Report on the Consolidated Project Financial Statements of the REDUCING HEALTH RISKS FACTORS of the Ministry of Finance and Treasury Financed by: - SDC Grant No. TF0A4795 For the year ended 31 December 2018 REDUCING HEALTH RISKS FACTORS PROJECT of the Ministry of Finance and Treasury of Bosnia and Herzegovina Consolidated Project financial statements for the year ended 31 December 2018 (all amounts in EUR, unless otherwise stated) CONTENTS 1 Introduction 1 2 Independent Auditor's Report 3 3 Consolidated Project financial statements for the year 2018 5 4 Notes to the consolidated project financial statements 9 APPENDICES A. 1 Designated account statement - SDC Grant No. TF0A4795 - FB&H 10 A.2 Designated account statement - SDC Grant No. TF0A4795 - RS 11 A.3 Designated account statement (BAM) - VAT refund - RS 12 B SoE Withdrawal Schedule of SDC Grant No. TF0A4795 (EUR) for the year ended 31 13 December 2018 C Reconciliation between IBRD's Historic Transaction Report in USD and IBRD Grant 14 account in EUR according to the to the balance sheet as of 31 December 2018; SoE Withdrawal Schedule of SDC Grant No. TF0A4795 1. Introduction 1.1 Background Bosnia and Herzegovina, through its Ministry of Treasury has obtained a grant funds from the International Bank for Reconstruction and Development as administrator funds of the World Bank. The grant funds provided by the Swiss Agency for Development and Cooperation. Letter Agreement (SDC Grant No. TF0A4795) was signed as of 24 October 2017 between IBRD and State of Bosnia and Herzegovina, represented by Ministry of Finance and Treasury of Bosnia and Herzegovina. The objective of the Project is to assist the Republika Srpska and Federation of Bosnia and Herzegovina in reducing selected non-communicable disease (NCD) risk factors by promoting tobacco and alcohol control, and diet and physical activity in four selected local communities. In accordance with Declaration of Effectiveness, the Letter Agreement and the Project Agreements became effective as of 20 February 2018. 1.1.1 Description of Project Change Attitudes and Behavior Concerning NCD Risk Factors Provision of support to two selected communities towards the: a) Review of existing programs and relevant studies that promote: (i) healthy food program(s) for pre-and primary shool children; (ii) prevention of tobacco and alcohol use in primary and secondary schools; and (iii) awareness of NCD risk factors among the adult population; b) Development of new preventive programs for major NCD factors including, inter alia: (i) designing, revising and distributing training materials among targeted groups; (ii) designating tobacco-free public spaces and promoting healthy lifestyles; and (iii) developing sets of toolkits for each risk factor for the promotion of tobacco-free public spaces and helthy lifestyles in public educational and health care institutions; c) Implementation of comprehensive local govermment interventions to adress key NCDs risk factors, including inter alia: (i) carryng out a training-the-trainers program(s) for teaching staff on practices that foster good health and promote awerencess on risk and preventiion of substance use; (ii) facilitating grants focused on promoting healthy lifesyles; and (iii) technical assistance for the dvelopment and implementation of advocacy campaigns and social mobilization, and surveys; d) Carrying out advocacy and social mobilization campaigns targeting dcision makers, civil servants and health professionals to increase awareness regarding harmfulness and hazards of NCDs risk factors; and e) Carrying out and end-of-Project study. The Project is financed by grant funds in total amount USD 1,409,682, of which the amount is USD 690,744 for Republika Srpska and USD 718,938 for Federation of Bosnia and Herzegovina. 1.2 SDC Grant No. TF0A4795 The World Bank has offered technical assistance and advice to the Republic of Srpska and the Federation of BH with an aim to undertake strategic interventions in the reduction of risk factors for selected non-communicable diseases, by promoting control of the use of tobacco and alcohol, and by improving the nutrition and increasing physical activity. The Swiss Agency for Cooperation and Development participates in the project as the financier, in order to provide support to the authorities in the Republic of Srpska and the Federation of Bosnia and Herzegovina in the preparation and implementation of efficient and promotional programs of prevention for the reduction of selected risk factors for non-communicable diseases among the population. 1.3 Financing of the Consolidated Project Eligible Expenditures as set forth in the folowing table: Amount of the Grant Percentage of Expenditures Allocated (expressed in to be Financed (inclusive of Category USD) Taxes) Goods, consulting services, Training and Incremental Operating Costs under Part A of the Project 718,938 100.00% Goods, consulting services, training and Incremental operating costs under part B of the Project 690,744 100.00% TOTAL 1,409,682 100.00% 2 bakertilly Baker Tilly Re Opinion d.o.o. Grbavi6ka 4 71000 Sarajevo Bosna i Hercegovina T: +387 (0) 33 552 150 F: +387 (0) 33 552 152 info@bakertilly.ba 2. Independent Auditor's Report www.bakertilly.ba To the State of Bosnia and Herzegovina, Ministry of Finance and Treasury Attn. of Minister of Finance and Treasury H.E. Mr. Vjekoslav Bevanda Report on the Consolidated Project Financial Statements Opinion We have audited the accompanying project financial statements of the Reducing Health Risk Factors Project (the "Project"), which comprise of Summary of sources and uses of funds, Balance sheet, Designated account statement, Statement of loan withdrawals as of and for the year ended 31 December 2018, and a summary of significant accounting policies and other explanatory notes for the year then ended, financed under SDC Grant. In our opinion, the accompanying consolidated project financial statements present fairly, in all material aspects, the financial position of the Project as of 31 December 2018, and of the funds received and disbursed during the year then ended, in accordance with the cash basis of accounting based on International Public Sector Accounting Standard ("IPSAS"), as described in Note 4.1. Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (ISAs) and "Guidelines: Annual Financial Reporting and Auditing for World Bank - Financed Activities" issued by FMSB. 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 Ministry of Finance and Treasury 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 ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Responsibilities of Management and Those Charged with Governance for the Project Financial Statements The management of project implementation unit in FB&H and management of project coordination unit in RS is responsible for the preparation of separate project financial statements in accordance with the cash basis of accounting based on IPSAS, as described in Note 4.1. Guidelines: Annual Financial Reporting and Auditing for World Bank-Financed Actitvities, and for such internal control as management determines is necessary to enable the preparation of separate project financial statements that are free from material misstatement, whether due to fraud or error. In preparing the separate financial statements, management is responsible for assessing the Project's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Project or to cease operations or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the financial reporting process. These consolidated financial statements are sum of separate project financial statements. JIB: 4200960550009 - PDV: 200960550009 - Raiffeisen Bank d.d. BiH: 1610000045270008 Baker Tilly Re Opinion d.o.o. trading as Baker Tilly is a member of the global network of Baker Tilly International Ltd., the members of which are separate and independent legal entities. Responsibilities for the Audit of Consolidated Financial Statements Our objectives are to obtain reasonable assurance about whether the consolidated 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 detected 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 consolidated 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 consolidated 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. * 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 consolidated 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 consolidated project financial statements, including the disclosures, and whether the consolidated 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. Report on other requirements In addition, with respect to the Statement of Expenditure, adequate supporting documentation has been maintained to support claims to the World Bank for reimbursements of expenditure incurred; and all expenditure included in withdrawal applications and reimbursed against are eligible for fina under the project. Signe on eh If of Baker Tilly Re Opinion d Sarajevo 0 A Nihad Fejzid, Dir tor and Certified A or Ezita Imam i, Certified Auditor BAKER TILLY Sarajevo, Bosnia and Herzegovina RE OPINION 5 June 2019 RAJO REDUCING HEALTH RISKS FACTORS of the Ministry of Finance and Treasury Consolidated project financial statements for the year ended 31 December 2018 (all amounts in EUR, unless otherwise stated) 3. Consolidated project financial statements for the year 2018 3.1 Summary of sources and uses of funds EUR under the TF0A4795 Actual Cumulative Cumulative Cumulative Ref 2018 2018 Budget variance FINANCING SDC Grant No. TF0A4795 727,075 727,075 1,257,458 530,383 RHRFP Account BAM 12,740 12,740 12,740 - TOTAL FINANCING 3.1. 739,815 739,815 1,270,198 530,383 PROJECT EXPENDITURES By category Goods, consulting services, Training and Incremental Operating Costs under Part A of the Project 263,808 263,808 606,519 342,711 Goods, consulting services, Training and Incremental Operating Costs under Part B of the Project 255,164 255,164 650,939 395,775 TOTAL EXPENDITURES 3.1. 518,972 518,972 1,257,458 738,486 PROJECT EXPENDITURES By component Increased enforcement of tobacco control policy documents and legislation in the FBiH - - - Changed attitudes and behavior on NCD risk factors and their prevention among the citizens of B&H 466,326 466,326 1,107,730 641,404 Project steering, coordination and supervision 52,646 52,646 149,728 97,082 TOTAL EXPENDITURES 3.1. 518,972 518,972 1,257,458 738,486 5 REDUCING HEALTH RISKS FACTORS of the Ministry of Finance and Treasury Consolidated project financial statements for the year ended 31 December 2018 (all amounts in EUR, unless otherwise stated) 3. Consolidated project financial statements for the year 2018 (continued) 3.1.1 Summary of sources and uses of funds EUR under the TF0A4795 Actual Cumulative Cumulative Cumulative Ref 2018 2018 Budget variance FINANCING SDC Grant No. TF0A4795 727,075 727,075 1,257,458 530,383 TOTAL FINANCING 3.1. 727,075 727,075 1,270,198 530,383 PROJECT EXPENDITURES By category Goods, consulting services, Training and Incremental Operating Costs under Part A of the Project 263,808 263,808 606,519 342,711 Goods, consulting services, Training and Incremental Operating Costs under Part B of the Project 255,164 255,164 650,939 395,775 TOTAL EXPENDITURES 3.1. 518,972 518,972 1,257,458 738,486 PROJECT EXPENDITURES By component Increased enforcement of tobacco control policy documents and legislation in the FBiH - - - Changed attitudes and behavior on NCD risk factors and their prevention among the citizens of B&H 466,326 466,326 1,107,730 641,404 Project steering, coordination and supervision 52,646 52,646 149,728 97,082 TOTAL EXPENDITURES 3.1. 518,972 518,972 1,257,458 738,486 6 REDUCING HEALTH RISKS FACTORS of the Ministry of Finance and Treasury Consolidated project financial statements for the year ended 31 December 2018 (all amounts in EUR, unless otherwise stated) 3. Consolidated project financial statements for the year 2018 (continued) 3.1.2 Summary of sources and uses of funds EUR under the TF0A4795 (RHRFP Account BAM, RS only) Actual Cumulative Cumulative Cumulative Ref 2018 2018 Budget variance FINANCING RHRFP Account BAM 12,740 12,740 12,740 TOTAL FINANCING 3.1. 12,740 12,740 12,740 PROJECT EXPENDITURES By category Goods - - - - Consulting services - - - - Training - - - - Incremental operating costs - - - - TOTAL EXPENDITURES 3.1. - - - - PROJECT EXPENDITURES By component Changed attitudes and behavior on NCD risk factors and their prevention among the citizens of the RS Project steering, coordination and supervision - - - TOTAL EXPENDITURES 3.1. - - - 7 REDUCING HEALTH RISKS FACTORS of the Ministry of Finance and Treasury Consolidated project financial statements for the year ended 31 December 2018 (all amounts in EUR, unless otherwise stated) 3. Consolidated project financial statements for the year 2018 (continued) 3.2 Balance sheet as of 31 decembar 2018 showing accumulated funds of the project EUR Ref. 31 December 2018 ASSETS Project expenditure by category 3.1. 518,972 Balance of Accounts Designated account SDC Grant TF0A4795 - FB&H A.1 113,099 Designated account SDC Grant TF0A4795 - RS A.2 95,004 RHRFP Account BAM - RS A.3 12,740 TOTAL ASSETS 739,815 LIABILITIES SDC Grant TF0A4795 - FB&H and RS 727,075 Other income - VAT - RS 12,740 TOTAL LIABILITIES 739,815 8 REDUCING HEALTH RISKS FACTORS of the Ministry of Finance and Treasury Consolidated project financial statements for the year ended 31 December 2018 (all amounts in EUR, unless otherwise stated) 4. Notes to the consolidated project financial statements 4.1 Basis of preparation and accounting records These consolidated project financial statements have been prepared in accordance with the International Public Sector Accounting Standard: "Financial Reporting under the Cash Basis of Accounting" issued by the Public Sector Committee of the International Federation of Accountants, and incorporate the accounting policies below, which have been consistently followed in all material respects and comply with the "Guidelines: Annual Financial Reporting and Auditing for World Bank - Financed Activities", issued by the Financial Management Sector Board. 1.2.1 Accounting policies The Project's fiscal year is 1 January to 31 December for the recording of all transactions. Cash basis of accounting All receipts and expenses under SDC Grant TF0A4795 are recorded on actual receipt and payment basis of accounting as per approved categories. Project expenditure is stated at original cost on the Balance sheet Direct payments Direct payments concern the amounts paid directly from the Credit account of the World Bank. Statement of Expenditure (SoE) Statements of Expenditure are used by the Ministry of health and social welfare to state the expenditure under the IBRD Agreement during a certain period. These statements are sent to the World Bank's disbursement department who authorises the payment of the expenditure through the Designated account. Currency conversions The reporting currency is Euro (EUR). Sources and use of funds (payments to suppliers and contractors) in currencies other than EUR have been converted to EUR using the currency rate at the moment of the disbursement or transaction. Bank balances, recorded on the balance sheet at reporting date, have been converted at reporting date rate. Designated account This is the total amount of the withdrawals from the Grant account for the Project. Grant is in USD, but withdrawals are in EUR. Other income Other income includes VAT refund. 9 REDUCING HEALTH RISKS FACTORS of the Ministry of Finance and Treasury Consolidated project financial statements for the year ended 31 December 2018 (all amounts in EUR, unless otherwise stated) APPENDIX A.1 DESIGNATED ACCOUNT STATEMENT - FB&H Account owned by: Ministry of Finance and Treasury of Bosnia and Herzegovina Account No.: BA391611000003240246 Depository Bank: Raiffeisen bank d.d. BiH Address: Zmaja od Bosne bb, 71000 Sarajevo Related Credit: SDC Grant TF0A4796 Currency: EUR 2018 Ref. EUR Opening balance 1 January 3.2 - Add: IBRD replenishments B 219,543 219,543 Deduct: Payments of expenditures during the period 106,444 106,444 Ending balance 31 December 3.2 113,099 10 REDUCING HEALTH RISKS FACTORS of the Ministry of Finance and Treasury Consolidated project financial statements for the year ended 31 December 2018 (all amounts in EUR, unless otherwise stated) APPENDIX A.2 DESIGNATED ACCOUNT STATEMENT - RS Account owned by: Ministry of Finance and Treasury Account No.: 660000749-3 Depository Bank: Raiffeisen bank d.d. Sarajevo Address: Zmaja od Bosne bb, Sarajevo Related Credit: SDC Grant No. TF0A4795 Currency: EUR Ref. EUR Opening balance 1 January 2018 3.2 - Add: Income from TF0A4795 B 350,168 350,168 Deduct: Payments to suppliers 255,164 255,164 Ending balance 31 December 2018 3.2 95,004 11 REDUCING HEALTH RISKS FACTORS of the Ministry of Finance and Treasury Consolidated project financial statements for the year ended 31 December 2018 (all amounts in EUR, unless otherwise stated) APPENDIX A.3 DESIGNATED ACCOUNT STATEMENT Account owned by: Ministry of Finance and Treasury Account No.: 660000749-3 Depository Bank: Raiffeisen bank d.d. Sarajevo Address: Zmaja od Bosne bb, Sarajevo Related Credit: Currency: BAM Ref. BAM EUR Opening balance 1 January 2018 3.2 - - Add: VAT Refund B 24,917 12,740 24,917 12,740 Deduct: Payments to suppliers - - Ending balance 31 December 2018 3.2 24,917 12,740 12 � о vииvм � и и и °о й`гNйй о о о � О�� � f� м f� 1� f� д О ONO)NCO N N N 'i М � � % h i� г и ._ а� Q. � � о ~ и О � N � � � и� N г � N N N Г L (р и t.C) 00 о О �О <О �О N � и�N�tf�м О О О L Е О оNйа°оNм �� tN. � � _ � � � � и и и � о �� о о о � � � Ф м v -о � � а Г v о � М F гП �' а a�i � й а а `т � F � с т ш ш �° л Q ~ � � .С и ��(О и и о0 .- О 1� f� f� �'С ш•иг ++ и;�� и�с��ши и и и С�' С L = С р Oi Oi � О с0 о0 oD о0 У�� ..�ш. ,� ��� огrnаог�м й й й И v L ° � � ш й �= о й � � � й �- ш = С� е �=coi F- ji с� �л гп v� J,�ш � ^ �шс а о Е � � � �r ш_ ш ш а о'� � � � 'С LL. � � i:. (g ,и и � � и о ?=т � *'' с V � •� � ` � о � � � � , о о о �_� т С9 й °о оо оо °о Ш t' с� ``.° V о °о °о °о °о � О � й д м м м м � О � о N � у f2 «+ -0 � С � � � (й = а_ V и О � и � � U ` � = й ййй�� � � r � iY � � � о � а�-оа �� и д N с с с с�� � р � ш т т т т й г===��_ � м � и�s �гs �гs �гs т т�гs � "- а Q от mmmvvm ._ о Q а и �а Z д� с�мvйioг� � � ор а �о оооооо ш °r° � о и ._ . . о о ,� с� а о U U U c�i U U v и N � и .� .а .Q.Q.Q.a.Q_ � � � т о � а f1C2f1af1 О О �О т n.a ¢аа¢аа � � �N ° REDUCING HEALTH RISKS FACTORS of the Ministry of Finance and Treasury Consolidated Project financial statements for the year ended 31 December 2018 (a// amounts in EUR, unless otherwise stated) C APPENDIX Reconciliation between World Bank's disbursement statements in EUR and according to the balance sheet Changesin Changesin USD EUR Original amount 1,409,682 1,257,458 Disbursed in previous years Withdrawal 1 (FB&H and RS) 350,381 300,000 Withdrawal 2 (FB&H and RS) 128,063 109,564 Withdrawal 3 (FB&H and RS) 149,793 129,155 Withdrawal 4 (FB&H and RS) 104,656 91,259 Withdrawal 5 (FB&H) 32,338 27,554 Withdrawal 6 (FB&H) 81,838 69,543 TOTAL disbursement in 2018 847,069 727,076 Cumulative disbursed as of 31 December 2018 847,069 727,075 Calculated undisbursed balance as of 31 Decebmber 2018 562,613 530,383 Undisbursed balance WB Summary as at 31 December 2018 562,613 490,645 Exchange rate -39,738 14