Islamic Republic of Afghanistan Supreme Audit Office Auditor General's Report & Opinion Qatia Statements of FY 1397 Supreme Audit Office of Islamic Republic of Afghanistan Government Qatia Statements Audit Commission Tel: 0202521551 Website: www.sao.gov.af Add: Beside MRRD, Kabul, Afghanistan Edition Number 16, Jawza-1398 Audit Report of Qatia Statement for FY1397 Supreme Audit Office Table of Contents Independent Audit Report of Auditor General .......................................................................... 4 Highlights ....................................................................................................................................... 6 Chapter 1 ...................................................................................................................................... 14 GENERAL .................................................................................................................................................................... 14 Definition of Qatia Statements .......................................................................................................................... 14 Importance of Qatia Statements preparation ................................................................................................... 14 Responsibility of the Budgetary Units ................................................................................................................ 15 Responsibility of the Ministry of Finance ........................................................................................................... 16 Responsibilities of the Supreme Audit Office (SAO) ........................................................................................... 16 Scope of the Audit .............................................................................................................................................. 17 Auditable Documents (Qatia Statement Supporting Document) ...................................................................... 17 Transparency in Transactions ............................................................................................................................ 18 Audit Methodology ............................................................................................................................................ 18 MoF comments on the draft report ................................................................................................................... 19 Chapter 2 ...................................................................................................................................... 20 AN OVERVIEW OF GOVERNMENT FINANCES AND BUDGET IMPLEMENTATION IN 1397 .............................................................. 20 SUMMARY OF EXPENDITURE AND RECEIPTS ....................................................................................................................... 20 Trends in Operating and Development Expenditures ........................................................................................ 20 Implementation of Operating and Development Budgets................................................................................. 22 Implementation of Revenue Budget, 1397 ........................................................................................................ 23 Financing the Budget: Domestic Revenue and External Assistance 1397 ......................................................... 24 Financing the Development Budget Expenditure in 1397 .................................................................................. 26 Domestic Revenue and Fiscal Sustainability ...................................................................................................... 27 Borrowings / Loans and their usage and repayment......................................................................................... 28 Usage of funds for operating and development activities: distribution by economic categories ...................... 29 Distribution of operating expenditure by economic categories ......................................................................... 30 Distribution of development expenditure by economic categories ................................................................... 31 Usage of funds for operating and development activities: distribution by sectors ........................................... 32 Quality of Budgeting, Expenditure and Financial Reporting .............................................................................. 33 Operation of contingency and reserve funds ..................................................................................................... 33 Advances paid, accounted for but not adjusted ................................................................................................ 35 Projects budgeted for but no expenditure was incurred ................................................................................... 36 Chapter 3 ...................................................................................................................................... 37 PRESENTATION OF THE DOCUMENTS ................................................................................................................................ 37 Chapter 4 ...................................................................................................................................... 40 DESCRIPTION OF NATIONAL BUDGET FOR FY1397 AND ITS SOURCES OF FINANCING ................................................................. 40 Sources of Financing for the National Budget ................................................................................................... 41 Summary of Organizational Structure (Tashkeel) in FY1397 ............................................................................. 43 Mid-Year Review Changes ................................................................................................................................. 43 Chapter 5 ...................................................................................................................................... 48 RESULTS OF AUDIT OF THE QATIA STATEMENTS FOR FY1397 ............................................................................................... 48 OPERATING BUDGET QATIA STATEMENT ........................................................................................................................... 48 The realization of Operating Budget for Fiscal Year 1397 ................................................................................. 50 The major findings of the results of audit of the Operating budget Qatia Statement ...................................... 59 DEVELOPMENT BUDGET QATIA STATEMENT ...................................................................................................................... 89 Explanation of Development Budget of the fiscal year 1397 ............................................................................. 89 The Realization of development Budget considering Qatia Statement of FY1397 ............................................ 89 Findings of the Audit results of FY1397 Development Budget Qatia Statement ............................................. 101 i REVENUES QATIA STATEMENT ...................................................................................................................................... 119 Revenues Qatia Statement of Operating Budget ............................................................................................ 119 Audit findings of Revenue Qatia Statement for FY1397 .................................................................................. 129 Development Revenues Qatia Statement ........................................................................................................ 132 Chapter 6 .................................................................................................................................... 135 LOANS...................................................................................................................................................................... 135 1. Loans without interest - ......................................................................................................................... 135 2. Loans with administrative cost and Interest in case not utilized - ......................................................... 135 New and Previous Loans Received by the Islamic Republic of Afghanistan. .................................................... 135 Chapter 7 .................................................................................................................................... 140 BANK STATEMENTS ..................................................................................................................................................... 140 Chapter 8 .................................................................................................................................... 142 1. MISCELLANEOUS TOTAL FOREIGN GRANTS DURING (2018) ........................................................................................... 142 2. TRANSFER OF FUNDS TITLED “CENTRAL BANK RECAPITALIZATION” ................................................................................... 143 3. NOT CONSIDERING NTA IMPLEMENTATION GUIDELINE IN RECRUITMENT OF CONTRACTOR STAFF ......................................... 145 ANALYSIS OF CONDITION OF