I I I I I I I I HOSPITAL WASTE MANAGEMENT SUPPORT PROJECT Credit Agreement No. 4899-VN AUDITED FINANCIAL STATEMENTS Fiscal year ended 31 December 2017 I I 2018 -06- 29s I I I I I I I I I I Hospital Waste Management Support Project Credit Agreement No. 4899-VN I I I CONTENTS Page I PART I INDEPENDENT AUDITORS' REPORT ON THE FINANCIAL STATEMENTS Report of the Project Management Unit 3 Independent Auditors' Report on the Financial statements 4-5 Audited Financial statements Statement of Financial Position 6 Statement of Funds and Uses of Funds 7 Statement of Designated Account 8 Statement of Withdrawals and Reconciliation of Funds 9 Notes to the Financial statements 10-23 PART II INDEPENDENT AUDITORS' REPORT ON 24-25 THE INTERNAL CONTROL SYSTEM PART III INDEPENDENT AUDITORS' REPORT ON 26-27 THE COMPLIANCE PART III MANAGEMENT LETTER 28-36 I I I I I I I 2 I I Hospital Waste Management Support Project Credit Agreement No. 4899-VN REPORT OF THE PROJECT MANAGEMENT The Project Management Unit of Hospital Waste Management Support Project ("the Project") presents this report and the Financial Statements of the Project for the fiscal year ended 31 December 2017. U The Project The Project is implemented under the Credit Agreement No. 4899-VN dated 31 May 2011 ("the Agreement") between the Government of the Socialist Republic of Vietnam and the World Bank. The Project Management Unit I Members of the Project Management Unit in the year and to the reporting date are: Mr. Nguyen Doan Tu Director Mrs. Nguyen Thi Lien Huong Deputy Director Mr. Tran Ngoc Tan Deputy Director Mrs. Pham Thi Tuyet Nhung Deputy Director Ms. Vu Thi Hong Nhung Chief Accountant Auditors The auditors of AASC Limited have taken the audit of financial statements of the Project. Responsibilities of the Project Management Unit I The Project Management Unit is responsible for preparing the project financial statements, including Statement of Financial Position, Statement of Funds and Uses of Funds, Statement of Designated Account and Statement of Withdrawals and Reconciliation of Funds, which comply with the accounting policies described in the attached Notes to the Financial Statements. The Project Management Unit assures that the accounting policies are appropriately selected and consistently applied. The Project Management Unit assures that the accounting records were fully maintained to prepare the financial statements in accordance with the applied accounting policies and to disclose, with reasonable accuracy at any time, the financial position of the Project. The Project Management Unit is also responsible for maintaining an effective internal control as management determines necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and comply with relevant laws, regulations and other provisions of the funding agreement that could have a direct and material financial effect on the Project financial statements. On behalf of the Project Management Unit Nguyen Doan Tu Director Hanoi, 27 June 2018 I I I 3 I I aasc I No.. 270618.003/BCTC.FIS2 INDEPENDENT AUDITORS' REPORT ON THE FINANCIAL STATEMENTS To: The Project Management Unit of Hospital Waste Management Support Project Opinion We have audited the accompanying Financial statements of the Hospital Waste Management Support Project ("the Project") which comprise Statement of Financial position as at 31 December 2017, Statement of Funds and Uses of Funds, Statement of Designated Account, Statement of Withdrawals and Reconciliation of Funds for the year then ended, and Notes to the Financial Statements, including a summary of significant accounting policies. In our opinion: The accompanying financial statements give a true and fair view of the financial position of the Project, including the balance of the Designated Account as at 31 December 2017, funds received and expenditures incurred, movements of the Designated Account for the year then ended in accordance with the basis of the principal accounting policies described in the Notes to the Financial Statements and the provisions of the Credit Agreement No. 4899-VN dated 31 May 2011 In addition, with respect to Statements of Expenditure, adequate supporting documents have been fully maintained to support to the replenishment requests submitted to the World Bank The expenditures are eligible and in right purposes of the Credit Agreement No. 4899-VN dated 31 May 2011. Basis of Opinion We conducted our audit in accordance with International Standards on Auditing ("ISAs"). Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Financial Statements section of our report. We are independent of Project Management Unit in accordance with the international Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants ("IESBA Code"), and we have fulfilled our other ethical responsibilities in accordance with the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Project Management Unit's Responsibility for the Financial Statements The Project Management Unit is responsible for the preparation of the financial statements in accordance with the principal accounting policies described in Notes to the Financial Statements, 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. In preparing the financial statements, management is responsible for assessing the Project's ability to continue as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting unless management either intends to cease operations, or has no realistic alternative but to do so. Auditor's Responsibility 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. T: (84) 4 3824 1990 1 F. ( 3 PhtingA member of International HAG ITOA C.. 4 I I As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout 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, 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 I to draw attention in our auditors' report to the related disclosures 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 auditors' 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 financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with the Project Management Unit 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. AASC Limited I Do Manh Cuong Nguyen Pham Hung Deputy General Director Auditor in-charge CPA Registered No.: 0744-2018-002-1 CPA Registered No.: 2893-2015-002-1 Hanoi, 27 June 2018 I I I * 5 I I Hospital Waste Management Support Project Financial Statements Credit Agreement No. 4899-VN Year ended 31 December 2017 STATEMENT OF FINANCIAL POSITION As at 31 December 2017 Nt 31/12/2017 31/12/2016 USD USD I Current assets 18,012,769.08 37,016,917.33 Cash on hand 57,149.90 46,859.28 Cash at bank 3 16,319,923.61 31,712,330.21 Advances to staff 57,322.22 11,123.16 Advances to contractors 4 1,577,952.07 5,246,604.68 Other receivables 421.28 - Non-current assets 97,111,170.03 51,066,742.12 Project implementation expenditures 6 96,720,003.83 50,161,494.55 I Foreign exchange rate differences 5 391,166.20 905,247.57 TOTAL ASSETS 115,123,939.11 88,083,659.45 Current liabilities 23,104,704.18 6,801,321.04 Payables to contractors 7 21,931,531.24 6,283,673.59 Tax payables and statutory obligations 458.97 536.53 Payables to employees 31,849.33 17,838.01 Other payables 8 1,140,864.64 499,272.91 Funds 92,019,234.93 81,282,338.41 Funds implementation project 92,019,234.93 81,282,338.41 - Funds received from the World Bank 85,899,951.00 77,109,965.00 - Counterpart funds 9 6,118,278.94 4,172,373.41 - Other funds 1,004.99 TOTAL RESOURCES 115,123,939.11 88,083,659.45 I I I I 3 6 I � , и ti со ��� о°ййw а�`о т°O о мw ® о �N =N� й�о� с`i с� � о � ui � ��Ш � N б� N О h � г� О и М � � б� М с- pj г о ,� V г б) � б� М.^7 tV r° г �: СЛ ш � м со г о � г � ы � о ;f � U Q О �П Cf� N СО Ci� М CD и - l6 Q М б? 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'о � �� �, n � � ° Ш с' с и и г� � св ,о и Q ш�-. о� г� c�i � � ° У � � � � a�i � и i с � � °� � а� .ь� Z 0 ш с� •«- й с й � � aci � г -� °з � св а- о, а � -� `� � � -п Q Е у � И c�i `о � � � у �v га � � � �Q. � `- � и• д с о �� � о о о о � � � � � г t� м � � а. = n_ с tL а > Е� и г. � ;� i�i м � ,а; аз р а 'ы о о и � � � и Е Е- с �-� -п � w ш ш ш � � с с с с и � � Ш � и > > � � о о о � � � � •� •� L � � Q Q .w`�' � Ш �` � ш ш -с п. � � � 'ш � й� а � �'' �� О ш сз с� с� ш° сг� I �`� ~и _г -�. � = С.� с� �L с� м _ с�, с� _ > � � � Hospital Waste Management Support Project Financial Statements Credit Agreement No. 4899-VN Year ended 31 December 2017 STATEMENT OF DESIGNATED ACCOUNT For the period: From 0110112017 to 3111212017 Account No: 181020000000347 Bank: Vietnam Joint Stock Commercial Bank for Industry and Trade - West Hanoi Branch Address: No. 8 Ho Tung Mau, Mai Dich, Cau Giay, Hanoi C Agreement No.: 4899- VN dated 3110512011 " H Currency: USD qG A PART A: ACTIVITIES USD Ilk Opening balance 6,654,791.89 Add: Total amounts deposited from the World Bank 8,789,986.00 Deduct: Total amounts withdrawn (15,154,945.80) Closing balance 289,832.09 PART B: RECONCILIATION 1. Amount advanced by the World Bank 7,166,868.80 2. Add: Amount supplemented by the World Bank 8,790,000.00 3. Deduct: Documented amount (7,725,643.72) 4. Present outstanding amount advanced to 8,231,225.08 5. Closing balance 289,832.09 6. Add: Bank charge 70.00 Amounts withdrawn and not yet claimed 7,941,322.99 7,941,392.99 7. Total advances accounted for 8,231,225.08 8 MM- =Mmmmmmm - -MM Hospital Waste Management Support Project Financial Statements Credit Agreement No. 4899-VN Year ended 31 December 2017 STATEMENT OF WITHDRAWALS AND RECONCILIATION OF FUNDS Credit Agreement No. 4899-VN For the fiscal year ended 31 December 2017 Withdrawal applications Quarterly Financial Statements Amount received Cumulative Amount Planned funds Documented documented No Date Currency claimed Quarter needed amount amount Date Amount Variances Note (a) (b) (b)-(a) Designated Account Year 2016 23 24/04/2017 USD 2,270,000.00 IV/2016 13,966,823.90 8,667,919.44 69,943,152.22 28/04/2017 2,269,993.00 (7.00) (1) Year 2017 19,513,406.00 7,725,643.72 6,519,993.00 (12,993,413.00) 24 13/10/2017 USD 6,520,000.00 I&II/2017 25,628,853.99 - 69,943,152.22 31/10/2017 6,519,993.00 (7.00) (1) 25 08/01/2018 USD - 111/2017 - 3,745,804.92 73,688,957.14 - - (2) 26 07/12/2017 USD 2,536,406.00 111/2017 17,604,359.49 - 73,688,957.14 - (2,536,406.00) (3) 27 07/03/2018 USD 10,457,000.00 IV/2017 28,211,354.57 - 73,688,957.14 - (10,457,000.00) (3) 28 07/03/2018 USD - IV/2017 - 3,979,838.80 77,668,795.94 - - (2) Total amounts in USD 21,783,406.00 16,393,563.16 8,789,986.00 (12,993,420.00) The amounts claimed were based on estimation for disbursement in the next 2 quarters after deducting any cash balance at the application date. (1) Bank charges of USD 14 (2) Documentation withdrawal (3) Received amount in 2018 9 I Hospital Waste Management Support Project Financial Statements Credit Agreement No. 4899-VN Year ended 31 December 2017 NOTES TO THE FINANCIAL STATEMENTS Fiscal year ended 31 December 2017 1. Background Hospital Waste Management Support Project operates under Credit Agreement No. 4899-VN dated 31 May 2011 between the Socialist Republic of Vietnam and the World Bank ("WB") and became effective on 01 September 2011 to reduce environmental degradation and potential risks for human health through the improved management of health care waste in Vietnam's hospital. Total project cost is estimated to be USD 155 million, in which IDA funding of USD 150 million and counterpart funding by the Government of Vietnam of USD 5 million. The Project has three (3) components: (i) Component 1: Policy and Institutional Environment Strengthening (implemented by Central Project Management Unit ("CPMU")); (ii) Component 2: Hospital Waste Management Improvement Facility (implemented by Central hospitals and Provincial Project Management Units ("PPMU")); and (iii) Component 3: Project Implementation Support and Coordination (implemented by CPMU). The Project has become effective on 01/09/2011 and it is expected to complete on 30/08/2019. The Project is managed by the Central Project Management Unit which is located at Room C8- C10, 5 floor, Pullman Hotel, No. 40 Cat Linh street, Dong Da district, Hanoi; 21 Central hospitals and 50 PPMUs. Central Hospital PPMU Hospital of Ophthalmology Hung Yen Can Tho Lam Dong Hospital of Lung diseases Hai Duong An Giang Dak Nong Hospital of Traditional Medicine HaiPhong Kien Giang Ninh Binh Hospital of National Geriatric Bac Giang Bac Lieu Dong Thap Hospital of Vietnam-Sweden Uong Bi Son La Tra Vinh Ben Tre Hospital of National Acupuncture Hoa Binh Tien Giang Ca Mau Hospital of National Psychiatric No.1 Ha Giang Long An Soc Trang Hospital of National Rehabilitation Bac Kan Quang Ninh Ba Ria - Vung Hospital of Can Tho General Cao Bang Thai Binh Tau Hospital of C Da Nang Binh Dinh Nam Dinh Hospital of National Odont- Stomatology Phu Yen Thanh Hoa Hospital of Vietnam-Cuba Dong Hoi Khanh Hoa Vinh Phuc Friendship National Institute of Maritime Medicine Dak Lak Phu Tho E Hospital Da Nang Dien Bien National Institute of Pediatrics Quang Tri Lai Chau Central 74 Hospital Quang Binh Quang Nam Hue Central Hospital Ha Tinh Quang Ngai Tue Tinh Hospital Nghe An Ninh Thuan Le Huu Trac National Institute of Burns Tuyen Quang Binh Thuan Cluster Bach Mai Hospital Vinh Long Binh Phuoc Thong Nhat Hospital Kon Tum Lao Cai 2. Principal Accounting Policies a. Basis of preparation of the Financial Statements The annual accounting period commences from 1st January and ends at 31st December. I The Project maintains its accounts in Vietnam Dong (VND). The financial statements are presented in United State Dollar (USD) in accordance with the requirements of the World Bank. I The principal accounting policies are summarized as below: 10 I Hospital Waste Management Support Project Financial Statements Credit Agreement No. 4899-VN Year ended 31 December 2017 b. Foreign currencies Transactions using the World Bank fund in VND were converted into USD at average exchange rates of all funds received during the year. . Transactions using the counterpart fund are converted by exchange rates announced by the Ministry of Finance in the month fund received. Monetary assets and liabilities denominated in currencies other than USD are converted into USD using buying exchange rate provided by the service bank (mentioned at Note 2d) at the reporting date. All foreign exchange rate differences from these transactions are presented as foreign exchange rate differences on the Statement of Financial Position. I c. Funds and Expenditures Funds: - Funds received from the World Bank are recorded when remittance made into Designated Account. I - Counterpart funds of the Vietnamese Government are recorded when payments are made directly from the Vietnamese Government to contractors/suppliers or when funds are remitted to the Project Management Units for settlement of project's activities. Expenditures: - Expenditures using the World Bank fund are recognized when they are actually incurred. - Expenditures using the counterpart fund are recognized when they are actually incurred and associated counterpart funds are available for these expenditures. d. Designated Account and its interest Designated Account is the deposit account in USD opened at the Vietnam Joint Stock Commercial Bank for Industry and Trade - West Ha Noi Branch for the implementation activities of the Projects. Payments made via Designated Account are for eligible expenditures of the Project in accordance with the provisions of the Credit Agreement No. 4899-VN dated 31 May 2011, the Project's Operations Manual and relevant regulations established by the World Bank. Interests of the Designated Account are considered as receipts of the State Budget and initially recorded as Other payables in Statement of Financial Position and used to cover bank charges. At the end of the project, outstanding interests will be returned to the Vietnamese Government. In case bank charges are not fully covered by the interests, the Project Management Unit will plan to settle by the counterpart funds. (According to the Circular No. 111/2016/TT-BTC dated 30 June 2016 which comes into force from 01 November 2016). e. Fixed assets Fixed assets are not presented on Statement of financial position. All expenses and incomes from purchases of disposal of fixed assets are record as receipts or disbursements in the period incurred. Memorandum listings are kept for control and management purposes. I I 11 1 I Hospital Waste Management Support Project Financial Statements Credit Agreement No. 4899-VN Year ended 31 December 2017 3. Cash at bank 31/12/2017 31/12/2016 USD USD CPMU 321,316.80 7,130,907.53 Designated account 289,832.09 6,654,791.89 Interest of Designated account (USD) 9,973.60 9,979.10 Settlement account (VND) 21,305.60 465,931.03 Others (USD) 205.51 205.51 The Central Hospitals 2,414,316.70 2,775,563.62 National Institute of Pediatrics 303,185.78 546,136.92 Cluster Bach Mai Hospital 736,351.95 - Le Huu Trac National Institute of Burns 62,480.27 161,123.71 Hospital of National Psychiatric No.1 44.528.39 117.889.88 Hospital of Vietnam-Sweden Uong Bi 277,252.27 435,857.16 Central 74 Hospital 264,132.64 92,225.87 Hue Central Hospital 63,267.01 - Hospital of Vietnam-Cuba Dong Hoi Friendship 209,800.31 151,406.95 E Hospital 114,993.60 293,58890 Hospital of Can Tho General 60,592.81 256,640.06 Tue Tinh Hospital 83,111.53 79,939.12 Hospital of National Acupuncture 22,228.79 165,326.35 Hospital of Lung diseases 9,946.99 16,966.13 Hospital of National Rehabilitation 8,448.26 78,563.63 Hospital of Traditional Medicine 68,599.52 61,493.32 Hospital of C Da Nang 2,102.14 96,238.00 National Institute of Maritime Medicine 57,230.67 142,886.35 Hospital of Ophthalmology - 41,858.09 Hospital of National Odonto - Stomatology 26,063.59 8,566.45 Hospital of National Geriatric 0.18 28,856.73 PPMUs 13,584,290.11 21,805,859.06 Cao Bang 514,666.40 73,194.92 Dak Nong 16,957.47 718,653.96 Dak Lak 479,161.11 485,250.53 Lam Dong 260,360.88 372,226.02 Binh Phuoc 18,006.15 567,973.26 Tra Vinh 796,201.97 822,281.83 Quang Tri 307,841.36 307,390.74 Quang Binh 308,837.81 776,111.30 Hai Duong 20,268.27 103,009.11 HaiPhong 214,702.83 238,320.64 Quang Nam 1,110,711.72 1,117,817.91 Can Tho 27,208.74 153,366.99 Dong Thap 40,433.44 642,538.34 Ca Mau 51,027.78 773,248.58 Thanh Hoa 48,167.72 179,076.22 Lao Cai 383,237.88 - Bac Kan 1,925.50 219,131.34 Quang Ninh 660,415.72 640,044.17 Hung yen 8,432.09 5,646.97 An Giang 25,356.97 687,060.45 Kien Giang 547,762.35 548,485.55 I 12 I I Hospital Waste Management Support Project Financial Statements Credit Agreement No. 4899-VN Year ended 31 December 2017 3. Cash at bank (continued) 31/12/2017 31/12/2016 USD USD PPMUs (continued) Bac Lieu 133,888.84 960,184.00 Tien Giang 41,245.17 76,068.13 Long An 300,588.61 21,583.54 Da Nang 199.734.50 178,323.74 Ha Tinh 132,467.75 145,118.73 Nghe An 826,195.27 903,200.50 Bac Giang 853,871.31 848,069.94 Quang Ngai 580,071.07 313,879.74 Binh Dinh 220,282.04 259,963.73 Phu Yen 32,512.10 71,854.10 Khanh Hoa 443,468.89 568,130.90 Ninh Thuan 5,979.16 572,079.52 Binh Thuan 169,314.96 887,249.36 Soc Trang 342,271.50 1,323,176.46 Vinh Long 483,035.95 479,754.06 Ba Ria - Vung Tau 30,156.49 150,298.71 Thai Binh 1,002,099.13 995,714.89 Nam Dinh 470,619.91 467,422.43 Ninh Binh 151,266.96 154,635.78 Son La 60,718.61 324,857.56 Hoa Binh 295,111.58 623,226.59 Ha Giang 46,094.41 112,224.59 Tuyen Quang 19,791.08 453,288.20 Vinh Phuc 562,131.03 520,877.26 Phu Tho 79,228.49 507,758.93 Dien Bien 138,170.93 246,693.50 Lai Chau 122,168.62 195,689.73 Ben Tre 121.59 13,705.61 16,319,923.61 31,712,330.21 4. Advances to contractors 31/12/2017 31/12/2016 USD USD CPMU 233,073.22 150,998.55 The Central Hospitals 723,856.95 695,947.55 National Institute of Pediatrics 3,453.90 Cluster Bach Mai Hospital 138,473.75 - Le Huu Trac National Institute of Burns - 101,805.37 Hospital of National Psychiatric No.1 922.72 114,865.70 Hospital of Vietnam-Sweden Uong Bi 6,614.95 - Central 74 Hospital - 3,082.34 Hue Central Hospital 325,564.98 - Hospital of Vietnam-Cuba Dong Hoi Friendship - 145,926.90 Hospital of Can Tho General 159,240.86 I 13 1 I Hospital Waste Management Support Project Financial Statements Credit Agreement No. 4899-VN Year ended 31 December 2017 4. Advances to contractors (continued) 31/12/2017 31/12/2016 USD USD The Central Hospitals (continued) Thong Nhat Hospital 247,022.50 - Tue Tinh Hospital - 64,970.89 Hospital of National Acupuncture 749.89 2,869.57 Hospital of National Rehabilitation - 2,766.49 Hospital of C Da Nang 1,054.26 99,856.02 National Institute of Maritime Medicine - 563.41 PPMUs 621,021.90 4,399,658.58 Cao Bang - 153,295.33 Dak Nong 2,561.02 - Lam Dong - 3,158.57 Binh Phuoc - 488,384.36 ITra Vinh - 235,801.18 Quang Tri - 139,795.13 HaiPhong - 1,849.41 Quang Nam 44,781.16 391,345.97 4' Dong Thap - 1,804.93 Ca Mau 40,335.24 112,087.19 Lao Cai 3,903.84 - Quang Ninh 21,478.61 98,332.50 An Gian9 - 5,047.69 SC Kien Giang 131,255.45 135,396.79 Bac Lieu 2,834.35 110,458.83 Da Nang 2,471.59 2,467.24 Bac Giang - 162,923.82 Quang Ngai 256,280.37 252,161.96 Binh Dinh - 331,706.87 Khanh Hoa - 52,289.65 Ninh Thuan 6,409.79 6,398.50 Soc Trang 21,041.02 873,793.74 Thai Binh 40,465.64 40,394.36 Ninh Binh - 37,322.77 Son La - 250,722.40 Ha Giang 5,382.03 112,643.20 Tuyen Quang - 167,136.51 Vinh Phuc 4,183.18 Phu Tho - 187,008.37 Lai Chau 41,821.79 41,748.13 I 1,577,952.07 5,246,604.68 I I I 14 I I Hospital Waste Management Support Project Financial Statements Credit Agreement No. 4899-VN Year ended 31 December 2017 5. Foreign exchange rate differences Year ended Year ended 31/12/2017 31/12/2016 USD USD Opening balance Foreign exchange rate differences 905,247.57 464,429.59 Foreign exchange rate differences incurred in the year (514,081.37) 440,817.98 Closing balance Foreign exchange rate differences 391,166.20 905,247.57 6. Expenditures 3 31/12/2017 31/12/2016 USD USD Expenditures covered by: The World Bank 90,411,124.35 46,017,929.09 The Counterpart fund 6,307,874.49 4,143,565.46 Other fund 1,004.99 96,720,003.83 50,161,494.55 I Expenditures are financed under the Credit Agreement No. 4899 - VN dated 31 May 2011 as below: 3 No. Component Funded 1 Policy and Institutional Environment Strengthening 100% of total expenditures 2 Hospital Waste Management Facility Improvement 100% of total expenditures 3 Project Implementation Support and Coordination 100% of total expenditures I I I I I I I I 15 m -mmm- m-mmm Hospital Waste Management Support Project Financial Statements Credit Agreement No. 4899-VN Year ended 31 December 2017 Expenditures by components (Currency unit: USD) Year ended 31/12/2017 Accumulated to 31/12/2017 Counterpart Counterpart Component WB fund fund Other Total WB fund fund Other Total Component 1: Policy and Institutional 1,628,851.78 - - 1,628,851.78 6,796,435.87 - - 6,796,435.87 Environment Strengthening Sub-component IA: Steamlining the 554,497.91 - - 554,497.91 1,074,152.70 - - 1,074,152.70 policy and regulatory framework for health care waste management Sub-component IB: Strengthening 272,834.15 - - 272,834.15 1,081,499.82 - - 1,081,499.82 capacities for health care waste management Sub-component IC: Establishing 801,519.72 - - 801,519.72 4,590,561.47 - - 4,590,561.47 monitoring and surveilance systems for health care waste management Sub-component ID: Hiring long-term - - - - 31,499.83 - - 31,499.83 consultant for component 1 Sub-component IF: Other fees - - - - 18,722.05 - - 18,722.05 Component 2: Hospital Waste 42,285,318.56 2,068,973.47 1,004.99 44,355,297.02 80,438,337.06 5,746,789.83 1,004.99 86,186,131.88 Management Improvement Facility Sub-component 2A: Central Hospital 7,578,302.46 217,388.52 1,004.99 7,796,695.97 12,467,266.42 772,107.73 1,004.99 13,240,379.14 Solid waste treatment 333,590.09 - - 333,590.09 1,355,895.48 - - 1,355,895.48 Wastewater collection and treatment 6,310,605.66 163,316.34 1,004.99 6,474,926.99 9,902,450.32 423,964.86 - 10,327,420.17 Logistic and management capacity 870,299.68 5,822.48 - 876,122.16 1,077,157.11 36,578.11 1,004.99 1,113,735.22 enhancing Grant management 63,807.03 48,249.70 - 112,056.73 131,763.51 311,564.76 - 443,328.27 Sub-component 2B: Provincial Hospital 34,707,016.10 1,851,584.95 - 36,558,601.05 67,971,070.64 4,974,682.10 - 72,945,752.74 Solid waste treatment 18,251,406.51 742,762.99 - 18,994,169.50 35,024,495.94 1,532,393.91 - 36,556,889.85 Wastewater collection and treatment 14,691,330.87 428,645.93 - 15,119,976.80 26,961,538.61 1,280,459.28 - 28,241,997.89 Logistic and management capacity 1,465,580.25 15,522.57 - 1,481,102.82 4,316,570.64 136,066.79 - 4,452,637.43 enhancing Grant management 298,698.47 664,653.46 - 963,351.93 1,668,465.45 2,025,762.12 - 3,694,227.57 16 Hospital Waste Management Support Project Financial Statements Credit Agreement No. 4899-VN Year ended 31 December 2017 Expenditures by categories (continued) (Currency unit: USD) Year ended 31/12/2017 Accumulated to 31/12/2017 Counterpart Counterpart Component WB fund fund Other Total WB fund fund Other Total Component 3: Project Implementation 479,024.92 95,335.56 - 574,360.48 3,176,351.42 561,084.66 - 3,737,436.08 Support and Coordination Sub-component 3A: Short-term local - - - - 15,001.07 - - 15,001.07 consultants Sub-component 3B: Workshops - - - 162,384.03 - - 162,384.03 Sub-component 3C: Local training on - - - 79,876.35 - - 79,876.35 project management Sub-component 3D: Procurements - - - 247,204.91 - - 247,204.91 Sub-component 3E: Monitoring, and - - - 14,558.53 - - 14,558.53 project implementation evaluation Sub-component 3F: Long-term 193,528.54 - - 193,528.54 1,060,120.37 - - 1,060,120.37 consultants Sub-component 3G: Independent 93,395.08 - - 93,395.08 745,470.54 - - 745,470.54 verifications Sub-component 3H: Operating costs 150,143.05 95,335.56 - 245,478.61 632,741.81 559,329.59 - 1,192,071.40 Sub-component 31: Oversea study and - - - - 22,383.28 - - 22,383.28 training Sub-component 3J: Audit 33,012.50 - - 33,012.50 117,097.54 - - 117,097.54 Sub-component 3K: Contingency 8,945.75 - - 8,945.75 63,660.98 1,755.07 - 65,416.05 Sub-component 3L: Operating Manual - - - 15,852.01 - - 15,852.01 Update _ 44,393,195.26 2,164,309.03 1,004.99 46,558,509.28 90,411,124.35 6,307,874.49 1,004.99 96,720,003.83 17 I Hospital Waste Management Support Project Financial Statements Credit Agreement No. 4899-VN Year ended 31 December 2017 7. Payables to contractors 31/12/2017 31/12/2016 USD - USD CPMU 26,155.35 230,806.39 The Central Hospitals 3,462,089.71 499,277.03 National Institute of Pediatrics 322,652.97 863.06 Cluster Bach Mai Hospital 1,596,866.34 - Le Huu Trac National Institute of Burns 61,652.58 70,686.49 Hospital of National Psychiatric No.1 49,080.64 - Hospital of Vietnam-Sweden Uong Bi 278,538.97 - Central 74 Hospital 480,260.74 14,824.97 Hue Central Hospital 6,247.42 2,742.49 Hospital of Vietnam-Cuba Dong Hoi Friendship 180,021.13 5,988.55 E Hospital 100,381.75 - Hospital of Can Tho General 53,800.96 30,975.05 Thong Nhat Hospital 7,135.99 - Tue Tinh Hospital 78,634.86 4,138.41 Hospital of National Acupuncture 19,580.86 162,358.61 Hospital of Lung diseases - 56,758.85 Hospital of National Rehabilitation 13,371.32 28,409.28 Hospital of Traditional Medicine 6,735.07 47,902.74 Hospital of C Da Nang 161,800.28 - National Institute of Maritime Medicine 45,327.83 58,987.36 Hospital of Ophthalmology - 0.04 Hospital of National Odonto - Stomatology 14,641.13 PPMUs 18,443,286.18 5,553,590.17 Cao Bang 602,276.36 198,481.29 Dak Nong 483,323.65 139,078.66 Dak Lak 419,987.28 300,594.74 Lam Dong 144,605.16 - Binh Phuoc 1,087,384.15 149,076.88 Tra Vinh 1,625,143.16 23,289.43 Quang Tri 333,660.80 1,055.36 Quang Binh 620,867.86 448,096.19 Hai Duong 13,394.46 214,016.70 HaiPhong 194,368.40 156,733.60 Quang Nam 1,518,137.46 10,362.97 Can Tho 786,018.18 171,005.31 Dong Thap 11,381.17 - Thanh Hoa 92,357.98 110,328.07 Lao Cai 795,346.49 - Bac Kan 9,686.20 229,741.81 Quang Ninh 1,178,565.59 2,983.27 Hung yen 5,593.30 40,277.81 An Giang - 629,213.96 Kien Giang 3,751.83 6,678.71 Bac Lieu 81,694.11 14,937.93 Tien Giang - 28,906.84 Long An 338,039.07 332,956.86 I 18 I I Hospital Waste Management Support Project Financial Statements Credit Agreement No. 4899-VN Year ended 31 December 2017 7. Payables to contractors (continued) 31/12/2017 31/12/2016 USD USD PPMUs (continued) Da Nang 203,410.92 376,804.82 Ha Tinh 139,881.83 143,235.68 Nghe An 204,676.10 314,751.12 Bac Giang 658,518.35 128,506.87 Quang Ngai 36,170.22 29,523.60 1 Binh Dinh 788,764.39 102,979.20 Phu Yen 3,670.14 48,506.63 Khanh Hoa 536,420.46 121.587.05 Ninh Thuan 708.59 707.35 Binh Thuan 94,888.15 - Soc Trang 2,064,486.23 5,442.36 Vinh Long - 4,231.13 Ba Ria - Vung Tau 1,496.63 14,744.60 Thai Binh 42,366.74 - Nam Dinh 125,472.93 - Ninh Binh 432,348.43 37,543.36 Son La 32,162.86 314,606.85 Hoa Binh 830,727.22 28,277.54 Ha Giang 401,350.11 123,346.61 Tuyen Quang 33,909.13 72,847.56 Vinh Phuc 537,950.04 253,613.34 Phu Tho 555,248.70 96,928.81 Dien Bien 372,255.60 21,486.98 Lai Chau 819.75 106,102.32 21,931,531.24 6,283,673.59 I 8. Other payables 31/12/2017 31/12/2016 USD USD CPMU 31,019.66 12,108.48 The Central Hospitals 79,927.62 69,567.60 National Institute of Pediatrics 5,406.05 3,357.97 Cluster Bach Mai Hospital 3,418.56 Le Huu Trac National Institute of Burns 1,961.32 1,502.40 Hospital of National Psychiatric No.1 3,799.24 3,170.68 Hospital of Vietnam-Sweden Uong Bi 11,946.18 11,176.88 Central 74 Hospital 1,701.01 636.26 Hue Central Hospital 547.77 352.27 Hospital of Vietnam-Cuba Dong Hoi Friendship 7,037.47 7,135.74 E Hospital 411.47 - Hospital of Can Tho General 2,630.84 2,096.93 Thong Nhat Hospital - - Tue Tinh Hospital 954.01 678.88 Hospital of National Acupuncture 6,314.76 6,203.91 I 19 I I Hospital Waste Management Support Project Financial Statements Credit Agreement No. 4899-VN Year ended 31 December 2017 8. Other payables (continued) 31/12/2017 31/12/2016 USD USD The Central Hospitals (continued) Hospital of Lung diseases 9,374.15 9,280.23 Hospital of National Rehabilitation 5,221.40 4,881.22 Hospital of Traditional Medicine 8,767.61 8,378.95 Hospital of C Da Nang 7,766.57 2,532.61 National Institute of Maritime Medicine 944.83 689.39 Hospital of Ophthalmology - 4,137.07 Hospital of National Odonto - Stomatology 1,724.20 2,519.20 Hospital of National Geriatric 0.18 837.01 PPMUs 1,029,917.36 417,596.83 Cao Bang 5,683.26 32,565.00 Dak Nong 9,205.87 7,944.04 Dak Lak 18,087.88 15,648.14 I Lam Dong 1,826.12 1,023.91 Binh Phuoc 7,999.85 6,207.11 Tra Vinh 16,307.56 12,269.48 Quang Tri 4,494.03 2,941.47 Quang Binh 6,711.82 5,867.45 Hai Duong 903.47 895.33 HaiPhong 22,246.55 21,301.14 Quang Nam 12,593.81 5,858.64 Can Tho 2,715.00 2,469.86 Dong Thap 612,760.68 24,612.17 Ca Mau 9,330.31 8,284.01 Thanh Hoa 22,256.71 29,911.53 Lao Cai 2,173.36 - Bac Kan 1,908.83 1,968.53 Quang Ninh 7,453.26 4,313.21 Hung yen 1,106.64 879.33 An Giang 4,781.18 4,704.61 Kien Giang 15,837.06 13,055.84 Bac Lieu 14,010.34 9,013.47 Tien Giang 19,229.41 18,959.19 Long An 19,692.18 18,144.59 Da Nang 10,091.76 9,000.43 Ha Tinh 6,464.68 5,818.64 Nghe An 17,831.30 13,864.81 Bac Giang 15,759.27 11,434.10 Quang Ngai 9,804.44 6,331.84 Binh Dinh 7,796.26 20,168.88 Phu Yen 4,243.33 4,087.99 Khanh Hoa 16,041.39 13,816.36 Ninh Thuan 6,593.32 4,119.61 Binh Thuan 4,716.56 641.52 Soc Trang 22,930.99 21,424.07 Vinh Long 3,501.10 592.54 Ba Ria - Vung Tau 597.47 185.63 I 20 I I Hospital Waste Management Support Project Financial Statements Credit Agreement No. 4899-VN Year ended 31 December 2017 8. Other payables (continued) 31/12/2017 31/12/2016 USD - USD PPMUs (continued) Thai Binh 11,452.11 6,539.10 Nam Dinh 8,555.99 2,300.54 Ninh Binh 1,354.39 655.33 Son La 6,050.10 4,784.57 Hoa Binh 13,461.40 11,199.23 Ha Giang 4,185.90 4,003.24 Tuyen Quang 7,314.85 5,101.62 Vinh Phuc 4,077.24 3,142.87 Phu Tho 5,221.17 4,647.26 Dien Bien 1,099.99 451.97 Lai Chau 1,335.58 741.02 Ben Tre 121.59 13,705.61 1,140,864.64 499,272.91 9. Counterpart funds 31/12/2017 31/12/2016 USD USD CPMU 557,292.99 465,750.04 The Central Hospitals 527,611.59 327,020.65 National Institute of Pediatrics 16,008.88 12,519.26 Cluster Bach Mai Hospital 69,169.18 - Le Huu Trac National Institute of Burns 39,401.04 25,366.88 Hospital of National Psychiatric No.1 24,911.69 24,911.69 Hospital of Vietnam-Sweden Uong Bi 32,435.68 19,007.76 Central 74 Hospital 15,915.56 3,170.58 Hue Central Hospital 50,907.24 27,176.37 Hospital of Vietnam-Cuba Dong Hoi Friendship 29,031.77 27,387.99 E Hospital 20,210.72 - Hospital of Can Tho General 34,065.46 31,736.47 Thong Nhat Hospital 11,837.75 - Tue Tinh Hospital 21,294.39 9,058.79 Hospital of National Acupuncture 25,180.25 23,142.31 Hospital of Lung diseases 19,131.88 12,246.67 Hospital of National Rehabilitation 22,841.48 22,841.48 Hospital of Traditional Medicine 23,867.78 23,867.78 Hospital of C Da Nang 23,711.52 22,646.98 National Institute of Maritime Medicine 14,808.47 9,058.79 Hospital of Ophthalmology 16,055.84 16,055.84 Hospital of National Odonto - Stomatology 16,825.01 16,825.01 PPMUs 5,033,374.36 3,379,602.72 Cao Bang 123,397.83 31,481.65 Dak Nong 79,592.59 22,767.63 Dak Lak 192,425.63 144,083.90 I 21 I Hospital Waste Management Support Project Financial Statements Credit Agreement No. 4899-VN Year ended 31 December 2017 9. Counterpart funds (continued) 31/12/2017 31/12/2016 3USD USD PPMUs (continued) Lam Dong 30,806.36 22,228.42 Binh Phuoc 91,431.16 91,431.16 Tra Vinh 132,642.85 104,639.86 Quang Tri 103,091.77 70,407.39 Quang Binh 164,713.88 116,826.84 Hai Duong 20,169.44 17,177.19 HaiPhong 354,820.86 276,137.33 Quang Nam 122,057.85 88,372.73 Can Tho 91,704.55 42,587.06 Dong Thap 221,819.12 175,045.12 Ca Mau 99,434.78 67,282.66 Thanh Hoa 333,331.46 178,758.24 Lao Cai 23,616.12 - Bac Kan 29,408.78 22,796.47 Kon Turn 7,004.24 - Ni Quang Ninh 72,623.68 49,137.60 IG KI Hung yen 18,608.47 11,491.17 AP An Giang 115,522.99 82,392.25 Kien Giang 110,458.26 88,987.32 Bac Lieu 166,040.11 111,354.16 Tien Giang 150,323.02 135,971.95 Long An 196,004.09 174,436.64 Da Nang 41,610.19 33,695.93 Ha Tinh 104,471.37 78,323.94 Nghe An 156,524.79 37,202.88 Bac Giang 62,730.52 6,627.02 Quang Ngai 170,596.02 82,111.04 Binh Dinh 83,134.18 48,207.36 Phu Yen 60,760.34 55,327.44 Khanh Hoa 180,796.91 111,709.20 Ninh Thuan 25,796.96 19,513.72 Binh Thuan 41,382.28 - Soc Trang 173,487.10 152,830.13 Vinh Long 12,661.21 - Ba Ria - Vung Tau 8,599.44 - Thai Binh 51,146.75 48,832.59 Nam Dinh 15,769.94 Ninh Binh 9,118.34 9,118.34 Son La 90,748.16 80,711.98 Hoa Binh 98,441.03 79,180.31 Ha Giang 104,601.86 62,278.69 Tuyen Quang 99,641.19 64,815.10 Vinh Phuc 50,382.68 18,695.78 Phu Tho 50,083.89 50,083.89 Dien Bien 43,654.71 - Lai Chau 31,641.97 - Ben Tre 214,542.64 214,542.64 3 6,118,278.94 4,172,373.41 22 I I Hospital Waste Management Support Project Financial Statements Credit Agreement No. 4899-VN Year ended 31 December 2017 10. Subsequent events There have been no significant events occurring after the reporting date, which would require adjustments or disclosures to be made in the Financial statements. 11. Corresponding figures The corresponding figures are the financial statements for the fiscal year ended as at 31 December 2016 which were audited by AASC Limited. 12. Approval of the Financial Statements The Financial Statements were approved by the Project Management Unit for issuance on 27 June 2018 I__ Nguyen Doan Tu Vu Thi Hong Nhung Director Chief Accountant Hanoi, 27 June 2018 I I I I I I I I I 23 I I I taasc I No.:270618.003/BCTC.FIS2 INDEPENDENT AUDITORS' REPORT ON THE INTERNAL CONTROL SYSTEM To: Project Management Unit of Hospital Waste Management Support Project We have audited, in accordance with International Standards on Auditing, the financial statements of the Hospital Waste Management Support Project ("the Project") for the year ended 31 December 2017 and issued the auditors report thereon dated 27 June 2018 expressing an opinion on those financial statements. In connection with our audit of the financial statements, we also examined the effectiveness of internal control over compliance with requirements that could have a direct and material financial effect on the financial statements as well as the internal control over financial reporting for the year ended 31 December 2017. Responsibilities of the Project Management Unit The Project Management Unit is responsible for maintaining an effective internal control over compliance with requirements that could have a direct and material financial effect on the financial statements as well as the internal control over financial reporting. Auditor's Responsibility Our responsibility is to express an opinion on the effectiveness of internal control based on our examination. I Our examination was conducted in accordance with the International Standard on Assurance Engagements (ISAE) 3000 (Revised). That standard requires that we comply with ethical requirements and plan and perform our procedures to obtain reasonable assurance about whether, in all material respects, the Project has maintained an effective internal control over compliance with requirements that could have a direct and material financial effect on the financial statements as well as internal control over financial reporting. I Our examination included obtaining an understanding, testing, and evaluating the design and operating effectiveness of the internal control, and performing other procedures as we considered necessary in the circumstances to obtain sufficient appropriate evidence to provide a basis for our opinion. Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not to be prevented or detected on a regular basis. In addition, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. I I T: (84) 4 3824 1990 : (8z)P4iun29Hieu, Hall( A member of I International HANG KIMiTOAN AAC 24 I I I Auditors' opinion In our opinion, the Project has maintained an effective internal control over misstatements that could have a direct and material financial effect on the Project's financial statements for the year ended 31 December 2017. AASC Limited Do Manph Cuong Nguyen Pham Hung Deputy General Director Auditor in-charge CPA Registered No.: 0744-2018-002-1 CPA Registered No.: 2893-20154-002-1 Hanoi, 27 June 2018 I I I I I I I I I I I I 25 I I I ,aasc No.: 270618.003/BCTC.FIS2 INDEPENDENT AUDITORS' REPORT ON THE COMPLIANCE To: The Project Management Unit of Hospital Waste Management Support Project We have audited, in accordance with the International Standards on Auditing, the financial statements of the Hospital Waste Management Support Project ("the Project") for the year ended 31 December 2017 and issued the auditors report thereon dated on 27 June 2018 expressing an opinion on those financial statements. In connection with the audit of the financial statements, we also performed procedures on the Project's compliance with the Credit Agreement No. 4899-VN dated 31 May 2011, law and regulations that have a direct and material effect on the Project's financial statements for the year ended 31 December 2017 ("the Requirements"). Responsibilities of the Project Management Unit The Project Management Unit is responsible for complying with the Requirements applicable to the Project. Auditor's Responsibility Our responsibility is to express an opinion on the Project's compliance with the Requirements based on our procedures. We limited our tests of compliance to the requirements, and we did not test compliance with all laws and regulations applicable to the Project. We performed our work in accordance with the International Standard on Assurance Engagements (ISAE) 3000 (Revised). That standard requires that we comply with ethical requirements and plan and perform our procedures to obtain reasonable assurance about whether, in all material respects, the Project has complied with the Requirements. An assurance engagement to report on the compliance with the requirements at the Project involves performing procedures to obtain evidence about whether the Project's activities are free of material noncompliance with the requirements, including obtaining an understanding of the internal control relevant to the Project's compliance with the requirements. The procedures selected depend on the auditors' judgment, including the assessment of risks that the Project does not comply with the requirements and whether such noncompliance could have a direct and material financial effect on the Project's financial statements. Our procedures included testing the compliance with the requirements we consider necessary to provide a reasonable assurance that the requirements are complied by the Project. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. I I I T: (84 438241990 F: (84) 4 325 397<3 A member of International HANGi KIM TOAN AAST 26 I I Auditor's Opinion in our opinion, the Project has complied with the Requirements that could have a direct and material financial effect on the Project's financial statements for the year ended 31 December 2017. AASC Limited I Do Manh Cuong Nguyen Pham Hung Deputy General Director Auditor in-charge CPA Registered No.: 0744-2018-002-1 CPA Registered No.: 2893-2015-002-1 Hanoi. 27 June 2018 I I I I I I I I I I I I I 27 I