Financial Statements on the Skills and Jobs Project
funded under Loan Agreement No. 8490-KZ between
the Government of the Republic of Kazakhstan and
the International Bank for Reconstruction and
Development
for the Year Ended 31 December 2021,
and Independent Auditor’s Report
TABLE OF CONTENTS
MANAGEMENT’S STATEMENT OF RESPONSIBILITY FOR THE PREPARATION AND APPROVAL OF THE
FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 3
INDEPENDENT AUDITOR’S REPORT 4-6
FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021:
Statement of Receipts and Disbursements of Funds 7
Statement of Comparison of Budget and Actual Amounts 8-9
Statement of Disbursements by Components 9-10
Notes to the Financial Statements 12-17
Тел.: +7 727 331 31 34 ТОО «BDO Qazaqstan»
Факс: +7 727 331 31 35 ул. Габдуллина, 6
info@bdoqz.com Алматы, Казахстан
www.bdoqz.com A15H4E3
Tel: +7 727 331 31 34 BDO Qazaqstan LLP
Fax: +7 727 331 31 35 6 Gabdullin Street
info@bdoqz.com Almaty, Kazakhstan
www.bdoqz.com A15H4E3
INDEPENDENT AUDITOR’S REPORT ON THE FINANCIAL STATEMENTS ON THE SKILLS AND JOBS
PROJECT FUNDED UNDER LOAN AGREEMENT No. 8490-KZ OF THE IBRD
To Management of the Ministry of Finance of the Republic of Kazakhstan, Ministry of Labor
and Social Protection of the Population of the Republic of Kazakhstan and the International
Bank for Reconstruction and Development
Opinion
We have audited the financial statements of the Skills and Jobs Project (hereinafter the
“Project”) funded under Loan Agreement No. 8490-KZ between the Government of the Republic
of Kazakhstan and the International Bank for Reconstruction and Development, which comprise
the Statement of receipts and disbursements of funds, Statement of comparison of budget and
actual amounts, Statement of disbursements by component for the year ended 31 December
2021, and a summary of significant accounting policies and other explanatory notes.
In our opinion, the financial statements present fairly, in all material respects, expenses
incurred for the Project, cash flows for 2021, and cash balances as of 31 December 2021, in
accordance with the International Public Sector Accounting Standard (the IPSAS (cash accounting
method)) and in accordance with the requirements of the International Bank for Reconstruction
and Development (the “IBRD”).
Basis for Opinion
We conducted our audit of the financial statements in accordance with the International
Standards on Auditing (the “ISA”), with giving due consideration to ISA 800. 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 International Ethics Standards Board for Accountants’ Code of Ethics for Professional
Accountants (IESBA Code) together with the ethical requirements that are relevant to our audit
of the financial statements in Kazakhstan, and we have fulfilled our other ethical responsibilities
in accordance with these requirements and the IESBA Code. We believe that the audit evidence
obtained is sufficient and appropriate to provide a basis for our opinion.
Товарищество с ограниченной ответственностью «BDO Qazaqstan», зарегистрированное в соответствии с законодательством Республики Казахстан,
является членом международного объединения BDO International Limited, британского общества с ответственностью, ограниченной гарантией его
участников.
BDO Qazaqstan, a limited liability partnership, registered under the laws of the Republic of Kazakhstan, is a member of BDO International Limited, a UK
company limited by guarantee, and forms part of the international BDO network of independent member firms.
INDEPENDENT AUDITOR’S REPORT (CONTINUED)
Management’s Responsibilities for the Financial Statements
Management of the Ministry of Labor and Social Protection of the Population of the Republic
of Kazakhstan is responsible for the financial reporting of the Skills and Jobs Project funded
under Loan Agreement No. 8490-KZ.
Management is responsible for the preparation and fair presentation of these financial
statements in compliance with the IPSASs published by the International Federation of
Accountants and in accordance with the technical specification to Agreement No. 71 dated
08.04.2022 and the requirements of the International Bank for Reconstruction and
Development, and for such internal control as management determines is necessary to
enable preparation of the financial statements that are free from material misstatement,
whether due to fraud or error.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives 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 the
International Standards on Auditing will always detect a material misstatement when it
exists. Misstatements can arise from fraud or errors 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.
An audit involves examining, based on testing, the evidence supporting the amounts and
disclosures in the financial statements. As part of the audit in accordance with the
International Standards on Auditing, we exercise professional judgment and maintain
professional scepticism throughout 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 internal control;
Evaluate the overall presentation of the financial statements, its structure and
content, including the disclosures, and whether the financial statements represent the
underlying transactions and events in matter that achieves fair presentation.
Skills and Jobs Project Funded under Loan Agreement No. 8490-KZ between the Government of the Republic of Kazakhstan and the International Bank for
Reconstruction and Development
Financial Statements
STATEMENT OF COMPARISON OF BUDGET AND ACTUAL AMOUNTS
For the Year Ended December 31, 2021
2021 Budget Variance
Proceeds from Proceeds from Proceeds from
Not
US dollars es
the Government the Government the Government
IBRD Loan Total IBRD Loan Total IBRD Loan Total
of the Republic of the Republic of the Republic
of Kazakhstan of Kazakhstan of Kazakhstan
EXPENDITURES
Part 1: Building the Foundation of a
National Qualifications System
Consultants’ services 925,338 449,658 1,374,996 943,396 460,711 1,404,107 98% 98% 98%
925,338 449,658 1,374,996 943,396 460,711 1,404,107 98% 98% 98%
Part 2: Enhancing Skills for
Improved Employment Outcomes
and Productivity
Goods - - - - - - - - -
Training - - - - - - - - -
Consultants’ services 194,373 72,091 266,464 1,576,785 72,818 1,649,602 12% 99% 16%
194,373 72,091 266,464 1,576,785 72,818 1,649,602 12% 99% 16%
Part 3: Project Management and
Monitoring and Evaluation
Goods - - - - - - - - -
Training - - - - - - - - -
Consultants’ services 134,909 49,938 184,847 145,660 53,874 199,534 93% 93% 93%
Operating costs 1,221 453 1,674 1,222 452 1,674 100% 100% 100%
136,130 50,391 186,521 146,882 54,326 201,208 93% 93% 93%
The notes on pages from 12 to 17 form an integral part of these financial statements
8
Skills and Jobs Project Funded under Loan Agreement No. 8490-KZ between the Government of the Republic of Kazakhstan and the International Bank for
Reconstruction and Development
Financial Statements
STATEMENT OF DISBURSEMENTS BY COMPONENT
For the Year Ended December 31, 2021
The cumulative amount from the Project start
2021
date through December 31, 2021
Notes Proceeds from Proceeds from
US dollars
the Government the Government
IBRD Loan Total IBRD Loan Total
of the Republic of the Republic
of Kazakhstan of Kazakhstan
EXPENDITURES
Part 1: Building the Foundation of a
National Qualifications System
Consultants’ services 925,338 449,658 1,374,996 6,707,169 2,590,521 9,297,690
925,338 449,658 1,374,996 6,707,169 2,590,521 9,297,690
Part 2: Enhancing Skills for Improved
Employment Outcomes and Productivity
Goods - - - 8,121,239 3,035,817 11,157,056
Training - - - 214,850 79,714 294,564
Consultants’ services 194,373 72,091 266,464 1,974,522 729,246 2,703,768
194,373 72,091 266,464 10,310,611 3,844,777 14,155,388
Part 3: Project Management and
Monitoring and Evaluation
Goods - - - 88,325 33,041 121,366
Training - - - 265,426 92,794 358,220
Consultants’ services 134,909 49,938 184,847 1,406,382 523,427 1,929,809
Operating costs 1,221 453 1,674 166,163 66,616 232,779
136,130 50,391 186,521 1,926,296 715,878 2,642,174
The notes on pages from 12 to 17 form an integral part of these financial statements
10
Skills and Jobs Project Funded under Loan Agreement No. 8490-KZ between the Government of the
Republic of Kazakhstan and the International Bank for Reconstruction and Development
NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended December 31, 2021
1. GENERAL PROVISIONS
Kazakhstan Business Environment
Project activities are carried out in Kazakhstan. Accordingly, the Project is exposed to risks
specific to economic and financial markets of Kazakhstan, whose economy shows specific
features of an emerging economy. The legal, tax and regulatory frameworks continue to
develop, but are subject to varying interpretations and frequent changes which together
with other legal and financial impediments contribute to the challenges faced by entities
operating in Kazakhstan.
Nature of Operations
Loan Agreement No. 8490-KZ (hereinafter the “Agreement”) between the Government of
the Republic of Kazakhstan (hereinafter the “Government”) and the International Bank for
Reconstruction and Development (“IBRD”) was signed on July 20, 2015 and ratified on
February 5, 2016 (the “Project start date”). Under the Agreement, IBRD provides a loan of
100,000,000 US dollars (the “Loan”) for the purposes of implementing the Skills and Jobs
Project (the “Project”). The Government shall repay the principal amount and the
percentage of the total principal amount of the loan in semi-annual instalments payable on
each March 15 and September 15 beginning September 15, 2020. The closing date of the
withdrawal period is June 30, 2020.
According to the letter of the IBRD ref. №20/080 dated March 16, 2020, the World Bank set
a later closing date for the Loan on December 31, 2021.
As per letter from the IBRD, ref. No. 19/031 dated February 01, 2019, the Loan has been
partially cancelled from September 17, 2018 in the amount of 55,200,000 US dollars.
As per the letter of IBRD ref. 21/186 dated June 15, 2021, the World Bank canceled the loan
amount equal to 24,000,000 US dollars from June 08, 2021, taking into account the
cancellation, the allocated loan amount is 20,800,000 US dollars.
Following the cancellation, the World Bank revises the repayment schedule set out in
Schedule 3 of the Agreement.
As per the approved budget for 2021, the Project receipts and disbursements financed out
of the proceeds of the Loan and from co-financing of the external loan by the Government
were estimated to amount to 2,667,062 US dollars and 587,855 US dollars, respectively
(2020: 3,088,096 US dollars and 1,140,464 US dollars, respectively).
The objectives of the Project are to improve employment outcomes and skills of target
beneficiaries and to improve the relevance of technical and vocational education and
training and higher education programs.
The Project consists of the following parts:
Part 1: Building the Foundation of a National Qualifications System
Enhance the institutional capacity of the Borrower for improving the relevance of technical
and vocational education and training, higher education, and in-service training, through
the following:
(a) Enhancement of occupational standards, including improvement of approval and
updating processes thereof;
(b) Development and implementation of a framework to review and update the
educational and training standards and curricula for technical and vocational
education and training and higher education; and
12
Skills and Jobs Project Funded under Loan Agreement No. 8490-KZ between the Government of the
Republic of Kazakhstan and the International Bank for Reconstruction and Development
NOTES TO THE FINANCIAL STATEMENTS (continued)
(c) Development of a roadmap for establishing an independent qualifications
assessment and award system through the provision of technical assistance for
piloting sector-specific skills testing and professional certification centers.
Part 2: Enhancing Skills for Improved Employment Outcomes and Productivity
Provide relevant workforce training to unemployed persons, unproductively self-employed
persons, and employed persons in need of training, all identified and selected in accordance
with the criteria set forth in the Project Operational Manual (hereinafter “POM”), through:
(a) Improvement of public employment services for unemployed and unproductively
self-employed people, through:
i. the design and implementation of an action plan to improve and expand public
employment services through the Employment Centers or Employment Units,
based on an assessment of current capacity carried out in accordance with the
POM; and
ii. the improvement of the capacity of the Employment Centers and Employment
Units to provide better advice to users through: (A) the introduction of a profiling
tool; (B) the strengthening of the existing labor market information system of the
Borrower to enhance the information available to staff of the Employment Centers
and Employment Units; and (C) training of staff to adopt a more proactive
approach to public employment service provision.
(b) Improvement of the relevance of workforce training, through:
i. the review of the regulatory framework concerning provision of workforce training
provision;
ii. the development of an inventory of workforce training providers; and
iii. the assessment of the relevance of workforce training and, on the basis of such
assessment, development of a list of pre-qualified workforce training providers
eligible to provide Training under Part 2(c) below; and
iv. the provision of the necessary support to selected workforce training providers to
improve the relevance of training delivery, including Training under Part 2(c)
below.
(c) Establishment and implementation of a skills enhancement training program,
consisting of the provision of Training to: (i) unemployed and unproductively self-
employed persons; and (ii) currently employed in need of training, all pursuant to
criteria set forth in the POM.
Part 3: Project Management and Monitoring and Evaluation
(a) Support Project management, monitoring and evaluation activities and financing
of Operating Costs; and
(b) Development and implementation of Project information and communication
campaign, a feedback and resolution mechanism, and an awards of excellence
program, all pursuant to criteria set forth in the POM.
2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS
These financial statements have been prepared in accordance with International Public
Sector Accounting Standard (IPSAS) “Financial Reporting under the Cash Basis of Accounting”
as published by the International Federation of Accountants, and in compliance with the
requirements of the International Bank for Reconstruction and Development.
13
Skills and Jobs Project Funded under Loan Agreement No. 8490-KZ between the Government of the
Republic of Kazakhstan and the International Bank for Reconstruction and Development
NOTES TO THE FINANCIAL STATEMENTS (continued)
3. SIGNIFICANT ACCOUNTING POLICIES
The accounting policies described below have been consistently applied in the reporting
periods presented in these financial statements.
Cash Method of Accounting
Cash method of accounting recognizes transactions and events only when cash is received
or paid under the Project.
Presentation Currency
These financial statements are presented in United States dollars (hereinafter “US dollars”).
Transactions in Foreign Currencies
Payments from Project’s designated accounts are translated into the presentation
currency at the exchange rates established by the National Bank of the Republic of
Kazakhstan as at the date of reconversion. Direct payments from the IBRD are translated
into US dollars at the exchange rates established by the National Bank of the Republic of
Kazakhstan as at the payment dates. Co-financing proceeds from the Government of the
Republic of Kazakhstan are translated into US dollars at the exchange rates established by
the National Bank of the Republic of Kazakhstan as at the dates of payment. Exchange
differences arising from translation of transactions denominated in other currencies into
US dollars are reported as a net value from changes in exchange rates.
Expenditure Categories
The Agreement specifies the main categories of expenditures financed by the Loan, the
amount for each category, as well as the percentage of expenditures to be financed in
each category.
According to the Agreement, there are the following categories of expenditures:
Goods, non-consulting services;
Consultants’ services;
Operating costs; and
Training under the Project.
Cash Received
According to the terms and conditions of the Agreement, the Government of the Republic
of Kazakhstan shall pay interest and the principal amount of the loan. Those payments are
recorded on the accounts of the Government and not reported in these financial
statements. The date of payment of the last instalment on the Loan by the Government
is March 15, 2034.
Allocation of Expenditures
Expenditures are allocated between the components in the statement of disbursements
by component based on the comparison of work description in the Agreement and work
description in source documents.
4. CASH
To carry out transactions under Loan No. 8490-KZ, the following designated accounts were
opened with the Committee of Treasury of the Ministry of Finance of the Republic of
Kazakhstan, the city of Nur-Sultan, for making cash payments to suppliers:
No. KZ10125USD1002300142 in US dollars;
(01.620101.000000000.Z08490.001.2130001.2)
No. KZ740702012130001001 in KZT
14
Skills and Jobs Project Funded under Loan Agreement No. 8490-KZ between the Government of the
Republic of Kazakhstan and the International Bank for Reconstruction and Development
NOTES TO THE FINANCIAL STATEMENTS (continued)
Cash balances as at December 31 and transactions of the account for the year ended
December 31, 2021 are detailed below:
In US dollars 2021 2020
Balance as at January 1 78 6,703
RECEIPTS
Replenishment of account 3,026,000
1,309,600
Refunded
(53,837)
1,255,763 3,026,000
EXPENDITURES
Expenditures under the Project 3,032,625
1,255,841
Net foreign exchange loss - -
1,255,841 3,032,625
Balance as at December 31 - 78
Including those denominated:
In US dollars -
-
In KZT - 78
5. DIRECT PAYMENTS AND REPLENISHMENT OF THE ACCOUNT
Direct payments under the Project are made by the IBRD directly to suppliers chosen in
accordance with the terms of the Agreement.
Direct payments to Suppliers and replenishment of the account by the IBRD under the
Project for the year ended December 31, 2021 were made based on the following withdrawal
applications:
In US dollars
No. of Withdrawal Date of Direct Replenishment
Total
Application withdrawal payments of the account
40 22.02.21 - 19,000 19,000
41 21.05.21 - 14,000 14,000
42 20.07.21 - 23,600 23,600
44 21.09.21 - 311,000 311,000
45 13.12.21 - 942,000 942,000
RN000000
28.12.21 - (53,837) (53,837)
358981
Total - 1,255,763 1,255,763
Reconciliation between the data provided by Project Management Unit and World Bank
payments data in Appendix No. 1
15
Skills and Jobs Project Funded under Loan Agreement No. 8490-KZ between the Government of the
Republic of Kazakhstan and the International Bank for Reconstruction and Development
NOTES TO THE FINANCIAL STATEMENTS (continued)
Statement of Expenditures (SOE)
US dollars
Actual expenditures by categories
Total amount
No. of Value (1) Goods, non-consulting
of the
Applic. date services, consultants’ services,
application Total
Operating Costs and Training under
the Project
40 22.02.21 19,000 - -
41 21.05.21 14,000 - -
42 20.07.21 23,600 - -
43 11.08.21 - 2,556,111 2,556,111
44 21.09.21 311,000 - -
45 13.12.21 942,000 - -
46 10.12.21 - 476,514 476,514
RN000000
28.12.21 (53,837) - -
358981
Total 1,255,763 3,032,625 3,032,625
6. UNUSED PORTION OF THE LOAN
As at December 31, 2021, the unused portion of the IBRD Loan amounted to 1,855,924 US
dollars, subject to the cancellation of a portion of the loan equal to 24,000,000 US dollars
in June 2021 (2020: 3,111,676 US dollars).
7. SUBSEQUENT EVENTS
Management believes that no other events have occurred between the date of the reporting
period and the date of approval of these financial statements that could affect these
financial statements.
On January 28, 2022, the Project submitted to the World Bank a final Statement of
Expenditure (SOE) for 2021 in the amount of 1,255,841 US dollars.
On February 8, 2021 Unicon Ltd (Claimant) filed a Claim Form (No.U196HBH) against the
Ministry of Labour and Social Protection of the Republic of Kazakhstan (Respondent) in
Arbitration Court (Arbitrator: Mr Roman Zykov, place of arbitration: Moscow, Russian
Federation) for the payment of services performed under the Contract No KZSJ-2. 3/CS-01-
QCBS dated November 28, 2017 ‘Advisory Services for the Design and Implementation of a
Skills Development Training Programme for Unemployed, Unproductively Self-employed
Persons and Employees of Enterprises in the Republic of Kazakhstan’ funded under the
World Bank Project. The Arbitration Court has now scheduled a hearing on the merits of
the claim, following which a further strategy for the arbitration proceedings will be agreed.
8. DATE OF ISSUE
These financial statements were approved for issue by the Vice Minister of Labor and
Social Protection of the Population of the Republic of Kazakhstan on June 01, 2022.
Appendix No. 1
16
Skills and Jobs Project Funded under Loan Agreement No. 8490-KZ between the Government of the
Republic of Kazakhstan and the International Bank for Reconstruction and Development
Reconciliation between the data provided by Project Management Unit and World
Bank payments data
US dollars
Application for Date of
As per PMU As per WB Variance
withdrawal withdrawal
32 23.03.20 278,000 278,000 -
34 27.04.20 855,000 855,000 -
35 27.05.20 1,232,000 1,232,000 -
36 24.06.20 197,000 197,000 -
37 04.08.20 76,000 76,000 -
38 23.09.20 143,000 143,000 -
39 20.11.20 245,000 245,000 -
Total 3,026,000 3,026,000 -
17