SUPPORT FOR AUTONOMOUS HIGHER EDUCATION PROJECT Sub-projects implemented aL Ministry of Educatiuo aid Tiaiiing and SAl IEP PMD Financing Agreement No. 6036-VN AUDITED FINANCIAL STATEMENTS For the year ended 31 December 2021 Support for Autonomous Higher Education Project Sub-projects implemented at Ministry of Education and Training and SAHEP PMB Financing Agreement No. 6036-VN CONTFNTS Page PART I INDEPENDENT AUDITORS' REPORT ON THE FINANCIAL STATEMENTS Report of the Project Management Board 3 Independent Auditors' Report on the Financial statements 4 - 5 Audited Financial statements Statement of Funds and Expenditures 6 Statement of Funds and Disbursements 7 Statement of Financial Position 8 Statement of Funds Balance 9 Statement of Designated Account 10 Statement of Withdrawals and Reconciliation of Funds 11 Notes to the Financial statements 12 - 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 21-24 2 Support for Autonomous Higher Education Project Sub-projects implemented at Ministry of Education and Training and SAHEP PMB Financing Agreement No. 6036-VN REPORT OF THE PROJECT MANAGEMENT BOARD The Project Management Board of the Support for Autonomous Higher Education Project ("the Project") presents this report and the Financial Statements of the Project - Sub-projects implemented at Ministry of Education and Training and SAHEP Project Management Board ("PMB") for the year ended 31 December 2021, The Project The Project is funded by the International Development Association (IDA) under the Financing Agreement No. 6036-VN ("the Agreement") dated 29 June 2018 between the Government of the Sociolist Ropublic of Vietnam and the World Dank. The Project Management Board Members of the Project Management Board in the year and to the reporting date are: Mr. Le Trong Hung Director Mrs. Nguyen Thi Phuong Thao Chief Accountant Auditors The auditors of AASC Limited have taken the audit of financial statements of the Project. Responsibilities of the Project Management Board The Project Management Board is responsible for preparing the project financial statements, including Statement of Funds and Expenditures, Statement of Funds and Disbursements, Statement of Financial Position, 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 Board assures that the accounting policies are appropriately selected and consistently applied. The Project Management Board 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 Board 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 Board Le Trong Hung Diroctor Hanoi, 20 June 2022 3 aasc No.: 200622.011/BCTC.FIS2 INDEPENDENT AUDITORS' REPORT ON THE FINANCIAL STATEMENTS To: The Project Management Board of The Support for Autonomous Higher Education Project Opinion We have audIted the accompanying financial statements of the Support for Autonomous Higher Education Project - Sub-projects implemented at Ministy of Educatiun and Training and SAHEP PMB ("the Project") which comprise Statement of Funds and Expenditures, Statement of Funds wid Disbursemenoils For thes year eided 31 Deceiiber 2021, Stateirent of Fianolal Purllui, Statement of Funds Balance as at 31 December 2021, Statement of Designated Account, Statement of Withdrawals and Reconciliation of Funds, and Notes to the Financial Statements, including a summary of significant accounting policies. In our opinion: The accompanying 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 2021, funds received and disbursements paid, 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.6306-VN dated 29 June 2018; 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.6306-VN. 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 Statomonts section of our report. We are independent of Project Management Board 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 Project Management Board for the Financial Statements The Project Management Board 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 T:(84) 24 38241990 I F:(84) 24 3825 3973 1 Le Phung Hieu, Hanoi, Vietnam 4 f>1;trAASC AUDITING FIRM 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 misatatemont of tho financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtaln audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material mistatement rosulting from fraud is higher than for one resulting from eror, as fraud may involve collusion, forgery, intentional oirilssuiis, inisrepieseitaioiis, ui 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 monagoment'F 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 Board regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies (if any) in internal control that we may identify during our audit. AASC Limited Do Manh Cuong Nguyen Pham Hung Deputy General Director Auditor in-charge CPA Registered No.: 0744-2018-002-1 CPA Registered No.: 2893-2020-002-1 Hanoi, 20 June 2022 5 Support for Autonomous Higher Education Project Sub-projects implemented at Ministry of Education and Training and SAHEP PMB Financial Statements Financing Agreement No. 6036-VN Year ended 31 December 2021 STATEMENT or FUNDS AND EXPLNDITURES For the year ended 31 December 2021 Accumulated Accumulated Note to 31/12/2020 Year 2021 to 31/12/2021 VNI VNU VND I. Funds 1. Funds received from the 03 - 42,245,885,480 42,245,885,480 World Bank 2. Counterpart funds 5,911,0(8,261 5,226,555,729 11,137,633,090 3. Other funds - Exchange rate difference - (242,249,209) (242,249,209) 5,911,078,261 47,230,192,000 53,141,270,261 II. Expenditures 1. Goods - 13,696,660,000 13,696,660,000 2. Non-consulting services 192,240,000 17,406,000,000 17,598,240,000 3 Consulting services 1,506,120,000 2,152,945,350 3,659,065,350 4. Incremental operating costs 4,212,718,261 1,982,916,127 6,195,634,388 04 5,911,078,261 35,238,521,477 41,149,599,738 Ill. Surplus - 11,991,670,523 11,991,670,523 6 Support for Autonomous Higher Education Project Sub-projects implemented at Ministry of Education and Training and SAHEP PMB Financial Statements Financing Agreement No. 6036-VN Year ended 31 December 2021 STATEMENT OF FUNDS AND DISBURSEMENTS For the year ended 31 December 2021 Accumulated Accumulated Note to 31/12/2020 Year 2021 to 31/12/2021 VND VNU VND I. Funds 1. Funds received from the World Bank 03 - 42,245,885,480 42,245,885,480 2. Counterpart funds 5,911,078,261 5,226,555,729 11,137,633,990 5,911,078,261 47,472,441,209 53,383,519,470 II. Disbursements 1. Goods - 20,918,177,091 20,918,177,091 2. Non-consulting services 192,240,000 7,736,000,000 7,928,240,000 3. Consulting services 1,506,120,000 2,662,882,511 4,169,002,511 4. Incremental operating costs 4,212,718,261 1,982,916,127 6,195,634,388 05 5,911,078,261 33,299,975,729 39,211,053,990 IlIl. Foreign exchange differences - (242,249,209) (242,249,209) IV. Surplus - 13,930,216,271 13,930,216,271 Represented by: Cash on hand - 10,000,000 Cash at bank - Designated Account - 13,924,040,144 Other receivables - Bank charges - 6,176,127 Other payables - Receipts from sale of - (10,000,000) bidding documents 13,930,216,271 7 Support for Autonomous Higher Education Project Sub-projects implemented at Ministry of Education and Training and SAHEP PMB Financial Statements Financing Agreement No. 6036-VN Year ended 31 December 2021 STATEMENT OF FINANCIAL POSITION As at 31 December 2021 Note 31/12/2021 31/12/2020 VND VND CURRENT ASSETS 24,423,473,432 Cash on hand 10,000,000 Cash at bank - the Designated account in USD 13,924,040,144 Other receivables 6,176,127 Advances to contractors 06 10,483,257,161 NON-CURRENT ASSETS 41,293,676,813 6,088,827,311 Tangible fixed assets 138,077,075 168,749,050 - Cost 262,093,000 247,093,000 - Accumulated depreciation (124,015,925) (78,343,950) Intangible fixed assets 6,000,000 9,000,000 - Cost 15,000,000 15,000,000 Accumulated amortization (9,000,000) (6,000,000) Project Implementation Expenditures 04 41,149,599,738 5,911,078,261 TOTAL ASSETS 65,717,150,245 6,088,827,311 CURRENT LIABILITIES 12,431,802,909 Payables to contractors 07 12,421,802,909 Other payables 10,000,000 FUNDS 53,285,347,336 6,088,827,311 Project Implementation Funds 53,141,270,261 5,911,078,261 Received from the Worfd Bank 03 42, 245,885,480 - Counterpart fund 11,137,633,990 5,911,078,261 Other funds - Exchange rate difference (24Z 249,209) - Funds for fixed assets acquisition 144,077,075 177,749,050 TOTAL RESOURCES 65,717,150,245 6,088,827,311 8 Support for Autonomous Higher Education Project Sub-projects implemented at Ministry of Education and Training and SAHEP PMB Financial Statements Financing Agreement No. 6036-VN Year ended 31 December 2021 STATEMENT OF FUNDS BALANCE As at 31 Deuembei 2021 Note 31/12/2021 31/12/2020 VND VND Surplus Surplus as at beginning Surplus In the year 13,930,216,2/1 Surplus as at closing 13,930,216,271 Represented by: Current assets 13,940,216,271 Cash on hand 10,000,000 Cash at bank - Designated Account 13,924,040,144 Other receivables 6,176,127 Current liabilities 10,000,000 Other payables 10,000,000 Net worth 13,930,216,271 _ 9 Support for Autonomous Higher Education Project Sub-projects implemented at Ministry of Education and Training and SAHEP PMB Financial Statements Financing Agreement No. 6036-VN Year ended 31 December 2021 STATEMENT OF DESIGNATED ACCOUNT For the period: from 01/01/2021 to 31/12/2021 Account holder: Project Management Board of the Support for Autonomous Higher Education Project Account No: 0301371361369 Bank: Joint Stock Commercial Bank for Foreign Irade of Vietnam - Hoan Kiom Branch - Dinh Cong Transaction Office Address Lot CN2 - Dinh Cong urban area, Hoang Mai district, Hanoi Agreement No.: 6036 - VN PART A: ACTIVITIES Note USD USD Opening balance Add: - Amounts deposited by the World Bank 1,844,134.00 Deduct - Amounts withdrawn (1,237,414.03) - Bank charge (272.23) (1,237,686.26) Closing balance 606,447.74 PART B: RECONCILIATION 1. Amount advanced by the World Bank - 2. Add: Amount supplemented by the World Bank 1,844,134.00 3. Deduct: Amount recovered by the World Bank (851,893.76) 4. Present outstanding amount advanced to 992,240.24 5. Closing balance 606,447.74 6. Add: Amounts withdrawn and claimed on 385,520.27 Withdrawal Applications No. SAHEP PMB - 04 dated 25/02/2022 7, Add: Bank charges (*) 272.23 8. Total advances accounted for 992,240.24 (*) Bank charges deducted by the Service Bank from the Designated Account for each transfer to be refunded by PMB Counterpart funds in the year 2022. 10 �Г � i _ �1 Ф � � � s�. У � Сб � гSа СО ; � � � U U � аЭ � ��..��.�.. С _ iQ ® (Т1 Г С" '� L, � [(� � � о � � .� � �.i� � � � � Q о С � � О О о U1 � С � � � Ш `ZL f�+ {С1 S } ��) S_ аб � W_ Ш r С.1 07 � С � г � � 4Ч N � � С7 С] С[ у--, N N � � N � Q г crs ю о сз ro � � � ti F°- ц�а h- N ц]R 'а" О Г�-- [�J a1f [9 N О� [Ct �О tg Г (�ё � - �i и ' � � и а и�`� гri ri � ог �'�� � rл сп � � '� со оа � - � й � � ¢ � О � � Г '� � �� � � �э � ш � � Q и � с t!3 С j �уу � Ш i] � с и � � ° ' S :-. о as :� � U 3 с� v i� ¢ � � �s о � р U '� � 'со а аэ сз г� о � � � с� о о а со ai cf й �с .:� � й �i � � � � � cRO � � а Q Z т оэ оо а- 'ч=� iQ , г � U � О � Ш � т� �' �, W � О � п � © ❑ Ш �' � � Z N � � � t . � ' � `�' � � с � � � � � � � � �� Z cv N оо ит €д � с°n � � °� т' �� с� 0 а т � г- �- о с, © ® � � 4 � � _ � ,- � ,., л д� ш �' � �ч ш с с � � 4} � Ш '�з � � � ,� Q т � �- � и' � c�i еэ о � . � � � � О � � Q � � � й ¢�- о- '` Е- вз °? т т � иа� � � � га -� � �° � ш из °, ш � у � � } � 'о = .с � � а � _ � Q Q а Q- й � f-' � -��, s_ •й = _ � г� ����� � � ° � � 0 г�Л гА " и и�� и i� ц� Support for Autonomous Higher Education Project Sub-projects implemented at Ministry of Education and Training and SAHEP PMB Financial Statements Financing Agreement No. 6036-VN Year ended 31 December 2021 NOTES TO THE FINANCIAL STATEMENTS Foi the year ended 31 December 2021 1 Background The Support for Autonomous Higher Education Project (SAHEP) is funded by the International Development Association (IDA) under the Financing Agreement No. 6036-VN dated 29 June 20,18 between the Government ot the Socialist Republic of Vietnam and the World Batik. Total original IDA loan is LISD 155,000,000 and the total amount of the counterpart fund is USD 19,600,000, The main objective of the Financing Agreement No. 6036-VN is to improve research, teaching, and institutional capacity at selected autonomous universities and strenothen the. national higher education management system The Project consists of the following parts: Part 1: Improved research, teaching and institutional management capacity at three autonomous universities. 1. 1. Carrying out of a program of activities to improve research, teaching aild ifistiLuLional management capacity at I lano! University of Science and Technology (HUST) through; 1.2. Carrying out of a program of activities to improve research, teaching and institutional management capacitv at Vietnam National University of Agriculture (VNIJA) through; 1.3. Carrying out of a program of activities to improve research, teaching and institutional management capacity at Industrial University of Ho Chi Minh City (IUH) through. Part 2: Strengthened National Higher Education Management System and e - Library establishment. 2.1. Strengthening the national accreditation system; 2.2. Support for policy analysis for sustainable higher education financing and autonomy; 2.3. Development of the Higher Education Management Information System (HEMIS); 2.4. Support for the establishment of an e-Library, The Financing Agreement No. 6036-VN officially is effective from 28 September 2018 and is expected to complete on 31 December 2022 The Project - Sub-projects implemented at Ministry of Education and Training is managed by the Project Management Board of the Support for Autonomous Higher Education Project (SAHEP - PMB) and its office is located at 3rd floor, Building No. 8C, lane 30 Ta Quang Buu, Bach Khoa ward, Hai Ba Trung district, Hanoi. The SAHEP - PMB is directly responsible forthe implementation of Parts 2.1, 2.2, 2.3, and having a supervisory role and general coordination for the whole Project according to the Financing Agreement. 2. Principal Accounting Policies a. Basis of accounting Annual accounting period commences from the 1s' January and ends at the 3151 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: 12 Support for Autonomous Higher Education Project Sub-projects implemented at Ministry of Education and Training and SAHEP PMB Financial Statements Financing Agreement No. 6036-VN Year ended 31 December 2021 b. Foreign currencies Funds received from the World Bank in foreign currency is translated into VND using actual exchange rates announced by the Joint Stock Commercial Bank for Foreign Trade of Vietnam at the date of receiving the funds or at the date of direct payment made to contractors/suppliers. Transactions in foreign currencles are translated into VND using actuAl exclaigu atus ut oilier transaction dates announced by the Joint Stock Commercial Bank for Foreign Trade of Vietnam - Hoan Kiem Branch. All exchango differences from these transactions are recorded as "Exchange rate differences" account and presented as "Other funds - Exchange rate differences" on the Statement of Funds and Expenditures. c. Funds, Expenditures and Disbursements Funds: - Funds received from the World Bank are recognized when remittance made into the Designated Accounts 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 PMB for settlement of project's activities including any payments under current year plan until the next 31/1; - Other funds are recorded when they are actually occurrod. Expenditures: - Expenditures are recorded when they are actually occurred. Disbursements: - Disbursements are recognized when payments are made by the Project to contractors/ suppliers. d. Designated Accounts and its interests Designated Account is the deposit account in USD opened at Joint Stock Commercial Bank for Foreign Trade of Vietnam - Hoan Kiem 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. 6036-VN dated 29/06/2018. There is no interest with this account under the prevailing rule. 3. Funds received from the World Bank Year 2021 Accumulated to 31/12/2021 USD Equivalent to VND USD Equivalent to VND Designated account Advance 1,844,134.00 42,245,885,480 1,844,134.00 42,245,885,480 1,844,134.00 42,245,885,480 1,844,134.00 42,245,885,480 13 гю о в о аа со .�: � �° � � о о�'о ц°з �,�„ р � °о °о �i � � � в о л о с� м !- � 1- 7 �``� с�п ° м `� � йNош й rn с�,э о ш � �� с� со иэ +�= �+ со «i ai цj �i � � ŭi � С�., Г е°�д и°�э с�г7с+ а�л rt цз ш _ _ cJ ч-- q_ сг� о � г� � r�i ш � � cv v� � сч .� � г S г О �О iSS С''7 �� `�' � zs с1 ar .-. го с� � `=т �� р в о ао w it �i � st5 r� n3 с� га ц? � г ttS г� tгь е-� �n as N -s� � о. ,� � � о м м � s�z ,� �, са о м сэ со �_ � _ � �, � � � � � G s пкti �э с��о � '� 1�= м ц)' п �`" � wL7 cNO а7 °' ш � а�ь�' ŭs�c`�t�°' � ro сз т-= со с*a в пъ ri со о , � г ,к.. .� г .. 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U1 � � � � � v � � � � � �.� � ъ � � С � � кt �- � д й � � � ,О с� с�ц аэ __ � ц�i .°' � .� v �. и� r.�. й ��• и � V � и• V � Са � � rд а � с� о � а � � г� ш ш� � v U? � С[] т � гз и д7 $ Я � 'С g V] П3 L], и, 6 С �'1 � С3 С С � .�-' °� С N ury (tl ' Cq U_� ?. �j л rrj. ci1 �� � с4 U> N гЭ О 4� О� � � [] � CL ' i1. � С!] (U N.С N ча м� N� [� U С`� � С3 - �.1] � � 7 .С t� f!7 i/? lг. Support for Autonomous Higher Education Project Sub-projects implemented at Ministry of Education and Training and SAHEP PMB Financial Statements Financing Agreement No. 6036-VN Year ended 31 December 2021 6. Advances to contractors 31/12/2021 31/12/2020 VND VND TH Nam Group JSC 9,973,320,000 Devalupirioitt Telecuinmunication JSC 4GO, 137, IG1 Others 41,800,000 10,483,257,161 Advance for Contract No. MOET-CrM U-002/1-IDKTISAHEP dated on 20 Septembor20,21 . 7. Payables to contractors 31/12/2021 31/12/2020 VND VND Kinh Sac Technology Dev lopment and Trading JSC 2,052,481,091 Viet Sac Technology Development Co., Ltd 699,321,818 Tri Nam Group JSC 9,670,000,000 12,421,802,909 Payable for Contract No. M0ET-CPMU-G01/HDKT/SAHEP dated on 30 September 2021. 8. Subsequent events There have been no significant events occurring after the reporting date, which would require adjustments or disclosures to be made in the financial statements. 9. Corresponding figures The corresponding figures are the financial statements for the year ended 31 December 2020 whidi weie dudiled by AASC United. 10. Approval of the Financial Statements The financial Statements were approved by Project Management Board for issuance on 20 June 2022. Le Trong Hung Nguyen Thi Phuong Thao DiFector Chief Accountant Hanoi, 20 June 2022 16 aasc No.: 200622.011/1BCC 1-182 INDEPENDENT AUDITORS' REPORT ON THE INTERNAL CONTROL SYSTEM To: The Project Management Board of Support for Autonomous Higher Education Project We have audited, in accordance with International Standards on Auditing, the financial statements of the Support for Autonomous Higher Education Project - Sub-projects implemented at Ministry of Education and Training and SAHEP PMB ("the Project") for the year ended 31 December 2021 and issued the auditors' report thereon dated 20 June 2022 expressing an opinion on those finarincial 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 financial effect on the financial statements as well as the internal control over financial reporting - Sub- projects implemented at Ministry of Education and Training and SAHEP Project Management Board ("PMB") for the year ended 31 December 2021. Responsibilities of the Project Management Doard The Project Management Board 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 ethical 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. T(84) 24 38241990 I F:(84) 24 3825 3973 I 1 Le Phung Hieu, Hanoi, Vietnam [ AASCAUDITING FIRM 17 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's financial statements for the year ended 31 Deceriber 2021. AASC Limited Do Manh.Cuong Nguyen Pham Hung Deputy General Director Auditor in-charge CPA Registered No.: 0744-2018-002-1 CPA Registered No.: 2893-2020-002-1 Hanoi, 20 June 2022 18 aasC No.: 200622.01 1/BCTC. FIS2 INDEPENDENT AUDITORS' REPORT ON THE COMPLIANCE To: Project Management Board of Support for Autonomous Higher Education Project We have audited, in accordance with the international Standards on Auditing, the financial statements of the Support for Autonomous Higher Education Project - Sub-projects implemented at MinIstry of Education and TrainIng and SAHEP PMB ("the Project") for the year ended 31 December 2021 and issued the auditors' report thereon dated on 20 June 2022 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. 6036-VN dated 29 June 2018, law and regulations that have a direct and material effect on the Project's financial statements for the year ended 31 December 2021 ("the Requirements"). Responsibilities of the Project Management Board The Project Management Board is responsible for complying with the Requirements applicable to the 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. Auditors' opinion T:(84) 24 3824 1990 I F:(84) 24 3825 3973 I 1 Le Phung Hieu, Hanoi. Vietnam AASC AUDITING FIRM 19 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 2021. AASC LImited Do Mani Cuong Nguyen Pham Hung Deputy General Director AudItor In-charge CPA Registered No.: 0744-2018-002-1 CPA Registered No.: 2893-2020-002-1 Hanoi, 20 June 2022 20 SUPPORT FOR AUTONOMOUS HIGHER EDUCATION PROJECT Sub projeu[s itripleirierted at Ministry of EducdtIon and Trainiy and SAHEP PMB Financing Agreement No. 6036-VN MANAGEMENT LETTER Fiscal year ended 31 December 2021 aaSC Hanoi, 20 June 2022 To: The Project Management Board of Support for Autonomous Higher Education Project 3rd floor, 80 Ruilding, lano 30 Ta Quang RHU, Rach Khoa ward, Hai Ba Trung district, Hanoi We have conducted the audit of the financial statements of the Support for Autonomous Higher Education Project ("SAHEP") - Sub-projects implemented at Ministry of Education and Iraining and SAHEP PMB ("Project") for the fiscal year ended on 31 December 2021. During the course of our engagement, we reviewed the accounting procedures and internal controls, and examined the Luripliui2ices with laws and regulations of Financing Agreement No 6036 -VN dated 29/06/2018. Accordingly, we enclose a memorandum of the points noted by us during our audit together with recommendations thereon. We have discussed the matters with the Board of Directors and the responses were incorporated in our memorandum. We would also like to extend our sincere thanks to the Director, the Chief Accountant and the staffs of I he Project Management Board of the Support for Autonomous Highei Educaiun Projeut for [he co-operation you all have extended to us during our recent audit visit. We look forward to working with you again soon, and in providing you with the required assistance, if any, in your future 7enTteavors. Yours sincerely, Do Manh'Cuong Deputy General Director T:(84) 24 3824 1990 I F:(84) 24 3825 3973 I 1 Le Phung Hieu, Hanoi, Vetnam HLS AASC AUDITING FIRM 21 Support for Autonomous Higher Education Project Sub-projects implemented at Ministry of Education and Training and SAHEP PMB Management letter Financing Agreement No.6036 - VN Year ended 31 December 2021 CONTENTS 1. Project's disbursem ent progress....................................................................................23 2. Irplementatioii status of previous auditors' recommendations............................................. 24 22 Support for Autonomous Higher Education Project Sub-projects implemented at Ministry of Education and Training and SAHEP PMB Management letter Financing Agreement No.6036 - VN Year ended 31 December 2021 1. Project's disbursement progress Observation We noted the disbursement progress the Project's activities to 31/12/2021 as follows: Activities Plan (*) Disbursement Rate VND VNL) Establishing a database system on 55,905,000,000 19,743,012,511 35.32% Vietnamese higher education component Investing for the system of quality assurance 18,578,000,000 11,573,447,091 62.30% and accroditatlon of Vietnamese higher education component Project Management 2,650,000,000 1,794,495,102 67.72% 77,133,000,000 33,111,554,704 42.93% (*) According to Decision No. 448/QD-BGDDT dated 22 January 2021 amended and supplemented by Decision No. 2432/QD-BGDDT dated 20 July 2021, Decision No. 4455/QD-BGDDT dated 26 November 2021 on approving the Operational plan, Financial Plan for 2021. In general, the Project disbursement progress is slow compared to the budget plan because of following reasons: - The addition of a component project using the residual funding from the SAHEP Project of the Ministry of Agriculture and Rural Development is slowing down the restructuring process of the SAHEP Project. - The allocation of administrative and non-business fund is limited, so activities of the sub- component of sustainability policy analysis, university autonomy as well as training activities for nearly 2,000 accreditors could not be carried out. - Ili addition, the coiriplicated situatin of the COVID-19 eplderilc caused some imported equipment of the two component projects to be delayed, and many project activities are impossible to implement, greatly affecting the actual plan of the proposed project activities. Recommendation The Project Management Board should strengthen the collaboration with relevant agencies to accelerate the restructuring of the Project, develop a plan to allocate administrative and non- business fund to ensure sufficient fund for activities, as well as continue implementing outstanding activities that have not been implemented in the year, ensuring the disbursement rate compared to the approved plan. The Project Management Board's responses Agree with the auditors' recommendations. 23 Support for Autonomous Higher Education Project Sub-projects implemented at Ministry of Education and Training and SAHEP PMB Management letter Financing Agreement No.6036 - VN Year ended 31 December 2021 2. Implementation status of previous auditors' recommendations No. Recommendations implementation status/Notes 1. Project implementation progress We note that the Project is behind its schedule Still exists. Detail in Section 1. 2. Statement of Withdrawals and Reconciliation of Fu inds The Project is in the implementation phase so During the year 2021, the PMR made the Project Management Board has opened the withdrawals from the Designated Designated Accounts but no withdrawal was Account. made. Accordingly, the Statement of Withdrawals and Reconciliation of Funds has not been prepared. 24