Phone 4258174 41 4(4266034 Office of th rGeneral0 of Uh r eneraAG Fax 97 1-4268309 410 0 ~Fax 9771-4262798 0- Post Box 13328 Ref No. - 2073/74 qm ,w6q ,4 Re N Babar Mahal, Kathmandu Nepal Date: March 26, 2017 INDEPENDENT AUDITOR'S REPORT The Secretary Ministry ofFinance Singh Durbar, Kathmandu Report on the Financial Statements We have audited the accompanying Project Financial Statements including Statement of Designated Account of the "National Reconstruction Authority" financed by IDA Credit No. 5706- NEP as at 15 July 2016 (31 Ashad, 2073) and for the year then ended and a summary of accounting policies and other explanatory notes. Management's Responsibility for Financial Statements Management is responsible for the preparation and fair presentation of the Financial Statements in accordance with the Government of Nepal (GON) accounting policies and relevant practices. This responsibility includes: designing, implementing and maintaining internal control relevant to preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud and error. Auditor's Responsibility Our responsibility is to express an opinion on these Project Financial Statements based on our audit. We conducted our audit in accordance with the INTOSAI (International Organisation of Supreme Audit Institutions) Fundamental Auditing Principles. Those Principles require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements 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 entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion Management letter highlighting areas for improving financial management is attached herewith. In our opinion, the Project Financial Statements including Statement of Designated Account, in all material respects, give a true and fair view of the financial position of the "National Reconstruction Authority" as of 16 July 2015 (31 Ashad, 2072), and of the results of its operations and its cash flows for the year then ended in accordance with GON accounting policies.We also report that funds provided under have been utilized for intended purposes. (Mohadatta Timilsina) Deputy Auditor General e-mai oagnep@ntcnet.np nfo@oag govnp Web Page www oagnep gov np Nepal Reconstruction Authority Earthquake Housing Reconst-uction Project IDA Credit No. 5706 NEP Report 1 Summary of Sources and Uses of Funds (Audited) Fiscal Year 2015/16 Amount in NPR Notes to Account Cumulative up to Previous Description Fiscal Year Current Fiscal Year Cumulative to Date Budget Allocation Approved Allocation - 4,319,762,000.00 4,319,762,000 00 A. Opening Cash/Bank Balance Cash/Bank balance of previous period . B. Sources of Funds 400,734,281.00 400,734,281 00 GoN Fund GoN Reimbursable Fund 1 400.734,281.00 400,734,281 00 IDA Fund 4 Total (A+B) - 400,734,281.00 400,734,281.00 C. Uses of Funds by Category 1. Goods. Works, Non-consulting Services, Consultants' Services, Incremental Operating Costs, and Workshops and Training - 45,534,281.00 45,534.281.00 2. Housing Grants -_355,200,000.00 355,200,000.00 3. Emergency Expenditures for the CER Component . Total - 400,734,281.00 400,734,281.00 D. Closing Balance Total (C+D) 400,734,281.00 400,734,281.00 Designated Account Statement 1 Opening Balance 2 Fund Received from IDA (USD 20,000,000,00 @ Rs.106 27) 2.125,400,000.00 2,125,400,000.00 3 Less Transle, to GoN Treasury Account 4 Less Direct Payment from Designated Account 5 Foreign Exchange Gain/Loss (+/-) - 9,200,000.00 9,200,000.00 6. Closing Balance (3-4-5) (USD 20,000,000 00 @ Rs.106.73) - 2,134,600,000.00 2,134,600,000.00 Bhim Prasad Regmi wi hstha Dr. Sanjay Sharma Rajendr Prasad Nal Moha Datta Timilsina Under Secretary (Accounts) Project Coordinator Secretary Financial Comptroller General Deputy Auditor General Nepal Reconstruction Authority Earthquake Housing'Reconsiruction Project IDA Credit No. 5706 NEP Report 2 Designated Account Reconciliation Statement (Audited) Fiscal Year 2015/16 Amount in USD Particulars Cumulative up to Current Year Cumulative to Date Remarks Previous FY 1. Opening Cash Balance - 2. Add : Receipt of Funds - 20,000,000.00 20,000,000.00 3. Total Cash Balance (1+2) - 20,000,000.00 20,000,000.00 4. Less: Transfer from Designated Account - 4.1 Transfer to GON Treasury - 4.2 Direct Payment - 5 Closing Designated Account Balance at the end of Reporting 20,000,000.00 20,000,000.00 Period (3-4) Bhim Prasad Regmi Dwarika Shrestha Dr. Sanjay Sharma Under Secretary (Accounts) Project Coordinator Secretary Report 3 Statement of Expenditure (Audited) Fiscal Year 2015/16 Amount In NPR Expenditure Balance Budget Cumulative Annual Budget Cumulative Expenditure to Category No. Description/ Component Total Project Cost Expenditure upto Allocation Date Previous FY Amount % Amount % 1 2 3 4 5 6 00) 8 = (5-6) (8/5*100) 10 (4+6) Goods, Works, Non-consulting services, consultant 1 services, Incremental Operating Costs, and Workshop and Training - 69,762,000.00 45,534,281.00 65.27 24,227,719.00 34.73 45,534,281.00 1 Goods - 40,765,000.00 39,825,244.00 97.69 939,756.00 2.31 39,825,244.00 1 Works - - - 1 Non-consulting services - 1,117,000.00 299,894.00 26 85 817,106.00 73.15 299,894.00 1 Consulting Services - 17,850,000.00 1,124,940.00 6.30 16,725,060.00 93.70 1,124,940.00 1 Operational Expenses - 6,290,000.00 2,860,926.00 45.48 3,429,074.00 54.52 2,860,926.00 1 Workshops and Training - 3,740,000.00 1,423,277.00 38.06 2,316,723.00 61.94 1,423,277.00 2 Housing Reconstruction Grants - 4,250,000,000.00 355,200,000.00 8.36 3,894,800,000.00 91 64 355,200,000.00 3 Contingency Emergency Response - - Grand Total - - 4,319,762,000.00 400,734,281.00 9.28 3,919,027,719.00 90.72 400,734,281.00 Bhim Prasad Regmi Dwarka Shrestha Dr. Sanjay Sharma Rajendra Prasad Nepal Moha Datta Timilsina Under Secretary (Accounts) Project Coordinator Secretary Financial Comptroller General Deputy Auditor General Nepal Reconstruction Authority Earthquake Housing Reconstruction Project IDA Credit No. 5706 NEP Note 1 GoN and GoN Reimbursable Funds (Audited) Fiscal Year 2015/16 Amount in NPR Description Cumulative up to Current Fiscal Year Cumulative to Date Previous Fiscal Year GoN Fund Released A GoN Reimbursable Fund Released 400,734,281.00 400,734,281.00 Total Funds Released - 400,734,281.00 400,734,281.00 B Transfer to GoN Treasury from Designated Account - Total . C Total Funds used from GoN Treasury (A-B) - 400,734,281.00 400,734,281.00 GoN Fund Expenditure _ D Less: Source to be changed to IDA source Net GoN Expenditure . GoN Reimbursable Funds: GoN Reimbursable Fund Expenditure - 400,734,281 .00 400,734,281.00 E Source to be changed from GoN source Less: Reimbursement Received Net GoN Reimbursable Funds 400,734,281.00 400,734,281.00 F Total (D+E)1 400,734,281.00 400,734,281.00 Bhim Prasad Regmi Dwarika Shrestha Dr. Sanjay Sharma Under Secretary (Accounts) Project Coordinator Secretary Nepal Reconstruction Authority Earthquake Housing Reconstruction Project IDA Credit No. 5706 NEP Expenditure Details Fiscal Year 2015/16 S. No. District Code District Budget Line Release and Expenditure Amount Rs. 26423 154,600,000.00 22522 1,294,851.00 1 22 Dolakha Total 155,894,851.00 26423 98,650,000.00 22522 1,052,709.00 2 25 Dhading Total 99,702,709.00 26423 101,950,000.00 22522 1,031,494.00 3 26 Nuwakot Total 102,981,494.00 4 28 Lalitpur (CLPIU) 22522 42,155,227.00 Total Expenditure in IDA Covered Districts 400,734,281.00 Housing Grant 26423 355,200,000.00 Programme Expenses 22522 45,534,281.00 5 20 Sindhuli 22522 274,350.00 6 21 Ramechhap 22522 241,850.00 7 23 Sindhupalchowk 22522 202,900.00 8 24 Rasuwa 22522 90,950.00 9 44 Gorakha 22522 287,320.00 Amount spent in districts not covered by IDA Loan Agreement which is under virement process in MOF 1,097,370.00 Total Programme Expenses 22522 46,631,651.00 Grand Total 401,831,651.00 Bhim Prasad Regmi DwakI a Shrestha Dr. Sanjay Sharma Under Secretary (Accounts) Project Coordinator Secretary Nepal Reconstruction Authority Earthquake Housing Reconstruction Project IDA Credit No. 5706 NEP Memorandum Statement of Designated Account Fiscal Year 2015/16 Amount S.No. Particulars NPR USD Exchange Rate 1 Opening Balance __- 2 Fund Received from IDA 2,125,400,000.00 20,000,000.00 106.27 3 Less: Transfer to GoN Treasury Account 4 Less: Direct Payment from Designated Account -_- 5 Foreign Exchange Gain/Loss (+/-) 9,200,000.00 - 6 Closing Balance 2,134,600,000.00 20,000,000.00 106.73 Bhim Prasad Regmi warika restha Dr. Sanjay Sharma Under Secretary (Accounts) Project Coordinator Secretary Nepal Reconstruction Authority Earthquake Housing Reconstruction Project IDA Credit No. 5706 NEP Reconciliation of Expenditure Statement Fiscal Year 2015/16 IDA Reimbursable Loan IDA Reimbursable Loan Expenditure as per NRA Expenditure as per FCGO under the agreement with S.No. Description record IDA Difference 1 Reimbursable Amount upto Previous Year 2 Re-imbursable Expenditure during FY 2015/16 401,831,651.00 400,734,281.00 (1,097,370.00) 3 Add: Source to be changed to GON (1,097,370.00) 1,097,370.00 4 Reimbursement during FY 2015/16 5 Re-imbursable Amount as on July 15, 2016 400,734,281.00 400,734,281.00 Bhim Prasad Regmi Dwarika Shrestha Dr. Sanjay Sharma Under Secretary (Accounts) Project Coordinator Secretary .п л й .м к ос ,и .v � �• ��������� ��� �����"� ��� .� � � ���� , �. �. �. �. � ���� , ���� � ��� � �� � � � � � �. �� � � ��j{ � О Л О N � � N К .nм О О О О О � � О О к � � � N о О О О О О О О О О О О О О О О О О О О '� "'I � � О р � /�7 ���уΡуΡуΡ О � О О О О О о О О о О q ` � -� �' °� ?l 'в�� � � � о о � � g � О � '��• � � � о о .. 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PJk NATIONAL RECON. AUTHORITY NATIONAL RECONSTRUCTION AUTHORITY SINGHDARBAR, KATHMANDU STATEMENT OF ACCOUNT AS AT : 31.03.73 CURRENT ACCOUNT NUMBER : 1200501/001.004.840 EARTHQUAKE HOUSING RECON.PROJECT IN UNITED STATES DOLLARS ISSUED ON 07.06.73 PAGE 1 DATE DESCRIPTION VALUEDATE DEBIT CREDIT BALANCE REF. OPENING BALANCE PER : 01.04.72 0,00 310173 6/104/072 IDA 570600011 310173 20.000.000,00 20.000.000,00 100-00002668263 BALANCE IN YOUR FAVOUR 20.000.000,00 Nepal Rastra Bank Banking Office, Thapathali (Account Statement) Client Code: 1200501 Client Name: NATIONAL RECONSTRUCTION AUTHORITY A/c No : 1200501/001.004.840 A/c Name : EARTHQUAKE HOUSING RECON.PROJECT Currency : USD Date Value Date Ref./Chq. Description Dr/Cr Amount Exch. Rate Balance FC NPR 2016/05/13 2016/05/13 6/104/072 6/104/072 IDA 570600011 CR 20,000,000.00 2,125,400,000.00 106.27 20,000,000.00 IDA 57 6/25/073 2016/10/06 2016/10/06 IDA570 6/25/073 IDA 570600012 CR 63,762,523.29 6,767,754,222.00 106.14 83,762,523.29 1 IDA 570 2017/01/31 2017/01/31 TRANSFER ACCOUNT TO DR -3,696,128.77 -400,734,281.00 108.42 80,066,394.52 ACCOUNT CENTRAL *This statement is for viewing purpose only and can not be claimed as authenticated statement.