The Education Reform for Knowledge Economy Project II (ERfKE II) Funded By International Bank for Reconstruction and Development (IBRD) Loan Agreement No. (7/02 JO) Ministry of Education (MoE) Amman- The Hashemnite inmgdom at Jordan Projeces Statement of Cash Receipts and Disbursements and Independent Auditor's Report For the Year Ended December 31, 2013 Prepard b Tala Abu-Ghazaleh & Co. Intemational (TAGI) Memtber of Tala Ab4u-hzaleh OCganization (TAGO) The Education Reform for Knowledge Economy Project II (ERfKE II) Ministry of Education (MoE) Amnmna- The Hashemite Kingdom of Jordan TABLE OF CONTENTS INDEPENDENT AUDITOR'S REPORT.....-.1 INDEPENDENT AUDITOR'S REPORT ON SPECIAL ACCOUNT..._.......... 3 STATEMENT OF CASH RECEIPTS AND DISBURSEMENTS ...4 NOTES TO FINANCIAL STATEMENT................... MANAGEMENTLEITER. .............. ............ . ... ..... ............ 12 TAGhAudilors Tlal Abu-Ghazaleh & Co. International I Global Company for Auditing and Accounting ;. .LL A1......3. I d-AmL 41 Alliance with Russell Bedford International More than 120 member & correspondent firms and 280 offices in Europe, the Americas & Asia-Pacific Independent Auditor's Report Messrs Ministry of Education The Education Reform for Knowledge Economy Project II (ERKE II) Amman- The Hashemite Kingdom of Jordan We have audited the accompanying statement of cash receipts and disbursements of the Education Reform for Knowledge Economy Project U (ERfKE II), for the year ended December 31, 2013 financed under loan agreement No. (7702 JO) through the administration of the International Bank for Reconstruction and Development (IBRD). The financial statement has been prepared by management using the cash basis of accounting described in Note (2/a). Management Responsibility for Finandal Statement Management is responsible for the preparation and fair presentation of this financial statement in accordance with cash receipts and disbursements basis of accounting described in Note (2/a); this includes determning that the cash receipts and disbursements basis of accounting is an acceptable basis for the preparation of the financial statement in the circumstances, and for such internal control as management determines is necessary to enable the preparation of the financial statement the is free from material misstatement, whether due to fraud or error. Auditor Responsibility Our responsibility is to express an opinion on the financial statement based on our audit We conducted our audit in accordance with International Standards on Auditing (ISA). Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement. An audit involves performing procedures to obtain audit evidence about amounts and disclosures in the financial statement The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statement, 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 statement on order to design audit procedures that are appropriate in the circumstances, but not 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, if any, made by the management, as well as evaluating the overall presentation of the financial statemenL TAG-KS Building-Amman Office =I41MURM111 4X-r" 4A-U0"2"Uu' L-&. 4 19 Mecca Street, Um-Uthaina U FORUM OF Fimis L e e.s-4 I Tel.: +962 6 5100 600 .+1 Y 1 0 * :UA Fax: +962 6 5100 601 tagi.com , , L. P.O.Box: 3966, Amman 11953 Jordan tagco.amman@tagi.com aji)il 1 N q r CA 4rvi I :gY We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion a) The financial statement presents fairly, in all material respects, the cash receipts and disbursements The Education Reform for Knowledge Economy Project II (ERfKE I) for the year ended December 31, 2013 in accordance with cash receipts and disbursements basis of accounting as described in Note (2/a); b) Internal control over financial reporting involved in the preparation of direct payments, and reimbursements on the basis of Funds Receipt and Payments can be relied upon to support the related withdrawals for the period from January 1, 2013 to December 31, 2013; c) The Project was, in all material respects, in compliance with the laws, regulations, guidelines and provisions governed by the Loan Agreement Basis of Accounting Without modifying our opinion, we draw attention to Note (2/a) to the financial statement, which describes the basis of accounting. The financial statement is prepared to provide information to IBRD. As a result the statement may not be suitable for another purpose. With respect to Statement of Cash Receipts and Disbursements, adequate internal controls and proper supporting documentation have been maintained to support claims to the IBRD for reimbursements of disbursements, and disbursements are eligible for financing under loan agreement No. (702 JO). Talal Abu-Chazaleh & Co. International Anman, April 28, 2014 L-A $$JJD) 6> A.TAG dilas Talal Abu-Ghazaleh & Co. International TGA®R Global Company for Auditing and Accounting I43 A ..2teIW S. 1 Alliance with Russell Bedford International More than 120 member & correspondent firms and 280 offices in Europe, the Americas & Asia-Pacific Independent Auditor's Report on Special Account Messrs Ministry of Education The Education Reform for Knowledge Economy ProjectI (ERf E II) Amman- The Hashemite Kingdom of Jordan We have audited the sources and applications of funds of the "Special Account" of the Education Reform for Knowledge Economy Project II (ERfKE II) loan agreement No. (7702 JO) for the year ended December 31, 2013. Our responsibility is to express an opinion on the statement of the special account based on our audit. We conducted our audit in accordance with International Standards on Auditing (ISA). Those Standards require that we plan and perform the audit to obtain reasonable assurance that the Special Account statement is free of material misstatement. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the statement of the "Special Account" presents a valid balance of Designated Account as wel as being used exclusively for the payment of eligible expenditures which gives a true and fair view of the source and applications of funds of the Education Reform for Knowledge Economy Project II (ERfKE II) loan agreement No. (7702 JO), for the year ended December 31,2013 in accordance with the cash basis of accounting as described in Note (2/a). Talal Abu-Ghazaleh & Co. International Amman, April 28,2014 TAG-KS Building-Amman Office RI 1"' M1 1a8kt..ll A Lbj L &Za LA. 19 Mecca Street, Um-Uthaina - FORUM OF FIRMS FjL---& % i Tel.: +96265100600 . +V%V I ui*t : Fax; +962 6 5100 601 tagl.com +l Y .. 4 P.O.Box: 3966, Amman 11953 Jordan tagco.amman@tagi.com CI&NI I IiA0 OUa t :',1.uI CN 2 rr jade~ C2a r 12 1111 c st ~ ~ ~ ~ 4 14mLn c 4 mq ca c' Ln z d8 i In o 1 1# tU r eii = U2a 11 E u o a L L 1 Ministry of Education The Education Reform for Knowledge Economy Project 11 (ERfKE I) Amman-The Hashemite Ingdom of Jordan Notes to Financial Statement 1) Status and Activities The Government of Jordan has signed a loan agreement for the Education Reform for Knowledge Economy Project II (ERfKE II) with the International Bank for Reconstruction and Development (IBRD) in the amount of (USD 60,000,000) under loan agreement No. (7702 JO), the planned closing date is December 31, 2015. The Education Reform for Knowledge Economy Project II (ERfKE II) aims to assist the Government of Jordan (Go]) in providing students enrolled in pre-tertiary education institutions with increased levels of skills to participate in the knowledge economy. The project consists of five components: 1. Establishment of a National School-based Development System; 2. Monitoring and Evaluation, and Organizational Development; 3. Development of Teaching and Learning; 4. Development of Special Focus Programs; 5. Improvements of Physical Learning Environments. The project Is managed and implemented by the Ministry of Education, and Ministry of Public Works and Housing. 2) Summary of Significant AccoRnting Policies a) Cash basis of accounting: The project's management prepares and presents its sources and uses of fund under the cash basis of accounting, as defined in the International Public Sector Accounting Standards (IPSAS) which is issued by the International Federation of Accountants (IFAC). According to this basis, funds are recorded when received and expenditures are recorded when paid. Lb) Foreign currencies: Project payments in Jordanian Dinars during the period are expressed in United States Dollars at an exchange rate of 1USD - JD 0.709. L Isi 0 g I IJ V, lliim 4rr u [u at b it Ij 0 L iLl _ L Z CCC, *2ìa sì aà s ata L l 〕！〕！〕！!，呈尋藝。華！!1邑”〕‘〕 〕！｝曇，-!l曇’喜”！〕！！〕邑‘發〕！ !：邑”〕‘!,！〔〔〕邑’華‘”〕哥〕〕邑”&’〕 [ { } 〕，!, 〕，!！〔〕！!!!!!!: - 7) Bank Account Balance as of Name of Bank Ace. Number Currency Description December 31,2013 USD Central Bank of Jordan 3174 3660 1 USD Current Account 676,635 Central Bank of Jordan 3177 3660 1 USD Current Account 11499,995 2,176,630 a) Special Account: The Project established and maintained a special deposit account at the Central Bank of Jordan in United States Dollars (USD) for the amounts transferred from the IBRD. b) Special Acco Reconciliation Statement. Descripti USD Opening Balance as of 1/1/2013 1,510,478 Add: Cash Receipts 10,708,388 Present outstanding amount advanced to Special Account 12,218,866 Special Account closing balance as of 31/12/2013 2,176,630 Add: Amount of eligible expenditures paid during the period 10,041,318 Bank Charges 918 Total advances accounted for 12,218,866 L I- L FQ CGN(D"I cnm mmmmss G 0l L i L i LI tå ' ol m :c :cta *. *55 5 5555* ** LO ca 0 0 0 0aa s 4p b.%4 m. <-4 gnmz d gananaagamma"o 4 4 j 4 r4 00 bo .r4G% r ~ L ' JJJJ CJCflJt% < << e 4 A m an m rV2Vzcoc o b o o0 o R m o- L [n a t % -,e,01c - z c 6C en 1-4c r