COVID-19 Vaccine Project under the COVID-19 Crisis Recovery Facility implemented by MINISTRY OF HEALTH Financed Under Asian Infrastructure Investment Bank Numbered LO640A As of December 31, 2022 and For the Year Then Ended Prepared by Ahmet Tugrul OZTIRK Yunus AYAN Treasury Controller Junior Treasury Controller Rumeysa iZGI Junior Treasury Controller Report's Number 103/4 - 20/6 - 5/5 June 9, 2023 REPUBLIC OF TORKIYE MINISTRY OF TREASURY AND FINANCE Board of Treasury Controllers CONTENTS EXECUTIVE SUM M ARY ................................................................................................................................... 3 A. Project Sum m ary ......................................................................................................................................... 3 B. Objectives of Audit ...................................................................................................................................... 3 C. Scope of Audit ............................................................................................................................................... 3 D. Audit Res ul ts ..................... ............................................................................................................................ 4 E. M anagem ent Recom m endation ............................................................................................................. 4 INDEPENDENT AUDITOR'S REPORT & FINANCIAL STATEMENTS OF THE PROJECT.........S INDEPENDENT AUDITOR'S REPOR ........................................................................................................ 6 Opinion ............................................................................................................................................................. 6 Basis for Opinion .......................................................................................................................................... 6 Em phasis of M atter in the Financial Statem ent............................................................................... 6 Going Concern ............................................................................................................................................... 6 Responsibilities of Management and Those Charged with Governance or other appropriate term s for the Financial Statem ent .............................................................................. 7 Auditor's Responsibilities for the Audit of the Financial Statements......................................7 ANNEX 1: Financial Statem ents................................................................................................9 1 EXECUTIVE SUMMARY REPUBLIC OF TORKIYE MINISTRY OF TREASURY AND FINANCE Board of Treasury Controllers EXECUTIVE SUMMARY A. Project Summary Loan Agreements numbered L0640A were signed between Republic of Turkiye and Asian Infrastructure Investment Bank (AIIB) within the scope of COVID-19 Vaccine Project under the COVID-19 Crisis Recovery Facility on July 4, 2022. The project is co-financed by the International Bank for Reconstruction and Development (IBRD). The objective of the Project is to enable affordable and equitable access to COVID-19 vaccines and to help ensure effective vaccine deployment in Tilrkiye by strengthening the vaccination system. The Project consists of the provision of support to the Republic of Tilrkiye's health sector in purchasing Project COVID-19 Vaccines and developing and carrying out public communication and awareness campaigns, social mobilization and capacity building in support of improving public awareness, reducing public vaccine hesitancy, and strengthening vaccine deployment. The total amount of the Project is t676.047.000,00. The amount of the Loan agreement signed between Republic of Tflrkiye and IBRD and AIIB are C450.700.000,00 and C225.347.000,00 respectively. Closing date of the Project is December 31, 2023. In the audit period (01.01.2022 - 31.12.2022), total disbursements made under the Project is £225.347.000,00. As of 31.12.202 2, the budget of the project is exhausted. B. Objectives of Audit The objectives of our audit are; a) To give an opinion on whether the financial statements, prepared as of December 31, 2022, present fairly, in all material respects, the financial position of the Project in accordance with the cash receipts and disbursements basis of accounting, b) To determine, as of December 31, 2022, whether the Ministry of Health has complied, in all material respects, with the rules and procedures of the Loan Agreement numbered L0640A. C. Scope of Audit We have performed an audit of financial statements of the COVID-19 Vaccine Project under the COVID-19 Crisis Recovery Facility Project as of December 31, 2022 in accordance with the cash receipts and disbursements basis of accounting. We have also performed a compliance audit on whether Project activities are in line with Loan Agreements. Our audit was conducted in accordance with the International Standards on Auditing published by International Federation of Accountants. There was no limitation in our scope for the Project's audit. 3 REPUBLIC OF TORKIYE MINISTRY OF TREASURY AND FINANCE Board of Treasury Controllers D. Audit Results For the financial statements of project; our audit resulted with an unmodified opinion. As of December 31, 2022, Ministry of Health has complied, in all material respects, with the rules and procedures of the Loan Agreement numbered L0640A. In addition, in our audit period, there was not any disbursement under the Statement of Expenditures (SOE). E. Management Recommendation Since we have not identified any finding during our audit, we have not issued a Management Letter. 4 INDEPENDENT AUDITOR'S REPORT & FINANCIAL STATEMENTS OF THE PROJECT REPUBLIC OF TORKIYE MINISTRY OF TREASURY AND FINANCE Board of Treasury Controllers INDEPENDENT AUDITOR'S REPORT TO MINISTRY OF HEALTH OF TURKEY ANKARA Opinion We have audited the Statement of Sources and Uses of Funds, Statement of Cumulative Investments and Statement of Special Account of the COVID-19 Vaccine Project under the COVID-19 Crisis Recovery Facility Project as of December 31, 2022, and for the period then ended, and a summary of significant accounting policies and other explanatory information. The financial statements have been prepared by the Ministry of Health based on financial reporting provisions of the Loan Agreement numbered L0640A. In our opinion; a) The accompanying financial statements present fairly, in all material respects, the financial position and cash flows of the COVID-19 Vaccine Project under the COVID-19 Crisis Recovery Facility Project as of December 31, 2022 and for the period then ended in accordance with the provisions of the Loan Agreement. b) Ministry of Health, the Project Management Unit, as of December 31, 2022 has complied with, in all material respects, the requirements of the Loan Agreement numbered L0640A. Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the "Auditor's Responsibilities for the Audit of the Financial Statements" section of this report. We are independent of the Ministry of Health within the meaning of "IFAC Code of Ethics for Professional Accountants" ethical requirements and have fulfilled our other responsibilities under those ethical requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Emphasis of Matter in the Financial Statement Without modifying our opinion, we draw attention to Note "2" to the financial statements, which describe the basis of accounting. The financial statements are prepared to assist to the Ministry of Health (MoH) comply with the financial reporting provisions of the contract referred to above. As a result, the financial statements may not be suitable for another purpose. Going Concern The Projects financial statements have not been prepared using the going concern basis of accounting. The project will end on 31.12.2023. 6 REPUBLIC OF TORK1YE MINISTRY OF TREASURY AND FINANCE Board of Treasury Controllers Responsibilities of Management and Those Charged with Governance or other appropriate terms for the Financial Statements The Ministry of Health is responsible for the preparation and fair presentation of these financial statements in accordance with Loan Agreement Numbered L0640A and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Those charged with governance are responsible for overseeing the Ministry of Health' financial reporting process. Auditor's Responsibilities for the Audit of the Financial Statements The objectives of our audit are to obtain reasonable assurance about whether the 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 ISAs 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 ISAs, we exercise professional judgment and maintain professional scepticism throughout the planning and performance of the audit. We also: * Identify and assess the risks of material misstatement 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 achieves fair presentation. We are required to 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. 7 REPUBLIC OF TORKIYE MINISTRY OF TREASURY AND FINANCE Board of Treasury Controllers We are also required to 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. Ahmet TUTAL Chairman of Board of Treasury Controllers Akif Bil t YACIOGLU (Audit Partner) Vice Chairman Ahmet Tugrul OZTORK hus AYAN Rumeysa lZGl Treasury Controller Junior Treasury Controller Junior Treasury Controller Date: June 9, 2023 Addres: Ministry of Treasury and Finance Board of Treasury Controllers 06510, Emek, ANKARA/TORKIYE 8 ANNEX I: Financial Statements MINISTRY OF HEALTH COVID-19 VACCINE PROJECT UNDER THE COVID-19 CRISIS RECOVERY FACILITY (LO640A) STATEMENT OF SOURCES AND USES OF FUNDS 31.12.2022 and for the Period Ending on This Date (In Euros) Actual Planned Deviation Current Period Cumulative Current Period Cumulative Current Period Cumulative I- SOURCES OF THE FUNDS A- Government Funds 0,00 0,00 0,00 0,00 0,00 0,00 B- Other Sources 0,00 0,00 0,00 0,00 0,00 0,00 C- AIIB Funds 225.347.000,00 225.347.000,00 225.347.000,00 225.347.000,00 0,00 0,00 1) DMrect Payments 22 534.700,00 22.534.700,00 22.534.700,00 22.534700,00 0,00 0,00 2- Retroactive Payment 202,812.300,00 202.812.300,00 202.812.300,00 202.812r300,00 0,00 0,00 3- Designated Account 0.00 0.00 0,00 0,00 0'00 0,00 TOTAL SOURCES 225.347.000,00 225.347.000,00 225.347.000,00 225.347.000,00 0,00 0,00 II- USES OF FUNDS (1) Goods for Section 2.A the Project 225.347.000,00 225.347.000,00 225.347.000,00 225.347 000,00 0,00 0,00 (2) Goods, Non-Consulting Services and Consulting Services 0,00 0,00 0,00 0,00 0,00 0,00 for the Section 2 B of the Project Total Project Expenditures 225.347.000,00 225.347.000,00 225.347.000,00 225.347.000,00 0,00 0,00 Opening Balance 0,00 Closing Balance 0,00 Za ide $ENALP P ect Director MINISTRY OF HEALTH COVID-19 VACCINE PROJECT UNDER THE COVID-19 CRISIS RECOVERY FACILITY (LOG40A) STATEMENT OF CUMULATIVE INVESTMENTS 31.12.2022 and for the Period Ending on This Date (in Euros) 1- INVESTMENTS Actual Planned Deviation Current Period Cumulative Current Period Cumulative Current Period Cumulative (1) Goods for Section 2.A the Project 225.347,000,00 225.347.000,00 225.347.000,00 225.347.000,00 0,00 0,00 (2) Goods, Non-Consulting Services and Consulting 0,00 0,00 0,00 000 0,00 Services for the Section 2.B of the Project Total Investment Cost 225.347.000,00 225.347.000,00 225.347.000,00 225.347.000,00 ,00 0,00 Zah e $ENALP Pro t Director MINISTRY OF HEALTH COVID-19 VACCINE PROJECT UNDER THE COVID-19 CRISIS RECOVERY FACILITY (L0640A) DESIGNATED ACCOUNT STATEMENT ACCOUNT NO: 943332004 AT THE CENTRAL BANK OF TORKiYE For the Date 31.12.2022 and the Period Ending On This Date (in Euros) Opening Balance 0,00 Reimbursements to DA 0,00 a) Advance 0,00 b) SOE Method 0,00 c) Summary Statement Method 0,00 Refunds to the DA 0,00 Available Funds 0,00 Withdrawals Made for Expenditures 0,00 Total Uses from DA 0,00 Closing Balance 0,00 Z,h de $ENALP Proj ct Director REPUBLIC OF TURKiYE MINISTRY OF HEALTH COVID-19 VACCINE PROJECT UNDER THE COVID-19 CRISIS RECOVERY FACILITY (L0640A) NOTES ON PROJECT FINANCIAL STATEMENTS FOR THE YEAR ENDING ON 31.12.2022 1. GENERAL INFORMATION ON THE PROJECT The Loan Agreement for the COVID-19 Vaccine Project under the COVID-19 Crisis Recovery Facility was signed between the Government of Republic of Tirkiye and Asian Infrastructure Investment Bank (AIIB). The agreement, which was approved by the Presidential Decree dated July 21, 2022 and numbered 5840, entered into force at the Asian Infrastructure Investment Bank on 01.08.2022. The Project consists of two categories. The objective of the Project is to enable affordable and equitable access to COVID- 19 vaccines and to help ensure effective vaccine deployment in Ttirkiye by strengthening the vaccination system. The Project includes provision of support to the health sector of the Republic of TUrkiye on such issues as procurement of vaccines under the COVID-19 project, developing and carrying out public communication and awareness campaigns, social mobilization, and capacity building in support of improving public awareness, reducing public vaccine hesitancy, and strengthening vaccine deployment. 2. ADDITIONAL FINANCING INFORMATION: Loan agreements were signed with EUR 450,700,000 provided by the World Bank and EUR 225,347,000 provided by the Asian Infrastructure and Investment Bank (AIIB) for Additional Financing (AF) for the procurement of COVID-19 vaccines. The loan agreement for the Emergency COVID-19 Health Project Additional Financing (9393-TR) was signed between the Republic of Tirkiye and the International Bank For Reconstruction and Development (IBRD) on 27.05.2022 while the loan agreement for the COVID-19 Vaccine Project under the COVID-19 Crisis Recovery Facility (Loan No. L0640A) was signed between the Republic of Tirkiye and the Asian Infrastructure Investment Bank (AIIB) on 04.07.2022. The signed agreements became effective with the Presidential decree No.5840 and dated 21.07.2022. The AF will support the costs of expanding activities of the existing Turkey Emergency COVID-19 Health Project (P173988) (Parent Project) under the COVID-19 Strategic Preparedness and Response Program (SPRP) using the Multiphase Programmatic Approach (MPA), approved by the Board on April 2, 2020, and the vaccines AF to the SPRP approved on October 13, 2020. The primary objective of the AF is to enable affordable and equitable access to COVID-19 vaccines and to help ensure effective vaccine deployment in Tilrkiye by strengthening the vaccination system. The EUR 91.2 million Turkey Emergency COVID-19 Health Project, prepared under the SPRP, was approved on April 24, 2020, and has been performing well. Component 1. Emergency COVID-19 Response l.1.a Purchasing Project COVID-19 Vaccines 450,200,000 1.Lb Purchasing Project COVID-19 Vaccines 225,347,000 1.2 Developing and carrying out public communication and awareness campaigns, social mobilization, and capacity building in support of improving 500,000 public awareness, reducing public vaccine hesitancy, and strengthening vaccine deployment TOTAL PROJECT AMOUNT 676,047,000 Project Implementing and Expenditure Units: General Directorate of Public Health General Directorate of Health Promotion A total project amount of FUR 676,047,000 has been allocated to the Ministry of Health of the Republic of Tirkiye. Of the total project amount, FUR 405,630,000 was withdrawn from the World Bank and FUR 202,812,300 was withdrawn from the Asian Infrastructure and Investment Bank (AIIB) retroactively within the scope of the project. In addition, as 10% of the project is related to vaccine procurements, FUR 44,570,000 were made from the World Bank project account and FUR 22,534,700 were made from the Asian Infrastructure and Investment Bank (AIIB) by direct payment method. The project designated account was not used in the mentioned transactions. 3. BASIC ACCOUNTING POLICIES a. Transactions regarding the project are entered into accounts on a cash basis. According to this basis, income occurs when the funds are received, and expense occurs when the funds are paid. b. Payments is made to the selling institutions through direct payments or through a designated account. c. Accounts are kept in the local currency of TRY and the credit currency of EURO. Payments, which are made in currency other than the local currency or EURO, are exchanged into EURO by using the exchange rate on the date of payment and are passed into accounts. d. Financial tables have been prepared with the aim of ensuring that the Ministry of Health acts in accordance with the financial provisions of the Loan Agreement No. 9393-TR and L0640A. 4. LOAN The Loan Agreement for the COVID-19 Emergency Health Project (COVID -19 SADP) was signed between the Government of Republic of Tiirkiye and International Bank for Reconstruction and Development (IBRD). With the signing of the Presidential Decree on 21.05.2020 and the opinion of the Ministry of Treasury and Finance on 22.05.2020, the World Bank announced that the Project would enter into force before 29.05.2020. Loan agreements were signed with FUR 450,700,000 provided by the World Bank and FUR 225,347,000 provided by the Asian Infrastructure and Investment Bank (AIIB) for Additional Financing (AF) for the procurement of COVID-19 vaccines. The loan agreement for the Emergency COVID-19 Health Project Additional Financing (9393-TR) was signed between the Republic of Tirkiye and the International Bank For Reconstruction and Development (IBRD) on 27.05.2022 while the loan agreement for the COVID-19 Vaccine Project under the COVID-19 Crisis Recovery Facility (Loan No. L0640A) was signed between the Republic of Tidrkiye and the Asian Infrastructure Investment Bank (AIIB) on 04.07.2022. The signed agreements became effective with the Presidential decree No.5840 and dated 21.07.2022. All project funds which have been used by the end of the review period are used by designated account methods, and retroactive payment was made by withdrawing a total of EUR 405,630,000 from loan account of the World Bank and a total of EUR 202,812,300 from the loan account of the Asian Infrastructure Investment Bank (AIIB). Also, as 10% of the project is related to vaccine procurements, EUR 44,570,000 were made from the World Bank project account, EUR 22,534,700 were made from the Asian Infrastructure Investment Bank (AIIB) and a total of EUR 675,547,000.00 were used from that source. 5. LIMITED USE OF FUNDS AND OTHER ASSETS In accordance with the loan agreement made between the Government of Republic of Tiirkiye and the Asian Infrastructure Investment Bank, the utilization of the funds in the designated account is limited to the project aims. Fixed assets procured by the project funds belong to the user institutions and their use is limited to project purposes until the completion of the project. 6. CASH BALANCE AS OF 31 DECEMBER 2022 The existing cash balance on December 31, 2022 is as shown in the table below. Designated Account Loan Funds Total 943332004 0,00 0,00 Zah e $ENALP Pro ct Director