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Supreme Audit Office 0Government of Islamic Republic of Afghanistan
INDEPENDENT AUDITORS' REPORT
ToThe Presidentof the Government of Islamic Republic of Afghanistan {
Report on the Financial Statements
1. We have audited the accompanying statements of Cash Receipts and Paym
Statements") of the Capacity Building for Result Facility Project World Bank Project19tVhi3845,
Grant Number TF 11447, (hereinafter referred to as the "Project") for the year ended 30 Qaws of
Solar Year 1394 (22 December 2014 to 21 December 2015), and a summary of significant accounting
policies and other explanatory notes.
The Ministry of Finance's Responsibility for the Financial Statements
2. The Ministry of Finance (the "Ministry") is responsible for preparation and fair presentation of
the Financial Statements in accordance with International Public Sector Accounting Standards
"Financial Reporting under the Cash Basis of Accounting." This responsibility includes designing,
implementing and maintaining internal control relevant to the preparation and fair presentation of
the financial statements which are free from material misstatement, whether due to fraud or error;
selecting and applying appropriate accounting policies; and making accounting estimates that are
reasonable in the circumstances.
3, The Ministry's policy is to prepare the accompanying financial statements on cash receipts and
payments basis. On this basis, revenue is recognized when received rather than when earned, and
expenses when paid rather than when incurred.
Auditor's Responsibility
4. Our responsibility is to express an opinion on these Financial Statements based on our audit. We
conducted our audit in accordance with the International Organisation of Supreme Audit Institutions
(INTOSAI) standards. These standards require that we comply with ethical requirements and plan
and perform the audit to obtain reasonable assurance on whether the financial statements are free
of material misstatement
5. An audit involves performing procedures to obtain sufficient and appropriate audit evidence
about the amounts and disclosures in the financial statements. The procedures selected depend on
the auditor's judgement, including the assessment of the risks of material misstatement of the
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5. An audit involves performing procedures to obtain sufficient and appropriate audit evidence
about the amounts and disclosures in the financial statements. The procedures selected depend on
the auditor's judgement, including the assessment of the risks of material misstatement of the
financial statements, whether due to fraud or error. In making the risk assessments, i ery9 eo,4 Qis
relevant to the entity's preparation and presentation of financial statements are d
to design audit procedures that are appropriate in the circumstances, but no f
expressing an opinion on the effectiveness of internal controls. An audit also inti s eva
appropriateness of accounting policies used, the reasonableness of accountin
management, as well as evaluating the presentation of the financial statements * A 6
6. We believe that the audit evidence obtained by us is sufficient and appropriate f0-4LJ Fr
basis for our opinion.
Opinion
7. In our opinion, the Financial Statements present fairly, in all material respects, cash receipts and
payments of the Capacity Building for Result Facility Project World Bank Project ID P123845, Grant
Number TF011447, for the year ended 30 Qaws of Solar Year 1394 (22 December 2014 to 21
December 2015) in accordance with International Public Sector Accounting Standards "Financial
Reporting under the Cash Basis of Accounting."
Report on Compliance
The Ministry of Finance's Responsibility for Compliance
8. In addition to the responsibility for the preparation and presentation of the financial statements
described above, the Ministry of Finance is also responsible for ensuring that the activities, financial
transactions and information reflected in the financial statements are in compliance with the Grant
Agreement No. TF11447, entered on 21 January 2012 between the Islamic Republic of Afghanistan
and the International Development Association acting as administrator of grant funds provided for
the provision of USD One Hundred million (USD 100,000,000) funding to the Project.
Auditor's Responsibility on Compliance
9. In addition to the responsibility to express an opinion on the financial statements described
above, our responsibility includes expressing an opinion on whether the activities, financial
transactions and information reflected in the financial statements are, in all material respects, in
compliance with Financing Agreement. This responsibility includes performing procedures to obtain
audit evidence about whether all cash payments and receipts are in compliance with the terms and
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conditions of Financing Agreement. Such procedures include the assessment of the risks of material
non-compliance.
10. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion on compliance.
Opinion on Compliance
11. In our opinion, in all material respects, the activities, financial trans I ton
reflected in the financial statements are in compliance with the terms an ditio
Agreements. of C
Other Matters - Restriction on Use
12. As indicated above, the statements of cash receipts and payments are prepared in accordance
with the International Public Sector Accounting Standard "Financial Reporting under the Cash Basis
of Accounting" and may not suit another purpose.
13. This report including our opinion is intended solely for the information and use of the President
of the Islamic Republic of Afghanistan and the International Development Association and should
not be used for any other purpose. We do not accept or assume responsibility for any other purpose
or to any other person to whom this report is shown or into whose hands it may come.
Other Matters - Internal Control Deficiencies
14. During the audit of the financial statements, we noted certain weaknesses in internal controls
and other operational matters which have been disclosed to the Ministry in the management letter
relating to the audit of the Solar Year 1394. These obser - ommendations, all of which
have been discussed with the Ministry, are inte ed to improve internal ntrol or result in other
operating efficiencies.
D o ammad Sharif "Sharifi"itor General of Afghanistan
Supreme Audit OfficeKabul, Afghanistan
June 2016
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tA
Islamic Republic of Afghani
Capacity Building for Results Facility Project(World Bank Reference: Project ID P123845; Grant ID 11447)
Financial Statements for the year ended
30 Qaws 1394 (21' December, 2015)
Capacity Building for Results Facility Project
World Bank Reference: Project 1D P123845; Grant ID 11447
STATEMENT OF CASH RECEIPTS AND PAYMENTS
FOR THE YEAR ENDED 30 QAWS 1394 (21 DECEMBER 2015)
1394 1393 CumulativeTo Date
ReceiptsiPayments PaymentsControlled by Third
by entity Parties Total Total
USD USD USD USD USD
RECEIPTS
Initial Advance '- 25,000,00
Replenishments 5,995,717 5 18,427,583
TOTAL RECEIPTS 5,995,717 -17 43,427,580
PAYMENTS
Disbursement Category:Iods, Non-Consulting Serveies, Consultants'
-vices, Payment of CBR's Recruits, 7,277,639holarships, Training & Workshops, Incremental
Operating CostsBank Charges 675 675 675 2,25
TOTAL PAYMENTS 7,278,314 7,278,314 6,252,569 21,550,223
Excess/(Deficit) of Receipts over Payment (1,282,597) (1,282,597) (26,640) 21,877,357
Taminat (Net) 2,725 2,725 2,7
ncrease/(Decrease) in Cash & Cash Equivalents (1,279,872 - (1,279,872) (26,640) 21,880,082
Cash and Cash Equivalaents at the beginning of
the year 23,159,954 - 23,159,954 23,186,594
1ncrease/(Decrease) in Cash & Cash Equivalents (1,279,872) - (1,279,872) (26,640)
Cash and Cash Equivalents at the end of the year 21,880,082 - 21,880,082 23,159,954
The accompanying notes form an integral part of this financial statement.
M. Mustafa MastoorDeputy Minister for FinanceMinistry of Finance, Islamic Republic of Af an ean
Dated: April 30, 2016
Capacity Building for Results Facility Project
(World Bank Reference: Project ID P123845; Grant ID 11447)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 QAWS 1394 (21 DECEMBER 2015)
1) LEGAL STATUS AND ACTIVITY
a) The Capacity Building for Results Facility Project grant agreement was set up on January 21,
2012. The project's objective is to assist Government-of Afghanistan in improving the capacity and
performance of select line ministries in carrying out their mandates and delivering-services
b) The project is funded by a grant bearing reference number 1 e fghanistan
Reconstruction Trust Fund (ARTF) in the amount of United States Do r000.
c) The project consists of the following parts:
i) Technical Assistance for Preparation and Implementation of Lr u ng
programsii) Building Human Resourcesiii) Civil Service Training
iv) Project management, Monitoring and Evaluation
d) The significant terms and conditions that determine or affect the availability of the funding
assistance are primarily the presentation of the eligible expenditures to donor within the period as
per and in accordance with the financing agreement,
e) These financial statements of the Project have been prepared in accordance with the requirements
of the Development Grant Agreement signed between the Government of the Islamic Republic of
Afghanistan and the International Development Association (acting as administrator of ARTF) in
January 2012.
2) SIGNIFICANT ACCOUNTING POLICIES
a) Basis of PreparationThe financial statements are prepared under the historical cost convention and in accordance with
Cash Basis IPSAS - Financial Reporting under the Cash Basis of Accounting issued by
International Federation of Accountants (IFAC).
b) PaymentsPayments made from Special Account are recognised in the financial statements based on the
date the cheque is issued and direct payments by World Bank are recognised on the date on
which the withdrawal application for the payment is submitted to the World Bank. However,
cheques or withdrawal applications that were ultimately rejected by the bank or the World Bank are
reversed in the reporting period.
c) Reporting CurrencyThe reporting currency is US Dollars. Since US Dollars is the principal disbursement currency of
the donor, the financial statements are not prepared in the Afghani which is the currency of
Afghanistan.
Capacity Building for Results Facility Project(World Bank Reference: Project ID P123845; Grant ID 11447)
d) Currency translationsTransactions in currencies other than the reporting currency are translated into US Dollar at the
rate of exchange at which the transaction is actually executed.
3) NOTES TO ACCOUNTS
a) ReceiptsThese represent temporary loan received from government's own IT wlwrnt of such
temporary loan would be refunded in due course when the funds ar g e donor.
b) Bank Charges
The Ministry of Finance has negotiated with Da Afghanistan Ban t r It not be
charged on the transactions in the US Dollar Special bank accoun Charges
may be levied by intermediary banks on deposits into the Special Acc XCL6sAturned
to the World Bank.
c) AppendicesThe accompanying appendices provide additional information and analysis and form an integralpart of these notes, except as indicated otherwise.
d) Others
i) These Financial Statements are originally prepared in English and then translated into Dari. In
the event of any inconsistency between the English and Dari versions, the English version
shall be considered to be correct.
Capacity Building for Results Facility ProjectWorld Bank Reference: Project ID P123845; Grant ID 11447
APPENDIX Al
SUMMARY OF WITHDRAWAL APPLICATIONSFOR THE YEAR ENDED 30 QAWS 1394 (21 DECEMBER 2015)
Description Application Number Initial Advance Amount
USD USD
DA-A 89 . 228,45DA-A 88DA-A 87DA-A 86 96DA-A 85DA-A 84DA-A 83DA-A 82DA-A 81DA-A 80DA-A 79 -446,589DA-A 77 280,659DA-A 78 151,804DA-A 76 179,158DA-A 75 449,930DA-A 74 158,365DA-A 73 154,036DA-A 71 215,334DA-A 72 201,814DA-A 70 297,320DA-A 69 99,894DA-A 68 85,369DA-A 67 91,603DA-A 66 122,249DA-A 65 203,259DA-A 64 428,917DA-A 63 143,641
Capacity Building for Results Facility ProjectWorld Bank Reference: Project ID P123845; Grant ID 11447
APPENDIX A2
US Dollar SPECIAL ACCOUNT SUMMARYFOR THE YEAR ENDED 30 QAWS 1394 (21 DECEMBER 2015)
Account No: 27442Depository Bank: Da Afghanistan Bank (DAB)Address: Kabul
Opening Balance as per Bank Statement 1 9,954
Add:Replenishment ,717
Total Additions 0 717
Deduct:Payments for Project Expenditure 7,274,914Bank Charges 675
Total Deductions 7,275,589
Closing Balance as per B.S 30 QAWS 1394 (21 DECEMBER 2015) 21,880,082
Capacity Building for Results Facility ProjectWorld Bank Reference: Project ID P123845; Grant ID 11447
APPENDIX A3US DOLLAR SPECIAL ACCOUNT RECONCILIATION
FOR THE YEAR ENDED 30 QAWS 1394 (21 DECEMBER 2015)
Account No: 27419Depository Bank: Da Afghanistan Bank (DAB)Address: Kabul
USD
Closing Balance as per bank statement - 30 QAWS 1394 (21 DECEMBER 2015 1U880,082
Closing balance as per financial statements - 30 QAWS 1394 (21 DECEMBER 41 )21088,0,082
Capacity Building for Results Facility ProjectWorld Bank Reference: Project ID P123845; Grant ID 11447
APPENDIX A4COMPONENT-WISE DISBURSEMENTS
FOR THE YEAR ENDED 30 QAWS 1394 (21 DECEMBER 2015)(not an integral part of the Financial Statements)
1393 1394 Cumulative
Project Component Actual Actual To Date
USDTechnical Assistance for Preparation and Implementation ofLine Ministry Capacity Building programs 588,198 6,857,974Building Human Resources 4187,29 t' 1,305,320
Civil Service Training 324,7 523,302
Project management, Monitoring and Evaluation
TOTAL PAYMENTS 6,251,8 4 ,547,998
Capacity Building for Results Facility ProjectWorld Bank Reference: Project ID P123845; Grant ID 11447
APPENDIX ASSTATEMENT OF ESTIMATED GRANT AMOUNT
FOR THE YEAR ENDED 30 QAWS 1394 (21 DECEMBER 2015)(Memorandum Statement -not an integral part of the Financial Statements)
Amount
In currency of commitmentAmount of Grant USD 100,000,000Amount disbursed by World Bank untill the end of 13941 USD 43,427,580Undisbursed Balance USD 56,572,420
In reporting currencyAmount disbursed by World Bank untill the end of 1394' 43,427,580Equivalent US Dollars for undisbursed amount 56,572,420
Total estimated amount of Grant Funds available 1000,000
Cumulative Payments for expenditure as per the Statement of Cash Receipts & Pay Lt V'4e 121,550,223
1 Actual amounts of total disbursement made by the World Bank since the beginning of the project as available fromClient Connection