STATE AUDIT OFFICE AUDIT REPORT “RESULT-BASED SCALING-UP RURAL SANITATION AND WATER SUPPLY” PROGRAM IN 2019 Hanoi, 2020 Mã tài liệu:.............. STATE AUDIT OFFICE SOCIALIST REPUBLIC OF VIET NAM Independence – Freedom – Happiness No: 129/KTNN-TH Hanoi, 13th July 2020 On sending the audit report on the “Result-based scaling-up rural sanitation and water supply”Program in 2019 To: The Ministry of Agriculture and Rural Development Under the Decision No. 217/QD-KTNN dated 27 February 2020 by the Auditor General on auditing Result-based rural sanitation and clean water Program for 08 provinces of the Red River Delta in 2019, the “Result-based scaling-up rural sanitation and water supply”Program in 2019, the Specialized Audit Department No V has conducted the audits thereof from 4 March 2020 to 31 March 2020 and from 6 May 2020 to 01 June 2020; to date, the two respective audit reports have been finalised. The State Audit Office of Viet Nam would like to send the afore-mentioned audit reports which are enclosed herewith this dispatch./. Recipients: pp. AUDITOR GENERAL - As mentioned above; DEPUTY AUDITOR GENERAL - Chairman of Finance and Budget Committee of the National Assembly; - Minister of Finance; - Minisster of Agriculture and Rural (Signed and sealed) Development; - Auditor General; - Deputy Auditor General Doan Xuan Tien; - Specialized Audit Department No V; - Department of Legal Affairs; Department of Doan Xuan Tien Audit Policy and Quality Control;Department of General Affairs; - Department of Administration (Secretariat- General Division); - Achived at the Administration Division, Audit Delegation. 1 STATE AUDIT OFFICE SOCIALIST REPUBLIC OF VIETNAM Independence - Freedom - Happiness Ha Noi, 2020 AUDIT REPORT “THE RESULT BASED SCALING UP RURAL SANITATION AND WATER SUPPLY PROGRAM” FOR THE FISCAL YEAR 2019 Under the Decision No. 217/QD-KTNN dated 27 February 2020 by the Auditor General on auditing “Result-based rural sanitation and water supply” Program for 08 provinces of the Red River Delta in 2019, the “Result-based scaling-up rural sanitation and water supply” Program in 2019, the Specialized Audit Department No V has conducted the audit of the afore-mentioned Programs from 04 March 2020 to 01 June 2020. 1. Subject matters The management, use of the Program fund; compliance with the State law, policies and regimes; management, direction and coordination in implementing the Program; the fulfillment of the Program objectives; the effectiveness, efficicency and economy of the Program. 2. Audit scope and scope limitation 2.1 Audit scope - Audit scope: 2019 and the previous and following periods that concern - Audited entities: + Ministry of Agriculture and Rural Development (MARD): Rural Water Supply Program Coordination Board (under General Department of Irrigation); National Centre for Rural Water Supply and Environmental Sanitation; + 21/21 Program Implementing provinces. (See the List of Audited Entities at Annex No. 01/BCKT-CTMT). - The accepted-for-payment completed volumes under the audit made up 88% of total accepted-for-payment completed ones in 2019 as per report (VND 1,009,610 / VND 1,143,881 million). 2.2. Scope limitation - The audit delegation did not check the quality of works and equipment, did not collate with the material, equipment and service providers; id not measure the length of water supply pipelines, the actual geometrical size of the 2 unexposed items; did not audit the contributions of the citizen of the beneficial localities and other legal financial sources in form of work day or in kind. - For financial statements prepared in the form required by the Program: As the donor allowed to consider the construction works funded by the State Budget and other sources, except for the private investment fund as outputs of the Program; simultaneously the construction works determination and verification implemented by independent consulting units were considered a part of the Program outputs; for the targets determined by the output (receivables from donors, funds that formed fixed assets, revenues temporarily calculated from World Bank - allocated capital fund) and created from funds excluding from Program, the audit delegation just noted the situation according to the entities’ reports; entities took responsibility for the accuracy, reliability of the documents, data provided for the audit delegation. 3. Audit basis - Law on State Audit, Law on State Budget, Law on Construction, Law on Tendering, other relevant laws and legal documents; - Audit standards, audit procedures, Regulation on the organization and operation of SAV audit delegations; - Financing Agreement for Credit 5739-VN signed by the Socialist Republic of Vietnam and the donor (IDA); The audit report was prepared on basis of audit evidences; audit minutes, individual audit reports of each audited entity as well as relevant documents. PART ONE AUDIT EVALUATION AND VERIFICATION I. THE TRUTH AND FAIRNESS OF THE PROGRAM FINAL ACCOUNT REPORTS (FINANCIAL DATA AND INFORMATION) The Audit Delegation audited the financial statements, program settlement figures prepared by the audited entities (see more details of the audit results at the Annexes No. 07.1, 07.2, 07.3, 08, 09, 10/BCKT-TKT-CTMT enclosed herewith). Responsibilities of the audited entities: Making and presenting the financial statements in a truthful and fair manner, complying with the framework on making and presenting the Program financial statements and the templates 3 required by the donor; conducting the internal controls which the entities found crucial to ensure the making and presenting the financial statements are free from material misstatements due to fraud or errors. Responsibilities of the audit delegation: Providing the independent audit opinions on the Program financial statements based on the audit results. The audit delegation has conducted the audit in line with the above-mentioned audit basis, scope, scope limitation, documents provided by the entities, in compliance with the regulations on the professional ethics, audit planning and execution with neccessary professional methodologiees, lying on the auditors‘ judgements to gather audit evidences (By applying the basis audit techniques such as analysis, collation, detailed check: based on the State’s regulations on the project management to analyse and evaluate how the investment done by the entities was; Based on the allocated buget, allocated estimates by the competent authorities which were reported by the entities and which were stated in the official documents on the budget allocation by the competent authorities to check the completeness of investment capital: vouchers, accounting books; collating allocated budget and settled amount reported by the entities with those verified by the relevant budget providers and other relevant units). Verification of the truth and fairness of the Program financial statements, the program final account reports According to the audit delegation, except the impacts of the factors listed in the Audit Scope Limitation and material-but-not-pervasive misstatements, in the material aspects, after adjusting the data according to the audit results, the Program financial statements in the fiscal year 2019 in provinces and audited entities truthfully and fairly reflected the financial situation, revenues, expenditures and in compliance with the applicable regulations. 4