nt...'/·r-A'r t..Yv&·l\'I! .m. •1:'l'C f,'l'•f>1'1-1,\'} Please Quote our Ref. No. When Replying {lt\h 011-6-61-11-11 •l;t\ 1-hll 011 · 6-61-08-85 T."i.41. 5744 Tel. 011-6-63-72-22 Telefax 011- 6-61-07-10 P.O.Box 5673 011- 6-62-73-69 h~.fl Ml'! - h ·h'·A· f ADDIS ABABA· ETHIOPIA I Rl'I.-l-l"A- f 4...e..&-1\'l! 11.'l"ht-fl.f'l! t T-flfl.h I I • \''l."t-fl 'l"C:ODt- h'li.\"Jfto-}- '1C7'&,7i'} The Federal Democratic Republic of Ethiopia Audit Services Corporation I I I INDEPENDENT AUDITOR'S REPORT TO THE MINISTRY OF WATER, IRRIGATION AND ELECTRICITY I We have audited the financial statements of Ministry of Water, Irrigation and Electricity, Urban Water Supply and Sanitation Project, financed under IDA Credit Nos. 4292- ET and 5115-ET and IOA Grant No. H287-ET, which comprise the balance sheet as at 7 July 2017, and the statement of sources and uses of funds and a Designated Account statement for the I year then ended, and a summary of significant accounting policies and other explanatory information. I Project Coordinator's Responsibility for the Financial Statements The Project Coordinator is responsible for the preparation of financial statements that give a I true and fair view in accordance with the modified cash basis of accounting described in note 2 to the financial statements and for such internal control as management detennines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. I 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 standards require that we comply with ethical requirements and plan and perfonn the audit to obtain reasonable assurance about whether the financial statements are free from I material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and I disclosures in the financial statements. The Procedures selected depend on the auditor's 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 I considers internal control relevant to the entity's preparation and fair presentation of the 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 We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. I ~ 2SI-011-551S222 Fax 251.011.5513083 E·mail: ASC@ethionet.com 1815720 _.,.-, I 251-011-S535012 r~-:~ '·,)i \ I' 251-0ll-55350!5 251.011.5535016 I I ~ ~. 1 ,, Jr-s'.~ I '\ . -· ,-- . I I I INDEPENDENT AUDITOR'S REPORT TO THE MINISTRY OF WATER, IRRIGATION AND ELECTRICTY (continued) I Opinion I In our opinion, the financial statements give a true and fair view of the financial position of Ministry of Water, Irrigation and Electricity, Urban Water Supply and Sanitation Project, financed under IDA Credit Nos. 4292-ET and 5115-ET and IDA Grant No. H287-ET, as at 7 July 2017 and of its sources and uses of funds for the year then ended in accordance with I the modified cash basis of accounting described in note 2 to the financial statements. Report on Other Requirements I As required by the World Bank guidelines we report that, to the extent we can assess I during the year all external funds have been used in accordance with the conditions of the relevant financing agreements and only for the purposes for which the financing was provided; I counterpart funds were provided and used in accordance with the conditions of the loan agreement, with due attention to economy and efficiency and only for the purposes for which they were provided; I goods, works and services financed have been provided in accordance with the relevant financing agreements and disbursement letters: I all necessary supporting documents, records and accounts have been maintained in respect of all Project activities; I the Designated Account has been maintained in accordance with the provisions of the relevant financing agreements and funds disbursed out of the Designated Account were used only for the purposes intended in the financing agreements; I National laws and regulations have been complied with and that the financing and accounting procedures approved for the Project; I financial performance of the Project is satisfactory; the funds disbursed covered expenditures that are eligible for financing under IDA Credtt Nos. 4292- ET and 5115- ET and IDA Grant No. H287- ET; I assets procured from Project funds exist and there is a verifiable ownership by the implementing beneficiaries in line with the financing agreement; I ineligible expenditures include in withdrawal applications are identified reimbursed to Designated Accounts. and I I I 2 I I I I I with respect to statements of expenditure submitted during the year ended 7 July 2017 and listed on page 9, in our opinion; I a) the statements, together with the procedures and internal controls involved in their preparation, can be relied upon to support the relevant withdrawals; b) adequate supporting documentation has been maintained to support claims I to the JDA for reimbursements of expenditures incurred; and c} which expenditures are eligible for financing under IDA Credit Nos. 4292· ET I and 5115-ET and IDA Grant No. H287-ET. I )luJ;-t £.e.- V '. (e._<; 26 December 2017 I I I I I I I I I I I I 3 I I I I I MINISTRY OF WATER, IRRIGATION AND ELECTRICITY URBAN WATER SUPPLY AND SANITATION PROJECT I IDA CREDIT NOS. 4292-ET AND 5115-ET AND IDA GRANT NO. H287-ET STATEMENT OF SOURCES AND USES OF FUNDS FOR THE YEAR ENDED 7 JULY 2017 I Cumulative from 27 November 2008 to 7 July I 2017 Ethiopian Birr 2017 Ethiopian Birr 2016 Ethiopian Birr I FINANCING Credits and grant from IDA I Initial deposit to Designated Account Direct payments 150,916,780 100,038.600 528,212,363 196,330,629 I SOE procedures 3517566 154,434,346 552,327,835 1,180,578,798 196,330,629 Contribution from towns and I municipalities Gain on foreign exchange 234,475,951 441,845 722,598,587 39,774,496 168,336,587 2,399,896 Other income 533,321 4 841 804 3 447 745 I TOTAL FINANCING 389,885.463 1,947,793.685 370,514,857 I PROJECT EXPENDITURE Works and goods 348,468,034 1,569,637,728 371,945,893 Consultants' services 14,754,712 83,346,337 I Training Operating costs 991,157 7,586,327 5,992,195 32,064,376 14,662,538 341,998 6 331 744 I TOTAL PROJECT EXPENDITURE 371,800,230 1,691,060,636 393,282, 173 I EXCESS OF FINANCING (DEFICIT) OVER I EXPENDITURE IB,DB5.233 256.133.Q!\9 (221Z§Z1~16) I I I 4 I I I I I MINISTRY OF WATER, IRRIGATION AND ELECTRICITY URBAN WATER SUPPLY AND SANITATION PROJECT I IDA CREDIT NOS. 4292-ET AND 5115-ET AND IDA GRANT NO. H287-ET BALANCE SHEET AS AT7 JULY 2017 I I Notes 2017 Ethiopian Birr 2016 Ethiopian Birr ASSETS I CURRENT ASSETS Cash and bank balances 3 190,060,994 111.244.455 I Debtors 4 154,844,502 344,905,496 178,816,473 290.060.928 CURRENT LIABILITIES I Creditors 5 88,172,447 51,413,112 I NET CURRENT ASSETS 256,Z33,D~9 238,647,816 I REPRESENTED BY ACCUMULATED FUND I 6 256,733,049 238,647,816 I I I I I I I 5 I I I I I MINISTRY OF WATER, IRRIGATION AND ELECTRICITY URBAN WATER SUPPLY AND SANITATION PROJECT I IDA CREDIT NOS. 4292-ET AND 5115-ET AND IDA GRANT NO. H287-ET DESIGNATED ACCOUNT STATEMENT I For year ended 7 July 2017 Account number 0261501357700 I Depository bank Address National Bank of Ethiopia Addis Ababa, Ethiopia I Related credit Currency IDA 4292-ET, 5115-ET and H287-ET USD I USD Equivalent in Ethiopian Birr I Beginning balance - 7 July 2016 Add: Replenishments 395,653.05 8,637,422.60 158,802.31 3,517,566.45 I 554,455.36 12,154,989.05 Less: I Less: Transfers to Birr account 317,708.14 236,747.22 7,150,180.42 5,004,808,63 I Add: Gain on foreign exchange Ending balance 7 July 2017 441,845.26 236.747,22 5.446.653.89 I I I I I I I 6 I I I I I MINISTRY OF WATER, IRRIGATION AND ELECTRICITY URBAN WATER SUPPLY AND SANITATION PROJECT I IDA CREDIT NOS. 4292 ET AND 5115 ET AND GRANT NO. H287 ET NOTES TO THE FINANCIAL STATEMENTS I 1. PROJECT INFORMATION The Project was established to implement IDA Credit agreement Nos. 4292-ET and I 5115-ET and Grant No. H287-ET signed between the Government of the Federal Democratic Republic of Ethiopia and the International Development Association (IDA) on 16 May 2007. The main objective of the Project is to insure sustainable I water supply and sanitation services for urban users through improved capacity in the sector. The Project became operational on 27 November 2008. The original closing date of I 2. 31 December 2014 has been extended to 31 December 2017. SIGNIFICANT ACCOUNTING POLICIES I a) Basis of preparation These financial statements have been prepared on a modified cash basis I whereby non-monetary assets are expensed when acquired and monetary assets and liabilities are carried at fair value. b) Currency I These financial statements are presented in Birr. Transactions in foreign currencies are translated into Birr at the approximate rates of exchange I prevailing at the dates of the transactions. Cash balances denominated in foreign currencies are translated into Birr at the exchange rates ruling at the balance sheet date. · I 3. CASH AND BANK BALANCES I 2017 2016 I National Bank of Ethiopia Ethiopian Birr Ethiopian Birr USD Designated Account No. 0261501357700 5,446,654 8,637,423 I Birr account No. 0160101368000 Commercial Bank of Ethiopia various branches 30,564,206 31,969,900 154,050,134 70 637 132 I 190,060,994 111,244,455 I I 7 I I I I I MINISTRY OF WATER, IRRIGATION AND ELECTRICITY URBAN WATER SUPPLY AND SANITATION PROJECT I IDA CREDIT NOS. 4292-ET AND 5115-ET AND GRANT NO. H287- ET NOTES TO THE FINANCIAL STATEMENTS (continued) 4. DEBTORS I 2017 2016 I Ethiopian Birr Ethiopian Birr I Advances to Suppliers Contractors 52,317,824 58,576,986 72,105,866 74,659,355 Staff 46,463 32,051,252 I sundry 43,903,228 154,844,501 178.816.473 I 5. CREDITORS I Contractors 1,814,164 Suppliers 7,553,349 3,802,809 I Withholding taxes Value added tax 367,574 552,342 113,938 514,717 Retention 22,054,364 18,941,169 I Sundry 55,830.654 88.172,447 28.040,479 51,413.112 I 6. ACCUMULATED FUND I Balance at 7 July 2016 Add: excess of financing over 238,647,816 expenditure 18,085.233 I Balance at 7 July 2017 256,733.049 I 7. DATE OF AUTHORIZATION I The Director of Water Supply and Sanitation Directorate of the Ministry authorized the issue of these financial statements 26 December 2017. I I 8 I I I I I MINISTRY OF WATER, IRRIGATION AND ELECTRICITY URBAN WATER SUPPLY AND SANITATION PROJECT I IDA CREDIT NOS. 4292-ET and 5115-ET AND GRANT NO. H287 ET SOE WITHDRAWAL SCHEDULE FOR STATEMENTS OF EXPENDITURE submitted during the I YEAR ENDED 7 JULY 2017 I Withdrawal Application Works and goods No. Ethiopian Birr USD I IDA Credit No. 5115 ET I 3,517,566.45 158.802.31 I I I I I I I I I I I 9 I I I