AUDITOR'S REPORT Audit Completion Date: 01-10-2024. Secretary Health Services Division, Ministry of Health & Family welfare Bangladesh Secretariat, Dhaka. Opinion status: Unqualified. We have audited the accompanying Financial Statements of "Urban Health Nutrition and Population project" implemented by Upazila Health Complex (UHC) under Ministry of Health and Family Welfare which comprise of the statement of cash receipts and expenditure, statement of comparison of budget and actual expenditure as at and for the year ended of 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 30th 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 World Bank guideline and Loan 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 Auditors 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 Auditor's 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 fulfill 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) - 15 - 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 World Bank 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 from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is not a guarantee that an audit conducted in accordance with GASB which are based on ISSAI 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 special purpose financial statements. 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 signed between IDA and Economic Relation Division (ERD) on behalf of Govt. of Bangladesh on 22 November, 2023 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 the Special account statements give a true and fair view of the Special accounts as at 30 June 2024 and the transaction of these accounts for the period then ended, in accordance with the IDA Guidelines; - 16 - (c) Projects expenditures disbursed and expenses claimed are in compliance with established proper procedures and according to the provisions of the Financing Agreements/Loan Disbursement handbook, and guidelines on financial management and analysis of projects 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 Loan Aagreement No: 7402-BD. (Mst. Afroza Aktar Remme) Deputy Director For Director General Foreign Aided Projects Audit Directorate Phone: +880-2226663612 - 17- Project financial statements (GOB Approved Model) As of and for tho years ended 30 June 2024 (in Lac Taka) Closing balance IDA credit 7402-BD (IDA) Notes Opening balance For the year as at 30 June as at I July 2023 ended 30 June i 2024 Resources (Cumulative prior 2024 (Cumulative perlod) (current period) current period) ovemment of Bangladesh 6 oan from lendedonor 7 000 39 246 534 IOther re< 8re Cashopening balance 5 total resources 0,00 539246 539 Expenditure and Cash 1. Medical & surgical requisite 0.00 70.816 70.816 2. Vaccine & Medicine 0.00 217.264 217264 3 Printing,Publcation,Research 0.00 13.677 3 4> Elertric Equ;pement 03 320) 5. Solar Electric Pannel 0.00 4 980 4.980 7. Fumitures &Fixures 4.0 43.430 . achinery and other 0.00 185.758 185.58 eqyupement_ SEpe ite39.24 9.246 Cash closing balance Imprest account pratg Accou¯nt (RPA) 0 0 0,00 0.00 0 00 Operating Account (GOB) fotal Expenditure and Cash The annexed notes 1 to 12 orm an ntegral part olhese Special purpose financial slatemenls rolect Die a '(Y4N -kx 18kr w,- i8 Statement of the Project sources and uses of funds of Project --- funded by Grant/Loan nO* IDA credit 7402-BD (IDA) As of and for the year ended 30 June 2024 (In Lac Taka) in (currency) ._________ Actual Budget -__ ___Difference Notes For the year 1 Cuuatv as For the year Cumulative For the year Cumulative ended 30 of 30 June, 2024 ended 30 as of 30 June, ended 30 June, as of 30 June, June, 2024 June, 2024 2024 2024 2024 Cash and bank balances as at 01 July 2023 5 Add. Funding from Government of Bangladesh 6 unding from Development Partner (loan from 7 539.246 539.246 1207.84 1207.84 668 594 668.594 ender/donor) Funding from other sources 8 Total financing 539.246 539.246 1207.84 1207.84 668.588 Exchange difference Other income Total Resources (financing and other receipts) Less: Expenses from Government of Bangladesh 9 Expenses from Development Partner 10 539.246 539,246 1207.84 1207,84 668594 668594 Expenses from other sources uc811 5399246 5926 10_2 8 60 94 _ 8_ 5 Total Project expenses 3.246 539246 1207.4 1207.84 6E8 594 l 68_594 Exchange rate differences I Other expenses Total expenses and other e6 539.24 539.246 1207.84 1207.84 668.594 668.594 Cash and bank balances as at 30 June 2024 5 0 0 0 0 1 0 The annexed notes 1 to 12 form an integral part of these special purpose financial statements. Project ire or Chief Accountant P ec 0 re I ornq M -its fiit Statement of uses of funds by Project activity and comparison to budget As of and for the years ended 30 June 2024 Act ual Budget IDA credit 7402-BD (World Bank) For the year Cumulativeas For the Cumulativeas ended 30 of 30 year of 30 June June 2024 ended30 June 2024 2024 June 2024 Category 1: Civil Works or as per DCA Category 2: Equipment or as per DCA Category 3: Instructors or as per DCA Category 4. Fellowships or as per DCA L Category 5: Local Training or as per DCA Category 6. International Consultant or as per DCA Category 7: Unallocated or as per OCA Category 8: or as per DCA Total Project expenses Total The annexed notes 1 to 12 form an integral part of these special purpose financial statements ProJact Drector Chief Accounant VV2 -fi mx. eej V11 I - 20 - Statement on cash flow on Cash /limprest accounts As of and for the year ended 30 June 2024 Balance as of 01 July 2023 xx Add: Receipt from Government Receipt from Development Partner Exchange rate difference Total Less: Amount of eligible expenses Exchange rate difference Total Balance as of 30 June 2024 The annexed notes 1 to 12 form an integral part of these special purpose financial statements. Protect Directo 24 Chief Accountant Notmay be prepared separately based on bank account. ; M 4421 -wl -21 - Notes to the financial statements 1. General Information The following information may be added A summary of the Project is to be given including IDA Credit no 7402BD dated hovember 22, 2023 aijreerr ent of between Government and International Development Association (IDA) A brief of the objective of the project and its components. The objective of the Project is to improve delivery of comprehensive primary healthcare serices for serlecd urban areas. The Project consists of the following parts; Part 1: Improve urban primary health, nutntion and population (INP) services led by the MoHF7W Support delivery of Essential Health Services in selected urban areas through (a) es'abbshment of and/or improvement of primary health service delivery networks and arrangement for each catchment area, including by providing training, medicines, equipment, human resources, and other requisite inputs as well as equippirg wh climate resilient technologies, adequate water and sanitation facilities, and enhanced informallon and communications technologies at primary HNP centers, mobile and satellite clinics, and re'erral cehs at secondary/tertiary-level hospitals, as relevant, and (b) support for day-to-day administration, management monitoring, and coordination of Part I of the Project, including financial management, procurement, montonrng and evaluation, citizen engagement, and environmental and social management Expected closing date for the project: December 31,2028 The total number of staffs involved. The approval date : November 22,2023 and authority of these financial statements Economic Relations Division of Ministry of Finance. 2. Significant Accounting policies Basis of preparation The financial statements of the Project have been prepared in accordance with IPSAS Financial Reporting Under the Cash Basis of Accounting, and comply with the Project Accounting Manual issued by the Finance Division, Ministry of Finance, Government of Bangladesh as well as including International Development Association (IDA) and the covenants of the including IDA Credit no 7402-BD dated November 22, 2023These special purpose financial statements reflect the data for the year ended 30 June 2024. Under this basis of accounting, financing is recognized when received rather than when earned and expenses are recognized when paid ratherthan when incurred. Expenses are resources directed for the payment of works, goods and services, recognized in the financial statements in the period when they are paid. Financing The disbursement procedures need to be described briefly. The amounts of Government financing are recognized as such and included in the special pu; Dose ftirCl3 statements when the funds are transmitted to the Project Current account (the 'Government financing accounf() Expenses Consistent with the cash basis of accounting, the Project expenses are recognized and included in tne soc,al purpose financial statements when the payment is actually made to suppliers of goods. works andlor services as opposed to when goods are received/ services are rendered - 22 - V Functional and presentalion currency BDT is the national currency of the Government of Bangladesh The special purpose financial statements of the Project are presented in BT/USO (presentation currency) and rounded to the nearest integer of BDT/USD. Income and expenses denominated in BDT are converted into USD applying the exchange rate set out by the Bangladesh Bank on the date of the transaction. Account balances denominated in BDT are converted into USD applying the exchange rate set out by the Bangladesh Bank at the reporting date, As of 30 June 2024. the exchange rate is xxxx. 3. Taxation According to the Loan/Grant Agreement, the loan and grant amounts should not be used to pay any taxes and dutes. 4. Fixed Assets Fixed assets of the Project include office equipment, vehicles and furniture procured for project implementation. Cost of fixed assets includes the cost of procurement and other related expenditures.(Copy attatched) Due to the cash basis of accounting, the fixed assets procured under the Project are measured on the basis of cost of procurement and reflected in the special purpose financial statement as expenditures instead of capitalization in balance sheet. The record of fixed assets is maintained in inventory sheets. Considering non-commercial status of the Project and cash basis of accounting, depreciation for the fixed assets is not accrued. 5. Cash and bank balances / Cash and cash equivalents The Project maintains xx number of bank accounts, an imprest bank account or revolving fund, which is kept at xxx Bank to hold funds advancedreceived from Donor and an operating account at xxx Bank to hold funds advanced/received from GOB as well as funds transferred from the imprest bank account Year-end cash balances were as follows. -Opening batance as at For the year Closing balance as 30 June, 2023 ended 30 at 30 June 2024 (inception to 30 June 2023) June 2024 inception to 30 June 2024) imprest account operating account (iA__________________I__ Dperating account (GOB) _____________ ________ ________ 6. Funding received from Government of Bangladesh Funds are allocated by the Government of Bangladesh to cover GOBs share of eligible project expenditures, as specified in the project manual and in annual development programme for each of the Project. Any a!located funds that have not been expended by the end of a fiscal year lapse and must be returned to GOB GOB contribution to the Project since inception and for the year are as follows. Opening balance as at 30 For the year ended Closing balance as at 30 June 2023 (inception to 30 30 June 2024 June 2024 (inception to June 2023)_ - 30 June 2024) - 23 - Disbursement by GOB Less: Refund to GOB aTotal 7. Funding received from Development Partners (loans from lenderidonor) The International Development Association (IDA) has provided funds to the Projrct to cover its sha,e of clgbie project expenditure. These funds, which must be repaid to the (name of the inder/doror) afler the conclusion of the Project, have been drawn by the Project in accordance with the Iolloinq wt1fawa! procd ires (In Lac Taka) Opening balance For the year Closing as at 30 June 2023 ended 30 June balance as at 30 (inception 2024 June 2024 to 30 June 2023) (inception to 30 _IJune_2024) SOE Procedures Mrt pyments Imprest account replenishments Others (RPA-GOB) 0,00 539246 539 2-6 Total 0.00 539.246 539246 8. Funding from other resources Other resources consist of the following Opening balance For the year Closing as at 30 June 2023 ended 30 June balance as at 30 (inception 2024 June 2024 to 30 June 2023) (inception to 30 June 2024) Project revenues Effxchange gamnand toss :Lss- TDS on intretand other tees ________________________ Total_____________ -24 - 9. Expenses from Government fund - -Actual Budget Difference nFortheperiodt Cumulative Fortheperiod Cumulative Fortheperiod Cumulative ended 30 June asof30June ended 30 June as of 30June ended 30 June as of 30 June 2024 202 2024 2024 2024 22 Category 1. Civil Works or as per DCA Category 2. Equipment or as per DCA Category 3: Instructors or as per DCA Category 4: Fellowships or as per DCA Category 5: Local Training or as per DCA Category 6: International Consultant or as per DCA Catgoy_7_Uallcaed_r s per DCA _________________________________________________ Categor -- --a- -e-DC--- _- - ---_ _ -Total Project expenses_________________________________________________ 10. Expenses from Development partners In (currency) t ual Budget Difference For the period Cumulative as of For the period Cumulative as of For the penod Cumulative as ended 30 June 30June ended 30 June 30 June ended 30 June of 30 June 2024 2024 2024 2024 2024 2024 Caegory 1: C[vii Wors or as per DCA Caleco Eumet or as_per DCA ecor Iwnsrucis or as per DCA Category 5: Local Trainngor as per DCA Category 6: International Consuilan or as per DCA __ Category7 Unallocated or as Category 8 or as per DCA-- 'Toal Project expenses 10.lReconciiiation of expenses by funding methods Nature of expeme cim Category 1 Categot 2 Category 3 Category 4 Categoy 5 Category 7 Category 8 Aount Arnount ifference ~Nauref epene ci agor ~aagoy agor Caegoy61aegry cat~or 8Recetyed Claimed Direct symeots ____ ____ _____ -____ mrrest account Others Total expenses caimed Memorandum record - Add: Expenses not claimed at year-end Less: Unclaimed expenses at previous -Totalexpenditure 10.2Summary of Withdrawal Applications (SOEL - S(E Date Category 1 Category 2- Category 3 Category 4 Category 5 Category 6 Category 7 Category 8 Amount Amncurt Difference No_Received C:airned 10,3Surrmary o Withdrawal Applications !mprest Account Replenishment) No Date Category t Category 2 Category 3 Category 4 Category 5 67 Cate 3 A tc Clor2 aeoy calegOry Ctg& Total I - 10 4Sunnary of Withdrawal Applcations (Direct Payment) No Date Categoategory3 Category 4 Category 5 ry go 6 C 2 Categoryategor Amunt! Amount Difference Received Cimed - - - - - - -- - - - 11. Expenses from other resources -n (currency) Actua Budget _ifference For the period Cumulative as of For the period Cumulative asof For the period Cumulative as of ended 30 June 2024 30June 2024 ended 30 June 30 June 2024 ended 30 June 30 june 2024 2024 _2024 Consullant 'ee Opera tng cosL-_----- OWers - Tota,'Projectexpenss Nole According to IPSAs 1 7 8 (c) an explanalion is required about the material ciference betveen the budget and actual armount. 12. Project implementation As of 30 June 2024. overall xx% of GranetfLoan his btee imlemened ine framework of the GranLoaa Agreenent xxxxx. The project expenses by c-eoies are prned m the tab s below Loan Grant E>penses BlRUdget a Bidgeted Iae a f n epen Proqr. iprr.mer ntatfnr. Of 30 30 Jn of30 Jun Budget an of 30 Jue June 2021 2024 il 2024 {n f 2024 in cunencym p lercenitage) rurrency In pecCnI y currency u nitum Works or as per DCA Categoy 2: Equipment Or asperCA Ca!egory 3 Instucetors Or as per DCA Categnor 4 Fellowesho ps Oras pcAcJý Category 5: Loca Traing o as per DCA Category 6: hterranona! Consultant or as perDCA Calegory 7 Unallocated or as i per DCA - _ - Category8 or as per i DCA Total Projectexpenses _ 28