1WIPY."14 YCavg-hA'A c2~h The Federal Democratic Republic of Ethiopia Audit Services Corporation INDEPENDENT AUDITOR'S REPORT ON THE FINANCIAL STATEMENTS OF THE FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA MINISTRY OF FINANCE ONE WASH NATIONAL PROGRAM We have audited the accompanying financial statements of One WASH National Program of the Federal Democratic Republic of Ethiopia, Ministry of Finance, financed under IDA Credit No.53860-ET, ADF Loan No. 210015003194 and 2100150037344, ADF Grant No. 2100155034517, DFID Grant No. 203766, FINLAND and UNICEF Grants, which comprise the balance sheet as at 7 July 2019, and the statement of sources and uses of funds and the designated account statements for the year then ended and a summary of significant accounting policies and other explanatory information. Responsibility for the Financial Statements The Ministry of Finance is responsible for the preparation and fair presentation of these financial statements in accordance with the Ethiopian Government's Manual of the Federal Accounting System which is based on a modified cash basis of accounting and for such internal control as it determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements 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 entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. 2 251-011-5515222 Fax 251-011-5513083 E-mail: ASC@ethionet.com 2 5720 251-011-5535012 251-011-5535015 251-011-5535016 INDEPENDENT AUDITOR'S REPORT ON THE FINANCIAL STATEMENTS OF THE FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA MINISTRY OF FINANCE ONE WASH NATIONAL PROGRAM (continued) We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion the financial statements give a true and fair view of the financial position of One WASH National Program of the Federal Democratic Republic of Ethiopia, Ministry of Finance, Financed under IDA Credit No. 53860-ET, ADF Loan No. 2100150031945 and 2100150037344, ADF Grant No. 2100155034517, DFID Grant No. 203766, FINLAND and UNICEF Grants as at 7 July 2019 and of its sources and uses of funds for the year then ended in accordance with the Ethiopian Government's Manual of the Federal Accounting System which is based on a modified cash basis of accounting. Reports on other requirements As required by the Loan and Grant Agreements, we report that, to the extent we can assess: - during the year all project funds have been used in accordance with the conditions of the relevant financing agreements and only for the purposes for which the financing were provided; - counter-part funds have been provided and used in accordance with the financing agreement and only for the purposes for which the financing was provided; - goods, works and services financed have been provided in accordance with the relevant financing agreements and disbursement letters; - all necessary supporting documents, records and accounts have been maintained in respect of all Project's activities; - the funds disbursed covered expenditures that are eligible for financing under IDA Credit No. 53860 ET, ADF Loan No. 2100150031945 and 210050031945, ADF Grant No. 2100155034517, DFID Grant No. 203766, FINLAND and UNICEF Grants; - there was a clear linkage between the books of accounts and the financial statements; - our examination revealed no weaknesses or irregularities in the systems of internal controls over financial expenditure other than those mentioned in the management letter; 2 INDEPENDENT AUDITOR'S REPORT ON THE FINANCIAL STATEMENTS OF THE FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA MINISTRY OF FINANCE ONE WASH NATIONAL PROGRAM (continued) Reports on other requirements (continued) - designated accounts have been maintained in accordance with the provisions of the financing agreements and funds disbursed out of the said accounts were used only for the purpose intended in the financing agreement; and - with respect to IFR based withdrawal applications submitted during the year ended 7 July 2019 and listed on page 16, in our opinion: a) the reports together with the procedures and internal controls involved in their preparation, can be relied upon to support the relevant withdrawals; b) adequate supporting documentation has been maintained to support the expenditures incurred; and said expenditures are eligible for financing under IDA Credit No. 53860, ADF Loan No. 2100150031945 and 210050037344, ADF Grant No. 2100155034517, DFID Grant No. 203766, FINLAND and UNICEF Grants; and c) ineligible expenditures which were identified had been reimbursed either to the Designated Accounts and or the donor partners. 6 January 2020 3 MINISTRY OF FINANCE ONE WASH NATIONAL PROGRAM (OWNP) BALANCE SHEET AS AT 7 July 2019 2019 2018 Notes Ethiopian Birr Ethiopian Birr ASSETS CURRENT ASSETS Debtors 3 758,605,758 463,201,550 Cash and bank balances 4 666,238,785 1,700,243,544 1,424,844,543 2,163,445,095 Current Liabilities Creditors 5 783,472,742 386,784,235 NET CURRENT ASSETS 641,371,801 1,776,660,859 REPRESENTED BY Accumulated Fund 6 641,371,801 L776,660,859 The notes on pages 12 to 17 form an integral part of these financial statements. 4 MINISTRY OF FINANCE ONE WASH NATIONAL PROGRAM(OWNP) STATEMENT OF SOURCES AND USES OF FUNDS FOR THE YEAR ENDED 7 JULY 2019 Cumulative From Year ended 8 July 2014 Year ended 7 July 2019 To 7 July 2019 7 July 2018 Note Ethiopian Birr Ethiopian Birr Ethiopian Birr FINANCING Credit from IDA Q8850 PPA - 114,619,248 - Initial advance IDA 53860 ET 738,586,293 3,681,602,409 1,332,403,198 DFID Assistance 279,169,420 2,169,287,128 692,100,640 ADF 427,281,000 2,014,808,366 751,914,645 UNICEF Assistance 12,952,503 100,631,193 22,326,134 Finland Assistance 32,079,931 61,737,752 16,764,994 Community contribution 109,761,096 629,388,581 198,774,000 Gain on foreign exchange 13,838,669 49,660,573 8,770,108 TOTAL FINANCING 1,613,668,913 8,821,735,249 3,023,053,718 PROJECT EXPENDITURE Works 2,166,125,375 6,099,565,980 1,231,729,713 Goods 84,699,164 505,393,293 145,107,458 Consultancy services 130,975,343 495,253,152 178,894,228 Training 149,396,573 510,692,003 87,659,989 Operating costs 216,925,289 568,622,794 109,403,448 TOTAL POROJECT EXPENDITURE 2,748,121,744 8,179,527,221 1,752,794,836 (DEFICIT)/EXCESS OF FINANCING OVER EXPENDITURE (1,134,452,832) 642,208,028 1,270,258,882 PRIOR YEAR ADJUSTMENT 6 (836,227) (836,227) - (1,135,289,058) 641371.801 1,270,258,882 The notes on pages 12 to 17 form an integral part of these financial statements. 5 MINISTRY OF FINANCE ONE WASH NATIONAL PROGRAM (OWNP) DESIGNATED ACCOUNT STATEMENT For year ended 7 July 2019 Account number 01001013/000479 Depository bank National Bank of Ethiopia Address Addis Ababa, Ethiopia Related credit IDA Credit No. 53860 ET Currency USD USD Ethiiopian Birr Beginning balance - 7 July 2018 14,939,455.10 407,646,935.53 Add: IDA Grant during the year 26,308,170.00 738,586,292.89 41,247,625.10 1,146,233,228.42 Less: Transfer to Birr account 40,090,000.00 1,119,101,025.00 Transfer to MoWIE 1,153,664.07 32.698.762.21 41,243,664.07 1,151,799,787.21 3,961.03 (5,566,558.79) Gain on foreign exchange 5.681,178.72 Ending balance -7 July 2019 3 1169. The notes on pages 12 to 17 form an integral part of these financial statements. 6 MINISTRY OF FINANCE ONE WASH NATIONAL PROGRAM (OWNP) DESIGNATED ACCOUNT STATEMENT For year ended 7 July 2019 Account number 01001013/00493 Depository bank National Bank of Ethiopia Address Addis Ababa, Ethiopia Related credit DFID Grant No. 203766 Currency USD USD Ethiopian Birr Beginning balance - 7 July 2018 309,872.93 8,455,378.70 Add: IDA Grant during the year 10,050,416.71 279,169,420.00 10,360,289.64 287,624,798.70 Less: Transfer to Birr account 10,190,000.00 284,552,275.00 Transfer to MoWIE 163,137.29 4,579,084.28 10,353,137.29 289,131,359.28 7,152.35 (1,506,560.58) Gain on foreign exchange - 1,713,527.43 Ending balance -7 July 2019 The notes on pages 12 to 17 form an integral part of these financial statements. 7 MINISTRY OF FINANCE ONE WASH NATIONAL PROGRAM (OWNP) DESIGNATED ACCOUNT STATEMENT For year ended 7 July 2019 Account number 01001013/00502 Depository bank National Bank of Ethiopia Address Addis Ababa, Ethiopia ADF Loan No. 2100150031945 and Related credit and Grant 2100150037344 and ADF Grant No. 2100155034517 Currency USD USD Ethiopian Birr Beginning balance - 7 July 2018 2,040,460.08 55,677,218.02 Add: IDA Grant during the year 15,000,000.00 427,281,000.00 17,040,460.08 482,958,218.02 Less: Transfer to Birr account 12,000,000.00 340,200,400.00 Transfer to MoWIE 4,981,053.05 142,710,335.41 16,981,053.05 482,910,735.41 59,407.03 47,482.61 Gain on foreign exchange 1,671,572.68 Ending balance -7 July 2019 71,719,05529 The notes on pages 12 to 17 form an integral part of these financial statements. 8 MINISTRY OF FINANCE ONE WASH NATIONAL PROGRAM (OWNP) DESIGNATED ACCOUNT STATEMENT For year ended 7 July 2019 Account number 01001013/00507 Depository bank National Bank of Ethiopia Address Addis Ababa, Ethiopia Related Grant UNICEF Grant Currency USD USD Ethiopian Birr Beginning balance - 7 July 2018 479,152.96 13,074,455.16 Add: IDA Grant during the year 462,931.63 12,952,502.96 942,084.59 26,026,958.12 Less: Transfer to Birr account 70,000.00 2,003,575.00 Transfer to MoWIE 867,194.96 24,341,208.61 937,194.96 26,344,783.61 4,889.63 (317,825.49) Gain on foreign exchange 459,316.22 Ending balance -7 July 2019 489611.07 The notes on pages 12 to 17 form an integral part of these financial statements. 9 MINISTRY OF FINANCE ONE WASH NATIONAL PROGRAM (OWNP) DESIGNATED ACCOUNT STATEMENT For year ended 7 July 2019 Account number 01001013/00543 Depository bank National Bank of Ethiopia Address Addis Ababa, Ethiopia Related Grant FINLAND Grant Currency USD USD Ethiopian Birr Beginning balance - 7 July 2018 620,362.54 16,927,584.48 Add: IDA Grant during the year 1,119,183.19 32,079,931.25 1,739,545.73 49,007,515.73 Less: Transfer to Birr account 1,720,000.00 48,853,040.00 19,545.73 154,475.73 Gain on foreign exchange - 411,117.10 Ending balance -7 July 2019 19 5456 9 The notes on pages 12 to 17 form an integral part of these financial statements. 10 MINISTRY OF FINANCE ONE WASH NATIONAL PROGRAM (OWNP) SCHEDULE OF MOVEMENTS IN THE BIRR ACCOUNT For year ended 7 JULY 2019 Account number 01001010/40662 Account Name One WASH National WASH Program Depository bank National Bank of Ethiopia Address Addis Ababa,Ethiopia Currency Ethiopian Birr Ethiopian Birr Beginning balance -7 July 2018 384,335,769 Transfer from IDA 1,119,101,025 Transfer from DFID 284,552,275 Transfer from ADF 340,200,400 Transfer from UNICEF 2,003,575 Transfer from Finland 48,853,040 2,179,046,084 Less: Transfer to Program implementers Tigray 74,648,350 Afar 74,000,000 Amhara 393,571,849 Oromia 654,464,874 Somalia 173,000,000 Benshangul 45,134,938 SNNP 554,783,342 Gambela 65,961,877 Harari 26,663,769 Dire dawa 23,891,896 MoH 8,887,251 WRDF 70,000,000 MoF 2,000,000 Total Transfer 2,167,008,146 Bank charge 4,486,776 Total Transfer and bank service charge 2,171,494,922 Ending balance 7 July 2019 11 MINISTRY OF FINANCE ONE WASH NATIONAL PROGRAM (OWNP) NOTES TO THE FINANCIAL STATEMENTS 1. BACKGROUND The objective of the Project is to increase access to improved water supply and sanitation services for residents in participating woredas, towns and communities in the territory of the Recipient. The project consists of the following parts: Part 1: Rural Water Supply, Sanitation and Hygiene - Construction and rehabilitation of community water supply schemes in participating woredas and towns. - Construction and rehabilitation of water and sanitation facilities in school and health facilities in participating woredas and communities. - Promotion of improved hygiene and sanitation practices in participating communities. - Capacity building to strengthen and sustain the capacity of participating woredas to effectively plan, implement and manage their water supply, sanitation and hygiene facilities. - Capacity building to strengthen and sustain the capacity of participating woredas to effectively operate their water supply and sanitation facilities. - Capacity building for respective water, health and education regional bureaus and woreda offices to create a critical mass of well trained and skilled facilitators to mobilize communities for behavior change and demand creation to sustain changes. Part 2: Urban Water Supply, Sanitation and Hygiene - Rehabilitation and reconstruction of urban water production, treatment and distribution systems. - Preparation of a Nation Urban Sanitation Strategy, supporting studies on urban sanitation and priority sanitation investments in participating towns. - Activities to strengthen the capacity of participating water boards/committees and operators to effectively manage their water supply and sanitation facilities. Part 3: Program Management and Capacity Building - Building the capacity of woreda/zonal/regional staff in surface and groundwater assessment, groundwater knowledge and sitting, distribution network design, environmental and social safeguards, water resources management. - Building the capacity of woreda/zonal/regional collection and MIS/database. - Building the capacity of woreda/zonal/regional accounts in financial management. - Building the capacity of woreda/zonal/regional contractors and artisans in construction methods. 12 MINISTRY OF FINANCE ONE WASH NATIONAL PROGRAM (OWNP) NOTES TO THE FINANCIAL STATEMENTS (continued) 1. BACKGROUND (continued) Part 3: Program Management and Capacity Building (continued) - Building the capacity of zonal PMUS, WWTs and TWUs in contract management and supervision. - Building the capacity of WASHCOs, men, women and youth artisans, HEWs and HAD including follow-up activities. - Strengthening the capacity of established Water Boards in Category III towns in: business planning, asset management, planning, monitoring operations, and oversight of Program implementation. - Train TWUs in routine O&M, asset and financial management, customer relations, reducing UAW, etc. - Preparation of standard bidding/contract management/supervisor documents. - Establishment of sub-regional operation and maintenance units and supply chain outlets. - Documentation and scaling up of pilot/demonstration activities. - Support 16 TEVETCs/HSCs to offer WASH courses. - Establish health clubs in schools. - Procure vehicles and vacuum trucks/carts, tool sets, office equipment, water quality testing equipment. The Project is mainly financed by IDA credit No. 53860-ET, ADF Loan No. 2100150031945 and 2100150037344, ADF Grant No. 2100150034517, and DFID Grant No. 203766, Finland and UNICEF Grants. 2. SIGNIFICANT ACCOUNTING POLICIES The principal accounting policies adopted by the Program, which are consistent with those applied in the prior year, are stated below. a) Basis of preparation These financial statements have been prepared in accordance with the Ethiopian Government's Manual of the Federal Accounting System based on a modified cash basis of accounting. b) Currency These financial statements are presented in Birr. Transactions in foreign currencies are translated into Birr at the approximate rates of exchange prevailing at the dates of the transactions. Balances in foreign currencies at the balance sheet date are translated at the rate of exchange prevailing on that date. 13 MINISTRY OF FINANCE ONE WASH NATIONAL PROGRAM (OWNP) NOTES TO THE FINANCIAL STATEMENTS (continued) 3 ADVANCES 2019 2018 Ethiopian Birr Ethiopian Birr Advance payment to: Letter of credit 58,159,033 5,181,461 Contractors 382,537,978 393,370,906 Suppliers 6,575,564 5,137,823 Consultants 5,815,143 10,779,099 Purchase advance to staff 4,815,008 15,710,878 Other advances within government 292,977,166 9,779,957 Others 7,725,867 23,241,426 758,605,758 463201550 4 CASH AND BANK BALANCES USD Special account No 1001012/00479 114,620 407,646,936 USD Special account No 1001012/00493 206,967 8,455,379 USD Special account No 1001012/00502 1,719,055 55,677,218 USD Special account No 1001012/00507 141,491 13,074,455 USD Special account No 1001012/00543 565,593 16,927,584 Ethiopian Birr Designated Account 2,051,162 384,335,769 Other Birr Account 654,793,980 798,425,706 Cash on hand 6,645,918 15,700,498 666,238,785 1,700,243.544 5 Accounts payable Retentions 97,016,508 76,714,766 Contractors 6,764,133 - Other payable within government 561,023,499 166,195,393 Taxes payable 29,392,680 21,900,901 Others 89,275,922 121,973,175 783,472,742 386,784,235 14 MINISTRY OF FINANCE ONE WASH NATIONAL PROGRAM (OWNP) NOTES TO THE FINANCIAL STATEMENTS (continued) 6 ACCUMULATED FUND Ethiopian Birr Balance at 7 July 2018 1,776,660,859 Prior year adjustment (836,227) 1,775,824,632 Deficit of financing over expenditure (1,134,452,832) Balance at 7 July 2019 641,371,8UI 7 DATE OF AUTHORIZATION Channel One Programs Coordinating Directorate Director of the Federal Democratic Republic of Ethiopia, Ministry of Finance authorized the issue of these financial statements on 6 January 2020. 15 MINISTRY OF FINANCE ONE WASH NATIONAL PROGRAM (OWNP) IFR BASED WITHDRAWAL SCHEDULE FOR APPLICATIONS Submitted during the Year ended 7 July 2019 Withdrwal Eqivalent in Application No. USD Ethiopian Birr IDA WASH 11-018 10,308,170.00 286,184,692.89 IDA WASH 11-020 16,000,000.00 452,401,600.00 ADB 00014 15,000,000.00 427,281,000.00 DFID 10,050,416.71 279,169,420.00 UNICEF 462,931.63 12,952,502.96 FINLAND 1,119,183.19 32,079,931.25 52,940,701.53 1,490,069,147.10 16 а� � о cV w о ,-, гл о rn � rn�о rn� и д- ,� t� оо оо N �i � о� и д� �,-• и оо �r � о и,-� и д- �--i оо ,--� оо О�D �О и l� о0 оо О� l� [� Н � N � О О� д' � 00 N М �--� �--i N и И N � � �О �О N СЛ М М 01 N_ t� Q1 д' О l� l� V� W � � i� �О О оо оо м N � �о � � �О оо М �--i � м � 1• � [� 01 О 01 �--� ,--� о0 �t �' И И о0 '[1' W l� � �--� и �D М l� `О \О l� [� \О р и V� ,� ,-, .-; ,--� м си U � г� W � � м й оио r � .NO ,� и и и о с� � � а � � rn о� д� м N V � � О� о о�о rn й � � � N rn N N �о .о у� М М [� �У � � �--� м Г�1 1-Z1 Е"� w ~ Г� А �. � � � °о о й °и � Т и F4 �О д� � О д- � м W� � д� N оо д� ��t о д� �А а� �N°��� � о �� �� ���°N� � � а/ �1 � 00 00 \О �U О W W � �-i ..� � и � и оо � � о .�о � гWл с�"а и м а� и и с� г� � г Г О' � д� о�ro- � о й о .� х А .. 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