Table of Content: 2. Back Ground

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TABLE OF CONTENT
PAGE
1. INTRODUCTION 2
2. BACK GROUND 3
2.1. PSCAP 3
2.2. INSTITUTIONAL ARRENGMENTS 3
2.3. FUNDING MODALITIES 5
3. ACCOUNTING POLICIES & PROCEDURES 6
3.1. BUDGETING & BUDGETARY CONTROL 6

3.2. CHART OF ACCOUNT 12
3.3. ACCOUNTING CYCLE 17
3.3.1. RECEIPT OF MONEY 17
3.3.2. TRANSFER OF FUND TO BENEFICIERIES 18
3.3.3. DISBURSMENTS 20
3.3.3.1. CHECK PAYMENTS 21
3.3.3.2. CASH PAYMENTS 22
3.3.4. JOURNAL VOUCHER 23
3.3.5. ACCOUNTING RECORDS 24
3.3.6. REPORTING TYPES AND FREQUENCY OF REPORINTG 28
3.4. TRAVEL EXPENSES 33
3.5. PROCURMENT 34
3.6. RECEIPT AND ISSURANCE OF GOODS 34
3.7. MANAGEMENT AND CONTROL OF PROGRAM ASSETS 35
3.8. INTERNAL CONTROLS 36
3.9. AUDITING 36
3.9.1. EXTERNAL AUDIT 36
3.9.2. INTERNAL AUDIT 36
3.10. RETAINING OF DOCUMENTS 37
3.11. USING COMPUTERS 37
3.12. REVISION OF FINANCIAL MANUAL 37
3.13. ANNEX 38
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PSCAP –Financial Management Guidelines
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1. INTRODUCTION
The Public Sector Capacity Building Program, PSCAP is a large national program planned to
be implemented by different government offices in different government structures. The
MoFED will be responsible for the disbursement of program fund to the different beneficiaries
and for the eventual gathering of financial reports, consolidating them and preparation of
financial reports to the government, donors and other stakeholders. This will only be possible if
uniform and agreed procedures are followed by all the concerned. Uniformity of action
facilitates bottom -up consolidation of financial monitoring reports in relatively easy, accurate
and speedy way, which in effect ensures full accountability to providers of the funds.
The purpos e of this manual is to provide simple and user-friendly reference material for all the
people involved to help them in transactions processing from the initial identification of
transactions to the final financial reporting. It discusses the detailed procedures in receiving
fund (from all donors of PSCAP), keeping the fund, spending it, recording the expenditures,
reporting to the appropriate body and in safeguarding the assets acquired using the fund.
The basic policies of Financial Management are explained in the Operational Manual/PIP . This
manual provides the procedures that will be followed to adhere to the broad policies stipulated
in the PIP.
In the section that follows, the background of the program, as relevant to the understanding of
the manual, is explained. This is essential for the quick grasp of the nature of the program, the
purpose and out put of the program especially for the people that will join the structure at a
latter date. Auditors will only be involved after the start of the program. The background
provided would be a tip to them to kick-off their job.
Section three deals with the detail policies and procedures necessary for the management of the
fund. Each and every item that will be encountered during the execution of the project are
identified and explained in a clear and simple way.
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2. BACK GROUND
2.1. PSCAP
In May 2003, the Government launched a new state transformation agenda. Specifically, the
MCB announced its intention to rapidly scale up support for the six, out of the fifteen National
Capacity Building Programs, core public sector reform programs as subprograms under a
consolidated five-year federal program called the PSCAP. 1
The fifteen programs are Civil service reform, Justice reform, Tax reform, District-level
decentralization, Urban management, Information and communication technology,
Cooperatives, Private sector, Textiles and garments, Construction sector, Banking sector,
Agricultural training of vocational and technical levels, Industrial training of vocational and
technical levels, Higher education, Civil society. The first six are those covered under PSCAP.
The objective of PSCAP Support Project for Ethiopia is to improve the scale, efficiency, and
responsiveness of public service delivery at the federal, regional, and local level; to empower
citizens to participate more effectively in shaping their own development; and to promote good
governance and accountability. This objective will be achieved by scaling up Ethiopia's ongoing
capacity building and institutional transformation efforts in the six priority areas under PSCAP.2
There are two main project components. Component 1, Federal PSCAP, supports federal level
activities across each of the six subprograms including those capacity building activities for
which there are scale and network economies including those activities that require national
level prototyping. Component 2, Regional PSCAP, constitutes the bulk of the Program and is
designed to empower regions to adapt and implement national reform and capacity building
priorities envisaged under PSCAP's six subprograms in a manner that is efficient, accountable,
and sustainable. 3 The components are required to include basic program support activities to
ensure effective implementation.
2.2. INSTITUTIONAL ARRANGEMENT
As mentioned above the PSCAP is a nation wide program involving different tiers of the
government. The structure of PSCAP is fundamental to the financial management of the
program. Funds flow down the channel and reports flow up the channel.
1
Ibid
2
http://web.world bank.org/
3
Ibid.
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IDA credit account

Washington DC
(Foreign currency)
Government of
Special USD account in Ethiopia‘s
IDA special Ethiopia for each of the Contribution
account in USD in other Donor in the pool (Birr)
Ethiopia
Birr account for the

pool at MoFED
(CAD for reporting)
FEDERAL PSCAP REGIONAL PSCAP
Birr account for PSCAP Birr account for

at each federal executing PSCAP at each
agency BoFED
Key
Fund flow
Report flow
Figure 1 - PSCAP Fund and report flow chart
The MCB, the MoFED, the MOR, the MFA , Federal Supreme Court, and ICTDA implement
the Federal PSCAP.
The BCB (BCB), the BoFED, Justice Bureau and the BoTIUD are the implementers of PSCAP
at regional level. However, the financial management function will be fully carried out by
BoFEDs of the respective regions.
The overall coordinator of the program at national level is the MCB. The BCB in regions are
the coordinators of the program in their respective regions.
The MoFED (MoFED) is responsible for the overall financial management aspect of the
program. It opens accounts for the program, receives funds from the donors, release funds to
beneficiaries, collect reports from the beneficiaries and consolidate and report on the use of
funds to donors, government and other stakeholders. At regional leve l, BoFED (BoFED)
perform the same activity. The detail procedure is explained in the latter chapters.
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2.3. FUNDING MODALITIES
Funding modalities or disbursement modalities specify how funds flow from the donors to the
government and/or to the relevant public body. They also specify the way reports on the
spending of the funds are submitted to the donors.
4
The MoFED has identified three Channels or instruments for the flow of donor funds.
CHANNEL I – Aid and Loan funds that flow through the MoFED or BoFEDs are included
here and the reporting system has to follow the same procedures.
CHANNEL II – This is one of the aid disbursement channels used by bilateral donors for
releasing resources to beneficiary institutions under projects financed by them. The donors
provide goods and/or funds to beneficiaries usually ministries.
CHANNEL III – Under this instrument, the donor directly controls all funds. The donors
maintain their own bank account, pays invoices directly to contractors and/or suppliers.
Channel I is the recommended funding modality for PSCAP.
4
MoF, Donor Fund Flow, Keeping, Recording and Reporting System (Amharic Version), Addis Ababa, Tir 5,
1991.
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3. ACCOUNTING POLICIES AND PROCEDURES
In the remaining part of this manual, detailed discussion of accounting procedures is presented.
The first paragraph in each section is given in a box. The text in the box is the accounting policy
on the basis of which the detailed procedures are provided. The financial management
provisions in the PIP are taken as financial management policies as appropriate to ensure
consistency between this manual and the PIP.
3.1. BUDGET AND BUDGETARY CONTROL
Budget codes for PSCAP
The budget for PSCAP shall be proclaimed under the name of MCB, MoFED , MFA, MOR,
Federal Supreme Court and ICTDA.
Once identified and used, the budget code for PSCAP shall remain unchanged through out the life
of PSCAP.
Budget calendar (as provided in the PIP)
The federal lead institutions prepare their PSCAP budget and submit to the FTT) through the
PPD no latter than 1st March.
The regional lead institutions prepare their PSCAP budget and submit to the RTT through the
RPPD no latter than 22nd February.
RTT shall forward the regional PSCAP budget toFTT no latter than 1 st March.
FTT shall submit the annual regional and federal plan to IDA for no objection no later then 15 th
March.
FTT shall submit the annual regional and federal plan to cabinet no later then 22 nd March.
Annual plan for PSCAP, along with the over all budget, shall be submitted to the Council of
Ministers and, regional matching fund requirements in the regional budgets shall be submitted to
regional council, no latter than 22 nd May.
The Cabinets shall recommend PSCAP budget no latter than 2 nd June.
Approval and adoption by federal legislature will be undertaken before 2 nd July.

Execution of PSCAP budget begins at the start of the fiscal year on 8 th July
Mid-year reallocation of budget shall be made between regions and between the federal lead
institutions based on rules set out in the PIP by the FTT on or before 1st February. MoFED issues
final reallocations on or before 8th February.
Supplemental budget proposals shall be finalized by the MCB on or before 8th February.
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a) Budget Codes
In the government accounting system, the coding system starts from budgeting. In the process
of budget preparation, all the recipients of the fund from MoFED are identified with specific
budget code. That code is basic to understand how much budget is allocated to a public body for
the budget year.
The public body is the institution that is entitled to request and receive a budget. A pubic body
is an institution that has a legal mandate, receives budget directly from the concerned finance
and planning body, submits its final accounts directly to the MoFED.
The budget proclamation is the basic document. Transfer to the public body shall be made
under the code identified in the budget proclamation and the recipient of the budget is
responsible to account for the budget it has received.. Using that code, it is possible to produce a
report for the transfer, expenditures and the fund balance of a recipient.
Under PSCAP, the budget recipient shall be the MCB for the programs that will be
implemented by it and all regional PSCAP. All expenditures incurred by the MCB and those
incurred by regional BoFEDs shall be given similar code –318. However as MoFED shall make
cash transfers direct to BoFEDs, for cash transfer purpose the code shall be the codes that are
currently used by BoFEDs when receving cash from MoFED. This code is 154 for regions
using the old single entry system: namely Afar, Somali and Gambela. All other regions and
MoFED shall use 152 when recording the cash transfer.
Five federal implementing agencies shall be recipients of funds for the program each of them
will be implementing. These are the MFA, MoFED, MOR, Federal Supreme Court and ICTDA.
PSCAP budget shall be proclaimed under the name of these five public bodies.
The budget code that will appear in the budget proclamation and thence on each accounting
document and report shall be the following. The budget code presented below shall remain
the same through out the life of PSCAP, as change of codes from year to year shall hinder
preparation of reports correctly.
BUDGET
CATAGORY CODE
Public body MCB 15/318

MFA 15/118
MoFED 15/152
MOR 15/156
ICTDA 15/325
Federal Supreme Court 15/122
Program PSCAP 08
Sub- agency Plan and Program Department 01

Federal implementing agencies other than MCB 00
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Sub-program PSCAP - Tigray 01
PSCAP – Afar 02
PSCAP – Amhara 03
PSCAP – Oromia 04
PSCAP – Sumali 05
PSCAP – Benishangul gumuz 06
PSCAP – SNNPR 07
PSCAP – Gambela 08
PSCAP – Harari 09
PSCAP – Addis Ababa City 10
PSCAP – DireDawa Administration Council 11
Federal implementing agencies 00
Project Civil Service Reform 001

Justice System Reform 002
Tax System Reform 003
Urban Management Reform 004
Information & Communication Technology Reform 005
District Level Decentralization Reform 006
Expenditure Management & Control Reform 007
Program Support 008
Figure 2- PSCAP account code

A complete budget code can be written as follows:
Example 1 – Budget for Civil Service Reform sub program at federal level is identified as
15/318/08/01/00/001
Example 2 – Budget for Urban Management and Reform Project in Gambella region is
identified as
15/318/08/01/08/004
Example 3 – Budget for Tax system reform at federal level is identified as
15/156/08/00/00/003
Note that in the above code, only the last three fields are variable. If the implement ing agency
is the MCB, the sub-agency code shall be 01. If the implementing agency is any of the federal
lead institutes other than MCB, the sub-agency code shall be 00.
Regions that are using single entry accounting code
The budget for PSCAP shall be proclaimed as a federal project under the MCB. Hence the
double entry budget coding system shall be used. However, those regions using single entry
accounting cannot use the budget code because, firstly, the formats they are using are not
designed to include all the information in the double entry system, secondly, the accountants
may not be familiar with the double entry. New codes have to be identified so that it will be
possible to identify PSCAP expenditure by both regional and federal users.
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The account code under single entry accounting is organized to show three major elements: the
location code, organization code and receipts and payments code.
Location code has four fields, each field having two-digit code. The first field is standard, 01
for central government and 02 for regional government. The next field is also a standard two
digit, which identifies regions. The third filed which has also two digits is to identify zones and
the last filed having two digits is to identify woreda.
E.g.: Ministry of Agriculture in the federal government is located as 01 00 00 00.
Organization code identifies the sector (the budget institution in the sector) and the Project or
reporting unit. It has three fields. The first field has three digits the sector and the supervising
institution.
E.g. Ministry of Agriculture is in the Economic sector 200 and is number 11. So
the code is 211 .
The second field has two digits and identifies the sub unit. The third field has also two digits
identifying the sub-sub-unit.
E.g.: To complete the above example – Ministry of Agriculture Administration

and General Services Section is identified by 211 01 00.
If the above budgetary institution is implementing a capital budget, another three fields shall be
used to identify the project. The first field has three digits and identifies the sector. The next
field has two digits and identifies program. The last field has two digits and identifies the
specific project.
E.g.: If the Ministry of Agriculture has a project at Gode under a program called
Irrigation Development and the sector is Natural Resource Development the code
can be 721 02 02.
If the payment in the above example is for land preparation and other construction the code can
be 8203.
The combined code can be presented as:
01 00 00 00 - 211 01 00 - 721 02 02 - 8203
The above structure can be used to identify a unique code that all the single entry using regions
can use so that the program’s expenditure can easily and effectively be identified.
Since PSCAP has two components, the first two digits in the location code can be used to
identify those. Federal PSCAP is 01 and regional PSCAP is 02. The next two digits are to
identify regions. Under PSCAP these shall be used to identify the sub-programs, which are the
regional PSCAPs. The list is as shown in the table for double entry budget codes. The zone and
woreda digits will not be used.
Egg: PSCAP – Dire Dawa-Bureau of Urban & Works (BoTIUD) is identified as 02

11 00 00 .
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The Public Body or the supervising institution in whose name the budget is proclaimed is the
MCB. The Plan and Program Department of MCB is the sub units responsible for PSCAP. Sub-
sub-units codes will not be used. Hence the second three fields can be written as 318 01 00.
The third group is to identify a capital project code. PSCAP is a capital project. The sector code
cannot be used. The program code can be identified as 08. The project code under double entry
accounting has three digits. Under single entry the first digit shall be dropped and the last two
digits shall be used as follows:

Urban Management and Reform 04
Program Support 08
The last group of code is the receipts and payments code. This code is more or less the same as
the code under the double entry. The codes relevant for PSCAP are identified in the next
section.
The combined code for PSCAP under single entry can be written as follows. Take for example,
the Dire Dawa- PSCAP has paid for land preparation and other construction the code being
8203. Assume the payment is made under Urban Management and Reform sub program.
02 11 00 00 - 318 01 00 - 000 08 04 - 8203
The formats that shall be used under single entry shall be filled with the above codes. It will
therefore be possible to identify transactions by source and it is also possible to summarize
transactions as needed.
Additional information box shall be added on the existing Ge/He/29/4, the Trial Balance,
Ge/He/29/5, Monthly Transfer Summary and Ge/He/29/3, Capital Expenditure summary. The
heading of, for example, the Ge/He/29/4 can be presented as follows.
This is on the reports this will be added

Reporting unit Code Supervising unit Code
Central government/ region Name of Public Body
Zone Name of Program
Woreda Name of Sub-agency
Unit Name of Sub-program
Sub-unit Name of Project
Sub-sub-unit Source of finance
Bank account No
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All the remaining details shall remain the same as in the existing Ge/He/29/xx. The above will
enable the processing of accounts by CAD in an effective way. In addition, the regions that are
not yet implementing the accounting reform shall start familiarizing themselves to the
requirements of the double entry accounting.
Codes to be used for cash and non-cash transfers
As mentioned above, implementing agencies shall get transfer from MoFED. Hence, even if the
budget is proclaimed in the name of MCB and that the expenditure code for regional PSCAP
shall be 318, the cash transfer code will be different. The MoFED code as sender of the money
and the BoFED code as recipient of the money shall be used. This is not a new requirement but
the one that is being used currently. To illustrate:
Example 1: MoFED transferred Birr 1 million to Tigray BoFED
• MoFED shall record the transaction as follows:
Account code Debit Credit

01/000/00/152/01/001 4015 1,000,000
15/000/00/152/00/22 4115 1,000,000
• Tigray BoFED shall record the transaction as follows:

01/000/00/152/01/001 4103 1,000,000
15/000/00/152/00/22 4015 1,000,000
Example 1: MoFED transferred Birr 1 million to Somali BoFED
• Somali BoFED shall record the transaction on Ge/He 23 as follows:
Account code Received

15/000/00/154/00/22 4015 1,000,000
• MoFED shall record the transaction as follows:

05/000/00/152/01/001 4015 1,000,000
15/000/00/152/00/22 4115 1,000,000
Note: that 4015 represents transfer and 4115 represents cash at bank accounts.
b) Budget preparation and control
The budget preparation at the implementing agency level starts before March 1st of the year.
The budget is the annual fiscal plan (annualised drawing rights) in monitory terms. The
procedure for the preparation, Appraisal Adoption, Execution, and Re-allocation of budget is
provided in the PIP. The relevant section of the PIP (section IV – Resource allocation and
Management) is attached at the end of this manual as Annex XXXIX.
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It is very important that the accountants responsible for keeping the records of PSCAP and the
budget section representatives in the implementing agencies are fully participated in the budget
preparation process so that they can fully understand the budget and they will not be in problem
when they perform the control function.
The account codes that will be recommended in subsequent sections shall be used for the
detailed budget purpose. Expenditure codes shall be assigned to each item in the budget based
on the chart of account and that code must be used in keeping the accounting records to ensure
comparison of budget with actual spending.
The budget ledger card, as described in the following section, shall be used in the budget
control exercise. The detail procedure is described in that section.
The budget section shall prepare monthly budget tracking report. Preparation of this report is
not a difficult task if the budget ledger is kept up-to-date at all time. The budget section shall
extract the approved revised budget for each item of expenditure from the budget ledger card.
Expenditure to date is also extracted from the same ledger and put in the budget tracking report.
Comparison is made between the two and a third column showing the budget balance. The
budget balance shall be normal, under spent or over spent. The budget section shall give
comments on the budget balance in bullet points to give warnings to the budget users. The
accountant shall agree the report by signing on the face of it. The report shall then be circulated
to the procurement officer, the section that follows up the program and the head of the
implementing agency on the basis of which they can take appropriate corrective action. In
regions, BoFED is responsible for the financial management function. The preparation of
budget tracking report is therefore the responsibility of BoFEDs. The circulation of the report
will be to the above-identified three officers of the implementing agencies. Sample budget
tracking report is given in annex I.
3.2. CHART OF ACCOUNT
The Federal Government of Ethiopia’s (FGE) financial management system shall be

used in the overall management of the Program.
A supplemental chart of account is provided. The purpose of the supplemental chart of

account is to enable MOFED to capture and classify the funds received from donors
by subprograms. The intent is to enable project costs to be directly related to specific
work activities and outputs under PSCAP and to enable MOFED to monitor funds
utilization across subprograms and to serve as one of the source of information for
assessing performance by relevant entities.
The FGE accounting system provides the FGE Chart of Accounts which is a system of coding
government uses to identify and classify financial entities and events. 5
5
The Civil Service Reform Account Design Team of MoFED with the support of the Decentralisation Support
Activity (DSA) Project, Manual 3 FGE Accounting System, Volume II, FGE Chart of Accounts, Version 1.0,
January, 2002.
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Under PSCAP, the final financial report that will be produced is the Statement of Cash Receipts
and Payments. The Chart of Account that is recommended in this manual is sufficient to capture
transactions in a way that enables the preparation of this statement. The account codes shall
enable the preparation of the detailed budget, accounting for the transfers from donors and
transfers to beneficiaries (receipt from MoFED), capturing the transactions that will occur, and
preparation of periodic financial reports and the year-end financial statement. The Chart of
Account is developed based on the accounts classification and coding system used in the FGE
Accounting system for Modified Cash Basis transactions. The equivalent codes for those
agencies that are using single entry bookkeeping is also provided.
Under the Modified Cash Basis of accounting, the following accounts shall be used. CAD shall
officially issue the final codes.
PSCAP
TRIAL BALANCE
Implementing
MoFED agencies
Account Debit Credit Debit Credit
code
Cash on hand 4101 XXX XXX
Cash at Bank – Foreign Currency -IDA 4102 XXX
Cash at Bank – Foreign Currency – XXX 4102 XXX
Cash at Bank – Foreign Currency - XXX 4102 XXX
Cash at Bank – Pooled Birr Account 4115 XXX
Cash at Bank – Implementing agencies 4103 XXX
Cash shortage & overage 4202 XXX XXX
Other advance within government 4210 XXX XXX
Advance to consultants 4252 XXX
Advance to suppliers 4253 XXX
Due to MoFED 5027 XXX XXX
Other payables within government 5028 XXX XXX
Transfers - cash 4015 XXX XXX
Transfers –non cash 4050 XXX XXX
Net asset equity 5601 XXX XXX
Revenue - External assistance 2000-2999 XXX
Revenue - External loan 3000-3999 XXX
Expenditure 6000-6999 XXX _____ XXX _____
XXX XXX XXX XXX
NB: The specific codes for revenue, both assistance and loan, is given in the budget
proclamation which will be available soon. Those codes shall be used by MoFED to open
ledger accounts and record the income. For example, external loan from IDA is given a code
number “3014”. The chart of account shall be expanded as and when the new donors or lenders
are identified.
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Under the single entry booking, the following accounts shall be used:
PSCAP
TRIAL BALANCE
Imple menting
MoFED agencies
Account code Account code
Cash 4005 4005
Cash at bank 4115 4006
Staff debtors 4101 4101
Cash shortage 4201 4201
Custom deposit 5300 5300
Other payable 5400 5400
Transfers – capital 4015 4015
Other cash transfers 4020 4020
Expenditure 8000-8999 8000-8999
The definition and purpose of the above accounts is as provided in the FGE Accounting System.
The definition serves for both the single entry using entities and the double entry using entities.
Cash: - Under PSCAP, MoFED shall maintain one special account each for the donors. A pooled
local currency account shall be opened wherein transfer from the special accounts and from
the treasury (the government contribution) shall be kept. Each of the implementing
agencies at federal level and BoFEDs at regional level will have Birr accounts, type “A”
which will not be closed at the end of the budget year, opened for PSCAP purpose to
receive transfers from MoFED. BoFEDs shall have only one bank account although the
fund they are going to handle is for all implementing agencies in the region. In
addition each federal beneficiary and BoFEDs will have cash on hand account to handle
petty cash. The definition for cash therefore embraces all this accounts.
Receivables: - Included in this category are cash shortage, advances, prepayments and other
receivables. Advances include prepayments to consultants and suppliers. Other
receivable is to account for other kinds of advance that will not fall in the other
categories.
Payables: - Payables under PSCAP are expected to be short term. Only two accounts are
suggested in the double entry, Due to MoFED and other payables within government.
Similar purpose payables shall be identified in the single entry.
Transfers: - This account is not a permanent account and is closed at the end of every year.
During the year it will be used to record monthly transfer of money to implementing
agencies at Federal level and the BoFED at region level. The implementing agencies
and BoFED shall debit their respective bank account for PSCAP and credit the transfer
account. The transfer in the single entry has the same purpose.
The rule is that the total debit in the transfer account of MoFED shall equal the
total of credits in all implementing agencies. In effect at the time of consolidation,
the transfer account will have a balance of ZERO. The same rule applies for the single
entry although the debits and credits are not there.
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The accounting for non-cash transfers will be the same as above except that the
implementing agency shall debited the appropriate expense account instead of the
bank account.
Revenue : - Only MoFED shall use this account, as the distinction of revenue by source (donor)
in all the implementing agencies is irrelevant and impossible because transfer to the
agencies will be made from one pooled Birr account.
There are three categories of revenue under PSCAP: the transfer from central
treasury being the Government’s contribution shall be kept in the first revenue
account. Income from IDA will be a credit and is categorized as external loan. A
separate account shall be maintained for it. Income from other donors can be either
external loan or external assistance. Separate account for each of the donor shall
be kept according to the nature of the transfer, i.e., either loan or assistance.
Expenditures: - The major and most important section of the Chart of Account is this
section. Most of the expenditure types can be captured by the expenditure account
codes being used in the accounting sys tem at present. The expenditure codes have
sufficient detail accounts and control accounts as well such that there is no need at
all to create new codes.
The expenditure codes have also control account and subsidiary account code system. Fore
example 6200 is the general category for Goods and Services and accounts from 6210 to
6224 are the subsidiary ledgers. The control account shall be used to provide summary
report by category for the donors’ purpose.
Matching of the single entry code with the double entry code is very important and it is done
like shown in the following table. As mentioned earlier PSCAP is a capital budget
program. The capital budget expenditures under the single entry are in the 8000 group. It is
also possible to establish major ca tegories for donor reporting purpose so that the system can
directly produce the donor report. Using the IDA’s category, the chart of account can be
designed as follows.
Donor Double Single

Account title Category entry entry
Control account Goods and Services Goods 6200
Subsidiary accounts Office supplies 6212 8303
Printing 6213 8303
Food 6216 8303
Fuel and lubricants 6217 8303
Other material & supplies 6218 8303
Miscellaneous equipment 6219 8303
Research & development supplies 6223 8303
Control account Fixed assets Goods 6310
Subsidiary accounts Purchase of equipment 6313 8204

Purchase of building s, furnishings & fixture 6314 8206
Consultant
Control account Contracted services services 6250
Subsidiary accounts Contracted professional services 6251 8101
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Consultant
Control account Personnel service services 6100
Salaries to permanent staff 6111 8301
Wages to contract staff 6113 8302
Wages to external contract staff 6115 8302
Allowance to pe rmanent staff 6121 8301
Allowances to contract staff 6123 8302
Allowance to external contract 6124 8301
Government contribution to permanent staff pension 6131 8301
Operating
Control account Contracted services costs 6230
Rent 6252 8303
Advertising 6253 8303
Insurance 6254 8303
Fees and charges 6256 8304
Electricity charges 6257 8303
Telecommunication charges 6258 8303
Water & other utilities 6259 8303
Control account Travelling & official entertainment service Ope rating 6230
costs
Subsidiary accounts Perdiem 6231 8501
Transport fees 6232 8501
Official entertainment 6233 8303
Control account Training Training 6270
Subsidiary accounts Local training 6271 8501
External training 6272 8501
Training related Perdiem 6273 8501
Training related transport fee 6274 8501
Operating
Control account Personnel service costs 6100
Subsidiary accounts Wages to causal staff 6114 8302
Operating
Control account Maintenance & repair costs 6240
Subsidiary accounts Maintenance & repair of vehicle 6241 8303
Maintenance & repair of equipment 6243 8303
Maintenance & repair of building, furnishings & fixtures 6244 8303
Figure 3- PSCAP expenditure code
The PSCAP expenditures are not fully known at this stage. The above codes and accounts
categories are drawn using the information at hand at the time of writing this guide. It will be
mandatory to revise the chart of accounts once the expenditure items are clearer. The
resp onsibility to establish new codes as the need arises shall be of CAD. The new codes shall
be identified, organized and communicated in writing to all implementing agencies.
The chart of account discussed above is attached as an annex at the end of this manual in
a summarized and detachable format. Refer annex XXXVIII.
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3.3. ACOUNTING CYCLE
The accounting cycle for PSCAP is not different from the government accounting cycle. It
starts when money is received in the special accounts and ends when report of expenditures is
presented to the CAD and CAD is closing the accounts. In the sections that follow we shall see
the accounting process.
3.3.1. RECEIPT OF MONEY
Foreign exchange (FOREX) account shall be opened to each donor with the national
bank of Ethiopia by the Treasury Department of the MoFED. One of the accounts shall
be the IDA special account. The others shall be used to keep funds received from other
donors.
One pooled Birr account shall be opened to keep transfers from the special accounts and
from central treasury being government’s contribution to the program. Transfers to the
pooled Birr account shall be made monthly based on the approved annual plan.
There are two concerned units of the MoFED that are relevant in the management of the
PSCAP. These are the Counterpart fund unit (CFU) in the Treasury Department and the Central
Accounts Department (CAD).
The CFU is the one authorized to open special bank accounts for programs. It will be requested
to open the special accounts mentioned above.
The initial deposits to the special accounts will be the advance payments from each donor as
agreed in the respective agreements signed with the donors. Subsequent deposits shall be based
on Statement Of Expenditure (SOE) that will be presented to the donor. After a certain initial
period, the Financial Monitoring Report (FMR) shall replace the SOE. These two reports are
discussed further in subsequent sections.
The CAD shall be responsible for the accounting function, i.e., to record the receipt transactio n,
to prepare donor reports and annual financial statements for reporting to donors and for the
annual audit.
The PSCAP program shall receive money from the two major sources, from donors and from
the government. The receipt transaction shall be recorded when bank advice is received from
the bank. The accounting entry to record the transfers shall be as follows. Note that only
MoFED shall receive money from donors. Hence the entries are relevant for CAD only.
1. If receipt of money is from IDA

Debit Credit
Cash at Bank – Foreign currency IDA XXX
Revenue –External credit – IDA XXX
2. If receipt of money is other donors as assistance

Debit Credit
Cash at Bank – Foreign currency (donor name) XXX
Revenue –External Assistance - IDA XXX
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3. If receipt of money is treasury

Debit Credit
Cash at Bank – Pooled Birr account XXX
Transfer XXX
Transfer shall be made from the special accounts to the pooled Birr account whenever the pool
account balance is low. The follow up of the bank account balance, like the special account
balances, shall be made by CFU. The entry to record the transfer shall be:
4. Transfer from special accounts to the pooled Birr account. Assume that transfer is from IDA
account
Debit Credit
Cash at Bank – Foreign currency IDA XXX
3.3.2. TRANSFER OF FUND TO BENEFICIERIES
MoFED Treasury department shall make transfer from the pooled account to the federal
beneficiaries and BoFED quarterly after the implementing agencies submit Disbursement
Request approved and cleared by MCB and accompanied by Quarterly Report.
The amount to be transferred to a beneficiary is calculated as the next quarter budget less
procurement to be made centrally less any unused money from the previous quarter.
Transfer to the beneficiaries and BoFED shall be made on the 12th day of the quarter.
Each federal beneficiary shall ope n a separate Birr account for PSCAP and transfer from
MoFED shall be to the PSCAP account.
At region level, BoFED shall open a separate Birr account for PSCAP in which transfer from
MoFED shall be deposited. The bank account shall be the only PSCAP account in the region.
Transfer account shall be used to record transfer to the beneficiaries and transfer from
MoFED.
Cash receipt Voucher shall be used to recognize cash transfers received. The equivalent
document for regions that are using single entry is Ge/He/21/1.
All institutions receiving PSCAP fund from the PSCAP Pooled Birr account shall open bank
accounts of type “A”. This type of account is more appropriate for the nature of PSCAP of all
the account types identified in Guideline No 16/2004, Guideline to Open and Administer
Government Bank Account, of MoFED.
Transfer of fund to federal implementing agencies and BoFED shall be made by the MoFED,
upon receiving instruction from the MCB who is the responsible agency for the overall
program. BoFEDs shall not transfer funds to regional implementing agencies. Rather, the
BoFEDs will handle the fund and effect all payments related with PSCAP upon request from
the implementing agencies.
BoFED shall be responsible to prepare the monthly reports and present to the MoFED.
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The first transfer from the pooled account to the federal beneficiaries and BoFEDs’ PSACAP
account shall be made on the basis of the first quarter budget that shall be prepared with
reference to the approved first year budget. Each beneficiary shall fill the Disbursement Request
(see annex II) immediately after receiving its approved budget.
Subsequent transfers shall be made on the basis of subsequent Disbursement Requests and
quarterly reports. Disbursement Requests shall be identified by the name of the beneficiary and
the request number referring to the quarter number for which request is made (the first advance
shall be for the 1st quarter). Quar terly reports shall be in the form prescribed in annex III. This
report shows the expenditures paid in the quarter on the approved budget lines. It shall also
show the budget for next quarter.
The amount to be requested for transfer is the budget for the next quarter less any procurement
included in the beneficiary’s budget but that will be made centrally (using foreign exchange etc)
less the balance of cash on hand and at bank at the end of the quarter.
E.g.: If the budget for Quarter II is Birr 100,000, the budget includes Birr 50,000 for goods that
will be paid centrally and the cash on hand and at bank at the end of the quarter is Birr
10,000, and then the amount of transfer requested should equal Birr 40,000.
Disbursement requests from federal bene ficiaries shall be forwarded to the MCB for approval.
The approved request shall be submitted to the MoFED, CFU. The CFU shall collect quarterly
disbursement requests from both federal beneficiaries and regional BoFED and request the
Treasury Department to make the transfer to the beneficiaries.
Disbursement request from BoFED shall be submitted to BCB, which will approve and forward
it to MCB. After checking and approving, the MCB shall advice the MoFED to make transfer to
the BoFED.
MoFED shall receive final disbursement requests and quarterly reports from federal
beneficiaries through MCB on the 10th day of the following quarter. MoFED shall transfer
funds on the 12 th day of the next quarter (within two working days after it received the
approved request). For this to happen, the federal beneficiaries shall submit the Disbursement
Request to the MCB on the 6 th day following the end of the quarter. BoFED shall forward its
request to BCB’s approval on the 6 th day. On the 8 th day, the BCB shall approve the request
and forward it to the MCB. The MCB shall forward the approved Disbursement request on the
10 th day.
The deadlines are very tight that quarterly reports and requests could not be send physically.
Reports and requests should therefore be submitted by fax whenever possible and the originals
can follow latter for file.
Two accounting entries shall be made at this point, one by the CAD and the second by the
beneficiary receiving the transfer.
The CAD will receive bank debit advice for the transfer. Upon receiving it will,
Debit Credit
Transfer account XXX
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The beneficiaries shall receive bank credit advice when their bank deposits the money in their
account. They will write cash receipt and pass the following entry:
Debit Credit
Transfer account XXX
The beneficiary shall use Cash Receipt Voucher as recommended in the FGE accounting
system (see annex IV). According to the FGE accounting system Cash Rece ipt Voucher shall
be used for all sorts of receipts. Cash may be received in notes and coins, in check, bank
transfer or direct deposit in the bank account. Hence all transfers from MoFED to federal
beneficiaries and to regional BoFED, and from BoFED shall be captured via Cash Receipt
Vouchers. The budget and account code shall be written on the face of the cash receipts as
follows:
Example – The Amhara region BoFED received Birr 1,000,000 from the MoFED to cover
expenditures of all PSCAP projects implemented in the region.
Budget category Account code Birr

Debit Credit
152/08/01/03/000 4103 1,000,000 00
152/08/01/03/000 4015 1,000,000 00
The regions that are using the single entry accounting will use Ge/He/21/1, which has the same
function as the cash receipt under the double entry accounting. Obviously they will not make
journal entries as shown above. However they will record the transfer using the account
number 4015 (remember that PSCAP is a Capital project). The above transaction can be
recorded as:
Revenue Item Purpose of payment Birr
4015 Transfer for PSCAP program 1,000,000 00
Bank charges to transfer money to regions shall be born by MoFED. This is important to
reconcile the transfer account maintained by MoFED with the tran sfer accounts
maintained by beneficiaries and BoFED.
3.3.3. DISBURSMENTS
Disbursement can be made in the form of cash (notes & coins), bank check or bank transfer.
The general policy is that disbursement shall be made for goods and services acquired
or to be acquired, if there is firm commitment.
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3.3.3.1.CHECK PAYMENTS & BANK TRANSFERS
All check payments and bank transfers shall be made via a payment voucher and
shall be duly authorized by the responsible officer. Regions that are using single
entry will use Model 6.
The approval procedure and the authorization limits to approve check payments
shall be the procedures existing in each implementing agency.
In Regions, the implementing agency shall complete the approval process and
present the payment documents for BoFED to effect the payment.
Payments by bank transfer shall be made for payees who are in a distant place.
As much as possible, all payments s hall be made by check. Only small payments, the
limit/demarcation being the one existing in each of the implementing agencies, shall be made in
cash.
Bank transfers shall be used to make payments to people in different places from the location of
the implementing agency.
The Bank Payment voucher that is being used in the FGE accounting system shall be used (see
annex V). The payment voucher has all the necessary details to identify the payment and all the
details have to be filled in. The account code is filled in the payment voucher as shown in the
following examples:
Examples
1. Payment of Birr 250,000 is made to MOENCO for the purchase of vehicle by Amahara
region Bureau of Urban & Works for UMRP. The region’s BoFED makes payment.
Budget category Account code Birr

Debit Credit
15/318/08/01/03/004 6311 250,000 00
15/152/08/01/03/000 4103 250,000 00
Those regional BoFEDs that are using the single entry accounting shall continue using model 6
until they go through the accounting reform. There is a space to write the expenditure
code/budget code and the account code on the payment voucher.
Example
2. Payment of Birr 270,000 is made to MOENCO for the purchase of vehicle by Sumali
region BCB for ICTD. The region’s BoFED makes payment.
Budg et code shall be 02150000 -3180100-0000805

Account code shall be 8205
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Each implementing agency shall use the existing procedures for payment process. This includes
the decision as to who will sign checks and the threshold for approval of any one payment.
In the regions, the implementing agencies are not check signatories. BoFEDs shall make the
payment based on the request of the implementing agencies. All documentations and approval
process shall be completed in each of the implementing agency, and on the basis of such
document, BoFED will effect the payment.
The list of signatories shall be provided to the bank where the PSCAP account is maintained.
3.3.3.2. CASH PAYMENTS
An imprest petty cash fund shall be established with each implementing agency at
federal level and with each BoFED.
The Cashier shall keep the fund in a safe.
All small payments shall be paid out of petty cash. Every payment has to be duly
approved.
Suspense payments can be made form the petty cash account.
The purpose of keeping this fund is to meet small payments for which writing of check is not
recommended. The fund shall be replenished whenever the amount of cash in safe is believed to
be small. A bank check in the name of the cashier shall be prepared for replenishment.
The Cashier shall keep the fund. There should be cash safe and the Cash office should be strong
enough.
Payment of cash out of the fund shall be made via the Cash Payment Voucher (see annex VI).
As in the check payments, the existing procedure for cash payment in each of the implementing
agency sha ll be used. The cashier shall maintain a follow up book, Petty Cash Book given in the
FGE accounting system, to track the balance of cash on hand (annex VII). What goes to the
debit column is the amount of check to replenish the fund. On the payment column of the book,
payment vouchers shall be recorded.
Temporary advances, suspense, can be paid out of the petty cash fund. Suspense Payment
Voucher given in the FGE accounting system (annex VIII) shall be used to process the
suspense transaction. The vouche r shall not be recorded in both the petty cash book and the
Transaction Register.
Under single entry accounting system, Model 6 (annex IX) is used for both check and cash
payments. Model 6 is also used to make temporary advances such as travel advances and salary
advances. When used as suspense vouchers, Model 6 is prepared in one copy only. When the
advance is settled, the single voucher shall be cancelled and returned to the one settling the
advance. The actual expense shall then be recorded following the normal procedure.
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Both the cash and check payment transactions shall be prepared for posting to the transaction
register when double entry, or to Ge/He/23 (annex X) when single entry. The preparation for
posting is the coding of the payment vouchers. The accountant shall write the appropriate
accounting code on the face of the voucher as shown earlier.
In regions, BoFED shall keep one petty cash fund for PSCAP purpose. Payments shall be made
based on the request of implementing agencies just like for Check Payments.
3.3.4. JOURNAL VOUCHERS
Journal Vouchers shall be used to capture transactions that do not result in payment or
receipt of cash.
The Head of the Budget and Accounts shall approve all Journal Vouchers.
Not all transactions involve payment of cash or receipt of cash. The purpose of the Journal
Voucher is to capture such non-cash transactions. Other common Journal Entries are correction
of errors. For example, a payment might have been debited to a wrong expenditure account and
need correction. The correction shall be made via Journal Voucher.
The Journal Voucher in the FGE Accounting System shall be used for PSCAP purpose (annex
XI). It shall be prepared in two copies. The first copy is the accounts copy and the second copy
is pad copy.
The Head of Budget and Accounts must approve all Journal Vouchers after the accountant
prepares it. The accountant then posts it to the transactions register. The following examples
illustrate the way the Journal voucher is prepared.
Example 1 – The MoFED purchased ICT equipment for Oromia region PSCAP from Blue
Nile Trading. The cost of the equipment is Birr 265,000. Oromia region BoFED will record
the transaction as follows:
Description Budget Category Account Code Debit Credit

Equipment 318/08/01/04/005 6313 265,000 00
Transfer 318/08/01/04/000 4050 265,000 00
Example 2 – In SNNPR’s JSRP, Birr 100,000 paid for external training was wrongly
charged to local training. The correcting entry would be:
Description Budget Category Account Code Debit Credit

External training 318/08/01/07/002 6272 265,000 00
Local training 318/08/01/07/002 6271 265,000 00
Under single entry accounting, there is no document equivalent to the Journal Voucher that
exists under double entry accounting. But Model 64B (Annex XII) is used to account for non-
cash transfers from the MoFED to implementing agencies and from one implementing agency
to the other, The implementing agency, when receiving Model 64B from MoFED shall treat it
as if it has received money from MoFED and immediately transfer the back to MoFED.
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To illustrate the treatment of Model 64B, assume that MoFED paid for consultancy who
provided service in Gambela region. The payment was Birr 100,000. MoFED shall write a
letter to the region that it has paid for the service. The region shall record the following on
Model 64. Two entries shall be recorded.
The first is to record the transfer as if it is a cash transfer.
Account code Receipts Payments

08/000/00/154/01/001 4012 100,000
The second is recording of the payment under the appropriate expense code;
Account code Receipts Payments

08/000/00/318/01/001 8101 100,000
3.3.5. ACCOUNTING RECORDS
The FGE standard accounting records, as described in the FGE Accounting System Manual III,
Volume I (Accounting for Modified Cash Basis Transactions) shall be used by all implementing
agencies uniformly in keeping records for PSCAP. Appropriate modifications to the reports
shall be discussed in this manual
Double entry
Each implementing agency shall maintain the FGE transactions register.
All transactions of PSCAP concluded by the implementing agency shall be recorded in the
register from the source documents.
Each debit and credit amount, for each transaction recoded in the transaction register, shall be
recorded on a ledger card in the general ledger. When necessary, subsidiary ledger shall be
maintained and posting to it shall be made from the transactions register.
Single entry
Each implementing agency shall maintain Ge/He 23.
Transfer received from MoFED and all payments made shall be registered in the Ge/He23.
The recodes that shall be used under PSCAP shall be, Transactions register, Budget ledger card,
General ledger and Subsidiary ledger.
The use and the manner of recoding in the above records shall be explained in this manual but
full discuss ion is made in the FGE accounting system manual.
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Transactions Register
At Federal level, MoFED shall maintain three groups of transactions registers. The first group
of transaction registers will be used to deal with the special accounts. One transaction register
per special account shall be maintained. The second group will have only one transaction
register. This register shall be maintained for the pooled Birr account. The third group shall also
contain only one register, which will be used to rec ord the PSCAP transactions that will be
implemented by MoFED.
As the first group of transaction registers will be used to deal with the special accounts, the
foreign currency transactions register(annex XIII) shall be used. This register is different
from the local currency register in that it has additional column to fill in the foreign currency
information. The first part of the register is used to fill information about the transaction. The
second part is used to do the accounting. Taking the second part of the register, the common
transactions that will be recorded in the register can be illustrated as follows:
Example 1: On July 9, 2004 USD 100,000 is received in the IDA special account. The
exchange rate on that date was Birr 9 for one USD. IDA account No is
3014.
Example 2: On July 10, 2004 USD 50,000 is transferred from special account to Birr
Pool account. The rate on the date of transfer was 8.5 as per the bank
advice. The account No for the pooled Birr account is 4103.
Others Cash at bank Foreign currency

Acct No Debit Credit Debit Credit Debit Credit
Example 1 3014 900,000 900,000 100,000
Example 2 4102 425,000 425,000 50,000
The register for pooled Birr account shall be maintained using the local currency format
(annex XIV) of the transaction register. To illustrate:
Example 1: On July 10, 2004 Birr 425,000 is transferred from IDA special account to
Birr Pool account.
Example 2: On July 12, 2004 Birr 300,000 is transferred to Tigray BoFED. The amount
will be credited to a transfer account 4015.
Others Cash at bank
Acct No Debit Credit Debit Credit
Example 1 3014 425,000 425,000
Example 2 4015 300,000 300,000
The third type of transaction register will be used for the program MoFED is going to
implement. This same transaction register shall be maintained by each implementing agency
using the double entry accounting. To illustrate let us assume that the Tigray MoFED shall
record the following transactions:
Example 1: On July 12, 2004 Tigray BoFED received Birr 300,000 from MoFED.
Example 2: On July 17, 2004 Birr 100,000 is paid for local training.
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Others Cash at bank

Acct No Debit Credit Debit Credit
Example 1 4015 300,000 300,000
Example 2 6271 100,000 100,000
Those BoFEDs who are not yet using the double entry accounting will use Ge/He 23, which has
the same purpose to the Transaction Register. The detail is more or less the same with the
transaction register. Using the above example, Tigray PSCAP would register the transactions
in Ge/He/23 as follows:
Acct code Safe Bank

(item code) Received Paid Received Paid
Example 1 4015 300,000
Example 2 8501 100,000
The accountant is responsible for the maintenance of the registe r. The register shall be
prepared in two copies. The original shall remain with the implementing agency. The second
copy shall be submitted to MoFED.
Regional BoFED shall keep separate transaction registers for each of the program implemented
in the regions.
Budget ledger card
Budget ledger card shall be maintained for each item of expenditure with approved budget. The
format of the budget ledger card shall be the one that is given in the FGE accounting system
(annex XV).
The approved budget for each expenditure item shall be posted to the budget ledger cards that
will be maintained by the budget section. Approval of the budget section shall be obtained
before the accounts section makes any payment.
The approved budged shall be increased or decreased by mid-year reallocation based on the
notice obtained from MoFED. If the implementing agency is a poor-performer the approved
budget shall be decreased and, if it is high-performer then the budget shall be increased.
Similarly, the approved budget shall be increased if the MCB approves supplemental budget
through rapid utilization of future drawing rights.
Let us illustrate how implementing agencies can use the budget card. Assume that the budget
ledger card is maintained by Oromia region.
Example 1: The approved budget for contracted professional service is Birr 500,000.
Example 2: A Birr 250,000 contract is signed with a local consultant. No payment is made.
Example 3: Birr 350,000 is received from MoFED.
Example 4: Birr 100,000 is paid to a second consultant as advance payment.
Example 5: Birr 90,000 received from one of the poor-performing regions.
Approved Addition Reduction Revised Payment Unpaid Commit Balance not

budget to budget to budget budget received balance ment committed
Example 1 500,000 500,000 500,000 500,000
Example 2 150,000 250,000 250,000
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Example 3 350,000 250,000
Example 4 100,000 150,000
Example 5 90,000 590,000 240,000 240,000
In the case of regions using single entry accounting, they can use Ge/Be/we 14/1 although the
form is prepared to control recurrent expenditures. PSCAP is a capital expenditure but the
detail is the same as a recurrent budget.
Ge/Be/We 14/1 is more or less similar to the budget ledger card except that it has no column for
commitment. Instead it has column to record actual payments. Let us see how the above
example can be illustrated.
Budget Budget
Approved transfer or deduction or Revised Amount Budget
budget supplement transfer budget paid balance
Example 1 500,000 500,000 500,000

Example 2
Example 3
Example 4 100,000 400,000
Example 5 90,000 590,000 490,000
General ledger
General ledger is a group of accounts (all cards together) that is used as a second step in the
process of recording and summarizing transactions. The primary book of record is the
transaction register and the general ledger is the second register. It is between the register and
the financial reports and as such prepares information that goes into the reports.
The general ledger card in the FGE accounting system is a multi-columnar card. It shall be
maintained for each and every account code in the transaction register. The ledger card (annex
XVI) shall be used with out any modification in the form.
The accountant shall be responsible for the maintenance of the general ledger.
There is no equivalent in the single entry accounting system. Model 36 is used as a working
paper to list revenues and expenditures item by item in order to prepare the monthly reports.
There fore, the single entry using regions shall continue using Mode 36 as working paper since
the report they are going to prepare are the Ge/He/29/XXs.
Subsidiary ledger
Control account balances may need detail in some cases. Subsidiary ledgers shall be maintained
to provide that additional detail information. Accounts that needs subsidiary ledger are the
expenditure, receivable and payable. Since there will be one cash account and one bank account
at the implementing agency and BoFED level for PSCAP, there will be no need to maintain
subsidiary ledger for cash and bank accounts.
In the transaction register of PSCAP, there is a last column to put in the subsidiary ledger code
to which posting is made. Posting to subsidiary ledger shall be made for each transaction. At the
end of every month, the total of the subsidiary ledgers in a group of expenditure shall be equal
to the total of the amounts posted to the general ledger.
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Each regional BoFED shall be responsible to maintain appropriate records for all the projects
that will be carried out in the region. For example, the Tigray BoFED shall maintain accounting
records for all the six sub programs of PSCAP. Six subsidiary ledgers shall be maintained for
each item of expenditure. The subsidiary ledgers shall be differentiated by the budget code.
Taking “salary to permanent staff” as an example, the ledger accounts that shall be maintained
by the Tigray BoFED shall be:
Project Budget code Account code
Civil Service Reform 318/08/01/01/001 6111

Justice System Reform 318/08/01/01/002 6111
Tax System Reform 318/08/01/01/003 6111
Urban Management and Reform 318/08/01/01/004 6111
Information & Communication Technology Reform 318/08/01/01/005 6111
District Level Decentralization Reform 318/08/01/01/006 6111
The accountant shall maintain the subsidiary ledger. Posting to subsidiary ledger shall be made
as soon as the transaction is registered in the register.
The format given for the general and subsidiary ledgers are similar in all respects.
Separate files of general and subsidiary ledgers should be maintained to avoid posting of
general ledger information into subsidiary ledger or vice versa. It would be very
important to differentiate the two legers using different colours.
In a single entry environment, there are no subsidiary ledgers. As mentioned earlier, the
records in the Ge/He/23 are summarized in Model 36 and monthly reports are prepared there
from.
3.3.6. REPORTING TYPES AND FREQUENCY OF REPORINTG
MoFED shall be responsible for the preparation of consolidated financial re ports. All reports
submitted to MoFED must be copied to the MCB Plan and Program Directorate.
Reporting from implementation agencies shall be on the pooled account in general with out a
need to identify the source of the fund. The source of income shall be identified at MoFED
level based on bank transactions and income ledger account.
The regular reporting period will be monthly. The monthly report pack shall include an SOE,
Bank Reconciliation and the monthly reports that are being prepared under both double and
single entry accounting environments.
The timetable and channel of reporting shall be:
a) For regional expenditures, BOFEDs to MoFED within two weeks after the end of the
month;
b) For federal expenditures, implementing agencies to MOFED within two weeks after
the end of each month;
c) MOFED to donors within three weeks after the end of the month.
In the initial period of the project, CFU of MoFED shall prepare statement of Expenditure as a
basis for the replenishment. The CFU will decide as to which donor an SOE should go to. The
_________________________________________________________________
SOEs shall be prepared based on the monthly reports mentioned above. 28
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After a certain period, the SOE shall be replaced by FMR. This is essentially one report to
be presented to the pool of donors. The donors shall decide as to how to share the
expenditures.
Quarterly financial report
This shall be prepared as a ba sis for requesting quarterly transfers
Annual report shall include:

• A statement of Receipt and Payments including account balances,
• A statement of Uses of Funds,
• Notes to the accounts,
Special Account Reconciliation Statement
The report shall be ready w ithin six weeks of the end of the year.
Report preparation responsibilities
MoFED has the overall responsibility of account maintenance and report preparation for
PSCAP. The Central Accounts Department (CAD) and the Counterpart Fund Unit (CFU) are
jointly responsible for the management of the PSCAP fund.
The CAD shall be responsible for collecting periodic reports from the implementing agencies.
The federal implementing agencies should send a copy of the reports to MCB at the same time
when they submit the reports to MoFED. BoFEDs shall send a copy of their reports to BCB at
the same time when they submit their reports to MoFED. This is to avoid any inconsistency
between the activity report and financial report.
The PSCAP expenditures have to be incorporated in the government accounts at federal levels.
The PSCAP monthly report pack is a bit different from the usual report pack. In addition the
SOE and Bank reconciliation shall accompany the monthly reports. Hence a separate pack shall
be prepared and submitted to CAD as regards PSCAP. At regions level as well, the PSCAP
report shall be separately prepared and send to CAD.
Method of report preparation
The implementing agencies know that there is a pooled Birr account for PSCAP in general and
transfers to them shall be made from this pooled account. It is the pooled (common) fund that
is channelled to the beneficiaries and not the money from donors identified by name. They have
to account for this common money as receipt, spent it according to their approved budget and
report on the common account up the reporting line. Hence the source of the money is not
relevant at the implementing agency level for accounting purpose.
The CAD and CFU can identify at any time the amount of money received from any donor. The
way report is presented to donors shall be Statement of Expenditures (SOE) or Financial
Monitoring Reports (FMR) as explained below.
_________________________________________________________________ 29
________________________________________________________________________
Monthly reporting
This is the basic reporting period. Quarterly, semi-annual or annual reports can all be prepared
on the basis of the monthly reports. The format to be used for monthly reporting determines the
formats to be used for Quarterly, semester and annual reports. It is advantageous to use similar
formats for all.
The monthly reports that are being used in the government reporting system shall be used for
PSCAP purpose also. Under double entry accounting system this shall include, Capital
Expenditure Report, Transfer Report, Receivable Report, Payables Report and the Trial
Balance. Other reports are not relevant for PSCAP. (The specimen reports are given in annex
XVII).
No modification will be necessary on the supporting schedules that will accompany the monthly
Trial Balance. However, the Trial Balance that will be used for PSCAP is a modified version of
the Trial Balance in the Government Accounting System. This is done to enable BoFEDs to
prepare one Trial Balance for all the sub-programs that are implemented in the region.
BoFEDs has to maintain subsidiary ledger for each sub-program they are responsible for. The
specific details for ea ch sub program will be presented in the supporting schedules. The total of
the supporting schedules will be transferred to the Trial Balance and the total of expenses paid
by BoFED and the balance of other transactions for all the sub programs can be obtained from
the Trial Balance. This will make easy reconciliation of the ledger balances with the bank
balances. (Annex XVIII provides the amended trial balance.)
The modified Trial Balance has three sections. The first section shows the expenditures incurred
in the current month. This is obtained from the supporting schedules. The second section shows
the total of the expenditures incurred in the months before the current month. This can be
obtained from the last month’s Trial Balance. The Third section gives the total of expenditures
incurred to the date of reporting. This column is important to follow up the expenditures
incurred to date and also to easily reconcile the Trial Balance with ledger also with the bank
balance.
Under single entry accounting, the monthly report pack shall contain Ge/He/29/4/2,
Ge/He/29/5/2 and Ge/He/29/3/2.
Ge/He/29/4/2 is a summary sheet equivalent to the Trial Balance in double entry accounting.
The existing format can be modified slightly to enable BoFEDs to prepare consolidated
statement for all sub-programs they are responsible for. Ge/He/29/3, which is capital
expenditure report shall be prepared for each sub program that is carried out in the region. The
total from each page of the capital expenditure report shall be transferred to the modified Ge/
He/29/4(see annex XIX). The total of the expenditure can then be compared with the cash on
hand and at bank.
In addition, an information table shall be added at the top. The table shall contain:
Supervising unit Code

Name of Public Body
Name of Program
Name of Sub -agency
Name of Sub -program
Name of Project
Source of finance
Bank account No
_________________________________________________________________ 30
________________________________________________________________________
The above information shall help the CAD to correctly identify report and expenditures
included in it.
Ge/He/29/5/2 (annex XX) is equivalent to the Transfer Report under double entry bookkeeping.
The same information shall be filled in it except that the account codes will be different. Again
the above information table shall be printed on the existing format.
Ge/He/29/3/2 is equivalent to the Capital Expenditure Summary under double entry

bookkeeping. The same information shall be filled in it except that the account codes will be
different. The above information table shall be printed on the existing format. In addition, two
account code columns shall be used in the report. The first column shall be for the account
codes under single entry bookkeeping system and the second column gives the equivalent codes
under double entry bookkeeping system. This will increase the correctness of the reports,
decrease the time of report processing at CAD and also familiarizes the single entry using
regions with the double entry. Proposed format is given in (annex XXI)
In addition to the usual monthly reporting, each federal implementing agency and BoFEDs shall
attach an SOE as explained below. Bank reconciliation of the pooled accounts maintained for
PSCAP purpose shall always accompany the monthly report. Format for the bank reconciliation
is given in annex XXII.
The timetable outlined above shall be observed to submit reports.
Statement of Expenditure (SOE)
SOE is a way of requesting reimbursement of payments already made. In the initial period of
PSCAP implementation, the SOE procedure shall be used to replenish the special accounts
maintained in Ethiopia. Each donor will receive an SOE on the basis of which the donor will
replenish its special account. When and to which donor an SOE will be send is a matter to be
decided by the CFU. The CFU will establish some sort of mechanism to do this. Then it will
prepare and submit the consolidated SOE to each donor alternately.
The preparation of the consolidated SOE is the responsibility of the Counterpart Fund Unit
(CFU) of MoFED. To ensure the consistency of the accounting records with the expenditures in
SOEs, SOEs shall be prepared by each federal implementing agency and by BoFEDs,
forwarded to CAD in the monthly report pack and then the CFU will receive the SOEs from the
CAD. The CAD shall make preliminary check of the agreement of the SOEs with the other
reports and records.
A uniform SOE format shall be used by each implementing agency. A proposed format is given in
annex XXIII. The SOE shall be clearly filled and approved before it is sent to the CAD.
The CFU shall collect the monthly SOEs from CAD and prepare a consolidated SOE. The CFU
also returns an approved SOE to the federal implementing agencies and BoFEDs so that the
reporting entities could know the amount they have reported is fully accepted or not. The
implementing agencies shall compare the SOE approved by the CFU and compare their record.
If they agree to the corrections made by the CFU, then they shall amend their records
accordingly.
_________________________________________________________________ 31
________________________________________________________________________
The format for the consolidated SOE shall be the same format as given for the implementing
agencies except that columns shall be added to fill foreign currency amounts (See annex
XXIV). If it decides that replenishment should be requested, then it will complete the necessary
formalities in preparation for the request. This will include the application pre-screening
checklist, the Application for Withdrawal, Special Account Reconciliation Statement, copy of
Bank Statements and the necessary supporting documents. CFU is well acquainted with the
procedures and hence there is no need to discuss the procedures.
Financial Monitoring Reports (FMR)
FMRs are intended to provide information whether or not funds disbursed to projects are be ing
used for the purpose intended, project implementation is on track, and budgeted costs will not
be exceeded. The FMR links financial reporting with activity reports and procurement reports.
The emphasis of FMR is on the financial aspects of the project.
In FMR system, the Accountant is responsible for the preparation of the financial reports, the
technical specialists shall prepare the activity progress reports and the procurement staff shall
prepare the procurement reports. In PSCAP, MoFED shall be re sponsible for the preparation of
the financial reports and the MCB Plan and Program Directorate shall be responsible for the
activity and procurement reports.
Financial reports under FMR must include a statement showing for the period and cumulatively
(project life or year to date) cash receipts by sources and expenditures by main expenditure
classifications; beginning and ending cash balances of the project; and supporting schedules
comparing actual and planned expenditures. The Statement of Receipts and Payments together
with Use of Funds by Sub Program as a supporting schedule (see annex XXV and XXVI) shall
be adequate to satisfy the requirements of the FMR.
The CAD in collaboration with CFU shall be responsible to prepare these reports. The monthly
reports gathered from implementing agencies shall be processed to update the records of
PSCAP in general that is implemented in CAD. Based on that information the periodic
Statement of Receipts and Payments with the supporting schedule shall be prepared.
As the special account is maintained in USD, the Statement of Receipt and Payments need also
be prepared in USD. The records of PSCAP are maintained in Birr. At first, the Statement of
Receipt and Payments shall be prepared in Birr. Then it will be translated to USD. The rate that
will be used to translate the report shall be:
• Opening balance of Special Accounts, at a rate ruling on that date,
• Closing balances of Special Accounts, at a rate ruling on that date, and
• Expenditures during a reporting period, at simple average rate of transfers from Special
Account to Pooled Birr Account during the reporting period.
The FMR prepared in this way shall be the report that is going to be presented to all donors.
_________________________________________________________________ 32
________________________________________________________________________
Before presenting it to the donors, the Statement of Receipt and Payment and the supporting
schedule shall be sent to the Plan and Program Directorate of MCB for the latter to compare it
with the activity progress and procurement report it is compiling. Similarly, CAD shall receive
copies of the activity and procurement reports prepared by MCB to check and agree that the
reports are consistent with the financial report. When MCB and MoFED agree that the report
can be presented to donors, the reports shall be submitted.
The frequency for presenting FMR to donors shall be six monthly and the report shall be
submitted within 45 days from the end of the reporting period.
Quarterly financial reports
These reports are used as a basis to make transfers to federal implementing agencies and
BoFED. The for mat and the purpose are fully explained in previous section.
Annual reports
These are mainly prepared for audit purpose. Annual reports are not separate reports from the
FMRs that will be prepared periodically (at lease six-monthly). Rather they are similar except
that the periodic FMRs shall be consolidated to give the annual reports. To facilitate
consolidation and to reduce degree of error in compiling the annual accounts, the periodic
reports shall be prepared for periods that start on July 8 (Hamle 1) of the year and ends
July 7 (Sene 30) of the next year. If, for example, FMRs are prepared quarterly, the four
quarter of the year will be: July 8 – October 7; October 8 – January 7; January 8 – April 7; and
April 8 – July 7. The annual report will then become the consolidated report of the four
quarters.
FMRs may not be introduced as a disbursement mechanism during the initial period of the
project implementation. For the annual accounts purpose however, the two financial reports,
Statement of Receipts and Payments and Use of Funds by Sub Program, will be prepared
starting from year one. Whenever there are figures that need additional explanations, notes to
the accounts shall be prepared. The notes to the accounts shall also be used to give brief
information about the nature of the project, the accounting policies followed in the preparation
of the financial statements and any additional information relevant for the reader of the financial
statements.
The two annual financial statements shall be the one that will be presented to the auditors to
start their annual audits.
3.4. TRAVEL EXPENSES

Each travel has to be requested and authorized in advance of the travel.
The traveller has to liquidate the travel advance when returning from the trip.
The government Perdiem rate shall be used for local travels.
Travels are usually pre-planned. The traveller shall fill travel advance request and authorization
form (Form 1 as shown in annex XXVII). The officer approving the trip shall sign the form.
The form shall be distributed to the finance section, personnel section and property section.
_________________________________________________________________ 33
________________________________________________________________________
Upon return from the trip, travel expense report form (Form 2 as shown in annex XXVIII)
shall be filled. The Budget and Accounts Head of the agency shall sign the form after checking
the accuracy. This form states the actual expenditure of the trip and the amount due to or from
the agency. The amount due to the traveller shall be paid by check or in cash depending on the
amount. The amount due to the agency shall be collected by cash receipt or shall be deducted
from the traveller’s salary.
There is another form (Form 3 in annex XXIX) that should be filled upon return from trip. It is
Perdiem Payment Control and Work Performed Record. This form, although given number
three, has to be filled before form 2. It explains the detail of the travel and the work performed
during the travel. The form shall be signed by the traveller and shall be approved by the
supervisor. This should be the basis to approve the expenses by the Budget and Finance Head.
3.5. PROCURMENT
Procurement in PSCAP shall be carried out in accordance with the procedures explained
in the Program Implementation Manual.
Payment for purchases of goods and services shall be made if the procurement
procedures are satisfied and duly approved payment request accompanied by the
necessary documents is received.
Procurement usually starts by a purchase requisition. A purchase requisition form shall be filled
by the user department and shall be approved by the department head. In PSCAP, the
responsible person for PSCAP in the implementing agency shall approve the purchase
requisition (see annex XXX). Prior to the approval by the responsible officer, the request shall
be presented to the budget section for checking of the availability of the budget. If there is
adequate budget for the item requested and the request is approved, the procurement process
starts.
Procurement of the consultancy service shall start when the user department requests for the
service by referring to the appr oved procurement plan. The request shall be in writing. Then the
procurement process starts as per the provisions of the PIP.
Final or staged payments for services shall be made when the concerned department declares
that the consultant have successfully delivered the service.
3.6. RECEIPT AND ISSUANCE OF GOODS
A Store Receiving Voucher shall evidence receipt of goods by the store of the
implementing agencies.
Final payment for goods acquired shall only be made after the goods purchased are
received in good condition and a copy of the receiving voucher is sent to the accounts.
Issuance of stock for use shall be requested via store requisition and shall be issued
via Store Issue Voucher.
_________________________________________________________________ 34
________________________________________________________________________
Purchased goods shall be inspected by the store before receiving. Inspection is made to
check the goods brought to store do agree with the order put both in quantity and
specification and that they are received in good condition. The concerned user should check
specialist items, as the storekeeper might not have the appropriate knowledge of the items.
After the items are checked, Receipt for Articles or Property Received-Model 19 (annex
XXXI) shall be prepared to receive the goods in the store. One copy of the voucher shall be
sent to the accounts section. The voucher shall be attached or adequately cross-referenced to
the Payment Voucher through which the final payment to the supplier is made. Writing the
Receipt for Articles or Property Received No on the Payment Voucher and vice versa can be
adequate cross-referencing.
At this point, the accountant shall reverse all advance payments kept as debtors, if any, to the
appropriate expense account using Journal Voucher. This is an important step as expenses
incurred might otherwise be only partly reported.
The user shall request issuance of stock through Store Requisition -Model 20 (annex
XXXII). The Stores Head shall check the existence of stock and authorizes the issuance on a
Delivery Order – Model 21 (annex XXXIII). The stores clerk shall issue the requested item
to the user through Receipt for Articles or Property Issued Model 22 (annex XXXIV).
Stock cards having detail of quantity and price shall be maintained by the store. Each receipt
and issuance of goods shall be entered in the Stock Card – Mode 70C (annex XXXV). A
person other than the Storekeeper shall maintain stock cards for each item. In addition to a
Stock Card, the storekeeper may maintain registers of stock – Model 70A. Bin cards (annex
XXXVI ) for each item shall also be maintained.
Periodic inventory of the stock on hand shall be made and shall be reconciled with the Stock
Card balance. Immediate action has to be taken on any stock shortage or overage.
3.7. MANAGEMENT AND CONTROL OF PROGRAM ASSETS
Fixed assets constitute assets that have the expected useful life of more than
one year.
Fixed assets shall be expensed upon purchase.
Follow up record, Fixed Assets Register, shall be maintained to control the

whereabouts of the assets.
All assets that will be purchased for PSCAP shall be expensed upon purchase. This is
important because, the program is run using donor funds who will need report of all
expenditures as and when incurred.
The process to acquire, receive and issue fixed assets shall be the process for receiving
stock. After fixed assets are issued to the user, assets shall be included in a fixed assets
register (annex XXXVII) with all the ne cessary details to know about the location and user
of the assets.
_________________________________________________________________ 35
________________________________________________________________________
Each fixed asset shall be identified using tag numbers organized in such a way that enables
identification of the implementing agency, the program, and the nature of the asset, the us er
department and the asset number. For example, a computer purchased under PSCAP for BCB
procurement desk can be assigned a tag as
“BCB/PSCAP/ PD /C /001”
A specific tagging system is not recommended in this manual as the implementing agencies
have the ir own tagging system already. The important thing to do is to make sure that PSCAP is
included in the numbering so that the program assets can be easily identified.
3.8. INTERNAL CONTROLS
Each implementing agency shall ensure that adequate internal controls are put in place and that
the controls are adhered to consistently. Among others, the internal control system should
ensure that all transactions are recorded, the recorded transactions have substance, they are
recorded at correct amounts in the correct period in the correct accounts and that they are posted
and summarised correctly. (For further explanation please refer the Project Implementation
Plan).
3.9. AUDITING
3.9.1. EXTERNAL AUDIT
The Office of the Federal Auditor General shall audit the annual financial statements of PSCAP or
shall cause the accounts to be audited by independent auditors in accordance with the TOR for
audit that will be agreed with the MCB. The Project Implementation Plan has provided sample
TOR for audit.
The annual financial stateme nts for audit shall be ready within eight weeks after the end of the
budget year. The audit shall be finalised with in nine months after the presentation of the
financial statements.
3.9.2. INTERNAL AUDIT
As one of the programs in which the government has invested money in, the MoFED Inspectors
shall be involved to carry out internal audit of the PSCAP. They shall include audit of PSCAP
in their annual audit program.
The internal audit reports referring to PSCAP shall be submitted to the MCB/ and MoFED.
Corrective actions shall be taken based on the recommendations. Subsequent audit reports shall
mention about the actions taken on the previous recommendations.
As one of the programs managed by an implementing agency, the federal implementing

agencies internal auditors shall include PSCAP in their annual audits. The report of the
implementing agencies internal auditors shall be addressed and submitted to the head of the
agency.
_________________________________________________________________ 36
________________________________________________________________________
3.10. RETAINING OF DOCUMENTS
The retention of documents shall be governed by Financial Documents Preservation

Guideline No 5/1999 of MoFED.
Proper filing system shall be introduced.
According to Financial Documents Preservation Guideline No 5/1999 of MoFED, financial

documents shall be preserved for ten years from the date they were created or up to two years
after the audit by the Auditor General is completed, which ever comes last. For further detail
please refer the guideline.
It would be very difficult and time consuming to transfer documents to a central point. All
documents shall be kept with the respective federal implementing agency and BoFEDs.
Documents refer to all the ledger cards, registers and supporting documents. The PSCAP
documents shall be kept separately and shall be filed in a way that makes referring to the
documents very easy. The filing system should enable the auditors of PSCAP and any one who
is authorized to check the documents of PSCAP to easily and systematically trace the
documents and information they are looking for.
3.11. USING COMPUTERS
As discussed in this manual, the final report preparation is the responsibility of the CAD and
CFU. At the implementing agency level, there is no need for new way of compiling the
financial information for PSCAP purpose except that a separate budget and account codes will
be used. What this entails is that, the existing system in each implementing agency, be it manual
or computerized, will continue to be used for PSCAP.
Simple templates for budget tracking and report preparation can be prepared on Microsoft Excel
centrally and can be distributed to the implementing agencies’ accountants with appropriate
training. This would speed up the process for decision making and re porting.
3.12. REVISION OF FINANCIAL MANUAL
Upon due approval of MCB, amendment to and/ or introduction of new procedures shall be
annexed to the existing procedures until full revision of the procedures is necessitated and made.
The procedures described in this section may need revision from time to time so that they can
address the practical difficulties that may be encountered during the actual implementation of
the program, and to increase the efficiency and effectiveness of the financial management
function. Any of the stakeholders in the PSCAP, may propose amendments to any of the
procedures and/ or additional procedures. The auditors, both internal and external, may also
propose amendments. Proposed changes shall be addressed to MoFED who will summarises the
proposed changes and present it to the MCB.
The MCB shall examine or shall cause examination of the proposed change and shall approve
the change. The change shall be effective from the date of the approval. The change shall be
adequately cross referenced to the relevant section of this manual and shall be annexed to the
manual until a full revision of the entire financial management procedures may be made.
_________________________________________________________________ 37
________________________________________________________________________
3.13. ANNEX
ANNEX
Budget Tracking Report I.

Disbursement Request II.
Quarterly Reports III.
Cash Receipt Voucher IV.
Bank Payment Voucher V.
Cash Payment Voucher VI.
Petty Cash Book VII.
Suspense Payment Voucher VIII.
Model 6 IX.
Ge/He/23 X.
Journal Voucher XI.
Model 64B – Journal voucher for non-cash trascations XII.
Foreign currency Transactions Register XIII.
Local currency Transactions Register XIV.
Budget Ledger Card XV.
Financial Ledger Card XVI.
Monthly report formats XVII.
Trial Balance XVIII.
Ge/He/29/4/2 XIX.
Ge/He/29/5/2 XX.
Ge/He/29/3/2 proposed format XXI.
Bank Reconciliation Statement of PSCP Bank Account XXII.
Statement of Expenditure (SOE) XXIII.
Consolidated Statement of Expenditure (SOE) XXIV.
Statement of Receipts & Payments XXV.
Use of Funds by Sub Program XXVI.
Travel Advance Request and Authorization Form XXVII.
Travel Expense Report Form XXVIII.
Per Diem Payment Control And Work Performed Record XXIX.
Purchase Requisition XXX.
Receipt for Articles or Property Received-Model 19 XXXI.
Store Requisition - Model 20 XXXII.
Delivery Order – Model 21 XXXIII.
Receipt for Articles or Property Issued Model 22 XXXIV.
Stock Card XXXV.
Bin Card XXXVI.
Fixed Assets Register XXXVII.
Chart of account - summarized XXXVIII.
Excerpt from the PIP – Section IV Resource Allocation & XXXIX.
Management
_________________________________________________________________ 38
________________________________________________________________________
Annex I
PSCAP 1
THE FEDERAL DEMOCRATIC REPUBIC OF ETHIOPIA

MOFED
PSACAP
BUDGET TRACKING REPORT
Implementing agency: MOR/BoFED
Month: July 2004
Approved
Account revised Expenditure Budget
Budget lines code budget to date balance
Birr Birr Birr
Tax systems reform
Goods & services 6200 100,000 10,000 90,000
Office supplies 6212 50,000 5,000 45,000
Printing 6213 20,000 2,000 18,000
Educational supplies 6215 10,000 1,000 9,000
Other material and supplies 6218 20,000 2,000 18,000
Contracted service (Consultants, audit) 6250 90,000 50,000 40,000
Contracted professional service 6251 30,000 35,000 (5,000)
Freight 6255 30,000 5,000 25,000
Fees and charges 6256 30,000 10,000 20,000
Training 6270 100,000 25,000 75,000
Local training 6271 50,000 - 50,000
External training 6272 50,000 25,000 25,000
Grand total 290,000 85,000 205,000
Comment
• The budge for goods and service in general appears to be spent according to physical plan.
• The budget for contracted service is spent very fast. The budget for contracted service is
over spent. This is due to price change and not out put increase.
• The budget for local training is not spent although the activity plan shows that the activity
had to be performed in the month of July.
Prepared by: ________________ Agreed by: _______________

Budget accountant Accountant
Checked by: _____________

Budget & accounts head
_________________________________________________________________ 39
________________________________________________________________________
Annex II
PSCAP 2

MOFED
PSACAP
DISBURSMENT REQUEST
Implementing agency/Region: MOR/SNNPR BoFED
QUARETER: 2 (October 8 to December 8, 2004) Request No: ____2__
Birr Birr
Budget for the next quarter (attached) XXX

Less: Purchases to be made centrally (XXX)
XXX
Less: Balance of cash at bank XXX

Balance of cash on hand XXX
XXX
Amount requested for transfer XXX
Prepared by: ________________ Checked by: _____________

Accountant Budget & accounts head
Authorized by: _______________ Approved by: _______________

Implementing agency head BoFED Head
_________________________________________________________________ 40
________________________________________________________________________
Annex III
PSCAP - 3

MOFED
PSACAP
QUARTERLY REPORT
QUARETER: 2 (October 8 to December 8, 2004) Request No: ____2__
Expenditures Next
Account Previous Current Quarter
Budget lines code quarter quarter Cumulative Budget
Birr Birr Birr Birr
Tax systems reform
Goods & services 6200 10,000 90,000 100,000 150,000
Office supplies 6212 5,000 45,000 50,000 25,000
Printing 6213 2,000 18,000 20,000 30,000
Food 6216 1,000 9,000 10,000 70,000
Other material and supplies 6218 2,000 18,000 20,000 25,000
Contracted service
(Consultants, audit) 6250 50,000 40,000 90,000 200,000
Contracted professional
service 6251 25,000 5,000 30,000 150,000
Insurance 6254 5,000 25,000 30,000 10,000
Fees and charges 6256 10,000 20,000 30,000 40,000
Training 6270 25,000 75,000 100,000 250,000
Local training 6271 - 50,000 50,000 60,000
External training 6272 25,000 25,000 50,000 190,000
Grand total 85,000 205,000 290,000 600,000
Prepared by: ________________ Checked by: _____________

Accountant budget & accounts head

_________________________________________________________________ 41
________________________________________________________________________
Annex XVIII
y£úB ¥m²z¾
PSCAP - 4
Trial Balance
m¼£ 27
ymNG|T m¼b@t$ mlÃ ______ wR ______

|M_______________________ q$_R
Name of Public Code ______ Month
Body:______________________
yPéG‰Ñ mlÃ ______
|M_____________________________ q$_R
Name of Program: Code ______
________________________
y|‰ KFl# mlÃ ______
|M_____________________________ q$_R
Name of Sub Agency: Code ______
_____________________
yN;#S PéG‰Ñ mlÃ ______
|M________________________ q$_R
Name of Sub Program: Code ______
______________________
yPéjKt$ mlÃ ______
|M_____________________________ q$_R
Name of Project: Code ______
__________________________
yÍYÂNS mlÃ ______
MNu _____________________________ q$_R
Source of Finance: Code ______
________________________
yÆNK £œB
_________________________________________________________________ 42
________________________________________________________________________
q$_R_____________________________
Bank Account Number:
______________________
¾›G<’< ¨` ÁKñƒ ¨^ƒ Previous •eŸ ›G<” É[e

Current Month months Cumulative
y£œB y£œB mGlÅ Áb!T KÊÄ!T ÉU` Áb!T KÊÄ!T ÉU` Áb!T KÊÄ!T ÉU`
mdB
Account Account Description Debit Credit Total Debit Credit Total Debit Credit Total
Code
xgR WS_ gb!½ :RÄ¬½ BDR £œB ¶±RT
Revenues/Assistance/Loan: (From
Revenue/Assistance/Loan Report)
wÀãCÝ(
Expenditures:
mdb¾ wÀ ¼kmdb¾ wÀ £œB ¶±RèC DMR¼
Recurrent expenditure (Total of
Recurrent Expenditure Reports)
yµpE¬L wÀ ¼kµpE¬L wÀ £œB ¶±RèC
DMR¼ Capital expenditure (Total of
Capital Expenditure Reports)
Civil Service Reform
¾c=y=M ›ÑMÓKAƒ ThhÁ
Justice System Reform
¾õƒI e`¯ƒ” ThhÁ
Tax System Reform
¾ •¡e e`¯ƒ” ThhÁ
Urban Management Reform
¾Ÿ}T ›e}ÇÅ` ThhÁ
Information & Communication Technology
Reform
¾›=”ö`T@i” ¢S<’>Ÿ?i” ‚¡•KAÍ= ThhÁ
District Level Decentralization Reform
u¨[Ç Å[Í ¾eM×” T"óðM e[›ƒ” ThhÁ
ZWWéC ¼kgNzB ZWWR £œB ¶±RèC DMR¼
Transfers: (from T ransfer Report)
tsBúb! £œïC ¼ktsBúb! £œB ¶±RèC
_________________________________________________________________ 43
________________________________________________________________________
DMR¼ Receivables: (from Receivables

Report)
Tax System Reform
Reform
¾›=”ö`T@i” ¢S<’>Ÿ?i” ‚¡•KAÍ= ThhÁ
tkÍY £œïC ¼ktkÍY £œB ¶±RT¼
Payables: (from payables Report)
Tax System Reform
Reform
¾›=”ö`T@i” ¢S<’>Ÿ?i” ‚¡•KAÍ= ThhÁ
l@tR åF KÊÄ!èC ¼b£œB mdB kx-”§Y
mZgB¼ Letters of Credit: (by account
code-from General Ledger)
Tax System Reform
_________________________________________________________________ 44
________________________________________________________________________

Reform
¾›=”ö`T@i” ¢S<’>Ÿ?i” ‚¡•KAÍ= ThhÁ
5601 ytÈ‰ hBT ¼kx-”§Y l@jR¼
Net Assets/Equity (form General
Ledger)
_Ê gNzBÂ y_Ê gNzB Xk#L êU Ã§cW ¼
b£œB mdB kx-”§Y l@jR¼
Cash & Cash Equivalents (by account
code-from General Ledger)
4101 bœ_N Ãl gNzB
Cash on hand
4102 bÆNk Ãl yWu MN²¶ gNzB
Cash at bank in foreign currency
4103 bÆNK Ãl gNzB
Cash at bank
DMR
Total
_________________________________________________________________ 45
________________________________________________________________________
ANNEX XIX

(MOFED)
PSACAP
TRIAL BALANCE SUMMARY REPORT
PSCAP - 5 ¾¾¨\ ¾Ñu=“ ¾¨Ü H>Xw Te•¨mÁ
GE/HE/29/4
¾-----------------------¨` 19 ------
¾H>dw ›p^u= S/u?ƒ ¢É ¡õM 4 TÖnKÁ

pê ÑH> 29/4
T°/S”Óeƒ/¡MM
µ”
¨[Ç
›`•eƒ
”®<e ›`•eƒ
”®<e”®<e ›`•eƒ
¾Ñ”²u< M¡
U`S^ SÓKÝ }kuMŸ< cÖG<
¡õM 3 "ú•M ¨Ü

T[ÒÑÝ Justice System Reform
Ÿ²=I uLÃ ¾}SKŸ}¬ TÖnKÁ“ Ÿ²=I Ò` Tax System Reform
¾}ÁÁ²<ƒ c”Ö[¼‹ ¾ -------- ¨` 19------- ¾•¡e e`¯ƒ” ThhÁ
¾Ñu=“ ¨Ü ƒ¡¡K— H>dw ¾T>ÁSK¡~ Urban Management Reform
SJ“†¬” uò`T‹” •“[ÒÓ×K”:: ¾Ÿ}T ›e}ÇÅ` ThhÁ
Reform
¾›=”ö`T@i” ¢S<’>Ÿ?i” ‚¡•KAÍ= ThhÁ
¾uLÃ ¾H>dw ¾Ñ”²w
vKeM×” g<U Á»
¡õM 5 K"ú•M ¨Ú 4012
ò`T ðce 4020
T°[Ó
K” wÉ` KS”Óeƒ W^}™‹ 4101
K?L (W”Ö[» }ÁÃ³DM) 4102
¾XØ” Ñ<ÉKƒ 4201
Ç=þ¸ƒ Ñ<U\¡ (W”Ö[» }ÁÃ³DM) 5300
Tdcu=Á K?L 5400
¾I pê ¾T>ÁÑKÓK¬ KÓUÍ u?ƒ Ñu=“ ¨Ü
Te•¨mÁ w‰ ’¬
"Kð¬ ¨` ¾µ[ W’É 4004

"Kð¬ ¨` ¾µ[ v”¡ 4003
Ÿ¨Ü k] uXØ” uØ_ Ñ”²w 4001
K}Ÿ •Â ¨` ¾T>µ` uv”¡ 4003
Ÿ¨Ü k] uXØ” uØ_ Ñ”²w 4001
Ÿ¨Ü k] uc’É 4004
TS³²—
_________________________________________________________________ 46
________________________________________________________________________
Annex XXI
Ge/He/29/3/2 – PSCAP 6

MOFED
PSACAP
MONTHLY CAPITAL EXPENDITURE REPORT

Reporting entity Code Project Code Public Body
Federal/Region Head Program
Head Sub-Head Sub-agency
Sub-Head Project Sub-program
Project
Account title Double entry Single entry Refund Expenditure

Birr Birr
Office supplies 6212 8303
P rinting 6213 8303
Food 6216 8303
Fuel and lubricants 6217 8303
Other material & supplies 6218 8303
Miscellaneous equipment 6219 8303
Research & development supplies 6223 8303
Purchase of vehicles 6311 8205
Purchase of equipment 6313 8204
Purchase of building s, furnishings & fixture 6314 8206
Contracted professional services 6251 8101
Rent 6252 8303
Advertising 6253 8303
Insurance 6254 8303
Fees and charges 6256 8304
Electricity charges 6257 8303
Telecommunication charges 6258 8303
Water & other utilities 6259 8303
Perdiem 6231 8501
Transport fees 6232 8501
Official entertainment 6233 8303
Local training 6271 8501
External training 6272 8501
Training related Perdiem 6273 8501
Training related transport fee 6274 8501
Salaries to permanent staff 6111 8301
Wages to contract staff 6113 8302
Wages to causal staff 6114 8302
Wages to external contract staff 6115 8302
Allowance to permanent staff 6121 8301
_________________________________________________________________ 47
________________________________________________________________________
Annex XXI (continued)
Allowances to contract staff 6123 8302

Allowance to external contract 6124 8301
Government contribution to permanent staff pension 6131 8301
Maintenance & repair of vehicle 6241 8303
Maintenance & repair of equipment 6243 8303
Maintenance & repair of building, furnishings & fixtures 6244 8303
Total to be carried forward to Ge/He/29/4/2
_________________________________________________________________ 48
________________________________________________________________________
Annex XXII
PSCAP 7

PSCAP
BANK RECONCILIATION STATMENT
Implementing agency: MFA
For the month ended on: August 8, 2004
Birr
Opening Bank Balance as per ledger (8/7/04) 100,000

Transfer received from BoFED/MoFED 400,000
Total cash available 500,000
Total expenditures for the month (350,000)
Cash at bank Balance as per ledger (8/8/04) 150,000
Bank balance shown in the Bank statement (8/8/04) 160,500
Add: Deposits in transit
CRV 006 – Refund from a supplier 10,000

CRV 009 – Refund of travel advance 1,500
11,500
172,000
Less: Checks written but not presented for payment
BD 12345 6,000
BD12349 7,000
BD12400 9,000
(22,000)
150,000
Prepared by ______________________ Checked By________________

Accountant Budget &Accounts Head
_________________________________________________________________ 49
________________________________________________________________________
Annex XXIII

MOFED PSCAP 8
PSACAP
MONTHLY STATEMENT OF EXPENDITURE (SOE)

Reporting entity Code Project Code Public Body
Federal/Region Head Program
Head Sub-Head Sub-agency
Sub-Head Project Sub-program
Project
For the month of _________________Year ___________ SOE No _____________
Item No Reference No Brief description of Goods, Name and Total Invoice

Payment Voucher Works or Services address of amount of amount
or Model 6 suppliers contract (Model 6)
Birr Birr
NB: Supporting documents should be attached if a payment is greater than the allowable threshold.
P repared by: ________________ Checked by: _____________

Accountant budget & accounts head

_________________________________________________________________ 50
________________________________________________________________________
Annex XXIV
MOFED
PSCAP 9
PSACAP
CONSOLIDATED STATEMENT OF EXPENDITURE (SOE)
FOR THE PERIOD FROM ____________ TO________________
Page Of
Application No
Credit/assistance No
Currency
Rate
Reference No Brief description of Name and Total Invoice Eligible

Item Payment Goods, Works or Services address of amount of amount percentage Amount Eligible for
No Voucher or suppliers contract (Model 6) of Finance Finance Remark
Model 6
Birr Birr Birr US
Grand Total
Counter Part Fund Unit

Prepared by: Approved By:
Position: Position:
Signature: Signature:
_________________________________________________________________ 51
________________________________________________________________________
PSACP 10 Annex XXV

MOFED
PSCAP
CONSOLIDATED STATEMENT OF RECEIPTS AND PAYMENTS
FOR THE MONTH ENDING SEPTEMBER 8, 2004
Previous months Current month
Birr Birr Birr Birr
RECEIPTS
IDA FUNDS 1,000,000 1,000,000
GOVERNMENT FUNDS 1,000,000 1,000,000
DFID 1,000,000 1,000,000
SIDA 1,000,000 1,000,000
Total Financing 4,000,000 4,000,000
Less: Expenditures by subprograms
Federal PSCAP
Civil Service Reform 100,000 200,000
District level Decentralization 100,000 200,000
Justice System reform 100,000 200,000
Urban management Capacity Building 100,000 200,000
Tax System Reform 100,000 200,000
Information & communications Tech 100,000 200,000
Program support 100,000 200,000
700,000 1,400,000
Regional PSCAP (detail for each region)
Civil Service Reform 100,000 200,000
District level Decentralization 100,000 200,000
Justice System reform 100,000 200,000
Urban management Capacity Building 100,000 200,000
Tax System Reform 100,000 200,000
Information & communications Tech 100,000 200,000
Program support 100,000 200,000
700,000 1,400,000
Total Payments 1,400,000 2,800,000
Excess of Receipts over payments 2,600,000 1,200,000
Add: Opening cash balances
Pooled Birr account - 1,000,000
Special Accounts _______- 1,600,000
________- 2,600,000
Net available cash 2,600,000 3,800,000
Comprising
Pooled Birr account 1,000,000 1,500,000
Special Accounts 1,600,000 2,300,000
2,600,000 3,800,000
_________________________________________________________________ 52
________________________________________________________________________
Annex XXVI
PSCAP 11 THE FEDERAL DEMOCRATIC REPUBIC OF ETHIOPIA

PSCAP
CONSOLIDATED USE OF FUNDS BY SUB PROGRAM
FOR THE MONTH ENDING SEPTEMBER 8, 2004
Current months Cumulative

Planned Actual Variance Planned Actual Variance
Birr Birr Birr Birr Birr Birr
Federal PSCAP
Civil Service Reform 250,000 200,000 50,000 300,000 300,000 -
District level Decentralization 250,000 200,000 50,000 300,000 300,000 -
Justice System reform 250,000 200,000 50,000 300,000 300,000 -
Urban management Capacity Building 250,000 200,000 50,000 300,000 300,000 -
Tax System Reform 250,000 200,000 50,000 300,000 300,000 -
Information & communications Tech 250,000 200,000 50,000 300,000 300,000 -
Program support 250,000 200,000 50,000 300,000 300,000 ______-
1,750,000 1,400,000 350,000 2,100,000 2,100,000 ______
Regional PSCAP (detail for each region)
Civil Service Reform 200,000 200,000 - 350,000 300,000 50,000
District level Decentralization 200,000 200,000 - 350,000 300,000 50,000
Justice System reform 200,000 200,000 - 350,000 300,000 50,000
Urban management Capacity Building 200,000 200,000 - 350,000 300,000 50,000
Tax System Reform 200,000 200,000 - 350,000 300,000 50,000
Information & communications Tech 200,000 200,000 - 350,000 300,000 50,000
Program support 200,000 200,000 _____- 350,000 300,000 50,000
1,400,000 1,400,000 ______ 2,450,000 2,100,000 350,000
Total Project Expenditures 3,150,000 2,800,000 350,000 4,550,000 4,200,000 350,000
_________________________________________________________________ 53
________________________________________________________________________
Annex XXX
PSCAP - 12

MOFED
PSACAP
PURCHASE REQISITION
Requested by: ___________________________
Request Approved by: ________________________________
Budget checked by: ____________________________________
No Description Unit of Quantity Budget Budgeted Delivery

Measure code price Date Remark
_________________________________________________________________ 54
________________________________________________________________________
Annex XXXVI
PSCAP - 13

MOFED
PSACAP
BIN CARD
Stock Item: _______________________________
Store No: _________________________________
Shelf No: _________________________________
Quantity
Date Ref No Description Received Issued Balance Remark
_________________________________________________________________ 55
________________________________________________________________________
Annex XXXVII
PSCAP - 14

MOFED
PSACAP
FIXED ASSETS REGISTER
Tag Description Date of Document Cost Issued Remark

Number purchase Reference (Birr) Voucher To
No Date (Name of user)
_________________________________________________________________ 56
________________________________________________________________________
ANNEX XXXVIII

PSCAP - 15 MOFED
PSACAP
SUMMARIZED CHART OF ACCOUNT
1. BUDGET CODES (For Both Double Entry And Single Entry Users)
BUDGET
CATAGORY CODE
Public body MCB 15/318

MFA 15/118
MoFED 15/152
MOR 15/156
ICTDA 15/325
Federal Supreme Court 15/122
Program PSCAP 08
Sub- agency Plan and Program Department 01

Federal implementing agencies other than MCB 00
Sub-program PSCAP - Tigray 01

PSCAP – Afar 02
PSCAP – Amhara 03
PSCAP – Oromia 04
PSCAP – Sumali 05
PSCAP – Benishangul gumuz 06
PSCAP – SNNPR 07
PSCAP – Gambela 08
PSCAP – Harari 09
PSCAP – Addis Ababa City 10
PSCAP – DireDawa Administration Council 11
Federal implementing agencies 00
2. PROJECT CODE FOR DOUBLE ENTRY USERS

Urban Management Reform 004
Program Support 008
_________________________________________________________________ 57
________________________________________________________________________
ANNEX XXXVIII
3. PROJECT CODE FOR SINGLE ENTRY USERS

Urban Management and Reform 04
Program Support 08
4. ACCOUNT CODE FOR DOUBLE ENTRY USERS
Donor Double
Account title Category entry Remark
Balance sheet Cash on hand 4101
accounts
Cash at Bank – Foreign Currency -IDA 4102
Cash at Bank – Foreign Currency – XXX 4102
Cash at Bank – Foreign Currency - XXX 4102
Cash at Bank – Pooled Birr Account 4115
Cash at Bank – Implementing agencies 4103
Cash shortage & overage 4202
Other advance within government 4210
Advance to consultants 4252
Advance to suppliers 4253
Due to MoFED 5027
Other payables within government 5028
Transfers - cash 4015
Transfers –non cash 4050 - 4099
Net asset equity 5601
Revenue - External assistance 2000-2999
Revenue - External loan 3000-3999
Control account Goods and Services Goods 6200
Subsidiary accounts Office supplies 6212
Printing 6213
Food 6216
Fuel and lubricants 6217
Other material & supplies 6218
Miscellaneous equipment 6219
Research & deve lopment supplies 6223
Control account Fixed assets Goods 6310
Subsidiary accounts Purchase of equipment 6313

Purchase of building s, furnishings & fixture 6314
_________________________________________________________________ 58
________________________________________________________________________
Consultant
Subsidiary accounts Contracted professional services 6251
Consultant
Subsidiary accounts Salaries to permanent staff 6111
Wages to causal staff 6114
Wages to external contract staff 6115
Allowance to permanent staff 6121
Allowances to contract staff 6123
Allowance to external contract 6124
Government contribution to permanent staff pension 6131
Control account Contracted services Operating
costs 6230
Rent 6252
Advertising 6253
Insurance 6254
Fees and charges 6256
Electricity charges 6257
Telecommunication charges 6258
Water & other utilities 6259
Control account Traveling & official entertainment service Operating 6230
costs
Subsidiary accounts P erdiem 6231
Transport fees 6232
Official entertainment 6233
Control account Training Training 6270
Subsidiary accounts Local training 6271
External training 6272
Training related Perdiem 6273
Training related transport fee 6274
Operating
Control account Personnel service costs 6100
Subsidiary accounts Wages to contract staff 6113
Operating
Control account Maintenance & repair costs 6240
Subsidiary accounts Maintenance & repair of vehicle 6241
Maintenance & repair of equipment 6243
Maintenance & repair of building, furnishings & fixtures 6244
_________________________________________________________________ 59
________________________________________________________________________
ANNEX XXXVIII
5. ACCOUNT CODE FOR SINGLE ENTRY USERS
Donor Single
Account title Category entry
Asset Accounts Cash 4005
Cash at bank 4006
Staff debtors 4101
Cash shortage 4201
Custom deposit 5300
Other payable 5400
Transfers – capital 4015
Other cash transfers 4020
Control account Goods and Services Goods
Subsidiary accounts Office supplies 8303
Printing 8303
Food 8303
Fuel and lubricants 8303
Other material & supplies 8303
Miscellaneous equipment 8303
Research & development supplies 8303
Control account Fixed assets Goods
Subsidiary accounts Purchase of equipment 8204
Purchase of building s, furnishings & fixture 8206
Consultant
Control account Contracted services services
Subsidiary accounts Contracted professional services 8101
Consultant
Control account Personnel service services
Subsidiary accounts Wages to causal staff 8302
Wages to external contract staff 8302
Allowance to permanent staff 8302
Allowances to contract staff 8301
Allowance to external contract 8302
Government contribution to permanent staff pension 8301
Control account Contracted services Operating
costs
Rent 8303
Advertising 8303
Insurance 8303
Fees and charges 8304
Electricity charges 8303
Telecommunication charges 8303
Water & other utilities 8303
Control account Traveling & official entertainment service Operating
costs
Subsidiary accounts Perdiem 8501
_________________________________________________________________ 60
________________________________________________________________________
Transport fees 8501
Official entertainment 8303
Control account Training Training
Subsidiary accounts Local training 8501
External training 8501
Training related Perdiem 8501
Training related transport fee 8501
Operating
Control account Personnel service costs
Subsidiary accounts Salaries to permanent staff 8301
Wages to contract staff 8301
Operating
Control account Maintenance & repair costs
Subsidiary accounts Maintenance & repair of vehicle 8303
Maintenance & repair of equipment 8303
Maintenance & repair of building, furnishings & fixtures 8303
_________________________________________________________________ 61

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3. ACCOUNTING POLICIES & PROCEDURES 6

3.1. BUDGETING & BUDGETARY CONTROL 6

2.2. INSTITUTIONAL ARRANGEMENT

IDA credit account

Birr account for the

Birr account for PSCAP Birr account for

Figure 1 - PSCAP Fund and report flow chart

2.3. FUNDING MODALITIES

Channel I is the recommended funding modality for PSCAP.

3. ACCOUNTING POLICIES AND PROCEDURES

3.1. BUDGET AND BUDGETARY CONTROL

Budget codes for PSCAP

Budget calendar (as provided in the PIP)

The Cabinets shall recommend PSCAP budget no latter than 2 nd June.

Approval and adoption by federal legislature will be undertaken before 2 nd July.

Public body MCB 15/318

Sub- agency Plan and Program Department 01

Project Civil Service Reform 001

Figure 2- PSCAP account code

Example 3 – Budget for Tax system reform at federal level is identified as

Regions that are using single entry accounting code

E.g.: Ministry of Agriculture in the federal government is located as 01 00 00 00.

E.g.: To complete the above example – Ministry of Agriculture Administration

The combined code can be presented as:

01 00 00 00 - 211 01 00 - 721 02 02 - 8203

Egg: PSCAP – Dire Dawa-Bureau of Urban & Works (BoTIUD) is identified as 02

Project Civil Service Reform 01

02 11 00 00 - 318 01 00 - 000 08 04 - 8203

This is on the reports this will be added

Codes to be used for cash and non-cash transfers

Example 1: MoFED transferred Birr 1 million to Tigray BoFED

• MoFED shall record the transaction as follows:

Account code Debit Credit

• Tigray BoFED shall record the transaction as follows:

Account code Debit Credit

Example 1: MoFED transferred Birr 1 million to Somali BoFED

• Somali BoFED shall record the transaction on Ge/He 23 as follows:

Account code Received

• MoFED shall record the transaction as follows:

Account code Debit Credit

3.2. CHART OF ACCOUNT

The Federal Government of Ethiopia’s (FGE) financial management system shall be

A supplemental chart of account is provided. The purpose of the supplemental chart of

Donor Double Single

Subsidiary accounts Purchase of equipment 6313 8204

3.3. ACOUNTING CYCLE

3.3.1. RECEIPT OF MONEY

1. If receipt of money is from IDA

2. If receipt of money is other donors as assistance

3. If receipt of money is treasury

3.3.2. TRANSFER OF FUND TO BENEFICIERIES

Budget category Account code Birr

Revenue Item Purpose of payment Birr

4015 Transfer for PSCAP program 1,000,000 00

3.3.3.1.CHECK PAYMENTS & BANK TRANSFERS

Budget category Account code Birr

Budg et code shall be 02150000 -3180100-0000805

3.3.3.2. CASH PAYMENTS

The Cashier shall keep the fund in a safe.

Suspense payments can be made form the petty cash account.

3.3.4. JOURNAL VOUCHERS

Description Budget Category Account Code Debit Credit

Prepared by: __ Agreed by: _

QUARETER: 2 (October 8 to December 8, 2004) Request No: __2

Prepared by: ____ Checked by: _

Authorized by: _ Approved by: _

QUARETER: 2 (October 8 to December 8, 2004) Request No: __2

Prepared by: ____ Checked by: _

Authorized by: _ Approved by: _

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