The Mongolia Improved Governance of Extractives Project Grant No: TF 0A2830 Financial Statements as of December 31, 2017 Ulaanbaatar 2018 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized
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The Mongolia Improved Governance of Extractives ProjectGrant No: TF 0A2830
Financial Statements as of December 31, 2017
Ulaanbaatar 2018
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"NIlSLEL AUDIT" LLCCertified audit appraisal and accounting consultancy company
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INDEPENDENT AUDITOR'S REPORT
To: PIU Coordinator Sh.TsolmonThe Mongolia Improved Governance of Extractives ProjectGrant No: TF OA 2830
We have audited the Project Financial Statements comprising the Balance Sheet, Project Source andUses of Funds by project activities, Disbursement Report and the Designated Account statement of theMongolia Improved Governance of Extractives Project for the period from August 24, 2016 toDecember 31, 2017. The management of the Mongolia Improved Governance of Extractives Projectis to prepare the Project Financial Statements on the cash receipts and payments basis in conformitywith the International Public Sector Accounting Standards (IPSAS). On this basis, cash receipts arerecognized when received and cash expenditures are recognized when paid rather than when incurred.Our responsibility is to express an opinion thereon based on our audit.
We conducted our audit in accordance with the International Standards on Auditing issued by theInternational Auditing and Assurance Standards Board of the International Federation of Accountants.These standards require that we plan and perform the audit to obtain reasonable assurance aboutwhether the annual financial reports are free of material misstatement. An audit includes examiningon test basis, evidence supporting the amounts and disclosures in the annual financial reports. An auditalso includes assessing the accounting principles used and significant estimates made by managementas well as evaluating the overall statement presentation. We believe our audit provides a reasonablebasis for our opinion.
In our opinion, the Project Financial Statements have been prepared in accordance with theInternational Public Sector Accounting Standards issued by the Public Sector Committee of theFederation of Accountants, presented fairly the cash receipts and payments of the project for the periodfrom August 24, 2016 to December 31, 2017 and, furthermore, in all material respects, expenditureshave applied to the purpose intended in the Grant Agreement, Grant No: TF OA 2830.
"NIISLEL AUDIT" LLCCertified aUd t, appra sa! ad accounting consultancy company
INDEPENDENT AUDITOR'S REPORT
To: PIU Coordinator Sh.TsolmonThe Mongolia Improved Governance of Extractives ProjectGrant No: TF OA 2830
We have audited the accompanying Statement Sources and Uses of Funds of the Mongolia Improved
Governance of Extractives Project submitted to the World Bank for the period from August 24, 2016to December 31, 2017 in support of credit withdrawals under the Grant Agreement, Grant No: TF OA2830.
We conducted our audit in accordance with generally accepted auditing standards that included
examination, on a test basis, of evidence supporting the amounts and disclosures in the Statement ofSources and Uses of Funds. An audit also includes assessing the accounting principles used and
significant estimates made by management as well as evaluating the overall statement presentation.We believe our audit provides a reasonable basis for our opinion.
In our opinion, the Statement of Sources and Uses of Funds submitted together with the internal
controls and procedures involved in their preparation can be relied upon to support the application for
"NIlSLEL AUDIT" LLCCertified audit, appraisal and accounting consultancy company
Date:....... ....
INDEPENDENT AUDITOR'S REPORT
To: PIU Coordinator Sh.Tsolmon
The Mongolia Improved Governance of Extractives ProjectGrant No: TF OA 2830
We have audited the accompanying Statement of Expenditures of the Mongolia Improved Governance
of Extractives Project submitted to the World Bank for the period from August 24, 2016 to December
31, 2017 in support of credit withdrawals under the Grant Agreement, Grant No: TF OA 2830.
We conducted our audit in accordance with generally accepted auditing standards that includedexamination, on a test basis, of evidence supporting the amounts and disclosures in the Statement of
Expenditures. An audit also includes assessing the accounting principles used and significant estimates
made by management as well as evaluating the overall statement presentation. We believe our audit
provides a reasonable basis for our opinion.
In our opinion, the Statement of Expenditures submitted together with the internal controls and
procedures involved in their preparation can be relied upon to support the application for credit
Grant No: TF OA 2830The Mongolia Improved Governance of Extractives Project
DETAILED STATEMENT OF EXPENDITURES (IDA Withdrawals)For the period from August 24, 2016 to December 31, 2017
(in USD)CLAIMED AMOUNT CREDITED AMOUNT
WA_CATEGORIES CATEGORIESWA
numbers NnIncremental DifferenceGoods Consultant Non Training and operatin Total Component Component Component ComponentGosconsultancy Wrsoosrtsn Total Totalservices services Workshop #1 #2 #3
"NIISLEL AUDIT" LLCCertified audit. appraisal and accouInting consultancy company
Date:............
INDEPENDENT AUDITOR'S REPORT
To: PIU Coordinator Sh.TsolmonThe Mongolia Improved Governance of Extractives Project
Grant No: TF OA 2830
We have audited the accompanying Designated Account Statement of the Mongolia Improved
Governance of Extractives Project submitted to the World Bank for the period from August 24, 2016to December 31, 2017 in support of credit withdrawals under the Grant Agreement, Grant No: TF OA2830.
We conducted our audit in accordance with generally accepted auditing standards that included
examination, on a test basis, of evidence supporting the amounts and disclosures in the Designated
Account Statement. An audit also includes assessing the accounting principles used and significant
estimates made by management as well as evaluating the overall statement presentation. We believe
our audit provides a reasonable basis for our opinion.
In our opinion, the Designated Account Statement submitted together with the internal controls and
procedures involved in their preparation can be relied upon to support the application for credit
"NIISLEL AUDIT" LLCCertified audit appraisal and accounting consultancy company
Date:............
INDEPENDENT AUDITOR'S REPORT
To: PIU Coordinator Sh.TsolmonThe Mongolia Improved Governance of Extractives Project
Grant No: TF OA 2830
We have audited the accompanying Sub-Accounts Statement of the Mongolia Improved Governanceof Extractives Project submitted to the World Bank for the period from August 24, 2016 to December
31, 2017 in support of credit withdrawals under the Grant Agreement, Grant No: TF OA 2830.
We conducted our audit in accordance with generally accepted auditing standards that included
examination, on a test basis, of evidence supporting the amounts and disclosures in the Sub-Accounts
Statement. An audit also includes assessing the accounting principles used and significant estimates
made by management as well as evaluating the overall statement presentation. We believe our audit
provides a reasonable basis for our opinion.
In our opinion, the Sub-Accounts Statement submitted together with the internal controls and
procedures involved in their preparation can be relied upon to support the application for credit
The Mongolia Improved Governance of Extractive ProjectNOTES TO THE FINANCIAL STATEMENTSFor the period from Aug 24, 2016 to Dec 31, 2017
1. PROJECT BACKGROUND
On July 06, 2016, the International Bank for Reconstruction and Development/InternationalDevelopment Association "World Bank" and the the Government of Mongolia (represented by theMinistry of Finance) signed the Financing Agreement Grant No.TFOA 2830 to implement theMongolia Improved Governance of Extractive Project (MIGEP). The total approved amount was USD450,000 and the project closing date is December 31, 2018.
The objective of the project is enhance transparency and accountability in the management ofMongolia's extractives sector through an inclusive and sustainable EITI process. Project consists ofthe following components.
Component 1: Building stakeholders capacity to engage through training and conferences.Capacity building of stakeholders in the EITI process, training, sub-national conference in fourregions, training and awareness raising workshop for civil society members and community leaders onEITI and support for dissemination and awareness campaigns, including television campaign, articlesand interview through daily newspapers, websites and radio channels and printing of EITI reports andother promotional materials.
Component 2: Strengthening Mongolia EITI Secretariat's communication and knowledge base.Through the provision of a study tour for the Mongolia EITI, and training and promotion of the EITI.
Component 3: EITI secretariat operational needs. Provision of support to the Mongolia EITISecretariat for purposes of carrying out of the day-to-day Project activities including financialmanagement, procurement, environmental and social management, communication and monitoringand evaluation of project activities.
Component 4: Capacity building. Support for local EITI sub councils' members and otherstakeholders through training, including EITI soum level roadshows for local community and otherstakeholders.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a) Statement of compliance: The Annual Financial Reports comprise Balance Sheet, Uses of Fundsby Category, Uses of Funds by Project Activity, Disbursement report and the Designated AccountStatement. These reports have been prepared as agreed with the World Bank.
b) Basis of preparation: The financial statements were prepared in accordance with the InternationalPublic Sector Accounting Standards (IPSASs) issued by the International Public SectorAccounting Standards Board (IPSASB) of the International Federation of Accountants. Thefinancial statements have been prepared on a cash basis. On this basis, cash receipts are recognizedwhen received and disbursements are recognized when paid rather than when expenses areincurred. The project financial activities carried out in compliance with the project Financialmanagement manual which has been accepted by the World Bank.
c) Basis of measurement: The financial statements are presented in U.S.Dollars (USD). Thepayments made by Mongolian currency (MNT) which were transferred into USD based on officialexchange rate, as of the date of payment.
d) Basis of presentation: The account balances in the financial statements cover transactionsbetween August 24, 2016 to December 31, 2017.
e) Designated account: In accordance with the Disbursement Letter dated July 6, 2016, the projectopened the Designated Account (DA) for the credit financing acceptable to the World Bank. Theceiling of the designated account is USD 50.000 (fifty thousand dollars). DA is located in StateBank and maintained in USD account number 104900069526.
f) Operating accounts: As specified in the Disbursement Letter, the project opened the MNTOperating Account (OA) to be opened at the same bank which is maintained with ceiling ofequivalent to USD 20,000. The OA will be used for reasonable expenditures related to training andoperational activities with approval of EITI coordinator. Uses of the advance in OA will be reportedand reconciled with the DA on a monthly basis based on the budget approved by MOF on aquarterly basis. The OA MNT was located in State bank until December 31, 2017 and maintainedby the PIU, account number 104900069518. The payments for the eligible expenditures trainingand workshops and incremental operating costs are paid from OAs.
3. CASH AND CASH EQUIVALENTS
The summary of transaction statement of Designated account and Sub-accounts for the period betweenAugust 24, 2016 and December31, 2017 is indicated as follows:
(in USD)
December 31, 2017 August 24, 2016
Cash at the bank:- Designated account 10,450.16 -
- Sub-account 1,631.39
TOTAL 12,081.55
4. CUMULATIVE PROJECT EXPENDITURES
The total disbursed amount of USD 219,357.38 for the period between August 24. 2016 and December31, 2017 is indicated by eligible expenditures and categories as follows:
(in USD)
Non Training IncrementalComponent names Goods Cons consultancy and operating Total
services Workshop costsComp#1:Building stakeholders -capacity to engage - - - 24,140.06 - 24,140.06though training andconference
Consultant Non Training IncrementalComponent names Goods consultancy and operating Total
services Workshop costs
Comp#2:Strengthening EITI
secretariat - 2,374.8 2,335.71 2,406.37 2,524.16 9,641.04communications andknowledge baseComp#3:Meeting EITI 2,102.20 157,917.66 - - 25,556.42 185,576.28secretariat operationalneedComp#4:Capacity building
TOTAL 2,102.20 160292.46 2,335.71 26,546.43 28,080.58 219,357.38
For the reporting period under the EITI total of 3 contracts were committed through shopping and DCmethods. Goods for the total amount of USD 2,102.20 in accordance with the procurement guidelinesissued by World Bank and PPL.
Goods: The total commitment USD2,102.20 and disbursed USD 2,102.20 for the period betweenAugust 24, 2016 and December 31, 2017 as follows:
Contract Description Contract Payment Total amount
number of the goods date date (in MNT) (in USD)
Purchse of Summit Computer1 11/17/105 Lap top tcoputer 9/10/2017 9/11/2017 4,699,000 2,102.20Lap top technology LLC
computer I
TOTAL AMOUNT 4,699,000 2,102.20
Consultant services: The total disbursed USD160.292.46 for the period between August 24, 2016 andDecember 31, 2017 as follows:
(in USD)
Contract Description Name of the Contract Closing Total Total~N of the committed disbursed
number contractor date dateconsultants amount amount
I MIGEP Consultancy Bayarsaikhan.N 11/19/2017 02/19/2018 2,000.00 1,344.5006/17 fee for PSA
Consultancy
2 MIGEP fee for Batpurev.A 11/18/2017 12/25/2017 2,500.00 1,030.1007/17 Media