I ~ Y' I I I I I I ~RENOVATION OF GENERAL EDUCATION PROJECT I Financing Agreement No. 5691-VN ~AUDITED FINANCIAL STATEMENTS I For the year ended 31 December 2018 I I I I I I I I I I I I The Renovation of General Education Project Financing Agreement No. 5691-VN I I I I7 CONTENTS Page PART I INDEPENDENT AUDITORS' REPORT ON THE FINANCIAL STATEMENTS Report of the Project Management Unit 3 Independent Auditors' Report on the Financial statements 4-5 Audited Financial statements Statement of Funds and Expenditures 6 Statement of Funds balance 7 Statement of Designated Account 8 Statement of Withdrawals and Reconciliation of Funds 9 Notes to the Financial statements 10-16 PART II INDEPENDENT AUDITORS' REPORT ON 17-18 THE INTERNAL CONTROL SYSTEM PART III INDEPENDENT AUDITORS' REPORT ON 19-20 THE COMPLIANCE PART IV MANAGEMENT LETTER 21-25 I I I I I 2 I I The Renovation of General Education Project Financing Agreement No. 5691-VN REPORT OF THE PROJECT MANAGEMENT UNIT The Project Management Unit of The Renovation of General Education Project ("the Project") presents this report and the Financial Statements of the Project for the year ended 31 December 2018. The Project The Project is funded by the International Development Association (IDA) under the Financing Agreement No. 5691-VN ("the Agreement") dated 08 April 2016 between the Government of the Socialist Republic of Vietnam and the World Bank. The Project Management Unit Members of the Project Management Unit ("the PMU") in the period and to the reporting date are: Mr. Nguyen Xuan Thanh Director Appointed on 21/01/2019 Mr. Doan Van Ninh Former Director Dismissed on 21/01/2019 Mr. Doan Van Ninh Deputy Director Appointed on 21/01/2019 Mr. Nguyen Ngoc Dung Deputy Director Appointed on 21/01/2019 Mrs. Tran Thi Kim Thuy Former Chief Accountant Dismissed on 01/02/2018 Mrs. Le Thi Ninh Ha Accountant in charge Appointed on 01/02/2018 and dismissed on 01/02/2019 Mr. Doan Cuong Chief Accountant Appointed on 01/03/2019 Auditors I The auditors of AASC Limited have taken the audit of financial statements of the Project. I Responsibilities of the Project Management Unit The Project Management Unit is responsible for preparing the project financial statements, including Statement of Funds and Expenditures, Statement of Funds balance, Statement of Designated Account and Statement of Withdrawals and Reconciliation of Funds, which comply with the accounting policies described in the attached Notes to the Financial Statements. The Project Management Unit assures that the accounting policies are appropriately selected and consistently applied. The Project Management Unit assures that the accounting records were fully maintained to prepare the financial statements in accordance with the applied accounting policies and to disclose, with reasonable accuracy at any time, the financial position of the Project. The Project Management Unit is also responsible for maintaining an effective internal control as management determines necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and comply with relevant laws, regulations and other provisions of the funding agreement that could have a direct and material financial effect on the Project financial statements. On behalf of the Project Management Unit Nguyen Xuan Thanh Director Hanoi, 10 June 2019 I I 3 I 1 I. aasc No.: 100619.005/BCTC.FIS2 INDEPENDENT AUDITORS' REPORT ON THE FINANCIAL STATEMENTS To: The Project Management Unit of The Renovation of General Education Project Opinion We have audited the accompanying financial statements of The Renovation of General Education Project ("the Project") which comprise Statement of Funds balance as at 31 December 2018, Statement of Funds and Expenditures, Statement of Designated Account, Statement of Withdrawals and Reconciliation of Funds of Funds for the year ended 31 December 2018, and Notes to the Financial Statements, including a summary of significant accounting policies. I In our opinion: The Financial Statements give a true and fair view, of the financial position of the Project, including the balance of the Designated Account as at 31 December 2018, funds received and expenditures incurred, movements of the Designated Account for the year then ended in accordance with the basis of the principal accounting policies described in the Notes to the Financial Statements and the provisions of the Financing Agreement No. 5691-VN dated 08 I April 2016; In addition, with respect to Statements of Expenditure, adequate supporting documents have been fully maintained to support to the replenishment requests submitted to the World Bank. The expenditures are eligible and in right purposes of the Financing Agreement No. 5691-VN dated 08 April 2016. Basis of Opinion We conducted our audit in accordance with International Standards on Auditing ("ISAs"). Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Financial Statements section of our report. We are independent of Project Management Unit in accordance with the international Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants ("IESBA Code"), and we have fulfilled our other ethical responsibilities in accordance with the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Responsibilities of Projcct Management Unit for the Financial Statements The Project Management Unit is responsible for the preparation of the financial statements in accordance with the principal accounting policies described in Notes to the Financial Statements, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is responsible for assessing the Project's ability to continue as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting unless management either intends to cease operations, or has no realistic alternative but to do so. Auditor's Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material A member of international HANG K1M TOAN AASC 4 I I misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Obtain an understanding of internal control relevant to the audit 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. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Project's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors' report to the related disclosures financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors' report. However, future events or conditions may cause the Project to cease to continue as a going concern. Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with the Project Management Unit regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. AASC Limited Do Ianh Cuong Doan Thi Thuy Deputy General Director Auditor in-charge CPA Registered No.: CPA Registered No.: 0744-2018-002-1 0937-2018-002-1 Hanoi, 10 June 2019 5 The Renovation of General Education Project Financial Statements Financing Agreement No. 5691-VN Year ended 31 December 2018 STATEMENT OF FUNDS AND EXPENDITURES For the year ended 31 December 2018 Accumulated Accumulated Note to 31/1212017 Year2018 to 31/12/2018 VND VND VND 1. Funds 1. Funds received from the World Bank 03 45,447,025,594 76,167,332,000 121,614,357,594 2. Counterpart funds 16,548,396,919 7,899,886,098 24,448,283,017 3. Other funds - Exchange rate difference 772,797,954 1,105,242,325 1,878,040,279 62,768,220,467 85,172,460,423 147,940,680,890 11. Expenditures 1. Goods 3,906,530,000 95,000,000 4,001,530,000 2. Training and Workshops 11,030,918,438 19,016,947,450 30,047,865,888 3. International consultants' services 13,237,280,220 9,181,342,801 22,418,623,021 4. Domestic consultants' services 27,157,525,047 24,071,006,363 51,228,531,410 5. Incremental operating costs 10,166,573,856 2,237,683,898 12,404,257,754 04 65,498,827,561 54,601,980,512 120,100,808,073 Ill. Surplus/(Deficit) (2,730,607,094) 30,570,479,911 27,839,872,817 6 I The Renovation of General Education Project Financial Statements Financing Agreement No. 5691-VN Year ended 31 December 2018 STATEMENT OF FUNDS BALANCE As at 31 December 2018 Note 31/12/2018 31/12/2017 .Surplus VND VND Surplus/(Deficit) as at beginning (2,730,607,094) 4,143,034,985 Surplus/(Deficit) in the year 30,570,479,911 (6,873,642,079) Surplus/(Deficit) as at closing 27,839,872,817 (2,730,607,094) Represented by: Current assets 32,489,000,220 13,042,242,075 Cash on hand 60,377,000 22,409,000 Cash at bank 05 32,423,592,820 12,115,632,827 Cash in transit 06 5,030,400 228,990,971 Advances to staff - 179,785,812 Advances to contractors - 495,423,465 Current liabilities 4,649,127,403 15,772,849,169 Payables to employees 1,176,941,700 2,273,064,171 Personal income tax 96,854,135 986,652,038 Payables to suppliers 07 2,893,794,001 12,462,906,880 Other payables 08 481,537,567 50,226,080 I Surplus/(Deficit) 27,839,872,817 (2,730,607,094) I I I I I I I I I7 I I The Renovation of General Education Project Financial Statements Financing Agreement No. 5691-VN Year ended 31 December 2018 STATEMENT OF DESIGNATED ACCOUNT For the period: from 01/01/2018 to 31/12/2018 Account No.: 177010000029090 Bank: Vietnam joint stock commercial bank for Industry and Trade - Nam Thang Long Branch Address: 11 7A Hoang Quoc Viet Street, Cau Giay District, Hanoi Agreement No.: IDA 569 1- VN PART A: ACTIVITIES Note USD USD Opening balance 534,159.98 Add: - Amounts deposited by the World Bank 3,388,000.00 - Bank charges refunded 714.80 3,388,714.80 Deduct: - Amounts withdrawn (2,483,206.18) - Bank charge (714.80) (2,483,920.98) 3 Closing balance 1,438,953.80 PART B: RECONCILIATION 1. Amount advanced by the World Bank 1,718,000.00 2. Add: Amount supplemented by the World Bank 2,225,200.69 3. Deduct: Amount recovered by the World Bank (713,706.69) 4. Present outstanding amount advanced to 3,229,494.00 5. Closing balance 1,438,953.80 6. Add: Amounts withdrawn and not yet claimed (1) 1,790,540.20 7. Total advances accounted for 3,229,494.00 (1) Including: USD Amounts withdrawn and claimed on Withdrawal 1,785,781.01 Applications No. 6/RGEP dated 22/04/2019 Training'and Workshops 2,983.42 I Cash on hand 1,775.77 1,790,540.20 I I I 1 8 I The Renovation of General Education Project Financial Statements Financing Agreement No. 5691-VN Year ended 31 December 2018 STATEMENT OF WITHDRAWALS AND RECONCILIATION OF FUNDS Financing Agreement No. 5691-VN For the year ended 31 December 2018 Withdrawal applications Amount claimed Amount received Goods, Works, Non - Consulting Services No Date Currency Advance Services Total Date Amount Variances Note Training and Workshop, and Incremental Operating Costs (a) (b) (b)-(a) Designated account 4/RGEP 16/01/2018 USD - 1,101,706.69 1,101,706.69 16/01/2018 388,000.00 (713,706.69) (1) 5/RGEP 15/05/2018 USD 2,225,200.69 774,799.31 3,000,000.00 16/05/2018 3,000,000.00 - Total 2,225,200.69 1,876,506.00 4,101,706.69 3,388,000.00 (713,706.69) (1) Being recovered by the World Bank 9 _______ _______ ______ I - 1 cU I The Renovation of General Education Project Financial Statements Financing Agreement No. 5691-VN Year ended 31 December 2018 NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2018 1. Background The The Renovation of General Education Project (RGEP) is funded by the International Development Association (IDA) under the Financing Agreement No. 5691-VN dated 08 April 2016 between the Government of the Socialist Republic of Vietnam and the World Bank. Total original IDA loan is SDR 55,400,000 (equivalent to USD 77 million) and the total amount of counterpart fund is USD 3,000,000. The main objective of the Financing Agreement No. 5691-VN is to raise student learning outcomes by: (i) revising and implementing the curriculum following a competency-based approach; and (ii) improving the effectiveness of the instruction by creating disseminating textbooks aligned with the revised curriculum. The Project consists of the following components: Part 1: Curriculum Development. OA (a) Providing support for the establishment of, and carrying out of activities by, a core technical - committee for curriculum revision and subject-specific technical committees; (b) Providing support for training of teachers on the revised curriculum, which includes: (i) curriculum piloting; (ii) the delivery of face-to-face and online training to teachers and Curriculum Champions; (iii) development of guidance materials for publishers of textbooks and other pedagogical materials. Part 2: Development and Dissemination of Aligned Textbooks. (a) Providing support for the development and appraisal of textbooks in alignment with the new learning outcomes standards, which include the translation of selected textbooks into selected ethnic minority languages; (b) Providing support for the dissemination of textbooks to disadvantaged schools. Part 3: Learning Assessment and Analysis for Continuous Improvement of Cirriculum and Policy (a) Providing support for establishment of the National Center for Sustainable Development (NCSDGE) of Genaral Education Quality and the National Center on Foreign Language Testing (NCFLT); (b) Providing support for NCSDGEQ's research programs and capacity building related to the revised curriculum and learning outcome standards; (c) Providing support for the development and administration of diagnostic examination for the measurement of learning outcomes at each educational sub level, including elementary, secondary and upper secondary levels, consistent with existing regulations on national periodical assessment of student learning outcomes in general education by the Ministry of Education and Training, and associated capacity building; (d) Providing support for the development and implementation of consultation and outreach campaigns. Part 4: Project Management. (a) Providing support for Project management activities; (b) Providing for the development and implementation and monitoring of Project monitoring and evaluation. The Financing Agreement No. 5691-VN officially came into operation since 08 August 2016 and is expected to close on 31 December 2020. 10 I The Renovation of General Education Project Financial Statements Financing Agreement No. 5691-VN Year ended 31 December 2018 No withdrawal shall be made for payments prior to the Agreement date, except those made for eligible expenditures on or before 30 September 2015 but its accumulated amount shall not exceed SDR 1,800,000. The Project is managed by the Project Management Unit of The Renovation of General Education Project and its office is located at No. 35, Dai Co Viet Street, Hanoi. 2. Principal Accounting Policies I a. Basis of accounting Annual accounting period commences from 1st January and ends at 31st December. The financial statements are prepared in accordance with the requirements of the World Bank and presented in Vietnam Dong (VND), except for the Statement of Designated Account and Statement of Withdrawals and Reconciliation of Funds, which are prepared in United State Dollar (USD). The principal accounting policies are summarized as below: b. Foreign currencies Funds received from World Bank in foreign currency is translated into VND using the exchange rates announced by the Ministry of Finance at the date of receiving the funds or at the date of direct payment made to contractors/suppliers. Transactions in foreign currencies are translated into VND using actual exchange rates at other I transaction dates announced by the Vietnam joint stock commercial bank for Industry and Trade. All differences on foreign exchange are recorded into exchange rate differences account and presented as other funds on Statement of Funds and Expenditures. c. Funds and Expenditures Funds: - Funds received from the World Bank are recognized when remittance made into the Designated Account or direct payment made to contractors/suppliers; - Counterpart funds are recognized when payments are made directly from the State Treasury to contractors/suppliers of the project or funds are withdrawn to the PMU for settlement of 3 project's activities including any payments under current year plan until the next 31/1; - Other funds are recorded when they are actually occurred. Expenditures are recorded when they are actually occurred. d. Designated account Designated Account is the deposit account in USD opened at the Vietnam joint stock cpmmercial Bank for Industry and Trade - Nam Thang Long Branch for the Project's activities. Payments made via Designated Account are for eligible expenditures of the Project in accordance with the provisions of the Financing Agreement No. 5691-VN dated 08 April 2016. There is no interest with this account under the prevailing rule. 3 11 I The Renovation of General Education Project Financial Statements Financing Agreement No. 5691-VN Year ended 31 December 2018 3 3. Funds received from the World Bank Year 2018 Accumulated to 31/12/2018 USD Equivalent to VND USD Equivalent to VND I Designated account Advance 2,225,200.69 50,038,087,939 3,943,200.69 88,328,091,939 Replenishment 1,162,799.31 26,129,244,061 1,482,723.39 33,286,265,655 3,388,000.00 76,167,332,000 5,425,924.08 121,614,357,594 4. Expenditures Accumulated Year 2018 to 31/12/2018 VND VND Expenditures covered by: The World Bank 45,384,625,914 94,335,056,556 The counterpart funds 9,217,354,598 25,765,751,517 54,601,980,512 120,100,808,073 The Financing Agreement No. 5691-VN dated 08/04/2016 finances 100% (inclusive of Taxes) of eligible expenditures includings goods, works, non-consulting services, consulting services, training and workshops, incremental operating costs. Incremental operational costs are finances by the World Bank, including auditing, evaluation and project monitoring. Counterpart funds are used to cover the project's incremental operating costs (office equipment costs, project management costs and part of the cost of the workshop, to develope program (under component 1.1) and compiled a set of textbooks (under component 2.1). I I I I I 1 12 I The Renovation of General Education Project Financial Statements Financing Agreement No. 5691-VN Year ended 31 December 2018 Expenditures by the components Year 2018 Accumulated to 31/12/2018 Components World Bank Counterpart fund Total World Bank Counterpart fund Total VND VND VND VND VND VND Part 1: Curriculum Development 41,476,385,347 4,520,943,000 45,997,328,347 89,865,815,989 5,047,709,400 94,913,525,389 1.1 Developing Program (Overall Program and 39,667,809,347 4,500,500,000 44,168,309,347 87,217,344,417 5,027,266,400 92,244,610,817 Subjects) 1.2 Implementing Program 1,808,576,000 20,443,000 1,829,019,000 2,648,471,572 20,443,000 2,668,914,572 Part 2: Development and Dissemination of - - Aligned Textbooks Part 3: Learning Assessment and Analysis for 2,858,079,163 - 2,858,079,163 3,419,079,163 - 3,419,079,163 Continuous Improvement of Cirriculum and Policy 3.1 Establishing the National Center for 371,110,000 - 371,110,000 371,110,000 - 371,110,000 Sustainable Development of General Education Quality and the National Center for Foreign Language Testing 3.2 Developing sustainably of quality of general 389,242,500 - 389,242,500 389,242,500 - 389,242,500 education 3.3 Implementing a periodic assessment of the 58,103,000 - 58,103,000 58,103,000 - 58,103,000 student's academic performance 3.4 Project communications 2,039,623,663 - 2,039,623,663 2,600,623,663 - 2,600,623,663 Part 4: Project Management 1,050,161,404 4,696,411,598 5,746,573,002 1,050,161,404 20,718,042,117 21,768,203,521 4.1 Office equipment - 9,999,000 9,999,000 - 3,700,529,000 3,700,529,000 4.2 Project management activities - 4,686,412,598 4,686,412,598 - 17,017,513,117 17,017,513,117 4.3 Development and implementation of Project 1,050,161,404 - 1,050,161,404 - 1,050,161,404 monitoring and evaluation 45,384,625,914 9,217,354,598 54,601,980,512 94,335,056,556 25,765,751,517 120,100,808,073 13 The Renovation of General Education Project Financial Statements Financing Agreement No. 5691-VN Year ended 31 December 2018 Expenditures by the categories Year 2018 Accumulated to 31/12/2018 Categories World Bank Counterpart fund Total World Bank Counterpart fund Total VND VND VND VND VND VND Goods 95,000,000 - 95,000,000 216,000,000 3,690,530,000 3,906,530,000 Training and Workshops 14,136,802,750 4,880,144,700 19,016,947,450 24,001,806,788 6,046,059,100 30,047,865,888 International consultants' services 9,181,342,801 - 9,181,342,801 22,418,623,021 - 22,418,623,021 Domestic consultants' services 21,961,006,363 2,110,000,000 24,071,006,363 47,228,868,747 3,999,662,663 51,228,531,410 Incremental operating costs 10,474,000 2,227,209,898 2,237,683,898 374,758,000 12,029,499,754 12,404,257,754 45,384,625,914 9,217,354,598 54,601,980,512 94,335,056,556 25,765,751,517 120,100,808,073 14 in -4 The Renovation of General Education Project Financial Statements Financing Agreement No. 5691-VN Year ended 31 December 2018 3 5. Cash at bank 31/12/2018 31/12/2017 VND VND The Designated Account (USD) 32,386,828,153 12,109,406,747 The Current Account (VND) 1,726 6,225,000 Current Account for salaries (VND) 36,656,444 - The Curent Account Interest (VND) 106,497 1,080 32,423,592,820 12,115,632,827 6. Cash in transit The ending balance as of 31 December 2018 is the amount transferred by the State Treasury in January 2019 to pay for stationery, telephone... of December 2018. 1 7. Payables to contractors 31/12/2018 31/12/2017 VND VND N Payables to the International Consultants 979,087,501 8,836,041,619 OAN Everest Vietnam Trading and Service Co., Ltd 447,500,000 - Viet An Tourism Investment and Trading Co., Ltd 306,871,000 60,290,000 Anh Thuan Phat Trading and Development Co., Ltd 259,000,000 - Technology MT9 JSC 293,400,000 - Kieu Gia Advertising and Communication Co., Ltd 108,500,000 - Tin Duc Technology Development and 95,000,000 - Investment Co., Ltd Ha Anh Aviation Tourism JSC - 846,803,326 Sao Khue Consulting and Development JSC - 583,120,000 Sen Viet Resort Co., Ltd - 621,400,000 Payables to the Domestic Consultants - 744,750,000 Nam Hue investment trading and services Co., Ltd - 116,322,250 Other payables 404,435,500 654,179,685 2,893,794,001 12,462,906,880 8. Other payables 31/12/2018 31/12/2017 VND VND Payables to employees for training and workshops 452,663,900 - Bid security 7,000,000 35,000,000 Sale of bidding documents 13,000,000 9,000,000 Insurances 8,752,000 - Per diem payables in Phu Quoc - 6,225,000 Bank interests 121,667 1,080 I 481,537,567 50,226,080 15 I I The Renovation of General Education Project Financial Statements Financing Agreement No. 5691-VN Year ended 31 December 2018 9. Subsequent events There have been no significant events occurring after the reporting date, which would require I adjustments or disclosures to be made in the financial statements. 10. Corresponding figures The corresponding figures are the financial statements for the year ended 31 December 2017 which were audited by AASC Limited. 11. Approval of the Financial Statements The financial statements were approved by Project Management Unit for issuance on 10 June 2019. I Nguyen Xuan Thanh Doan Cuong Director Chief Accountant Hanoi, 10 June 2019 I I I I I I I I I I 16 I 1 I 'aasc No.: 100619.005/BCTC.FIS2 INDEPENDENT AUDITORS' REPORT ON THE INTERNAL CONTROL SYSTEM To: The Project Management Unit of The Renovation of General Education Project We have audited, in accordance with International Standards on Auditing, the financial statements of The Renovation of General Education Project ("the Project") for the year ended 31 December 2018 and issued the auditors' report thereon dated 10 June 2019 expressing an opinion on those financial statements. In connection with our audit of the financial statements, we also examined the effectiveness of internal control over compliance with requirements that could have a direct and material financiall effect on the financial statements as well as the internal control over financial reporting for the year ended 31 December 2018. Responsibilities of the Project Management Unit The Project Management Unit is responsible for maintaining an effective internal control over compliance with requirements that could have a direct and material financial effect on the financial statements as well as the internal control over financial reporting. Auditor's Responsibility Our responsibility is to express an opinion on the effectiveness of internal control based on our examination. Our examination was conducted in accordance with the International Standard on Assurance Engagements (ISAE) 3000 (Revised). That standard requires that we comply with ethicall requirements and plan and perform our procedures to obtain reasonable assurance about whether, in all material respects, the Project has maintained an effective internal control over compliance with requirements that could have a direct and material financial effect on the financial statements as well as internal control over financial reporting. Our examination included obtaining an understanding, testing, and evaluating the design and operating effectiveness of the internal control, and performing other procedures as we considered necessary in the circumstances to obtain sufficient appropriate evidence to provide a basis for our opinion. Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not to be prevented or detected on a regular basis. In addition, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. I I T: (84)24 3824 19901 F: (84)24 3825 3973 1 1 Le Phung Hieu. Hanoi, Viotnam A member of International HANG KIM TOAN AASC 17 I 1 I Auditors' opinion In our opinion, the Project has maintained an effective internal control over misstatements that could have a direct and material financial effect on the Project financial statements for the year ended 31 December 2018. AASC Limited Do Manh Cuong Doan Thi Thuy Deputy General Director Auditor in-charge CPA Registered No.: CPA Registered No.: 0744-2018-002-1 0937-2018-002-1 Hanoi, 10 June 2019 I I I I I I I I I I I I 18 I I aasc I No.: 100619.005/BCTC.FIS2 INDEPENDENT AUDITORS' REPORT ON THE COMPLIANCE To: Project Management Unit of The Renovation of General Education Project We have audited, in accordance with the International Standards on Auditing, the financial statements of The Renovation of General Education Project ("the Project") for the year ended 31 December 2018 and issued the auditors' report thereon dated on10 June 2019 expressing an opinion on those financial statements. In connection with the audit of the financial statements, we also performed procedures on the Project's compliance with the Financing Agreement No. 5691-VN dated 08 April 2016, law and regulations that have a direct and material effect on the Project's financial statements for the year ended 31 December 2018 ("the Requirements"). Responsibilities of the Project Management Unit The Project Management Unit is responsible for complying with the Requirements applicable to the I Project. Auditor's Responsibility Our responsibility is to express an opinion on the Project's compliance with the Requirements based on our procedures. We limited our tests of compliance to the Requirements, and we did not test compliance with all laws and regulations applicable to the Project. We performed our work in accordance with the International Standard on Assurance Engagements (ISAE) 3000 (Revised). That standard requires that we comply with ethical requirements and plan and perform our procedures to obtain reasonable assurance about whether, in all material respects, the Project has complied with the Requirements. An assurance engagement to report on the compliance with the Requirements at the Project involves performing procedures to obtain evidence about whether the Project's activities are free of material non-compliance with the Requirements, including obtaining an understanding of the internal control relevant to the Project's compliance with the Requirements. The procedures selected depend on the auditors judgment, including the assessment of risks that the Project does not comply with the Requirements and whether such non-compliance could have a direct and material financial effect on the Project's financial statements. Our procedures included testing the compliance with the Requirements we consider necessary to provide a reasonable assurance that the Requirements are complied by the Project. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. I I I T: (84)24 3824 1990I F: (84)24 3825 3973 I 1 Le PhUng Hieu. Hanoi, Vietnam A member of International HANG KIEM TOAN AASC 19 I I I Auditors' opinion In our opinion, the Project has complied, with the Requirements that could have a direct and material financial effect on the Project's financial statements for the year ended 31 December 2018. AASC Limited Do Manh Cuong Doan Thi Thuy Deputy General Director Auditor in-charge CPA Registered No.: CPA Registered No.: 0744-2018-002-1 0937-2018-002-1 Hanoi, 10 June 2019 I I I I I I I I I I I I 20 I