k                                Gove        t of Nepal
National Re                       Action Authority
Earthquake Hou                 c     cion Project (EHRP)
Projec   fnt Unit
F.Y.: 2075/076                                             Singhadurbar, Kathmandu
Ref No.: 2,26                                              Phone No. : 01-4211535
Date: 17 April 2019
Mr. Kamran Akbar
Task Team Leader, EHRP
The World Bank                                              0(ON
Nepal Country Office
Durbar Marg, Kathmandu, Nepal
Sub: 2017-18 Audited Project Accounts - Earthquake Housing Reconstruction Project (IDA Cr No. 5706 NEP, IDA Credit
No. 6164, and MDTF Grant No. OA4783)
Dear Mr. Kamran,
Please get attached the audit report and the audited project accounts for FY 2017/18 under the Financing
Agreements of the Government of Nepal (GON) with the International Development Association (IDA) for
Earthquake Housing Reconstruction Project (EHRP - Credit Numbers 5706 NEP and 6164 NEP; and MDTF
Grant Number 0A4783) for your information and necessary action.
We would like to express our sincere thanks for the cooperation the World Bank Group extended in the
reconstruction campaign after the 2015 earthquake disaster in Nepal. We assure you our best effort in
maintaining a sound financial management system and financial reporting.
Sincerely,
Bharat Prasad Aryal
Project Director
CC:    Mr. Yogesh Bom Malla
Financial Management Specialist
World Bank


Phone: 4258174
4266034
Office of the A.                       General                           4255707
A.G. Fax : 977-1-4268309
Go                     Fax : 977-1-4262798
Ref No: 2075/76 -t                         of                                    Post Box: 13328
INDEPENDENT AU             REPORT                W!RTf, wTmie, Aqw
Babar Mahal, Kathmandu, Nepal
The Secretary                                                                   April 17. 2019
Ministry of Finance
Singh Durbar, Kathmandu
Report on the Financial Statements
We have audited the accompanying Project Financial Statements of Designated Account and Financial
Monitoring Report (FMR) of Earthquake Housing Reconstruction Project (EHRP) under National
Reconstruction Authority financed by IDA Credit No.5706-NEP, Credit No. 6164, and MDTF Grant No.
0A4783 as at 16 July 2018 (32 Ashadh, 2075) 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 INTOSAI (International Organization 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 and Financial
Monitoring Report (FMR), in all material respects, give a true and fair view of the financial position of the
Earthquake Housing Reconstruction Project (EHRP) under National Reconstruction Authority as of 16 July
2018 (32 Ashadh, 2075), 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.
In addition, with respect to FMR a) Adequate supporting documentation has been maintained to support claims
to donor for reimbursement of expenditures incurred. b) Expenditures are eligible for financing under the above
mentioned credits/grants.
(Iswa-ePTy
Deputy Auditor General
email: oagnep@ntc.net.np, info@oag.go.np                                Web Page: wwwoagnep.gov.np
'1q1f#qw -,tT qw utotflwq, 11qIh;M -< f~qtUw'.1 Nqqvqql 0,Q4t.1 #M