To: Nansen Dialogue Centre, Skopje, Macedonia                  

AUDIT STATEMENT

(1) We have audited the Financial Statements of the Project "Local self-government support of the Jegunovce municipality". This Project is financed by the Ministry of Foreign Affairs of Kingdom of Norway, according to the Grant Agreement No.05/02655 from 11 October 2005 conducted between Nansed Dialogue Centre - Skopje and the Norwegian Ministry of Foreign Affairs (Royal Norwegian Embassy). 

(2) The Financial Statements, subject of audit, refer to the period from 11 October 2005 till 31 December 2006.

Management's responsibility for the financial statements

(3) Management of the Project is responsible for the preparation and fair presentation of these financial statements in accordance with Agreement for the grant and the audit requirements. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and far presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditor’s Responsibility

(4) Our responsibility is to express and opinion on these financial statements based on our audit. We conducted our audit according to the International Audit Standards. These standards require that we perform the audit in order to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provide a reasonable basis for our opinion.

Auditor's opinion 

 (5) In our opinion, the financial statements of the Project “Local self-government support of the Jegunovce municipality” give a true and fair view in all material segments, of the Organization’s expenses and revenues, and are in accordance with the Agreement for the grant and the audit requirements. 

(6) Without qualifying our opinion we note that part of the realized expenses are supported only with supplier’s bill while the fiscal bill is not attached. Taking in consideration that audited period was period of implementation of fiscal registers, many of the small suppliers (taxi, pay tools, restaurants etc) did not provide customers with fiscal bills. 

Skopje, 24 January 2008 

Dimitrov Dragan, Certified Auditor

 STATEMENT OF SOURCES AND USES OF THE FUNDS

For the period from 11 October 2005 to 31 December 2006

 Project Leader                                                                                      

___________________                                                                      

 NOTES TO THE FINANCIAL STATEMENTS

3 GENERAL INFORMATION

The Project “Local self-government support of the Jegunovce municipality” is financed by the Ministry of Foreign Affairs of Kingdom of Norway, according to the terms and articles of the Grant Agreement No.05/02655 about the Project No.2050376 as from 11 October 2006, signed between Nansen Dialogue Centre – Skopje and the Norwegian Ministry of Foreign Affairs (Royal Norwegian Embassy). The Project is implemented by Nansen Dialogue Centre – Skopje, Macedonia. 

The implementation and development of the project refers to the period of 11 October 2005 till 31 December 2006. 

4 OBJECTIVES AND NATURE OF THE PROJECT

Project in Jegunovce is community based.  Nansen Dialogue Centre Skopje work-plan enfolds activities to support the development of the municipality of Jegunovce, but also all other principal community based activities. 

The system of education in this community remains to be main focus. The work in the municipality of Jegunovce shows that education is the most priority issue. 

Exceptional notice is given to elementary schools in Jegunovce. Work-plan consists of various activities which we believe will be promising and improve the educational standards at the first place. 

-  Involve, inspire and include community and stakeholders throughout the NDC Skopje actions; 

- Foster multiethnic values and mutual understanding among pupils in municipality of Jegunovce throughout informal courses and seminars;

- Maintain and obtain the support from the municipal authorities in Jegunovce;

- Make certain of NDC Skopje ensuing actions in Jegunovce;

- Sustain and follow up the implementation of some of the recommendations of the Strategic Plan for education system in Jegunovce. 

5 ACCOUNTING POLICIES

The basic accounting policies used for preparation of the Financial Statements are listed in the following text. 

Basis for preparation of the Financial Reports

The Financial Statements of the Project are prepared based on the Grant Agreement, which does not impose reporting requirements referring financial statements preparation and presentation.

These Project Financial Statements are part of the financial accounting of the Nansen Dialogue Centre – Skopje, that is based on the Accounting Law for Non-profit Organizations, accounting regulation and accounting principles used in Republic of Macedonia. 

Foreign exchange rates 

Project accounts are kept in MK denars. For the reporting purposes, the local currency is transferred into EUR. Translations of the transactions from MKD to EUR are made at exchange rate of 61 MKD for 1 EUR. 

6 GRANT AND FUNDING

The Project is financed by the Ministry of Foreign Affairs of Kingdom of Norway, according to the terms and articles of the Agreemenr No.05/02655 about the Project No.2050376 of 11 October 2005. The transfer of funds was received as it is stated bellow:

The preview bellow gives details and comparison of the approved budget and the actually received funds according to the instalments:

7 PROJECTS COSTS

The following preview represents the used funds according to separate budget items as for the total reporting period.

 Comparison between the approved budget and the used funds:

The differences within the budget items mainly refer to the realocation of the remaining amounts from budget lines 1 and 3 on behalf of the budget lines 2 and 4.