Audited Project Financial Statements

The audited project financial statements are documents owned by the borrower. The views expressed herein do not necessarily represent those of ADB’s Board of Directors, Management, or staff. These documents are made publicly available in accordance with ADB’s Public Communications Policy 2011 and as agreed between ADB, Baise Municipal Government and Baise University.

Project Number: 47009-002 Loan Number: 3215 Period covered: 6 July 2015 to 31 December 2016

People’s Republic of China: Guangxi Baise Vocational Education Development Project

Prepared by the Baise Municipal Government and Baise University

For the Asian Development Bank Date received by ADB: 28 June 2017

+ + K *4"A f 6Ji ik?,# tr F t+ ttAudit Office of Guangxi Zhuang Autonomous Region of the

People's Republic of China

Audit ort

ti H ,l'+R (2017 ) 42 +

GX AUDIT REPORT ( 2OT7 ] NO.42

ry.fl 4 tB: f,.i^\ff k+F-tlfr +kr wH 8 4fl it+tH. kRryflProject Name: Guangxi Baise Vocational Education Development

Project Financed by the Asian Development

Bank

ft. i't, t: 3215-PRC

Loan No. : 3215-PRC

qfl +ilti+1n: H ETiT4ljIA E rFfi'ikryfl r1F4frS4.4X t1-^8.

Project Entity: Leading Group Office for Project Utilized Foreign

Capital of Baise City

AitHt{: 2ors4t A 6a4-2oL64tz B rt n

Accounting Period: July 6,2015-December 3 l, 2016

bE1Ht

E

Contentstl= -'I rlr & ril'q tyrF,glr........ .........1

I. Auditor's Opinion .................3

:. vt++v.hkrt++w.+p1t,i ......... .6

II. Financial Statements and Notes to the Financial Statements.................6

(-),fr++|fi* ........6

i, Balance Sheet ........6

(-)4E+E*. , ........8

ii. Summary of Sources and Uses of Funds by Project Component.....8

( = ) 9i',+tth,t+t"11'H)X,+". ........10

iii. Statement of Implementation of Financing Agreement.................10

( E ) +)XfiKF +R* . .. .. 1r

iv. Special Account Statement....... ........... 11

( E ) \t++W.Rlt1tir.. .. ... . 13

v. Notes to the Financial Statements......... ...............16

r . H it kq, fit t',1 F[.kHiX ..... le

III. Audit Findings and Recommendations. ............22

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H, if; : 86-771-s800259

ftH 86-771-s8 oo2s9

20

I. Auditor's Opinion

Auditor's Opinion

To Leading Group Office for Project Utilized Foreign Capital of Baise

City

We have audited the special purpose financial statements (from page 6

to page 18) of Guangxi Baise Vocational Education Development

Project Financed by the Asian Development Bank, which comprise the

Balance Sheet as of December 37,2016, the Summary of Sources and

Uses of Funds by Project Component, the Statement of Implementation

of Financing Agreement and the Special Account Statement for the

period then ended, and Notes to the Financial Statements.

The Responsibility of Project Entity and the Finance Department ofGuangxi ZhuangAutonomous Region for the Financial Statements

The preparation of the Balance Sheet, the Summary of Sources and Uses

of Funds by Project Component and the Statement of Implementation ofFinancing Agreement is the responsibility of your entity, while the

preparation of the Special Account Statement is the responsibility of the

Finance Departrnent of Guangxi Zhtang Autonomous Region, whichincludes:

i. Preparing and fair presenting the accompanying financial statements inaccordance with Chinese accounting standards and system, and the

requirements of the project loan agreement;

ii. Designing, implementing and maintaining the necessary internal

control to ensure that the financial statements are free from material

misstatement, whether due to fraud or eror.

Auditor' s Responsibilify

Our responsibility is to express an opinion on these financial statements

based on our audit. We conducted our audit in accordance with the

Government Auditing Standards of the People's Republic of China and

International Standards on Auditing. Those standards require that we

comply with ethical requirements and plan and perform the audit toobtain 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 eror. In making those risk assessments, the auditor

considers internal control relevant to the entities' preparation and fairpresentation 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'sintemal control. An audit also includes evaluatingthe appropriateness ofaccounting policies used and the reasonableness of accounting estimates

made by management, as well as evaluating the overall presentation ofthe financial statements.

We believe that the audit evidence we have obtained is appropriate and

sufficient to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements identified in the first paragraph

present fairly, in all material respects, financial position of Guangxi

Baise Vocational Education Development Project Financed by the AsianDevelopment Bank as of December 37, 2016, its financial receipts and

disbursements, the project implementation and the receipts and

disbursements of the special account for the period then ended inaccordance with Chinese accounting standards and system, and the

requirements of the project loan agreement.

Other Matter

We also examined the withdrawal application No.B0001 to No.B0003

and the attached documents submitted to the Asian Development Bank

during the period. In our opinion, those documents comply with the

project loan agreement and can serve as basis for loan withdrawal.

The audit report consists of the Auditor's Opinion and two more parts

hereinafter: Financial Statements and Notes to the Financial Statements,

Audit Findings and Recommendations.

Aud uang Autonomous

Regi

June

lic of China

Address: No. 98, Minzu Avenue, Nanning, Guangxi, P.R. China

Postcode: 530022

Tel.: 86-771-5800259

Fax: 86-771-5800259

The English translation is for the convenience of report users; Please

take the Chinese audit report as the only offrcial version.

:. M+#.tX.M+#*FftltII. Financial Statements and Notes to the Financial Statements

(-) fr.#+'&*i. Balance Sheet

fra+'&tBALANCE SHEET

zorcFnAya(As of December 31, 2016)

4.fl &tfr: friil;t- k&ftft#.f EE-€Hit bk€ kEry.aProject Name: Guangxi Baise Vocational Education Development Project Financed by the Asian Development Bank

ffi#Hln: H6frfti)HErfit#4ar.1F4fr+A'9il1tlAB- Hfi41t: /.R,fi,LLead Offrce for Pro Utilized Fo I of Baise C Unit: R_N4B Yuan

fr + AffiApplication ofFund

lit^Line

No

yfr+tw.

Beginning Balance

W1+W.

Ending Balance

fr#*,8Sources of Fund

11t^LineNo

N4ilW.Beginning Balance

tEx&Endrng Balance

TFF+e r!. /4E XU E ll

Total Project ExpendituresI I 03,803,755 59

-. 4E +h+f.ai+Total Project

Appropriation Funds

28 I 07,082,830 0 l

r t1n&,EhFFixed Assets Transferred

2 1 2,250,807 9 I

-. IEEE+-5rntrfr+LtRProject Capital and CapitalSumlus

29

2'l+&+H4.Ai.tConstruction Expenditures

to be Disposed

3HS;tEIlEfflncluding: Grants

30

3 HHfSfrJnvestmenls Transferred-out

4 =. IFE.ffiffiaitTotal Project Loan

3t 86,538,692 I 5

4 tt+rtEConstrucrion in Progress

5 91.s52,947 68

r rn Elsfri#ffiTotal Project

Investment Loan

32 86.538,692 I s

-. ,e&EP+,in&F,f6fl,.rInvestment Loan Receivable

6(1) Erl-l#ffi

Foreign LoanJJ 86,538,692 l

flf :,&tliEP4fifrl1tt#i.Including: Asian Development

Bank Investment Loan

Receivable

7HH: tr#11trtstR1]lncluding. ADB

34 86,s38,692 I

=. ffi4i85/E+qH'(#HAppropriation of lnvestment

Loan

8(2) EA1S#r(

Domestic Loan35

H*:#'(.1U1ifrfiIncluding :Appropriation ofAsian Development Bank

Investment Loan

92 H1t{#fi

Other Loan36

E. +&i.t

Equipment10

w, Lt*ffi.^+*fr.8#.Appropriation ofInvestrnent Loan

3',7

H*:1*4lEt*t/tft*Including: Equipment Losses

in Suspense

il4H:#AI[1ifr#Including: Asian

Development Bank Loan

JO

r. ,tffiE#ai+Total Cash and Bank

t2 38,122,344 39n. #.!!ffi+fr+

Bond Fund39

t. +R1IEF}'Cash in Bank

l3 38,122,344 39

/\'. f+i+lFElHConstruction Expenditures

to be Offset

40

Hf :tHffiF#*Including: Special Account

l4 34,694,992.68t. lu.l-ttai+

Total Payable41 6.445,558 7i

2 '\#Cash on Hard

l5

4#:&,HIE1ifitFl,E,lncluding: Asian

Development Bank Loan

Interest Payable

42

fr* Co be continued)

i. fi.H&&&taitTotal Prepaid and Receivable

l6 58,155,108 87

ru.{.Jv1f fifiExHfi,Asian Development

Bank Loan

Commitment Fee

Payable

+J

f,H:&&u{ifiilfi1,8,Including: Asian Development

Bank Loan Interest Receivable

17

E.ffilz'{ififiH#AHfrAsian Development

Bank Loan Sewice Fee

Pavahle

44

&&ulifrtfrii$ftAsian Development Bank

Loan Commitment Fee

Receivable

l8 /\. *tfr+itOther Payables

45

&&u.1ifififr#frffiftAsian Development Bank

Loan Service- Fee

Receivable

19tL. Lgith.^fr.+

Appropriatron of Fund46

n. Hhin.+Marketable Securities

20+. EFt{t

Retained Eamings47 14,t27 92

/\. trtEP.+itTotal Fixed Assets

21

trtHErFlAFixed Assets, Cost

22

fil:Hit]TlELess: Accumulated

Depreciation

23

trEfrP}FEFixed Assets, Net

EIEftFiBiEFixed Assets Pending Disposal

25

1+ftjstEtHPtEtFixed Assets Losses in Suspense

26

E#5ffiei+Total Application of Fund

27 200,08r,208 85fr#*il,Eei+

Total Sources ofFund51 200,08r,208 85

(-) 4E+E*ii. Summary of Sources and Uses of Funds by Project Component

4 E + H_ * (-)SUMMARY OF SOURCES AND USES OF FUNDS

BY PROJECT COMPONENT IAH&a zorc 1p A sr a

(For the period ended December 3 1 , ZOrc )

4d Ltt: f,iAft k+R'nfrikf frH &,W"\Lb\H kRq.AProject Name: Guangxi Baise Vocational Education Development Project Financed by the Asian Development Bank

ffil\,H4-v: H6frftlHttrrf/friktrlarff4fr+A.2ilfu-^a- trfiHL-v:,\R,firrLeading Group Office for Project Utilized Foreisn Capital of Baise Unit: RMB Yuan

6HCunent Period

7-tl

Cumulalive

+ffii+tl]anCunent Period

Budget

+HX.EffiCunent Period

Actual

+ffift,tn*,Cunent

Period %

Comoleted

u E HitirlmLife of PAD

Hi+iEI6nCumulative

Actual

Hiti,frrrCumulative

% Completed

fr+*'tF.+itTotal Sources ofFunds

307,830,000 00 )93,621 ,522 16 62 90Vo 641,948,000 00 193,621,s2216 30 16%

trp,n#E{rgrEfitIntemational Financine

132,813,000 00 86,538,692 I 5 65 160k 3 1 0,000,000 00 86,538,692 15 21 92yo

t w.nlfrti+fll1ADB

1 32,8 I 3,000 00 86,538,692 I 5 6s 16% 3 I 0,000,000 00 86,538,692 1 5 21 92Yo

-. man#Counterpart Financing

175,017,000 00 107,082,830 01 6t 18% 331,948,000 00 r 07,082,830 01 3226%

HAjEHAi+ (ti4H A6)Total ApplJcation ofFunds (by

Proiect Component)

307,830,000 00 r 03,803,75s 59 3372% 641,948,000 00 1 03,803,755 59 t6 t1%

r re H4.q)Ufl H,E Aru liF.AUhImproving TVET Qualiry and

CapaciW Development

r l,284,000 00 22,61 I ,400 00

z iH**,fflrtrt3itChengbi New Campus Construction

255,3 l 6,000 00 101,1 14,904 88 39 60% 510,746,700 00 10t,t 14,904 88 19 80%

3 +EaqRuAE0U*f&+HX^r6Promoting T\IET Innovation and

Relevance

2,356,000 00 4,792,600.00

4IfrE*ffiHErSiEEE+Consulting Services for Project

Imolementation Manasement

1 ,798,000 00 467,673 08 2601% 3,s96,000 00 46'7,673 08 r3 01%

s.tr1itlJ,E,trEulfiADB Loan Interest and

Commitment Charges

3,782,000 00 1,229,221 63 32 50% 20,779,300 00 1,229,221 63 5 92%

6.EA€iAtrfl.E,Loan Interest

7,502,000 00 99r,956 00 1322% l 6,864,000.00 991,9s6.00 5 88%

7.T.E|frnfrNon Predictable Fee

25,792,000 00 62,558.000 00

EJ+Difference

89,817,766 57 89,817,766 s7

I &qiffA.1rChange rn Receivables

58,t 55,108 87 5 8, I 55, I 08.87

2 Nfi*k*tL,Change in Payables

-6,445,558 77 -6,44s,ss8;77

3. frfifr#N4tChange in Cash and Bank

38,122,344.39 38,122,344 39

4{uOther

-14,127.92 -14,127 92

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( E ) +trITKPflTiv. Special Account Statement

+HFKP##SPECIAL ACCOUNT STATEMENT

A4l&ezorc+nA3tfl(For the period ended December 31, 2016)

$,fl&tfr: vrir\ftk*eftfritiwFefrHit fr P +RtuLfri: *tr1+w+HtuWflatR,a\abKH KRry.A H?dB',HT{T

Project Name: Guangxi Baise Vocational Depository Bank: Nanning Taoyuan Branch,

Education Development Project Financed by china construction Bank

the Asian Development Bank ,EK ? : a50501604550000000I 6

ftik?: 3215-PRC AccountNo. :45050160455000000016

LoanNo.321s-PRC Hfiffi*: *nffiffiH4n: f@,Li,*.HjetrItrrT currency:USD

Prepared by: The Finance Deparfinent of

Guangxi ZruangAutonomous Region

ll

^*tfi, +ffi+=,HKF{tltEfi

Part A-Account Activity for !he Cunent Period

+. E^

Amount

il+il^ffiBegrnning Balance

000

Htr[Add:

6trtr1iE+t"E.A4Total Amount Deposited tllis Period by Asian Development Bank

12,29'7 ,146 94

+trft,E,qi ,H. hfr (ft ^+

HAKF s[r] )

Total Interest Eamed this Period ifDeposited in Special Account1,470 49

^tr4e+*t Hr:tr,H,an

Total Amount Refunded this Period to Cover lneligible Expenditures

ffiD,Deduct:

+Hi4-t,H.*rTotal AmountWithdrawn this Period

7,297,146 94

+ffi *E+6& t.{n&+ frlEE+ fr n HTotal Service Charges this Period if not Included in Above Amount Withdrawn

30 00

H*AMEnding Balance

5,001,440 49

(frlifo be continued)

B *[,}. €HIKFiEfiPart B-Account Reconciliation

+finAmount

I w11E1^E#t,8ffiAmount Advanced by Asian Development Bank 5,000,000 00

ttf,D,

Deduct:

2 Itrltfrts-+RliE&,#,*n

Total Amount Recovered by Asjan Development Bank

3 +ffi HX€,ffi rM. F E lhH#.1+fi^

Outstanding Amount Advanced to the Special Account at the End ofthis period 5,000,000 00

4 +ffiKFffiXAAFEnding Balance of Special Account 5,00r,440 49

jEXn,

Add:

s &E+ff HX E +i€*ffi.K'lE i{*E+l'+ffiAmount Claimed but not yet Credited at the End of this Period

!1lEtj5

Application No

#$fr

Amount

6 EUE+HH1I E,1,(i1E itrt +iE+E[K#$IAmount Withdrawn but not yet Claimed at the End of thts Period

7 nv+,ffi?;tly.,9t (tuxa# 5.fr 6 Eqtr)Cumulative Sewtce Charges (If not Included in Item 5 or 6)

30 00

Rr),Deducc:

8 f!,E.rtt,\ (# +ffi [Ktr*[r])Interest Eamed (IfIncJuded in Spectal Account)

1,4'70 49

Total Advance to the Special AccountAccounted for at the End ofthis Period5,000,000 00

t2

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15

v. Notes to the Financial Statements

Notes to the Financial Statements

1. Project overview

The Loan No. of Guangxi Baise Vocational Education Development ProjectFinanced by the Asian Development Bank is 3215-PRC. It aims to promotethe economic development of Baise city, enterprise transformation, and createa high quality, flexible and fast-responding multilayer vocational educationsystem that satisff local enterprises'needs through the project implementation.The contents of this project include the engineering of Improving TVETQuality and Capacity Development; Chengbi New Campus Construction;Promoting TVET Innovation and Relevance; Consulting Services for ProjectImplementation Management. The Project Agreement was signed on March19,2015 and came into effect on July 6,2075. The account of the project willbe closed before June 30, 2020. The total investment plan of the project wasRMB641,948,000 yuffi, which the total Asian Development Bank loanamount was USD50,000,000, equivalent to RM8310,000,000 yuan.

2. Consolidation Scope of the Financial Statements

Consolidation scope of the financial statements covers the financial statementsof Project Management Office of Baise City, Baise University and the SpecialAccount set in the Finance Department of Guangxi Zhuang AutonomousRegion.

3. Accounting Policies

3.1 The Financial Statements of the project were prepared according to therequirements of Accounting Methods for the World Bank Financed Project(Caijizi [2000] No. 13).

3.2In accounting practice, the Gregorian calendar year is adopted as the fiscalyear from January 1 to December 31. The accouting period of this project onthis report was from July 6, 2015 to December 31,2016.

3.3 The accrual basis and the debit/credit double entry bookkeeping method

16

are adopted. RMB is used as the recording cuffency of bookkeeping.

3.4 The exchange rate adopted in the financial statements was the exchangerate on December 31, 2016 of the People's Bank of China, which is USDI:RMB6.9370 ytan.

4. Explanation of Subjects

4.1 Total Project expenditures

The project expenditure in 2016 was RMB103,803,755.59 yuffi, and thecumulative expenditures were RMB103,803,755.59 yuan, which accountedfor 16.l7Yo of the total investment plan.

4.2 Cash and Bank

on December 3r, 2016, the balance was RMB38,122,344.39 yuan with anincrease of RMB38,|22,344.39 yuan compared to last year. The funds in theSpecial Account were converted to RMB3 4,694,992.6g yuan.

4.3 Prepaid and Receivable

The balance on December 31, 2016 was RMB58,155,10g.97 yuan, whichincluded mainly the prepaid project payment in engineering, advance paymentof labor insurance premium for construction engineering, and migrantworkers'wage guarantee, and etc.

4.4 Project Appropriation Funds

The balance on December 3r,2016 was RMB107,082,830.01 yuan.The total planned counterpart funds of this project were ru,m::1,94g,000.00yuan. By the end of December 31,2016, RMBro7,og2,g30.01 yuan of thecounterpart funds had been allocated, which accounted for 32.26Yo of theplan.

4.5 Project Loan

The balance on December 31, 2016 was RMB86,538,692.15 ytan, includingthe ADB loan of USDL2,47 4,944.81, equivalent to RMB86,5 3g,692.1 5 yuan.

t7

By the end of December 37, 2016, accumulated uSD12,474,944.81 of theADB loan had been withdrawn, accounting for 24.95% of the total, which thewithdrawal for civil works was rJ5D7,272,149.37, accounting for 19.84% ofthe category plan; the withdrawal for consulting services for projectimplementation management was USD25,597.57, accounting for 4.4I% of thecategory plan; the withdrawal for interest and commitment charges wasUSD177,I97.87, accounting for 5.29% of the category plan; the withdrawalfor imprest fund was USD5,000,000.00.

4.6Payable

The balance on December 3r,2016 was RMB6,445,558.77 ytan, which wasmainly outstanding payable guarantee money of constructions and works.

4.7 Retained Earnings

The balance on December 3r, 2016 was RMBl4,l27.92 yuotr, which wasmainly interest earned of bank deposit.

5. Special Account

The Special Account of this project is set in Nanning TaoyuanBranch, ChinaConstruction Bank, with the account number of 45050160455000000016, andUSD as currency Unit. The initial Deposit of the Special Account wasUSD5,000,000.00. The beginning balance of the period was USD0.00 and thereimbursement in the period was USD12,297,746.94. The interest earned onthis period was USD1 ,470.49 and the disbursement was rJ5D7,297,746.94.Thus, the ending balance was USD5,001 ,440.49.

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