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Worker Voice in the Apparel Sector in Bangladesh (Vide Letter No-03.07.2666.665.68.038.20-422 dated 12 May 2020) Implemented by: Phulki Funded by: The Cahn Group, LLC Information and Particulars Required by NGO Affairs Bureau Information and particulars on the audited Accounts of “Worker Voice in the Apparel Sector in Bangladesh”, a project of Phulki, Reg. # 465 dated 28 April 1991, renewed on 25 January 2016, for the year ended 28 February 2021 as per requirements of NGO Affairs Bureau (Vide circular # 03.07.2666.657.43.253.17-51, dated 16 January 2020) are stated below: 1. Role of Audit Firm in auditing the NGO: We confirm that we have performed a financial audit of accounts of the project “Worker Voice in the Apparel Sector in Bangladesh”, a project of Phulki, funded by The Cahn Group, LLC, as per International Standard on Auditing (ISA) with particular emphasis on the Terms of References (ToR) of NGO Affairs Bureau for the year ended 28 February 2021 with professional due care and highest level of integrity. 2. Compliance with Rules and Procedures: While conducting the audit, we considered whether the requirements of NGOAB as specified in their circular and regulations ‘The Foreign Donations (Voluntary Activities) Regulation Act, 2016; and the Gazette issued from the Prime Minister's Office, on the 12 April 2012, No 07.070.022.03.00.013.2010-90 (500) were also complied with and project was properly approved and implemented in accordance with the approved FD-6 (the goals, objectives and budget of the project). It is noted that initially the period of the project accorded by the Bureau was from 01 May 2015 to 30 April 2016, vide project approval letter ref no: 03.09.0000.665.68.098.15-761 dated 20 August 2015. The NGO Affairs Bureau has accorded the cost extension and budget revision for a period from 01 May 2015 to 31 December 2019 vide revised budget approval letter ref: 03.09.0000.665.68.098.15-614 dated 23 May 2019 and also accorded cost extension and budget revision for the period from 01 May 2015 to 31 March 2020 vide revised budget approval letter ref: 03.09.0000.665.68.098.15-114 dated 28 January 2020. 3. Reporting requirements of NGOAB: We have attached FD-4 along with Annexure A/1 in prescribed format, which was duly certified by us. All financial information provided in FD-4 was based on cash basis rather than accrual basis. All figures of the approved budget, actual expenditure and the variances between these two were shown in Taka. Annexure A/1 contained a detailed break-up of approved budget, actual expenditure and variances thereon including their causes of occurrences. 4. Separate audit report for each project: We have audited this project of Phulki for the first time. This report is prepared for the year ended 28 February 2021. During the course of our audit, we did not come across any income or donation other than the “Foreign Donations” to be reported separately as specified herein. 5. Disclosure of aims, objectives and activities of the project: The aims, objectives and activities of the project and other relevant information are given below:

Project Aims

Focused on counselling on any problem about workers especially about garments workers and ensuring a good work environment and safety environment of garments workers by maintaining a national/ native phone number which is toll free.

Project Objectives

1. To raise awareness through the helpline on workers’ environment, benefits and safety issues. 2. Provide training on 24 hours of service to use most modern, widely used mobile phone technology. 3. Making good relationship between factory manager and workers. 4. To create effective opportunities among factory manager and workers through training.

Project Activities

1. Ensuring a good work environment and safety environment of

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garments workers by maintaining a national/ native phone number which is toll free. 2. Provide training on 24 hours of service to use most modern, widely used mobile phone technology. a. Name of the project

Worker Voice in the Apparel Sector in Bangladesh

b. Project period

01 April 2020 to 31 December 2021

1. Vide no: 03.09.0000.665.68.098.15-761, Dated 20 August 2015 2. Amended vide no: 03.09.0000.665.68.098.15-445, Dated 15 May 2016 3. Amended vide no: 03.09.0000.665.68.098.15-484, Dated 31 May 2017 c. Project approval 4. Amended vide no: 03.09.0000.665.68.098.15-557, Dated 24 May 2018 letter ref 5. Amended vide no: 03.09.0000.665.68.098.15-614, Dated 23 May 2019 6. Amended no: 03.09.0000.665.68.098.15-114, Dated 28 January 2020 7. Latest Amended no: 03.09.2666.665.68.100.20-641, Dated 02 July 2020 The organization has received three (03) fund clearance letter for receiving fund during the year which are as follows: d. Fund clearance letter 1. Vide memo #03.09.0000.665.68.098.15-614, dated 23 May 2019; 2. Vide memo # 03.09.0000.665.68.098.15-891, dated 31 July 2019; & ref. 3. Vide memo # 03.09.0000.665.68.098.15-114, dated 28 January 2020 4. Vide memo # 03.09.2666.665.68.100.20-641, Dated 02 July 2020 e. Fund clearance The organization obtained fund clearance approval for the amount of BDT 16,883,740 amount f. Total fund received g. Whether the Foreign Donation has been received into the mother account before obtaining fund clearance letter

BDT 22,150,697

No (Note # 7.1 of Financial Statements)

01 April 2019 to 28 February 2021 i. Project The project is being implemented in Savar, Mirpur Dhaka, Bangladesh. implementation area j. Number of 3,227,524 Persons (Approx.) beneficiaries k. Date of appointment of CA firm to conduct 25 August 2020 audit h. Audit period

6. Adherence to guidelines: The Audit Report contains Statement of Financial Position (Balance Sheet), Statement of Income & Expenditure (Income & Expenditure Account) and Statement of Receipts & Payments (Receipts & Payments Account) which have been prepared according to the ledger maintained by Phulki and signed by the management which are enclosed with the audit report. The Receipts & Payments accounts has been prepared in accordance with books of accounts maintained by the management. No contingency has been shown in the financial statements. 7. Contents of the audit report: All pages of the audit report were numbered and initialed by the appropriate authority of the CA firm along with seal. Auditors’ Report, Statement of Financial Position (Balance Sheet), Statement of Income & Expenditure (Income & Expenditure Account), Statement of Receipts & Payments (Receipts & Payments Account), FD-4 certificate, and report according to the ToR have been signed by us. Audited financial statements are presented as follows: First part



Independent Auditors’ report enclosing scope, opinion etc.

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    

Statement of Financial Position (Balance sheet) Statement of Financial Performance (Income & Expenditure Account) Statement of Receipts and Payments (Receipts & Payments Account) Notes to the Financial Statements Schedule/ Appendix/ Other Statement

Second Part

   

FD-4 certificate Annexure A/1 Notes to FD-4 (Statement Showing Movement of Foreign Donation Fund) Report according to the ToR of NGO Affairs Bureau

8. Submission of last year’s audit report: This is the last year of the project covering 11 months from 01 May 2019 to 31 March 2020. Last year’s audit report has been duly submitted by us for the year ended 30 April 2019. 9. Submission of audit report: A copy of the audit report will be sent directly by us to the Deputy Director (Inspection & Audit) of NGO Affairs Bureau, Dhaka in a sealed envelope immediately after completion of the audit. 10. Registration with the NGO affairs bureau: Phulki is registered with the NGO Affairs Bureau of the Government of the People’s Republic of Bangladesh bearing registration number 465 dated 28 April 1991, renewed on 25 January 2016, which will expire on 27 April 2021. 11. Bank account of foreign donations: As per section # 9 of the foreign donations (Voluntary activities) Regulation Act 2016, the organization received all foreign donations through a mother bank account being maintained by Phulki which is Standard Chartered Bank, 14 Kamal Attaturk Avenue Branch, Banani, Dhaka-1213 during this year as stated in serial # 12 (a) of this sheet. 12. Details of bank accounts: a) Information about Mother Bank Account (approved by NGO Affairs Bureau):

I. II. III. IV. V. VI. VII.

Account No Account name Name of bank Name of branch Name of donor Grant received during the year Closing balance

Name of the Donor

: 01-620-1725-01 : Phulki : Standard Chartered Bank : 14 Kamal Attaturk Avenue Branch, Banani, Dhaka : The Chan Group, LLC : BDT 22,150,697 : BDT 136,779.59 (There was no closing balance of the project fund)

Date of receipts 30-May-2019

The Chan Group, LLC

Amount In BDT 5,526,092.63

04-August-2019

5,526,092.63

16-October-2019

5,542,637.81

05-February-2020

5,555,873.96 22,150,697.00

Foreign donation received during the year

b) Details of Project Bank Account: The organization maintains one (01) project bank account at Dhaka for operating the concerned project. Details of these are given below:

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Sl. Name of Bank No.

Branch name

Account name

Account no.

Closing balance (in BDT)

1.

Progoti Branch

Phulki

4028-789454-430

2,704,182.52

AB Bank Limited

Sharani

Total  The balance in mother account and project account has been duly reconciled and found correct. 13. Receipts of foreign donation in kind: Other than cash, Phulki did not receive any donation in kind for the concerned project from the donor during the year under audit. 14. Bank interest/exchange gain/loss: No exchange gain has been received by the project during the year under audit. However, bank interest amounting to BDT 136,073 was received by the project bank account mentioned above during the year under audit. 15. Method of maintenance of books of accounts: As per Section-12 of the Foreign Donation (Voluntary Activities) Regulation Act, 2016, the organization maintained its accounts according to double entry system and cashbook, bankbook, ledger is maintained properly though we didn’t find any stock register, fixed assets register and other register. 16. RLF fund: The organization has no Revolving Loan Fund (RLF) activities under this project. 17.

Micro credit: The organization did not disburse any amount in the form of Micro Credit from the project fund. The organization has no involvement in Micro Credit operation as informed by the management.

18.

Spending of donation in foreign currency: No amount has been expensed in foreign currency during the year under audit.

Reasons for incurring excess expenditures: The organization has neither adjusted any excess of expenditure over approved budget line item with another line item nor any expenditure falls outside the approved budget. However, reasons for variance between budget and actual expenditures have been shown in Annexure-A/1. 20. Payment of salaries and other expenditures: Payments of Contingency, fuel for generator and other expenditures exceeding BDT 10,000 weren’t made through account payee cheque / bank transfer. These details are given below: 19.

21. VR no & Date PV: 53, 22-07-2019

Head of expense Contingency

Mode of transaction Cash

PV: 159, 28-01-2020 PV: 117, 14-11-2019 PV: 142, 23-12-2019 PV: 50, 17-07-2019 PV: 122, 26-11-2019 PV: 147, 27-12-2019 PV: 190, 25-03-2020

Amount (BDT) 56,000

Contingency Cash 39,500 Fuel for Generator Cash 19,825 Fuel for Generator Cash 45,500 Tax Payable Cash 20,870 Tax Payable Cash 106,084 Tax Payable Cash 101,558 Tax Payable Cash 85,752 Total 475,089 Loan taken from other sources: Amader Kotha Helpline project did not take any loan in order to implement the project during the year under audit, which might require approval from NGOAB. 22. Payment of salary/honorarium to the members of General and Executive committees: To the best of our knowledge, no member of General Body or Executive Committee of the organization received salary, allowance or any kind of honorarium from the project fund. 23. Internal Control System: According to the best of our knowledge and observation, nothing has come to our attention, which indicates that there is a significant weakness in the internal control system. 24. Refund of money to the Donor: No amount was refunded to the donor during the period under audit as confirmed by management, which might require approval from NGOAB.

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25. Deduction of VAT & Tax: During this period, the organization deducted VAT amounting to BDT 115,759 and Tax amounting to BDT 224,855 from employees and suppliers concerned with the project; out of which BDT 103,237 and BDT 216,507 for VAT and Tax respectively were deposited to the national exchequer and BDT 12,522 for VAT and BDT 8,348 for Tax remained payable. The details of which are given below:

Sl No.

1. 2. 3. 4. Total

Particulars

Salary & allowances Administrative expenses Program expenses Overhead Cost

Amount of Deductible amount Expenditure (Taka) (BDT)

Deducted Amount (Taka)

Deposited (Taka)

Amount

Due amount (Taka)

3,547,556

VAT -

Tax 179,300

VAT -

Tax 179,300

VAT -

Tax 179,300

VAT -

Tax -

1,326,960

112,948

41,817

112,948

41,817

100,426

33,469

12,522

8,348

14,508,865

2,811

3,738

2,811

3,738

2,811

3,738

115,759

224,855

115,759

224,855

103,237

216,507

12,522

8,348

4,495,712 23,879,093

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Treasury/ Mushak Challan No. & Date

Ref: AnnexureB

26. Submission of Income Tax return as per ITO 1984: Phulki filed income tax returns as per provision of The Income Tax Ordinance, 1984 for the income year 2018-2019. However, there was no foreign employee employed during the year under audit. 27. Income Generating Activity (IGA): The organization did not undertake any Income Generating Activity (IGA) under this project. 28. Foreign travel: No employees of the organization availed foreign travel from project fund during the year under audit. 29. Particulars of deed of lease or rental agreement against Land / Fixed Assets: Details of fixed assets of the project has been mentioned Annexure-A the audited financial statements. All deed of lease agreement/ office rental agreement/ land/ vehicle and other properties belonged to the Project. Particulars regarding vehicle rental agreement are given below: SL No 01

Name of Vendor

Name of proprietor

Contract period

M/S Sinha Enterprise

Mohammad Sohid

01 Jan 2016 to further notice

Rent per month as per agreement 100,000

30. Sales or transfer of fixed or moveable assets: No asset has been sold or transferred under the project during the year under audit. 31. Management Letter: Based on our audit, we did not come across any reportable issue regarding irregularities and fraud that needed to draw the attention of top management. Therefore, we did not issue separate management letter to the management. 32. Year(s) of Audit: Hoda Vasi Chowdhury & Co has conducted the audit of this project for the second time for the year ended 31 March 2020 being last year of the project. 33. Governing body: Particulars of members of the Executive Committee are given below: Sl. No.

Name

Designation

1 2 3 4 5 6 7

Mr. Rashidul Hasan Dr. Niaz Zaman Mrs. M. Firdaus Ahmed Mrs. Shirin Khan Mrs. Fareya Haque M. Wazirul Alam Major General Md. Abdus Salam Khan

Chairman Vice Chairman Treasurer Member Member Member Member

34. Payment of Audit Fees: Expenditures regarding the audit fees have been charged to the project fund. 35. Enlistment of Firm: Enlistment of Hoda Vasi Chowdhury & Co. with NGO Affairs Bureau was made vide memo no. 03.07.2666.657.43.253.17-51, dated 16 January 2020 and our serial number is thirty-six (36). 36. Money Laundering & Terrorist financing activities: To the best of our knowledge, no such instances came to our notice during the course of the audit, which may indicate that the financial transactions associated with the project aimed at money laundering & terrorist financing activities. 37. Fulfillment of conditions mentioned in project approval: In response to the conditions mentioned in project approval letter vide no: 03.09.0000.665.68.098.15761, Dated 20 August 2015, we have obtained certain confirmations from management, which are summarized below:  Copy of FD-6 has been duly submitted to the District Commissioner;  Submission of project progress report to NGO Affairs Bureau and to the District Commissioner is under process;  Submission of the annual report in accordance with the Paripatra (Para- 11) is under process;

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 VAT/Tax has been deducted and deposited to govt. exchequer within due time (Ref: Annexure – B);

 Duality in project implementation has been avoided. 38.

Conducting audit within the time bound: Hoda Vasi Chowdhury & Co. has conducted the audit of this project for the year ended 28 February 2021 but could not submit the audit report within the time specified in project approval letter vide no: 03.09.0000.665.68.098.15-761, Dated 20 August 2015 due to delayed to appoint us.

Dhaka,

Chartered Accountants Signed by: M Munjurul Hassan, FCA Senior Partner

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