cash balance 188.536 - Found received from Japanese Grant - special 0 350.000 account Less: project expenditure 17.062 178.526 Services - Category 2 1.690 163.153 Operating costs - Category 3 15.372 15.372 Closing cash balance 171.474 171.474 MINISTRY OF LABOR, FAMILY, SOCIAL PROTECTION AND ELDERLY JAPANESE GRANT PHRD (TF010417) RELATED TO PROJECT FOR IMPROVED POLICY- MAKING AND INSTITUTIONAL FRAMEWORK FOR PERSONS WITH DISABILITY 31 DECEMBER 2015 - all the amounts are expressed in USD, unless otherwise stated 2. STATEMENT OF EXPENDITURES 2.1 Uses of funds Expenditures in 2015 Payments from special account 17.062 TOTAL 17.062 2.2 Classification of expenses by category Category 2015 1. Goods - 2. Consultancy services (including, among others, consulting for 1.690 project management), training in the country, workshops and audit 3. Operating costs 15.372 TOTAL 17.062 In the category of operating costs, the Ministry recorded and paid the amount of 15.372 USD regarding personnel expenditures for May and June 2015. In the category of consultancy services, the amount of 1.690 USD was paid regarding the invoice for financial audit services. 14 MINISTRY OF LABOR, FAMILY, SOCIAL PROTECTION AND ELDERLY JAPANESE GRANT PHRD (TF010417) RELATED TO PROJECT FOR IMPROVED POLICY- MAKING AND INSTITUTIONAL FRAMEWORK FOR PERSONS WITH DISABILITY 31 DECEMBER 2015 - all the amounts are expressed in USD, unless otherwise stated 3. FINANCIAL STATEMENT OF THE LOAN 3.1 Total disbursements as at 31 December 2015 Amounts Up to 1 January 2015 350.000 Disbursed in 2015 Total disbursement as at 31 December 2015 350.000 On 5 May 2014 IBRD transferred the amount of USD 350.00 to the special account opened by the Ministry of Labour, Family, Social Protection and Elderly as an advance under grant agreement. 4. PROJECT COMMITMENTS 4.1 Project Commitments as at 31 December 2015 Payments Remaining Total made under payments Description Supplier No. of contract Value the contract from the (USD) (USD) contract (U )(SD) Category 1 0 0 0 1. Goods 0 0 0 Category 2 572.373 161.464 410.909 2. Consultancy services (including, among others, consulting for project management), training in the 572.373 161.464 410.909 country, workshops and audit Consultancy European CTR. services Profiles SA 1/05.02.2014 BAKER TILLY CTR. Financial audit KLITOU AND 1/02.10.2015 services PARTNERS AA 11.132,17 1.689,56 9.442,61 S.R.L. 1/27.10.2016 Category 3 0 0 0 3. Operating costs 0 0 0 Salaries PMU Salaries CIM 7.657,27 7.657,27 0 for May Salaries PMU Salaries CIM 7.715,52 7.715,52 0 for June GRAND TOTAL ' 598.877,96 178.526,35 420.351,.611 MINISTRY OF LABOR, FAMILY, SOCIAL PROTECTION AND ELDERLY JAPANESE GRANT PHRD (TF010417) RELATED TO PROJECT FOR IMPROVED POLICY- MAKING AND INSTITUTIONAL FRAMEWORK FOR PERSONS WITH DISABILITY 31 DECEMBER 2015 - all the amounts are expressed in USD, unless otherwise stated In 2014 the consultant has submitted the following invoices which have not yet been accepted by the PMU: 1. Invoice 1131B/10.07.2014 for USD 4,636 representing penalties for the delay for the advance payment. 2. Invoice 874/28.11.2014 for USD 105,155 remuneration and USD 12,669 reimbursable costs. These invoices are related to deliverable no. 4 submitted but not yet accepted by the PMU due to some technical departures between what it was requested in the terms of reference and what it was delivered. 4.2 Commitments subsequent to 31 December 2015 During 2016, PMU signed following contracts: - Consulting services with ,,Fundatia DALA" (family medicine expert, Angela Grecu), amounting EUR 8.250 for a period of 15 days from signing the contract (10/07/2016); - Consulting services with ,,Asociatia Pro ACT" (social services expert, Liliana Nicoleta Predescu), amounting EUR 8.250 for a period of 15 days from signing the contract (10.07.2016); - Consulting services with,,Fundatia DALA" (disability expert, Monica Stanciu), amounting EUR 8,250, for a period of 15 days from signing the contract (10.07.2016); - Consulting services with ,,Fundatia DALA" (expert socio-professional integration, Luminita Danes), amounting EUR 8.250 for a period of 15 days from signing the contract (10.07.2016); - Consulting services with PFA Furtunescu Florentina (public health / rehabilitation expert Furtunescu Florentina), amounting EUR 8.250 for a period of 15 days from signing the contract (10.07.2016); - Consulting services with S.S.E.O.TEHNICAL ASSISTANCE SRL (coordination expert, Chiriacescu Diana) amounting EUR 9,000, for a period of 15 days from signing the contract (10.07.2016); - Event management services with the Company ART ZONE EVENTS SRL, amounting 86.808 lei for organizing a number of 4 events during the month of October 2016. MINISTRY OF LABOR, FAMILY, SOCIAL PROTECTION AND ELDERLY JAPANESE GRANT PHRD (TF010417) RELATED TO PROJECT FOR IMPROVED POLICY- MAKING AND INSTITUTIONAL FRAMEWORK FOR PERSONS WITH DISABILITY 31 DECEMBER 2015 - all the amounts are expressed in USD, unless otherwise stated 5. ACCOUNTING POLICIES AND RECORDS Basis of preparation The special purpose Project Financial Statements are prepared under the historical cost convention, in accordance with and comply with relevant World Bank guidelines. The amounts presented in these financial statements are expressed in USD. These amounts have been derived by applying the RON/USD exchange rate as at the time of payment, for the internal payments using NBR exchange rate and for the external payments using auctions exchange rate given by the bank. Obligations Recording the loan The loan will be recorded as a use of funds as the withdrawals take place. The entire amount of the loan will not appear as a debt element in the accounting of the Project Management Units before the project is finished. Acquisition of goods and services The acquisition of goods and services is recorded as expenditures at the time of the payment, and is allocated between the different sub-projects and activities to which they refer. The invoices for goods and services not paid at the time of the financial reporting will be shown as off - balance sheet items and will be reported as uses of funds at the date of payment. Funding Contribution of the International Bank for Reconstruction and Development The loan is not recorded at the full value at the time of the contract signing by the Project Management Unit. Therefore, only the withdrawals from the Loan Account will be accounted for, as the funds are being withdrawn. Therefore, the reports generated will include only the amount paid for the Project until the reporting date. Foreign currency translation Foreign currency transactions of the Company are accounted for at the NBR exchange rates for the internal payments and at the auctions exchange rate for the external payments. MINISTRY OF LABOR, FAMILY, SOCIAL PROTECTION AND ELDERLY JAPANESE GRANT PIRD (TF010417) RELATED TO PROJECT FOR IMPROVED POLICY- MAKING AND INSTITUTIONAL FRAMEWORK FOR PERSONS WITH DISABILITY 31 DECEMBER 2015 - all the amounts are expressed in USD, unless otherwise stated 6. BANK ACCOUNTS UTILIZED WITHIN THE PROJECT, STATEMENT OF DESIGNATED ACCOUNT BRD- Special Account Under the loan agreement, using the amounts GEF will be using a distinct operational account in US dollars, called the Special Account. For this purpose PMJ has opened an account in USD at BRD. Account No. RO 23 BRDE 450S V284 7104 4500 Bank BRD Branch Mari Clienti Corporativi Address Bulevardul Ion Mihalache nr. 1-7, Sector 4, 011171 Account Currency USD Account BRD at 31 December 2015 BIRD Amounts in USD Opening balance as at 1 January 2015 188.536 Cash receipts from IBRD for funds approved by funds providers 0 Total cash receipts 188.536 Payments during the period (17.062) Closing balance as at 31 December 2015 171.474 14* MINISTRY OF LABOR, FAMILY, SOCIAL PROTECTION AND ELDERLY JAPANESE GRANT PHRD (TF010417) RELATED TO PROJECT FOR IMPROVED POLICY- MAKING AND INSTITUTIONAL FRAMEWORK FOR PERSONS WITH DISABILITY 31 DECEMBER 2015 - all the amounts are expressed in USD, unless otherwise stated NOTES TO THE PROJECT FINANCIAL STATEMENTS Note 1. Legislation and Fiscal Environment in Romania The legislation and fiscal environment in Romania and their implementation into practice change frequently and are subject to different interpretations by various Ministries of the Government. Over recent years, Romania has undergone substantial legal and economic changes. Due to the current situation determined by the internal and international financial crisis, there is an uncertainty with regard to the future legislative policy of the Romanian Government and its impact on the evolution of the projects on the social protection system. Therefore, it is not possible to estimate what changes may occur or the resulting effect of any such changes on the Project development or future results of its development. Note 2. Project financial statements presentation The special-purpose Project Financial Statements are prepared on the cash basis of accounting. On this basis sources of funds are recognized when received rather than when earned, and uses are recognized when paid rather than when incurred. The special-purpose Project Financial Statements were prepared for complying with the Loan requirements and with the appropriate World Bank guidelines, and are not intended to be a complete presentation of the Project's operations. Note 3. Fiscal treatment of VAT declaration In 2014 PMU registered with Romanian fiscal authorities for VAT purposes and paid VAT amount of USD 30,581 to the state budget. MINISTRY OF LABOR, FAMILY, SOCIAL PROTECTION AND ELDERLY JAPANESE GRANT PHR) (TF010417) RELATED TO PROJECT FOR IMPROVED POLICY- MAKING AND INSTITUTIONAL FRAMEWORK FOR PERSONS WITH DISABILITY 31 DECEMBER 2015 - all the amounts are expressed in USD, unless otherwise stated Note 4. Subsequent events During 2016 and up to the date of the present project financial statements the following events occurred: a. Contingent liabilities Beneficiary, PMU and the Consultant had several meetings in order to agree upon the final form of deliverable 4 -7, which were were submitted in 2014 and subsequently modified and resubmitted in 2015 nd 2016. Up to the date of the present project financial statements the above mentioned deliverables have not been accepted and no payment was made to the consultant in addition to those presented in the project financial statements. On 9.09.2015 the Ministry has received a letter from the consultant through its legal representative, claiming the acceptance of the deliverables already submitted and the payment of invoices already issued corresponding to the above mentioned deliverables. The consultant is also asking for a meeting to settle the existing disagreements on the deliverables and reserves its right to consider further legal actions with the Ministry. Subsequently, on 29.07.2016, the Ministry received an invitation to conciliation / prior complaint regarding full execution of the contractual obligations and Ministry refusal of contract modification through an amendment (Amendment no.4). b. Durata acordului de grant As of 24 October 2016, World Bank through IBRD approved the extension of Grant Contract PHRD TF010417 for a 12 (twelve) months period, until 25 October 2017 respectively. Date: 1 November 16 Constantin 01 anu Luci Golea Director P Financial Coo inator Ministry of Labor, Family, Social Protection and Elderly stamp 20