Manual 3 Federal Accounting System

Chapter 11. Monthly Reports

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CHAPTER 11 MONTHLY REPORTS

The purpose of this Chapter is to describe the monthly reports submitted by a Reporting
Unit to MOFED. The Chapter contains the following sections:
 Revenue/Assistance/Loan Report
 Recurrent Expenditure Report
 Capital Expenditure Report
 Transfer Report
 Receivables Report
 Payables Report
 Trial Balance
 Submitting Monthly Reports to MOFED

The only monthly reports verified by MOFED are the Transfer Report and the Trial Balance.

The Transfer Report is verified by MOFED to ensure that all disbursements to an

Accounting Unit by MOFED and all disbursements from an Accounting Unit to MOFED are
accounted for within the accounting system to enhance control over cash transfers.

The Trial Balance is verified by MOFED to ensure that the total debits and credits are equal
and that General Ledgers are balanced. Also, the cash balance for the domestic source of
finance is verified and monitored by MOFED from the Trial Balance to enhance cash
management practices.

All other monthly reports that are submitted to MOFED serve as input documents to
consolidate reports and produce financial statements at the Federal Level. The Inspection
Department and the Office of the Auditor General verify these reports.

All monthly reports are prepared in two copies. The original copy is passed to MOFED and
the second copy is retained as a permanent record at the Reporting Unit.

Some Public Bodies receive no funds from Treasury. Instead, their entire budget is financed
by revenue that they collect and retain. Public Bodies that operate entirely on retained
revenue must report to MOFED quarterly rather than monthly.

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REVENUE/ASSISTANCE/LOAN REPORT

Meaning

The Revenue/Assistance/Loan Report provides information on the year-to-date revenues of

an Accounting Unit from each source of finance.

Purpose

The purpose of the Revenue/Assistance/Loan Report is to facilitate consolidation of the

actual revenues, assistance and loan collected and comparison of budgeted revenues to
actual revenues by account category.

Preparation & Source Documents

The Accountant prepares a Revenue/Assistance/Loan Report for the Accounting Unit. The
source document to prepare the Revenue/Assistance/Loan Report is the General Ledger.
Each item of revenue, assistance or loan is identified by account code. The amount from the
balance column in the General Ledger Card is transcribed into the Revenue/Assistance/Loan
Report. The grand totals from each Revenue/Assistance/Loan Report are carried forward to
the Trial Balance.

Balances in the Revenue/Assistance/Loan Report are normally credits.

Each Accounting Unit prepares one Revenue/Assistance/Loan Report.

Format

Figure 11.1 shows the Revenue/Assistance/Loan Report.

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Figure 11.1
Revenue/Assistance/Loan Report

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Table 11.1 identifies and describes the fields in the Revenue/Assistance/Loan Report.

Table 11.1
Fields in the Revenue/Assistance/Loan Report

Field Description
Top of Page:
Name Name of Public Body to identify Accounting Unit
Code Code of Public Body to identify Accounting Unit
Bank Account Number Number of the bank account to identify Accounting Unit
Month/Year Month and year of the report
Table
Account Code Account code from the Ledger Card (the three most common
are preprinted)
Account Description Description of the account code (the most common are
preprinted)
YTD Revenue (Dr/Cr) Balance for the account from the Ledger Card
Total /To Trial Balance/ Calculate the grand total and transfer to the Trial Balance
Bottom of Page:
Prepared by Signature of accountant preparing the report
Verified by Signature of accountant verifying the report

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RECURRENT EXPENDITURE REPORT

Meaning

The Recurrent Expenditure Report provides information on the year-to-date recurrent

expenditures of each BI managed by an Accounting Unit.

Purpose

The purpose of the Recurrent Expenditure Report is to facilitate consolidation of the actual
recurrent expenditures and comparison of budgeted expenditure to actual expenditure.

Preparation & Source Documents

The Accountant prepares the Recurrent Expenditure Report for each BI.

The source document to prepare the Recurrent Expenditure Report is the Subsidiary Ledger.
The amount from the balance column in each Subsidiary Ledger Card is transcribed to the
appropriate account code in the Recurrent Expenditure Report.

Balances in the Recurrent Expenditure Report are normally debits.

The Recurrent Expenditure Report has two pages.

Each Accounting Unit prepares a Recurrent Expenditure Report for each BI that it manages.

Format

Figure 11.2 shows the Recurrent Expenditure Report.

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Figure 11.2
Recurrent Expenditure Report

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Figure 11.2
Recurrent Expenditure Report – Page 2

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Table 11.2 identifies and describes the fields in the Recurrent Expenditure Report.

Table 11.2
Fields in the Recurrent Expenditure Report

Field Description
Top of Page:
Left-Side
Public Body & Code Name and code of Public Body to identify Accounting
Unit
Program & Code Name and code of Program if needed to identify
Accounting Unit or BI
Sub Agency & Code Name and code of Sub Agency if needed to identify
Accounting Unit or BI
Sub Program & Code Name and code of Sub Program if needed to identify
Accounting Unit or BI
Project & Code Name and code of Project if needed to identify
Accounting Unit or BI
Source & Code Source code (1800 is Treasury; 1900 is Retained
Revenue; revenue code for donor (2001-2999) or lender
(3001-3999).
Bank Account Number Number of the bank account to identify Accounting
Unit
Right-Side
Month/Year Month and year of the report
Table
Account Code Account code from the Ledger Card (all are
preprinted)
Account Description Description of the account code (all are preprinted)
Expenditure Current Month Expenditure for the month
YTD Expenditure (Dr/Cr) Balance for the account from the Ledger Card
Total /To Trial Balance/ Calculate the grand total and transfer to the Trial
Balance
Bottom of Page:
Prepared by Signature of Accountant preparing the report
Verified by Signature of Accountant verifying the report

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CAPITAL EXPENDITURE REPORT

Meaning

The Capital Expenditure Report provides information on the year-to-date capital

expenditures of each BI managed by an Accounting Unit.

Purpose

The purpose of the Capital Expenditure Report is to facilitate consolidation of the actual
capital expenditures and comparison of budgeted expenditure to actual expenditure.

Preparation & Source Documents

The Accountant prepares the Capital Expenditure Report for each BI.

The source document to prepare the Capital Expenditure Report is the Subsidiary Ledger.
The amount from the balance column in each Subsidiary Ledger Card is transcribed to the
appropriate account code in the Recurrent Expenditure Report.

Balances in the Capital Expenditure Report are normally debits.

The Capital Expenditure Report has two pages.

Each Accounting Unit prepares a Capital Expenditure Report for each BI that it manages.

Format

Figure 11.3 shows the Capital Expenditure Report.

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Figure 11.3
Capital Expenditure Report

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Figure 11.3
Capital Expenditure Report – Page 2

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Table 11.3 identifies and describes the fields in the Capital Expenditure Report.

Table 11.3
Fields in the Capital Expenditure Report

Field Description
Top of Page:
Left-Side
Public Body & Code Name and code of Public Body to identify
Accounting Unit
Program & Code Name and code of Program if needed to identify
Accounting Unit or BI
Sub Agency & Code Name and code of Sub Agency if needed to
identify Accounting Unit or BI
Sub Program & Code Name and code of Sub Program if needed to
identify Accounting Unit or BI
Project & Code Name and code of Project if needed to identify
Accounting Unit or BI
Source & Code Source code (1800 is Treasury; 1900 is Retained
Revenue; revenue code for donor (2001-2999) or
lender (3001-3999).
Bank Account Number Number of the bank account to identify
Accounting Unit
Right-Side
Month/Year Month and year of the report
Table
Account Code Account code from the Ledger Card (all are
preprinted)
Account Description Description of the account code (all are
preprinted)
Expenditure Current Month Expenditure for the month
YTD Expenditure (Dr/Cr) Balance for the account from the Ledger Card
Total /To Trial Balance/ Calculate the grand total and transfer to the Trial
Balance
Bottom of Page:
Prepared by Signature of Accountant preparing the report
Verified by Signature of Accountant verifying the report

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TRANSFER REPORT

Meaning

The Transfer Report consists of two parts:

 Part 1 summarizes transfer account balances from the General Ledger.
 Part 2 provides information on each monthly cash transfer between the
Accounting Unit and MOFED. Transfers made between other units of
government using transfer account code 4017 are reported on Part 1 of this
report, but details are not reported on Part 2.

Purpose

The purpose of the Transfer Report is to serve as a control tool to verify cash transfers
between MOFED and an Accounting Unit and vice versa.

Preparation & Source Documents

The Accountant prepares a Transfer Report for each Accounting Unit. The source
documents to prepare the Transfer Report are the General Ledger Cards.

Balances in the Transfer Report are debits or credits depending on the nature of the transfer
account.

One Transfer Report is prepared for each Accounting Unit.

Part 1

The amount from the Balance Column in the General Ledger Card is transcribed into the
Transfer Report - Part 1. The grand totals from each Transfer Report - Part 1 are carried
forward to the Trial Balance.

Transfer Report - Part 1 is shown in Figure 11.4.

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Figure 11.4
Transfer Report - Part 1

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Table 11.4 identifies and describes the fields in the Transfer Report- Part 1.

Table 11.4
Fields in the Transfer Report - Part 1
Field Description
Top of Page:
Left-Side
Name of Reporting Unit Name of Reporting Unit
Bank Account Number Number of the bank account to identify Accounting Unit
Right-Side
Month/Year Month and year of the report
Table
Account Code Account code from the Ledger Card
Account Description Description of the account code
YTD Balance (Dr/Cr) Balance for the account from the Ledger Card
Total to Trial Balance Calculate grand total and transfer to the Trial Balance
Bottom of Page:
Prepared by Signature of Accountant preparing the report
Verified by Signature of Accountant verifying the report

Transfer Report - 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
 4009: Other Transfers
 4017: Zero Balance transfers
 Any other transfer code used during the month to transfer funds to/from MOFED

Columns are pre-printed for transfer codes 4001 through 4007. If other transfer codes are
used during the month, a blank column is provided. The appropriate transfer code should
be written at the top of the column.

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Columns are identified by account code. The date and amount of each transaction recorded
in the account code's Ledger Card during the month are transcribed in the corresponding
sub-column of the Transfer Report. Each transaction is recorded in a separate row.
Transfers received from MOFED are credits. Transfers of cash to MOFED are debits.

Debit and credit sub-columns are totaled and the total is recorded in the total row.

The difference between the totals in the debit and credit sub-columns for each account code
is calculated. If the total of debits is greater than the total of credits, the difference is
recorded in debit sub-column of the Net Activity row. If the total of credits is greater than
the total of debits, the difference is recorded in credit sub-column of the Net Activity row.

The balance from the account code's Ledger Card at the beginning of the month is recorded
in the beginning of month (BOM Balance) row.

The amount is the Net Activity row is combined with the amount in the BOM Balance row
and recorded in the end of month (EOM Balance) row. The EOM Balance must equal the
balance in the account code's Ledger Card at the end of the month, which equals the balance
recorded for the account code in Part 1 of the Transfer Report.

Format

Transfer Report - Part 2 is shown in Figure 11.5.

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Figure 11.5
Transfer Report - Part 2

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Figure 11.5
(Continued)
Transfer Report - Part 2

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Table 11.5 identifies and describes the fields in the Transfer Report - Part 2.

Table 11.5
Fields in the Transfer Report - Part 2
Field Description
Columns
Account Code Account code from the Ledger Card
Sub-Columns:
Date Date of the transfer taken from the Ledger Card
Debit/Credit Amount of the transfer taken from the Ledger Card
Rows
[Blank] Each transfer for the month is recorded in a separate row
Total The total for the debit and credit sub-columns is recorded here.
Net Activity The difference between the totals for the debit and credit sub-
columns is recorded here. If the total of debits is greater than
the total of credits, the difference is recorded in debit sub-
column. If the total of credits is greater than the total of debits,
the difference is recorded in credit sub-column.
BOM Balance The balance at the beginning of the month from the Ledger
Card of the appropriate account code is recorded here.
EOM Balance The amount in the Net Activity row is combined with the
amount in the BOM Balance row and recorded here. The EOM
Balance must equal the balance in the Ledger Card of the
appropriate account code at the end of the month, which
equals the balance recorded for the account code in Part 1 of
the Transfer Report.

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RECEIVABLES REPORT

Meaning

The Receivables Report provides information on the year-to-date receivables owed to an

Accounting Unit.

Purpose

The purpose of the Receivables Report is to provide information on the year-to-date

receivables owed to an Accounting Unit and facilitate consolidation of receivables owed to
the FGE.

Preparation & Source Documents

The Accountant prepares a Receivables Report for each Accounting Unit. The source
document to prepare the Receivables Report is the General Ledger. Each item of receivable is
identified by account code. The amount from the Balance Column in the General Ledger
Card is transcribed into the Receivables Report. The grand totals from each Receivables
Report are carried forward to the Trial Balance.

Balances in the Receivables Report are normally debits.

One Receivables Report is prepared for each Accounting Unit.

Format

Figure 11.6 shows the Receivables Report.

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Figure 11.6
Receivables Report

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Table 11.6 identifies and describes the fields in the Receivables Report.

Table 11.6
Fields in the Receivables Report
Field Description
Top of Page:
Left-Side
Name Name of Public Body to identify Accounting Unit
Bank Account Number Number of bank account to identify Accounting Unit
Right-Side
Code Code of Public Body to identify Accounting Unit
Month/Year Month and year of the report
Table
Account Code Account code from the Ledger Card
Account Description Description of the account code
YTD Receivables (Dr/Cr) Balance for the account from the Ledger Card
Total to Trial Balance Calculate the grand total and transfer to Trial Balance
Bottom of Page:
Prepared by Signature of Accountant preparing the report
Verified by Signature of Accountant verifying the report

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PAYABLES REPORT

Meaning

The Payables Report provides information on the year-to-date payables owed by an

Accounting Unit.

Purpose

The purpose of the Payables Report is to provide information on the year-to-date payables
owed by an Accounting Unit and facilitate consolidation of the actual payables owed by the
FGE.

Preparation & Source Documents

The Accountant prepares a Payables Report for the Accounting Unit. The source document
to prepare the Payables Report is the General Ledger. 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. The grand totals from each Payables Report are
carried forward to the Trial Balance.

Balances in the Payables Report are normally credits.

One Payables Report is prepared for each Accounting Unit.

Format

Figure 11.7 shows the Payables Report.

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Figure 11.7
Payables Report

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Table 11.7 identifies and describes the fields in the Payables Report.

Table 11.7
Fields in the Payables Report
Field Description
Top of Page:
Left-Side
Name Name of Public Body to identify Accounting Unit
Bank Account Number Number of the bank account to identify Accounting Unit
Right-Side
Code Code of Public Body to identify Accounting Unit
Month/Year Month/year of the report
Table
Account Code Account code from the Ledger Card
Account Description Description of the account code
YTD Payables (Dr/Cr) Balance for the account from the Ledger Card
Total to Trial Balance Calculate the grand total and transfer to the Trial Balance
Bottom of Page:
Prepared by Signature of Accountant preparing the report
Verified by Signature of Accountant verifying the report

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TRIAL BALANCE

Meaning

The Trial Balance is the summary of the net cumulative year-to-date 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.

Purpose

The Trial Balance proves the arithmetical accuracy of the General Ledger. The total amount
of the Debit Column must equal the total amount of the Credit Column in the Trial Balance.
The Trial Balance serves as a basis to produce financial statements.

Preparation & Source Documents

The Accountant prepares the Trial Balance for each Accounting Unit. The source documents
to prepare the Trial Balance are:
 Revenue/Assistance/Loan Report,
 Recurrent Expenditure Report,
 Capital Expenditure Report,
 Transfer Report,
 Receivables Report,
 Payable Report, and
 The General Ledger.

The account codes that are taken from the General Ledger directly to the Trial Balance are:
 Net Assets/Equity – balance could be debit or credit.
 Cash and Cash Equivalents – balances in each account should be debits.

One Trial Balance is prepared for each Accounting Unit.

Format

Figure 11.11 shows the Trial Balance.

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Figure 11.8
Trial Balance

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Table 11.8 identifies and describes the fields in the Trial Balance.

Table 11.8
Fields in the Trial Balance
Field Description
Top of Page:
Left-Side
Name Name of Public Body to identify Accounting Unit
Bank Account Number Bank account number to identify Accounting Unit
Right-Side
Code Code of Public Body to identify Accounting Unit
Month/Year Month and year of the report
Table
Account Code Account code, if applicable
Account Description Description of the account code, if applicable
Debit/Credit Balance for the account from the Report or from the
Ledger Card
Total Calculate the total of each column. The column totals
must equal.
Bottom of Page:
Prepared by Signature of Chief Accountant
Checked by Signature of person checking Trial Balance
Approved by Signature of Head of Public Body and Seal

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Bank Reconciliation for Zero Balance and Separate Bank Account

The process of comparing the bank statement with the books of account is known as
reconciling the bank account, and the schedule that is prepared to demonstrate the results of
the comparison is called bank reconciliation. The balance shown on the bank statement may
not agree to the bank balance in the general ledger. Causes of differences include:
 Checks issued but not presented to the bank

 Deposits made that do not appear on the bank statement

 Transactions that have not yet been recorded in the books

 Record keeping errors by either the Reporting Unit or the bank.

Meaning and Purpose

The bank reconciliation provides proof that all bank related transaction errors are identified
and provides the basis to take corrective action to eliminate errors. The bank reconciliation
is submitted to MOFED

Preparation and Source Documents

The Finance Service Head prepares the Bank Reconciliation. The source documents to
prepare the Bank Reconciliation are:
 Monthly Bank Statements received from the bank

 Drawing Limits Register/Transaction Register/General Ledger, and

 Detailed information in documents accompanying the bank statement, the

checkbook.
Steps required in preparing bank reconciliation include:
1. When the bank statement is received, verify that items from the prior reconciliation
are recorded on the statement by the bank.

2. Compare the check numbers listed on the bank statement to entries in the
Transaction Register, noting errors and outstanding checks.

3. Compare deposits on the bank statement with entries in the Transaction Register,
noting differences.

4. List other items on the bank statement that are not recorded in the accounts and
items in the accounts that are not on the bank statement.

5. Prepare the bank reconciliation.

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Items on the bank side of the bank reconciliation must either be corrected by the bank or will
automatically be adjusted when the transaction reaches the bank.

A bank reconciliation format is presented below for the separate bank account:

BALANCE PER BANK STATEMENT Birr 2,350.70

ADD:
Deposits in Transit 1,355.20
Amount incorrectly charged by the bank 51.75

TOTAL: 3,757.65
LESS:
Outstanding Checks
#4321 Birr 738.49
#4351 299.00 1,037.49
BALANCE PER CASH ACCOUNT Birr 2,051.96
ADD:
Credit advises 1,015.00
Submitting
Error on 17 Sene Monthly
1998 Deposit Reports to BoFED 54.00
TOTAL: 3,120.96
LESS:
Service Charge 18.10
Non-Sufficient Fund Check 382.70
400.80
CORRECTED CASH BALANCE 2,720.16

A bank reconciliation format is presented below for the zero balance bank account:

BALANCE PER BANK STATEMENT Birr 0.00

LESS:
Outstanding Checks
#4321 Birr 738.49
#4351 299.00 1,037.49

BALANCE PER GENERAL LEDGR Birr (1037.49)

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SUBMITTING MONTHLY REPORTS TO MOFED

Monthly reports will be prepared and submitted to a Reporting Unit or MOFED within two
weeks of the last day of the month by all Accounting Units.

All transactions that occur during a month should be recorded daily on the Transaction
Register and into the appropriate General and Subsidiary Ledgers.

The Transaction Register is closed on the last day of each month. Transactions that occur
during the month, but are not recorded in the Transaction Register, are recorded in the next
month's Transaction Register. In other words, reports are prepared each month based on
the information recorded by the end of that month in the Transaction Register.

Ideally, transactions are recorded in the Transaction Register in the same month in which
they occur. However, the monthly reports should not be delayed because all transactions
are not recorded in the proper month. The monthly reports should be prepared on time. At
a minimum, all transfers should be recorded in the proper month.

If there is a Reporting Unit that is distinct from the Accounting Unit, the reports must be
sent to the Reporting Unit before the end of the second week of the month. The Reporting
Unit should:
 Verify the mathematical accuracy of all reports.
 Verify that totals in the Revenue/Assistance/Loan Report, Recurrent Expenditure Report,
Capital Expenditure Report, Transfer Report, Receivables Report and Payable Report
are carried forward to the Trial Balance.
 Verify that the EOM Balance in Part 2 of the Transfer Report is carried forward to Part 1
of the Transfer Report.
 The reconciling items on the bank reconciliation statement are not unusual.

 The Cash at Bank balance shown on the Bank Reconciliation equals the Cash at Bank
balance shown on the Trial Balance.

 All accounts have a “normal” balance

 Visit any Accounting Unit that does not report within two weeks and assist with the
monthly reports.

The Reporting Unit does not consolidate reports. The reports from the Accounting Units are
forwarded to MOFED intact. The Reporting Unit is required to send their monthly reports to
MOFED during the third week of the month.

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Central Accounts Department at MOFED will:

 Verify the mathematical accuracy of all reports.
 Verify that totals in the Revenue/Assistance/Loan Report, Recurrent Expenditure Report,
Capital Expenditure Report, Transfer Report, Receivables Report, and Payable
Report are carried forward to the Trial Balance.
 Verify that the EOM Balance in Part 2 of the Transfer Report is carried forward to Part 1
of the Transfer Report.
 Reconcile individual transfers recorded on the Transfer Report with its records.
 Visit any Reporting Unit that does not report within three weeks to identify and assist
with monthly reporting.
 Prepare and distribute various reports for FGE.
 Consolidate balances for each account into a FGE Financial Statement.

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