Office of the Director General Foreign Aided Projects Audit Directorate Audit Complex (6th Floor) Segunbagicha, Dhaka. No. 82.08.0000.112.46.033.24.272 Dated: 29/12/2024 Sub: Project Audit Report on the Accounts of "Dhaka City Neighborhood Upgrading Project (DCNUP)" financed by IDA Credit no. 6361-BD for the financial year 2023-24. The Auditor's Report along with a Management Letter containing audit observations on the accounts of the above-mentioned project is enclosed for your information and necessary action. Enclosure: 1. Auditor's Report 2. Financial Statement with notes. 3, Management Letter. (ATM Mostafizur Rahman) 4. Follow-up action. Deputy Director For Director General Foreign Aided Projects Audit Directorate Phone: 02226663606 Secretary Local Government Division Ministry of Local Government, Rural Development & Cooperatives Bangladesh Secretariat, Dhaka. No. 82.08.0000.112.46.033.24.272 Dated: 29/12/2024 Copy for information and necessary action to: - 1. Secretary, Economic Relations Division (ERD), Ministry of Finance, Sher-e-Bangla Nagar Dhaka. 2. ountry Director, lorid Bank, E-32, Sher-e-Bangla Nagar, Agargaon, Dhaka. \f 'The Project Director, 'Dhaka City Neighborhood Upgrading Project (DCNUP)', Nagar Bhabon, 9th Floor, Fulbaria, Dhaka (a)Replies/comments on the Auditor's Report and Management Letter may please be sent to the undersigned within three weeks of the receipt of this letter in your office (b) Observations in SF1 should be responded to through the Ministry concerned and observatons in non-SFl should be responded to FAPAD directly. 4. Office Copy (ATM Mostafizur Rahman) Deputy Director For Direcrt Foreign Aided Pojecs o Phone: '222_1 On The Accounts of "Dhaka City Neighborhood Upgrading Project (DCNUP)" financed by IDA Credit no. 6361-BD for the financial year 2023-24. Foegn Aided Projects Audit Directorate, Segunbagicha, Dhaka. TABLE OF CONTENTS PROJECTAUDITREPORT .............................................................................................................................. P A R T -1l............................... .............................._ ................................................................................. ................. 0 T a b le o f c o n te n ts ........................................................................ . ............................................................ ......... 1 In fo rm at io n reg a rd in g A ud it ......................... ........................,...................................................... ...... .................. 2 A u d ito r's R e p o rt ............................................................... ................................................................. ...... ............4 F in a n cia l S tatem e nt an d N otes ........................................................................................................................... 6 C a u se s o f Irreg u la rities a n d L o ss :................................................................................................................ 23 A u d it R ec o m m e nd atio n s :............................................................................................................................... 23 M a n a g e m e n t L ette r ............ ....................................... ................................................. ... .................. ....... .......... 24 S E C T IO N -O N E ................. .................. ... ........................................... _........................ ... .................. .. ... ......... . 2 5 S u m m a ry o f A ud it Fin d in gs .............. ........................................... L ................... .... . ............. ... ....... 28 Serious Fnancial lrregularities.. 28 Non-Serious Financial Irreguarities . ... .. . ....... ..... . .28 P A R T -I ........... ......- ............................. . ...... ....... ..... .... ... ........ .. .. .. 2 9 S E C T IO N -T W O...... ............................ ...I..................W.................. 29 Serious Financal Irregua ties 29 Non-Serious Finan a rregulafit s. 33 Overafl Audit Resut 35 SECTION-THREE ...6... ... ... .-E .. ............. ... 36 Follow up Action 37 Annexuress38 SECTION-FOU . ... . . . . . . 43 Crteria Goverr nt ' 3 -r ) LIST OF ABBREV AT ONS AND ACRONYMS................ . ................... .. ... . .. .. .... 44 INFORMATION REGARDING AUDIT 01. Name of the Audit Unit Dhaka City Neighborhood Upgrading Project (DCNUP) 02. Nature of Audit Special purpose Financial Audit. 03. Duration of audit From 27/10/2024 - 03/11/2024 04. Financial Year 2023-24 05. Audit Year 2024-25 06. Names of the members of the Team-02: audit engagement team Team Leader: Faiz Ahmad, Audit and Accounts Officer including that of the team Team Member: G M Jahurul Islam Siddiqui, SAS Superintendent leader 07. Audit Methodology : * Verification of Financial Statement. * Test Cheek of vouchers 08. Scope of Audit Certification of Annual Financial Statement. * The audit was conducted following Government Auditing Standards of Bangladesh (GASB) and International Standards of Supreme Audit Institutions (ISSAI) and practices of INTOSAI/SAI of Bangladesh and also as per procedures prescribed by GOB and Development partner. * Audit opinion is limited to the fund receipts and expenditure incurred by the project authority. * Review of Financial Management. 09. Project Duration 01-03-2019 to 30-06-2025 10. Date of Commencement 1 March, 2019 11. Date of Completion 30 June, 2025 12. How many times this project 4th time audited by FAPAD 13. Total Budget :_ n Lakh) Particulars Approved Cost Total GOBE3__ 4597.00 ___4597 00 RPA ______ 83246-63 . 83246 63 DPA 202 50 202 50 Total 8804611388046 13 14. Current year Budget (as per RADP) Particulars 2023-24 Total GOB___ ___10.0 __100 RPA 27_____ YOO 0 0 ____ 27307 01D DPA '0.00 Total 2800000 28000.00 15. Current year Resources fin lakh) Particulars 202324 ToTot GOB 1200 12 00 RPA 649i6 45 198 45 Total 6510.45565 1 0 . 4 16. Current Year Expenditure Particulars 2023-24 Total GOB _ DPA 6C Total 609958 6 0 9 96 58 17. Executin Ministr Ministry of Local Government, Rural Development & Co-operatives 18. Department . Local Government Division 19. Implementing Agency Dhaka South City Corporation 20. Funding Agency IDA Credit no. 6361-BD 21. Name and Address Mr. Md Rajib Khadem, (PD), el-0' 1715341533 DSCC Nagar Bhaban 9th floor Fu bar a Dhaka nmal C.onta.r: -arson Kn:ondokar Nazl A b Mobile: +880173037883 Email: naz10 l malcon 22. Objectives of the Project The objective of the project is to enhance public spaces & improve urban services in selected neighborhoods under Dhaka South City Corporation Outcomes: * Enhancing space for recreation & socialization in under-served & marginalized neighborhoods; * Creating vibrant markets and commercial spaces for local economic development; * Improving access to public and civic amenities, such as public toilets; * Improving safety and mobility for pedestrians, * Improving efficient traffic circulation and parking management * Contributing to a cleaner environment and better air quality; and * Improving resilience to disasters and climate change by making use of designs, materials and technologies that improve energy efficiency, promote rainwater harvesting, use renewable energy, and reduce exposure to the effects of disasters, particularly - - ---- f flooding. AUDITOR'S REPORT Audit Completion Date: 03.11.2024. To Secretary Local Government Division Ministry of Local Government, Rural Development & Co-operatives Bangladesh Secretariat, Dhaka. Opinion status: Unqualified. We have audited the accompanying Financial Statements of "Dhaka City Neighborhood Upgrading Project (DCNUP), IDA Credit no. 6361-BD. Bangladesh which comprise of the financial statement as at and for the year ended on 30 June 2024 and a summary of significant accounting policies and other explanatory notes. In our opinion, the project Financial Statements present fairly, in all material respects the cash and cash equivalents of the project as on 30 June 2024 and the funds received and expenses incurred for the year then ended in accordance with the IPSAS financial reporting under the cash basis of accounting and the requirements of project accounting manual issued by the Finance Division, Ministry of Finance, Government of Bangladesh as well as those of IDA guideline and agreement. Basis for opinion We have conducted our audit in accordance with the 'Government Auditing Standards of Bangladesh' (GASB) issued by the Office of the Comptroller and Auditor General (OCAG) of Bangladesh which are based on the International Standards of Supreme Audit Institutions (ISSAls) issued by International Organization of Supreme Audit Institutions (INTOSAI). Our responsibilities under those standards are further described in the Auditors responsibilities for the audit of the Financial Statements section of our report. We are independent of the project in accordance with the Code of ethics' issued by the OCAG Bangladesh which is based on ISSAI 130- Code of Ethics (INTOSAI Code), and we have fulfilled our other ethical responsibilities in accordance with these ethical requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Other Matter This audit of the project financial statements has been conducted to comply with the specific requirements of the development partner as specified in the related loan agreement. OCAG reserves all the rights to incorporate any audit observation from this report in the CAG's audit report for being laid before parliament to fulfil the constitutional responsibilities. Responsibilities of Management for the Financial Statements and internal Controls: Management of the project is responsible for the preparation and fair presentation of this special purpose financial statements in accordance with the International Public Sector Accounting Standard (IPSAS) financial reporting under the cash basis of accounting issued by the International Public Sector Accounting Standards board (the IPSASB) of the international Federation of Accountants (IFAC), the requirements of project accounting manual issued by the finance division MOF GOB as well as those of the IDA guideline and agreement and for such internal control as management determines is necessary to enable the preparation of special purpose financial statements that are free from material misstatements, whether due to fraud or error Auditor's Responsibilities for the Audit of the Special Purpose Financial Statements: Our objectives are to obtain reasonable assurance about whether the financial statement is free 'ro: material misstatement, whether dueLo fraud or error and to issue an auditor's report that includes our opinion Rasonabe assurance is not a guarantee tnal an audit conducted in accordance with GASB which are based rn SSi ,iil always detect a materil mnisstatement when it exists. Misstatements can arise from oad o e -r''d ' ae considered material i rn. dually or in the aggregate they could reasonably be expected to n ene he economic decisions of scm ta-en on the basis of these special purpose financi-a sta*em n,s As part of an audit in accordance with the Government Auditing Standards of Bangladesh which are based on ISSAls, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: * Identify and assess the risks of material misstatements of the 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 entity'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 financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieve fair presentation. Report on Requirements of the Development Partner In accordance with the Project, Agreement was signed between IDA and Economic Relation Division (ERD) on behalf of Government of Bangladesh on 29 May, 2019 and later amended on 27 May 2024 we also report that: a) In our opinion the funds were utilized for the purposes described in the Financing Agreements and agreed Project's annual work plans: b) In our opinion, financial statements give true and fair view except stated in section-l of this report: c) In our opinion projects expenditures disbursed and expenses claimed through withdrawal applications (SOE) are in compliance with established proper procedures and according to the provisions of the financing agreements/ Disbursement handbook, and guidelines on financial management and analysis of project issued by the IDA d) The procurement of goods, services and civil works have been made in accordance with the financing agreements and IDA procurement regulations, e) The PMU has complied with covenants specified in the agreement (ATM Mostafizur Rahman) Deputy Director For Director Genera' Foreign Aided Projects Audit Directorate Phone: 02226663606 FINANCIAL STATEMENT AND NOTES Dhaka City Neighborhood Upgrading Project Appendix-S.D Dlhaka South City Corporation Nagar Blhaban (Level- 10), F Ibaria, Dhaka- 1000. Project Financial Statement As on 30 June 2024 Taka in lac Notes * Cumulative Current Cumliulative Reso u rces Prior Period Period Current Period (jov,ernment ol Bangladesh 1 68.00 12.00 80.00 Loan from DCv clopment Partner IDA Cr. No. 14,27903 6,498.45 20,777.48 6361-131) Othlers RsucsBn 3 807.00 21 1.48 1,018.48 interest(R 1PA=2 i .40)÷GOB='0.08) _________ Opening Cash Balance 4 - 6,872.88 - TOTAL RESOURCES 15,154.03 13,594.81 21,875.96 EXPENDITURE AND CASH 5 PyadAJ anc 273.74 66. 56 340.30 p nC 218.86 40.39 1 259.25 -\ tCCS`21 3.597.52 280.54 3,878.06 .d GOB=29.04) 83.22 1.48 84.70 3,380.35 5,710.61 9,090.96 Td1 tE x pe nditi re 7,553.68 6,099.58 13,653.26 NcQc> 1.3 -1.13 Inlerst (RPA÷GOB) 713.08 197.81 910.89 IV, ca lt o 11) 1.00 - 1.00 I____ 1226 9. i T 2 .6 8 1oa Projec~ ~t Expllsess afnd other F-Apenses 8,2 8 1. 15 6,306.81 14,587.96 C nCh iBaantces 1 11,R ) I DA Cr. No. 636 1-BD 6,863.40 7 286.3- 7,286,34 9,48 1.66 1.66 T"t pnd t le nd Casl 15,154.03 13,594.81 21,875.96 Ä QI .-<.Y cd o(ccs 1j l k.cc Dhaka City Neighborhood Upgrading Projeet Notes to financial stateients Appendix-5.D As on 30 June 2024 1. Governtnient of Bangladesh Fund are allocated by the government of Bangladesh to cover GOB's share of elegible project expenditures, as specified in the proijct proforma and in annual Development Programme. GOB contribution to tc project since inception are as follow (In i ac Taka) Inception to for the ycar Inception to 30 Particulars 30 1Jun1e 2023 2023-24 June 2024 Disbursements by GOB 1 68.00 12.00 80.00 Less: Refunds to GOB 12.26 9.42 21.68 Total 55.74 j 2.58 58.32 2. Loan from Development Partner The International Development Association(IDA) has provided funds to the project to cover it's share of eligible project expenditures. These flunds, whicl nust be repaid to International Development Association (DA) after the concusion of the project.Donner fund have been drawkn by the project in accordance ih the i follo ing withdrawal proecedures ( In Lac Taka) Inception to for the year Inception to 30 Particulrs 30 June 2023 2023-24 June 2024 Initial Deposit ( Adance)lDA Cr. 6361-BID 8.000.00 - 8,000.00 RPA (lDA Cr. 6361 -BD) 6,279.03 6,498.45 l 2,777.48 Total 14,279.03 6,498.45 20,777.48 3. Other resources Other resources consist of the fol lowing Inception to for the year Inception to 30 30 June 2023 2023-24 June 2024 Project Bank ltr RPA) 1805.58 21 1.40 1,016.98 Project Bank IIterest(GOB) 0.29 0.08 0.37 ProjeCt Revenuesale proceeds(GOB) _.13 1.3 Fxchiange gaini 1sses Total 807.00 211.48 1,018.48 4. Cashi lhe projC,t maimttins olle bank acconilt all iiprest bank accouni:i reds no fund. mhich is kept at sonali BlankNa Bý1 haban biancli, Dhikt and brainch to hold i11nds ads nced by MIB- Bank Interesi aIreadx deposied io Bangladesli Bank tloiglh treasury ehallan Year end cash linces srcl as tollo\s In 1 ka) Inception to for tie r ilnception to 30 Particulats 3 June 2033 202-2 Jucne 2024 *l2a S,4 1) o ,288.00( Statenent of the Project sources and uses of funds of DCNUP Project funded by Loan no IDA-6361-BD As of and for the year ended 30 June,2024 BDT ,n Lakh Actual Budget Difference For the year Cumulative For the year For the year Cumulative Notes ended 30 as of 30 June, ended 30 June, e ened 30 June, as of 30 June, 2024 2024 2024 of 30 June, 2024 e 202 June, 2024 Cash and bank balances as at 01 July 2023 5 6,872.88 Add: Funding from Government of Bangladesh 6 12.00 80.00 12.00 80.00 - Funding from Development Partner (loan from 6,498.45 20777.48 15650.00 43,683.00 9,151.55 22905.52 donor) Funcing from otier sources 8 211.48 1,018.48 Total financing 13,594.81 21,875.96 15,662.00 43,763.00 9,151.55 22.905.52 Exchange diffarence Other income - . Total Resources (financing and other receipts) 13,594.81 21,875.96 15,662.00 43,763.00 5,764.62 13,753.97 Less Expenses from Government of Bangladesh 9 10.39 56.80 15.00 80.00 4.61 23.20 Expenses from Development Partner 10 6,089.19 13,596.47 15,650,00 43,683.00 9,560.81 30,086.53 Expenses from oTher sources 11 207.23 934.70 Total Project Expenses 6,306.81 14,587.96 15,665.00 43,763.00 9,565.42 30,109.73 xcharne rate d fierences O e")Cnr e ses Total Project expenses and other expenses 6,306.81 14,587.96 15,665.00 43,763.00 9,565.42 30,109.73 Cash and bank balances as at 30 June 2024 5 7,288.00 7,288.001 T re arnexed nores 1 to 12 form an integral palt of these special-purpose financial statements. oc t - Project Director Statement of Cash Flow on CONTASA & GoB As of and for the year ended 30 June 2024 Balance as of 01 July 2023 (RPA 6,863.80+GoB 9.48) 6,872.88 Add : Received from Government (GoB) 12.00 Received from Development Partner (RPA) 6,498.45 Received from Others Resources (Bank interest)(RPA 211.40+GoB 0.08) 211.48 Exchange Rate Difference - Total 13,594.81 Less Amount of Elegible Expenditure (RPA 6,089.19+GoB 10.39) 6,099.58 Expenses of Others Resources (Bank.Int Deposit)(RPA 197.72+GoB 0.09) 197.81 Government Fund Refunded 9.42 Exchange Rate Difference Balance as of 30 June 2024 (RPA 7,286.34+GoB 1.66) 7,288.00 Total 13,594.81 STtement of uses of fundä by Proj,-t actvity and com parison to budget As of and for the years endad30.June 2024 .IDA Credit No: 6361-80 tud Budget D?rn For tha yer Cumufle an For L yzar CUWMLst & For thl Y= Cumddve gg ended 30- of 30 Jung,202 M 30 Jun,20U of 30 June,202 June,2024 Jurg,2024 Jur2024 Category 1: Pay and Allowance 66.56 340.30 85.00 388.00 18.44 47.70 Category 2: Consuftancy 280.54 3878.06 2,470.00 8,807.00 2189.46 4928.94 Category 3: CM Wos 5,710.61 9090.96 13,017.00 23.076.00 7306.39 13985.04 Category 4 Goods 148 5566 2.00 11400 0-52 58.34 Category 5 Operating Cost 30.00 231.49 88,00 609.00 58.00 377.51 Total 6,089.19 13,5,5.47 15,662.00 32,994.00 9,5721 19,397.53 The annexed nots 1 to 12 lom an integral part of these speciapurpose financial str s. Notes to the financial statements 1. General Information The following information may be added: A summary of the Project is to be given including the Loan date agreement between the Government and development partners. * A brief of the objective of the project and its components. Objectives The cbjective of the project is to enhance public spaces and improve urban services in selected neighborhoods under Dhaka South City Corpcration. Outcomes The implementation of the project is expected to result in the following outcomes: (a) Enhancing space for recreation and socialization in under-served and marginalized neighborhoods; (b) Creating vibrant markets and commercial spaces for local economic development (c) Improving access to public and civic amenities, such as public toilets; (d) Improving safety and mobility for pedestrians; (e) Improving efficient traffc circulation and parking management; (0 Contributing to a ceaner environment and better air quality; and (g) Improving resilience to disasters and climate change, by making use of designs, materials and technologies that improve energy efficiency, promote rainwater harvesting, use renewable energy, and reduce exposure to the effects of disasters, particularly flooding. * E xpcted closing date for the project: 30 June,2024 * The total number of staff involved: 9 Consultants, 19 Outsourcing and 6 from DSCC * The approval date and authority of these financial statements. 2. Significant Accounting Policies Basis of preparation he fnacial statements of the Project have been prepared in accordance with IPSAS Financial Reporting Under the Cash Basis of Accourtng and comply wth the Project Accounting Manual issued by the Finance Division, Ministry of Finance, Government of angladesh as well as (cevelopment partners' requirements) and the covenants of the IDA (Loan). These special purpose financial s:tmnre oct the data for the year ended 30 June 2024. Unrr ,is basis of accounting, financing is recognized when received rather than when earned, and expenses are recognized tten paid ratner than when incurred. Expenses are resources directed for the payment of works, goods, and services, recognized in the financ;al sratemen:s in the period when they are paid. Financing The distursement procedures need to be described briefly. The amounts of Govenment financing are recognized as such and included in the special purpose financial statmncnts when tIhe funds are to the Prnect Current account (the 'Government financing accounr) Expenses Ccns'stent v.th the cash ba.ss of accounting, the Project expenses are recognized and included in the special purpose financial stateent whe 'e payment s actualy made to suppIers of goods, works, and seryces as opposed to vhen goods are rcerved! ser:ces are rendered Functional and presentation currency 1, t rr ato cuecy of the Government of Bangladesh. The special purpose financa s:atmn:s'e t ot the P'o,ect are presented inWET x0 fesnRon currency) and rounded to the nearest integer of BDT. Income and expenses dencminated in BDT are converted D .e e.xrrngea rate set out by the Bangladosh Bank on the date of tera"scton AcLon b c no rxe in BDT are converted into USD applying the exchang rae u 0 nh Bnke mt te 0 toe eRchange rate is hstorical. 3. Taxation merininanrn,.nn ~ ~ a ' s-dmrrier!ian,i5Xt not h Lj d to , y 4. Fixed Assets Fxed assets of the Project inclide cflize equipment. vehicles, and fumiture procurcd for project implemenlaton. The cost of fied assets inc'udes the cost of procurement and other related expenditures. Due to the cash basis of accounting, the fixed assets procured under the Project are measured on the basis of the cost of procurement and reflected in the special purpose financial statement as expenditures instead of cat-a'izaton in the balance sheet The record of fhed asse:s is maintained in inventory sheets. Considering the non-commercial status of the Project and the cash basis of aCcountng, depreciation for the fixed assets is not accrued. 5. Cash and bank balances / Cash and cash equivalents The Prolect maintains 2 number of bank accounts, a CONTASA bank account or revolving fund. which is kept at Sonali Bank Ltd to hold :urns advanced,received from Donor and an operating account at Sonali Bank Ltd to hoAd funds advancedireceived fhom GOB as well as funds transfered from the CONTASA bank accourILYear-end cash balances were as follows: Opening balance as at 30 June For tfe year ended 30 Closing balance as as at 30 2023 (inception to 30 June June 2024 June 2024 (incepton to 30 2023) June 2024) mplust account CONTASA account (RPA) 6,853.4 7,23634 728334 toerit,ng account (GOB) 9 4 1 66 1.66 TOIl 6,872.8 1 7,288.00 7,288.00 6. Funding received from the Goverement of Bangladesh Fur-s a-e SIlcated by the Government of Bangladesh to cover GOB's share of chg b.c project expend.tures, as specieO in the pro;ect nanuf and in the annual development program for each of the projects. Any aflocited funds rhat have not been expended by the end of a o Iar lapse and must be returned to GOB GOB's contabubon to the Project since inceptron and for the year are as foltows Opening balance as at 3ended 0 Closing ba!ance as as at 30 2023 (inception to 30 June F,o 2024 June 2024 (inception to 30 2023) June 2024) LOOsscinc by GOB 8 G i00 1200 8000 Refund 0 GOB 12.23 942 2t h8 55074 253 58.32 7 Furding received from Development Partners (loans from lenderidonor) me of te lcnder,coror) has pro,idad funds to Ihe Project to cover its share of a ible preect expene u,e These fnds, wh o mus be epad to the (name of the tenderidonor) after the conclusion of the Projeci have bre d:-rwn by the Project in accordance wiin !ne fv -ng mrthdawal procedrures Openng Closing alance as as at 30 2023 (inception to 30 June n '024 ncepton to 30 2023) ne 20 (lt,al Ad,ance) 800 0" 0 c r epen shwents 6 279.0 34 12 777 43 14,279.03 6 4934T 2077748 3 Funding from other resources L o_rc ts conss! of the frowing enw (lance us at 3' June n caS at o3 2023 (incoeption to 30 June Joneo to024 'P23 ____ (37___ .e'ro lss 'm1v 80,.es. 2t, on.e _fees84 sV\2 9. Expenses from Government fund (BDT in Lakh) Actual Budget Difference For the period Cumulative For the period Cumulative For the period Cumulative gry ended 30 June of 30 June ended 30 June of 30 June ended 30 June of 30 June 2024 2024 2024 2024 2024 2024 1 Pay and Allowance 2. Consultancy 3. Civi \\'I rks 4 GeC< - 29.04 - 30.00 - 0.96 5 : Cost 10.39 27.76 1200 50.00 9.42 15,63 Total Project Expenses 10.39 56.80 12.00 80.00 9.42 16.59 10. Expenses from Development partners (BDT in Lakh) Actual Budget Difference Category For the period Cumulative For the period Cumulative For the period Cumulative ended 30 June of 30 June ended 30 June of 30 June ended 30 June of 30 June 2024 2024 2024 2024 2024 2024 1 Pay ard Allovace 66 56 340.30 85.00 388,00 18.44 47.70 2 C s ancy 260.54 3,878.06 2,470,00 8,807 00 2,189.46 4,923 94 i3 C:. ks 5,710 61 9,090.96 13,017 00 23,076 00 7,306 39 13.985 04 4 1.48 55.66 2.00 114 00 0.52 58 34 Total_Project_Expenses 6,3000 231.49 68.00 60900 ,58 371.51 Total Project Expenses 6,089.19 13,596.471 15,662.00 32,994.00 9,572.81 19,397.53] l. I Reconili.ation of expenses by funding methods Amount Category 1 Category 2 Category 3 Civil Category 4 Category 5 Amount n lv&C a W,orks Goods Operat ng Cost Claimed Received 74 . 195 4 .198 25 - 30,25 5,498.45 6,49845 -e'r :s Total expenses claimed 74.46 195.49 6,198.25 30.25 6,498.45 6,498.45 k4!~ KJluín record Add Exprses no: caimed al year-end 5.21 115.21 693.50 1.48 3.59 L__ss: Un 'ce expenses at prev,ous year-end 13.10 31.12 1,181.16 2.87 LUI!ta. hpenif(e 66.57 279.58 5,710.59 1.48 30.97 10.2 Summary of Withdrawal Applications (SOE) SOC Dale Category 1 Category 2 Category 3 Category 4 Category 5 Amount Amount DifferencE (Pay & Allow) (Consuitancy) (Civil Works) (Goods) (Operating Cost) Received Claimed W 11) 20 07.2023 13.10 31-12 1,181.16 2 87 1,228.25 1,228.25 \WA-20) 30.11.2023 22.36 63.81 689.97 9.60 785.74 785.74 \%A-2 1 11.02.2024 12.44 30.31 873.47 6.17 922.39 922.39 -22 19.05.2024 16.26 43.05 1,087.28 8.71 1,155.30 1,155.30 - A.-23 23.05.2024 5.09 14.41 987.90 1,007.40 1,007.40 - WA2 l 19.06.2024 5.21 12.79 1,378.47 2.90 1.399.37 1,399.37 - Total 74.46 195.49 6,198.25 - 30.25 6,498.45 6,498.45 - 10.3Summory of Withdrawal Applications (Imprest Account Replenishment) Cry 2 Category 3 Category Category 5 Amount Amount e a!e,ory Ce Ceceived Claimed Diferem N/A Total 10 4 Suim ry of Withdrawal Applications (Direct Payment) Category 3 Y Amount Amount Cfae No Dae Category I Category 2 Category 3 Category 4 Categcoy reived Claimed Diffre CategoRecive 2Claimed_ _____ T L _ _ _ _ _ _ _ _ 11. Expenses from other resources In BDT Lakh Actual Budget Difference For the period Cumulative as For the period . For the Cumulative as peid ne Cumulative as ended 30 June of 30June ended 30 penod ended 2024 2024 June 2024 of 30June 2024 of 3OJune 2024 2024_224 _ Jue202430 June 2024 R e aun ln erest 197.81 910.89 - (197.81) (910,89) Cu;ues (Refund of GoB fund) 9,42 21.68 (9,42) (21.68) ers(Sa e Proceeds refund to GoB) - 1.13 - (1.13) C r (Impres fund) 1.00 - (1.00) Total Project expenses 207.23 934.70 - (207.23) (934.70) 12. Project implementation As of 3) June 2024. overall 7%0 of Loan has been implemented in the framework of the Loan Agreement IDA Credit No.6331-BD. The t expenses by calegones are presented in the tables below: Expenses as Budget as of Budgeted Total Project Loan' Grant Of 30 June 2024 30 June 2024 expenses as of Project Budget implementabon as in currency unit in currency unit 30 June 2024 (in in Currency unit Of 30 June2024 percentage) (ercentacet Caregory 1: Pay and A'!owance 66.56 85.00 78% 1,47080 5% Categcory 2: Consu:tancy 280.54 2,470.00 11% 8,804.50 3% !Caegory 3: Civ;l Works 5.710.61 13,01700 44% 72,474.70 6% Category4 Goods 1.48 2.00 74% 152.10 1% DyOerang Cost 30,00 88.00 34% 5,144.00 1% T roject expenses 6,089.19 15,662.00 39% 83,046.10 7% Dhaka City Ncigiiborliood Upgrading Project Statement of Expenditure (Notc-5) For the year ended June 30, 2024 Appendix-5B CodM no l'urticulars GOB RPA Total 31 l 1101 Oscer's Pav - 21.19 21.19 31 l 1201 S. StaffPav - 16.92 16.92 31 l 1310 louse rent - 24.00 24.00 3i11311 Medical 4.13 4.13 1111314 Tin - 0.32 0.32 Sub -Total Pav and Allowancc - 66.56 66.56 321 i107 Car Rental 24.87 24.87 3 2 1 l20 lelephone Bill 1.20 1.20 321II 2 Adverisement - 3.22 3.22 3258101 Vichel Maintenance .88 0.88 58103 \laineniciie of Computers & OMc ceqiment - 0.71 0.71 L 10! POL Expenses 9.51 - 9.51 l -otal Operating cost 10.39 30.00 40.39 .\rchitectire, Lgineering Design, Supervision & - 102.43 102.43 ,2-7!;.)] Social Safeguarcaum colmn S st/S - l - 29.87 29 87 ii nvironIent Specialst 1 -S-II 9.96 9.9 l rhn D,esin SpeCialisL S -1 I2A 24.00 21, 00 7 1 \nni:oring & Evaluation Specialst/S-14 22.28 22.28 101 lFinancial Management SpecialstS-16 - 33.53 33.53 7101 'roject Accounts Officer (National)S-17 15.60 15.60 725 1 Material & Quality EnLincer /S18 - 23.93 23.93 3?5-'101 Trafle .Signal Consultant /S- 19 - 17.98 17.98 715 1 Proiect Prepairatorv Acti\ ities 0.96 01.96 uh, Totl Consultinu Services 280.54 280.54 w (1 Jnnuny (erltre (New) 2. 185.00 28 15.00 1 201 Ci nunnity Centre (Deveopment) 229.76 229.76 2 rrn Street(3-5i) 91.67 91.67 i w2 i\\. street (5m wide) 139.59 139.59 k o rh Bdg54.25 54.25 7 )r nD 4s.Sa 485S8 DPjeÅ pment 1,5.7 1145.7 nd .1 erupetS79. 57 59. S \ a,e Trnse Station 2323 ~l \ i(nm ide) 600 360.02 i l. iur i-l 1471' o .,.1 sm 3 312 96 mund 8w,0 1s80.00 1'hT ( i5______1 5orn fl 760 (,71 ' - u lr U 10 3, K) OJ,) U9TSS [)haka City Ncighborhood Upgrading Project (DCNUP) Dhaka South City Corporation Special Account Reconciliation Statement Period : From 01-06-2024 to 30-06-2024. Account Number : SND 1623803000062 with Sonali Bank Ltd. Nagar Bhaban Brancli,Dhaka. Particulars Amount in BDT Baiilancce as per Bank Statementas on 30.06.2024 810,533,536.00 Less Cheque Issued but not presented at Bank within 30.06.2024 No Checque Nos. Date Anount 1 4189971 29.06.2024 8,014,180.00 2 4189972 29.06.2024 1,337,285.00 31 4189973 29.06.2024 891,523.00 4 4189974 30.06.2024 194,807.00 5 4189975 30.06.2024 32,468.00 -4189976 30.06.2024 21,645.00 4189977 30.06.2024 195,652.00 8 4189978 30.06.2024 32,609.00 91 4189979 30.06.2024 21,739.00 '0 4189980 30.06.2024 234,563.00 1 4189981 30.06.2024 19,094.00 12 4189982 30.06.2024 26,063.00 13 4 189983 30.06.2024 101,739.00 4189984 30.06.2024 16,957.001 7 4 189987 30.06.2024 26,304.00 4 189986 30.06.2024 1 3 38.00 4 189987 30. 06.2024 6,008.00 2 41 89990 30.06.2024 19,537.00 4 8999 30.06.2024 17,2. 8 00 4 1 V99 30.06.2024 19 , 17 00 23 4189991 30.06. 024 6 321.00 I1 994 30.06.2024 ,1 ,77001 S81999 30.06.2024 63300 4 1 li 4 39).06.2024 1 0 i0 0 41 1S99 ] 0. 06. 2 024 6 ___,__ oL) 0 0 8 096 30.06.2024 39 00 8 90 ~7 30.06 2024 27, 01 ,.00 30.06.2024 27,0 0('..6.20-41< Dhaka City Ncigliborliood Upgrading Project (DCNUP) Dhaka South City Corporation Special Account Reconciliation Statement Period : From 01-06~2024 to 30-06-2024. Account Number: SND 1623803000062 with Sonali Bank Ltd. Nagar Bhaban Branch,Dhaka. Particulars Aniount in BDT 31' 4190001 30.06.2024 27,013.00 321 1190002 30.06.2024 21,113.00 33, 4190003 30.06.2024 19,110.00 34 4190004 30.06.2024 19,110.00 35 4190005 30.06.2024 19,110.00 36 4190006 30.06.2024 19,110.00 37 4190007 30.06.2024 19,110.00 38! 4190008 3006.2024 19,110.00 39 4190009 30.06.2024 19,110.00 49 4190010 30.06.2024 19,110.00 41 4190011 30.06.2024 17,610.00 421 4190012 30.06.2024 17,610.00 43ý 4 1900 13 30.06.2024 42,500. 00 4 4190014 30.06.2024 2,500.00 5 4190o1I 30.06.2024 5,000.00 46 4190016 30.06.2024 12,110,495.00 47 4190017 30.06.2024 1, 128,307.00 48 4 l 900 18 30.06.2024 1,053,087.00 49 4190019 30.06.2024 12, 198,226.00 4 190020 30.06.2024 1,1144,378.00 51 4190021 30.06.2024 1,068,087.00 52 40 90022 30.06.2024 16,804,559.00 3 4190023 30.06.2024 1,565,253.00 54 4190024 30.06.2024 1,469 512. 0 55 900 30 .06.2024 1 69 .00 5!, )( 6 30.06.2024 5,9 93.00 30.06.2024 9 38 00 30.06.2024 1 :u 0 30.06.2024 -u o3006.2 024 3 V> 3 0.02024 1 30.06.-0241_'~ _____ Dhaka City Neigliborhood Upgrading Project (DCNUP) Dhaka South City Corporation Special Account Reconciliation Statement Period : From 01-06-2024 to 30-06-2024. Account Number SND 1623803000062 with Sonali Bank Ltd. Nagar Bhaban Branch,Dhaka. Particulars Anount in BDT 9"j 4190034 30.06.2024 28,215.00 651 4190035 30.06.2024 4,455.00 661 4190036 30.06.2024 1,485.00 671 4190037 30.06.2024 88,920.00 68 4190038 30.06.2024 14,040.00 69 4190039 30.06.2024 4,680.00 7 4190040 30.06.2024 30,780.00 71 4190041 30.06.2024 4,860.00 72 4190042 30.06.2024 1,620.00 73 4190043 30.06.2024 17,100.00 74 4190044 30.06.2024 2,700.00 5 4190045 30. 06.2 024 900.00 76 4190046 30.06.2024 15,253.00 4190047 30.06.2024 2,408.00 ,8 4190048 30.06.2024 803.00 91 4190049 30.06.2024 9,158.00 804 190050 30.06.2024 1,446.00 4190051 30.06.2024 482.00 821 4190052 30.06.2024 16,720.00 83 41190053 30.06.2024 2,640.00 04 4190054 30.06.2024 880.00 85 4190055 30.06.2024 14 228 00 4190056 30.06.2024 24600 8 4190057 30.06.2024 74S.00 9005 30.06.2024 4 190 OM Total= 81,899,128.00 81,899,128.00 Balamce asper Cash lBook as on 30.06.2023 728,634,408.00 Non-compliance of financial rules & regulations Non-compliance of condition of contract Non-compliance of Government orders. Due care should be given for compliance of the financial rules of regulations. Condition of contract should be followed. Due care should given on government orders. MANAGEMENT LETTER Secretary Local Government Division Ministry of Local Government, Rural Development & Co-operatives Bangladesh Secretariat, Dhaka. Subject: Submission of the Management Letter based on the audit of financial statements of "Dhaka City Neighborhood Upgrading Project (DCNUP), funded by IDA Credit no. 6361-BD for the year ended on 30 June 2024. Dear Sir We confirm that we have completed our audit on the accounts of "Dhaka City Neighborhood Upgrading Project (DCNUP), funded by IDA Credit no. 6361-BD for the year ended on 30 June 2024 and pleased to submit the management letter dealing with certain matters relating to the preparation and presentation of financial statements. During the course of our audit, we have evaluated the Project's system of internal control to the extent we considered necessary as per the Government Auditing Standards of Bangladesh which are based on International Standards of Supreme Audit Institutions (ISSAI) as well as requirements of the relevant agreements executed between the Government of Bangladesh and IDA. Our review of such areas includes amongst other procurement process, utilization of funds, maintenance of covenants, human resources etc. The purposes of this review of internal control were to determine the nature, timing and extent of the auditing procedures necessary for expressing an independent opinion on the Project's financial statements. Our examination was carried out primarily to enable us to form an opinion on the financial statements as a whole on the basis of materiality and, therefore, did not necessarily bring to light all the weaknesses in the system of internal control, on which a special review might have done. We identified certain matters related to weaknesses of interna control and other deficiencies which may be of interest to you and the project management. Accordingly we have included these findings in this management report Each of these findings has been divided into the Section-Two In addition. we have examined the internal control system considering COSO model where control environment, Risk assessment. control activities. Information and monitoring activities were examined. Besides this fund management reconciliation and other relevant issues were also evaluated Assets are procured in accordance with the RDPP to ensure efficient project work There is a list of Office Equipment and Goods but not maintained yearly basis. We would like to place on record our sincerest appreciation of the c ou_r-sy and -co-oceration extended to our audit team Ly toe management and all grades of staff of the Project duing i'1e aourse of our audit (ATM Mostaizur Rahman) Deputy Director Phn 0 ener P hone 02226663606 SECTION-ONE 1. INTRODUCTION: In terms of the scope of work identified in the Agreement executed by IDA and the Government of Bangladesh, we carried out an audit pertaining to the "Dhaka City Neighborhood Upgrading Project (DCNUP), IDA Credit no. 6361 -BD for the period ending 30 June 2024. II. BACKGROUND: The loan Agreement was signed 29 May, 2019 and later amended on 27 May, 2024. The total resources of the project as under: Amount in Lakh Particulars Approved Cost Total GOB 459700 4597.00 RPA 83246.63 83246.63 DPA 202.50 202.50 Total 88046.13 88046.13 The project will be ended on 30 June, 2025 with an estimated duration of 06 years. Ill. SCOPE OF AUDIT: The audit was conducted following International Standards on Auditing (ISA) and practices of International Organization of Supreme Audit Institute (INTOSAI) / SAI Bangladesh and also as per procedures prescribed by GOB and Development Partner. The audit accordingly included such tests of accounting records internal controls and other procedures those were considered essential for due performance of this audit. Discussion on management, accountability and on audit observations was held with the Project Director, Mr. Md Rajib Khadem on 03/11/2024, IV. OVERALL OPINION ON: (A) FINANCIAL OPERATION AND CONTROL: (i) GOB fund: (ii) The GOB fund was released by the Local Government Div!sion Ministry of local government rural development & cooperatives on the lbasis of al oa: n The croject authority withdraws th)s money by submitting bills to the FA & CAO, Ministry oa qovernment, rural development & -ooperatives and kept it in to the project Bank A/C no 15238013 613 Sonali Bank Nagar Bhaban Branch Dnaka-1000. (ii) PA fund: RPA Fund: A CONTASA is being maintained with Sonal ' Ba'K -t': ' a Brnch Fulbaria Dhak3a on SND-1623803000062 for RPA f DPA Fund: A small amount 202.50 Lakh of DPA fund was allocated in the RDPP. (B) ADEQUACY OF MANAGEMENT STRUCTURE: The Management structure of the project is as per RDPP (C) EQUIPMENT USE AND CONTROL: (D) SOAN REQUIREMENTS: ASSETS VERIFICATION REPORT (FINANCIAL YEAR: 2023-2024) SOAN Deviation Impact Recommendations Requirement Assets Project Authorities did not conduct Usable condition of those Project Authority (PA) verification any physical verification yearly. Fixed Assets could not be should conduct a Report Ascertained by the Audit physical verification on Team fixed assets & prepare reports on Fixed Assets once a year and submit to audit during conducting field audit. Assets Fixed Asset Management: The The permanent asset Permanent Asset Register project authority-maintained Register maintained Register and Assets List stock/assets register for properly must be properly procurement of furniture & maintained and verified equipment. It is recommended to continue this trend. Evaluation of Internal Control S.N. Weakness/Operative Effectiveness Impact Recommendation 01 Procurement Management: According Failure to follow PPR-2008 it is recommended to continue to PPR-2008. rule-3 it is mandatory to properly may -s n tn s trend. fovo PPR-2008 for procurement of erroneous procu -e