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AUDITORS' REPORT ON THE FINANCIAL STATEMENTS

OF

FEDERAL URBAN JOB CREATION & FOOD SECURITYAGENCY

GRANT NUMBER IDA CREDIT NO.5112 ET AND TF-16392ET

AS AT AND FOR THE YEAR ENDED 07 JULY 2016

TAY & Co.

Chartered Certified Accountants & Authorized AuditorsAddis Ababa, Ethiopia

Tel. 251-11-442-1336 Fax 251-11-442-1338 E-mail: taycoCethionet.et

P.O.Box 1335 Addis Ababa, Ethiopia

Ethio-china Friendship Street Wongelawit Tadesse Building lt Floor

Website: www.tayauditing-.com

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TAY & Co.kA xrtere .rtifie AccoiruntAnts 4 A- torize Au 4iters

INDEPENDENT AUDITOR'S REPORT ON THE FINANCIAL STATEMENTS OFFEDERAL URBAN JOB CREATION & FOOD SECURITY AGENCY WOMENENTREPRENEURSHIP DEVELOPMENT PROJECT GRANT NUMBER IDACREDIT NO. 5112 ET & TF- 16392 ET

Report on the financial StatementsWe have audited the accompanying financial statements of Federal Urban Job Creation & Food SecurityAgency Women Entrepreneurship Development Project Grant Number IDA Credit No.5112 ET and TF-16392 ET, which comprise the statement of financial position as at 7 July 2016, the statement of sourcesand uses of fund, and a summary of significant accounting policies and other explanatory notes for theyear then ended.

Management's Responsibility for the Financial StatementsManagement is responsible for the preparation and fair presentation of these financial statements inaccordance with Generally Accepted Accounting Principle. This responsibility includes: designing,implementing and maintaining internal control relevant to the preparation and fair presentation offinancial statements that are free from material misstatement, whether due to fraud or error; selectingand applying appropriate accounting policy; and making accounting estimates that are reasonable in thecircumstances.

Auditor's ResponsibilityOur responsibility is to express an opinion on these financial statements based on our audit. Weconducted our audit in accordance with International Standards on Auditing. Those standards requirethat we comply with ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures inthe financial statements. The procedures selected depend on the auditor's judgment, including theassessment of the risks of material misstatement of the financial statements, whether due to fraud orerror. In making those risk assessments, the auditor considers internal control relevant to the entity'spreparation and fair presentation of the financial statements in order to design audit procedures that areappropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness ofthe entity's internal control. An audit also includes evaluating the appropriaten g policiesused and the reasonableness of accounting estimates made by manageme ( el as ng theoverall presentation of the financial statements.

Opinion eIn our opinion, the financial statements present fairly, in all material respects, the-C4_ncial i n ofFederal Urban Job Creation & Food Security Agency Women Entrepre irphip Dievelo ojectGrant Number IDA Credit No.5112 ET and TF-16392 ET as at 7 July 20 nan rmanceand operating result for the year then ended in accordance with General ccountingPrinciple.

Ethio-China Friendship Street, Wengelawit Tadesse Building 1 St Floor

In addition, with respect to the statement of expenditure submitted during the year ended 7 July 2016, inour opinion.

a. The statements, together with the procedures and initial control involved in their preparation, can bereplied up on to support the relevant withdrawals,

b. Adequate supporting documentation has been maintained to support claims to IDA for

reimburs of expenditures incurred: and

C. re ligible for financing under IDA Credit No.5112 ET and TF-16392 ET

TAY Co.Carter fle cco a Addis Ababa,Authoriz December 27 , 2016

uditoc

2

FEDERAL URBAN JOB CREATION & FOOD SECURITY AGENCY


NOTES TO THE ACCOUNTFOR THE YEAR ENDED 7 JULY 2016

CURRENCY: ETHIOPIAN BIRR

2016 2015

Notes

CURRENT ASSET

Receivable 5 1,988,038.70 1,018,188.15

Cash at bank 6 9,077,513.48 3,584,271.95

11,065,552.18 4,602,460.10

CURRENT LIABLITIES

Creditors and accruals 7 111,326.64 3,894,444.52

111,326.64 3,894,444.52

Net current Asset 10,954,225.54 708,015.58

REPRESENTED BY:

Fund Balance 8 10,954,225.54 708,015.58

3

udW-6s;



STATEMENT OF SOURCES AND USES OF FUNDS

FOR THE YEAR ENDED 7 July 2016

CURRENCY:ETHIOPIAN

BIRR

Notes 2016 2015

SOURCESIDA Credit

SOE procedures 9 13,283,174.04 19,874,428.93

Gain on Exchange 255,790.42 41,496.78

Trust Fund 10,419,621.14 5,896,430.89

23,958,585.60 25,812,356.60

USES

Entrepreneurial Skills, Technology and 10cluser Dveloment11,686,747.76 22,612,951.55

cluster Development

Project Management, Advocacy andoutreach, monitoring and evaluation and 11impact Evaluation 2,025,627.88 4,000,768.15

13,712,375.64 26,613,719.70

EXCES OF SOURCE OVER USES 10,246,209.96 (801,363.10)

4



NOTES TO THE ACCOUNT


1. ESTABLISHMENT OF THIE AGENCY

The Federal Urban Job Creation and Food Securities Agency is established as the Council of Ministers Regulation 374/2016

2 OBJECTIVE OF THE AGENCY

The Agency established with the following objectivities:-

a) To improve the livelihood of citizen who are unable to work or able to work but unemployed due to different

conditions and live under poverty line; based on the principles of urban job creation and food security ,by

providing developmental safety net support to citizen sustainably and ensure their food security.

b) To support and coordinate institutions assisting the micro enterprises and small enterprises do not fall under

the manufacturing sector to make them competitive, sustainable and strong foundation industrial development.

c) To promote and develop micro enterprises and small enterprises do not fall under the manufacturing sector

engaged in urban agriculture ,construction ,trade and services sectors with a view to make these sectors

competitive ,sustainable and thereby create employment opportunities in the urban center ,improve their income

- and create fair resource distribution

d) To ensure balanced nutritional security of citizens.

3 Background of the project

Financing agreement was signed on 12 June 2012 between the Federal Democratic Republic of Ethiopia and the International

Development Association (IDA) according to which SDR 32,200,000 (Thirty-two million two hundred thousand) is available

in the form of credit to implement the activities of the Women Entrepreneurship Development project, under credit

agreement No 5122-ET.The project is implemented through Ministry of Urban Development and construction (MoUD &C)

National project management team (NPMT) is established with in the Federal Micro and Small Enterprise Development

Agency (FeMSEDA) under the MoUD &C . MoUD &C , FeMSEDA , NPMT, Development Bank of Ethiopia (DBE) and

other sub national administration selected for the execution of the project and implementing project activities. The objective

of the project is to increase the earning and employment of Micro and small enterprises (MSEs)fully or partially owned by

female entrepreneurs in the targeted cities.

4. Accounting policies

The principal accounting policies adopted by the project are set out below. These policies have been consistently applied to

all years presented, unless otherwise stated.

a. Basis of presentation

These financial statements have been prepared in accordance with cost convention

b. Currency

Transitions in foreign currency are converted to Birr at the exchange rate ruling at the date of the transaction. Cash balances

maintained in the foreign currency is converted to Birr at the exchange rate ruling at the date of the balance sheet date

c. Basis of accounting

Modified cash basis of accounting is used in the recognition of source and uses of fund.

d. Fund balance

Incorporates gain on exchange rate and net interest income before profit and tax of Development bank of Ethiopia obtained

from disbursement of loan to micro finance institution,

e. Fixed Asset chtere,Fixed Assets are treated As project Expenditure at the time of Pur s ng of Depreciation.

5o&



NOTES TO THE ACCOUNTFOR THE YEAR ENDED 7 July 2016


5. Advance to regions2016 2015

Advance to Addis Ababa COFED - 708,854.12

Akaki College 106,467.00

Misrak college 106,467.00

Entoto College 106,467.00

Nifas-Silk lafto TVET 106,467.00

Tegbareid College 106,467.00

General Winget college 106,467.00

Advance to Mekelle COFED 102,962.30 117,908.86

Advance to Mekelle polytechnic college 159,849.00

Advance to Bahir Dar COFED 63,914.91 15,419.52

Advance to Bahir Dar Polytechnic college 159,849.00

Advance to Adarna COFED 36,208.77 100,076.99

Advance to Adama Polytechnic college 159,849.00

Advance to -lawassa COFED 168,564.16 7,243.94

Advance to Hawassa Polytechnic College 159,849.00

Advance to Dere Dawa COFED 178,341.56 68,684.72

Dire Dawa Melese Zenawi College 159,849.00 ___________

1,988,038.70 1,018,188.15

7. Cash and Bank Balance2016 2015

NBE-0100101300490 4,411,445.97

NBE-0100751040010 4,666,067.51 3,584,271.95

9,077,513.48 3,584,271.95

8. Creditors and accruals2016 2015

Withholding tax payable 10,052.39 2,53 1,528.35

VAT Payable 100,972.11 1,291,265.07

Salary income tax payable 71,651.10

Staff creditors 270.16 -

- Sundry Creditors 31.98 ___________

111,326.64 3,894,444.52

1 4 -

3620.7010,769





9. Fund Balance2016 2015

Opening Balance 708,015.58 1,509,378.68

Add: Current year transfer 10,246,209.96 (801,363.10)10,954,225.54 708,015.58

10. SOE Procedure2016 2015

Withdrawal application 13,283,174.04 16,022,453.74

Direct payment by world bank - 3,851,975.19

13,283,174.04 19,874,428.93

11. Entrepreneurship Skills, Technology and cluster Development

2016 2015

Salaries & related benefit 2,986,117.39 830,680.00

Stationery & office supplies 2,931,212.28 1,544,982.98

Contractual professional Service 103,694.00 16,019,138.87

Training 1,560,095.73 1,815,320.80

Purchase of Equipment & furniture - 634,468.23

Fuel & lubricants 48,197.22 611,718.44

Repair and maintenance 109,574.46 347,036.30

Periderm 411,830.00 200,305.22

Telephone Expense 912,490.30 175,111.60

Rent 81,995.00 139,169.04

Publication 23,000.00 67,591.20

Transportation 73,102.00 67,341.00

Insurance 12,995.50 46,888.99

Entertainment 22,403.11 46,142.43

Service Charge 71,237.24 44,259.70

Loading & unloading 14,430.00 14,200.50

Advertising 91,801.09 8,596.25

Purchase of machinery ,jed Ceruf/.. 2,232,572.44 / 41 11,686,747.76 22,612,951.55

04 9,744637,3

411,30h0r20,35e2




12. Project Management, Advocacy and outreach, Monitoring and evaluation and impact Evaluation


2016 2015

Salaries & related benefit - 1,276,154.30

Stationery & office supplies 34,153.04 184,161.14

Contractual professional Service - 772,728.00

Training 105,331.49 103,512.03

Fuel & lubricants 11,720.40 198,612.05

Repair and maintenance 168,687.49 188,285.40

Periderm 285,984.00 346,394.00

Telephone Expense 125,997.42 140,163.76

Rent 495,748.79 30,000.00

Publication 101,510.00 432,080.66

Medical Supplies 42,383.86 -

Transportation 76,228.50 100,347.18

Insurance - 31,762.93

Entertainment 7,731.12 9,864.51

Service Charge 1,903.00 43,663.08

Loading & unloading 8,282.78 -

Advertisement 510,228.75 88,260.48

Purchase of vehicle - 19,791.50

Purchase of machinery 49,737.24 34,028.01

Miscellaneous expense - 959.12

2,025,627.88 4,000,768.15

一：〕：〕辦

AUDITORS'REPORT ON THE DESIGNATED ACCOUNT

OF

FEDERAL URBAN JOB CREATION AND FOOD SECURITY

AGENCY

GRANT NUMBER IDA CREDIT NO.5112 ET


TAY & Co.


Tel.251-11-442-1336 Fax 251-t 1-442-1338 E-mail: jAyc o (e- )ethionet.etP.O.Box 1335 Addis Ababa, Ethiopia

Ethio-china Friendship Street Wongelawit Tadesse Building I" FloorWebsite: www.tayaL1ditin,(z. coin

rt~r~ TAY &tCo.e,A rtae, Catife, Accu t pmt5 2j Au14tfjIrize4 ArzI ita'r5

INDEPENDENT AUDITOR'S REPORT TO THE MANAGEMENT OF FEDERAL

URBAN JOB CREATION AND FOOD SECURITY AGENCY NUMBER IDA

CREDIT NO.5112 ET

We have audited the accompanying special accounts of Federal urban job creation and food security

agency Grant Number IDA Credit No.5112 ET and for the year ended 7 July 2016.

Management's Responsibility for the Financial StatementsManagement is responsible for the preparation and fair presentation of these financial statements in

accordance with Generally Accepted Accounting Principle .This responsibility includes : designing,

implementing and maintaining internal control relevant to the preparation and fair presentation of financial

statements that are free from material misstatement, whether due to fraud or error; selecting and applying

appropriate accounting policy; and making accounting estimates that are reasonable in the circumstances.

Auditor's ResponsibilityOur 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. Those standards require that we comply

with ethical requirements and plan and perform the audit to obtain 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 error. In making

those risk assessment, the auditors considers internal control relevant to the entity's preparation and fair

presentation 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's internal

control. An audit also includes evaluating the appropriateness of accounting policies used and the

reasonableness of accounting estimates made by management, as well as evaluating the overall

presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our

audit opinion.

OpinionIn our opinion, th al accounts give a true and fair view of the financial position of Federal urban job

creation an o sduv ency Grant Number IDA Credit No.5112 ET as at 7 July 2016 and the

moveme f ar in accordance with Generally Accepted Accounting Principle.

.00

TAY& ct.\Chartere &''I d Ace ta Addis Ababa,

Authorize . i' O. ... December 27, 2016

Ethio-China Friendship Street, Wengelawit Tadesse Building 1st Floor

Tel. (011) 442 1336, 442 0062, (011) 470 7092, (011) 470 7094 - Mob. (093) 001 4106, (091) 151 5038/39

Fax (011) 442 1338 - e-mail: [email protected] - www.tayauditing.com - P.O. Box 1335 - Addis Ababa, Ethiopia

FEDERAL URBAN JOB CREATION AND FOOD SECURITY AGENCY

GRANT NUMBER IDA CREDIT NO.5112 ET

STATEMENT OF DESIGNATED ACCOUNT


For the year ended 7-Jul-16

Account Number 0100751300078(0261501394100)

- Depository bank National bank of Ethiopia

Address: Addis Ababa, Ethiopia

Related Grant IDA Credit 5112-ET

Currency USD

2015

Balance as of 8 july 2015

Add:- World Bank Replenishment 625,762.07 795,177.12

Amount Transferred from World Bank during this period

Other Deposit625,762.07 795,177.12

Less:- Expenditure During the periodTransferred to birr Account 625,762.07 795,177.12

Balance as of 7 july 2016 _ _ _

2 P OB8OX1335

AUDITORS' REPORT ON THE DESIGNATED ACCOUNT

OF

FEDERAL URBAN JOB CREATION AND FOOD SECURITY

AGENCY

GRANT NUMBER IDA CREDIT TF-16392ET


TAY & Co.


Tel. 251-11-442-1336 Fax 251-11-442-1338 E-mail: tavco )ethionet.etP.O.Box 1335 Addis Ababa, Ethiopia

Ethio-china Friendship Street Wongelawit Tadesse Building 1' FloorWebsite: www.tavauditine.com

TAY & Co.

INDEPENDENT AUDITOR'S REPORT TO THE MANAGEMENT OF


NUMBER TF 16392 ET

We have audited the accompanying special accounts of Federal Urban Job Creation and Food Security

Agency Grant Number TF-16392ET, for the year ended 7 July 2016.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in

accordance with Generally Accepted Accounting Principle .This responsibility includes : designing,

implementing and maintaining internal control relevant to the preparation and fair presentation of

financial statements that are free from material misstatement, whether due to fraud or error; selecting

and applying appropriate accounting policy; and making accounting estimates that are reasonable in the

circumstances.

Auditor's ResponsibilityOur 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. Those standards require that

we comply with ethical requirements and plan and perform the audit to obtain 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

error. In making those risk assessment, the auditors considers internal control relevant to the entity's

preparation and fair presentation 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's internal control. An audit also includes evaluating the appropriateness of accounting policies

used and the reasonableness of accounting estimates made by management, as well as evaluating the

overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for

our audit opinion.

C~artereyOpinion .In our opinio , cial acc e a true and fair view of the financial position of Federal urban

job creation odjsppyrity age c ant Number TF-16392 ET as at 7 July 2016 and the movement

for the ear cd& i4 a e.3h Generally Accepted Accounting Principle

TAY & Co.Chartered Certifie unt Addis Ababa,

Authorized Auditors December 27 , 2016

Ethio-China Friendship Street, Wengelawit Tadesse Building 1st Floor

Tel. (011) 442 1336, 442 0062, (011) 470 7092,(011) 470 7094 - Mob. (093) 001 4106, (091) 151 5038/39

Fax (011) 442 1338 - e-mail: [email protected] - www.tayauditing.com - P.O. Box 1335 - Addis Ababa, Ethiopia


Grant Number IDA TF NO.16392ETSTATEMENT OF DESIGNATED ACCOUNT


For the year ended 7-Jul-16

Account Number 100101300490

Depository bank National bank of Ethiopia

Address: Addis Ababa, Ethiopia

Related Grant IDA TF NO.16392ET

Currency USD

2016

Balance as of 8 july 2015 -

Add:- World Bank Replenishment 502,078.11Amount Transferred from World Bank during periodOther Deposit

Less:- Expenditure During the period 300,000.00Transferred to birr Account

Balance as of 7 july 2016 For Trust Fund 202,078.11

2

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