AUDITOR'S REPORT Audit Completion Date: 29/11/2023 To The Secretary Local Government Division Ministry of Local Government, Rural Development & Cooperatives Bangladesh Secretariat, Dhaka. Opinion status: Un-qualified. We have audited the accompanying Financial Statements of "Local Government COVID- 19 Response and Recovery project (LGCRRP) " Project, RDEC Bhaban, LEVEL-6, LGED Bhaban, Agargaon, Sher- E -Bangla Nagar, Dhaka 1207, which comprise of the statement of cash receipts and expenditure, statement of comparison of budget and actual expenditure as at and for the year ended on 30th June 2023 and a summary of significant accounting policies and other explanatory notes. In our opinion, the project Financial Statements present fairly, in all material respects the cash and cash equivalents of the project as on 30"' June 2023 and the funds received and expenses incurred for the year then ended in accordance with the IPSAS financial reporting under the cash basis of accounting and the requirements of project accounting manual issued by the Finance Division, Ministry of Finance, Government of Bangladesh as well as those of IDA guidelines and agreement. Basis for opinion We have conducted our audit in accordance with the 'Government Auditing Standards of Bangladesh' (GASB) issued by the Office of the Comptroller and Auditor General (OCAG) of Bangladesh which are based on the International Standards of Supreme Audit Institutions (ISSAls) issued by International Organization of Supreme Audit Institutions (INTOSAI). Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the Financial Statement section of our report. We are independent of the project in accordance with the 'Code of Ethics' issued by OCAG Bangladesh which is based on ISSAI 130- Code of Ethics (INTOSAI Code), and we have fulfilled our other ethical responsibilities in accordance with these ethical requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Other Matter This audit of the project financial statements has been conducted to comply with the specific requirements of the development partner as specified in the related credit agreement. OCAG reserves all the rights to incorporate any audit observations from this report in the CAG's audit report for being laid before parliament to fulfill the constitutional responsibilities. Responsibilities of Management for the Financial Statements and internal Controls: Management of the project is responsible for the preparation and fair presentation of this special purpose financial statements in accordance with the International Public Sector Accounting Standard (IPSAS) financial reporting under the cash basis of accounting issued by the International Public Sector Accounting Standards Board (the IPSASB) of the International Federation of Accountants (IFAC), the requirements of project accounting manual issued by the finance division MOF, GOB as well as those of the IDA guidelines and agreement and for such internal control as management determines is necessary to enable the preparation of special purpose financial statements that are free from material misstatements, whether due to fraud or error. Auditor's Responsibilities for the Audit of the Special Purpose Financial Statements: Our objectives are to obtain reasonable assurance about whether the financial statement is free from material misstatements, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is not a guarantee that an audit conducted in accordance with GASB which are based on ISSAI will always detect a material 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 special purpose financial statements. As part of an audit in accordance with the Government Auditing Standards of Bangladesh which are based on ISSAls, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: * Identify and assess the risks of material misstatements 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 one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. * Obtain 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 entity's internal control. * Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. * 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 achieve fair presentation. Report on Requirements of the Development Partner In accordance with the Project, Agreement was signed between IDA and Economic Relation Division (ERD) on behalf of Govt. of Bangladesh on January, 2015, (a) Funds were utilized for the purposes described in the Financing Agreements and agreed Project's annual work plans; (b) In our opinion, the special account statement gives a true and fair view of the special accounts as at 30 July 2023, and the cash movements of these accounts of the period then ended, in accordance with the IDA guidelines; (c) Project expenditures disbursed and expenses claimed are in compliance with established proper procedures and according to the provisions of the financing agreements/loan Disbursement handbook, and guidelines on financial management and analysis of project issued by IDA. (d) The procurement of goods, services and civil works have been made in accordance with the financing agreements and IDA procurement regulations; (e) The PMU has complied with covenants specified in the credit agreement. (Md. Abdul Quddusrdhan) Deputy Director For Director General Foreign Aided Projects Audit Directorate Tel: +8802226663606 甲才．＿。＿〕f)&_&___＿黴 州鬥胤念＿他＿亡二雙＿、江訕忽一＇怎餞胤 躍盛認盔圈粅自蘊疲煙鼴，必觀取鶴蛋乏田豐聖組屆觀翅暱鑰嗎鹽選訪珊號涉肥總勗至憂煙誣 Locni Govemmerit COVID-19 Response and Recovery Project Depa menl of Local Government Engineering Department Project Financial Statement As of and the ended 30 June 2023 Project Onzincial statements (GOB Approved Model) As of and for the years ended 30 June 2023 ...... __ .... ...,(Development Opening balanceas For the year Closing balance r Notes as at 30 June partner's) GranfUILoan at I July 2022 ended 30 June 2023 q ou e (Cumulative prior 2023 (Cumulative Fesources period) (current period) current period) overriment of Bangladesh 6 0.00 119.0 oan from lenderldonor 7 HO 44096.00 44096.0 1 ther resources ash opening balanoe 44215.0 Gal -esources- - 0,00 44215M, Expenditure and Cas _ 1. Supply and Services 331.014 331,0 2. Maintenance 35.01! 35-01 3. Wealth 39.50 1 4,(a) Givil Work (Actual 2039 20, 2039.21 Expenditure I CRG Advance Paid 34285.08 36729.89 36729 8- Cash closing balznce Impresi account Op--rating Account (RPA) 7421.56 1121,11 Ope atirig Account (GOB)-Refund 63.SS 63 5-1 FaM nd CasW_ 5 15,00 4 0 The annexed notes I to 12 form an integral part of these special purpose Financial statements. Pro ,ct Director Chief Accountant liazmus Sadat l4d, Ziltur R31-iman Statement of the Project sources and uses of funds of Project -- funded by Grant/Loan no 7033 BD. As of and for the year ended 30 June 2023 Currencyj Actual Budgt Difference For the year Cumulative as For the year Cumulative For the year Cumulative ended 30 of 30 June, 2023 ended 30 as of 30 June, ended 30 June, as of 30 June, June, 2023 June, 2023 2023 2023 2023 Cash and bank balances as at 01 July 2022 5 dd: Funcino from Government of Bangadesh 6 119.00 121.00 2.00 unding from Development Partner (loan from 7 36675.00 36675,00 0.00 )ender/donor) Funding from other sources Total financing 36794.00 36796.00 2.00 Exchange difference Other income Total Resources (flnancing and other receipts) 36794.00 36796.00 2.00 Less: Expenses from GoveSment oS anladesh 545 Actual Expenses fom Development Partner 10 203920 CRG Advance From Development Partner 34635.24 Expenses from otner so rces 11 Total Project expenses 35729.89 Exchange rate di:erences Other expenses Total Project expenses and other expenses I 36729.9 Cash and bank balances as at 30 June 2023 J 5 ____________________ ______f The annexed-notes I to 12 torm anintegral partof these special purpose inancial statements Project Director' Chief Accountant Nazmus Sadat Md. Zilur Rahman Pro;ecl Oiocior tel G EDnen!-6 R9 a I Rover P.o0ed LGED HQ. Ohaka. Stmont of uses of funds by Project aclivily and comparison to budget As of and for the years ended 30 June 2023 ... ....... ,(Development partr s) n G rant/Lojan For the year Cumulativeas Forthe Cumulativeas ended30 o130 year of 30 202uJne02 ended30 Juo June 2022 ed 3O June 2023 2022 June 2023 Category 1: a) Civil Works or as per DCA (Actual 2039.20 2039,20 Expenditure) b) CRG Advance 34285,08 34285.08 Category 2: Equipment or as per DCA Category 3. Instructors or as per OCA Category 4: Fellowships or as per DCA Category 5: Local Training or as per DCA Category 6: Intemnational Consultant or as per DCA Categ cated or as per DCA405.1 405.61 Category 8:,or as per DCA Total Project expenses 36729.89 36729.89 Totalf The annexed notes 1 to 12 form an integral pad or these special purpose Financial statements. Propct Datector Chiel Accountant 11 Sadat 37dU ZSt Rahman u r6 Statement on cash flow on Cash 1Imprest accounts As of and for the year ended 30 June 2023 Balanco as of 01 July 2022 XX Add: 119.00 Receipt from Government Receipt from Development Partner 44096.00 Exchange rate difference 44215,00 Total Less: 2444.81 Amount of eligible Actual expenses Amount of eligible CRG Advance 6355 Refund of GOB Exchange rate difference Total 7421.56 Balance as of 30 June 2023 The annexed notes 1 to 12 form an integral part of these special purpose financial statements. Chief Accountant Project Director Sadat Md. Zitur Rahmao Na e liM#Ybe prepared separately based on bank account. to LED 80G Dbaka. Notes to the financial statements 1. General Information The following information may be added: A summary of the Project Is to be given including Loan/Grant date agreement of between Government and development partners, A brief of the objective of the project and its components. Expected closing date for the project. The total number of staffs involved. The approval date and authority of these financial statements. 2. Significant Accounting policies Basis of preparation The financial statements of the Project have been prepared in accordance with IPSAS Financial Reporting Under the Cash Basis of Accounting, and comply with the Project Accounting Manual issued by the Finance Division, Ministry of Finance, Government of Bangladesh as well as (development partners requirements) and the covenants of the .... (Loan/Grant). These special purpose financial statements reflect the data for the year ended 30 June 2023. Under this basis of accounting, financing is recognized when received rather than when oarned and expenses are recognized when paid rather than when incurred. Expenses are resources directed for the payment of works, goods and services, recognized in the financial statements in the period when they are paid. Financing The disbursement procedures need to be described briefly. The amounts of Government financing are recognized as such and included in the special purpose financial statements when the funds are transmitted to the Project Current account (the 'Government financing account). Expenses Consistent with the cash basis of accounting, the Project expenses are recognized and included In the special purpose financial statements when the payment is actually made to suppliers of goods, works and/or services as opposed to when goods are received/ services are rendered. Functional and presentation currency BDT is the naional currency of the Government of Bangladesh. The special purpose financial statements of the Project are presented in BOT/USD (presentation currency) and rounded to the nearest integer of BDT/USD. Income and expenses denominated in BDT are converted into USD applying the exchange rate set out by the Bangladesh Bank on the date of the transaction. Account balances denominated in BDT are converted into USD applying the exchange rate set out by the Bangladesh Bank at the reporting date. As of 30 June 2022, the exchange rate is xxxx. 3. Taxation According to the LoanlGrant Agreement, the loan and grant amounts should not be used to pay any taxes and duties. 4. Fixed Assets FIed assets of the Project include office equipment, vehicles and furnitute procured for project Implementation. Cos of fixed assets includes the cost of procuremoni and other related expenditures Due to the cash basis of accounting, the fixed assets procured under the Project are measured on the basis of cost of procurement and reflected in the special purpose financial statement as expenditures instead of capilalization in balance sheet, The record of fixed assets is maintained in inventory sheets. Considering non-commercial status of the Project and cash basis of accounting, depreciation for the fixed assets is not accrued, 5. Cash and bank balances I Cash and cash equivalents The Project maintains xx number of bank accounts, an imprest bank account or revolving fund, which is kept at xxx Bank to hold funds advanced1received from Donor and an operating account at xxx Bank to hold funds advanced/received from GOB as well as funds transferred from the imprest bank account, Year-end cash balances were as follows: Opening balance as at For the year Closing balance as 30 June, 2022 ended 30 at 30 June 2023 inception to 30 June 2022t June 2023 Imprest account Operating account (GOB) d_09O7 Total 7121,16_4415011 425 6. Funding received from Govemment of Bangladesh Funds are allocated by the Government of Bangladesh to cover GOB's share of eligible proiect expenditures, as specified in the project manual and in annual development programmed for each of the Proect. Any allocated funds that have not been expended by the end of a fiscal year lapse and must be returned to GOB. GOB contribution to the Project since inception and for the year are as follows: Opening balance as at 30 For the year ended Closing balance as at 30 June 2022 (inception to 30 30 June 2023 June 2023 (inception to June 2022 _ _ _ 30 June 2023 D so rTe nt by GO B 1__ 1 y900 119.00 7Ess. lud to GOB ______________ 93.5 5 s"63& LTota __55.45 55.4 7. Funding received from Development Partners (loans from lenderddonor) The IDA has provided funds to the Project to cover its share of eligible project expenditure. These funds, which musl be repaid to the IDA after the conclusion of the Project, have been drawn by the Project in accordance with the tolliowrig withdrawal procedures_ Opening balance For the year Closing as at 30 June 2022 ended 30 June balance as at 30I (inception 2023 June 2023 to 30 June 2022) (inception to 30 June 2023 ~ 'es' r-~_,~rerl __ fill h f Ii , I'll" 8, Funding from other resources Other resources consisi of the following OpenIng balanco For the year as at 30 June 2022 onded 30 Junc balance as at 30 (inception 2023 June 2023 to 30 June 2022) (inception to 30 June 2023) Projecl revenues - - - Exchangle oain and loss Less:. TDS on interest and other fees Total-- 9. Expenses from Govemment fund Ln curren Ackual ~_ ~~~ Oiffrer;ce For the period Cumulativo For the period Cumulative For the period Gurnula rie ended 30 June as o130 June ended 30 June as of30June ended 30 as of 30 2023 2023 2023 2023 Jun 2023 2023 C'V V1 CK, Wuks or as per DCA Clerr 2: Eou,nment or as per DCA C- e rrirjcors or as per DCA C;ileg e shys -r as per DCA 5 Local Tranmng or asperDCA Cgo nrerna a Consulant or as per DCA CG e oy 7: naoca:ed or as per DCA 5 5A01119.00119 00 C:eory E or as Der DCA Total ProJecl expenses 55A5 55A5 11900 119 1rj 10. Expenses from Development partners In (currency) Actual Budget Difference For the period Cumulative as of For the period Cumulative as of For the period Cumulative as ended30 June 30Ju ne ended30 June 30June ended30June of30June 2023 2023 2023 2023 223 2023 1a,gory 1: Crl Works or as per DCA 36324.2 36324 28, 36324.331 36324.33 0.05 0MS rAciual ExpeniLre: 2039.2C+CRG Advance: 3428509) floteoor 2 Eru pner or as per DCA 39 5 39 5 39 57 39.57 0.071 0.074 Catory3: ndrcto s sper DCA cegory 4: Feuships or as per DCA aegry Trai asperDCA _ Category 6: lnernalional Consullant or as per DCA _ aiegory 7: Unallocaled or as per DCA 31065 31006 311. id 311.ld 0.4 5 15 agory 8: or as cer DCA_____- oIo aro ne es 3G744 36074.44 36675.00 36675.0 0o5 0.5s Naumus Sadat Md. Zilur Rahman ?re,ec Director L.GED H. Draks. 10AlReconcill3tion of expenses by funding methods Natre f ICotior 2 t 31 C 4 CAmount D[fference CXpOfXls cin Categ o 2 Calegory 3 Category 4 Category 5 Category 6 Category 7 Category 8 Amoun Am d 31r 44096 00 !rnprest zicco,unt 3 6324.28' 3953 _____1_____ .61 _____ Total expenses claimed j Memnorandum record Add. Expenses not claimed at year-end Less: Unclaimed expenses at previous year-end Totalexpenditre Tk. 36674.44 10.2Summary of Withdrawal App lications SOE SOE Date Category 1 Category 2 Category 3 Category 4 Category 5 Category 6 Category 7 Category 8 Amount Amount Diflerence No Received Claimed 10 35umma of Withdrawal A licationsj mprest Account Rep enishment) N Date Ca!egory1 Category2 Category 3 Category 4 Categor Category 6 Category 7 Category 8 Amount Amount IDifference Received Claimed Nazmus Sa urRha Project Direcor LGED HQ. Dhaka_ 10.4Summ3ry o Withdrawa1 Applicatons (Direct Payment) N DCatory 2 Ctegory 3 Cntegory 4 Cntegory 5 Ciegory 6 Categorl 7 Category 8 Arount IDffene 11. Expenses from other resources Budget Difference For the period Cumulatlve as of For the period Cumulative ascf For the period Cumulativ-e as o ended 30 June 2023 30June 2023 endcd 30 June 30 June 2023 ended 30 June 30 June 2023 2023 2023 Note: According !o PSAs 1,7.8 (c) an explanation is required about the material dfference between the budget and actual amount Nazmus Sidat Md ZIllur Rahman rEt Die r L GED HQ. Dtra 12. Project Implementation As of 30 June 2023, overall 14.42% of Grant/Loan has been implemented in the framework of the Grant/Loan Agreement 7033-BD, The project expenses by categories are presented in the tables below: Loani Grant Expenses as Budget as Budgeled Total Project Of 30 June 2023 In of expenses Project implementation currency unit 30 June as of30 Budget as of 30 June 2023 m June 2023 in 2023 currency (in Currency (in percentage) unit percentage) unit Category 1 Civil AC 2039.20 3632433 99.99% 244004,00 14.88% Works or as per DCA Advance 34285.0 Category 2: Equipment 39.50 39.57 99.90% 32300 12.25% Or as per DCA -_-_--_--- Category 3 Instructors OrasperDCA ------------- Category 4: Fellowships Or as per DCA Category 5: Local Training or as per DCA - - Category 6: International Consullant or as per DCA Calgoy 7 Uallcaed310.65 311 10 99.85% 10073,00 3.08% Category 8: or as per DCA _______________ Total Project expenses: Tk 36674.44 Nazmus Sadat Md. Zillur Rahman Lrject Direfecr LGED HQt. Dbaka.