Special Purpose Project Financial Statements for the year ...documents.worldbank.org/curated/en/... · to the special purpose project financial statements of "Scaling-up of the Pilot

"Scaling-up of the Pilot of Nutrition investments inSeverely Food Insecure Districts Project"Grant N2 TF 015755

Special Purpose Project Financial Statementsfor the year ended December 31, 2015

and independent auditors' report

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"SCALING-UP OF THE PILOT OF NUTRITION INVESTMENTS IN SEVERELY FOODINSECURE DISTRICTS PROJECT"GRANT NO. TF 015755

TABLE OF CONTENTS

Page

STATEMENT OF MANAGEMENT'S RESPONSIBILITIES FOR THE PREPARATIONAND APPROVAL OF THE SPECIAL PURPOSE PROJECT FINANCIAL STATEMENTS 2FOR THE YEAR ENDED DECEMBER 31, 2015

INDEPENDENT AUDITORS' REPORT 3-4

SPECIAL PURPOSE PROJECT FINANCIAL STATEMENTSFOR THE YEAR ENDED DECEMBER 31, 2015:

Statement of financial position 5

Statement of cash proceeds and disbursements 6

Statement of uses of funds by project components 7

Statement of applications 8

Statement of special account 9

Notes to the special purpose project financial statements 10-14

STATEMENT OF MANAGEMENT'S RESPONSIBILITIES FOR THE PREPARATION ANDAPPROVAL OF THE SPECIAL PURPOSE PROJECT FINANCIAL STATEMENTSFOR THE YEAR ENDED DECEMBER 31, 2015

The following statement, which should be read in conjunction with the independent auditors'responsibilities stated in the independent auditors' report set out on pages 3-4, is made with a view todistinguish the respective responsibilities of management and those of the independent auditors in relationto the special purpose project financial statements of "Scaling-up of the Pilot of Nutrition Investments inSeverely Food Insecure Districts Project", Grant Nq TF 015755 (the "Project").

Management is responsible for the preparation of the special purpose project financial statements thatpresent fairly, in all material respects, the financial position, cash proceeds and disbursements, uses offunds by project components, statement of applications, special account of the Project for the year endedDecember 31, 2015 in accordance with International Public Sector Accounting Standard "FinancialReporting Under the Cash Basis of Accounting" (the "IPSAS") issued by the International PublicAccounting Standards Board of the International Federation of Accountants and the World Bank'sFinancial Management Sector Board's "Guidelines: Annual Financial Reporting and Auditing for WorldBank Financed Activities" (the "WB Guidelines").

In preparing the special purpose project financial statements, management is responsible for:

* selecting suitable accounting policies and applying them consistently;* making judgments and estimates that are reasonable and prudent;* stating whether IPSAS and WB Guidelines have been followed, subject to any material departures

disclosed and explained in the special purpose project financial statements; and* preparing the special purpose project financial statements on a going concern basis, unless it is

inappropriate to presume that the Project will continue its activity for the foreseeable future.

Management is also responsible for:

* designing, implementing and maintaining effective and sound system of internal control and forrevealing risks in system of internal control;

* maintaining proper accounting records that disclose, with reasonable accuracy at any time. the fiancialposition of the Project, and which enable them to ensure that the special purpose project financialstatements of the Project comply with IPSAS and WB Guidelines;

* compliance with laws and regulations of the Republic of Tajikistan, accounting system of the Projectand the requireients of the World Bank;

* taking such steps as are reasonably available to them to safeguard the assets of the Project; and* detecting and preventing fraud and other irregularities.

The special purpose project financial statements for tie year ended December 3 1, 2015 were approved andauthorized for issue on June 24, 2016 by the management of the Project.

On behalf of the Management:

N. Salimzoda /' F. SafakovMinister of Health and Social Protection Head of Accounting and Reporting Department

of the Ministry of Health and Social Protection

June 24, 2016 June 24, 2016Dushanbe, Republic of Ti sta n Dushanbe, Republic of Tajikistan

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BAKER TILLYBaker Tilly Klitou and Partners SRL52 Splail ndependentei05oo85 BucharestRomania

T: +4021 3156ooF: +40 21 3156102

info@ bakertillyklitou.roINDEPENDENT AUDITORS' REPORT www.bakertillyklitou.ro

To the Management of "Scaling-up of the Pilot of Nutrition Investments in Severely Food InsecureDistricts Project" under the Ministry of Health and Social Protection of the Republic of Tajikistan andthe State Committee on Investments and Government Property Management of the Republic ofTajikistan:

Report on the Special Purpose Project Financial Statements

[1] We have audited the accompanying special purpose project financial statements of "Scaling-up ofthe Pilot of Nutrition Investments in Severely Food Insecure Districts Project" (the "Project")which comprise the statement of financial position, the statement of cash proceeds anddisbursements, the statement of uses of funds by project components, the statement ofapplications, the statement of special account for the year ended December 31, 2015, and asummary of significant accounting policies and other explanatory information (the "specialpurpose project financial statements").

Management's responsibility for the special purpose project financial statements

[2] Management is responsible for the preparation and fair presentation of these special purposeproject financial statements in accordance with International Public Sector Accounting Standard"Financial Reporting Under the Cash Basis of Accounting" (the "IPSAS") issued by theInternational Public Accounting Standards Board of the International Federation of Accountants,and the World Bank's Financial Management Sector Board's "Guidelines: Annual FinancialReporting and Auditing for World Bank Financed Activities" (the "WB Guidelines"), and forsuch internal control as management determines is necessary to enable the preparation of thespecial purpose project financial statements that are free from material misstatement, whetherdue to fraud or error.

Auditors' responsibility

[3] Our responsibility is to express an opinion on these special purpose project financial statementsbased on our audit. We conducted our audit in accordance with International Standards onAuditing. Those standards require that we comply with ethical requirements and plan andperform the audit to obtain reasonable assurance whether the special purpose project financialstatements are free from material misstatement.

[4] An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the special purpose project financial statements. The procedures selected dependon the auditors' judgment, including the assessment of the risks of material misstatement of thespecial purpose project financial statements, whether due to fraud or error. In making those riskassessments, the auditor considers internal controls relevant to the entity's preparation and fairpresentation of the special purpose project financial statements in order to design auditprocedures that are appropriate in the circumstances, but not for the purpose of expressing anopinion on the effectiveness of the entity's internal control. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of accounting estimates madeby management, as well as evaluating the overall presentation of the special purpose projectfinancial statements.

Associated officesCyprus: Nicosia T: +357 22 458500, Cyprus: Limassol T: +357 25 591515, Cyprus: Larnaca T: +357 24 663299Romania: Bucharest T: +40 2131561oo, Bulgaria: Sofia T: +359 2 9580980, Moldova: Chisinau T: +373 22 233003Registered in Romania (RN: J40/5434/2003). List of directors can be found at the Company's Registered Office. Cyprus

An independent member of Baker Tilly International

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BAKER TILLY

[5] We believe that the audit evidence we have obtained is sufficient and appropriate to provide abasis for our audit opinion.

Opinion

[6] In our opinion, the accompanying special purpose project financial statements present fairly, in allmaterial respects, financial position as at December 31, 2015 and cash proceeds anddisbursements, uses of funds by project components, applications and special account for the yearended December 31, 2015 in accordance with International Public Sector Accounting Standard"Financial Reporting Under the Cash Basis of Accounting" (the "IPSAS") issued by theInternational Public Sector Accounting Standards Board of the International Federation ofAccountants, and the World Bank's Financial Management Sector Board's "Guidelines: AnnualFinancial Reporting and Auditing for World Bank Financed Activities" (the "WB Guidelines").

Emphasis of matter

[7] Without qualifying our opinion, we draw attention to Note 2 to the special purpose projectfinancial statements which describe the basis of accounting. These special purpose projectfinancial statements were prepared for complying with the appropriate World Bank Guidelinesand Grant agreement requirements, and therefore are not intended to be a complete presentationof the "Scaling-up of the Pilot of Nutrition Investments in Severely Food Insecure DistrictsProject" (the "Project") operations.

Other Matter

[8] The special purpose project financial statements are prepared to assist the Project to comply withthe requirements of the World Bank. As a result the special purpose project financial statementsmay not be suitable for another purpose. Our report is intended solely for use by the managementof the Project and the World Bank and should not be distributed or used by anyone other thanthese specified parties.

Baker Tilly Klitou and Partners SRL

Bucharest, Romania

June 24, 2016

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STATEMENT OF FINANCIAL POSITIONAS AT DECEMBER 31, 2015(in US Dollars)

Notes December 31.2015

ASSETS AND EXPENDITURESCash and cash equivalents 4 474,717Cumulative project expenditures 5 1,040,744Foreign exchange differences 4,060

TOTAL ASSETS AND EXPENDITURES 1,519,521

FINANCINGGrants received 6 1,519,521

TOTAL FINANCING 1,519,521


N. Salimzoda F. SafarovMinister of Hlealth and SM411 rotction Head of Accounting and Reporting Department


June 24, 20 16 June 24. 2016Dushanbe, Republic of Taj1ie.ft Dushanbe, Republic of Tajikistan

11ie notes on pages 10-14 forn an integral patrt of the special purpose project financial statements. The Independent AuditorsReport is on pages 3-4

5


STATEMENT OF CASH PROCEEDS AND DISBURSEMENTSFOR THE YEAR ENDED DECEMBER 31, 2015(in US Dollars)

Notes For the year Cumulativeended

December 31,2015

Opening balance 4 600,000 600,000

Funding sourcesGrant No. TF 015755 6 919,521 919,521

Total Financing 919,521 919,521

Project expensesGoods 5 661,148 661,148Consultation services 5 193,348 193,348Trainings and workshops 5 150,578 150,578Operating expenses 5 35,670 35,670

Total project expenses 1,040,744 1.040,744

Foreign exchange rates differences 4,060 4,060

Closing balance 4 474,717 474,717


N. Salimzoda F. SafarovMinister of Health and Socil Protection Head of Accounting and Reporting Department


June 24, 2016 June 24, 2016Dushainbe, Republic of Takjikihn 7 Dushanbe, Republic of Tajikistan

The notes on pages 10-14 form an integra P.irt of the special purpose project Financial statements The Independent Auditors'Report is on pages 3-4

6


STATEMENT OF FUNDS BY PROJECT COMPONENTSFOR THE YEAR ENDED DECEMBER 31, 2015(in US Dollars)

For the year Cumulativeended

Decenlber 31,2015

Component 1. Household Gardening 84,738 84,738Component 2. Community based nutrition improvement interventions 165,397 165,397

Component 3. Community training on management ofchildhoodillnesses 274,704 274,704

Component 4. Educational campaign to promote healthy behaviorchange 76,541 76,541Component 5. Provision of micronutrient supplements 159,930 159,930Component 6. Strengthening local capacity in MCI 107,606 107,606

Component 7. Project management, monitoring and evaluation,knowledgc dissemination 171,828 171,828

1,040,744 1,040,744


N. Salimzoda F. SafarovMinister of 1ealth and Socialrotetion Head of Accounting and Reporting Department


3Line24,2016 June 24. 2016DUshanbe, Republic of Tajik iy DLIShanbe, Reptiblic of Tajikistan

The notes on pages 10-14 form an integral pirt of tlhe special purpose project financial statements. The Independent Auditors'Roport is on pages 3-4

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STATEMENT OF APPLICATIONSFOR THE YEAR ENDED DECEMBER 31, 2015(in US Dollars)

Sources of Application Date Direct Goods and Totalfinancing payment services,

includingaudit,

trainings andoperatingexpenses

TF-015575 2 August 31, 2015 144,357 - 144,3573 Septernber 28, 2015 - 324,083 324,0834 December 30, 2015 - 451,081 451,081

144,357 775,164 919,521


N. Salimzoda F. SairovMinister of Health and Social Protection Head of Accounting and Reporting Department


June 24, 2016 , * 7 June 24, 2016Dushanbe, Republic of Tajikistan - Dushanbe, Republic of Tajikistan

T he notes on pages 10-14 form an integral part of the special purpose project financial statements. Thc independent AIditors'Report is on pages 3-4

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STATEMENT OF SPECIAL ACCOUNTFOR THE YEAR ENDED DECEMBER 31, 2015(in US Dollars)

Special accounts Grant TF- 015755CurrencY US Dollars

Bank account 22696840000076Bank National Bank of TajikistanBank's location 27/2 Rudaki Avenue, Dusbanbe 734003, Tajikistan

Description Notes US Dollars Total

Balance as at January 1, 2015 4 600,000 600,000

Reimbursement of expenses 6 775,164 775,164Total funds received to a special account 775,164 775,164

The amount of eligible expenditures paid 5 896,387 896,387Foreign exchange differences 4,060 4,060

Balance as at December 31, 2015 474,717 474,717

On behalf of the Managenp -

N. Salirnzoda F. Safarov,Minister of Health and-Soial Protection Head of Accounting and Reporting Department

of the Ministry of Iealth and Social Protection

JuneC 24. 2016 June 24, 2016Dushanbe, RepLtblic of lkitall Dushanbe, Republic of Tajikistan

I he notes on pages 10- 14 form an integral part of the special purpose project financial statements The Independent Auditors'Report is on pages 3-4

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NOTES TO THE SPECIAL PURPOSE PROJECT FINANCIAL STATEMENTSFOR THE YEAR ENDED DECEMBER 31, 2015(in US Dollars)

L GENERAL INFORMATION

According to the Agreement between the Republic of Tajikistan and International DevelopmentAssociation (the "IDA"), as administrator of grant funds provided by Japan (the "Donor") tinder theJapan Social Development Fund dated May 7, 2014, provided a Grant TF 015755 in amount not toexceed 2.800,000 USD to the Republic of Tajikistan.

The Grants were provided for implementation of Scaling-up of the Pilot of Nutrition Investments inSeverely Food Insecure Districts Project (the "Project").

Project purpose

The Project Development Objective of the Project is to improve health and nutrition status amongchildren less than five years of age and pregnant and lactating mothers in the 14 districts affectedby the food price shocks in Khatlon Province.

The key indicators of achievement of the Project Development Objective are as follows:* Child anthropometric measures such as weight for age;* Childrens consumption of nutritious food;* Proportion of households growing more nutritious food;* Mother/caregiver is able to correctly mention at least three key actions for managing

children' illness at home;* Mother/caregiver able to narme at least three key actions to improve their children's nutrition,

The key indicators of achievement of the Project Development Objective are as follows:* Percentage of pregnant women receiving antenatal care four or more times from a skilled

health provider,* Contraceptive prevalence rate;* Average Health Facility Quality of Care Score;* Percentage of children Under-five with diarrhea treated with any Oral Rehydration Therapy.

The Project is to be implemented during 2015-2017, and comprises 7 components:

Component 1. Household gardening;Component 2. Comminity-based nutrition improvement interventions,Component 3. Community training on management of childhood illnesses;Component 4. Educational campaign to promote healthy behavior change;Component 5. Provision of micro-nutrient supplements;Component 6. Strengthening local capacity in Maternal & Childhood Illnesses (MCI) andNutrition Surveillance:Component 7. Project Management, Monitoring and Evaluation and Knowledge Dissemination.

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2. PRESENTATION OF THE SPECIAL PURPOSE PROJECT FINANCIAL STATEMENTS

Basis of preparation

These special purpose project financial statements have been prepared in accordance with theInternational Public Sector Accounting Standard (the "IPSAS") "Financial Reporting under the CashBasis of Accounting" issued by the Public Sector Committee of the International Federation ofAccountants, and incorporate the following principal accounting policies, which have been consistentlyfollowed in all material respects and comply with the World Bank's Financial Management SectorBoard's "Guidelines: Annual Financial Reporting and Auditing for World Bank Financed Activities"(the -WB Guidelines").

Under the cash basis system income (or expenditure) is recognized when cash is received (or paid)irrespective of when goods or services are received.

The Project's approved budget disclosed by categories of expenses is not publicly available and assuch comparison of budget and actual amounts is not presented.

These special purpose project financial statements consist of:

* Statement of financial position;* Statement of cash proceeds and disbursements;* Statement of uses of funds by project components;* Statement of applications;* Statement of special account;* Notes to the special purpose project financial statements, including short description of main

statements of accounting policy and other descriptive notes.

The reporting currency of these special purpose project financial statements is US Dollars(the "USD").

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cash basis of accounting

Special purpose project financial statements are prepared on a cash basis of accounting. The cashbasis of accounting recognizes transactions and events only when cash (including cash equivalents) isreceived or paid by the entity. Special purpose project financial statements prepared under the cashbasis provide readers with information about the sources of cash raised during the period, thepurposes for which cash was used and the cash balances at the reporting date. The measurement focusin the special purpose project financial statements is balances of cash and changes therein.

Foreign currency

Operations in foreign currency initially are counted in functional currency by the official currencyexchange rate settled by the National Bank of Tajikistan (the "NBT") on a date of operation.

All payments made in local currency are translated into USD at the official exchange rate defined byNational Bank of Tajikistan, at the date of transaction.

Monetary assets and liabilities expressed in foreign currency are converted to functional currency atofficial exchange rate on a date settled by the NBT.

All foreign exchange differences resulted from maturity or recounting are included in statement ofcash proceeds and disbursements.

Non-monetary items are valued according to their historic cost in foreign currency, which arerecalculated on rates of the initial operation date.

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Cash and cash equivalents

Cash and cash equivalents include cash on hand and due from banks, which can be converted to thecorresponding amount of cash in the short term.

Taxes

Calculation and payment of personal income tax and social security contributions from income oflocal staff and consultants is made in accordance with the requirements and rates of the Tax Code ofthe Republic of Tajikistan.

Project expenses

The expenses are recorded in the period when they were actually paid.

Sources of funds

The funds were provided by the World Bank to the Project by replenishment of special account orthrough direct payment to the end supplier of goods and/or services and contribution of the Republicof Tajikistan.

4. CASH ANI) CASH EQUIVALENTS

Cash and cash equivalents as at December 31, 2015 comprise:

December 31,2015

Special account in foreign currency Grant No. TV 015755 474,717Transit account in national currency Grant No. TF 015755 -

474,717

5. CUMULATIVE PROJECT EXPENDITURES

Project expenditures by components are presented in the statement of funds by project components.Project expenditures on major categories are presented in the statement of cash proceeds anddisbursements. Breakdown of project expenses by categories and nature is presented as follows:

GOODS


December 31,2015

Medical bags 169,217 169,217Replication of brochures and information materials 167,828 167,828Provision of micronutrients 144,357 144,357Presentation equipment 89,133 89,133Provision of fertilizers 43,731 43,731Stationery and bags for volunteers 25,262 25,262Stationery 11,691 11,691Bloodtest kits 9,929 9,929

661,148 661,148

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CONSULTATION SERVICES


December 31,2015

Salary and related taxes 193,348 193,348

193,348 193,348

TRAININGS AND WORKSHOPS


December 31,2015

Trainings on management of childhood illnesses 60,229 60,229Strengthening of primary health care health workers' capacity viafamily medicine training 45,258 45,258Trainings on nutrition improvement 45,091 45,091

150,578 150,578

OPERATING EXPENSES


December 31,2015

Comm uni cation 11,003 11,003Fuel 6,359 6,359Salary and related taxes 6,106 6,106Business trips 5,737 5,737Stationery 3,002 3,002Bank fees 522 522Other 2.9 1 2,941

35,670 35,670

6. GRANTS RECEIVED

The grants received were presented by the following reimbursement methods:

Financing method / sources of financing; For the year Cumulativeended

December 31,2015

Direct payment 144,357 144,357Reimbursement of expenses 775,164 775,164

919.521 919,521

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7. UNDRAWN FUNDS

For the year ended December 31, 2015 undrawn funds with breakdown are presented as follows:

Grant No.TF 015755

USDApproved grant amount 2,800,000Disbursed amount 1,519,521

Undrawn amount 1,280,479

Grant No.TF 015755

USDOpening disbursed amount 600,000Disbursed during the year 919,521

Closing disbursed amount 1,519,521

8. COMMITMENTS

In the normal course of activities, the Project concludes agreements with suppliers of goods andservices in accordance with the established budget and procurement plan. Contract value ofobligations valid as at December 31, 2015 was as follows:

Counterparty Contract # Contract Contract Paid up to Remainingcurrency value December 31, amount to be

2015 paidJoint Charityorganization "Orivon" SUPNI/TF015755/CQS/015/001 TJS 275,127 186,365 88,762

9. LEGAL CASES

There were no any legal claims related to the Project.

10. EVENTS AFTER THE REPORTING DATE

From January 1, 2016 until the date of issue of these special purpose project financial statementsthe World Bank has replenished the special account of the Project as follows:

Date Application Grant No.TF 015755

March 11, 2016 5 121,223June 13, 2016 6 126,715

247.938

As at the date of issue of these financial statements no other significant events or transactionshappened, which should be disclosed in the special purpose project financial statements, except forthe events or transactions described above.

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Documents

Special Purpose Project Financial Statements for the year ...documents.worldbank.org/curated/en/... · to the special purpose project financial statements of "Scaling-up of the Pilot