E-Health Project Credit No 5489-MN Financial statements as of December 31, 2017 Ulaanbaatar 2018 "NIISLEL AUDIT" LLC - Certified audit, appraisal and accounting consultancy company Date: -7W ., INDEPENDENT AUDITOR'S REPORT To: PIU Coordinator S.Enkhbold E-Health Project Credit No: 5489-MN We have audited the Project Financial Statements comprising the Balance Sheet, the Statement of Project Sources and Uses of Funds by project activities, Disbursement Report and the Designated Account Statement of E-Health Project Credit, No:5489-MN for the period from December 31, 2016 to December 31, 2017. The management of E-Health Project is to prepare the Project Financial Statements on the cash receipts and payments basis in conformity with the International Public Sector Accounting Standards (IPSAS). On this basis, cash receipts are recognized when received and cash expenditures are recognized when paid rather than when incurred. Our responsibility is to express an opinion thereon based on our audit. We conducted our audit in accordance with the International Standards on Auditing issued by the International Auditing and Assurance Standards Board of the International Federation of Accountants. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the annual financial reports are free of material misstatement. An audit includes examining on test basis, evidence supporting the amounts and disclosures in the annual financial reports. An audit also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall statement presentation. We believe our audit provides a reasonable basis for our opinion. In our opinion, the Project Financial Statements have been prepared in accordance with the International Public Sector Accounting Standards issued by the Public Sector Committee of the Federation of Accountants, presented fairly the cash receipts and payments of the project for the period from December 31, 2016 to December 31, 2017 and, furthermore, in all material respects, expenditures have applied to the purpose intended in the Financing Agreement, Credit No:5489-MN. "Niislel-Audit" LLC Ulaanbaatar city, Sukhbaatar district, Baga toiruu-44 Phone/Fax: 31-89-18, 70120095 E-mail: info@niislelaudit.mn - The Government of Mongolia The International Development Association Credit N: 5489-MN E-Health Project BALANCE SHEET For the period from December 31, 2016 to December 31, 2017 (in USD) Balance category Notes Dec 31, 2017 Dec 31, 2016 ASSETS: Cash on hand 4 6.80 In banks: Designated account IDAMN-5489 4 776,171.29 468,334.66 Operating account IDAMN-5489 4 17,034.82 4,078.48 Total cash 793,206.11 472,419.94 Category 1 280,470.24 92,623.56 Consultant services for Part 5. 5 167,817.42 65,839.62 Goods for Part 5 5 86,218.57 22,354.32 Incremental Operating Costs for Part 5 5 26,434.25 4,429.62 Category 2 122,778.86 - Consultancy and Training Part 1-4 5 98,317.68 Goods for Part 5 5 2,662.21 Non Consultancy Part 1-4 5 21,798.97 - Cumulative Project Expenditures 403,249.10 92,623.56 TOTAL ASSETS 1,196,455.21 565,043.50 FUNDS: IDA's fund 1,164,190.42 560,000.00 Interest Earned 6 32,264.79 5,043.50 TOTAL FUNDS 1,196,455.21 565,043.50 Prepared by: Approved b P.SUVD D Financial Management Specialist ct o inator (\* \ - 77 "NIISLEL AUDIT" LLC Certified audit, appraisal and accounting consultancy company Date: INDEPENDENT AUDITOR'S REPORT To: PIU Coordinator S.Enkhbold E-Health Project Credit No: 5489-MN We have audited the accompanying Statement of Sources and Uses of Funds of E-Health Project submitted to the World Bank the period from December 31, 2016 to December 31, 2017 in support of credit withdrawals under the Financing Agreement, Credit No: 5489-MN. We conducted our audit in accordance with generally accepted auditing standards that included examination, on a test basis, of evidence supporting the amounts and disclosures in the Statement of Sources and Uses of Funds. An audit also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall statement presentation. We believe our audit provides a reasonable basis for our opinion. In our opinion, the Statement of Sources and Uses of Funds submitted together with the internal controls and procedures involved in their preparation can be relied upon to support the application for credit withdrawals. /iw- fA6y T P fT "Niislel-Audit" LLC Ulaanbaatar city, Sukhbaatar district, Baga toiruu-44 Phone/Fax: 31-89-18, 70120095 E-mail: info@niislelaudit.mn - - The Government of Mongolia The International Development Association Credit N: 5489-MN E-Health Project STATEMENT OF PROJECT SOURCES AND USES OF FUNDS For the period from December 31, 2016 to December 31, 2017 (in USD) Cumulative to Cumulative Sources and Uses Funds Notes Cm1a2017 2017 tomDeat31, Dec 31, 2017 to Dec 31, SOURCES OF FUNDS: IDA's fund 1,164,190.42 604,190.42 560,000.00 Interest Earned 6 32,264.79 27,221.29 5,043.50 TOTAL SOURCES OF FUNDS 1,196,455.21 631,411.71 565,043.50 USES OF FUNDS: Category 1 280,470.24 187,846.68 92,623.56 Consultant services 5 167,817.42 101,977.80 65,839.62 Goods 5 86,094.11 63,739.79 22,354.32 Training and Workshop - - - Incremental Operating Costs 5 26,558.71 22,129.09 4,429.62 Category 2 122,778.86 122,778.86 Goods 5 2,662.21 2,662.21 Consultant services 5 98,317.68 98,317.68 Training and Workshop 5 13,069.39 13,069.39 Non consuitant service 5 8,729.58 8,729.58 TOTAL USES OF FUNDS 403,249.10 310,625.54 92,623.56 SURPLUS OF FUNDS OVER USES 793,206.11 320,786.17 472,419.94 Prepared by: roved P.SUVD D Financial Management Specialist t oor4iator 3pyyfl "NIISLEL AUDIT" LLC liery ,rl - Certified audit, appraisal and accounting consultancy company Date: . . . INDEPENDENT AUDITOR'S REPORT To: PIU Coordinator S.Enkhbold E-Health Project Credit No: 5489-MN We have audited the accompanying Statement of Expenditures (SOEs) of E-Health Project submitted to the World Bank for the period from December 31, 2016 to December 31, 2017 in support of credit withdrawals under the Financing Agreement, Credit No:5489-MN We conducted our audit in accordance with generally accepted auditing standards that included examination, on a test basis, of evidence supporting the amounts and disclosures in the Statement of Expenditures. An audit also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall statement presentation. We believe our audit provides a reasonable basis for our opinion. . In our opinion, the Statement of Expenditures submitted together with the internal controls and procedures involved in their preparation can be relied upon to support the application for credit withdrawals. "N iislel -Auddit", LIMC Ulaanbaatar city, Sukhbaatar district, Baga toiruu-44 Phone/Fax: 31-89-18, 70120095 E-mail: info@niislelaudit.mn The Government of Mongolia The International Development Association Credit Ng: 5489-MN E-Health Project STATEMENT OF EXPENDITURES (IDA Withdrawals) For the period from December 31, 2016 to December 31, 2017 (in USD) WA Application Claimed Credited Amount Amount Difference numbers type date date WA-3 Advance 2 15-Mar-17 3-May-17 440,000.00 440,000.00 WA-4 Replenishment 16-Mar-17 5-May-17 90,507.39 90,507.39 - WA-5 Replenishment 18-Jul-17 30-Aug-17 54,956.76 54,956.76 - WA-6 Replenishment 4-Sep-17 22-Dec-17 18,726.27 18,726.27 - Total 604,190.42 604,190.42 - Prepared by: Ap roedbv P.SUVD S.EN LD Financial Management Specialist Project Coordinator The Government of Mongolia The International Development Association Credit N: 5489-MN E-Health Project DETAILED STATEMENT OF EXPENDITURES (IDA Withdrawals) For the period from December 31, 2016 to December 31, 2017 (in USD) Claimed amount Credited amount WA_ Categories Categories numbers Consultant Training Incremental Component Component 5 Component 5 Difference nubesCosltn ComonntComponent Toa Goods and operating Total /Consultant /Training Total I I services Workshop costs service/ workshop/ 5 AOC/ WA-1-2 Advance 560,000.00 Advance 560,000.00 WA-3 Advance 440,000.00 Advance 440,000.00 WA-4 22,354.32 65,839.62 2,313.45 90,507.39 22,354.32 65,839.62 - 2,313.45 90,507.39 WA-5 - 48,657.51 6,299.25 54,956.76 - 48,657.51 - 6,299.25 54,956.76 WA-6 4,227.84 14,498.43 18,726.27 4,227.84 - - 14,498.43 18,726.27 Total 26,582.16 114,497.13 - 23,111.13 1,164,190.42 26,582.16 114,497.13 - 23,111.13 1,164,190.42 Prepared by: ve P.SUVD K ENIKHB Financial Management Specialist Pro ect Coo indt r The Government of Mongolia The International Development Association Credit N: 5489-MN E-Health Project STATEMENT OF USES OF FUNDS BY PROJECT ACTIVITY For the period from December 31, 2016 to December 31, 2017 (in USD) Cumulative Disbursement amount No. Project Activities Procurement Consultant Non consulting Incremental Total % plan Goods services service operating costs 1 Component 5 1,100,000.00 86,218.57 167,817.42 - 26,434.25 280,470.24 25% 1.1 Project management 1,100,000.00 86,218.57 167,817.42 - 26,434.25 280,470.24 25% 2 Componenmt 1-4 18,400,000.00 2,662.21 98,317.68 21,798.97 - 122,778.86 1% 2.1 Ehealth foundation activities 2,620,000.00 2,662.21 98,317.68 8,729.58 - 109,709.47 4% 2.2 Clinical data collection, access and sharing 12,360,000.00 - 2.3 NHIC 2,220,000.00 - 2.4 Institutional Strengthening and capacity building 1,200,000.00 13,069.39 13,069.39 1% 3 Project implementation support 19,500,000.00 88,880.78 266,135.10 21,798.97 26,434.25 403,249.10 2% Total 19,500,000.00 88,880.78 266,135.10 21,798.97 26,434.25 403,249.10 2% Prepared by: 31'I- ve SiUVD SNlKH D Financial Managament Specialist Project Coordinator "NIISLEL AUDIT" LLC Certified audit, appraisal and accounting consultancy company Date: INDEPENDENT AUDITOR'S REPORT To: PIU Coordinator S.Enkhbold E-Health Project Credit No: 5489-MN We have audited the accompanying Designated Account Statement of E-Health Project submitted to the World Bank the period from December 31, 2016 to December 31, 2017 in support of credit withdrawals under the Financing Agreement, Credit No:5489-MN We conducted our audit in accordance with generally accepted auditing standards that included examination, on a test basis, of evidence supporting the amounts and disclosures in the Designated Account Statement. An audit also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall statement presentation. We believe our audit provides a reasonable basis for our opinion. In our opinion, the Designated Account Statement submitted together with the internal controls and procedures involved in their preparation can be relied upon to support the application for credit withdrawals. )TIHAA7P'XOT r "Niislel-Audit? LC Ulaanbaatar city, Sukhbaatar district, Baga toiruu-44 Phone/Fax: 31-89-18, 70120095 E-mail: info@niis1elaudit.mn The Government of Mongolia The International Development Association Credit No: 5489-MN E-Health Project DESIGNATED ACCOUNT STATEMENT For the period from December 31, 2016 to December 31, 2017 (in USD) Notes Dec 31, 2017 Dec 31, 2016 PART A - Account transactions Beginning balance 468,334.66 Add 630,046.60 566,675.78 IDA Advance 440,000.00 560,000.00 Replenishment 164,150.42 Interest Earned 6 25,896.18 6,675.78 Deduct 322,209.97 98,341.12 Goods 5 54,732.90 2,629.03 Consultant services 5 98,317.68 - Training and Workshop Advanve payment - - Incremantal Operating Costs 169,159.39 95,712.09 Ending balance 776,171.29 468,334.66 PART B - Account reconciliations Amount advanced by the IDA 1,000,000.00 560,000.00 Ending balance 776,171.29 468,334.66 Add 256,093.50 98,499.40 Sub-accounts (USD and MNT) ending balance 17,034.82 4,078.48 Petty cash ending balance 6.80 Amount withdrawn but not claimed yet 239,058.68 90,507.39 Claimed in previous WA not yet credited - 2,116.17 Exchange rate income - 1,790.56 Deduct 32,264.79 6,834.06 Interest Earned 32,264.79 6,834.06 Total advance to Designated account for 1,000,000.00 560,000.00 Difference - - Prepared by: ved b. P.SUVD LD Financial Managament Specialist 00ct ordinator "NIISLEL AUDIT" LLC ( *. Certified audit, appraisal and accounting consultancy company Date (6 INDEPENDENT AUDITOR'S REPORT To: To: PIU Coordinator S. Enkhbold E-Health Project Credit N: 5489-MN We have audited the accompanying Sub-Accounts Statement of E-Health Project submitted to the World Bank for the period from December 31, 2016 to December 31, 2017 in support of credit withdrawals under the Financing Agreement, Credit No: 5489-MN We conducted our audit in accordance with generally accepted auditing standards that included examination, on a test basis, of evidence supporting the amounts and disclosures in the Sub-Accounts Statement. An audit also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall statement presentation. We believe our audit provides a reasonable basis for our opinion. In our opinion, the Sub-Accounts Statement submitted together with the internal controls and procedures involved in their preparation can be relied upon to support the application for credit withdrawals. 4'141Jt 1/6k "Niislel-Audit" LLC -. Ulaanbaatar city, Sukhbaatar district, Baga toiruu-44 Phone/Fax: 31-89-18, 70120095 E-mail: info@niislelaudit.mn The Government of Mongolia The International Development Association Credit N2: 5489-MN E-Health Project SUB ACCOUNTS STATEMENT For the period from December 31, 2016 to December 31, 2017 (in USD) Dec 31, 2017 Dec 31, 2016 Opening balance 4,078.48 - Balance of Operational account 4,078.48 Add Advance from Designated account 169,159.39 95,712.09 Other Net interest earnings 1,365.11 138.27 Total additions 170,524.50 95,850.36 Deduct 157,568.16 91,379.21 Goods 9,144.16 19,725.29 Consultant services 77,679.86 51,011.16 Non Consultant services 2,644.18 Training 13,079.88 Operating costs 53,906.10 18,884.14 Transferred to petty cash 1,113.98 Uses of interest earning Exchange rate (loss or gain) 1,758.62 Total deductions 157,568.16 91,379.21 Closing balance 17,034.82 4,085.28 Balance of Operational account 17,034.82 4,078.48 Balance of Petty cash - 6.80 Balance of Treasury Account 17,034.82 4,085.28 Prepared by: Approved b/: P.SUVD j S Financial Managament Specialist P oainator E-Health Project Credit No: IDAMN-5489 Financial Statement as of December 31, 2017 The Government of Mongolia The International Development Association Credit N2: 5489-MN E-Health Project NOTES TO THE FINANCIAL STATEMENTS For the period from December 31, 2016 to December 31, 2017 1. PROJECT BACKGROUND In accordance with the financing agreement (Credit X:5489-MN) established between the Government of Mongolia and the International Development Association of the World Bank on June 23rd, 2015, the project was approved to be implemented between 2016-2020. The total credit amount was USD 19,389,490 and the project implementation started on June 1, 2016. The development objective of the Project is to improve integration and utilization of health information and e-health solutions for better health service delivery in selected pilot sites, national medical center #1, 2, and 3, and Songinokhairkhan district clinic. The Project consists of the following components: Component #1: E-health Foundational Activities 1.1 Enterprise Architecture development Adopting of a national enterprise architecture framework and developing a domain specific enterprise architecture adapted to the health sector, including analysis of the current business processes at health facilities and subsequent development of required elements of the enterprise information system. 1.2 Health data standards Establishment of a suite of health data standards to form the common language required for the diverse computer systems in the Recipient's health sector to interoperate, including subscription to use of major health data exchange standards. Component #2: Clinical Data Collection, Access and Sharing 2.1 E-health portal and viewer Development of a basis for standardized data exchange between healthcare providers and data access for users, including development of: (a) the computer architecture; (b) a web-portal application and links that would enable the electronic health information system to become fully functional over time; and (c) security infrastructure for the portal to assure appropriate levels of privacy and confidentiality. 2.2 Health Information Exchange Platform Development of health information exchange platform (HIEP) to (a) facilitate messaging, enhanced continuity-of-care and referrals; and (b) enable information exchange with other services, notably those related to health insurance and health services utilization reporting and epidemiology. Niislel audit LLC E-Health Project Credit No: IDAMN-5489 Financial Statement as of December 31, 2017 2.3 Analysis and Implementation of Picture Archiving and Communication System (PACS) Development of a central archiving and communication environment for digital medical images, upgrade of selected facilities to enable use of digitally acquired imagery (mini PACS), and upgrade of local networks to be able to share digital imagery. 2.4 IT infrastructure, maintenance and support and Pilot Tests (a) Acquisition and installation of the servers required for the HIEP and for pilot testing the clinical and imaging data exchange mechanisms developed under Parts 2.1 and 2.2 of the Project. (b) Carrying out pilot tests of the clinical and imaging data exchange mechanisms developed under Parts 2.1 and 2.2 of the Project. Component #3: National Health Information Center 3.1 NHIC standards and applications Establishment and operation of a national health information center to oversee e-health including: (a) defining, disseminating and enforcing health data standards; and (b) supporting the design and creation of specialized e-health applications. 3.2 Health data statistics Establishment and initial operation of the health information dashboard, including acquisition and installation of computer hardware, database management software, and analysis tools for a health data warehouse system. Component #4: Institutional Strengthening and Capacity Building Carrying out of training and capacity building activities as follows: (a) Provision of user training to improve the computer literacy of health service providers; and (b) Provision of information technology technical training to improve the information technology skills and competencies of staff of NHIC. Component #5: Project Management Provision of support for project implementation, supervision, monitoring and evaluation, including provision of technical assistance and training. The eligible expenditures that may be financed out of the proceeds of the Financing and allocated amounts of the Financing for each category and percentage of expenditures are shown in the table below: Niislel audit LLC E-Health Project Credit No: IDAMN-5489 Financial Statement as of December 31, 2017 Amount of the Amount of the Percentage of Category allocated allocated expenditures financing (in financing (in to be financed SDR) USD) (1) Goods, Non-Consulting Services, Consultants Services, and Incremental Operating Costs for 750,000.00 1,100,000.00 100% the Component #5 of the Project (2) Goods, Non-Consulting Services, and Consultant Services for Component #1, 2, 3 and 11,950,000.00 18,400,000.00 100% 4 of the Project ToTal amount 12,700,000.00 19,500,000.00 The Project Steering Committee, chaired by the Minister of Health, provides oversight and strategic policy advice and guidance to the Project Management Unit (PMU). The PMU within the Ministry of Health is responsible for the project implementation, including overall management, financial management, monitoring, and reporting. The PMU consists of Project Coordinator, Financial Management specialist, IT specialist, Clinical specialist and Implementation and procurement specialist. 2. SUMMARY OF SIGNIFICANT POLICIES Financial report consists of following reports: Balance sheet 1 Financial reporting Statement of cash flow Statement of cash flow (by components) Statement of designated account Project Management Unit reports its source of funding and expenditures under cash based accounting method in accordance with International Public Sector Accounting Standards (IPSAS) 2 Basis of presentation issued by the International Federation of Accountants (IFAC). The Project Implementation Manual includes financial management section. The section contains detailed guidelines approved by the World bank on project accounting and preparation of financial reporting. The currency used for project reporting is USD. MNT incurred 3 Reporting measures costs shall be converted to USD at daily exchange rate set by the Bank of Mongolia. 4 Reporting period The account balances of the financial statements as of January 1, 2017 were compared with the balances as of December 31, 2017. 5 Accounting software "Info Systems" accounting software is used to keep records and prepare financial reports. Niislel audit LLC E-Health Project Credit No: IDAMN-5489 Financial Statement as of December 31, 2017 Income is recognized when cash is received. Income consists of 6 Income the funding transferred by the World Bank and bank account interest earning. 7 Expenditure Disbursement is recognized when paid rather than at the time expenses incurred. Designated account In accordance with the Disbursement Letter of the Financing Agreement IDA Credit 5489-MN, the Project shall maintain one segregated USD account at the financial institution acceptable to the Bank with the ceiling limit of USD I million. Four disbursement methods (advance, reimbursement, direct payment and special commitment) are available for and can be used by the Project. Operating account As specified in the Disbursement Letter, the Project shall maintain Operating Account (OA) in MNT with ceiling Bank account and petty cash equivalent to USD 30,000. The OA shall be used to pay eligible expenditures of small training and incremental operating expenditures with approval of the PMU. The Ministry of Finance directed projects funded by the international organizations to use Government treasury system. In compliance with this decision, the operating account balance was transferred to the treasury account on December 15th, 2017. Petty cash As specified in section 5.6 of Project Implementation Manual, limited amount of cash withdrawn from the OA and kept as petty cash for immediate payments. Petty cash should not exceed MNT 500,000 and use of petty cash is subject to Project coordinator's approval. The Guidelines for Procurement of Goods, Works, and Non- Consulting Services of the World Bank shall be followed for procuring goods, works and services. Following methods should be used for Goods: 9 Procurement of oods works and 1. International Competitive Bidding >=USD 1,000,000 services 2. National Competitive Bidding =USD 5,000,000 2. National Competitive Bidding