Audit of the Financial Statement of the"Conseil National de la Recherche Scientific"

CAPWATER Project No. P117-170Beirut - Republic of Lebanon

For the period from January 1, 2015till September 30, 2015

Talal Abu-Ghazaleh & CoMember of Talal Abu-Ghazaleh Organization

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Index

Contents: Page

Independent Auditor's Report 1

Project Statement of Cash Receipts and Payments 2

Notes to the Project Statement of Cash Receipts and Payments 3-11

TAGIAudionTalal Abu-Ghazaleh & Co.

Global Company for Auditing and Accounting 4 . a d .ll L I

Alliance with Russell Bedford International More than 120 member & correspondent firmsand 280 offices in Europe, the Americas & Asia-Pacific

Societe Civile (R.C. 67) oi9u -l W (IV 1. SrgaCertified Public Accountants

Independent Auditor's Report

To Conseil National de la Recherche ScientificCAPWATER Project No. P117-170Beirut - Republic of LebanonWorld Bank Grant No. TF091513

We have audited the accompanying financial statement compromising of the Statement of CashReceipts and Payments by category of CAPWATER for the Period from January 1, 2015 tillSeptember 30, 2015.

We have also audited compliance with the laws, regulations, guidelines and provisions governed bythe Grant Agreement for the period from January 1, 2015 till September 30, 2015.

We conducted our audit in accordance with International Standards on Auditing (ISA). Thosestandards require that we plan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free of material misstatement and about whether the First MunicipalInfrastructure Project has complied with laws, regulations, guidelines and provisions governed by theGrant Agreement. An audit includes examining, on a test basis, evidence supporting the amounts anddisclosures in the financial statement. An audit also includes assessing the accounting principles usedas well as evaluating the overall statement presentation. We believe that our audit provides areasonable basis for our opinion.

In our Opinion:a. the project Financial Statement (PFS) present fairly, in all material respects, the cash receipts

and payments of the First Municipal Infrastructure Project for the period from January 1, 2015till September 30, 2015 and showing cumulative balances as at December 31, 2014 inaccordance with the International Public Sector Accounting Standards (IPSAS), under thecash basis of accounting;

b. internal control over financial reporting involved in the preparation of replenishments, directpayments, payments through special commitments , and reimbursements i.e. expendituresreimbursed on the basis of statements of Expenditures can be relied upon to support therelated withdrawals for the period from January 1, 2015 till September 30, 2015;

c. The project was in all material respects in compliance with the laws, regulations, guidelinesand provisions governed by the Gran greement.

Waref M. Kumayha(Liccuse # 1927)

Beirut on October 28, 2015

Sanayeh-Al Mansour Bldg. N'IUMER0' Fll LZ. - _itAahllTel.: +961 1 754 222 u FORUM OF FIRNS + i I t V

Fax: +961 1754 222 tagi.com +vl tVat :USUP.O.Box: 11-7381, Beirut, Lebanon Tageo.bierut@tagi.com 4.ALIi L 4Lj 4y 1 1 v VA I :

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Notes to the Project Statement of Cash Receipts and PaymentConseil National de Ia Recherche Scientific

CAPWATERProject Grant No. P117-170

For the period from January 1. 2015 till September 30, 2015(Amounts are expressed in US Dollar)

Note 1: Project Purpose:

The purpose of the Agreement states that the World Bank grants the LebaneseRepublic a contribution of maximum US$ 1,050,000 as participation towards therealization of the project as per the description of the project and the budget.

The Middle East North Africa (MENA) program by the World Bank, achieveimproved water resources management and planning across the Mediterraneancountries including Lebanon. The project name is "Regional Coordination onImproved Water Resources Management and Capacity the Lebanese part of theproject was nominated "CAPWATER ".

The World Bank has partnered with NASA and USAID to deliver, implement andoperationalize a set of water management tools, the Water Information SystemsPlatform (WISP). Lebanon will use NASA Earth Science products and toolscustomized to address the country's unique requirements and capabilities for

improved water resources management.

NASA will develop and transfer WISP tools and data sets to the CNRS asimplementing agency in Lebanon.

Below is a brief description of the projects' objectives.

Project Objective 1Improve Lebanon capacities in the assessment of climate change impacts onLebanon's water resources

Project Objective 2Improve Lebanon capacities in drought assessment, monitoring and forecasting andstrengthen Lebanese capacities in flood and fire detection and modeling.

Project Objective 3Capacity building in crop mapping, assessment of evapotranspiration and yieldprediction.

Project Objective 4Field crop yield prediction of select water intensive crops.

3

Note 2: Designated Account Reconciliation Statement:

USD1. Total Amount Advanced by the World Bank 150,0002. Less: Total Amount Recovered by the World Bank 149,564.92

3. Outstanding Amount Advanced to SA/DA (Subtract 1-2) 435.084. Amount in SA/DA as per attached Bank Statement 435.085. Amount Claimed -6. Amount Claimed in Previous Application but not yet Credited to

SA/DA as per Bank Statement

Total of Pervious Applications not yet Credited

7. Amount Withdrawn from SA/DA not yet Claimed for Replenishment -8. Foreign Exchange difference9. Total Advance Documented (Add: 4+5+6+7) 435.08

10. Explanation of any Difference Between Amounts in Lines 3 and 9

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* Details of expenses for operating costs:

* workshops and supervision missions = 27,427 USDExpenses related 5,082 USDProject management 20,000 USDAuditing services 6,050 USDfield trips = 9,816 USD

68,375 USD

Note 12: Taxes due for ministry of financeThis account represents the value of contracts stamps duty taxes related tocontractors that were not paid since it is not allocated in the project's budget by theWorld Bank.

* Attached:1- Commitment table by category of project.2- List of contracts and Quantities of equipment (Hardware and Software).3- List of signed contracts (Technical assistant, project manager and consultant).4- Bank statement.

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