I INDUSTRIAL PARK DEVELOPMENT CORPORATION (IPDC) COMPETITEVINESS AND JOB CREATION PROJECT (CJCP) INDEPENDENT AUDITOR'S REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 07 JULY 2018 lK1 lE cc lE 11 V11::. t~, 2 8 DEC 2018 I ACRONYMS AND ABBREVIATION IPDC Industrial Park Development Corporation CJCP Competativness and Job Creation Project IDA International Development Association ETB Ethiopian Birr 1 I INDUSTRIAL PARK DEVELOPMENT CORPORATION COMPETITEVINESS AND JOB CREATION PROJECT INDEPENDENT AUDITOR'S REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 07 JULY 2018 TABLE OF CONTENTS Pages PART 1 INTRODUCTION 1.1 Background 3 1.2 Organ izational objectives 3 1.3 Audit objectives 3 1.4 Audit scope 3 1.5 Audit methodology 4 1.6 Results of the audit 4 PART 2 STATEMENT OF MANAGEMENT'S RESPONSIBILITIES 5 PART 3 INDEPENDENT AUDITORS ' REPORT ON THE FINANCIAL STATEMENTS 3 .1 Independent auditors' report 6-7 3 .2 Statement of Receipt and Expenditure 8 3 .3 Statement of Fina ncial Position 9 3.4 Summary of Activity in the Designated Account 10 3 .5 Notes to the financial statements 11 - 13 PART 4 INDEPE NDE NT AUDITORS ' REPORT ON COMPLIANCE 14 PART 5 INDEPENDENT AUDITORS ' REPORT ON INTERNAL CONTROL 15 Annex 1 Statement of expenditure by components activities and category 16 2 I INDUSTRIAL PARK DEVELOPMENT CORPORATION COMPETITEVINESS AND JOB CREATION PROJECT (CJCP) INDEPENDENT AUDITOR'S REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENED 07 JULY 2018 1 INTRODUCTION 1.1 Background Competitiveness and Job creation project (CJCP) is a 6 year project with a credit extension of USO 250 Mill ion by International Development Association - IDA (World Bank) to the Federal Democratic Republic of Eth iopia with an objective of contributing job creation by attracting investments and improving com petitiveness of enterprises in the targeted industrial Zones and their linked domestic enterprises. The project consists of four (4) components, namely: Component 1 : Institutional & Regulatory Framework & Capacity Building; Compone nt 2 : Support to Industrial Infrastructure; Componen t 3 : Integration with Local Economy; and Component 4: Program Management and Monitoring & Eva luation Com ponen t. 1.2 Organizational Objectives IPDC, in collaboration with Ethiopian Investment commission and Ethiopian Revenue and Custom Authority and more institutions provides one-stop-shop service for investors investing in designated industria l parks. The audited project is for the year ended 07 July 2018. 1.3 Audit objectives The objective of the audit is to express an opinion on the Project financial stateme nts of CJCP for the year ended 07 July 2018 . The audit includes but not limited to the following tasks: a) Give comments and observations on the accounting records , systems and controls that were examined during the course of aud it; b) Identify specific deficiencies or areas of weakness in systems and controls, and make recommendations for the ir improvement; c) Report on the degree of compliance of each of the financial covenants in the financing agreement and give commen ts, if any, on internal and external matters affecting such comp liance d) Dete rmine whether the management and financial systems, includ ing internal controls, with in the components are adequate for efficient and prudent management of funds; e) Comment on the use of funds vis a vis approved budgets in relation to the agreement between the organizatio n and donors; f) Assess the compliance with administrative/ lega l/fiscal issues regarding local employees contracted under the organiza ti on; and g) Recommend possible improvements and/o r actions in any area on fina ncial management and especia lly areas where weaknesses were noted . 1.4 Audit scope The audit scope required us to carry out sufficient audit steps and procedures to ensure that the audit objectives were met for the year ended 07 July 2018 . Details of the steps and procedures are described in note 1.5 . 3 I INDUSTRIAL PARK DEVELOPMENT CORPORATI ON COMPETITEVI NESS AN D JOB CREATION PROJECT (CJCP) INDEPENDENT AUD ITOR'S REPORT AND FINANCIAL STATEME NTS FOR THE YEAR ENDED 07 JULY 2018 1.5 Aud it Methodology We conduct ed the aud it in accordance with International Standards on Aud iting and in compliance with the accounti ng pol icies and agreed terms between Industrial Park Development Co rporatio n (IPDC) and IDA (International Development Association - World Bank). 1.5 .1 Internal contro ls We have eva luated sig nifi cant interna l controls to obtai n sufficient understand in g of t he design of relevant controls, policies and procedures and whether they have been in operation during the period under review . 1. 5 . 2 Complia nce with terms agreement and applicable laws and regulations We have reviewed , assessed and reported on comp lian ce with the terms and conditio ns of the agreements . 1.5 .3 Representations by gra ntees We have obta ined specific written rep resentations from manaqement . 1.5.4 Contractual obligations a) Appraised relevant documents such as agreements with cre ditors; b) Verified compl iance of organization 's expenditures with relevant terms of agreements as we ll as all th e applicable rules ; c) Verified comp liance of the recipient wi th the terms and conditions of the agreement with the creditors ; and d) Verified timely submission of interim and audited fi nancia l reports for the creditor as stipulated in t he agreement. 1.5 .5 Receipts and disbursements Verified compliance with the disbursements and procurement procedures set up for the organiza tion. 1.5 .6 Implemen tation a) Examined whether the expenditures are classifi ed in accordance with t he budget. b) Reviewed bank statements and other relevant books of accounts and assessed whether they show a complete view of the income rece ived and expenditure incurred ; c) Verified and confirmed that all commitments are genuine, with the relevant agreements disclosed within the fin ancial records and are for the pu rsuance of agreed Project objectives; and d) Examined a representative sample of payments transactions includi ng accuracy and completeness of records . 1.5 .7 Other income sou rces a) Established whether other income generated by the Orga nization , such as sales of items, exchange gains, etc .; have been used in furthe rance of the project's object ives; and 1.6 Results of the aud it 1.6.1 Summary of results by audit obj ectives ( i) Rea ch an opinion as to the validity of the financial statements . In our opin io n, the financial statements present fai rly, in all material respects the sources and uses of funds in accordance with the accounting policies and in conformity with the budget. (ii) Report on the financia l management and internal control findings We reviewed the internal con t rol stru cture and co nclu ded that the system was adequate to meet th e needs of the program . We have not observed significant deficiency or material weaknesses on the internal control of the project. 4 I INDUSTRIAL PARK DEVELOPMENT CORPORATION COMPETITEVINESS AND JOB CREATION PROJECT (CJCP) INDEPENDENT AUDITOR'S REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 07 JULY 2018 2 STATEMENT OF MANAGEMENT'S RESPONSIBILITIES The management are responsible for preparing the financial statements which give a true and fair view of the IPDC Project named Competitiveness and Job Creation Project financed by International Development Association as at the end of the year and of the project's financial statements for that year. The management are required to ensure the project keeps proper accounting records which disclose with reasonable accuracy at any time the fund rece ipts and expenditures for the year and the financial position of the project. They are also respon sible for safeguarding the assets of the project. The management are respons ible for the preparation of financial statements that gives a true and fair view in accordance International Public-Sector Accounting Standards (IPSAS), the funding agreement between IPDC and International Development Association and the accounting pol icies stated in Note 3.5 of this repo rt and for such internal controls as the management determine are necessary to enable the preparation of the project financial statements that are free from material misstatement, whether due to fraud or error. The management accept responsibi lity for the financial statement which has been prepared using appropriate accounting pol icies supported by reasonable and prudent judgments and estimates. The management believes the project' s financial statements give a true and fair view of the state of the financial affairs of the project for the year and of its financial position as at 07 July 2018. The management further accept respo nsibility for the maintenance of accounting records which may be relied upon in the preparation of the project financial statements, as well as adequate systems of internal financial control. The management certify that, to the best of their knowledge, the information furnished to the auditors for the audit i) Designing, implementing and maintaining such intern al control as they determ ine necessary to enable the presentation of financial statements that are free from material misstatement, whether due to fraud or error; ii ) Selecting suitable accounting policies and applying them consistently; and iii) Making accounting estimates and judgements that are reasonable in the circumstances. Management acknowledges that the independent audit of the financial statements does not relieve them of their responsibilities . Noth ing has come to the attention of management to indicate that the Company will not remain a going concern for at least the next twelve months from the date of this statement. Signed on behalf of the management by: Project Coordinator Financial Management Specialist 26 December 2018 5 I P.O. Box 1bUts Addis Ababa Ethiopia Chartered Certified Accountants and Authorized Auditors Tel : +251 115 527666/67 Fax: +251 115 528384 r-,... oo(l hl't :f CD· r'lt'\11 h'P 4:: ?1 "f c; N· i{. cJ> .l'.t\ :far >. ~. rC''f· www.hst-et.com INDUSTRIAL PARK DEVELOPMENT CORPORATION COMPETITEVINESS AND JOB CREATION PROJECT (CJCP) INDEPENDENT AUDITOR'S REPORT AND FINANCIAL STATEMENTS FOR THE YEAR EDNED 07 JULY 2018 3 INDEPENDENT AUDITORS' REPORT Opinion We have audited the accompanying financial statements of Industrial Park Development Corporation (IPDC)- Competitive ness and Job Creation Project (CJCP) fina nced by Internationa l Developme nt Associatio n (IDA) set out on pages 8 to 13, which includes the Statement of Financial Position as at 07 July 2018, Statement of Recei pts and Expenditure and the Summary of Activity in the Designated Account for the year ended 07 July 2018 and the re lated notes to the financial statements, including summary of significant accounting policies . In our opinion, the acco mpanying financial statements give a true and fair view of the fund balance as at 07 July 2018 and the receipts and expenditure and summary of activity of designated acco unt of the Industrial Park Development (IPDC) - Competitiveness and Job Creation Project (CJCP) for the year ended 7 July 2018 in accordance with International Public-Sector Accounti ng Standards (IPSAS) and the f und ing agreement between IPDC and In ternational Development Association. Basis for opinion We conducted our audit in accordance with International Standards on Au diting (ISAs) . Our responsibi li ties under those standard s are further described in the Auditor's Responsib ili ties for the Audit of the Financial Statements section of our report. We are independent of the Project in accordance with the ethical requ irements that are re levant to our audit of the financia l statements, and we have fu lfill ed our other ethical res pon sibil ities in accordance with these requirements . We believe that the audit evidence we have obtained is sufficient and appropriate to provide a ba sis for our opinion . Management's res ponsibi lities for the project financia l statements Management are responsible for the preparation and fair presentation of the fina ncial statements in accordance with International Public-Sector Accountin g Standards (IPSAS) and the funding agreement between IPDC and International Development Association and fo r such internal co ntrol as manageme nt dete rmine is necessary to enab le the preparation of financ ial statements that are free from material misstatement, whether due to fraud or error. The management of IPDC are responsib le for overseeing the Project's financial reporti ng process . Auditors' responsibilities for the audit of the project financial statements Our objectives are to obtain reasonable assurance about whether the finan cial statements are free from mate rial m isstatement, whether due to fraud or error, and to issue an auditor's report that includ es 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 m iss ta tement when it exists. Misstatements can arise from fraud or error and are cons idered material if, individually or in the agg regate, they could reaso nably be expected to influence the economic decis ions of users taken based o n these fi nancia l statements. • Audit · Tax • Consulting • Learning Solution Partners: Tekeste Gebru; Solomon Gizaw; Getu Jemaneh ; Yonas Harun ; Solomon Melaku I 3 INDEPENDENT AUDITORS ' REPORT (Continued) Aud ito rs ' responsibilities for the audit of the project financial statements (Continued) As part of an audit conducted in accordance with ISAs, we exercise professional judgement and maintain professional skepticism 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 respons ive 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 interna l control. • Obtain an understanding of internal control relevant to the audit to design audit procedures that are appropriate in the circumstances, but not for expressing an opinion on the effectiveness of the Project's internal control. • Evaluate the appropriateness of accounting poli cies used and the reasonableness of accounting estimates and related disclosures made by the 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 communicate with Management regarding, among other matters, the planned scope and timing of the audit and significant audit findings, includ ing any significant deficiencies in inte rnal control that we identify during our audit. Th is is a report sent to IPDC and International Development Association and is intended solely for their use and information . Addis Ababa 7 I I NDUSTRIAL PARK DEV ELOPM ENT CORPORATI O N COMPETITEVI NESS AND JOB CREATI ON PROJECT 3.2 STATEMENT OF RECI EPT AND EXPE NDITURE FOR THE YEAR END ED 0 7 JULY 2018 2018 2017 ETB ETB FUND RECIEPT Notes Fund receipts during the year 3.5.3 3,109,900,806 2,158,850,127 Other income (gain on exchange rate fluctuation) 3.5.4 38,127,560 11,980,108 3,148,028,366 2,170,830,235 EXPENDITURE Total expenditure during t he year 3.5.5 (3 ,292, 029 ,302) (88,020,659) Excess (deficit) of income over expenditure (144,000,936) 2,082,809,576 Fund ba lance brought forward 2,295,474,251 212,664,675 Fund bala nce carried forward 2,151,473,315 8 I INDUSTRIAL PARK DEVELOPMENT CORPORATION COMPETITEVINESS AND JOB CREATION PROJECT 3 .3 STATEMENT OF FINANCIAL POSITION AS AT JULY 7 2018 2018 20 17 Notes ETB ETB ASSETS CURRENT ASSETS Cash and bank balances 3 .5.6 140,014,258 226,716,610 Tarde and other receivab les 3.5.7 2,343,212,437 2,068,936,740 2,483,226,695 2,295,653,350 EQUITY AND LIABILITY EQU ITY Fund balance 2,151,473,315 2,295 ,474,251 CURRENT LIABILITIES Trade and other payables 3.5 .8 33 1,753,380 179 099 Total Liability and equity 2,483,226,695 2,295,653,350 The financial statements on pag es 8 to 13 were approved by the IPDC management on 26 December 2018 and sig ned on its behalf by: /essema Geda Project Coordi na tor Financial Management Special ist 9 I I NDUSTRIAL PA RK DEVELOPM ENT CORPORATION CO MPETITEVINESS AND JOB CRE ATION PROJECT 3.4 SUMMARY OF T HE ACTIVITY IN THE DESIG NATED ACCOUNT FOR THE YEAR ENDED 07 JULY 2018 USD Bank Account (a/c # 100401300006): National Bank of Ethiopia 2018 2018 US D ETB Opening Bank Balance 9 ,053,742 209 ,403,085 ADD : Recei pts Fund rece ived fro m IDA 3 .5 .2 .2 31 ,356,708 830,705 ,080 Ot he rs (Gai n on exchange rate di fference) 3.5 .2 .7 38 ,1 24 ,370 Fu nds ava ilable for use 40 ,410,450 1,078 ,232,535 Less: Tra nsfers and Expe nditures/ payments Expend itures/ pa y ments 3 .5 .2.3 35,683 ,433 949 ,248,332 Sub total (35,68 3,433 ) (949, 248, 332) Closing Balance 4 727 0 17 128,984, 203 10 3.5 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 07 JULY 2018 3.5.1 INTRODUCTION 3.5.1.1 Background I Competitiveness and Job creation project (CJCP) is a 6 year project with a credit extension of USO 250 Million by International Development Association - IDA (World Bank) to the Federal Democratic Republic of Ethiopia with an objective of contributing job creation by attracting investments and improving competitiveness of enterprises in the targeted industrial Zones and their linked domestic enterprises .. 3 .5.1.1 Project objectives IPDC, in collaboration with Ethiopian Investmerat commission and Ethiopian Revenue and Custom Authority and mare institutions provides one-stop-shop service for investors investing in designated industria l parks. The audited project is for the year ended 07 July 2018. 3 .5 .2 BASIS OF PREPARATION The financia l statements have been prepared on modified cash basis of accounting whereby receipts are recognized when cash is received and expend itures are recogn ized when incurred, except construction costs recognized when approved payment certificates are received . 3 .5 .2.1 Budget The budget is developed on the same accounting basis (modified cash basis), same classification basis, and for the same period as for the financial statements . The budget was approved as required by the standard conditions of the credit agreement and work-plan . 3.5 .2.2 Funds Receipt Fund receipt is recognized to the extent of credit extended by the Bank to the project's designated account. Funds received and direct payments during the year are as follows: Received (USO) Confirmed (USO) Cash transfer 31,356,708 31,356,708 Direct payment 78,558,617 78,558,617 109,915,325 109,915,325 3.5 .2.3 Expenditure Expenditure represents amounts disbursed and costs incurred denominated in ETB . 3.5 .2.4 Foreiqn currency transactions Cash receipts and payments arising from transactions in a foreign currency are recoded in the financial statements using the actual rate of exchange applicable on date of transa ctions . Foreign currency denominated monetary assets and liabilities are translated to ETB using exchange rates applicable at year-end . 3.5 .2.5 Non -current assets In accordance with lender's requireme nts, purchase of fixed assets is expensed on acquisition . The office maintains an asset register that tracks all project fixed assets . 3.5.2 .6 Currency The financial statements are presented in Ethiopian Birr ( ETB ) . 3.5.2.7 Foreign Exchange Gain Foreign exchange gain represents all ga ins obtained when payment is received from IDA and payments are made to the service providers from the USD account due to exchange rate fluctuation . 11 INDUSTRIAL PARK DEVELOPMENT CORPORATION COMPETITEVINESS AND JOB CREATION PROJECT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 07 JULY 2018 2018 2017 3.5.3 INCOME ETB ETB Direct payment 1,844,557,043 1,773,252,352 Deposi ts 830,705,080 116,180,385 Government Contribution 434,638,683 269, 417 ,390 I 3.5.4 OTHER INCOME 3,109,900,806 2, 158,850,127 Sundry income- Staff penalty 3, 190 Gain on Foreign exchange fluctuation 38,124,370 11,980,108 38 ,1 27 ,560 11,980,108 3.5 .5 OPERATING EXPENSES Works/Constru ction 3,215,318, 496 6,475,697 Consultancy service 53,631,869 58,450,893 Salary and employees benefits 10,042,031 6,772,056 Bank service charge 2,548,5 30 627,204 Sundry 2,040,562 878,508 Linkage expense 1,664,899 304,795 Professiona l fee 1,619,913 506,368 Office rent 1,200,000 Training and workshop 1,149,296 1,608,071 Office supplies 639,204 285 ,660 Repair and mai ntena nce 396,576 530,915 Fuel lubrican ts 363,185 233 , 175 Goods 352,564 10,354,888 Advertis ing and promotion 308,905 193,393 Entertainment 214,231 216,386 Postage and telephone 167,172 69,814 Vehic le inspection fee 128,826 5,038 Vehicles insu rance 115,652 127,770 Travelling and per deim 123,791 376,429 Cash indemnity allowance 3,600 3,600 3 .292 .029.302 88,020 .659 3.5.6 CASH AND CASH EQUIVALENT Cas h at bank 139,993,463 226,708,885 Cash on hand 20,795 7,725 140,014, 258 226,716,610 12 INDUSTRIAL PARK DEVELOPMENT CORPORATION COMPETITEVINESS AND JOB CREATION PROJECT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 07 JULY 2018 2018 2017 3.5.7 TRADE AND OTHER RECEIVABLES ETB ETB Advan ce to co ntractors 2,068,831,901 I 2,339,959,098 Sundry receivables 3,082,162 27 ,264 Staff receivables ' 171,177 77,576 2,343,212,437 2,068,936,740 3 .5.8 TRADE AND OTHER PAYBLES Retention 325,761,402 175,133 CPO deposit by contractors 4,000,000 Sundry Payables 1,777,233 32 Taxes payable 214,745 3,921 Acc ruals 13 331,753,380 179,099 13 /liil f Chartered Certified Accountants and Authorized Auditors t"".U. DUA Addis Ababa Ethiopia IVVV Tel: +251115 527666/67 Fax: +251 115 528384 \'•f'uo(\hli\r(D• \''ll\11 n'P.~ rC''f www.hst-et.com I Industrial park Development Corporation Competativness and Job Creation Project Addis Ababa Attention: Tessam Geda Project Coordinator Dear Sir, 4 INDEPENDENT AUDITORS' REPORT ON COMPLIAN CE We have audited the accompanying financial statements of CJCP financed by IDA set out on pages 8 to 13, which includes the Statement of Financial Position as at 07 July 2018, Statement of Receipts and Expe nd iture and the Statement of Summary of Activity in the Designated Account for the year ended 07 July 2018 and the related notes to the financial statements, including summary of significant accounting policies and have issued our report on it dated 11 December 2018. We conducted ou r audit in accordance with International Standards on Auditing. Those standa rd s require that we plan and pe rform the audit to obtain reasonable assurance about whether the financ ial statements are free of material misstatement resulting from violations of agreement terms and laws and regulations that have a direct and material effect on the financial statements. Compliance with the terms of agreement, laws and regulations, contracts and binding policies and procedures are the respon sibility of the managemen t of the IPDC. As part of our audit, we selected and tested transactions and records to determine the project's complia nce with agreement terms, laws, regulations, contracts, binding policies and procedures . However, our objective was not to provide an opinion on overall compliance with such provisions. Accordingly, we do not express such an opinion . Material instances of non-compliance are failure to follow requirements or violations of the terms agreement and laws and regulations that cause us to conclude that the aggregation of m isstatements resulting from those failures or violations is material to the financial statements. Our conside ration and evaluation of internal contro ls did not identify any instances of non-compliance with grant agreement, laws and regulations . Th is report is intended for the information of IPDC and IDA. HST Gene ral Partnership , Chartered Certifi ed Accountants and Authorized Auditors (Auditors of IPDC - CJCP, Financed by IDA) Add is Ababa . - 0 ~-+norc· TAlo:~!':tP. Audit • Tax • Consulting • Learning Solution Gebru: Solomon Gizaw; Getu Jemaneh ; Yonas Harun; Solomon Melaku r .v . UVA'""''"' .... Addis Ababa Ethiopia Chartered Certified Accountants and Authorized Auditors Tel: +251115 527666/67 Fax: +251 115 528384 f'·f·ool'lhlf\:fa1· f''UHl n'P~9J'fc; f'·t-t..,/>S..f\:fOJ· ~~ rC''f· www.hst-et.com Industrial Park Development Corporation Competativness and Job Creation Project Addis Ababa Attention : Tessam Geda Project Coordinator Dear Sir, 5 INDEPENDENT AUDITORS ' REPORT ON INTERNAL CONTROL We have audited the accompanying financial statements of CJCP finan ced by IDA set out on pages 8 to 13, which includes the Statement of Financial Pos ition as at 07 July 2018, Statement of Receipts and Expenditure and the Statement of Summary of Activity in the Designated Account for the year ended 07 July 2018 and the related notes to the financial statements, including summary of significant accounting policies and have issued our report on it dated 11 December 2018. We condu cted our audit in accordance with International Standards on Auditing. In planning and performing our audit, we considered the project's internal control over financial reporting as a basis for design ing our auditing procedures for expressing our opinion on the financial statements, but not for expressing an opinion on the effectiveness of the entity's internal con trol. Accordingly , we do not express an opinion on the effectiveness of the entity's internal control. Our cons ideration of internal control was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control that might be significant deficie ncies or material weaknesses and therefore, there can be no assurance that all deficie ncies , significant deficiencies, or material weaknesses have been identified . A deficiency in intern al control exists when the design or operation of a control does not allow management or em ployees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely ba sis . A material weakness is a defi ciency, or a combination of deficiencies, in interna l control, such that there is a reasonable possibility that a material misstatement of the project's financial statements will not be prevented, or detected and corrected on a timely basis. Based on our audit, we did not identify any deficiencies to report on . This report is intended for the information of IPDC and IDA. Add is Ababa Audit • Tax • Consulting • Learning Solution - · - - --· T~1, 0 cto r,phru: Solomon Gizaw; Getu Jemaneh; Yonas Harun; Solomon Melaku - Annex 1 Statement of exoend iture bv comoonents activities and category rActual . Budget Performance Variance Fund Utilization in % Particulars 1Brrr IB1rr IB1rr Components -1 L .:3 (4) - (2- 3) ( !) J = (3/ 2JU/0 1.lnst1tut1ona1 ana Keguratory r-rameworK ana Component 1 Capacity Building 1.1 Requlatorv Framework 784,655 432,452 352,203 55% 1uperat1ona11zat1on ot the 1nst1tut1ona1 and regulatory 1.2 framework 1.2.1 Support to IPDC 33 057 024 7,150,095 25,906,929 22% 1.2.2 Support to the requlator - 1.2.3 Suooort to EiC 10,754,395 221,760 10,532,635 2% 1.2.4 Investment Promotion 1.2.5 PPP Framework Sub Total 44,596,074 7,804,307 36,791,767 17% Component 2 Support to Industrial Infrastructure 2.1 Feasibility and Engineering Design plans 44 148,521 45,944,352 - 1,795,831 104% 2.2 Infrastructure Work 2.2.1 Bole Lemi-11 2 216 111,708 1,034,134,800 1,181,976,908 47% 2.2 .2 Kilinto-I 3,386,516,892 2 , 166, 376,539 1,220,140,353 64% 2.3 Modern Social and Environmental processes 484,183 484,183 0% Sub Total 5,647,261,304 3,246,455,691 2,400,805,613 570/o Component 3 Integration with Local Economy 3 .1 Skills Development Center 18,693,261 4,936,325 13,756,936 26% 3 .2 B2B Linkaae Fund 77,294,142 3,905, 332 73,388,810 5% Sub Total 95,987,403 8,841,657 87,145,746 90/o Project Management and Monitoring and -, I' Component 4 Evaluation r 1?,: c," 4 .1 Project Manaqement 11 458,554 12,478,072 -1,019,518 109% )(. 4.2 Monitorinq and Evaluation 4.3 Basic Infrastructure for Community Development 8,688,120 26,621,673 118,093 16, 331,482 8,570,027 10,290,191 61% 1% .; ~~ '. Sub Total 46,768,347 28,927,647 17,840,700 620/o l I ff . 't, ~ Grand Total 5.834,613,128 3.292,029,302 2.542,583,826 s&evo r...,,. _ 16