Government of Nepal Ministry of Water Supply Department of Water Supply and Sewerage Management Water Sector Governance Infrastructure Support Project IDA Reimbursable Loan (IDA Credit No.7132-NP) Audited Project Financial Statement FY 2022/23 (NFY 2079/80) Government of Nepal Ministry of Water Supply (MOWS) Department of Water Supply and Sewerage Management (DWSSM) Project Management Unit (PMU) Water Sector Governance and Infrasstructure support project (WaSGISP) (IDA Credit No. 71320-NP) FY 2079/80 (2022/23) Amount In Nrs. Cumulative up to Cumulative up to Note Previous Year Current Year Previous ear current Year Sources GON Fund 2 9,267,226.52 9,267,226.52 GON Reimbursable Fund (IDA Loan) 2 4,276,647.00 4,276,647.00 IDA Loan received 3 4,873,915.00 4,873,915.00 Total 18,417,788.52 18,417,788.52 Application I) Works, and consulting services under Part I of the Project 1 2)Goods and non-consulting services under Parts I and 2 of 1 the Pro ect 4,240,383.00 3 (a)Transfer to the Participating Municipalities for Training and Incremental Operating Cost Under Parts I and 2 of the 1 0.00 0.00 Pro ect 3(b)Training and Incremental Operating Cost under Parts 1 1 6,729,311.52 6,729,311.52 and 2 of the Pro ect 4) Transfer to the Participating Municipalities for works under 1 0.00 0.00 Part 2 of the Pro-ect 5) Goods,works,nonconsulting services,lncremental Operating Costs,Training, and consulting services under Part 3 of the 1 0.00 0.00 Pro•ect 6) Emergency Expenditure Total 18,417,788.52 18,417,788.52 Kamal Raj Shrestha Prakash Thapa Magar u Dev paudyal Project Director Director General Account Officer DWSSM WASGISP WASGISP Ramesh Ghimire Suresh Acharya Hari Prasad Mainali Financial Compt Iler General Undersecretary,Account Secretary FCG MOWS MOWS Bindu Bista Deputy Auditor General neral Office of a,4Uditot epal 2016 Water Sector Governance and Infrasstructure support project IDA Loan Project Financial Statement FY 2022/23 (NFY 2079/80 ) Note : I Acccounting policy i.e, on Cash basis. In the GON accounting system, all The Project has maintained the accounts as per the GON accounting system disbursements including advances are treated as expenditure. Amount in NRs. Cumulative up to Cumulative up to Current Year Previous Year Current Year Works, and consulting services under Part I of the Project 31112 Construction/purchase of non-residential buildings 31112 6003372 6003372 31135 Consulting service 31135 31156 Construction of water supply structures 31156 1444722 1444722 31159 Other Public Constructon 31159 Sub Total 7,448,094.00 7,448,094.00 Goods and non-consulting services under Parts I and 2 of the Project 2,336,774.00 2336774 31122 Machinery and Tools 31122 1,903,609.00 1903609 31123 Furniture and Fixtures 31123 Sub Total 4,240,383.00 4,240,383.00 3 (a) Transfer to the Participating Municipalities for Training and c Incremental Operating Cost Under Parts 1 and 2 of the Project Sub Total 3(b) Training and Incremental Operating Cost under Parts 1 and 2 of the Project 1,887,520.52 1,887,520.52 50,000.00 50,000.00 21121 Dress 21121 54,000.00 54,000.00 21132 Dearness allowance 21132 19,500.00 19,500.00 21134 Meeting allowance 21134 0.00 0.00 21212 Contribution pension fund 21212 9,600.00 9,600.00 21213 Contribution insurance fund 21213 4,020.00 4,020.00 22111 Water and Electricity 22111 25,000.00 25,000.00 22112 Communication 22112 693,631.00 693,631.00 22212 Fuel office use 22212 849,376.00 849,376.00 22213 Vehicle maintenance 22213 27,459.00 27,459.00 22221 Machineries operation and maintenance 22221 735,412.00 735,412.00 22311 Office Supplies 22311 293,906.00 293,906.00 22315 Newspaper printing and Notice publishing 22315 1,008,314.00 22413 Contract service 22413 0.00 0.00 22522 Program Expenses 22522 514,410.00 514,410.00 22611 Monitoring and evaluation 22611 557,163.00 557,163.00 22711 miscellaneous expenses 22711 Sub Total 6,729,311.52 €729,311.52 for works under Part 2 of the 4) Transfer to the Participating Municipalities Project Sub Total 5) services,lncremental Operating Costs,Training, and consulting services under Part 3 of the Project Sub Total 5) Goods,works,nonconsultingservices,lncremental Operating Costs,Training, and consulting services under Part 3 of the Project Sub Total 6) Emergency Expenditure Sub Total Total 18,417,788.52 18.417,788.52 p s Thapa Magar Bashu Dev Paudyal Account Officer Project Director WASGISP WASGISP Water Sector Governance and Infrasstructure support project Statement of GON Fund & GON Reimbursable Fund FY 2022/23 (NFY 2079/80 ) Note : 2 Amount in NRs Cumulative up to cumulative up to Particulars Previous Year Current Year Previous year Current Year A. 1 GON Fund ex enditure 9,267,226.52 9,267,226.52 Less: unspent balance Less Scurce Transfer from GON fund to IDA Loan Add: Source Transfer from IDA Loan to GON fund Sub total GON fund 9,267,226.52 9,267,226.52 A.2 GON Reimbursable Fund 9,150,562.00 9,150,562.00 Uns ent Balance GON Reimbursable Fund Less Source Transfer from IDA Loan to GON fund Add: Source Transfer from GON fund to IDA Loan Less: Reimbursed to GON Central Account Ka-7-15 4,873,915.00 4,873,915.00 Advance Account Transfer (Ka-7-15) Sub total GON reimbursable fund (IDA Loan) 4,276,647.00 276,647.00 rakash Thapa Magar B ev Paudyal Account Officer Project Director WASGISP WASGISP Water Sector Governance and Infrasstructure support project FY 2022/23 (NFY 2079/80 ) IDA Loan Note:3 Cumulative revious Yea Current Year umulative up to Current Yea Category Cat. No. Nrs. XDR Nrs. XDR Nrs. XDR Nrs. XDR Reimbursement (1)Works, and consulting services under Part 1 of the Project 1 1895239.00 10877.23 1,895,239.00 10,877.23 (2)Goods and non-consulting services under Parts 1 and 2 of the Project 2 2978676.00 17095.33 Total IDA Loan 4873915.00 27972.56 1895239.00 10877.23 Prakash Thapa Magar Bashu Dev Paudyal Account Officer Project Director WASGISP WASGISP Water Sector Governance and Infrasstructure support project IDA Loan STATEMENT OF EXPENDITURE (SOE) FY 2022/23 (NFY 2079/80 ) Category Total (2) Goods and non- (1)Works, and consulting consulting services services under Part 1 of the under Parts 1 and 2 of WA NO Authorization Value date Project the Project Nrs. XDR USD Upto 2021/2022 FY 2022/2023 1 30-Jun-23 1895239 2978676 4873915 27972.56 37205.46 Total of 2022/2023 1895239 2978676 4873915 27972.56 37205.46 Total up to 2022/2023 Prakash Thapa Magar Bashu Dev Paudyal Account Officer Project Director WASGISP WASGISP Water Sector Governance and Infrasstructure support project Statement of Supplementary Account (313011173& 313011174) FY 2022/23 (NFY 2079/80 ) Note to the account :I Budget Release Expenditure Balance Budget NO. Description GON IDA Reimbursible Loan Total GON IDA Reimbursible Loan Total GON IDA Reimbursible Loan 313011173 Recurrent 1,887,520.52 1,887,520.52 21121 Dress 21121 50,000.00 50,000.00 50,000.00 50,000.00 21132 Dearness allowance 21132 54,000.00 54,000.00 54,000.00 54,000.00 21134 Meeting allowance 21134 19,500.00 19,500.00 19,500.00 19,500.00 21212 Contribution pension fund 21212 21213 Contribution insurance fund 21213 9,600.00 9,600.00 9,600.00 9,600.00 22111 Water and Electricity 22111 4,020.00 4,020.00 4,020.00 4,020.00 22112 Communication 22112 25,000.00 25,000.00 25,000.00 25,000.00 22212 Fuel office use 22212 693,631.00 693,631.00 693,631.00 693,631.00 22213 Vehicle maintenance 22213 849,376.00 849,376.00 849,376.00 849,376.00 Machineries operation and 22221 maintenance 22221 27,459.00 27,459.00 27,459.00 27,459.00 22311 Office Supplies 22311 735,412.00 735,412.00 735,412.00 735,412.00 Newspaper printing and Notice 22315 publishing 22315 293,906.00 293,906.00 293,906.00 293,906.00 22413 Contract service 22413 1,008,314.00 1,008,314.00 1,008,314.00 1,008,314.00 22522 Program Expenses 22522 22611 Monitoring and evaluation 22611 514,410.00 514,410.00 514,410.00 514,410.00 22711 miscellaneous expenses 22711 557,163.00 557,163.00 557,163.00 557,163.00 Total Recurrent 6,729,311.52 6,729,311.52 6,729,311.52 6,729,311.52 313011174 Capital Construction/purchase of non- 31112 residential buildings 31112 31122 Machinery and Tools 31122 701,033.00 1,635,741.00 2,336,774.00 701,033.00 1,635,741.00 2,336,774.00 31123 Furniture and Fixtures 31123 571,083.00 1,332,526.00 1,903,609.00 571,083.00 1,903,609.00 31135 Consulting service 31135 900,511.00 5,102,861.00 6,003,372.00 900,511.00 6,003,372.00 Construction of water supply 31156 structures 31156 31159 Other Public Constructon 31159 365,288.00 1,079,434.00 365,288.00 1,444,722.00 Totla Capital 2,537,915.00 9,150,562.00 11,688,477.00 2,537,915.00 11,688,477.00 Total Recurrent & Capital 9,267,226.52 9,150,562.00 18,417,788.52 9,267,226.52 2.00 18,417,788.52 6. Prakash Thapa Magar Bashu Dev Paudyal Account Officer Project Director WASGISP WASGISP Government of Nepal Ministry of Water Supply Department of Water Supply and Sewerage Management Water Sector Governance and Infrastructure Support Project IDA Loan Project Account FY 2022/23 (NFY 2079/80 ) Amount in NRs. Source wise this year Expenditure GON IDA Total Works, and consulting services under Part 1 of the Project Construction/purchase of non-residential 31112 buildings 31112 0.00 0.00 0.00 31135 Consulting service 31135 900511.00 5102861.00 6003372.00 31156 Construction of water supply structures 31156 0.00 0.00 0.00 31159 Other Public Constructon 31159 365288.00 1079434.00 1444722.00 Sub Total 1265799.00 6182295.00 7448094.00 Goods and non-consulting services under Parts 1and 2 of the Project 31122 Machinery and Tools 31122 701033.00 1635741.00 2336774.00 31123 Furniture and Fixtures 31123 571083.00 1332526.00 1903309.00 Sub Total 1272116.00 2968267.00 4240383.00 3 (a) Transfer to the Participating Municipalities c for Training and Incremental Operating Cost Under Parts 1 and 2 of the Project Sub Total 3(b) Training and Incremental Operating Cost under Parts 1 and 2 of the Project 1,887,520.52 1,887,520.52 21121 Dress 21121 50,000.00 50,coo.oo 21132 Dearness allowance 21132 54,000.00 54,coo.oo 21134 Meeting allowance 21134 19,500.00 19,500.00 21212 Contribution pension fund 21212 21213 Contribution insurance fund 21213 9,600.00 9,600.00 22111 Water and Electricity 22111 4,020.00 4,C20.oo 22112 Communication 22112 25,000.00 25,coo.oo 22212 Fuel office use 22212 693,631.00 693,631.00 22213 Vehicle maintenance 22213 849,376.00 849,376.00 22221 Machineries operation and maintenance 22221 27,459.00 27,459.00 22311 Office Supplies 22311 735,412.00 735,412.00 22315 Newspaper printing and Notice publishing 22315 293,906.00 293,906.00 22413 Contract service 22413 1,008,314.00 22522 Program Expenses 22522 22611 Monitoring and evaluation 22611 514,410.00 514,410.00 22711 miscellaneous expenses 22711 557,163.00 557,163.00 Sub Total 6,729, 52 6,729,311.52 4) Transfer to the E Participating Municipalities for works under Part 2 of the Project Sub Total 5) Goods,works,nonconsulting services,lncremental Operating Costs,Training, and consulting services under Part 3 of the Project Sub Total 5) Goods,works,nonconsulting services,lncremental Operating Costs,Training, and consulting services under Part 3 of the Project Sub Total H 6) Emergency Expenditure Sub Total Total 9267226.52 9150562.00 18417788.52 ash Thapa Magar Bashu Dev Paudyal Account Officer Project Director WASGISP WASGISP Water Sector Governance and Infrasstructure support project IDA Loan ka-7-15 Transfer Statement July 16, 2022 to July 16, 2022 (Shrawan 1 ,2079 to Ashad 31, 2080) IDA Loan From Advance Account From IDA Total W.App Deposit Date XDR USD Nrs. XDR USD Nrs. XDR USD Nrs. 1 30-Jun-23 27972.56 37205.46 4873915 27,972.56 37,205.46 4,873,915.00 Total 27,972.56 4,873,915.00 27,972.56 4,873,915.00 rakash Thapa Magar Bashu Dev Paudyal Account Officer Project Director WASGISP WASGISP Category wise IDA Loan in Detail 2 Goo san (1)Works, and consulting services non-consu ting App Value Date Total services under Parts 1 and 2 under Part 1 of the Project of the Pro•ect No. Nrs. XDR Nrs. XDR Nrs. XDR Replenishment 1 30-Jun-23 4,873,915.00 27,972.56 1895239 10877.23 2978676 17095.33 Total 4,873,915.00 27,972.56 1,895,239.00 10,877.23 2,978,676.00 17,095.33 akash Thapa Magar Bashu Dev Paudyal Account Officer ProjectDirector WASGISP WASGISP Water Sector Governance and Infrasstructure support project Statement of Budget release 2079/80 Chalu 313011173 PMU Surkhet Bivag Total GON 6,170,676.12 558,635.40 6,729,311.52 IDA Loan TOTAL 6,170,676.12 558,635.40 6,729,311.52 Pujigat 313011174 PMU Surkhet Bivag Total GON 217,597.00 2,537,915.00 IDA Loan 734,823.00 TOTAL 10,736,057.00 952,420.00 11,688,477.00 Total Chalu+Pujigat PMU Surkhet Bivag Total GON 8,490,994.12 776,232.40 9,267,226.52 IDA Loan 734,823.00 9,150,562.00 TOTAL 16,906,733.12 1,511,055.40 18,417,788.52 6, Prakas Thapa Magar Bashu Dev Paudyal Account Officer Project Director WASGISP WASGISP Water Sector Governance and Infrasstructure support project Reconsiliation Statement of Reimbursable Fund FY 2022/23 (NFY 2079/80) Particulars FCGO Project A/C GON Reimbursable Fund: IDA Loan 4276647.00 4276647.00 Total (NRs) 4276647.00 4276647.00 rakash Thapa Magar Bashu Dev Paudyal Account Officer Project Director WASGISP WASGISP Note of Reconsiliation : F.Y. 2079/80 Adjustment I (Source Project Budget No. Opening Balance This year Budget release This year Replenishment Transfer) Closing Balance Water Sector Governance and Infrasstructure support project 313011173/74 IDA (4,873,915.00) 4,276,647.00 Total 9,150,562.00 (4,873,915.00) 4,276,647.00 This year Reimbursable Budget release 313011173 Chalu 313011174 Pujigat 9,150,562.00 Sub Total 9,150,562.00 Water Sector Governance and Infrastructure Support Project IDA Credit No 71320 NP Notes to the Project Financial Statements-Accounting Policies and Explanatory Notes 1. Project Background Water Sector Governance and Infrastructure Support Project (WaSGISP) which is a collaboration between the Government of Nepal (GON) and World Bank, is one of the major projects of the Department of Water Supply and Sewerage Management (DWSSM). The project is set to be implemented in six municipalities in the Karnali and Sudurpaschim Provinces (former Provinces 6 and 7 respectively) through World Bank's financial assistance (80 million USD out of total 100 million USD project finance structure). The GON has committed to 20 percent counterpart financing for the Project wherein the Government portion shall be included in each fiscal year's budget and the counterpart funding shall be on joint co-financing basis, from the municipality and provincial government of varying magnitude, need, and commitment. The municipalities covered through this project are Birendranagar, Dipayal-Silgadhi and Sharadha Municipality, and Janaki, Joshipur and Bardagoriya Rural Municipalities. The project has four major components and the main objective of the prcject is to strengthen sector institutional capacity for service delivery under federalism and increase access to improved water supply and sanitation services in selected municipalities. Each project component has specific objective as listed below: Component 1: Strengthening of Sector Governance and Institutional Capacity, and Project Management Component 2: Increasing Access to Climate-resilient, Improved and Safe Water Supply and Sanitation (WSS) Component 3: Reducing Climate Hazards impacting WSS infrastructure through Integrated Water Resources Management (IWRM) and Watershed Management Component 4: Contingency Emergency Response (CER) for covering climate-related events and pandemics 4. 1 A financial agreement for the WaSGISP was signed between the Government of Nepal (GON) and World Bank on July 13, 2022, and the project was deemed effective from September 8, 2022. 2. Project Management Agreement The Ministry of Water Supply (MoWS) is the primary coordinating agency for the Project and is responsible for project implementation, management, supervision, and coordination. The six participating municipalities will be responsible for the implementation of Component 2, which has over 75 percent of the project's investments, through the already established Project Implementing Units (PIUS) of each municipality, while the federal PMU under DWSSM is responsible for the implementation of Components 1 and 3. The Project Management Unit (PMU) of WaSGISP has been established in the DWSSM and it is the agency that manages this project. 3. Statement of Compliance Project Financial Statements have been prepared in accordance with Nepal Public Sector Accounting Standard (NPSAS) on cash basis and Government Accounting Guideline 2016 issued by FCGO in the accounting guideline. 4. Fund Flow Mechanism After the annual budget is approved by the Parliament, the Ministry of Finance (MOF) issues an Authorization Letter to the Ministry of Water Supply (MoWS) and then the MoWS releases the budget to DWSSM. DWSSM then issues an Authorization Letter to PMU for the Project Fund (GoN/World Bank). The GON fund and GON reimbursable fund is received from the GON through Treasury Single Account (TSA) system. Annual program and budget are linked with the Line Ministry Budget Information System (LMBIS) and budget is released under this procedure. The PMU on behalf of the Project Implementation Units (PIUS) of all municipalities consolidates the Statement of Expenditures (SOEs) and prepares withdrawal applications (WA) of all units, and submits WAS to World Bank for eligible payments. 2 Participating municipalities then receives disbursements through the District Treasury Controller Office (DTCO) each quarter as conditional grants, based on the SOES pertaining to the previous quarter. 5. Advances Advances provided are treated as expenditure. Budget VS Expenditure of current FY 2022/23 Description GoN IDA Loan Total NRs. Allocation 47100000 352700000 399800000 Released 9267226.52 9150562 18417788.52 Expenditure 9267226.52 9150562 18417788.52 % of expenditure 19.68 2.59 4.61 over budget allocation 6. Sources and Application Project Financial Statement (Main Sheet) reflects the figures as Source and Application. GON fund, GON reimbursable fund, IDA Loan, and Advance account replenishable amount are the main source of the project. Category wise total expenditure are shown in the Application. GON expenditure heads are grouped in the respective donor's category as per Note-I of the project financial statement. 7. Previous Year/Cumulative up to the current FY The Project Financial Statement shows previous year column to show only the comparison between current year and previous year's data. Similarly, Cumulative up to the current FY is shown for cumulative purpose by adding cumulative up to previous year and current year's data. 8. Recognition of Project Expenditure Value Date 3 Actual date of financial transaction (cheque issue date) is considered as value date for the expenditure done by the project in Nepalese Currency. 9. Exchange Rate Applicable The exchange rate applied is 1.33007000 to convert the payment received in USD to XDR (World Bank Currency). 10. Nepalese Fiscal Year FY 2022/23 started from July 16, 2022 and ended on July 16, 2023. The figures mentioned in this Project Financial Statement are within this reporting period. 11. Reporting Currency The reporting currency is in Nepalese Rupees — NRs. (Currency of Nepal). The financial statements for project financed under World Bank (IDA loan) are separately reported showing currencies of financed in Note 3 of the project financial statement. 12. Intended Purpose The Loan has been used exclusively for the intended purpose of the project. 13. Date of Authorization These financial statements have been authorized for issue by the Project Management Unit of Water Sector Governance and Infrastructure Support Project (WaSGISP), DWSSM, Panipokhari, Kathmandu on December 3, 2023. (Mr. Prakash Thapa Magar) (Mr. Bashu Dev Paudyal) Project Director Account Officer 4 FINANCIAL COVENANTS AS PER FINANCING AGREEMENT Not Para Not Product Schedule Description Complied yet Ongoing Remarks/lssue No. Complied due IDA 2 Section The Recipient, through appropriate Loan procedures and transaction mechanisms 7132 NP with the Participating Municipalities, shall ensure that the Participating Municipalities are responsible for: (i) the implementation of the project; (ii) the management of the day-to-day operations , including technical, financial management, procurement, safeguards and monitoring and evaluation associated with their respective activities under the Project; and (iii) the preparation of financial and itnplementation progress reports. IDA 2 Section To facilitate the carrying out of the Loan I.C.I. Project, the Recipient shall make the 7132 NP proceeds of the Financing available to the respective Participating Municipality under the Participation Agreement between the Recipient, through MoWS, and the Participating Municipality, under the terms and conditions approved by the Association, which shall include: (a) the requirement to follow procedures and guidelines set for in the Project Implementation Manual; and (b) the Participating Municipality shall be subject to the terms of this Agreement. IDA 2 Section The Recipient shall ensure that no funds Loan l.c.2. shall be disbursed to any Participating 7132 NP Municipality until and unless the Participating Municipality has : (a) duly and validly signed the Participation Agreement; (b) established Municipality WASH Unit; and (c) established the Project Implementation Unit IDA 2 Section Subject to sub-section C.2 above, the Loan l.c.3. Recipient shall ensure that funds under 7132 NP Part 2 shall be disbursed to the Participating Municipalities periodically, but only upon their having fulfilled the GACs to the satisfaction of the Association. IDA 2 Section Without limitation upon the provisions of Complied Loan III. A Article II of the General Conditions and in 7132 NP accordance with the Disbursement and Financial Information Letter, the Recipient may withdraw the proceeds of the Financing to finance Eligible Expenditures in the amount allocated and, if applicable, up to the parentage set forth against each Category. IDA 2 Section No withdrawal shall be made: Complied Loan 111. B (a) For payments made prior to the 7132 NP Signature Date; or (b) Under Categories (3) (a) and (4) until and unless regulations satisfactory to the Association have been furnished to the Association showing that the Recipient has implemented reporting procedures to ensure appropriate and timely reporting by the Participating Municipalities