FGE Chapter 4,5, and 6
FGE Chapter 4,5, and 6
Chapter Four
Monthly Reports
2
Introduction
Monthly reports submitted by a reporting entity
to MOFED.
Revenue /Assistance/ Loan report
Recurrent expenditure report
Capital expenditure report
Transfer report
Receivables report
Payables report
Trial balance
3
Cont’d……
• The only monthly reports verified by MOFED
are the transfer report and the Trial Balance.
Revenue/Assistance/Loan Report
provide information on the year to date
revenues of an accounting unit from each
source of finance.
Account YEAR-TO-DATE
Code Account description Revenue
Debit Credit
1101 Tax on wages and salaries
1465 Interest on loans to government employees
1485 Other miscellaneous revenue
Example 1:
You are provided with the following general
ledger balances as at May 31, 2010 for
Ethiopian Civil Service College with budget
category 319/01/07/00/000/1800 and bank
account Number 10645839.
Solution:
Revenue/Assistance/Loan report
Me/He 21
Month __May ________
Name of Public Body:___ ECSC________________ code: __319_____
Name of Program:___________________________ code: ____01___
Name of Sub Agency:________________________ code: ___07____
Name of Sub Program: ________________________code: __00_____
Name of Project: _____________________________code: _000______
Bank Account Number:___10645839____________________
Account YEAR-TO-DATE
Code Account description Revenue
Debit Credit
1101 Tax on wages and salaries 6750
1415 Court fees 750
1429 Other fees and charges 1000
1465 Interest on loans to government employees
1485 Other miscellaneous revenue 500
Total (To Trial Balance) 9000
Account YEAR-TO-DATE
Code Account Description Expenditure
Debit Credit
Preprinted Preprinted
Example 2:
Based on the data given on Example 1, prepare
the Recurrent Expenditure report
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Solution:
Account YEAR-TO-DATE
Code Account Description Expenditure
Debit Credit
6111 Salary to permanent staff 67500
6131 Gov’t contribution to perm. Staff-pension 4050
6241 Maintenance and repair of vehicles 1950
6257 Electricity charges 1200
6213 Printing 7000
6258 Telecommunication charges 600
6259 Water and other utilities 600
6217 Fuel and lubricants 15000
Total (To Trial Balance) 97900
Account YEAR-TO-DATE
Code Account Description Expenditure
Debit Credit
Preprinted Preprinted
Transfer Report
• Its function is to serve as a control tool to verify
cash transfers between MOFED and an
accounting unit and vice versa
Me/He 24 Month__________
Name of Public Body:________________________ code: _______
Name of Program:___________________________ code: _______
Name of Sub Agency:________________________ code: _______
Name of Sub Program: ________________________code: _______
Name of Project :_____________________________code: _______
Bank Account Number:_______________________
Account YEAR-TO-DATE
Code Account Description Balance
Debit Credit
4001 Recurrent salary and allowances
4002 Recurrent operating expenditure
4003 Capital salary and allowances
4004 Capital expenditure
4005 Staff advances
4006 SSDP funds
4007 Grace period payables
4008 Between BI and/or Region
4009 Other cash transfers
4010 Within BI or MOFED
4051 Recurrent salary and allowances: non-cash
4052 Recurrent operating expenditure: non-cash
4053 Capital salary and allowances: non-cash
4054 Capital expenditure: non-cash
4055 Other non-cash transfers
Total (To Trial Balance)
Example 3:
• Based on the data given in Example 1, you are
required to prepare the Transfer Report Part I.
24
Solution:
Transfer Report - Part 1
Me/He 24 Month___May_______
Name of Public Body:____ECSC________________ code: _319______
Name of Program:___________________________ code: ___01____
Name of Sub Agency:________________________ code: ___07____
Name of Sub Program: ________________________code: _00______
Name of Project :_____________________________code: _000______
Bank Account Number:___10645839____________________
Account YEAR-TO-DATE
Code Account Description Balance
Debit Credit
4001 Recurrent salary and allowances 57550
4002 Recurrent operating expenditure 33450
4003 Capital salary and allowances
4004 Capital expenditure
4005 Staff advances 9600
4006 SSDP funds
4007 Grace period payables
4008 Between BI and/or Region
4009 Other cash transfers 2750
4010 Within BI or MOFED
4051 Recurrent salary and allowances: non-cash
4052 Recurrent operating expenditure: non-cash
4053 Capital salary and allowances: non-cash
4054 Capital expenditure: non-cash
4055 Other non-cash transfers 6750
Total (To Trial Balance) 2750 107350
Part 2
Each cash transfer during the month between the
accounting unit and MOFED is listed individually in
Part 2 of the transfer report. The information
required for Part 2 is transcribed from the following
cash transfer account Ledger cards:
4001: recurrent salary and allowances
4002: Recurrent operating expenditure
4003: capital salary and allowances
4004: capital expenditure
4005: Staff advances
4006: SSDP funds
4007: Grace period payables
Any other transfer code used during the month to transfer
Funds to /from MOFED
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Total
Net
activity
BOM
Balance
EOM
Balance
30
Total
Net
activity
BOM
Balance
EOM
Balance
31
Receivables Report
Account YEAR-TO-DATE
Code Account Description Receivables
Debit Credit
4201 Suspense
4202 Cash shortage
4203 Advance to staff
4204 Advance for SSDP
4205 Advance for staff from next year's budget
4206 Advance for recurrent expenditures from next year's budget
4207 Advance for capital expenditures from next year's budget
4208 Advance to regions
4209 Other advances to BI
4210 Other advances within government
4251 Advance to contractors
4252 Advance to consultants
4253 Advance to suppliers
4254 Other advances outside government
4271 Peasant associations
4272 Cooperatives
4273 Individuals and private organizations
4274 Others
Total (To Trial Balance)
Example 4:
• Based on the data provided in Example 1, you
are required to prepare receivable report.
35
Solution:
Receivables Report
Me/He 25
Month__May________
Name of Public Body: _________ECSC_____________ code: _319______
Name of Program:___________________________ code: ____01___
Name of Sub Agency:________________________ code: ___07____
Name of Sub Program: ________________________code: __00_____
Name of Project :_____________________________code: __000_____
Bank Account Number:___10645839____________________
Account YEAR-TO-DATE
Code Account Description Receivables
Debit Credit
4201 Suspense
4202 Cash shortage
4203 Advance to staff 9600
4204 Advance for SSDP
4205 Advance for staff from next year's budget
4206 Advance for recurrent expenditures from next year's budget
4207 Advance for capital expenditures from next year's budget
4208 Advance to regions
4209 Other advances to BI
4210 Other advances within government
4251 Advance to contractors
4252 Advance to consultants
4253 Advance to suppliers
4254 Other advances outside government
4271 Peasant associations
4272 Cooperatives
4273 Individuals and private organizations
4274 Others
Total (To Trial Balance) 9600
Payables Report
Cont’d……
• Each payable item is identified by account code
and the amount from the balance column in the
general ledger card is transcribed into the
payables report.
YEAR-TO-
Account Account Description DATE
Code Payables
Debit Credit
5001 Grace period payables
5002 Sundry creditors
5003 Pension contribution payable
5004 Salary payable
5021 Due to staff
5022 Due to Ministry of Finance and Economic Development for
SSDP
5023 Due to Ministry of Finance and Economic Development for
staff from next year’s budget
5024 Due to Ministry of Finance and Economic Development for
recurrent expenditures from next year’s budget
5025 Due to Ministry of Finance and Economic Development for
capital expenditures from next year’s budget
5026 Due to regions
5027 Other payables to Ministry of Finance and Economic
Development
5028 Other payables within government
5051 Custom deposits
5052 Court deposits
5053 Hospital deposits
5054 Other deposits
5061 Retention on contract
Total (To Trial Balance)
Example 5:
Based on the information given in Example 1, you are required to prepare the Payables report.
Solution:
Payables Report
Me/He 26 Month__May_________
Name of Public Body: ______ECSC_________Code: _319____
Name of Program: _______________________ Code: __01___
Name of Sub Agency: ____________________ Code: _07____
Name of Sub Program: ___________________ Code: _00____
Name of Project: _______________________ Code: _000____
Bank Account Number_____10645839_____
YEAR-TO-
Account Account Description DATE Payables
Code
Debit Credit
5001 Grace period payables
5002 Sundry creditors
5003 Pension contribution payable
5004 Salary payable 19850
5021 Due to staff
5022 Due to Ministry of Finance and Economic Development for SSDP
5023 Due to Ministry of Finance and Economic Development for staff
from next year’s budget
5024 Due to Ministry of Finance and Economic Development for
recurrent expenditures from next year’s budget
5025 Due to Ministry of Finance and Economic Development for capital
expenditures from next year’s budget
5026 Due to regions
5027 Other payables to Ministry of Finance and Economic Development
5028 Other payables within government
5051 Custom deposits
5052 Court deposits
5053 Hospital deposits
5054 Other deposits
5061 Retention on contract
Total (To Trial Balance) 19850
Trial Balance
It is the summary of the net cumulative debit and credit balances
contained in the general ledger at the end of each month for each
account code represented by a general ledger card.
Prepared by Name & Sig. Checked by Name & Sig. Authorized by Name & Sig.
44
Example 6:
Based on the data given in activity 1, you are required to prepare the monthly trial balance.
Solution:
Trail Balance
Me/He 27
Month_ May_______
Name of Public Body: ____ECSC___________Code: __319____
Name of Program: _______________________ Code: ___01__
Name of Sub Agency: ____________________ Code: __07___
Name of Sub Program: ___________________ Code: ___00__
Name of Project: ________________________ Code: __000___
Bank Account Number __10645839_________________
Code Account Description Debit Credit
Revenues/Assistance/Loan: (from Revenue/Assistance/Loan report 9000
Expenditures:
Recurrent expenditure (Total of Recurrent Expenditure Reports) 97900
Capital expenditure (Total of Capital Expenditure Reports)
Transfers: (from Transfer Report) 2750 107350
Receivables: (from Receivables Report) 9600
Payables: (from Payables Report) 19850
Letters of Credit: (by account code-from General Ledger)
5601 Net Assets/Equity (from General Ledger)
Cash and Cash Equivalents (by account code-from General ledger
4101 Cash on hand 22850
4102 Cash at bank in foreign currency
4103 Cash at bank 3100
TOTAL 136200 136200
Prepared by Name & Sig. Checked by Name & Sig. Authorized by Name & Sig.
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Chapter Five
Financial Statements
50
Guiding Principles
Transparency in government begins with full
and fair disclosure of financial information.
GOVERNMENT OF ETHIOPIA
ASSETS (CURRENT)
Cash and cash equivalents 1 0 0
Receivables 2 0 0
Total Assets 0 0
LIABILITIES(CURRENT)
Current Liabilities - Payables 3 0 0
Total liabilities 0 0
Net Current
Assets/(Liabilities) 0 0
NET ASSETS/EQUITY
Accumulated surpluses/deficits 0 0
56
GOVERNMENT OF ETHIOPIA
Statement of Financial Performance
For the year ended 7 July 20X2
Ethiopian Birr '000
Notes 20X2 20X1
OPERATING ACTIVITIES
Operating Revenue
Tax revenues 4 0 0
Non-tax revenues 5 0 0
Subsidies 6 0 0
Municipality revenues 7 0 0
Other revenue 8 0 0
Total operating revenue 0 0
Operating Expenses
Subsidies 0 0
Personnel services 9 0 0
Goods and services 10 0 0
Fixed assets and construction 11 0 0
Other expenses 12 0 0
Total operating expenses 0 0
GOVERNMENT OF ETHIOPIA
Statement of Changes in Net Assets/Equity
For the year ended 7 July 20X2
Changes in accounting
policy/Fundamental errors 0
Restated balance 0
GOVERNMENT OF ETHIOPIA
Cash Flow Statement
For the year ended 7 July 20X2
Ethiopian Birr '000 20X2 20X1
1 CASH FLOW FROM OPERATING ACTIVITIES
Tax revenues 0 0
Non tax revenues 0 0
Other income 0 0
Miscellaneous income 0 0
Municipality revenues 0 0
Regional subsidy 0 0
Total Receipts - A 0 0
Personnel services 0 0
Goods and services 0 0
Finance charges 0 0
Subsidies 0 0
Other expenses 0 0
Total Payments - B 0 0
Non Cash Movements
Increase/(Decrease) in payables 0 0
Increase/(Decrease) in receivables 0 0
Total Non Cash Movements - C 0 0
GOVERNMENT OF ETHIOPIA
Cash Flow Statement
For the year ended 7 July 20X2
Ethiopian Birr '000
20X2 20X1
3 CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from external assistance 0 0
Proceeds from external loans 0 0
Total Receipts (A) 0 0
GOVERNMENT OF ETHIOPIA
Accounting Policies and Notes to Financial Statements
Domestic currency refers to local currency held in a safe as well as in a bank account. Foreign
currency is cash held in a bank account denominated in foreign currency. Budget support refers to
cash from a foreign source held in a bank account available for unrestricted general budgetary
support. Counterpart funds refer to grants held in a bank account reserved for specific program
support.
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2 Receivables
Advances
Prepayments
Others ___________ ______
Advances represent amounts due from government entities and staff. Prepayments represent
amounts due from suppliers, contractors and consultants. Others represent amounts due from
peasant associations, cooperatives, individuals, private organizations and others.
63
GOVERNMENT OF ETHIOPIA
Accounting Policies and Notes to Financial Statements
Accounts Payable
Payables within Government
Direct advances
Treasury bills
Deposits
Retentions ___________ ______
Accounts payables represent grace period payables, sundry creditors, pension contributions
payable, salary payable and other payroll deductions. Payables within government represent
amounts due to government entities and staff. Deposits represent customs, court, hospital bid
bond, VAT and other deposits.
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4. Tax Revenues
• Tax revenues are legally mandated payments to
government.
• Tax revenues represent taxes on income, profits
and capital gains, value added tax and sales
turnover tax on domestically manufactured goods
and services, excise tax and foreign trade taxes
which include excise tax, value added tax,
customs and export duties.
• The breakdown of tax revenues by revenue item is
provided in the statement of comparison of
budget and actual amounts – domestic revenue.
65
6. Subsidies
• Subsidy revenue represents treasury funds
received by regions from the federal government
to execute their recurrent and capital budgets.
• subsidy expense represents treasury funds
transferred by the federal government to regions
to execute their recurrent and capital budgets.
7. Municipality Revenues
• Municipality revenue represents different types of
municipal taxes, municipal rents and service
charges and sale of goods and municipal services.
67
8. Other Revenues
Other revenue represents government
investment income including dividend income,
residual surplus and capital charges. The
breakdown of other revenues by revenue item is
provided in the statement of comparison of
budget and actual amounts – domestic revenue.
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9. Personnel Services
• Personnel services represent government
pension contributions made to pension funds
and salaries, wages, allowances/benefits paid
to permanent, contracted, externally
contracted and casual staff.
• The breakdown of personnel services by
expense item is provided in the statement of
comparison of budget and actual amounts –
expenditure.
69
16 Finance Costs
Finance costs represent payments of bank charges and interest on external and domestic debt.
The amounts falling due for repayment within the next 12 months amount to Birr …..
Details of the lenders, date of obtaining loan, amount due in foreign currency and the period of
repayment are detailed below:
Maturity Analysis
Due within 1 year 0 0
Due within 2 to 5 years 0 0
Due after more than 5 years 0 0
Accounting Policies
• The principal accounting policies of the Government, which
are set out below, have been applied consistently throughout
the period.
BASIS OF ACCOUNTING
• The financial statements have been prepared on the
historical cost basis using a modified cash basis of
accounting that recognizes the following non-cash
transactions:
• Revenue is recognized when:
Aid in kind is received.
Payroll is processed (income tax and employee fines)
Salary advance is made to an employee (interest on salary
advances)
Withholding tax is deducted from the amount due to a supplier.
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GOVERNMENT OF ETHIOPIA
Statement of Comparison of Budget and Actual Amounts - Domestic Revenue
for the year ended 7 July 20X2
Ethiopian Birr '000
20X2 20X1
Budget Actual Variance Budget Actual Variance
OPERATING REVENUE
Tax revenues
Tax on income, profit and capital gains
Value Added Tax on goods & services
Excise Tax
Sales turnover tax on goods & services
Stamp sales and duty
Customs Duty on imported goods
Excise Tax on imported goods
Value Added Tax on imported goods
Export Duties
Timber Tax
Municipality Tax revenue
Total tax revenues
Non-tax revenues
Administrative fees and charges
Sales of public goods and services
Miscellaneous revenue
Municipality revenues
Total non-tax revenues
Subsidies
External assistance
External loans
Total operating revenues
84
GOVERNMENT OF ETHIOPIA
Statement of Comparison of Budget and Actual Amounts - Domestic Revenue
for the year ended 7 July 20X2
Ethiopian Birr '000
20X2 20X1
Budget Actual Variance Budget Actual Variance
Other revenues
Government investment income
Dividend income
Residual surplus
Interest income and capital charges
Total government investment income
Contribution to pension funds
Capital revenue
Sale of properties, stock and intangible assets
Privatization proceeds
Capital transfers from non-governmental sources
GOVERNMENT OF ETHIOPIA
Total 0 0 0 0 0 0
86
GOVERNMENT OF ETHIOPIA
GOVERNMENT OF ETHIOPIA
20X2 20X1
Adjusted Adjusted
Emoluments
Total 0 0 0 0 0 0
88
GOVERNMENT OF ETHIOPIA
Comparison of Original and Adjusted and Actual Amounts
6110 Emoluments
6120 Allowances/benefits
6320 Construction
6000 TOTAL
89
GOVERNMENT OF ETHIOPIA
Statement of Expenditure by Functional Classification
for the year ended 7 July 20X2
Ethiopian Birr '000
6110 Emoluments
6120 Allowances/Benefits
GOVERNMENT OF ETHIOPIA
Summary Statement of Domestic and External Revenues
For the year ended 7 July 20X2
ITEM OF REVENUE
A. ORDINARY REVENUE
Direct Tax
Indirect Tax
Taxes on Foreign Trade
Government Investment Income
Other Revenue
Total Ordinary Revenue
B. EXTERNAL ASSISTANCE
Counter Part Fund Grants
Technical Assistance
Total External Assistance
C. CAPITAL REVENUE
Domestic Sources
Counter Part Fund Credit
External Loan
Total Capital Revenue
D. DOMESTIC BORROWING
GRAND TOTAL
91
GOVERNMENT OF ETHIOPIA
Summary Statement of Expenditure
For the year ended 7 July 20X2
Ethiopian Birr ‘000
Particulars Recurrent Expenditure Capital Expenditure Subsidies Total
Administrative & General Service: 100 series
Organs of State
Justice and Security
National Defense
General Services
Others:
Grand Total
92
GOVERNMENT OF ETHIOPIA
Summary Statement of Expenditure and its Financing
For the year ended 7 July 20X2
1. EXPENDITURE
A. Recurrent Expenditure
Administrative and General Service
Economic Service
Social Service
Other Service
Total Recurrent Expenditure
B. Capital Expenditure
Economic Development
Social Development
General Development
Other Development
Total Capital Expenditure
C. Subsidy to Regions
Total Expenditure
2. FINANCING
A. Domestic Revenue:
Tax Revenue
Non Tax Revenue
Total Domestic Revenue
B. External Assistance:
Counter Part Fund Assistance
Technical Assistance
Total External Assistance
C. Borrowings:
External Loan & Credit
Counter Part Fund Credit
Project Loan
External Loan Total
Domestic Loan
Direct Advance N.B.E.
Treasury Bills
Deposit & Other Account Balances
Net Domestic Loan & Other Deposit Accounts
Grace Period Credits
Total Borrowing
Total Financing
93
Chapter 6
Financial Administration in
FGE Accounting System
94
Public Body
Budget Section
Accounts Section
The remaining sections in this chapter include an overview of the roles and responsibility of
MoFED and PBs in the FGE accounting system.
Programs
Accountant Cashier
Programs
Planning is conceived in terms of programs and encompasses periods of up to three years. A
96
• Accounting Unit
• For cash management, another entity is created: the Bank Account
(BA).
• The BA is not coded in the chart of accounts and does not receive a
budget. However, it is important for cash Management and control.
• The FGE accounting system includes the BA in the accounting system.
• A PB may administer many BIs and many BAs, or a PB may have only
one BI and one BA. Each BA:
▫ Is managed by an accountant.
▫ May:
Have its own cashier,
Share a cashier with other BAs, or
Have no cashier associated with it (like foreign currency bank
accounts)
▫ Handles cash flows:
For one or more than one BI, and
From one source of financing (domestic, assistance or loan).
For more than one type of budget (capital/recurrent).
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• Reporting Entity
• A reporting entity is the entity that sends monthly
reports to MOFED.
• Although the accounting unit prepares monthly
reports, every accounting unit may not send monthly
reports directly to MOFED.
• Each of the following may apply to a reporting entity:
A reporting entity may be an accounting unit, and an
accounting unit may consist of only one BI. Therefore, a single
BI may be a reporting entity.
A reporting entity may be a PB that receives the monthly
reports from several accounting units.
• Whoever sends the reports to MOFED is the reporting
entity. Therefore, the reporting entity is not,
necessarily, an accounting unit.
101
Thank You