Republic of Sudan

Federal Ministry of Education -La Y 1 ,9Global Partnershp For Education(GPE) 6.... 6.Wl

Basic Education Recovery Project (BERP)

Republic of Sudan

Federal Ministry of Education

Grant Agreement No : TF 013351

BASIC EDUCATION RECOVERY PROJECT (BERP)

Audit Report

For the Year ended

31 st December, 2016

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Table of Content

Statem ent of M anagem ent's Responsibility..................................s-i....................................... .2

A cro ny ms...................... ........................................................................... s.................. - 3

Statements of receipts & payments for the period from 1 January 2016to 31 December 2016...4

Statem ent of Fund Balances as at Decem ber,31, 2016................................................................5

Euro Special A ccount Statem ent................................................................................................6

N ote (1) Project backg ro u nd ............................................. ........................................................co7

N ote (2) significant acco unting policies......................................................................................7

N ote (3) R eceipts.......................................ept........ ......................................................... g

(a) Receipts from the Global Partnership for Education (GPE) ........................... 8

(b) Receipts from the Ministry of Finance and National Economy (MFNE) ......... 9

N ote (4) C o m po ne nt o ne .............................................................. ............. ....... I... .......... .10

N ote (5) Com po nent tw o ........................................................................................................ 10

N ote (6 ) C o m po ne nt th ree ...................................................................................................... 11

N ote (6-1) O p eration Cost details.................................................................................11

Note (7) Foreign exchange G ain / Loss......................... ...................................................... 12

Note (8) Banks and cash balances as at 31/12/2016..............................................12

N ote (9) Euro closing Balance...............................,..............................................................13

N o te (1 0) Receivable (L/C M argin)........................................................................................13

N o te (1 1) Ta x a tio n .....................................................n.................................................... 13

1

Statement of Management's Responsibility

Management accepts responsibility for the financial statements, set out onpages (5) to (12), which have been prepared using appropriate accounting,policies supported by reasonable and prudent judgments and estimates.Management is of the opinion that the financial statements give a true andfair view of the state of the financial affairs of the Basic Education RecoveryProject (BERP) and that they are in accordance with the Project accountingguidelines. Management further accepts responsibility for the maintenanceof the accounting records that may be relied upon in the preparation of thefinancial statements, as well as adequate systems of internal financialcontrol.

Hashim Hamza Alhassan Hayder brahim Saeed

Project Manager Senior Financial Officer

2

Acronyms

BERP Basic Education Recovery Project

DA Designated Account

ECG Education Coordination Group

EMIS Education management information system

ESSP Education Sector Strategic Plan

FA Financial Agreement

FM Financial management

FMoE Federal Ministry of Education

FSA Fiduciary Support Agent

GA Grant agreement

GoS Government of Sudan

GPE Global Partnership for Education Fund

IFR Interim Financial Reports

LUC Local unit cost

M&E Monitoring and evaluation

MoFNE Ministry of Finance and National Economy

NCCER National Center for Curriculum and Educational Research

NGO Non-governmental organizations

NLA National learning assessment

NSCS National School Construction Strategy

OM Operational Manual

PlU Project Implementation Unit

PM Project manager of the BERP

PSC Project Steering Committee

3

Republic of the SudanNational Audit ChamberP.0 Box: 91- Khartoum

Tel: 83 778231 -778232 -771566

Date.J/q1/ 2017

To: manager project.Basic Education Recovery Project (BERP)

Subject: Audit Report for the year ended 31.Decmber 2016

Dear Sir,

I am pleased to send you the original audit report regarding theabove mentioned programme for the year ended December 31,2016, and four copies thereof You are kindly requested to forwardthe four copies of the report to (BERP) World Bank Grant NO: TF013351 and retain the originals for your records.It is also imperative that you carefully consider and follow-up theaudit findings and observations and ensure implementation of theaudit recommendations.

Thank you for your anticipated cooperation.

Yours sincerel

Mohamed Elhafiz Nasr Mohamed NasrActing Auditor General

Republic of Sudan

Independent Auditor's ReportTO: Basic Education Recovery Project

Grant No: TF 13351

OpinionWe have audited the accompanying financial statements of Basic EducationRecovery Project (BERP) World Bank Grant No: TF 13351, which comprise thestatement of fund balances as at December 31st, 2016, statement of sources anduses of funds for the year ended December 31st, 2016, statement of specialaccount as at December 3 1st, 2016, and a summary of significant accountingpolicies and other explanatory information,In our opinion, the financial statements of Basic Education Recovery Project, as atDecember 3 1st, 2016, are prepared in all material respects, in accordance with thecash receipts and disbursements basis of accounting.Basis for OpinionWe conducted our audit in accordance with International Standards on Auditing(ISAs). Our responsibilities under those standards are further described in theAuditors Responsibilities for the Audit of the Financial Statements section of ourreport. We are independent of the project in accordance with the InternationalEthics Standards Board for Accountants' Code of Ethics for professionalAccountants (IESBA), and we have fulfilled our other responsibilities in accordancewith these requirements. We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our opinion.Responsibilities of Management and Those Charged with Governance for theFinancial StatementsManagement is responsible for the preparation of these financial statements inaccordance with the cash receipts and disbursements basis of accounting asmodified by the recognition of receivables and payables, and for such internalcontrol system as management determines is necessary to enable the preparationof financial statements that are free from material misstatement, whether due tofraud or error,Those charged with governance are responsible for overseeing the project'sfinancial reporting process.Auditor's Responsibilities for the Audit of the Financial Statements.Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement, whether due to fraud orerror and to issue an auditor's report that includes our opinion. Reasonableassurance is a high level of assurance, but is not a guarantee that an auditconducted in accordance with ISAs will always detect a material misstatementwhen it exists. Misstatement can arise from fraud or error and are consideredmaterial if, individually or in the aggregate, they could reasonably be expected toinfluence the economic decisions of users taken on the basis of these financialstatements.As part of an audit in accordance with ISAs we exercise professional judgment andmaintain professional skepticism throughout the planning and performance of theaudit we also:

Tel. +249183-775170 / 779936 Fax. +249183-775340 E-mail. info@auditgov.sd

Independent Auditor's ReportTO: Basic Education Recovery Project

Grant No :TF 13351

* Identify and assess the risks of material misstatements of the financial statement, whether due to fraud or error, design and perform audit procedures responsiveto those risks , and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a materialmisstatements resulting from fraud is higher than for one resulting from error, asfraud may involve collusion, forgery intentional omissions, misrepresentations, orthe override of internal control.

* Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances.

" Evaluate the appropriateness of accounting polices used and thereasonableness of accounting estimates and related disclosures made bymanagement.

We communicate with those charged with governance regarding, among othermatters, the planned scope and timing of the audit and significant audit findings,including any significant deficiencies in internal control that we identify during ouraudit.

EltahirAbd-Elghayoum IbrahimAUDITOR GENERALREPUBLIC OF SUDAN

Khartoum onli/61201720/9/1438

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Grant Agreement No. TF 013351

Euro Special Account Statement as at 31/Dec/2016

Account No: 014-6918-3910-002Depository Bank: BANK OF SUDANGrant Agreement: TF 013351Currency: EURO

NOTE 2016 2015

Opening balance at I January 2016 2,187,212 864,517.34

Add:Total amount received frorn IDA 17,728,147.16 17,622,744.66

Funds available during the year 19,915,359.16 18,487,262

Less:Transfers to I-,C Account during theperiod 19,252,164.68 16,300,000Bank charges 0.00 50Other Payments 0.00 0.00

Total payments 19,252,164.68 16,300,050

Closing balance at 31 December 2016 663,194.48 2,187,212

Hashim Hamza Alhassan Hayder Ibrahim Sead

Project Manager Senior Financial Officer

6

Note (1) Project background

The Government of Sudan has received financing from the GlobalPartnership for Education Fund (GPE) to be administered by the WorldBank toward the cost of the Sudan Basic Education Recovery Project(BERP),

The Government of Sudan has signed a Grant Agreement with GlobalPartnership for Education Fund (GPE) on 11 April 2013.

The grant is implemented by Federal Ministry of Education and managed byWorld Bank.

Note (2) significant accounting policies

The principal accounting policies adopted in the preparation of thesefinancial statements are set out below:

The financial statements are prepared under the historical cost convention.

The financial statements have been prepared on a cash basis of accountingas modified by the recognition as receivables and payables. These financialstatements are therefore not intended to be presented in conformity withInternational Financial Reporting Standards.

Receipts are recognized as income in the Project financial statements in theperiod in which they are received.

Payments are recognized in the Project financial statements in the period inwhich it is paid rather than incurred.

Transactions denominated in foreign currency are translated into SudanesePounds at the rates ruling on the date of the transaction. Bank balances onthe Euro account in the Central Bank of Sudan were re-translated at the

7

period end using a closing rate of SDG 6.655 to Euro 1.Exchange differenceis dealt with in the statement of Receipts and Payments.

The Reporting Currency is Sudanese GENAIH (SDG)

Note (3) Receipts

These are amounts from WB, the Administrator of the GPE fund, depositedin the Special Account, and/or directly paid to providers of goods andservices. The amounts are received in Euro and translated to SudanesePounds (SDG) at rates ruling on the dates of receipt. The receipts duringthe year were reconciled to the amounts as disbursed to the project andcomprised the following amounts.

Date WA No Amount Euro Direct Payment Total SDG

15/02/2016 30 3,151,314.73 21,491021.06

26-Feb-16 26 265.664.10 1,764,940.79

26-Feb-16 26 404,720.92 2,688,765.44

26-Feb-16 26 431,386.72 2,865,919.8526-Feb- 16 26 602,758.02 4,004,425.9126-Feb-16 26 464,828.10 3,088,087.8305-May-16 33 200,010.72 1,402,828.2003-Jun-16 24 271,169.73 1,831,129.84

01-Jul-16 31 3,040,218.74 20,365,547.51

26-Jul-16 34 2,574,285.57 17,181,708.63

11-Aug-16 35 2,862,939.52 19,309,210.1315-Seb-16 37 1,718,004.66 11,545,575.46

13-Nov-16 39 838,656.66 5,566,545.83

01-Dec-16 40 3,138,924.31 20,131.820.64

06-Dec-16 41 403,782.97 2,598,498.90Sub-total 17,728,152.16 2,640,538.31 135,732,767.13

8

These relate to the Government of Sudan (GoS) counterpart fundingdeposited on the local currency (Sudanese Pounds) account with theCentral Bank of Sudan, and other cash contributions which represent cashamounts received from bidding documents sales in PIU & Clusters.

# Month MoFNE Other Total

I 03-Feb-16 158,333.002 11 -Feb-16 918,000.00

3 14-Mar-16 158 333 .304 15-May-16 1,2240000

5 17-May-16 158,333.00

6 02-Jun-16 158,333.307 17-Jui-16 158,333-308 12-Oct-16 158,333.30

9 12-Oct-16 158,333.3010 21-Oct-16 918,000,00

Total Fund Received 41d 32A0

9

Note (4J Component one

This shows the details for the subcomponent payments according to thedonors share stated in the grant agreement for the BERP Project.

Component PIU Total 2018 2015Classroom Construction 32,051,668.24 32,051,668.24 61,701,875.59

Community based 51,156,353.93 51,156,353.93 29,921,094.65Classroom ConstructionSub-total 83,208,022.17 83,208,022.17 91,622,970.24School Grants Program 25,560,273.22 25,560,273.22 4,338,000

Sub-total 25,560,273.22 25,560,273.22 4,338,000

Grand Total 108,768,295.3 108,768,295.39 95,960,970.249

Note (5) Component two

This shows the details for sub-components cost according to the donorsshare stated in the grant agreement for the BERP Project.

# Component PIU Total 2016 2015Textbook availability 23,007,514.49 23,007,514.49 3,711,997.85Training & Workshop 2,474,954-97 2,474,954.97 36,444Consultancy 6,000,00 6,000,00 503,349.44

Sub-total 25,488,469.46 25,488,469.46 4,251,791.29

10

ot (6) 'Componen t Three

This shows the details for five sub-components cost according to thedonors share stated in the grant agreement for the BERP Project.

Component Note GPE Gos Total 2016 Total 201National Learning Assessment 742,212 0,00 742,212 3,571,092.50Teacher Management & Monitoring System 52,160 2,000 54,160.00 731,313.16Education Management Information System 1,021,772 0.00 1,021,772 164,268.50Education Sector Strategic Plan 913,248.82 0,00 913,248.82 165,481Management & Operation Cost (6-1) 5,036,993.83 1,108,651 90 6,145,645.73 10,479,903.45Total 7,766,386.65 1,110,651.90 3,877,038.55 15,112,058.61

This shows the detailed operational cost as incurred for the reported period.

Stationeries 68,052Communication Cost 77,021Fuel &Lubricants Oil 176,084Water &Electricity Bills 2,814Travel& Transportation Cost 557,628.27Administrative Cost 630,041.42Bank Chargs 42,400,11Basic Salaries 2,800,525Supporting Staff Incentives 1,304,881.90Advertisement 103,266.33Social Insurance 120,473.71Insurance 104,097Vehicle Maintenance 158,360.99

6145645.73

This refers to amounts paid by GoS to cover GPE share of expenditures and

Reimbursed in 2016.

11

(n f ( HI "J~in

This relates to the difference arising on the revaluation of funds maintainedin SDG as Incentives resulting for new regulation from bank of Sudan

Bank balances refer to reconciled cash book balances for accounts in theproject bank accounts. These are as follows:

Bank Name Bank Account No Branch Amount SDGBank of Khartoum 1586055 Khartoum 56,645,024.79Bank of Sudan 014-6919-3190-001 Khartoum 2,561,257.90Bank of Sudan Kassala 42,578.40Bank of Khartoum Sinnar 16,239.70

Sub-total 59,265,100.79

PIU Cash Account 0.00Kassala Cash Account 0.00Sinnar Cash Account 0.00

sub-total 0.00

Total Fund Available 59,265,100.79

12

Note (9) Euro closing Balance

Dec EURO SDG

Closing Balance at 31/12/2016 663,194.48 4,413,559.26

The exchange rate used is SDG 6.655 to Euro 1

Note (10) Receivable (L/C Margin)

Total L/C Amount = 1,800,010.25 Euro

L/C Payment = 403,782.97 Euro

Blocked Amount Balance = 1,396,227.28 Euro

EURO SDG

LIC Margin Balance in 31/12/2016 1,396,227.28 9,291,892.50

Note (11) Taxation

As the project implemented by GoS is exempted from paying incomes taxeson surplus fund, all other necessary taxes are paid from GPE contribution.

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