Audit Report on the Verification of Expenditures for the Project No. 2009/225-551

Audit report on the verification of expenditures for the project no. 2009/225-551

INDEPENDENT AUDIT REPORT
AGREED-UPON PROCEDURES REPORT
AUDIT REPORT ON THE VERIFICATION OF EXPENDITURES FOR THE PROJECT No. 2009/225-551

T a b l e o f

C o n t e n t s

Report of Factual Findings…………………………………………………………………..3

The Project Objectives………………………………………………………………………..6

Findings………………………………………………………………………………………..7

Recommendations……………….…………………………………………………………….9

Report of Factual Findings

DritonBajraktari, General Manager

Down Syndrome Kosovo (DSK)

Address: Kroi i Bardh street 72,

10 000 Prishtina,

Kosovo

22 February 2012

Dear Mr. DritonBajraktari

In accordance with the terms of reference dated 06.02.2012 that you agreed with us, we provide our Report of Factual Findings (budget and expenditure), with respect to the accompanying Financial Report for the period covering 15.01.2010 – 14.01.2012(Annex 1 of this Report). You requested certain procedures to be carried out in connection with your Financial Report and the European Union financed Grant Contract concerning External action of the EUROPEAN UNION, no 2009/225-551, the ‘Grant Contract’.

Objective

Our engagement was an expenditure verification which is an engagement to perform certain agreed-upon procedures with regard to the Financial Report for the Grant Contract between you and The European Union the ‘Down Syndrome Kosovo (DSK). The objective of this expenditure verification is for us to carry out certain procedures to which we have agreed and to submit to you a report of factual findings with regard to the procedures performed.

Standards and Ethics

Our engagement was undertaken in accordance with:

-International Standard on Related Services (‘ISRS’) 4400 Engagements to perform Agreed-upon Procedures regarding Financial Information as promulgated by the International Federation of Accountants (‘IFAC);

-TheCode of Ethics for Professional Accountants issued by the IFAC. Although ISRS 4400 provides that independence is not a requirement for agreed-upon procedures engagements, the Contracting Authority requires that the auditor also complies with the independence requirements of the Code of Ethics for Professional Accountants;

Procedures performed

As requested, we have only performed the procedures listed in Annex 2A of the terms of reference for this engagement (see Annex 2 of this Report).

These procedures have been determined solely by the Contracting Authority and the procedures were performed solely to assist the Contracting Authority in evaluating whether the expenditure claimed by you in the accompanying Financial Report is eligible in accordance with the terms and conditions of the Grant Contract.

Because the procedures performed by us did not constitute either an audit or a review made in accordance with International Standards on Auditing or International Standards on Review Engagements, we do not express any assurance on the accompanying Financial Report.

Had we performed additional procedures or had we performed an audit or review of the financial statements of the Beneficiary in accordance with International Standards on Auditing, other matters might have come to our attention that would have been reported to you.

Sources of Information

The Report sets out information provided to us by you in response to specific questions or as obtained and extracted from your accounts and records

Factual Findings

The total expenditure which is the subject of this expenditure verification amounts to86,277.82euro.

The Expenditure Coverage Ratio is 88.90%. This ratio represents the total amount of expenditure verified by us expressed as a percentage of the total expenditure which has been subject of this expenditure verification. The latter amount is equal to the total amount of expenditure reported by you in the Financial Report and claimed by you for deduction from the total sum of pre-financing under the Grant Contract as per your Request for Payment of 17.12.2009.

We report the details of our factual findings which result from the procedures that we performed in Chapter 2 of this Report.

Use of this Report

This Report is solely for the purpose set forth above under objective.

This report is prepared solely for your own confidential use and solely for the purpose of submission by you to the Contracting Authority in connection with the requirements as set out in Article 15 of the General Conditions of the Grant Contract. This report may not be relied upon by you for any other purpose, nor may it be distributed to any other parties.

The Contracting Authority is not a party to the agreement (the terms of reference) between you and us and therefore we do not owe or assume a duty of care to the Contracting Authority who may rely upon this expenditure verification report at its own risk and discretion. The Contracting Authority can assess for itself the procedures and findings reported by us and draw its own conclusions from the factual findings reported by us.

The Contracting Authority may only disclose this Report to others who have regulatory rights of access to it in particular the European Commission, the European Anti Fraud Office and the European Court of Auditors.

This Report relates only to the Financial Report specified above and does not extend to any of your financial statements.

We look forward to discussing our Report with you and would be pleased to provide any further information or assistance which may be required.

Yours sincerely,

Auditors’ signature

Name of Auditor signing:BashkimXhuxha

Auditors’ address:Gjakova, Kosovo

Date of signature:22.02.2012

1. THE PROJECT OBJECTIVES

The Overall objectives of the action were the social integration towards improvements of living conditions of children with disability and their families in Kosovo.

Accordingly, the project objectives were as follows:

1. To strengthen understanding on the early intervention on children with disability as human rights issue, consistent with EU and international standards.

1. To increase the level of awareness of decision-makers and relevant authorities for inclusive education of children with disability and presenting the early Intervention model as mechanism which will help the children and families as well as the inclusive education process in general.

a)Community with Down syndrome and other children with development disability (through information sections on Early Intervention

b)Parent Support Group network of Down syndrome and Other children with development disability Group ( through training components)

c)Disabled Persons Organization (through training in open audience and sharing good practice)

d)Unit of Special education in Ministry of Education

e)Faculty of Education and Institute of Pedagogy

f)Unit of Human Rights in Ministry of Health and Health adviser of Prime Minister Cabinet

g)Unit of Human Rights in Ministry of Labor and Social Welfare and Department of Welfare Policy

h)Pediatric Clinic of University Center of Clinics and Genetic-Obstetrics Laboratory, Lab of cytogenetic.

Excepted results of project were:

1. Changing the attitude of parents and members of families regarding the integration of their children with Down syndrome and other children with development disability in mainstream education, through visits of 160 families.

1. Providing information on Down syndrome and other children with development disability, focusing on EIP for parents, family members, doctors, students and tutors, through six (6) lectures and four (4) workshops.

1. Creating summer program for pupil with Down syndrome on approaching their ability as peers, through intensive progrmme and developing model for schools.

1. Creating regional network on early intervention and sharing experience with support of abroad expertise, through regional conference and sharing together concerns (the professionals, governmental institution and civil society) among early intervention.

1. Creating partnership and sustainable communication with relevant governmental institution and agencies, through visits in key institutional governments as well as providing them with expertise, idea and models regarding early intervention program, inclusion in general as way towards of quality life improvements.

1. FINDINGS

According to the Agreement for the grant ‘External Actions of the European Union” with no. 2009/255-551, article no. 3 - financial actions, paragraph 3.1, the total amount of this project is EUR97,054.67. As per paragraph 3.2, the Contracting Authority (The European Union) participates with 75.67% or in the financial value EUR73,439.34, whereas the remaining part from EUR23,615.33 has to be financed by the Government of Kosovo.

1. The budget of the project

From the total budget of the project no. 2009/255-551 in the amount of EUR97,054.67, we have the following financial condition as shown in Table 1.

Table 1

Description / Budget / Participation in %
The Government of Kosovo / EUR23,615.33 / 24.33%
The European Union / EUR62,770.67 / 64.68%
Subtotal direct eligible costs of the action / EUR86,386.00 / 89.01%
Provision for contingency reserve (maximum 5% of Subtotal direct eligible costs of the action) / EUR4,319.30 / 4.45%
Total direct eligible costs of the action / EUR90,705.30 / 93.46%
Administrative costs ( maximum 7% of total direct eligible costs of the action) / EUR6,349.37 / 6.54%
Total eligible costs / EUR97,054.67 / 100.00%

Based on the Decision no. 2/115 dated 25.03.2010, The Government of Kosovo has allowed a fund of EUR23,420.00. From this information results that the actual amount of the fund allowed by the Government is lower than anticipated with the project of the European Union for EUR195.33.

After approval of the budget according to the above mentioned Decision by the Government of Kosovo, we have the following financial condition as shown in Table 2.

Table 2

Description / Budget / Participation in %
The Government of Kosovo / EUR23,420.00 / 24.13%
The European Union / EUR62,966.00 / 64.88%
Subtotal direct eligible costs of the action / EUR86,386.00 / 89.01%
Provision for contingency reserve (maximum 5% of Subtotal direct eligible costs of the action) / EUR4,319.30 / 4.45%
Total direct eligible costs of the action / EUR90,705.30 / 93.46%
Administrative costs ( maximum 7% of total direct eligible costs of the action) / EUR6,349.37 / 6.54%
Total eligible costs / EUR97,054.67 / 100.00%

1. Expenditures of the Project

From the above mentioned budget (EUR97,054.67), during the 2 year period are realized expenditures in the amount of EUR86,277.82. For details look on table 3 as shown below:

Table 3

Description / Budget / Costs / Balance
The Government of Kosovo / EUR23,420.00 / EUR20,089.00 / EUR3,331.00
The European Union / EUR62,966.00 / EUR61,821.31 / EUR1,144.69
Subtotal direct eligible costs of the action / EUR86,386.00 / EUR81,910.31 / EUR4,475.69
Provision for contingency reserve (maximum 5% of Subtotal direct eligible costs of the action) / EUR4,319.30 / EUR4,367.51 / EUR(48.21)
Total direct eligible costs of the action / EUR90,705.30 / EUR86,277.82 / EUR4,427.48
Administrative costs ( maximum 7% of total direct eligible costs of the astion) / EUR6,349.37 / - / EUR6,349.37
Total eligible costs / EUR97,054.67 / EUR86,277.82 / EUR10,776.85

2.1Subtotal direct eligible costs of the action

From the budget and the realization of the project, below on table 4 are presented expenditures for the category ‘Subtotal direct eligible costs of the action’ during the periodcovering15.01.2010 –14.01.2012:

Tab 4

Description / Budget / Costs / Balance
Subtotal HumanResources / 46,240.00 / 45,960.00 / 280.00
Subtotal Travel costs / 850.00 / 850.00 / -
Subtotal Equipment and supplies costs / 3,320.00 / 2,767.50 / 552.50
Subtotal Local office costs / 23,420.00 / 20,089.00 / 3,331.00
Subtotal Other costs, services / 12,556.00 / 12,243.81 / 312.19
Total / 86,386.00 / 81,910.31 / 4,475.69

From the information on the table 4 we can see that during the period of the realization of the budget from 15.01.2010 to 14.01.2012 are spent EUR81,910.31 or 95% of the total budget. The amount that has not been spent is EUR4,475.69 or 5%.

2.2Provision for contingency reserve (maximum 5% of Subtotal direct eligible costs of the

astion)

From the budget and the realization of the project, below on table 5 are presented expenditures for the category ‘provision for contingency reserve (maximum 5% of Subtotal direct eligible costs of the action)’ during the periodcovering15.01.2010 –14.01.2012:

Table 5

Description / Budget / Costs / Balance
provision for contingency reserve (maximum 5% of Subtotal direct eligible costs of the action) / 4,319.30 / 4,367.51 / (48.21)

As shown above in Table 5, expenditures on this category are exceeded in relation to the budget for EUR48.21. This category budgeted in the amount of EUR4,319.30 is considered as contingency reserve for covering expenditures which can be exceeded during the realization of the project. Therefore, if expenditures done by DSK in any line of expenditures exceeded the budgeted lines, then this contingency reserve can be used to cover the difference. During the verification of expenditures, the audit finds that the above mentioned budget line is spent for realization of the conference during the year 2010.

2.3 Administrative costs ( maximum 7% of total direct eligible costs of the action)

Table 6

Description / Budget / Costs / Balance
Administrative costs ( maximum 7% of total direct eligible costs of the astion) / 6,349.37 / - / 6,349.37

Budget line shown in table 6 in the amount of EUR6,349.37, is still not used. DSK can get access to this fund if the projected budget in the amount of EUR90,705.30 (EUR 97,054.67 min EUR 6,349.37) will be realized according to the contract.

1. RECOMMENDATIONS

We recommend the management of DSK the funds that has not been used (budget surplus) in the financial value of EUR10,776.85to be used:

• Request from the donator (The European Union) that the budgeted amount for the category ‘Administrative costs (maximum 7% of total direct eligible costs of the action)’in the amount of EUR6,349.37, approval for allowance and use of this fund in the account of DSK.
• From the donator (The European Union), the remaining unused fundin the amount of EUR1,096.48, request allowance for use for covering expenses of DSK, otherwise this amount to be transferred in the account of the donator.
• From the donator (The Government of Kosovo) the remaining unused amount of EUR3,331.00, request allowance for use for covering expenses of DSK, otherwise this amount to be transferred in the account of the donator

Annex 1

Tab 7

Description / Units / Budget for units / Budget / Costs / Balance
1. Human Resources
1.1 Salaries (gross amounts, local staff)
1.1.1 Project Manager / Per month / 24 / 650.00 / 15,600.00 / 15,600.00 / -
1.1.2 Assistant of manager / Per month / 24 / 250.00 / 6,000.00 / 6,000.00 / -
1.2 Salaries (gross amounts, 2 int. staff)
1.2.1 International Experts
Early Intervention Expert / Per month / 1 / 2,400.00 / 2,400.00 / 2,400.00 / -
Organisation& Management Expert / Per month / 1 / 2,400.00 / 2,400.00 / 2,400.00 / -
1.3 Per diems for missions/travel
1.3.1 Abroad (staff assigned to the Action) / Perdiem / 20 / 248.00 / 4,960.00 / 4,680.00 / 280.00
1.3.2 Local staff
1.3.2.1 PSG Member 1 / Per month / 12 / 200.00 / 2,400.00 / 2,400.00 / -
1.3.2.2 PSG member 2 / Per month / 12 / 200.00 / 2,400.00 / 2,400.00 / -
1.3.2.3 Coordinator 1 / Per month / 12 / 200.00 / 2,400.00 / 2,400.00 / -
1.3.2.4 Coordinator 2 / Per month / 12 / 200.00 / 2,400.00 / 2,400.00 / -
1.3.2.5 Coordinator 3 / Per month / 12 / 200.00 / 2,400.00 / 2,400.00 / -
1.3.2.6 Coordinator 4 / Per month / 12 / 200.00 / 2,400.00 / 2,400.00 / -
1.3.3 Seminar/conference participants
1.3.3.1 Lecturers*6 * 2 lecturer / per lecturer / 2 / 240.00 / 480.00 / 480.00 / -
Subtotal Human Resources / 144 / 7,388.00 / 46,240.00 / 45,960.00 / 280.00
2. Travel
2.1. International travel (London-Prishtina-London) / Per flight / 2 / 425.00 / 850.00 / 850.00 / -
2.2 Local transportation / Per month
Subtotal Travel / 2 / 425.00 / 850.00 / 850.00 / -
3. Equipment and supplies
3.1 Purchase or rent of vehicles, (rent*1 vehicle one month) / Per vehicle / 1 / 370.00 / 370.00 / 95.50 / 274.50
3.2 Furniture, computer equipment / Per PC / 4 / 200.00 / 800.00 / 800.00 / -
3.3 Machines, tools / Per printers / 2 / 180.00 / 360.00 / 340.00 / 20.00
3.4 Spare parts/equipment for machines, tools / Per scaner / 1 / 190.00 / 190.00 / - / 190.00
3.5 Other (LCD Projector and digital camera) / per pieces / 2 / 800.00 / 1,600.00 / 1,532.00 / 68.00
Subtotal Equipment and supplies / 10 / 1,740.00 / 3,320.00 / 2,767.50 / 552.50
4. Local office
4.1 Vehicle costs / Per vehicle / 1 / 3,500.00 / 3,500.00 / 3,500.00 / -
4.1.2 Maintance / Per month / 24 / 35.00 / 840.00 / 809.00 / 31.00
4.1.2 Fuel / Per month / 24 / 70.00 / 1,680.00 / 1,680.00 / -
4.2 Office rent / Per month / 24 / 450.00 / 10,800.00 / 7,500.00 / 3,300.00
4.3 Consumables - office supplies / Per month / 24 / 40.00 / 960.00 / 960.00 / -
4.4 Other services (tel/fax, electricity/heating, maintenance) / Per month / 24 / 235.00 / 5,640.00 / 5,640.00 / -
Subtotal Local office / 121 / 4,330.00 / 23,420.00 / 20,089.00 / 3,331.00
5. Other costs, services
5.1 Publications / Publication / 2 / 1,000.00 / 2,000.00 / 2,000.00 / -
5.2 Studies, research / Research / 1 / 1,500.00 / 1,500.00 / 1,500.00 / -
5.3 Auditing costs / Audit / 2 / 800.00 / 1,600.00 / 1,600.00 / -
5.4 Evaluation costs / Evaluation / 2 / 400.00 / 800.00 / 800.00 / -
5.5 Translation, interpreters / per day / 26 / 100.00 / 2,600.00 / 2,390.00 / 210.00
5.6 Financial services (bank charges) / Per month / 24 / 20.00 / 480.00 / 81.81 / 398.19
5.7 Costs of conferences/seminars / Conference / 1 / 400.00 / 400.00 / 400.00 / -
5.7.1 Regional conference, 12* persons from region countries / per diem / 12 / 248.00 / 2,976.00 / 3,472.00 / (496.00)
5.8 Visibility actions, leaflets / Action / 1 / 200.00 / 200.00 / 200.00
Subtotal Other costs, services / 71 / 4,668.00 / 12,556.00 / 12,243.81 / 312.19
5.8 Visibility actions, leaflets, Provision for contingency reserve (maximum 5% of Subtotal direct eligible costs of the astion) / - / 4,319.30 / 4,367.51 / (48.21)
Grand Total / 18,551.00 / 90,705.30 / 86,277.82 / 4,427.48

Page 1 of 12