Audit

In accordance with the terms of the Loan Agreement No. 7436 POL of May 11, 2007 between the Republic of Poland and the International Bank for Reconstruction and Development, the Borrower is obliged to have the Project audited by independent auditors according to standards acceptable to the Bank. The Parties to this Agreement have also agreed that financial audit and audit of the Project progress will be conducted by the Polish Supreme Audit Institution (Najwyższa Izba Kontroli – NIK) and an audit report will be furnished to the Bank as quickly as possible, but not later than within 6 months from the end of each year. NIK’s first audit of the implementation of the Odra River Basin Flood Protection Project for the period 2007-2008 conducted at the Project Coordination Unit by the NIK Wrocław Branch lasted from July 1, 2009 to March 19, 2010. Based on this audit, NIK prepared a Project audit report in February 2010. This report was furnished to the World Bank through the Minister of Interior and Administration. In its audit findings, NIK assessed negatively the Project coordination and management activities for the period until March 2008 and positively for the period from March 2008. NIK also assessed positively, with some reservations, the Project’s annual financial statements for the years 2007 and 2008 concluding that expenditures from World Bank funds had been made for the purposes defined in the Loan Agreement and had been recorded correctly in the accounts. On the other hand, NIK assessed negatively the execution of the Project works due to low utilization of funds and low progress. The next audits were conducted by NIK each year and each time they covered the previous calendar year.