VIETNAM SCALING UP URBAN UPGRADING PROJECT SUBPROJECT OF TAN AN CITY, LONG AN PROVINCE Pursuant to the Financing Agreements No. 6055-VN and No. 6056-VN dated 29 June 2018 between the Socialist Republic of Vietnam and the International Development Association (IDA) AUDITED FINANCIAL STATEMENTS Fir the fiscal year ended 31 December 2021 URBAN UPGRADING PROJECT MANAGEMENT UNIT OF TAN AN CITY VIETNAM SCALING UP URBAN UPGRADING PROJECT - SUBPROJECT OF TAN AN CITY, LONG AN PROVINCE Pursuant to the Financing Agreements No. 6055-VN and No. 6056-VN dated 29 June 2018 between the Socialist Republic of Vietnam and the International Development Association (IDA) CONTENTS Page PART I: FINANCIAL STATEMENTS Statement of the Board of Directors 2-3 Independent Auditor's Report on Financial Statements for the fiscal year ended 31 December 2021 4-5 Statement of capital and expenditures for the fiscal year ended 31 December 2021 6 Statement of capital balance as of 31 December 2021 7 Statement of balance and fluctuation of the designated account for the fiscal year ended 31 December 2021 8 Statement of IDA and IDA SUF capital for the fiscal year ended 31 December 2021 9 Notes to the Financial Statements for the fiscal year ended 31 December 2021 10- 15 PART II: INDEPENDENT AND REASONABLE ASSURANCE REPORT ON COMPLIANCE 16-17 PART III: INDEPENDENT AND REASONABLE ASSURANCE REPORT ON THE INTERNAL CONTROL 18 - 19 APPENDIX: MANAGEMENT LETTER 20-25 URBAN UPGRADING PROJECT MANAGEMENT UNIT OF TAN AN CITY VIETNAM SCALING UP URBAN UPGRADING PROJECT - SUBPROJECT OF TAN AN CITY, LONG AN PROVINCE Pursuant to the Financing Agreements No. 6055- VN and No. 6056- ViN dated 29 June 2018 between the Socialist Republic of Vietnam and the International Development Association (IDA) STATEMENT OF THE BOARD OF DIRECTORS The Board of Directors of Urban Upgrading Project Management Unit of Tan An City (hereinafter referred to as "the PMU") presents this statement together with the Financial Statements for the fiscal year ended 31 Decc. .her 2021. Overview of the PMU Urban Upgrading Project Management Unit of Tan An City is a public non-business entity incorporated by the People's Committee of Tan An City according to the Decision No. 2879/QD-UBND dated 26 September 2017 of Chairman of the People's Committee of Tan An City. Head office: No. 187 Hung Vuong Street, Ward 3, Tan An City, Long An Province. The functions and duties of the PMU are: * To perform tasks and powers of the investor and directly organize the project management; to take responsibility before the law and the People's Committee of Tan An City for the entity's activities. * To perform other tasks assigned by the People's Committee of Tan An City, the Chairman of the People's Committee of Tan An City. Board of Directors The Board of Directors of the PMU during the year and as of the date of this statement includes: Full name Position Appointing date Mr. Tran Thanh Nhan Director 05 December 2018 Mr. Le Minh Tam Deputy Director 09 September 2020 Mr. Vo Anh Tu Deputy Director 28 September 2017 Vietnam Scaling Up Urban Upgrading Project - Subproject of Tan An City, Long An Province Vietnam Scaling Up Urban Upgrading Project - Subproject of Tan An City, Long An Province (hereinafter referred to as "the Project") has been approved under: * the Decision No. 363/QD-TTg dated 23 March 2017 of Prime Minister on approving the investment scheme for "Vietnam Scaling Up Urban Upgrading Project" with the capital borrowed from the World Bank. * the Decision No. 4012/QD-UBND dated 31 October 2018 of Chairman of the People's Committee of Long An Province on approving Vietnam Scaling Up Urban Upgrading Project - Subproject of Tan An City, Long An Province. The project is funded by the World Bank through the Financing Agreements No. 6055-VN and No. 6056- VN dated 29 June 2018 between the Socialist Republic of Vietnam and the International Development Association (IDA) (hereinafter referred to as "Financing Agreements"). Auditors A&C Auditing and Consulting Co., Ltd. has conducted the audit on the Financial Statements of the Project for the fiscal year ended 31 December 2021. Responsibilities of the Board of Directors The Board of Directors of the PMU is responsible for the preparation of the Financial Statements to give a true and fair view of the financial position of Project for each fiscal year. In order to prepare these Financial Statements, the Board of Directors must: * select appropriate accounting policies and apply them consistently; * make judgments and estimates prudently; 2 URBAN UPGRADING PROJECT MANAGEMENT UNIT OF TAN AN CITY VIETNAM SCALING UP URBAN UPGRADING PROJECT - SUBPROJECT OF TAN AN CITY, LONG AN PROVINCE Pursuant to the Financing Agreements No. 6055-VN and No. 6056-ViV dated 29 June 2018 between the Socialist Republic of Vietnam and the International Development Association (IDA) STATEMENT OF THE BOARD OF DIRECTORS (cont.) * state clearly whether the accounting standards applied to the Project are followed or not, and all the material differences from these standards are disclosed and explained in the Financial Statements; * prepare the Financial Statements on the going-concern basis, except for the cases that the going- concern assumption is considered inappropriate; design and implement effectively the internal control system to ensure the compliance with regulations that might have a direct and material effects to the Financial Statements, as well as the preparation and presentation of the Financial Statements free from material misstatements due to frauds or errors; and responsible for the confirmation of the effectiveness of this internal control system. The Board of Directors hereby ensures that the PMIJ has complied with the aforementioned requirements in preparation of the Financial Statements; the accounting books have been fully recorded and can fairly reflect the financial position of the Project at any time and the Financial Statements have been prepared in compliance with the accounting policies presented in the Notes to the Financial Statements, as well as the provisions of the Financing Agreements. The Board of Directors is also responsible for protecting the Project's assets and consequently has taken appropriate measures to prevent and detect frauds and other irregularities. The Board of Directors hereby commits to the compliance with the aforementioned requirements in preparation of the Financial Statements and Report on Compliance. The Board of Directors, on the date of this statement, has authorized the release of the Financial Statements and the Report on Compliance. On behalf of the Board of Directors, Tran Thanh Nhan Director Long An, 16 August 2022 A&C AUDITING AND CONSULTING CO., LTD. bakertly Head Office : 02 Truong Son St., Ward 2, Tan Binh Dist., Ho Chi Minh City, Vietnam Tel:+84 (028) 3547 2972 kttv@a-c.com.vn Branch in Ha Noi : 40 Giang Vo St., Dong Da Dist., Ha Noi City, Vietnam Tel: +84 (024) 3736 7879 kttvhn@a-c.com.vn A & C Branch in Nha Trang : Lot STH 06A.01, St No 13, Le Hong Phong II Urban Area, Phuoc Hai Ward, Nha Trang City Vietnam Tel: +84 (0258) 246 5151 kttv.nt@a-c.com.vn Branch in Can The :15-13 Vo Nguyen Giap St., Car Rang Dist., Can Tho City, Vietnam Tel+84 (0292) 376 4995 kttvct@a-c.corn.vn www.a-c.com.vn No. 1.1323/22/TC-AC INDEPENDENT AUDITOR'S REPORT To: The Board of Directors Urban Upgrading Project Management Unit of Tan An City Opinion of Auditors A&C Auditing and Consulting Co., Ltd. has audited the accompanying Financial Statements of Vietnam Scaling Up Urban Upgrading Project - Subproject of Tan An City, Long An Province (hereinafter referred to as "the Project"), including Statement of capital and expenditures, Statement of capital balance, Statement of balance and fluctuation of the designated account, Statement of IDA and IDA SUF capital for the fiscal year ended 31 December 2021 and the Notes to the Financial Statements presenting a summary of important accounting policies and other explanatory information (hereinafter referred to as "Financial Statements") which were set out from page 06 to page 15. In our opinion: * The accompanying Financial Statements give a true and fair view of the financial position of the Project as of 31 December 2021, the capital received and the expenditures for the fiscal year ended 31 December 2021, in conformity with the accounting basis and accounting policies presented in Notes No. 2 and 3 in the Notes to the Financial Statements. * Statement of balance and fluctuation of the designated account gives a true and fair view of the balance of the designated account as at 31 December 2021, the capital received and the payment made through the designated account for the fiscal year ended 31 December 2021, in accordance with the provisions of the Financing Agreements No. 6055-VN and No. 6056-VN dated 29 June 2018 between the Socialist Republic of Vietnam and the International Development Association (IDA). * Withdrawal applications were compared with the Statement of IDA and IDA SUF capital for the fiscal year ended 31 December 2021, and these statements are fully supported by valid documents. Basis for audit opinion We conducted our audit in accordance with International Standards on Auditing (ISA). Our responsibilities under those standards are further described in the Auditors' Responsibilities for auditing the Financial Statements. We are independent with the Project as the ethical requirements related to the audit of the Financial Statements in Vietnam, and we have complied with other ethical responsibilities under these standards. We believe that the audit evidences we have obtained are sufficient and appropriate to provide a basis for our audit opinion. Accounting basis We would like to draw the attention of the readers to Notes No. 2 and No. 3 in the Notes to the Financial Statements on accounting basis and the applicable accounting policies. The Financial Statements are prepared in accordance with the accounting basis and accounting policies described in Notes No. 2 and No. 3. Responsibility of the Board of Directors The Board of Directors of the PMU is responsible for the preparation of the Financial Statements in accordance with the accounting basis and accounting policies described in Notes No. 2 and No. 3 in the Notes to the Financial Statements; and for such internal control as the Board of Directors determines necessary to enable the preparation of the Financial Statements to be free from material misstatement due to fraud or error. 4 A&C Auditing and Consulting Co., Ltd. trading as Baker Tilly A&C is a member of the global network of Baker Tilly International Ltd., the members of which are separate and independent legal entities bakertilly A&C In preparing the Financial Statements, the Board of Directors 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 the Board of Directors either intends to cease operations, or has no realistic alternative but to do so. Those who are in charge of governance must supervise the preparation process of the Project's Financial Statements. Responsibility of Auditors 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 to express our opinion. Reasonable assurance is a high level of assurance, but is not guarantee that an audit conducted in accordance with International Standards on Auditing will always detect any material misstatement. The misstatements can arise due to fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions if they make decisions of users taken on the basis of these Financial Statements. As part of an audit in accordance with International Standards on Auditing, 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 Project's preparation and fair presentation of 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 the Board of Directors. * Conclude on the appropriateness of the Board of Directors' 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 in the 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. We communicate with those charged with governance 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. F6rand- on behalf of A-&C Audith and Consulting Co., Ltd. Nguyen Chi Dung - Deputy General Director Hoang Thai Vuohg - Auditor Audit Practice Regmtraiion Certificate No. 0100-2018-008-1 Audit Practice Registration Certficate No. 2129-2018-008-1 Ho Chi Minh City, 16 August 2022 5 URBAN UPGRADING PROJECT MANAGEMENT UNIT OF TAN AN CITY VIETNAM SCALING UP URBAN UPGRADING PROJECT - SUBPROJECT OF TAN AN CITY, LONG AN PROVINCE Pursuant to the Financing Agreements No. 6055-VN and No. 6056-VN dated 29 June 2018 between the Socialist Republic of Vietnam and the International Development Association (IDA) FINANCIAL STATEMENTS For the fiscal year ended 31 December 2021 STATEMENT OF CAPITAL AND EXPENDITURES For the fiscal year ended 31 December 2021 From 01 January 2021 Accumulated to Accumulated to to 31 December 31 December 31 December Note 2021 2021 2020 VND VND I. CAPITAL RECEIVED Capital from IDA and IDA 1. SUF 5 181.392.721.000 261.439.573.000 80.046.852.000 2. Counterpart fund 6 27.779.650.000 442.891.650.000 415.112.000.000 Total 209.172.371.000 704.331.223.000 495.158.852.000 II. EXPENDITURES 1. Expenditures from IDA and IDA SUF capital 7 138.059.594.000 261.439.573.000 123.379.979.000 1.1 Construction expenses 135.366.167.000 256.155.792.000 120.789.625.000 1.2 Consultancy expenses 2.362.970.000 4.953.324.000 2.590.354.000 1.3 Other expenses 330.457.000 330.457.000 2. Expenditures from counterpart fund 7 27.779.650.000 442.891.650.000 415.112.000.000 2.1 Expenses for compensation, support and resettlement 25.000.000.000 409.486.566.000 384.486.566.000 2.2 Consultancy expenses 779.650.000 27.999.937.720 27.220.287720 2.3 Project management expenses 2.000.000.000 3.000.000.000 1.000.000.000 2.4 Other expenses - 2.405.146.280 2.405.146.280 Total 165.839.244.000 704.331.223.000 538.491.979.000 Receipts/payments difference 43.333.127.000 _ - (43.333.127.000) Do Dat Thinh Dang Ngoc Khanh Tran Thanh Nhan Preparer Chief Accountant Director Long An, 16 August 2022 This statement must be read in conjunction with the Notes to the Financial Statements 6 URBAN UPGRADING PROJECT MANAGEMENT UNIT OF TAN AN CITY VIETNAM SCALING UP URBAN UPGRADING PROJECT - SUBPROJECT OF TAN AN CITY, LONG AN PROVINCE Pursuant to the Financing Agreements No. 6055-VN and No. 6056-VYN dated 29 June 2018 between the Socialist Republic of Vietnam and the International Development Association (IDA) FINANCIAL STATEMENTS For the fiscal year ended 31 December 2021 STATEMENT OF CAPITAL BALANCE As of 31 December 2021 Note 31 December 2021 31 December 2020 VND VNDI Capital balance Beginning balance (43.333.127.000) Receipts/payments difference during the year 43.333.127.000 (43.333.127.000) Foreign exchange difference -_- Ending balance - (43.333.127.000) Reflected by: Current assets Cash on hand - Prepayments to contractors/suppliers - - Current liabilities Payables to contractors/suppliers 8 43.333.127.000 Taxes and other obligations to the State Budget - -_ 43.333.127.000 Net assets - -_ _ Do Dat Thinh Dang Ngoc Khanh Tran Thanh Nhan Preparer Chief Accountant Director Long An, 16 August 2022 This Datement must be read in conjunction with the Notes to the Financial Statements 7 URBAN UPGRADING PROJECT MANAGEMENT UNIT OF TAN AN CITY VIETNAM SCALING UP URBAN UPGRADING PROJECT - SUBPROJECT OF TAN AN CITY, LONG AN PROVINCE Pursuant to the Financing Agreements No. 6055-VN and No. 6056-V1N dated 29 June 2018 between the Socialist Republic of Vietnam and the International Development Association (IDA) FINANCIAL STATEMENTS For the fiscal year ended 31 December 2021 STATEMENT OF BALANCE AND FLUCTUATION OF THE DESIGNATED ACCOUNT Period From 01 January 2021 to 31 December 2021 Account No. : 126000054777 Currency USD Bank : VietinBank - Long An Branch Address : No. 396, Highway 1, Ward 4, Tan An City, Long An Province Financing Agreements : 6055- VN and 6056- VN Note USD A. ACCOUNT TRANSACTION Opening Balance - Add: Total amount deposited by the World Bank for the period 8.000.575,00 Bank interests Amount refunded to cover ineligible disbursements Less: Amount withdrawn for the period (8.000.484,00) Bank charges (91,00) Amount refunded to the World Bank - Closing balance - B. ACCOUNT RECONCILIATION Outstanding amount advanced to Designated Account at the beginning of the period 2.383.222,81 Amount advanced by the World Bank 8.000.575,00 Total amount recovered by the World Bank (3.068.052,50) Outstanding amount advanced to Designated Account at the period end 7.315.745,31 Ending balance of Designated Account at the period end Add: Amount claimed but not yet credited (advanced) Amount withdrawn but not yet claimed 7.315.745,31 Ineligible expenditure to be refunded Less: Bank interests Total advances to Designated Account as at period end 7.315.745,31 Do Dat Thinh Dang Ngoc Khanh Tran Thanh Nhan Preparer Chief Accountant Director Long An, 16 August 2022 This statement must be read in conjunction with the Notes to the Financial Statements 8 URBAN UPGRADING PROJECT MANAGEMENT UNIT OF TAN AN CITY VIETNAM SCALING UP URBAN UPGRADING PROJECT - SUBPROJECT OF TAN AN CITY, LONG AN PROVINCE Pursuant to the Financing Agreements No. 6055- VV and No. 6056- VN dated 29 June 2018 between the Socialist Republic of Vietnam and the International Development Association (IDA) FINANCIAL STATEMENTS For the fiscal year ended 31 December 2021 STATEMENT OF CAPITAL RECEIVED FROM IDA AND IDA SUF For the fiscal year ended 31 December 2021 Withdrawal application Proposed amount for withdrawal Received amount Differe Advance Supplement Total Date Amount nce Notes No. Date USD USD USD USD USD Financing Agreement No. 2.958.879,00 - 2.958.879,00 2.958.844,00 (35,00) 6055-VN 02B TAN AN 28/12/2020 601.489,00 - 601.489,00 15/01/2021 601.482,00 (7,00) Bank charge 03B TAN AN 03/01/2021 283.558,00 - 283.558,00 15/01/2021 283.551,00 (7,00) Bank charge 04B TAN AN 10/05/2021 278.783,00 - 278.783,00 26/05/2021 278.776,00 (7,00) Bank charge 05B TAN AN 13/07/2021 213.555,00 - 213.555,00 23/07/2021 213.548,00 (7,00)Bank charge 06B TAN AN 02/08/2021 158.220,00 - 158.220,00 16/08/2021 158.213,00 (7,00) Bank charge 07B TAN AN 21/11/2021 862.325,00 - 862.325,00 07/12/2021 862.325,00 - 08B TAN AN 17/12/2021 560.949,00 - 560.949,00 29/12/2021 560.949,00 - Financing Agreement No. 5.041.696,00 - 5.041.696,00 5.041.640,00 (56,00) 6056- VN 04A TAN AN 28/12/2020 272.274,00 - 272.274,00 15/01/2021 272.267,00 (7,00) Bank charge 05A TAN AN 21/01/2021 729.506,00 - 729.506,00 29/0112021 729.499,00 (7,00) Bank charge 06A TAN AN 31/03/2021 769.176,00 - 769.176,00 12/04/2021 769.169,00 (7,00) Bank charge 07A TAN AN 10/05/2021 805.525,00 - 805.525,00 21/05/2021 805.518,00 (7,00)Bank charge 08A TAN AN 11/06/2021 371.718,00 - 371.718,00 23/06/2021 371.711,00 (7,00)Bank charge 09A TAN AN 13/07/2021 477.788,00 - 477.788,00 23/07/2021 477.781,00 (7,00)Bank charge IOA TAN AN 02/08/2021 450.719,00 - 450.719,00 16/08/2021 450.712,00 (7,00)Bank charge I 1A TAN AN 16/09/2021 279.486,00 - 279.486,00 04/10/2021 279.479,00 (7,00)Bank charge 12A TAN AN 25/10/2021 443.548,00 - 443.548,00 15/11/2021 443.548,00 (7,00)Bank charge 13A TAN AN 21/11/2021 441.956,00 - 441.956,00 02/12/2021 441.956,00 - Total 8.000.575,00 8.000.575,00 8.000.484,00 (91,00) Do Dat Thinh Dang Ngoc Khanh Tran Thanh Nhan Preparer Chief Accountant Director Long An, 16 August 2022 This statement must be read in conjunction with the Notes to the Financial Statements 9 URBAN UPGRADING PROJECT MANAGEMENT UNIT OF TAN AN CITY VIETNAM SCALING UP URBAN UPGRADING PROJECT - SUBPROJECT OF TAN AN CITY, LONG AN PROVINCE Pursuant to the Financing Agreements No. 6055-VN and No. 6056-VN dated 29 June 2018 between the Socialist Republic of Vietnam and the International Development Association (IDA) FINANCIAL STATEMENTS For the fiscal year ended 31 December 2021 NOTES TO THE FINANCIAL STATEMENTS For the fiscal year ended 31 December 2021 1. General information Vietnam Scaling Up Urban Upgrading Project - Subproject of Tan An City, Long An Province (hereinafter referred to as "the Project") has been approved under: * the Decision No. 363/QD-TTg dated 23 March 2017 of Prime Minister on approving the investment scheme for "Vietnam Scaling Up Urban Upgrading Project" with the capital borrowed from the World Bank. * the Decision No. 4012/QD-UBND dated 31 October 2018 of Chairman of the People's Committee of Long An Province on approving Vietnam Scaling Up Urban Upgrading Project - Subproject of Tan An City, Long An Province. The Project is funded by the World Bank through the Financing Agreements No. 6055-VN and No. 6056-VN dated 29 June 2018 between the Socialist Republic of Vietnam and the International Development Association (IDA) (hereinafter referred to as "Financing Agreements"). The overall objectives of the Project are to improve the access to basic infrastructure in low-income areas, enhance key infrastructure network connectivity, and strengthen cities' capacity for integrated urban planning to respond to climate change. Specific objectives of the Project: * Urban upgrading in low-income areas will be accomplished through a multi-sector investment package that will help eliminate poverty, improve living conditions and environmental sanitation. * Enhance the transport network connectivity, reduce traffic density for main routes, improve urban look. Improve drainage and environmental sanitation conditions for canals and ditches in the city. * Promote green space construction and climate change adaptation, increase the access to public space and enhance the city's capacity for urban planning, management and response to climate change. The Project includes components as follows: * Component 1: Upgrading infrastructure - level 3 in low-income areas. * Component 2: Prioritized infrastructure - levels 1, 2. * Component 3: Resettlement area. * Component 4: Implementation support and technical support. The Project is divided into 10 component projects as follows: * Infrastructure - level 3 in low-income areas: - LIA I area. - LIA 2 area. - LIA 3 area. - LIA 4 area. * Prioritized infrastructure - levels 1, 2: - Bao Dinh river embankment in the area of Ward 3 and Ward 4. - Constructing an embankment reference line in Ward 7. - Constructing a ring road from Chanh Ditch to Highway lA (connecting Phan Van Tuan Street with Nguyen Tan Chinh Street). - Upgrading Luu Van Te Street. - Renovating Cau Tre Ditch, the section from Bao Dinh River to Highway 1. These notesJOrm an 1ntegral part ofand should be read in conjunction with the Financial Starements 10 URBAN UPGRADING PROJECT MANAGEMENT UNIT OF TAN AN CITY VIETNAM SCALING UP URBAN UPGRADING PROJECT - SUBPROJECT OF TAN AN CITY LONG AN PROVINCE Pursuant to the Financing Agreements No. 6055-VN and No. 6056-Vi dated 29 June 2018 between the Socialist Republic of Vietnam and the International Development Association (IDA) FINANCIAL STATEMENTS For the fiscal year ended 31 December 2021 Notes to the Financial Statements (cont.) - Constructing a road connecting Tran Phong Sac Street with Nguyen Minh Duong Street. Investor: People's Committee of Tan An City, Long An Province. Location of project implementation: Long An Province. Total investment of the Project: VND 999.963.413.457. Investment capital includes: Loans from the World Bank, i.e. from IDA capital, IAD SUF and counterpart fund (local budget) for the amounts of USD 20,00 million (equivalent to VND 456.000.006.767), USD 15,00 million (equivalent to VND 341.999.991.863) and USD 8,858,045 (equivalent to VND 201.963.414.827) respectively. Duration: 5 years (2018 - 2023). 2. Accounting basis Except for the statement of balance and fluctuation of the designated account and the Statement of capital received from IDA and IDA SUF as presented in US Dollar (USD), other statements are presented in VND. These Financial Statements are prepared in accordance with the accounting policies presented in Note No. 3 in the Notes to the Financial Statements. The first accounting period of the Project was from 29 June 2018 to 31 December 2020. The subsequent accounting periods is from 01 January to 3 1 December annually. 3. Accounting policies The PMU has applied the following accounting policies in the preparation of the Financial Statements: (a) Foreign currency transactions Transactions in foreign currencies are converted into VND at the exchange rates ruling as at the date of transaction as announced by the commercial bank where the designated account is opened. Foreign exchange differences are recorded in "Foreign exchange differences" and are presented separately in the Statement of capital balance. (b) Recognition of the Project's capital source * Capital received from the International Development Association (IDA) is recognized when remittance made into Designated Account or direct payment made to the contractors/suppliers. * Counterpart fund of the State Budget is recognized when payments are made directly to contractors/suppliers or funds are remitted to the PMU for settlement of Project's expenses. * Other capital includes deposits interest of designated accounts (after deducting bank charges, if any). Other capital is recognized when the money is actually collected. (c) Recognition of Project's expenses Project implementation expenses are recognized upon incurrence and availability of all valid supporting documents approved by the Board of Directors. (d) Payables Payables are recorded for the amounts payable in the future associated with the goods and services received. These notes form an integral part ofand should be read in conjunction with the Financial Statements 11 URBAN UPGRADING PROJECT MANAGEMENT UNIT OF TAN AN CITY VIETNAM SCALING UP URBAN UPGRADING PROJECT - SUBPROJECT OF TAN AN CITY, LONG AN PROVINCE Pursuant to the Financing Agreements No. 6055-VN and No. 6056-VV dated 29 June 2018 between the Socialist Republic of Vietnam and the International Development Association (IDA) FINANCIAL STATEMENTS For the fiscal year ended 31 December 2021 Notes to the Financial Statements (cont.) 4. Designated accounts Designated Account is the deposit accounts in USD opened at VietinBank - Long An Branch to make payments for the Project's activities. Paymentc ire made via the Designated Account for eligible expenditures of the Project in accordance with Lae provisions of the Financing Agreements No. 6055-VN and No. 6056-VN dated 29 June 2018 between the Socialist Republic of Vietnam and the International Development Association (IDA) and related regulations of the World Bank. 5. Capital from IDA and IDA SUF From 01 January From 29 June 2018 2021 to 31 to 31 December December 2021 2020 VND VND Capital from IDA 67.808.182.000 45.192.857.000 Capital from IDA SUF 131.584.539.000 34.853.995.000 Total 181.392.721.000 80.046.852.000 6. Counterpart fund From 01 January From 29 June 2018 2021 to 31 to 31 December December 2021 2020 VNID VND Capital received from the State Budget 27.779.650.000 415.112.000.000 capital reimbursed to the State Budget _ Total 27.779.650.000 415.112.000.000 These notesform an integral part of and should be read in conjunction with the Financial Statements 12 з� �� о о о о о о о � о о о о о о о � о о о о о о о о о о о о о о ® Z о о о о о о о о о о о о о о (м � м t� � г� vi о� �О -� �п N�-+ � М о� � с� о�о �о о, ^� rn и и�• и r о N д; м и� �о �о и N N г.� � � ri v �о о �о м ri �t � � о� � ,-� ��r cv � v�- о� г� со и о м гл о, и о� м �о �� а� [� �t о оо м '7 � � .-� и� М �� R � cr1 eV и и�е о М q ,-• г� и € r � � о , _ и А� �� � � � � � � � о о о о � ° й Z о о N ry � С � и> и И О ef � V' С' �О п� д � и О О И И � � v у М М [� о о ® t�a ri � �1 � � и � � � � � � � � � � � о о о о � с �� й Z °о оо оо °о о О Е Ф r� °о °о °о °о � р., � к о о о о � а� о о о о °' � °о оо °о о к � c�i е� мi � � � � й и д � � � � � � о о о о о о ° и о о о о с� cv � � д иZ о ооо г: � � са � � � оо � о ,� •-- i с ^ v й у! � ��� N � 9 � С и и � и N М О U о о м °i �и � оиi о'"'о ?-0 U N М М N о у а�, � о � А °о о °о оо °о оо °о � °о °о °о � °о °о °о и Z о о о о о о о о о о о N о � V '� а и а� , м г� � сл vi о� �о [� rr t� о� �ri �_ � а� о�д и rn�-, г� •' � rn м �о t: га ti' 'i4 О N V М и О� �О �U �О •--� п-� и �А � О й и `р м� �р О�О М М оо м �О И Q� р�л а и cr cv � � д- о� � о и �с .� оо � v о и О� м � �G ^� .У_ - ь��� л� � 3 о__ Е� �° `� Е� � `� � � � � й `° 3 р 'о и �_ W, о м ьдл Q 3й �_ �� д � Х од г°s о� .-, о ° U " W w Z 3 � Z � ' и о о � V' О-� w ,� у � G ол ra с� � Z с� о �•_ о _ я У i ь � а° га 3 `� а� � � � � Q; С7 а °_' р а� о � а" ' о Е Е � � � ш а� о ы и а� у z � °' � b " ы' cv �'" � aui �' F-� � b ,-. ,�-. � и `п у F-� �, А А о � U о а> �' tд и й U � � � С д -� � 7 � +�.� � .у р � М М � � � у у � й "'~� a�.i г,� � � .� и � � � � о О � V] и О v -о � „�., �, �.F'. .а � � г� b о ev .о .n о p�i., ¢� � ы i� � о с Е" Q �° Д`и' •°- а с�ие � С����Q � �'� �мv, � �р�� �Е` °�' о � ш � Ё Ё � -- �в .� i � • �. о Г� L bf1 ;,. о G ы и > > Wj �"� j r W-�р гл �� Q Q_ ¢� ro С r. �г � Cj `б са ,� ш`._% и и °' А� � W� r �о c�О ..��1..а.� �•� у R"� гwл�� к-.С сиа � r i�zy z, С С'й � bДb4bД N и fi 0-0С �•+-�• � и и и � F-� и � и и, ���-� � о а-ы� о С• 3 и � и а� и аэ G � '� �-L � са с й й 'О 'О 'О � V �, �р и ^С Qp � 'С7 � ..С � � � ro С С С i ¢ у и°' С � пi г� са (,� ,.b и.� G��� р•� и л аыi а� и с� о �-,.�' й � ,� � ;; °� °' �'л ьд an о ы � .. � о �. о ьд о ;� о � � о с а с � �R аа.а.га `� о :c�WU ¢•а� о bди к к х � ��� U�и-' о W w ���д]3U¢U � � ��С� °U °ZC7 W W W г +. 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N м �t � Е а � > � � и `� � ш � � � С W �° •� � ¢ Q Q � � � � Е-� � � � о `д � � ш � � � ¢ " � с� а ..а 1 �1 .? ,.д � Q � а, ^-� ьл � � о и а, � Ры U°' й� с � b�!) bGЛ b�Л b�A �� U л� р�•� j_ i и� � о r� �' � -а �, д � v'о'д �v � 3 � 3 �'� °° � � > � � � од.� � й � Q й ь'С. � � ы�, � ы Q Т7 и� r, CS .�' � s., р� и'О � и N� v -г%� � bд b-0 bD bD О�� bp ^ � у О bA G� С� О ш С а �� � о � г�. а s�. и, се �с о... • сС W U а ш о ,� ��' о s д _ _ G� ����c�lмU.=�. 3 �� ���i�U3aиC7 Е-� �� ы Э � � и ¢ ~ .` г� > С ci. t° � � 3 URBAN UPGRADING PROJECT MANAGEMENT UNIT OF TAN AN CITY VIETNAM SCALING UP URBAN UPGRADING PROJECT - SUBPROJECT OF TAN AN CITY, LONG AN PROVINCE Pursuant to the Financing Agreements No. 6055- VN and No. 6056- VX dated 29 June 2018 between the Socialist Republic of Vietnam and the International Development 4ssociation (IDA) FINANCIAL STATEMENTS For the fiscal year ended 31 December 2021 Notes to the Financial Statements (cont.) 8. Payables to contractors/suppliers 31 December 2021 31 December 2020 VNI) VND Thi Son Production and Construction Company Limited - 14.127.948.000 Port Construction Joint Stock Company - 17.507.712.000 Truong Thanh Trading Building Investment Corporation - 8.863.280.000 Viet Thang Agricultural Construction Joint Stock Company - 1.787.450.000 Hong Ha Engineering Consultant & Construction Joint Stock Company - 563.867.000 Vietnam Construction and Environment Joint Stock Company - 482.870.000 Total - 43.333.127.000 9. Subsequent events There are no material subsequent events which are required adjustments or disclosures in the Financial Statements. 10. Approval of the Financial Statements The Board of Directors of the PNTU has approved these Financial SWtt ,'iiWpts on 16 August 2022. Do Dat Thinh Dang Ngoc Khanh Tran Thanh Nhan Preparer Chief Accountant Director Long An, 16 August 2022 These notesform an integi,alpart of and shoald be read in coi#unction ivith the Financial Statemerits 15 A&C AUDITING AND CONSULTING CO., LTD. ( bakertilly Head Office 02 Truong Son St., Ward 2, Tan Binh Dist., Ho Chi Minh City, Vietnam Tel:+84(028) 3547 2972 kttv@a-c.com.vn Branch in Ha Noi :40 Giang Vo St., Dong Da Dist., Ha Noi City, Vietnam Tel +84 (024) 3736 7879 ktt.hn@a-c.com.vn A . Branch in Nha Trang Lot STH 06A.01, St, No.13, Le Hong Phong I1 Urban Area, Phuoc Hai Ward, Nha Trang City,Vietnam Tel: +84 (0258) 246 5151 lKtty.nt@a-c.com.vn Branch in Can The :15-13 Vo Nguyen Giap St., Cai Rang Dist., Can The City, Vietnam Tel: +84 (0292) 376 4995 ktty.ct@a-c.comvn www.a-c.coM.vn No. 1.1324/22/TC-AC INDEPENDENT AND REASONABLE ASSURANCE REPORT ON COMPLIANCE To: The Board of Directors Urban Upgrading Project Management Unit of Tan An City A&C Auditing and Consulting Co., Ltd. has examined the compliance level of Urban Upgrading Project Management Unit of Tan An City (hereinafter referred to as "the PMU") with applicable Laws, regulations and bidding procedures, as well as other regulations of the Financing Agreements No. 6055- VN and No. 6056-VN dated 29 June 2018 between the Socialist Republic of Vietnam and the International Development Association (IDA) (hereinafter referred to as the "Financing Agreements") for the fiscal year ended 31 December 2021. The PMU is responsible for the compliance with the Financing Agreements, the Project Operation Manual (POM) as well as the Laws and other regulations applicable to the Project (hereinafter collectively referred to as "the Project's regulations"). Responsibility of Auditors Our responsibility is to express an opinion, based on our examination, on the compliance of the PMU with the Project's regulations that could have a direct and material financial effect on the Financial Statements of the Project for the fiscal year ended 31 December 2021. We conducted our examination in accordance with the principles of International Standard on Assurance Engagements 3000 - Assurance Engagements other than Audits or Reviews of Historical Financial Information (ISAE 3000) insofar this standard could be usefully applied in this examination and in its specific compliance context. This standard requires that we comply with ethical requirements and that we plan and perform this examination to obtain the reasonable assurance about whether the PMU complies with the Project's regulations, that could have a direct and material financial effect on the Financial Statements. Our examination includes obtaining a sufficient understanding of the Project and the Project's regulations; assessing the risk on non-compliance exists that could have a direct and material financial effect on the Financial Statements of the Project; testing and evaluating, on a sample basis, the compliance of the PM_U with the Project's regulations based on the assessed risk; and performing such other procedures as we considered necessary in the circumstances. We considered the following criteria in evaluating the compliance of the PMU with the Project's regulations: * the PIU's awareness of the Project's regulations; * the implementation of the Project's regulations by the PMU; * the influence on the Financial Statements where the PMU fails to comply with one requirement or several requirements in the Project's regulations, if any; and * that a weakness or a deficiency existed where PMU fails to comply with one requirement or several requirements in the Project's regulations that could have a direct and material financial effect on the Financial Statements. We believe that our examination provides a reasonable basis for our opinion. 16 A&C Auditing and Consulting Co.. Ltd. trading as Baker Tilly A&C is a member of the global network of Baker Tilly International Ltd.. the members of which are separate and independent legal entiries bakertilly A&C Opinion In our opinion, the PMU complies, in all material respects, with the Project's regulations that could have a direct and material financial effect on the Financial Statements of the Project for the fiscal year ended 31 December 2021 based on the evaluation criteria above. This examination involved a historic evaluation of the compliance of the PVfU with the Project's regulations at a specific point of time. Thus, this examination does not provide assurance for future periods due to the risk of changes in the Project's regulations, or that the degree of compliance with the Project's regulations, may deteriorate. For and on behalf of A&C Auditing and Consulting Co., Ltd. Nguyen Chi Dung Deputy General Director Hoang Thai Vuong - Auditor pa7tractice Registration Certificate No. 0100-2018-008-1 Audit Practice Registration Certificate No, 2129-2018-008-1 Ho Chi Minh City, 16 August 2022 17 A&C AUDITING AND CONSULTING CO., LTD. baker Head Office 02 Truong Son St., Ward 2, Tan Binh Dist., Ho Chi Minh City, Vietnam Tel:+84(028) 3547 2972 kttv@a-c.com.vn Branch in Ha No : 40 Giang Vo St., Dong Da Dist, Ha Noi City, Vietnam Tel: +84 (024) 3736 7879 ktty.hn@a-c.com.vn A & C Branch in Nha Trang : Lot STH 06A 01, St. No.13, Le Hong Phong II Urban Area, Phuoc Hai Ward, Nha Trang City Vietnam Tel: +84 (0258) 246 5151 ktty.nt@a-c.com.vn Branch in Can The :I513 Vo Nguyen Giap St., Cai Rang Dist., Can The City, Vietnam Tel: +84 (0292) 376 4995 ktty.ct@a-c.com.vn www.a-c.com.vn No. 1.1325/22/TC-AC INDEPENDENT AND REASONABLE ASSURANCE REPORT ON THE INTERNAL CONTROL To: The Board of Directors Urban Upgrading Project Management Unit of Tan An City A&C Auditing and Consulting Co., Ltd. has audited the design and operating effectiveness of the internal control of Vietnam Scaling Up Urban Upgrading Project - Subproject of Tan An City, Long An Province (hereinafter referred to as "the Project") as operated by Urban Upgrading Project Management Unit of Tan An City (hereinafter referred to as "the PMU") which existed for the fiscal year ended 31 December 2021. The internal control was set up for the purpose of managing risks to the achievement of the Project's objectives, including the reasonable prevention and detection of errors, irregularities and fraud. The internal control is the responsibility of the PMU. Responsibility of Auditors Our responsibility is to express an opinion, based on our audit, on the effectiveness of the internal control that could have a direct and material financial effect on the Financial Statements of the Project for the fiscal year ended 31 December 2021. We conducted our audit in accordance with the principles of International Standard on Assurance Engagements 3000 - Assurance Engagements other than Audits or Reviews of Historical Financial Information (ISAE 3000) insofar this standard could be usefully applied in this audit and in its specific compliance context. This standard requires that we comply with ethical requirements and that we plan and perform the audit to obtain the reasonable assurance about whether the internal control for the Project is adequately designed for the purpose of the Project and was operating effectively during the period covered by the audit. Our audit included obtaining a sufficient understanding of the Project and the internal control for the Project; assessing the risk that a material weakness exists that could have a direct and material financial effect on the Financial Statements of the Project; testing and evaluating, on a sample basis, the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We considered the following criteria in evaluating the effectiveness of the internal control: * the requirement for design and implementation of the internal control in the Project Operation Manual (POM); * the appropriateness of the internal control for the Project's activities and objectives; * the implementation of the internal control by the PMU to achieve its objective of prevention and detection of errors, irregularities, and fraud that could have a direct and material financial effect on the Financial Statements of the Project; * the influence on the Financial Statements where one control or several controls did not operate as designed, if any; and * that a weakness or a deficiency existed where a control or several controls did not reasonably prevent or detect risks that could have an adverse impact on the objectives of those internal controls which are to provide reasonable assurance that the Financial Statements are prepared, in all material respects, in accordance with the adopted accounting policies and POM, that the fund are utilized for the purposes defined in the Financing Agreements No. 6055-VN and No. 6056-VN dated 29 June 2018 between the Socialist Republic of Vietnam and the International Development Association (IDA) and that the Project complies with the Financing Agreements, POM and other applicable laws regulations. We believe that our audit provides a reasonable basis for our opinion. 18 A&C Auditing and Consulting Co., Ltd. trading as Baker Tilly A&C is a member of the alobal network of Baker TillY International Ltd.. the members of wshich are separate and independent legal entities CO bakertilty A&C Opinion In our opinion, the Project's internal control that existed during the fiscal year ended 31 December 2021, in all material respects, was adequately designed for the purpose of the Project and operated in an effective manner, based on the evaluating criteria above. This audit involved a historic evaluation of the internal control at a specific point of time. Thus, this audit does not provide assurance for future periods due to the risk that internal control may become inappropriate because of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate. For and on behalf of A&CAuditing and Consulting Co., Ltd. Nguyen Chi Dung -Depifty General Director Hoang Thai Vuong - Auditor tfPra~z1ci Reguira!ion Certificate No. 0100-2018-008-1 Audit Practice Registration Certificate No. 2129-2018-008-1 Ho Chi Minh City, 16 August 2022 19 VIETNAM SCALING UP URBAN UPGRADING PROJECT SUBPROJECT OF TAN AN CITY, LONG AN PROVINCE Pursuant to the Financing Agreements No. 6055-VN and No. 6056-VN dated 29 June 2018 between the Socialist Republic of Vietnam and the International Development Association (IDA) MANAGEMENT LETTER For the fiscal year ended 31 December 2021 20 A&C AUDITING AND CONSULTING CO., LTD. C bakertilly Head Office .02 Truong Son St., Ward 2, Tan Binh Dist., Ho Chi Minh City, Vietnam Tel:+84 (028) 3547 2972 kttv@a-c.com.vn Branch in Ha Noi :40 Giang Vo St., Dong Da Dist, Ha Noi City, Vietnam Tel: +84 (024) 3736 7879 ktty hn@a-c.com.vn A & C Branch in Nha Trang : Lot STH 06A.01, St. No.13, Le Hong Phong II Urban Area, Phuoc Hai Ward, Nha Trang City Vietnam Tel: +84 (0258) 246 5151 kttv.nt@a-c.com.vn Branch in Can The :15-13 Vo Nguyen Giap St., Cai Rang Dist., Can The City, Vietnam Tel: +84 (0292) 376 4995 kttv.ct@a-c.com.vn www a-c.com.vn No. 1.0039/22/TQL-AC Ho Chi Minh City, 16 August 2022 To: The Board of Directors Urban Upgrading Project Management Unit of Tan An City Management Letter -Auditing the Financial Statements of Vietnam Scaling Up Urban Upgrading Project - Subproject of Tan An City, Long An Province for the fiscal year ended 31 December 2021 A&C Auditing and Consulting Co., Ltd. has audited the Financial Statements for the fiscal year ended 31 December 2021 of Vietnam Scaling Up Urban Upgrading Project - Subproject of Tan An City, Long An Province (hereinafter referred to as "the Project") under the Financing Agreements No. 6055-VN and No. 6056-VN dated 29 June 2018 between the Socialist Republic of Vietnam and the International Development Association (IDA), in accordance with the International Standards on Auditing and has issued the Auditor's Report No. 1.1323/22/TC-AC dated 16 August 2022. 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 Project's preparation and 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. Accordingly, we do not provide opinions on the effectiveness of the Project's internal control. The maintenance of adequate control designed to fulfill control objectives is the responsibility of PMU. Because of inherent limitations in internal control, errors or fraud may nevertheless occur and not be detected. Also, controls found to be functioning at a point in time may later be found deficient because of the performance of those responsible for applying them, and there can be no assurance that controls currently in existence will prove to be adequate in the future as changes take place in the Project. During our audit, we noted certain matters involving internal control and other operational matters that are presented for your consideration. These comments and recommendations, all of which have been discussed with the Board of Directors of the PMU, are intended to improve internal control or result in other operating efficiencies and are summarized in the enclosed Management Letter. Our audit procedures are designed primarily to enable us to form an opinion on the Financial Statements, and therefore may not bring to light all weaknesses in policies and procedures that may exist. We aim, however, to use our knowledge of the Project gained during our work to make comments and suggestions that we hope will be useful to you. This Management Letter is solely intended to provide information to the Donor, PMU and others in the Project and is not intended to provide to or be used by others except for the stated parties. 21 A&C Auditing and Consulting Co.. Ltd. trading as Baker Tilly A&C is a member of the global network of Baker Tilly International Ltd.. the members of which are separate and independent legal entities bakertilly A&C On this occasion, we would like to express our sincere thanks to all staff of the PMU for your kind support and help during the audit. Best regards, Folr-and on behalf of A8tC Auditing and Consulting Co., Ltd. Niyen Chi Dung Dputy General Director 22 URBAN UPGRADING PROJECT MANAGEMENT UNIT OF TAN AN CITY VIETNAM SCALING UP URBAN UPGRADING PROJECT - SUBPROJECT OF TAN AN CITY, LONG AN PROVINCE Pursuant to the Financing Agreements No. 6055-VVN and No. 6056- VN dated 29 June 2018 between the Socialist Republic of Vietnam and the International Development Association (IDA) MANAGEMENT LETTER For the fiscal year ended 31 December 2021 CONTENTS Page 1. The implementation of recommendations in the previous year's Management Letter 24 1.1 Organization of accounting works 24 1.2 Disbursed capital 24-25 2. Recommendations in the current year's Management Letter 25 23 URBAN UPGRADING PROJECT MANAGEMENT UNIT OF TAN AN CITY VIETNAM SCALING UP URBAN UPGRADING PROJECT - SUBPROJECT OF TAN AN CITY, LONG AN PROVINCE Pursuant to the Financing Agreements No. 6055-VN and No. 6056-VN dated 29 June 2018 between the Socialist Republic of Vietnam and the International Development Association (IDA) MANAGEMENT LETTER For the fiscal year ended 31 December 2021 1. The implementation of recommendations in the previous year's Management Letter 1.1 Organization of accounting works Issues In the previous year, the PMU had not opened a separate accounting book to monitor the Project- related transactions, had not classified the incurred expenses and had not stored the Project's documents to serve the inspection purpose. Recommendations The PMU should open an accounting book to separately monitor the Project-related transactions and should not record expenses together with other projects. Upon recording, it was necessary to classify expenses by content (expenses for compensation, support and resettlement; Construction expenses; Consultancy expenses; Project management expenses; Other expenses) and each item. The implementation thereof in the current year The PMU carried out the Auditor's recommendation. 1.2 Disbursed capital Issues In the previous year, the PMU received two disbursements from IDA SUF, of which some regulatory procedures had not been completed, so these disbursements were being monitored as IDA capital. Details were as follows: Amount Date Item (USD) 16 January Advance for construction of package TA-PW 2.2; 2.3 section 2020 connecting Phan Van Tuan Street with Nguyen Tan Chinh Street, construction of the road section of the ring road and consultancy expenses on construction supervision and contract management of the road section of the ring road 1.369.006,41 13 April Advance for construction of package TA-PW 2.2; 2.3 section 2020 connecting Phan Van Tuan Street with Nguyen Tan Chinh Street, construction of the road section of the ring road (the second disbursement) and consultancy expenses on construction supervision and contract management of the road section of the ring road (the second disbursement) 58 1.009,52 Total 1.950.015,93 Recommendations The PMU should work with the Ministry of Finance to adjust the capital sources appropriately. The implementation thereof in the current year On 14 January 2022, the Department of Debt Management and External Finance (DMEF) issued the Official Letter No. 77/QLN-DADP on the conversion of withdrawn capital of Vietnam Scaling up Urban Upgrading Project, which specified that "Such expenditure is not in conformity with the Decision No. 205]/QD-UBND dated 12 June 2019 ofthe People's Committee ofLongAn Province, regarding the approval of the project contractor selection plan. Therefore, it is recommended that the PfU reports this issue to the People's Committee ofLong An Province. 24 URBAN UPGRADING PROJECT MANAGEMENT UNIT OF TAN AN CITY VIETNAM SCALING UP URBAN UPGRADING PROJECT - SUBPROJECT OF TAN AN CITY, LONG AN PROVINCE Pursuant to the Financing Agreements No. 6055-VN and No. 6056-VN dated 29 June 2018 between the Socialist Republic of Vietnam and the International Development Association (IDA) MANAGEMENT LETTER For the fiscal year ended 31 December 2021 On 11 July 2022, the People's Committee of Tan An City submitted the Proposal No. 2913/TTr- UBND to Long An Province Department of Planning and Investment on approving the adjustment in the contractor selection plan of Vietnam Scaling up Urban Upgrading Project - Subproject of Tan An City, Long An Province. According to the Proposal for the adjustment of capital source for the approved bidding packages under the Decision No. 2051/QD-UBND dateu 12 June 2019 of the People's Committee of Long An Province from IDA or IDA SUF capital into ODA capital, include 02 bidding packages of construction and 02 bidding packages of consultancy on construction supervision and contract management for the road and bridge sections of the Ring Road. On 20 July 2022, the Department of Planning and Investment submitted the Valuation Report No. 833/BC-SKHDT to the People's Committee of Long An Province on the foregoing issue. 2. Recommendations in the current year's Management Letter We found no issues that need to be brought to your attention regarding the improvement of the Project's accounting and internal control systems in the current year. 25