I i'L"11~~ao M?A7A4 Wc767T7 The Federal Democratic Republic of Ethiopia Audit Services Corporation I INDEPENDENT AUDITOR'S REPORT ON THE FINANCIAL STATEMENTS OF THE FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA MINISTRY OF HEALTH SUSTAINABLE DEVELOPMENT GOALS PERFORMANCE FUND (SDG PF) We have audited the financial statements of Sustainable Development Goals Performance Fund (SDG PF) of the Federal Democratic Republic of Ethiopia, Ministry of Health, which comprise the balance sheet as at 7 July 2018, and the statement of sources and uses of funds for the year then ended and a summary of significant accounting policies and other explanatory information. Management's Responsibility for the Financial Statements The Ministry of Health 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 the Ministry 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 I 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. I2 251-011-5515222 Fax 251-011-5513083 E-mail: ASC@ethionet.com l 5720 251-011-5535012 251-011-5535015 I I INDEPENDENT AUDITOR'S REPORT ON THE FINANCIAL STATEMENTS OF THE FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA MINISTRY OF HEALTH SUSTAINABLE DEVELOPMENT GOALS PERFORMANCE FUND (SDG PF) (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 the Sustainable Development Goals Performance Fund (SDG PF) of the Federal Democratic republic of Ethiopia, Ministry of Health as at 7 July 2018 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 terms of reference for the audit of SDG PF we report that, to the extent we can assess: a) SDG PF has been used in accordance with the conditions of the Joint Financing Arrangement, with due attention to effective implementation in alignment with the budgetary and accountability system and legislation of the Federal Ministry of Heath; b) SDG Funds have been provided and used in accordance with the programmatic priorities and activities jointly agreed, with due attention to economy, effectiveness and efficiency, and only for the purposes for which they were provided; c) Goods, works and services financed have been procured in accordance with the relevant governmental financial and procurement policy; d) All necessary supporting documents, records, and accounts have been maintained in respect of all fund activities; e) Designated Accounts have been maintained in accordance with the provisions of the relevant SDG fund joint financing arrangement and funds disbursed out of the Accounts were used according to the joint financing arrangement; f) National laws and regulations have been complied with, and that the financial and accounting procedures of Ethiopian Government were followed and used; g) Assets procured from the fund exist and there is verifiable ownership by the implementing agencies or beneficiaries in line with the joint financing arrangement, with the exception of the irregularities reported in the management letter. 23 May 2019 I 2 I I MINISTRY OF HEALTH SUSTAINABLE DEVELOPMENT GOALS PERFORMANCE FUND BALANCE SHEET AS AT 7 JULY 2018 2018 2017 Notes Ethiopian Birr Ethiopian Birr * ASSETS CURRENT ASSETS Advance payments 3 6,430,632,594 5,476,909,809 Sundry receivables 4 81,727,369 9,452,272 Cash and bank balances 5 2,683,566,938 614,275,067 9,195,926,901 6,100,637,148 I CURRENT LIABILITIES Sundry creditors 6 5,180,189 5,043,755 NET CURRENT ASSETS 9,190,746,712 6,095,593,39 REPRESENTED BY FUND BALANCE 7 9,190,746,712 6,095,593,393 I I I The notes on pages 5 to 9 form an integral part of these financial statements. I I I I I I 3 I I MINISTRY OF HEALTH SUSTAINABLE DEVELOPMENT GOALS PERFORMANCE FUND STATEMENT OF SOURCES AND USES OF FUNDS FOR THE YEAR ENDED 7 JULY 2018 Cumulative from 15 April Yearended 2009 Yearended 7 July 2018 to 7 July 2018 7 July 2017 Notes Ethiopian Birr Ethiopian Birr Ethiopian Birr SOURCES Spanish Government 31,375,500 584,714,656 23,368,015 DFID 2,899,205,031 14,072,748,724 1,245,586,947 Irish Aid 159,041,264 800,967,024 105,187,106 UNFPA - 84,308,779 - WHO - 27,492,614 - UNICEF - 63,383,726 - Australian Aid -455,538,771 A Italian Co-operation - 229,473,930 34,890,805 World Bank 2,013,138,455 3,631,629,118 189,180,556 Netherlands Embassy 315,880,617 1,427,039,379 240,862,375 GAVI-HPF 417,952,325 1,991,967,802 435,982,913 European Union - 517,187,202 206,998,216 Gain on foreign exchange 136,234,532 889,210,557 133,822,135 I 5,972,827,724 24,775,662,282 2,615,879,068 USES Construction, training and others 8 723,788,814 2,468,725,027 496,211,041 Goods and equipment 9 893,925,940 6,156,204,940 516,300,637 Operating costs 10 1,259,959,651 6,976,514,788 1,395,033,226 2,877,674,405 15,601,444,755 2,407,544,904 EXCESS OF SOURCES OVER USES 3,095,153,319 9,174,217,527 208,334,164 Prior year adjustment - refund from suppliers - 16,529,185 - 3,0951 53,319 9,190,746,712 208,334.164 The notes on pages 5 to 9 form an integral part of these financial statements. I I I I 4 U I I MINISTRY OF HEALTH SUSTAINABLE DEVELOPMENT GOALS PERFORMANCE FUND NOTES TO THE FINANCIAL STATEMENTS 1. PROGRAM INFORMATION The Sustainable Development Goals Performance Fund (SDG PF) is a pooled funding mechanism managed by the Federal Ministry of Health using the Ethiopian Government's procedures. SDG PF provides specific federal grant for public goods and capacity building activities within the framework of health system strengthening. The fund includes the joint funding arrangement that sets out the jointly agreed terms and procedures for SDG fund management, governance framework, decision making, reporting, review and evaluation, audit and supply chain management. In the framework of the Ethiopian International Health Partnership (IHP) compact, it provides flexible resources, consistent with the One Plan, One Budget and One Report concept, to secure additional finance to the Health Sector Transformation Plan (HSTP). It is one of the Government's preferred modalities for scaling up development partner's assistance in support of HSTP, which became effective on 15 April 2009 and was revised in December 2011 and July 2015. 2. SIGNIFICANT ACCOUNTING POLICIES The principal accounting policies adopted by the Program are stated below. These policies are consistent with those applied in the preceding year. a) Basis of preparation These financial statements have been prepared in accordance with the Ethiopian Government's Manual of the Federal Accounting System which is based on a I 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. Foreign currency balances are translated into Birr at exchange rates ruling at the balance sheet date. I I I I 5 I I MINISTRY OF HEALTH SUSTAINABLE DEVELOPMENT GOALS PERFORMANCE FUND NOTES TO THE FINANCIAL STATEMENTS (continued) 3. ADVANCE PAYMENTS 2018 2017 Ethiopian Birr Ethiopian Birr Advance to Regions 1,594,218,008 718,698,467 Pharmaceuticals Fund and Supply Agency 2,463,426,729 2,412,158,276 UNICEF 1,611,726,265 1,524,204,853 UNOPS 205,806,855 627,941,341 Purchase advance 270,173 270,173 Advance to contractors 16,647,756 20,349,534 Advance to suppliers 538,536,808 173,287,165 6.430,632,594 5,476,909R809 4. SUNDRY RECEIVABLES UNFPA 114,175 7,355 JICA International Fund 2,545 2,545 UNICEF HPE 67,504,171 - UNICEF 7,240 - CDC International Fund 494,400 - Yellow Fever 113,459 - Global Fund - Malaria 2,816,752 4,147,928 . Staff debtors 3,084,659 5,294,444 VAT Receivable 7,589,968 - 1 5. CASH AND BANK BALANCES USD Designated Account No. 0261516300000 1,385,823,460 160,053,983 USD Designated Account No. 0261501377500 1,144,736,744 308,574,797 SDG-Birr Account No. 0160101352600 - NBE 153,006,734 145,616,802 SDG-Birr Account No. 1000148975338 - CBE - 29,485 2.683.566.938 614,275,067 I I I 6 I I MINISTRY OF HEALTH SUSTAINABLE DEVELOPMENT GOALS PERFORMANCE FUND NOTES TO THE FINANCIAL STATEMENTS (continued) 1 6. SUNDRY CREDITORS 2018 2017 Ethiopian Birr Ethiopian Birr Pooled Account (GAVI) - 1,108,323 VAT payable 624,623 1,418,142 Withholding tax payable 1,037,652 1,994,395 Retention payable 3,172,632 - I Other payable 345,282 522,894 5,18,189 5,043,755 7. FUND BALANCE Ethiopian Birr Balance at 7 July 2017 6,095,593,393 Add: Excess of sources over uses for the year 3,095,153,319 I Balance at 7 July 2018 9.190.746,712 I 8. CONSTRUCTION, TRAINING AND OTHERS Cumulative from 15 April Year ended 2009 Year ended 7 July 2018 to 7 July 2018 7 July 2017 Ethiopian Birr Ethiopian Birr Ethiopian Birr Construction of health centers 459,411,669 1,488,038,755 267,891,781 Advocacy and training 264,377,145 980,686,272 228,319,260 723,788,814 2.468.725.027 496.211.041 I I I 7 W I I MINISTRY OF HEALTH SUSTAINABLE DEVELOPMENT GOALS PERFORMANCE FUND NOTES TO THE FINANCIAL STATEMENTS (continued) 1 9. GOODS AND EQUIPMENT Cumulative Year ended from 15 April 2009 Year ended 7 July 2018 to 7 July 2018 7 July 2017 Ethiopian Birr Ethiopian Birr Ethiopian Birr I Medical equipment 175,597,590 4,144,385,045 516,671,621 Furniture 245,558 476,167 85,928 Motor vehicles 718,082,792 2,011,343,728 (456,912) 893,925,940 6,156,204,940 516,300,637 10. OPERATING COSTS Cumulative from 15 April Year ended 2009 Year ended 7 July 2018 to 7 July 2018 7 July 2017 Ethiopian Birr Ethiopian Birr Ethiopian Birr Travel and per diem 166,187,392 517,019,262 132,947,483 Medical supplies 912,228,109 5,629,035,407 1,038,293,082 Printing and stationery 4,726,369 100,574,242 12,890,910 Fuel and lubricants 20,841,750 73,696,102 12,518,808 Advertising 2,922,929 28,174,920 13,274,526 Bank charges 1,976,836 25,777,723 1,074,577 Uniforms 762,040 2,636,660 601,583 Office supplies 4,533,258 16,321,149 2,130,099 Vehicles maintenance 855,345 27,763,107 7,080,399 Rent 7,314,655 81,950,871 31,465,248 Audit fee - 69,000 - Community health insurance 64,896,829 293,850,153 74,029,312 Contribution and Subsidy to Hospitals - 13,681,246 - Salary to contractual staff 20,842,735 63,340,566 37,480,161 Miscellaneous 51,871,404 102,624,380 31,247,038 1, 259,959,651 6,976,514,788 1,395,033,226 I I I 8 W I I MINISTRY OF HEALTH SUSTAINABLE DEVELOPMENT GOALS PERFORMANCE FUND NOTES TO THE FINANCIAL STATEMENTS (continued) 1 11. DATE OF AUTHORIZATION The Director, Finance and Procurement Directorate of the Ministry authorized the issue of these financial statements on 23 May 2019. I9 I I I I I I I I I I I I I 9 I The Federal Democratic Republic of Ethiopia Audit Services Corporation INDEPENDENT AUDITOR'S REPORT ON THE DESIGNATED ACCOUNT STATEMENT OF THE FEDERAL DEMOCRATIC REPUIBLIC OF ETHIOPIA MINISTRY OF HEALTH SUSTAINABLE DEVELOPMENT GOALS PERFORMANCE FUND (SDG PF) I IDA CREDIT No. 5209 AND GRANT No. TF 014107 We have audited the accompanying Designated Account statement of the Federal Democratic Republic of Ethiopia, Ministry of Health, Sustainable Development Goals Performance Fund (SDG PF), financed under IDA Credit No. 5209-ET and Grant No. TF 014107, for the year ended 7 July 2018. Responsibility for the Statement The Ministry of Health is responsible for the preparation and fair presentation of this statement. Auditor's Responsibility Our responsibility is to express an opinion on this statement based on our audit. We conducted our audit in accordance with International Standards on Auditing and relevant Joint Financing Arrangement. Those standards and arrangements require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Designated Account has been maintained in accordance with the provisions of the relevant Joint Financing Arrangement and that funds disbursed out of the Account were used according to the joint financing arrangement. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a I basis for our audit opinion. Opinion In our opinion, the statement gives a true and fair view of a summary of the activity in the Designated Account of the Federal Democratic Republic of Ethiopia, Ministry of Health, Sustainable Development Goals Performance Fund (SDG PF) for the year ended 7 July 2018 and the Designated Account has been maintained in accordance with the provisions of the relevant SDG fund joint financing arrangement and funds disbursed out of the Account were used according to the joint financing arrangement. I 1 23 May 2019 3M 251-011-5515222 Fax 251-011-5513083 E-mail: ASC@ethionet.com C 5720 251-011-5535012 251-011-5535015 I 1 MINISTRY OF HEALTH SUSTAINABLE DEVELOPMENT GOALS PERFORMANCE FUND (SDG PF) DESIGNATED ACCOUNT STATEMENT For the year ended 7 July 2018 Account number 0261516300000 Depository bank National Bank of Ethiopia Address Addis Ababa, Ethiopia IDA Credit 5209-ET Related Grant TF 014107 Currency USD Ethiopian Birr equivalent Balance at 7 July 2017 6,917,603.80 160,053,982.61 1 Transfer from Donors during the year 73,937,190.81 2,013,138,455.05 80,854,794.61 2,173,192,437.66 * Deduct Payment for goods and services 16,296,959.61 445,507,254.33 Transfer to pooled account 6,538,656.60 178,151,100.00 Transfer to Regions 7,181,810.20 195,705,366.36 Payment for training 49,676.14 1,353,372.00 30,067,102.55 820,717,092.69 50,787,692.06 1,352,475,344.97 Gain on foreign exchange . 33,348,115.02 Balance at 7 July 2018 50,787,6920 1 23,459.99 I I I I I I I 2 I The Federal Democratic Republic of Ethiopia Audit Services Corporation INDEPENDENT AUDITOR'S REPORT ON THE DESIGNATED ACCOUNT STATEMENT OF THE FEDERAL DEMOCRATIC REPUIBLIC OF ETHIOPIA MINISTRY OF HEALTH SUSTAINABLE DEVELOPMENT GOALS PERFORMANCE FUND (SDG PF) DEVELOPMENT PARTNERS GRANT We have audited the accompanying Designated Account statement of the Federal Democratic Republic of Ethiopia, Ministry of Health, Sustainable Development Goals Performance Fund (SDG PF), financed under Development Partners Grant, for the year ended 7 July 2018. Responsibility for the Statement The Ministry of Health is responsible for the preparation and fair presentation of this statement. Auditor's Responsibility Our responsibility is to express an opinion on this statement based on our audit. We conducted our audit in accordance with International Standards on Auditing and relevant Joint Financing Arrangement. Those standards and arrangements require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Designated Account has been maintained in accordance with the provisions of the relevant Joint Financing Arrangement and that funds disbursed out of the Account were used according to the joint financing arrangement. . I We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. I Opinion In our opinion, the statement gives a true and fair view of a summary of the activity in the Designated Account of the Federal Democratic Republic of Ethiopia, Ministry of Health, Sustainable Development Goals Performance Fund (SDG PF) for the year ended 7 July 2018 and the Designated Account has been maintained in accordance with the provisions of the relevant SDG fund joint financing arrangement and funds disbursed out of the Account were used according to the joint financing arrangement. 23 May 2019 2 251-011-5515222 Fax 251-011-5513083 E-mail: ASC@ethionet.com C 5720 251-011-5535012 251-011-5535015 I I MINISTRY OF HEALTH SUSTAINABLE DEVELOPMENT GOALS PERFORMANCE FUND (SDG PF) DESIGNATED ACCOUNT STATEMENT For the year ended 7 July 2018 Account number 0261501377500 Depository bank National Bank of Ethiopia Address Addis Ababa, Ethiopia SDG grant Development partners Currency USD I Ethiopian Birr equivalent Balance at 7 July 2017 13,336,738.98 308,574,797.13 Add: Transfer from Donors during the year 143,828,190.60 3,823,454,737.69 Refund from GF - Malaria 47,398.59 1,292,846.93 157,212,328.17 4,133,322,381.75 Deduct: Payment for goods and services 42,271,040.53 1,123,739,044.41 Transfer to pooled account 12,000,000.00 325,380,000.00 Transfer to Regions 51,004,675.32 1,371,160,620.69 Transfer to implementing Agencies 9,483,540.40 257,653,054.21 Payment for training 500,731.05 13,543,141.38 115,259,987.30 3,091,475,860.69 41,952,340.87 1,041,846,521.06 Gain on foreign exchange . 102,890,222.98 Ending balance - 7 July 2018 41,952340.8 1.144,736744.04 I I I I I I I 2