V%"I(1 Mag hAvA7*+ WC716V7 The Federal Democratic Republic of Ethiopia Audit Services Corporation INDEPENDENT AUDITOR'S REPORT ON THE FINANCIAL STATEMENTS OF THE FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA MINISTRY OF HEALTH SUSTAINABLE DEVELOPMENT GOALS PERFORMANCE FUND (SDG PF) We have audited the financial statements of Sustainable Development Goals Performance Fund (SDG PF) of the Federal Democratic Republic of Ethiopia, Ministry of Health, which comprise the balance sheet as at 7 July 2016, and the statement of sources and uses of funds for the year then ended and a summary of significant accounting policies and other explanatory information. Management's Responsibility for the Financial Statements The Ministry of Health is responsible for the preparation and fair presentation of these financial statements in accordance with the Ethiopian Government's Manual of the Federal Accounting System which is based on a modified cash basis of accounting and for such internal control as the Ministry determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility 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 perform the audit to obtain reasonable assurance about whether the financial statements are free from 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 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 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 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 sufficient and appropriate to provide a basis for our audit opinion. M 251-011-5515222 Fax 251-011-5513083 E-mail: ASC@ethionetcom 25720 251-011-5535012 251-011-5535015 251-011-5535016 INDEPENDENT AUDITOR'S REPORT ON THE FINANCIAL STATEMENTS OF THE FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA MINISTRY OF HEALTH SUSTAINABLE DEVELOPMENT GOALS PERFORMANCE FUND (SDG PF) (continued) Opinion In our opinion, the financial statements give a true and fair view of the financial position of Sustainable Development Goals Performance Fund (SDG PF) of the Federal Democratic republic of Ethiopia, Ministry of Health as at 7 July 2016 and of its sources and uses of funds for the year then ended in accordance with the Ethiopian Government's Manual of the Federal Accounting System which is based on a modified cash basis of accounting. Reports on other requirements As required by the terms of reference for the audit of SDG PF we report that, to the extent we can assess: a) SDG PF has been used in accordance with the conditions of the Joint Financial Arrangement, with due attention to effective implementation in alignment with the budgetary and accountability system and legislation of the Federal Ministry of Health; b) SDG Funds have been provided and used in accordance with the programmatic priorities and activities jointly agreed, with due attention to economy, effectiveness and efficiency, and only for the purposes for which they were provided; c) Goods, works and services financed have been procured in accordance with the relevant governmental financial and procurement policy; d) All necessary supporting documents, records, and accounts have been maintained in respect of all fund activities; e) Designated Accounts have been maintained in accordance with the provisions of the relevant SDG fund joint financial arrangement and funds disbursed out of the Accounts were used according to the joint financing arrangement; f) National laws and regulations have been complied with, and that the financial and accounting procedures of Ethiopian Government were followed and used; g) Assets procured from the fund exist and there is verifiable ownership by the implementing agencies or beneficiaries in line with the joint financing arrangement, with the exception of the irregularities reported in the management letter. 27 April 2017 2 MINISTRY OF HEALTH SUSTAINABLE DEVELOPMENT GOALS PERFORMANCE FUND BALANCE SHEET AS AT 7 JULY 2016 2015 Notes Birr Birr CURRENT ASSETS Advance payments 3 3,994,841,088 3,974,342,877 Sundry receivables 4 2,687,113 1,023,122 Cash and bank balances 5 1,950,096,136 3,740,393,347 5,947,624,337 7,715,759,346 CURRENT LIABILITIES Sundry creditors 6 60,365,108 3,133,893 NET CURRENT ASSETS 587,712,625,45 REPRESENTED BY FUND BALANCE 7 5 7.259,229 7,712.625-453 The notes on pages 5 to 8 form an integral part of these financial statements. 3 MINISTRY OF HEALTH SUSTAINABLE DEVELOPMENT GOALS PERFORMANCE FUND STATEMENT OF SOURCES AND USES OF FUNDS FOR THE YEAR ENDED 7 JULY 2016 Cumulative Year ended from 15 April 2009 Year ended 7 July 2016 to 7 July 2016 7 July 2015 Notes Birr Birr Birr SOURCES Spanish Government - 529,971,141 22,793,300 DFID 954,845,500 9,927,956,746 2,033,499,058 Irish Aid - 536,738,654 274,610,810 UNFPA 84,308,779 - WHO - 27,492,614 - UNICEF 9,703,866 63,383,726 9,973,050 Australian Aid - 455,538,771 - Italian Co-operation 57,491,750 194,583,125 71,349,000 World bank 78.553,571 1,429,310,107 690,275,416 Netherlands Embassy 333,147,455 870,296,387 299,259,264 GAVI-HPF 434,981,788 1,138,032,564 - European Union 158,527,432 310,188,986 151,661,554 Gain on foreign exchange 176.542.302 619,153,891 164.865,883 2.203.793,664 16,186,955,491 3,718,287,335 USES Construction, training and others 8 502,656,910 1,248,725,173 370,704,202 Goods and equipment 9 2,112,706,415 4,745,978,363 872,015,397 Operating costs 10 1 413.796,563 4,321,521.911 764.695.838 4,029 159,888 10,316,225,447 2,007,415,437 (DEFICIT)/ EXCESS OF SOURCES OVER USES (1,825,366,224) 5,870,730,044 1,710,871,898 Prior year adjustment - refund from suppliers - 16,529,185 16.529 185 1 =825 5L2241 1 727.401 083 The notes on pages 5 to 8 form an integral part of these financial statements. 4 MINISTRY OF HEALTH SUSTAINABLE DEVELOPMENT GOALS PERFORMANCE FUND NOTES TO THE FINANCIAL STATEMENTS 7 JULY 2016 1. PROGRAM INFORMATION The Sustainable Development Goals Performance Fund (SDG PF) is a pooled funding mechanism managed by the Federal Ministry of Health using the Ethiopian Government's procedures. SDG PF provides specific federal grant for public goods and capacity building activities within the framework of health system strengthening. The fund includes the joint funding arrangement that sets out the jointly agreed terms and procedures for SDG fund management, governance framework, decision making, reporting, review and evaluation, audit and supply chain management. In the framework of the Ethiopian International Health Partnership (IHP) compact, it provides flexible resources, consistent with the One Plan, One Budget and One Report concept, to secure additional finance to the Health Sector Transformation Plan (HSTP). It is one of the Government's preferred modalities for scaling up development partner's assistance in support of HSTP. which became effective on 15 April 2009 and was revised in December 2011 and July 2015. 2. SIGNIFICANT ACCOUNTING POLICIES The principal accounting policies adopted by the Program are stated below. These policies are consistent with those applied in the preceding year. a) Basis of preparation These financial statements have been prepared in accordance with the Ethiopian Government's Manual of the Federal Accounting System which is based on a modified cash basis of accounting. b) Currency These financial statements are presented in Birr. Transactions in foreign currencies are translated into Birr at the approximate rates of exchange prevailing at the dates of the transactions. Foreign currency balances are translated into Birr at exchange rates ruling at the balance sheet date. 5 MINISTRY OF HEALTH SUSTAINABLE DEVELOPMENT GOALS PERFORMANCE FUND NOTES TO THE FINANCIAL STATEMENTS (continued) 7 JULY 2016 3. ADVANCE PAYMENTS 2015 Birr Birr Advance to Regions 429,560,723 484,784,060 Pharmaceuticals Fund and Supply Agency 3,081,130,529 2,282,781,208 UNICEF 257,235,275 292,343,741 UNOPS 65,464,693 688,798,897 Purchase advance 9,320,360 217,048 Advance to contractors 8,262,392 11,846,833 Advance to suppliers 143,867,116 213.571,090 3.994841-088 3,974,342.877 4. SUNDRY RECEIVABLES 2015 Birr Birr UNFPA 7,355 7,355 JICA International Fund 2,545 2,545 Staff debtors 2,677,213 1,013,222 2.687.113 1.023.122 5. CASH AND BANK BALANCES 2015 Birr Birr USD Designated Account No, 0261516300000 1,311,712,616 1,330,779,553 USD Designated Account No. 0261501377500 606,377,103 2,374,987,395 SDG-Birr Account No. 0160101352600 - NBE 31,668,493 34,626,399 SDG-Birr Account No. 1000148975338 - CBE 337,924 - 1.95.Q-96136 3.1.4Q 4 6 MINISTRY OF HEALTH SUSTAINABLE DEVELOPMENT GOALS PERFORMANCE FUND NOTES TO THE FINANCIAL STATEMENTS (continued) 7 JULY 2016 6. SUNDRY CREDITORS 2015 Birr Birr Pooled Account (GAVI) 863,028 285,513 VAT payable 1,484,595 1,202,498 Withholding tax payable 966,675 970,933 Adami Tulu Pesticides Processing Sc. 55,768,000 - Other payables 1,282810 674,949 7. FUND BALANCE Birr Balance at 7 July 2015 7,712,625,453 Less: Deficit of sources over uses for the year (1,825,366.224) 8. CONSTRUCTION. TRAINING AND OTHERS Cumulative Year ended from 15 April 2009 Year ended 7 July 2016 to 7 July 2016 7 July 2015 Birr Birr Birr Construction of health centers 306,533,640 760,735,306 251,030,426 Advocacy and training 196,123,270 487,989.867 119,673,776 502,656,910 i2370 704.20 MINISTRY OF HEALTH SUSTAINABLE DEVELOPMENT GOALS PERFORMANCE FUND NOTES TO THE FINANCIAL STATEMENTS (continued) 7 JULY 2016 9. GOODS AND EQUlPMENT Cumulative Yearended from 15 April 2009 Yearended 7 July 2016 to 7 July 2016 7 July 2015 Birr Birr Birr Medical equipment 1,727,568,362 3,452,115,834 805,958,714 furniture - 144,681 - Motor vehicles 385.138,053 1,293,717,848 66,056,683 2.12.064 15 4.745.978M6 8Z2J15.39 10. OPERATING COSTS Cumulative from Year ended 15 April 2009 Year ended 7 July 2016 to 7 July 2016 7 July 2015 Birr Birr Birr Travel and per diem 67,218.336 217,884,387 61,991,966 Medical supplies 1,161,175,156 3,678,514,216 580,627,905 Printing and stationery 7,188,417 82,956,963 14,389,080 Fuel and lubricants 12,266,204 40,335,544 14,996,318 Advertising 5,195,050 11,977,465 2,035,773 Bank charges 10,474,273 22,726,310 859,046 Uniforms 918,650 1,273,037 116,808 Office supplies 5,156,285 9,657,792 1,504,940 Vehicles maintenance 7,387,762 19,827,363 8,593,276 Rent 13,331,020 43,170,968 25,489,216 Audit fee - 69,000 - Community health insurance 107,983.673 154,924,013 41,372,051 Contribution and subsidy to hospitals - 13,681,246 6,681,246 Salary to contractual staff 5,017.670 5,017,670 Miscellaneous 10,484,067 19,505,937 6,038,213 i -31R6J563 4,321,521911 7 8 MINISTRY OF HEALTH SUSTAINABLE DEVELOPMENT GOALS PERFORMANCE FUND NOTES TO THE FINANCIAL STATEMENTS (continued) 7 JULY 2016 11. DATE OF AUTHORIZATION The Acting Director of Finance and Procurement Directorate of the Ministry of Health authorized the issue of these financial statements on 27 April 2017. 9 The Federal Democratic Republic of Ethiopia Audit Services Corporation INDEPENDENT AUDITOR'S REPORT ON THE DESIGNATED ACCOUNT STATEMENT OF THE FEDERAL DEMOCRATIC REPUIBLIC OF ETHIOPIA MINISTRY OF HEALTH SUSTAINABLE DEVELOPMENT GOALS PERFORMANCE FUND (SDG PF IDA CREDIT NO. 5209 AND GRANT NO. TF 014107 We have audited the accompanying Designated Account statement of the Federal Democratic Republic of Ethiopia, Ministry of Health, Sustainable Development Goals Performance Fund (SDG PF), financed under IDA Credit No. 5209 ET and Grant No. TF 014107, for the year ended 7 July 2016. Responsibility for the Statement The Ministry of Health is responsible for the preparation and fair presentation of this statement. Auditor's Responsibility Our responsibility is to express an opinion on this statement based on our audit. We conducted our audit in accordance with International Standards on Auditing and relevant Joint Financing Arrangement. Those standards and arrangements require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Designated Account has been maintained in accordance with the provisions of the relevant Joint Financing Arrangement and that funds disbursed out of the Account were used according to the joint financing arrangement. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the statement gives a true and fair view of a summary of the activity in the Designated Account of the Federal Democratic Republic of Ethiopia, Ministry of Health, Sustainable Development Goals Performance Fund (SDG - PF) for the year ended 7 July 2016 and the Designated Account has been maintained in accordance with the provisions of the relevant SDG fund joint financial arrangement and funds disbursed out of the Account were used according to the joint financing arrangement. 27 April 2017 S 251-011-5515222 Fax 251-011-5513083 E-mail: ASC@ethionet.com 2 5720 251-011-5535012 251-011-5535015 251-011-5535016 MINISTRY OF HEALTH SUSTAINABLE DEVELOPMENT GOALS PERFORMANCE FUND (SDG PF) DESIGNATED ACCOUNT STATEMENT For the year ended 7 July 2016 Account number 0261516300000 Depository bank National Bank of Ethiopia Address Addis Ababa, Ethiopia IDA Credit 5209-ET Related Grant TF 014107 Currency USD Ethiopian Birr equivalent Balance at 7 July 2015 64,645,510.65 1,330,779,553.14 Transfer from Donors during the year 3,667,317.36 78,553,571.12 68,312,828.01 1,409,333,124.26 Deduct Payment for goods and services 8.227,415.85 176,215,081.03 60,085,412.16 1,233,118,043.23 Gain on foreign exchange - 78,594,572.55 Balance at 7 July 2016 CO,0`.4J-2L 1,311-712 6157 2 The Federal Democratic Republic of Ethiopia Audit Services Corporation INDEPENDENT AUDITOR'S REPORT ON THE DESIGNATED ACCOUNT STATEMENT OF THE FEDERAL DEMOCRATIC REPUIBLIC OF ETHIOPIA MINISTRY OF HEALTH SUSTAINABLE DEVELOPMENT GOALS PERFORMANCE FUND (SDG PF) DEVELOPMENT PARTNERS GRANT We have audited the accompanying Designated Account statement of the Federal Democratic Republic of Ethiopia, Ministry of Health, Sustainable Development Goals Performance Fund (SDG PF), financed under Development Partners Grant, for the year ended 7 July 2016. Responsibility for the Statement The Ministry of Health is responsible for the preparation and fair presentation of this statement. Auditor's Responsibility Our responsibility is to express an opinion on this statement based on our audit. We conducted our audit in accordance with International Standards on Auditing and relevant Joint Financing Arrangement. Those standards and arrangement require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Designated Account has been maintained in accordance with the provisions of the relevant Joint Financial Arrangement and that funds disbursed out of the Account were used according to the joint financing arrangement. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the statement gives a true ard fair view of a summary of the activity in the Designated Account of the Federal Democratic Republic of Ethiopia, Ministry of Health, Sustainable Development Goals performance fund (SDG PF) for the year ended 7 July 2016 and the Designated Account has been maintained in accordance with the provisions of the relevant SDG fund joint financial arrangement and funds disbursed out of the account were used according to the joint financing arrangement. 27 April 2017 e 251-011-5515222 Fax 251-011-5513083 E-mail: ASC@ethionetcom F| 5720 251-011-5535012 251-011-5535015 251-011-5535016 MINISTRY OF HEALTH SUSTAINABLE DEVELOPMENT GOALS PERFORMANCE FUND fSQG PF DESIGNATED ACCOUNT STATEMENT For the year ended 7 July 2016 Account number 0261501377500 Depository bank National Bank of Ethiopia Address Addis Ababa, Ethiopia SDG grant Development partners Currency USD Ethiopian Birr equivalent Balance at 7 July 2015 115,370,177.24 2,374,987,394.63 Add: Transfer from Donors during the year 92,614,626.74 1,944,923,066.42 GAVI 8,553,865 178,313,01440 216,538,668.98 4,498,223,475.45 Deduct: Payment for goods and services 23,703,394.44 502,388,544.93 Transfer to pooled account 45,000,000.00 945,659,400.00 Transfer to Regions 120,014,868.31 2,540,781,848.33 Payment for training 44,176.35 964308.35 188,762.439.10 3.989,794,101.61 27,776,229.88 508,429,373.84 Gain on foreign exchange - 97,947,729.47 Ending balance - 7 July 2016 27.776-2298 aQU,1L331t 2