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Office of the
Special Sectors Audit WingConstitution Avenue >
Islamabad
NoPA/FAP/KPKSSA/F-I5/ ?L Dated: 2 -12-2016
To,
L The Secretary, -
Economic Affairs Division,Government of PakistanPak Secretariat, Block "C".Islamabad
2: The Country Director.World Bank Resident Mission, 20-A, Shahrah-e-JamhuriatSector G-5/1, Islamabad
Subject: FOREIGN AIDED PROJECTS (FAPs) AUDIT REPORTS
Financial Attest Audits of the following FAP Audit Reports has been conducted bythis office:
S.No Name of Projects DevelopmentPartners
L Governance Support Program WorldBank(MDTF)
2. Competitive Industries Project foT Khyber Pakhtunkhwa World Bank(MDTF)
I Khyber Pakhtunkhwa-Southern Area Development World Bank(MDTF)
Project
4. evitalization and Strengthening the Health Services World Bank(MDTF)
Delivery and Nutrition Services in Crisis Affected
Districts of Khyber Pakhtunkhwa under Public Private
Partnership[
5, UpgradationRehabilitation of Road from Chakdara to World Bank(IDTF)
Madyan on the Right Bank of River Swat under
Emergency Road Recovery Project Khyber Pakhtunkhwa
6. Economic Revitalization in Khyber Pakhtunkhwa World World Bank(MDTF)
L _ Bank/MDTF Grant No.TF.99175-Pak
2 Certificate/Financial Attest alongwith the Audit Report containing therein themanagement letter (ML) on the same is attached herewith. The referred is hereby isucd
simultaneously to the Government (to EAD) and to the World Bank Resident Mission
Islarnabad.
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FINANCIAL ATTEST AUDIT REPORT
ON THE ACCOUNTS OF
REVITALIZATION AND STRENGTHENINGTHE HEALTH SERVICES DELIVERY AND
NUTRITION SERVICES IN CRISISAFFECTED DISTRICTS OF KHYBER
PAKHTUNKIHWA
PUBLIC PRIVATE PARTNERSHIP (MLDTF)
HEALTH DEPARTMENTGOVERNMENT OF
KHYBER PAKHTUNKHWA
FOR THE FINANCIAL YEAR 2015-16
AUDITOR GENERAL OF PAKISTANISLAMABAD
FINANCIAL ATTEST AUDIT REPORT
ON THE ACCOUNTS OF
REVITALIZATION AND STRENGTHENINGTHE HEALTH SERVICES DELIVERY AND
NUTRITION SERVICES IN CRISISAFFECTED DISTRICTS OF KHYBER
PAKHTUNKIIWA
PUBLIC PRIVATE PARTNERSHIP (MDTF)
HEALTH DEPARTMENTGOVERNMENT OF
KHYBER PAKHTUNKHWA
FOR THE FINANCIAL YEAR 2015-16
AUDITOR GENERAL OF PAKISTANISLAMABAD
TABLE OF CONTENTS
Abbreviations and Acronyms................. ....................
Preface .............. 2.............. ............ 2
PART-1
Project Overview .... .............................................. 3
Auditor's Report to the management (Audit Opinion)............. ......... .. 4
Financial Statements ....................................... 6
PART-II
Covering letter to the management .............. ........................- 17
Executive summary .....- . .................... ............... 18
Management letter...........-....-----.-.......... ........... 19
Introduction..... -............................ ........ 20
2. Audit Objectives .................. ........................ 22
3. Audit Scope and Methodology ..... ........... .................. .-22
4. AUDIT FINDINGS AND RECOMMENDATIONS........ ............ 23
4.1 Organization and Management.................................234-2 Financial Management..... ......... ........................ 234.3 Procurement and Contract Management...........................254.4 Asset Management..........................................264.5 Monitoring and Evaluation ............. ........................ 274,6 Compliance with grants / loan covenants.................. ...... 274,7 Environment............................... ..... 274.8 Sustainability ..... ................. ................ ...... 274.9 Overall Assessment............................ ..... 275, CONCLUSION........................... ................ ............ 28
ACKNOWLEDGEMENT ..... ..-............... ......... ............. 29
Abbreviations and Acronyms
ADP Annual Development Program
BOQ Bill of Quantity
B10 Basic Health Unit
CTR Central Treasury Rules
DI1Q District Head Quarter
ECNEC ENecutive Committee of National Uconomic Council
FMM Financial Management Manual
GCC General Conditions of Contract
GFR General Financial Rules
IBRD International Bank for Reconstruction and Development
IDA International Development Association
INTOSAI International Organization for Supreme Audit Institutions
KP Khyber Pakhtunkhwa
MDTF Multi Donor Trust Fund
PC-1 Planning Commission Proforma-1
PCNA Post Crisis Need Assessment
PDWP Provincial Development Working Party
CoA Chart of Accounts
PSC Project Steering Committee
ISSAl International Standards of Supreme Audit Institutions
IPSAS International Public Sector Accounting Standards
TOR Terms of Reference
PREFACE
The Auditor General conducts audits subject to Articles 169 and 170 of the
Constitution of the Islamic Republic of Pakistan 1973, read with Sections 8 and 12 of
the Auditor-General's (Functions, Powers & Terms and Conditions of Service)
Ordinance, 2001. The Financial Attest Audit of the "Revitalization and Strengthening
the Health Services Delivery and Nutrition Services in Crisis Affected Districts of
Khyber Pakhtunkbwa under Public Private Partnership (MDTF)" was carried out
accordingly.
The Directorate General Audit Khyber Pakhtunkhwa conducted audit of
"Revitalization and Strengthening the Health Services Delivery and Nutrition
Services in Crisis Affected Districts of Khyber Pakhtunkhwa under Public Private
Partnership (MDTF)" Project during November, 2016 for financial year 2015-16 with
a view to reporting significant findings to stakeholders. Audit examined the economy,
efficiency, and effectiveness aspects of the Project. In addition, audit also assessed, on
test check basis, whether the management complied with applicable laws, rules and
regulations in managing the Project. The Audit Report indicates specific actions that.
if taken, will help the management realize the objectives of the Project.
The Report consists of two parts. Part-1 contains Auditor's Report (Audit Opinion)
and Financial Statements. Part-l contains Executive Summary, Management Letter
and Audit Findings.
The Report has been prepared for submission to the Multi Donor Trust Fund (MDTF)
in terms of its Grant Agreement with the Government of Islamic Republic of Pakistan.
Dated: ).9/12/2016 (Javed Iqbai)Peshawar Director General Audit,
Khyber Pakhtunkhwa
2
PROJECT OVERVIEW
Name of the Project: Revitalization and Strengthening the HealthServices Delivery ard Nutrition Services inCrisis Affected Districts of KhyberPakhtunkhwa under Public Private Partnership
Sponsoring Agency: MDTF through World Bank
Executing Authority: Health Department Government of KhyberPakhtunkhwa
Grant No.: TF 11062 PK
PC-I Cost: Rs.I,004.66 million
Date of Coin mencement: July, 2012
Actual Date of Commencement: July, 2012
Date of Completion: June, 2016
Date of Approval by ECNEC: 29-07-2012
Loan Closing Date: 31 October, 2015
Grant Provision status in 2015-16: Rs.319.800 million
Grant utilization status in 2015-16: Rs. 150.944 million
Progressive expenditure up toApril 2016: Rs.572.797 million
3
OFFICE OF TRE DGA 9211309
DIRECTOR GENERAL AUDIT Dir: =9211306KHYBER PAKHTUNKHWA Fax: 9211265
PESHAWAR PBX:= 9211250-54
AUDITOR'S REPORT
We have audited the accompanying Financial Statements of project
"Revitalization and Strengthening the Health Services Delivery and Nutrition
Services in Crisis Affected Districts of Khyber Pakhtunkhwa under Public Private
Partnership (MDTF)" that comprises of Statement of Receipts and Payments,
Statement of Comparison of Budget and Actual together with the notes forming part
thereof for the year ended June, 2016.
Management Responsibility
It is the responsibility of Project Management to establish and maintain a
system of internal control, and prepare and present the Statements of Receipts and
Payments in conformity with the requirements of Cash Basis IPSAS, Financial
Reporting under the Cash Basis of Accounting Standard.
Auditor's Responsibility
The responsibility of the Auditor is to express an opinion on the Financial
Statements based on the audit conducted. We conducted our audit in accordance with
the International Standards of Supreme Audit Institutions. Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether the
Financial Statements are free of material misstatements. The audit process includes
examining, on a test basis, evidence supporting the amounts and disclosures in the
Financial Statements. It also includes assessing the Accounting Principles used and
significant estimates made by management, as well as evaluating the overall statement
presentation. We believe that our audit provides a reasonable basis for our opinion.
4
Opinion
In our opinion:
a) The Financial Statements present fairly, in all material respects, the cash
receipts and payments by the project for the year ended June, 2016 in
accordance with Cash Basis IPSAS, Financial Reporting under the Cash Basis
of Accounting Standard.
b) The expenditure has been incurred in accordance with the requirements of
legal agreements.
Dated: >-/12/2016 (Javed Iqbal)Peshawar Director General Audit,
Khyber Pakhtunkhwa
5
FINANCIAL STATEMENTS
Revitalization and Strengthening the Health Services Delivery and
Nutrition Services in Crisis Affected Districts of Khyber Pakhtunkhwa
under Public Private Partnership (MDTF)
For the year ended on 3 0"h June, 2016
Page No
Statement of Cash Receipts & Payments 7
Statement of comparison of budget & actual amounts 8
Notes to the Financial Statements 9
6
Revitalizing Health and Nutrition Services in Crises Affected Districts of KP
Statement of Cash Receipts and Payments
For the year ended June 30, 2016Note 2015-16 2014-15
Receipts(?ayments)Controlled by Payment by Third Receipts(Payrneits) Payment by
Project Parties Controlled by Project Third Parties
I_ Rupees
Externa. Assista nce 5 123,447,440 171,405,768Total Receipts 123,447,440 - 171,405,768
Payments
Consultancy Sewces 6 137,344,010 363,886,768
Operat:n Expenses 17 4676,728 9608 857
Goods S 7,455,633 14,895 203
Trinng 9_ _ 1,468,039 3,371.932
Total Payments I 150,94410 - 390,762,760
InCreas e (De4 reasel in casn (27,496,970) 219S, 35 6, 992)
Ca sh st the BA.ginning ofyezar 33,272,675 2412,529,667
Cash at 'he rr;rJceof Year 5,675,705 33,172,675
Project Coordinator
Revitalizing Health and Nutrition Services in Crises Affected Districts of KP
Statement of Comparison of Budget & Actual Amount
For the year ended June 30, 2016
Not I2015416 - 201445SActual
Budgeted Amount Actual Amount Budgeted Amount Amount
ExternM AssEance 5 23 447,440 123,447,440 :71,405,768 -
TotaReceipts 123,47440 123,447,440 171405,768
Payrnents ________________________________
____
Consultancy c--S 6 39,00000I 137 344,010 364,000,000 363883763
.perat;flg Expenses 7 3000,000 4 B76,728 8,650,000 9608857
Gonds 8 3,000,000 7 455,633 1,40000 14893203
Trav ngs 9 2,000,000 4)8,039 4,80,000 3371932
Tota Paymets 157,000000 15044,410 393930,0D ____ 390,72,70
Pro ect Coordinator
Revitalizing Health and Nutrition Services in Crises Affected Districts of KP
Notes to the Financial Statements
For the year ended June 30, 2016
Reporting Entity
The fiancal statemerts are for "Revitlizing/Strengthening Health and Nutrition Se:vices in Crises Alfeceo Disticts of KK
Projeci, The finanral statement enconmpasses the reporting entity as defined in the Financirg Agremernt between the Islarric
RepubLic cf Pakistan and the Wcr d Bank. The Finarins At-|.reemert was signed on April 12, 2L72 for an arnount of US $161MI
The projec became effective from Apnil 12, 2012 with the closing date of April 12, 2016.
USS 5-8 sniflion has been concelNed in Mune 2094 o the request cf the Borrower ord 9toa grant available to project is US$ U.2
müijWqn.
The objective of revtaäzingjStrengthening Health and Nutrition Servkes in Crises Affected Districts of KP" Proect is to:
I mprove .ibuity, a:cessibili:y and quality of helth care services at -e stricts leveL
2 Strengt-. rnzianagement of hEahh services in the ::strict5 through a puo c private partnership model-
3. nstitutin.aäze an effective monitoring and evaluation systern to facilite learning and evder.ce based decision making,
During the year 2014-45, t:e proje:t has been restructured in November 2014 to delete cornponent 11 and drop District i
i: hem cn:tract out srcpe Il 30th of June 2C15. The Pro;ect is rnplemented throuJgh Health Department GoKP.
Financing
The financinr is made in the form of Gran-, based on Standard Wor'd BUnk :erms. The Financing Agreenent No Is TF-11062-
PAK.
2 Cenification by PrlecI ManagernEänt on AppIlCaion of Funds
Te "Re...aliing]5trengthe:Lng Heath and Nuuition Services in Cr-ses Aftected ':str.cts of KF" project management certitied
inatcthe fundsa nve en appied/expenditure Jave beer incurred for the purpo'es iteded in he finaning agreernent
3 Accounting Convention and Statement of Compance
The financial statements have been prepared Ln accordance with Cash Basis IPSAS 'FinanciaL' Reporting under the Cash Basis of
Accountiig' standard.
Th accountng policies have been appled cor.st tntly througlCut the perio.
4 Significant Accounting Policies
4 1 Pcruign Currency Tronsactin
Cash receipts and payments arisirr F-om transactions in foreIgn curren6i2S are recorded In Fa:x Rupee by applylng to the
foregn currency amount, the exchange rate between the Pak Rupee and th Foreign Currency a: the date of the rCei5ts and
Dayments- Exchange differences aris*ng on settlement of these transaction, are recognized in the S:atement of Receipts and
Paym ents
4.2 Reporting Currency
A. T-moun- in the finarcial statements are in ?ak Rupees.
4.3 Recognition of Expenditure
EXpenditue it recognized on the date when payment i5 made or cheque is issued. Financial year to which the payments
pertain is determined by the date on which a cheque or payment advice is issued,
4.4 Employee Terminal Senefits
5e,vice 6enefits of government deputations empicyees are accounted for in their respective departments white no services
terminal benefirs are paid to the con-factual employees.
Project Coordinator
to
Revitalizing Health and Nutrition Services in Crises Affected Districts of KP
Notes to the Financial Statements
For the year ended June 30, 2016
External Assistance
Externa assstance was received in the form of Grant from the World Bank under financing agreement dated
April 12, 2012 between the World Bank and Government of Pakistan (GOP) for the purpose of the Rev'talizing
Health and Nutrition Services in Crises Affected Dstricts of KP Project- The following amounts were received
by the Project during the period-
2015-16 2014-15
UPak Rupees us$ Pak Rupees
SE Procedures 5.1 1,182,53S 123,447,440 1,669,489 171,405,768
1,13,538123,47,440 1,569,489 171,405,758
51 T:is represents funds transferred to the Revitalizing Health and Nutrition Services in Crises Affected
Districts or KP Project's Designated US Dollar Bank Account by the Wcrld Bank on the basis of Withdrawal
Application(s) submitted by the Project-
There has been no instance of non compl ance with the terms and conditions of the financing agreement
between the World Bank and GoP which have resulted in cancellation of Credit.
Undrawn External
Assistance
Jndrawn Credit at report;ng date represent amounts specified in the financing agreement between the World
Bank and GOP that the World Bank will cisburse for Revitalizing Health and Nutrition Services in Crises
Affected D-tricts of KP project purposes.
2015-15 2014-15
Note Amounts in US $
Closing Balance 55,986.97 5,530,511
55,986.97 5,530,511
Tñe redCed Closing Daonce is duc to cancenalotiOn of US$ 5.8 milyiOn from
the total sign ed amöunt
Consu!tancy Services
2015-16 2014-15
Note Amounts in Pak Rupees
Individuals(Component-3' 6.1 9,032,253 559066
Firrns (Component-1) 6.2 I28311,757
Consultancy 137,344,Ö10 6,355303
oods 331,940,799
358,296,102
137,344,010 363,886,768
61 -ihis represents the long term consultants hired for the pu,poses of financial management
ar:angements at the project, rnonitoring project activities, development cf MlS/GRM , Procurernert
documentation systen för the Projec validation of progress of service delivery at distriets by Lmplementing
?artners etc.
6.2 This represerts paymern to Irplemernting partriers as per contract agreement with them for
managernent of health facl-ities in the target districts under the Project.
/2-
Operating Expenses 2015-1f 2014-15
Note Anounts in Pak Rupees
Remnnerat4on and
Sa laris 7-1 2,193,323 4,999,160
General Operating
Expenditures 7.2 2,483,405 3,609,697
4,676,728 8,608,857
2015-16 2014-15
Amounts in Pak Rupees
Salries- Officers 7- 1743,323 3,007,377
Salaries- Staff 450,000 1,99L783
2,193,323 4,999,160
General Operatirig
Expendiures 7.2 2015-16 2014-15
Amounts in Pak Rupees
commrnurnications 5,820
U:ies 253,692 242,007
R en( of Buid 726, 000 1,424,023
TAIDA 584,070 424565
13
379>449 444, 2POL Grge
4990 4,990Conveyan ce Charges
sZ1t2ery Charges 70,830 144,223
I8,608Parng Charges
4,7 12News papers471
172,57 149,203
Medi;aI Charges 3,900
2,122
Paymenm o G2her0s for00Sc rvces Re:dý c :d
Olhers109,433 107,076Others
Pension Contribution 119,798 85,366
239,536
E rå'er1ainment
Repair of Transport
Repair cfan 20,00 14,020
26,459Repair of Furniture
10,700
2,483,40S 3,609,697
. .¼•!•!!!ees es
Goods a 2015-16 2014-15
Amounts In Pak Rupees
Trzansport 3.1 21,502,034
Plant & nacir.ery 8-2 1,335,353 723,158
FLrniture & Fixtures 83 1,306,136
Computer Equipment 8.4 1,354,375
Procurement of Goods
by Consultant Firm
(Componet-1) 83 6, 12 0,270
7,455,633 14,895,203
Trainings 9 2015-15 2014-15
Amounts i Pak Rupees
Trainings/Vorkshops 9.1 1,170,915 3,043,666
Workshops/Conferences 9-2 297,124 32S,266
1,468,039 3,371,932
Cash at Bank 2015-16 2014-15
AmoUnts in Pak Rupees
Casht Bank 5,675,705 33,172,675
5,675,705 33172,675
Authorizat]On for :ssue
hese finrtie:' statements have been authorized for issue by the Pro,ect
Coordinator on Novernber 07, 2016.
Genera:l
Figu:es have been rounded off
-: the nEýarest rupee.
Corparative figures have been rearranged where necessary for the
puro D2 :omparnO~
Project Coordinator