U U U U U North East and Red River Delta Regions Health * System Support Project J (Under the Financing Agreement No. IDA 5259 - VN between the Government of the Socialist Republic of Vietnam and the International * Development Association (IDA)) * Financial statements * For the year ended 31 December2018 U * 2L~K 13r U U U U U U U U U U U U U U U U U U U U U North East and Red River Delta Regions Health System Support Project Under the Financing Agreement No. IDA 5259 - VN between the Government of the Socialist Republic of Vietnam and the International Development Association (IDA) CONTENTS Pages Report of the Project management 1 -2 Independent auditors' report on the financial statements 3-4 Balance sheet 5 Statement of income, expenditure and fund balance 6 Cash flow statement 7 Statement of designated account 8-9 Statement of expenditures 10 Notes to the financial statements 11-26 Independent assurance report on compliance 27-28 Independent assurance report on effectiveness of internal control 29 - 30 Appendix 1: Management letter 1-25 UJ U; U * North East and Red River Delta Regions Health System Support Project Under the Financing Agreement No. IDA 5259 - VN between the Government of the Socialist Republic of Vietnam and the International Development Association (IDA) REPORT OF THE PROJECT MANAGEMENT The management of North East and Red River Delta Regions Health System Support Project (the "Project") presents this report and its financial statements as at 31 December 2018 and for the year then ended. THE PROJECT MANAGEMENT'S RESPONSIBILITY IN RESPECT OF THE FINANCIAL STATEMENTS The Project management is responsible for the financial statements as at 31 December 2018 and for the year then ended which give a true and fair view of: > the assets, liabilities and fund balance as at 31 December 2018; > the receipt, expenditure and fund balance for the year ended 31 December 2018; > the statement of cash flows of the Project for the year ended 31 December 2018; > the balances of the designated account as at 31 December 2018 and the movements of this account for the year then ended; and > the statements of expenditures (SOEs) for the year ended 31 December 2018. In preparing these financial statements, the Project management is required to: > select suitable accounting policies and then apply them consistently in accordance with the International Public Sector Accounting Standards ("IPSAS"); the Financing Agreement No. IDA 5259 - VN ("Financing Agreement") between the Government of the Socialist Republic of Vietnam and the International Development Association ("IDA"); the Project Operation Manual ("POM"); >, state whether applicable accounting policies have been followed, subject to any material departures disclosed and explained in the financial statements; and > design and implement an effective internal control to enable the preparation of the financial statements that are free from material misstatement, whether due to fraud or error. The Project management is responsible for ensuring that proper accounting records are kept which disclose, with reasonable accuracy, the Project's assets, liabilities and fund balance; its receipt and expenditure and its cash flows for the reporting period and accounting books in compliance with applicable accounting policies. They are also responsible for safeguarding the assets of the Project and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. Ns V1 The Project management confirms that they have complied with the above requirements in preparing the financial statements. 1 * North East and Red River Delta Regions Health System Support Project Under the Financing Agreement No. IDA 5259 - VN between the Government of the Socialist Republic of Vietnam and the International Development Association (IDA) REPORT OF THE PROJECT MANAGEMENT (continued) STATEMENT BY THE PROJECT MANAGEMENT The Project management does hereby state that, in its opinion: the accompanying financial statements give a true and fair view of the fund balance of the Project as at 31 December 2018, its receipt and expenditure and its cash flows for the year then ended, the balance of designated account as at 31 December 2018 and its movements for the year then ended and the statement of expenditures for the year ended 31 December 2018 in accordance M with IPSAS, Financing Agreement and POM; the funds provided by IDA and the Government of Vietnam are utilized for the purposes defined M in the Financing Agreement; M the Project complies with the Financing Agreement, POM, and other applicable law and regulations; and M the Project designs and implements an effective internal control to enable the preparation of the financial statements that are free from material misstatement, whether due to fraud or error, as IN well as to ensure compliance with the Financing Agreement, POM, law and regulations applicable to the Project. M For and on behalf of the Project management:' U M * Mr Dang Viet Hung Project Director U Hanoi, Vietnam 27 June 2019 M U U U U U M M 2 M Ernst & Young Vietnam Lirited Tel: +84 24 3831 5100 8th Foor, CorncrStone Building Fax: +84 24 3831 5090 16 Phan Chu Trinh Street ey.com Building a better Hoanie Dst8 Fictm working world Hni ..o ita Reference: 61199325/20159858 INDEPENDENT AUDITOR'S REPORT ON THE FINANCIAL STATEMENTS U To: The Central Project Management Unit of North East and Red River Delta Regions Health System Support Project U Opinion We have audited the financial statements of North East and Red River Delta Regions Health System Support Project ("the Project"), as set out on pages 5 to 26, which comprise the balance sheet as at 31 December 2018, the statement of receipt, expenditure and fund balance as at 31 December 2018 and for the year then ended, the statement of cash flows, the statement of designated account and the statement of expenditures for the year ended 31 December 2018, and the notes to the financial statements, including a summary of significant accounting policies. In our opinion, the financial statements of the Project as at 31 December 2018 and for the year then U ended are prepared, in all material respects, in accordance with the accounting policies as described in Note 3 to the financial statements and the Project Operation Manual ("POM"). Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (ISA). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Project in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants (IESBA Code) together with the ethical requirements that are relevant to our audit of the financial statements in Vietnam, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Accounting Policies We draw attention to Note 3 to the financial statements, which describes the accounting policies. Our opinion is not modified in respect of this matter. Responsibilities of the Central Project Management Unit to the Financial Statements The Central Project Management Unit is responsible for the preparation of these financial statements in accordance with the accounting policies as described in Note 3 to the financial statements and POM, and for such internal control as the Project management determines is necessary to enable the preparation of the financial statements that are free from material misstatement, whether due to fraud or error. g3 " EY Building a better working world U Auditors' responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISA will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with ISA, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Project's internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. We communicate with the Central Project Management Unit regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. For and on behalf of Ernst & Young Vietnam Limited Bui Anh Tuan Deputy General Director Audit Practicing Registration Certificate No. 1067-2018-004-1 Hanoi, Vietnam U 27 June 2019 4 U g 4 * North East and Red River Delta Regions Health System Support Project Under the Financing Agreement No. IDA 5259 - VN between the Government of the Socialist Republic of Vietnam and the International Development Association (IDA) BALANCE SHEET as at 31 December 2018 Currency: VND Notes Ending balance Beginning balance ASSETS Cash 4 145,015,224,824 229,034,865,227 Advances to suppliers 5.1 1,496,707,710 17,221,989,960 Advances to Project's implementation partners 5.2 527,269,540 9,639,305,568 Advances to Project's staff 5.3 159,224,023 738,313,885 Other receivables 6 - 2,000,000 147,198,651,097 256,636,474,640 * LIABILITIES AND FUND BALANCE Payables to suppliers 7.1 33,997,780,194 139,400,149,908 Payables to Project's implementation partners 7.2 19,771,554,754 25,627,508,444 Payables to Project's staff 7.3 101,341,490 385,235,818 Other payables 8 836,714,684 5,363,174,158 Fund balance 92,491,259,975 85,860,406,312 147,198,651,097 256,636,474,640 W Ms Dang Thi Phuong Nga Mr Dang.Viet Hung * Chief Accountant -Project Director Hanoi, Vietnam 27 June 2019 U5 U W U U U W U 5 U * North East and Red River Delta Regions Health System Support Project Under the Financing Agreement No. IDA 5259 - VN between the Government of the Socialist Republic of Vietnam and the International Development Association (IDA) STATEMENT OF INCOME, EXPENDITURE AND FUND BALANCE as at 31 December 2018 and for the year then ended Currency: VND Cumulative for the period from 17 For the year ended October 2013 to 31 Notes 31 December 2018 December 2018 RECEIPT Contribution from the International Development Association 9 386,874,683,036 1,890,218,304,440 Contribution from the Government of Vietnam 10 12,100,529,215 72,897,809,997 Bank interests 11 (3,603,156) 207,465,264 Other receipts 12 (54,195,000) 141,402,435 TOTAL RECEIPT 398,917,414,095 1,963,464,982,136 * EXPENDITURE 13 Component I: Strengthening the capacity of lower level hospitals to deliver quality services 340,223,826,009 1,636,674,531,383 Component II: Reducing the financial barriers to access health services for the economically vulnerable people 44,653,927,060 182,199,749,113 Component III: Project management, monitoring and evaluation 20,308,269,776 92,743,168,368 TOTAL EXPENDITURE 405,186,022,845 1,911,617,448,864 (DEFICIT)/SURPLUS OF RECEIPT OVER EXPENDITURE (6,268,608,750) 51,847,533,272 Foreign exchange differences 12,899,462,413 40,643,726,703 FUND BALANCE AT THE BEGINNING OF THE YEARIPERIOD 85,860,406,312 - FUND BALANCE AT THE END OF THE YEARIPERIOD 92,491,259,975 92,491,259,975 Ms Dang Thi Phuong Nga Mr Dang Viet Hung Chief Accountant Project Director Hanoi, Vietnam 27 June 2019 6 North East and Red River Delta Regions Health System Support Project Under the Financing Agreement No. IDA 5259 - VN between the Government of the Socialist Republic of Vietnam and the International Development Association (IDA) CASH FLOW STATEMENT as at 31 December 2018 and for the year then ended Currency: VND Cumulative for the period from 17 For the year ended 31 October 2013 to 31 Notes December 2018 December 2018 (Deficit)/surplus of receipt over expenditure during the year/period (6,268,608,750) 51,847,533,272 Decrease/(increase) in advances 25,416,183,140 (2,183,426,273) Decrease in other receivables 2,000,000 (Decrease)/increase in payables (116,068,677,206) 54,707,391,122 Net cash flows (used in)/from operating activities of the Project (96,919,102,816) 104,371,498,121 Net cash flows from investing activities of the Project Net cash flows from financing activities of the Project Net (decrease)/increase in cash (96,919,102,816) 104,371,498,121 Cash at beginning of the year/period 229,034,865,227 Foreign exchange differences 12,899,462,413 40,643,726,703 Cash at end of the year/period 4 145,015,224,824 145,015,224,824 Ms Dang Thi Phuong Nga Mr Dang Viet Hung Chief Accountant Project Director Hanoi, Vietnam 27 June 2019 7 North East and Red River Delta Regions Health System Support Project Under the Financing Agreement No. IDA 5259 - VN between the Government of the Socialist Republic of Vietnam and the International Development Association (IDA) STATEMENT OF DESIGNATED ACCOUNT as at 31 December 2018 and for the year then ended RECONCILIATION OF DESIGNATED ACCOUNT Currency: USD Cumulative up to 31 December 2018 Advance withdrawal 15,000,000 Balance of designated account as at 31 December 2018 5,743,990 Increase: Amount withdrawn and not yet claimed as at 31 December 2018 9,256,010 Total advance to designated account as at 31 December 2018 15,000,000 Ms Dang Thi Phuong Nga Mr Dang Viet Hung Chief Accountant Project Director Hanoi, Vietnam 27 June 2019 U W W W/ W U U W * North East and Red River Delta Regions Health System Support Project Under the Financing Agreement No. IDA 5259 - VN between the Government of the Socialist Republic of Vietnam and the International Development Association (IDA) STATEMENT OF DESIGNATED ACCOUNT (continued) as at 31 December 2018 and for the year then ended BALANCE AND MOVEMENTS OF DESIGNATED ACCOUNT Notes USD VND Equivalent Balance as at 1 January 2018 9,834,552 220,539,837,570 Increase: Amount deposited by the International Development Association 9 17,145,243 386,874,683,036 Foreign exchange differences - 12,898,615,828 Decrease: Amount withdrawn 21,235,805 489,206,565,825 Balance as at 31 December 2018 4 5,743,990 131,106,570,609 Balance as at 31 December 2018 as per bank statement 4 5,743,990 131,106,570,609 Ms Dang Thi Phuong Nga Mr Dang,Viet Hung Chief Accountant Project Director Hanoi, Vietnam 27 June 2019 U9 ■ ■ ■ � oor�o�vrn rn о и�и� о и ■ и м�- о со и с� � с� о й.- м й м _ '� оог�оом с� � Zj- M1�M�f�00 О ■ ш Ш сос�оr:мй со и rt м � с� �л �vми�rrn оо 'a�i �о � `'�°°°°м`'�° °> и � > о `� с ш �- � _ ` ■ �_ � соиг�осflМ м � (f� N О е- с}' U � � оомйи�со с� ~-- � ш - - -��о �д �`�.� о и _и с� � :✓ с� миvг� � ., �Q сВ tC) U') t0 М СО � � д �� � � V' М �- с- cf 1� . .-. t N � � �, � о � � � ` � ос�оошо оо r �0. ш а � ��оосоо � 1 ■ � т � и со о о cr о с� > г��со�r�� oi с� о � оо с� г� ао � •о .�' а. м и д- д- с� си и ■ �_ Ш c�o�rr-мv с� � ° с г�tiиисис� со � а�.О � �-б) oNN СО ._...... � =�т j м .-�- ti � � ш �" т � � > о а� ш � йосNош�й � ■ V � Ш � !� 00 �- 00 I� СО О .�','� о � М��о~О�о М V � U � М � .О � � �� "" О М ' N СО СО Q1 � �� �.И Ш и Q� О� �с00 с- � � V +�-� � � Qoj > 1� .- rn М � е_ � ао � ао с� с� v ■ �i и � V"�-� _� Z7' lf� и N l� N с- Ш f2 � тп� ш оо йNN N �� �°и`L° � м� с�.-� оо � (/� о гУ �.� с � Г Г М Г о _�L�� � _� � � ш с.�п й_, � Ш� ш � т р шм � с�оом с� с�Л � о�`°� � сл М� йNо v ■ й� о�� �� мс� йг�о оо <-ш итсfl ti ��О U ч� о ct с- h ■ � � о � � р� ш° � N � й� о ш � ■ � � ,-С, , и О с- N и о0 Q1 и � a�.Q� .� со��-о.-t� с� СОМОМ�М � ■ �� ' М N б� М б� М � р-о .°'сг°� ш ����й� v Z а,� й � с��с�соои м �� � > j �ONh-tno tD ... ■ р I ��� М О W N N о lC ; �о, �л�,� �' � � � й с-° � � ооооМойоой� � р� � � j � СО М М � М о 00 .. . 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О р� р,�а 1� NO00 N � С,� М�t Ср N М О L О (ЛО р Q ��М��� �р ■ ; Z Ш N U U г _ N "' � N LL Ш � .fZ ■ � Ш �� I� М о О N z V N N N М М М � �� Ш � Z Z Z Z Z Z Z � �� кГ ������ т tЛ Ш м о о о о о о � с --� � (� U � Ш � � � � c��i c��i �. � � +� с�в р р �° о �а �а �а Q �а ��. �L � �п � а а а а а а (� lL � Z � � QQQQQQ � � � � О о �v со т т т �а � ш N � Ш ш .о ш сп . .� ��.U Ш� � т� т с��о т т � Q > с � �� о Q� 'а� s_�_�_�_=__°с ;� � ш ° � Z�Q й`о Q ������ � �U = v � ■ ■ North East and Red River Delta Regions Health System Support Project Under the Financing Agreement No. IDA 5259 - VN between the Government of the Socialist Republic of Vietnam and the International Development Association (IDA) NOTES TO THE FINANCIAL STATEMENTS as at 31 December 2018 and for the year then ended I PROJECT BACKGROUND On I August 2013, the Government of the Socialist Republic of Vietnam and the International Development Association ("IDA") signed the Financing Agreement ("Financing Agreement") with the amount of SDR 100, 100,000 (equivalent to USD 150 million) for North East and Red River Delta Regions Health System Support Project ("the Project") being effective since 17 October 2013. Funding from the Vietnamese Government is approximately VND 105.18 billion; equivalent to USD 5 million; in which funding from the central government is approximately VND 40 billion, and those from local government is approximately VND 65.18 billion. The Project aims to assist the implementation of the national health strategy to promote access to necessary health services in provinces under the Project, which complies to the national strategies and policies on developing the health system, especially the elimination of overcrowding and the universal health coverage policy, by enhancing the capacity in delivering qualified health services and managing at provincial and district level, and by promoting access to these services, with priority to disadvantaged groups in the North East and Red River Delta Regions through: (i) Improve technical capacity and managing capacity in health services delivery system at provincial and district level to promote the quality of health services in five specialized departments: oncology, cardiology, obstetrics, pediatrics, and trauma; (ii) Expand the scope of health coverage for the near-poor; and (iii) Enhance the managing capacity, leadership, and technical transfer in health sector in provinces under the Project as well as the participating central hospitals. The Project will be implemented in 13 provinces in the Red River Delta and North East Regions, including Lang Son, Bac Giang, Thai Nguyen, Yen Bai, Tuyen Quang, Phu Tho, Hung Yen, Hai Duong, Thai Binh, Nam Dinh, Ha Nam, Ninh Binh, Hoa Binh and Thai Nguyen Central General Hospital ("BVDK TW"). The Project is implemented by the Ministry of Health of the Socialist Republic of Vietnam under a decentralized system consisting of 13 implementing Provincial Project Management Units ("PPMU"), Thai Nguyen Central General Hospital ("BVDK TW) and Central Project Management Unit in Hanoi ("CPMU"). !G The project consists of 3 following components: 4H (i) Component 1 - Strengthening the capacity of lower level hospitals to deliver quality services, including 2 sub-components: H sub-component 1A: Provincial sub-projects for the development of medical services and quality improvement; and sub-component 1 B: National policy and central level technical support for reducing hospital overcrowding and quality. (ii) Component 2 - Reducing the financial barriers to access health services by the economically vulnerable people: includes 3 sub-components: sub-component 2A: Direct subsidies to support the purchase of health insurance by the near-poor; sub-component 213: Coverage of catastrophic health care expenditure at lower level hospitals; and sub-component 2C: Support information, education and communication activities about health insurance. (iii) Component 3 - Project Management, monitoring and evaluation. U W North East and Red River Delta Regions Health System Support Project Under the Financing Agreement No. IDA 5259 - VN between the Government of the Socialist Republic of Vietnam and the International Development Association (IDA) NOTES TO THE FINANCIAL STATEMENTS (continued) as at 31 December 2018 and for the year then ended 2. BASIS OF PREPARATION The Project's financial statements, except for the statement of designated account, are expressed in Vietnam dong ("VND"). The statement of designated account is expressed in United States dollars ("USD"). The Project's financial statements are prepared in accordance with the International Public Sector Accounting Standards Board ("IPSAS"); the Financing Agreement No. IDA 5259 - VN between the Government of the Socialist Republic of Vietnam and the International Development Association ("IDA"); and the Project Operation Manual ("POM"). The Project's financial statements include financial statements of CPMU, 13 PPMU and Thai Nguyen Central General Hospital. 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The significant policies adopted in the preparation of the financial statements are set out below. Contribution from International Development Association ("IDA") Contributions from IDA are recognized when funds are transferred to the Project's designated account which is managed by the CPMU, rather than when being committed or budgeted. Contribution from the Vietnamese Government Contributions from the Vietnamese Government are recognized when cash is deposited in the Project's accounts at the CPMU, 13 PPMU and Thai Nguyen Central General Hospital or is disbursed through the Project's accounts at the CPMU, 13 PPMU and Thai Nguyen Central General Hospital, rather than when being committed or budgeted. Other income Other income includes: > Bank interests, which are recognised when cash is actually received after being net off with bank charges incurred during the period; and > The proceeds from sale of biding documents which are recorded when actually received, after being net off with bidding costs incurred. 01 Expenditures Except for advance to Project staffs and other receivables, expenditures are recognized as follows: > For the Project's expenditures financed by IDA, expenditures are recorded upon the approval of the Project management based on the accompanying documents. 1> For the Project's expenditures financed by the Government of Vietnam, expenditures are recorded when following criteria are satisfied: * activities and the certificate of work completion or equivalent documents are completed by the end of reporting year; * supporting documents are approved by the Project management during the year or within January of the following year; and * supporting documents are approved and paid by the State Treasury during the year or within January of the following year. U 8 12 U W North East and Red River Delta Regions Health System Support Project Under the Financing Agreement No. IDA 5259 - VN between the Government of the Socialist Republic of Vietnam and the International Development Association (IDA) NOTES TO THE FINANCIAL STATEMENTS (continued) as at 31 December 2018 and for the year then ended 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Foreign exchange differences Receipts in foreign currencies by CPMU are converted into VND using the monthly exchange rate declared by the Ministry of Finance in the month of the receipts. Expenditures in foreign currencies are converted into VND using the exchange rate ruling at the date of transaction at the buying exchange rate quoted by Lien Viet Post Joint Stock Commercial Bank. Monetary items which are denominated in foreign currencies, are translated into VND at the exchange rate quoted by State Bank at the reporting date. Foreign exchange differences are presented separately in the statement of receipt, expenditure and fund balance for the reporting year. Advances to implementing partners and Project staff Advances to implementing partners and project staffs to implement the Project's activities are carried as part of the fund balance until subsequent liquidation or clearance at approval of the Project management. Payables Payables are recognized as follows: For the Project's activities financed by IDA, payables are recorded upon the approval of the Project management based on accompanying documents. For the Project's activities financed by the Government of Vietnam, payables are recorded when following criteria are satisfied: * activities and the certificate of work completion or equivalent documents are completed by the end of reporting year; * supporting documents are approved by the Project management during the year or within January of the following year; and * supporting documents are approved and paid by the State Treasury within January of the following year. Personal income tax awaiting for payment to the tax authority and contribution based on salary awaiting for payment to insurance department in the reporting date are presented as payables in the balance sheet. Fixed asset and machinery expenses Fixed asset and machinery expenses are charged as the Project's expenses upon finalization and approval of the Project management. List of assets are maintained for management and monitoring purpose. U 8 13 North East and Red River Delta Regions Health System Support Project Under the Financing Agreement No. IDA 5259 - VN between the Government of the Socialist Republic of Vietnam and the International Development Association (IDA) NOTES TO THE FINANCIAL STATEMENTS (continued) as at 31 December 2018 and for the year then ended 4. CASH Currency: VND CPMU Ha Nam Yen Bai Phu Tho Tuyen Quang Thai Binh Ninh Binh Hung Yen PPMU PPMU PPMU PPMU PPMU PPMU PPMU Cash in banks 134,031,238,507 857,502,712 11,245,756 1,203,909,269 307,900,101 1,363,315,275 1,152,305,369 142,465,439 Designated accounts 131,106,570,609 - - - - - - - Bank accounts at provinces - 854,505,990 9,940,500 811,331,555 307,224,708 306,639,800 1,080,691,040 132,802,314 Interest bank accounts 2,260,588 2,996,722 1,305,256 60,895,348 48,276 31,464,670 13,440,562 7,055,608 Sales of bidding document accounts 7,881,307 - - 331,682,366 597,227 25,210,805 20,725,559 - Other accounts 2,914,526,003 - - - 29,890 - 37,448,208 2,607,517 Cash on hand 29,736,335 18,040,010 406,800 13,281,000 37,929,865 4,669,000 130,634,960 - TOTAL 134,060,974,842 875,542,722 11,652,556 1,217,190,269 345,829,966 1,367,984,275 1,282,940,329 142,465,439 Hoa Binh PPMU Nam Dinh Hai Duong Thai Nguyen BVDK TW Bac Giang Lang Son Total PPMU PPMU PPMU Thai Nguyen PPMU PPMU Cash in banks 839,471,916 360,838,036 875,970,268 510,672,405 337,623,710 1,659,729,621 985,108,605 144,639,296,989 Designated accounts - - - - - - - 131,106,570,609 Bank accounts at provinces 838,488,240 357,456,120 848,190,441 510,399,756 334,391,675 1,629,936,900 959,291,887 9,981,290,926 Interest bank accounts 983,676 2,765,004 27,306,328 272,649 640,835 29,792,721 7,819,862 189,048,105 Sales of bidding document accounts - - 473,499 - 2,591,200 - 17,996,856 407,158,819 Other accounts - 616,912 - - - - - 2,955,228,530 Cash on hand 63,944,100 - 1,126,000 2,352,284 45,014,481 - 28,793,000 375,927,835 TOTAL 903,416,016 360,838,036 877,096,268 513,024,689 382,638,191 1,659,729,621 1,013,901,605 145,015,224,824 14 * North East and Red River Delta Regions Health System Support Project Under the Financing Agreement No. IDA 5259 - VN between the Government of the Socialist * Republic of Vietnam and the International Development Association (IDA) NOTES TO THE FINANCIAL STATEMENTS (continued) as at 31 December 2018 and for the year then ended U g 5. ADVANCES 5.1 Advances to suppliers Currency: VND Ending balance Beginning balance CPMU - 17,221,989,960 Hoa Binh PPMU 535,887,210 Nam Dinh PPMU 956,004,000 Lang Son PPMU 4,816,500 TOTAL 1,496,707,710 17,221,989,960 5.2 Advances to Project's implementation partners Currency: VND Ending balance Beginning balance CPMU 35,806,000 8,145,982,538 Ha Nam PPMU 80,000,000 80,000,000 Yen Bai PPMU 79,514,600 506,400,000 Phu Tho PPMU - 148,078,000 Tuyen Quang PPMU 3,950,000 - Thai Binh PPMU - 64,386,000 Ninh Binh PPMU 160,000,000 - Hung Yen PPMU - 42,417,007 Hoa Binh PPMU 158,347,000 158,347,000 Nam Dinh PPMU - 235,500,000 Thai Nguyen PPMU 9,651,940 140,000,000 Bac Giang PPMU - 57,588,338 Lang Son PPMU 40,985,485 60,606,685 TOTAL 527,269,540 9,639,305,568 5.3 Advances to Project's staff Currency: VND Ending balance Beginning balance Ha Nam PPMU - 71,882,000 Yen Bai PPMU - 86,488,400 Thai Binh PPMU - 165,666,000 Ninh Binh PPMU - 160,000,000 Hoa Binh PPMU 61,442,000 11,442,000 Lang Son PPMU 97,782,023 242,835,485 TOTAL 159,224,023 738,313,885 15 * North East and Red River Delta Regions Health System Support Project Under the Financing Agreement No. IDA 5259 - VN between the Government of the Socialist Republic of Vietnam and the International Development Association (IDA) NOTES TO THE FINANCIAL STATEMENTS (continued) as at 31 December 2018 and for the year then ended 6. OTHER RECEIVABLES Currency: VND Ending balance Beginning balance Thai Binh PPMU - 2,000,000 TOTAL - 2,000,000 7. PAYABLES 7.1 Payables to suppliers Currency: VND Ending balance Beginning balance CPMU 29,797,523,744 71,310,874,846 Ha Nam PPMU - 2,223,000,000 Yen Bai PPMU - 10,791,210,000 Phu Tho PPMU 336,547,500 16,303,332,300 Tuyen Quang PPMU - 3,205,710,000 Ninh Binh PPMU 3,666,985,000 13,423,182,040 Hoa Binh PPMU 1,980,000 11,266,426,000 Nam Dinh PPMU - 8,963,471,500 Thai Nguyen PPMU - 1,550,300,000 BVDK TW Thai Nguyen - 197,226,000 Lang Son PPMU 194,743,950 165,417,222 TOTAL 33,997,780,194 139,400,149,908 7.2 Payables to Project's implementation partners Currency: VND Ending balance Beginning balance CPMU 5,154,205,870 Ha Nam PPMU 1,226,773,700 2,233,833,390 Yen Bai PPMU 418,996,500 Phu Tho PPMU 1,249,550,000 8,264,987,820 Tuyen Quang PPMU 1,050,920,400 1,776,825,239 Thai Binh PPMU 311,559,500 Ninh Binh PPMU 1,640,108,000 1,959,099,200 Hung Yen PPMU 3,449,673,870 Hoa Binh PPMU 833,193,200 1,385,990,190 Hai Duong PPMU 1,917,327,944 - Thai Nguyen PPMU 550,900,000 161,725,000 BVDK TW Thai Nguyen - 20,000,000 Bac Giang PPMU - 7,214,026,000 Lang Son PPMU 2,482,885,770 2,611,021,605 TOTAL 19,771,554,754 25,627,508,444 16 * North East and Red River Delta Regions Health System Support Project Under the Financing Agreement No. IDA 5259 - VN between the Government of the Socialist Republic of Vietnam and the International Development Association (IDA) NOTES TO THE FINANCIAL STATEMENTS (continued) as at 31 December 2018 and for the year then ended 7. PAYABLES (continued) 7.3 Payables to Project's staff Currency: VND Ending balance Beginning balance Ninh Binh PPMU 39,733,090 174,176,308 Hai Duong PPMU 61,608,400 61,608,400 BVDK TW Thai Nguyen - 149,451,110 TOTAL 101,341,490 385,235,818 8. OTHER PAYABLES Currency: VND Ending balance Beginning balance CPMU 221,977,091 25,214,898 Ha Nam PPMU 22,164,000 - Yen Bai PPMU 830,300 78,900 Phu Tho PPMU 120,170,000 - Tuyen Quang PPMU 138,383,033 231,189,890 Ninh Binh PPMU 138,282,161 63,973,821 Hung Yen PPMU 91,578,500 - Nam Dinh PPMU 13,216,912 594,946 Hai Duong PPMU 1,500,107 4,886,301,637 Thai Nguyen PPMU - 331,506 BVDK TW Thai Nguyen 22,400,000 30,960,000 PPMU Lang Son 66,212,580 124,528,560 TOTAL 836,714,684 5,363,174,158 17 * North East and Red River Delta Regions Health System Support Project Under the Financing Agreement No. IDA 5259 - VN between the Government of the Socialist Republic of Vietnam and the International Development Association (IDA) NOTES TO THE FINANCIAL STATEMENTS (continued) as at 31 December 2018 and for the year then ended 9. CONTRIBUTION FROM INTERNATIONAL DEVELOPMENT ASSOCIATION ("IDA") 9.1 Contribution from IDA according to Project reports USD Equivalent VND Accumulated to 31 December 2017 68,308,740 1,503,343,621,404 Increase: Withdrawal Application No. 27 1,529,816 34,284,714,220 Withdrawal Application No. 28 4,519,365 101,477,829,120 Withdrawal Application No. 29 3,632,517 81,564,547,046 Withdrawal Application No. 30 1,351,521 30,675,445,808 Withdrawal Application No. 31 1,641,406 37,254,997,429 Withdrawal Application No. 32 4,470,618 101,617,149,413 Total 17,145,243 386,874,683,036 Accumulated to 31 December 2018 85,453,983 1,890,218,304,440 9.2 Reconciliation of contribution from IDA USD Equivalent VND Contribution from IDA in designated account 17,145,243 386,874,683,036 Plus: Foreign exchange differences - 4,981,340,263 Total amounts contributed by IDA as per Statement of Expenditures 17,145,243 391,856,023,299 18 North East and Red River Delta Regions Health System Support Project Under the Financing Agreement No. IDA 5259 - VN between the Government of the Socialist Republic of Vietnam and the International Development Association (IDA) NOTES TO THE FINANCIAL STATEMENTS (continued) as at 31 December 2018 and for the year then ended 10. CONTRIBUTION FROM THE VIETNAMESE GOVERNMENT Currency: VND Cumulative for the period For the year ended 31 from 17 October 2013 to December 2018 31 December 2018 CPMU 4,633,072,350 30,158,057,050 Ha Nam PPMU 415,303,267 2,971,826,623 Yen Bai PPMU 655,798,000 5,232,907,200 Phu Tho PPMU 500,000,000 2,923,367,000 Tuyen Quang PPMU 315,676,744 1,515,805,522 Thai Binh PPMU 550,000,000 4,355,934,100 Ninh Binh PPMU 988,226,470 2,706,801,268 Hung Yen PPMU 981,333,884 4,029,256,984 Hoa Binh PPMU 754,272,500 3,256,490,256 Nam Dinh PPMU 476,768,000 2,577,768,000 Hai Duong PPMU 600,000,000 3,402,900,288 Bac Giang PPMU 354,613,000 2,109,535,600 Lang Son PPMU 615,465,000 2,428,957,230 Thai Nguyen PPMU 260,000,000 1,994,113,976 BVDK TW Thai Nguyen - 3,234,088,900 TOTAL 12,100,529,215 72,897,809,997 11. BANK INTERESTS Currency: VND Cumulative for the period For the year ended 31 from 17 October 2013 to December 2018 31 December 2018 CPMU 1,292,424 2,803,276 Ha Nam PPMU (3,064,024) 2,996,722 Yen Bai PPMU (1,066,819) 1,305,256 Phu Tho PPMU 749,120 64,756,214 Tuyen Quang PPMU (1,693,451) 146,793 VI Thai Binh PPMU 1,236,649 31,766,475 HI Ninh Binh PPMU (350,361) 11,002,044 H Hung Yen PPMU (1,942,333) 9,676,225 Hoa Binh PPMU (1,298,127) 983,676 Nam Dinh PPMU (4,731,206) 2,765,004 Hai Duong PPMU (2,305,398) 28,536,344 Bac Giang PPMU 4,572,533 29,792,721 Lang Son PPMU (2,185,428) 8,008,903 Thai Nguyen PPMU (5,718,422) 216,649 BVDK TW Thai Nguyen 12,901,687 12,708,962 TOTAL (3,603,156) 207,465,264 This is the interest income earned from the Project's bank accounts, after netting off with bank charges incurred during the period. 19 North East and Red River Delta Regions Health System Support Project Under the Financing Agreement No. IDA 5259 - VN between the Government of the Socialist Republic of Vietnam and the International Development Association (IDA) NOTES TO THE FINANCIAL STATEMENTS (continued) as at 31 December 2018 and for the year then ended 12. OTHER INCOME Currency: VND For the year ended 31 Cumulative for the period December 2018 from 17 October 2013 to 31 December 2018 CPMU (50,035,000) 16,015,555 Ha Nam PPMU - 13,719,000 Phu Tho PPMU - 24,909,000 Thai Binh PPMU - 60,997,300 Ninh Binh PPMU - 20,000 Hoa Binh PPMU (4,160,000) - Nam Dinh PPMU - (621,216) Hai Duong PPMU - 17,800,000 Lang Son PPMU - 1,562,796 BVDK TW Thai Nguyen - 13,719,000 TOTAL (54,195,000) 141,402,435 Other income mostly comprises of proceeds from sale of bidding documents, presented net of costs incurred for the bidding process. U a 20 WWWOWWNNOagaOagNEOMagNgENNENM No ONEW North East and Red River Delta Regions Health System Support Project Under the Financing Agreement No. IDA 5259 - VN between the Government of the Socialist Republic of Vietnam and the International Development Association (IDA) NOTES TO THE FINANCIAL STATEMENTS (continued) as at 31 December 2018 and for the year then ended 13. EXPENDITURES 13.1. Expenditures by categories and sources of funds Currency: VND For the year ended 31 December 2018 Cumulative for the period from 17 October 2013 to 31 December 2018 Counterpart Counterpart fund by the fund by the Government of Government of Financed by IDA Vietnam Total Financed by IDA Vietnam Total Component I: Strengthening the capacity of lower level hospitals to deliver quality services 338,425,446,659 1,798,379,350 340,223,826,009 1,602,750,859,345 33,923,672,038 1,636,674,531,383 Component II: Reducing the financial barriers to access health services by the economically vulnerable people 44,653,927,060 - 44,653,927,060 182,199,749,113 - 182,199,749,113 Component Ill: Project management, monitoring and evaluation 10,006,119,911 10,302,149,865 20,308,269,776 53,767,050,409 38,976,117,959 92,743,168,368 TOTAL 393,085,493,630 12,100,529,215 405,186,022,845 1,838,717,658,867 72,899,789,997 1,911,617,448,864 21 North East and Red River Delta Regions Health System Support Project Under the Financing Agreement No. IDA 5259 - VN between the Government of the Socialist Republic of Vietnam and the International Development Association (IDA) NOTES TO THE FINANCIAL STATEMENTS (continued) as at 31 December 2018 and for the year then ended 13. EXPENDITURES (continued) 13.2. Actual expenditures and budget comparison by categories for reporting yearl period Currency: VND For the year ended 31 Cecember 2018 Project disbursement progress Over/(Under) budget Accumulated Approved budget (*) expenditures for the Budget approved period from 17 by the Ministry of October 2013 to 31 Progress Code Activities Expenditures Health Variance % December 2018 VND Equivalence USD (%) . Component 1: Strengthening the capacity of lower level hospitals to deliver quality services 340,223,826,009 481,219,466,671 (140,995,640,662) -29% 1,636,674,531,383 2,482,248,000,000 118,000,000 66% l.A Improving lower level medical services and quality 306,533,403,857 423,212,343,384 (116,678,939,527) -28% 1,529,300,682,966 2,250,852,000,000 107,000,000 68% I.A.1 Supporting medical equipment and repairing small size infrastructure for technical transfer ("CGKT") 248,336,018,769 341,654,067,580 (93,318,048,811) -27% 1,360,329,862,854 1,935,312,000,000 92,000,000 70% L.A.2 Supporting in hospital management capacity enhancement 16,529,602,110 29,242,228,105 (12,712,625,995) -43% 49,125,828,020 105,180,000,000 5,000,000 47% I.A.3 Supporting in training for technical transfer 41,667,782,978 52,316,047,699 (10,648,264,721) -20% 119,844,992,092 210,360,000,000 10,000,000 57% 1.B. National policy and central level technical support for reducing hospital overcrowding and quality improvement 33,690,422,152 58,007,123,287 (24,316,701,135) -42% 107,373,848,417 231,396,000,000 11,000,000 46% I.B.1 Policy and technical support 2,863,495,125 3,224,949,809 (361,454,684) -11% 14,068,489,767 32,605,800,000 1,550,000 43% I.B.2 Support equipment for national hospital 30,826,927,027 54,782,173,478 (23,955,246,451) -44% 93,305,358,650 198,790,200,000 9,450,000 47% II. Component II: Reducing the financial barriers to access health services by the economically vulnerable people 44,653,927,060 99,113,142,893 (54,459,215,833) -55% 182,199,749,113 610,044,000,000 29,000,000 30% II.A Direct subsidies to support the purchase of health insurance by the near-poor 27,731,650,900 77,106,086,950 (49,374,436,050) -64% 125,633,505,885 483,828,000,000 23,000,000 26% II.B Coverage of catastrophic health care expenditure in central and provincial hospital 431,686,502 1,064,661,153 (632,974,652) -58% 1,467,188,165 42,072,000,000 2,000,000 4% II.C Supporting in information, education and communication activities about health insurance 16,490,589,658 20,942,394,790 (4,451,805,132) -21% 55,099,055,063 84,144,000,000 4,000,000 65% III Component Ill: Project management monitoring and evaluation 20,308,269,776 27,285,665,588 (6,977,395,812) -26% 92,743,168,368 168,288,000,000 8,000,000 55% 111.1 Consultant selection 4,482,921,640 7,481,820,024 (2,998,898,384) -40% 23,632,929,089 30,502,200,000 1,450,000 77% 111.2 Organizing conference, workshop, training, monitoring planning 2,128,369,280 4,804,378,231 (2,676,008,951) -56% 10,567,296,430 30,556,893,600 1,452,600 35% 111.3 Survey, research 215,529,600 901,224,811 (685,695,211) -76% 1,302,940,600 5,259,000,000 250,000 25% 111.4 Office equipment and vehicle purchase 1,198,374,581 1,081,303,374 117,071,207 11% 9,320,999,321 16,092,540,000 765,000 58% 111.5 Project operation expenses 12,283,074,675 13,016,939,148 (733,864,473) -6% 47,919,002,928 85,877,366,400 4,082,400 56% TOTAL 405,186,022,845 607,618,275,152 (202,432,252,307) -33% 1,911,617,448,864 3,260,580,000,000 155,000,000 59% (*) The approved budget is the total fund of the Project (USD 155,000,000) converted into VND using the exchange rate of the Ministry of Finance at the date of signing the Agreement (1USD = VND21,036). 22 North East and Red River Delta Regions Health System Support Project Under the Financing Agreement No. IDA 5259 - VN between the Government of the Socialist Republic of Vietnam and the International Development Association (IDA) NOTES TO THE FINANCIAL STATEMENTS (continued) as at 31 December 2018 and for the year then ended 13. EXPENDITURES (continued) 13.3. Actual expenditure and budget comparison by PPMU for the reporting year/period Currency: VND For the year ended 31 December 2018 Budget approved by Component I Component II Component Ill Total Ministry of Health Over/(Under) CPMU 283,628,801,540 5,753,193,638 9,346,993,004 298,728,988,182 337,500,000,000 (38,771,011,818) Ha Nam PPMU 2,065,400,500 3,267,703,940 472,909,267 5,806,013,707 15,244,084,556 (9,438,070,849) Yen Bai PPMU 2,803,691,700 1,310,505,300 1,146,752,100 5,260,949,100 11,295,100,000 (6,034,150,900) Phu Tho PPMU 13,010,868,500 7,671,040,719 702,975,000 21,384,884,219 43,538,000,000 (22,153,115,781) Tuyen Quang PPMU 1,309,913,650 2,278,081,640 537,023,511 4,125,018,801 13,490,716,096 (9,365,697,295) Thai Binh PPMU 3,299,573,900 1,270,422,600 1,004,231,800 5,574,228,300 10,942,000,000 (5,367,771,700) Ninh Binh PPMU 5,094,494,000 393,809,000 1,135,148,418 6,623,451,418 13,459,374,500 (6,835,923,082) Hung Yen PPMU 4,795,635,600 6,901,471,240 1,269,638,884 12,966,745,724 25,200,000,000 (12,233,254,276) Hoa Binh PPMU 2,218,748,200 1,070,363,470 787,695,700 4,076,807,370 25,229,000,000 (21,152,192,630) Nam Dinh PPMU 2,359,630,690 1,533,661,401 476,183,600 4,369,475,691 20,599,000,000 (16,229,524,309) Hai Duong PPMU 4,794,431,710 5,265,773,404 865,824,340 10,926,029,454 24,038,000,000 (13,111,970,546) Bac Giang PPMU 3,962,072,500 6,768,981,000 548,472,400 11,279,525,900 34,603,000,000 (23,323,474,100) Lang Son PPMU 5,512,672,000 536,076,570 1,254,189,400 7,302,937,970 17,324,000,000 (10,021,062,030) Thai Nguyen PPMU 4,381,632,850 632,843,138 655,111,352 5,669,587,340 12,656,000,000 (6,986,412,660) BVDK TW Thai Nguyen 986,258,669 - 105,121,000 1,091,379,669 2,500,000,000 (1,408,620,331) TOTAL 340,223,826,009 44,653,927,060 20,308,269,776 405,186,022,845 607,618,275,152 (202,432,252,307) 23 MW ONION E agENN NN E N E II 01010000 NE S W R W g North East and Red River Delta Regions Health System Support Project Under the Financing Agreement No. IDA 5259 - VN between the Government of the Socialist Republic of Vietnam and the International Development Association (IDA) NOTES TO THE FINANCIAL STATEMENTS (continued) as at 31 December 2018 and for the year then ended 13. EXPENDITURES (continued) 13.3. Actual expenditure and budget comparison by PPMU for the reporting yearlperiod (continued) Currency: VND For the period from 17 October 2013 to 31 December 2018 Approved budget (*) Progress Unit - - -oo Component / Component 11 Component Ill Total VND equivalence USD (%) CPMU 888,537,109,387 11,685,624,073 48,772,287,768 948,995,021,228 1,763,082,631,932 83,812,637 54% Ha Nam PPMU 61,086,240,500 12,637,393,272 2,643,520,613 76,367,154,385 114,649,481,616 5,450,156 67% Yen Bai PPMU 64,260,192,800 5,446,367,700 4,217,489,700 73,924,050,200 113,348,194,656 5,388,296 65% Phu Tho PPMU 62,373,570,060 40,549,601,307 3,202,512,640 106,125,684,007 120,931,251,936 5,748,776 88% Tuyen Quang PPMU 36,508,845,571 6,804,320,260 2,889,162,516 46,202,328,347 90,046,827,816 4,280,606 51% Thai Binh PPMU 68,543,010,400 4,227,663,500 4,643,033,900 77,413,707,800 118,739,574,204 5,644,589 65% Ninh Binh PPMU 75,209,666,400 3,328,242,000 3,261,911,835 81,799,820,235 118,833,710,304 5,649,064 69% Hung Yen PPMU 38,670,783,025 17,350,517,433 4,494,984,684 60,516,285,142 105,222,576,864 5,002,024 58% Hoa Binh PPMU 76,433,914,400 6,502,274,590 2,544,681,456 85,480,870,446 141,103,177,200 6,707,700 61% Nam Dinh PPMU 38,482,230,590 4,232,076,641 2,237,385,640 44,951,692,871 98,990,598,756 4,705,771 45% Hai Duong PPMU 45,029,088,308 25,660,947,654 3,938,831,002 74,628,866,964 113,194,484,604 5,380,989 66% Bac Giang PPMU 36,784,870,738 25,377,529,996 2,356,642,462 64,519,043,196 108,129,794,136 5,140,226 60% Lang Son PPMU 28,720,559,832 4,941,074,560 3,170,107,810 36,831,742,202 79,469,969,088 3,777,808 46% Thai Nguyen PPMU 47,755,047,400 11,561,124,522 2,851,636,227 62,167,808,149 98,363,031,768 4,675,938 63% BVDK TW Thai Nguyen 68,279,401,972 1,894,991,605 1,518,980,115 71,693,373,692 76,474,695,120 3,635,420 94% TOTAL 1,636,674,531,383 182,199,749,113 92,743,168,368 1,911,617,448,864 3,260,580,000,000 155,000,000 59% (*) The approved budget is the total fund of the Project (USD 155,000,000) converted into VND using the exchange rate of the Ministry of Finance at the date of signing the Agreement (1USD = VND21,036). 24 North East and Red River Delta Regions Health System Support Project Under the Financing Agreement No. IDA 5259 - VN between the Government of the Socialist Republic of Vietnam and the International Development Association (IDA) NOTES TO THE FINANCIAL STATEMENTS (continued) as at 31 December 2018 and for the year then ended 13. EXPENDITURES (continued) 13.3. Actual expenditure and budget comparison by PPMU for the reporting year/period (continued) 13.3.1 Actual expenditure and budget comparison by the International Development Association by PPMU for the reporting year/period Currency: VND For the period from 17 October 2013 to 31 December 2018 Budget approved by the Intemational Development Unit Association Component I Component II Component Ill Total VND equivalence USD Over/(Under) CPMU 871,074,754,337 11,685,624,073 36,076,585,768 918,836,964,178 1,721,354,528,460 81,828,985 (802,517,564,282) Ha Nam PPMU 59,909,921,500 12,637,393,272 848,012,990 73,395,327,762 110,033,888,712 5,230,742 (36,638,560,950) Yen Bai PPMU 61,247,119,500 5,446,367,700 1,997,655,800 68,691,143,000 108,723,661,452 5,168,457 (40,032,518,452) Phu Tho PPMU 61,765,044,700 40,549,601,307 887,671,000 103,202,317,007 116,241,528,168 5,525,838 (13,039,211,161) Tuyen Quang PPMU 35,858,516,710 6,804,320,260 2,023,685,855 44,686,522,825 85,765,749,384 4,077,094 (41,079,226,559) Thai Binh PPMU 67,448,426,400 4,227,663,500 1,381,683,800 73,057,773,700 114,049,429,716 5,421,631 (40,991,656,016) Ninh Binh PPMU 74,627,996,400 3,328,242,000 1,136,780,567 79,093,018,967 114,078,838,044 5,423,029 (34,985,819,077) Hung Yen PPMU 37,470,407,025 17,350,517,433 1,666,103,700 56,487,028,158 100,819,784,136 4,792,726 (44,332,755,978) Hoa Binh PPMU 74,907,952,400 6,502,274,590 812,173,200 82,222,400,190 136,241,231,700 6,476,575 (54,018,831,510) Nam Dinh PPMU 37,479,126,890 4,232,076,641 662,721,340 42,373,924,871 94,559,218,104 4,495,114 (52,185,293,233) Hai Duong PPMU 44,133,876,482 25,660,947,654 1,431,142,540 71,225,966,676 108,907,915,776 5,177,216 (37,681,949,100) Bac Giang PPMU 36,209,343,200 25,377,529,996 950,807,400 62,537,680,596 103,831,697,580 4,935,905 (41,294,016,984) Lang Son PPMU 28,633,618,832 4,941,074,560 1,404,252,900 34,978,946,292 75,247,917,672 3,577,102 (40,268,971,380) Thai Nguyen PPMU 46,979,492,850 11,561,124,522 1,504,903,801 60,045,521,173 93,986,870,616 4,467,906 (33,941,349,443) BVDK TW Thai Nguyen 65,005,262,119 1,894,991,605 982,869,748 67,883,123,472 71,557,740,480 3,401,680 (3,674,617,008) TOTAL 1,602,750,859,345 182,199,749,113 53,767,050,409 1,838,717,658,867 3,155,400,000,000 150,000,000 (1,316,682,341,133) 25 � � � � -` _ j i N�и�00MNtt�fNOCOC�C00 М � о N N о С О М о� д' и�t и О t� N О а � N� f�� М о 1� N С D и о и �� О � � � СПСО�СПNООииNСОМи��1' О U `. �СОмиf� f�Mf� СОМиI�-О � � С � L 01� MNNOи V'(OCO1�NO�1� N ОМ СОис}'мММММ(Об)MCf� О � � � 1��'оСрCDМct'1�оим�CflиО 00 о � О иш_CO��мо�сооотммс�.- пi ■ � U v �� � .��. ���� N , м ш � � N�o)ООNСОиМи1�-М CONO О � � и�ММ иМб)N иI�NOM� О С Ср�00�иоОN�_tO1�Mt�01� О � Ср � U � � М б �_� N М N С О о О М д' О М М О � � � С � М�- NONNOM ООООМ О � L � 'tS с�`�- С о_NNNNNNNNNNNNNN О = р С � С С о 'л U L 'L. 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Ш ш v� И w� ���� �����Z � � � Q Qo � с с ����������а.�°-� � о' с � rn � � � Z N � д д �а� ����а���� �1--- � L � С � С .С � � Q- � � tn п> >, � о � � р � �- сл . � cQ ш � г a�i д � т ���тт�т � � � °Z� J � �Q > с (� � � � U ш � � .�.. � Z т � j,'с� � � гц Е � U � �� � fa- 0 Ш � � (� � д .� .�.. е а со ш.с �.с ._ � о с� с� со с� �> О и:с св � Ш ш.о �о ш Q Q � U=�°-f-t-zx=z=m�E-m � �с.� = N ��� и� � ��° �i� м м J с и О ■ G� Q Z(В [� Г t� � � Emst & Yo,inq Vietnam Limited 1cl: +84 24 3831 1_100 8th Floor, Coi nerStone BUJIding Fav 84 24 3831 5090 Ey 16 Phan Chu Trinh S[rect ey.com Hoan Kiem District Building a better Hand, S+R. of Vietnam working world Reference: 61199325/20159858 INDEPENDENT ASSURANCE REPORT ON COMPLIANCE To: The Central Project Management Unit of the North East and Red River Delta Regions Health System Support Project We have examined the compliance of the management of North East and Red River Delta Regions Health System Support Project ("the Project") including.- (1) the Central Project Management Unit (hereinafter referred to as "the CPMU"), (2) Ha Nam Provincial Project Management Unit ("Ha Nam PPMU"), (3) Yen Bai Provincial Project Management Unit ("Yen Bai PPMU"), (4) Phu Tho Provincial Project Management Unit ("Phu Tho PPMU"), (5) Tuyen Quang Provincial Project Management Unit ("Tuyen Quang PPMU"), (6) Thai Binh Provincial Project Management Unit ("Thai Binh PPMU"), (7) Ninh Binh Provincial Project Management Unit ("Ninh Binh PPMU"), (8) Hung Yen Provincial Project Management Unit ("Hung Yen PPMU"), (9) Hoa Binh Provincial Project Management Unit ("Hoa Binh PPMU"), (10) Nam Dinh Provincial Project Management Unit ("Nam Dinh PPMU"), (11) Hai Duong Provincial Project Management Unit ("Hai Duong PPMU"), (12) Thai Nguyen Provincial Project Management Unit ("Thai Nguyen PPMU"), (13) Bac Giang Provincial Project Management Unit ("Bac Giang PPMU"), (14) Lang Son Provincial Project Management Unit ("Lang Son PPMU"), and (15) Thai Nguyen Hospital Project Management Unit (collectively referred to as "the fourteen PPMUs") with the applicable laws, regulations, procurement procedures and other provisions of the Financing Agreement between the Government of the Socialist Republic of Vietnam and the International Development Association ("IDA") ("the Financing Agreement") during the year ended 31 December 2018. The Project management is responsible for the compliance with the Financing Agreement, the Project Operation Manual ("POM") and other laws and regulations applicable to the Project (collectively referred to as "the Project's regulations"). Auditors' responsibility Our responsibility is to express an opinion, based on our examination, on the compliance of the CPMU and the fourteen PPMUs with the Project's regulations that could have a direct and material financial effect to the financial statements of the Project for the year ended 31 December 2018. We conducted our examination in accordance with the principles of International Standard on Assurance Engagements 3000 - Assurance Engagements other than Audits or Reviews of Historical Financial Information ("ISAE 3000") insofar this standard could be usefully applied in this examination and in its specific compliance context. This standard requires that we comply with ethical requirements and that we plan and perform the examination to obtain reasonable assurance about whether the CPMU and the fourteen PPMUs comply with the Project's regulations that could have a direct and material financial effect to the financial statements. Our examination included obtaining a sufficient understanding of the Project and the Project's regulations; assessing the risk on non-compliance exists that could have a direct and material financial effect to the financial statements of the Project- testing and evaluating, on a sample basis, the compliance of the Project's management with ihe Project's regulations based on the assessed risk" and performing such other procedures as we considered necessary in the circumstances. 27 F-Is &Y-f W - EY Building a better working world We considered the following criteria in evaluating the compliance of the CPMU and the fourteen PPMUs with the Project's regulations: the CPMU and the fourteen PPMUs' awareness of the Project's regulations; the implementation of the Project's regulations by the CPMU and the fourteen PPMUs; the significance to the financial statements where the CPMU and the fourteen PPMUs fail to comply with one requirement or several requirements in the Project's regulations, if any; and that a weakness or a deficiency existed where the CPMU and the fourteen PPMUs fail to comply with one or several requirements in the Project's regulations that could have a direct and material financial effect to the financial statements. We believe that our examination provides a reasonable basis for our opinion. Opinion In our opinion, the CPMU and the fourteen PPMUs comply, in all material respects, with the Project's regulations that could have a direct and material financial effect to the financial statements of the Project for the year ended 31 December 2018 based on the evaluating criteria above. Other matters We draw attention to Appendix 1 - Management letter, in which we discussed certain departures from the Project's regulations which have no direct and material financial effect to the financial statements of the Project but may put the Project's objectives at risk. This examination involved a historic evaluation of the compliance of the CPMU and the fourteen PPMUs with the Project's regulations at a specific point of time. Thus, this examination does not provide assurance for future periods due to the risk of changes in the Project's regulations, or that the degree of compliance with the Project's regulations may deteriorate. For and on behalf of Ernst & Young Vietnam Limited But Anh Tuan Deputy General Director Audit Practicing Registration Certificate No. 1067-2018-004-1 Hanoi, Vietnam 27 June 2019 2 28 W Ernst & Young Vietnam Limited Tel: +84 24 3831 5100 8th Floor, Cor nerStonc Bui!6ng Fax: +84 24 3831 5090 W 16 Phan Chu Tfinh Stieet ey'com H oan Kiemn DIStFiCt Building a better Haoi S+R. of Vietnan- working world Reference: 61199325/20159858 U INDEPENDENT ASSURANCE REPORT ON * THE EFFECTIVENESS OF INTERNAL CONTROL M To: The Central Project Management Unit of the North East and Red River Delta Regions Health System Support Project We have audited the design and operating effectiveness of the internal control of the North East and Red River Delta Regions Health System Support Project ("the Project") as operated by the management of: (1) the Central Project Management Unit (hereinafter referred to as "the CPMU"), (2) Ha Nam Provincial Project Management Unit ("Ha Nam PPMU"), (3) Yen Bai Provincial Project Management Unit ("Yen Bai PPMU"), (4) Phu Tho Provincial Project Management Unit ("Phu Tho PPMU"), (5) Tuyen Quang Provincial Project Management Unit ("Tuyen Quang PPMU"), M (6) Thai Binh Provincial Project Management Unit ("Thai Binh PPMU"), (7) Ninh Binh Provincial Project Management Unit ("Ninh Binh PPMU"), (8) Hung Yen Provincial Project Management Unit ("Hung Yen PPMU"), (9) Hoa Binh Provincial Project Management Unit ("Hoa Binh PPMU"), (10) Nam Dinh Provincial Project Management Unit ("Nam Dinh PPMU"), (11) Hai Duong Provincial Project Management Unit ("Hai Duong PPMU"), (12) Thai Nguyen Provincial Project Management Unit ("Thai Nguyen PPMU"), (13) Bac Giang Provincial Project Management Unit ("Bac Giang PPMU"), (14) Lang Son Provincial Project Management Unit ("Lang Son PPMU"), and (15) Thai Nguyen Hospital Project Management Unit (collectively referred to as "the fourteen PPMUs") which existed for the year ended 31 December 2018. The internal control was set up for the purpose of managing risks to the achievement of the Project's objectives, including the reasonable prevention and detection of errors, irregularities and fraud. The internal control is the responsibility of the CPMU and the fourteen PPMUs. Auditors' responsibility Our responsibility is to express an opinion, based on our audit, on the effectiveness of the internal control that could have a direct and material financial effect to the financial statements of the Project for the year ended 31 December 2018. We conducted our audit in accordance with the principles of International Standard on Assurance Engagements 3000 - Assurance Engagements other than Audits or Reviews of Historical Financial Information ("ISAE 3000") insofar this standard could be usefully applied in this audit and in its specific compliance context. This standard requires that we comply with ethical requirements and that we plan and perform the audit to obtain reasonable assurance about whether the internal control for the Project is adequately designed for the purpose of the Project and was operating effectively during the period covered by the audit. U Our audit included obtaining a sufficient understanding of the Project and the internal control for the * Project; assessing the risk that a material weakness exists that could have a direct and material financial effect to the financial statements of the Project; testing and evaluating, on a sample basis, the design and operating effectiveness of internal control based on the assessed risk; and performing such other procedures as we considered necessary in the circumstances. 2 U U *g> ..- - 29 U " EY Building a better working world U We considered the following criteria in evaluating the effectiveness of the internal control: the requirement for design and implementation of the internal control in the Project Operation Manual ("POM"); the appropriateness of the internal control for the Project's activities and objectives; the implementation of the internal control by the CPMU and the fourteen PPMUs to achieve its objective of prevention and detection of errors, irregularities and fraud that could have a direct and material financial effect to the financial statements of the Project; the significance to the financial statements where one control or several controls did not operate as designed, if any; and that a weakness or a deficiency existed where a control or several controls did not reasonably prevent or detect risks that could have an adverse impact on the objectives of those internal controls which are to provide reasonable assurance that the financial statements are prepared, in all material respects, in accordance with the adopted accounting policies and POM, that the funds are utilised for the purposes defined in the Financing Agreement between the Government of the Socialist Republic of Vietnam and the International Development Association ("the Financing Agreement") and that the Project complies with the Financing Agreement, POM and other applicable laws and regulations. We believe that our audit provides a reasonable basis for our opinion. Opinion U In our opinion, the Project's internal control at the CPMU and the fourteen PPMUs which existed for the year ended 31 December 2018, in all material respects, was adequately designed for the purpose of the Project and operated in an effective manner, based on the evaluating criteria above. Other matters We draw attention to Appendix 1 - Management letter, in which we discussed certain findings from the internal control which have no direct and material financial effect to the financial statements of the Project but may put system objectives at risk. This audit involved a historic evaluation of internal control at a specific point of time. Thus, this audit does not provide assurance for future periods due to the risk that internal control may become inappropriate because of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate. For and on behalf of Ernst & Young Vietnam Limited UI U Bui Anb Tuan Deputy General Director Audit Practicing Registration Certificate No. 1067-2018-004-1 Hanoi, Vietnam 27 June 2019 3 g ~ 30