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4 March 2014 | Gokarna Forest Resort, Nepal
Workshop on Results-Based Project Reporting and Auditing: Special Focus on Donor Funded Projects
DAY 4 PROJECT FINANCIAL STATEMENTS
FORMAT AND CONTENT OF PROJECT FINANCIAL STATEMENTS Presenters: RAMU PRASAD DOTEL, OAG, Nepal, SHERAZADE SHAFIQ, FM Specialist, ADB TIMILA SHRESTHA, FM Consultant, WB Moderators: FCGO DAY 4
SESSION 9
2
Objective, Structure, & Output
Objective: To agree on improvements and refinements to the template for project financial statements.
Session Structure:
i. Audit Guidelines Template and Challenges faced (30 mins)
ii. Cash Basis IPSAS disclosure checklist (20 mins) iii. Accrual Basis Accounting Status iv. WB observation and experience in reviewing APFS v. Q & A (15 mins) vi. Group activity
Output: Agreed Changes to PFS template
SESSION 9
3
Cash Basis IPSAS 1 Standard only The ONLY Standards available for Cash Basis Accounting Applies to GPFS GON accounts as a whole Public Sector Entities Not adopted by any country entirely due to
consolidation requirements Extent relevant to Project Financial Statements
Cash receipts, cash payments and cash balances Including amounts settled on Projects behalf
direct payments Financial Charges borne by State Measurable and Allocable expenditure
SESSION 9.b
6
Cash Basis IPSAS Comparative and current year financial information Budget Vs Actual Modified-cash not recognized by IASSB Single Entry or Double Entry? Voluntary narrative disclosure for other items Receivables Payables Advances
SESSION 9.b
7
Cash Basis IPSAS Basis of accounting that recognizes transactions and
other events only when cash is received or paid. Control of cash arises when the entity can use or
otherwise benefit from the cash in pursuit of its objectives and can exclude or regulate the access of others to that benefit.
sources of cash raised during the period With sources and sub classifications
purposes for which cash was used the cash balances at the reporting date
SESSION 9.b
8
Cash Basis IPSAS Notes to the financial statements additional
information liabilities, such as payables and borrowings, non-cash assets, such as receivables,
investments and property, plant and equipment Restrictions on cash balances held Commitments Accounting Policies
Not precluded from adding additional notes or statements
Inappropriate accounting treatment not rectified by disclosure
SESSION 9.b
9
Not recorded!
Only disclosed
Cash Basis IPSAS DISCLOSURE the date when the financial statements were
authorized for issue and who gave that authorization The domicile and legal form of the entity, and the
jurisdiction within which it operate A description of the nature of the entity’s operations
and principal activities Undrawn borrowing facilities that may be available for
future operating activities and to settle capital commitments, indicating any restrictions on the use of these facilities.
The financial statements should be clearly identified and distinguished from other information
SESSION 9.b
10
Cash Basis IPSAS The name of the reporting entity or other means of
identification; Whether the financial statements cover the
individual entity or the economic entity The reporting date or the period covered by the
financial statements The reporting currency; and The level of precision used in the presentation of
figures
SESSION 9.b
11
Cash Basis IPSAS entity should disclose the amount of exchange
differences included as reconciling items between opening and closing cash balances for the period
external assistance debt rescheduled or cancelled during the period
Significant terms and conditions of external assistance loan or grant agreements or guarantees that have not been complied with during the period when non compliance resulted in cancellation of the assistance or has given rise to an obligation to return assistance previously provided.
DP requirement – By output also
SESSION 9.b
12
14
SESSION 9.b Resources Notes Up to FY
2011/12 FY 2012/13 Up to July
15, 2013 Applications Category Notes Up to FY
2011/12 FY 2012/13 As of July
15, 2013
GON Fund II - 278,444 278,444
Equipment 1 I - - -
GON Reimbursable II - - Consultant’s services
2 I 300,000 1,863,494 2,163,494
ADB Grant III - 599,233 599,233
Training 3 I 370,650 - 370,650
Outstanding Replenishment
IV 670,650 985,816 1,656,466
Sub-Total IV 670,650 1,863,494 2,534,144
Sub-Total 670,650 1,863,494 2,534,144
B. Imprest Account B.
Imprest Account Initial Deposit
IV 41,495,000 43,627,200 41,495,000
Imprest Account Balance
IV 43,627,200 41,899,018 41,899,018
Exchange Gain/Loss IV 2,802,850 (742,365) 2,060,484 Outstanding Replenishment
IV 670,650 985,816 1,656,466
Sub-total 44,297,850 42,884,834 43,555,484 Sub-total 44,297,850 42,884,834 43,555,484
Grand Total 44,968,500 44,748,328 46,089,628 44,968,500 44,748,328 46,089,628
ACTUAL PFS - NEPAL
Contra Entry
Receivable (not cash)
15
Notes to Account IV - Statement of Imprest Account
S.N. Particulars Equivalent NR ('000) US$
A Balance in Imprest Account as at [beginning of the current year] 33,059,893.20 597,720.00 (Exchange Rate as on 14/09/2012 1 USD= NR 55.31) Total A 33,059,893.20 597,720.00 B Outstanding Replenishments as of [previous year] - - Total B - - C Add: Disbursements during the year 11,518,539.00 209,888.66 Total C 11,518,539.00 209,888.66 D Less: Replenishment during the year 0 0 Total D 0 0 E Liquidation/ Recovery of Initial Balance 0 0 Total E 0 0 F Outstanding Replenishment as of [end of the current year] 11,518,539.00 209,888.66 Total F 11,518,539.00 209,888.66
G Outstanding Amount of Imprest Account (A-C+D) @ NR 60.12 23,316,420.16 387,831.34 H Initial Deposit as at (original date) 33,059,893.20 I Exchange Gain/Loss (G-H) 1,775,065.96 -
NOTE ON IMPREST - ACTUAL SESSION 9.b
Notes to Account IV - Statement of Imprest Account (Alternate Presentation)
S.N. Particulars Equivalent NR ('000) US$ A Opening Balance of Imprest Account 33,059,893.20 597,720.00
(Exchange Rate as on 14/09/2012 1 USD= BTN 55.31) B Less: Disbursements - Expenditure 11,518,539.00 209,888.66 - To Sub Account 0 0 C Add: Replenishment 0 0
A-B+C = D Closing Balance of Imprest Account (without Exchange Diff) 21,541,354.20 387,831.34 E= F - D Add/Less: Exchange Difference (balancing figure) 1,775,065.96
F Closing Balance of Imprest Account (as per actual bank account) @ 60.12 23,316,420.16 387,831.34
16
SESSION 9.b NOTE ON IMPREST - PROPOSED
17
Notes to Account IV a - Reimbursable from ADB
S.N. Particulars Equivalent NR
('000) US$
A Outstanding Replenishments as of [previous year] - -
Total A
B Add:
Disbursements during the year 11,518,539.00 209,888.66
Total B 11,518,539.00 209,888.66
C Less:
Replenishment during the year
Total C
D Liquidation/ Recovery of Initial Balance
Total D
E Outstanding Replenishment as of [end of the current year] 11,518,539.00 209,888.66
SESSION 9.b NOTE ON IMPREST - PROPOSED
18
Notes to Account IV - Statement of Imprest Account
S.N. Particulars Equivalent NR
('000) US$
A Balance in Imprest Account as at [beginning of the current year] 33,059,893.20 597,720.00
(Exchange Rate as on 14/09/2012 1 USD= NR 55.31) Total A 33,059,893.20 597,720.00 B Outstanding Replenishments as of [previous year] - - Total B - - C Add:
Disbursements during the year 11,518,539.00 209,888.66
Total C 11,518,539.00 209,888.66 D Less: Replenishment during the year 0 0 Total D 0 0 E Liquidation/ Recovery of Initial Balance 0 0 Total E 0 0
F Outstanding Replenishment as of [end of the current year] 11,518,539.00 209,888.66
Total F 11,518,539.00 209,888.66
G Outstanding Amount of Imprest Account (A-C+D) @ NR 60.12 23,316,420.16 387,831.34
H Initial Deposit as at (original date) 33,059,893.20 I Exchange Gain/Loss (G-H) 1,775,065.96 -
NOTE ON IMPREST - ACTUAL SESSION 9.b Notes to Account IV - Statement of Imprest Account (Alternate Presentation)
S.N. Particulars Equivalent NR
('000) US$
A Opening Balance of Imprest Account 33,059,893.20
597,720.00
(Exchange Rate as on 14/09/2012 1 USD= BTN 55.31)
B Less: Disbursements
- Expenditure 11,518,539.00
209,888.66
- To Sub Account 0 0
C Add: Replenishment 0 0
A-B+C = D Closing Balance of Imprest Account (without Exchange Diff) 21,541,354.20
387,831.34
E= F - D Add/Less: Exchange Difference (balancing figure) 1,775,065.96
F Closing Balance of Imprest Account (as per actual bank account) @ 60.12 23,316,420.16
387,831.34
19
Notes to Account IV - Statement of Imprest Account
S.N. Particulars Equivalent NR
('000) US$
A Balance in Imprest Account as at [beginning of the current year] 33,059,893.20 597,720.00
(Exchange Rate as on 14/09/2012 1 USD= NR 55.31) Total A 33,059,893.20 597,720.00 B Outstanding Replenishments as of [previous year] - - Total B - - C Add:
Disbursements during the year 11,518,539.00 209,888.66
Total C 11,518,539.00 209,888.66 D Less: Replenishment during the year 0 0 Total D 0 0 E Liquidation/ Recovery of Initial Balance 0 0 Total E 0 0
F Outstanding Replenishment as of [end of the current year] 11,518,539.00 209,888.66
Total F 11,518,539.00 209,888.66
G Outstanding Amount of Imprest Account (A-C+D) @ NR 60.12 23,316,420.16 387,831.34
H Initial Deposit as at (original date) 33,059,893.20 I Exchange Gain/Loss (G-H) 1,775,065.96 -
Notes to Account IV a - Reimbursable from ADB
S.N. Particulars Equivalent NR
('000) US$
A Outstanding Replenishments as of [previous year] - -
Total A
B Add:
Disbursements during the year 11,518,539.00
209,888.66
Total B 11,518,539.00
209,888.66
C Less:
Replenishment during the year
Total C
D Liquidation/ Recovery of Initial Balance
Total D
E Outstanding Replenishment as of [end of the current year] 11,518,539.00
209,888.66
SESSION 9.b
Breakout Group Discussion Use Nepal PFS and IPSAS template –
laptops Also consider CAG India Template FS Identify differences in groups (15 mins) Share in Plenary (15 mins)
SESSION 9.e
22
Case study Lego Water Supply Project Financial
Statements Participants will prepare a set of PFS using the current Nepal template but free to edit.
Nominate a group leader to present 35 mins
SESSION 9.f
23
Discussion and Presentation Each group will discuss and share:
1. what challenges did they face? 2. what did they do different from the other
groups, 3. what would they suggest, 4. what did they learn from their colleagues; 5. is there anything they would like to see
different in Nepal’s PFS template?
SESSION 9.g
24
Accrual Basis IPSAS No plans by GON as yet Other SAARC countries – Move to Accrual
Bangladesh Bhutan India Sri Lanka Pakistan
Other SAARC countries – No plan to move to accrual Afghanistan Maldives
SESSION 9.b
26
Accrual Basis IPSAS Benefits of Accrual Accounting (Evans, Resource
Accounting and Budgeting in the Government) better measurement of costs and revenues, including
comparisons between years greater focus on outputs rather than inputs more efficient and effective use of resources, eg, through
charges for fixed assets full cost of providing a service can be compared with
outside suppliers a better indication of the sustainability of government
policy improved accountability better financial management and greater comparability of management performance
results.
SESSION 9.b
27
Plenary Discussion Participants will discuss a possible action
plan for future consideration by GON Moderator: Timila, WB Discussants: Dr Asif, SAI Pakistan, Ibrahim
Fazeel, SAI Maldives, Ramu Prasad, OAG Nepal
SESSION 9.i
33