SurE ScteNrtrtc INsrtrunoN "lNsnrurE oF EDUCATIoNAL ANALrrtcs" STRENGTHENING EVIDENCE.BASED PoLICYMAKING WITH EoucITIoN Srlnsncs aHo Axllvsrs PRoJEcr, SpecIII- PunposE FINANCIAL STATEMENTS FoR THE PERIoD rnom 24 JANUARY 2017 To 3 1 DEcEMBER 201 8 Together with lndependent Auditors' Report StReNGrneurNc EvroENcr-BlsEo PolrcvMAKrNG wrn Eouc.alor Sranmcs lxo Axllysrs pRoJEcr Specur- Punpose FrNlNcnl SrlrelteNrs For the period from 24 January 2017 to 31 December 201 8 ln USD Contents: INDEPENDENT AUDITORS' REPORT Survt,uany oF souRcEs AND usES oF FUNDS Scnroulr or WrruonawALS FRoM rnr GRINI AccouNr SrarrmrNt oF wtTHDRAWALS rHRouGH THE SUMMARY oF STATEMENTS oF EXpENDtTURES Rrponr oF cASH wtTHDRAWAL FRoM DESTGNATED AccouNT DesrcNarro AccouNT STATEMENT 10 Srarrmrxr oF FAcruAL EXpENDITURES tN NATIoNAL cuRRENcy 11 RTCOUCILIITIoN BETWEEN RECoRDS oF PIU AND THE BANK t2 Norrs ro rnr Specral PuRposr FTNANcTAL SrarururNrs IJ Wonro Baux Auorr DocuurNrnrou CHrcxlrsr 15 5 l_ www.bdo,ua Tet.: Fax: +38 044 393 26 87 +380443932691 BDO LLC 201-203, Kharkiwke Road, Kyrv l(In flr 4 e-mail: bdo@bdo.kiev.ua Ukraine,02121 Tet.: L= Fax: +38 056 370 30 43 4, Andriya Fabra Slr- t_ +38 056 370 30 45 e-mail: dnipro@bdo.com.ua Dnipro Ukrairc,4)fiI) r l_ -, r r r 4 INDEPENDENT AUDITORS' REPORT State Scientific Institution "lnstitute of Educational Analytics" t_ .--a l- .-.4 Opinion l- We have audited the accompanying special purpose financial statements ln our opinion, the special purpose financial statements give true and fair view of the sources and use of funds of the TFSCB tr g under the Strengthening Evidence- Based Poticymaking with Education Statistics and Anatysis Project (hereafter referred to as the Project) Grant No. TF0A4096 for the Strengthening Evidence'Based Policymaking with Education Statistics and Anatysis Project for the period from 24 January 2017 to 31 December 2018, in accordance with the Bank's rutes. r E funded from the TFSCB Grant No. Externa[ funds have been used in comptiance with the TF0A4096 for the period from 24 requirements of the corresponding generaI conditions, r January 2017 to 31 December 2018, financial agreements, and the Disbursement Letter, paying due comprising of: attention to efficiency and cost-effectiveness; and have been r Summary of sources and uses of used onty for the corresponding purposes. tr ! funds as at 31 December 2018; Terms of the Agreement of the TFSCB Grant No. TF0A4096 do not provide for the use of the partners' costs. g Reporting on the Statement of r--l Expenditure from 24 January The services and the goods have been purchased in comptiance 2017 to 31 December2018; with the corresponding generaI conditions, financiaI agreements, and the Disbursement Letter. l_ 4 r Designated Account Statement for the period from24 January Accounting and storing of the necessary supporting documents, 2017 to 31 December2018; accounting data and accounts regarding Project att transactions, including those concerning the expenditures r tr = r A summary of significant accounting poticies and other exptanatory notes. disctosed in the Statement of actuaI expenditures, are performed in a due manner. There is a ctear interconnection between accounting data and the financia[ statements provided to the World Bank. The prepared specia[ purpose financia[ statements comply tr with the requirements of generatty accepted accounting principles and practices, and the instructions from the Wortd Bank; and truly and objectivety reflect the financia[ position of the Project as at 31 December 2018 as we[[ as the resources r and expenditures for the period from 24 January 2017 to 31 E December 2018. r r .-a Separate opinion regarding expenditure Furthermore, in respect of expenditure for the period from 24 January 2017 lo 31 December 2018, adequate supporting documentation has been maintained, confirming apptications submitted to the Bank for reimbursement of incurred expenditure. More to that, costs specified in the apptications, are I .-.- subject to financing in accordance with the conditions of the TFSCB Grant No. TF0A4096. li BDO LLC, a Ukrainian LLC, is a member of BDO lnt€rEtind international BDO network of independ€nt rsnber foE BDO is the brand name for the BDO network and LtG a -: --Er-\ -r*!< fr dl d rE tE -5G =rE qt gsntre, ild fms part of the F We conducted our audit in accordance with lnternationa[ Standards on A.ditirE (EAsl- O, responsibitities under those standards are further described in the "Auditor's Rqrcibilitia fr tle Audit of the Special Purpose Finonciol Stotements" section of our report. We are indepenern d tfE State Scientific lnstitution "lnstitute of Educational Anatyti6" in accordance with the kternadrd Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants (IESBA Coe) ild ethicat requirements appticable in Ukraine to our audit of financia[ staternents, and trc tnrc ftIfitled our other ethical responsibitities in accordance with these professional etiics requirernetB and 1ES8A Code. We betieve that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Emphasis of matter We draw attention to Note 2 to the Special Purpose Financial Statements, where the fact is disctosed that the end date of the Grant funds use is 24 Juty 2019 or such later date as estabtished by the Bank. We do not further quatify our opinion in this regard. Responsibility of Management and Those Charged with Governance for the Special Purpose FinanciaI Statements Management is responsible for the preparation and fair presentation of these special purpose financial statements in accordance with the rutes of the Wortd Bank, and for such internal control as management determines is necessary to enable the preparation of the specia[ purpose financia[ statements that are free from material misstatement, whether due to fraud or error. ln preparing the specia[ purpose financial statements, management is responsibte for assessing the Project's abitity to continue as a going concern for the disbursement period, i.e. titt 24 July 2019 or such later date as estabtished by the Bank, disclosing, as appticabte, matters retated to going concern and using the going concern basis of accounting untess management either intends to tiquidate the Project or to cease operations, or has no reatistic atternative but to do so. Those charged with governance are responsibte for overseeing the financial reporting process of the Project. Auditor's Responsibility for the Audit of the Special Purpose Financial Statements Our objectives are to obtain reasonabte assurance about whether the special purpose financial statements as a whote are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that inctudes our opinion. Reasonabte assurance is a high [eve[ of assurance, but is not a guarantee that an audit conducted in accordance with lSfu witl always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individuatty or in the aggregate, they coutd reasonably be expected to inftuence the economic decisions of users taken on the basis of th6e speciat purpose financial statements. As part of an audit in accordance with lSA, we exercise professiona[ judgment and maintain professiona[ skepticism throughout the audit. We also: r ldentify and assess the risks of material misstatement of the speciat purpose financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resutting from fraud is higher than for one resutting from error, as fraud may invotve cottusion, forgery, intentiona[ omissions, misrepresentations, or the override of interna[ controt. r 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 the purpose of expressing an opinion on the effectiveness of the interna[ controt. r Evatuate the appropriateness of accounting poticies used and the reasonabteness of accounting estimates and retated disclosures made by the management. I Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists retated to events or conditions that may cast significant doubt on the Project's ability to continue as a going concern. lf we conctude that a material uncertainty exists, we are required to draw attention in our auditor's report to the retated disctosures in the special purpose financial statements or, if such disctosures 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 Project to cease to continue as a going concern. r Evatuate the overat[ presentation, structure and content of the special purpose financiaI statements, inctuding the disctosures, and whether the special purpose financia[ statements represent the undertying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governance regarding the ptanned scope and timing of the audit and significant audit findings, inctuding any significant deficiencies in internal control that we identify during our audit. We atso provide those charged with governance with a statement that we have comptied with retevant ethical requirements regarding independence, and communicate with them att retationships and other matters that may reasonabty be thought to bear on our independence, and where appticabte, retated safeguards. The audit was performed Partner, N o. M. Key Audit Partner Nikolaenko O. M. For and on behatf of Director Batchenko S.O. 21 June 2019 Kyiv l-.I lr. l_ i-. SrneNctHeNtNc EvtoeNce-Blsro PoltcyMAKtNG wrrH EDUcATrox Srarrsrcs AND ANALysts pRoJEcr SummaRv oF souRcEs AND usES oF FUNDS For the period f rom74 January 7017 to 31 December 2018 ln USD Actual For the period Total Opening balance Designated account Ukreximbank - US do[[ars Current account State Treasury of Ukraine - hryvnya Total available funds at the beginning of period: Sources of funds: Grant of the lnternationaI Bank for reconstruction and Devetopment 167,493 167,493 Total financing: 167,493 167,493 Project expenditure: Category 1: Goods and consutting services 118,527 118,527 Category 2: Training 21,657 21,657 Category 3: Operating Costs 7,078 7,078 Total Project expenditure: 147 262 147 262 Closing balance Designated account Ukreximbank - US dollars 20,700 20,200 Current account State Treasury of Ukraine - hryvnya 31 31 20,231 20,231 Notes on pages 1 3 - 14 are an integral part of these financial statements. , a I , I StRgttclurNtNG EvtDENcE-BASED PoLtcyMAKtNG wtrH EDUcATrox Starrsttcs aNo ANlt-ysts pRoJEcr ScHeoule or WrrnouwAls FRoM rne GuNr AccouNr For the period from24 January 2017 to 31 December 2018 ln USD Payment USD Date of Applicotion number Category withdrowal Currency Equivolent Equivalent 2.IEA z 12.05.2017 UAH 29,499 1,119 3-IEA DA.A 17 .05.2017 USD 83,000 83,000 10-rEA DA.A 20.10.2017 USD 10,000 10,000 13-tEA DA-A 09.02.20't8 USD 20,000 20,000 20-tEA 1 28.09.2018 USD 9,300 9,300 23-t EA 1 26.11.2018 EUR 39,428 45,074 Totol: 167,493 Summary schedule by categories: Category 1 53,374 Category 2 1 ,119 DA-A 1 13,000 Totol: 167.493 Notes on pages 13 - '14 are an integral part of these financiatstatements. L. L SrReucrueNtNG EvTDENCE-BmEo PolrcyMAKrNG wrrH EDUcATToN Surrsrrcs lNo ANllysts pRoJEcr L, SuremeNr oF wrrHDRAwALs rHRouGH For the period from 24 January 2017 THE suMMARy oF STATEMENTS oF ExpENDtruREs L= to 31 December 201 8 t l_ Hll ln USD Application number Category I Cotegory 2 Cotegory 3 Totol 1. Applications submitted to the World Bank and reimbursed during the period 24.01.7017 - b 2-IEA 4-IEA 31.12.2018 1 ,119 i, 1,119 75 t= 5.IEA 6-IEA 2,436 1,213 2,436 1,213 L, 7-IEA 1,663 4,890 r 2,937 390 8.IEA 13,594 41 13,635 l_- 9-IEA 9,404 79 9,433 11-tEA 1 ,539 2,976 4,515 12-rEA 3,500 1,850 16 5,366 r -_ l HI b 13-IEA 14-rEA 15-tEA 16-tEA 17-tEA 18-tEA 19-tEA 1,529 1,561 13,904 1,578 7,365 1,521 1 ,507 1,741 11 ,124 277 696 134 5 10 1,511 5 9 5 5 1,534 3,312 26,538 1,761 3,07O '1,659 1,512 1_- 20-tEA 8,300 8,300 t4 21-tEA 2,253 75 7 2,335 l_ 4 77-tEA 23-tEA 1,570 45,074 5 '1,525 45,074 l_ 4 Total 74-tEA 1,520 ,718 1 14 ,016 21 ,092 5 140,826 5 '1,525 2. Expenditures factually incurred for the period from24 January 2017 to 31 December 2018 r E From the Grant 53,374 1,119 54,493 account From designated accounts r From current accounts - -. l in nationaI currencies 65,1 53 20,538 7,079 92,769 r Total '119,527 21,657 7,078 147,262 3. Table of differences in Project costs between the World Bank records and PIU for the period from24 January 2017 to 31 December 2018 Reimbursed according l--t 114,718 21,016 5,092 140,826 l- to information IBRD Amount of costs not provided for l_ - g reimbursement as at 31.17.7018 3,81 0 641 1,986 6,437 l_ g Accordinq to PIU data 118,527 21,657 7,078 147,262 l_ l- l--- Notes on pages 1 3 - 14 are an integraI part of these financiaI statements. I l-.l I l--- r--- L- .--- li r--.- l-' r-l F StnrNcrneNtNG EvIDENcE-Baseo PoLtcvMAKtNG wlrn EouclloN SrATtslcs AND ANALysts pRoJEcr Reponr oF cAsH wtTHDRAwAL FRoM DESTGNATED AccouNT For the period from 74 January ?017 to 31 December 201g ln USD Withdrawals USD Equivolent Date of withdrowal Cur omount Sub_account 29.05.2017 USD 3,000 3.000 5ub_account 19.06.2017 U5D 1,000 1.000 Sub_account 0s.07.2017 USD 4,700 4.7ffi Sub_account 16.08.2017 USD 3,600 3.600 Sub_account 22.08.2017 USD 10,000 10.000 Sub_account 01 .09.2017 USD 5,500 5,500 Sub_account 26.09.2017 USD 4,000 4,000 Sub_account 08.11.2017 USD 4,400 4,400 Sub_account 06.12.2017 USD 2,100 2,100 Sub_account 15.12.2017 USD 1,300 1,300 Sub_account 21.12.2017 USD 2,000 2,000 Sub_account 25.01 .2018 U5D 1,600 1,600 Sub_account 06.02.2018 USD 3,300 3,300 Sub_account 09.04.2018 USD 26,300 26,300 Sub_account 15.04.2018 USD 200 200 Sub_account 10.05.2018 USD 1,800 1,900 Sub_account 06.06.2018 USD 3,000 3,000 Sub_account 13.07.2018 USD 1,700 1,700 Sub_account 16.08.2018 USD 1,500 'l ,500 Sub_account 14.09.2018 USD 2,300 2,300 Sub_account 17.10.2018 USD 1,600 1,600 Sub_account 13.11.2018 USD 1,500 1 ,500 Sub_account 05.12.2018 USD 1,900 1,900 Sub_account 20.12.2018 USD 3,000 3,000 Sub_account 21.12.2018 USD 1 ,500 1,500 Total: 92,900 Summary by categories Sub_account total 92,800 Total: 92,900 Notes on pages 13 - 14 are an integraI part of these financiaI statements. u I- SrneNorHeNtNG EvTDENcE-Blseo PolrcvmAKrNG wrn EouclrtoN Stlttsncs AND ANALysrs pRoJEcr I= t_ DesrGNlreo AccouNT STATEMENT For the period from24 January 7017 to 31 December 2018 g t_ g ln USD t= Deposit bank Ukreximbank Account No. 253060000001 33, 253040000001 91 E L--- Grant No. Currency TF0A4096 US dottars L= BALANCE AT THE PERIOD BEGINNING r--- Revenues: Funds received 1 13,000 I. lnterest accrued I r-- = TOTAL FUNDS RECEIVED Maintenance: costs Transfer of funds in nationaI currency 1 13,000 92,800 E l--- Direct payments from designated account Payment for bank services t-' TOTAL COSTS 92,800 t_ -Jl BALANCE AT THE PERIOD END 20.200 t. l--i t- l-.- Notes on pages 1 3 - 1 4 are an integraI part of these financiaI statements. tr r--- t- ri r--- r-.- ta STRENcrneNtNG EvtDENcE-BAsED PoLtcyMAKtNG wtrH EDUcATtoN Srartsrrcs AND ANALysts pRoJEcr SlarruENr oF FAcruAL EXpENDtruREs tN NATIoNAL cuRRENcy For the period from24 January 2017 to 31 December 2018 ln USD ----- Poyment ----- {.rsD Equivolent Currency Amount an,ol.,tt Category 1: Goods and consutting services UAH 1,719,191 Category 2: Training UAH 539,296 Category 3: Operating Costs UAH 1 88,899 Total expenditurgs of the period 2,446,386 92,769 Notes on pages 13 '14 are an integraI part of these financiatstatements. L L= SrRENorxeNtNG EvTDENcE-BASED PoLrcyMAKrNG wrrn EouclrroN Stattsttcs lNo ANllvsts pRoJEcr L, RrcoNcrlnroN BETwEEN RecoRos oF PIU For the period from 24 January 2017 lNo rxe BlNr to 31 December L= ln USD 201 8 E g Grant amount Subtract: L= tr Project costs: Category 1: Goods and consutting services Category 2: Training 118,527 21,657 Category 3: Operating Costs 7,O78 Total: (147,2621 Designated account Ukreximbank - US dottars 20,700 Current account State Treasury of Ukraine - hryvnya 31 TotaI available funds: (20,2311 TotaI withdrawals: (167,493\ Balance as at 31 December 2018 172,507 Notes on pages 1 3 - 14 are an integral part of these financial statements. StReNGrneNrNG EvTDENcE-BnsEo PoltcvMAKtNG wtrH EDUCATToN Stlttsttcs nuo ANlt-ysts pRoJEcr NorEs ro rHE Specnr- Punpose FTNANcTAL STATEMENTS For the period f rom24 January 7017 to 31 December 2018 ln USD 1. Project Description Ukraine has received financiaI assistance from the lnternationaI Bank ic' ]=::-.:--:-:- =- - Devetopment ("the Wortd Bank"), actimg as administrator of grant funds prc.':e: :_, .=' --: ) -- -'- under the Mutti-Donor Trust Fund for Statistical Capacity Building lll TTFSCB-l :: -=]-l::' '- .-= =- ---'- of three hundred and forty thousand US dottars (340,000.00 USDt tthe "Gra:: ,':- ---= !:-=-::-=- -! Evidence-Based Poticymaking with Education Statistics and Anatysls Projeci :-: ='-.=--- --: 1'.-. consists of three components: Component 1 : Development of an lntegrated EMIS; Component 2: Preparation for Participation in PISA; Component 3: lnstitutionaI Capacity Buitding. The Project is imptemented by the State Scientific lnstitutjon "lnstitute of Educational Anatytics" under the generaI supervision of the Ministry of Education and Science of Ukraine ('MES"). The Grant's implementation is regulated by the documents of the TFSCB Grant No. TF0A4096 and by the Decree of the Cabinet of Ministers of Ukraine No. 153 "On the Establishment of a Unified System for the lnvotvement, Use and Monitoring of lnternationaI TechnicaI Assistance" dated 15 February 2002, and other legaI acts of the Cabinet of Ministers of Ukraine, orders of IEA and MES. Z. Basis of Presentation These speciat purpose financial statements of the Project are prepared on a cash basis and inctude such significant accounting poticies that have been consistentty apptied in at[ materiaI respects and are in accordance with the recommendations of the Wortd Bank's FinanciaI Management Committee "Recommendations: AnnuaI FinanciaI Reporting and Audit of Activities, funded by the Wortd Bank". Project financing is recognized as a source of funds for the Project at the time of receipt of funds. Project costs are recognized as the use of funds under the Project at the time of making payments. The reporting currency is US Dottars. ltems inctuded in the speciaI purpose financiaI statements of the Project are vatued using the currency that best reftects the economic substance of the Company's retevant events and circumstances ('functional currency"). The functionaI currency of the Project is US Dottars. Transactions in other currencies are transtated into US dottars at the interbank currency exchange rate, which was effective on the date of the respective conversion of US doltars into the payment currency. Cash batances in other currencies are transtated into US dottars at the interbank exchange rate of the Last conversion of USD into the currency of payment. 3, Significant Accounting Policies Basis of Preparotion The speciaI purpose financial statements were prepared under the cash basjs, Accounting potlcles'/''eIe apptied consistentty during the entire period of the Grant funds use. Reporting Period This report covers the period of the Grant funds usage from 24 -)anuary 70'7 :: l' l=:=- ---' : -- -=' closing date of the Grant is 24 Juty 2019 or such later date as estabtjshed b', :-: 3=-. Reporting Currency According to the requirements of the Wortd Bank, the reporting currency is US doliar. STRTUCTHENING EVIDENCE-BASEO POI-ICVMAKING WITH EDUCATION STATISTICS INO ANITVSIS PROJECT NOTES TO TXE SPECIIT PURPOSE FINANCIAL STATEMENTS For the period f rom24 January 2017 to 31 December ZOlg ln USD Designoted bonk account The Project is implemented by the State Scientific lnstitution "lnstitute of Edu:a:,:--. the generaI supervision of the Ministry of Education and Scjence of U<-a,^e ,",:: --: ,---:: _-:-. - _- _=- -. imptement the Project, bank accounts were opened with pJSC 'state Expori- -r-:: -:)=-- -_, _--= -= _ :- _ the State Treasury Service of Ukraine. Recognition of receipts and expenditures The Project keeps its records and prepares its financial statements on the cash bas,s. le::,]:s -.3 recorded when they are made on bank accounts, which are supported by advances from ine iBRD. Expenditures are recorded on the date of funds withdrawal from accounts. The foltowing methods of funding can be apptied within the Grant: . Reimbursement of expenses; . Advance payments; o Direct payments. The minimum Apptication for reimbursements and direct payments is 25,000 USD. B The tabte betow defines the categories of Etigibte Expenditures that can be financed from the Grant ("Category"), the attocations of the Grant funds between the Categories, and the percentage of expenditures that can be financed by Etigibte Expenditures in each Category: Allocated funds of the Percentage of Category expenditures being Grant (in USD) tax Goods and consultinq services 297 300 100% Traini 34 700 100% at Costs 8 000 100% TOTAL 340 000 A[[ products, advisory and non-advisory services required for the project, and those that are etigibte for funding from the Grant, shoutd be procured in accordance with the requirements described in the Wortd Bank Procurement Regutations for lpF Borrowers dated 01 Juty 2016. 4. Economic Environment The main economic activity is performed on the territory of Ukraine. The Ukrainian economy is in a protracted crisis, complicated by the mititary conftict in eastern Ukraine and the unrecognized sep'aration of the Autonomous Repubtic of Crimea. Stabitization of the situation in Ukraine witt tirgety depend on the government's actions aimed at resolving the mititary conflict, reforming the couniry's financial, administrative, fiscaI and legat systems. To sotve the above-mentioned tasks, t-he gor"rnr"nt of the country introduces rather severe and unpoputar measures, such as partiat mobitization of the poputation liabte to mititary service, introduction of new taxes and fees, restrictions on cash and non- cash foreign currency transactions, etc. L L L, WoRr-o BlHx Auolr DocumenrlrroN CHecrusr tr Name of Loan/Credit: World Bank TF044096 UKRAINE 5 Year ended December 31, 2018 b Check if Check ;f b lncluded NrA b t. Audit report (Opinion): A. Appticabte accounting standards noted B. Appticabte auditing standards noted = L= = C. Opinion rendered on atl forms of withdrawats: t= 1. Statement of Expenditures I, 7. Designated Account I= D. A[[ sources of financing for the project are noted I= ll. Financial Re E l--l A. Revenue Earning Entity (att of the fo[towing are required): 5 1. Balance sheet 2. Cash Flow Statement tr 3. lncome Statement =Hi tr EE B Non-Revenue Earning Entity (att of the fottowing are required): 1. Batance sheet g 2. Summary of Sources and Uses of Funds t_ g E= C. lf appticable (refer to Loan Agreement): 1. Statement of Expenditure (SOE) Statement 2-. Designated Account Statement lll. Notes to the Financial Statements lV. Reconciliation between World Bank records and project records t Letter X