Chartered Accountants Independent Auditor's Report To, Project Director BISPS-BRDS Rural Development Department Patna Report on the Audit of the Project Financial Statements Opinion We have audited the accompanying special purpose financial statements of BIHAR INTEGRATED SOCIAL PROTECTION STRENGTHENING (BISPS) PROJECT (the Project) financed by the International Development Association (IDA) under Credit/Loan No. 5349- IN/IDA and implemented by BIHAR RURAL DEVELOPMENT SOCIETY (BRDS). These financial statements comprise of the statement of Sources and Application of Fund and the Reconciliation of claims to total Application of fund for the year ended 31st March 2020, and notes to these financial statements, including a summary of significant accounting policies (collectively referred to as the "Project Financial Statements"). In our opinion, the aforesaid special purpose Project Financial Statements give a true and fair view of the financial position of the Proiect as at March 31, 2020, , receipts and disbursements of the Project for the year ended on March 31, 2020 and the expenditure of the Project for the year ended on March 31, 2020, in accordance with the financial reporting provisions of Section 5.09 of the General Conditions of the World Bank read with the Loan Agreement and Project Agreement both dated 07! August 2014 described in Note. Basis for Opinion We conducted our audit in accordance with the Standards on Auditing issued by Institute of Chartered Accountants of India (ICAI). 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 implementing agency in accordance with the ICAI's Code of Ethics for undertaking this assignment, and we have fulfilled our ethical responsibilities in accordance with ICAI's Code of Ethics'. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Emphasis of Matter' We draw attention to Note 1 to the PFS describing the basis of accounting. The PFS is prepared to assist the Bihar Rural Development Society_to meet the financial reporting requirements of the Project's Loan Agreements Financing for Investment Project Financing dated 0712 August 2014 in respect of preparation of the Project Financial Statements in a manner to reflect the operations, resources and expenditures related to the Project. As a result, these special purpose financial statements may not be suitable for another purpose. Our opinion is not modified in respect of this matter. Responsibilities of Management and those charged with Governance for the Project Financial Statements The Management of the implementing agency is responsible for the preparation and fair presentation of the Project Financial Statements in accordance with the financial reporting framework described in Note I to these H.O. L1/58, Ground Floor, Near Shiv Mandir Sri Krishnapuri, Boring Road, Patna-800001 (Bihar). Ph.: 0612-2541729,9771497729 Email: tbaca.bih(algmail com HYDERABAD*NEW DELHI* KOLKATA* GUWAHATI * GURGAO N*M UMBAI *RANCH I*BHUWANESHWAR*LUCKNOW*RAI PUR Tf I A Chartered Accountants financial statements, and for such internal control as management determines is necessary to enable the preparation of Project Financial Statements that are free from material misstatement, whether due to fraud or error. The Management and those charged with governance are responsible for overseeing the implementing agency s financial reporting process. Auditor's Responsibilities for the Audit of the Project Financial Statements Our objectives are to obtain reasonable assurance about whether the 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 the Standards of Auditing 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. As part of an audit in accordance with Standard of Auditing, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: * identify and assess the risks of material misstatement of the 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 * evaluate the overall presentation, structure and content of the Project Financial Statements, including the disclosures and whether these financial statements present the Project's operations and underlying transactions and events in a manner that achieves fair presentation in accordance with the financial reporting provisions described in Note 1 to the Project Financial Statements. * 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. * provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. Report on Other Legal and Regulatory Requirements Further to our opinion on the Project Financial Statements we further report that: a) we have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit; H.O. L1/58, Ground Floor, Near Shiv Mandir Sri Krishnapuri, Boring Road, Patna-800001 (Bihar). Ph.: 0612-2541729,9771497729 Enail: tbaca.bii:lginail.corn HYDERABAD*NEW DELI* KOLKATA* GUWAHATI*GU RGAON*MUM BAI*RAN CHI*BHUWANESHWAR*LUCKNOW*RAIPUR Tin6.iorBlun anc&Associates' Chartered Accountants b)in our opinion, proper books of accounts have been kept by the implementing agency for Project purposes so far as appears from our examination of those books; c) the Project Financial Statements dealt with by this report is in agreement with the books of accounts; d) the project funds were utilized for the purposes for which they were provided; e) expenditures, including assets created under the Project, shown in the PFS are eligible for financing under the project Financing Agreements; f) Interim Financial Reports (IFR) submitted by the Project management can be relied upon to support applications for withdrawal of the Loan, and adequate supporting documentation has been maintained to SUpport these claims; c ProCurement has been carried out in line with the agreed procedures as detailed in the Operations NaLnualiProcurement Manual/Project Implementation Plan/Legal Agreements; and h) the Project has an adequate internal financial control system (including IT controls) and such controls were operating effectively as at March 31, 2020 and the Project complies with the provisions on financial management contained in the Operations Manual/ Project Implementation Plan/ Financial Management Manual, in all material aspects. For Tha huwanesh & Associates '4' rtered Accountants 019690N jesh Kumar Jha Partner -Mbership No. 412318) Place of Signature: Patna UDIN Date: H.O. L1/58, Ground Floor, Near Shiv Mandir Sri Krishnapuri, Boring Road, Patna-800001 (Bihar). Ph.: 0612-2541729,9771497729 Email: tbaca,bih(agmgiil.com HYDERABAD*NEW DELHI* KOLKATA* GUWAHATI*GURGAON*MUMBAI*RANCHI*BHUWANESHWAR*LUCKNOW*RAIPUR Anneureon ourcs ad A plication of funds Name of the Project : BISPS- BRDS Loan/Credit/Grant No: IDA 5349-IN Annexure-1 Statement of Sources and Applications of Funds Report for the year ended 31 March, 2020 In Rs./Million Particulars Current Year Previous Year Project to Date 2018-19 Opening Balance 56.77 11.38 5Receipts Funds from Government through Budget (These will include external assistance received by 126.39 159.47 422.88 Government for the Project) Others-Loan (Transferred from BRDS-MGNREGA) 49.70 (5.10) 54.33 Other-( Interest from bank & Others) 1.74 1.66 5.32 Total Receipts (A) 234.61 167.41 482.52 Expenditures by Component (B) A Component 1 Strengthening social Protection capacity and system 233.57 110.63 481.48 B Piloting innovation in social Protection Delivery - . Total Expenditures (A+B) 233.57 110.63 481.48 Closing balance 1.05 56.77 1.05 In term of our report even data For Thakur Bhuwanesh & Associates Chartered Accountant FRN - 019 90N FRN- CA. B . Thakur _ trol er Finance Dy.Project Director Partner - BISPS- RDS,Patna BISPS-BRDS,Patna MN - 500431 Place: Patna UDIN: / Date ~;~ r Annexure-lA Component wise Expenditure statement Report for the year ended 31 March, 2020. fNR/Million Expenditure Expenditure for the Cumulative ~~eVou~ear year 2019-20 expenditure A) (B3) (A+B) 1Component I Strengthening social [rotection capacity and system 247.91 233.57 481.48 A Training and Capacity Bulding 4.18 4.48 8 InemetExpnse .18 .488.65 C nfternet Exrenses 0.26 0.42 office Exnses 1.31 2.86 4.17 D Rent 9.54 2.38 11.92 Sala' 132.00 128.51 260.51 F Telephone and Mobile Expenses 0.20 0.04 0.24 G Traveling Expenses 0.97 0.40 1.37 H Security Guard Expenses 1.36 0.55 1.91 1 Recruitment &Counseling Expenses 0.84 0.86 1.70 J Printing & Stationery Expenses 0.05 0.22 0.27 K Electricity 0.28 1.00 L Audit fee 0.13 ML Consultancy Service Exp. 4.39 15.51 19.90 Computer Software (Including Tally.ERP 168.81 N 9) & Accessories,Godrej and Generator 0 Repair & Maintenance 0.01 - 0.01 P Meeting & Seminar Exp. 0.19 0.19 2 Piloting innovation in Social protection Delivery Total (1+2) 247.91 233.57 481.48 In term of our report ev ana For Thakur Bhuw sS es Chartered Acco FRN - 01962)0 CA. Bi . hakur C rinance Dy.Project Director Partner BISPS- RDS,Patna BISPS-BRDS,Patna MN - 500431 Place: Patna UDIN: §((1W >~$ Date ' Note: The expenditure as mentioned above should match whith the expenditure reported in Annexure-1 Reconciliation of Claims to Total Applications of Funds of the Project BISPS Lon / Credit/Grant No IDA 5349-IN Reconcilation of Claims to Total Applications of fund Report for the year ended 31 March 2020. Current Previous Project to Schedules Yer Year Date Year 2018-19 Bank Fund claim during the year IUFR I 22.31 22.37 48.75 IUFR 2 23.14 25.32 61.05 IUFR 3 53.28 14.16 77.65 IUFR 4 495 IUFR 4 64.77 15.60 149.58 Totel Bank Fund claimed ( A) 163.50 77.44 337.03 Total Expenditure made during the year (B) 233.57 110.63 481.48 Less; Outstanding AC bill (C) II Ineligible expenditures (D) III Expenditures not claimed (E) IV Total Eligible Expenditures claimed (F)=(B)-(C)-(D)-(E) 233.57 110.63 481.48 World Bank Share @ 70%of (F) above (G) 163.50 77.44 337.03 Amount to be claimed/refunded (H)=(A-G) - - - In term of our report even data For Thakur Bhuwane Associates Chartered Accoun)4 's s FRN - 019690 CA. B. K. at ,Contr6llerinance Dy.Project Director Partner BISPS-BRDS,Patna BISPS-BRDS,Patna MN - 500431 Place: Patna UDIN: r Date r~ Bihar Rural Development Society Scheme- Bihar Integrated Social Protection Strengthening (BISPS) Project Accounting Policies and Notes on Accounts forming an integral part of the ProetFnnilSaeen o h eredd3intMarh2p0r2ofth Note - 1 A. SIGNIFICANT ACCOUNTING POLICIES: Basis of Preparation of Financial Statements The Financial Statements have been maintained on double entry system adopting cash basis of accounting. Financial Statements are prepared in accordance with the Generally Accepted Accounting Principles including Accounting Standards followed in India to the extent applicable. Preparation of the financial statements are in conformity with the Generally Accepted Accounting Principles requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities on the date of financial statements and reported amount of revenues and expenses for the year. Estimates are based on assumptions that management believes are reasonable under the circumstances. 2. Revenue recognition Revenue recognized on receipt basis for grant received from State Government. 3. Provisions No provision for expenses has been taken. In terms of our report of even date For & on behalf of Thakur Bhuwanesh & Associates Chartered Accountants Firm re tra nNo (CA. Raesh -Ku ar Jh PAJNA Partner Membership No: 412318 UDIN Date: / UDIN: Or)gina Submission- ! / ' 9 Date of Original Submission- J