NGO Anti-Corruption Action Center (AntAC) Project #TFOB2997 Statement of Sources and Uses of Funds for the period from 01 July 2023 till 31 October 2023 together with Independent Auditor's Report NGO Anti-Corruption Action Center (AntAC) Contents Transmittal letter 3 Independent Auditor's Report 4 Statement of Sources and Uses of Funds 7 Notes to the Statement of Sources and Uses of Funds 8 2 NGO Anti-Corruption Action Center (AntAC Ms. Daria Kaleniuk Executive Director NGO Anti-Corruption Action Center 4/6 Omelyanovycha-Pavlenka St. office 905, 01010 Kyiv, Ukraine 8 December 2023 Dear Ms. Kaleniuk, Pursuant to the terms of the contract ANTAC-LCS-C-01 dated 19 December 2022 signed between the NGO Anti-Corruption Action Center and "RSM UKRAINE" LLC, we are providing you with our Independent Auditor's Report on the accompanying the Statement of Sources and Uses of Funds of the Empowering Civil Society and Journalists in Oversight and Promotion of Effective Anti-Corruption Environment Project for the period form 01 July 2023 till 31 October 2023. Sincerely, Olga Poldiaieva Vice-President 3 11 1 C 1 ( 1 co INDEPENDENT AUDITOR'S REPORT To the management of NGO Anti-Corruption Action Center Opinion We have audited the accompanied Statement of Sources and Uses of Funds of the Empowering Civil Society and Journalists in Oversight and Promotion of Effective Anti-Corruption Environment Project (hereinafter - the Project), implemented by the NGO Anti-Corruption Action Center, a Civil Society Organization with legal personality duly registered in the public registry of civil associations of Ukraine (hereinafter - the Organization) for the period from 01 July 2023 till 31 October 2023, and notes thereto, which comprise a summary of significant accounting policies and other explanatory information (together "the Statement of Sources and Uses of Funds"). The Statement of Sources and Uses of Funds has been prepared by the management using the cash receipts and disbursements basis of accounting described in Note 3 to the Statement of Sources and Uses of Funds. In our opinion, the Statement of Sources and Uses of Funds for the period from 01 July 2023 till 31 October 2023 is prepared in all material respects in accordance with the requirements of the International Bank for Reconstruction and Development (hereinafter - the IBRD), the Letter Agreement for GPSA Trust Fund Grant No. TFOB2997 dated 12 June 2020, as well as the IBRD Guidelines and the Operational Manual approved by the IBRD. Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (hereinafter - ISAs). Our responsibilities according to those standards are further described in the Auditor 's Responsibilities for the Audit of the Statement of Sources and Use of Funds section of our report. We are independent of the Organization in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants (hereinafter - IESBA Code) together with ethical requirements that are relevant to our audit of the Statement of Sources and Uses of Funds, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Emphasis of Matter - russian Federation's invasion of the territory of Ukraine We bring to your attention Note 8 to the Statement of Sources and Use of Funds, which states that On February 24, 2022, russian Federation launched invasion of the territory of Ukraine. In 2023, the Organization's management made a conclusion that the assumption about the Organization's ability to continue as a going concern fell under significant uncertainty as a result of military aggression of russian Federation against Ukraine. On date of the Project's financial statement's approval, having analyzed the existing internal, economic and military factors of uncertainty and considering their possible effect, the Organization's management made a .11 RS1ANus e brofteRMnewr-n tae sRM.RMi heta gnaeueJy h e brso h E ntokEchmme f h S etoki n needn conclusion that of military aggression of russian Federation against Ukraine could have influence on the Organisation, but not as significant uncertainty of going concern. It is expected that its full impact may be insignificant, but it cannot be reasonably measured or assessed on date of this report (military action can affect the economic, political, and humanitarian situation in the country and its consequences cannot be estimated with the sufficient level of predictability). The Organization's management monitors the current situation and takes measures to minimize any negative consequences as much as possible. Our opinion was not modified with regard to this matter. Emphasis of Matter - Basis for Accounting and Limitations to Distribute and Use We bring to your attention Note 3 to the Statement of Sources and Use of Funds, which describes cash principle of receipts and disbursements as the comprehensive basis for accounting, other than accounting principles generally applied in Ukraine. The Statement of Sources and Use of Funds was prepared with the purpose to assist in the Organization's compliance with the IBRD requirements and in accordance with the Letter Agreement for GPSA Trust Fund Grant No. TFOB2997 dated 12 June 2020, the IBRD Guidelines and the Operational Manual approved by the IBRD, as stated above. Therefore, the Statement of Sources and Use of Funds may not be suitable for other purposes. Our Independent Auditor's Report is solely aimed for the Organization and the IBRD and shall not be distributed or used otherwise. Our opinion was not modified with regard to this matter. Responsibilities of Management and Those Charged with Governance for the Statement of Sources and Use of Funds Management is responsible for the preparation and fair presentation of the Statement of Sources and Uses of Funds in accordance with the accounting basis of cash receipts and disbursements described in Note 3 to the Statement of Sources and Uses of Funds, for determining acceptability of this basis of accounting, and for such internal control as management determines is necessary to enable the preparation of the Statement of Sources and Uses of Funds that is free from material misstatement, whether due to fraud or error. In preparing the Statement of Sources and Uses of Funds, the management of the Organization is responsible for assessing the Organization's ability to continue as a going concern, disclosing, as applicable, matter related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Organization or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Organization's financial reporting process. Auditor's Responsibilities for the Audit of the Statement of Sources and Uses of Funds Our objectives are to obtain reasonable assurance about whether the Statement of Sources and Uses of Funds as a whole is 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 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 this Statement of Sources and Uses of Funds. As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also: * Identify and assess the risks of material misstatement of the Statement of Sources and Uses of Funds, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain 2 audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control; * Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Organization's internal control; * Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management of the Organization; * Conclude on the appropriateness of the Organization management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Organization's ability to continue as a going concern. If we conclude that the material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the Statement of Sources and Uses of Funds 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 auditor's report. However, future events or conditions may cause the Organization to cease to continue as a going concern. We communicate to those charged with governance information on 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. Vice-president Olga Poldiaieva Registration number in the Register of Auditors and Audit Entities - 100721 37/19 Donetska Str., Kyiv, Ukraine 08 December 2023 3 N1GO Antii-C'orrupt j)IOn Actioni Cen r?/n1C) Staternent of Sources and Uses of Funds fjr the period from 01 July 2023 ti1131 OcIoher 2023 (in, US dollars) Note 0l J u ly 2023 - 31 October 2023 Cum ulative Opeiing balance of cash and cash equivalents 24 - Finanicing received Grant Funds of the IBRI) 5 54, 000 449,160 Co-financing - Total financing 5 54,000 449,160 Project expenditures (oiponent/Cate,ory l 6 18 081 135,556 ComponentCitegory 2 6 4,837 120,565 Component /Category 3 6 31,103 193,039 Total project expenditures 6 54,024 449,160 Closing balance of cash and cash equivalents The Statement of Sources and Uses of Funds is to be read in conjunction with the notes set out on pages 8-12. Ixecutive Director Da i \ria Kaleiniuk Chief Accountant Anna Trosenko 7 NGO Anti-Corruption Action Center (AntAC) Notes to the Statement of Sources and Uses of Funds for the period from 01 January 2022 till 30 June 2023 1. Background On June 12, 2020, the International Bank for Reconstruction and Development ("IBRD") acting as administrator of grant funds provided by multiple donors ("Donors") under the Global Partnership for Social Accountability ("GPSA") Multi Donor Trust Fund ("GPSA Trust Fund") and the NGO Anti-Corruption Action Center ("Organization" or "AntAC"), a Ukrainian civil society organization that unites experts from legal, media and civic-political sectors fighting corruption as a root cause of the key state-building problems in Ukraine, signed the Letter Agreement ("Agreement") on extension of a grant fror the GPSA Trust Fund No. TFOB2997 ("Grant") to finance the Empowerment of Civil Society and Journalists in Oversight and Promotion of Effective Anti-Corruption Environment Project ("Project"). The purpose of the Project is to improve the implementation of anti-corruption legislation in Ukraine by strengthening the country's anti-corruption coalition's capacities to enhance and enforce said legislation through collaborative social accountability processes at the national and sub-national levels. The Project consists of the following parts: Part 1. Capacity building for collaborative social accountability (Category 1). Provide capacity building support for collaborative social accountability, including inter alia, through: (a) Support the network of investigative journalists and activists by producing learning and operational resources. (b) Creating micro centers of investigative journalism in regions with weak investigative journalism capacities, including provision of training and mentoring of selected journalists on research and reporting on corruption cases. (c) Facilitating networking and collaboration across stakeholders from various sectors implementing or supporting anti-corruption refonrs. Part 2. Implementing collaborative social accountability mechanisms for improved anti- corruption reforms (Category 2). Support civil society's collaborative engagement with selected pro-reforn institutions and leaders, including preventive and investigative bodies at the national and sub-national levels, including inter alia, through: (a) Conducting independent analyses, observations, preparing technical recommendations and presenting them before relevant state institutions to ensure transparency and accountability, as well as adherence to quality standards with regards to anti-corruption reforms and their implementation. 8 NGO Anti-Corruption Action Center (AntA C) Notes to the Statement ofSources and Uses ofFunds for the period from 01 July 2023 till 31 October 2023 (b) Supporting the establishment of new or strengthening of existing institutionalized mechanisms for continued collaborative engagement between civil society and state institutions. Part 3. Improving knowledge and learning on social accountability in the Ukrainian anti- corruption sector and Project management (Category 3). Establish an internal adaptive knowledge and learning process to regularly adjust Project implementation based on experience and contextual circumstances, and to generate knowledge and learning for targeted external dissemination amongst key stakeholders, including inter alia, through: (a) Developing and implementing a monitoring, evaluation and learning (MEL) system designed to strengthen CSOs' capacities for adaptive Project management and learning. (b) Conducting regular internal project MEL sessions focused on adjusting the project's social accountability strategy and operations. (c) Developing and implementing a plan for disseminating the Project's knowledge and learning products to key target audiences. (d) Promoting knowledge and learning about collaborative social accountability. (e) Preparing and disseminating learning products, tailored at local activists and journalists on finding conflicts of interest in local authorities and addressing them. (f) Support to carry out day to day Project implementation and monitoring. The initial cost of the Project was estimated at USD 450,000. The source of financing is the GPSA Trust Fund. According to extended implementation schedule, the Project shall be completed by 30 June 2023. In June 2023, the project was further extended until 31 October, 2023. The Statement of Sources and Uses of Funds is prepared for the reporting period from 01 July 2023 till 31 October 2023. 2. Political and economic environment in Ukraine Before February 24, 2022, the main factor affecting the economic and political processes in Ukraine was the instability of the political and economic situation, which began at the end of 2013 and led to a drop in the gross domestic product and foreign trade volumes, the deterioration of the public finances, and the reduction of foreign exchange reserves of the National Bank of Ukraine, a significant devaluation of the national currency and further lowering of the credit ratings of Ukraine's sovereign debt. Despite some improvement in the situation in 2017-2021, the pace of economic growth remained low due to the incompleteness of the structural reforms needed to strengthen investor confidence. As of the date this Statement of Sources and Uses of Funds is approved for issue, the main factor affecting the economic, political, humanitarian and other processes in Ukraine are the events after the balance sheet date, which are referred to in note 8. 9 NGO Anti-Corruption Action Center (AntAC) Notes to the Statement ofSources and Uses of Funds fbr the period from 01 July 2023 till 31 October 2023 The outcome of the political and economic situation and the war in Ukraine, as well as its consequences are extremely difficult to predict, however, they may have a further negative impact on the economy of Ukraine. 3. Basis for preparation This Statement of Sources and Uses of Funds is prepared according to the requirements of the IBRD, the terms and conditions set forth in the Letter Agreement for extension of the GPSA Trust Fund Grant No. TF0B2997, the IBRD Guidelines and the GPSA Operational Manual approved by the IBRD on the accounting basis of cash receipts and disbursements, which is a comprehensive basis of accounting other than accounting principles generally accepted in Ukraine. On this basis, revenue (receipts) is recognized when received rather than when earned, and expenditures are recognized when paid rather than when incurred. 4. Foreign currency translation This Statement of Sources and Uses of Funds is presented in US dollars. Transactions in other currencies are converted to US dollars at the commercial exchange rate effective at the date of the foreign currency sale transaction. Cash balances in other currencies are converted to US dollars at the commercial exchange rate effective at the date of the foreign currency sale transaction. 5. Schedule of withdrawals from the Grant account Cash of withdrawals from the Grant account for the period from 01 July 2023 till 31 October 2023 are as follows: (in US dollars) Year Month Date of Value Date Type Amount withdrawal 2023 September 07-Sep-2022 12-Sep-2023 DA-A 30,000 Direct 2023 October 23-Oct-2023 27-Oct-2023 Payment 24,000 Total 54,000 Summary schedule by categories: DA-A 30,000 Direct 24,000 Payment Total 54,000 6. Detailed Uses of Funds 10 NGO Anti-Corruption Action Center (AntAQ Notes to the Statement ofSources and Uses ofFunds for the period from 01 July 2023 till 31 October 2023 The expenses incurred by the Project for the period from 01 July 2023 till 31 October 2023 have the following detailed structure: (in US dollars) Project Components/Categories and Contracts 01 July 2023 - 31 October 2023 Cumulative Component 1 Accountant - 18,002 Senior analyst 4,015 37,016 Journalist (two positions) - 36,302 Local Journalist (three positions) 14,069 44,236 Total Component 1 18,084 135,556 Component 2 Advocacy Expert - 9,543 Expert on international PR and GR - 26,061 Lawyer (two positions) - 42,018 Project manager. advocacy expert - 22,875 Senior Legal Counsel 4,837 20,068 Total Component 2 4,837 120,565 Component 2 Bank commission 224 2,690 Design and visualization - 10,620 Editor in Chief - 18,011 Executive director - 20,890 External evaluator 24,000 24,000 Financial Audit 5,161 24,461 Financial manager 1,718 12,852 IT service - 11,238 Laptop - 3,214 M&E Manager - 7,059 Office rent - 17,975 Office Supplies - 1,587 Project Assistant - 22,771 Staff travel (international) - 2,960 Translation - 10,846 Utilities - 1,797 Postage - 68 Total Component 3 31,103 193,039 11 NGO Anti-Corruption Action Center (AntAC) Notes to the Statement ofSources and Uses of Funds for the period from 01 July 2023 till 31 October 2023 Total 54,024 449,160 7. Budget implementation The Project cost is estimated to be USD 450,000 to be financed completely by the GPSA grant. The table below presents the percentage of expenditures that can be financed: (in US dollars) Funds Cash of Budgeted Indicative withdrawals Percentage of available financing Timing of Timing of from the expenditures on the from the Disbursemen Disbursements Grant being Grant financed as account as Grant ts account as at at 31.10.2023 at 31.a10.2023 31.10.2023 First Disbursement - After signing the Grant Agreement; Second The Project Disbursement - Year 2 shall - Quarter 1; Third be completed Disbursement - Year 3 by - Quarter 1; Final 31 October Disbursement- Year 4 - 450,000 2023 Quarter 1 449,160 99.81% 840 8. Subsequent events On February 24, 2022, Russian Federation launched invasion on the territory of Ukraine. Military action can significantly affect the economic, political and humanitarian situation in the country and its consequences cannot be estimated with the sufficient level of predictability. Having analysed the existing internal, economic and military factors of uncertainty and considering their possible effect, the Organization's management made a conclusion that the assumption about the Organization's ability to continue as a going concern falls under significant uncertainty as a result of military aggression of Russian Federation against Ukraine. The Company's management monitors the current situation and takes measures to minimize any negative consequences as much as possible. 9. Approval of the project financial statements These project financial statements (the Statement of Sources and Uses of Funds) were approved by the Organization's management and authorized for issue on 08 December 2023. 12