REPUBLIC OF KOSOVO OFFICE OF THE AUDITOR GENERAL

Transcription

1 REPUBLIC OF KOSOVO Document No: AUDIT REPORT ON THE PROJECT RENOVATION OF SCHOOL BUILDING, SCHOOLYARD AND SPORT AREA IN VILLAGE OF RADEVA IN MUNICIPALITY OF GRACANICA Audit based on the agreement with the UN Habitat No. 09/2013 Prishtina, April 2015

2 1 Introduction The Office of the Auditor General (OAG), based on the agreement with UN Habitat dated December 10, 2013, has carried out the final audit of the financial report on the project Renovation of school building, schoolyard, and sports area in Radeva village of Gracanica municipality. The municipality and the UN Habitat have entered into an agreement on 26 June 2013 to cofinance the project. The municipality should finance 50% of the project and UN-Habitat 50%. The agreement does not cover a renovation of the school building as such. The municipality should finance this part. According to the agreement the last instalment from UN-Habitat will be transferred after receiving the audit report issued by OAG. 2 Scope It is responsibility of the parties in the agreement to prepare a financial report. The Office of the Auditor General is contracted for carrying out an audit of the final financial report and to carry out a physical examination whether the works have been executed in accordance with the agreement. 3 Implementation of the project Description The municipality implemented the procurement procedure 1.. In the tender process, an open procedure was used. The criterion for the contract award was the lowest price. The Economic Operator NNP Sinani Ing won the contract worth 78,476 for implementation of the project on The agreement stipulated that only 63,999 would be co-financed. The municipality should finance the remaining amount of 14,477 for the renovation of school building. In order to oversee the execution of works the municipality appointed a project manager and a supervisory body, consisting of three members. After the completion of works, the 1 Waiver: The OAG has not audited the procurement procedure for this project, thus it is not responsible for issues linked to this procedure. 2

3 municipality appointed a committee for acceptance of the final works. This committee accepted the works of the project on The Committee assessed that the project was completed and that the works were in accordance with the contract. Findings The agreement between the municipality and the UN Habitat expired on 26 November The project was not completed at that time. The parties did not sign any annex contract to extend the timeframe of the project. The works should, according to the dynamic plan, have been completed in 35 days or by 17 October 2014 the latest. NNP Sinani Ing started the works on 21 August 2014 and completed them on 4 December According to the project manager, this delay occurred due to unsuitable weather conditions and difficulties related to safety of students attending the school. During the audit, we have noticed that the playground slide was not identical to the model foreseen in the plan, and a part of the pavement (about 1m 2 ) was not covered with cobblestones. Later, after our visit, the municipality has undertaken measures and eliminated these weaknesses. The works carried out have contributed in improvement of life conditions of the public in general and students in particular and have added value in terms of improvement of public spaces. The municipality has paid its obligation according to the co-financing agreement. UN- Habitat has transferred 80% of its obligation or 22,069. The remaining 20% ( 5,517) will be transferred after the reception of the audit report by the OAG. The financial progress of the project is presented in the following table: The table below shows the balance of payments (in ) Co-financing parties The contracted amount Paid Remaining Debt MA Gracanica 32,000 32,000 0 UN-Habitat 32,000 22,069 9,931 2 Total: 64,000 54,069 9,931 The table above shows that the outstanding liability of the UN-Habitat (excluding the VAT) is 5, From this amount should be subtracted VAT in amount of 4,414 3

4 Conclusion We can conclude that in general the project is implemented in accordance with the agreement and required technical standards and with sufficient quality, with the exception of the mentioned shortcomings. The project has contributed in achieving of the overall objectives. We recommend the UN Habitat to: Transfer the remaining amount of 5,517; and Issue the confirmation for exemption from the VAT to NNP Sinani Ing. 4

5 Annex: Financial Statement FINAL FINANCIAL STATEMENT Project name: Renovation of school object, regulation of school-yard and sport area in Radeve, Municipality of Gracanica Total CIP Contract value (EUR) 78, Total CIP Contract value which is co-funded by UN-Habitat (EUR) 63, Investment funded by Municipality Gracanica 14, Budget source EUR Municipality of Gracanica 31, UN-Habitat contribution without VAT 27, Total VAT portion in UN-Habitat's contribution 4, Total CIP Contracted Project Value incl. VAT 63, Installments paid by UN-Habitat EUR Received on 1st Installment as per AoC 8, nd Installment as per AoC 13, Total installments to date 22, Total UN-Habitat contribution without VAT 27, Total remaining financial obligation of UN-Habitat 5, Payments of the Municipality of NAME to the contractor EUR Paid on 1st Payment for the contractor NNP "Sinani ING" (Municipality's Part) 12, nd Payment for the contractor NNP "Sinani ING" (Municipality's Part) 13, rd Payment for the contractor NNP "Sinani ING" (Municipality's Part) 16, th Payment for the contractor NNP "Sinani ING" (UN-Habitat's Part) 8, th Payment for the contractor NNP "Sinani ING" (UN-Habitat's Part) 13, Total Payments (UN-Habitat's Part) 22, Total contract value (UN-Habitat's portion without VAT) 27, Total remaining financial obligation 5, Payment schedule according to the Agreement of Cooperation EUR 1st Installment as per AoC (30%) - (completed) 8, nd Installment as per AoC (50%) - (completed) 13, rd Installment as per AoC (20%) - (due for payment) 5,