Uni

tThree
Anal
ysi
sofTr
ansact
ions

3.
1.Cas
hTr
ans
fer
s

Casht
ransfer
sar
ecashmovementsamonggover
nmentuni
ts.Cas
htransf
ersmay
bemadeint hef
orm ofc
urr
ency,c
hecksordi
rectc
ashmovementbetweenbank
acc
ounts.

CashTransfers:BetweenBankAc count
satPublicBodi
esandMOFED
Cashistransferr
edfr om MOFEDbankac count
st obankacc
ountsofpubl
icBodi
es,
andc ashist ransf
er redfrom bankaccountsofpublicBodiestoMOFED bank
accounts. Theset ransfer
saredonei nthef orm ofChecks,andDir
ectbank
tr
ans f
ersevidencedbybankadvi ces.

Cashtrans
fersfr
om MOFEDbankac countstobankaccount
sofpubl
icBodiesare
rec
orded:
 ByMOFED, asadebittotheappropr
iatet
rans
fercodeandacr
editto4105,
and
 Byt hepubl i
cBody,asdebi tcash atBank4103 and acredittot he
appropri
atetrans
fercode.

Exampl
e:As
sumeapubl
icBodyr
ecei
vesf
rom MOFEDat
rans
ferofBi
rr100,
000
f
orCapi
talex
pendi
tur
eandal
sof
urt
heras
sumet
hatyouar
eanac
count
anti
nbot
h
t
hePBandMOFED

Tr
ans
act
ionRegi
sterofMOFED:
No Desc
ript
ion TB Acc
ount Ot
her
s Cas
hatbank
Number 4105
Dr Cr Dr Cr
1 Cas
htr
ans
fert
o -
- 4004 100,
00 100,
000
PB 0

Tr
ans
acti
onRegi
sterofPubl
icBody:
No Descri
pti
on TB Acc
oun Ot
her
s Cas
hatbank
t 4103
Numbe
r
Dr Cr Dr Cr
1 Cas
h t r
ans
fer f
rom - 4004 100,
00 100,
000
MOFED 0

AtMOFED,althoughat r
ans f
erauthori
zationtoonebankac countmayi ncl
ude
fundsformor
et hanoneBI ,t
heentir
et ransf
erisone.Therefore,onlyoneent r
y
shoul
dbemadef orthetotalofthetr
ansferintheTr
ans ac
tionRegistermaintai
ned
atMOFED.TheBI c
odefort heentrys
houldbet heBIcodeoftheRepor ti
ngEnt i
ty.

I
fthebankc
hargesaservi
cechargef
orthetrans
fer
:
 TheServi
cechargeshoul
dberecordedasadebi
ttoac
countc
ode6256.

38
  Cashatbank4103s houl
dbedebitedf
ortheamountofc
ashact
uall
y
rec
eived.
 Theappropri
atetr
ansferacc
ountc
odeshoul
dbecredi
tedf
orthegros
s
amountofthetr
ansfer
.

Exampl
e:MOFEDt
rans
fer
sBi
rr100,
000t
oapubl
icbodyf
orc
api
talexpendi
tur
e.
Thebankdeduc ts2000bi r
rasas er
vic
echar
ge;t hepubli
cbodyr ec
eivesBi
rr
98,000.
Transacti
onRegi
sterofMOFED:
No Des cr
iption typeof Ac count Other
s Cas
hatbank
budget Number 4105
Dr Cr Dr Cr
1 Cas htransfertoPB 4004 100,000 100,
000

Tr
ans
acti
onRegi
sterofPubl
icBody:
No Descr
ipti
on type Acc
ount Ot
her
s Cas
hatbank
of Number 4103
budge
t
Dr Cr Dr Cr
1 BankSer
vic
eChar
ge 02 6256 200
0
Cas
htrans
ferf
rom 4004 100,
00 98,
000
MOFED 0

CashTr ansfers
:Bet weenBankAc countsatPublicBodiesandMOFED:Fr om
Publi
cBodiest oMOFEDatf ederall
evel
Cashtransfersfrom bankacc
ountsofpubl i
cBodiestoMOFEDbankac countsare
rec
orded:
 ByMOFED,asadebi ttoCashatBank4105andac r
edittotheappropriat
e
transfercode,and
 Byt hePubl i
cBody,asadebitt otheappr
opriat
etr
ansfercodeandac redit
toCas hatBank4103.

Exampl
e:APubl
icBodyc
oll
ect
edr
evenueofBi
rr60,
000.
Thec
ashi
str
ans
fer
redt
o
MOFED.

Tr
ans
acti
onRegi
sterofMOFED
No Descri
pti
on TB Acc
ount Ot
her
s Cashatbank
Number 4105
Dr Cr Dr Cr
1 Cas
htr
ans
ferf
romPB - 4009 60,000 60,000

Tr
ans
acti
onRegi
sterofPubli
cBody:
No Descri
pti
on TB Acc
ount Ot
her
s Cas
hatbank
Number 4103
Dr Cr Dr Cr
1 Cas
htr
ans
fert
oMOFED - 4009 60,
00 60,000
0

39
Somepubl icBodiesdepos i
tc ash di
rec
tlyintoaMOFED bankac countwhen
revenueiscoll
ect
ed.I frevenueisdeposit
eddirectl
ytoaMOFEDbankac c
ount,
the entr
yi nthe Transacti
on Regist
eroft he publicBodyisa debittot he
appropr
iatetr
ansf
erac countcodeandac r
editt
ot heappr
opri
ater
evenueaccount
code.

CashTransfer
s:BetweenMOFEDs afeandPubl icBodies
Accor
ding to MOFED and DSA Pr oj
ectmanual ,J anuary 2002,t he Treasury
DepartmentatMOFEDmai ntai
nsasafe.Publ
icBodi esc anwithdr
awamaxi mumof
Bir
r2,000from thesaf
ewi thappropri
ateapproval.MOFED- CADr ecordstheCas h
paymentVouc herasat rans f
eri
nt heFeder alTrans acti
onRegis t
er.Thepubl ic
BodyrecordstheCashpaymentVouc herasatr ansf
eri nitsTr
ansacti
onRegi ster
.

Exampl
e:A Publ
icBodypr
ovi
desGe/
Be/
We11/
2toTr
eas
uryDepar
tmentf
or
paymentofBi
rr1,
000f
romt
hes
afeatMOFED.

Tr
ans
acti
onRegi
sterofMOFED:
No Descri
pti
on TB Acc
ount Ot
her
s Cas
hinSafe
Number 4101
Dr Cr Dr Cr
1 Cas
htr
ans
fer - 4002 1,
000 1,000

Tr
ans
acti
onRegi
sterofpubl
icBody:
No Des
cri
pti
on TB Acc
ount Ot
her
s Cas
hinSafe
Number 4101
Dr Cr Dr Cr
1 Cas
htr
ans
fer - 4002 1,
000 1,
000

CashTransfers:Bet weenPubl i
cBodies
Cashmaybet r
ans ferredfromabankac c ountofonepubl icbodyt oabankac c
ount
ofanot
herpubl icbody .Thes etransf
ersar edonei ntheform of:Checks,andDirec
t
banktr
ans fer
sevi denc edbybankadvi ces .Cashtransf
ersfrom abankac c
ountof
onepubli
cBodyt oabankac countofanot herpubli
cBodyar erec or
ded:
 Byt hepubl i
cBodys endingthecas h, asadebittotransfercode4008anda
credittocas hatBank4103, and
 Byt hepubl icBodyr eceivi
ngthec ash,asadebi tCashatBank4103anda
credittotrans f
erc ode4008.

Exampl
e:Publ
icBody#1t
rans
fer
sBi
rr90,
000t
opubl
icBody#2.

Tr
ans
acti
onRegi
sterofpubli
cBody#1:
No Descr
ipt
ion TB Acc
ount Ot
her
s Cas
hatbank
Number 4103
Dr Cr Dr Cr
1 Cas
htr
ans
fert
oPB#2 - 4008 90,
000 90,000

Tr
ans
acti
onRegi
sterofpubli
cBody#2:
No Des c
ript
ion TB Acc
ount Ot
her
s Cas
hatbank
Number 4103
Dr Cr Dr Cr

40
 1 Cas
htr
ans
fert
oPB#1 - 4008 90,
000 90,
000

CashTr ansfers:Wi thi

nPubl icBody
I
nt hes ameManualpr epar edbyMOFED&DSDAPr oject
,itisindic
atedt hatsome
publi
cBodi esmai ntainbr anc hbankac counts.ThepublicBodymayt ransfercash
from onebankac counttoanot herbankac countofitsbranch.Thesetransfersare
donei nf orm of :Chec ks,andDi rectbankt ransf
ersevidencedbybankadvi ces
.
Casht r
ans ferswi thi
napubl i
cbodyf rom bankAc c
ount#1t obankAc c
ount#2ar e
recor
ded:
 Byt heac countinguni tforbankAc count#1,asadebi ttotrans f
erc ode
(tr
ans ferbet weenf inancialbureauandwer edafinance/distr
ictfinance/
offic
e)4011andac redittoc as
hatBank4103, and
 Byt heac counti
nguni tforbankac count#2,asadebi tc as
hatbank4103
andac redittotrans fercode4011.

Afterbot
ht r
ansact
ionsarerecor
dedintheconsol
idat
edgener
alledgerofthe
publi
cbody,t
henetef f
ectofthei
nter
nalt
rans
feriszer
o(t
hebalanc
eintrans
fer
code4011iszer
o).

Forcont r
olpur poses,ifthepubl i
cbodytransfer
st omor ethanonebr anchbank
account,as ubsi
diaryledgershoul dbemaint
ainedbyt hemai nbankaccount.
Each
branchbankac countt hatreceivesorsendsat ransferusi
ngac countcode4011
shouldhavei tsowns ubs i
diar
yl edgerc
ardundert ransferc
ode4011.Thiswillaid
consoli
dationint hegener alledgerofthepubl i
cbodyandi mprovecashcontrol
withi
nt hepubl i
cBody.

Exampl
e:BankAccount#1t
rans
fer
sBi
rr80,
000t
oBankAc
count#2

Tr
ans
acti
onRegi
sterofBankAcc
ount#1:
No Descr
ipt
ion TB Acc
ount Ot
her
s Cas
hatbank
Number 4103
Dr Cr Dr Cr
1 Cas
htr
ans
fert
oBA#2 - 4011 80,000 80,000

Tr
ans
acti
onRegi
sterofBankAcc
ount#2:
No Descri
ption TB Ac c
ount Ot
her Cas hatbank
Number 4103
Dr Cr Dr Cr
1 Cas
htr
ans
ferBA#1 - 4011 80,000 80,000

3.
2Non-Cas
hTr
ans
fer
s

Non-Cashtransf
ersareusedtorecordatransf
erwhencashdoesnotac
tual
ly
move.Theauthori
zat
ionf
oranon-
c ashtr
ans
ferusual
lyi
sal
ett
erfr
omMOFED.

Exampl
e:As
sumeMi
nis
tryofHeal
th(
MOH)r
eques
tsMOFEDt
opayc
ust
omsdut
y
amount i
ngtoBirr250,
000oni t
sbehal
ftothecust
omsAuthori
ty(CA)formotor
vehicl
esfromit
scapit
alexpendi
tur
ebudgetandf
urt
heras
sumingthatyouaret
he
accountanti
nthesei
nsti
tuti
ons.

41
Solut
ion:
Trans
ac t
ionRegi
sterofMOFED:
No Descr
ipt
ion TB Acc
oun Ot
her
s Cas
hatbank
t 4105
Numbe
r
Dr Cr Dr Cr
1 Transf
ert
oMOH- - 4054 250,
00
Customsdut
y 0
Transf
erf
romCA-
Cus
toms - 4055 250,
00
duty 0

Tr
ans
acti
onRegi
sterofMinist
ryofHealt
h:
No Descr
ipti
on TB Ac c
ount Ot
her
s Cashatbank
Number 4103
Dr Cr Dr Cr
1 Purchaseofmot
or 02 6311 250,
00
vehicl
es 0
Transf
erfromMOFED- - 4054 250,
00
Customsduty 0

Tr
ans
acti
onRegi
sterofCustomsAut
hori
ty:
No Descr
ipt
ion TB Ac c
ount Ot
her
s Cashatbank
Number 4103
Dr Cr Dr Cr
1 Tr
ans
fert
oMOFED - 4055 250,
00
0
Dut
yonMot
orvehi
cles - 1301 250,
00
0

3.
3.Rec
eiptofRevenue/
Ass
ist
anc
e/Loan

PublicBodiesareauthori
zedt ocoll
ectrevenueonbehal foftheFGE.I
naddi t
ion,
PublicBodiesmayr ecei
vefundsforas s
istanceandl oandi
rec
tlyf
rom donorsand
lenders.Recei
ptsarec ol
lectedint heform ofcurrency,c
hecksanddirectbank
transfer
s.Recei
ptsarerecordedasadebi ttocashatBank4103andac redi
ttothe
appropriat
erevenue/assi
stance/loanaccountcode.

Exampl
e:As
sumeyouar
etheac
count
antofMi
nis
tryoff
orei
gnaf
fai
rsandt
hatyou
c
oll
ect
edbi
rr10,
000i
nfeesf
orvi
sas
.

Tr
ans
acti
onRegi
sterofMinis
tryofFor
eignAf
fai
rs:
No Descr
ipt
ion TB Ac count Ot
her
s Cas hatBank
Number 4103
Dr Cr Dr Cr
1 Revenue - 1411 10,000 10,000

Trans
ferofc
ollec
tionsDir
ectl
ytoMOFED
Insomepubli
cbodies,r
evenuecol
lec
tor
smakedepos
itsdi
rec
tlyt
oaMOFEDbank

42
ac
count.I
tisimportantthatthec oll
ec t
oradequatelyidentif
ythepubli
cbodyf or
whic
hthedepos i
tismade.
 WhenMOFEDr ec
eivesthebankadvi ce,MOFEDr ec
ordsadebittoc as
hi n
Bank4105andac r
edittotransferaccountcode4009.
 Whent hepubli
cbodyr ecei
vest heReceiptvoucherfromrevenuecol
lector
s,
thepubli
cbodyr ecordsadebi ttotransferaccountcode4009andac r
edit
totheappropri
aterevenueac countcode.

Exampl
e:MOFEDr
ecei
vesadepos
itf
rom I
nter
nalRevenuef
orBi
rr40,
000.The
depos
iti
sfr
omt
hec
oll
ect
ionofagr
icul
tur
ali
ncomet
ax.

Tr
ans
acti
onRegi
sterofMOFED:
No Descr
ipt
ion TB Acc
ount Ot
her
s Cas hatbank
Number 4105
Dr Cr Dr Cr
1 Tr
ans
ferf
romI
R - 4009 40,000 40,000

Tr
ans
acti
onRegi
sterofInt
ernalRevenue:
No Descr
ipti
on TB Ac c
ount Ot
her
s Cashatbank
Number 4103
Dr Cr Dr Cr
1 Agri
cult
uralRevenue 4009 40,
000
Tr
ansfer 1107 40,
000
3.
4.Cas
hExpendit
ures

Publi
cBodi
esar eauthor
izedtomakec
ashexpendit
uresfrom f
undsbudgetedf
or
thatpur
pose.Cashexpendit
uresar
emadeusi
ngc ur
rency,chec
ksanddirec
tbank
trans
fer
s.

CashExpendi
tures
:Payment stoRegi
ons /
Tr ans
ferRec i
pientsbyMOFED
PaymentsbyMOFEDt oregi
onsandt ransferrecipi
ents(Functi
onalc l
assif
icat
ion
4000-4099,arebudgetedexpendi
turesoft hefederalgovernment.WhenMOFED
makesthesepayments,MOFEDr ec
ordstheexpendi tureinthefederalTransact
ion
Regi
ster
.

Exampl
e:As
sumeas
ubs
idypaymentofBi
rr300,
000i
smadet
oar
egi
onbyMOFED
wher
eyouar
eanac
count
ant
.

Tr
ans
acti
onRegis
terofMOFED
No Descr
ipt
ion TB Acc
ount Ot
her
s Cas
hatbank
Number 4105
Dr Cr Dr Cr
1 Regi
ons
ubs
idy 6411 300,
000 300,
000

Cas
hExpendi
tur
es:CheckPayment
sbyAccountant
s
Onl
yacc
ountant
sareall
owedtomakepaymentsusi
ngc
hec
ks.

Exampl
e:As
sumet
hatanac
count
antpaysbyc
hec
kanamountofBi
rr50,
000f
or
of
fi
ces
uppl
ies
.

43
Tr
ans
acti
onRegi
sterofPubli
cBody:
No Descr
ipt
ion TB Acc
ount Ot
her
s Cashatbank
Number 4103
Dr Cr Dr Cr
1 Off
ices
uppl
iespai
din 6212 50,000 50,000
cas
h

CashExpenditur
es:Cas hpaymentByMOFEDonBehal fofPubli
cBodies
MOFED c anmakec ashpayment sonbehal fofapubl i
cbody.Thet r
ansact
ion
begi
nswi thalett
erf r
om thepubli
cBodyt oMOFEDr equesti
ngthatthepayment
bemadeoni t
sbehalf.CashpaymentsmadebyMOFEDonbehal fofPubli
cBodies
arerec
orded:
 ByMOFED,asadebi ttot
heappr opri
atetr
ansfercodeandac r
edittoCash
atBank4105, and
 Byt hepublicBody,asadebi ttot heappropr
iateexpenditur
ec odeanda
creditt
otheappr opri
atet
ransfercode.

Exampl
e:TheMi
nis
tryofHeal
th(
MOH)r
eques
tsMOFEDt
opayf
oramot
orvehi
cle
oni
tsbehal
famount
ingt
oBi
rr280,
000f
romi
tsc
api
talexpendi
tur
ebudget
.

Tr
ans
acti
onRegis
terofMOFED:
No Descr
ipt
ion TB Acc
oun Ot
her
s Cas
hatbank
t 4105
Numbe
r
Dr Cr Dr Cr
1 Tr
ans
fert
oMOH - 4004 280,
000 280,
00
0

Tr
ans
act
ionRegis
terofMi
nis
tryofHeal
th:
No Desc
ript
ion TB Ac count Ot
her
s Cashatbank
Number 4103
Dr Cr Dr Cr
1 Purchase of mot or 02 6311 280,
00
vehicl
es 0
Transf
erfr
omMOFED - 4004 280,
00
0

CashExpendi tures:Let terofCredit

APubl icBodymayneedt oopenaLet t
erofCr editaspar tofani nternati
onal
purchaseagr eement .Openi ngaletterofc redi
tmeansput ti
ngcashinar estri
cted
bankac c
ountdedi catedt opaymentoft hepur chasepr i
cewhen appr opri
ate
condit
ionsar emet .Ther earetwopr oc es
sesforopeningal ett
erofcredit
:
 Ift helet t
erofc reditisf
orBir r50,000orless,thepublicbodyc anopent he
l
et terofc redit.
 Ift hel etterofc reditisformor ethanBi r
r50, 000,thepublicbodymus t
reques tthatMOFEDopent hel ett
erofcredi
t.

Cas
hExpendi
tur
es:Let
terofCr
edi
t:OpenedbyPubl
icBody

44
Whenapubl icBodyopensaLet terofCr edi
t,cashi
spaid,usingaBankpayment
Voucher, f
rom thebankac countoft hepubl i
cBodytoar est
ric
t edbankaccountat
thenationalbankofEthiopia.Inthet ransact
ionregi
sterf
orthepubl i
cbody'sbank
account,expenditureisr ec orded.The publ i
cbody us esanot hertransacti
on
regis
terf orther estr
icted bankac count.Thepubl i
cbodymus tcombinet he
mont hl
yr eportofther est
rictedac countwitht hemonthlyreportofther egul
ar
bankacc ountforrepor
tingtoMOFED.

Exampl
e:Themi
nis
tryofHeal
th(
MOH)es
tabl
ishesar
est
ric
tedbankac
countt
o
openal
ett
erofc
redi
tfort
hepur
chas
eofmedi
cals
uppl
iesval
uedatbi
rr30,
000.

Trans
actionRegist
er-Regul
arBankAcc
ountofMi ni
str
yofHeal
th:
No Desc
ript
ion TB Ac coun Other
s Cashatbank
t 4103
Numbe
r
Dr Cr Dr Cr
1 Pur chaseofmedical 02 6214 30, 00 30,000
suppli
es 0

Trans
act
ionRegist
er-Res t
ric
tedBankAccountofMinis
tryofHealth:
No Descri
ption TB Ac count Others Cas hatbank
Number 4103
Dr Cr Dr Cr
1 Letterofc
redit#xxxx - 5500 30,000 30,000

Cas
hExpendit
ures:Lett
erofCr
edi
t:OpenedbyMOFEDonbehalfofPubl
icBody
APubl
icBodyrequestst
hatMOFEDopenalet
terofc
redi
toni
tsbehalf
.

MOFED:Transfer
sc as
ht orestr
ict
edbankaccountatnat
ionalbankofEthi
opi
aon
behal
fofthepublicbody,Recordsacas
htransfert
othepublicbody,andNot
if
ies
thepubl
icbodyofthetransac
tion.

ThePubli
cBody:Rec or
dst hecashtr
ans f
erasexpenditurei
nt hetr
ansac
tion
Regi
sterf
orthepubli
cBody'sbankaccount,andRec
or dstheLet
terofCr
editin
anot
herTrans
act
ionRegis
terfort
heres
tric
tedbankaccount.

Exampl
e:TheMi
nis
tryofHeal
th(
MOH)r
eques
tsMOFEDt
oopenal
ett
erofc
redi
t
on it
sbehalfamount
ing t
oBi
rr700,
000 f
ormot
orvehi
clesf
rom i
tsc
api
tal
expendi
tur
ebudget
.

Tr
ans
act
ionRegis
ter:
No Descr
ipt
ion TB Acc
ount Ot
her Cas
hatbank
Number 4105
Dr Cr Dr Cr
1 Tr
ans
fert
oMOH - 4054 700,
00 700,
00
0 0

Tr
ans
act
ionRegi
sterbankac
countMOH:

45
 No Des
cri
pti
on TB Acc
oun Ot
her Cas
hatbank
t 4103
Numbe
r
Dr Cr Dr Cr
1 Pur
chaseofMot
or 02 6311 700,
00 700,
00
vehic
le 0 0
2 Tr
ansf
erfromMOFED - 4054 700,
00
0

Tr
ans
act
ionRegi
ster-Res t
rict
edBankAcc
ountofMini
str
yofHealt
h:
No Desc r
ipti
on TB Ac coun Ot
her Cashatbank
t 4103
Numbe
r
Dr Cr Dr Cr
1 LetterofCredit#xxxx - 5531 700,
00 700,
00
0 0

CashExpenditures:Cas
hPaymentbyPubl i
cBodyt oRegion
Occasi
onally,
publicBodiesmakec as
hpayment stor egi
ons
.Someoft hefundsare
i
ntendedf ors ec
torbureausi nt her egi
ons.Thes ectorl
inemi ni
stryactsasa
tr
easurydepartmentbydi st
ribut
ingt hecashtotheregions
ectorbureausdir
ectl
y.

Allpaymentstotheregi
onsfrom thef
ederall
evelarebudget
edaspartofthe
regi
on'ssubs
idy.Whenapubl
icbodypayscashtoregi
ons,t
hepaymenti
spartof
theregionssubsi
dy.Thepublicbodyshouldr
ecordthepaymentasas ubs
idy
payment .

Example:Theminist
ryofHeal
th(
MOH)s
endsBi
rr53,
000t
oar
egi
onaspar
tofa
sect
ordevelopmentplan.

Tr
ans
ac t
ionRegis
ter-Mini
str
yofHeal
th:
No Descr
ipt
ion TB Ac c
ount Ot
her
s Cashatbank
Number 4103
Dr Cr Dr Cr
1 Regi
onSubs
idy - 6411 53,
000 53,
000

CashExpenditures:CashPaymentRequir i
ngWi thhol
dingofTax
Thetaxauthorityrequiresthatataxmus tbepai dons peci
fi
edpurchasesovera
cert
ainamount .Thepurc has
ercoll
ect
sthet axasawithholdi
ngfromt hepurchase
pri
ce.Thethresholdamountandt hetaxratemayvar yeachyear.Thetaxispaidto
theappropriateaut hor
ity,feder
alorr egionalgovernment,dependingont he
loc
ationofthesupplier.

Thes uppli
ercanr ecl
aimt hewi t
hholdingtax.Thet axaut hori
tyc reatesas pecial
taxreceiptthatshouldbei s
suedt othesupplierwhent hetaxi swi thhel
d.Thi s
recei
pti snotanac countingdoc umentands houldnotber eferencedi nany
accounti
ngr ecor
d.Ifar egionaltaxauthor
ityhasnoti ssuedas pecialtaxreceipt,
thefederalspeci
altaxreceiptshouldbeused.Thewi thholdingtaxdoesnotr educ e

46
thecostofthegoodstothepublicbody.Thewithholdingtaxisareducti
ont othe
paymentmade t ot he suppl
ier.The paymenti smade t ot he appropri
ated
governmentins
tead.Whenapur c
has ei
smadet hatrequirest
hewi t
hholdingoftax,
abankpaymentvouc herispreparedthatindicat
es ,inthes pac
epr ovidedfor
account
inguseonly.

Theexpendi tureac countc odewi t

hadebi tf
ortheful
lpur chaseprice.Ifthet axi s
federal,withholdingt axrevenuec ode1103or1104( dependingofwhet hert he
supplierisani ndivi
dualorac orporation)wit
hac r
editfort heamountoft het ax.
Theonl yexc eptionisi fthepaymenti smadewithretainedr evenue.Ifr etained
revenuei st hes ourceoff undsf ort hepayment,payableac countc ode5028i s
credit
edf ortheamountoft het ax.I
fthet axi
sregi
onal,payableaccountc ode5026
withac r
editfort heamountoft het ax.Cas
hatbank4, 103wi t
hac redi
tf ort he
actualamountpai dtot hesuppl ier
.

Cas
hExpenditures
:CashPaymentRequir
ingWithholdi
ngofTax:FederalTax
Whenfederaltaxiswithheldfr
om apurchas
e,t hetaxisrecordedasr evenue
i
mmediatel
y s ubsequentl
y;anamountofcas
hequalt othetaxistransf
erredto
MOFED.

Example:Apubli
cbodybuysoffic
esuppli
esfrom acor
porati
onforBi
rr200,
000
fr
om it
sr ec
urr
entexpendit
urebudget-Birr198,000r
elat
est othec
ostofthe
off
ices
uppli
esandBi
rr2,000ist
hewithhol
dingtax.

Tr
ans
act
ion#1:Paymentef
fect
edt
osuppl
ier

Tr
ans
ac t
ionRegi
sterofPubli
cBody:
No Descr
ipt
ion TB Acc
oun Ot
her
s Cas
hatbank
t 4103
Numbe
r
Dr Cr Dr Cr
1 Of
fi
ces
uppl
ies 01 6212 200,
00
0
Wit
hhol
dingt
ax 1104 2,
00 198,
00
r
evenue 0 0

Tr
ans
act
ion#2:Tr
ans
fert
oMOFED

Tr
ans
ac t
ionRegi
sterofPubli
cBody:
No Descri
pti
on TB Acc
ount Ot
her
s Cashatbank
Number 4103
Dr Cr Dr Cr
2 Tr
ans
fert
oMOFED 4009 2,
000 2,000

Tr
ans
ac t
ionRegi
sterofMOFED:
No Descri
pti
on TB Acc
oun Ot
her
s Cas
hatbank
t 4105
Numbe
r

47
 Dr Cr Dr Cr
1 Tr
ans
fert
oMOFED 4009 2,
000 2,
000

CashExpendi t
ures :CashPaymentRequiri
ngWi thholdingofTax:Regi onalTax
Whenr egionaltaxi swit
hheldfrom apur
chase,thetaxi srecor dedasapayabl eto
theregion.Subs equently,anamountofc ashequalt ot het axist r
ansferredto
MOFED.MOFEDpayst het axamounttotheregion.As ubsidiaryledgers houldbe
maintai
nedf orpayabl et oregi
onac c
ountcode5026i ftaxi sc oll
ectedf ormore
thanoner egi
on. Eachregionshoul
dbeas eparat
eac countint hes ubsi
diaryledger
.

Exampl
e:Apubl
icbodybuysof
fi
ces
uppl
iesf
orBi
rr200,
000f
rom i
tsr
ecur
rent
expendi
tur
ebudget-Birr198,
000rel
atest
othec
ostoft
heof
fi
ces
uppl
iesandBi
rr
2,000i
stheregi
onalwi
thholdi
ngtax.

Tr
ans
act
ion#1:Paymentef
fec
tedt
osuppl
ier

Tr
ans
act
ionRegi
sterofpubl
icBody:
No Descri
pti
on TB Acc
oun Ot
her
s Cas
hatbank
t 4103
Numbe
r
Dr Cr Dr Cr
1 Of
fi
ceSuppl
ies 01 6212 200,
00
0
Taxpayabl
eto 5026 2,
00 198,
00
Regi
on 0 0

Tr
ans
act
ion#2:Tr
ans
fert
oMOFED

Tr
ans
act
ionRegi
sterofPubli
cBody:
No Descri
pti
on TB Acc
ount Ot
her
s Cashatbank
Number 4103
Dr Cr Dr Cr
2 Payabl
eto 5026 2,
000 2,000
MOFED

Tr
ans
acti
onRegi
sterofMOFED:
No Des
cri
pti
on TB Acc
oun Ot
her
s Cas
hatbank
t 4105
Numbe
r
Dr Cr Dr Cr
1 Taxpayabl
etor
egi
on 5026 2,
000 2,
000

Tr
ans
act
ion#3:MOFEDpayst
axt
oregi
on

Tr
ans
act
ionRegi
sterofMOFED:
No Descri
pti
on TB Acc
ount Ot
her
s Cashatbank
Number 4105
Dr Cr Dr Cr

48
 2 Payabl
etor
egi
on 5026 2,
000 2,
000

CashExpendi tures :Cons truc ti

onPr ojects
Thel ong- termc ons truc t
ionpr ojec t
sinvolvec ompl icatedf i
nanc i
alar r
angement s
.
Sever alac count i
ngent ri
esar enec essaryovert hel i
feoft hepr oj ect.Ingener al
,
whenac ons tr
uc ti
onc ont racti ssigned,t herear es everals tepsi nt hepayment
proces s.Ateac hs t
em, anac countingentryi srequired. Thegener als tepsare:
 Paymentofanadvanc e:Us uall
ythec ontractc all
sforanadvanc epayment
tot hec ont ractor .Theadvanc epaymenti spr opor t
ionatelydeduc tedf rom
futur epayment stot hec ontractor.
 Pr ogr esspayment sbas edonpaymentc erti
ficates:Us uallyt hec ontract
callsf orpar ti
alpaymentoft het otalc ontrac tpriceast hec onstruction
reac hesagr eed- uponper centagesofc ompl etion.Apaymentc ert
ificat
ei s
evidenc et hatt heagr eed-uponc ompl etionper centagei sreac hed.
 Paymentoft her etent i
on:Us ually aper centageoft hepaymenti sret ai
ned
andnotpai dunt ilfinalac ceptanceoft hec ompl etedc onstruc t
ion.

Exampl
e:As
sumet
hef
oll
owi
ng:
Acontr
ac tiss ignedt oconstr
uctabui l
dingf or2,
000,000Birr.Termsofcontract
ar
e:
Ini
tialadvanc eof20% =400,000Bi rr
Advanc eadjus t
edproporti
onat el
ywi theachpaymentc erti
fi
cat
eapproval.
Retent ionof10% wi thheldfrom eac hpaymentc er
tif
icate&paidaf
terfinal
appr oval.
St
epsinpaymentar e:
Paymentof20% advanc e.
Paymentc er t
if
icatewhen40% c ompl ete.
Paymentc er t
if
icatewhen80% c ompl ete.
Paymentc er t
if
icatewhen100% c ompl ete.
Tr
ansacti
on#1:paymentof20% advanc e:
Acc ount antpreparesacheckf or400,000Birr.
Acc ount antpreparespaymentVouc herfor400,
000Bi r
r:
Debi tto4251&Cr editto4103

Tr
ans
act
ionRegi
sterofpubli
cBody:
No Descri
ption TB Acc
oun Ot
her
s Cas
hatbank
t 4103
Numbe
r
Dr Cr Dr Cr
1 Advanc
et o 4251 400,
000 400,
00
cont
ract
or 0

Tr
ans
ac t
ion#2:paymentc erti
fi
catewhen40% c omplet
e.
AccountantPreparesacheckfor560,000Bir
rasfoll
ows:
800,000paymentc er
tifi
cater
equest
160,000adjust
mentt oadvance
80,000retent
ion.
AccountantpreparespaymentVouc herasf
ollows
:

49
 Debitto6323f
or800,000
Creditt
o4251for160,000
Creditt
o5061for80,
000
Creditt
o4103for560,000

Tr
ans
act
ionRegi
sterofpubl
icBody:
No Descript
ion TB Acc
oun Ot
her
s Cas
hatbank
t 4103
Numbe
r
Dr Cr Dr Cr
2 Construct
ion - 02 6323 800,
00
Buil
ding 0
Advanc et
oc ont
rac
tor 4251 160,
00
0
Ret
ent
iononc
ont
rac
t 5061 80,
000 560,
00
0

Tr
ans
act
ion#3:paymentcer
tif
icat
ewhen80% compl
ete.
AccountantPr eparesacheckf or560,000Bi
rrasfol
lows
:
800,000paymentc ert
ific
ater
equest
160,000adjustmentt oadvance
80,000retenti
on
Accountantpr eparespaymentvouc herasf
oll
ows :
Debitto6323f or800,000
Creditto4251f or160,000
Creditto5061f or80,
000
Creditto4103f or560,000
Tr
ans
ac t
ionRegi sterofpublicBody:
No Descri
pti
on TB Ac count Others Cas
hatbank
Number 4103
Dr Cr Dr Cr
4 Cons t
ructi
on- 02 6323 800, 00
Buildi
ng 0
Advanc eto 4251 160,00
contractor 0
Retentionon 5061 80,000 560,
00
Cont r
act 0

Tr
ans
ac t
ion#4:paymentc ertif
icat
ewhen100% c ompl et
e.
Accountantpr epar
esc heckf or280,
000Bi r
rasfoll
ows:
400,000paymentc erti
fi
caterequest
80,000adjustment stoadvance
40,000retention
Accountantpr epar
espaymentVouc herasfol
lows:
Debitto6323f or400,000
Creditto4251 for80,000
Creditto5061f or40,000
Creditto4103f or280,000

50
Tr
ans
acti
onRegi
sterofpubl
icBody:
No Descri
pti
on TB Acc
ount Ot
her
s Cas
hatbank
Number 4103
Dr Cr Dr Cr
4 Constructi
on- 02 6323 400,
00
Buil
ding 0
Advanc eto 4251 80,
000
contractor
Retentionon 5061 40,
000 280,
00
Contract 0

Tr
ans
ac t
ion#5:Paymentofretentionaft
erfinalapprovalofpr
ojec
t:
Accountantprepar
esacheckfor200,
000Bi rr
.
Accountantprepar
espaymentvoucherfor200,000Birr:
Debi
tto5061&Creditto4103

Tr
ans
act
ionRegi
sterofpubl
icBody:
No Descri
pti
on TB Acc
oun Ot
her
s Cas
hatbank
t 4103
Numbe
r
Dr Cr Dr Cr
5 Retenti
onon 5061 200,
00 200,
00
contrac
t 0 0

3.
5.Sal
ary

Publi
cBodiespays
alar
iest
oempl
oyeesever
ymont
h.Thi
ssec
tiondes
cri
best
he
account
ingfor
:
Paymentofsalar
y
Unpai
dsalary
Unear
neds al
ary

PaymentofSal
ary
Thesalar
ypaymenttr
ansacti
oniscomplex.
Thepubl
icbodymustrec
ordt
hegross
sal
aryamountandgovernment'sporti
onofpensi
onasexpendit
uretomai
ntain
budgetcont
rol
,butonlythenetsalar
yamountistr
ansfer
redt
o,andpai
dbyt he
publi
cbody.

Afterthes alar yreques tisappr oved,MOFEDt rans f

erst henets al
aryamountt o
the publi
c body and t he totalpens ion amount ,empl oyee and government
contri
buti
on,t othepens i
onAut hor
ity.Althoughc ashf orpensionist r
ansfer
red
dir
ectlytot hepens ionaut horit
y,MOFEDr ecordst hec asht r
ansferasifthecash
wast r
ansf erredtot hepubl i
cbody.AtMOFED,t wot ransferentri
estot hepublic
bodyar erecor dedint het r
ans acti
onregi s
ter:
 Adebi tt otrans f
erc oder4001andac redittoc as hatbank4105f orthenet
sal
ar yamount .
 Adebi tt otransfercoder4001andac r
editt ocas hatbank4105f orthetotal
pens i
onamounts entt othepens ionAut hority.

51
Eachtransferamounti sreport edt ot hepubl icBodys epar atelyonGe/ Be/ We12/ 1
withModel33.Whent hepubl i
cBodyr eceivesGe/ Be/ We12/ 1,t hepubl i
cBody
prepar
es :
 Ar ec eiptvouc herfort het otalamountofc as hr eceived. Theent r yisadebit
toc as hatbank4103,adebi ttopens ionpayabl eac countc ode5003f orthe
amountofc as hpai dtot hepens i
onAut horityandac redittot rans fercode
4001.
 Aj our nalvouc hertor ec ords alaryandpens ionexpens e.Theent r yisadebit
tos alaryexpens ecode6111( 6112f ormi l
it
ar y)f orthegr osss alaryamount ,
a debi tt o pens ion expens ec ode 6131 ( 6132 f or mi lit
ar y)f or the
gover nment ’
spor ti
onoft hepens ionc ontri
but ion, acr editt osalar ypayable
c ode5004f ort henets alar yamount ,
ac reditt opens ionpayabl ec ode5003
fort heamountofeac hpai dt othepens i
onAut hority,ac r edittoi ncomet ax
c ode 1101 f ort ax wi thhel df rom s alary,and a c reditt o any ot her
wi thhol di
ngamount s
.

Exampl
e:As
sumet
heMi
nis
tryofAgr
icul
tur
e(MOA)r
eques
tss
alar
yfort
hemont
h
ofJul
y2001 wi tht he f ol
lowi ng detail
sand al s
o as
sume t
hatyou ar
ethe
ac
countanti
nMOAandMOFED.
Grosssalary 40,000
Deduc t
ion:salaryadvanc e1,200
Pensionexpens e-6% 2,
400
Penaltyforabs enteei
sm 500
Employeepens ion-4% 1,600
NetSalar ypayable32,700
Inc
omet ax 4,000

Tr
ans
act
ionRegi
sterofMOFED:
No Des cri
pti
on TB Acc
ount Ot
her
s Cashatbank
Number 4105
Dr Cr Dr Cr
1 Tr
ansf
erf
or 4001 32,70 32,700
MOFED 0
2 Tr
ansf
ert
oPB 4001 4,000 4,
000

Tr
ans
act
ionRegi
sterofMOA:
No Descript
ion TB Acc
ount Ot
her
s Cashatbank
Number 4103
Dr Cr Dr Cr
1 Transfert
oPB 4001 36,700
Pens i
onpayable 5003 4,
000 32,
700
2 SalaryExpense 01 6111 40,
000
Pens i
onExpense 01 6131 2,
400
Salarypayabl
e 5004 32,
700
IncomeTax 1101 4,
000
StaffAdvance 4203
1,200
Fi
nes 1485 500
Pens
ionPayabl
e 5003 4,000

52
Unpai dSalary
Nets alaryamounti srecordedassal
ar ypayablewhens alaryexpens eisrecorded
(seeabove) .Whens al
aryispaid,
sal
arypayableisdebit
edf ortheamountpai d.Any
unpaids alaryistheamountr emai
ningi nthes al
arypayableac countc ode5004
afters al
aryi spai
d.Whenunpai dsalaryispaid,theent ryisadebi tthes al
ary
payablec ode5004andac reditt
ocash. Aft
ersalar
yispaid,as ubsi
diaryledgerfor
salar
ypayabl eac c
ounts houldbemaintained.Eachunpaidempl oyees houldbean
accountint hesubsidi
aryledger.

Unear nedSalar y
Oc casi
onally,
s al
aryisrequestedandr eceived,
buttheempl oyeei snotenti
tl
edto
theent ir
es al
ar yamountr eceived.Forsomer eas
on,t heempl oyeequitsworki
ng
fort hepubl i
cBodydur i
ng t hemont h.When t hishappens ,t hesalar
yent r
y
explainedabovemus tber eversedfort hatemployee,andt hepens i
ont r
ansf
er
mus tbec orrected.Inaddi t
ion,MOFED mus tbenot i
fi
eds ot hatthepens i
on
transferands ubsequentmont hss al
arycanbeadjusted.

Exampl
e:Suppos
eanempl
oyeei
ntheMi
nis
tryofAgr
icul
tur
ewor
kedonl
yhal
fof
J
ulyi
nsteadofthewhol emont
h.Thi
sisdi
s c
overedaf
terthesalaryexpenseent
ry
i
ntheexampleabove.Theamount
sofoverpaymentar
e:
Gr os
sSalary 1000 Incomet ax 70
Pens i
onexpense-6% 60 Salar
yPayable
890
Empl oyeepens
ion-4% 40

Tr
ans
act
ion#1:Rever
ses
alar
yexpens
e
Tr
ans
act
ionRegi
sterofMOA:
No Descri
pti
on TB Acc
ount Ot
her
s Cashatbank
Number 4103
Dr Cr Dr Cr
1 Sal
aryExpense 01 6111 1000
Pensi
onExpense 01 6131 60
Sal
aryPayabl
e 5004 890
I
ncomeTax 1101 70
Pensi
onPayable 5003 100

Tr
ans
act
ion#2:Adj
ustPens
iont
rans
fer
Tr
ans
acti
onRegi
sterofMOA:
No Descri
pti
on TB Acc
oun Ot
her
s Cas
hatbank
t 4103
Numbe
r
Dr Cr Dr Cr
2 Trans
fer-Sal
ary 4001 100
Pensi
onpayable 5003 100

Tr
ans
act
ionRegi
sterofMOFED:

53
 No Des
cri
pti
on TB Accoun Ot
her
s Cas
hatbank
t 4105
Number
Dr Cr Dr Cr
1 Advanceto 4210 100
pension
2 Tr
ansfer-Salar
y 4001 100

Transaction#3:Nextmont h'
ssal
arytransfer
TheMi nistr
yofAgr i
cult
ure(MOA)r equestssal
aryf
ort
hemont
hofAugus
t2001
withthef ol
lowingdet ai
ls:
Grosss al
ary 38,
000
Incomet ax 3,
800
Pens i
onexpens e-6% 2,
280
Deduc t
ion:salaryadvance 1,
200
Empl oyeepension-4% 1,
520
NetSalar ypayable 31,
480

Tr
ans
acti
onRegi
sterofMOFED:
No Descri
pti
on TB Acc
ount Ot
her
s Cashatbank
Number 4103
Dr Cr Dr Cr
1 Trans
fert
oPB 4001 31,480 31,480
2 Trans
fert
oPB 4001 3,
800
Advancet
o 4210 100 3,
700
Pensi
on

Tr
ans
act
ionRegi
sterofMOA:
No Descri
pti
on TB Acc
ount Ot
her
s Cashatbank
Number 4103
Dr Cr Dr Cr
1 TransfertoPB 4001 35,280
Pens i
onpayable 5003 3,
800 31,
480
2 SalaryExpense 01 6111 38,000
Pens i
on 01 6131 2280
Expens e
Salarypayabl
e 5004 31,480
IncomeTax 1101 3,
800
StaffAdvance 4203 1200
Pens i
onPayable 5003 3,
800

3.
6.Rec
eivabl
esandPayabl
es

Arecei
vableisanamountowedt oapubl i
cBodyt hatdoesnothavet ermsof
r
epaymentdetai l
edinas i
gnedagreement.Receivablesusuall
yar ecreatedwhen:
 Cas histransfer
r edbutmus tberet
urnedunl essc er
tai
nc ondit
ionsar emet.
 Advanc esar egivenwi ththeunder
standingthatt heamountmus tber epai
d
orotherwiseacc ountedfor,
orgoodsorser vi
cesmus tbedel i
vered.

Apayabl
eisamountowedbyapubl
icbodyt
hati
sduewi
thi
noneyear
.Payabl
es

54
usual
lyarec reatedwhen:
 Cashi sr eceivedbutmus tber eturnedunl
essc er
taincondit
ionsaremet .
 Goodsors ervic
esar edel
iveredbutpaymenti snotyetmade.
Receivabl
esandPayabl es:WithMOFED
Insomes ituations ,MOFEDadvanc esc ashtopubl i
cBodi es
.MOFEDr ecordst he
advanceasar eceivable,andthepubl i
cBodyr ec
ordst headvanc easapayabl e.
Cashmovement sbet weenMOFEDandapubl i
cBodyar er ec
ordedasar eceivable
and a payabl e,r athert han a tr
ans fer,i
fthe fundswer e notreques t
ed by
Ge/Be/We11/ xx.Advanc esmus tber epaidt
oMOFEDorot herwiseaccountedfor.

Exampl
e Pr
iort
orec
eiptofi
tsbudgetnot
if
icat
ion,
apubl
icBodyr
eques
tsf
undsi
n
J
unet
opayr
ecur
rentexpendi
tur
es.
MOFEDs
endsBi
rr7,
000

Tr
ans
act
ionRegi
sterofMOFED:
No Descri
pti
on TB Acc
oun Ot
her
s Cashat
t bank4105
Numbe
r
Dr Cr Dr Cr
1 Advancef
or 4206 7,00 7,00
Recurr
ent 0 0

Tr
ans
act
ionRegis
terofPubli
cBody:
No Des cr
ipti
on TB Ac c
ount Ot
her
s Cashatbank
Number 4103
Dr Cr Dr Cr
1 Duet
oMOFED 5024 7,
000 7,
000

Whent hepubli
cBodyr ecei
vesitsbudgetnoti
fic
ati
on,aGe/
Be/We11/ 2issentt
o
MOFED f orBir
r14,000.Thisr equest
si ncl
udest he7,
000Bir
rr ec
eivedasan
advance.MOFEDappr ovesther eques
t,reducesthecas
htrans
ferby7, 000Bir
r,
andtransfer
sBir
r7,
000i ncash.

Tr
ans
act
ionRegi
sterofMOFED:
No Descr
ipt
ion TB Acc
oun Ot
her
s Cas
hatbank
t 4105
Numbe
r
Dr Cr Dr Cr
1 AdvanceRec
urr
ent 4206 7,
000
Trans
fer- 4002 14,
00 7,
000
Recurr
ent 0

Tr
ans
acti
onRegi
sterofPubl
icBody:
No Descri
pti
on TB Acc
ount Ot
her
s Cashatbank
Number 4103
Dr Cr Dr Cr
1 DuetoMOFED 5024 7,
000
Trans
fer- 4002 14,
000 7,
000
Recurr
ent

55
Recei
vablesandPayabl es:wit
hEmpl oyees
Thr
ees i
tuati
onsaredesc r
ibedhere:
 Long-t er
ms alaryadvances.
 Amount sduef rom empl oyeesasr ei
mbursementforus
eofgover
nment
property.
 Handl ingoffundshel dbyapublicbodyonbehal
fofanemployee

Recei
vabl
esandpayabl
es:wi
thEmpl
oyees
:Long-Ter
mSal
aryAdvance
Anempl oyeecanr eceivealong-t
erm advanceons al
ary(longerthanonemonth)
underappr opr
iat
ec ondit
ions.Whenal ong-ter
ms alar
yadvanc eisproces
sed,
i
nt er
estisc har
gedandwi thheldf
rom t
headvanc e.Thepubl i
cbodyisres
ponsi
ble
forrepaymentofs alaryadvancestoi
tsempl oyees.

Exampl
e:Al
ong-
ter
msal
aryadvanc
eofBi
rr2,
000i
sreques
tedandappr
oved.
MOFEDtransf
ersthenetamounttot
hepubli
cbodyaf
terdeduc
tingt
heappl
icabl
e
i
nter
estontheadvanceamounti
ngtoBi
rr200.

Tr
ans
act
ion#1:c
ashtransf
erf
romMOFED
Tr
ans
act
ionRegi
sterofMOFED:
No Des cr
ipti
on TB Ac c
ount Ot
her
s Cashatbank
Number 4105
Dr Cr Dr Cr
1 Tr
ans
fer 4005 1,
800 1,800

Tr
ans
act
ionRegi
sterofPubl
icBody:
No Des cri
pti
on TB Ac c
ount Ot
her
s Cashatbank
Number 4103
Dr Cr Dr Cr
1 Tr
ans
fer 4005 1,
800 1,800

Tr
ans
act
ion#2:PaymentofAdvanc
e
Tr
ans
act
ionRegist
erofPubli
cBody:
No Descr
ipt
ion TB Ac c
ount Ot
her
s Cashatbank
Number 4103
Dr Cr Dr Cr
1 Staff 4203 2,
000
Advance
I
nt er
est 1465 200 1,
800

Rec
eivabl
esandPayabl
es:Wi
thEmpl
oyees
:Rei
mbur
sedPayment
s

I
ncert
ainci
rcumst
ances
,employeesmakeper
sonalus
eofgovernmentpropert
y.
Whenthi
soccur
s,t
hepubli
cbodymustchar
getheemployeeandc
oll
ectpayment.

Exampl
e:APubl
icbodyr
ecei
vesat
elephonebi
llf
orBi
rr300.I
ncl
udedi
nthebi
ll
ar
eper
sonalt
elephonesc
all
smadebyanempl
oyee.

Treat
ment#1:ThePublicbodyknows,atthetimethetel
ephonebi
lli
spai
d,t
hat
theamountoft
hepersonaltel
ephonecal
lstot
alsBi
rr100.

56
Tr
ans
act
ionRegi
sterofPubli
cBody:
N Desc
ript
ion TB Acc
oun Ot
her
s Cas
hatbank
o t 4103
Numbe
r
Dr Cr Dr Cr
When the t el
ephone bi
lli
s
pai
d:
1 Tel ephoneExpense 01 6258 200
St
affAdvance 4203 100 300
Whenempl oyeepays:
2 St affAdvance 4203 100 100

Treat
ment#2:Thepubl i
cbodydoesnotknow,att het
imet hetel
ephonebilli
s
paid,
theamountoft hepersonaltel
ephonec
alls.
Transac
tionRegist
erofPubl icBody:
No Descri
ption TB Ac count Others Cashatbank4103
Number
Dr Cr Dr Cr
When thet elephonebi l
lis
paid:
1 Tel ephoneExpens e 01 6258 300 300
Whenempl oyeepays :
2 Tel ephoneExpens e 01 6258 10 100
0

ReceivablesandPayabl es:WithEmpl oyees :FundsHeldonEmpl oyee'sBehalf

I
nc ertai
nc i
rc umst
anc es,
fundsar ereceivedbyapubl i
cbodyandar eintendedfor
theus eofanempl oyee.Thes efundsarenotbudget edbytheFGE.Thepubl icbody
i
ss i
mpl yac ondui
tus edforas s
igningthef undsf r
om adonortoanempl oyee.The
publi
cbodys houl
d:
 Onl yhandlef undst hatareusedbyt heempl oyeetofur
thert heobjecti
ves
ofthepublicbody ,
and
 Nevergi vetheempl oyeeac cesst oot herfundsheldint hes amebank
account(donotal l
owt heempl oyeeac cesstochecks
).

Movementsoff undsheldbypubl i
cbodiesonbehalfofanempl oyeear
enot
rec
ordedasrevenueorexpendi
turefort
hegovernment.Thef
undsareduetot
he
employeewhil
einthecust
odyofthepubli
cbody.

Exampl
e:Adonordepos
itsBi
rr3,
000i
nthebankac
countofapubl
icbodyt
o
s
uppor
tther
esear
chofanempl
oyee.

Tr
ans
act
ion#1:
Fundsaredeposi
ted
Tr
ans
act
ionRegi
sterofPubl
icBody:
No Des cri
pti
on TB Ac c
ount Ot
her
s Cashatbank
Number 4103
Dr Cr Dr Cr
1 Duet
ost
aff 5021 3,
000 3,
000

57
Tr
ans
act
ion#2:Theemployeerecei
ves550Birrfr
omt hefund
Tr
ans
act
ionRegi
sterofPubli
cBody:
No Des cri
pti
on TB Ac count Others Cas
hatbank
Number 4103
Dr Cr Dr Cr
2 Duet ostaf
f 5021 550 550

Rec ei
vablesandPayabl es:WithEmpl oyees:EmployeeTr ansferr
edwi t hSalary
Advanc e
Empl oyeesmaybet ransferredfrom onepubl i
cbodyt oanother;thet r
ans fer
red
empl oyeemayhaveal ong- t
erms alaryadvancewi t
hanout standi
ngbal anc e.The
balancef ortheempl oyeei ntheadvanc eaccountmus tbet ransferr
edwi ththe
empl oyeef r
om t heac counti
ngr ecordsoft heformerempl oyertot her ecordsof
thenewempl oyer.Thedoc umenti sal et
teroftransferthatdetai
lsthebal ancein
theempl oyee’sadvanc eac count.Eac hpublicbodypr eparesaj ournalvouc her
basedont heletter.

Exampl
e:Anempl
oyeei
str
ans
fer
redf
rom publ
icBody#1t
opubl
icBody#2.The
empl
oyeehasalong- termadvancewithanoutst
andi
ngbalanceofBir
r6,000.
Tr
ansac
tionRegisterofPublicBody#1:
No Desc ri
pti
on TB Ac count Other
s Cashatbank
Number 4103
Dr Cr Dr Cr
Net 5601 6,000
Asset/Equit
y
Advanc etoStaff 4203 6,000

Tr
ans
act
ionRegi
sterofPubli
cBody#2:
No Des cr
ipti
on TB Ac c
ount Ot
her
s Cas
hatbank
Number 4103
Dr Cr Dr Cr
AdvancetoStaf
f 4203 6000
Net 5601 6,
000
Asset
/Equit
y

ReceivablesandPayables:Wit
hSuppliers
I
nt hepr oces
sofproc ur
ement,thepaymentofcashandt
herec
eiptofgoodsand
ser
vicesdo notoc curs i
multaneous
ly.When ther
eisa t
iming di
ff
erence,a
rec
eivableorapayableisc r
eat
ed.

Receivabl
esandPayabl es:WithSuppli
ers:Recei
vabl
esfromSuppl
ier
s
Receivabl
esarecreatedwhenas uppl
ierispai
dforgoodsors
ervi
cespri
ort
ot heir
deli
very.I
nt hi
scas e,thes uppl
ierowest othepubli
cbody:Goodsandservic
es
equaltothecashprovided,orReturnofthecash.

Exampl
e:Apubl
icBodypaysanadvanc
eofBi
rr500t
oas
uppl
ierf
orpr
ocur
ement
ofoff
icesuppl
ies
.Thesuppl
ierdel
iver
stheof
fi
ces
uppl
iesaf
ter30daysandt
he
act
ualinvoi
ceamount
stoBir
r2,500.

58
Tr
ans
act
ion#1:paymentofadvanc
e.
Tr
ans
act
ionRegist
erofPubli
cBody:
No Descri
pti
on TB Ac c
ount Ot
her
s Cas
hatbank
Number 4103
Dr Cr Dr Cr
1 Advanceto - 4253 500 500
Suppli
er

Tr
ans
act
ion#2:Deli
ver
yofsuppl
ies.
Tr
ans
acti
onRegis
terofPubli
cBody:
No Descr
ipt
ion TB Acc
oun Ot
her
s Cas
hatbank
t 4103
Numbe
r
Dr Cr Dr Cr
1 Off
iceSuppl
ies 01 6212 2,
500
AdvancetoSuppl
ier - 4253 500 2,
000

Receivabl
esandPayabl es:WithSuppli
ers:Payablest
osuppliers
Payablesarecreat
edwhenas uppli
erdeli
versgoodsorservi
cespriortorecei
ving
payment .
I
nt hi
sc as
e,thepublicbodyowest othesuppli
er:Paymentforthecostofthe
goodsands ervi
ces,orRetur
noft hegoods.

Example:Apublicbodyrec ei
vesoff
icesuppliesamounti
ngtoBirr2,
500oncredi
t
fr
omas uppli
er.Paymentismadeaf t
er30days .
Trans
acti
on#1:Rec ei
ptofof fi
cesuppli
es
Trans
actionRegist
erofPubl i
cBody:
No Des cr
ipt
ion TB Ac count Others Cashatbank
Number 4103
Dr Cr Dr Cr
1 Of fi
ceSupplies 01 6212 2,
500
Sundrycreditors 5002 2,
500

Tr
ans
act
ion#2:Paymentismade.
Tr
ans
act
ionRegist
erofPubli
cBody:
No Desc
ript
ion TB Ac c
ount Ot
her
s Cas
hatbank
Number 4103
Dr Cr Dr Cr
1 Sundry - 5002 2,
500 2,
500
Credi
tors

ReceivablesandPayabl es:Wi t
hSuppl iers:GracePer iodPayables
Thefirst30daysoft hef i
scalyeararec alledthegr ac eperi
od.Thef i
nanc i
alLaw
permitspubl i
cBodi est oexpendf undsf r
omt heirprioryear'srecur
rentandc api
t al
budgetsdur i
ngt hegr ac eperi
odf orgoodsands ervi
cesdel i
veredbefor
et heendof
thefiscalyear.Amount sduet osuppli
er sont helastdayoft hefisc
alyear,thatar e
paiddur i
ngt hegr aceper iodfrom thepr i
oryear '
sbudget ,arecall
edgr aceperiod
payables( accountc ode5001) .Transfersoff undsf rom MOFEDt opubl i
cBodies ,
thatareus edt opaygr aceper i
odpayabl es,aregivenac countcode4007.

59
Exampl
e:I
nthef
irs
t30daysoft
hef
isc
alyear
,apubl
icbodypaysBi
rr12,
000f
or
off
icesuppli
esthatwer
erec
ordedasgr
aceper
iodpayabl
esf
rom t
hepr
ioryear
's
capi
talexpendi
ture.

Transac
tion#1:Provi
sionforgrac
eperiodpayableslas
tyear .
LastYear'sTr
ansacti
onRegisterofPubli
cBody:
No Descr
ipti
on TB Ac count Other
s Cas
hatbank
Number 4105
Dr Cr Dr Cr
1 Of fi
cesuppli
es 02 6212 12,000
Graceperi
od 5001 12,00
payabl
es 0

Transact
ion#2:Transferoffundsf
orgr
aceperi
odpayablesthi
syear.
Thisyear'
sTransacti
onRegi st
erMOFED:
No Descri
ption TB Ac count Other
s Cas
hatbank
Number 4103
Dr Cr Dr Cr
1 Transfer-GPP - 4007 12,000 12,
00
0

Thi
syear
'sTr
ans
act
ionRegist
erofPubl
icBody:
No Descr
ipt
ion TB Ac count Ot
her
s Cashatbank
Number 4103
Dr Cr Dr Cr
1 Tr
ans
fer-GPP - 4007 12,
00 12,000
0

Transacti
on#3:Paymentofgr aceperi
odpayablest
hisyear.
Thisyear'
sTransac
tionRegisterofPubli
cBody:
No Descri
pti
on TB Ac count Other
s Cas
hatbank
Number 4103
Dr Cr Dr Cr
1 Graceperiodpayables 5001 12,00 12,
00
0 0

Rec ei
vablesandPayabl es:wi thRegions
Occ asi
onall
y,publ i
cBodi esmakec ashpayment st oregions.Payment st othe
regionsfrom t hef ederall evelar ebudgetedaspar toft heregion'
ss ubsi
dy.The
publ i
cBodys houldr ec ordt hepaymentasas ubsidypayment .Arar eexcepti
on
occurswhent hef undsar epar toftheapprovedbudgetf orthepublicBodyandi n
thisrarecase,thei temofexpendi t
ureispartoft heappr ovedbudgetf orthepubli
c
body,t her egioni ss i
mpl yac ti
onasapur chas i
ngagentf ort hemi nist
ry.The
responsibi
li
t yfort hebudget edexpenditurec as hremai nswi t
ht hepubl i
cbody,
althoughtheexpendi tur eisexec ut
edinther egionals i
nceas ettli
ngoft hefundsi
s
expec t
ed,thet ransactioni srecordedasar eceivableByMOEatFeder allevel.

60
Exampl
e:TheMi
nis
tryofEduc
ati
on(
MOE)s
endsBi
rr55,
000t
oAmhar
aRegi
onal
Educ
ati
onBur
eau(AREB)
.TheAmharaRegi
onalEduc
ati
onBureaur
etur
nsinvoi
ces
fort
hebooktot
ali
ngBir
r47,000andcashtot
ali
ngBir
r8,000totheMinis
tryof
Educ
ati
on.

Tr
ans
act
ion#1:Cashissentt
oAREB
Tr
ans
acti
onRegist
erMoE:
No Descr
ipt
ion TB Ac c
ount Ot
her
s Cas
hatbank
Number 4103
Dr Cr Dr Cr
1 Advancet
o - 4208 55,000 55,
00
regi
on 0

Tr
ans
act
ion#2:Cas handinvoic
esarer
eceivedfromAREB.
Tr
ans
act
ionRegisterofMOE:
No Descri
ption TB Ac count Ot
her
s Cas
hatbank
Number 4103
Dr Cr Dr Cr
1 Books 02 6215 47,000
Advanc eto 4208 55,00 8,
000
region 0

Receivabl
eandPayables:Deposit
s
Somepubl icbodi
escoll
ectandr eturndeposi
ts.Deposi
tsar
enotbudgeted.The
rec
eiptandr et
urnofdeposit
smaybedoc ument
edus i
ngspeci
alfor
ms(Models85
and86orModel s185and186) .Deposi
tsmaybekepti nt
hesafe,
inthemainbank
accountofthepubl
icbody,orinaseparat
ebankac c
ount.

Adeposi
tisapayableforapubl icbody.Apublicbodymus
tret
urnthedeposi
t
upondemandofthedepos i
tor.Apublicbodyshouldnots
penddepos
itfunds
.
Whenthedepos
iti
sreturned,thepayabl
eiscanc
elled.

Recei
vableandPayables:Deposit
s :Rec
eiptandReturnofDepos
it
Example:Apublicbodycoll
ectsadepos itofBi
rr40,
000asbidsecur
ity.Thebi
dis
unsuc
cessfulandthedeposi
tisreturnedatalat
erdate.

Tr
ans
act
ion#1:Recei
ptofDepos
it.
Tr
ans
acti
onRegi
sterofPubli
cBody:
No Descri
pti
on TB Acc
oun Ot
her
s Cas
hatbank
t 4103
Numbe
r
Dr Cr Dr Cr
1 Bi
dsec
uri
tyDepos
it - 5054 40,
00 40,000
0

Tr
ans
act
ion#2:RefundofDeposi
t.
Tr
ans
act
ionRegi
sterofPubl
icBody:

61
 No Des
cri
pti
on TB Acc
oun Ot
her Cas
hatbank4103
t
Numbe
r
Dr Cr Dr Cr
1 Bi
dSecuri
ty - 5054 40,000 40,000
Depos
it

Rec ei
vablesandpayabl es:Deposi
ts:Deposit
skeptinseparateBankAccount
I
fabankac countismai ntai
nedfordepos i
tsonly,thereisnoneedt okeepa
transact
ionr egist
erforthebankac count.Adetai
ledrecordofeachdeposi
tmus t
bemai ntained,buttheform oftherecordcanbecashbookwithsubsi
diar
yrecor
ds
foreachdepos i
t.

Mont hl
y,t hec ashbal ancei nthec ashbookmus tber econc il
edwi t
ht hebank
account's bank s tatementand wi tht he detai l
ed subsidiaryr ecords.Af ter
rec
onc i
liat
ion,thec orrec t
eddepos itamountmus tequalthec ashbal anceinbank.
Thi
samounts houl dbeent eredint het ransact
ionr egi
steroft hepubl i
cbodyas
fol
lows:
 Thedepos i
tac countc odeshoul dbedebi t
edandc ashinbank4103c redited
forthec urrentbal anceinthedepos itacc
ount .Af
terthisent ry,thebal ance
i
nt hedepos i
tac countiszero.
 Cas hi nbank4103s houl
dbedebi tedandt hedepositac countc odes hould
bec reditedf ort hec orr
ecteddepos i
tamountatt heendoft hec urrent
mont h.

Theses houl
dbet heonlyac c
ounti
ngent r
iesinthepublicbody'stransacti
on
regis
terthati
nvolvesthedeposi
taccount.Nosubsi
diar
yledgerisnec
es sar
y;the
detail
edsubsi
diar
yr ec
ordsfort
hecashbookser
vic
esasthesubsidi
aryl
edger .

Exampl
e:Thebal
anc
epert
heGener
alLedgeri
ndepos
itac
countc
ode5051i
sBi
rr
400,
000.Thedepos
itbankacc
ountisreconc
iledt
othedet
ail
eds
ubs
idi
aryr
ecor
ds
andthecor
rec
tedbalanc
eisBir
r600,000

Tr
ans
act
ion#1:Setdeposi
taccountbal
anc
et ozer
o.
Tr
ans
act
ionRegist
erofCustoms :
No Descri
pti
on TB Ac count Other
s Cas
hatbank
Number 4103
Dr Cr Dr Cr
1 Customs - 5051 400,
000 400,
00
Deposit 0

Tr
ans
act
ion#2:Recordcorr
ecteddeposi
t.
Tr
ans
act
ionRegist
erofthepublicBody:
No Desc
r i
pti
on TB Ac c
oun Ot
her
s Cas
hatbank
t 4103
Numbe
r
Dr Cr Dr Cr
1 Cus
tomsDepos
it - 5051 600,
00 600,
000

62
 0

3.
7Ai
dinKi
nd

Aidinkindisgoodsors ervi
ces(s uc hastechnic
alassi
stance)provi
dedt oapubl i
c
bodybydonor s
.Ai di
nkindi srec eivedwhengoodsar ereceivedorservicesar e
rendered,andnopaymenti sexpec t
ed.Aidinkindrepresentstwot ransac t
ions
simult
aneously:therecei
ptofass istanceandtheexpenditureofassi
stance. Aidin
kindshouldbebudget edandr ec ordedasbot hrevenueandexpendi ture.The
expenditur
eshoul dberecordedint hesubsi
diaryl
edgerforthebudget edpr oject
,
usingthe4-di
gitsourceoffundi
ngc odeass
ignedtotheproject
.

Exampl
e:As
sumeai
dinki
ndi
srec
eivedbyapubl
icbodyi
nwhi
chyouar
ewor
king
asanac
count
anti
nthef orm ofamotorvehic
lewithac os
tofBi
rr200,
000f
rom
USAI
Dundert
hecapi
talexpendi
tur
ebudgetforpr
ojectc
ode2356.

Tr
ans
acti
onRegi
sterofthepubli
cBody:
No Des cr
ipti
on TB Ac count Ot
her
s Cashatbank
Number 4103
Dr Cr Dr Cr
1 Motorvehic
les 02 6311 200,
000
Ass
istanc
e 2084 200,
00
0

Al
lai
dinki
ndent
riesar
erec
ordedi
nloc
alc
urr
enc
yonl
y.

3.
8Fi
nanc
ialDoc
umentTr
ans
mit
talVouc
her
:Me/
He

Me/ He i
st he doc umentpr epared asevidenceforthe trans f
eroff inanci
al
documents,s uc
hasexpendi tur
evouc hers
,betweenresponsiblepersonsint he
accounti
ngs yst
em. Thepurposeoft heFi
nanci
alDocumentTrans mitt
alVoucheris
tor ec
ordthet ransferoffinancialdocumentsfr
om oner es ponsi
blepar t
yt o
another.

Pr
epar
ati
onandSour
ceDocument
s:Whoeveri
srec
eivi
ngf
inanc
ialdoc
ument
s
prepar
estheFinanci
alDocumentTrans
mi t
talvoucher
.Thef
ormatoft
heFi
nanc
ial
DocumentTransmit
talvoucheri
sshowninFigure3.
1

63
 Fi
gur
e3.
1:Fi
nanc
ialDoc
umentTr
ans
mit
talVouc
her
Model42 Ser
ialNo.
Dat
e
THEFEDERALDEMOCRATI CREPUBLICOFETHI
OPIA
MINISTRYOFFINANCE&ECONOMI CDEVELOPMENT
FINANCI ALDOCUMENTTRANSMITTALVOUCHER
No Dat
e Des
cri
pti
o Referenc
eType Referenc
eNo Amount No.ofAt
tac
hment
s Remar
n k

Tot
al
Ihaver
ecei
vedt
hedocumentsl
ist
edabovef
rom ont
he _____________daysoft
hemont
h
year andiss
ued.

Tr
ans
fer
redby:NameandSi
gnat
ure Rec
eived:NameandSi
gnat
ure

Or
igi
nal-
to-
Trans
fer
or,
sec
ondc
opyt
oRec
eiver

64
3.
9Publ
icBodi
eswhor
ecei
veNoTr
eas
uryFunds

Somepublicbodiesrecei
venof undsfrom t
reasury.I
nst
ead,t
hei
renti
rebudgeti
s
fi
nanc
ed byr evenuethatt heycol
lec
tand retai
n.However,t
hei
rreport
smaybe
submi
ttedquarter
lyr
atherthanmonthl
y.

3.
10Cl
osi
ngEnt
ry

AsdiscussedinModuletwooft hi
sc ourse,spec i
alrouti
nesarerequir
edattheendoft he
fi
scalyeart omaintaingener alands ubsidiaryledgers.Speci
fic
all
y,entri
esmus tbe
recordedineverygener alands ubs i
diaryledgeratt heendoft heyearafterthel ast
mont hlyr
eportispreparedands enttoMOFED.Thes earecal
ledc l
osi
ngentrieswhi ch
mus tberecordedinever ygener alands ubs i
diaryledgersattheendoft heyearaf ter
thelastmonthlyreporti
spr eparedands entt oMOFED. Thesearecall
edclosi
ngent r
ies.
Closi
ngent ri
esalsoisr equir
edi nMOFED' sgener alandsubsidi
aryledgersafterthe
annualaccountsareclos
ed.

Thepurposeofclosingentri
esistosetalltemporaryaccountsint
hegener
all
edger
,and
allr
elat
edsubsidiaryaccount
s,tozero.Temporaryaccountsare:
 Revenue/ Assist
ance/Loanacc ountcodes1000-3999.
 Transf
erac countcodes4000-4099.
 Expendit
ur eaccountcodes6000-6999.

Theproceduresformaki ngt hec losi

ngent ryare:
1.Topr eparet helas tmont hlyrepor tforthef i
scalyearands ubmi tthereportt
o
MOFED. I fthet ransferwass entfrom MOFEDdur i
ngt hefiscalyear,i
tshoul
d
ber ecordedin t hatfiscalyearandnotwhent hec ashisrec
eived.
2.Afterthel astmont hlyr eportforthef is
calyearisacceptedbyMOFED,t orecor
d
thefollowingentryi nthet ransacti
onr egis
terofthebankac countfromMe/ He27
tri
albalance:

A.Fr
omtheli
nefromRevenue/ As si
s t
anc e/Loan:
 Recordadebiti
nt hetransactionregis
terforanyamountthatisac
redi
ton
thi
sli
neinMe/ He27.
 Recordacredi
tint het
r ansactionregi
sterforanyamountthati
sadebi
ton
thi
sli
neinMe/ He27.
B.Fr
omtheli
neforRecurrentExpendi t
ur e:
 Recordadebiti
nt hetransactionregis
terforanyamountthatisac
redi
ton
thi
sli
neinMe/ He27.
 Recordacredi
tint het
r ansactionregi
sterforanyamountthati
sadebi
ton
thi
sli
neinMe/ He27.
C.Fr
omtheli
neforcapit
alexpendi t
ure:
 Recordadebiti
nt hetransactionregis
terforanyamountthatisac
redi
ton
thi
sli
neinMe/ He27.
 Recordacredi
tint het
r ansactionregi
sterforanyamountthati
sadebi
ton
thi
sli
neinMe/ He27.

65
D.Fromt hel i
nef orTr ans fers :
 Rec ordadebi ti nthet r ansactionr egisterf oranyamountt hati sacrediton
thislinei nMe/ He27.
 Rec ordac redi tint het r ansactionr egisterf oranyamountt hatisadebi ton
thislinei nMe/ He27.
E.Innetas set/equi tyac countc ode5601r ec ordstheappr opriateamountasadebi t
orac redi ttomaket heent rybal anc e.
 Toent ert heamountf ornetas s et/ equityont henetas s et
/ equityaccount
code5601l edgerc ardi nt hegener alledger ;thisac counts houl dhaveno
subs i
di aryl edger .
3.Toremovef romt hegener alledger sal lgener alledgerc ardsforac c ountcodes:
a.r evenue/ as sis
t anc e/loanac countc odes1000–3999
b.t ransferac countc odes4000–6999
c.expendi tureac countc odes6000-6999
4.Toremoveal ls ubs idiar yledgerc ardsas soc i
atedwi thac countc odes
a.Revenue/ As si
st anc e/Loanac countc odes1000–3999
b.Tr ans ferac c ountc odes4000–6999
c.Expendi tureac countc odes6000–6999
5.Tostoreal lgener al,subs idiaryandbudgetl edgerc ardst hatar eremovedi naf i
le.
The f il
es houl dbeappr opr i
at elylabel edasl edgerc ardsf orthef iscalyear.

Ac losi
ngent rymus tbemadei nal lgener alands ubs idiaryledger s.Ift her eisan
inter
nalbankac countt hatmai ntainsgener aland/ ors ubsi
diar yl edger s,t he
closing ent ryi sasf ol lows :
 Ift hei nternalbankac counti st reat edasas afe,noc los i
ngent ryi s
nec essary.
 Ifthebankac counthol dsdepos itsonl y, noc l
os i
ngent ryisnec es sar y.
 Ifthebankac counti sf ornon-budget ar yfundst hatar enotr epor tedt o
MOFED, noc los i
ngent ryisnec es sary.
 Ifat rans action r egi steri smai ntai nedf ort hebankac c ount ,butt he
transac t
ion r egi st
eri sr ecor ded i n a gener all edger( wi t
hs ubsidiary
ledger s)t hati smai ntained by t he publ i
cBody,no c losing ent ryi s
nec essary.
 Ifthebankac c ounti sanac count inguni twi thi tsowngener aland/ or
subs i
diar yledger ,ac losingent ryisnec es sary.
 Ifamont hlyr epor tispr epar edands entt ot hepubl icbody,f ollow t he
instructionsgi venabove.
 Ifamont hlyr epor ti snotpr epar ed,t heamount sf ort hec losingent ry
(revenue/ as si
s tanc e/loan,Tr ans fer,and expendi ture)s houl d be t aken
calculatedbyt ot al
ingbal ancesont hec or r
espondi nggener all edgerc ards.
Thec l
osingent rys houl dbet heoppos i
teoft hel edgerc ardbal anc e( i
ft he
ledgerc ar dbal anc eisadebi t,thec losingent r ys houldbeac redit;ift he
ledgerc ar dbal anc ei sac redit ,thec losingent r
ys houl dbeadebi t).
Eac hyearmus tbegi nwi thaz erobal anc ei nal lgener alands ubs idiar yledger
cardsforac countc odes :

66
  Revenue/ Assi
s t
anc e/
Loanaccountcodes1000-3999.
 Transf
erac countc odes4000-4099.
 Expenditureac countcodescarr
yforwardfrom theendofthefi
scaly
eart
o
thebalanc esinallotheraccountcodescarryforwar
dfrom t
heendofone
fi
scalyeart othebeginningofthenextfi
scalyear.

Exampl
e:As
sumeaPubl
icbodyi
nwhi
chyouar
ewor
kingasanac
count
antpr
epar
esi
ts
fi
nalMe/
He27,
whi
chi
sthet
rialbal
anc
efort
hef
isc
alyear
.Thef
inalr
epor
tisac
cept
ed
byMOFED.

Thenexthypot
hetic
alact
ivi
tywillgi veyouahi ntonhowthefinalMe/
He27isprepared
inpar
t.
AccountCode Acc ountDes cr
iption Debi t Credit
-- Revenue/ Ass
ist
anc e/Loa 1,
200,509
n:
-- Expendi ture:
-- Recurr entexpenditure: 2,680,832
-- CapitalExpenditure: 6,377,142
-
- Transfer s
: 2,031,
491, 9,
703,216

Notethatr
evenue/
ass
istance/l
oanaccountbal ancestypical
lyarecredi
ts,expendi
tur
e
acc
ountbalanc
esaretypical
lydebi
ts,butt r
ans ferac
c ountbalanc
esc anbedebi t
sor
cr
edit
sdependi
ngonthedirecti
onofthetransfer.

Alsodur
ingtheperiodof pr eparati
onofcl
osi
ngent r
y,t
hef oll
owinghastobedoneby
you.
Trans
act
ionRegist
eroft hepubl i
cBody:
No Des cript
ion TB Ac count Others Cashatbank
Number 4103
Dr Cr Dr Cr
1 Cl osi
ngEnt ry: --
Revenue/ Assis
tance/Lo -- 1,200,50
an 9
Recurrentexpendi t
ure -- 2,
680,
83
2
Capit
alExpendi ture -- 6,
377,
14
2
Transf
er s -- 9,703,21 2,013,
49
6 1
NetAs sets/Equit
y 5601 167,740

Youhavet oremoveallledgercar
dsf r
om it
sgeneralandsubsi
diaryledger
sthathave
accountcodes1000-3999,4000-4099,and6000-6999.Thecardsarelabel
edandfi
led
instor
age.Youhavetorecordadebitof167,
740innetasset
/equit
yledgercardac
count
code5601.

67
3.
11Begi
nni
ngofYearPr
ocedur
es

AccordingtoMOFEDandDSAPr ojec
tmanual,December2002,s
peci
alpr
ocedur
esare
requir
ed:Beforeac
countingf
oranewfi
scalyearc
anbegin,andimmedi
atel
yaft
erthe
beginningofanewfis
calyear
.

Thesespec
ialprocedur
esar e:
 Openingnewl edgerc ards
,
 Recordingcashands tock,and
 ProceduresatMOFED.
Thesebegi
nningofyearpr oceduresaredesc
ribedher
e.
Beginni
ngofYearPr ocedures:LedgerCards

Asetofbudgetandgener
all
edgerc
ardss
houl
dbepr
epar
edatt
hebegi
nni
ngofeac
h
f
isc
alyear
.

BudgetLedgerCards
Budgetledgercardsareval i
donlyforthebudgetyeart owhichtheyrelate.When
budgetnoti
fi
cati
onisrecei
ved,budgetl
edgercardsshoul
dbeprepar
edforeac hi
tem of
expendi
tureforeachbudgetaryI
nsti
tut
ion.Thepri
oryear'
sbudgetl
edgercardsshould
befil
ed

GeneralLedgerCar ds
Generalledgercardsf orthef ol
lowingac c
ountc odesar
ecl
osedatt
heendoft
hef
isc
al
year:
 Revenue/ Assis
t ance/Loanac countcodes1000–3999
 Trans f
eraccountc odes4000–4099
 Expendi t
ureac countc odes6000-6999
Clos
inganac countmeans :
 Set ti
ngtheac count'sbalancet ozer
o,and
 Filingtheaccount '
sledgerc ard'

Balancesinallotheraccountscarr
yf orwardtot henextfi
scalyear.However,keeping
thes ameledgercardmaybeawkwar d,si
nc ethenumberofc ardsbecomesbul ky.The
publicbodyshouldbeginanewf is
calyearbypr epari
ngnewgener alledgercardsforall
accountsthathavec ar
ryf or
wardbalances.Thebeginningbalance(equaltolastyear'
s
endingbalance)s houl
dber ec
ordedoneac hcard.Lastyear'
sgener alledgerc ar
ds
shouldbefil
edwitht heledgerc
ardsofac countst
hatwer ec
losed

Exampl
e:I
fapubl
icBodyr
eques
tBi
rr100,
000f
rom MOFED.Thent
heMOFEDt
rans
fer
s
onlyBir
r90,000ass
umingthatt
hepubli
cBodyhadBirr10,
000asopeni
ngbalanc
e.At
thesameti
me, arec
ordi
ngismadeasi
ftheendi
ngcas
hbalancewastr
ansf
err
edbackto
MOFEDass hownhereunder
.

Tr
ans
act
ionRegi
sterofMOFED:

68
Tr
ansac
tionRegis
teroft
hePubli
cBody:
No Des
cri
pti
on TB Account Ot
her CashatBank
. Number 4105
Dr Cr Dr
1. Cas
htr
ans
fer - 4002 90,
00
0
Non-Cas
htr
ans
fer - 4052 10,
00
0
Non-Cas
htr
ans
fer - 4055 10,
000 90,
00
0

Tr
ansac
tionRegi
sterofthePubl
icBody:
No Desc
ript
ion TB Acc
ount Ot
her
. Number
Dr Cr Dr
1. Non-
Cas
htr
ans
fer - 4055 10,
00
0
Non-Cashtr
ans
fer - 4052 10,
000
Casht
ransf
er - 4002 90,
000 90,
00
0
Subs i
diar
yLedgerCar ds
Subsidiar
yl edgerc ardsf orclosedgener alledgerac c
ount sshoul dbef iledwi tht he
generalledgerc ards.Subs i
diaryledgerac countsandr elat
edgener alledgerac counts
alsoarec ons i
der edc losed.Bal ancesinal lothersubsi
diaryac countsc arryf orwar dto
thenextf iscalyear .Unl esst henumberofc ardsforapar t
iculars ubsidiaryac count
becomesbul ky,las tyear '
sc ardsc anc ont
inuet obeus edint hef ollowingyear .Ifthe
publicbodyc hoos est obegi nanewf is
calyearbypr epar
ingnews ubsi
diaryl edgerc ards
,
thebalancef oreac hs ubs i
diaryac c
ountc arri
esforward.Thebegi nningbalanc e(equalt o
lastyear'
sendi ngbal anc e)shoul dberec or
dedoneac hcard.Anys ubsidiar
yl edgerc ards
thatarereplac eds houl dbef i
ledwi ththeledgerc ar
dsofac c
ount sthatwer ec l
osed.

BeginningofYearProceduresOpeni ngBalances
Afterthelastdayoft hefi
sc alyear
,t hecashandst
ockbalancesatpubl
icBodi
esare
sealeduntilIns
pectorscanver i
fythebal ances
.MOFED appl
iesthecashands t
ock
balancesagai
nstthefutur
er equests
, asi
ndicat
edonGe/Be/
We11/ 2orGe/
Be/we11/3.

CashOpeningBal anc es
Theendingbal anc einc ashinsafeandc ashi
nbankatapubl i
cbodymus tbet ransfer
red
toMOFEDatt heendoft hefis
c alyear.
However,thepublicbodyneedsc as
ht ransfer
red
toitf
ort henewf i
scalyear.Rat herthanmovingc ashbackandf or
th,thet r
ans f
ersare
handledasnon- casht r
ans f
ers.MOFEDdeduc tstheopeningbalanceofc ashins afeand
cashinbankf r om theamountofbudget edc as
ht obet ransf
erredtothepubl i
cbody.
Thi
sdeduc ti
oni smadeonGe/ Be/ We11/2orGe/ Be/We11/ 3andi shandledasanon-
cashtransf
erbyMOFEDandbyt hepubli
cBody.Att hesamet i
me,ar ecordingismade
asift
heendi ngc ashbal ancewast r
ansfer
redbackt oMOFED.

69
Exampl
e:As
sumeapubl
icBodyr
eques
tsBi
rr200,
000f
rom MOFED.MOFEDt
rans
fer
s
Bi
rr190,
000bec
aus
ethepubl
icBodyhasBi
rr10,
000asopeni
ngbal
anc
es.

Tr
ans
act
ionRegi
sterofMOFED:
No Des
cri
pti
on TB Acc
oun Ot
her
s Cas
hatbank
t 4105
Numbe
r
Dr Cr Dr Cr
1 Cas
htr
ans
fer - 4002 190,00
0
Non-
cas
h - 4052 10,000
tr
ans
fer
Non-
cas
h - 4055 10,
00 190,
000
tr
ans
fer 0

Tr
ans
act
ionRegi
sterofthepubl
icBody:
No Descr
ipt
ion TB Acc
oun Ot
her
s Cas
hatbank
t 4103
Numbe
r
Dr Cr Dr Cr
1 Non-c
ash - 4055 10,000
tr
ansf
er
Non-c
ash - 4052 10,00
tr
ansf
er 0
Cashtr
ansf
er 4002 190,0 190,
0
00 00

StockOpeningBalances
Theendingbalanceinstockatapubli
cbodyi
schargedasr educt
iontothenextyear'
s
budget. Thereducti
oni streat
edasanon-cas
ht ransf
erandasar educti
ontot he
amountofc as
hthatcanber equest
edandc
ommittedforaparti
cul
arbudgetedi
tem.

Theamountoft heendingstockal soshouldber ecordedint hetransact

ionregi
sterat
MOFEDasadebi ttonon-cas
ht ransferf
orr ec
urrentexpenditureaccountcode4052and
acreditt
oothernon-cashtransfersaccountcode4055.I nitsTransacti
onRegist
er,the
publi
cBodyrecordsadebittoot hernon-cashtransfersacc
ountc ode4055andac redi
t
tonot-casht
ransferf
orrecurrentexpenditureaccountcode4052.

Exampl
e:As
sumei
nspec
tor
srepor
tBi
rr145,
000i
nst
ockr
emai
ningataPubl
icBodyat
theendoft heyear.APublicBodyrequestsBirr200,
000f
rom MOFED.MOFEDt rans
fers
Bir
r55,000becaus ethepubli
cBodyhasBi rr145,
000asopeni
ngstockbal
ance.Andals
o
fur
therassumet hatyouareanaccountantofbothMOFEDandt hepubl
icbody.

70
Tr
ans
act
ionRegi
sterofMOFED
No Desc
ript
ion TB Acc
ount Ot
her
s Cas
hatbank
Number 4105
Dr Cr Dr Cr
1 Casht
ransf
er - 4002 55,
00
Non-cash - 4052 145,
0
tr
ansf
er 00
Non-cash - 4055 145,
0 55,
000
tr
ansf
er 00

Tr
ans
act
ionRegis
terofPubl
icBody:
No Des
cri
pti
on TB Ac c
ount Ot
her
s Cas
hatbank
Number 4103
Dr Cr Dr Cr
1 Non-cash - 4055 145,
000
tr
ansf
er
Non-cash - 4052 145,
000
tr
ansf
er
Casht
ransf
er - 4002 55,
00 55,
00
0

I
ntheappropr
iat
estockit
em'sbudgetledgercar
d,i
nthe"
paymentr
ecei
ve"and
"
commi
tment"col
umns,
Bir
r145,
000isrec
orded.

BeginningofYearPr oc eduresatMOFED
I
nher eal so,specialProceduresar erequir edatMOFEDbef oret
heacc
ount i
ngforanew
fi
scalyearc anbegi n.Thes es peci
alpr oceduresinc l
udeupdat
ingf
orc hangesto:the
budget,budgetc odesandac countc odes.I npart
icular
,MEFEDmustinputorupdatein
thebudget /disbursement /accountspr ogram:
1.Budgeti dentifi
cationcodesf orallpublicBodies.
2.Budgeti dentifi
cationcodesf orallreporti
ngEnt i
ti
es.
3.TheChar tofAccount sforanyc hangest o:
It
emofExpendi ture
It
emsofRevenue
Transfers
As s
ets
Liabil
iti
es
4.Annualappr opriatedbudget .

2.
12Cas
hierFunc
tions

CashierFuncti
ons:CashWithdr
awnfromBankt oSaf
e
Theac count
antwr i
tesachecktot
hec as
hiertoputc
ashinthetrans
act
ionregi
sterand
thecashierr
ecordsthebankpaymentvoucheri
nthepet
tycashbookasadebitt
oc as
h.

71
Exampl
e:Acheckf
orBi
rr3,
000i
swr
itt
ent
othec
ashi
erf
orpet
tyc
ash.

Trans
acti
onRegi
sterofpubli
cBody:
No Descr
ipti
on TB Ac c
oun Cashatbank Cas
hinsaf
e
t 4103 4101
Numbe
r
Dr Cr Dr Cr
1 Cas hwi
thdrawnfrom - - 3,
000 3,
000
saf
e

CashierFunc tions:Cashdepositedintobankf romthesafe

Thecas hiertrans f
erscashfrom thesafetothebankbydepos it
ingthecas hinthebank.
Thec ashi erbringst hebankdepos i
ts l
iptot heaccountantwhopr epar esar ecei
pt
voucher. Theac countantrec
ordst herecei
ptvoucherinthetransact
ionregisterandthe
cashi
err ec or
dst herecei
ptvoucherint herec
eiptcas
hbookasac r
editt
oc ash.

Exampl
e:TheCas
hierdepos
itsBi
rr20,
000i
nthebank.
Tr
ans
act
ionRegi
sterofPubl
icBody:
No Des
cri
pti
on TB Acc
oun Cas
hinSaf
e Cashatbank
t 4101 4103
Numbe
r
Dr Cr Dr Cr
1 Cash depos
ited i
nto - - 20,
000 20,
000 Cashi
er
bank Funct
ions
:
CashandChec kRec ei
ptsbyCas hi
er
Whenac as
hi err ecei
vesc urrencyofc hecks,ar ecei
ptvouc herisiss
ued.Thec ashi
er
recordsther ec ei
ptvouc herint her eceiptcashbookasar ec
eiptofcash.Att heendof
theday,t hec ashierdepositst hecas handc hecksint hebankandbr i
ngsal lr
ecei
pt
vouchersandt hebankdepos i
ts l
ipt otheac c
ountant.Theac c
ountantissuesarecei
pt
vouchertot heCahi er
.Theac countantr ecordseachrec ei
ptvoucherinthet rans
acti
on
regis
terandt hec ashi
err ecor
dst her eceiptvoucherfrom theac c
ountantintherecei
pt
cashbook.

Exampl
e:As
sumet
hataCas
hierr
ecei
vesat
otalofBi
rr2,
000ont
hes
ameday.Bi
rr
1,000inc ashisareturnofanadvanc
ebyas t
affmember ,andBirr1,
000incheckisa
courtdepos i
t.TheCashi
errec
ordstherecei
ptsintheReceiptsCas
hBookanddepos it
s
theBirr2, 000inthebankatt heendoft heday.Thebankdepos i
tsli
pandRec ei
pt
Vouchersar eprovi
dedt ot
heAc c
ountant
.TheAc c
ountantissuesaRecei
ptVoucherto
theCashier.

Tr
ans
act
ionRegi
sterofPubl
icBody

No Des
cri
pti
on TB Acc
oun Other
s Cashat Cas
hinSaf
e
t 72 bank4103 4101
Numbe
r
 Dr Cr Dr Cr Dr Cr
1 Staf
fAdvance - 4203 1,
000 1,
000
2 Deposit - 5052 1,
000 1,
000
3 Cashdeposi
ted 2,
000 2,
000
i
nt obank

CashierFunc ti
ons:CashI mpr estPayment stoCas hierbyAc countant
Eachpubl i
cbodys houldes tabl i
sht heamountofc asht oholdinpett
yc ash.Thec ashi
er
makesc ashpaymentf rom t hei mpr essfundus ingc ashpaymentvouc hers.Whent he
pettyc ashbal anceisl ow,t hec ashiersubmi t
st hec as
hpaymentvouc herstot he
accountant.Theac count antwr i
tesac hecktothec ashierforthepaymentvouc hersto
theAc countant.TheAc count antwr itesacheckt othec ashi
erforthetotalamountoft he
cashpaymentvouc her.Theac countantrecordseac hc ashdoc umentf orthec heckis
bank paymentvouc heri nt he t ransact
ion regist
er.The c ashi
err ecordst he bank
paymentvouc herfromt heac c ountanti nt
hepet tycashbookasadebi ttoc ash.

Exampl
e:TheAccount
antpayst
hec
ashi
erBi
rr4,
000byc
hec
kus
ingabankpayment
vouchertorepl
enishthepettycas
hfrom acashpaymentvouc herfr
om thecashi
erf
or
Bir
r4,000paidtoanempl oyeef
orperdiem.Thecas
hierrec
ordst herec
eipti
nthepet
ty
Cashbook.The accountantrecor
dst he c
ash and bank paymentvouc hersinthe
tr
ansacti
onregi
sterasfoll
ows:

Tr
ans
act
ionRegi
sterofPubl
icBody:
No Des
cri
pti
on TB Acc
oun Ot
her
s Cas
hatbank Cas
hinSaf
e
t 4103 4101
Numbe
r
Dr Cr Dr Cr Dr Cr
1 PerDiem 01 6231 4,
000 4,
000
2 Cashto 4,
000 4,
000
Cashi
er

73