Sichuan P rovincial Audjt Oflice of the People's Republic of China

it Audit Report

J11'4i'?r* c2015J 165 %

SICHUANAUDITREPORT (2015) NO. 165

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Project Name: GEF Large-City Congestion and Carbon Reduction

Project

l!t • ~: Grant No.:

TF0 14206 TFOl4206

Project Entity: Transport Committee of Chengdu

~it .1J:. Ji: 2014

Accounting Year: 2014

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fl * Contents

wit ~ifi ~Ji!, ......................................................................................... 1

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

.=. • J!t ~ ffi.-* ll< Ji!;f' 4J-*-* llfHi. ................................................................. s

ll . Financial Statements and Notes to the Financial Statements ................ 5

( - ) ltf ~112-~.'1!c ............................................................................... 5

i. Balance Sheet ................... ....................... .... ....................... ................ 5

( .=.) Jj! 13 :i&J.t;l!c ............................................................................... 7

ii. Summary of Sources and Uses of Funds by Project Component .. ... 7

( ~ ) ~~t:b-Jttlt.fi't~9l* ............................................................... 9

iii. Statement of Implementation of Grant Agreement. ........... .............. 9

( 11!1 ) ~ g}-** llft-ii. ......................................................................... 1 0

iv. Notes to the financial statement ..................... ...................... .. .. ...... 13

~ - Witit:.~if:J fcJPII.&~U ................................................................... 16

Ill. Audit Findings and Recommendations ..................... ... ....................... 18

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it i! : 86-028-86522491

~ "I!,: 86-028-86523693

2

l. Auditor's Opinion Auditor's Opinion

To Transport Committee of Chengdu

We have audited the special purpose financial statements (from page 5 to page 15 of GEF Large-City Congestion and Carbon Reduction Project Financed by the GEF, which comprise the Balance Sheet as of December 31 , 2014, the Summary of Sources and Uses of Funds by Project Component, Statement of Implementation of Grant Agreement, and Nottes to the Financial Statements.

Project Entity's Responsibility for the Financial Stateme nts

The preparation of the Balance Sheet, the Summary of Sources and Uses of Funds by Project Component and the Statement of Implementation of Grant Agreement is the responsibility of your entity, which includes: i. Preparing and fair presenting the accompanying financial statements in accordance with Chinese accounting standards and system, and the requirements of the project grant agreement; ii. Designing, implementing and maintaining necessary internal control to ensure that the financial statements are free from material misstatement, whether due to fraud or error.

Auditor's Responsibili ty

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audi t in accordance with the Government Auditing Standards of the People's Republic of China and lntemational 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 j udgment, including the assessment of the risks of material misstatement of the financial statements, whether due 10 fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entities' preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the

3

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 appropriate and sufficient to provide a basis for our audit opinion.

O pinion

ln our opinion, the financial statements identified in the first paragraph present fairly, in all material respects, financial position of GEF Large-City Congestion and Carbon Reduction Project Financed by the GEF as of December 3 1, 2014, its financial receipts and disbursements, the project implementation and the receipts and disbursements of the special account for the year then ended in accordance with Chinese accounting standards and system, and the requirements of the project grant agreement.

Other Matter

The audit report consists of the Auditor's Opinion and two more parts hereinafter: Financial Statements and Notes to the Financial Statements, Audit Findings and Recommendations.

Sichuan Provincial Audit Office of the People's Republic ofChfoa June 30, 2015

Address: No. IS, Yong Xing Alley, Chengdu City, Sichuan Province, P.R. China Postcode: 61 00 12 Tel.: 86-028-86522491 Fax: 86-028-86523693

The English translation is for the convenience of report users; Please take the Chinese aud.it report as the only official version.

,1

_,

II. Financial Statements and Notes to the Financial Statements

(-)·4,.-~·* i. Balance Sheet

•*-.lfl-fJ;! BALANCE SHEET

2014~ 12}131 B (As of December 31. 201 4)

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c~>~~U* ii. Summary of Sources and Uses of Funds by Project Component

lJi 13 ~ .lt * (-) SUMMARY OF SOURCES AND USES OF FUNDS BY

PROJECT COMPONENT I )j;;JOJ~j[ 20 14 ~ 12 }l JI 13

(Forthe period ended December 3 1. 2014)

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7

~ 13 ~ .ll * ( .=:. ) SUMMARY OF SOURCES AND USES OF FUNDS

BY PROJECT COMPONENT Il 4-M~~ 2014 "f- 12 Fi 31 B

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( .=.) ,iittd,.)t~fi·lt~* iii. Statement of Implementation of Grant Agreement

• • tdJ. ~ tit. fr it ?,l, * STATEMENT OF IMPLEMENTATION OF GRANT AG REEM.ENT

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iv. Notes to the fin ancial statement

Notes to the financial statement

I. Project overview.

GEF Large-City Congestion and Carbon Reduction Project GEF Grant NO.TFOl4206-CN, The objectives of the project (Chengdu) are to help Chengdu develop policies and measures to alleviate traffic congestion and reduce greenhouse gas emissions through public transport improvements, travel demand management and intelligent Transport System improvements. The project is expected to guide Chengdu to a path towards a greener and more sustainable city with less energy consumption and Jess greenhouse gas emissions. The project (Chengdu) consists of the following eight tasks: ( I) Pub I ic transport priority study al street segments and signalized in1ersections. (2) Bus stop optimization study. (3) Bus routes network optimization and medium-capacity rapid public transport system study. (4) Travel information dissemination and guidance system. (5) Parking management and leveled pricing system. (6) Tratlic conges1ion reduction policies and measures. (7) Integrated traffic database and modeling at Chengdu ci ty level. (8) Pr~ject management.

The project agreement was signed on June 28, 20 13, and came into effect on September 2, 2013. The grant account is planned to close on June 30, 2018. The total investment plan of the project is USO 26,800,000.00, among which the total GEF grant amount is USO 3,000,000.00, equivalent to RMB 18, 357,000.00 yuan(exchange rate was the rate on December 31, 2014, which was USD l :RMB 6.1190 yuan), and counterpart fund amount is USO 23,800,000.00 among which human resources and material objects worth USO 400,000.00, equivalent to RMB 143,237,000.00 yuan(except for project management, RMB 2,500,000.00 yuan, counterpart financi ng are converted to RMB on exchange rate of USO 1 :RMB 6.1 J 90 yuan)

2. Consolidation Scope of the Financial Statements

Consolidation scope of the financial statements covers the financia l statements of GEF "Large-City Congestion and Carbon Reduction Project" of Chengdu Transport Committee.

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3. Accounting Policies

3. 1 The financia l statements of this project were prepared according to the requirements China's accounting standards and the Financial Management and Payment Manual o.(The World Bank Loaning Program.

3 .2 In accounting practice, the Gregorian calendar year is adopted as the fiscal year from January I to December 31 .

3.3 The accrual basis and the debit/credit double entry bookkeeping method are adopted. RMB is used as the recording currency of bookkeeping.

3.4 The exchange rate adopted in the financial statements. was the exchange rate on December 3 1, 20 14 of the People's Bank of China, which is USDI :RMB 6.1190 yuan.

4. Explanation of S ubjects

4.1 Total Project expenditures The project expenditure in 20 14 was RMB 95,252,592. 78 yuan, and the cumulative expenditures were RMB 95,252,592.78 yuan, which accounted for 58.95% of the tota l investment plan.

4.2 Bank deposits. On December 31 , 2014, the balance of the bank deposits was RMB 32,518,495.02 yuan, which was domestic counterpart fund.

4.3 Prepaid and Receivable Its balance on December 31, 2014 was RMB 2,768,278.32 yuan, among which the repayment to Sichuan Xingzhong Intelligence Transport Engineering Co., LTD. was RMB 699,219.60 yuan, for the ,cost of engineering and equipment, and the repayment to Sichuan New Development Transport engineering Co., LTD. was RMB 2,069,058.72 yuan, for the cost of engineering and equipment.

4.4 Project Appropriation Funds On December 31 , 2014, the balance was RMB 111. 083,901.00 yuan, which was the counterpart fund allocated by the city, accounting for 88.95% of the plan.

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4.5 Project Capital and Capital Surplus On December 31, 2014, the balance was RMB 18,357,000.00 yuan, the amount of the project of Electronic Signs at Bus Stop completed and financed by Chengdu Public Transport Group Co., LTD., accounting for 100.00% of the counterpart funds plan.

4.6 Payable Its balance on December 31, 2014 was RMB 1,098,465.12 yuan, among which the payable to Sichuan Haote Communications Co., LTD. was RMB 632,048.68 yuan, for the cost of Engineering, and the payable to Sichuan Xingzhong Intelligence Transport Engineering Co., LTD. was RMB 466,416.44 yuan, for the cost of Engineering.

5. Designated Account

As of December 3 1. 2014, no application of withdrawal or reimbursement regardi.ng the project was received . and had not yet to open a special account for grants.

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