Financial Attest Report on the Accounts of Pakistan Crisis-Resilient Social Protection IDA Credit No. 68550-Pak Benazir Income Support Programme For the Financial Year 2020-21 Audit Year 2021-22 Auditor General of Pakistan Islamabad TABLE OF CONTENTS Abbreviations and Acronym s .................................................................................................... i PREFACE............................................................................................................................... ii PART-1 ................................................................................................................ ...........1.....1 PROJECT OVERV IEW ..........................................................................................................2 AUDITOR'S REPORT TO THE M ANAGEM EN T.................................................................3 FINANCIAL STA TEM EN TS.................................................................................................4 PART-1I ................................................................................................................................... 1 1 EXECUTIVE SU M M ARY ....... ........................................................................................ 13 M ANAGEM EN T LETTER .....................................................................................................14 1, IN TROD UCTION ......................................................................................................15 2. AUD IT O BJECTIV ES .................................................................................................. 15 3. AUDIT SCOPE AN D M ETHODOLO GY..................................................................15 4. AUDIT FINDINGS AND RECOMMENDATIONS...................................................16 4.1 Financial M anagem ent...........................................................................................16 4.2 Sustainability..........................................................................................................17 4.3 Overall Assessm ent................................................................................................17 5. CONCCULUSSION ......................................................................................................... 17 ACKN OW LED GEM EN T .......................................................................................................18 Abbreviations and Acronyms AGP Auditor-General of Pakistan AGPR Accountant General Pakistan Revenues BISP Benazir Income Support Programme CRISP Crisis Resilient Social Protection EAD Economic Affairs Division FY Financial Year IDA International Development Association IPSAS International Public Sector Accounting Standards ISSAls International Standards of Supreme Audit Institutions NBP National Bank of Pakistan CRISP Pakistan Crisis Resilient Social Protection PPRA Public Procurement Regulatory Authority PREP Pandemic Response Effectiveness Project RFA Revolving Fund Account Rs, Rupees SBP State Bank of Pakistan SOE Statement of Expenditure SSNs Social Safety Nets UCT Unconditional Cash Transfer PREFACE Auditor General of Pakistan conducts audits subject to the Article 169 and 170(2) of the Constitution of Islamic Republic of Pakistan, 1973 read with Section 8 and 12 of the Auditor General's (Functions, Powers and Terms and Conditions of Service) Ordinance, 2001. The audit of "Pakistan Crisis Resilient Social Protection" under Benazir Income Support Programme for the Financial Year 2020-21 was carried out accordingly. Director General Audit (Social Safety Nets) conducted audit of the project during October, 2021 for the financial year 2020-21 with a view to report significant findings to stake holders. Audit examined the Annual Financial Statements in accordance with the International Standards of Supreme Audit Institutions (ISSAIs) to express an opinion. In addition, Audit also assessed, on test check basis, whether the management complied with applicable laws, rules and regulations in managing the project. The Audit Report indicates specific action that, if taken, will help the management to realize the objective of the project. The report consists of two parts; Part-I contains Auditor's Report (Audit Opinion) and Financial Statements; Part-II contains Executive Summary, Management Letter and Audit Findings. The report has been prepared for submission to the International Development Association (IDA) in terms of Credit No.68550-PAK. Dated: IJ.12.2021 Kamran ashid Khan Place: Islamabad DIRECTOR GENERAL PART-I 1. PROJECT OVERVIEW 2. AUDITOR'S REPORT TO THE MANAGEMENT 3. FINANCIAL STATEMENTS 11 Page PROJECT OVERVIEW Name of Project: Pakistan Crisis-Resilient Social Protection Sponsoring Authority: International Development Association (IDA) Executing Authority: Benazir Income Support Programme (BISP) Credit No: IDA-68550-PAK Project Cost: SDR 416,500,000 US $ 600 Million Date of Commencement: 26-03-2021 Date of Completion: 30-06-2025 (As per agreement) Credit Closing Date: 30.06.2025 Expenditure Rs. Nil (July 2020 to June 2021) 2 Pag AUDITOR'S REPORT TO THE MANAGEMENT Ms. Ismat Tahira, Secretary, Benazir Income Support Programme F-Block, Pak Secretariat, Islamabad Auditor's Report on the Pakistan Crisis-Resilient Social Protection (CRISP) We have audited the accompanying Financial Statements of "Pakistan Crisis-Resilient Social Protection (CRISP)" under the Benazir Income Support Programme, Credit No. 68550-PAK that comprise Statement of Receipts and Payments together with the Notes forming part thereof for the year ended 3othJune, 2021. Management's Responsibility It is the responsibility of the project management to establish and maintain a system of internal controls, and prepare and present the Statement of Receipts and Payments in conformity with the requirements of Cash Basis International Public Sector Accounting Standards (IPSAS), Financial Reporting under the Cash Basis of Accounting Standard. Auditor's Responsibility The responsibility of the auditor is to express an opinion on the financial statements based on the audit conducted. We conducted our audit in accordance with the International Standards of Supreme Audit Institutions (ISSAIs). These standards require that we plan and perform the audit to obtain reasonable assurance whether the financial statements are free of material misstatement. The audit process includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. It also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall statement presentation. We believe that the audit evidence, we have obtained is sufficient and appropriate to provide a basis for audit opinion. Opinion In our opinion The Financial Statements present fairly, in all material respects, the cash receipts and payments made by the project for the year ended 30 June, 2021 in accordance with Cash Basis IPSAS, Financial Reporting under the Cash Basis of Accounting Standard. U Kamran Rashid Khan DIRECTOR GENERAL Directorate General Audit (SSNs), Benevolent Fund Building, Zero Point, Islamabad Dated: 14.2.2021 3 P FINANCIAL STATEMENTS 묵 I BENAZIR INCOME SUPPORT PROGRAMME PAKISTAN CRISIS RESILIENT PROTECTION (CRISP) i I 5tatement of% a Receipts and Payments 'or the year ended June 30,2021 FY-2020-2021 FY-2019-2020 (Rupees in million) IUS$ In million) (Rupees in Million) (US$ in Million) NOTES Receipts / Receipts / Receipts / Receipts / Payments Payments by Payments Payments by Payments Payments by Payments PaynaentS by Controlled by Third Parties Controlled by Third Parties Controlled by Third Parties Controlled by lhirdParties BISP BISP HISP BISP RFdIPTS Receipts of Technical Assistance (TA) Receipts as dvect Transfer to GOP by The World L, nl 147.92 TOTAL RECEIPTS 22,660 148 PAYMENTS Monitoring and Evaluation 4-1 Capacity Building 4-1 StrengthLning Fiduciary and Environmental Social Controts 4-1 Project Management 4-1 - - Direct Transfer to GoP by the World Bank 4-2 22,660.12 147 92 TOTAL PAYMENTS 22,660,124 147,924 Net payments 22,660.224 147-924 Net Receipts 22,660.124 147.924 Increase/Decfease in cash Cash at the beginning of the Year Increase/Dect ease in cash Cash at the end of the year 1ir.1.,1 II&AI Financial Management Specialist Directof General (F&A) BENAZIR INCOME SUPPORT PROGRAMME PAKISTAN CRISIS RESILIENT PROTECTION (CRISP) Cash Flow Statement For the Financial Year July 01, 2020 to June 30. 2021 FY-2020-21 FY-2019-20 Rs. In Million US$ In Million Rs. In Million US$ In Million Cash inflow from Stakeholders Financing Receipts of Technical Assistance (TA) 3-1 - -1 - Receipts as direct Transfer to GOP by The World Bank 3-2 22,660.124 147.924 - TOTAL RECEIPTS 22,660124 147.924 Cash outflow from Operating Activities Goods, Non-Consulting, Consulting Services, Training & Operating Costs 4.1 - - Direct Transfer to GOP by the World Bank 4.2 22,660.124 147.924 TOTAL PAYMENTS 22,660.124 147.924 Increase/Decrease in cash - - Cash at the beginning of the Year Cash at the end of the year Financial Management Specialist r orGeneral(F&A) BENAZIR INCOME SUPPORT PROGRAMME PAKISTAN CRISIS RESILIENT PROTECTION (CRISP) NOTES TO THE FINANCIAL STATEMENT FOR THE PERIOD ENDED JUNE 30, 2021 1. THE PROJECT The World Bank vide their project namely Pakistan Crisis Resilient Protection (CRISP) signed on 26.03.2021 has committed US$ 600 million (SDR 416,500,000) credit from IDA. The Project aimed to support the Government of Pakistan through a) Program for Disbursement Linked Results (DLRs) in an amount of US$ 550 million by making disbursements against the key results as part of the government's program. b) The Technical Assistance component in an amount of US$ 5 million. 2. SIGNIFICANT ACCOUNTING POLICIES Following accounting policies have been applied in dealing with items, which are considered material for financial statements of Crisis Resilient Protection (CRISP). 2.1 BASIS OF PREPARATION The financial statement has been prepared in accordance with International Public Sector Accounting Standard (IPSAS) on Cash Basis 2.2 ACCOUNTING CONVENTION These financial statements have been prepared under the historical cost convention with cash basis of accounting. Accordingly, expenses are recognized when paid rather incurred. There were no expenses under this loan during the FY 2020-21. 2.3 CURRENCY The financial statements have been prepared in equivalent Pak Rupees. The received foreign currency amounts were translated I converted into Pak, Rupees at the SBP buying exchange rate prevailing on the date of transfer of funds by the donor and payments were translated notionally at the SBP rate of exchange at which the foreign currency was purchased by the SBP ( date of receipt of funds from the donor in SBP). The financial statements have been prepared in Pak Rupees. 2.4 FOREIGN EXCHANGE TRANSACTIONS Transactions in local and foreign currencies are accounted for in compliance with the Finance Division O.M. No. F.2. (1) - B.R-I1/2007-949 dated 2nd August,2013. 2.7 PROVISIONS Due to cash basis of accounting, no provision is recognized in the financial statements. However, if there is any event which may have a legal or other obligation with contingent financial implications, then it is identified by a separate disclosure in the notes to the financial statements. 2.8 OFFSETTING Neither assets-liabilities nor fund flow & expenditure have been set off in the financial statements. Financial Management Specialist - Dir General (F&A) BENAZIR INCOME SUPPORT PROGRAMME PAKIS' N CRISIS RESILIENT PROTECTION (CRISP) NOTES TO THE FINANCIAL STATEMENT FOR THE PERIOD ENDED JUNE 30. 2021 FY-20Z0-ZO21 FY-2019-2020 Rs. USD Rs. USD (in Million) (in Million) (in Million) (in Million) Receipts Note 3-1 Receipts of Technical Assistance (TA Note 3-2 Receipts as direct Transfer to GOP by The World Bank SBP Letter # 8KG-U-10(ICA)/33687/167-2021 6-05-2021 (Advance received against DLls) 22,660,124 147.924 - 22,660.124 147.924 - Total Receipts 22,660.164.174924 - FnniMaae nSpcDi oriGeneral (F&A) Financial Management SpeciaL BENAZIR INCOME SUPPORT PROGRAMME PAKISTAN CRISIS RESILIENT PROTECTION (CRISP) Detail of Expenditure NDIL-41EMBl FY 2020-21 FY 201g-20 tsesLefAcounts j Total Amount Project Management Total Amount Project Managennt Gonds, Non Connsuting, Consultirg Sermces, Paining & Operating Costs Total Expense Direct Transfer to GoP by The World Bank Advance received Against DLi 22,66,124,017.0O Total 22,660,124,017,00 inanclat Management Specialist rector General (F&A BENAZIR INCOME SUPPORT PROGRAMME PAKISTAN CR1515 RESILIENT PROTECTION (CRISP) Detail of Expenditures (or the vear ended Jane 30. 2021 NOTE-4.1 (USD1 FY 2020-21 FY 2019-20 Project Man.gemoent ProjecI0onsgement Head of Accou.ts Totai Arnount Total Amount -d -ý Operaotig Cort, Total1 Expnso NOTÉ-4.2 uDII Diret Transfer lo GoP by The World Bank AdnanceMoreceted Against, DLsrt147,923.913,- Total 147,923,913.06 Financial Management SpecOalist ietr nril A