Restricted THE REPUBLIC OF THE UNION OF MYANMAR OFFICE OF THE AUDITOR GENERAL OF THE UNION AUDIT DEPARTMENT AUDIT REPORT ON FINANCIAL STATEMENT OF DECENTRALIZING FUNDING TO SCHOOLS PROJECT-DFSP JOINTLY IMPLEMENTED BY MINISTRY OF EDUCATION AND THE WORLD BANK FOR 2020-2021 FINANCIAL YEAR Date- 27" December 2022 Restricted Restricted Contents Serial Paragraph Page Particular No From To From To 1 2 3 4 5 6 1 Audit Opinion 1 2 1 - 2 Basis for Qualified Opinion 3 - 1 2 3 Emphasis of matter 4 - 2 - 4 Responsibilities of Management and Those Charged with 5 6 2 3 » Governance for Financial Statements 5 Auditor's Responsibilities for the Audit of the Financial 7 8 3 - Statements 6 Report on compliance 9 - 3 - 7 Management's responsibility for compliance 10 - 3 - 8 Auditor's responsibility for compliance 11 12 4 - 9 Audit opinion on compliance 13 - 4 - Restricted Restricted Audit report on the Financial Statements of the Decentralizing Funding to Schools Project (DFSP) financed by the World Bank's loan, AusAID grant and Ministry of Education's budget, implemented by the Ministry of Education for 2020-2021 Financial Year Audit Opinion 1. We have audited the Financial Statements of the Decentralizing Funding to Schools Project (DFSP) financed by the World Bank's loan, AusAID grant and Ministry of Education's budget, implemented by the Department of Basic Education and the Department of Education Research, Planning and Training, the Ministry of Education for 2020-2021 Financial Year which comprise the Interim Unaudited Financial Reports (IFRS) of DBE, Interim Unaudited Financial Reports {IFRS) of DERPT and Interim Unaudited Financial Reports {IFRS) of DBE+DERPT. 2. In our opinion, except for the effects of the matters described in the Basis for Qualified Opinion section of our report, Financial Statements of the Decentralizing Funding to Schools Project {DFSP) for 2020-2021 Financial Year present fairly, in all material respects, its cash receipts and payments for the year then ended in accordance with Government Accounting System-Cash Basis. Basis for Qualified Opinion 3. We have audited the Financial Statements of the Decentralizing Funding to Schools Project (DFSP) for 2020-2021 Financial Year in accordance with International Standards of Supreme Audit Institutions {ISSAls). Our responsibilities under these standards are further described under the auditor's responsibility for the audit of the Financial Statements section of our report. We are independent of the audited entity in accordance with ethical requirements that are relevant to our audit of the Financial Statements of the Decentralizing Funding to Schools Project (DFSP). We have fulfilled our other ethical responsibilities in accordance with these requirements. We believed that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion. According to our findings, a basis for qualified opinion is as mentioned below; Restricted Restricted 2 a g ( a) As per the bank statement, total receipt of fund for the Department of Basic Education (DBE) and the Department of Education Research, Planning and Training (DERPT) was USO 18.499 million (24,419.917 million Kyat). However, It was described as USD 18.357 million (24,230.777 million Kyat) in the Financial Statements due to the preparation of it according to the World Bank's formula. (b) Loan from the World Bank was actually used by the Department of Basic Education (DBE) and the Department of Education Research, Planning and Training (DERPT) under only 4 budget codes. However, it was described under 15 budget codes in Interim Unaudited Financial Reports (IFRS). ( c) A note of the variances between the bank statement and the Financial Statements was not made in the Financial Statements. Emphasis of Matter 4. Regarding the Financial Statements of the Decentralizing Funding to Schools Project (DFSP) funded by the World Bank's loan, AusAID grant and the Ministry's budget, implemented by the Department of Basic Education and the Department of Education Research, Planning and Training, we draw attention to the facts as emphasis of matter material for not only project management but also user of Financial Statements that it is the need for maintaining separate accounts from State budget in order to examine allocation and use of funds by each State/ Region Education Office. Our opinion is not modified with respect to this matter. Responsibilities of Management and Those Charged with Governance for the Financial Statements 5. The project management has the responsibility to prepare and fairly present the Project Financial Statements in accordance with the Government Accounting System, Cash Basis and for such internal control as management determines is necessary to enable the Restricted Restricted 3 .. preparation of Financial Statements that are free from material misstatements, whether due to fraud or error. Moreover the management has responsibility to perform in line with Financing Agreement, Grant Agreement and Operational Guidelines. 6. Those Charged with governance are responsible for overseeing the Project's financial reporting process. Auditor's Responsibilities for Audit of the Financial Statements 7. Our responsibility is to conduct audit on the Financial Statements in accordance with International Standard of Supreme Audit Institutions (ISSAls) and comply with code of ethics for auditors and to express sufficient and appropriate audit opinion as per audit findings after conducting audit with reasonable assurance whether material misstatements exist in Financial Statement. 8. During the course of the audit, regarding to figures and disclosures in the Financial Statements which comprise the statement of expenditure of the Decentralizing Funding to Schools Project for 2020-2021 Financial Year, we obtained sufficient audit evidence for evaluating error and deficiencies and by applying audit procedures based on auditor's assessment and judgement. In this regards, we have obtained sufficient and appropriate audit evidence in order to provide basis for our audit opinion. Report on compliance 9. As per auditor's responsibility prescribed by respective laws, rules, regulations, procedures and auditing standards, report on compliance is conducted as part of an audit on the Financial Statements. Management's responsibility for compliance • 10. In addition to the responsibility for the preparation and presentation of Financial Statements described above, management is also responsible for ensuring that the activities, financial transactions and information reflected in the Financial Statements are in compliance with the authorities which govern them. Restricted Restricted 4 •- Auditor's responsibility for compliance 11. In addition to the responsibility to express an opinion on the Financial Statements described above, our responsibility includes expressing an opinion on whether the activities, the financial transactions and information reflected in the Financial Statements are, in all material respects, in compliance with the authorities which govern them. This responsibility includes performing procedures to obtain audit evidence about whether the entities' receipts and payments have been applied to the purposes intended by the legislature. Such procedures include the assessment of the risks of material non- compliance. 12. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a reasonable basis for our opinion on compliance. Audit opinion on compliance 13. Based on audit evidence that we obtained, our opinion is as the following; (a) Funds have been used in all material respects in line with the conditions of Financing Agreement and for the purposes intended. (b) Regarding the use of funds, it has been used in all material respects in compliance with Financing Agreement, Grant Agreement and Operational Guidelines for School Improvement Fund. (Signed) (Khin Khin Thi) Director General Date- 27 December 2022 Restricted Government of the Union of Myanmar Minlstry of Education Decentralizing Funding to Schools Project interim Unaudited Financial Reports (IFRs) Annual Period: Oct 1, 2020- Sept 30, 2021 Consolidated Report for period ending Sept 30, 2021 ---- ---.-- .. --- --- ""-- - eea Share of TF Actual for Actual expenditures $ Share of IDA Actual Share of IDA Actual for Share of TF Actual for Variances (Budget- Approved Budget period - annual Comments/ Expenditure Headings (spending}- for period - annual period- annual Report In period -annual Report in Actual expedltures) 7 1- annual Report/Cumulative forend of Rema rks (ot 1-Sept 30) (Kyats) Report (Kyats) (us$) (us$) 2 Year (Annual) (Kyats) School Grants 1 2 3 . 4 0.11075 1,320.00 5 6 1,320.00i 7 , (11- High school; 12 Middle school; 13 Primary schools expenses only) 02 Travelllng Allowance 6,817,579,066 6,815,098,624 754,788,523.40 571,809 2,480,442/ 0201 Internal Travelling Allowance 6,817,579,066 6,815,098,624 754,788,523.40. 571,809 2,480,442/ 03 Expenses of Goodsand Services 88,053,127,601 88,042,801,352/ 9,750,951,482.64 7,387,084 10,326,249 0301 Labor charges 17,222,361,485 17,214,939,985/ 1,906,595,905.55/ 1,444,391/ 7,421,500, 0303 Renting vehicles or machinery 1,490,498,850 1,490,008,850, 165,022,054.98 125,017/ 490,000 0304 Transport charges 3,713,855,772 3,713,440,772 411,272,474.81/ 311,570, 415,000 0305 Office Supplies 8,542,562,920 8,542,214,320° 946,070,730.47 716,720 348,600 0307 Postage, Telegram, Telephone 581,618,603/ 581,593,553/ 64,412,881.36 48,798/ 150%9, 0308 Electricity and Power 2,828,452,013/ 2,828,201,415, 313,230,092.10 237,296i 250,599° 0309 Books, Periodical and Newspaper 5,047,221,727/ 5,046,789,527/ 558,944,048.41/ 423,442/ 432,200 0313 consumable expenditures 17,888,578,280 17,888,110,980 1,981,151,208.32/ 1,500,872 467,300 0314 Food Supplies 320,585,250 320,389,250, 35,483,878.12/ 26,882 196,000 0320 Printing and Publication Charges 29,734,474,814 29,734,369,813/ 3,293,152,795.74/ 2,494,813 105,001 4 0325 Exhlbltion and Events 682,917,887/ 682,742,887/ 75,615,412.78l ! 57,284 175,000 04 Maintenan ce Charges 119,382,894,460° 119,381,637,566 13,221,802,781.72 10,016,517 1,256,894 0409 Minor maintenance and repairs 119,382,894,460 119,381,637,566 13,221,802,781.72 i 10,016,517 1,256,894 $ SchoolGrants-Subtotal 214,253,601,127 214,239,537,541 23,727,542,788 17,975,411/ 14,063,586 Stipend . ; ' (11- Hlgh school; 12 Middle school; 13 Primary schoolsexpensesonly) l ~ l 05 Transfer Paym ents 840,500,000° 840,400,000 93,076,316.29 70,512 100,000 0501 Transfer Payments 840,500,000 840,400,000 93,076,316.29 70,512 100,000 Stipend sub-total 840,500,000 840,400,000 93,076,316.29 70,512 100,000 Training 0506 Educative Training (7 - Refreshertraining) 5,562,755,430 3,703,381,683 410,158,406.57/ ! - ·3 310,726 1,859,373,747 Training Sub total 5,562,755,430 3,703,381,683 410,158,406.57/ 310,726 1,859,373,747 Grand Total 220,656,856,557 218,783,319,224 24,230,777,511 18,356,649.63 1,873,537,333 ~ - .- . \~c':;"' ·,- Prepared by: Name and T7le: \: 3 ' Approved by. 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