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Contents

' $it YiP -;t ,w., ......................................................................................... I

I . Auditor's Opinion .................................................................................. 3

-=-' Jj!J-:1§-:tli*~JJt ~~* 15ft1i ................................................................. 6

II. Financial Statements and Notes to the Financial Statements ................ 6

( - ) j1.f~f-~*··························· · ···················································6 i. Balance Sheet ............................................... .................. .................... 6

( -=- ) ~ ;%X tdJ-Jt tAAf '~f ?JL aJJ ~ * ....................................................... 7

ii. Statement of Implementation of Grant Agreement.. ......................... 7

( .=.. ) 1t JfJ Jift(P lJ5c.:t * ........................................... ........... .. .... ........... 8

iii. Special Account Statement ...... ........................................................ 8

( IZ!1 ) Jj!J-~:!'~*!!it Ji ........................................................................... 9

iv. Notes to the Financial Statements .................................................. 11

-=-, '*it Jt ~ ~ r~ ~&Jt.t)l ................................................................... 13

III. Audit Findings and Recommendations ............................................... 14

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it i!: 86-10-82199990

-ft~: 86-10-82199887

2

I . Auditor's Opinion

Auditor's Opinion

To Center for Project Supervision and Management of National Health Family Planning Commission of the People's Republic of China

We have audited the special purpose financial statements (from Page 6 to Page 12) of Capacity Building of Evaluation of China's Health System Reform Pilot Project Granted by the World Bank, which comprise the Balance Sheet as of December 31, 2014, the Statement of Implementation of Grant Agreement and the Special Account Statement for the period then ended, and Notes to the Financial Statements.

Project Entity's Responsibility for the Financial Statements

Your entity is responsible for the preparation of the financial statements mentioned above, which include: i. Preparing and fair presenting the accompanying financial statements in accordance with Chinese accounting standards and system, and the requirements of the project grant agreement; ii. Designing, implementing and maintaining necessary internal control to ensure that the financial statements are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Government Auditing Standards of the People's Republic of China and International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from 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

3

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 appropriate and sufficient to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements identified in the first paragraph present fairly, in all material respects, financial position of Capacity Building of Evaluation of China's Health System Reform Pilot Project Granted by the World Bank as of December 31, 2014, its financial receipts and disbursements, the project implementation and the receipts and disbursements of the special account for the period then ended in accordance with Chinese accounting standards and system, and the requirements of the project grant agreement.

Other Matter

We also examined the withdrawal application No.1-No.5 and the attached documents submitted to the World Bank during the period. In our opinion, those documents comply with the project grant agreement and can serve as basis for grant withdrawal.

The audit report consists of the Auditor's Opinion and two more parts hereinafter: Financial Statements and Notes to the Financial Statements, Audit FindingS"'an,d Recommendations.

,,,#'~,.;.· ·-.~~ .. , ! . ~ ! I .,.~l~. ~P .' ... · ... ,•!1 / , "=' tr~ .t'" '\ •\" • ,.~ · :-, f 1_,:J. ·' J f / , I "i)\. /l ':;.; . ..:-•,. '· . ' ' :-; ,. ',.. '\

Au4r::~aj~,i;;en~{<t~hina National Audit Office for F~eigh Lo'1lJ~d AS.~iS,/nce Projects J~;f:,~~·v· . 20 i 5 .. N"C° ...._ f

,..,_ .._ - t ,*"{II

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Address: No. Zhongguancun South Avenue, Beijing, P.R.China Postcode: 100086 Tel. : 86-10-82199990 Fax: 86-10-82199887

4

The English translation is for the convenience of report users; Please take the Chinese audit report as the only official version.

5

_,

II. Financial Statements and Notes to the Financial Statements

(-)*4k-1¥-~* i. Balance Sheet

** f~* BALANCE SHEET 2014 5¥- 12}] 31 s

(As of December 31, 2014) ~ f2 ~{~: 1!tJ1!.-1Rff~tk tJ:i oo ~ IJk~.~~.Ji~:1.t11r~~hffit~~ m Project Name: Capacity Building of Evaluation of China's Health

System Refonn Pilot Project Granted by the World Bank •*•ft: OO*~~tt~~~m-~~*•*t~ Prepared by: Center for Project Supervision and Management National

Health Family Planning Commission of the People's R bl" fCh" epu lC 0 ma

51i~i5ffl Application ofFund

#§~~ WHll~Wi

Wl*~Wi #§~ft

Subject Name Beginning

Ending Balance Subject Name Balance

tl>!tr:ff~ r.v,~w.: 0.00 164,753.16

Cash in Bank Grant Received

f!l:ll~~ 0.00 0.00

iEift:~~

Appropriation of Grant Counterpart Fund

~l§l~l:ll

Project Expenditure

l . ei:.iliuta~J'z:Wtfl'< 1Jl: 0.00 1,150,573.19

w, ~ifilnfl*)

Independent Evaluation 0.00 871,553.03 .fl\ZN~~

of the Reform

Pilots( Goods, Payable

Consultants' Services) 0.00 279,020.16

2.~nmtii <:tifv1D

Capacity Building

(Training)

mi&~~ 0.00 0.00

5f1JA\l.l&A Receivable Accounts Interest

~~iSffl*rr ~~*W*TI' Total Application of 0.00 1,315,326.35 Total Sources of

Fund Fund

6

~~%: TF013943 Grant No.: TF013943

1'A' $ •1ft.: A~ 'ff5 jt Currency Unit: RMB Yuan

~~*W Sources of Fund

~!lltlJ~Wi Wl*~~

Beginning Ending Balance

Balance

0.00 1,315,221.90

0.00 0.00

0.00 0.00

0.00 104.45

0.00 1,315,326.35

( .:=.) ~~#J.Jt~fj-·Jt~a/H!ll-*: ii. Statement of Implementation of Grant Agreement

~~tb-Jt~tr·tt~~~* STATEMENT OF IMPLEMENTATION OF GRANT AGREEMENT

~~ 2014 if. 12 fJ 31 s (For the period ended December 31, 2014 )

J.Yl §.4;*: i!t~itHr~ ~ t:f 00 I! ~1t..~~~iHt1ft-~~;h 9ti*~ I§ Project Name: Capacity Building of Evaluation of China's Health System

Reform Pilot Project Granted by the World BanJc ~*lf!.1ft: IE*JL& it&~J.Yl I§ *~11fr.~ B~~i:f 1\i'

Prepared by: Center for Project Supervision and Management National Health Farnilv Planning Commission of the Peoole's Reoublic of Ch" - _ _____ ..,.J - - -- -----"~ - - ------ - - -· - ... - - _,.,. -- - - - - - - - - - - --- - - ------- -

~}'EWj *AA'.&:1:.{Y: C@D ~?,IJ Grant Amount Amount of Current Withdrawals

Categoiy tlJ.~~lfi A~lfi tlJ.i$l:llt lfi AlX.ffl Grant Currency (USD) RMB Grant Currency ( USD) RMB

-.§i!Ulll91- 175,000.00 1,070,825.00 94,341.68 577,276.74 Consultants' Services

=-~~ 15,000.00 91,785.00 0.00 0.00 Goods

.:::.. t&illl 60,000.00 367,140.00 45,598.98 279,020.16 Training

l!!l. ~Jfl~f':fd~ 0.00 0.00 75,000.00 458,925.00 Special Account

11rit 250,000.00 1,529,750.00 214,940.66 1,315,221.90 Total

7

~1:k%: TF013943 Grant No.: TF013943

~ff5~1i: ~;ltl)d.~; ff5 jt Currency Unit: USD/RMB Yuan

~TI-11:1:.{Y: ( Wj)

Accumulated Amount of Withdrawals

ttJ.-W.:lltffl Ati!;ffi Grant Currency CUSD) RMB

94,341.68 577,276.74

0.00 0.00

45,598.98 279,020.16

75,000.00 458,925.00

214,940.66 1,315,221 .90

iii. Special Account Statement

~JfJJJ*?~:t* SPECIAL ACCOUNT STATEMENT

*-'Ail~~ 20141¥- 12 JJ 31 El

(For the period ended December 31, 2014)

lJi g;g#: tltJf-#lff~tk. 9=100 l!U!z1i..~~)ltit1ft-n~h ~RlJi fil 7f f1 {llfi;g #: 9=1 OO#lfil~~,ffit ~-$ Project Name: Capacity Building of Evaluation of China's Depository Bank: Head Office of Bank

Health System Reform Pilot Project Granted by the World Bank of China

~tk.%: TF013943 Ji*%: 778350126512

Grant No.: TF013943

i,jfijfaJl11ft: 00 *JI.!i it !£.~Jji g *~ ~tt ~fl:9J-if i\.,' Prepared by: Center for Project Supervision and Management

National Health Family Planning Commission of the People's

Republic of China

J!Ji~ Item

!.WlilJ~Wi Beginning Balance

11~, 2.;$:WJ1amfJJl Add: Amount Deposited this Period by World Bank

3.;f!J.ll!.i&A. Interest Earned this Period

4.;r-~m :stl±l)!:lB!.~wt Total Amount Refunded this Period to Cover Ineligible Expenditure

~; 5.:;t>'.Wl:it{<fWi Deduct: Amount Withdrawn this Period

6.itHi'.!¥~~ Bank Service Charges this Period

7 .;$:Wl~J.ll!.~ l±l!MI: Interest Transferred this Period

8.Wl-*~Wi Ending Balance

8

Account No.: 778350126512

~$#~: *Jt Currency Unit: USO

:ftWi Amount

0.00

214,940.66

17.07

0.00

187,863.20

169.68

0.00

26,924.85

1. ~I§ ;ftl~{JL

"i!t~•ff·~~OO~~~~~*W*~h~~"~l§,~@~ JL&it&~ C JJ?:JL&-$) OO~ffi~ !flit, lili!tJf-4R1f~1#,~,lYf~ 2so,ooo ~Jt~i!t~•1t~#1A1J~,Jl£~(1DF).~,:t#, -~% ~ TF013943, @*JL& it&~J,Vi I§~~~* All4}~ /~'~ J,Vi g/ tAAf-lf!-1io *J,Vi §I ~ 1± 1@_:1±,:t #xt ~-~ 1~ ~~!kif_ tf * ~,&_1@_:1±~1#JJ Pj€i)iSJL*7I * ~ *l)IJ *~~OO~JL&*&~~OO~~*~~~~~~~W*~~h.~gi tdl-i>l -f 2013 ~ s JJ 24 s &~x, ~ 13 ~ :#.Jt. El~ 2016 ~ s A 24 s.

2. :J~*~ ~U m IE Jilt4}*%~M: ~~~·····~~ftff~{JL~~·-~mJt.

? Y5c.:t*·

3 . .i.~%itJ)(~

3.1 %it:ft~~lt*m *}Jj~~u' ~P4¥-:9=-~ 1 A 1 El~ 12 A 31

El o *-M :ft~ M r~ JI 2013 :9=- s A 24 Er ~ 2014 ~ 12 A 31 s . 3 .2 *~ g/ ft =ii,&_ «Jilt Jj( ~ 00 ~ff-~ *JI~.~~ 13 %it :ft~~ ff

f)J, 5i » . « !!I ~ff- ~ ~ ~IL ~~ ~ jf): • ~ J:Yi g/ Jilt 4} * JI ~ ff f)J, 5:£: » ( Jilt ~ffi C 2011 J10 % x )~Jfs:~ gi tAAftdJ-i>l~ ~>Jt:Jll:ff Jilt 4}f :£!5f!J%it:ft~.

3 .3 %it:ft 1t ~ "{x~ ~ & ~~" 1t ~ iG)t.j: Y!L ~A~ $ ~ ic)t. Jts:ft$, ~~~I#$C~Jt)-~Jt..

4. ~ I§ tAAf 1lt ?lli 4.1 :r:Yt I§ miJJ7f ll'it?JL: ~~ 2014 ~ 12 JJ 31 s, .i.~~ I§ mill

~t5-*illl-wfif% 1 /}\_, # 70 :Sf:-A~}JP; ill OO*iltl 1 /}\_; ~:1-)t~~

~ 117J-, %~~~~ 160,000 ~JG, ~J:Yt I§ r~,-~i]li~ 64%0

4.2 ••ft1f 1lf 1Jt: ~~ 2014 .1f- 12 A 31 s, :r:Yt §I tAAf-lf!-1i,J it ~i!tJf-ifi-{f i:fJif~- 5 !}\_, ~~-~# 214,940.66 ~JG, ~~ \§ r~,it

J?;tl~ 85.98%.

4.3 -*:r:Yt §1 ~ JfJ Jt.p iil@*JL& it& ~:r:Yt gi ~~ ~* All4} ~ 1~"* JI, i~1£~ 00iri1f ,~,qf~ ~$' Jt.% ~ 778350126512, $;ftp~ ~JG.

9

-t m J*? tr )fe_;(f~ 75,000.00 ~JGo ;fs:_fWfW*JJ~$i 0.00 ~JG, ;fs:_JW-tlt 1-J@J;fr 214,940.66 ~JG, 5ftl,~,t&A. 17.07 ~JG, ;fs:_JW5z.1t 188,032.88

~JG c -%-4~Ut.f~~ 169.68 ~JG), M-*~$ij; 26,924.85 ~JGo

5. YJi-4J-~It~~ I§ ii J¥t 5.1 1R1tif#X: tt•Y~iU ~filJf.1R1r~*x' 5ftl .~t&.ffi #~ § jz_ tlL

-v m J*? M-*~-iY!j; 26,924.85 ~JG, ¥f~JG*m 2014 -1¥- 12 JJ 31 s A~$ Jt~]t 1C$ 9=1 ~11r ( 1 ~7t=A~ FfJ 6.1190 7t) tff-1f:j; A~ FfJ

164,753.16 Jto 5 .2 ~ I§ 5z_ ili : ;ft#~ § J~' 5z_ ltL 3:. :f-§ '*" 00 ~ 5'~ :I:* 1Jtl , 1iJf 1-t % ,

~1foAlt~-~ o M-*~$ij; A~ FfJ 1,150,573.19 ]t, :!t 9=11CJty~~j; A ~ $ 9,338.18 Jt 0

5.3 fkA.~~: tt•~ I§ 4~Ju-tltJf..1R1t~~~iJl, M*~iJij; 214,940.66 ~7t, ¥f ~7t*-JfJ 2014 -1¥- 12 JJ 31 SA~$ Jt~]t 1C$ 9=1 1~11r C 1 ~7t=A~ $ 6.1190 7t) tJf~j;A~ FfJ 1,315,221.90 7to

5.4 5ftl ,~,4~A.: {};:#~ gi 45ciU ~5ftl rl~L M-*~iJij; 11.01 ~Jt,

¥f~Jt*-JfJ 2014 .1t- 12 JJ 31 SA~ FfJ Jt~7t 1C$ 9=1fi3J11r ( 1 ~Jt=A ~ $ 6.1190 7t) tJf~j;A~ FfJ 104.45 7to

IO

iv. Notes to the Financial Statements

Notes to the Financial Statements

1. Project overview The Institutional Development Fund (IDF) of USD 250,000.00 for Capacity Building of Evaluation of China's Health System Reform Pilots Project granted by the World Bank (Grant No. TF013943) was applied by the Department of International Cooperation of former Ministry of Health (MOH) and designated to Center for Project Supervision and Management National Heath Family Planning Commission of the People's Republic of China (CPSM). The objectives of the project are through the evaluation of the pilot reform to support independently evaluate and training of affecting evaluation method to strengthen the ability of the national health and family planning commission and domestic experts to affect the current health reform. The project agreement was signed on May 24, 2013. The closing date of the grant account will be May 24, 2016.

2. Consolidation Scope of the Financial Statements The financial statements consist of Balance Sheet, Statement of Implementation of Grant Agreement and Special Account Statement.

3. Main accounting policies 3.1 In accounting practice, the Gregorian calendar year is adopted as the accounting year, i.e. from January 1 to December 31. Moreover, the current accounting period is from May 24, 2013 to December 31, 2014. 3 .2 Financial management and accounts recording is based on the Financial Management Methods of the Projects Financed by Grants under the Administrative of Department of International Cooperation of Ministry of Finance and the Temporal Methods on Financial Accounting of the Projects Financed by Grants under the Administrative of Department of International Cooperation of Ministry of Finance (Caijizi [2001] No.195), Interim Financial Accounting Methods of the Projects Financed by the World Bank Loan/Grant (Caiji [2011] No.10), and Project Implementation Agreement. 3.3 The acc1ual basis and the debit/credit double-entry bookkeeping method are adopted in project accounting. RMB yuan is used as the main cmrency of bookkeeping and USD is used as a secondary currency in the project grant account.

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4. Implementation status of the project 4.1 The project activities: As of December 31, 2014, the main project activities included organizing 1 training (70 people), organizing 1 overseas training, and signing 1 project consulting services contract with the amount ofUSD160,000 which accounted for 64% of the total grant. 4.2 The Implementation of grant: As of December 31, 2014, the project entity submitted five withdrawal applications, and the amount of grant disbursement was USD214,940.66, which accounted for 85.98% of the total grant. 4.3 The Special Account is managed by the Center for Project Supervision and Management National Health Family Planning Commission of the People's Republic of China, which is set in Head Office of Bank of China, with the account number of 778350126512, and USD as currency unit. The Initial Deposit of the Special Account is 75,000.00. The beginning balance in this period was USO 0.00 and the reimbursement in this period by World Bank was USD 214,940.66. During this period, the interest earned was USD 17.07, and the disbursement was USO 188,032.88 (including Bank Service Charges of USD 169.68). Thus, the ending balance was USD 26,924.85.

5. Notes to the main items of the financial statements 5.1 Cash in Banlc The subject of Cash in Bank represents the World Bank grant received, interest and related project expenditures, the ending balance of Cash in Bank is USD 26,924.85, which is converted to RMB 164,753.16 yuan, using a middle rate of USD 1= RMB 6.1190 yuan on December 31, 2014. 5 .2 Project Expenditures: It represents the expenditures of this project,

, including the disbursement of domestic training, overseas training, workshops and consulting services. The ending balance of Project Expenditures is RMB 1,150,573.19 yuan, including the exchange earning is RMB9 ,3 3 8.18 yuan. 5.3 Grant Received: The subject of Grant Received represents the grant deposited in the Special Account by the World Bank. As of December 31, 2014, the ending balance of the subject is USD214,940.66, which is converted to RMB 1,315,221.90 yuan, using a middle rate of USD 1= RMB 6.1190 yuan on December 31, 2014. 5.4 Accounts Interest: The subject of Accounts Interest represents interest received. The ending balance of Accounts Interest is USDl 7.07, which is converted to RMB 104.45 yuan, using a middle rate of USD 1 =

RMB 6.1190 yuan on December 31, 2014.

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