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Lecturer Note: Overview of Ethiopian Government Accounting

CHAPTER ONE
INTRODUCTION
1.1. Introduction to FGE Accounting
Due to the unique environment in which public bodies are operating,
characteristics of public bodies accounting and similarities with business
organizations is worth considering.
1.1.1.Goals achieved by FGE Accounting System
As stated in the first volume of FGE Accounting system, Manual 3, The FGE
accounting system achieves three goals: budget control, cash control, and
accountability.
Budget control
 The ability of the accounting system to report expenditure consistent
with budgetary principle and
 Including accounting for commitments in the system. A commitment is
an amount of budgeted funds that is reserved for a specific future
expenditure. Any committed budgeted funds are no longer available
for future commitments. Commitments are made against the budget
when a purchase order is approved.
Cash control
 Maintaining the balance of cash at bank and cash in safe in a general
budget.
 Clarifying the responsibilities and duties of the cashier and the
accountant for cash at bank and cash in safe. The cashier handles
cash in safe, while the accountant is assigned overall responsibility for
cash in safe and specific responsibility for the checkbook and cash at
bank.
 Using an imprest system to control cash in safe. In an imprest system,
the cash safe is from the safe documented. The cash in safe is
periodically reimbursed, based on vouchers, for the exact amount
necessary to restore the original cash balance deposited in the bank
intact.
Accountability
 Establishing a system of financial reporting that produces two reports
for use by government and a statement of changes in cash position for
use by interested parties outside of Budget and Actual for revenue and
expenditure and a statement of Net assets.
 Every attempt is made to design a system that is consistent and clear.
To permit jurisdictions some ability to adapt the system to their
capacity, the design allows implementation of the system initially for

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recording other assets and liabilities using the cost method can be
deferred for later implementation.

1.1.2.Changes in the FGE accounting system

 The Federal government of Ethiopia (FGE) accounting system used in
1994 EC has been in service for more than last a century. The system
has been revised at various times and the revisions through time
house brought major changes in recording, summarizing and reporting
of the government financial information.
 The federal government decided that there was a need to revise the
current accounting process as an integral part of the civil service
Reform. The civil service task force, formed in the prime minister’s
office, began the revision process. Further study and implementation
responsibilities were given to the accounts Reform Team established by
the Ministry of Finance and Economic Development (MOFED)
 The overall strategy of the civil service Reform for accounts is to mode
from strictly cash controls to emphasis on management and
accountability.
1.1.3. Standardization of Federal and Regional Accounts
The federal and regional accounts are standardized in fundamental areas
such as accounting concepts and policies, procedures, source documents,
registers, ledgers and reports as detailed below.
A. Basis of Accounting
The accounting system at the federal and regional levels employs a modified
cash basis of accounting. The modified cash basis of accounting means that
cash basis of accounting applies except for recognition of certain defined
items. The key considerations used to determine which items to include or
exclude in the modified cash basis of accounting are the availability,
complexity, practicality and efficiency with which information can be
obtained to include other assets and liabilities within the accounting system
and the need to keep the basis of accounting consistent with the
government’s budgeting system.
B. Bookkeeping Method
The accounting system at the region and federal levels uses double-entry
bookkeeping.
C. Chart of Accounts
A chart of accounts is a system of coding used by a financial management
system to identify and classify financial transactions and events. The chart
of accounts used is exactly the same at the federal and regional levels to

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record revenues, expenditures, transfers, assets, liabilities and net

assets/equity.
D. Budget Classification Scheme
The budget classification scheme is how the budget is organized by each
budget institution. For accounting purposes, the budget classification
scheme as defined in the government’s annual budget is tracked to identify
expenditure variances between what is budgeted and what is expended by
budget institution. The budget classification scheme to classify budget
institutions is the uniform at the federal and regional levels.
E. Accounting Cycle
The diagram below provides an overview of the accounting cycle used at the
federal and regional levels.
Source Documents

Payment Vouchers Receipt Vouchers Journal Vouchers

Transaction Register
Book of Original
Entry

General Ledger Budget Ledger/ Expenditure Subsidiary Ledger

Revenue Report Ledgers

Transfer Report
Receivable Report Trial Balance Expenditure Reports
Payable Report

Monthly Reports

Post Closing Trial balance

Summary Income and Expenditure Statements

Detailed Income and Expenditure Statements
Cash Flow Statement Financial
Statements Balance Sheet

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Lecturer Note: Overview of Ethiopian Government Accounting

The above diagram clearly indicates that in addition to the accounting

process, the source documents to capture and approve accounting data, the
registers to record accounting data, the ledgers to analyze accounting data
and the reports produced by the accounting system are the same at the
federal and regional levels. The accounting system is designed to have the
capability to record, analyze and report expenditures and revenues for all
types of donor funds and other special funds that are included in the
government budget.
1.2. Chart of Accounts of FGE Accounting Systems
A chart of accounts is a system of coding used to identify and classify
financial entities and events. The current chart of accounts, described in the
Budget Reform Manual incorporates detailed codes for items of domestic
revenue, external assistance, external loans, and items of expenditure. The
classification of the chart of accounts is structured in a systematic manner
and facilitates the recording of transactions and the reporting of information
in accordance with the budget.
The chart of accounts treats all detailed account codes as temporary
accounts and permanent accounts. Temporary accounts are accounts that
begin each year with a zero balance. Permanent accounts are detailed
account codes whose balance at the end of a year becomes the balance in
the account at the beginning of the next year.
Revenue, expenditure and cash transfers are temporary account code
categories. Account codes in these categories:
 are always treated as temporary accounts, and
 begin each year with a zero balance.
Assets, liabilities and net asset/equity are permanent account code
categories. Account codes in these categories:
 are always treated as permanent accounts, and
 begin each year with the account balance as long as they had at
the end of the previous year. In other words, these accounts are not
closed.
1.2.1. Chart of Temporary Accounts
The Budget Reform Team under the Expenditure Management and Control
Sub-Program of the Civil Service Reform designed codes in the chart of
accounts for detailed coding of:
 Items of domestic revenue, external assistance and external loans
using code numbers 1000 through 3,999, and

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 Transfers using code numbers 4000 through 4099.

 Items of expenditure using code numbers 6,000 through 6,999.
The Budget Manual created account codes for the FGE chart of accounts as
follows:
 Items of domestic revenue using account codes 1000-1799,
 External assistance using account codes 2000-2999,
 External loans using account codes 3000-3999,
 Transfers using code numbers 4000 through 4099, and
 Items of expenditure using account code 6000-6999.
The chart of accounts for these classifications is presented in Appendix 2 at
the end of this chapter.
1.2.2. Chart of Permanent Accounts
The Accounts Reform Team under the Expenditure Management and control
Sub-Program of the Civil Service Reform designed codes for detailed coding
of:
 Assets using code numbers 4100 through 4999.
 Liabilities using code numbers 5000 through 5499.
 Letters of Credit using code numbers 5500 through 5599.
 Net Assets/Equity using code numbers 5600 through 5699.
A general description of these account codes is described here,
 Assets: are resources controlled by an entity as a result of past events
and from which future economic benefits or service potential are expected
to flow the entity.
o Cash and cash equivalents: Cash is cash on hand and cash at bank.
Cash equivalents are short-term, highly liquid investments that are
readily convertible to known amount of cash and which are subject to
an insignificant risk of change in value.
o Receivables: receivables are amounts owed to (given to) a
government unit by another government unit, a person, or a non-
government entity except public enterprises. Salary advances to
employees and advances to suppliers are two examples of receivables
commonly occurring in FGE transactions.
o Goods in transit: Goods in transit are goods that are owned by the
FGE but not yet in the FGE's possession. Typically, these are goods that
are purchased overseas using a letter of credit.
o Stocks: Stocks are goods that are consumed in less than one year.
o Fixed assets: Fixed assets are physical items that are expected to
have a useful life of longer than one year and have a certain minimum
value.

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o Loans receivable: Loans receivable are amounts due from public

enterprises over a period of time exceeding one year.
o Investments: Investments are FGE investments in public enterprises
and private organizations that are held for more than one year.
 Liabilities: "present obligations of the entity arising from past events,
the settlement of which is expected to result in an outflow from the entity
of resources embodying economic benefits or service potential." The
categories of liabilities in the improved and expanded accounting system
are:
o Payables. Payables are obligations to pay that are due in less than
one year. Examples of FGE payables are deposits, grace period
payables, treasury bills, and retention on contracts.
o Long-term debt. Long-term debt is an obligation to pay that is due
in more than one year.
 Letters of Credit: A letter of credit represents a guarantee to pay
suppliers with cash set aside in bank account restricted for that purpose.
 Net assets/equity: Net assets/equity is formally defined by the Institute
of public sector accounting standards as "the residual interest in the
assets of the entity after deducting all its liabilities." Net assets/equity is
the balance remaining after liabilities are deducted from assets. This
balance represents the equity interest of Regional and Federal
Governments.
1.3. Basis of Accounting
The basis of accounting is the basic set of principles and rules employed by
the accounting system to determine when and how to record transactions.
The cash basis of accounting is a basis of accounting that recognizes
transactions and other events when cash is received or paid. Although
organization’s earnings and related operating activities are continuous, they
are reported at specific intervals (i.e. an accounting period or budget year) in
order to provide useful information for decision-making on a timely basis.
Some activities may begin and end during the accounting period, while
others may require two or more accounting periods for completion. Budget
year for FGE is from Hamle 1 to Sene 30.
In summary, accrual accounting is based on cash flows but reports
transactions and other events with cash consequences at the time the
transactions occur rather than at the time cash is received or paid. Accrual
accounting is also superior to cash-basis accounting from the standpoint of
measuring financial statement elements.
The FGE accounting system employs a modified cash basis of accounting.
Modified cash basis of accounting is a compromising basis of accounting
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between the two extreme bases of accounting. It adopts features from both
bases of accounting. Most transactions are recorded using cash basis of
accounting and some transactions are recorded using accrual basis of
accounting. The modified cash basis of accounting in FGE means that cash
basis applies except for recognition of the following transactions:
 Revenue and expenditure are recognized when aid in kind is
received.
 Expenditure is recognized:
 When payroll is processed.
 At the end of the year when a grace period payable is
recognized.
 When goods are received or services are rendered if payment
for the goods or services was rendered in advance.
 When cash moves from an unrestricted to a restricted bank
account to meet the requirements of a letter of credit. When
cash moves out of he restricted account, no expenditure is
recognized.
 Intergovernmental transfers are recognized in the absence of actual
cash movement.
 Transactions resulting from salary withholdings are recognized in
the absence of actual cash movement.
The modified cash basis of accounting is consistent with the budgeting
process and produces information useful for comparing budgeted and actual
revenue and expenditure. The modified cash basis accounting system
requires the same temporary accounts as the cash basis of accounting plus
the following permanent accounts: cash and cash equivalents, receivables
and payables.
All assets and liabilities are not recognized in the modified cash basis
accounting system. Only those receivables and payables included in the
chart of accounts are included in the system. The modified cash basis
accounting system produces financial information that is reported in a
Statement of Changes in Cash Position and a Statement of Budgeted versus
Actual Expenditure. Asset and liability accounts other than cash, receivables,
payables, and letters of credit are included in the chart of accounts to allow
institutions that have the capacity to maintain accounting records of all
assets and liabilities. These other assets and liabilities are recorded using the
cost method. The cost method values assets at their original cost and
liabilities at the amount still due.
Recording these other assets and liabilities is an option for the future in the
FGE accounting system. Every transaction that is recorded by accounting has

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two aspects: effort and reward, source and use, cash inflow and expenditure.
The purpose can be, for example, expenditure, revenue deposit, or transfer.
The FGE accounting system uses double-entry bookkeeping. Double-entry
bookkeeping means that both aspects of each transaction are recorded in
the accounting records with at least one debit and one credit so that the total
amount of debits and the total amount of credits are equal to each other.
The advantages of double-entry bookkeeping are numerous, including:
 All aspects of the transaction are properly recorded in accounts.
 The accounts are self-controlling because the total of all debits must
equal the total of all credits; therefore, many errors are easily
detected and corrected.
 Modified cash basis of accounting can be introduced.
Double-entry bookkeeping requires an understanding of some additional
basic accounting concepts and terms. The most basic are the terms debit
and credit. Debit literally means left and credit literally means right. By
convention, the rules for increases for Letter of Credit and Net Asset /Equity
are credit which is used in modified cash basis of accounting.
Transfer Accounts:
 If cash is sent by transfer, Transfer account is debited.
 If cash is received by Transfer, Transfer account is credited
FGE Basic Accounting Equation is as follows:
Asset = Liabilities + Net Assets/Equity

Cash & Cash Equivalents + Receivables = payables + Letters of Credit + Net

Assets/Equity
A control account is an account in a general ledger that maintains the total
balance of all related accounts in a subsidiary ledger. For each control
account, a subsidiary ledger is kept. A subsidiary ledger is a ledger separate
from the general ledger that contains a group of related accounts. The
control account is part of a general ledger. The subsidiary ledger accounts
provide details about the balance in the control account.
Any account in the general ledger that requires more detail than simply the
amount in the account becomes a control account with a subsidiary ledger.
An example of a subsidiary ledger is presented here. Suppose advances are
provided to three employees. The account code in the general ledger for
Advances to staff is 4203. A subsidiary ledger for account code 4203 is
created where each advance is assigned an account code as follows:
No Employee Subsidiary
Account code
1 Gebremariam 4203-01

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2 Kidane 4203-02
3 Hassen 4203-03
The specific advance provided, for example, to Kidane for example, is
maintained in account code 4203-02 in the subsidiary ledger. The total of all
advances is the total of all account balances in the subsidiary ledger and is
the balance recorded in control account code 4203 in the general ledger.
Bookkeeping method
Accounting similarities FGE Accounting system with business
organizations
There are many similarities between the accounting for business and not-for-
profit government organizations. A double entry system of accounting is
recommended for both. The general mechanics for record keeping are the
same: documents from the basic record, books of original entry (journals) are
kept and posted to general ledgers and subsidiary ledgers, trial balances are
drawn to prove the equality of debits and credits, a chart of accounts
properly classified and properly fitted to the organization’s structure is
essential to good accounting, and of course, uniform terminology is highly
desirable in both fields. Both prepare financial statements, closing entries,
etc.
In most of the operations, government budgetary institutions are not
concerned with profit measurement, but only to assure continuity and/or
improvement of services to the public, and the need to ensure compliance
with extensive legal requirements often results in government organizations
having more stringent operational and administrative controls than in
commercial organizations. But the market in which they operate regulates
commercial businesses. If the management is not responsive to the market
demand and fails to provide the quality of services demanded by the
market, the commercial organization will ultimately be forced out of
business.
1.4. Budget Control in FGE Accounting System
1.4.1.Overview of Accounting for Transaction
This topic will try to explain issues related to authorization of
Transactions, capturing transactions when they occur, and recording
transaction in the accounting system, summarizing transactions by
accounts, and reporting to appropriate authorities.
Accounting for transactions means recognizing/recording daily economic
activities. Transactions cause increases and decreases to revenue, receipts
from external assistance, receipts from external loans, expenditures,
transfers, cash and cash equivalents, receivables, payables, letters of credit.
Most transactions involve only domestic currency, but a few transactions

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involve foreign currency. No accounting unit handles both types of

currencies; an accounting unit's transactions are either all domestic currency
or all foreign currency. The processes for handling both types of currency are
the same, but the forms used in the processes differ.
The remaining chapters in this course provide a detailed description of
accounting for transactions.
A. Authorization of transactions
A strong budget control is achieved if authorized expenditure is recorded as
a budget commitment at the time the expenditure is authorized. The
process of maintaining a continuous record of commitments by the Budget
Section ensures that proposed expenditure is authorized against:
 The updated revised budget, and
 A budget amount that is still available for expenditure (an amount that
has not been committed to any other expenditure).
B. Capturing Transactions When They Occur
Transactions are captured by the first document prepared by the accounting
unit when the transaction occurs. The source document varies depending on
the nature of transaction. Examples include:
 Receipt vouchers when cash is received,
 Payment vouchers when expenditures are made, and
 Journal vouchers when the transaction does not involve cash.
The accounting unit prepares the source document when the transaction
occurs and may be supported by another document received from an
external party. For example, a bank statement may show a charge that
supports a payment voucher, or a tax bill may support a cash receipt. The
other document is a supporting document only; the accounting unit must
prepare a source document when the transaction occurs (MOFED & DSA
Project, Manual 3 Volume I, May, 2007).
The source document contains the information necessary to record the
transaction in the accounting system. Generally, an accountant in the
accounting unit prepares the source document.
Exhibit 1.4
Overview of Accounting for Transactions
Accounting System Accounting Form Employed Party Responsible for
Activity Activity
Transaction Authorization Budget Ledger Cards Budget Section
(Verification that budget is (for each Budgetary Institute
available for proposed and bank account)
expenditure)
Capture Transaction Receipt vouchers, Cashier and accountant
(at the time transaction payment vouchers, Cashier and accountant

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occurs) journal voucher Accountant

(for each transaction) (in accounting unit)
Record Transaction Transaction Register Accountant
(in the accounting unit) (for each accounting unit) (in accounting unit)
Summarize Transaction General Ledger Accountant
(by account) (for each accounting unit) (in accounting unit)
Subsidiary Ledger
(as required)
Report Monthly Report Accountant
(To MOFED) (by Budgetary Institute, (in accounting unit and in
accounting unit, &/or reporting reporting entity)
entity)

C. Recording Transactions in the Accounting System

The accountant in the accounting unit records information from the source
document in a transaction register. The transaction register is the book of
original entry into the accounting system. A transaction register is
maintained for each accounting unit (Bank Account). Transactions are
recorded in the transaction register from source documents as they occur.
The transaction register is designed to provide sufficient information to
record the transaction in the general ledger.
D. Summarizing Transactions by Account
Each transaction recorded in the transaction register affects the balance of
two account codes by the same amount, but one is a debit and the other is a
credit. Each debit and credit amount for each transaction must be recorded
on a ledger card in the general ledger.
In the general ledger of the accounting unit, the accountant must record the
amount of the transaction as a debit or as a credit, depending on how the
amount is recorded in the transaction register, on the corresponding ledger
cards for the two accounts involved in the transaction (MOFED&DSA Project
manual, May 2007).
E. Reporting to Appropriate Authorities
Monthly, an accountant in the accounting unit prepares a report for the
accounting unit. The monthly report contains the total debits and credits by
account. The information for the monthly report is taken from the general
ledger.
If the accounting unit is a reporting entity, the accountant sends the monthly
report directly to MOFED. Otherwise the accounting unit forwards the
monthly report to a reporting entity. The reporting entity sends the
consolidated report to MOFED at federal level.
1.4.2.Budget Control

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Under this topic, the sub topics such as approved budget, payments received
for approved budget, procedures to achieve budget control and the
expenditure approval process will be dealt in detail
Budget control has two key elements:
o Expenditure is incurred only if there is an available budget.
o Actual expenditure does not exceed budgeted expenditure.
The budget section is tasked with the responsibility of budget control
A. Approved Budget
At a national level, Council of People's Representatives approve budget and
the total budget is published in Negarit Gazet both for capital and recurrent
budgets.
B. Additions/Reductions to Approved Budget
During the year, the approved budget may be revised in two ways:
 Budget supplement: A budget supplement is an additional
appropriated budget.
 An addition to one budget item and a corresponding reduction
to the budget of another item of expenditure:
Once the approved budget is adjusted for additions and /deductions, it is
considered as revised budget. The revised budget is the benchmark for budget
control, as an item of expenditure must not exceed its revised budget.
C. Payments Received for Budgeted Expenditure
Treasury funds are the primary source of domestic expenditures for most
Budgetary Institutes. MOFED transfers amounts to Public bodies monthly
based on requests made by the Public Bodys at federal level. In addition,
MOFED may make payments on behalf of a Budgetary Institutes. When this
happens, a non-cash transfer is recorded and considered as a payment
received by the Budgetary Institutes to meet budgeted expenditure.
1.4.3. Budget Ledger Card
The purpose of the budget ledger card is to maintain a continuous and
updated record for each budgeted item of expenditure by BI and source of
finance with respect to:
 Approved budget
 Revised budget
 Payments received for budgeted expenditure.
 Amount remaining to be requested.
 Commitments
 Balance in the revised budget that is not committed.
The budget ledger card is divided into two parts:
A. The top of the card contains information to identify the
 Budgetary Institute,

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Type of budget, and


Item of expenditure.

The table on the card contains detailed information about each

budget transaction.
B. The Budget Section maintains a budget ledger card for each individual
item of budgeted expenditure by Budgetary Institute and source of
finance. The appropriate budget ledger card is updated each time a
transaction occurs. Figure 1.4.3 shows the Budget Ledger Card
Figure1.4.3: Budget Ledger Card
Page No. 1
Name of Public Body: MOFED Code: ___152_
Name of Program: ______________________________ Code: ______
Name of sub Agency: Administration &General Service Code: ____02_
Name of Sub Program ___________________________ Code: ____00__
Name of Project ________________________________ Code: ___000__
Source of Finance: treasury Code: ___1800_
Type of Budget: RECURRENT Code: _1_
Item of Expenditure: OFFICE SUPPLIES Code: 6212
Addition Reduction Payment Ba
Reference No. Approved Budget to Budget to Budget Revised Budget Received Unpaid Balance Commitment C
N o Date Description
1 11/07/01 Approved M/1/94 300,00 - - 300,00 - 300,00 - 3
Budget 0 0 0
2 01/08/ Purchase Order PO/1/94 - - - - - 300,00 200,000 1
01 0
3 01/9/0 Adjustment to PR/1/94 - - - - - 300,00 (200,000 3
1 PO/1/94 0
3 01/09/ Payment for PR/1/94 - - - - 130,00 170,00 130,000 1
01 September 0 0
3 01/09/ Unused Stocks PR/1/94 - - - - 70,000 100,00 20,000 1
01 0
4 02/09/ Purchase Order PO/2/94 - - - - - 100,00
100,100,000 N

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01 0
5 10/09/ Cancel Purchase PO/2/94 - - - - - 100,00
(1, 1
01 Order 0 (100,000)
6 15/09/ Supplementary RE/1/94 - 100,00 - 400,00 - 200,00 - 2
01 Budget 0 0 0
Revised Budget = Approved budget + Additions to budget -Reductions to budget
Unpaid Balance = Revised Budget - Cash and Nominal Cash Payments received to date
Balance not Committed= Balance carried forward from the balance not committed-Current
Commitment + Commitment Cancelled+/- Additions to/Reductions
from Approved Budget.
1.5. Overview of Financial Administration in FGE
Accounting System
1.5.1. Financial Administration
The financial administration in FGE mainly involves Ministry of Finance and
Economic Development (MOFED) and Regional Finance and Planning Offices
and a Public Body. The specific Federal and Regional government
administrative authorities and the required organizational structure in public
bodies are illustrated in the following Figure 1.7.1 and Figure 1.7.2 below as
it is presented in Manual
Figure 1.7.2: 3 FGE Accounting system Volume I, May, 2007).
Structure of financial Figure
administration
1.7.1 within public Body
Structure of Financial Administration in the Budget Process

Ministry of Finance and Economic

Head Development
of public Body

Public Body
Head of Administration and Finance

Budgetary Institution:
Project or Sub-Agency
Head of Budget and Accounts
Budgetary Institution: General Services
Sub-Project or Sub-Sub-Agency and Administration

Budget Section
Accounts section

Accountant Cashier

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Figure 2.2
Structure of Financial Administration within a Public Body
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The following are responsibilities of MOFED, Budgetary Institutions,

Accounting unit, Reporting Entity, Cashier and Accountant in the financial
administration in the Budget process and within the Public Body
A. Ministry of Finance and Economic Development (MOFED)
MOFED administers the financial system for the federal government and has
the highest level of administrative authority. MOFED consists of a:
 Budget Department that prepares and distributes notification of
approved federal budgets and administers the budget.
 Central Accounts Department that receives monthly repots and
compiles financial statements for the federal government.
 Central Treasury Department that receives and distributes cash
from central treasury.
 Credit and Investment Department that manages the federal
government's investments and debt.
This is not a complete description of MOFED or its departments. This is
description of their roles and responsibilities within the accounting system.
B. Budgetary Institution (BI)
Budgetary Institutions are defined as those institutions that are fully or
partially financed by Government. The budget process assumes the
appropriation of budgets. The appropriated budget is the budget approved
by the Council of people's Representatives (CPR). The appropriated budget
is broken down by:
 Recurrent and capital expenditure for the federal government, and
 Subsidy for each regional government
The federal government's portion of the appropriated budget is assigned to
projects and sub-agencies within PBs and broken down by sources of funding

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(domestic, assistance and loan). This is called the approved budget. The
approved and appropriated budget is published in the Negarit Gazeta.
A Public Body's entire approved budget is assigned to projects and sub-
agencies under its immediate administrative control. The budget of a Public
Body is the total budget of its projects and sub-agencies. A project or sub-
agency may allocate any portion of its approved budget to sub-projects or
sub-sub-agencies. The budget of a sub-project or sub-sub-agency is called an
allocated budget. A sub-project or sub-sub-agency for which a budget is
allocated always at a different location from the project or sub-agency. A
notification of any allocation is sent to MOFED.
Projects, sub-agencies, sub-projects, and sub-sub-agencies are defined and
coded in the chart of accounts. Any entity that receives an approved or
allocated budget from a PB's approved budget is called a Budgetary
Institution (BI). Generally:
 PBs are ministries, authorities, and commissions.
 BIs are projects, sub-agencies, sub-projects, and sub-sub-agencies.
 BIs are administered by Public Body’s.
 The entire approved budget of a Public Body is assigned to BIs.

C. 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).
An accounting unit is the unit that initially captures and records transactions
into the accounting system.

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One general ledger is maintained for the BA. The only records maintained
for each BI are accounts in subsidiary ledgers for items of expenditure.
Monthly, the subsidiary ledger information is used to prepare an expenditure
report for each BI. These reports are consolidated with information from the
general ledger into a monthly report for the BA. The balances of cash in safe
and cash in bank are maintained in ledger cards of general ledger for the BA.
D. 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. The reporting entity
may be the accounting unit or a higher level of authority (perhaps a PB).
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.
E. Cashier and Accountant
In the FGE accounting system of cash control, the cashier's function and the
accountant's function are distinct. Cash consists of currency and checks.
The cashier's function is to maintain and control cash in the safe. The
accountant's function is to maintain and control cash at the bank.
Only the cashier can receive currency and checks and make disbursements
in currency. Daily, the cashier should count cash on hand and reconcile
ending cash on hand to the cash book.
The cash in safe is controlled by an imprest system. When cash is received
as per the budget or other sources, the cashier will:
 Issue a cash receipt,
 Segregate the cash received from cash available to disburse,
 Deposit the cash received intact in the bank as soon as practical,
usually daily, and
 Surrender copies of all cash receipts and a copy of the bank deposit
slip to the accountant.
In the imprest system, a balance is established for cash in safe. The
accountant issues this amount of cash to the cashier using a check. When
cash is disbursed to establish the Imprest Fund, the cashier will issue a
receipt voucher. If the amount of cash in safe is to be replenished, the
cashier will surrender all payment vouchers to the accountant. The

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accountant will replenish the cash in safe by issuing a check to the cashier
for the total amount of the payment vouchers that are surrendered. The
replenishment should return the balance of cash in safe to the established
level.
The accountant's responsibility for cash is to maintain a record of the total
cash position of the entity, including cash at the bank and cash in the safe.
The accountant records cash movements that flow through the cashier and
cash movements that flow directly through the bank. Direct cash
movements through the bank normally include bank transfers and charges,
checks written, and any other transactions that do not require cash handling
by the cashier.

APPENDIX

Appendix 1 Budget Classification scheme, Budget

Categories and their standardized codes

There are many different users of budget information. These include national
planners, sectoral planners, economists, donors, lenders, NGOs and civil
society groups, managers in public bodies, treasury or cash management
officials, MOFED budget officials and accounting officials, Ministers, etc. the
information needs of these users vary significantly. For this reason, budget
information, whether planned or actual, needs to be analyzed and classified
from many different viewpoints and dimensions.
There are eleven budget categories in the budget classification scheme
presented below. The presentation of codes in the budget begins with the
"head" class of accounts that are assigned to the budget categories of
functional classification, sub-functional classification, and public body.
Standardized or Discretionary: Standardized means that all public
bodies, regions and weredas must use the codes defined by the Budget
Department and the Central Accounts Department of MOFED. Discretionary,
means that public bodies, regions and weredas can assign their own names
and codes for these budget categories (limited by the number of digits
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available for that field or category). Public Bodies have the discretion to code
their programs, sub-agencies, sub-programs and projects. Each Public Body
in consultation with MOFED does the coding of these budget categories.
Table 1.1
Budget Classification Scheme
Budget Category Class of Code (#of digits,
Account standardized or
discretionary codes
Jurisdiction 7, Standardized
Type of Budget 1, Standardized
Functional classification Head 1, Standardized
Sub-Functional Head 1, Standardized
classification
Public body Head 1, Standardized
Programs S-Head 2, Discretionary
Sub-Agency S-S-Head 2, Discretionary
Sub-Program S-S-S-Head 2, Discretionary
Project S-S-S-S-Head 3, Discretionary
Item of Expenditure Item 4, Discretionary
Source Finance Source 4, Discretionary
The eleven budget categories listed in the table above are defined as follows
and the codes for the categories that are standardized are to be discussed
and listed below.
Jurisdiction: Jurisdiction is the government level to which the budget
applies. There are twelve jurisdictions that include the Federal Government,
nine Regions and two Administrative Councils (Addis Ababa and Dire Dawa).
The code for jurisdictions is a standardized two-digit code.
Type of Budget: There are two types of expenditure budgets: recurrent
and capital. The code is one digit and standardized.
Functional classification: Functional classifications are the broad areas of
expenditure that are used for analysis and national accounts. There are four
functional classifications of expenditure: Administrative and General,
Economic, Social, and Other. The "Administrative and General" functional
classification covers expenditures for the following services: executive,
legislative, judicial, financial and fiscal affairs, defense, public order, general
services (personnel management, and standards)." The "Economic"
functional classification covers expenditures that directly deliver economic
services or provide services that enable economic services. The "social"
functional classification covers expenditures that deliver social services and
includes the sub-areas of education, culture and sport and health. The

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"Other functional classification covers expenditures that are not classified by

the other three categories and includes transfers. The Functional
classification code is one digit and standardized.
The Other functional classification coded with the 400 series includes four
sub-functional classifications: transfers, debt, contingency and
miscellaneous. Transfers include the subsidies to regions; debt includes
domestic and external obligations; contingency covers past commitments
and write-offs, and miscellaneous can include items such as duty drawbacks
and capital contributions.
The functional classification is the first digit of the three-digit head code. For
example, the functional classification code for economic expenditure is 200.
The second digit of the three digit code is the sub-functional classification
and the third digit is the public body code.
Sub-Functional classification: The four functional classifications are
further divided into sub-functional classification of expenditure. Sub-
functional classification is the second digit of the three-digit "head" code.
Public bodies are assigned a unique three-digit head code under the budget
classification scheme presented in the above table. The first digit of the
head code identifies the public body's functional classification, the second
digit identifies the sub-functional classification, and the third digit is a unique
number for public body within the sub-functional classification. The second
table provides the current list of federal public bodies and their head codes.
Programs: A public body may have programs that are broad objectives of
expenditure. Programs are a sub-head class of account and are coded with
one digit assigned by the public body in consultation with the MOFED.
Sub-Agencies: A public body is often divided into administrative units of
sub-agencies. Sub-agencies are usually the departments of a public body.
Sub-agencies are a sub-sub-head class of account and are coded with a
unique two-digit number assigned by the public body in consultation with the
MOFED.
Table 1.2
Budget Categories and their Standardized codes
Code
Jurisdiction Central government 15
Tigray Region 1
Afar Region 2
Amhara Region 3
Oromiya Region 4
Somalia Region 5
Benishangual Gumuz Region 6

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Southern Nations, Nationalities and

Peoples Region 7
Gambella peoples Region 8
Harari Peoples Region 9
Addis Ababa Administrative Council 10
Dire Dawa Administrative Council 11

Recurrent 1
Type of
Capital 2
budget
Public Bodies 100 -
Administration & General 399
Functional
Economic 100
Classificatio
Social 200
n
Other expenditures 300
400 –
499
Sub- Administrative & General 100
Functional Organ of State 110
Classificatio Justice and Public order 120
n Defense 140
General Service 150-170
Economic 200
Agricultural and Natural Resources 210
Water Resources 220
Trade and Industry 230
Mining and Energy 250
Transport and Communication 260
Construction 270
Social Service 300
Education & Training 310
Information & Communication 320
Culture and Sport 330
Health 340
Labor and social Affairs 350
Prevention and Rehabilitation 360
Other Social 370
Other Expenditures 400
Transfer recipients 410
Regional Subsidy 430
Public debts 450
Provisions 460
Others 470
Sub Federal Public Bodies Codes

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functional Administration and General 100

Classificatio Organs of State 110
n House of People's Representatives 111
Office of the Prime of ministers 112
Office of Federal Auditor General 113
House of federation 114
Office of the President 115
Palace Administration 116
National Electoral Board of Ethiopia 117
Ministry of Federal Affairs 118
Justice and Security 120
Ministry of Justice 121
Federal Supreme court 122
Special Public Prosecutor's Office 123
Federal Tax Appeal Commission 124
Justice and Legal system Research Institute 125
Security, Immigration and Refugee Affairs Authority 126
Federal Police Commission 127
Federal Anti Corruption Commission 128
Federal Anti Prisons Administration 129
Ethiopian Land Mine Clearing Office 131
Ethiopian Human Right Commission 132
Institution of the Ombudsman 133
Acts and Document Verification and Registration 134
Office 140
Defense 141
Ministry of National Defense 150
General Service 151
Ministry of Foreign Affairs 152
Ministry of Finance & Economic Development 153
Ministry of Information 154
Central Statistical Authority 155
Federal Civil Service Commission 156
Ministry of Revenue 157
Federal Inland Revenue Administration 158
Ethiopian customs Authority 159
Ethiopian Broadcasting Agency 161
Ethiopian Science and Technology commission 162
Ethiopian Mapping Authority 163
Office of Population & Houses census Committee 168
Office of the Board of Trust for Privatized Public 171
Enterprise
Ethiopian Development Research Institute
Economic 200

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Agricultural and Rural Development

Ministry of Agriculture and Rural Development 210
National Fertilizer Industry Agency 211
Ethiopian Agricultural Research Institution 212
Institute of Bio-Diversity Conservation 213
Social Work Agency 214
National Seed Industry Agency 216
Environmental Protection Authority 218
Water Resource 219
Ministry of Water Resources 220
Water Development Fund Office 221
National Meteorology Agency 222
Trade and Industry 223
Ministry of Trade and Industry 230
Federal Micro and Small Enterprise Development 231
Ethiopian Export Promotion Agency 232
Basic Metals and Engineering Industry Agency 233
Ethiopian Investment Authority 234
Ethiopian Quality and Standards Authority 235
Ethiopian Privatization Agency 236
Coffee and Tea Authority 237
Live stock Marketing Authority 238
Public Enterprise Supervising Authority 239
Leather and Leather Products Technology Institute 241
Mines and Energy 243
Ministry of Mines 250
Geological Survey of Ethiopia 251
Ethiopian Electric Agency 252
National Fuel Reserve Depots Administration 253
Ethiopian Rural Energy Development & Promotion 254
Center 255
Transportation and Communication 260
Ministry of Transport and Communications 261
Ethiopian Telecommunications Agency 262
Ethiopian Civil Aviation Authority 263
Ethiopian Road Transport Authority 265
Ethiopian Radio and Television Organization 266
Ethiopian News Agency 267
Ethiopian Press Agency 268

Construction 270
Ministry of Work and Urban Development 271
Federal Urban Planning Institute 272
Ethiopian Road Authority

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Office of Road Fund Administration 273

274
Social 300
Education 310
Ministry of Education 311
Addis Ababa University 312
Alemaya University 313
Bahir Dar University 314
Mekele University 315
Debub University 316
Jimma University 317
Ministry of Capacity Building 318
Ethiopian Civil Service College 319
Information and Communication 320
Ethiopian Information & Communication Tech.Dev’t
Agency 321
Culture and Sport 330
Ministry of Youth & Sport 331
Ministry of Culture and Tourism 332
National Archieve and Library Agency 333
Authority for Research & Conservation of Cultural 334
Heritage 335
Ethiopian conference Center 340
Health 341
Ministry of Health 342
Ethiopian Health & Nutrition Research Institute 343
Ethiopian Drug Administration and Control Authority 344
Ethiopian Radiation Protection Authority 345
National HIV/AIDS Prevention & Control Secretariat 350
Labor and Social Affairs 351
Ministry of Labor and Social Affairs 352
Social Security Agency 353
National Population Affairs Office 354
Ministry of Women’s Affairs 360
Prevention and Rehabilitation 361
Disaster Prevention and Preparedness Commission 362
Emergency Food Security Reserve Administration 363
National Disaster Prevention and Preparedness Fund 371
Office 372
Arba Minch University 373
Gonder University
Adama University
Other 400
Transfer Recipients 410

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Ethiopian Social Rehabilitation Development Fund 411

HIV 412
Ethiopian Electric & Power Corporation 413
Ethiopian Patriots Association 414
Ethiopian Red Cross 415
Budget Subsidy (Support) for other Organizations 416
Construction & Business Bank 417
African Development Bank 418
Ethiopian International Institute for Peace & 419
Development 421
Emergency & Rehabilitation Administration Unit 422
Demobilization & Reintegration Coordination Office 423
Women's Affairs 424
Food Security Program 425
National Parks, Nech Sara, Mago, Omo 426
Ethiopian Air Ports Administration Enterprise 430
Regional Subsidy 431
Tigray Region 432
Afar Region 433
Amhara Region 434
Oromiya Region 435
Somali Region 436
Benshangul - Gumuz Region 437
Southern Nations, Nationalities and People's Region 438
Gambella People's Region 439
Harari people's Region 441
Addis Ababa City Administration 442
Dira Dawa Administration Council 450
Public Debts 451
Internal Debt 452
External Debt 460
Provisions 461
Provision for past Commitments 462
Provision for Salary & Operation Expenditure 463
Provision for Bank Charges 464
Insurance for Government Vehicles 470
Miscellaneous 471
Duty Draw Back 472
Compensation Payment 473
Withholding Tax
(Source: MOFED and DSA Project, December 2002, May 2007)
Appendix 2 - FGE Chart of account
Items of Domestic Revenue

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Code Area/Sub-Area/Item of Domestic Revenue

1000-1399 I. TAX REVENUE
1100-1199 Tax on income, profit and capital gain
1101 Wages and salaries
1102 Rental income
1103 Profits to individuals
1104 Profits to corporations
1105 Dividend and chance winnings
1106 Capital gains
1107 Agricultural income
1108 Royalties
1109 Withholding tax on imports
1111 Interest income tax
1200-19 Excise taxes on locally manufactured goods
1201 Petroleum and its products
1202 Sugar
1203 Salt
1204 Soft drinks
1205 Mineral water
1206 Alcohol and alcoholic products
1207 Beer
1208 Tobacco and tobacco products
1209 Textiles
1211 Leather
1212 Plastic goods
1219 Other goods
1220-39 Sales tax on locally manufactured goods
1221 Petroleum and its products
1222 Sugar
1223 Salt
1224 Food
1225 Soft drinks
1226 Mineral water
1227 Alcohol and alcoholic products
1228 Beer
1229 Tobacco & tobacco products
1231 Cotton, yarns and fabrics, textiles and clothing
1232 Leather and leather products
1233 Chemical and chemical products
1234 Iron and steel
1236 Non metallic mineral products
1239 Other goods
1240-69 Service sales tax
1241 Telecommunication

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1242 Garage
1243 Laundry
1244 Tailoring
1245 Legal
1246 Photography and Photocopying
1247 Auditing
1248 Works contract
1249 Lodging
1251 Consultancy
1252 Commission Agent
1253 Entertainment
1254 Barbers & Beauty Salon
1255 Tourism
1256 Rent of Goods
1257 Advertisement
1258 Pesticide service
1259 Financial
1269 Other services
1270-79 Stamp sales and duty
1271 Sale of stamps
1272 Stamp duty
1300-29 Customs duty on imported goods
1301 Motor vehicles and accessories
1302 Machinery’s, capital goods and accessories
1303 Building materials and metals
1304 Electrical equipment and appliances
1305 Household, office goods and appliances
1306 Films, film recorders & reproducers & musical instruments
1307 Stationery, calculating machines and appliances
1308 Personal goods and appliances
1309 Pharmaceutical equipment, drugs and supplies
1311 Cotton, yarns and fabrics, textiles and clothing
1312 Tobacco and tobacco products
1313 Alcohol and alcoholic beverages
1314 Wood and wood products
1315 Food
1329 Other goods
1330-49 Excise tax on imported goods
1331 Petroleum
1332 Automobiles
1333 Textiles
1334 Tobacco and tobacco products
1335 Alcohol and alcoholic beverages
1336 Plastic products

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1339 Other goods

1350-79 Sales tax on imported goods
1351 Motor vehicles and accessories
1352 Petroleum products & lubricants
1353 Machinery, capital goods and accessories
1354 Building materials and metals
1355 Electrical equipment and appliances
1356 Household, office goods and appliances
1357 Films, film recorders & reproducers & musical instruments
1358 Stationery, calculating machines and appliances
1359 Personal goods and appliances
1361 Pharmaceutical equipment, drugs and chemicals
1362 Cotton, yarns and fabrics, textiles and clothing
1363 Tobacco and tobacco products
1364 Alcohol and alcoholic beverages
1365 Wood and wood products
1366 Food
1379 Other goods
1380-89 Export duties
1381 Coffee
1400-99 II. NON-TAX REVENUE
1410-29 Administrative fees and charges
1411 Passports and visas
1412 Registration of foreigners
1413 Work permits
1414 Court fines
1415 Court fees
1416 Forfeits
1417 Business and professional registration and license fees
1418 Warehouse fees
1419 Television license fees
1421 Coffee inspection and other fees
1422 Standards charges
1429 Other fees and charges
1430-59 Sales of public goods and services
1431 Sales of government newspapers, magazines, and publications
1432 Media
1433 Advertising revenue
1434 Veterinary services
1435 Health Services
1436 Sales of medicines and medical supplies
1437 Medical examinations and treatments
1438 Handicrafts
1439 Printed forms

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1441 Prisons administration revenue

1442 Research and development services
1443 Vocational and educational institutions
1444 Entertainment
1445 Engineering industry
1446 Cultural services
1447 Meteorological services
1448 Mapping services
1449 Civil aviation services
1451 Road transport services
1452 Science and technology services
1453 National examination service fees
1454 Postal services
1455 Farm products
1456 Forest products
1459 Other goods and services
1460-79 Government investment income
1461 Residual surplus
1462 Dividend income from government assets
1463 National lottery surplus
1464 Interest on loan to government agencies
1465 Interest on loan to government employees
1466 Interest on government bank accounts
1467 Capital charges
1468 Rural land use fee
1469 Urban land lease
1480-89 Extraordinary and miscellaneous revenue
1481 Proceeds from sugar auction sales
1482 Pre-shipment inspection fees
1485 Other miscellaneous revenue
1500-99 III. CAPITAL REVENUE
1501 Sales of movable and immovable properties
1502 Sales of stock
1503 Royalty on public assets
1504 Privatization proceeds
1505 Collection of principal from on-lending
1506 Capital transfers from non-government sources
External Assistance
Codes Categories of Assistance
2000-2099 DONOR CODES UNRELATED TO PROJECTS
2001 African Development Bank
2002 African Development Fund
2005 Christian Blindness Mission
2008 European Union

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2009 Food and Agriculture Organization

2010 Global Environment Facility
2011 International Atomic Energy Agency
2014 International Development Association
2018 International Monetary Fund
2025 United Nations Children’s Fund
2026 United Nations Conservation & Development Fund
2027 United Nations Development Program
2029 United Nations Fund for Population Activity
2030 United Nations Industrial Development Organization
2032 World Bank
2033 World Food Program
2034 World Health Organization
2036 UNCA & GLRA
2053 Austria
2057 Canada
2058 China, People’s Republic
2061 Finland (DIDC)
2062 France (Government & CRD)
2063 Germany (GTZ)
2064 Germany (KFW)
2067 Ireland
2069 Italy
2070 Japan (JICA)
2078 Sweden (SIDA)
2081 The Netherlands (SNV)
2082 The Netherlands Government (KNCB)
2084 United States (USAID)
2091 EU Grant
2092 Bilateral Grant
2100-2999 SOURCE OF FINANCING (PROJECT/DONOR)
2100-2199 Administrative and General Projects
2200-2599 Economic Projects
2600-2799 Social Projects
2800-2849 Other Projects
2850-2899 Counterpart Funds
2900-2949 Stable Grant
2950-2999 Others
External Loan
Codes Categories of Loan
3000-3099 LENDER CODES UNRELATED TO PROJECTS
3001 African Development Bank
3002 African Development Fund
3003 Arab Bank for Economic Development

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3007 European Investment Bank

3014 International Development Association
3016 International Fund for Agricultural Development
3021 Nordic Development Fund
3071 Kuwait Fund (KREAD)
3091 Fertilizer Loan
3092 Balance of Payment Support (IDA)
3100-3999 SOURCE OF FINANCING (PROJECT/DONOR)
3100-3199 Administrative and General Projects
3200-3599 Economic Projects
3600-3799 Social Projects
3800-3849 Other Projects
3850-3899 Counterpart Loans
3900-3999 Other
4000-
TRANSFERS 4099
Cash Transfers 4000-
4049
Recurrent salary and allowances 4001
Recurrent operating expenditure 4002
Capital salary and allowances 4003
Capital expenditure 4004
Staff Advances 4005
SSDP funds 4006
Grace period payables 4007
Between BI and/or region 4008
Other cash transfers 4009
Non-Cash Transfers 4050-
4099
Recurrent salary and allowances: non-cash 4051
Recurrent operating expenditure: non-cash 4052
Capital salary and allowances: non-cash 4053
Capital expenditure: non-cash 4054
Other non-cash transfers 4055
Items of Expenditure
Code Area/Sub-area/Item of Expenditure
6100 PERSONNEL SERVICES
6110 Emoluments
6111 Salaries to permanent staff

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6112 Salaries to military staff

6113 Wages to contract staff
6114 Wages to casual staff
6115 Wages to external contract staff
6116 Miscellaneous payments to staff
6120 Allowances/benefits
6121 Allowances to permanent staff
6122 Allowances to military staff
6123 Allowances to contract staff
6124 Allowances to external contract staff
6130 Pension contributions
6131 Government contribution to permanent staff pensions
6132 Government contribution to military staff pensions
6200 GOODS AND SERVICES
6210-20 Goods and supplies
6211 Uniforms, clothing, bedding
6212 Office supplies
6213 Printing
6214 Medical supplies
6215 Educational supplies
6216 Food
6217 Fuel and lubricants
6218 Other material and supplies
6219 Miscellaneous equipment
6221 Agriculture, forestry and marine inputs
6222 Veterinary supplies and drugs
6223 Research and development supplies
6224 Ammunition and ordinance
6230 Traveling and official entertainment services
6231 Per Diem
6232 Transport fees
6233 Official entertainment
6240 Maintenance and repair services
6241 Maintenance and repair of vehicles and other transport
6242 Maintenance and repair of aircraft and boats
6243 Maintenance and repair of plant, machinery, and equipment
6244 Maintenance and repair of buildings, furnishings and fixtures
6245 Maintenance and repair of infrastructure
6246 Maintenance and repair of military equipment
6250 Contracted services
6251 Contracted professional services
6252 Rent
6253 Advertising
6254 Insurance

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6255 Freight
6256 Fees and charges
6257 Electricity charges
6258 Telecommunication charges
6259 Water and other utilities
6270 Training services
6271 Local training
6272 External training
6280 Stocks of emergency and strategic goods
6281 Stocks of food
6282 Stocks of fuel
6283 Other stocks
6300 FIXED ASSETS AND CONSTRUCTION
6310 Fixed assets
6311 Purchase of vehicles and other vehicular transport
6312 Purchase of aircraft, boats, etc.
6313 Purchase of plant, machinery and equipment
6314 Purchase of buildings, furnishings and fixtures
6315 Purchase of livestock and transport animals
6316 Purchase of military equipment
6320 Construction
6321 Pre-construction activities
6322 Construction of buildings-residential
6323 Construction of building-non-residential
6324 Construction of infrastructure
6325 Construction for military purposes
6400 OTHER PAYMENTS
6410 Subsidies, investment and payments
6411 Subsidies to Regions and Administrative Councils
6412 Grants, contributions & subsidies to institutions & enterprises
6413 Government investment
6414 Contributions to international organizations
6415 Contingency
6416 Compensation to individuals and institutions
6417 Grants and gratuities to individuals
6418 Contributions to sinking funds
6419 Miscellaneous payments
6430 Debt payments
6431 Payments on the principal of external public debt
6432 Payments of interest and bank charges on external public debt
6433 Payments on the principal of domestic public debt
6434 Payments of interest and bank charges on domestic public debt
6440 Pension payments
6441 Government pension payment to permanent staff

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6442 Government pension payment to military staff

Account codes by account category

ASSETS 4100-
4199
Cash and Cash 4100-4199
Equivalents
Cash on hand 4101
Cash at bank in foreign 4102
currency
Cash at bank 4103
Letter of Credit 4104
restricted account
Cash at bank in central 4105
treasury
General budget support 4106
from loan
General budget support 4107
from assistance
Commodity credit grant 4108
Grant deposit account 4109
SSDP loan 4110
SSDP assistance 4112
Sinking fund 4113
Receivables 4200-4299
Suspense 4201
Cash shortage 4202
Advances 4203-4249
Advance for SSDP 4204
Advance for staff from next year's budget 4205

Advance for recurrent 4206

expenditures from next
year's budget
Advance for capital 4207
expenditures from next
year's budget
Advance to regions 4208

Other advances to BI 4209

Other advances within 4210

government

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Prepayments 4250-4269
Advance to contractors 4251
Advance to consultant 4252
Advance to supplier 4253
Other advances outside 4254
government
Other Receivables 4270-4299
Peasant associations 4271
Cooperatives 4272
Individuals and private organizations 4273

Other 4274

Goods in Transit 4300-4399

Organs of state 4301
Justice and public order 4302
National Defense 4303
General services 4304
Agricultural and natural 4305
resources
Water resources 4306
Industry and trade 4307
Mining and energy 4308
Transportation and 4309
communication
Construction 4310
Education and training 4311
Culture and sport 4312
Health 4313
Labor and social affairs 4314
Relief and rehabilitation 4315
Others 4316
Stocks 4400-4499
Uniforms, clothing, 4401
bedding
Office supplies 4402

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Lecturer Note: Overview of Ethiopian Government Accounting

Printed materials 4403

Medical supplies 4404
Educational supplies 4405
Food 4406
Fuel and lubricants 4407
Miscellaneous 4408
equipment
Agriculture, forestry and 4409
marine inputs
Veterinary supplies and 4410
drugs
Research and 4411
development supplies
Ammunition and 4412
ordinance
Building and 4413
construction materials
Spare parts 4414
Factory raw materials 4415
Factory work-in- 4416
progress
Factory finished goods 4417
Other materials and 4418
supplies
Fixed Assets 4500-4599
Construction in 4500-4519
Progress
Construction of 4501
buildings – residential
Construction of 4502
buildings – non-
residential
Construction of 4503
infrastructure
Construction for military 4504
purpose
Property and 4520-4599
Equipment
Vehicles and other 4521
vehicular transport
Aircraft, boats, etc. 4522
Plant machinery and 4523
equipment
Military equipment 4524

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Lecturer Note: Overview of Ethiopian Government Accounting

Buildings – residential 4525

Buildings – non- 4526
residential
Infrastructure 4527
Military purpose 4528
buildings
Furnishings and fixtures 4529
Livestock and transport 4530
animals

Long Term Loans 4700-4799

Long Term Loans to 4700-4719
Public Enterprises
Food sector 4701
Beverage 4702
Textile leather 4703
Trade and industry 4704
Chemical 4705
Printing 4706
Trade 4707
Metal 4708
Agriculture 4709
Financial institutions 4710
Hotel and tourism 4711
Transport and 4712
communication
Construction 4713
Mining and energy 4714
Others 4715
Investments 4800-4899
Public Enterprises 4800-4819
Food sector 4801
Beverage 4802
Textile leather 4803
Chemical 4804
Printing 4805

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Beta logo college college of business and technology 2020
Lecturer Note: Overview of Ethiopian Government Accounting

Trade 4806
Metal 4807
Agriculture 4808
Financial institutions 4809
Hotel and tourism 4810
Transport and 4811
communication
Construction 4812
Mining and energy 4813
Others 4814
Private 4820-4899
Organizations
MOENCO 4821
5000-5499
LIABILITIES
Payables 5000-5099
Accounts Payable 5000-5019
Grace period payables 5001
Sundry creditors 5002
Pension contribution 5003
payable
Salary payable 5004
Payables within 5020-5039
Government
Due to staff 5021
Due to MOFED for SSDP 5022
Due to MOFED for staff 5023
from next year's budget
Due to MOFED for 5024
recurrent expenditures
from next year's budget
Due to MOFED for 5025
capital expenditures
from next year's budget
Due to regions 5026
Other payables to 5027
MOFED
Other payables within 5028
government
Government 5040-5049
Payables

38 Beta logo college

Beta logo college college of business and technology 2020
Lecturer Note: Overview of Ethiopian Government Accounting

Direct advance 5041

28 day treasury bill 5042
91 day treasury bill 5043
182 day treasury bill 5044
Deposits 5050-5059
Custom deposits 5051
Court deposits 5052
Hospital deposits 5053
Other deposits 5054
Retentions 5060-5069
Retention on contract 5061
Long-Term Debt 5100-5399
Local Loans 5100-5149
Bonds 5101
Special bonds 5102
Foreign Loans 5150-5399
Special Purpose 5150-5179
Commodity credit 5151
Credit fund 5152
Private 5180-5199
Commercial loan 5181
Multilateral 5200-5299
ADB 5201
ADF 5202
BADEA 5203
EDF 5204
EIB 5205
EU 5206
FAO 5207
GEF 5208
IAEA 5209
CIMMYT 5210

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Beta logo college college of business and technology 2020
Lecturer Note: Overview of Ethiopian Government Accounting

ICAO 5211
IDA 5212
IDRC 5213
IFAD 5214
ILO 5215
IUCN 5216
KFAED 5217
NTF 5218
NDF 5219
OPEC 5220
TAF 5221
UNCDF 5222
UNICEF 5223
UNDP 5224
UNESCO 5225
UNFPA 5226
UNIDO 5227
UNSO 5228
WFP 5229
World Bank 5230
WHO 5231
WWF 5232
Bilateral 5300-5399
Algeria 5301
Australia 5302
Austria 5303
Belgium 5304
Bulgaria 5305
Canada 5306
China, People’s 5307
Republic of
Czechoslovakia 5308
Finland 5309

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Beta logo college college of business and technology 2020
Lecturer Note: Overview of Ethiopian Government Accounting

France 5310
Germany 5311
Hungary 5312
Israel 5313
Italy 5314
Japan 5315
Korea, Democratic 5316
Republic of
Libya 5317
Netherlands 5318
Norway 5319
Poland 5320
Spain 5321
Sweden 5322
Switzerland 5323
United Kingdom 5324
United States 5325
Yugoslavia 5326
LETTERS OF CREDIT 5500-5599
Organs of state 5501
Justice and public order 5502
National defense 5503
General services 5504
Agriculture and natural 5505
resources
Water resources 5506
Industry and trade 5507
Mining and energy 5508
Transport and 5509
communication
Construction 5510
Education and training 5511
Culture and sport 5512
Health 5513

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Beta logo college college of business and technology 2020
Lecturer Note: Overview of Ethiopian Government Accounting

Labor and social affairs 5514

Relief and rehabilitation 5515
Others 5516
5600-5699
NET ASSETS/EQUITY
Net Assets/Equity 5601
Reserves 5610-5699
Sinking Fund 5611
Capital of Public 5612
Enterprises
Capital in Private 5613
Organizations
Pension Fund 5614
Road Fund 5615
Fuel Stabilization Fund 5616

NEW ACCOUNT
Description Account
Code
1. Interbanktransfer ………………………………..………..
……………………….4010
2. Transfer b/n Finance Beuro and Woreda Finance /District Finance /
office………………………………………………….….………………………....
4011
3. Deposit interest account code………………………………….……..………..
4114
4. Purchase Advance………………………………………..………………………
4211
5. Other Payroll deduction (like court order, idir, mortgage, family
Allotment etc.)………………………………………………….…………………..
…………. 5005
6. Withholding Tax payable account code………………………..………………
5006
7. Family pay (The code is used to record a payable to individuals from
military)…………………………………………………..…….
…………………..5029
8. Repatriation (The code is used to record a payable to individuals from
the repatriation fund)……………………..
………………………………………… 5030
9. Internally Displaced persons (The code is used to record a payable to
individuals from the internally displaced persons fund………………….

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Lecturer Note: Overview of Ethiopian Government Accounting

….5031
10.Demobilization (The code is used to record a payable to Individual
from the Demobilization fund…………………………………..
…………………….…… 5032
11.War veterans (The code is used to record a payable to individuals
from the war veterans fund)……………………………….
…………………………...………..5033
12. Due to MOFED revolving fund (fund given for long term Employee
loans, for hospital and other revolving fund)
…………………………………...……… 5035
13.Bid bond deposit …………………………………….………….………………..
5055
14. Counterpart fund deposit from grant. (This type grant indicate
Ownership by MOFED ie., the bank account jointly signed by MOFED
and donor's)…… 5057
15. Value added tax Retention payable……………………………………………
5058

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