Regulation No. 190/2010 Financial Administration Council of Ministers Regulation | GOALGOOLE | Because you need Information for your goals !
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Regulation No. 190/2010 Financial Administration Council of Ministers Regulation

COUNCIL OF MINISTERS REGULATION No. 190/2010
COUNCIL OF MINISTERS REGULATION TO
PROVIDE FOR THE FINANCIAL
ADMINISTRATION OF THE FEDERAL
GOVERNMENT

This Regulation is issued by the Council of Ministers pursuant to Article 5 of the Definition of Powers and Duties of the Executive Organs of the Federal Democratic Republic of Ethiopia Proclamation No. 471/2005 /as amended/ and Article 75 of the Federal Government of Ethiopia Financial Administration Proclamation No. 648/2009.

PART ONE
GENERAL

1.    Short Title
This Regulation may be cited as the “Financial Administration Council of Ministers Regulation No. 190/2010”
2.    Definitions
In this Regulation unless the context requires otherwise:
1/ “Advance” means a payment for which there is no exchange of value and that is to be accounted for by the recipient at some later date and does not include a progress payment made on account of, but before the completion of a contract;
2/ “Capital Expenditure” means;
a)    the acquisition, reclamation, enhancement or laying out of land exclusive of roads, buildings or other structures;
b)    the acquisition, construction, preparation, enhancement or replacement of roads, buildings and other structures;
c)    the acquisition, installation or replacement of movable or immovable plant, machinery and apparatus, vehicles and vessels, aircrafts and other similar goods;
d)    the making of advances, grants or other financial assistance to any person towards expenditure incurred or to be incurred by him/her on the matters mentioned from paragraphs (a) to (c) of this sub-article or in the acquisition of investments;
e)    the acquisition of share capital or loan capital in any body corporate;
f)    costs incurred for study and research;
g)    capacity building training costs; or
h)    any associated consultancy costs of the above;
3/ “Debt Assignment” means the transfer of the responsibility for a debt from one person, organization or country to another. It may refer to a transfer from one debtor to another or one creditor to another;
4/ “Fees and Charges” means a payment made by users to public bodies for the supply of goods, rendering of services and use of facilities; and does not include fines and penalties;
5/ “Macro-Economic and Fiscal Framework” means annually adjustable projection of public revenue and expenditure of three years based on macro-economic assumptions, which provides the basis of budget ceiling to be fixed in order to facilitate the management of public resource within the framework of mid- term plan and make sure that annual appropriation is geared towards ensuring macro-economic stability and includes:
(a)    tax revenue forecasts at existing rate of taxation,
(b)    forecast of non-tax revenues (surplus of public enterprises, fees, user charges, etc.) based on revenue projections applicable in a setting where there is no change in policy,
(c)    estimation of additional tax revenues which may be mobilized by higher tax rates, a different tax structure, or institutional and administrative reforms in tax collection.
(d)    estimation for additional income resulting from changes in the policy framework for public enterprises, public sector pricing policy charges in the social sectors,
(e)    estimates of resources available from domestic and external borrowing and grants,
(f)    projections of recurrent and capital expenditure,
(g)    estimate of expenditure of budgetary subsidy made available to regional states, and
(h)    projection of budget deficit and deficit financing of the Federal Government.
6/ “Negotiable Security” means a financial instrument which is transferable from one person to another by being delivered with or without endorsement so that the title passes to the transferee;
7/ “Security Deposit” mean:
(a)    a bill of exchange:
i)    that is payable to the Ministry,
ii)    that is certified by an approved financial institution or drawn by an approved financial institution on itself:
(b)      a government guaranteed bond; or
(c)    such other security as may be deemed appropriate by the public body and approved by the Ministry;
8/ “Proclamation” means the Federal Government of Ethiopia Financial Administration Proclamation No. 648/2009;
9/ “Record” means any information in hard or soft copy;
10/ other terms used in this Regulation shall have the respective meaning ascribed to them in the Proclamation.

PART TWO
BUDGET

3.    Principle
1/ Budget of the government shall have to be founded on plan.
2/ Budget of the government shall be prepared in accordance with macro-economic and fiscal framework.
3/ Mid-term development plan shall be prepared by the heads of responsible public bodies.
4/ Budget estimates of expenditures and revenues shall be prepared for the upcoming fiscal year.
5/ No capital expenditure shall exceed the ceiling set in respect of each sector by the macro- economic and fiscal framework.
6/ The priorities established in the macro-economic and fiscal framework shall determine the priorities to be given for sectors in the capital budget.
7/ Where a public body is permitted to retain and expend its revenues, such revenues shall be included in both its revenue and expenditure appropriation totals; however, no netting is permitted.
4.    Preparation and Submission of Budget
1/ Budget estimates shall be prepared in accordance with the financial limits and formats prescribed by the Ministry in the annual budget call letters on the basis of the macro-economic and fiscal framework to be approved by the Council of Ministers.
2/ Budget estimates of recurrent expenditures shall include a report of preliminary results of the first half of the current year and previous year performance.
3/ Budget estimates of recurrent and capital expenditure shall be signed by heads of public bodies.
4/ Budget estimates of tax revenue shall be prepared by the Ministry.
5/ Budget estimates of revenue from non tax sources shall be prepared by the head of the responsible public body and submitted to the Ministry.
6/ Budget estimates of capital and recurrent expenditure of public bodies shall be presented to the Ministry for evaluation, any necessary revisions and consolidation.
7/ Budget estimates shall include estimates of foreign loan as well as all aids in cash and in kind that a public body expects to receive in the upcoming fiscal year including full details of the nature of the aid-in-kind and its estimated monetary value.
5.    Approval of Budget Estimates
1/ Upon completion of evaluations and any necessary revisions and discussions with the heads of public bodies, the Minister shall present the compiled budget estimations of recurrent and capital expenditures to the Council of Ministers for review and recommendation.
2/ The budget estimates recommended by the Council of Ministers shall be submitted to the House of Peoples’ Representatives.
3/ The Ministry shall notify the heads of public bodies the budget approved by the House of peoples’ Representatives.
6.    Budget Calendar
The Minister shall issue a directive setting the budget calendar.
7.    Discretion
If a public body fails to submit its budget estimates in accordance with Article 6 of this Regulation on schedule of the budget calendar set by the Minister, the Minister shall use its discretion to decide what shall be included in the budget estimates.
8.    Budget Transfer
1/ The Minister may grant transfer from recurrent to capital appropriations when necessitated by an approved reorganization of public body, or where it can be demonstrated that it is clearly beneficial to the achievement of government objectives.
2/ Transfer from other recurrent expenditures to salaries, wages and allowances shall be subject to the approval of the Minister.
3/ The Minister shall introduce a budget implementation monitoring mechanism in order to enable it effect transfer to another public body budget appropriated to a certain public body which fails to use the budget. The Minister shall issue a directive establishing the procedure by which such transfer may be effected.
4/ The Minister may in whole or in part delegate to heads of public bodies the budget transfer power vested in it by Article 24 of the Proclamation. The mode of implementation of this delegation shall be prescribed by a directive.
9.    Budgetary Control
1/ Subject to directives of the Minister, the heads of public bodies shall maintain a register of appropriations, authorized transfers and allotments for each budgetary head and sub-head and for each capital project.
2/ Subject to directives of the Minister, the heads of public bodies shall provide information to enable the government to maintain necessary central controls over budgetary funds.
10.    Supplementary Appropriation
1/ When the need for supplementary appropriation arises, proposals for such appropriation shall be submitted to the Minister in accordance with the directives to be issued by the Minister.
2/ The Minister shall cause supplementary budget to be approved and become effective in accordance with the budget approval and notification procedure established by the Proclamation.
11.    Procedure of Budget Transfer
Any public body requesting budget transfer or effecting such transfer in accordance with the power delegated to it shall complete the necessary number of copies of the budget request and authorization form in accordance with the directive to be issued by the Minister.

PART THREE
PUBLIC DISBURSEMENTS

12.    Disbursement and Payment
Disbursements or payments may be made only if they are appropriated.
13.    Payment Vouchers
No payment shall be made unless it is adequately vouched; and public bodies shall complete payment vouchers for all payments in accordance with the directives to be issued by the minister.
14.    Lists of Authorized Persons
1/ The head of every public body shall establish and maintain a list of employees whom he or she has authorized to sign the documents referred to in this Regulation.
2/ Such lists shall be circulated to the finance head and the head of internal audit of the public body.
15.    Cash Management
1/ Cash management shall be handled in such a manner as to enable the maintaining of accounts at minimum balance based on the cash requirement of public bodies to execute the expenditure budget appropriated to their work programs and the cash flow of the treasury.
2/ For the purpose of sub article (1) of this Article, public bodies shall be required to apply a cash management approach based on zero balance accounting.
3/ Heads of public bodies shall have to submit to the Minister plan of the quarterly cash requirements of the respective public body for which they are responsible, by breaking it down into parts representing their monthly requirements.
4/ In the event of failure by public bodies to submit their cash requirements in accordance with sub article (3) of this Article and the directives to be issued by the Minister, the Minister shall fix the amount on the basis of information available to it.
5/ A cash requirement plan shall indicate the amount of monthly expenditure and when the cash is needed.
6/ Without prejudice to the provision of sub article (5) of this Article, public bodies collecting revenue shall be required to submit to the Minister their be required to submit to the Minister their plan and performance report of revenue collection of each upcoming and outgoing month.
16.    Disbursement and Payment of Public Money
1/ Disbursement or payment of public money shall be effected by depositing the money into the bank account of the public body or creditor to whom the money is transferred.
2/ Notwithstanding the provision of sub article (1) of this Article, the conditions in which payment may be effected by check, letter of credit or in cash shall be prescribed by a directive to be issued by the Minister.
3/ Disbursement shall be effected in accordance with the financial limits to be established by the Ministry on the basis of cash requirement plans submitted by public bodies.
17.    Safety of Money in the Custody of Cashiers
The Minister shall use an insurance scheme to hedge against risk of loss, under any circumstance, of government money in the custody of cashiers.

PART FOUR
FEES AND CHARGES

18.    Principles
All public bodies shall consider the following principles in establishing and maintaining fees and charges:
1/ the promotion of fairness to tax payers by shifting the cost of a particular activity from taxpayers at large to the specific users who benefit most directly from that activity; and/or
2/ the promotion of a more efficient allocation of resources by introducing a market oriented discipline on the demand for the supply of goods and services.
19.    Survey of Activities
Subject to the Proclamation which established them, all public bodies shall conduct survey of all their activities in order to determine those for which they may justifiably subject their clients or users to a fee or charge.
20.    Criteria for Determining Level of Fees and Charges
In determining the level of fees and charges, all public bodies shall take into consideration the following criteria:
1/ the cost of the activity in question;
2/ an initial assessment of the revenue potential of the fee and its ramifications on this activity and other activities of the government;
3/ the willingness and ability of users to pay in the light of the quality and value of the goods or services; and
4/ the apparent level of user satisfaction on the quality and value of the goods or services.
21.    Approval
1/ Heads of public bodies shall be required to submit for approval to the Council of Ministers, proposals on new fees or charges or on variations to existing fees or charges through the Minister.
2/ Notwithstanding the provision of sub article (1) of this Article, the Minister shall have the power to approve proposals of fees or charges of goods and services, if such goods and services are of a kind that a public body does not supply or render to the public on regular basis or the unit price of which does not exceed fifty (50) Birr.
22.    Publication
All public bodies shall publish the details of all new approved fees or charges and any approved changes to existing fees and charges together with their effective dates.
23.    Review
All public bodies shall review the adequacy of their fees or charges at intervals stated in directives issued by the Minister.

PART FIVE
COLLECTION AND DEPOSIT OF PUBLIC
MONEY

24.    Collection of Public Money
The head of every public body shall ensure that there is an adequate and effective internal control system for the collection functions within the public body so that all public money, which the public body is legally obliged to collect, is collected efficiently.
25.    Receipt of Public Money
1)    or every sum of money collected on behalf of the Federal Government of Ethiopia, a serially numbered, official receipt of the Ministry or of entities authorized by the Minister shall be issued.
2)    For every remittance received, including cash transfers from the Ministry or other public bodies, whether they are in the form of cash, cheque or bank transfer, an official receipt shall be issued to the remitter by the receiver.
3)    Notwithstanding the provisions of sub-article (1) and (2) of this Article it shall be sufficient to produce bank deposit slip in respect of money deposited in the bank accounts of the Government.
26.    Money Kept in Trust or as Security
1/ Public bodies may receive, keep and administer any sum of money on behalf of organizations or individuals or as per a requirement under a procurement contract to submit a performance bond.
2/ Public bodies shall enter receipts of money to be kept in trust or as security separately under a kept in trust or as security separately under a code of account different from that of receipts of money belonging to the Federal Government.
27.    Collection in Cheques
Cheques drawn on a bank within Ethiopia may be accepted in payment, subject to directives issued by the Ministry provided they are not post-dated and are made payable to the public body to which they are tendered. If they are accepted, such cheques shall be immediately endorsed restrictively as follows: “For Deposit Only to the Consolidated Fund (name of receiving body).”
28.    Collection of Income from Public Property
1/ Public bodies may collect income from public property in accordance with the directive of the Minister.
2/ Unless a public body generating income from public property is authorized to use its income directly, any income derived by that public body from the use or sell of public property shall be deposited into the consolidated fund.
29.    Deposit
1/ Every person who collects or receives public money from a collector or from any other person shall deposit it daily or in accordance with the exceptions contained in the directives to be issued by the Minister.
2/ All such money forms part of the revenue budget and shall be deposited either in the bank account of the public body which collects it or in the bank account of the Ministry with the National Bank of Ethiopia or with banks delegated by the National Bank.
3/ Cheques not made payable to the consolidated fund of the Federal Government of Ethiopia or to the public body to which they are tendered, bills of exchange and promissory notes are not acceptable for deposit.
30.    Recording
1/ All recording of receipts under Article 24 and 25 of this Regulation shall be done in accordance with directives of the Minister.
2/ All receipts of public money, except for refunds of expenditure as provided under Article 39 of the Proclamation, shall be recorded as revenue.
31.    Directives
The Minister shall issue a directive prescribing the detailed procedures for the collection and deposit of public money.

PART SIX
ADVANCES

32.    Advances for Purchasers
1/ When necessary to make purchases, cash advances may be made to an employee of a public body which must be settled within seven working days after payment is received unless otherwise authorized by the head of the public body.
2/ The maximum amount of such advances shall be established by the head of the public body or by an officer authorized in writing by the head of the same public body. The criteria for determining the amount of such advances shall be determined in accordance with the directives to be issued by the Minister.
33.    Advances of Per Diem and Travel Allowances
1/ No per diem shall be paid for more than 3 consecutive months within a fiscal year. However, the Minister may authorize payment of per diem beyond the time limit stated where he is satisfied that the application for the extension of the time limit submitted by the head of a public body is justified.
2/ Advances of per diem and travel allowances shall be made in accordance with the directives to be issued by the Minister.
34.    Restriction in Advances
No advance of any kind may be issued to an employee of a public body unless and until all existing advances are accounted for or returned by the employee to whom they were issued.
35.    Recovery of Outstanding Advances
1/ Where any employee of a public body fails to repay or account for an advance or any portion of an advance made to him or her in accordance with this Regulation, the outstanding amount of the advance may be recovered from any sum of money payable to him or her by the government except for pension money.
2/ Where an advance or any portion of an advance made to any employee of a public body under this. Regulation remains outstanding or unaccounted for at the time of his death, the outstanding amount may be recovered from any some of money payable by the government to the heirs of the employee, except for pension money and money payable to the family of any employee of a public body in the event of death in accordance with the Civil Servants Proclamation.
3/ All public bodies shall review all advances outstanding at the end of every month as the basis for taking the necessary action to clear overdue advance.
4/ Every public body shall ensure that all of its employees who resign or retire clear advances before they receive their last payment of salary.
5/ In the month following the end of each fiscal year, each public body shall prepare a complete analysis of all outstanding advances. This analysis shall isolate all those outstanding advances which are considered to be irrecoverable and shall be supported by a brief indication of why this determination was made. A copy of this analysis shall be forwarded to the Ministry within two months of the end of each fiscal year.
36.    Records
Every public body shall maintain appropriate and complete records of all advances made by the public body.
37.    Reporting
Subject to directives issued by the Minister, public bodies shall report all advances outstanding at the end of every fiscal year in the public accounts for the fiscal year just ended.

PART SEVEN
WRITE-OFFS OF RECEIVABLES,
OBLIGATIONS
AND CLAIMS

38.    Power to Write-Off
1/ The head of a public body or the deputy head on behalf of the head shall have the power to write-off upon the recommendation of the relevant department of that public body, debt up to an amount of Birr ten thousand in each case provided that the total amount to be so written off in a fiscal year shall not exceed Birr fifty thousand.
2/ The Minister shall have the power to write off upon recommendation of the head of the Public Body and the relevant department of the Ministry, debt in the amount ranging from Birr ten thousand to Birr one million in each case provided that the total amount to be so written off in a fiscal year shall not exceed ten million Birr.
3/ Where a debt in respect of which write off is recommended exceeds Birr one million, the matter shall be referred to the Council of Ministers together with the recommendations of the head of the public body and the Minister and all other relevant information necessary to make a decision.
39.    Employees and Former Employees
1/ No receivables, obligations or claims resulting from the overpayment by the government of salaries or employment related allowances, or any part of them shall not be written off without prior approval of the Minister.
2/ Notwithstanding the provision of sub article (1) of this Article, the principle of write off  shall apply to receivables, obligations or claims owing to the government by its former employees that are discovered after their employment has ceased and all benefits payable to them have been paid.
40.    Duty to Report
1/ At the end of each month, every public body shall prepare a complete analysis of all receivables, obligations and claims and forward a copy of it to the Ministry. This analysis shall isolate all those receivables, obligations and claims which are considered to be uncollectible and shall be supported by a brief  statement of why this determination was made.
2/ Subject to Article 5 of the Proclamation, all public bodies shall report all receivables, obligations and claims which are outstanding at the end of every month to the Ministry and shall report all receivables, obligations and claims which are outstanding at the end of every fiscal year in the public account for the fiscal year just ended.
3/ In addition, all public bodies shall report all receivables, obligations and claims written off each month to the Ministry and shall report all receivables, obligations and claims written off each month to the Ministry and shall report all receivables, obligations and claims written off in the fiscal year just ended according to whether these write-offs pertained to receivables, obligations and claims of that year or of prior years.
41.    Directives
The write-off of a receivable, obligation or claim or part of a receivable, obligation or claim shall be done in accordance with directives to be issued by the Minister.

PART EIGHT
PUBLIC DEBT AND THE INVESTMENT OF
PUBLIC MONEY

42.    Debt Management Strategy
1/ Debt management strategies shall be developed by the Minister based on the overall objective of borrowing appropriate amounts at appropriate times and in a way that balance minimization of cost with cost stability and taking into consideration the level of debt and the ability to re-pay.
2/ Borrowing shall take into account non-interest costs, such as the different marketing costs which are incidental to borrowing. These include the various commissions, fees and other administrative costs of registrars and fiscal agents.
3/ Borrowing shall be managed in such a manner as to prevent any negative impacts on the general economy, such as creating instability in monetary policy or balance of payments.
4/ Short-term borrowing shall be based upon reliable current information on the governments balance in the banking system, exchange market activity, and budget estimates of fiscal inflows and outflows.
43.    Borrowing by the Government
The Minister shall, in accordance with the approved fiscal plan, submit for approval of the Council of Ministers semi annually proposals to meet the government’s financial requirements. These proposals shall contain information on how the money shall be raised such as by loans and/or by the issue or sale of securities.
44.    Regulatory Power of the Minister
The Minister shall have the power to regulate the manner in which public enterprises and financial agencies obtain foreign loans and the execution of such loans.
45.    Guarantee
1/ The Minister may issue guarantee for the performance of obligations with due consideration being given to the following conditions before issuing guarantee:
(a)    the reason why the guarantee is necessary and the benefits to be gained from it;
(b)    the probability and consequences of the guarantee being exercised.
2/ The Minister may issue a guarantee for the performance of an obligation to repay pursuant to sub article (1) of this Article, provided that the proceeds of the loan in respect of which guarantee is sought are used to finance the implementation of projects to which priority is given in the development plan of the government approved by the House of Peoples’ Representatives.
3/ The party benefiting from the guaranty shall have the obligation to reimburse any expense incurred by the Ministry to satisfy the guarantee.
46.    Investment
Money in the consolidated fund that is not immediately required for payments, shall only be invested in securities when the Minister is satisfied that it is truly surplus to requirements and cannot be put to better use in some other area of public debt management.
47.    Sinking Funds
1/ Sinking funds may be established for re payment of long term loans, for replacement of fixed assets or for any other purpose that the Council of Ministers may determine.
2/ Sinking funds shall normally only be established where it is considered economically sound by the Council of Ministers. Sinking funds for capital replacements shall only be reserved for the purpose intended.
3/ The creation of a sinking fund shall be supported, as a minimum, by a through business case, linked to the fiscal plan and the development plan of government, showing why it is beneficial to establish such a fund. This business case shall also show the investment options considered and the reason why the one chosen is best.
4/ The management of a sinking fund shall be supported by a system of records and periodic reports to the Council of Ministers on the progress of the sinking fund, any changes made since the previous report, and projections of its expected value by its planned date of maturity.
48.    Assignment of Debts
1/ No assignment of debts of the government of Ethiopia to a third party shall be made by a foreign lender without a formal agreement of the government of Ethiopia evidenced by the signature of the Minister. Before signing, the Minister must establish that the assignment is under the same or better terms and conditions for the government of Ethiopia than the original debt arrangement.
2/ No assignment of the domestic debts of third parties or the right to collect the domestic debts of third parties shall be made to the government without the approval of the Minister. Such assignment must have the signed acknowledgement of the assignment by the Minister. Before acknowledging the assignment, the Minister shall be provided with the properly authenticated legal documents.
49.    Government’s Banker and Fiscal Agent
1/ The Minister shall instruct the National Bank of Ethiopia on the government’s requirements arising from the fiscal plan and borrowing proclamation.
2/ The Minister shall monitor the performance of the National Bank of Ethiopia by requiring it to provide monthly reports on its activities as the government’s fiscal agent.
50.    Books and Records
The Minister shall cause to be maintained the system of books and records on its public debt management in accordance with Article 52 of the Proclamation. This system shall show or contain the following:
(a)    all money authorized by the Council of Minister to be borrowed;
(b)    a description of and record of all money so borrowed;
(c)    all principal interest and other charges paid in respect of all money borrowed;
(d)    a description of and record of all money invested;
(e)    all income earned from money invested, as well as amounts paid for the acquisition, administration and redemption of these investments;
(f)    a description and record of all guarantees authorizeds;
(g)    all payment out of the consolidated fund against such guarantees, including the reasons why such payments were necessary and;
(h)    a description and record of all loans granted to regional states.

PART NINE
FEDERAL/STATE FINANCIAL REALATIONS

51.    Financial Reporting Systems
1/ The financial reporting systems of state government shall correspond with that of the federal government.
2/ The financial reporting requirements of the Council of Ministers shall be observed by the federal and state governments.
3/ The Minister shall provide the necessary guidance and support to state governments to enable them establish and maintain financial reporting system that will facilitate federal/state financial relations.
4/ The state government shall provide quarterly, semi-annual and annual financial reports to the Minister in accordance with the requirements of the Council of Ministers and the format developed by the Minister. These reports shall show details of their receipts and disbursements by revenue and expenditure source codes and their cash balances and levels of outstanding debt.
5/ The Minister shall prepare consolidated quarterly, semi-annual and annual financial reports for state governments, in accordance with the details submitted by those governments as described in sub article (4) of this Article and submit the same to the Council of Ministers.
6/ The Minister shall maintain complete record on the financial transactions between the federal and state governments.
52.    Source of Finance and Loan to be Granted to State Governments
1/ The  source of finance of the state governments shall consist of the revenue they generate and the budgetary subsidy granted to them by the government.
2/ Where state governments experience budget shortfall in any fiscal year, the government may give them loan in the form of advance to be charged to their budgetary subsidy of the following year.
53.    Tax Harmonization
1/ Consultations between the federal and state governments shall take place on all new or changed taxes at both levels of governments to ensure that the tax bases are harmonized and standardized.
2/ The Minister shall provide, as required, research and administrative support to state governments to facilitate the harmonization and standardization of their tax bases with those of the federal government.
54.    Subsidy and Foreign Currency
1/ The federal government shall advice the state governments of their budget subsidy ceilings in time for them to prepare their budgets.
2/ State governments shall submit their foreign currency requirements to the Minister.
55.    Formats and Deadlines
The Minister shall issue a directive to establish the deadlines and procedure of submission by state governments of their revenue forecasts, borrowing and foreign currency requirements.
56.    Public Accounts
1/ The public accounts shall contain details of the financial transactions between federal and state governments and fiscal year and reports on the financial status of the federal and state governments on a consolidated and comparative basis.
2/ The Minister shall inter into a performance agreement with the state governments, requiring them to supply timely information on their financial operation in general, and on the use of the budgetary subsidy granted to them by the Government in particular.
57.    Audit
The Federal Auditor General, as part of its regular audit program, shall audit the federal government’s records of its financial transactions with state governments.

PART TEN
PUBLIC ACCOUNTS

58.    Submission of Public Account
Pursuant to Article 63 sub article (3) of the Proclamation, public bodies which are not directly accountable to the Council of Ministers shall submit their financial report along with their activity report to the House of Peoples’ Representatives through the Ministries to which they are accountable.
59.    Closure of Public Accounts
Public bodies shall close and submit their account to the Auditor General within three months from the end of the fiscal year.

PART ELEVEN
INTERNAL AUDITS

60.    Power of Internal Audits
Internal audits of public bodies shall have unlimited power of audit over the whole range of a finance, property and activity of their public body.
61.    Duties and Responsibilities of Internal Audit
Internal audits of public bodies shall:
1/ carry out financial audit including accounts of grants, loans and internal revenue, and performance audit of their respective public bodies;
2/ submit for approval to the head of the public body, their work plan of audit of the following year and communicate the same to the Minister;
3/ report to the head of the public body, the result of audit they carried out, notify the same to the Minister by a copy of the report, follow up the implementation of measures prescribed by the Minister on the basis of their recommendation in the audit report and communicate the result to the Minister and the head of the public body.

PART TWELVE
LOSSES OF PUBLIC MONEY AND PUBLIC
PROPERTY

62.    Investigation
1/ All losses of public money and public property, however they are reported, require complete investigation with full cooperation of all the employees of the public body.
2/ With the exception of certain minor employment related incidents which do not involve criminal activity, losses in which employees are suspect shall be reported to the Federal Ethics and Anti-Corruption Commission, if such losses constitute an offense of corruption.
3/ Without prejudice to sub article (2) of this Article, criminal acts which do not constitute offense of corruption shall be reported to the police immediately.
4/ Any preliminary examination undertaken by a public body shall be limited to ascertaining whether any allegation of an offence associated with a loss of public money or property is well founded.
63.    Reporting
1/ Every employee who discovers or suspects that a loss has occurred shall report it immediately to the head of his or her department. The latter is responsible for ensuring that all losses which are reported to him or her are promptly reported in writing to the head of administration department of the public body with copies of the report to its legal and internal audit departments. In addition, the head of the administration department shall forward a copy of this report to the head of the public body and the Minister.
2/ All public bodies must ensure that all their employees are aware of their responsibility to report all losses of which they have knowledge.
64.    Civil Action
1/ Action must be taken in accordance with directives to be issued by the Ministry of Justice to recover all losses of public money or property.
2/ When an employee is accountable for a loss of money or property, the loss must be recovered from that employee unless the Minister has specifically authorized the public body to waive recovery in accordance with Article 13 of the Proclamation.
65.    Disciplinary Action
1/ Disciplinary action shall be taken in accordance with the directive issued by the Federal Civil Service Commission or by a directive issued by the public body pursuant to the powers vested in it by enabling, legislation as appropriate, against the employee (s) involved in the loss where the head of a public body considers that the circumstances warrant such action.
2/ A disciplinary action that may be taken by a public body in accordance with sub- article (1) of this Article shall not bar any other measure that may be taken by the appropriate authorities.
66.    Reimbursement
Shortage of cash resulting from loss of money which calls for additional disbursement to reimburse shall be charged to the appropriation of the related activity after approval by the head of the public body or such other senior employee as may be designated in writing by him/her.
67.    Public Safes
1/ In the event of unauthorized absence, death or incapacity of a casher of a public body, the safe shall be sealed by the heads of finance and internal audit of the public body.
2/ The head of the public body shall immediately establish a committee in accordance with directives to be issued by the Minister to determine the contents of the safe and prepare a list of them.
3/ The committee shall conduct the inspection by opening the safe in the presence of witnesses and report its finding in accordance with directives issued by the Minister.
68.    Reporting of Losses
1/ All losses must be reported in the public accounts.
2/ The gross amount of a loss (estimated when necessary) exclusive of recoveries, is to be reported in the public account for the fiscal year in which the loss occurred or, when the loss is not discovered in time, in the first public accounts in which it is practicable to do so.
3/ Recoveries against losses are to be reported in the public accounts for the fiscal year in which the amount is recovered.

PART THERTEEN
MISCELLANEOUS PROVISIONS

69.    Time Limit of Retaining Records
1/ All public bodies shall retain all financial information and records for a length of time adequate to provide all required references to that information by the public body itself or external auditors.
2/ Notwithstanding sub-article (1) of this Article, all financial information and records shall be retained for a minimum of ten years.
70.    Type of Records to be Retained
Financial information and records to be retained in accordance with Article 69 of this Regulation shall include the following:
1/ submissions for approval to the Council of Ministers and/or the Minister;
2/ documents that inform of decisions being taken;
3/ correspondences that relate to financial matters;
4/ details of financial transactions and supporting documents;
5/ basic financial records such as cash books and records of receipts.
71.    Using Electronic Methods
To enhance the efficiency and effectiveness of the public finance administration system introduced by the Proclamation and this Regulation, the Minister shall promote the extensive use of electronic methods.
72.    Transitory Provisions
1/ The termination of long term loan made available to civil servants in accordance with Article 41 of the Council of Ministers Financial Administration Regulation No. 17/1997 shall be effective two fiscal years after the date of entry into force of this Regulation.
2/ Financial transactions beginning prior to the entry into force of this Regulation shall be completed in accordance with the Council of Ministers Financial Administration Regulation repealed by this Regulation.
73.    Methods and Length of Time of Retention
The Minister shall issue a directive to prescribe the method of retention of financial information and records and the length of time of retaining such information and records.
74.    Repealed Laws
The Council of Ministers Financial Administration Regulation No. 17/1997 is hereby repealed and replaced by this Regulation.
75.    Effective Date
This Regulation shall enter in to force up on the date of publication in the Federal Negarit Gazeta.
Done at Addis Ababa this 4th day of October 2010.

MELES ZENAWI
PRIME MINISTER OF THE FEDERAL
DEMOCRATIC REPUBLIC OF ETHIOPIA
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