GrantThornton Financial Statements and Independent Auditor's Report Grant number: TF O3063-MOG Pioject numbet P168248 Strengthening Governance in Mongolia Project For the period from 1 January 2021 to 31 December 2021 Contents Abbreviations 3 Independent Auditor's Report 4 Statement of financial position 6 Statement of Sources and Uses of Funds by Cost Category 7 Statement of Uses of Funds by Project activity 8 Statement of Designated account 9 Statement of Sub-account 10 Summary of withdrawal applications (IDA) 11 Detailed statement of expenditures by IDA withdrawals 12 Notes to the financial statements 13 Abbreviations GoM Government of Mongolia IDA The International Development Association IPSAS International Public Sector Accounting Standards ISA International Standards on Auditing NGO Non-governmental organization PIT Personal Income Tax PlU Project Implementation Unit SIP Social Insurance Premium SoS Secretary of State VAT Value added tax WB World Bank GrantThornton Independent Auditor's Grant Thorton Audit" Report To the management of Grant No. TFOB0063-MOG: Strengthening Governance in Mongolia Project: Opinion We have audited the following statements as of 31 December 2021 and for the year then ended of the Grant No. TFOB0063-MOG: Strengthening Governance in Mongolia Project (the "Project"): - statement of financial position, - statement of sources and uses of funds by cost category, - statement of uses of funds by project activity, - statement of designated account, - statement of sub-accounts, - detailed statement of expenditures and - the notes (collectively referred to as "Financial statements"). In our opinion, in all material respects: - The accompanying financial statements of the Project give a true and fair view of the financial position as of 31 December 2021 as well as the funds received and expenditures for the period from 1 January 2021 to 31 December 2021 in conformity with World Bank financial reporting guidelines and accounting policies described in Note 2 to the financial statements. - The statement of uses of funds by project activity has been accurately and objectively disclosed in accordance with the requirements of the Grant Agreement No. TFOB0063-MOG the project implementation manual and relevant regulations. - The accompanying statements of designated accounts give a true and fair view of the balance of the designated account and sub-accounts as at 31 December 2021 and the Project's receipts and disbursements via the accounts for the period from 1 January 2021 and 31 December 2021 in conformity with relevant regulations established by the World Bank and the operation of the accounts in accordance with the financing agreement, and the internal controls surrounding the operation of the accounts are adequate. - Withdrawal applications were adequately reconciled to the statements of expenditures ("SOEs") prepared by Project management unit for the year and those SOEs were adequately supported by accounting vouchers and expenditures claimed are eligible under the relevant financing agreement. 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 our report. We are independent of the Project in accordance with the International Ethics www.grantthornton.mn GrantThornton Standards Board for Accountants' Code of Ethics for Professional Accountants (the "IESBA Code") together with the ethical requirements that are relevant to our audit of the financial statements in Mongolia, and we have fulfilled our other ethical responsibilities in accordance with those ethical requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Emphasis of the Matter The project financial statements are prepared in accordance with designated purpose framework and that, as a result, the project financial statements may not be suitable for another purpose. Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with IPSAS, 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, Statemen Auditor's Responsibilities for the Audit of the Financial Statements Our objectives 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, our responsibilities include the exercise of professional judgment and skepticism and those responsibilities indicated in paragraphs 38 and 39 of (revised) ISA 700 posted in International Federation of Accountants webdi1e VIANAGING PA 30 May 2022 Ulaanbaatar. Mongolia www.qrantthornton.mn Government of Mongolia The International Development Association Strengthening Governance in Mongolia Project IDA Grant No.TFOBOO63-MOG Financial Statements for the period from 1 January 2021 to 31 December 2021 Expressed in Euro (otherwise stated) Statement of financial position in UR ote31 December 31 December In EU Note2021 2020 Assets Cash and cash equivalents Designated account 3 4,503.24 224,400 14 Sub-account 3 101,785.14 90,028.89 106,288.38 314,429.03 Cumulative project expenditures 4 Goods 4 1 42,895.65 10,151.28 Consultant services 4 2 674,805.24 275,646.95 Training and workshops 4.3 45,751.58 21,298.29 Incremental operating costs 44 18,274.28 7,466.83 781,726.75 314,563.35 Total assets 888,015.13 628,992.38 Funds IDA Fund 5 888,000.00 628,992.38 Other income 6 15.13 - Total funds 888,015.13 628,992.38 The statement of financial position was approved on 30 May 2022 by: D. Batmunkh B. Und-Maa Project Coordinator Accountant The statement of financial position is to be read in conjunction with the notes to and forming part of the financial statements set out on pages 13 to 19. 6 Government of Mongolia The International Development Association Strengthening Governance in Mongolia Project IDA Grant No.TFOB0063-MOG Financial Statements for the period from 1 January 2021 to 31 December 2021 Expressed in Euro (otherwise stated) Statement of Sources and Uses of Funds by Cost Category Cumulative For the period Cumulative In EUR as of 31 from 1 January as of 31 December 2021 to 31 December 2021 December 2021 2020 Sources of funds WB funds 888,000.00 259,007.62 628,992.38 Other 4,486.82 75.65 4,411,17 892,486.82 259,083.27 633,403.55 Uses of funds Goods 42,895.65 32,744.37 10,151.28 Consultant services 674,805.24 399,158.29 275,646.95 Training and workshops 45,751.58 24,453.29 21,29829 Incremental operating costs 18,274.28 10,807.45 7,466.83 781,726.75 467,163.40 314,563.35 Other expenditures 4,471.69 60.52 4,411.17 Fund balance at the end of the year Designated account (State Bank 104900092970) 4,503.24 (219,896.90) 224,400 14 Sub-account (Treasury 100900011754) 101,785.14 11,756.25 90,028.89 106,288.38 (208,140.65) 314,429.03 The statement of sources and uses of funds was approved on 30 May 2022 by: D. Batmunkh B. Undar aa Project Coordinator Accountant The statement of sources and uses of funds is to be read in conjunction with the notes to and forming part of the financial statements set out on pages 13 to 19. 7 Government of Mongolia The International Development Association Strengthening Governance in Mongolia Project IDA Grant No TFOB0063-MOG Financial Statements for the period from 1 January 2021 to 31 December 2021 Expressed in Euro (otherwise stated) Statement of Uses of Funds by Project activity Component 1: Strengthening 1 Macroeconomic and Fiscal 615,476 30 - 18,372 08 16,307 22 - 34,679 30 6% Management Component 2: Improving the 2 Efficiency of Public Financial 1,807,589 20 10,151 28 248,727 00 4,199 55 - 263,077 83 15% Management 3 Component 3 Project Management 76,934 50 - 8,547 87 791 52 7,466 83 16,806 22 22% Total 2,500,000.00 10,151.28 275,646.95 21,298.29 7,466.83 314,563.35 13% The statement of uses of funds was approved on 30 May 2022 by D. Batmunkh B Unda Project Coordinator Accountant The statement of uses of funds is to be read in conjunction with the notes to and forming part of the financial statements set out on pages 13 to 1g. 8 Government of Mongolia The International Development Association Strengthening Governance in Mongolia Project IDA Grant No.TFOB0063-MOG Financial Statements for the period from 1 January 2021 to 31 December 2021 Expressed in Euro (otherwise stated) Statement of Designated account In EUR 30 December 31 December 2021 2020 PART A. ACCOUNT ACTIVITY I. State Bank - 104900092970 (EUR) Beginning balance of Designated account (State Bank 104900092970) 224,400.14 172,305.19 Add: Total amount replenished to Designated account 259,007.62 228,992 38 Add: Interest income earned on balance of Designated account - 1,737.35 259,007.62 230,729.73 Deduct: Transferred to Sub-account 200,000.00 150,000.00 Deduct: Consultant services 3,779.25 26,724.11 Deduct: Bank charges 125.27 173.32 Deduct Interest income transferred to MoF - 1,737.35 Deduct: Transferred to Designated account 279,503.24 - 483,407.76 178,634.78 Ending balance of Designated account (State Bank 104900092970) - 224,400.14 I1. Treasury - 202900011754 (EUR) Beginning balance of Designated account (Treasury 202900011754) - - Add: Total amount replenished to Designated account 279,503.24 Add: Interest income earned on balance of Designated account - 279,503.24 Deduct Transferred to Sub-account 275,000 00 275,000.00 Ending balance of Designated account (Treasury - 202900011754) 4,503.24 PART B. ACCOUNT RECONCILIATIONS 1. Initial advance 400,000 00 400,000 00 2. Increase in advance 175,000.00 3. WB advance 575,000.00 400,000.00 Balance of Designated account and Sub-account 106,288.38 314,429.03 1. Designated account (State Bank 104900092970) 4.503,24 224,400.14 II. Sub-account (Treasury 100900011754) 101,785.14 90,028.89 Add Amount withdrawn but not claimed yet 468,726.75 85.570.97 Deduct Bid income 15.13 - Total advance to Designated account 575,000.00 400,000.00 The statement of designated account was approved on 30 May 2022 by: D. Batmunkh B. Undarmaa Project Coordinator Accountant 9 Government of Mongolia The International Development Association Strengthening Governance in Mongolia Project IDA Grant No.TFOB0063-MOG Financial Statements for the period from 1 January 2021 to 31 December 2021 Expressed in Euro (otherwise stated) Statement of Sub-account In EUR 30 December 31 December 2021 2020 Transactions Beginning balance Sub-account (Treasury - 100900011754) 90,028.89 171,068.80 Add: Transferred from Designated account 475,000 00 150,000 00 Add: Interest income earned on Sub-account - Add: Income from bidding documents 75.65 - 475,075.65 150,000.00 Deduct: Total expenditures Goods 32.744.37 7,619.00 Consultant services 395,379.04 215,472.73 Training and workshops 24,453.29 4,991.07 Incremental operating costs 10.682.18 2,957.11 463,258.88 231,039.91 Deduct: Total expenditures 60.52 Ending Balance Sub-account (Treasury - 100900011754) 101,785.14 90,028.89 The statement of sub-account was approved on 30 May 2022 by. D. Batmunkh B. Undarm a Project Coordinator Accountant The statement of sub-account is to be read in conjunction with the notes to and forming part of the financial statements set out on pages 13 to 19. 10 Government of Mongolia The International Development Association Strengthening Governance in Mongolia Project IDA Grant No.TFOBOO63-MOG Financial Statements for the period from 1 January 2021 to 31 December 2021 Expressed in Euro (otherwise stated) Summary of withdrawal applications (IDA) WA NQ Application type Claimed Credited Amunt Amoui Difference Beginin balancee cedte Beginning balance 628,992.38 628,992.38 6TFOB0063 Replenishment 2021-03-14 2021-03-30 84,007.62 84,007.62 006 TFOBOO63: 007 Replenishment 2021-09-09 - - - TFOBOO63 008 Replenishment 2021-11-11 - - 9TFOB0063 Advance 2021-12-01 2021-12-22 175,000.00 175,000.00 009 Total 888,000.00 888,000.00 The summary of withdrawal applications was approved on 30 May 2022 by: D. Batmunkh B. Undarmaa Project Coordinator Accountant The summary of withdrawal applications is to be read in conjunction with the notes to and forming part of the financial statements set out on pages 13 to 19. I I I i i III II i I i I I Government of Mongolia The International Development Association Strengthening Governance in Mongolia Project IDA Grant No.TF0B0063-MOG Financial Statements for the period from 1 January 2021 to 31 December 2021 Expressed in Euro (otherwise stated) Detailed statement of expenditures by IDA withdrawals Claimed Credited Submitted WA N Cosulant Training Incremental Coslat Training Incremnental DfencCostat Training incremnental Goods and operatmng Total Goods and operating Total Goods and operating Total services workshops Costs services workshops Costs services workshops Costs Advance - 400,000.00 - - 400,000,00 - - - TF0B0063: 000 2,532,28 34,612.37 16,307.22 3,174.14 56,626.01 - - - 56,626.01 2,532.28 34,612.37 16,307.22 3,174.14 56,626.01 TB00 3 TF0B0063 7,619,00 91,333.34 202,49 301 94 99,456,77 10,151 28 125,94571 16,509 71 3,476.08 156,082.78 (56,626 01) 7,619.00 91,333,34 202.49 301 94 99,456.77 003 TF0B0063 56,795.67 4,596,85 523,60 61,916.12 56,795,67 4,59685 523.60 61,916 12 - - 56,795.67 4,596.85 523.60 61,916.12 F0B0063 10,526.80 191 73 27495 10,993.48 10,526.80 191 73 274.95 10,993.48 10,526.80 191.73 274.95 10,993.48 TFOB0063 84,007.62 - 84,007.62 - 87,905,99 2,122.90 - 90,02889 006 TFOB0063 - 10,020.10 146,815 97 9,824.03 4,273.69 170,93379 TFB0063 - - 154,751.57 2,301.23 6,020.12 163,072.92 0086,2.2 13029 Advance 175,000 00 175,000 00 - - - Total 10,151.28 193,268.18 21,298.29 4,274.63 888,000.00 10,151.28 193,268.18 21,298.29 4,274.63 888,000.00 0.00 20,171.38 582,741.71 35,546.45 14,568.44 653,027.98 The detailed statement of expenditures was approved on 30 May 2022 by: D Batmunkh B. Undarmaa Project Coordinator Accountant The detailed statement of expenditures is to be read in conjunction with the notes to and forming part of the financial statements set out on pages 13 to 19. 12 Government of Mongolia The International Development Association Strengthening Governance in Mongolia Project IDA Grant No.TFOB0063-MOG Financial Statements for the period from 1 January 2021 to 31 December 2021 Expressed in Euro (otherwise stated) Notes to the financial statements 1 Project background and information Project name: Grant No.TFOB0063-MOG: Strengthening Governance in Mongolia Project Project number: P168248 Project purpose and activities: The project objective is to support the Government's efforts to improve fiscal discipline, public financial management (PFM), and transparency and accountability processes for strengthened governance of public resource management in Mongolia. Financing amount: EUR 2,500,000,00 Project duration period: 26 April 2019 - 28 February 2023 Financing agency: World Bank, The International Development Association (IDA) Implementing agency: Ministry of Finance Project management: Project Director M. Sanjaadorj Project Coordinator D. Batmunkh Address: Suite 205, United Nations Street 8/2, the 4th khoroo, Chingeltei District, Ulaanbaatar-15160, Mongolia The project consists of the following parts: Component 1. Strengthening Macroeconomic and Fiscal Management Conduct research and analysis to strengthen the capacity of the Fiscal Stability Council and improve fiscal policy. Component 2. Improving the Efficiency of Public Financial Management Ministry of Finance, National Develop budget and financial management reform plans and regulations of relevant agencies, budget planning and execution, budget reporting and transparency, public investment management and service standards. Component 3. Project Management and Monitoring Providing technical and operational support for the project implementation, coordination, monitoring and evaluation, including audit arrangements, reporting requirements, procurement, and financial management activities. 13 Government of Mongolia The International Development Association Strengthening Governance in Mongolia Project IDA Grant No.TFOB0063-MOG Financial Statements for the period from 1 January 2021 to 31 December 2021 Expressed in Euro (otherwise stated) 2 Significant accounting policies 2.1 Basis of accounting The statement of financial position, statement of sources and uses of funds by cost category and project activity, statement of designated and sub-accounts and explanatory notes to the financial statements have been prepared in accordance with Cash Basis of International Public Sector Accounting Standards (IPSAS) issued by the IPSAS Board and requirements of the World Bank. The cash basis of accounting recognizes transactions and events only when cash is received or paid by the Project. 2.2 Accounting period The financial year of the Project is from 1 January 2021 to 31 December 2021, and it is presented with cumulative and comparative amount. 2.3 Functional and presentation currency The national currency of Mongolia is the Mongolian Tugrug (MNT), but, functional currency of the Strengthening Governance in Mongolia Project is Euro ("EUR"). These financial statements are presented in EUR (unless otherwise stated), since this currency is more useful for the users of these financial statements. 2.4 Foreign currencies Foreign currency transactions In preparing the financial statements, transactions in currencies other than the functional currency are recorded at the rates of exchange defined by the respective commercial bank prevailing on the dates funding in EUR from Designated account transferred to MNT sub-accounts using first in first out basis for the period. 2.5 Recognition of funds and expenditures Project funds and expenditures are recognized on modified cash basis. - IDA fund: Funds are recognized when direct payment from World Bank to suppliers or/ and receipts from World Bank to Designated account. - Counterpart fund: Fund is recognized when direct payment from Treasury to suppliers. - Expenditures are recognized when incurred. 2.6 Designated and sub-accounts 2.6.1. Designated accounts In accordance with the Disbursement Letter of Grant Agreement No.TFOBOO63, the project opened the Designated Account (DA) which is the segregated account for the financing at the State Bank acceptable to the World Bank Account number of the DA is No.104900091970 and it is maintained in EUR. In the reporting year, in accordance with a request of the Ministry of Finance and the approval No 017/21 on 21 January 2021 of the World Bank, a new designated account No.202900011754 in EUR was opened at Treasury. Funds at State Bank by the World Bank be transferred to the Treasury, in which transactions should be made from the account of Treasury. 14 Government of Mongolia The International Development Association Strengthening Governance in Mongolia Project IDA Grant No.TFOB0063-MOG Financial Statements for the period from 1 January 2021 to 31 December 2021 Expressed in Euro (otherwise stated) Amounts disbursed but not claimed yet is as follows: In Euro 31 December 31 December 2021 22 Beginning balance: Disbursed but not yet claimed 85,570.97 1,429,158.92 Add: Expenditure in the reporting year 467,163.40 257,937.34 Less: Amount claimed and credited in the reporting period 259,007.62 228,992.38 Add: Increases in advance in the reporting year 175,000.00 - Less: Claimed but not yet credited - - Ending balance 468,726.75 85,570.97 2.6.2. Sub-accounts As specified in the Disbursement letter, the project opened the MNT Sub-account (SA) No. 100900011754 at Treasury for the financing acceptable to the World Bank. The payments for the eligible expenditures of procuring goods, consultants fee and training are paid in MNT from the Sub-account. The Sub-accounts will be reported and reconciled with DA No. 104900092970 and 202900011754 maintained by PIU. 2.7 Taxes Indirect taxes, and duties .- The Project is exempted from Value added tax on its purchased goods and services according to the Decree No.72 of Minister of Finance dated on 3 May 2021. Personal Income Tax, and Social and Health Insurance premium In respect with salary and salary equivalent income earned by employees and any income earned by other people, the Organization is responsible to withdraw 10 percent of individual income tax and pay such tax to the budget in accordance with the Personal Income Tax Law of Mongolia. In addition, the Organization is responsible for withdrawing, paying and reporting health and social insurance fee from salary and salary equivalent income earned by employees in accordance with the Law on Social Insurance and the Law on Health Insurance of Mongolia. 2.8 Procurement All procurement of goods and works with WB Grant will be undertaken in accordance with WB's Procurement Guidelines. Procurement policy is reflected on the grant agreement made between the GOM and WB. And the procurements are made according to contracts conducted under selection result due to the following procurement methods in comply with the Project's Procurement Plan. Goods and Services Procurement methods Thresholds Open international bidding /work/ USD 3,000,000 5 Open national bidding /work/ < USD 3,000,000 Open international bidding /goods/ USD 300,000 5 Open national bidding /goods/ < USD 300,000 Request for Quotations as a selection method /work/ 5 USD 200,000 15 Government of Mongolia The International Development Association Strengthening Governance in Mongolia Project IDA Grant No.TFOBOO63-MOG Financial Statements for the period from 1 January 2021 to 31 December 2021 Expressed in Euro (otherwise stated) Request for Quotations as a selection method /goods/ 5 USD 100,000 Consulting Services National consultants' selection based on qualification and skills < USD 100,000 3 Cash and bank balances In EUR 31 December 31 December 2021 2020 Designated account (State Bank - 104900092970) - 224,400.14 Designated account (Treasury - 202900011754) 4,503.24 - Sub-account (Treasury - 100900011754) 101,785.14 90,028.89 Total 106,288.38 314,429.03 Refer to note 2.3 for the currencies in which the cash and bank balances are denominated. 4 Cumulative project expenditures I. Cumulative project expenditures as of 31 December 2021 Consultant Training Incremental No Project activities Goods sevcsand operating Total workshops costs Component 1: Strengthening 1 Macroeconomic and Fiscal 23,277.51 109,945.93 16,307.22 - 149,530.66 Management Component 2: Improving the 2 Efficiency of Public Financial 17,267.90 533,47248 28,221.83 - 578,962.21 M.Management 3 Component 3 Project 2,350.24 31,386.83 1,222.53 18,274.28 53,233.88 Management Total 42,895.65 674,805.24 45,751.58 18,274.28 781,726.75 11. Cumulative project expenditures as of 31 December 2020 Consuting Training Incremental No Project activities Goods Cosulings and operating Total workshops costs Component 1: Strengthening 1 Macroeconomic and Fiscal - 18,372.08 16,307.22 - 34,679.30 Management Component 2: Improving the 2 Efficiency of Public Financial 10,151,28 248,727.00 4,199.55 - 263,077.83 Management 3Component 3: Project - 8,547.87 791.52 7,466.83 16,806.22 Management Total 10,151.28 275,646.95 21,298.29 7,466.83 314,563.35 16 Government of Mongolia The International Development Association Strengthening Governance in Mongolia Project IDA Grant No.TFOB0063-MOG Financial Statements for the period from 1 January 2021 to 31 December 2021 Expressed in Euro (otherwise stated) 4.1 Goods Cumulative as Cumulative as In EUR of 31 December of 31 December 2021 2020 Project Activities / Component: Component 1: Strengthening Macroeconomic and Fiscal 23,277.51 Management 1.1. Fiscal Council 1.2. Assets and Liability Management 1.3. Taxation and Revenue Management 23,277.51 1.4. Research and analysis capacity for sound fiscal and financial policy Component 2: Improving the Efficiency of Public Financial 17,267.90 10,151.28 Management 2 1. Overall PFM Reform Plan and Inter-agency Coordination - 2.2. Budget Preparation and Execution 4,893.17 - 2.3. Budget Reporting and Transparency 12,374.73 10,151.28 2.4. Contingent Liabilities - - 2,5. Public Investment Management Component 3: Project Management and Monitoring 2,350.24 - Total 42,895.65 10,151.28 In the reporting period, the project implementation unit concluded agreements with companies including the Setto Co LLC, the Topica LLC, the Monnip LLC, Cybercom LLC, Summit Computer Technology LLC and New Sonic LLC to procure goods. 4.2 Consulting services Cumulative as Cumulative as In EUR of 31 December of 31 December 2021 2020 Project Activities / Component: Component 1: Strengthening Macroeconomic and Fiscal 109,945.93 18,372.08 Management1 1.1. Fiscal Council 43,537.15 8,345.97 1.2. Assets and Liability Management 13,604.51 - 1.3. Taxation and Revenue Management 52,804.27 10,026.11 1.4. Research and analysis capacity for sound fiscal and financial policy Component 2: Improving the Efficiency of Public Financial Management 533,472.48 248,727.00 2.1 Overall PFM Reform Plan and Inter-agency Coordination 60,309.71 11,177.54 2.2 Budget Preparation and Execution 23,375.04 4,618.32 2.3 Budget Reporting and Transparency 320,600.91 173,731.66 2.4 Contingent Liabilities 49,408.84 11,919.26 2.5 Public Investment Management 79,777.98 47,280 22 Component 3: Project Management and Monitoring 31,386.83 8,547.87 Total 674,805.24 275,646.95 17 Government of Mongolia The International Development Association Strengthening Governance in Mongolia Project IDA Grant No.TFOB0063-MOG Financial Statements for the period from 1 January 2021 to 31 December 2021 Expressed in Euro (otherwise stated) During the reporting period, the project implementation unit received consulting services from 3 companies and 33 individuals and paid off the relevant fees. 4.3 Training and workshops Cumulative as Cumulative as In EUR of 31 December of 31 December 2021 2020 Project Activities / Component: Component 1: Strengthening Macroeconomic and Fiscal 16,307.22 16,307.22 Management 1.1. Fiscal Council - - 1.2. Assets and Liability Management - - 1 .3. Taxation and Revenue Management 16,307 22 16,307 22 1.4 Research and analysis capacity for sound fiscal and financial policy Component 2: Improving the Efficiency of Public Financial 28,221.83 4,199.55 Management 2.1. Overall PFM Reform Plan and Inter-agency Coordination 11,926.85 - 2.2. Budget Preparation and Execution 2,786.64 2.3. Budget Reporting and Transparency 3,698.49 667.84 2.4. Contingent Liabilities 3,263.97 - 2.5. Public Investment Management 6,545.88 3,531,71 Component 3: Project Management and Monitoring 1,222.53 791.52 Total 45,751.58 21,298.29 In the reporting period, the project organized two domestic trainings under Component 3 and paid for the related payment. 4.4 Incremental operating costs Cumulative as Cumulative as In EUR of 31 December of 31 December 2021 2020 Stationary, office equipment maintenance and software licenses fee 5,140.73 1,941.63 Contractual staff: Cleaning Services and Translation Costs 3,538.70 2,621 18 Office supply expenses 2,880.11 466.56 Social insurance expense (PIU) 2,698.30 1,162.26 Communication expenses 1,881.32 19.40 Advertising expenses 1,003.31 647.22 Honoria fee and/or PSC meetings, Evaluation Team, NGO or PSR 793.74 431.93 in Evaluation Committee Bank Charge 338.07 176.65 Total 18,274.28 7,466.83 18 Government of Mongolia The International Development Association Strengthening Governance in Mongolia Project IDA Grant No.TFOB0063-MOG Financial Statements for the period from 1 January 2021 to 31 December 2021 Expressed in Euro (otherwise stated) 5 IDA Funding in URAs of 31 As of 31 December 2021 December 2020 IDA Funding 888,000.00 628,992.38 Total 888,000.00 628,992.38 6 Other revenue In EUR As of 31 As of 31 l December 2021 December 2020 Other income from bidding documents 15.13 Total 15.13 7 Project budget and actual by cost category From 1 Cuuat Total Cumulative as January 2021 Cuative3 In EUR allocated of 31 December to 31 aseofm31r o% budget 2021 December Dee00 2021 Goods 515,052.31 42,895.65 32,744.37 10,151.28 8% Consulting services 1,678,017.81 674,805.24 399,158.29 275,646.95 40% Training and workshops 268,089.75 45,751.58 24,453.29 21,298.29 17% Incremental operating costs 38,840.13 18,274.28 10,807.45 7,466.83 47% Contingencies - - - - 0% Total 2,500,000.00 781,726.75 467,163.40 314,563.35 31% 8 Subsequent events On 4 April 2022, Alma Kanani, the World Bank Governance Practice Manager for East Asia and the Pacific, and D. Badamchimeg, World Bank Senior Public Sector Specialist and Fiscal Strengthening Project Co-Coordinator, reviewed the project's performance and implementation and provided recommendations for further action. A work plan of the project for 2022 was submitted to the World Bank on 9 May 2022 and after receiving comments and feedback from WB, it has finalized on 27 May 2022. 9 Translation The audit report has been prepared in both Mongolian and English languages. The report in Mongolian language shall prevail in case of discrepancies between the versions in Mongolian and English languages. 19