Audit Report ofJACPA Capacity Building Project

IDF Grant # TF1 1789Jordan Association of Certified Public Accountants

Amman - Jordanfor the period 1 Jan 2014 to 31 July 2015

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TABLE OF CONTENTS

II. Auditor Report

I I. Statement of Cash Receipts & Payments by Category

III. Notes to the Financial Statement

IV. Management Letter

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INDEPENDENT AUDITOR REPORT

To Jordan Association of Certified Public AccountantsAmman, Jordan

We have audited the accompanying special purpose project financial statement comprising ofthe statement of Cash Receipts and Payments of JACPA Capacity Building Project - IDFGrant # TF11789 for the period 1 Jan 2014 to 31 July 2015, and the explanatory notes forthe period then ended.

Management's Responsibility:Management of the project is responsible for the preparation and fair presentation of thisstatement n accordance with interational public sector accounting standards, and for suchinternal conrols as management determines is necessary to enable the preparation offinancial statements that are free from material misstatement. whether due to fraud or error.

Auditor's Responsibility:Our responsibility is to express an opinion on this financial statement based on our audit. Weconducted our audit in accordance w ith International Standards on Auditing. Those Standardsrequire that we plan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free of material misstatement and about whether JACPA CapacityBuilding project has complied with the laws, regulations, guidelines and provisionsgoverned by the Grant Agreement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statement. An audit also includesassessing the accounting principles used, as well as evaluating the overall financial statementpresentation. We believe that our audit provide a reasonable basis for our opinion.

Our opinion:(a) The general purpose project financial statement presents fairly, in all materialrespects, the cash receipts and payments of the Project for the period 1 Jan 2014 to 31 July2015 in accordance with the International Public Sector Accounting Standards, under thecash basis of accounting;(b) Internal control over financial reporting invol ed in the preparation of replenishments,direct payments and reimbursement can be relied upon to support the related withdrawals forthe period(c) The project was in all material respects in compliance with laws, regulations,guidelines and provisions governed by the Grant agreement

Other mattersThis report is intended solely for the information and use of World Bank, the Government ofJordan. Jordan Association of Certified Public Accountants and the related projectmanagement.

Mohammad QazzazLicense # 7123 August 2015

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Swefieh, Yagoub Mu'ammar Str. P.O. Box 8500'7 Amnman. 11'.85 Jordan Phone: + 962 6 582 20 50 Fax: + 962 6 581 55 85

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JACPA Capacity Building ProjectWorld Bank IDF Grant No. TF 11789Jordan Association of Certified Public AccountantsAmman - JordanNotes to the Financial Statements as of 31 July 2015

1. General Background

Grant Amount: USD 250,000Agreement Date: 8 March 2012Closing Date: 21 March 2015

The Jordan Association of Certified Public Accountants (JACPA) is the legal body that hasfinancial and administrative independence and carries out a wide range of activities thatinclude provision of sen4ces to its members. supporting scientific and professional research,contributing to the development of training programs for the purpose of increasing thecompetency of its members, cooperating and coordinating with various associations andinternational, regional and national professional and academic bodies. JACPA also act as as asyndicate to protect the interests of the public accountants.

JACPA has received a grant from the ) 'orld Bank (WB) Institutional Development Fund(IDF) of up to USD 250.000. The objective of the grant is to strengthen JACPA's capacity toprovide outsourcing sen-Ices in accounting and financial reporting.Eligible expenditures that may be financed out of the proceeds of the grant and the allocationof the amounts to each Category and the percentage of e-xpenditures to be financed arespecified in the following table:

Amount of Grant Percentage of

Category Allocated Expenditures to beFinanced

USD (inclusive of Taxes)

1. Consultants' Seri-ices and audit 148,500 100%

2. Training 75,000 100%

3. Goods 26,500 - - 100%

TOTAL AMOUNT 250,000

The project consists of the following parts (component) -

Part A:. Designing a strategy to strengthen JACPA's outsourcing capacity inaccounting and reporting.Part B: Assessing the training needs, developing training plan and programs.

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Part C: Selecting, training, and utilization of master-trainers by JACPA.

Part D: Management and audit of the project.

JACPA established a project management unit (PMU) in order to manage the implementationof the project and for the purpose of implementation of the grant agreement in accordancewith the grant stipulations and WB disbursement and procurement guidelines. such PMUcomprises of the project manager and 2 members of the JACPA, such is assisted by theaccounting function that serve JACPA in general.

2. Summary of Significant Accounting Policies

Basis of Accounting & Reporting:

The JACPA followed and maintained its accounts under Cash Basis of Accounting inrecording the transactions; accordingly JACPA recognizes funds when received andexpenditures when occurred.As for reporting of this grant JACPA reports the project operations in accordance withInternational Public Sector Accounting Standards, under the cash basis of accounting.

Translation of currencies:

Functional currency for the project operations is Jordanian Dinars (JOD) and translated intoUnited States Dollars (USD) at the prevailing exchange rate of LSD 1 = JOD .708, andmaintains the accounts in JOD.The project also reports all transactions in USD.

3. Designated Account

As per the grant agreement; the Jordan Association of Certified Public Accountants opened aDesignated Account with the Arab Jordan Investment Bank. Project Special Account Numberis 0202-0031081-002-0560-001 in USD with an initial deposit from the World Bank of USD60,000, this account is feeding a zero balance sub-account of 0202-0031081-001-0548-001 inJOD to cover payments made in local currenc).

JACPA maintained this Designated Account and its sub-account for the grant payments andreplenishments (using Withdrawal Applications) exclusively.

Initial Deposit:Initial Deposit from the World Bank of USD 60,000 w as transferred to the DesignatedAccount in July 2012.

'B ReplenishmentsDuring the period the World Bank replenished the Designated Account with 5 replenishmentswith the total of LSD 69,175

Disbursements: The Designated Account summary of transactions during the period isillustrated below in USD:

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Beginning Balance 37,851Add:World Bank Replenishments 69.175Deduct:Payments for Expenditures 107,015

Ending Balance 11

4. Uses of grant funds per part (component):

During the period expenses made are illustrated below in LUSD

Part A Strategy 100,500

Part B Training 32,361

Part C Master Trainers 59,792

Part D Management & Audit 5,882

Total Expenditures 198,535

5. Contract Listing

The Status of signed contracts under the grant is illustrated in the folluwing table in USD asof 31 July 2015:

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"Report on Accounting Procedures & Internal Control"

JACPA Capacity Building ProjectWorld Bank IDF Grant No. TF1 1789

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Jordan Association of Certified Public AccountantsJACPA Capacity Building ProjectWorld Bank IDF Grant No. TF11789Amman, Jordan

The accompanying memorandum includes suggestions for improvement of accountingprocedures and internal controls that came to our attention as a result of our audit of thefinancial statement of JACAPA Capacity Building project - World Bank Grant No. TF 11789for the period 1 Jan 2014 to 31 July 2015.

In accordance with international standards on auditing, we performed a study and evaluationof existing internal controls for the purpose of providing a basis for reliance thereon indetermining the nature, timing and extent of the audit tests applied in connection with ouraudit of the project financial statement.

Nothing comes to our attention during the course of conducting the annual audit exercise thatrequires us to report on with regard to the project internal controls.

The memorandum is intended solely for the use of project management and the World Bankand is not intended for any other purpose.

Finally we wish to express our appreciation for the courtesies and cooperation extended toour representatives during the course of their work.

Very truly yours

Mohammad Qazzaz

3 August 2015

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Swefieh, Yaqoub Mu'ammar Str PO Box 850037 Amman 11185 Jordan Phone: + 962 6 582 20 50 Fax + 962 6 581 5r P

Report on Accounting Procedures, Internal Control Structure:

As per our review we noted no material findings

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