Republic of Macedonia Ministry of education and science Ministry of Education and Science of the Republic of Macedonia No._______ To: The World Bank Date_ 34 Leninova Street 100 Soj Ss. Cyril and Method ius No. 54 1 , opje1000 Skopje Republic of Macedonia Attn: Ms. Bojana Naceva Senior Education Specialist, Macedonia, Fax: (02)3118414 Europe and Central Asia Web: www.mon.gov.mk MKD SERTIFIKAT MKS EN ISO 9001:2009 Subject: Loan No. 8332 - MK (Skills Development and Innovation Support Project); Audit report for SDIS Project for year 2014 and 2015 Dear Ms. Naceva, On behalf of the Ministry of Education and Science and the SDIS Project, Loan 8332MK please find attached to this letter the Audit Report of the financial statements for the year 2014 and 2015. Sincerely, Projec Director, Igor stevski Prepared: Aleksandra Davitkovska Bozn>',!2 ECCMK dd/ mmI/ Original N Reeived Box No. Scanned ProectID-Fil Reference O GrantThornton Project's Financial Statements and Independent Auditors' Report Ministry of Education and Science of the Republic of Macedonia "Skills Development and Innovation Support Project" - International Bank for Reconstruction and Development Loan number 8332-MK For the period from 7 February 2014 to 31 December 2015 Ministry of Education and Science of the Republic of Macedonia "Skills Development and Innovation Support Project" IBRD Loan number 8332-MK Contents Page Management Responsibility 1 Independent Auditors' Report 2 Statement of Sources and Uses of Funds 4 Statement of Uses of Funds by Project Activity 6 Balance sheet 8 Statement of Breakdown of Loans and Grants 9 Statement of Withdrawals - Designated Account 11 Statement of Designated Account - EUR 12 Statement of Designated Account - EUR (Fund for Innovation and Technological Development) 13 Statement of Treasury Account (Mirror Designated Account) - MKD 14 Statement of Petty Cash in MKD 15 Statement of Petty Cash in EUR 16 Notes to Project's financial statements 17 Ministry of Education and Science of the Republic of Macedonia "Skills Development and Innovation Support Project" IBRD Loan number 8332-MK Management Responsibility The accompanying financial statements comprising of Statement of Sources and Uses of Funds, Statement of Uses of Funds by Project Activity, Balance sheet, Statement of Breakdown of Loans and Grants, Statement of Withdrawals (SOE's), Designated Account Statements and related disclosure Notes (further referred as to "Project's Financial Statements"), of the Ministry of Education and Science of the Republic of Macedonia ("the Ministry"), "Skills Development and Innovation Support Project" (further referred to as "the Project"), financed under International Bank for Reconstruction and Development Loan (IBRD) numbered 8332-MK ("Original loan") as at and for the period from 7 February 2014 to 31 December 2015 included on pages 4 to 19, are the responsibility of, and have been approved by the Project's management. The accompanying Project's financial statements have been compiled by the Project's management, for the purposes of reporting to the Ministry and the International Bank for Reconstruction and Development, in conformity with the related requirements of the World Bank's financial reporting guidelines and in compliance with the relevant provisions set out in the Loan Agreement numbered 8332-MK dated 7 February 2014. Project's management, in furtherance of the integrity and objectivity of the Project's financial statements, has developed and maintained an internal control structure, including the appropriate control environment, accounting systems and control procedures. Project's management believes that internal controls provide assurance that financial records are reliable and form a proper basis for the preparation of financial statements, and that assets are properly accounted for and safeguarded. There are, however, inherent limitations that should be recognized in considering the assurances provided by the internal control structure. The internal control process also includes management's communication to employees of policies, which govern ethical business conduct. Grant Thornton, Independent Auditors, have been engaged to audit these Project's financial statements in accordance with the International Standards on Auditing. Their report is included on pages 2 and 3. 1 June Mr b !Ea r Mr. Igor a,;kdsn Davitkovska 1 els of Project Direct Financial Manager O GrantThornton Independent Auditors' Report Grant Thomton 000 Sv. Kiril I Metodij 52b/1-20 1000 Skopje Macedonia T +389 2 3214 700 F +389 2 3214710 To the Management of the Project www.grant-thornton.com.mk We have audited the accompanying financial statements of the Ministry of Education and Science of the Republic of Macedonia ("the Ministry"), "Skills Development and Innovation Support Project" (further referred to as "the Project"), financed under International Bank for Reconstruction and Development, Loan numbered 8332-MK comprising of the Statement of Sources and Uses of Funds, Balance sheet, Statement of Uses of Funds by Project Activity, Statement of Breakdown of Loans and Grants, Statement of Withdrawals, Designated Account Statements and related disclosure Notes (further referred as to "the Project's Financial Statements") as at and for the period from 7 February 2014 to 31 December 2015 and included on pages 4 to 21. Management's responsibility for the Project's financial statements These Project's financial statements are compiled for the purposes of reporting to the Ministry and the International Bank of Reconstruction and Development (JBRD) management, and are the responsibility of the management of the Project. The Projects' management is responsible for developing and maintaining such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatements, whether due to fraud or error. The Project's Management policy is to prepare the accompanying Project's financial statements on the cash receipts and disbursement basis in conformity with the related requirements of the World Bank's financial reporting guidelines and in compliance with the relevant provisions set out in the Loan Agreement numbered 8332-MK dated 7 February 2014. On this basis, cash receipts are recognized when received rather when earned and cash expenditures are recognized when paid rather than when incurred. Auditor's responsibility Our responsibility is to express an opinion on these Project's 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. Chartered Accountants k0aniho am Atbawl TW,,On ,Wf-0-1 I1o O GrantThornton 3 In making those risk assessments, the auditor considers internal control relevant to the Project'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 Project'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 In our opinion, the financial statements of "Skills Development and Innovation Support Project", financed under International Bank for Reconstruction and Development, Loan numbered 8332- MK, present fairly, in all material respects, the Project's financial position as at 31 December 2015, and the movement on the Sources and Uses of Funds, Statement of Uses of Funds by Project Activity, Statement of Breakdown of Loans and Grants, Statement of Withdrawals and Designated Account Statements for the period from 7 February 2014 to 31 December 2015, in conformity with the related requirements of the World Bank's financial reporting guidelines and in compliance with the relevant provisions set out in the Loan Agreement numbered 8332-MK dated 7 February 2014. Skopje, 2 June 2016 Grant Thornton DOO, D c 1 V6* --.200 irector Certified Auditor uzana Stavrik an Suzana Stavrik Chartered Accountants Member firm of Grant Thornton Intemational Ltd Ministry of Education and Science of the Republic of Macedonia 4 "Skills Development and Innovation Support Project" IBRD Loan number 8332-MK Financial Statements For the period from 7 February 2014 to 31 December 2015 Statement of Sources and Uses of Funds (Amounts in EUR) For the period from 7 February 2014 to 31 December 2015 Actual Planned Variance Current Cumulative Current Cumulative Current Cumulative period to date period to date period to date Sources of funds World bank DA-A 1,563,784 1,563,784 1,563,784 1,563,784 World bank DA-B 400,000 400,000 400,000 400,000 Interests Earned - - - Front end fee 44.250 44.250 44,250 44,250 Total sources of funds 2,008,034 2,008,034 2,008,034 2,008,034 - Foreign exchange difference Exchange gains 61 61 61 61 - Exchange losses (89) (89) (89) (89) - Uses of funds Financed by WB Component 1: Improving Transparency in higher education (97,386) (97,386) (97,386) (97,386) - Component 2: Modernization of Secondary Technical Vocational Education and Training (204,210) (204,210) (204,210) (204,210) - Component 3: Improving the Innovative capacity of enterprises and collaboration with research organizations (71,946) (71,946) (71,946) (71,946) - Component 4: Project Management and Monitoring and Evaluation (317,111) (317,111) (317,111) (317,111) Front and fee (44,250) (44,250) (44,250) (44,250) - Subtotal - Financed by WB (734,903) (734,903) (734,903) (734,903) - Financed by GoM Component 1: Improving Transparency in higher education Component 2: Modernization of Secondary Technical Vocational Education and Training Component 3: Improving the Innovative capacity of enterprises and collaboration with research organizations Component 4: Project Management and Monitoring and Evaluation Subtotal - Financed by the GoM Total uses of funds (734,903) (734,903) (734,903) (734,903) Ministry of Education and Science of the Republic of Macedonia a "Skills Development and Innovation Support Project" IBRD Loan number 8332-MK Financial Statements For the period from 7 February 2014 to 31 December 2015 Statement of Uses of Funds by project activity (continued) (Amounts in EUR) For the period from 7 February 2014 to 31 December 2015 Actual Planned Variance Current Cumulative Current Cumulative Current Cumulative period to date period to date period to date Net increasel(decrease) in the cash flow: 1,273,103 1,273,103 1,273,103 1,273,103 - Bank Balances, at beginning of the period -- - - Bank Balances, at end of the period 1,273,103 1,273,103 1,273,103 1,273,103 The Project's Financial Statements have been approved by the Ministry on 1 June 2016 and signed on its behalf by: Mr. h Mr. Igor tevski ,Aleksandra Davitkovska f, cation and Project ixector Financial Manager Chartered Accountantz Member finn of Grant Thornton Intemational Ud Ministry of Education and Science of the Republic of Macedonia 6 "Skills Development and Innovation Support Project" IBRD Loan number 8332-MK Financial Statements For the period from 7 February 2014 to 31 December 2015 Statement of Uses of Funds by Project Activity (Amounts in EUR) For the period from 7 February 2014 to 31 December 2015 Actual Planned Variance Current Cumulative Current Cumulative Current Cumulative period to date period to date period to date Projects expenditures by activity: Component 1: Improving Transparency of Higher Education Contract 1: Needs Assessment, Strategy and Policy Development for NTTO 97,386 97,386 97,386 97,386 Contract 2 Contract 3 Contract 4 Contract 5 Contract 6 Payments without contract - - Sub-total 97,386 97,386 97,386 97,386 - - Component 2: Modernization of Secondary Technical Vocational Education and Training Contract 1:Skills forecasting 49,086 49,086 49,086 49,086 - - Contract 2: TA for new competency based curriculum and pertinent modules for innovation and entrepreneurship education in 123,120.0 secondary education 0 123,120.00 123,120.00 123,120.00 - Contract 3: Preparation of program for provision of grants and support in development of implementation legal procedures 32,004 32,004 32,004 32,004 - - Contract 4 Contract 5 Contract 6 Payments without contract - Sub-total 204,210 204,210 204,210 204,210 - - Component 3: Improving the Innovative capacity of enterprises and collaboration with research organizations Contract 1: Resident Advisor for Capacity Building of the FITD 32,377 32,377 32,377 32,377 - - Contract 2: Software for the Needs of the FITD 30,496 30,496 30,496 30,496 - - Contract 3: Equipment for the FITD 4,928 4,928 4,928 4,928 - - Contract 4 - . . Contract 5 Contract 6 Contract 7 Payments without contract - - . - - - Capacity Building of the FITD/ Training I accommodation, per diem, and transport 4,145 4,145 4,145 4,145 - Sub-total 71,946 71,946 71,946 71,946 - - Ministry of Education and Science of the Republic of Macedonia 7 "Skills Development and Innovation Support Project" IBRD Loan number 8332-MK Financial Statements For the period from 7 February 2014 to 31 December 2015 Statement of Uses of Funds by project activity (continued) (Amounts in EUR) For the period from 7 February 2014 to 31 December 2015 Actual Planned Variance Current Cumulative Current Cumulative Current Cumulative period to date period to date period to date Project's expenditures by activity: component 4: Project Management and Monitoring and Evaluation Contract 1: Project Manager/Director 41,418 41,418 41,418 41,418 - Contract 2: Procurement Specialist 35,199 35,199 35,199 35,199 - - Contract 3: Financial Specialist 25,705 25,705 25,705 25,705 - - Contract 4: Coordinator for business and innovations 27,205 27,205 27,205 27,205 - Contract 5: Monitoring and Evaluation Specialist 16,614 16,614 16,614 16,614 - - Contract 6: Part-Time Environmental Consultant 4,816 4,816 4,816 4,816 - - Contract 7: Financial/Accounting Software and support and maintenance for the project duration 1,511 1,511 1,511 1,511 - - Contract 8: Equipment for the PMU 2,453 2,453 2,453 2,453 - Contract 9: Hardware for the PMU 15,628 15,628 15,628 15,628 - - Contract 10: Administrative Assistant 15,511 15,511 15,511 15,511 - Contract 11: Procurement Assistant 14,376 14,376 14,376 14,376 - - Contract 12: Phones for the PMU 5,672 5,672 5,672 5,672 - - Contract 13: Consulting services for logistical support in the organization of a conference dedicated to the needs and challenges in the area of higher education 4,332 4,332 4,332 4,332 - - Contract 14: Monitoring and Evaluation Assistant 509 509 509 509 - - Contract 15: Grants Officer 509 509 509 509 - - Contract 16: Development of Software for Skills Observatory 10,601 10,601 10,601 10,601 - Contract 17: Technical Assistance for Policy Development and Initial Set-Up of the Skills Observatory 42,920 42,920 42,920 42,920 - - Contract 18: IT Specialist for the establishment of the Skills Observatory 9,247 9,247 9,247 9,247 - - Contract 19: IT Senior Administrator for the Skills Observatory 6,470 6,470 6,470 6,470 - - Contract 20: Skills Observatory Administrator 509 509 509 509 - - Payments without contract Training / accommodation, per diem, and transport 3,553 3,553 3,553 3,553 - - Operating Cost for the PMU 30,421 30,421 30,421 30,421 - - Operating costs: Bank provision 827 827 827 827 - - Operating costs: Petty cash 1,105 1,105 1,105 1,105 - - Sub-total 317,111 317,111 317,111 317,111 - Total 690,653 690,653 690,653 690,653 - - Ministry of Education and Science of the Republic of Macedonia 8 "Skills Development and Innovation Support Project" IBRD Loan number 8332-MK Financial Statements For the period from 7 February 2014 to 31 December 2015 Balance sheet In EUR 31 December 2015 Assets Bank balances 1,273,103 Total assets 1,273,103 Funds and liabilities Funds Unspent funds 1,273,103 Fund balance 1,273,103 Total Fund and liabilities 1,273,103 wErw -w E L 0> o æ EQ . .E 2 r CGI LL En r- LLL E E~ a. EEl - CL il i .- C -~ ? 22 ü 2 2 Zcoo roooomoooo .0 2 9 5 - : 515 , DC) wE E . =88 0 2 .= .E E 3 c E 0 cm ø æ z . 2 CL> c CL> - 00 U)J ø0 (b - Ef E 0 = ( E e .a t.. tm r .(b o c 2 w« z .2 x (b! ý .2 S ø du .ø EE EI 0 EC i r_r = 5 1 a a r E con U) C)0 *. UE > duCe' a o -a-.