Transcription
Audited Project Financial StatementsProject Number: 50102-002Loan/Grant Number: 3684/0591Period covered: 1 January 2020 to 31 December 2020Cambodia: Second Urban EnvironmentalManagement in the Tonle Sap Basin ProjectPrepared by Ministry of Public Works and TransportFor the Asian Development BankDate received by ADB: 9 June 2021The audited project financial statements are documents owned by the borrower. The views expressedherein do not necessarily represent those of ADB’s Board of Directors, Management, or staff. Thesedocuments are made publicly available in accordance with ADB’s Access to Information Policy and asagreed between ADB and the Ministry of Public Works and Transport.
ROYAL GOVERNMENT OF CAMBODIAMINISTRY OF PUBLIC WORKS AND TRANSPORTSecond Urban Environmental Management in theTonle Sap Basin ProjectADB Loan No. 3684 – CAM (COL) andADB Grant No. 0591 – CAM (EF)Financial Statementsand Statement of Compliancefor the year ended 31 December 2020
Ministry of Public Works and TransportSecond Urban Environmental Management in the Tonle Sap Basin ProjectADB Loan No. 3684 – CAM (COL) and Grant No. 0591 – CAM (EF)ContentsPagePART IFINANCIAL STATEMENTSStatement by the managementReport of the independent auditors2–5Statement of receipts and payments6–7Statement of advance accountNotes to the financial statementsAppendix I: Statement of budget versus actual paymentsPART II18 – 1011 – 30iINDEPENDENT ASSURANCE REPORT ON COMPLIANCEManagement assertion31Independent reasonable assurance report32 – 34Statement of compliance with the financing agreements35 – 38
PART IFinancial Statementsfor the year ended 31 December 2020andReport of the Independent Auditors
Ministry of Public Works and TransportSecond Urban Environmental Management in the Tonle Sap Basin ProjectADB Loan No. 3684 – CAM (COL) and Grant No. 0591 – CAM (EF)Notes to the financial statementsfor the year ended 31 December 2020These notes form an integral part of, and should be read in conjunction with, the accompanyingfinancial statements.1.Background and activitiesThe Second Urban Environmental Management in the Tonle Sap Basin Project (“the Project”)was established under the Loan Agreement No. 3684 - CAM (COL) and Grant Agreement No.0591 - CAM (EF), signed on 24 October 2018 between the Asian Development Bank (“ADB”)and the Royal Government of Cambodia (“RGC”) (represented by the Ministry of Economy andFinance). The Asian Development Bank (“ADB”) finances US 87,730,000 from ADB’s SpecialFund resources.The financing agreements became effective for implementation on 14 December 2018 and theclosing date is expected to be completed on 30 June 2024.The objective of the Project is to improve urban environmental services in Battambang, BunteayMeanchey (Serei Saophoan) and Kompong Thom (Stueng Saen), three of Cambodia’sprovincial cities located around the Tonle Sap lake. The project will also improve institutionaleffectiveness to provide sustainable services and support an improved policy and planningenvironment for wastewater and solid waste management.The Ministry of Public Works and Transport is the Project’s Executing Agency (“EA”) and isresponsible for the overall technical supervision and execution of the Project. The ProjectManagement Unit (“PMU”) was established by MPWT to implement and supervision the Projectactivities.The Project comprises the following components:Component 1: Improvement of urban infrastructure:(a) A new 4,800 m3/d capacity WWT plant at Battambang and about 86.8 km of new sewers;(b) A new 2,500 m3/d capacity WWT plant in Stueng Saen and about 39 km of new sewers;(c) A new 2,500 m3/d capacity WWT plant in Serei Saophoan and about 78 km of new sewers;(d) Two drainage subprojects, a 17.1 km drainage network in Stueng Saen and an 8.5 kmdrainage network in Serei Saophoan;11
Ministry of Public Works and TransportSecond Urban Environmental Management in the Tonle Sap Basin ProjectADB Loan No. 3684 – CAM (COL) and Grant No. 0591 – CAM (EF)Notes to the financial statements (continued)for the year ended 31 December 20201.Background and activities (continued)Component 1: Improvement of urban infrastructure (continued):(e) Three controlled landfills in Stueng Saen (48,000 m3) , Serei Saophoan (130,00 m3), andBattambang (350,000 m3); and(f) Free household latrines for about 760 poor households.Component 2: Improvement of institutional effectiveness:(a) Improving staff capacity in critical urban service delivery areas;(b) Supporting the establishment of urban service units; and(c) Providing dedicated consultant support for project management.Component 3: Improvement of policy and planning environment:(a) Developing urban development strategies and master plans for all three cities;(b) A roadmap for financial sustainability for wastewater and solid waste; and(c) Building community awareness on benefits of proper sanitation, separate sewerage systemsand safe disposal of solid waste.12
Ministry of Public Works and TransportSecond Urban Environmental Management in the Tonle Sap Basin ProjectADB Loan No. 3684 – CAM (COL) and Grant No. 0591 – CAM (EF)Notes to the financial statements (continued)for the year ended 31 December 20201.Background and activities (continued)The table below sets forth the categories of items of expenditure to be financed out of the proceeds of the ADB Loan No. 3684 – CAM (COL), GrantNo. 0591 – CAM (EF) and RGC financing and the allocation of amounts of the Loan and Grant to each such category:ADB LoanNo.ItemAmountAllocatedBasis for Withdrawal(US )66,470,0001Civil works *2Goods and equipment2,370,0003Consulting services5,660,0004Incremental administration costs5Interest charge6Land acquisition 07750,0002,460,000-90.90% of totalexpenditure claimed100% of totalexpenditure claimed**100% of totalexpenditure claimed**100% of totalexpenditure claimed100% of amount dueADB GrantAmountAllocatedBasis forWithdrawal(US )1,270,000RGCAmountAllocated(US )6,770,00074,510,000240,0009.10% of totalexpenditure claimedContribution in kind-Not applicable570,000Contribution in kind6,220,000-Not applicable250,00025% of totalexpenditure claimedNot applicable1,000,000100% of totalexpenditure claimedNot applicable870,000-Not applicable--Not applicable870,000100% of totalexpenditure claimed-Not applicable-1,270,000Subject to upfront full utilization of the grant under Grant Agreement.**Exclusive of taxes and duties imposed within the territory of the borrower.(US )90.90% of totalexpenditure claimedNot applicableNot applicable*TotalBasis 97,690,00013
Ministry of Public Works and TransportSecond Urban Environmental Management in the Tonle Sap Basin ProjectADB Loan No. 3684 – CAM (COL) and Grant No. 0591 – CAM (EF)Notes to the financial statements (continued)for the year ended 31 December 20202.Basis of accounting(a)Statement of complianceThe financial statements have been prepared in accordance with the Cash Basis of Accounting ofCambodian Public Sector Accounting Standards (“CPSAS”). These are the first set of financialstatements prepared in accordance with CPSAS and Part 1 Section 1.8 Effective Date of Part 1and Transitional Provisions has been applied.In the previous financial period, the financial statements were prepared in accordance with amodified cash receipts and disbursements basis of accounting. This is a basis of accounting that isdesigned to meet the requirements of the Project; it is not designed to produce financial statementsthat are compatible with International Financial Reporting Standards.The Project has applied consistently to all periods presented in these financial statements and inpreparing the opening CPSAS statement of receipts and payments and statement of advanceaccount at 14 December 2018 (Project effective date) for the purposes of the transition to CPSAS.The financial statements are prepared for the information of and use by the management of theProject, the Ministry of Economy and Finance (“MEF”) and the Asian Development Bank (“ADB”).As a result, the financial statements may not be suitable for another purpose.An explanation of how the transition to CPSAS has affected the reported statement of receipts andpayments and statement of advance account of the Project is provided in Note 15.(b)Basis of measurementThe financial statements expressed in United States Dollars (US ) have been prepared under thehistorical cost convention.3.Significant accounting policies(a)Fund receipts and paymentsFund receipts are defined as the fund received by the Project from developing partners and RGC.This is recognised when received and recorded as gross amounts of bank charges.Payments represents all costs paid to support the objective of the Project and are recognised whenpaid.14
Ministry of Public Works and TransportSecond Urban Environmental Management in the Tonle Sap Basin ProjectADB Loan No. 3684 – CAM (COL) and Grant No. 0591 – CAM (EF)Notes to the financial statements (continued)for the year ended 31 December 20203.Significant accounting policies (continued)(b)Statement of advance accountThe statement of advance account is prepared in accordance with the Loan and Grant Agreementsand is purely used to receive and disburse for expenditure financed by the ADB loan and grantproceeds.(c)Non-expendable equipmentThe cost of non-expendable equipment is charged to the statement of receipts and payments andstatement of advance account upon acquisition. For control and management purposes, amemorandum account for non-expendable equipment is maintained by way of a non-expendableequipment listing.(d)Interest chargeThe interest charged by the ADB is a direct payment, and accounted for in the statement of receiptsand payments as receipts with corresponding payment category.(e)Foreign currency transactionsThe Project transacts its operations and maintains its accounting records primarily in United StatesDollars (“US ”). Transactions in currencies other than US are converted into US at the rates ofexchange prevailing on the transaction dates published by the National Bank of Cambodia.Cash and bank balances in currencies other than US are translated into US at the open marketrates of exchange at the year/period-end date. All foreign exchange differences are recognised inthe statement of receipts and payments and the statement of advance account.(f)In-kind contributionAll in-kind contribution from the RGC to the Project is not accounted for in the statement of receiptsand payments and statement of advance account. In-kind contribution is disclosed in the note tothe financial statements for information only.15
Ministry of Public Works and TransportSecond Urban Environmental Management in the Tonle Sap Basin ProjectADB Loan No. 3684 – CAM (COL) and Grant No. 0591 – CAM (EF)Notes to the financial statements (continued)for the year ended 31 December 20204.CashCash comprises cash on hand, demand deposits and cash equivalents. Demand deposits andcash equivalents consist of balances with banks.Cash included in the statement of receipts and payments and statement of advance accountcomprise the following amounts:As atAs at31 December 2020 31 December 2019US US Advance account – ADB Loan No. 3684 (*)Advance account – Royal Government of Cambodia (*)193,6778,64280,573202,319104,65924,086(*) These represent bank balances maintained in a separate bank account with the National Bankof Cambodia (“NBC”).16
Ministry of Public Works and TransportSecond Urban Environmental Management in the Tonle Sap Basin ProjectADB Loan No. 3684 – CAM (COL) and Grant No. 0591 – CAM (EF)Notes to the financial statements (continued)for the year ended 31 December 20205.ReceiptsYear ended 31 December 2020ADBDirect payments (*)Advance account (**)RGCDirect payments (*)Advance account (***)(*)Period from14 December 2018 to31 December 2019Cumulativeperiod from14 December 2018 to31 December 2020US US ADB LoanNo. 3684US ADB GrantNo. 0591US US TotalUS Direct payments represent payments made by ADB (RGC) directly to the suppliers upon the request from the Project.(**) The statement of advance account is prepared in accordance with the Loan and Grant Agreements and is purely used to receive and disburse forexpenditure financed by the ADB loan and grant proceeds.(***) This represents advance from the RGC during the year/period.17
Ministry of Public Works and TransportSecond Urban Environmental Management in the Tonle Sap Basin ProjectADB Loan No. 3684 – CAM (COL) and Grant No. 0591 – CAM (EF)Notes to the financial statements (continued)for the year ended 31 December 20206.Civil worksYear ended 31 December 2020ADB LoanNo. 3684US ADB GrantNo. 0591US RGCUS TotalUS Period from14 December 2018 to31 December 2019Cumulativeperiod from14 December 2018 to31 December 2020US US Direct payments:Steung Saen wastewater and drainageBattambang 6,4464,997,730-4,997,73018
Ministry of Public Works and TransportSecond Urban Environmental Management in the Tonle Sap Basin ProjectADB Loan No. 3684 – CAM (COL) and Grant No. 0591 – CAM (EF)Notes to the financial statements (continued)for the year ended 31 December 20207.Goods and equipmentYear ended 31 December 2020ADB LoanNo. 3684US ADB GrantNo. 0591US --RGCUS TotalUS Period from14 December 2018 to31 December 2019Cumulativeperiod from14 December 2018 to31 December 2020US US Direct payment :Vehicles--161,400161,40019
Ministry of Public Works and TransportSecond Urban Environmental Management in the Tonle Sap Basin ProjectADB Loan No. 3684 – CAM (COL) and Grant No. 0591 – CAM (EF)Notes to the financial statements (continued)for the year ended 31 December 20208.Consulting servicesYear ended 31 December 2020ADB LoanNo. 3684US ADBGrantNo. 0591US RGCUS TotalUS Period from14 December 2018 to31 December 2019Cumulativeperiod from14 December 2018 to31 December 2020US US Direct payment:Project implementation 65859,7211,925,486Advance account:Project implementation consultantNational environmental specialistNational resettlement specialistNational project accountant176,4801,065,765--Included in the above payments, there were advance payments to consultants of Nil (2019: US 811,871); out of which no amounts were not liquidated as at31 December 2020 (31 December 2019: US 811,871). Refer to Note 12 for details.20
Ministry of Public Works and TransportSecond Urban Environmental Management in the Tonle Sap Basin ProjectADB Loan No. 3684 – CAM (COL) and Grant No. 0591 – CAM (EF)Notes to the financial statements (continued)for the year ended 31 December 20209.Incremental administrative costsYear ended 31 December 2020ADB LoanNo. 3684US ADB GrantNo. 0591US RGCUS TotalUS Period from14 December 2018 to31 December 2019Cumulativeperiod from14 December 2018 to31 December 2020US US Advance account:Office running costsTravelling costsVehicles operation and maintenanceStaff 491119,52021
Ministry of Public Works and TransportSecond Urban Environmental Management in the Tonle Sap Basin ProjectADB Loan No. 3684 – CAM (COL) and Grant No. 0591 – CAM (EF)Notes to the financial statements (continued)for the year ended 31 December 202010. Statement of disbursementDetails of statement of disbursement from ADB fund are as follows:ADB fund claims during the year/periodDirect paymentsAdvance accountYear ended31 December 2020Period from14 December 2018 to31 December 2019Cumulativeperiod from14 December 2018 to31 December 2020US US US total(A)5,935,1011,123,5007,058,601Total payments made during the year/period(B)6,155,6011,058,8417,214,442Payments made out of Government Counterpart fundPayments incurred in prior year but claimed during the periodPayments not yet claimed during the year/periodInitial advance remains 5,914)(69,427)150,000(349,518)(59,323)253,000Total eligible payments claimed (G A B C D E F)(G)5,935,1011,123,5007,058,60122
Ministry of Public Works and TransportSecond Urban Environmental Management in the Tonle Sap Basin ProjectADB Loan No. 3684 – CAM (COL) and Grant No. 0591 – CAM (EF)Notes to the financial statements (continued)for the year ended 31 December 202011. Payments by category and financiersParticularsADB LoanNo. 3684 – CAM (COL)US %ADB GrantNo. 0591 – CAM (SF)US %US %RGCTotalUS Civil worksConsulting servicesIncremental administrative costsInterest ,76582,02910,077Total payments – for the year ended 31 December 20204,551,997741,270,00020.60333,6045.406,155,601% of total project costs – for the year ended 31 December 20205.19%100%3.83%6.30%% of total project costs – for the period from 14 December2018 to 31 December 20206.38%100%4.02%7.38%23
Ministry of Public Works and TransportSecond Urban Environmental Management in the Tonle Sap Basin ProjectADB Loan No. 3684 – CAM (COL) and Grant No. 0591 – CAM (EF)Notes to the financial statements (continued)for the year ended 31 December 202012. Advance to consultantsDuring the year/period, the Project incurred the following advance transactions:Year ended31 December2020US At beginning of the year/periodAddition for the year/period (*):Consulting servicesLiquidation:Consulting servicesAt end of the year/period (**)(*)Period from14 December 2018 to31 December 2019US 811,871--811,871(811,871)--811,871The advances were recorded as payments in respective payment categories in the statementof receipts and payments upon incurred.(**) This represents unliquidated advances which maintained by way of an advance register bymanagement for monitoring purpose:As at31 December 2020US Consulting services (Note 8)-As at31 December 2019US 811,87124
Ministry of Public Works and TransportSecond Urban Environmental Management in the Tonle Sap Basin ProjectADB Loan No. 3684 – CAM (COL) and Grant No. 0591 – CAM (EF)Notes to the financial statements (continued)for the year ended 31 December 202013. Statement of withdrawalsWithdrawalapplication No.DescriptionADB fundYear ended 31 December 2020ADB Loan No. 3684 – CAM (COL)A0005Direct paymentA0007Direct paymentA0009Direct paymentA0010Direct paymentA0011Direct paymentCapDirect paymentCapDirect paymentA0004ReplenishmentA0006Additional advanceA0008ReplenishmentSub-total (A)ADB Grant No. 0591 – CAM (EF)B0001Direct paymentSub-total (B)Total fund receipts for the year (C A B)Civil worksGoods ativecostsInterestchargeDateCurrencyInitial -Nov-20N/AN/A03-Jul-2002-Oct-2024-Nov-20US US US US US US US US US US US 20US US US 03,0001,270,0001,270,0005,935,10125
Ministry of Public Works and TransportSecond Urban Environmental Management in the Tonle Sap Basin ProjectADB Loan No. 3684 – CAM (COL) and Grant No. 0591 – CAM (EF)Notes to the financial statements (continued)for the year ended 31 December 202014. Items not recognised in the statement of receipts and payments14.1. Income from selling bid documentsDuring the year, the Project sold bid documents on behalf of the National Treasury Departments(“NTD”) as follow:Year ended31 December2020US ReceiptTransferred to NTD (*)(*)Period from14 December 2018 to31 December 2019US 6,900(6,900)-Cumulativeperiod from14 December 2018 to31 December 2020US 6,900(6,900)The Project transferred cash receipt to NTD amounting to US 6,900 on 27 November 2020.14.2. In-kind contributionThe Project’s management has identified and calculated in-kind contribution from the RGC to theProject based on the MEF’s guideline as follows:Year ended31 December2020US Salaries of project staffOffice spaceUtilitiesTaxationVATWithholding taxCumulativePeriod fromperiod from14 December 2018 to 14 December 2018 to31 December 201931 December 2020US US 88487,49227
Ministry of Public Works and TransportSecond Urban Environmental Management in the Tonle Sap Basin ProjectADB Loan No. 3684 – CAM (COL) and Grant No. 0591 – CAM (EF)Notes to the financial statements (continued)for the year ended 31 December 202014. Items not recognised in the statement of receipts and payments(continued)14.3. Payment commitmentsAs at 31 December 2020, the Project had the following payment commitments:As at31 December 2020US Contracted, but not yet paid:Civil worksConsulting servicesAs at31 December 2019US 29,481,8013,687,6874,552,75233,169,4884,552,75215. Explanation of transition to CPSASAs stated in Note 2, these are the Project’s first set of financial statements prepared in accordancewith CPSAS.The accounting policies set out in Note 3 have been applied in preparing the financial statementsfor the year ended 31 December 2020 and the comparative information presented in thesefinancial statements for the period from 14 December 2018 to 31 December 2019.In preparing its opening CPSAS statement of receipts and payments and statement of advanceaccount, the Project has adjusted amounts reported previously in financial statements prepared inaccordance with modified cash receipts and disbursement basis (“Previous GAAP”) relating to thepreparation of the financial statements.Reconciliation of cashThe following reconciliation summarise the impacts on initial application of CPSAS on the Project’sfinancial position as at 31 December 2019 and the Project’s statement of receipts and paymentsand statement of advance account for the period from 14 December 2018 to 31 December 2019.28
Audited Project Financial StatementsProject Number: 50102-002Loan/Grant Number: 3684/0591Period covered: 1 January 2020 to 31 December 2020Cambodia: Second Urban EnvironmentalManagement in the Tonle Sap Basin ProjectPrepared by Ministry of Public Works and TransportFor the Asian Development BankDate received by ADB: 9 June 2021The audited project financial statements are documents owned by the borrower. The views expressedherein do not necessarily represent those of ADB’s Board of Directors, Management, or staff. Thesedocuments are made publicly available in accordance with ADB’s Access to Information Policy and asagreed between ADB and the Ministry of Public Works and Transport.
Ministry of Public Works and TransportSecond Urban Environmental Management in the Tonle Sap Basin ProjectADB Loan No. 3684 – CAM (COL) and Grant No. 0591 – CAM (EF)Notes to the financial statements (continued)for the year ended 31 December 202015. Explanation of transition to CPSAS (continued)Reconciliation of cash (continued)31 December 2019PreviousGAAPUS Current assetsCash at banksAdvancesAEffect of transitionto CPSASUS CPSASUS ,659Reconciliation of statement of receipts and payments for the period from 14 December 2018to 31 December 2019Period from 14 December 2018 to 31 December 2019PreviousGAAPUS Effect of transitionto CPSASUS CPSASUS ReceiptsAsian Development BankRoyal Government of 104,659Payments by category and financierGoods and equipmentConsulting servicesIncremental administrative costsInterest chargeChange in cashA29
Ministry of Public Works and TransportSecond Urban Environmental Management in the Tonle Sap Basin ProjectADB Loan No. 3684 – CAM (COL) and Grant No. 0591 – CAM (EF)Notes to the financial statements (continued)for the year ended 31 December 202015. Explanation of transition to CPSAS (continued)Reconciliation of statement of advance account for the period from 14 December 2018 to31 December 2019Period from 14 December 2018 to 31 December 2019PreviousGAAPUS Effect of transitionto CPSASUS CPSASUS ReceiptsAsian Development Bank150,000-150,000Consulting servicesIncremental administrative costs47,85021,577-47,85021,577Increase in cash69,42780,573-69,42780,573Payments by category and financiersA.Restatement of advancesUnder previous GAAP, the expenditure is recognised when payments are made rather than whenit is incurred, except for the advanced payments made to suppliers/staff that are initially recognisedas a receivable and only recognised as expenditure when they have been liquidated by supportinginvoices.On adoption of CPSAS, the payments increased by US 811,871 and advances decreased byUS 811,871.Period from14 December 2018 to31 December 2019US Statement of receipts and paymentsIncrease in consulting services811,871Adjustment to change in cash811,871Represented by:Decrease in advances811,87130
Second Urban Environmental Management in the Tonle Sap Basin Project ADB Loan No. 3684 - CAM (COL) and Grant No. 0591 - CAM (EF) Notes to the f inancial statements (continued) for the year ended 31 December 2020 16 4. Cash Cash comprises cash on hand, demand deposits and cash equivalents. Demand deposits and
