Sudan Family Support Program (SFSP) IDA D 7350; TF 0B4259; TF B3907 Republic of the Sudan Special Purpose Project Financial Statements and Independent Auditor’s Report For the period 01 January 2021 to 30 June 2022 Sudan Family Support Program IDA-D7350; TF 0B4259 and TF B3907 CONTENTS Table of Contents Page Statement of Management’s responsibilities for the preparation and approval of the 3 Special Purpose Project Financial Statements for the period 01 January 2021 to 30 June 2022 Independent Auditor’s Report 4 Special Purpose Project Financial Statements for the period 01 January 2021 to 30 June 2022 Statement of Receipts and Payments 7 Statement of Fund Balance 8 Statement of comparison of the budget and actual amount 9 Statement of special designated account 10 Notes to Special Purpose project financial statements 11 Significant Accounting Policies 18 2 Privileged Privileged Information Information Sudan Family Support Program IDA-D7350; TF 0B4259 and TF B3907 Statement of Management’s responsibilities for the preparation and approval of the Special Purpose Project Financial Statements for the period 01 January 2021 to 30 June 2022 3 Privileged Privileged Information Information SARB & Associates CHARTERED ACCOUNTANTS 404, Second Floor, Patparganj Industrial Area, New Delhi - 110092, India Tel: +91-11-45639681 | Email: info@sarb.co.in | Website: www.sarb.co.in INDEPENDENT AUDITOR’S REPORT To The Ministry of Finance and Economic Planning, Khartoum, Republic of Sudan Report on the Special Purpose Project Financial Statements Opinion We have audited the special purpose project financial statements of "Sudan Family Support Program", (the "Project") which comprise the statement of designated account reconciliation, statement of receipts and payments (sources and uses of funds) and statement fund balances (Balance Sheet) for the period 01 January 2021 to 30 June 2022, and a summary of significant accounting policies and other explanatory information (the "special purpose project financial statements"). In our opinion, the accompanying special purpose project financial statements present fairly, in all material respects, cash proceeds and disbursements and uses of funds by project components of the Project for the period ended 30 June 2022, in accordance with International Public Sector Accounting Standard "Financial Reporting Under the Cash Basis of Accounting" (the "IPSAS") issued by the International Public Sector Accounting Standards Board of the International Federation of Accountants, and the World Bank's Financial Management Sector Board's "Guidelines: Annual Financial Reporting and Auditing for World Bank Financed Activities" (the "WB Guidelines") 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 Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Project in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants (IESBA Code) together with the ethical requirements that are relevant to our audit of the special purpose project financial statements in Commonwealth of Dominica, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Other matters There is lying unutilized disbursements at various PSPs amounting to Euro 3,341,874.48 (SDG 1,739,502,836) as at 30-June-2022. (Refer section 2.7.3 of the Management Letter). However, this information was not disclosed in the financial statements. Our report is not qualified in this respect. 4 Privileged Privileged Information Information SARB & Associates CHARTERED ACCOUNTANTS 404, Second Floor, Patparganj Industrial Area, New Delhi - 110092, India Tel: +91-11-45639681 | Email: info@sarb.co.in | Website: www.sarb.co.in Further, we draw attention to Note 5.1 (b) to the special purpose project financial statements which describe the basis of accounting. These special purpose project financial statements were prepared for complying with the appropriate World Bank Guidelines and financing agreement requirements. The special purpose project financial statements are prepared to assist the Project to comply with the requirements of the World Bank. As a result, the special purpose project financial statements may not be suitable for another purpose. Responsibilities of Management and Those Charged with Governance for the special purpose project financial statements. Management is responsible for the preparation and fair presentation of the special purpose project financial statements in accordance with International Public Sector Accounting Standard "Financial Reporting Under the Cash Basis of Accounting" (the "IPSAS") issued by the International Public Accounting Standards Board of the International Federation of Accountants, and the World Bank's Financial Management Sector Board's "Guidelines: Annual Financial Reporting and Auditing for World Bank Financed Activities" (the "WB Guidelines"), and for such internal control as management determines is necessary to enable the preparation of the special purpose project financial statements that are free from material misstatement, whether due to fraud or error. Auditor's responsibilities for the audit of the special purpose project financial statements Our objectives are to obtain reasonable assurance about whether the special purpose project 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 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 the special purpose project financial statements. 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 special purpose project financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. 5 Privileged Privileged Information Information SARB & Associates CHARTERED ACCOUNTANTS 404, Second Floor, Patparganj Industrial Area, New Delhi - 110092, India Tel: +91-11-45639681 | Email: info@sarb.co.in | Website: www.sarb.co.in  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 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 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 auditor's report to the related disclosures in the special purpose project 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 auditor's 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 special purpose project financial statements, including the disclosures, and whether the special purpose project financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Bhushan Agrawal, Partner Membership Number: 408037 SARB & Associates CHARTERED ACCOUNTANTS Firm Registration Number: 017437C Date: 18/June/2023 Place: Delhi UDIN: 23408037BGXBQD1463 6 Privileged Privileged Information Information 7 Privileged Privileged Information Information 8 Privileged Privileged Information Information 9 Privileged Privileged Information Information 10 Privileged Privileged Information Information 11 Privileged Privileged Information Information 12 Privileged Privileged Information Information 13 Privileged Privileged Information Information 14 Privileged Privileged Information Information 15 Privileged Privileged Information Information 16 Privileged Privileged Information Information 17 Privileged Privileged Information Information 18 Privileged Privileged Information Information 19 Privileged Privileged Information Information 20 Privileged Privileged Information Information 21 Privileged Privileged Information Information Sudan Family Support Program (SFSP) IDA D 7350; TF 0B4259; TF B3907 Republic of the Sudan Additional Information to the Special purpose Project Financial Statements For the period 01 January 2021 to 30 June 2022 22 Privileged Privileged Information Information CONTENTS Table of Contents Page Independent Auditor’s Report on Internal Controls 24 Independent Auditor’s Report on Compliance 26 Independent Auditor’s Report on Paid Application for Withdrawal 27 Independent Auditor’s Report on Designated Account Statement 28 Summary of Main Procedures Performed 29 23 Privileged Privileged Information Information SARB & Associates CHARTERED ACCOUNTANTS 404, Second Floor, Patparganj Industrial Area, New Delhi - 110092, India Tel: +91-11-45639681 | Email: info@sarb.co.in | Website: www.sarb.co.in Independent Auditors’ Report on Internal Controls To Ministry of Finance and Economic Planning, Khartoum, Republic of Sudan Sudan Family Support Program, IDA D7350, TF 0B4259 and TF B3907 We have completed our audit of the financial resources managed during the period 01 January 2021 to 30 June 2022 under the Sudan Family Support Program, IDA D7350, TF 0B4259 and TF B3907. Our responsibility is to express an opinion on the Project’s Internal Control based on our audit. We conducted our audit in accordance with International Standards on Auditing, the World Bank Guidelines on the Project and the Terms of Reference for the engagement. International Standards on Auditing and World Bank Guidelines require that we plan and perform the audit to obtain reasonable assurance as to whether the financial statements are free of material misstatement. In planning and performing our audit, we considered the Project’s internal control structure in order to determine our auditing procedures for the purpose of expressing our opinion on the Statement of Sources and Uses of Funds and not to provide assurance on the internal control structure. The project’s management is responsible for establishing and maintaining an adequate internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of control procedures. The objectives of an internal control structure are to provide management with reasonable but not absolute assurance that assets are safeguarded against losses from non-authorized uses or disposition and that transactions are executed according to management authorization and are adequately recorded in order to permit preparation of the financial statements in conformity with International Financial Reporting Standards and the project Agreement. Because of inherent limitations in any internal control structure, errors or irregularities may nevertheless occur and not be detected. For the purpose of this report, we have classified significant policies and procedures relative to the Project’s internal control structure into the entity level controls, which is the overall general control environment and specific control procedures which relates in various systems and application controls. These included controls over procurement of goods and services, receipts and disbursements, cashbook and bank account maintenance, the maintenance of proper accounting records and timely reporting of management and financial information. 24 Privileged Privileged Information Information SARB & Associates CHARTERED ACCOUNTANTS 404, Second Floor, Patparganj Industrial Area, New Delhi - 110092, India Tel: +91-11-45639681 | Email: info@sarb.co.in | Website: www.sarb.co.in Independent Auditors’ Report on Internal Controls (Cont’d) For each of the categories listed above, we obtained an understanding of the design and implementation of controls and the relevant policies and procedures and guidelines established by management in respect of the various controls in order to determine whether they have functioned efficiently during the period under review and assess the control risks. In our opinion, the Project's internal controls which existed during the period 01 January 2021 to 30 June 2022, in all material respects, except the internal control deficiencies identified and included in our internal control memorandum (management letter), were adequately designed for the purpose of the Project and operated in an effective manner, based on the assessment criteria above. This audit involved a historic evaluation of the effectiveness of internal control at a specific point of time. Thus, this audit does not provide assurance for future periods due to the risk that internal control may become inappropriate because of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate. Bhushan Agrawal, Partner Membership Number: 408037 SARB & Associates CHARTERED ACCOUNTANTS Firm Registration Number: 017437C Date: 18/June/2023 Place: Delhi UDIN: 23408037BGXBQD1463 25 Privileged Privileged Information Information SARB & Associates CHARTERED ACCOUNTANTS 404, Second Floor, Patparganj Industrial Area, New Delhi - 110092, India Tel: +91-11-45639681 | Email: info@sarb.co.in | Website: www.sarb.co.in Independent Auditors’ Report on Compliance To Ministry of Finance and Economic Planning, Khartoum, Republic of Sudan Sudan Family Support Program, IDA D7350, TF 0B4259 and TF B3907 We have completed our audit of the financial resources managed during the period 01 January 2021 to 30 June 2022 under the Sudan Family Support Program, IDA D7350, TF 0B4259 and TF B3907 (the project). Our responsibility is to express an opinion on the Project’s compliance with the terms of the Project Agreement based on our audit. We conducted our audit in accordance with International Standards on Auditing, the World Bank Guidelines on the Project and the Terms of Reference for the engagement. International Standards on Auditing and World Bank Guidelines require that we plan and perform the audit to obtain reasonable assurance about whether the Project has complied with the terms of the Project Agreements. In our opinion, the project, except as identified and reported in the internal control memorandum (management letter), has in all material respects complied with the terms of the Project agreements for the period 01 January 2021 to 30 June 2022. Bhushan Agrawal, Partner Membership Number: 408037 SARB & Associates CHARTERED ACCOUNTANTS Firm Registration Number: 017437C Date: 18/June/2023 Place: Delhi UDIN: 23408037BGXBQD1463 26 Privileged Privileged Information Information SARB & Associates CHARTERED ACCOUNTANTS 404, Second Floor, Patparganj Industrial Area, New Delhi - 110092, India Tel: +91-11-45639681 | Email: info@sarb.co.in | Website: www.sarb.co.in Independent Auditors’ Report on Paid Applications for Withdrawal To Ministry of Finance and Economic Planning, Khartoum, Republic of Sudan Sudan Family Support Program, IDA D7350, TF 0B4259 and TF B3907 We have completed our audit of the financial resources managed during the period 01 January 2021 to 30 June 2022 under the Sudan Family Support Program, IDA D7350, TF 0B4259 and TF B3907 (the project). Our responsibility is to express an opinion on the Project’s Paid Applications for Withdrawal based on our audit. We conducted our audit in accordance with International Standards on Auditing, the World Bank Guidelines on the Project and the Terms of Reference for the engagement. International Standards on Auditing and World Bank Guidelines require that we plan and perform the audit to obtain reasonable assurance about whether the Project has complied with the terms of the Project Agreements. As part of obtaining reasonable assurance as to whether the financial statements are free of material misstatement, we performed tests on the expenditure included in the Paid Applications for Withdrawal. These included testing eligibility, compliance with applicable Project Agreements and internal control procedures. In our opinion, the expenditures included in the Paid Applications for Withdrawal are eligible, the funds have been used only for Project purposes in accordance with the requirements established in the Project Agreement, and the internal control procedures used in the preparation of the Paid Applications for Withdrawal are adequate. Bhushan Agrawal, Partner Membership Number: 408037 SARB & Associates CHARTERED ACCOUNTANTS Firm Registration Number: 017437C Date: 18/June/2023 Place: Delhi UDIN: 23408037BGXBQD1463 27 Privileged Privileged Information Information SARB & Associates CHARTERED ACCOUNTANTS 404, Second Floor, Patparganj Industrial Area, New Delhi - 110092, India Tel: +91-11-45639681 | Email: info@sarb.co.in | Website: www.sarb.co.in Independent Auditors’ Report on the Designated Account Statement To Ministry of Finance and Economic Planning, Khartoum, Republic of Sudan Sudan Family Support Program, IDA D7350, TF 0B4259 and TF B3907 We have audited the accompanying Designated Account for the period 01 January 2021 to 30 June 2022 under the Sudan Family Support Program, IDA D7350, TF 0B4259 and TF B3907 (the project). Our responsibility is to express an opinion on the Project’s Special Account based on our audit. We conducted our audit in accordance with International Standards on Auditing, the World Bank Guidelines on the Project and the Terms of Reference for the engagement. Those standards and the World Bank Guidelines require that we plan and perform the audit to obtain reasonable assurance as to whether the Project has complied with the terms of the Agreement. An audit includes examining appropriate evidence on a test basis. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the Designated Account Statement presents fairly in all material respects, the financial position of the Designated Account of Sudan Family Support Program, IDA D7350, TF 0B4259 and TF B3907 as of 30 June 2022 and of the Sources and Uses of Funds for the period 01 January 2021 to 30 June 2022. Bhushan Agrawal, Partner Membership Number: 408037 SARB & Associates CHARTERED ACCOUNTANTS Firm Registration Number: 017437C Date: 18/June/2023 Place: Delhi UDIN: 23408037BGXBQD1463 28 Privileged Privileged Information Information SARB & Associates CHARTERED ACCOUNTANTS 404, Second Floor, Patparganj Industrial Area, New Delhi - 110092, India Tel: +91-11-45639681 | Email: info@sarb.co.in | Website: www.sarb.co.in Summary of Main Audit Procedures Performed Sudan Family Support Program, IDA D7350, TF 0B4259 and TF B3907 1. Planning a) We performed the followings:  Understanding the project and its environment by going through Project Appraisal Document, Operational Manual; and World Bank Procurement Guidelines.  Understanding the nature and characteristics of internal controls relevant to the audit and components of internal controls.  Assessed the risk of material misstatement at both financial statements level and assertion level. b) Conducted entrance and exit meetings with senior staff and management of the Project Coordinating Unit. c) Development of overall audit strategy and audit plan, determining the nature, timing and extent of the audit procedures for each class of transactions, accounts and disclosures. d) We held interviews with the Project Coordinator / Manager, Senior Financial Management Analyst, Procurement Specialist, Payment Manager, and M&E Officer, PIU. 2. Evaluating Internal Control We performed the test of controls on the following areas: a) Compliance with applicable legislation b) Receipt and disbursements of project funds c) Designated and Project Bank account reconciliations d) Safeguarding of assets e) Data retention and supporting documentation f) Procurement of goods, works and services 3. Substantive audit procedures performed We performed the following substantive audit procedures in order to verify the existence, accuracy and completeness of the following: I. Cash and bank balances a) Confirmed bank balances as at 30 June 2022. 29 Privileged Privileged Information Information SARB & Associates CHARTERED ACCOUNTANTS 404, Second Floor, Patparganj Industrial Area, New Delhi - 110092, India Tel: +91-11-45639681 | Email: info@sarb.co.in | Website: www.sarb.co.in b) Obtained copies of bank reconciliation statements for all bank accounts at 30 June 2022 and performed the following audit procedures:  We tested each bank reconciliation for mathematical accuracy;  Agreed general ledger balance as per reconciliation statement to general ledger for each bank account; and  Agreed bank balance shown on the bank reconciliation statement to the bank statement. II. Verification of funds received from the World Bank a) Examined credit advices for funds received during the period under review. b) Examined monthly bank statements to verify whether amounts received were credited to the appropriate account and included in the bank balance. c) Confirmed funds disbursed by the World Bank. d) Trace the amount received to the bank statement. III. Data analysis and verification of expenditure a) Collection of documents and information; b) Understanding internal controls and testing them so as to understand the deficiencies, dysfunction and ineffective internal control measures and management controls at the project; c) Conducting a reconciliation, review of documents, review of information available in records, verification of information with beneficiaries (on sample basis); d) Interviewing of the project's staff; e) Application of Computer-assisted audit techniques (CAAT) for data analysis; f) The items examined were agreed to invoices, receipts and forms of external documentation except as disclosed in the Report on Internal Controls Memorandum (Management Letter). IV. Verification of the procurement process a) We examined the World Bank Procurement Guidelines. b) Tested the procurement procedures for contracts tendered during the period. V. Follow up on the status of findings of previous audit reports Since this was the first audit for the project, the related procedures were not appliable. 30 Privileged Privileged Information Information