Public Disclosure Authorized - documents.worldbank.orgdocuments.worldbank.org/curated/en/... · khammouane development project (kdp) funded by the international development association

KHAMMOUANE DEVELOPMENT PROJECT (KDP)FUNDED BY THE INTERNATIONAL DEVELOPMENTASSOCIATION UNDER DEVELOPMENT PROJECT NO.P087716 (ORIGINAL FINANCING) - FINANCINGAGREEMENT GRANT NO. IDA H404 - LA AND PROJECTNO. 127176 (ADDITIONAL FINANCING) - FINANCINGAGREEMENT GRANT NO. IDA H756 -- LA

FINANCIAL STATEMENTS

FOR.THE YEAR ENDED 30 SEPTEMBER 2014

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KHAMMOUANE DEVELOPMENT PROJECT (KDP)FUNDED BY THE INTERNATIONAL DEVELOPMENT ASSOCIATION UNDERDEVELOPMENT PROJECT NO. P087716 (ORIGINAL FINANCING) - FINANCINGAGREEMENT GRANT NO. IDA H404 - LA AND PROJECT NO. 127176 (ADDITIONALFINANCING) - FINANCING AGREEMENT GRANT NO. IDA 11756 - LA


FOR THE YEAR ENDED 30 SEPTEMBER 2014

KHAMMOUANE DEVELOPMENT PROJECT (KDP)FUNDED BY THE INTERNATIONAL DEVELOPMENT ASSOCIATION UNDERDEVELOPMENT PROJECT NO. P087716 (ORIGINAL FINANCING) - FINANCINGAGREEMENT GRANT NO. IDA H404 - LA AND PROJECT NO. 127176 (ADDITIONALFINANCING) - FINANCING AGREEMENT GRANT NO. IDA H766 - LA


FOR THE YEAR ENDED 30 SEPTEMBER 2014

CONTENTS Page(s)

Statement by the Project management 1-3

Independent auditor's report on the financial statements 4-5

Statement of cash receipts and disbursements 6

Statement of fund balance 7

Statement of designated bank account reconciliation 8

Notes to the financial statements 9 - 24

KHAMMOUANE DEVELOPMENT PROJECT (KDP)FUNDED BY THE INTERNATIONAL DEVELOPMENT ASSOCIATION UNDER DEVELOPMENTPROJECT NO. P087716 (ORIGINAL FINANCING) - FINANCING AGREEMENT GRANT NO. IDAH404 - LA AND PROJECT NO. 127176 (ADDITIONAL FINANCING) - FINANCING AGREEMENTGRANT NO. IDA H756 - LA

STATEMENT BY THE PROJECT MANAGEMENT

Khammouane Development Project (KDP/the Project) is highly complementary to Nam Theun 2 (NT2)related activities, which are underwritten by a major commitment on the part of the Government of LaoPeople's Democratic Republic (PDR) and the International Development Association (IDA). With itsstrong emphasis on capacity building and complementary investments, the proposed Project wouldensure that NT2 upstream and downstream compensatory activities are followed up by measures thatenhance institutional sustainability and establish a provincial level public sector framework that is able todeliver the quality goods and services in the long term. The Project moreover, will provide opportunities-beyond those already envisaged- to profit from the downstream irrigation potentially generated by theNT2 facility.

Considerable experience of building capacity in variety of areas across the country has brought amore systematic and cross-cutting approach to building capacity at the provincial level. These areasinclude bottom-up planning systems, linking planning and budgeting processes, strengthening publicfinancial management, improving the investment climate and strengthening the monitoring andevaluation systems.

The Project will make substantial contribution to: (i) sustaining the growth, (ii) improving socialoutcome, (iii) strategic approach to capacity development and partnership, and (iv) supporting NT2implementation.

The Project is financed by an International Development Association (the Association) Grant ofSpecial Drawing Rights (SDR) 5,600,000 (USD 9,000,000 equivalent) signed on 25 July 2008 underfinancing agreement for grant no. IDA HA404-LA (the financing agreement).

It was agreed that Khammouane Province would contribute in cash equivalent up to USD 504,000towards the District Development Fund (DDF) and Provincial Development Fund (PDF) funding,corresponding to approximate 10% of the total expected value of DDF / PDF -financed investments.

Khammouane Province has received an Additional Financing (AF)under grant number H756-LAamounting to USD8.5 million. The additional grant would mainly finance the costs associated withscaling up the original project to enhance impact. The AF would provide additional allocation for: (a)the District Development Fund (DDF) under Component 1 to develop rural infrastructure for poorerdistricts and facilitate post-disaster reconstruction for rural infrastructure damaged by the recentTyphoon NokTen; (b) rehabilitation of additional irrigation schemes along the Xe Bang Fai (XBF)River under Component 2; and (c) a new Component 3 to provide rural livelihood assistance forpoorest villages. This new component (which would scale-up activities originally implemented underComponent 1) is dedicated to rural livelihoods and agricultural development activities and expandscoverage of the poorest villages. To facilitate implementation and expand capacity building,responding to the request of the province, responsibility for Component 3 would be assigned to theProvincial Agricultural and Forestry Office (PAFO) and the District Agricultural and Forestry Offices(DAFOs).

The KDP AF has become effective on 4 April 2012, and the duration of the implementation period isuntil 31 March 2016. The project closure date will be on 31 March 2016

The Project consists of three components as below:

Component 1: Local Development and Provincial Capacity Building, which would mainly supportthe public investment through the District Development Fund (DDF) and the ProvincialDevelopment Fund (PDF) facilities, and provides technical training for the various departments ofthe provinces; and

Component 2: Support for irrigation development along Nam Theun 2 (NT2) downstream channeland lower Xe Bang Fai (XFB), which would mainly support the development of irrigation facilitiesutilizing the discharge water from the NT2 hydropower station.

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STATEMENT BY THE PROJECT MANAGEMENT (Continued)

Component 3

The new component, Component 3 is established to strengthen capacity of PAFO and its districtoffices, DAFOs to provide effective livelihood support and extension services for local communitiesand farmers. The Component 3 is also tailored to assist PAFO/DAFOs to take over livelihoodachievements initiated. by Namtheun 2 Downstream Program (NT2 DSP) in 5 districts' along XeBang Fai river, and to expand Xe Bang Fai extension center and Agriculture Livelihood Grant (ALG)activities initiated under the original KDP.

The Project components performances for the year ended 30 September 2014 are as follow:

Component 1:

i) Baseline surveys were conducted in relation to rural infrastructure needs carried out by thedistricts as a basis to implement the DDF;

ii) Around 50 percent completion of civil works in the three initial districts financed by DDF and theadvanced preparation work underway for the remaining six districts which were all beingmanaged by the Districts;

iii) Improvements in project administration, particularly financial management and procurement;iv) Progress in developing and moving forward the Provincial Development Fund (PDF) and the

capacity building activities for DPI and DOF including completion of a comprehensive capacityneeds assessment at provincial and district levels.

v) The ALG livelihood support activities was transferred and managed by PAFO to implement itsactivities in an efficient and accountable manner and scaling up and expansion of the ALGactivities to other poorest villages.

Component 2:

The Component 2 contributed to:

i) rehabilitation of existing irrigation facilities in ThaThot village, Gnommalat district;ii) support for pilot downstream irrigation development in the ThaThot area;iii) strategic investment plan for irrigation development along the NT2 downstream channel;iv) rehabilitation and institutional strengthening of small scale pumped irrigation schemes along

lower Xebangfai, and v) component management.

In the reporting period the Component 2 has made achievements in implementing the plannedactivities under its five sub-components mentioned above. The Rehabilitation of ThaThot IrrigationScheme is on track, Feasibility Study and Preparation of Strategic Investment Plan for DownstreamIrrigation Development is underway, Rehabilitation and Institutional Strengthening of Small ScalePump Irrigation Schemes along Lower Xebangfai is going well, and KDP Safeguard policies andguidelines has effectively been applied to the implementation of all Civil Works.

The Component 2 continued to strengthen the capacity and effectiveness of DAFO and PAFO staffthrough a capacity building program to ensure effective implementation of Component 2.

Component 3

The initial assessment of the progress of the newly established C3 under the KDP AF, includes itsaccomplishment in component management unit that started carrying out a range of preparatoryactivities including consultant mobilization and baseline survey.

Ngommalath, Mahaxay, Xe Bang Fai, Nongbok and also Xaybouly in Savannakhet

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STATEMENT BY THE PROJECT MANAGEMENT (Continued)

There are 33 proposed additional villages to be supported by the ALG under the KDP AF needs tobe revised and discussed with other organizations providing similar assistance) to ensure that thepoor villages and households are better targeted and villages are not overlapping with those to becovered by the other projects. The ALG implementation would be intensified in the first 27 villagessupported through the original KDP since there are still many more poor households which have notreceived livelihood support.

The Project maintains its records and prepares its financial statements in accordance with the cashreceipts and disbursements basis of accounting for the Project. Any direct payments made byfinanciers for the Project expenditures are recorded by the Project at the time they take place.

The financial statements are the responsibility of the Project management. The followings are thecomponents of financial statements:

* Statement of cash receipts and disbursements* Statement of fund balanceo Statement of designated bank account reconciliation" Notes to the financial statements

As the responsible officials, we do hereby state that the financial statements, to the best of ourknowledge and belief:

- have been prepared in accordance with IDA's financing requirements for grant No. IDA H404-LAand IDA H756 - LA; and

- are prepared, in all material respects, in accordance with the basis of accounting set out in Note 2.

We also hereby state that the statement of disbursements only includes costs which are eligible forfinancing under IDA Financing Agreement No. IDA- H404 - LA and IDA- H756 - LA and adequatesupporting documentation has been maintained for these costs.

On behalf of the Project:

Mr. Phousana Xaykosy Mr. Khamhou Phanthavong Mr.Dethsackda ManikhamComponent 1 Manager, KDP Component 2 Manager, KDP Component 3 Manager, KDPDate: 27 March 2015 Date: 27 March 2015 Date: 27 March 2015

Mr.SoukVathllitthichackProject Director, KDP

Date: 27 March 2015

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Indepeiideiit auditor's report on the financial statements

To ie Management of Khanunouane Development Project and theInternational Development Association ('tle Association'/ 'the World Bank')

We have audited the accompanying financial statements of the Khammouane DevelopmentProject ('the Project') for grant agreement number IDA-H404-LA and IDA-H756 - LA(financing agreements), which comprise the statement of cash receipts and disbursements,statement of fund balance, and statement of designated bank account reconciliation for theyear ended and as at 30 September 2014, and a summary of significant accounting policiesand other explanatory information. The financial statements have been prepared bymanagement of the Project in accordance with the accounting policies described in Note 2 tothe financial statements.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements in accordancewith the accounting policies described in Note 2 to the financial statements and for suchinternal control as management determines is necessary to enable the preparation offinancial 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. Thosestandards require that we comply with ethical requirements and plan and perform the auditto obtain reasonable assurance about whether the financial statements are free from materialmisstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements, The procedures selected depend on the auditor'sjudgment, including the assessment of the risks of material misstatement of the financialstatements, whether due to fraud or error. In maldng those risk assessments, the auditorconsiders internal control relevant to the entity's preparation of the financial statements inorder to design audit procedures that are appropriate in the circumstances, but not for thepurpose of expressing an opinion on the effectiveness of the entity's internal control. An auditalso includes evaluating the appropriateness of accounting policies used and thereasonableness of accounting estimates made by management, as well as evaluating theoverall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit opinion.

PrircetvaterhouseCoopers (Loo) Co., Ltd., 40 Floor, ANZ Vientiane Conunercial Building, 33 Lane Xang Avenue,PO Box 7oo3, Telephone: + 856 21 222718-9, Facsimile: +856 21222723, liLpVutjCoit

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Opinion

In our opinion, the financial statements of the Project for grant number IDA-H4o4-LA andIDA-H756 - LA as at and for the year ended 30 September 2014 are prepared, in all materialrespects, in accordance with the accounting policies described in Note 2 to the financialstatements.

Basis of accounting

Without modifring our opinion, we draw attention to Note 2 to the financial statements,which describe the basis of accounting. The financial statements are prepared to assist theProject to comply with the financial reporting provisions of the agreements above. As a result,the financial statements may not be suitable for another purpose.

Other matters

This report is intended for the information of Project, the Association/the World Bank, andGovernment of Lao, P.D.R. as the beneficiary represented by Ministry of Finance and for noother purpose. However, upon release by the Association/the World Bank, this report is amatter of public record and its distribution is not limited. We do not, in giving this opinion,accept or assume responsibility for any other purpose or to any other person to whom thisreport is shown or into whose hands it may come, except where expressly agreed by our priorconsent in writing.

For PricewaterhouseCoopers (Lao) Co., Ltd.

By Paiboon TunkoonPartnerVientiane, Lao PDRDate: 27 March 2015

.. ............................... ................................................ ........................ .........PricewaterhiouseCoopers (Lao) Co., Ltd., 4zh Floor, ANZ Vientiane Coin mercial Building, 33 Lane Xang Avenue,PO Box 7oo3, Telephone : + 856 21222718-9, Facsimile: + 856 21222723, MVIow.pwc.cOn /a

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KHAMMOUANE DEVELOPMENT PROJECT ('KDP')FUNDED BY THE INTERNATIONAL DEVELOPMENT ASSOCIATION UNDER DEVELOPMENTPROJECT NO. P087716 (ORIGINAL FINANCING) - FINANCING AGREEMENT GRANT NO. IDAH404 - LA AND PROJECT NO. 127176 (ADDITIONAL FINANCING) - FINANCINGAGREEMENT GRANT NO. IDA H756 - LA

STATEMENT OF CASH RECEIPTS AND DISBURSEMENTSFOR THE YEAR ENDED 30 SEPTEMBER 2014

From 1 OctoberFrom 1 October 2008

2008 to 30 to 30 September2014 September 2013 2014

Note USD USD USD

Receipts

Designated accountreplenishment 4 2,226,082 10,859,635 13,085,717

Counterpart fund contribution 4 64,436 317,458 381,894

Foreign currency exchange,gain, (net) 759 407 1,166

Total receipts 2,291,277 11,177,500 13,468,777

Disbursements

Component 1 5.1 /5.2 1,636,589 3,577,058 5,213,647

Component 2 5.1 / 5.2 362,631 4,605,212 4,967,843

Component 3 5.1 /5.2 907,743 961,726 1,869,469

Advance movements - C1 5.3 11,786 1,070 12,856

Advance movements - C2 5.3 5,087 - 5,087

Advance movements - C3 5.3 (5,556) 16,397 10,841

Total disbursements 2,918,280 9,161,463 12,079,743(Deficit)surplus of receiptsover disbursements (627,003) 2,016,037 1,389,034

Mr. Phousana Xaykosy Mr. Khamhou Phanthavong Mr.Dethsackda ManikhamComponent 1 Manager, KDP Component 2 Manager, KDP Component 3 Manager, KDP

Date: 27 March 2015 Date: 27 March 2015 Date: 27 March 2015

uk L hack

Date: 27Mar 0 15

The accompanying notes on pages 9 to 24 form an integral part of the financial statements.Auditors' report - pages 4 and 5.

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KHAMMOUANE DEVELOPMENT PROJECT ('KDP')FUNDED BY THE INTERNATIONAL DEVELOPMENT ASSOCIATION UNDER DEVELOPMENTPROJECT NO, P087716 (ORIGINAL FINANCING) - FINANCING AGREEMENT GRANT NO. IDAH404 - LA AND PROJECT NO. 127176 (ADDITIONAL FINANCING) - FINANCINGAGREEMENT GRANT NO. IDA H766 - LA

STATEMENT OF FUND BALANCEAS AT 30 SEPTEMBER 2014

2014 2013Note USD USD

Fund balance

Opening fund balance 2,016,037 1,594,081(Deficit)/surplus of receipts over (627,003) 421,956disbursementsClosing fund balance 3 1,389,034 2,016,037

Represented by:

Cash on hand and at banks 3 1,389,034 2,016,037

1,389,034 2,016,037

Mr. Phousana Xaykosy Mr. Khamhou Phanthavong Mr.Dethsackda ManikhamComponent I Manager, KDP Component 2 Manager, KDP Component 3 Manager, KDPDate: 27 March 2015 Date: 27 March 2015 Date: 27 March 2015

Mr. ouk aqLft t<achackProjecftirector, DPDate: 27 March 2015

The accompanying notes on pages 9 to 24 form an integral part of the financial statements.Auditors' report - pages 4 and 5

7

KHAMMOUANE DEVELOPMENT PROJECT ('KDP')FUNDED BY THE INTERNATIONAL DEVELOPMENT ASSOCIATION UNDER DEVELOPMENTPROJECT NO. P087716 (ORIGINAL FINANCING) - FINANCING AGREEMENT GRANT NO. IDAH404 - LA AND PROJECT NO. 127176 (ADDITIONAL FINANCING) - FINANCINGAGREEMENT GRANT NO. IDA H756 - LA

STATEMENT OF DESIGNATED BANK ACCOUNT RECONCILIATIONAS AT 30 SEPTEMBER 2014

2014 2013Note USD USD

Opening balance 3 968,293 1,329,999

Fund transfers from IDA 4 2,226,082 3,661,787

Replenishments to sub-account (Cl) 6.1 (1,739,609) (1,125,739)

Replenishments to sub-account (C2) 6,ii (505,030) (1,243,319)

Replenishments to sub-account (C3) 6.iii (543,698) (1,147,387)

Payments from designated bank account (Cl) 7 (143,082) (125,633)

Payments from designated bank account (C2) 7 (30,391) (381,415)

Payments from designated bank account (C3) 7 (125,111)

Closing balance 3 107,454 968,293

it>'

Mr. Phousana Xaykosy Mr. Khamhou Phanthavong Mr.Dethsackda ManikhamComponent 1 Manager, KDP Component 2 Manager, KDP Component 3 Manager, KDPDate: 27 March 2015 Date: 27 March 2015 Date: 27 March 2015

M 0otds i t hackKDP Projc Pirea 0Date: 27 arch 15

The accompanying notes on pages 9 to 24 form an integral part of the financial statements.Auditors' report - pages 4 and 5.

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KHAMMOUANE DEVELOPMENT PROJECT ('KDP')FUNDED BY THE INTERNATIONAL DEVELOPMENT ASSOCIATION UNDER DEVELOPMENTPROJECT NO. P087716 (ORIGINAL FINANCING) - FINANCING AGREEMENT GRANT NO. IDAH404 - LA AND PROJECT NO. 127176 (ADDITIONAL FINANCING) - FINANCING AGREEMENTGRANT NO. IDA H756 - LA

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 SEPTEMBER 2014

1. General information

The Lao People's Democratic Republic (the Recipient) carries out the KhammouaneDevelopment Project (the Project) through Khammouane Province. The Project implementsthe Project and manages the funds provided by International Development Association (theAssociation) and by Lao People's Democratic Republic, in accordance with the grant agreementnumber H404 LA (the financing agreement) signed on 25 July 2008. The Association agrees toprovide a grant on the terms and conditions set forth in the financing agreement in an amountequivalent toSpecial Drawing Rights (SDR) 5,600,000 or United States Dollar (USD) 9,000,000equivalent. It was agreed that Khammouane Province would contribute in cash equivalent up toUSD 504,000, (referred to as counterpart funds) towards the District Development Fund (DDF)and Provincial Development Fund (PDF) funding, corresponding to approximate 10% of the totalexpected value of DDF / PDF -financed investments.

Khammouane Province has received an additional financing of USD8.5 million. The additionalgrant would mainly finance the costs associated with scaling up the original project to enhanceimpact. The additional financing (AF) would provide additional allocation for: (a) the DistrictDevelopment Fund (DDF) under Component 1 to develop rural infrastructure for poorer districtsand facilitate post-disaster reconstruction for rural infrastructure damaged by the recent TyphoonNokTen; (b) rehabilitation of additional irrigation schemes along the Xe Bang Fai (XBF) Riverunder Component 2; and (c) a new Component 3 to provide rural livelihood assistance forpoorest villages. This new component (which would scale-up activities originally implementedunder Component 1) is dedicated to rural livelihoods and agricultural development activities andexpands coverage of the poorest villages. To facilitate implementation and expand capacitybuilding, responding to the request of the province, responsibility for Component 3 would beassigned to the Provincial Agricultural and Forestry Office (PAFO) and the District Agriculturaland Forestry Offices (DAFOs).

The KDP AF has become effective on 4 April 2012, and the duration of the implementationperiod is until 31 March 2016.

The Program consists of three distinct and mutually reinforcing components as below:

Component 1: Local Development and Provincial Capacity Building, which would mainlysupport the public investment through the District Development Fund (DDF) and the ProvincialDevelopment Fund (PDF) facilities, and provides technical training for the various departmentsof the provinces; and

Component 2: Support for irrigation development along Nam Theun 2 (NT2) downstreamchannel and lower Xe Bang Fai ('XFB'), which would mainly support the development ofirrigation facilities utilizing the discharge water from the NT2 hydropower station.

Component 3: is established to strengthen capacity of PAFO and its district offices, DAFOs toprovide effective livelihood support and extension services for local communities and farmers.The Component 3 is also tailored to assist PAFO/DAFOs to take over livelihood achievementsinitiated by Namtheun 2 Downstream Program (NT2 DSP) in 5 districts2 along Xe Bang Fai river,and to expand Xe Bang Fai extension center and ALG activities initiated under the original KDP.

Ngommalath, Mahaxay, Xe Bang Fai, Nongbok

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1. General information

Primary Program objectives: strengthen the planning process and public financial managementassociated with decentralized delivery of public services and infrastructure, including irrigationdevelopment, in Khammouane Province,

i) Objective 1: strengthening infrastructure and service delivery with improved local transparencyand accountability (Component 1);

1i) Objective 2: supporting the development of a strategic vision for the technically, economicallyand socially sustainable development of irrigation along the NT2 Downstream Channel and in

areas situated along the lower Xe Bang Fai River (Component 2).

iii) Objective 3: provide effective livelihood support and extension services for local

communities and farmers,

The Project's office is located in Thakek District, Khammovane Province, Lao PDR.

2. Significant accounting policies

The principal accounting policies adopted in the preparation of the financial statements are set

out below,

a. Basis of preparation

The statements of cash receipts and disbursements, fund balance, and designated bankaccount reconciliation are expressed in USD, have been prepared under the historical costconvention and the cash receipts and disbursements basis of accounting. Under the cashreceipts and disbursements basis of accounting, transactions are recorded when cash ispaid or received by the Project. Advances are included in the Project's disbursements inaccordance with Note 2(c). The Project maintains its accounting records in USD, as this isthe currency in which the majority of its transactions are denominated and settled. TheProject maintains its financial management systems and prepares financial statements inaccordance with consistently applied accounting standards acceptable to the Association.

b. Cash receipts

Receipts consist of the authorised allocation of the Association, direct payments made byAssociation, eligible expenditure refunded to date and funds contributed by the Lao People'sDemocratic Republic (the counter-party). These funds are accounted for when received or,in the case of direct payments made by Association, when notified as having been paid from

the Program's funds from Association.

c. Cash disbursements

Disbursements represent all cash costs of the Project (whether funded by Association orCounter-party) paid in line with the Project's objectives and approved budgets.Disbursement costs include advances which represent amounts paid in advance to the

Project staff for the purpose of travel to the province, district or overseas or meetings,workshops or conferences and to the districts for the implementation of the DistrictDevelopment Fund (DDF) activities. Advances are included in the project's disbursementsand presented as 'advanced movement' in the statement of cash receipts anddisbursements.

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2. Significant accounting policies (Continued)

c. Cash disbursements(Continued)

The expenses related to advanced amount are only classified to the related expenditurecategory line on the date of submission of supporting evidences of the actual expendituresincurred. Per Project policy, advances should be cleared within 10 working days after thecompletion of activities. An excess amount returned to the Project will be debited to cashaccount upon receipts by the Project. An advance control book is maintained for monitoring,follow-up, and control purposes of the Project.

d. Fixed Assets

The cost of fixed assets is charged to related expenditure categories and reported asdisbursements in the period of purchase. A fixed assets register is maintained by the Programfor control purposes.

e. Foreign exchange currency translation

The transactions arising in currency exchange other than United States Dollar (USD) arebased on the currency exchange rate on the date of actual release from the bank at theComponent Account inBanquePoure Le Commerce ExterieurLao Public (BCEL). Monetarybalances in currencies other than USD as at reporting date are translated in to USD usingthe bank prevailing rate as at the period end. Foreign exchange currency differences areincluded in the statement of receipts and disbursements. This policy became effective on IOctober 2011.

f. Special account replenishment

The special account replenishment represents cash received by the Project under theFinancing Agreement and Counterpart Fund, which are maintained in a special depositaccount and used exclusively to cover the Association's share of eligible expenses.

g. Direct disbursements

Direct disbursements relate to direct payments made by the Association to suppliers,contractors and consultants. These payments are accounted for when the payments arenotified by IDA to the Project.

h. Counterpart fund

Counterpart fund is recognised as receipt upon notification of payment by the Government ofLao PDR through the Department of Planning Investment under Khammouane Province.

Disbursements from counterpart fund are recognised in accordance with note 2(c).

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3. Cash on hand and at banks

As at 30Original Currency September 2014

Cash on hand USD

Component 1 USD 1,436 1,436Component 2 USD 1,257 1,257Component 3 USD 1,100 1,100

3,793Cash at bank

Component 1 USD 393,478 393,478Component 2 USD 360,749 360,749Component 3 USD 134,345 134,345Designated Account USD 107,454 107,454Government of Lao P.D,R

Account LAK 3,128,119,592 389,215

1,385,241

1,389,034

As at 30Original Currency September 2013

Cash on hand USD

Component 1 USD 1,063 1,063Component 2 USD 1,373 1,373Component 3 USD 819 819

3,255Cash at bank

Component 1 USD 406,196 406,196Component 2 USD 192,893 192,893Component 3 USD 365,389 365,389Designated Account USD 968,293 968,293

Government of Lao P.D.RAccount LAK 627,047,892 80,011

2,012,782

2,016,037

All cash on hand and cash at banks in Lao Kip are translated into USD using the average exchangerate when replenishment from the designated bank account (Bank of Lao PDR) is made.

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3. Cash on hand and at banks (Continued)

Cash at banks represent cash deposited in the current accounts at local banks, which carry nointerest, under the accountability of each component.

The details of cash at banks are as follows:

Component IAccount No. : 020110100270420001Account Name : Khammouane Development ProjectDepository Bank : Banque pour le Commerce Exterieur Lao ('8CEL'), Khammouane

Province BranchAddress : Ban Phonsaad, Thakhek DistrictCurrency : USD

Component 2Account No. : 020110100272057001Account Name : Khammouane Development ProjectDepository Bank : Banque pour le Commerce Exterieur Lao, Khammouane Province

BranchAddress : Ban Phonsaad, Thakhek DistrictCurrency : USD

Component 3Account No. : 02011010007150001Account Name : Khammouane Development ProjectDepository Bank : Banque pour le Commerce Exterieur Lao, Khammouane Province

BranchAddress : Ban Phonsaad, Thakhek DistrictCurrency : USD

Designated bank account

Account No. : 0000012121210000133Account Name : Kharnmouane Development ProjectDepository Bank : Bank of Lao ('BoL') PDR tinder the name of: Khammouane

Development Project 'KDP', Authorised by Ministry of FinanceAddress : Yonet Road P.O. Box 2925 Vientiane, Lao PDRRelated credit : Project No. P087716, IDA H404 - LA, AF 11756-LACurrency : USD

Government of Lao P,D,R. account

AccountNo. : 020110000126171001Account Name : Khammouane Development ProjectDepository Bank : Banque pour le Commerce Exterieur Lao, Khammouane Province

BranchAddress : Ban Phonsaad, Thakhek DistrictCurrency : LAK

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4. Fund receiptsFrom

1 October 2008to 30 September

2014 2013USD USD

Designated account replenishment 2,226,082 10,859,635Counterpart fund contribution 64,436 317,458

2,290,518 11,177,093

Withdrawal application (W/A) for the Program will be submitted to International DevelopmentAssociation (IDA) by the Project Steering Committee (PSC) through the Ministry of Finance.This will incorporate transactions and documentation submitted by Downstream IrrigationManagement Unit (DIMU) through the province. Fund at designated bank account will be usedfor implementing activities. It will be managed by the Ministry of Finance, day by daymanagement and submission of withdrawal application will be done by the Project SteeringCommittee including expenditures incurred by Component 1, 2 and 3.

Application Date of 2014number application Particular USD

H404 22/11/2013 The 2 414 Replenishment No. 31 38,151

38,151

AF756 20/11/2013 The 23r, Replenishment No. 31 397,059AF756 21/04/2014 The 24 h Replenishment No. 32 698,595AF756 03/07/2014 The 2 5th Replenishment No. 35 600,000AF756 11/08/2014 The 26th Replenishment No. 34 492,277

2,187,9312,226,082

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4. Fund receipts (Continued)

Application Date of 2013number application Particular USD

H404 09/10/2012 The 191" Replenishment No. 25 442,797H404 01/03/2013 The 2 0 Replenishment No. 26 813,46411404 11/06/2013 The 21st Replenishment No. 27 337,20211404 30107/2013 The 22n0 Replenishment No. 29 222,109H404 23/08/2013 The 23' Replenishment No. 30 600,000

Receipts from IDA-H404 - LA 2,415,572

AF756 25/02/2013 The 2 0 ' Replenishment No. 26 305,286AF756 12/06/2013 The 2 1" Replenishment No. 27 322,954AF756 31/07/2013 The 22 nd Replenishment No. 29 617,976

Receipts from IDA-H756 - LA 1,246,216

Total 3,661,788

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KHAMMOUANE DEVELOPMENT PROJECT ('KDP')FUNDED BY THE INTERNATIONAL DEVELOPMENT ASSOCIATION UNDER DEVELOPMENT PROJECT NO. P087716 (ORIGINAL FINANCING) -FINANCING AGREEMENT GRANT NO. IDA H404 - LA AND PROJECT NO. 127176 (ADDITIONAL FINANCING) - FINANCING AGREEMENT GRANTNO. IDA H756 - LA


5. Disbursements

5. 1 Disbursements by Project's component activities category are as follows:

From1 October 2008

Component 1: Costs on local development and livelihoods H404 H756 Total to 30 Septembersupport 2014 2014 2014 2013

USD USD USD USD

Support for District Development Fund (DDF) 949,356 - 949,356 1,520,730Support for Provincial capacity Building 68,799 - 68,799 975,277Support for component 1 - Management() (80,265) 710,485 630,220 1,082,121

937,890 710,485 1,648,375 3,578,128Component 2: Costs on Support for irrigation development forNam Theun 2 (NT2) downstream and lower Xe Bang Fai (XBF)B(i) Rehabilitation of ThaThot Irrigation Scheme - 79,114 79,114 877,195B(ii) Development of Downstream Irrigation Scheme in ThaThot - - - 254,580B(iii) Rehabilitation of small pump scheme in lower XBF - - - 154,528B(iv) Strategic investment plan for Downstream Irrigation Development - 126,380 126,380 2,501,454B(v)Support for component 2- Management support (- 162,224 162,224 817,455

- 367,718 367,718 4,605,212Component 3: Cost of Livelihoods support, AgriculturalLivelihood Grant, Entrepreneur Support Grant, Capacity Buildingfor PAFOAgricultural Livelihood Grant - 156,769 156,769 115,322C3 (i)-XBF Extension Centre - 212,052 212,052 91,352C3 (ii)- Technical Training PAFO and DAFO - 64,700 64,700 31,478C3 (ii)- Implementation support livelihood activities - 121,201 121,201 123,469Support for component 3 Management() - 347,465 347,465 616,502

- 902,187 902,187 978,123937,890 1,980,390 2,918,280 9,161,463

T The total amount of USD2,918,280presented include the advance movements of Component 1, 2 and 3 amountingto USD 11,317 as disclosed inNote 5.3

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KHAMMOUANE DEVELOPMENT PROJECT ('KDP')FUNDED BY THE INTERNATIONAL DEVELOPMENT ASSOCIATION UNDER DEVELOPMENT PROJECT NO. P087716 (ORIGINAL FINANCING) -FINANCING AGREEMENT GRANT NO. IDA H404 - LA AND PROJECT NO. 127176 (ADDITIONAL FINANCING) - FINANCING AGREEMENT GRANTNO. IDA H756 - LA


5. Disbursements (Continued)

5.2 Disbursements by expenditures cost category as follows:

FromComponent 1 Component 2 Component 3 Total 1 October 2008 to

30 September2013

2014 2014 2014 2014Category USD USD USD USD USD

Sub-project grants (BBG)1 1,218,598 5,087 151,213 1,374,898 1,239,753Sub-project grants (ALG) - - - - 383,793Sub-project grants (PDF) 103,185 - - 103,185 367,847Civil work - 71,418 273,739 345,157 2,312,190Goods & vehicle 84,174 30,370 24,447 138,991 1,906,091Consultant services 204,476 179,190 151,122 534,788 1,601,429Training and study tour (40,669) 20,408 224,527 204,266 517,688Incremental operating costs 78,611 61,245 77,139 216,995 832,672Total 1,648,375 367,718 902,187 2,918,280 9,161,463

The total amounts presented include the advance movements of Component I and 3 as disclosed in Note 5.3

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5, Disbursements (Continued)

5,3 Advance movements

As at 30 As at 30September September 2014

2014 2013 MovementsComponent 1 USD USD USD

Advances-other 12,856 1,070 11,786

12,856 1,070 11,786

Component 2

Advances-other --- 5,087 - 5,087

5,087 _ 5,087Component 3

Advances-other 10,841 16,397 5,556)

10,841 16,397 (5,656)

28,784 17,467 11,317

As at 30 As at 30September September 2013

2013 2012 MovementsComponent I USD USD USD

Advances-other 1,070 627 443

1,070 627 443

Component 3

Advances-other 16,397 7,105 9,291

16,397 7,105 9,291

17,467 7,732 9,734

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6. Replenishments

i, Replenishments to sub-account (Component 1)

Replenishment Date of 2014number replenishment Description USD

30 25/10/2013 First DDF investment fund 544,18517 04106/2014 CA reimbursement from DA No.17 203.13231 07/07/2014 Second DDF investment fund 533,36618 14/08/2014 CA reimbursement from DA No.18 458,926

1,739,609

Replenishment Date of 2013number replenishment Description USD

14 26/10/2012 Replenishment No.14 30,068- 06/12/2012 CA account increasing 400,000

15 24/12/2012 Replenishment No.15 14,75816 11104/2013 Replenishment No.16 280,97017 27/08/2013 Replenishment No.17 399,943

TOTAL 1,125,739

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6. Replenishments (Continued)

ii. Replenishments to sub-account (Component 2)

Replenishment Date of Description 2014number replenishment USD

48 10/01/2014 CA reimbursement from DA No.48 305,78549 04/06/2014 CA reimbursement from DA No.49 199,245

605,030

Replenishment Date of Description 2013number replenishment USD

44 24/10/2012 Replenishment No. 44 29,253- 06/12/2012 CA account increasing 400,000

45 06/12/2012 Replenishment No. 45 22,99346 15/03/2013 Replenishment No. 46 453,82747 15/06/2013 Replenishment No. 47 337,246

TOTAL 1,243,319

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6. Replenishments (Continued)

iii. Replenishments to sub-account (Component 3)

Replenishmentnumber Date of replenishment Description 2014

USD

09 15/01/2014 Replenishment No. 09 229,22210 04/06/2014 Replenishment No. 10 314,476

543,698

Replenishmentnumber Date of replenishment Description 2013

USD

04 25/10/2012 Replenishment No. 04 26,73105 09111/2012 Replenishment No. 05 35,26106 11/12/2012 Replenishment No. 06 400,00007 27/05/2013 Replenishment No. 07 315,50508 06/09/2013 Replenishment No. 08 369,890

TOTAL 1,147,387

The replenishments represent cash transferred from the BoL to BCEL bank accounts ofComponent 1, 2, and 3. The account in BoL is maintained in a special deposit account and usedexclusively to cover the IDA's share of eligible expenses for Component 1, 2, and 3.

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KHAMMOUANE DEVELOPMENT PROJECT ('KDP')FUNDED BY THE INTERNATIONAL DEVELOPMENT ASSOCIATION UNDER DEVELOPMENT PROJECT NO. P087716 (ORIGINAL FINANCING)- FINANCING AGREEMENT GRANT NO. IDA H404 - LA AND PROJECT NO. 127176 (ADDITIONAL FINANCING) - FINANCING AGREEMENTGRANT NO. IDA H756 - LA


7. Payments from designated bank account

Account Component Component Component 2014code Description 1 2 3 USD

61010 Vehicle & motorbike - 11,912 - 11,91264050 Bank charge - 21 - 2161011 Office equipment - 18.458 - 18,45850210 ALG investment - - 125,111 125,11150300 DDF 143,082 - 143,082

143,082 30,391 125,111 298,584

Account Component Component Component 2013code Description 1 2 3 USD

60003 Rehabilitation of Irrigation Systems - 325,530 - 325,53061010 Vehicle & motorbike 36,539 - - 36,53964050 Bank charge - 85 - 8561081 Provide new pontoons for 12 PIS with "Very

Poor" Ranking - 55,800 - 55,80063000 ADPC 31,732 - - 31,73250300 DDF 57,362 - - 57,362

125,633 381,415 - 507,047

The grant was disbursed according to the IDA's system of disbursement- Disbursements or transfers to Project accounts are made from the nationaldesignated account which is replenished by the IDA against Statement of Expenditures (SOEs).

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8. Commitment

The total committed expenditures are as follows:

2014 2013USD USD

Consultant servicesk 362,817 165,630Construction services" 172,963 228,527Goods 15,000 144,008Sub-grants - 868,403

550,780 1,406,568

* Consultant service mainly commitment salary base on contracts remaining of theproject* Construction service include construction work of Nongbok district and Xebangfai district.

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KHAMMOUANE DEVELOPMENT PROJECT ('KDP')FUNDED BY THE INTERNATIONAL DEVELOPMENT ASSOCIATION UNDER DEVELOPMENT PROJECT NO. P087716 (ORIGINAL FINANCING) -FINANCING AGREEMENT GRANT NO. IDA H404 - LA AND PROJECT NO. 127176 (ADDITIONAL FINANCING) - FINANCING AGREEMENT GRANT NO-IDA H756 - LA


8. Commitment (Continued)

The details of commitments for consultant services are as below:

Commitment by each Component 1 Component 2 Component 3 Totalcomponent

2014 2013 2014 2013 2014 2013 2014 2013USD USD USD USD USD USD USD USD

Construction services 61,256 35,214 19,925 112,063 91,782 18,353 172,963 165,630Local consultants 124,679 10,678 28,893 24,618 42,064 193,231 195,636 228,527International consultants 106,907 - 30,137 - 30,137 - 167,181 -Goods 15,000 - - - - 144,008 15,000 144,008Sub-grants to districts - 868,403 - - - - - 868,403Total 307,842 914,295 78,955 136,681 163,983 355,592 550,780 1,406,568

Significant amounts of the above total commitment are expected to be settled within April 2015.

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Documents

Public Disclosure Authorized - documents.worldbank.orgdocuments.worldbank.org/curated/en/... · khammouane development project (kdp) funded by the international development association