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                                                                                               Date: April 22, 2020

                                         INDEPENDENT AUDIT REPORT

The Secretary
Ministry of Finance
Singh Durbar, Kathmandu

Report on the Financial Statements

We have audited the accompanying Project Financial Statements of the "Rediness plan Redeness fund of
the FCPF" financed by IDA Grant No.TF 0A4169-NEP and TF 0A4496-NEP implemented
under your ministry for the fiscal Year 2018/19 (2075/76) and for the year then ended and a summary
of accounting policies and other explanatory notes.
Management's Responsibility for Financial Statements
Management is responsible for the preparatioi1 and fair presentation of the Financial tatements in accordance with
the Government of Nepal (GON) accounting policies and relevant practices. This responsibility includes: designing,
implementing and maintaining internal control relevant to preparation and fair presentation of project financial
statements that are free from material misstatement, whether due to fraud and error.
Auditor's Responsibility
Our responsibility i to express an opinion on these Project Financial tatements based on our audit. Except as
mentioned in following paragraph we conducted our audit in accordance with the .INTOSAI (International
Organisation of Supreme Audit .Institutions) Fundamental Auditing Principles. Those Principles require that we plan
and perform the audit to obtain reasonable a urance about whether the financial statements are free of material
misstatement.
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 judgment, including the assessment of the risks of
material misstatement of the financial statemei1ts, 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 financial
statements in order to design audit procedure that are appropriate in the circumstances, but not for the purpo e of
expressing an opinion on the effectiveness o · rhe entity's internal conlrol. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of accounting estimates made by management,
as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have
obtained is sufiicient and appropriate to provide a basis for our audit opinion.
Opinion
Management letter highlighting areas for improving financial management including compliance with financial
covenant is attached herewith.
In our opinion, the Project Financial Statements including designated account in all material respects, give a true
and fair view of the financial position of the "Rediness plan Redeness fund of the FCPF" financed
under the IDA Grant No.TF 0A4169-NEP and TF 0A4496-NEP as at 16 July 2019 (32 Ashad
2075) and of the results of its operations and its cash flows for the year then ended in accordance
with GON accounting policies. We also report that funds provid d under IDA grant No.TF
0A4 l 69-NEP and TF 0A4496-NEP have been utilized for intended purpose .
    In addition With respect to statement of expenditure (SOE) a) adequate supporting documentation has been
maintained to support claims to donor for reimbursement of expenditures incurred; and b) expenditures are eligible


                                                                                                          L
for financing under the above mentioned Grants.
                                                                                                     A
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                                                                                              (Ram Maya Kunwar)
                                                                                             Deputy Auditor General




 Phone: 4258174, 4266034, 4255707, A.G. Fax: 977-1-4268309, Fax: 977-1-4262798, Post Box: 13328
  email: aag.mgmt@oagnep.gov.np                                                     Web Page: www.oagnep.gov.np
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