MLull YuCaO6- h7A'7t"r W71, The Federal Democratic Republic of Ethiopia Audit Services Corporation INDEPENDENT AUDITOR'S REPORT ON THE FINANCIAL STATEMENTS OF THE FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA MINISTRY OF FINANCE URBAN INSTITUTIONAL AND INFRASTRUCTURE DEVELOPMENT PROGRAM (UIIDP-IPF) IDA CREDIT NUMBERS 6196-ET, SUF 6197-ET AND IDA GRANT No.D277-ET AND AFD 1073 01 U We have audited the accompanying financial statements of Urban Institutional and Infrastructure Development Program (UIIDP-IPF) financed under IDA Credit numbers 6196-ET, SUF 6197-ET,Grant No. D277- ET and AFD 1073 O1U of the Federal Democratic Republic of Ethiopia, Ministry of Finance, which comprise the balance sheet as at 7 July 2019, the statement of sources and uses of funds and the designated accounts statement for the period from 26 December 2018 to 7 July 2019, and a summary of significant accounting policies and other explanatory information. Responsibility for the Financial Statements The Ministry of Finance is responsible for the preparation and fair presentation of these financial statements in accordance with the Ethiopian Government's Manual of the Federal Accounting System which is based on a modified cash basis of accounting and for such internal control as it determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from 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. a2jSc- 251-011-5515222 Fax 251-011-5513083 E-mail: ASC@ethionet.com l 5720 251-011-5535012 251-011-5535015 251-011-5535016 INDEPENDENT AUDITOR'S REPORT ON THE FINANCIAL STATEMENTS OF THE FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA MINISTRY OF FINANCE URBAN INSTITUTIONAL AND INFRASTRUCTURE DEVELOPMENT PROGRAM (UIIDP-IPF) IDA CREDIT NUMBERS 6196-ET, SUF 6197-ET AND IDA GRANT No.D277-ET AND AFD 1073 OIU (continued) Opinion In our opinion, the financial statements give a true and fair view of the financial position of the Urban Institutional and Infrastructure Development Program (UIIDP-IPF) financed under IDA Credit numbers 6196-ET, SUF 6197-ET,Grant No. D277- ET and AFD 1073 O1U as at 7 July 2019 and of its sources and uses of funds for the period from 26 December 2018 to 7 July 2019 in accordance with the Ethiopian Government's Manual of the Federal Accounting System which is based on a modified cash basis of accounting. Reports on other requirements As required by the World Bank guidelines we report that, to the extent we can assess:- - during the period IDA funds have been used in accordance with the conditions of the relevant financing agreements and only for the purposes for which the financing were provided; - counter-part funds have been provided and used in accordance with the financing agreement and only for the purposes for which the financing was provided; - goods, works and services financed have been provided in accordance with the relevant financing agreements and disbursement letters: - all necessary supporting documents, records and accounts have been maintained in respect of all Project's activities; - the funds disbursed covered expenditure that are eligible for financing under IDA Credit Nos. 6196-ET, SUF 6197-ET,Grant No. D277-ET and AFD 1073 1 U; - there was a clear linkage between the books of account and the financial statements; and - our examination revealed no major weaknesses or irregularities in the system of internal controls over financial expenditure other than those mentioned in the management letter; 6 January 2020 2 MINISTRY OF FINANCE URBAN INISTITUTIONAL AND INFRASTRUCTURE DEVELOPMENT PROGRAM (UIIDP-IPF) IDA CREDIT NO.6196-ET,SUF 6197-ET,GRANT NO.D277-ET AND AFD 1703 01 U BALANCE SHEET AS AT 7 JULY 2019 Notes Birr CURRENT ASSETS Cash and bank balances 3 113,564,832 113,564,832 CURRENT LIABILITIES Accounts payable 4,30 NET ASSET 113.560,532 FINANCES BY ACCUMULATED FUND 113,560,532 3 MINISTRY OF FINANCE URBAN INISTITUTIONAL AND INFRASTRUCTURE DEVELOPMENT PROGRAM (UIIDP-IPF) IDA CREDIT NO.6196-ET,SUF 6197-ET,GRANT NO.D277-ET AND AFD 1703 01 U STATEMENT OF SOURSE AND USE OF FUND FOR THE PERIOD FROM 26 DECEMBER 2018 TO 7 JULY 2019 Birr SOURSE Initial deposit IDA Grant D277-ET 130,190,207 Gain on foreign exchange 3,049,247 133,239,454 USES Goods 651,600 Consultancy services 11,745,289 Training and work shop 7,154,658 Operating costs 127,375 19,678,922 EXCESS OF SOURCES OVER USES 113,560,532 4 MINISTRY OF FINANCE URBAN INISTITUTIONAL AND INFRASTRUCTURE DEVELOPMENT PROGRAM (UIIDP-IPF) DESIGNATED ACCOUNT STATEMENT For the period From 26 December 2018 to 7 July 2019 Account number 0100101300560 Depository bank National Bank of Ethiopia Address Addis Ababa, Ethiopia Related credit IDA Credit No.6196-ET,SUF 6197-ET,GRANT NO. D277-ET AND AFD 1703 01 U Currency USD USD BIRR Add: IDA Grant during the year 4,644,309.31 130,190,207.44 Less: Transfer to Birr account 1,450,000.00 40,806,045.00 3,194,309.31 89,384,162.44 Gain on foreign exchange - 3,049,246.63 Ending balance -7 July 2019 3,194.309.31 92,433,409.07 5 MINISTRY OF FINANCE URBAN INISTITUTIONAL AND INFRASTRUCTURE DEVELOPMENT PROGRAM (UIIDP-IPF) SCHEDULE OF MOVEMENTS IN THE BIRR ACCOUNT For the period From 26 December 2018 to 7 July 2019 Account number 0100101040695 Depository bank National Bank of Ethiopia Address Addis Ababa,Ethiopia Related credit IDA Credit No. 6196-ET, SUF 6197-ET, Grant NO. D277-ET and AFD 1073 01 U Currency Ethiopian Birr Transfer from USD Designated Account 40,806,045.00 Less: Transfer to beneficiaries Ministry of Urban Development, Housing and Construction 38,422,230.87 Bank charge 102,015.11 38,524,245.98 End balance at 7 July 2019 2,281,799.02 6 MINISTRY OF FINANCE URBAN INSTITUTIONAL AND INFRASTRUCTURE DEVELOPMENT PROGRAM (UIIDP-IPF) IDA CREDIT NUMBERS 6196-ET, SUF 6197-ET AND IDA GRANT No.D277-ET AND AFD 1703 01 U NOTES TO THE FINANCIAL STATEMENTS 1. PROJECT INFORMATION UIIDP IPF Project is used to fund a range of institutional and capacity development interventions at or coordinated by Ministry of Urban Development and Construction (MUDCo). The MUDCo will undertake activities in five areas: (a) developing capacity, systems, and organizations of federal entities; (b) developing capacity, systems, and organizations of regional and ULG entities, (c) conducting project preparation studies, pre-feasibilities and feasibility studies for ULGs with specific needs for further investments; (d) UIIDP management and monitoring and evaluation, and (e) procuring and managing APAs and VfM audits. The financing agreement was entered into between IDA and Agence Francaise De Development and The Federal Democratic Republic of Ethiopia by Grant No.D277-ET and AFD 1703 1 U, on 20 March 2018 and 21 June 2018 respectively. This IPF window has a total funding of US$34.57 million. It will support MUDCo to administer and coordinate the Operation, and to strengthen its capacity to support and guide the regions and ULGs (US$32.57 from IDA; and about US$2.0 million (approx. Euro 1.8 million) from AFD). 2. SIGNIFICANT ACCOUNTING POLICIES The principal accounting policies adopted by the Project are stated below:- a) Basis of preparation These financial statements have been prepared in accordance with the Ethiopian Governments Manual of the Federal Accounting System based on a modified cash basis of accounting. b) Currency These financial statements are presented in Birr. Transactions in foreign currency are translated into Birr at the approximate rate of exchange prevailing at the date of the transaction. Cash balances denominated in foreign currencies are translated into Birr at the exchange rates ruling at the date of statement of financial position. 7 MINISTRY OF FINANCE URBAN INISTITUTIONAL AND INFRASTRUCTURE DEVELOPMENT PROGRAM (UIIDP-IPF) IDA CREDIT No, 6196-ET,6197-ET,GRANt No. D277 AND AFD 1073 01 U NOTES TO THE FINANCIAL STATEMENTS (continued) 3 CASH AND BANK BALANCES Birr USD Designated account 92,433,409 Ethiopian Birr Designated Account 2,281,799 Ministry of Urban Development and Construction 18,849,624 113,564,832 5 DATE OF AUTHORIZATION Channel One Programs Coordinating Directorate Director of the Federal Democratic Republic of Ethiopia, Ministry of Finance authorized the issue of these financial statements on 6 January 2020. 8 MINISTRY OF FINANCE URBAN INSTITUTIONAL AND INFRASTRUCTURE DEVELOPMENT PROGRAM (UIIDP- IPF) IFR BASED WITHDRAWAL SCHEDULE FOR APPLICATIONS SUBMITTED DURING THE For the period from 26 December 2018 to 7 JULY 2019 Withdrwal EQUIVALENT IN Application No. USD ETHIOPIAN BIRR UIIDP - IPF-002 4,644,309.31 130,190,207.44 9 1 1 о � й N м м о° м с�1 cv �д- rn и оо м и � O0 � rn д�- м � � � �� • н'-' � о с� �о и и и .� � N � о м м о� М с� М � Q ,�' � М М �--� ~ �--+ � .г'ч ~ .-� ,--+ �--� ,--в r1 � �б �-�i U .СЧ [� И И О V � � � � � О О �}' м � ,-� .� и и � м т м о � � ,� .� .-а о а �д � � � � � w � �� � � � [� �r �r о и м м � О Z О � � й й м � � � ,� ,--� оо и �w� аг� F"'i � Н т � � � о � а W � о W А U А Е'' W W ° о о � � � � А W о о р!А��� � � N� Г^ н � А а V � � � � W �¢ N � А � Н � � z а F А W���x � � , W��°�А � � АН��°.�� О'W Е"'' W W �"' � W^'д "��,� и ��wa°w о � �р � � � � и ,,,�� (�,� � z о гWi� о ,� � О си +, � � л � � ?С v и OUE��WA о � � °' �'� г� � •� �% GA И • н н а�д V W W и '� °•�•� � �� � � (� i�-' U �р Ч� � Q с� �� и � � C,j О W �4 � Cj � и � й � й a�i � о � . ? � � � V А � '� � • bЛ � . � � W U � й й > с�дз., ��AaN� � дм�С7Е� � w0 UUQa