"NIISLEL AUDIT" LLC Certified audit, appraisal and accounting consultancy company Date. INDEPENDENT AUDITOR'S REPORT To: PIU Coordinator Ts.Natsagdolgor Mongolia Employment Support Project Credit N2: 5974-MN We have audited the Financial Management Reports comprising the balance sheet, project source and uses of funds by project activity, disbursement report and the designated account statement of Mongolia Employment Support Project Credit No: 5974-MN for the period from November 5, 2017 to December 31, 2018. The management of Mongolia Employment Support Project is to prepare the Financial Management Reports on the cash receipts and payments basis in conformity with 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 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 interim financial reports are free of material misstatement. An audit includes examining on test basis, evidence supporting the amounts and disclosures in the interim 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 Financial Management Reports have been prepared in accordance with International Public Sector Accounting Standard 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 November 5, 2017 to December 31, 2018 and furthermore in all material respected, expenditure have applied to the purpose intended in the Credit No: 5974-MN. "Niislel-Audit" LLC Ulaanbaatar city, Sukhbaatar district, Baga toiruu-44 Phone/Fax: 31-89-18, 70120095 Ltd E-mail: info@niislelaudit.mn CER ED CONTN The Government of Mongolia The International Development Association Credit No.5974-MN MONGOLIA EMPLOYMENT SUPPORT PROJECT BALANCE SHEET For the period from Nov 05, 2017 to Dec 31, 2018 Dec 31, 2018 Dec 31, 2017 Balance items Note (iUD) inSD (in USD) (in USD) ASSETS Cash and cash equivalent 3 2,220,639.45 - Designated account 1,012,895.84 - Sub-account 691.92 - Cash on hand 197.84 - Operating Account MNT /EPF/ 1,206,853.85 Cumulative project expenditures 4 313,751.45 Goods 4(a) 105,865.12 - Consultant's services 4(b) 113,606.06 - Training and Workshops 4(c) 44,538.08 - Incremental operating costs 4(d) 49,742.19 - TOTAL ASSETS 2,534,390.90 FUNDS IDA Fund 5 2,500,000.00 - Net Interest earning 6 34,390.90 - TOTAL FUNDS 2,534,390.90 Prepa c : Approved by: ra i g.B Na t/agdolgor.Ts Financial Manage nt Specialist Project Coordinator DCERT AD ACCOU ING AUDIT &APPRA SA,L "NIISLEL AUDIT" LLC Certified audit, appraisal and accounting consultancy company Date:.. INDEPENDENT AUDITOR'S REPORT To: PIU Coordinator Ts.Natsagdolgor Mongolia Employment Support Project Credit N2: 5974-MN We have audited the accompanying statement Sources and Uses of Funds Mongolia Employment Support Project submitted to the World Bank for the period from November 5, 2017 to December 31, 2018 in support of credit withdrawals under the Credit No: 5974-MN. We conducted our audit in accordance with generally accepted auditing standards that accordingly included examination, on a test basis, of evidence supporting the amounts and disclosures in the statement of Sources and User 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. "Niislel-Audit" LLC Ulaanbaatar city, Sukhbaatar district, Baga toiruu-44 Phone/Fax: 31-89-18, 70120095 r , Ltd E-mail: info@niislelaudit.mn CC-RT The Government of Mongolia The International Development Association Credit No.5974-MN MONGOLIA EMPLOYMENT SUPPORT PROJECT PROJECT SOURCES AND USES OF FUNDS BY CATEGORY For the period from Nov 05, 2017 to Dec 31, 2018 SOURCES AND USES OF FUNDS Note Dec 31, 2018 Dec 31, 2017 (in USD) (in USD) SOURCES IDA Fund 5 2,500,000.00 Net interest earned 6 34,390.90 TOTAL FUNDS 2,534,390.90 USES OF FUNDS BY CATEGORY Goods 4(a) 105,865.12 Consultant's services 4(b) 113,606.06 Training and Workshops 4(c) 44,538.08 Incremental operating costs 4(d) 49,742.19 TOTAL USES OF FUNDS 313,751.45 Surplus of funds over uses 2,220,639.45 Prepared b Approved by: Uranchim g. Natsagdolgor.Ts Financial Managementf pecialist Project Coordinator ei ismao "NIISLEL AUDIT" LLC Certified audit, appraisal and accounting consultancy company Date: ......... o ~ INDEPENDENT AUDITOR'S REPORT To: PIU Coordinator Ts.Natsagdolgor Mongolia Employment Support Project Credit XM: 5974-MN We have audited the accompanying the Statement of Expenditures (SOEs) of Mongolia Employment Support Project submitted to the World Bank for the period from November 5, 2017 to December 31, 2018 in support of credit withdrawals under the Credit No: 5974-MN. We conducted our audit in accordance with generally accepted auditing standards that accordingly 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. "Niislel-Audit" LLC Ulaanbaatar city, Sukhbaatar district, Baga toiruu-44 Phone/Fax: 31-89-18, 70120095 N!!LE AD Co.,Ltd E-mail. info@niislelaudit.mn The Government of Mongolia The International Development Association Credit No.5974-MN MONGOLIA EMPLOYMENT SUPPORT PROJECT STATEMENT OF EXPENDITURES (IDA Withdrawals) For the period from Nov 05, 2017 to Dec 31, 2018 WA Application Claimed Credited Amount Amount claimed in credited Difference numbers type date date (nUD) inSD (in USD) (in USD) Beginning balance - - WA-001 Replenishment 2018.04.29 2018.05.14 2,500,000 2,500,000 TOTAL 2,500,000 2,500,000 Prepar by- Approved by: Uran im' B Natsagdolgor.Ts' Financial Managem t Specialist Project Coordinator ta "NIISLEL AUDIT" LLC Certified audit, appraisal and accounting consultancy company Date: 7we 77 c7U INDEPENDENT AUDITOR'S REPORT To: PIU Coordinator Ts.Natsagdolgor Mongolia Employment Support Project Credit N2: 5974-MN We have audited the accompanying the Designated Account Reconciliation Statement of Mongolia Employment Support Project submitted to the World Bank for the period from November 5, 2017 to December 31, 2018 in support of credit withdrawals under the Credit No: 5974-MN. We conducted our audit in accordance with generally accepted auditing standards that accordingly included examination, on a test basis, of evidence supporting the amounts and disclosures in the Designated Account Reconciliation 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 Reconciliation Statement submitted together with the internal controls and procedures involved in their preparation can be relied upon to support the application for credit withdrawals. "Niislel-Audit" LLC Ulaanbaatar city, Sukhbaatar district, Baga toiruu-44 Phone/Fax: 31-89-18, 7020095 ilSLEL.AUDIT Co.,Ltd E-mail: info@niislelaudit.mn CERTIFIED ACCOUNTING AUDIT L APPRAISAL The Government of Mongolia The International Development Association Credit No.5974-MN MONGOLIA EMPLOYMENT SUPPORT PROJECT DESIGNATED ACCOUNT RECONCILIATION STATEMENT For the period from Nov 05, 2017 to Dec 31, 2018 2018.12.31 2017.12.31 Notes (in USD) (in USD) Beginning balance Add: 2,534,390.90 Total advanced by IDA 2,500,000.00 Replenishment - Interest income 34,390.90 Deduct: 1,520,605.30 Goods 105,865.12 Consultant's services 113,606.06 Training and Workshops 44,538.08 Incremental operating cost 49,742.19 Operating Account MNT /EPF/ 1,206,853.85 ENDING BALANCE 1,013,785.60 PART B - ACCOUNT RECONCILIATION Total advanced by IDA 2,500,000.00 Remaining amount 1,012,895.84 Add: 1,521,495.06 Sub-account ending balance 691.92 Cash on hand 197.84 Operating Account MNT /EPF/ 1,206,853.85 Goods 105,865.12 Consultant's service 113,606.06 Training and Workshops 44,538.08 Incremental operating cost 49,742.19 Deduct: 34,390.90 Interest income 34,390.90 Total advance to DA accounted 2,500,000.00 Difference Prepared : Approved by: Uranchimeg.B Natsagdolgor.Ts Financial Management ecialist Project Coordinator CERT!z!,---,. YNG "NIISLEL AUDIT" LLC Certified audit, appraisal and accounting consultancy company Date: ,61p INDEPENDENT AUDITOR'S REPORT To: PIU Coordinator Ts.Natsagdolgor Mongolia Employment Support Project Credit N: 5974-MN We have audited the accompanying Sub Accounts Statement of Mongolia Employment Support Project submitted to the World Bank for the period from November 5, 2017 to December 31, 2018 in support of credit withdrawals under the Credit No: 5974-MN. We conducted our audit in accordance with generally accepted auditing standards that accordingly 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. "Niislel-Audit" LLC Ulaanbaatar city, Sukhbaatar district, Baga toiruu-44 Phone/Fax: 31-89-18, 70120095 MiSLEL-AUD T Co.,Ltd E-mail: info@niislelaudit.mn CERTIFIED ACCOUNTNG AUDIT m APPRAISAL The Government of Mongolia The International Development Association Credit No.5974-MN MONGOLIA EMPLOYMENT SUPPORT PROJECT SUB-ACCOUNT RECONCILIATION STATEMENT For the period from Nov 05, 2017 to Dec 31, 2018 Notes 2018.12.31 2017.12.31 (in USD) (in USD) Beginning balance - - Add: 207,210.99 Replenishment from DA 207,210.99 - Interest income Deduct: 206,519.07 Cash in hand MNT 10,821.53 - Consultant's services 113,606.06 Training 36,401.13 Incremental operating cost 45,690.35 - Ending balance 691.92 - Prep d by: Approved by: Uranchi g.B Natsagdolgor.Ts Financial Manage nt Specialist Project Coordinator ,ii dcl Aud i -C The Government of Mongolia The International Development Association Credit No.5974-MN MONGOLIA EMPLOYMENT SUPPORT PROJECT NOTES TO THE FINANCIAL STATEMENTS For the period from Nov 05, 2017 to Dec 31, 2018 1. PROJECT BACKGROUND On July 5, 2017, the International Development Association (IDA) and the the Government of Mongolia (represented by the Ministry of Finance) signed the Financing Agreement Credit No.5974-MN (P159215) to implement the total approved credit amount is SDR 18,400,00 (equivalent to original approved amount of US$ 25,000,000) and the Financing Agreement came effective November 5, 2017 The project closing date is September 30, 2021. The objective of the project is to provide jobseekers and micro-entrepreneurs inMongolia with improved access to labor market opportunities. COMPONENTS NAMES AND SUB-COMPONENTS IMPLEMENTING AGENCY Supporting client-centric public employment services 2.1 Integrated employment training program 2 Strengthening select active labor market prgrms2.2 Support for micro-entrepreneurs programs 2.3 Employment promotion piloting program Facilitating labor market monitoring and 3.1 Labor market monitoring and analysis 3 analysis and project management 3.2 Project management and monitoring Component 1: Supporting client-centric public employment services (US$ 4.75 million). Component I will address job-search constraints related to incomplete information and poor Labor market transparency by supporting client-centric public employment services. The unifying and Guiding principle for the component will be to empower job counselors to focus on clients (jobseekers, employers, students seeking career guidance, and so on) and their core functions of placement and acquiring new vacancies. This will enable public employment services to be both more efficient and Effective in achieving quality job placements and in attracting more employers and more and higher killed job listings Component 2: Strengthening select active labor market programs (US$ 17.25 million). Component 2 will strengthen the design, relevance, and demand orientation of select active labor market programs. Based on international best practice examples and an assessment of local conditions, it will finance interventions to address the widespread lack of technical and socio- behavioral skills and of labor demand, in particular, among young people. The component will consolidate and improve activities MWL'l \uldi 1A,C CEI Gt currently financed through the existing Program for Providing Employment Skills and Retaining Work Places and the Entrepreneurship Development Program. It will have three subcomponents. Component 3: Facilitating labor market monitoring and analysis and project management (US$ 3 million). Component 3 will enhance the scope, quality, and availability of labor market information for institutional and individual users, to allow them to make informed decisions. In addition, it will provide support for M&E and project management. It will consist of two subcomponents. \~i~I .Ad~ A Allocated Allocated Documented Documented Category amount amount amount amount USD% (in SDR) (in USD) (in SDR*) (in USD) Goods, works, non-consulting services, consultants' services, Training and Incremental Operating 6,570,000 8,926,609 Costs for Non-EPF Activities under Parts 1, 2 (a) (vii), 2(b) (iii), 2(c) (ii) and 3 of the Project Non-consulting services, consultants' services, Training, Micro-loans and Employment Promotion Piloting 11,830,000 16,073,391 Grants for EPF Activities under Parts 2 (a) (i) to 2(a) (vi), 2(b) (i), 2(b) (ii) and 2 (c) (i) of the Project TOTAL AMOUNT 18,400,000 25,000,000 - Note: Actual disbursement in USD as of December 31, 2018 have been tanslated into SDR at theexchange rate: 1XDR=.41]834US. li,p i: 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES a) Statement of compliance: The Interim Financial Reports comprise Balance Sheet, Uses of Funds by Category, Uses of Funds by Project Activity, Disbursement report and the Designated Account Statement.These reports have been prepared as agreed with the World Bank. b) Basis of preparation: The financial statements were prepared in accordance with International Public Sector Accounting Standards (IPSASs) issued by the International Public Sector Accounting Standards Board (IPSASB) of the International Federation of Accountants.The financial statements have been prepared on a cash basis. On this basis, cash receipts are recognized when received and disbursements are recognized when paid rather than when expenses are incurred. The project financial activities carried out in compliance with the project Financial management manual which has been accepted by the World Bank. The reports are operated and maintained by the financial management information system, named PACS, designed by the Infosystems LLC capable of generating IFRs in accordance with formats agreed with the Bank. c) Basis of measurement: The financial statements are presented in U.S.Dollar (USD). The payments made by Mongolian currency (MNT) which were transferred into USD based on official exchange rate, as of the date of payment. d) Basis of presentation: The account balances in the Financial statements covers transactions between Nov 5, 2017 to December 31, 2018. e) Designated account: Project opened the Designated Account (DA) for the credit financing acceptable to the World Bank. The ceiling of the designated account is USD 3,000,000 (three million). DA is located in State Bank and maintained in USD by Ministry of Finance, account CERT~IFIr;CAWT fING jJ A U I ,~"I P ,; number 106000056853 The payments for the eligible expenditures of goods (over USD 100,000), Micro loans (USD 1,000,000), training and Employment promotion piloting grants (over USD 150,000) are paid fi-om DA. t) Sub-accounts: As specified in the Disbursement Letter, the project opened the MNT Sub- account (SA) for the credit financing acceptable to the World Bank. Accordingly, expenditures expressed by MNT will be financed from SA (MNT). 3. CASH AND CASH EQUIVALENTS The PIU has opened project designated accounts and sub-accounts to manage the project assets.The ending balance of the cash and cash equivalents as of 31 December 2018 are shown below: Project Bank Account December 31, 2017 December 31, 2018 (in USD) (in USD) Designated account - 1,012,895.84 Sub-accounts - 691.92 Cash on hand - 197.84 Operating Account MNT /EPF/ 1,206,853.85 TOTAL - 2,220,639.45 4. CUMULATIVE PROJECT EXPENDITURES The cummulative disbursement is indicated by categories as follows: Total allocated Total Total Disbursement Categories budget as cumulated disbTot Disbursement indicated in disbursement disursement percentage % PAD amount amount 2018 Goods, works, non-consulting services, consultants' services, Trainingand Incremental Operating Costs for Non-EPF 8,926,609.00 313,751.45 313,751.45 3.51% Activities under Parts 1, 2 (a) (vii), 2 (b) (iii), 2 (c) (ii) and 3 of the Project Non-consulting services, consultants' services, Training, Micro-loans and Employment Promotion Piloting Grants for 16,073,391.00 - EPF Activities under Parts 2 (a) (i) to 2 (a) (vi), 2 (b) (i), 2 (b) (ii) and 2 (c) (i) of the Project TOTAL 25,000,000.00 313,751.45 313,751.45 3.51% CERT!FI P!J N G /9 A UD!7 L 5. INTERNATIONAL DEVELOPMENT ASSOCIATION'S FUND As of December 31, 2018 the project had received USD 2,500,000 (10% of the total credit) through the Designated Account as financing from IDA Credit No:59740-MN and had disbursed USD 313,751.45. WA Application Credited Amount Amount numbers type Claimed date date claimed in credited in (in USD) (in USD) WA-01 2018.04.29 2018.05.14 2,500,000.00 2,500,000.00 TOTAL 2,500,000.00 2,500,000.00 6. INTEREST EARNING For the reporting period, total accumulated interest income of the designated account and sub- accounts are: Bank category December 31, 2017 December 31, 2018 (in USD) (in USD) Designated account (USD) 34,390.90 TOTAL 34,390.90 kuHI'L(~ �,_ ,_� r м � о �с и ,^ о�о tG � cV .-+ � м t� о I-� I ,� ^ v� c�i �о c�i vi Q А �.: а; �с ,, � N А � о N rn о`Oо Е-� � ���� i-` ��: -' ,..,, � о r г� й й � с оо �n м - 0о � � и ~ м О Н`� р �"� � r� О � А�'`� ry О �С �О I�i ,..� м Г� О о �•' А �.л а, �о ��� � � '�� � � � , � � � -11 ° � � � о й о N � р оо й м � о .., е°v �"' '-' "' Н мЁ N о°о �°о й ;__... 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U � � � д w ��„ и 'й s�. ,� оо �о оо оо .'`"-� � ;� ао.э , � ^о 'С � � � � � ` й 0 и � Оо о о �' N М о � �,, � � д о ,� а � � .,, U о , ,^ et � F. � ^' е� м �r � ,� � �� N � Н , 1 (4c) Training and workshop: The total disbursed amount for the training are: Training Number Number of Component Names 2018.12.31 and of the the (in USD) Workshop training participants (in USD) Supporting client-centric public 44,538.08 44,538.08 2 25 employment services TOTAL 44,538.08 44,538.08 3 478 (4d) Incremental operating cost: The total disbursed amount for the incremental operating costs are: Total amount TOTAL Description 2018.12.31 (in USD) (in USD) Cumulative dishursement amount before the repotWngperiod Operating cost of the project 49,742.19 49,742.19 TOTAL AMOUNT 49,742.19 49,742.19 "'.N6,f Audit