EMPLOYMENT SUPPORT PROJECT FOR SYRIANS UNDER TEMPORARY PROTECTION AND TURKISH CITIZENS Implemented by TURKISH LABOR AGENCY (ISKUR) Financed Under International Bank of Reconstruction and Development Grant Agreement Numbered TF-AS478 As of December 31, 2022 and For the Year Then Ended Prepared by Meryem KOSAR Mervenur TOZLUYURT Treasury Controller Junior Treasury Controller Report's Number 86/5-10/9 June 6, 2023 REPUBLIC OF TORKIYE MINISTRY OF TREASURY AND FINANCE Board of Treasury Controllers CONTENTS EX ECUTIVE SUM MAR Y .................................................................................................... ............ ................. i A. Project Sum m ar y ......................................................................................................................................... 1 B. Ob ject ives of Audit ...................................................................................................................................... 1 C. Scope of Audit ............................................................................................................................................... 1 D. Audit Res ul ts ................................................................................................................................................. 2 E. M anagem ent Recom m endation ............................................................................................................. 2 IN DEPENDENT AUD ITO R'S SREPORT T............................................................................................................ 4 Opinion n............................................................................................................................................................. 4 Basis for rOpinion .......................................................................................................................................... 4 Em phasis of M atter in the Financial Statem ent ............................................................................... 5 G oin g Concern ............................................................................................................................................... 5 Responsibilities of Management and Those Charged with Governance or other appropriate term s for the Financial Statem ents ............................................................................. 5 Auditor's Responsibilities for the Audit of the Financial Statem ents...................................... 5 ANNEX I: FinancialStatem entsoftheProject ........................................................................................... 7 i EXECUTIVE SUMMARY REPUBLIC OF TORKIYE MINISTRY OF TREASURY AND FINANCE Board of Treasury Controllers EXECUTIVE SUMMARY A. Project Summary Grant Agreement numbered TF-A5478 of "Employment Support Project for Syrians under Temporary Protection and Turkish Citizens" was signed between Republic of Tirkiye and International Bank of Reconstruction and Development (IBRD) on December 21, 2017. Employment Support Project for Syrians under Temporary Protection (SuTP) and Turkish Citizens has been carried out within the scope of European Union Facility for Refugees in Tarkiye (EU FRIT/FACILITY) by Ministry of Labor and Social Security (MoLSS) and ISKUR in order to improve the employability of SuTP and Turkish citizens in the places selected from the regions where SuTP live intensively. Grant Agreement's amount, numbered TF-A5478, signed between IBRD and Republic of Tirkiye (represented by MoLSS) is E 45.450.000 (forty five million and four hundred fifty thousand Euro). In terms of project, in 2022, C 2.191.045,42 was disbursed from ISKUR's portion. B. Objectives of Audit The objectives of our audit are; a) To give an opinion on whether the financial statements, prepared as of December 31, 2022, and for the year then ended, present fairly, in all material respects, the financial position of the Project in accordance with the cash receipts and disbursements basis of accounting, b) To determine, as of December 31, 2022, whether ISKUR has complied, in all material respects, with the rules and procedures of the Grant Agreement numbered TF- A5478, c) To examine whether adequate supporting documentation has been maintained to support expenditures incurred and to evaluate eligibility of these expenditures for financing under the IBRD Grant Agreement numbered TF-A5478. C. Scope of Audit We have performed an audit of financial statements of the Employment Support Project for Syrians under Temporary Protection and Turkish Citizens as of December 31, 2022 in accordance with the cash receipts and disbursements basis of accounting. We have also performed a compliance audit on whether Project activities are in line with Grant Agreement. 1 REPUBLIC OF TORKYE MINISTRY OF TREASURY AND FINANCE Board of Treasury Controllers Our audit was conducted in accordance with the International Standards on Auditing published by International Federation of Accountants applicable to the audit of financial statements and compliance auditing. There was no limitation in our scope for the Project's audit. D. Audit Results For the financial statements of project; our audit resulted with an unmodified opinion. As of December 31, 2022, ISKUR has complied, in all material respects, with the rules and procedures of the Grant Agreement numbered TF-A5478. In addition, with respect to expenditures, adequate supporting documentation has been maintained to support expenditures incurred from Special Account; and these expenditures are eligible for financing under the IBRD Grant Agreement numbered TF- A5478. E. Management Recommendation Since we have not identified any findings during our audit, we have not issued a Management Letter. 2 INDEPENDENT AUDITOR'S REPORT & FINANCIAL STATEMENTS OF THE PROJECT REPUBLIC OF TORKIYE MINISTRY OF TREASURY AND FINANCE Board of Treasury Controllers INDEPENDENT AUDITOR'S REPORT TO TURKISH LABOR AGENCY ANKARA Opinion We have audited the Statement of Sources and Uses of Funds, Statement of Cumulative Investments, Statement of Requests for Reimbursement (SOE Statement) and Statement of Special Account of the "Employment Support Project for Syrians Under Temporary Protection and Turkish Citizens Project" as of December 31, 2022, and for the period then ended, and a summary of significant accounting policies and other explanatory information. The financial statements have been prepared by Turkish Labor Agency (ISKUR) based on financial reporting provisions of the Grant Agreement Numbered TF-A5478. In our opinion; a) The accompanying Statement of Sources and Uses of Funds, Statement of Cumulative Investments, Statement of Requests for Reimbursement (SOE Statement) and Statement of Special Account present fairly, in all material respects, the financial position and cash flows of the "Employment Support Project for Syrians Under Temporary Protection and Turkish Citizens Project" as of December 31, 2022 and for the period then ended in accordance with the provisions of the Grant Agreement Numbered TF-A5478. b) ISKUR, as of December 31, 2022 has complied with, in all material respects, the requirements of the Grant Agreement Numbered TF-A5478. c) With respect to SOEs, adequate supporting documentation has been maintained to support claims to the World Bank for reimbursement of expenditures incurred, and these expenditures are eligible for financing under the Grant Agreement Numbered TF-A5478. Basis for 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 this report. We are independent of the ISKUR within the meaning of "IFAC Code of Ethics for Professional Accountants" and have fulfilled our other responsibilities under those ethical requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. 4 REPUBLIC OF TORKiYE MINISTRY OF TREASURY AND FINANCE Board of Treasury Controllers Emphasis of Matter in the Financial Statement Without modifying our opinion, we draw attention to Note 2 to the financial statements, which describe the basis of accounting. The financial statements are prepared to assist ISKUR to comply with the financial reporting provisions of the contract referred to above. As a result, the financial statements may not be suitable for another purpose. Going Concern The Projects financial statements have not been prepared using the going concern basis of accounting. The closing date for this Project is December 30, 2022. However, in accordance with the current practice of the World Bank, further disbursements from the Grant have been made for withdrawal applications received by the World Bank by close of business on April 30, 2023 Responsibilities of Management and Those Charged with Governance or other appropriate terms for the Financial Statements ISKUR is responsible for the preparation and fair presentation of these financial statements in accordance with Grant Agreement Numbered TF-A5478, 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. Those charged with governance are responsible for overseeing the ISKUR's financial reporting process. Auditor's Responsibilities for the Audit of the Financial Statements The objectives of our audit 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 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 planning and performance of the audit. We also: * Identify and assess the risks of material misstatement 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 for one resulting from error, as fraud may involve collusion, 5 REPUBLIC OF TORKiYE MINISTRY OF TREASURY AND FINANCE Board of Treasury Controllers 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 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 achieves fair presentation. We are required to 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. We are also required to provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. Ahmet TUTAL Chairman of Board of Treasury Controllers Aif Bi BYACIOLl (Audit Partner) Vice Chairman Merye i OS ' Mervenur TOZLUYURT Treasu Controller Junior Treasury Controller Date: 06/06/2023 Address: Ministry of Treasury and Finance Board of Treasury Controllers 06490, Emek, ANKARA/TORKiYE 6 ANNEX I: Financial Statements of the Project °о°о °о °о оо� й о о о о о о Р О М О О О i ry 3 С у О О О О О О О О О а О О О О О О О � М О О i _ �у �- О О О О О Р ���. О � � _ О О О О О -�, �'� � О О О О О �р О и О О �О О . ��'* г "' N �D �°с N - �``* LJ � О д м б � �.,..._� Е _ _•�-�"',�1 � У б � - Е 9 = С С .� г С � V г о i ё гр т Ё ш � °о °о °о °о г а � а U fглl о о о о О иQ' �F �.�., г - м Uzp т о. � и� i р" - � й ��2Qг� О а С � } и � р � � р+� aгs.S - z2g0�-' <�[1иС � ос у F w О О °о о° °о ° � � � � °о i ё °о п� О С С�� 1' о о оо о с т � о - Ф�{:1 С� j � � О _1 Т� о О , Е Z Z г ш О � г n n О и - �< ry С О �i С'h � N й О Г�1 �' р ,. а �г . л O�z��v v ��?� .., }FCU,_ _ RF' � �=М �,. г�"'`�''й� - U у� т � �С� [�.� - °о°о°оос`о�п °о v v �� SCF �,Vj � оооос о � � ° v v v°о Е� U р <` п п т ? у7 <ш в, } г _ о. о�о �"' CzC О2 ° - � _ r i � 0. < С� 2 а а � и Е г _ и� � >. О � а ш ' д. v v �о - - �о r У 0. � ..1 Е � � � л а О а` L•1 � `о ю 2' � ы v � ? й � �о � `� 4`о. � С �р � � а б N и � и � б а G О V � С С С J�j г д'_ С __ \ i ° и� � Е ° б [�к. о `о ' = '' � ? � г Ё � � и 'S г pv_ � у� '' � �ш ;.� � .� � �ЁЕΡрΡ)`�_';��� 9и 4г- r�9 � YiSi С й и р ` ¢ � ,% � р °�' � � �� t r �.�'с��-�У', �а е� �`' W$ $�_ � w й 'о г � и �(7(� т� � `о � о о г о `� `� 1QФU Е =U С.iЙ F UU � ооо о-����..е о и �о� _ е о о о о-'r о и � о� " о оооо •°� о д ' аоо � � Р Р - О О О Р - F � °°- и � м а О _ М � ° ° _�� � О � 00 О�� N CJ � ' И .-..... F � У ц Я �р �i ооо io°= о о и Е �о�� �,й ., v о, о v r �� о v, р о �} о rioowo:г о� о ° ° й ' соо ��г� > гР-. о Р. й о �en• v°о� _'л о ' о = о мооо -- � i и О Й .... .... - и F ы с о ❑ U orиv� � и о е _ е _ о от-оо Г. о� о о о ё�ом �° - о=акiо �� r - о о - --� - м ov i� � м о е �боо�та _. е и Я °-`°. . -� `° °о ° й�iо;и•%° г � v °ооо°оо --о ° и ооо°�v� � Н � и � '"'�- _ �о � и и - ы . Q � О� У Q .• F м м � е - „� ' л � U �` i' _ ----- и `l � � F 9 С .� -..._.......-;.. Q О г.. " С '.� г о � 1O V г °' Я �F Г~°~-.. _ z o а ц' - �"'U�"' ❑ Гi йо°о �о°й v а °о °°. а �о `� а �~+ � Q[V�1 и } ш ооа оР rn Р- о- vi �' -ои г ё � V ZF F н м й °O п '°м ,и-^оа` .м - с,� с,� � ш п °` й ci а �° о � rn и�а � о е м �i,a, _ �, м ., . � О а й - - = ,-� ^' Е - � и --.-} О °' z > ° и Е 00 Z ❑ р � а й ш с zsEë>.. с> z:G�"'Ё�О ? п °z��'^.=�iй v о е ёымс�" е ОсСа ...�� м � �т �� й Р а а- _'• а QFCO�гs=i л п�r; т -^ й 'O йо°оо�.т='O г F Е �л � х г� � м вi аб •,��аб Е � ��� � U ^ °°пл оё о ° �ovv•'=:°о о,�игv� � �тп аа ы ё -м.о�,�ё г�[г. п п v м z F � V о А � Е йрй ш `?_ � У шу,0� F, _� т \�=х�йа � о ё и �п°v�� е 2 р F ра„ �> 'л ��� v � Й� о � � _ ;� F'�ш и с т � т v о о и - а°��r� о t�. � оо оо ы ri .� � � w ао с� V г- �i rn- F�� п � r ri и м -� и ша �а о ` а F й о Е О � � � r О .� а! С 0 � � .р е ш z � й ` с С G " ?i О ,У' � � w `о � г � д и Q �r � 3 � О � V � � у а С г £ i =с°'. о U л _ `�и р" о0 а 'д й й F � � '' � � .g с - Ии- } и � � л3 ц'.�J =с '° 5 е ° v' и о] и ы Ё и 4 �g цс��'i' U � с и ги � 'г , д !- Z о.Е � ё� i�= о ы V Е Z гл_с о• g V� s��а �� �i ° Е Z � � ю и� а ш й � г � г� � �� с Е " К � f- Z 'с° с�.с tл7 й � г i� С i о � с � � Ш Z` .ё � г°� и ю J ? °' � ��'��•- Q � Ё w Ш = Z у°о о о ю рΡЕ-¢- с у � У' �� o Q о � � " O U п V O p .- .-. � � � �U гv Е = S н U- �т �Е � � _ �--� `'�• � � .о � ` �_"`_---�-.-_ � � О У` Z ... .. .fV fV N гJ ....�, . �`*�,..,. i N N N N �,°\ ^ _. > ���. V� �О � N --_ �"-�.. О � IO О и о ^ ,.. ,.,. и R О О �,., 'У С � N �1 r r N м ` м а, и оо ° й � й о L и ry с� г� а� и °J t� оо [� а � С N 7 Q� И О � �0 И .+ й '7 и и г < ^ г � V � С � С О и О и и Е и Е U � � � � г а а и - t С о � � � � ♦ F �е Е о а �_ Z С С < > > г Ё Ё �" � < < U г ' . С� о о� �" �� r r г� м м о м � С� м а� и оо _ N ° й Z<х 9 =Q й�eNy'т м �а :а м J Z а � о r oo r� N о о O0 s7 �1 r г� � с� и � . - � ,и � '�1 �1 со и ,.. Г r .� �. � v' � р � r � ^ _ �- -_ ,. � _ � и 1 6. W " й й '7 ���Й О..,Г й й 7 � ,• • ,ио t` ;П � � ! 7 и �О рш �>, �F °'и и.fl од оомг� оо � о•= �_'� од о о•`-' `-'� о у oNO, � F"' �'! и V С L %� q аил г... М N О� N r С L L R аив 4.. С L L � [� Z г и t и и и О �^ -у � О г.� и и О � и и й О й м < и СС <_ � и и ед о,.-, и о о r �д м . и и од О и � и и ОЛ о..-, и м ш о � ^ v �о од од ° Ci " •°, �' " � � од ос Е U `q �° -о од ос ° U �?, •о ,.: ОС��'�о.р �°о у у•° �иу °о у_у•° �ис` °о у у•� �NC`, 7� � Z и Ci 7 7 i'ь. L �J 7 7 s�.. ' i С% 7 7 L L r О 9� � и и L еа �р и и F., R R и и� R �р � �' ,и Z R s: д г�i с а � у г i а с i у г�i с с� ь у '_' Z tV � '° й й G. й й а й й б о�<`о�- е о о_ о �' Г" � С� N_ й ь. �- О� оо ы � L О . � ��D �� И м bЛ и и О l� 7 7+°', b0 и и О � й� �О Лр г � С.� � �oN Nи :7. С� � й С.� = й .°`f Z Е' О Ё о й у,eui vi с� г�i �: � � й �.°J о й у.°' оо\ � �j и и р N 7 N О� ,'v� •°: и и р и О м Gr� � и С р� С L 7���.1� С р� С L С рр С L СС • � �° и°' и ��. �° и� й.Е и у �^ Gz1 � р д Е и .. .., Е и .. Е и � г � °-- о° �а i " о° са L о° �а у Е- � р о � � а�... `�` � � а�.. с � а г.. yi < 1' С .- о а° с � о а° ' о 1° СС i �р '. � ^ _ и � и � ... ,0 и � - F' i �� О й�� С� О w�� О й� ш г С7.У 'D = • > � F- �; L 'с `� С ^ у с ьи. д " й С и и р 1 и R о,`" и гА �] и С7 � =] С ,.д и ,.,нма Е � Z �O а`+ ........ о о о о СС и " '" д '1� С� Z' '1� д s] `о Е :.+ ��+ �+ с Е F д � Е � й_ _й й_ _л о � 0 � х о N N и и а е � 0. _ о N N N N о � `л N с°� °ry °и "� _ < и СС и _ W 7 R аил r' � �' Е е0 О О,,, � N ао. � Е са < � а� r � N N � сС а� �; � � < й г < г F T.R. THE MINISTRY OF LABOR AND SOCIAL SECURITY GENERAL DIRECTORATE OF TURKISH EMPLOYMENT AGENCY qP[,()VMENT SUPPORT PROJECT FOR SYRIANS UNDER TEMPORARY PROTECTION AND TURKISH CITIZEN GRANT NO. TFOA5478 SPECIAL ACCOUNT STATEMENT ACCOUNT NO:94 14 32 008 AT CENTRAL BANK AS OF DECEMBER 31,2022 AND FOR THE YEAR THEN ENDED (In EURO's) Note Opeiling Balance 2.392.345,94 Reimbursements to SA a) Advance 6 b)Recovery of Advance 6 (7.728.324,39) c) SOE Procedure 6 7.728.324,39 Available Funds 2.392.345,94 Payrnents Made for Expenditures 2.191.045,42 Bank fees charged 0,00 Transfer of Interest and Exchange 0,00 Difference Income to Trust Account Total Project I nvestments 2.191.045,42 Closing Balance 201.300,52 GENERAL DIRECTORATE OF TURKISH EMPLOYMENT AGENCY EMPLOYMENT SUPPORT PROJECT FOR SYRIANS UNDER TEMPORARY PROTECTION AND TURKISH CITIZENS NR. TF0A5478 NOTES RELATED TO PROJECT FINANCIAL STATEMENTS AS OF THE PERIOD ENDING ON 31.12.2022 1. OBJECTIVES AND STRUCTURE OF THE PROJECT Employment Project for Syrians under Temporary Protection (SuTP) and Turkish Citizens (the Project) has been carried out within the scope of European Union Facility for Refugees in Turkey (EU FRiT/FACILITY) by Ministry of Labor and Social Security (MoLSS) and ISKUR (Turkish Employment Agency) in order to improve the employability of SuTP and Turkish citizens in the places selected from the regions where Syrians under Temporary Protection (SuTP) live intensively. The entire project is funded with a grant of 45.450.000,00 Euros provided according to the Grant Agreement signed between Republic of Turkey and International Bank of Reconstruction and Development (IBRD) on 21 December 2017 and entering into force on 21 March 2018. The closing date of the project was extended by 1 year and updated to 31.12.2022. With the letter received from the World Bank on 22.12.2022, the project closing date was reported as 30 April 2023. Beneficiaries of the Project The main beneficiaries of the Project will be working age (15 - 64 ages) SuTP and Turkish citizens living in the selected regions where SuTP live intensively. The companies and public sector employers, which will benefit from subsidised labour force, will also be the indirect beneficiaries of the Project. Communities where project beneficiaries live will be indirect beneficiaries of the project via improvements in public services and infrastructure through improvements in iKUR's services and labour market transition programmes which will be conducted within the scope of the project. In addition, institutional support will be given to Ministry of Labor and Social Security (MoLSS) and 15KUR. The Project has two main components: Component 1 - Employment Services and Active Labour Market Programmes (ALMP) Component 2 - Institutional Support for Employment Services and ALMPs Component 1 includes language training, labour market transition programmes, skills training courses, applied training programmes for SuTP, various active labour market measures such as covering work permit fees of project beneficiaries who are employed, and support for employment services such as evaluation, counselling and matching. Component 2 will give institutional support to I5KUR and Ministry of Labor and Social Security (MoLSS) for the services which will be rendered for SuTP. This support includes human resources support for project coordination and implementation, IT support, support for communication, monitoring and evaluation and activities such as improvement of physical infrastructure. Budget of the Project and Financing The entire project will be funded by a Grant of 50.000.000,00 Euros provided by European Union within the scope of EU FACILITY which is a special fund for supporting Turkish Government during the socio-economic integration of SuTP. The Grant in question will be managed as a composite Trust Fund with sections run by the Recipient Ministry of Labor and Social Security (MoLSS) and the World Bank (the Bank). In accordance with the Administrative Agreement for Trust Fund, total amount of usable fund is 48.000.000,00 Euros, after deducing an administrative fee of 4 per cent for the Bank. The Recipient-executed Trust fund (RETF) will amount to 45.450.000,00 Euros and finance the activities stated in the Grant Agreement and the Project Appraisal Document (PAD). 44.250.000,00 Euros of the Grant amount is allocated to I5KUR by the Recipient as per the Subsidiary Agreement stipulated in the Grant Agreement. 1.200.000,00 Euros is allocated to the General Directorate of International Labor Force (UIGM). 2. MAIN ACCOUNTING POLICIES (a) Transactions related to the project are accounted on cash basis. On this basis, funds are recorded as resource when they are received, and recorded as expenditure when they are used. (b) Eligible expenditures can be made through designated account (advance) in accordance with the disbursement letter. For withdrawal with advance method, a Designated Account in Euro currency (with upper-limit of 5.000.000,00 Euros and managed by Turkish Employment Agency PUB (i5KUR-PUB)) was opened in Halk Bank which is one of the commercial banks acceptable by the World Bank. However, this upper limit was 2 increased to 10.000.000,00 Euros when the project contract was amended and the project was extended on 31.12.2022. Advance balance ceiling for the account managed by I$KURPUB was determined as Euro in the Disbursement Letter. (c) Transactions related to the project are recorded as and followed in terms of EURO. Transactions realised in other currencies are converted into EURO using valid buying exchange rate of the Central Bank of the Republic of Turkey on the transaction date. (d) Chart of accounts for the Project, which is used within the scope of the project and has been formed to follow fund resources and disbursements in detail required in the project reporting, was created via chart of accounts offered in Accounting Principles and Policies on Projects Financed by the World Bank and Chart of Accounts and Financial Statements Draft Manual which were published by the Board of Treasury Controllers. In this context, since I$KUR is in the scope of the 4th chart of the Law no. 5018, the Agency has its own regulations of accounting applications. Relevant account descriptions were made in this chart of accounts. Fund resources and disbursements related to the project are kept in computerised record system in accordance with this determined chart of accounts. Transactions related to all parts of the project are recorded in the books of the project in the system and the project financial statements and reports are produced by the system. 3. FINANCIAL STATEMENTS In accordance with the provisions of the relevant Agreement, utilisation of funds provided within the project is limited to the project objective. Projects funds, which are not yet used at the end of the project, will be returned in accordance with the relevant provisions of the agreement. Regarding utilisation of the project funds, unaudited interim financial statements covering each three-month calendar period are prepared and submitted to the World Bank. 4. CASH AT HAND The funds received within the scope of the project are kept in a designated account and no cash at hand is held. 5. PROJECT DESIGNATED ACCOUNT The bank account in Euro with TR36 0001 2009 4520 0058 0001 92 iban number, which has been opened at the Halk Bank Ankara Corporate Branch, is used as a Designated Account. f 3 Advance balance ceiling has been determined as 10.000.000,00 Euros in the disbursement letter, and as of the end of the review period, a total of 44.250.000,00 Euros have been taken into the designated account and 44.048.699,48 Euros have been spent from the designated account. For all resource withdrawals from the World Bank, an electronic form is filled in via the World Bank Client Connection system and the application is electronically signed by the authorities and sent to the World Bank. Authorized Signatures for the withdrawal applications were filled in the form attached to the Letter of Disbursement and notified to the World Bank. In the withdrawals, additional forms mentioned in the Disbursement Letter and bearing authorized signatures and certain supporting documents depending on the nature of the withdraw are presented to the World Bank. To report eligible expenditures paid from the Designated Account: Statement of Expenditure prepared in the format provided for expenditures / contracts related to the purchase of goods and services, education and operating costs, -d Statement of Expenditure prepared in the format provided for payments within the scope of Active Labour Market Programs (ALMP), - iii. Designated account reconciliation notification and related bank account statement are submitted. Eligible expenditures made from Designated Accounts are reported quarterly or more frequently if needed. Guidance on financial transactions guide has been published and necessary revisions have been made for the payment transactions made from the grant sources in the Designated Account for activities and expenditures, which are considered appropriate for the project components. The guidance covers all processes related to financial management at the central and local level and the practitioners carry out transactions in accordance with these rules. Within the scope of the project, due to the Ruling dated 31.07.2018 and numbered 99274 and annexed VAT Exemption Certificate received from the Revenue Administration, invoices or documents equivalent to invoice made out by the relevant parties for payments are issued without VAT. The mentioned certificate and letter were renewed due to the extension of the project. (The Ruling dated 03.01.2022 and numbered 367 and its annex, the certificate dated 03.01.2022 and numbered VAT.IPA.CERT.2022/1) 4 6. ADVANCE RENEWAL With the advance withdrawals, through the Client Connection system and based on documentary evidence (SOE and Project designated account breakdown), the designated account is supplemented to the ceiling level of 10.000.000,00 Euros as of 01/01/2022. Up to the relevant audit period (01/01/2022-31/12/2022),4 SOE applications has been submitted in total and the total grant amount of 44,250,000,000 Euros was transferred to our project account. Following the advance renewal transactions completed as of January2022, the expenditures of 7.728.324.39 Euros (ISKUR021-022-023 and 024) expenses made in 2022 were made with SOE (Statement of Expenditures) and these SOE's have not been withdrawn and are offset against the supplemented the ceiling traction amount of 10,000.000 Euros. 5