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The Federal Democratic Republic of Ethiopia cf>')
Date
Ministry of Finance and Economic Cooperation
The World Bank
I Ethiopia Country Office
Addis Ababa
Dear Sir,
Subject: - Submission of General Education Quality Improvement Proiect-11
IDA Cr. No. 53150; GPE Grant No. TF 016684 and MDTF Grant No. TF018053
Annual financial audit report for the period ended July 7, 2017 (EFY 2009)
Attached herewith please find the annual financial Audit Report for the year ended July 7, 2017
(EFY 2009).
~ Annual Audit findings and recommendations (one copy)
~ Independent auditors' report on the financial statements (one copy) and
~ Independent auditors' report on designated and pool birr account statements
Thank you for your usual cooperation.
Sincerely yours,
Degu Labw Bguale
Channel One Programs CoontiDating DiMctlnte
Provisional Coordinator
• Ministry of Education
Addis Ababa
• Channel One Programs Coordinating Directorate
o5JAN C-,J
• GEQIP Program follow up
MoFEC
llAh f?'.U/.41 4-hll +r-w,
nllil nfllJ n.
Tel 251-11-155 24 00, 22 66 98 P.O.Box 1905,1037 Fax 251-11-156 01 24,55 14 96 Addis Ababa- Ethiopia
251-11-155 00 81, 83 86 89 251-11-155 11 38
MhP''} on All il.lJ4-A '} Yi;''} <l?'l'C .l','1'4'(l.
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I
• f 'I.U/il P"Coo&. h1A°lll-T JlC?' ~7i'J
The Federal Democratic Republic of Ethiopia
Audit Services Corporation
I INDEPENDENT AUDITOR'S REPORT ON THE
I FINANCIAL STATEMENTS OF
MINISTRY OF FINANCE AND ECONOMIC COOPERATION
GENERAL EDUCATION QUALITY IMPROVEMENT PROGRAM PHASE II
I We have audited the accompanying financial statements of General Education Quality
Improvement Program Phase II of the Federal Democratic Republic of Ethiopia, Ministry of
I Finance and Economic Cooperation, which comprise the balance sheet as at 7 July 2017, and
the statement of sources and uses of funds and the designated account statement for the year
then ended and a summary of significant accounting policies and other explanatory
I information.
Responsibility for the Financial Statements
I The Ministry of Finance and Economic Cooperation (MoFEC) is responsible for the
preparation and fair presentation of these financial statements in accordance with the Ethiopian
I Government's Manual of the Federal Accounting System which is based on a modified cash
basis of accounting and for such internal control as it determines is necessary to enable the
preparation of financial statements that are free from material misstatement, whether due to
I fraud or error.
Auditor's Responsibility
I Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with International Standards on Auditing. Those
I standards require that we comply with ethical requirements and plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free from material
misstatement.
I An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditor's
I judgment, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entity's preparation and fair presentation of the
I financial statements 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
entity's internal control. An audit also includes evaluating the appropriateness of accounting
I policies used and the reasonableness of accounting estimates made by management, as well as
evaluating the overall presentation of the financial statements.
I ~ 251-011-5515222 Fax 251-011-5513083
251-011-5535012
I 251-011-5535015
251-011-5535016
I
I
I INDEPENDENT AUDITOR'S REPORT ON THE
FINANCIAL STATEMENTS OF
MINISTRY OF FINANCE AND ECONOMIC COOPERATION
I GENERAL EDUCATION QUALITY IMPROVEMENT PROGRAM PHASE II
(continued)
I We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion.
I Opinion
In our opinion the financial statements give a true and fair view of the financial position of
I General Education Quality Improvement Program Phase II (GEQIP II) of the Federal
Democratic Republic of Ethiopia, Ministry of Finance and Economic Cooperation as at 7 July
2017 and of its financial performance and its sources and uses of funds for the year then ended
I in accordance with the Ethiopian Government's Manual of the Federal Accounting System
which is based on a modified cash basis of accounting.
I Reports on other requirements
As required by the World Bank guidelines we report that, to the extent we can assess:-
I all external financing has been used in accordance with the conditions of the relevant
financing agreements, with due attention to economy and efficiency, and only for the
I purposes for which the financing was provided;
counter-part funds have been provided and used in accordance with the financing
I agreement and only for the purposes for which the financing were provided;
goods, works and services financed have been provided in accordance with the relevant
I financing agreement and disbursement letters;
all necessary supporting documents, records and accounts have been maintained in
I respect of all Program activities.;
the funds disbursed covered expenditures that are eligible for financing under IDA
I Credit No. 5315 ET, Multi Donors Trust Fund Grant No.18053, Global Partnership for
Education Fund Grant No.16684
I our examination revealed no weaknesses or irregularities in the systems of internal
controls over financial expenditure other than those reported in our management letter;
I and
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I
INDEPENDENT AUDITOR'S REPORT ON THE
I FINANCIAL STATEMENTS OF
MINISTRY OF FINANCE AND ECONOMIC COOPERATION
GENERAL EDUCATION QUALITY IMPROVEMENT PROGRAM PHASE II
I (continued)
Reports on other requirements (continued)
I with respect to IFR based withdrawal applications submitted during the year ended 7
July 2017 and listed on page 13, in our opinion;
I a) the applications together with the procedures and internal controls involved in their
I b)
preparation, can be relied upon to support the relevant withdrawals;
adequate supporting documentation has been maintained to support claims to the
I World Bank for reimbursements of expenditures incurred; and
c) which expenditures are eligible for financing under IDA Credit No. 5315 ET,
I Multi Donors Trust Fund Grant No.18053, Global Partnership for Education Fund
Grant No.16684.
I
I 2 January 2018
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I MINISTRY OF FINANCE AND ECONOMIC COOPERATION
GENERAL EDUCATION QUALITY IMPROVEMENT PROGRAM PHASE II
I BALANCE SHEET
AS AT 7JULY 2017
I
I
I CURRENT ASSETS
Debtors
Cash and bank balances
3
4
11,105,175
319,728,957
14,545,957
731,937,109
I CURRENT LIABILITIES
330,834,132 746,483,066
Creditors 5 4,889,682 6,980,606
I NET CURRENT ASSETS 325,5H~:d:5Q 132,5Q2,46Q
I REPRESENTED BY
ACCUMULATED FUND 6 325,944,450 739,502,460
I
I
I The notes on pages 6 to 13 form an integral part of these financial statements.
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I MINISTRY OF FINANCE AND ECONOMIC COOPERATION
GENERAL EDUCATION QUALITY IMPROVEMENT PROGRAM PHASE II
I STATEMENT OF SOURCES AND USES OF FUNDS
FOR THE YEAR ENDED 7 JULY 2017
I Cumulative for
the :geriod from
Year ended 18 February 2014
I 7 July 2017
Birr
to 7 July 2017
Birr
7 July 2016
Birr
SOURCES
I IDA credit and grant
Multi donors trust fund
191,938,238
1,175,387,779
1,795,458,908
2,513,012,369
474,545,513
699,101,631
Global Partners for Education 211,384,158 1,837,388,158 825,512,000
I Fund transfer from teachers
Development Program (TDP) 43,575,894
Gain on foreign exchange 15,599,819 36,452,623 14,229,315
I Direct payment and special commitment
1,594,309,994 6,225,887,952 2,013,388,459
IDA Credit and grant 214,847,374 258,077,395 43,230,021
I Multi donors trust fund 356,191,699 519,378,525 163,186,826
2,165,349,067 7,003,343,872 2,219,805,306
I USES
Pre-service education quality improvement 243,268,706 555,997,517 122,004,798
In-service education quality improvement 232,593,059 694,273,639 302,576,418 ,
I School grants 1,249,269,775 3,989,292,584 1,192,280,671 ;
2!~:~~~:~~~ ;
School improvement program 37,579,221 62,475,632
Teaching and learning materials 642,699,270 941,904,097
I Capital development for education
planning and management 14,024,850 7,998,363
Capital development for school
I planning and management
Education materials 12,061,602
39,531,810
63,530,869
22,580,415
39,850,079
Curriculum reforms and implementation 1,178,781 2,863,174 874,218
I Program coordination
Monitoring and evaluation
23,922,590
3,364,103
56,781,519
12,826,353
20,999,014
5,662,885
Assessment and examination 7,379,053 24,690,940 10,363,355
I Inspection
Communication
19,552,454
45,614,638
35,293,451
52,583,030
9,909,720
4,144,813
Licensing 38,661,769 109,553,071 39,741,621
I National policy and institution for ICT
Leadership program 2,719,933
14,830
2,719,933
2,747
Support and capacity building 19,042,123 19,042,123
I (DEFICIT)/EXCESS OF SOURCES OVER
2,578,907,077 6,677,399,422 2,047,648,106
I USES (413.558.010) 325.944,450 172,157,200
The notes on pages 6 to 13 form an integral part of these financial statements.
I 5
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I MINISTRY OF FINANCE AND ECONOMIC COOPERATION
GENERAL EDUCATION QUALITY IMPROVEMENT PROGRAM PHASE II
I USD DESIGNATED ACCOUNT STATEMENT
FOR THE YEAR ENDED 7 JULY 2017
I For the Year ended 7 July 2017
Account number 0100101300482
I Depository bank
Address
National Bank of Ethiopia
Addis Ababa, Ethiopia
Related credit IDA Credit No. ET- 5315, Multi Donors Trust
I Fund Grant No. TF-18053, Global Partnership
for Education Fund Grant No. TF-16684
Currency USD
I Ethiopian
USD Birr
I Beginning balance 8 July 2016 25,113,291.08 548,243,234.91
I Add: Fund received during the year 71,109,238.90
96,222,529.98
1,578,710,174.89
2,126,953,409.80
I Less: Transfer to pool Birr account
Transfer to Ministry of Education
89,100,000.00
1,770,773.10
1,977,931,160.00
40,021,905.54
I 5,351,756.88 109,000,344.26
Gain on foreign exchange 14,779,905.45
I Ending balance - 7 July 2017 5,351,756.88 123,780,242.71
I
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I The notes on pages 6 to 13 form an integral part of these financial statements.
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MINISTRY OF FINANCE AND ECONOMIC COOPERATION
I GENERAL EDUCATION QUALITY IMPROVEMENT PROGRAM PHASE II
NOTES TO THE FINANCIAL STATEMENTS
I 1. PROGRAM INFORMATION
I The objective of the General Education Quality Improvement Program Phase II
(GEQIP II) is to support Ethiopia's efforts to increase the quality of general education
within its territory through improving teaching and learning conditions in schools as
I well as enhancing management planning and budget capacity of the Ministry of
Education and of the Regional Education Bureaus respectively. In an agreement dated
5 December 2013, under credit number 5315 ET, the International Development
I Association (IDA) agreed to extend a credit in an amount equivalent to Special
Drawing Rights (SDR) variously "credit and financing" to assist in financing the
Program which will be supervised through the Ministry of Education with MoFEC
I being responsible for overall financial management of the Program.
The Program is also financed by:-
I a) The World Bank administered Grant Agreement Multi Donors Trust Fund Grant
No. 18053-USD 204,348,329 Million and
I b) Global Partnership for Education Fund Grant No. 16684-USD 100,000,000
I The government also intends to contribute the equivalent of approximately USD 78
million of its own funds to assist in the financing of the GEQIP Program. The proposed
Adaptable Program Loan (APL) will be implemented in two phases. The first phase is
I for over a period of four years and the second phase is also for over a period of another
four years respectively. The second phase of GEQIP has the following parts.
I Part I
Part II
Curriculum, text books and assessment, examination and inspection
-
-
Teacher development program
Part III School improvement program
-
I Part IV
Part V
Management and capacity building
-
-
Improving the quality of learning and teaching through the use of information
and communication
I Part VI -Program and coordination, monitoring, evaluation and communication of the
GEQIP
The above financers Program closing time and application deadline is as follows:-
I Application deadline
Financer Closing Date date
I • Multi Donors Trust Fund
Grant No. TF 18053 31 July 2018 30 November 2018
• Global Partnership for Education
I Fund Grant No. TF 16684
• International Development Association
16 February 2018 16June2018
IDA Credit No. 53150 ET 07 July 2018 07 November 2018
I 7
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MINISTRY OF FINANCE AND ECONOMIC COOPERATION
I GENERAL EDUCATION QUALITY IMPROVEMENT PROGRAM PHASE II
NOTES TO THE FINANCIAL STATEMENTS (continued)
I 2. SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies adopted by the Program, which are consistent with
I those applied in the previous years, are stated below.
a) Basis of preparation
I These financial statements are prepared on a modified cash basis and in
I accordance with the accounting policy of the Government of the Federal
Democratic Republic of Ethiopia.
I b) Currency
These financial statements are presented in Birr. Transactions in foreign
I currencies are translated into Birr at the approximate rates of exchange prevailing
at the dates of the transaction. Balances in foreign currencies at the balance sheet
date are translated at the rate of exchange prevailing on that date.
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MINISTRY OF FINANCE AND ECONOMIC COOPERATION
I GENERAL EDUCATION QUALITY IMPROVEMENT PROGRAM PHASE II
NOTES TO THE FINANCIAL STATEMENTS (continued)
I 3. DEBTORS
I Birr
2016
Birr
I Amhara National Regional State
Benishangul Gumuz National Regional State
1,006,519
15,698
1,675,564
14,607
Harrari People National Regional State 7 51,416
I Oromiya National Regional State
Southern Nations, Nationalities and People's
744,005 1,141,406
Regional State 3,395,560 880,258
I Tigray National Regional State
Addis Ababa University
32,547
79,269
287,051
85,580
Dire Dawa City Administration 14
I Bahir Dar University
Dilla University
1,837
172,670
393,460
168,914
Jimma University 50
I Hawassa University
Mekele University
1,948
11
10,227
5,919
Ministry of Education 2,955,109 9,464,325
I Addis Ababa City Administration
Haromaya University
11,080
111,293
5,000
32,848
Adigrat University 34,674 5,929
I Axum University
Arbaminch University 1,760
47,531
247,829
Medawelabo University 433,755 2,743
I Debremarkos University
Jigjiga University 1,590,369
25,350
Afar National Regional State 517,000
I 11,105,175 14,545,257
I 4. CASH AND BANK BALANCES
2016
I Birr Birr
US Dollar account 123,780,250 548,243,235
I Main Birr account
Cash and bank balances in
11,301,948 356,333
184,646,759 183,337,541
I regional states and universities
312,728,257 731,237, 1Q2
I 9
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MINISTRY OF FINANCE AND ECONOMIC COOPERATION
I GENERAL EDUCATION QUALITY IMPROVEMENT PROGRAM PHASE II
NOTES TO THE FINANCIAL STATEMENTS (continued)
I 5. CREDITORS
I Birr
2016
Birr
,I Addis Ababa City Administration 64,808 24,109
Amhara National Regional State 92,795 545,730
I Benishangul Gumuz National Regional State
Dire Dawa City Administration
Harrari People National Regional State
542,695
140
423
157
I Ministry of Education
Oromiya National Regional State
Southern Nations, Nationalities and
453,529
165,798
309,017
310,452
I People's Regional State
Somali National Regional State
Tigray National Regional State
1,905,341
30,763
130,594
4,375,995
25,543
I Afar National Regional State
Addis Ababa University
158,750
2,676
497,250
516,932
8,567
Adigrat University
I Ambo University
Arbaminch University
24,915
10,728 262,384
Axum University 23,649
I Wollega University
Debre Birhan University
21,682
9,780
Debremarkos University 1,106
I Dilla University
Haromaya University
289,494
5,415
106,430
36,849
Hawassa University 129,920 50,936
I Mekele University
Medawelabo University 441,233
4,788
8,964
Welayta-Sodo University 17,980
I Woldia University
Wollo University 60
4,200
233,627
Jimma University 17,838
I Jigiigga University
4,889.682
6,246
6.98Q.6Q6
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I MINISTRY OF FINANCE AND ECONOMIC COOPERATION
GENERAL EDUCATION QUALITY IMPROVEMENT PROGRAM PHASE II
NOTES TO THE FINANCIAL STATEMENTS (continued)
I 6. ACCUMULATED FUND
I
I Balance at 8 July 2016
Deficit of Sources over Uses
739,502,460
I of funds of the current year
Balance at 7 July 2017
(413,558,010)
325,944.450
I 7. DATE OF AUTHORIZATION
I Channel One Programs Coordinating Directorate Director of The Federal Democratic
Republic of Ethiopia, Ministry of Finance and Economic Cooperation authorized the
issue of these financial statements on 2 January 2018.
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MINISTRY OF FINANCE AND ECONOMIC COOPERATION
I GENERAL EDUCATION QUALITY IMPROVEMENT PROGRAM PHASE II
IFR BASED WITHDRAWAL SCHEDULE
FOR APPLICATIONS submitted from 8 July 2016 to 7 July 2017
I
I Application
Number USD BIRR
I Balance 8 July 2016
030
235,083,293
5,614,844
4,773,566,108
123,727,569
I 034
032
041
5,614,844
44,918,747
1,285,743
123,727,569
990,215,840
29,175,953
I 039
040
046
428,581
428,581
7,690,739
9,730,032
9,730,032
175,441,908
I 045
047
2,563,580
2,563,580
71,109,239
58,480,636
58,480,636
1,578,710,175
I 306,192,532 6,352,276,283
I Application
for special
I commitment
number
I 004
005
2,114,557
5,822,229
46,575,432.25
129,037,491.15
006 2,433,014 54,051,647.42
I 007
008
4,550,540
5,200,698
101,584,869.23
114,220,294.44
009 362,313 8,156,205.50
I 010
011
1,118,944
724,110
24,702,818.89
16,347,298.25
013 374,478 8,474,584.78
I 017
021
303,110
2,639,992
6,883,232.12
61,005,199.14
25,643,985 571,039,073.14
I TOTAL 331,836,517 6,923,315,356.03
I
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MINISTRY OF FINANCE AND ECONOMIC COOPERATION
GENERAL EDUCATION QUALITY IMPROVEMENT PROGRAM PHASE II
RECONCILIATION OF THE FOUR QUARTERS OF INTERIM FINANCIAL REPORTS (IFR)
WITHTHEYAERENDSTATEMENTOFSOURCESANDUSESOFFUNDSANDTHEBALANCESHEET
Cumulative
First Second Third Fourth 18 Feb. 2014 to
Quarter Quarter Quarter Quarter 7 July 2017
Year ended Birr Birr Birr Birr Birr
SOURCES
Balance 8 July 2016 4,837,994,805
Collection during the year
Cash transfer 7 July 2017 1,237,670,978 48,636,017 292,403,180 1,578,710,175
Direct Payments and special commitments 7 July 2017 202,049,950 254.035,201 48,016,308 66,937,614 571.039,073
1,439,720,928 254.035,201 96,652,325 359,340.794 6,987,744,053
Gain on foreign exchange 15,599,819
7,003,343,872
USES
Balance 8 July 2016 4,098,492,345
Program expenditures 7 July 2017 326,645,509 1.198.270,832 549.467,362 504,523,374 2,578,907,077
Cumulative Program expenditures 6,677,399,422
EXCESS OF SOURCES OVER USES 325,944.450
Cash at bank 319,063,626
Cash on hand 665,331
Advances 11,105,175
330.834,132
Payables (4,889.682)
ACCUMULATED FUND 325,944.450
13