I International Development Association, IReportdocuments.worldbank.org/curated/pt/346691479715839814/pdf/... · I I I Lao PDR Mobilizing Ethnic Communities for Improved Livelihoods

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Lao PDR Mobilizing Ethnic Communities for ImprovedLivelihoods and Wellbeing Project

(Funded by International Development Association,I acting as administration of the Japan Social Develpoment Fund,under Grant Number TFO97786)

IReport of the Project's Management andAudited Financial Statements

For the period from 1 October 2015 to 22 April 2016

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ILao PDR Mobilizing Ethnic Communities for Improved Livelihoods andWellbeing Project - JSDF Grant No. TF097786

CONTENTS

Pages

General information 1

Report of the Project's Management 2

Independent auditors report 3-4

Statement of receipts and disbursements 5

Statement of fund balance 6

Notes to the financial statements 7 - 12

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GENERAL INFORMATION

Lao PDR Mobilizing Ethnic Communities for Improved Livelihoods and Wellbeing Project

Lao POR Mobilizing Ethnic Communities for Improved Livelihoods and Wellbeing Project ("theProject") is implemented by the Poverty Reduction Fund ("PRF") of the National Leading Board forRural Development and Poverty Alleviation, Prime Minister Office, under the subsidiary grant

agreement signed by the Government of Lao PDR ("GoL") and the PRF on 8 July 2011. The

implementation of the Project was approved by the Japan Social Develpoment Fund ("JSDF") on

Disbursement Letter dated 22 April 2011, and the Project implementation period commences from 22

April 2011 to 22 April 2015. The implementation of the Project was extended to 22 April 2016.

The overall objective of the Project is to pilot an innovative livelihood focused community-drivendevelopment program in the selected poverty reduction priority districts in Huaphan and Savannakhet

provinces.

The specific parts of the Project are:

a) Formation of Community Sefl-Help Groups and Capacity Building of Local Service Providers;

b) Community Asset Creation;

c) Participatory Pro-Nutrition Assessment and Activites; and

d) Monitoring and Impact Evaluation of Activities.

The Project is managed by the management of PRF. Project activities mainly cover five povertyreduction priority districts in Huaphan and Savannakhet provinces, enabling 28,800 households inethnic communities in rural areas in Lao PDR to improve their livelihoods and wellbeing throughgroup-based activities.

The eligible expenses that will be financed out of the proceeds of the grant are allocated to the

following categorises:

- Category 1: Goods, Training and Consultancy

- Category 2: Incremental Operating Costs

- Category 3: Sub-grants under Part (b) of the Project

I JSDF Grant No. TF09T786

The Project has been financed by the International Development Association ('IDA"), acting as

administrator of the JSDF. The accompanying financial statements are for the JSDF Grant No.

TF097786,

I JSDF through the IDA signed Grant Agreement No- TF097786 on 22 April 2011, and Disbursementletter dated 22 April 2011 agreed by IDA and MoF for financing of USD 2,621,500 in respect of the

Project

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U Lao PDR Mobilizing Ethnic Communities for Improved Livelihoods andWellbeing Project - JSDF Grant No. TF097786

REPORT OF THE PROJECT'S MANAGEMENT

MANAGEMENT'S RESPONSIBILITIES IN RESPECT OF THE FINANCIAL STATEMENTS

The Project's Management is responsible for the preparation of the Project's financial statementswhich compnse the statement of receipts and disbursements for the period from 1 October 2015 to 22April 2016 and the statement of fund balance as at 22 April 2016 together with the explanatory notesthereto.

In preparing the financial statements, the Project's Management is required to:

w adopt accounting policies as described in Note 3 to the financial statements and apply themconsistently in accordance with the requirements of JSDF for Government-executed projects'financial statements,

w make judgements and estimates that are reasonable and prudent;

P maintain proper financial operations and controls:

I maintain adequacy of the management structure and general control environment;

w ensure that all non-expendable properties are used solely for and by the Project, and maintainproper control over those properties, and

U comply with the related grant and financing agreements.

The Project's Management is responsible for ensuring that proper accounting records are kept whichdisclose, with reasonable accuracy at any time, the funds requested, authorized for, received anddisbursed by the Project and to ensure that the accounting records comply with the accountingpolicies described in Note 3 to the financial statements The Project's Management is also responsiblefor safeguarding the assets of the Project, and for taking reasonable steps for the prevention anddetection of fraud and other irregularities

The Project's Management confirms that they have complied with the above requirements inpreparing the financial statements.

1 APPROVAL OF THE FINANCIAL STATEMENTS

We hereby approve the accompanying financial statements for the period from 1 October 2015 to 22

April 2016 and as at 22 April 2016 which are prepared in accordance with the accounting policies as

described in Note 3 to the financial statements and comply with the related grant and financingagreements,

cial statements are prepared to assist the Project's Management in meeting the reportingir of the JSDF As a result, the financial statements may not be suitable for any other

rpose

ect Management:

r unkouang Souvannaphanh Ms. Boualy SayavongExecutive Director Head of Finance and Administration

Vientiane, Lao POR

30 September 2016

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Building a betterworking world

Reference: 60826839/18850058

INDEPENDENT AUDITORS' REPORT

To: The Management of Lao PDR Mobilizing Ethnic Communities for Improved Livelihood andWellbeing ProjectThe Japan Social Develpoment Fund

We have audited the accompanying financial statements of Lao PDR Mobilizing Ethnic Communitiesfor Improved Livelihood and Wellbeing Project under Grant No. TF097786 ("the Project") as set out onpages 5 to 12, which comprise the statement of receipts and disbursements for the period from 1October 2015 to 22 April 2016, the statement of fund balance as at 22 April 2016 and the notesthereto ("the financial statements"). The financial statements have been prepared by the Project'smanagement in accordance with the accounting policies as described in the Note 3 to the financialstatements.

Management's responsibility for the financial statements

The Project's management is responsible for the preparation of the financial statements inaccordance with the accounting policies as described in Note 3 to the financial statements, and forsuch internal control as management determines is necessary to enable the preparation of thefinancial statements that are free from material misstatement, whether due to fraud or error.

Auditors' responsibility

Our responsibility is to express an opinion on the financial statements based on our audit Weconducted our audit in accordance with International Standards on Auditing. Those standards requirethat we comply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosuresin the financial statements. The procedures selected depend on the auditors' judgment, including theassessment of the risks of material misstatement of the financial statements, whether due to fraud orerror. In making those risk assessments, the auditors consider internal control relevant to thepreparation of the financial statements in order to design audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an opinion on the effectiveness of the Project'sinternal control. An audit also includes evaluating the appropriateness of accounting policies used andthe reasonableness of accounting estimates made by management, as well as evaluating the overallpresentation of the financial statements,

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our audit opinion.

Opinion

I In our opinion, the financial statements of the Project for the period from 1 October 2015 to 22 April2016 and as at 22 April 2016 are prepared, in all material respects, in accordance with the accountingpolicies as described in Note 3 to the financial statements.

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Buiding a better

I working world

Accounting policies and restriction on use

We draw attention to Note 3 to the financial statements, which describes the accounting policiesadopted by the Project

This report is entended for the information of the Project, the JSDF and the Government of Lao PDRand not for other purpose. However, upon release by the JSDF. this report will be a matter of publicrecord and its distribution will not be limited We do not, in giving this opinion accept or assumeresponsibility for r rpose or to any other person to whom this report is shown or into whosehands it may e expressly agreed by our prior consent in writing

Vientiane, L *oNRo.O

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ULao PDR Mobilizing Ethnic Communities for Improved Livelihoods andWellbeing Project - JSDF Grant No. TF097786

STATEMENT OF RECEIPTS AND DISBURSEMENTSfor the period from 1 October 2015 to 22 April 2016

3 Currency: $USFor the period from For the year1 October 2015 to ended 30

Notes 22 April 2016 September 2015ReceiptsFunds from JSDF 4 1033,449

Total receipts - 1,033,449

DisbursementsCategory 1 Goods, Training and Consultancy 18821 357954Category 2 Incremental Operating Costs 10648 69290

Category 3 Sub-grants under Part (b) of the Project 9551 910786

T q sbursements 5 39,020 1,338,030

ents (39,020) (304,581)

I ouang SuanpnhMs. Boualy Sayavong

oag SouvannaphanhExecutive Director Head of Finance and Administration

Vientiane, Lao PDR

30 September 2016

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STATEMENT OF FUND BALANCEas at 22 April 2016

Currency $US

22 Apni 30 SeptemberNotes 2016 2015

Opening fund balance 39,463 344,044Net disbursements (39.020) (304,581)

Closing fund balance 443 39,463

Represented by:Cash on hand and cash at banks 6 443 37329

J.I)443 39,463

ouang Souvannaphanh Ms. Boualy SayavongExecutive Director Head of Finance and Administration

Vientiane, Lao PDR

30 September 2016

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NOTES TO THE FINANCIAL STATEMENTSas at and for the period from 1 October 2015 to 22 April 2016

1. PROJECT BACKGROUND

Lao PDR Mobilizing Ethnic Communities FOR Improved Livelihood and WellbeingProject

Lao PDR Mobilizing Ethnic Communities for Improved Livelihoods and Wellbeing Project ("the

Project") is implemented by the Poverty Reduction Fund ('PRF") of the National LeadingBoard for Rural Development and Poverty Alleviation. Prime Minister Office, under thesubsidiary grant agreement signed by the Government of Lao PDR ("GoL') and the PRF on 8July 2011 The implementation of the Project was approved by the Japan Social DevelpomentFund ("JSDF") on Disbursement Letter dated 22 April 2011, and the Project implementationperiod commences from 22 April 2011 to 22 April 2015 The implementation of the Projectwas extended to 22 April 2016,

The overall objective of the Project is to pilot an innovative livelihood focused community-driven development program in the selected poverty reduction priority districts in Huaphanand Savannakhet provinces.

The specific parts of the Project are:

a) Formation of Community Sefi-Help Groups and Capacity Building of Local Service

Providers;

b) Community Asset Creation;

c) Participatory Pro-Nutrition Assessment and Activites; and

d) Monitoring and Impact Evaluation of Activities.

The Project is managed by the management of PRF. Project activities mainly cover fivepoverty reduction priority districts in Huaphan and Savannakhet provinces, enabling 28,800households in ethnic communities in rural areas in Lao PDR to improve their livelihoods andwelibeing through group-based activities

The eligible expenses that will be financed out of the proceeds of the grant are allocated tothe following categorises:

- Category 1: Goods, Training and Consultancy

- Category 2: Incremental Operating Costs

- Category 3: Sub-grants under Part (b) of the Project

JSDF Grant No. TF097786

The Project has been financed by the International Development Association ("IDA"), actingas administrator of the JSDF. The accompanying financial statements are for the JSDF GrantNo. TF097786-

JSDF through the IDA signed Grant Agreement No. TF097786 on 22 April 2011, andDisbursement letter dated 22 April 2011 agreed by IDA and MoF for total financing of USD2,621,500 in respect of the Project. The Project is expected to be completed by 22 April 2016.

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ULao PDR Mobilizing Ethnic Communities for Improved Livelihoods andWellbeing Project - JSDF Grant No. TF097786

NOTES TO THE FINANCIAL STATEMENTS (continued)as at and for the period from 1 October 2015 to 22 April 2016

2. BASIS OF PREPARATION

The Project's financial statements comprise the statement of receipts and disbursements andthe statement of fund balance which are expressed in United States Dollars ("USD"), Thesefinancial statements are prepared by the Project's management in accordance with theaccounting policies as described in Note 3.

The Project maintains its accounting records in USD.

The financial statements are prepared solely to assist the Project's management in meetingthe reporting requirements of the JSDF

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3.1. Funds from JSDF

Funds from JSDF represent fund under Grant Agreement No- TF097786 which areU recognized as receipts when cash is credited to the Project's Designated Account,

3.2. Disbursements

I Disbursements are recognized when documents substantiating the Project's transactions aresubmitted and approved and payment is made, except for sub-grants to Koum Bans (group ofvillages) where disbursement is recognized when cash is transferred from the Project's bankaccounts to Koum Bans,

I3.3. Advances

3 Advances, which comprise mainly of amounts advanced for the Project's activities, arerecorded as such in the statement of fund balance when paid. When the advances areliquidated, the related expenses are recognized in the statement of receipts and

* disbursements.

3.4. Fixed assets

Fixed assets procured are recognized as expenditures in full in the statement of receipts and

I disbursements when received or when handed-over from the contractors or suppliers uponthe respective acceptance and approval by the Project and when payment is made,Accordingly, fixed assets are not recognized in the statement of fund balance at the end of the

year,The Project maintains a fixed asset register for control and monitoring purposes, whichincludes vehicles, furniture and fittings, computers and office equipment h

.5. Foreign exchange differences

Disbursements and withdrawals in foreign currencies other than US are converted into SDat the actual exchange rates ruling at the dates of transactions. Fund balance denoted in

foreign currencies are translated into USO at the closing exchange rate at the reporting date.Foreign exchange differences are recognized in the statement of receipts and disbursements.

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4. FUNDS FROM JSDFCurrency: $US

For the periodfrom 1 October For the year

Withdrawal Application 2015 to 22 April ended 30No. Date of receipt 2016 September 2015

JSDF TF097786Application No 030 24 October 2014 56,242Application No. 031 12 November 2014 - 178937Application No. 032 26 November 2014 - 193,637

Application No. 033 22 December 2014 - 123,051Application No. 034 20 January 2015 - 133,138Application No 035 16 February 2015 - 32,117

Application No. 036 02 March 2015 - 67,027Application No 037 09 March 2015 - 84,317Application No. 038 30 March 2015 - 135,722

Application No 039 28 April 2015 - 29,261

Total replenishments of designated accountNo. 0000010056200100 1,033,449

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5. DISBURSEMENTS

For the periodfrom 1 For the year

Accumulated October 2015 ended 30as at 22 April to 22 April September

I Total budget 2016 2016 2015I Category 1: Goods,Training and ConsultancyTraining, Monitoring costsand Information, Educationand Communication (lEC)materials 500,000 499,979 9,458 91,783Local consultancy 560,000 545,573 - 155,826International consultancy 310,500 347,986 9,363 110,345

1,370,500 1,393,538 18,821 357,954

Category 2: IncrementalOperating CostsIncremental Operating Costs 118,000 122,367 10,648 69,290

118,000 122,367 10,648 69,290

Category 3: Sub-grantsSub-grantsunder Part (b) of the Project 1,133,000 1,105,153 9,551 910.786

1,133,000 1,105,153 9,551 910,786

Total disbursement 2,621,500 2,621,058 39,020 1,338,030

6. CASH ON HAND AND CASH AT BANKSCurrency: $US

30 SeptemberNote 22 April 2016 2015

Cash on hand - 51Cash in Project's operating accounts atprovinces 6.11 - 27,472Cash in Designated Account 61.1 443 9,806

1443 37,329

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6.1 Cash in Designated Account

In accordance with the financing agreement of the Project, the following Designated Accountis maintained in UJSD at the Bank of Lao PDR:

Account No.: 0000010056200100Depository: Bank of Lao PDRAddress: Yonet Street, Vientiane, Lao PDRRelated Grant JSDF Grant Agreement No, TF097786Currency: USD

I The purpose of the Designated account is to receive fund from JSDF on Grant AgreementNo. TF097786 for transferring to operating accounts and for certain direct payments tosuppliers, contractors and service providers-

I The Designated Accounts are non-interest bearing. Movement of the special account is asfollows:

6.1.1 Account activities

For the pefod from For the year ended1 October 2015 to 30 September

22 Ap!n/2016 2015

Opening balance 9,806 193,758Add:

JSDF replenishment (Note 4) - 1,033449Opening balance of:

Cash on hand 51 544Advances 2,134 12,462Cash in Project's operating accounts atprovinces 27,472 137280

U Ddut:39,463 1,377,493

Total disbursement during the year (Note 5) (39,020) (1,338030)Ending balance of:

Cash on hand (Note Q) (51)Advances (Note 7) (2134)

Cash in Project's operating accounts atprovinces (Note 6) (27,472)

(39,020) (1,367,687)

Ctosing balance (Note 6.1.2) f:3 9,806CahoIad(oe6Idacs(oe7Iahi rjc' prtn consa

9*86 9375

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6. CASH ON HAND AND CASH AT BANKS (continued)

6.1 Cash in Desginated Account (continued)

6.1.2 Account reconciliationCuirrency:, $US

For the period from For the year ended1 October 2015 to 30 September

22 April 2016 2015

Amount advanced by JSDF to the SpecialAccount during the year 61,190 250,000Amount recovered by JSDF (60,747) (188,810)Outstanding amount advanced to DesingatedAccount at the end of the year 361,190

IClosing balance of Designated Account (Note 6) 443 9,806AddAmount wtthdrawn but not yet claimed _________ 51,384Outstanding amount advanced to Designated 6,9Account at the end of the year _ 4 1,9

7. ADVANCESCurrency:- $US

30 April 30 September2016 2015

Advances mh Vientiane -

Advances at provinces ________2,134

_____________2,134

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8. PROJECT CLOSING PROCESS

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In ccodace ithth ageemntsiged eteenJSFo the romuFo the a r nddaed 2April 011, te perid from1 October 2015 to 30 Spi 06itefnlo eraigpmeroth

Project-~~2 Afe ta,tesrlscsbaaewiletansfre /o So 20 6 Ags 2015

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