Ethiopia Second UWSSP PIM Volume II FM, Oct 11

UWSSP II – FINANCIAL MANAGEMENT MANUAL
ETHIOPIA SECOND URBAN WATER SUPPLY

AND SANITATION PROJECT (UWSSP II)
Project Implementation manual (PIM)
Volume Two: Financial Management
Ministry of Water, Irrigation and Electricity

Addis Ababa
August 2017
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Table of Content
List of Acronym’s and Abbreviations .................................................................................... v
Glossary ............................................................................................................................ vii
1. OVERVIEW AND INTRODUCTION .................................................................................. 1
1.1. OVERVIEW ..................................................................................................................... 1
1.1.1. Second Urban Water Supply and Sanitation Project .......................................................................... 2
1.1.2. Project Components ........................................................................................................................... 2
1.1.3. Basic Implementation Principles ........................................................................................................ 5
1.2. INTRODUCTION .............................................................................................................. 6
2. INSTITUTIONAL ARRANGMENT..................................................................................... 8
2.1. PROGRAM MANAGEMENT AND IMPLEMENTATION ARRANGMENTS ............................... 8
1.1.4. PROGRAM MANAGMENT ................................................................................................................... 8
1.1.5. Program Implementation ................................................................................................................. 12
3. Financial Management .............................................................................................. 18

3.1. Introduction ..................................................................................................................18
3.2. Budgeting ......................................................................................................................20
3.2.1. Budget Preparation .......................................................................................................................... 20
3.2.2. Budget Control.................................................................................................................................. 22
3.2.3. Budget Revision ................................................................................................................................ 22
3.3. Accounting ....................................................................................................................23

3.3.1. Accounting Centers........................................................................................................................... 23
3.3.2. Methods of Accounting .................................................................................................................... 23
3.3.3. Transaction sources .......................................................................................................................... 24
3.3.4. Transactions, Source Documents and books .................................................................................... 25
3.3.5. Charts of Accounts ............................................................................................................................ 26
3.3.6. Accounting System ........................................................................................................................... 26
3.3.7. Double Dipping. ................................................................................................................................ 26
3.4. Financial Management Reporting...................................................................................27

3.4.1. Reporting procedures: ...................................................................................................................... 27
3.4.2. Contents of IFR Reports .................................................................................................................... 27
3.4.3. Balance Sheet ................................................................................................................................... 28
3.4.4. Statement of Special (Designated) Accounts /FUND FLOW/ ............................................................ 28
3.4.5. Statement of Use of Fund ................................................................................................................. 28
3.4.6. Consolidated Expenditures Summary ............................................................................................... 28
3.4.7. Expenditures Forecasts & Cash Requirements ................................................................................. 29
3.4.8. Aging Analysis of payables and receivables ...................................................................................... 29
3.4.9. Bank reconciliation and Bank Statements ........................................................................................ 29
3.5. Fund Flow Arrangement and Disbursement ....................................................................29
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3.6. Internal Control and Auditing .........................................................................................31
5.5.1. Internal Control ................................................................................................................................ 31
5.5.2. Journal Vouchers .............................................................................................................................. 31
5.5.3. Control over Cash Receipt ................................................................................................................ 32
5.5.4. Control over Petty Cash .................................................................................................................... 33
5.5.5. Control over Bank Payments ............................................................................................................ 33
5.5.6. Control Over Special Payments ........................................................................................................ 34
5.5.7. Purchase Advance............................................................................................................................. 35
5.5.8. Control of Fixed Assets ..................................................................................................................... 35
5.5.9. Control over Payroll .......................................................................................................................... 36
5.5.10. Stock Management ...................................................................................................................... 36
5.5.11. Internal Auditing .......................................................................................................................... 38
5.5.12. External Audit .............................................................................................................................. 39
4. Annexes ..................................................................................................................... 40
3.7. Annex 1 Chart of Accounts .............................................................................................40
3.8. Annex 2 Disbursement schedule ....................................................................................45
3.9. Annex 3Vouchers...........................................................................................................46
3.10. Annex 4 Audit ToR .........................................................................................................60
3.11. Annex 5 IFR Format .......................................................................................................66
5. Notes to the IFR-Discussion of Financial performance, Notes & Explanations ............ - 2 -

3.12. 1.1 General information about the project .................................................................. - 2 -
3.13. 1.2 Financial Management .......................................................................................... - 2 -
3.14. 2.1 Overview of sources of funds ................................................................................ - 2 -
3.15. 2.2 Overview of expenditures including trend analysis ................................................ - 2 -
3.16. 2.3 Status of budget utilization by project components/sub components/category ...... - 2 -
3.17. 2.4 Variance analysis with summary of actions taken and/or planned to be taken ....... - 2 -
3.18. 2.5 Overview of closing balances including analysis of major outstanding advances and
payables ................................................................................................................................. - 2 -
3.19. 2.6 Exchange rates used .............................................................................................. - 3 -
3.20. 2.7 Adjustments ........................................................................................................ - 3 -
3.21. 2.8 Internal audit oversight on the project funds ........................................................ - 3 -
3.22. 2.9 FM challenges and actions taken and/or planned to be taken ............................... - 3 -
3.23. 3.1 FM assessment/ supervision action plans implementation status ........................... - 3 -
3.24. 3.2 Status of action plan to address issues raised in the project audit reports ............... - 3 -
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3.25. 3.3 Status of action plans to address issues raised by Internal auditors ........................ - 3 -
3.26. 3.4 Status of action plans to address issues raised by capacity assessment ................... - 3 -
3.27. 3.5 Status of action plans to address AAWSA issues including backlog audit ................. - 3 -
3.28. 3.6 Status of action plans to address other utility issues including the status of resolution
of their backlog audits ............................................................................................................ - 4 -
6. Statement of Sources and Uses of Fund-In Category ................................................. - 5 -

7. Statement of Sources and Uses of Fund- In Component ............................................. - 6 -
8. Uses of Funds by Project Component ............................................................................ 9
9. Uses of Funds by Project Category .............................................................................. 12
10. Expenditure Apportionment Worksheet .................................................................. 15
11. Expenditure Forecast per category.......................................................................... 16
12. Expenditure Forecast per component ...................................................................... 18
13. Cash Flow Forecast ................................................................................................. 20
14. End Balance Summary ............................................................................................ 22
15. Statement of Cash Movement ................................................................................ 23
16. Bank Statements .................................................................................................... 26
17. Schedule of Designated Account (DA) Documentation............................................. 29
18. Payment Made during Reporting Period ................................................................. 30
19. Schedule of expenditure subject to prior and post review by World Bank ................ 31
20. Accounts Receivable/Advance Schedule With Age Analysis ..................................... 32
21. Accounts Payables Schedule With Age Analysis ...................................................... 33
22. Account Reconciliation ........................................................................................... 34
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iv
List of Acronym’s and Abbreviations

AfDB African Development Bank
AAWSA Addis Ababa Water Supply and Sewerage Authority
CGD Child, Gender and Differently-abled
CoFED City Finance and Economic Development office
CQS Selection based on Consultants’ Qualifications
CWA Consolidated WASH Account
CWTT City WaSH Technical Team
DFID Department for International Development
EOI Expression of Interest
ESIA Environmental and Social Impact Assessment
ESMP Environmental and Social Management Framework
FIIDCA Federal Integrated Infrastructure Development Coordination Agency
FM Financial Management
FMHACA Food, Medicine and Health Care Administration and Control Authority
GoE Government of Ethiopia
GPN General Procurement Notice
GTP II Growth and Transformation Plan II
HEH Hygiene and Environmental Health
IBRD International Bank of Reconstruction Development
ICB International Competitive Bidding
IDA International Development Association
IFBs Invitation for Bids
IFR Interim Financial Report
IUSH Integrated Urban Sanitation and Hygiene
IUSHS Integrated Urban Sanitation and Hygiene Strategy
IUSHSAP Integrated Urban Sanitation and Hygiene Strategy Action Plan
JMP Joint Monitoring Program
JTR Joint Technical Review
LCS Least Cost Selection
LIAs Low Income Areas
LIBs Limited International Biddings
LWM Liquid Waste Management
M&E Monitoring and Evaluation
MoCT Ministry of Culture and Tourism
MoEFCH Ministry of Environment, Forest and Climate Change
MoFEC Ministry of Finance and Economic Cooperation
MoH Ministry of Health
MoU Memorandum of Understanding
MoUHD Ministry of Urban Housing and Development
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MoWIE Ministry of Water Irrigation and Electricity
MSF Multi Stakeholders Forum
NCBs National Competitive Biddings
NRW Non-Revenue Water
NWSC National WaSH Steering Committee
NIUSHS National Integrated Urban Sanitation and Hygiene Strategy
OWNP One WaSH National Program
PAD Project Appraisal Document
PIM Project Implementation Manual
PMUs Project Management Units
PPs Procurement Plans
QCBS Quality and Cost-based Selection
RIUSHS Regional Integrated Urban Sanitation and Hygiene Strategy
RPF Resettlement Policy Framework
RAP Resettlement Action Plan
RWBs Regional Water Bureaus
RWTT Regional WaSH Technical Team
RWYAB Regional Women and Youth Affairs Bureau
SDG Sustainable Development Goals
SPN Specific Procurement Notice
SSS Single-source Selection
STEP Systematic Tracking of Exchanges in Procurement
ToR Terms of Reference
UNDB United Nation’s Development Business
UNICEF United Nations Children’s Fund
UWSSP II Second Urban Water Supply and Sanitation project
WaSH Water Supply, Sanitation and Hygiene
WRDF Water Resource Development Fund
WWTP Wastewater Treatment Plant
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Glossary
The following terms are defined for the purpose of this project
City wide inclusive Sanitation: means that everybody benefits from adequate sanitation
service delivery outcomes, human waste is safely managed along
the whole sanitation service chain and effective resource recovery
and reuse are considered
Fecal sludge/Septage: The liquid and solid material removed from septic tanks or pit
latrines.
Hygiene: Hygiene is practices or behaviors that support the maintenance of
good health by blocking the transmission of diseases that are water,
sanitation and hygiene related.
Improved latrine: According to Joint WHO/UNICEF Monitoring Program (JMP),
facilities considered as improved are flush toilet, ventilated
improved pit latrine, pit latrine with a slab, or composting toilet
used by a household and does not share this facility with other
households
Liquid waste: wastewater and fecal sludge or septage excluding storm water.
Onsite system: Excreta removal facility where excreta is collected at the site.
Offsite system: Excreta removal facility where excreta is carried away through
water to wastewater treatment system.
Sanitation services: Refers to the provision of facilities and services for the safe
disposal of liquid waste.
Sewerage system: A system for the collection, treatment and final disposal of
sewage/wastewater.
Solid Waste: Garbage, refuse, sludge and any other discarded material of solid
and semi solid nature collected from residential houses,
institutions, industries etc.
Solid waste management: Comprises storage, collection transportation, treatment and disposal
of solid waste, contributes significantly in breaking the chain of
disease transmission and creation of a healthier environment.
Storm water runoff Unfiltered rain water that reaches streams, lakes, and oceans by
means of flowing across impervious surfaces.
Sullage: The liquid waste form from household sinks, showers, and baths.
Urban sanitation Comprises storage, collection, transportation, treatment, and
disposal/ reuse of liquid waste.
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Utility: an institution responsible for the provision of safe water supply and
sanitation services for the cities.
Wastewater/ Sewage: The off-site water-carried waste (human feces, urine and sullage),
in solution or suspension
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1. OVERVIEW AND INTRODUCTION
1.1. OVERVIEW
1. As one of the areas of focus for the Growth and Transformation Plan (GTP-II) is
addressing the gap on urban infrastructure, the government of Ethiopia is desirous to
focus on improving the urban sanitation situation in cities and improve operational
efficiency on water supply. On this account, the Government of Ethiopia obtained
financing from the World Bank for a project that has three key components: i) Addis
Ababa Sanitation and Water Supply Services Improvement, (ii) Secondary 221 Cities
and Towns Sanitation and Water Supply Services Improvement, and (iii) Project
management and institutional strengthening. The total budget for the project is US
$445 Million and is to be completed in six years. A project appraisal document
(PAD) has been prepared by the World Bank in March 2017. This project
Implementation Manual (PIM) is prepared by the Ministry of Water Irrigation and
Electricity (MoWIE) to clearly articulate all the implementation aspects of the
project in compliance with the PAD.
2. Integrated Urban Sanitation and Hygiene Strategy (IUSHS) drafted in October, 2015
details the different components of sanitation and provides strategic direction in
terms of integration of urban sanitation intervention, service delivery requirements
and management technology, capacity building, cross cutting issues, financing and
tariff setting principles, institution arrangement and roles. The document
recommends sanitation interventions including capacity building plan to be
city/town specific taking into consideration an integrated sanitation planning and
implementation. It also stresses that successful implementation of the integrated
urban sanitation and hygiene is dependent on the effectiveness of the institutions
created to manage urban sanitation in different towns. Following IUSHS
development, different sector ministries undertaking urban sanitation have signed a
memorandum of understanding (MOU) in April 2017 to ensure commitment and
facilitate implementation of IUSHS.
3. Ministry of Water, Irrigation, and Electricity prepared Urban Wastewater
Management Strategy, in January 2016 with the aim of establishing a sustainable
wastewater management system providing guidance and strategic direction for the
present and immediate future. It reviews existing policies and strategies in terms of
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The 1stgroup is regional capitals & biggest towns with populations above 300,000 (Dire Dawa, Mekelle, Adama,
Hawassa and Bahir). The 2ndgroup is regional capitals for the smaller (Harari, Jijiga, Gambella, Asosa, and Semera
Logiya). The 3rdcluster are secondary towns 1 from each of the big regions Jimma, Gonder, Sodo, and Adigrat. The
4thcluster is owns with populations between 100,000 and 200,000 and includes Bishoftu, Dessie, Shashamene,
Nekemete, Assella, Arbaminch, Debrebirehan, and Degeh Bur
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sanitation. The document assumes Water sector offices at different level and
municipalities to be responsible for the planning, implementation, and operation of
wastewater management systems while other sectors like health and environment
play the role of promotion, decision making, monitoring and evaluation. The
document, like other reviewed documents recommends economically affordable,
environmentally suitable and socially acceptable technologies. While discussing the
implementation modality the document briefly points out on the need for
development of legislation, regulation, standard, guidelines and code of practice.
1.1.1. Second Urban Water Supply and Sanitation Project

4. The Urban Water Supply and Sanitation project (UWSSP I) is an ongoing project
until December 31, 2017 financed by the World Bank (250 million USD) with the
aim of increasing access to sustainable water supply and sanitation services in Addis
Ababa and five secondary cities. This UWSSP II will be a continuation and
expansion of the World Bank long term engagement in the sector and support to an
effort of GoE to improve sanitation services in the urban areas.
5. The objective of the project is to increase access to enhanced water supply and
sanitation services in an operationally efficient manner in Addis Ababa and selected
secondary cities. The project aims to cover twenty-three cities including Addis
Ababa. The GoE selected the participating towns giving priority to regional capitals,
large population size towns, nevertheless maintaining regional equity. A total of 3.38
million people (50 percent of them women) residing in Addis Ababa and the selected
22 towns will directly benefit from the project, of which 2.76 million from improved
sanitation facilities and 623,000 from access to improved water supply services.
6. The project is designed to contribute to the GoE effort to eliminate open defecation,
increase percentage of population using a ‘safely managed’ sanitation service, and
enhance existing water supply services through improved operational efficiency and
expansion of WS service to unserved areas. On this account, the project finances the
following components in Addis Ababa and selected secondary 22 cities and towns.
1.1.2. Project Components

7. The project is designed in such a manner that it goes beyond providing sanitation
facilities but sanitation services where issues of operation and maintenance are
considered as central to the sanitation provision. The project comprises three
components, which are summarized in the following paragraphs.
8. Component 1: Addis Ababa sanitation and water supply services improvements
(US$260 million). This comprises three subcomponents: (a) sanitation services
improvement, (b) operational efficiency improvements, and (c) project management
and institutional strengthening.
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9. Subcomponent 1.1: Sanitation services improvement in Addis Ababa (U$224.6
million).This subcomponent will entail the following: (a) sanitation assessments,
feasibility studies, and the design and construction of a WWTP for eastern
catchment, through a design, build and operate (DBO) approach,2 (b) sewerage
networks for the eastern catchment; (c) improvement of operation and maintenance
(O&M) management of existing WWTPs; (d) Improvement of sanitation services in
unserved and LIAs, including construction of communal and public latrines; and (e)
procurement of appropriate desludging equipment for fecal sludge treatment plants.
10. Subcomponent 1.2: Operational efficiency improvements in Addis Ababa
(US$33.1 million).This subcomponent will support AAWSA to improve WSS
services levels by modernizing the operational and management system, including:
(a) NRW reduction and management; (b) customer care; (c) financial management
(FM); (d) network management; and (e) improving sewer connections and fleet
management systems. The project will also support management contracts to fill
O&M capacity gaps and establish effective management systems, including
performance-based contracts for small-scale leak detection and repair. Critical areas
will include business plans and performance agreements to focus on: (a)
implementation of operational processes and performance improvements; (b) HR
Improvements and change management; (c) a comprehensive Supervisory Control
and Data Acquisition (SCADA) system to secure supervisory control and data
acquisition, (d) ability to analyse real-time data; and (e) dedicated operator support
to assist AAWSA to translate high-level plans to action.
11. Subcomponent 1.3: Project management and institutional strengthening in
Addis Ababa (US$2.3 million).AAWSA’s existing project management capacity
will be supplemented through additional staff before the start of the project and
during implementation to enhance the capacity of the management board and utility
staff to manage WSS facilities effectively. This assistance will cover the cost of
training on project implementation and utility operations, regional, international, and
in-country exposure visits and learning exchanges, procuring office equipment and
vehicles, and miscellaneous expenses.
12. Component 2: Sanitation and water supply services improvement in secondary cities
(US$241 million). This will involve three subcomponents.
13. Subcomponent 2.1: Sanitation services improvement in secondary cities
(US$196 million).This subcomponent will finance studies and design, technical
2DBO procurement streamlines the design-build (DB) delivery approach of a single private contractor designing,
constructing and operating a new facility or a capital improvement, focused on up-front cost-savings, not long-term
efficiencies. The advantages of this approach are lower capital and maintenance costs, use of robust technology and
equipment, appropriated risk, shorter delivery schedules, and a single contract. DBO risks include weak supervision
and too much upfront pricing, with long-term operational requirements left vague.
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assistance (TA) and infrastructure development. This support will improve fecal
sludge management facilities and conventional sewer systems where feasible,
support the Urban Health Extension Program, construct communal and public
latrines, procure desludging equipment, rehabilitate or construct wastewater and
fecal sludge treatment plants, and develop small and medium enterprises (SMEs) to
manage public latrines and similar facilities.
14. Subcomponent 2.2: Water supply and operational efficiency improvement in
secondary cities (US$36.8 million). This subcomponent will finance interventions
to help WSS agencies modernize service provision, and improve the management of
NRW. This will entail: (a) establishment of performance based systems to
incentivize the reduction of NRW; (b) water supply provision to unserved and LIAs;
(c) TA and studies for situation assessment and development of NRW reduction and
management interventions, development of billing and accounting systems,
customer care, FM improvement, network management, and improving the
provision of sanitation services; (d) capacity building and training on billing and
accounting and, improvement in the customer data base and citizen engagement,
gender, and management for water boards; (e) piloting of modern meter reading and
collection technology and other efficiency interventions for possible scale-up; and
(f) public awareness creation and communication strategy for demand management.
15. Subcomponent 2.3: Project management and institutional development in
secondary cities (US$8.2 million). This subcomponent will fund capacity
enhancement for water board members and utility staff to manage WSS facilities.
This will include staff training; exposure visits and study tours; provision of
equipment; and awareness creation for the management team, boards, utilities,
municipalities, and urban health extension workers. The project will also support the
establishment of utility performance monitoring and benchmarking, and the
preparation of business plans. Project management costs will include
communications, monitoring and evaluation (M&E), procurement, FM, safeguards,
and other functions. Institutional development will also cover: (a) establishment of
work systems and the development of guidelines and manuals; (b) procurement of
vehicles, relevant instruments and tools; and (c) staff training.
16. Component 3: Project management and institutional strengthening (Federal
and Regional level). (US$4 million). This subcomponent will help MoWIE manage
the project and strengthen its institutional capacity, and will include short term
training, study tours, and carefully planned acquisition of office equipment; and
vehicles. This component will also finance several studies to support improvements
in sector performance, such as options for private participation; data collection and
monitoring systems related to performance-based agreements, monitoring and
benchmarking; the establishment of independent bodies to regulate utility
performance; and emerging needs for applied research, technology choice, waste
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reuse, and other topics.
1.1.3. Basic Implementation Principles

17. The basic principles for the implementation of the UWSSP II are in line with OWNP
principles. The guiding principles specifically for UWSSP II are:
18. Integrated city-wide approach to sanitation improvement with mix of service
options to accommodate diverse needs in different settlement types: This principle
aims to ensure a city-wide approach whereby all the residents of the town
irrespective of their cultural and socio-economic background and location are
addressed with an affordable and appropriate mixed technology options to address
their diverse need for proper sanitation service. Mixed options approach provides a
pragmatic instrument to pick interventions according to specific contexts and
capacities. Cities practically evolve with affordable and manageable sanitation
systems. A key consideration will be whether such options fit in with city-wide
integrated interventions that link sanitation with broader urban planning and
governance, finances and service delivery programs. A city-wide sanitation
improvement demands for integration of conventional and non-conventional means
used by different service providers to manage waste holistically. A holistic
approach demands strategic technical engagement to manage waste using the
different options and technologies used to start from the point of waste generation
up to its final disposal or reuse.
19. Stepped approach: stepped approach will give opportunity for towns to creating
enabling environment prior to pursuing infrastructure investment: This principle
will also create sense of competition amongst the implementing units to perform
timely while at the same time guaranteeing that the investment will bring the
intended outcome and impact.
20. Develop a suite of services in every city to collect, transport, treat and
dispose/reuse liquid wastes: This principle recognizes the need to provide fund for
the development of infrastructure for entire sanitation service chain: collection,
transport, treat and dispose/reuse. The public health risks associated with pathogenic
human waste can only be reduced when the entire waste service chain or safe waste
management system is developed. This principle will address the current incomplete
practice in the urban wastewater management.
21. Promotion of public awareness and enhanced social engagement: This principle
recognizes the need to create public awareness and knowledge amongst the society
about the health benefits from proper handling of wastes. The promotion is also to
cause the public to be engaged in the issues that concern their health, particularly by
willingly maintaining, improving, and sustaining their sanitation services and
conservational use of water. The public awareness will also enable the public to
better understand their role and responsibilities in the sanitation chain and make
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informed decision about their sanitation technology choice.
22. Higher emphasis on improving efficiency of utilities: This principle emphasizes
that it is not enough to focus on the supply aspect of the infrastructure rather efficient
use of available resources and water supply and wastewater management systems at
the utility level is equally important to achieving the desired result. Most of the staffs
engaged in water utilities may have the skill from practice about the task they
perform but do not have proper training to understand the entire procedure. The
project thus provide fund for institutional development including business plan
development operating system improvement human resource development and
organizational structure review and adjustment. This principle provides incentives
to utilities through operational efficiency gains in line cost recovery policy.
23. Encourage and facilitate the involvement of the private sector: Engagement of the
private sector in the implementation of the project through provision of services,
supply of goods and construction of works is one of the means used to encourage
and facilitate involvement of the private sector. In addition, the project will introduce
private sector participation in provision of operation and maintenance services. A
fair competition amongst the private sectors through participation of those with the
appropriate qualification in open bidding is also another means of facilitation of
private sector involvement.
1.2. INTRODUCTION
24. Based on the Program objectives and targets, this manual is designed to allow the
establishment of a uniform system across the implementing agencies, to provide
Financial Management Guidelines and procedures that will specify how financial
transactions of the Project are recorded and reported by implementing agencies at
Federal, Regional, and Towns/Woreda levels, from the initial identification of
transactions to the final financial reporting. It discusses the detailed procedures in
receiving fund, keeping the fund, spending it, recording the expenditures, reporting
to the appropriate body and in safeguarding the assets acquired.
25. The Manual has the following general objectives:
✓ Outlining the various processes and procedures to be followed by all staff involved
in the FM of the Program.
✓ Providing instructions to ensure that resources to be used are incorporated in the
budget and adequate internal controls are in place to safeguard the use of funds
during implementation.
✓ Aligning the program FM to financiers’ guidelines.
✓ Outlining responsibilities among the key players of the various operational aspects
of the FM system.
✓ Serving as a reference document for all parties involved in the implementation of the
Program.
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26. The FGE Accounting System’s policies and procedures are the basis of this
guideline. Codes are similar unless new account titles are required as a result of the
unique system of the the project. Requirements of financer were reflected. This will
assist smooth and consistent application of different Programmes, consolidation
process, and wise utilization of already built up learning curves of the Government’s
accounting staff.
27. The manual considers the capacity of the accounting staff and offices of the
implementing institutions at all level. It also provides guidelines for proper
documentation and system of internal control that would assure sufficient audit for
future reference of any interested organ. It incorporates valuable ideas and comments
gathered from preceding Programmes’ governmental implementation agencies,
financers of the Programmes and remarks of finance officers. It also provides
directives for proper documentation and system of internal control that would assure
sufficient audit trail for future reference, to any interested organ.
28. The content of the manual has been divided into five logical parts and include
introduction and overview, Institutional Arrangement, Financial Management, ,
Administration and Annexes sections.
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2. INSTITUTIONAL ARRANGMENT
29. Urban sanitation has no institutional home of its own but again different institutions
are mandated to undertake certain responsibilities to address sanitation issues.
Number of studies, assessments, and progress have been made in the past recent
years including the development of integrated urban sanitation and hygiene strategy
(IUSHS) and signing of an MoU of sector Ministries of their commitment to
implement IUSHS. Nevertheless, no one Ministry or office has been designated to
take lead in urban sanitation at federal level. Though Ministry of Water, Irrigation
and Electricity has been mandated to oversee water and sewerage utilities yet in most
cities/towns municipalities are more active in liquid waste management than the
water and sewerage utilities. While defining the structure, roles and responsibilities
of institutions for the implementation of UWSSP 2 at all level, this institutional
arrangement assumes the Steering Committee for the existing OWNP will also
oversee UWSSP 2 and water and sewerage utilities will take full responsibilities for
LWMs. In towns where municipalities now manage LWMs, this role and technical
staffs with capacity will be transferred to WSS utilities.
30. As to the governance and policy guidance of the program, Existing institutions that
are providing overall governance and provision of national guidance for water supply
and urban sanitation and IUSHS will continue to do the same. In this sections the
role of these institutions in regard to UWSSP 2 are listed below. However, there is
still a need for establishing common governance framework whereby roles are
clarified, collaborations strengthened and organizational system and capacity are
built at federal, regional and local levels.
2.1. PROGRAM MANAGEMENT AND IMPLEMENTATION

ARRANGMENTS
1.1.4. PROGRAM MANAGMENT

31. To provide the UWSSP 2 overall oversight and management, the following Steering
Committees and Technical Teams; at Federal, regional and City level, will be
established
a) STEERING COMMITTEES
National UWSS Steering Committee (NWSC):
32. For second urban UWSS project management, a new steering committee will be
established comprising state ministers and agency head or assigned representatives
of: Ministry of water, irrigation and electricity; Urban development and housing;
Ministry of Health; Environment, forestry and climate change; and Federal
Integrated Infrastructure Development Agency.
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33. The role of the Steering Committee is to Provides UWSSP2 national guidance and
governance and its responsibilities are:
✓ Reviews and endorses the UWSSP 2 annual Plans and budgets;
✓ Oversees the proper functioning of the M&E of the UWSSP 2;
✓ Reviews and endorses NIUSHS Plans and budget proposed;
✓ Oversees the proper functioning of the M&E of the NIUSHS; and
✓ Presides over Annual Multi-Stakeholder Forum (Sector Review) and follow
up on the implementation of undertakings.
Regional UWSS Steering Committee (RWSC):
34. For second urban UWSS program management, a new steering committee will be
established comprising bureau heads or assigned representatives of:
35. Regional water Bureaus; Regional health Bureaus; Urban development and housing;
and Environment, forest and climate change. The committee would have guidance
and governance provision role and will have the following responsibilities;
✓ Reviews and endorses the regional UWSSP 2 annual plans and budgets;
✓ Oversees the proper functioning of the M&E of the UWSSP 2;
✓ Reviews and endorses RIUSHS Plans and budget proposed; and
✓ Oversees the proper functioning of the M&E of the RIUSHS.
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CITY UWSSP Steering Committee
36. City UWSS Steering Committee composed of city cabinets and/or heads of: Manager
of Municipality; Health office head; City land administrator; and Head of
environment, forest and climate change office. Water and sewerage utility head
37. The City Steering Committee will have advocacy and guidance provision role and
would take the following responsibilities
✓ Negotiates UWSSP 2 and IUSH targets and resource allocations with the
RWTT;
✓ Provides CUWSST with planning and budgeting parameters;
✓ Approve UWSSP and IUSH plans and endorses CUWSST requests for
funds;
✓ Assigns personnel to the city WASH Team and selects Team Head;
✓ Ensures timely, efficient and effective logistical, administrative and
financial support to the CUWSST; and
✓ Appraises the performance of the CUWSST, the WASH Coordinator on the
basis of results against plans and budget.
b) TECHNICAL TEAMS:
Federal National UWSS Technical Team (NWTT):
38. For second urban UWSS project management, new NWTT will be established from
directorates or assigned representatives of: Ministry of water, irrigation and
electricity, Urban development and housing, Ministry of Health, Environment, forest
and climate change and Federal Integrated Infrastructure Development Agency.
39. The federal technical team Provides advocacy and guidance for the implementation
of the UWSS and its responsibility includes:
✓ Appraises the performance of the CUWSST, the WASH Coordinator on the
basis of results against plans and budget.
✓ Negotiates UWSSP 2 and IUSH targets and resource allocations with the
RWTT;
✓ Provides CUWSST with planning and budgeting parameters;
✓ Approve UWSSP and IUSH plans and endorses CUWSST requests for
funds;
✓ Assigns personnel to the city WASH Team and selects Team Head;
✓ Ensures timely, efficient and effective logistical, administrative and
financial support to the CUWSST; and
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Regional UWSS Technical Team
40. For second urban UWSS project management, new NWTT will be established from
directorates or assigned representatives of: Regional water Bureaus; Regional health
Bureaus; Urban development and housing; and Environment, forestry and climate
change.
41. The teams will provide direct oversight and direction for the planning and
implementation of the Regional UWSS and its duties and responsibilities includes:
✓
✓ Negotiates allocation of targets and resources up with NUWSSTT and down
with cities
✓ Reviews and recommends Regional IUSH and UWSS plans and budget;
✓ Reviews physical, financial and M&E reports of IUSH and UWSS
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City UWSS Technical Team:
42. This Team will comprise focal technical persons from: Municipality; Health
bureaus/office; City land administration; Environment, forest and climate change
office; and Water utilities.
43. It provides direct oversight and direction for the planning and implementation of the
City level IUSH and UWSS
44. The Responsibility the Team will be:
✓ Negotiates allocation of targets and resources up with RUWSSTT
✓ Facilitate review of the integrated urban sanitation master plan study by all
stakeholders and submit the final draft for approval to the City UWSS
Steering Committee.
✓ Reviews and recommends City IUSH and UWSS plans and budget;
✓ Reviews physical, financial and M&E reports of IUSH and UWSS
✓ Ensure and follow up the institutional development plans and
implementation of City wide IUSH plans
1.1.5. Program Implementation

45. Institutions roles and responsibilities for the implementation of UWSSP 2 at different
levels are as listed below.
I. Ministry of Water, Irrigation and Electricity

46. Role: Ensure that Regional PMUs, CWT, City Water Boards have the directions,
information, systems, skills and resources necessary to carry out their UWSS
mandate and achieve expected program results.
47. Responsibility:
✓ Opens foreign currency and Birr accounts
✓ Request and receive funds from the World Bank.
✓ Transfers funds, on the basis of approved plans, budgets and reports, to
special accounts opened by AAWSA, Secondary cities, and RWBs.
✓ Ensures that adequate internal controls are in place and adhered to.
✓ Conduct final appraisal of project proposals and monitor implementation.
✓ Give technical support and capacity building for AAWSA, Secondary cities,
and RWBs
✓ Prepare generic standards, guidelines and manuals
✓ Facilitate quarterly and annual planning and review meetings
✓ Checks to confirm compliance of participating cities with the requirement of
the appraisal criteria prior to design and construction financing is approved.
✓ Ensure that there is adequate capacity both at MoWIE and implementing
agencies to enable the timely submission of internal audit standard reports.
12
✓ Undertake timely external financial and procurement audits on annual basis
and submits audit report to the World Bank no later than six months after the
close of each fiscal year.
✓ Ensure timely submission of Reports on use of UWSS funds including the
outstanding balance.
✓ Ensures timely replenishment of the UWSS Account and fund disbursement
to implementing agencies
✓ Ensure that funds transferred to regions are based on agreed plan of
implementation and to cities based on their allocated budget, accepted plans
and study result.
✓ Ensure timely disbursement and settlement of funds for Program activities.
✓ Ensure financial report from cities and regions is disaggregated to project
components.
✓ Develop standards, guidelines and regulatory frameworks;
✓ Ensure that Program activities, strategies and results are monitored,
evaluated and reported within the UWSSP 2/ WaSH framework and systems.
✓ Direct and follow up with all implementing entities’ that internal auditors
conduct internal audits;
✓ Play an overall and overarching role of ensuring that actual performance is
in line with budgets and any material deviations are explained.
✓ Fund management including querying and follow up of regions and
implementing cities that are not using resources for a long period of time to
utilize the resource and account for.
✓ Collect reports from regions and implementing cities and prepare a program
wide financial statements/reports on a regular basis.
✓ Play supervisory and support roles of ensuring that government rules and
regulations are adhered in regards to accounting, internal control, treasury
management, etc including regular monitoring and evaluation and
supervisory trips to entities as necessary to ensure that all is in order.
✓ Build linkages with and among regions – sharing information, progress
reports and best practices.
✓
II. Water Resource Development Fund
48. Role: Coordinate and monitor the Federal Government’s on-lending program for the
construction investment of fecal sludge treatment; and study and construction of
sewerage system or centralized wastewater treatment projects.
49. Responsibility:
✓ Responsible for appraisal of on lending fecal sludge treatment management
system construction and procurement of vacuum trucks, study and
construction of sewerage systems or centralized WWT proposed by the cities
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✓ Conduct final appraisal of project proposals and monitor implementation.
✓ Checks to confirm compliance of participating cities with the requirement of
the appraisal criteria prior to design and construction financing is approved.
✓ Request MoWIE PMU for release funds to Cities Utilities based on appraised
projects and agreed financing schedule and upon approval of the on-lending
aspect of IFRs submitted by the respective city PMUs.
✓ Prepare consolidated project financial statements.
✓ Submit audited financial statements no later than four months after the close
of each fiscal year to the MOWIE.
III. Water Bureau (PMU)

50. Role: Ensures that cities PMUs’ have the directions, standards, regulations and
enforcement mechanism, information, systems, skills and resources necessary to
carry out their UWSS mandate and achieve expected program results
51. Responsibility:
✓ Opens a Birr account.
✓ Implement UWSS at regional level.
✓ Monitors implementation of UWSS program.
✓ Provides support to secondary cities.
✓ Budget follow up and report review of UWSS
✓ Ensures that program strategies, activities and results are monitored,
evaluated and reported within the UWSS framework and systems.
✓ Provide technical assistance to secondary cities identify their program gaps
and management deficits
✓ Builds linkages with and among secondary cities sharing information,
progress reports and best practices
✓ Consolidate regional and secondary cities annual plan, quarterly, biannual
and annual physical and financial reports and send to the MoWIE.
✓ Monitor and provide technical support to secondary cities on procurement,
contract administration, construction supervision, and signing-off contracts.
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IV. Water Supply and Sewerage Service Enterprise
52. Role: Provide clear and adequate water service to the residents, institutions and
commercial centers using the revenue it generates from different sources. Manages
and regulate liquid waste generated in the town/city by residents, institutions and
commercial centers. Overall management of the Cities UWSS budget in accordance
to the approved City UWSS plan.
53. Responsibilities:
✓ Opens a Birr account for the UWSSP 2 project at city level
✓ Set city goal in terms of UWSS intervention.
✓ Recruit in coordination with CoFED and RWBs external auditor and ensure
the program financial statements are audited by the external auditor.
✓ Direct and follow up all implementing entities’ within it respective city that
internal auditors conduct internal audits;
✓ Operate, maintain and manage day to day water supply systems and liquid
waste management systems.
✓ Reviews and provides comment on the financial, physical and M&E reports.
✓ Provide water supply and sewerage services to residents, commercial and
institutional centers.
✓ Collect and manage as per the tariff and other revenues of water and sewerage
services
✓ Produce and report to the T/CWB on the performance.
✓ Responsible for the overall technical, commercial/customer service and
financial and administrative aspects of the utility.
✓ Ensure adequate service delivery according to the guidelines and standards.
✓
V. PMU at Water and Sewerage Enterprise/Utility
54. Role: Plan and manage the overall UWSS activities in the city.
55. Responsibility:
✓ Reports on use of UWSSP 2 funds to RWB and MoWIE and other
stakeholders.
✓ Ensures timely replenishment of the UWSSP 2 Account.
evaluated and reported within the UWSSP 2 framework and systems.
✓ Propose on the kind of UWSS intervention
✓ Actively participate in the technical assistance provided for the preparation
of program proposal and capacity building particularly in the improvement
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of water supply and/or liquid waste management services.
✓ Procure and manage consultants, contractors and suppliers for the UWSSP 2
project.
✓ Communicate with the City Mayor, Water Board and Utility management
team on UWSSP 2 funds and provide periodical update on UWSSP 2 fund
disbursement and settlement.
✓ Ensure timely disbursement and settlement of funds for Program activities.
✓ Prepare financial report disaggregated for the three project components.
✓ Contribute to preparation of city UWSSP 2 plans and budgets.
✓ Prepare utilities business plan and submit to the Water Board for approval.
evaluated and reported within the UWSS framework and systems.
✓ Collect reports from sector implementing entities and consolidate and
prepare a program wide financial statements/reports on a regular basis and as
required by stake holders.
VI. City Water Board
56. Role: Plan and manage the overall water supply budget and activities in the
town/city.
57. Responsibilities:
✓ Assesses the proposal and extent and kind of need in terms water supply and
wastewater management system improvement submitted to it by the Utility
management.
✓ Set town/city goal in terms of water supply and wastewater management
system improvement intervention.
✓ Approve the kind of water supply and wastewater management system
improvement intervention proposed by the Utility management in the town.
✓ Initiate the preparation of program proposal and capacity building
particularly in the improvement of water supply and/or liquid waste
management services.
✓ Review and approve Contracts; oversee, monitor & evaluate utility’s
operation and report to city administration.
✓ Budget follow up and report review of UWSS program at utility/enterprise
level
✓ Play an overall and overarching role of ensuring that actual performance is
in line with budgets and any material deviations are explained.
✓ Fund management including querying and follow up fund utilization.
✓ Review and endorse annual plan regarding the UWSSP-2 in water supply and
liquid waste management and send it to the City WaSH Team for approval
and consolidation in the town’s integrated urban sanitation annual plan.
16
✓ Reviews and provides comment on the financial, physical and M&E reports.
✓ Play supervisory and support roles of ensuring that the government rules and
regulations are adhered at city level in regards to accounting, internal control,
treasury management, etc.
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3. Financial Management
3.1. Introduction
58. This section of the Financial Management Manual is designed to provide financial
guidelines and procedure specifying how the projects and programs planning and
budgeting are processed, disbursements are effected, financial transactions are
recorded and reported by implementing agencies at federal, regional, Woreda and
city levels. It discusses the procedures for receiving funds from WB, the required
books to be kept, keeping the funds, spending them, recording the expenditures,
reporting to the appropriate entities.
59. To meet these requirements, the system will have the following features:
▪ Budgeting: A system to identify the short-term activities necessary to achieve
the Program objectives and express these activities in financial terms.
▪ Accounting: A system to trackrecord, analyses and summarize financial
transactions.
▪ Funds flow arrangements: Appropriate arrangements to receive funds from all
sources and disburse the funds to the agencies involved in Program
implementation.
▪ Internal control: Arrangements, including internal audit, to provide reasonable
assurance that (a) operations are being conducted effectively and efficiently and
in accordance with relevant financing agreements; (b) financial and operational
reporting are reliable; (c) applicable laws and regulations are being complied
with; and (d) assets and records are safeguarded.
▪ Reporting: A system that would produce sufficient detailed information to
manage the Program, and provide GCF with regular consolidated interim
financial reports and annual consolidated financial statements.
▪ External audit: Arrangements for conducting annual external audit of the
consolidated financial statements for the sector on terms of reference acceptable
to GCF.
60. The financial management cycle is illustrated under the following diagram
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Planning
Auditing Budgeting
Avialable
Fund Fund flow
Accounting
&
and
Disbursem
Reporting
ent
Controlling Reciept
(Internal and
control) payment
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3.2. Budgeting
3.2.1. Budget Preparation

61. Budget allocation for regional level components and Secondary cities during the Step
I: Preparation phase will be seen on individual cases and depends on extent of
consultancy and capacity building work needed for each regional WBs and cities.
Likewise, budget allocation for WSS system and institutional development costs
during Step 2: implementation phase for cities will be based on need and will be
determined after the study and design based on individual cities technical and
financial viability of the proposed UWSS system. UWSSP II budget preparation will
follow the government budget preparation schedule. The budget approval process
for UWSSP II budget will also follow existing government regulations and
procedures. MoWIE will prepare an indicative budget allocation for the RWBs and
for AAWSA, and for each implementing secondary cities by component and submit
the same for review by Ministry of Finance and Economic Cooperation (MoFEC)
and approval by the Council of Ministers.
62. Generally, approved project proposals will form the basis for budget preparation.
Budgets will be prepared within the time frame for preparation of budget according
to the Ethiopian Budget system. Each implementing institutions is responsible for
the preparation of its annual work plan and the budget for its own expenditure for
the different activities that it plans to undertake during the financial year. Early
preparation of budget is crucial to secure World Banks’s “no objection” prior to
having the budget proclaimed in accordance GoE’s budget protocol and calendar.
Budgeting for project activities at different levels will be carried out as follows:
63. At MoWIE Level:
✓ MoWIE budget preparation forms its basis on the indicative funding for the
project management and institutional strengthening component. At MoWIE
level, MoWIE is responsible for the:
✓ Preparation of its annual budget for its own expenditure in accordance to its
annual plan and the financing requirements for each activity;
✓ Reviewing and approving annual consolidated budgets submitted to it by
AAWSA, WRDF, RWBs, and utilities of secondary cities;
✓ Consolidating annual approved plans and budget of each implementing
institutions including its own and submission of the same for “no objection” to
the World Bank; and
✓ Upon securing “no objection” from the World Bank, submitting again the
consolidated budget to NUWSSSC for endorsement, MoFEC for approval and
GoE’s proclamation in compliance and within the time frame of the Ethiopian
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Budget system.
64. At RWBs Level:
✓ RWBs budget preparation also form its bases on the indicative fund allocation
announced to it by MoWIE for the project management and institutional
strengthening component. Each RWBs is responsible for the:
annual plan and the financing requirements for each activity;
✓ Providing technical assistance, reviewing and approving annual plans and
budgets prepared by the secondary cities in their region; and
✓ Consolidating the annual approved plans and budget of the secondary cities and
its own for endorsement to RUWSSSC, and for review and approval to MoWIE.
65. At AAWSA Level:
✓ AAWSA budget preparation also form its bases on the indicative fund allocated
for the different project components. AAWSA is responsible for the:
project proposal and its annual plan and the financing requirements for each
activity for all the three components;
✓ Obtaining city council approval for its annual budget; and
✓ Sending its annual plan and budget approved by the council for its endorsement
by the CUWSSSC for endorsement, for review and approval to MoWIE and
WRDF.
66. At Secondary Cities Level:
✓ Each utility’s budget preparation form its bases on the indicative fund allocated
for the different project components. The utility in close consultation with its
water board, concerned planning committee formed at city level is responsible
for:
✓ Preparation of the annual planned activities including the financing requirements
and annual budget;
✓ Obtaining city UWSSSC and council approval for its annual plan and budget;
and
✓ Sending its annual plan and budget for reviewing, approval and consolidation to
its respective RWB and WRDF.
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3.2.2. Budget Control

67. Implementing entities receiving financial resources through the 2nd UWSS are
responsible for budget discipline and control to ensure that project activities are
properly budgeted, expended and reported. Budget control is exercised to ensure
that UWSS funds are that funds are used for the intended purpose and are being spent
as planned with respect to categories, cost, timeliness and value for money. Primary
responsibility for budget control is the PMU accountants at different level. The
finance unit in each of the implementing agencies receiving funds for program
implementation will be responsible for the preparation of monthly budgetary control
statements comparing actual with budgeted results and ensuring that explanations
are obtained from the responsible officer on the variances. Heads of the respective
agencies are responsible for examining the control statements and providing
appropriate remedial action to ensure effective budget control.
68. The budget control also helps to ensure that: expenditure is committed or incurred
only if there is an available budget; actual expenditure does not exceed budgeted
expenditure, ensuring availability of budget before processing payment and tracking
if any, variances between actual and planned cost and activities. The main tool
would be budget tracking preferably integrated into the accounting system.
3.2.3. Budget Revision

69. Revision to an agreed and approved plan and budget should not be easily allowed.
Neither will inter- component budget transfer be permitted in the program (unless
the project is formally restructured by the GoE with the agreement of the World
Bank). However; there could be good causes to consider changes and budget
transfers among activities in each component.
70. When such a change is considered essential, the revision of work plan and budget
together with procurement and training need to be recommended by the City UWSS
Steering Committee to the regional technical and steering committees or to MoWIE
in case of AWSSA.
71. Once changes are approved by the Regional technical and steering committees, the
consolidated regional revised budget work, budget, procurement and training plans
are submitted to the federal level technical and steering committees
72. Approved revisions of work, budget, procurement and training plans are
consolidated by MoWIE and submitted to the World Bank for its approval. Budget
transfer application for approval is accepted only if the proposal is submitted within
the first two quarters of a fiscal year.
73. The plan & Budget including a consistent Procurement Plan should be cleared by the
Bank before commencement of any disbursement.
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3.3. Accounting
74. Accounting is the system used to track, record, analyses and summarize financial
transactions. The accounts shall be prepared according to generally accepted
accounting principles. The accounting system for each implementing entities will
be a double entry bookkeeping system and modified cash bases of accounting in
compliance with the GoE accounting policies and procedures. Most of the
implementing entities have a financial management (FM) manual of their own,
except Gambella and Semera utilities. However, the financial management for this
2nd UWSS project will be in accordance to the requirements depicted in this financial
management arrangements chapter of the PIM.
3.3.1. Accounting Centers

75. The first task in developing the accounting system is defining the accounting centers.
For the 2nd UWSS project the main accounting centers are:
✓ MoWIE
✓ All participating RWBs (9)
✓ AAWSA
✓ Utilities in the Secondary cities (22)
76. Centers should ensure that they have an adequate accounting system which will
record all financial transactions completely and accurately. These transactions must
be processed on a timely basis. A system of internal control is an essential component
of any accounting system to ensure accurate recording of financial transaction.
3.3.2. Methods of Accounting

77. Each accounting centers adopt Double Entry System of book keeping on modified
cash basis using the FGE standard accounting records, as described in the FGE
Accounting System Manual III, Volume I (Accounting for Modified Cash Basis
Transactions).
✓ All payments will be charged off from the relevant project activity account
head (chart of accounts) at the time of making the payments.
✓ Advance payments will be charged off from the relevant project activity
account head on adjustment
✓ Materials purchased for project activities will be charged off from the
relevant project expenditure head at the time of purchase itself.
✓ Release of funds to other implementing entities will be accounted for as
advance in the books of account and treated as expenditure only upon
submission of expenditure information.
✓ Release of funds to suppliers will be accounted for as advance in the books
of account and treated as expenditure only upon submission of expenditure
information.
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3.3.3. Transaction sources

✓ The second UWSSP follows FGE accounting and financial management
cycle and passes the following process:
✓ Budgeting expenditure
✓ Preparation and coding of source documents or vouchers then
✓ journalizing entries to the transaction register,
✓ posting to control and subsidiary ledgers and finally
✓ Preparation of financial statements and other reports.
78. Therefore, the bookkeeping cycle for Second UWSSP starts when money is received
in the project designated accounts of implementing agencies and ends when report
of expenditures is presented to the MoWIE and MoWIE is closing the accounts.
79. Summarized below are the specific source documents and books of the account
together with the required financial reports, as per the FGE manual.
80. Transaction and source documents:
✓ Cash Receipt Voucher(CRV)
✓ Bank payment voucher (BPV)
✓ Petty Cash Payment voucher (CPV)
✓ Journal voucher
✓ Debit notes
✓ Credit notes
✓ Purchase Documents Payroll
24
3.3.4. Transactions, Source Documents and books

81. Source documents are prepared to capture transactions as and when it occurs.
Transaction Register / Book of Original
82. The Transaction Register is maintained to ensure that all transactions are recorded
in the accounting system and serves as a basis to post entries into the Ledgers. Journal
entries are coded on each source documents. Each of the transactions and its
reference are first recorded in the Transaction Register from the respective source
documents.
83. All transactions of the Second UWSSP concluded by the implementing agency shall
be recorded in the register from the source documents. There are three major types
of transactions to be recorded in the Transaction Register
84. Transaction Register / Book of Original Entry
Source documents Types of transaction Specifics
CRV Cash receipts Involves Collection of cash

Receipt of check through
Cash or Bank Payment Cash Payment Involves Cash payment in

Voucher check Transfer by Bank
Journal Voucher None cash transactions, Transactions not involving

transfers & Aid in kind Cash receipts and payment
vouchers
85. Each implementing agency shall maintain the standard transactions register. The
register should be prepared in duplicate.
86. At Federal level, MoWIE shall also maintain transaction registers in addition to the
standard register to deal with the special/designated bank accounts. One transaction
register per special account shall be maintained. These transaction registers will be
different from the local currency register in that they have additional column to fill
in the foreign currency information.
General Ledger
87. General ledger is a group of accounts that is used as a second step in the process of
recording and summarizing transactions. The primary book of record is the
transaction register and the general ledger is the second register. It is between the
register and the financial reports and as such prepares information that goes into the
reports. The ledger card shall be used without any modification in the form. The
Second UWSSP General Ledger will be organized in sequence of the account codes
25
similar to the Government accountas will be detailed in financial procedures that will
be prepared later:
88. The balances of the General ledger would be the basis for financial reporting as
proved by periodic trail balance.
89. Subsidiary Ledger Control account balances may need detail in some cases.
Subsidiary ledgers shall be maintained to provide that additional detail information.
Accounts that needs subsidiary ledger are the expenditure, receivable, inter
implementing agencies accounts and payable
3.3.5. Charts of Accounts

90. The Federal Government of Ethiopia (FGE) Chart of account as described in the
FGE Accounting System Manual III, Volume II (Chart of Accounts) will be in use
for the project without making no changes to the existing account codes of FGE chart
of accounts but with development of new sub accounts codes and titles where
necessary to capture properly the project components sub components and categories
of the project expenditure.This will again be also detailed in the financial procedures
that will be prepared later.
3.3.6. Accounting System

91. Computerization facilitates timely and reliable financial reporting. Each
implementing entities are expected to use software packages for its project
accounting. However, uniformity of the accounting system including having
enough fields; character position and design for the generation of report on project
category, major component, sub components and chart of accounts should be
considered. The software thus need to accommodate the chart of accounts. The
capacity of the supplier of the software to provide technical support for the product
must be ensured in advance. The installed software must provide the timely and
reliable information needed for project decision taking and reporting.
3.3.7. Double Dipping.

92. Due to extension of the closing date of the ongoing UWSSP-1 up to December 31,
2017, it is likely that the two projects for five of the utilities will run in parallel for
at least four months. The risk of double dipping in these five utilities of UWSSP-1
with UWSSP II over overlapping period is low. This is because the overlapping
period is short and that different/distinct activities are being financed by the two
operations. But to avoid this risk of duplication of activities, adequate monitoring
systems should be instituted at these utilities, RWBs and MoWIE level.
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3.4. Financial Management Reporting
3.4.1. Reporting procedures:
93. Financial reports generated from the above accounting system will be comparable to
fund allocations for the different components; yearly budgets, forecasting and
utilization of funds relating to physical and institutional development as targeted
under the Project.
94. Consistency in internal reporting and reporting regimes should be streamlined in
content as well as utility. Project reporting is to be done on quarterly -Interim
Financial Reports (IFRs), half yearly and annual basis by each of the implementing
entities.
95. Reports at least include: Statement of sources and uses of funds; the current quarter's
project expenditures including comparison with budgets for the quarter and
cumulatively by disbursement categories, components and subcomponents;
statement of balances for the quarter and cumulatively; statement of forecasted
expenditures by disbursement category for the two quarters after the latest IFR
received; etc.
96. MoWIE will submit consolidated IFR to IDA within 45 days after the end of the
quarter. The format and contents to be agreed with MoWIE would be in consistent
with the World Bank’s standard. MoWIE is expected to produce its own IFR and
consolidate all other IFRs received from RWBs and AAWSA. Likewise, RWBs are
expected to produce their own and consolidate IFRs from their respective utilities in
secondary cities by the 30 days after the end of the quarter; while IFRs from AWSSA
and utilities in the secondary cities are expected to submit within 20 days to MoWIE,
WRDF and RWBs respectively.
3.4.2. Contents of IFR Reports

97. This section briefly discusses about the main schedules/statements forming part of
the IFRs.
98. Statement of Sources & Uses of Funds Summary information on opening cash
balances; sources of funds, uses of funds and closing cash balance will be contained
in this form. This report is prepared by all implementing entities at all levels.
99. In this statement MoWIE shall include all opening balances of woredas and region,
cash transfer from MOFED and donor direct transfer if any, expenditures of
reporting period with major components level, and ending balance with detail
breakdown(cash on hand and at bank, advances, payables).
100. Report prepared at MoWIE level include all opening balances of the donor
account & regions, sources or collection from donor and government, expenditures
27
total of the reporting period with components details
101. All the donor account balance kept in foreign currency are converted to Birr using
the prevailing exchange rate. The statements shall prepare every quarter and once in
a year.
3.4.3. Balance Sheet

102. Balance sheet is prepared at all levels of government shall MoWIE prepare
balance sheet after preparing sources & uses of funds. It shows the overall financial
position of the programme.
103. Major consolidated items included in this statement are current assets, currents
liabilities and accounted fund. The statements shall prepare every quarter and once
in a year.
3.4.4. Statement of Special (Designated) Accounts /FUND FLOW/
104. This is a statement showing summary of the movements of each of the financers’
special foreign bank accounts. Separate statement shall prepare for each financer.
105. The statement include receipts, transfer to pool birr account, service charge
apportioned expenditures of the period, closing balance, and foreign exchange gain
or loss. Calculation of exchange rate gain or loss shall follow governments
accounting procedures. The statements shall prepare every quarter and once in a
year.
3.4.5. Statement of Use of Fund

106. Statement of uses of fund /fund utilization/ shows actual expenditures, which are
appropriately classified by main project activities (categories, components and sub-
components) and include an actual versus budget comparisons for the current
quarter, year to date and cumulative project life and percentage of utilization.
107. The statement is prepared at all levels including federal, regional, woredas and
city level. The regions are consolidating each woredasand sector bureau actual
utilization report and compare with their allocated budget.
3.4.6. Consolidated Expenditures Summary

108. Summary of expenditures consolidated at federal level. Each region expenditures
should be presented with major components details (Rural, Urban, and program
management),
109. Both annually and quarterly it is prepare and compared with respective period
budget to show actual versus budget comparisons for the current quarter, year to date
28
and cumulative project life. The statement shows fund utilization percentage as per
each region and major components.
3.4.7. Expenditures Forecasts & Cash Requirements

110. This includes a statement of cash forecast or requirement covering for six months
period.
111. It is prepared both in the local currency and in the currency of the designated bank
accountby taking project budget for the coming two quarters after the end of the
relevant quarter. The total is then reduced by ending balance and direct payments if
any. It should also indicate the source of finance. This report should be worked with
maximum due diligent to get accurate forecast figure which reflect the correct future
expenditure and source of funds.
3.4.8. Aging Analysis of payables and receivables

112. This discusses aging of unsettled payables and receivables, its volume compared
to the total expenditure of the quarter or percentage of cumulative expenditure. All
fund receiving entities should prepare and submit to higher level entity.
3.4.9. Bank reconciliation and Bank Statements

113. From practice, it is understood that the balance per record of organization’s book
may not agree with the balance per bank statement. The most common causes for
differences include:-Deposits in transit, not shown in the bank statements,
Outstanding Cheques not presented to the bank, Deposits/payment not recorded on
books, Errors in recording either by the bank or by the implementing agency
114. Bank reconciliation should be prepared every month in not more than a week time
from the end of the month. Bank reconciliation should be made on a monthly basis
even if there is no payment or deposit or transfer received in the month.
115. Bank reconciliations to be prepared by the following entities to reconcile all bank
accounts maintained for the program.
3.5. Fund Flow Arrangement and Disbursement

116. The fund flow arrangement is as detailed here below and as shown in the Figure
1 for Fund Flow, Reporting and Disbursement arrangement.
117. Legal enforcement that should be taken to ensure social safeguard activities in to
proper implementation is very mandatory. Thus, linking financial disbursement with
safeguard activities is important and need to be clearly stated in this PIM how this is
integrated.
29
Figure 1: Fund Flow and Financial Reporting Arrangement

118. As shown in the Figure 6 each of the implementing entities will maintain a
separate bank account for the project in a commercial Bank for the project funds.
IDA fund will be deposited in a designated US Dollar account to be opened and
managed by MoWIE at the National Bank of Ethiopia. Funds from this designated
US $ account of MoWIE will be transferred to Birr account opened by MoWIE for
Birr payments and expenses of the project. MoWIE then transfers Birr to accounts
opened by each RWBs, AAWSA and utilities in the secondary cities. The fund flow
for each implementing entity will be in accordance to its approved annual work plan
and budget.
119. The project will start with an initial amount being deposited to the MoWIE
designated dollar account (DA) as an advance. MoWIE will again open a Birr
account to receive funds from IDA. Each of the other implementing entities namely
RWBs, AAWSA and Utilities in the secondary cities will also open a Birr account
to receive funds from IDA through MoWIE. Advance to MoWIE, RWBs, AAWSA
and Utilities in the secondary cities will be based on approved work plan and the
amount will be transferred to the bank accounts opened at each level.
120. Except for advance deposit any subsequent disbursement of the loan proceeds
from IDA requires submission of consolidated IFR. IDA will make quarterly
disbursement based on the consolidated IFR submitted to it by MoWIE within 45
days at the close of each quarter. Timely submission of IFRs is mandatory for further
disbursement of funds to the special account with the National Bank of Ethiopia
30
operated by MoWIE. Disbursement will be based on actual expenditure of the past
quarter and cash requirements forecast for the next six months less unutilized
available fund or balance. The expenditure reported in IFR is subjected to
confirmation as per the annual audit for the project. One or combination of the
disbursement methods of Designated Account, Direct Payment, Reimbursement and
Special Commitment can be used by MoWIE to withdraw fund from IDA to the
project using withdrawal applications through online platform.
3.6. Internal Control and Auditing
5.5.1. Internal Control

121. Each implementing agency shall ensure that adequate internal controls are put in
place and that the controls are adhered strictly. At present, most of the utilities
internal audit units are largely ineffective. Until the capacity of internal audits of
implementing agencies is built and strengthened to provide the required adequate
internal controls, one internal auditor at MoWIE will be recruited in the meantime
by the project to support the project audit and close the gap in the internal audit
function. Among others, the internal control system should ensure that all
transactions are recorded, the recorded transactions have substance, they are
recorded at correct amounts in the correct period in the correct accounts and that they
are posted and summarized correctly. Both the cash and check payment transactions
shall be prepared for posting to the transaction register.
122. Presence of basic accounting and internal control systems, including staffing is a
prerequisite for city utilities to releasing resources to them. Basic internal controls
that should be in place are: segregation of duties and multiple signature systems (at
least two for each transaction), prompt and proper recording of transactions and
events, pre-numbering (sequentially) of originating documents (such as goods’
received notes, cash receipts and invoices, and accounting for these; independent
recording of transactions in control accounts and periodic checking of these with the
balances on the appropriate ledger; reconciliation of cash books with bank
statements; cross-checking of documents (e.g. invoice with purchase order and
goods received note); and verification of physical assets.
5.5.2. Journal Vouchers

123. Journal Vouchers shall be used to capture transactions that do not result in
payment or receipt of cash. The Head of the Budget and Accounts shall approve all
Journal Vouchers. Not all transactions involve payment of cash or receipt of cash.
The purpose of the Journal Voucher is to capture such non-cash transactions. Other
common Journal Entries are correction of errors.
124. The Journal Voucher in the FGE Accounting System shall be used. It shall be
31
prepared in two copies. The first copy is the accounts copy and the second copy is
pad copy. The Head of Budget and Accounts must approve all Journal Vouchers
after the accountant prepares it. The accountant then posts it to the transactions
register.
125. All implementing entities should strictly control over Financial Management
activities using the following procedures:
5.5.3. Control over Cash Receipt

✓ All cash receipt should be evidenced by Cash Receipt Voucher (CRV) in
strict numerical sequence;
✓ The budget and account code shall be written on the face of the cash receipts;
✓ Cashier should have no role in the preparations of, or access to, the
accounting records other than those related directly to cash;
✓ All cash received should be deposited intact to the bank daily and the
making of payments or advances out of cash collections should be
specifically prohibited;
✓ Cheques received should be deposited on separate deposit slips, each deposit
slip being referenced to the receipt to which it relates;
✓ The unused CRV pads must be kept in safe custody by a responsible official
who is not involved in the handling of cash;
✓ New pads should only be issued against return of the completed ones, which
should be scrutinized by the issuing official for apparent correctness, i.e.
there have been no alteration or erasures;
✓ Registers of unused receipts should be maintained by the custodian who
should be subject to periodic surprise verification by accountant or auditor;
✓ The cashier’s record should be in such a way that all receipts are recorded
in numerical sequence so that any omission can easily be spotted;
✓ The deposit of each day collections should be deposited separately so that
the resultant nil balance proves that all cash received has been deposited;
✓ Surprise cash counts should be conducted from time to time;
✓ The cashier’s records should be independently checked every day and
particular attention made to the integrity of the numerical sequences of the
prime documents which should be scrutinized for-evidence of alternation or
erasure;
32
5.5.4. Control over Petty Cash
✓ Petty cash book which the daily expenditures and the balance on hand must
be maintained;
✓ The fund must be kept in a safe place of conditions.;
✓ The petty cash fund must not be mixed with other funds and should not be
used for salary advance;
✓ Pre-numbered Cash Payment Vouchers must be used.
✓ Petty cashiers should not have role in approving the amount of fund, signing
Cheques or approving payment vouchers or recording and/or posting
functions;
✓ All paid petty cash vouchers must be stamped “paid” and initialed by the
petty cashier;
✓ The accountant in charge must stamp all replenished Payment Vouchers
“Replenished”;
✓ Surprise cash counts should be conducted from time to time;
5.5.5. Control over Bank Payments

✓ Cheque books must be collected from bank by designated signatories or
authorized personnel. The Cheque leaves should be counted for
completeness at the time of receipt. Any missing leaves are to be reported
immediately to the bank for replacement;
✓ Only one Cheque book at a time should be issued to the accountant
responsible for Cheque preparation;
✓ Cheque Payment Voucher should be prepared based on the authorized
payment requests. Availability of budget and completeness and validity of
supporting documentation should be carried out before preparation and
submission of the payment voucher and the Cheques to the officials for
signature;
✓ Blank Cheques should not be signed by any of the signatories;
✓ Cheque stubs should be completed with the date, name of payee, amount
and initials of the authorized officials;
✓ When there is an error in the preparation of a Cheque, the Cheque should be
cancelled by writing “CANCELLED” diagonally across the face of the
Cheque. The cancelled Cheque should then be retained in the Cheque book
stapled to the Cheque stub;
✓ Each Cheque payment should be evidenced by Cheque Payment Voucher.
Payments to organizations, suppliers and contractors shall be supported with
33
the required documents such as receipts, invoices, contracts, work
completion certificates and goods or materials receipt reports;
✓ To ensure that only the designated beneficiary receive payment and curb
fraudulent endorsement, Cheques should preferably be made payable to a
person company or enterprise and crossed A/C Payee only;
✓ Bank accounts should be reconciled monthly against a bank book or cash at
bank ledger; and
✓ Supporting documents for bank payment should be stamped with a “Paid
Stamp”. Paid stamp should be prepared in the name of PROJECT
COORDINATION UNIT Project and it should contain Reference and Date.
5.5.6. Control Over Special Payments

✓ Travel and Per diem
✓ Travels should basically be pre-planned; and
✓ Per Diem rates and other reimbursable expenses should be computed in
accordance with the approved rate for the project.
✓ When Travel Advance is taken:
✓ When a travel advance is required, the traveler should fill the Travel Request
and Approval Form, prepared in one copy and get the approval of his
unit/department head. The traveler then passes the approved form to
accounts for budget checking and processing payment; and
✓ Earlier Travel advance must be cleared (settled) before another travel
advance is given.
✓ When Travel Advance Settled
✓ Traveler should settle the per diem advance in three days from the date of
return.
✓ Traveler should complete and submits a Travel Report and Settlement Form
within three days of returning from the travel.
✓ The settlement form shall be prepared by the traveler (finance may assist) in
one copy, attaching allowable receipts for reimbursable expenses.
✓ The form shall be verified by head of the unit or department where the
traveler belongs, checked by accountant and should be approved by the
respective authority.
✓ The Financial Management Specialist shall to check the validity of the
supporting documents. Where any errors are found, the Travel Report and
Settlement Form are returned to the traveler with a memo listing the errors.
✓ If there is additional payment to be given to the traveler, the appropriate
payment voucher should be prepared. If the traveler is supposed to refund
for the excess advance, he/she must be informed to return the cash against a
cash receipt.
34
5.5.7. Purchase Advance

✓ Purchase advance should be provided to a purchaser in cash or in Cheque in
a situation where vendors are not known in advance;
✓ The appropriate procurement documentations, including purchase
requisition, purchase order, approved request for payment and others as
applicable, need to be fulfilled before preparation of the payment voucher;
✓ Purchase advances should be settled in 30 days’ time from the date of
receipt;
✓ No purchase advance will be provided unless the purchaser settles the earlier
advances;
✓ All purchase advances should be settled immediately up on receiving the
goods/service by providing the required invoice, GRN, purchase order, and
evaluation minutes and Performa invoices;
✓ All purchase advances should be settled before closing date of Sene 30 (July
7) of each budget year;
✓ Workshops, Seminars and Training Payments to workshop and seminar
participants should be done according to the following procedure;
✓ Attendance of all participants for each day must be duly taken;
✓ The number of stay on travel must be confirmed by the mode of transport
they have used and distance of the place they are coming from to the venue;
✓ Confirmation letter of salary scale and that each participant has not taken
any allowance from its work station must be submitted;
✓ Official and original receipt for transport payment in its clean form shall be
to be submitted as a witness for the expense incurred for transportation;
✓ All the above information may have to be attested by the focal person who
organizes the event; and
✓ Payment sheet should be prepared based on the above information and
approved by the respective officials who are delegated to authorize
payments.
5.5.8. Control of Fixed Assets

✓ Fixed Asset Register (FAR) should be set up and maintained for each group
of assets such as vehicles and transport; plant machinery and equipment;
buildings, furnishings and fixtures, etc.
✓ There shall be a register, separate and with more detailed information about
each individual fixed asset or the types of fixed assets the Program would
acquire from time to time. This register should be strictly maintained, in the
absence of maintenance of fixed assets account. The register should be
maintained at all implementation agencies. The information that is to be
provided on each FAR includes:
35
▪ Detailed description of the fixed asset, including type, Chassis and
Engine number, or serial number if known, the date of acquisition and
cost or value of the asset when it was first acquired;
▪ Current location of fixed asset and the center to which the asset is
assigned;
▪ Identification number, if available; and
▪ Details of the ownership status, that is, whether the asset is owned by
or Granted temporarily in custody of an implementing agency.
126. Periodic physical inventory of fixed assets should be conducted and the result
should be compared with the register. Any identified difference should be
communicated to management for decision and action; and
127. The accountant should extract his records and periodically reconcile with the
master fixed assets register of the specific implementing agency. The internal auditor
should perform the same at a surprise visit.
5.5.9. Control over Payroll

✓ Records relating to staff shall be based on proper documents issued by an
authorized official. Input records like engagement letters, increments etc.
should be properly completed and authorized;
✓ All changes made to earnings for individual staff members should be
authorized and controlled;
✓ Only eligible employees should be paid and the amount drawn for payment
shall be reconciled by comparing it to the previous month’s payroll;
✓ Whenever it is feasible, especially when there is more than one accountant,
the function of payroll preparation should be rotated among these
accountants;
✓ Payroll deductions are authorized, correctly accounted for and paid to the
appropriate third parties; and
✓ Transactions related to salaries are accurately entered in the accounting
record.
5.5.10.Stock Management
✓ The FGE accounting manual requires stock accounts to be maintained as
assets although the existing adopted accounting system of the Government
stock balances are not recognized in the accounts as an asset. Therefore,
control procedures around memorandum records should be adequate and
strictly followed.
✓ In and out of stock items must be evidenced by goods receiving note and
goods issue note and a requisition for issue;
✓ Maintain stock cards for receipts, issue and balances of stock items. The
36
stock cards should be maintained for both quantity and value to the extent
possible. The record keeping should be done by someone other than the store
man;
✓ Prepare stock taking instructions and programs periodically. Conduct
physical count and compare with the card balance. Bring any variance to the
management attention, decision and action. Consider accounting for
adjustable events, if there are any;
✓ Record cut of documents of stock issue and receipt vouchers as of the year
end;
✓ The counting team should sign on the count sheet  Update stock records by
the count;
✓ Internal auditors should review adequacy of adherence to the control
procedures;
✓ Damaged items should be identified and adjustments should be done on the
stock cards based on management decision; and
✓ Prepare summary report for monthly stock movements.
37
5.5.11.Internal Auditing
128. Internal audit system is one of the important parts of financial management to
examine and verify the adequacy and effectiveness of the internal inherent control
of each implementing entity.
129. The frequency for the Internal Audit system for the project is six months. The
scope of the internal auditing involves topics such as the effectiveness of operations,
the reliability of financial reporting, deterring and investigating fraud, safeguarding
assets, and compliance with laws and regulations. As per regular government
procedures, the internal auditor of each implementing entity (i.e. MoWIE, RWBs,
AAWSSA, secondary city utilities) shall perform an internal audit on the program
fund. All the implementing entities to be funded by the project must be well
performing entities. Thus, all the internal audit units of the mentioned entities shall
routinely include the Project in their work plan and conduct regular audit on the
Project funds. The audit includes a periodic review of effectiveness and compliance
with financial and accounting policies and procedures and internal control
mechanisms; the overall reliability of accounting system, data and financial reports.
The report of the implementing agencies’ internal auditors shall be addressed and
submitted to the respective coordinator of the PIU of the implementing entity.
However, major findings during an audit shall be communicated to MoWIE
immediately for corrective action.
38
5.5.12.External Audit
130. External Audit is a periodic examination of the books of accounts and records of
an entity conducted by an independent third party (an auditor) to ensure that they
have been properly maintained, are accurate and comply with established concepts,
principles, and accounting standards, and give a true and fair view of the financial
state of the entity.
131. Office of Federal Auditor General or another qualified auditor as agreed in
advance with the World Bank will be responsible for auditing the project.
132. The audit will be carried out in accordance to the standard indicated in the audit
ToR agreed during negotiation. MoWIE will submit audited financial statements six
months after the end of each fiscal year. The annual project audit report is expected
to include audited financial statements; auditor’s opinion; notes to the statement and
Management letter.
39
4. Annexes
3.7. Annex 1 Chart of Accounts
Account Title Account Number
EXTERNAL LOAN 3000
EXTERNAL ASSISTANCE 2000
TRANSFERS 4000-4099
Transfers, MOFEC to implementing entities 4006-1
Transfers, MOFEC to BOFED 4006-3
Transfers, BOFED to WOFED 4011-1
Transfers, BOFED to REB 4011-2
ASSETS
Cash on hand 4101
Cash at Bank – US$ Designated A/C 4102
Cash at Bank – US$ Special A/C -IDA 4102-1
Cash at Bank – US$ Special A/C – MDTF 4102-2
Cash at Bank – US$ Special A/C –GPE 4102-3
Cash at Bank - Treasury Account – MOFED 4103
Cash at Bank – Treasury Account - Other Implementing 4103

agencies
DEBTORS AND PREPAYMENTS
40
Suspense 4201
Cash shortage and overage 4202
Advance to Staff: - travel 4203
Advance to BOFED/federal implementing agencies/woredas 4208
Other advance within government entities 4210
Advance to staff: - Purchase 4211
Advance to contractors 4251
Advance to consultants 4252
Advance to suppliers 4253
Other Receivables 4274
LIABILITIES
Accrued payable 5001
Sundry payables 5002
Salary payable 5004
Payroll deductions 5005
Withholding tax payable 5006
Due to Staff 5021
Due to Regions 5026
Due to MOFEE/BOFED 5027
Other payable within government entities 5028
VAT payable 5059
41
Retention 5061
NET ASSETS EQUITY 5601
EXPENDITURES
PERSONNEL SERVICES
Wage to contact staff 6113
Allowances/benefits
Allowances to contract staff 6123
Allowances to external contract staff 6124
Pension contribution
Govenment contribution 6131
GOODS AND SERVICES
Goods and supplies
Goods and Supplies 6210
Office supplies 6212
Printing 6213
Educational supplies 6215
Fuel and lubricants 6217
Other material and supplies 6218
Miscellaneous equipment 6219
Research and development supplies 6223
Travelling and official entertainment
42
Per diem 6231
Transport fees 6232
Maintenance and repair
Maintenance and repair of vehicles and other transports 6241
Maintenance and repair of equipment 6243
Maintenance and repair of building, furnishing and fixtures 6244
Contracted services
Contracted professional services 6251
Rent 6252
Advertising 6253
Insurance 6254
Freight 6255
Fees and charges 6256
Electricity charges 6257
Telecommunication charges 6258
Water and other utilities 6259
Training services
Local training 6271
External training 6272
FIXED ASSETS AND CONSTRUCTION
Fixed assets
43
Purchase of vehicles and other vehicles transport 6311
Purchase of equipment 6313
Purchase of buildings, furnishings and fixtures 6314
OTHER PAYMENTS
Grant to schools 6412
Miscellaneous payments 6419
44
3.8. Annex 2 Disbursement schedule
UWSSP I DISBURSEMENT SCHEDULE IN MILLION USD $

Actual Actual Actual Actual Actual Actual Actual
Planned disbursed by Planned disbursed by Planned disbursed by Planned disbursed by Planned disbursed by Planned disbursed by Planned disbursed by
Disbursement the end of Disbursement the end of Disbursement the end of Disbursement the end of Disbursement the end of Disbursement the end of Disbursement the end of
S.No Proportion in 2018 FY 2018 FY in 2019 FY 2019 FY in 2020 FY 2020 FY in 2021 FY 2021 FY in 2022 FY 2022 FY in 2023 FY 2023 FY in 2024 FY 2024 FY
1 Addis Ababa 51.49% 10.3 24.198 47.37 52.51 54.059 27.802 12.871
2 Total for Secondary Cities 47.72% 9.54 22.43 43.9 48.68 50.109 25.77 11.931
3 MoWIE & RWBs 0.79% 0.16 0.372 0.73 0.81 0.832 0.428 0.198
45
3.9. Annex 3Vouchers

Second Urban Water Supply and Sanitation Project
CHECK PAYMENT VOUCHER
No.__________
Date_______________________
Paid to______________________________________________________________________________
Amount in figure_______________________________________________________________________
Amount in Words______________________________________________________________
Purpose of payment
_________________________________________________________________________
_____________________________________________________________________________
______________
Check No. ___________________ Bank Account No______________________________
For Accounts Only

Budget Category Account code Debit Credit
Total
__________________ ________________ _________________
Prepared by Checked by Approved by
__________________
Received by
DISTRIBUTION
Original - Accounts 1st Copy - Pad Copy
46

Petty Cash PAYMENT VOUCHER
No.__________
Date_______________________
Paid to______________________________________________________________________________
Amount in figure_______________________________________________________________________
Amount in Words______________________________________________________________
Purpose of payment
_________________________________________________________________________
_____________________________________________________________________________
______________
For Accounts Only

Budget Category Account code Debit Credit
Total
__________________ ________________ _________________
Prepared by Checked by Approved by
__________________
Received by
DISTRIBUTION
Original - Accounts 1st Copy - Pad Copy
47

PETTY CASH SUMMARY & Replenishment REQUEST FORM
Page ______________ Date __________________

Date PCPV No. Discription Amount paid Balance
Balance brought forward
Total amount paid-Amount to be replenished

Petty cash on hand: in cash
Petty cash on hand: in suspense voucher
Petty cash limit
Balance carried forward-next page
Cashier’s Name & Signature

___________________________________________________________________
Checked and Receipt of the Petty Cash Summary Replenishment Request Form together with all supporting
documents by (Name & Signature)
_____________________________________________________________________
Approved by _____________________ Check No. __________________ Date Replenished

_________________
DISTRIBUTION: Original - Finance Copy - Cashier
48

Suspense Voucher
Paid to______________________________________________________________________________
Amount in figure_______________________________________________________________________
Amount in Words______________________________________________________________
Purpose of payment
_________________________________________________________________________
_____________________________________________________________________________
______________
Duration: For ________________________ days
__________________ ______________________ _______________________

Requested by Approved by Recipient’s Signature
Note: This temporary voucher remains with the cashier until settlement is made by the
recipient.
49

REQUEST FOR QUOTATION
No. _______________________
Date ___________________
To_________________________________________________________________________
Please issue us your Proforma invoice for the following items.
Ser. Item Description Unit Quantity Remark

No. Meas.
Requested by ____________________ Approved by _______________________
50

Goods Receiving Notes
No. _______________________
Date ___________________
Supplier_____________________________________________________________________________
Supplier's Inv. no. ______________ Date ____________PO No. ____________
Purchase Req. No. _____________ Date ____________
Donor Name__________________________ Project Name_________________________
Budget Code _____________________________
S.No Item Description Unit Qty Price
Unit Cost Total Cost
Received by: Delivered by: Approved by:

Name __________________ Name _________________ Name _________________
Signature _____________ Signature ____________ Signature ____________
DISTRIBUTION
Original – Accounts 1st Copy – Store 2nd Copy - Pad
51

PURCHASE REQUISITION
No. _______________________
Date ___________________
Requesting Department________________________________________________________________
Budget Code _____________________________
S.No Item Description Code no. Size or part Unit Qty Remark
no.
Prepared by ____________________ Checked by______________

Approved by ______________________
DISTRIBUTION
Original – Accounts (through purchaser) 1st Copy – Store
52

STORE REQUISITION
No. _______________________
Date ___________________
Requesting Department________________________________________________________________
Budget Code _____________________________
Store Issue Voucher No. __________________ Purchase Requestion No._________________
S.No Item Description Code no. Size or part Unit Qty. Qty.
no. Requested Approved
Requested by: Approved by: Property Div. Head

Name __________________ Signature ____________ Signature ___________________
Signature _____________
DISTRIBUTION
Original – Accounts 1st Copy -store keeper 2nd Copy – Pad
53

STORE ISSUE VOUCHER
No. _______________________
Date ___________________
Receiving Department________________________________________________________________
Store Requisition No. ____________________ Date ____________
Budget Code _____________________________
S.No Item Code Unit Qty Price Remark

Description no.
Unit Cost Total

Cost
Recieved by: Delivered by: Approved by:

Name __________________ Name ____________ Signature ___________________
Signature _____________ Signature _____________
DISTRIBUTION
Original – Accounts 1st Copy -store 2nd Copy – Pad
54

STOKE RECORD CARD
Description ___________________________ Model ________________ Stock Card No.
_________________
Part No. ___________________
Date Refer. Particulars Stock Movement Price

(Issued to
No.
& Qty Qty Balance Unit FIFO unit Total
In Out Price Price Value

Received
From)
55

TRAVEL REQUEST & APPROVAL FORM
Name of Traveling Person_____________________________________________________________.
Department ________________________________ Duty Station ___________________

Salary__________________
Traveling From ______________to _______________ Duration ___________ Type of Transport

____________________
Purpose of Travel ______________________________________________________________________________

____________________________________________________________________________________________
_________
Perdiem
Type of expense No of days Amount Birr
rate
Travel Advance
Transport Advance
Fuel Advance
Others (Specify)
Total Advance
I the undersigned have promised to settle the above advance with proper documentation or in cash, in case of
unused advance, within five days of my return from field trip.
Name of the traveler:______________________ Signature ______________ Date ______________

______________________
Certified by
______________________
Approved by
56

TRAVEL REPORT & SETTLEMENT FORM
Name of Traveling Person_______________________ Monthly Salary_________________
Department: _______________________
Place of Travel: From____________________ to __________________________________
Travel advance taken: Ref No. ______________dated __________Birr _________________
Travel Dates Report
Travel Departure from Arrival in
From To Date Time Date Time
1. Per diem calculation
Date Per Break Lunch Dinner Accommodatio Total amount

diem fast 25% 25% n 40%
rate 10%
Total
2. Transport/Fuel expenses as per the attached receipts: ______________________________
3. Other Payments, as per the attached receipt _____________________________________
TOTAL PAYMENT (1+2+3) ___________________________
ADVANCE PAYMENT ___________________________ CK/PV No. _____________________
PAYABLE (RECEIVABLE) ___________________________
___________________ ___________________ _________________ _________________
Traveler's Verified by Checked by Approved by
Checked and Receipt of the Summary report together with the supporting documents by
_________________
DISTRIBUTION
Original: Accounts Copy: Traveler
57

PERDIEM PAYMENT SHEET (NON STAFF)
Project Activity ______________________________________

Budget Code ___________________
Venue: ________________________________ Date: _________________________
Ser Name Represented No of Perdiem Total Signature Remark

No. Organization days rate per Perdiem
Name day
_________________ ______________ _____________ _________________

Prepared by Verified by Checked by Approved by
Coordinator
58

Fixed Asset Register
S. Date of Description Ref. Supplier Qty Cost Condition ID No. Location Remark
of item
NO purchase Name
59
3.10. Annex 4 Audit ToR
60
61
62
63
64
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3.11. Annex 5 IFR Format
66
THE NATIONAL FEDERAL GOVERNMENT OF ETHIOPIA
MINISTRY OF WATER, IRRIGATION AND ELECTRICITY
SECOND ETHIOPIA UBAN WATER SUPPLY AND

SANITATION PROJECT
(Project ID P156433)
Interim Unaudited Financial Report
For the quarter ended……
Contents
1. Notes to the IFR-Discussion of Financial performance, Notes & Explanations ............... - 2 -
2. Statement of Sources and Uses of Fund-In Category .................................................... - 5 -
3. Statement of Sources and Uses of Fund- In Component ............................................... - 6 -
4. Uses of Funds by Project Component ............................................................................... 9
5. Uses of Funds by Project Category................................................................................. 12
6. Expenditure Apportionment Worksheet ........................................................................ 15
7. Expenditure Forecast per category ................................................................................ 16
8. Expenditure Forecast per component ............................................................................ 18
9. Cash Flow Forecast ....................................................................................................... 20
10. End Balance Summary ............................................................................................... 22
11. Statement of Cash Movement ................................................................................... 23
12. Bank Statements ....................................................................................................... 26
13. Schedule of Designated Account (DA) Documentation................................................ 29
14. Payment Made during Reporting Period .................................................................... 30
15. Schedule of expenditure subject to prior and post review by World Bank ................... 31
16. Accounts Receivable/Advance Schedule With Age Analysis ........................................ 32
17. Accounts Payables Schedule With Age Analysis ......................................................... 33
18. Account Reconciliation .............................................................................................. 34
-1-
5. Notes to the IFR-Discussion of Financial performance, Notes &

Explanations
SECTION 1: BACKGROUND INFORMATION ABOUT THE

PROJECT
3.12. 1.1 General information about the project

(PDO, Components, implementing entity, benefiting entities, etc.)
3.13. 1.2 Financial Management

(Accounting center, basis of accounting, major accounting policies, currencies, etc.)
SECTION 2: PROJECT IMPLEMENTATION
3.14. 2.1 Overview of sources of funds
3.15. 2.2 Overview of expenditures including trend analysis
3.16. 2.3 Status of budget utilization by project components/sub

components/category
3.17. 2.4 Variance analysis with summary of actions taken and/or

planned to be taken
3.18. 2.5 Overview of closing balances including analysis of major

outstanding advances and payables
-2-
3.19. 2.6 Exchange rates used
3.20. 2.7 Adjustments
3.21. 2.8 Internal audit oversight on the project funds
3.22. 2.9 FM challenges and actions taken and/or planned to be

taken
SECTION 3: STATUS OF ACTION PLANS
3.23. 3.1 FM assessment/ supervision action plans implementation

status
3.24. 3.2 Status of action plan to address issues raised in the project
audit reports
3.25. 3.3 Status of action plans to address issues raised by Internal

auditors
3.26. 3.4 Status of action plans to address issues raised by capacity

assessment
3.27. 3.5 Status of action plans to address AAWSA issues including

backlog audit
-3-
3.28. 3.6 Status of action plans to address other utility issues including
the status of resolution of their backlog audits
SECTION 4: OTHER ISSUES
-4-
6. Statement of Sources and Uses of Fund-In Category

Statement of Sources and Uses of Fund-In Category
For The Quarter Ended_____________________
Currency (to be prepared in USD and ETB)
CUMMULATI CUMMULATI
CURRENT VE CURRENT VE PROJECT
Particulars QUARTER YEAR LIFE
OPENING BALANCE
Cash on hand - -
Cash at bank- Designated Account - -
Cash at bank - Local Accounts - -
Account receivables - -
Less: Account payables - -
TOTAL OPENING BALANCE - -
ADD: SOURCES
Government contribution
Advance to the Designated Account - - -
Direct Payment - - -
Special Commitment - - -
Reimbursement - - -
Others - - -
TOTAL SOURCES FOR THE PERIOD - - -
TOTAL AVAILABLE FUND FOR THE PERIOD - - -
LESS: PROJECT EXPENDITURE BY CATEGORY
Government financed expenditures** - - -
IDA financed expenditure
Category 1 - - -
Category 2 - - -
Category 3 - - -
TOTAL EXPENDITURE FOR THE PERIOD - - -
TOTAL AVAILABLE FUND LESS TOTAL EXPENDITURE - - -
ADD: FOREIGN EXCHANGE DIFFERENCE - - -
Net Fund Available - - -
Closing balance represented By:

Cash on hand - - -
Cash at bank- Designated Account - - -
Cash at bank - Local Accounts - - -
Account receivables - - -
Less: Account payables - - -
Total Closing balance - - -
Note-** The Government financed expenditure refers to the AAWSA implemented -Part 1 a.ii of the financing
agreement to be financed by Government
Prepared By___________________________ Approved By __________________________

Signature ___________________________ Signature ___________________________
Date ________________________________ Date ______________________________
-5-
7. Statement of Sources and Uses of Fund- In Component

Statement of Sources and Uses of Fund- In Component
currency (to be prepared in USD and ETB)
CUMMULATIV CUMMULATIV
CURRENT E CURRENT E PROJECT
Particulars QUARTER YEAR LIFE
OPENING BALANCE
Cash on hand - -
Cash at bank- Designated Account - -
Cash at bank - Local Account - -
Account receivable - -
Less: Account payable - -
TOTAL OPENING BALANCE - -
ADD: SOURCES
Government Contribution
Advnace to the Designated Account - - -
Direct Payment - - -
Special Commitment - - -
Reimbursement - - -
Others - - -
TOTAL SOURCES FOR THE PERIOD - - -
TOTAL AVAILABLE FUND FOR THE PERIOD - - -
LESS: PROJECT EXPENDITURE BY COMPONENT
Component 1: Addis Ababa sanitation and water supply
services improvements
1.1: Sanitation services improvement- financed by Gov't - - -
1.1: Sanitation services improvement- financed by IDA - - -
1.2: Operational efficiency improvements - - -
1.3: Project management and institutional strengthening -
Sub total - - -
Component 2: Sanitation and water supply services
improvement in secondary Cities
2.1: Sanitation services improvement in secondary Cities - - -

2.2: Water supply and operational efficiency improvement in
secondary Cities -
2.3:Project management and institutional development in
secondary Cities - - -
Sub total - - -
-6-
Statement of Sources and Uses of Fund- In Component
currency (to be prepared in USD and ETB)
Component 3: Project management and institutional
strengthening (Federal and Regional level) - - -
TOTAL EXPENDITURE FOR THE PERIOD - - -
TOTAL AVAILABLE FUND LESS TOTAL EXPENDITURE - - -
ADD: FOREIGN EXCHANGE DIFFERENCE - - -
Net Fund Available - - -
Closing balance represented By:

Cash on hand - - -
Cash at bank- Designated Account - - -
Cash at bank - Local Account - - -
Account receivable - - -
Less: Account payable - - -
Total Closing balance - - -

Date ________________________________ Date ______________________________
-7-
8
8. Uses of Funds by Project Component

For the quarter ending………
ANNUAL CURRENT QUARTER CUMMULATIVE CURRENT YEAR CUMMULATIVE PROJECT LIFE
Project Components BUDGET Planned Actual Variance Planned Actual Variance Planned Actual Variance
Component 1: Addis Ababa sanitation and water
supply services improvements
Sub-Component 1.1: Sanitation services
improvement
a) Sanitation assessments, feasibility studies and
the design and construction of a WWTP for
eastern catchment-IDA financed
a) Sanitation assessments, feasibility studies and
the design and construction of a WWTP for
eastern catchment- Gov't financed
b) Sewerage networks for the Eastern catchment

c) Improvement of operation and maintenance
(O&M) management of existing WWTPs
d) Improvement of sanitation services in unserved
and low income areas, including construction of
communal and public latrines
e) Procurement of appropriate desludging
equipment for fecal sludge treatment plants
Sub total 0 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Sub-Component 1.2: Operational efficiency
improvements
a)
b)
c)
etc
Sub total 0 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
9
Sub-Component 1.3: Project management and
institutional strengthening
a) Hiring project staff
b)Hiring consultant
c) Operational expenses
d)Procurement of office equipment and furniture
e)Training and Exposure visit
f) Procurement of Vehicles
etc
Sub total 0 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Total for Component 1 0 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Component 2: Sanitation and water supply
services improvement in secondary Cities
a)
b)
c)
etc
Sub total 0 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Sub-Component 2.2: Water supply and
operational efficiency improvement in
secondary Cities
a)
b)
c)
etc
Sub total 0 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
10
Component 3:Project management and
institutional strengthening (Federal and Regional
level)
a)
b)
c)
etc
GRAND TOTAL 0 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Date ________________________________ Date ______________________________
11
9. Uses of Funds by Project Category

CUMMULATIVE CURRENT
ANNUAL CURRENT QUARTER YEAR CUMMULATIVE PROJECT LIFE
Project Category BUDGET Planned Actual Variance Planned Actual Variance Planned Actual Variance
Component 1: Addis Ababa sanitation and water
supply services improvements
improvement-IDA
a) Category 1
b) Category 2
c) Category 3
improvement-Gov't
Sub total 0 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Sub-Component 1.2: Operational efficiency
improvements
a) Category 1
b) Category 2
c) Category 3
etc
Sub total 0 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
institutional strengthening
a) Category 1
b) Category 2
c) Category 3
etc
Sub total 0 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
12
CUMMULATIVE CURRENT
Component 2: Sanitation and water supply
services improvement in secondary Cities
a) Category 1
b) Category 2
c) Category 3
etc
Sub total 0 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Sub-Component 2.2: Water supply and
operational efficiency improvement in
secondary Cities
a) Category 1
b) Category 2
c) Category 3
etc
Sub total 0 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
institutional development in secondary Cities
a) Category 1
b) Category 2
c) Category 3
etc
Sub total 0 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
13
CUMMULATIVE CURRENT
Component 3:Project management and
institutional strengthening (Federal and Regional
level)
a) Category 1
b) Category 2
c) Category 3
etc
GRAND TOTAL 0 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Summary by Category
a) Category 1 0 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
b) Category 2 0 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
c) Category 3 0 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Government contribution 0 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Total category costs 0 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Date ________________________________ Date ______________________________
14
10. Expenditure Apportionment Worksheet

Currency (to be prepared in USD
Current Quarter Remaining
Previous Expenditure Undocumented Undisbursed
Category Allocation per PAD * Allocation per CC** Disbursed*** Documented Allocated Total Documented Balance**** Balance*****
1 2 3 4 5 6=4+5 7=3-6 8=2-6
IDA Regular Financing

a) Category 1
b) Category 2
c) Category 3
etc
Total for IDA Regular Financing 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
IDA Scale up Facility

a) Category 1
b) Category 2
c) Category 3
etc
Total for IDA Scale up Facility 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
GOE Contribution
Total for GOE Contribution 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
GRAND TOTAL 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Date ________________________________ Date ______________________________
* Allocation total should correspond to USD amount shown in the PAD

** Allocation total should correspond to USD amount shown in the Client connection at exchange rate ruling on the reporting date
*** Disbursed amount should correspond to total amount advanced to designated account as per the cash flow forecase
**** Remaining undocumented balance should correspond to the closing fund balance as shown in the statement of sources and uses of funds
***** Remaining undisbursed amount is the differnece between the agreed amount covernted to USD at the reporting date less the total documentation
15
11. Expenditure Forecast per category

For the next Six months ending………..
Forecast for the 6 months
Category Annual In Birr In USD
Approved
Budget Quarter 1 Quarter 2 Total (Q1 + Q2) Total (Q1 + Q2)
Component 1 Addis Ababa sanitation and water supply
services improvements
Sub-Component 1.1: Sanitation services improvement-IDA

a) Category 1
b) Category 2
c) Category 3
etc
Sub total - - - - -
Sub-Component 1.1: Sanitation services improvement- Govt
financing - - - - -
Sub total - - - - -
Sub-Component 1.2: Operational efficiency improvements
a) Category 1
b) Category 2
c) Category 3
etc
Sub total - - - - -
Sub-Component 1.3: Project management and institutional
strengthening
a) Category 1
b) Category 2
c) Category 3
etc
Sub total - - - - -
Total for Component 1 - - - - -
Component 2: Sanitation and water supply services
Sub-Component 2.1: Sanitation services improvement in
secondary Cities
a) Category 1
b) Category 2
c) Category 3
etc
Sub total - - - - -
Sub-Component 2.2: Water supply and operational efficiency
a) Category 1
b) Category 2
c) Category 3
etc
Sub total - - - - -
16
Category Annual In Birr In USD
Approved
a) Category 1
b) Category 2
c) Category 3
etc
Sub total - - - - -
development in secondary Cities
a) Category 1
b) Category 2
c) Category 3
etc
Sub total - - - - -
Component 3 Project management and institutional
strengthening (Federal and Regional level)
a) Category 1
b) Category 2
c) Category 3
etc
GRAND TOTAL - - - - -
Annual
Summary by Category Approved In Birr In USD
a) Category 1
b) Category 2
c) Category 3
d) Gov't contribution
Prepared By___________________________ Approved By ______________________
Signature ___________________________ Signature _________________________
Date ________________________________ Date ____________________________
17
12. Expenditure Forecast per component

Annual In Birr In USD
Approved Total Total
Components/ Sub components Budget Quarter 1 Quarter 2 (Q1 + Q2) (Q1 + Q2)
Component 1 Addis Ababa sanitation and water supply services
improvements
Sub-Component 1.1: Sanitation services improvement

a) Sanitation assessments, feasibility studies and the design and
construction of a WWTP for eastern catchment-IDA financed
b) Sewerage networks for the Eastern catchment- Govt financed
c) Improvement of operation and maintenance (O&M) management
of existing WWTPs
d) Improvement of sanitation services in unserved and low income
areas, including construction of communal and public latrines
e) Procurement of appropriate desludging equipment for fecal sludge
treatment plants
Sub total - - - - -
Sub-Component 1.2: Operational efficiency improvements
a)
b)
c)
etc
Sub total - - - - -
strengthening
a)
b)
c)
etc
Sub total - - - - -
Component 2: Sanitation and water supply services improvement
in secondary Cities
Sub-Component 2.1: Sanitation services improvement in secondary
Cities
a)
b)
c)
etc
Sub total - - - - -
a)
b)
c)
etc
Sub total - - - - -
development in secondary Cities
a)
b)
c)
etc
Sub total - - - - -
18

Annual In Birr In USD
Approved Total Total
Components/ Sub components Budget Quarter 1 Quarter 2 (Q1 + Q2) (Q1 + Q2)
Component 1 Addis Ababa sanitation and water supply services
improvements
Component 3 Project management and institutional strengthening
(Federal and Regional level)
a)
b)
c)
etc

Date ________________________________ Date ____________________________
19
13. Cash Flow Forecast

In Birr In USD
Category For the next six months For the next six months
Category 1 - -
Category 2
Category 3
Gov't financing
GRAND TOTAL - -
Less: Amount to be paid through direct payment/ special
commitment
Less: DA balance end of the quarter
Less: Birr account balances end of the quarter
Less: Account receivable balance end of the quarter
Add: Account payable balance end of the quarter
Net Cash Requirement for the next six months - -
Contribution from:
a) IDA Regular Financing
b) IDA Scale up Facility
c) GoE Contribution
d) Others
Net Cash Requirement for the next six months - -

Date ________________________________ Date ____________________________
20
21
14. End Balance Summary

As at …….
End Balances
Implementing Entity Cash on Hand Cash at Bank Accounts Receivable Accounts Payable Total Ending Balance
MOWIE -
AAWSA -
RWBs Tigray -
RWBs Amhara -
RWBs Oromia -
RWBs SNNPR -
RWBs Somali -
RWBs Afar -
RWBs Beshangul Gumuz -
RWBs Gambella -
RWBs DD -
RWBs Harari -
Utility 1 -
Utility 2 -
Utility 3 -
Utility 4 -
Utility 5 -
Utility 6 -
Utility 7 -
Utility 8 -
Utility 9 -
Utility 10 -
Utility 11 -
Utility 12 -
Utility 13 -
Utility 14 -
Utility 15 -
etc -
-
Total - - - - -

Date ________________________________ Date ______________________________
22
15. Statement of Cash Movement

STATEMENT OF CASH MOVEMENT per component _________________MoWIE/Region/Utility
For the quarter ended…………….
Amount in Birr
Opening Balance -
Add :Cash transfers
Transfers from MOWIE -
Transfer from GoE -
Other income -
-
Fund Available for use -
Less :Expenditure
Component 1
Sub component 1.1 -
Sub component 1.2 -
Sub component 1.3 -
Sub total -
Component 2
Sub component 2.1 -
Sub component 2.2 -
Sub component 2.3 -
Sub total -
Component 3
Activity 1 -
Activity 2 -
Sub total -
Total expenditure -
Closing balance -
Breakdown of closing balance
Cash and Bank balances -
Receivables -
Payables -
Others -
Total Closing Balance Balances -
Prepared By___________________________
Signature ___________________________
Date ________________________________
23
STATEMENT OF CASH MOVEMENT per category _________________MoWIE/Region/Utility
For the quarter ended…………….
Amount in Birr
Opening Balance -
Add :Cash transfers
Transfers from MOWIE -
Transfer from GoE -
Other Income -
-
Fund Available for use -
Less :Expenditure
Component 1
Category 1 -
Category 2 -
etc -
Sub total -
Component 2
Category 1 -
Category 2 -
etc -
Sub total -
Component 3
Category 1 -
Category 2 -
Sub total -
Total expenditure -
Closing balance -
Breakdown of closing balance
Cash and Bank balances -
Receivables -
Payables -
Others -
Total Closing Balance Balances -
Prepared By___________________________
Signature ___________________________
Date ________________________________
24
25
16. Bank Statements

Statement of Designated Account, Bank a/c ______________
For the quarter ended ……………………
USD Birr
Opening Bank Balance - -
Add: Receipts
Fund received from IDA on… - -
Fund received from IDA on… - -
Others (specify) - -
Sub total - -
Fund available for use - -
Less: Transfers and Expenditure/payment
Transfer to Birr account - -
Expenditure/payments - -
Others (specify) - -
Sub total - -
Closing Bank Balance - -
Exchange rate at quarter end -
Closing Bank Balance at the rate of quarter end -
Add: Gain or (Loss) on foreign exchange -
Closing Bank Balance after gain/ (loss) of foreign exchange -

Date ________________________________ Date ______________________________
26
Statement of Local Account, Bank a/c ______________
Birr Birr
Opening Bank Balance -
Add: Receipts
Cash transfer from USD account -
Cash transfer from GOE -
Others (specify) -
Sub total -
Less: Advances and Expenditure/payment -
Advances -
Expenditure/payments -
Others (specify) -
Sub total -
Closing Bank Balance -

Date ________________________________ Date ______________________________
27
Designated Account Reconciliation Statement

Account Number__________________at NBE
For the quarter ended …………………… USD
1. Total Advanced to the DA by World Bank to the end of the reporting period -
2. Less: Total Amount Documented to DA and/or Recovered by World Bank -

3. Equals Present outstanding Amount Advanced to the Designated Account (Number 1 Less
Number 2) -
4. Balance of Designated Account per Attached Bank Statement at the end of the reporting period -
5. Plus: Total Amount Claimed in this application No.
6. Plus: Total Amount Withdrawn and not yet claimed
Reason: ___________________________________
7. Plus: Amounts claimed in previous applications not yet credited at date of Bank Statements
Application No. Amount
Subtotal of previous applications not yet credited
8. Minus: Interest Earned -
9. Total Advance accounted for (no. 4 Through No. 9) -
10. Explanation of any difference between the totals appearing on lines 3 and 9: -
The difference is due to the USD equivalent of
Account receivable balance at the end of the reporting quarter
Account payable balance at the end of the reporting quarter
Local account balance at the end of the reporting quarter
Others - explain

Date ________________________________ Date ____________________________
28
17. Schedule of Designated Account (DA) Documentation

Schedule of Designated Account (DA) Documentation
For the Quarter ended ……………..
Withdrawal
S.N. Application No. Particulars Amount in USD Total in USD
A. Amount disbursed to Designated account
1 -
2 -
3 -
Total disbursed to DA up to the end of the reporting quarter -
B. Amount documented to Designated account
1 -
2 -
3 -
Total documented to DA -
Undocumented DA amount -

Date ________________________________ Date ____________________________
29
18. Payment Made during Reporting Period

Against Contracts subject to the World Bank's Prior Review
Date of WB's No WB's Share of Special

Objection to Amount Paid to Amount Paid to *Amount Paid in Commitment/
Contract Number Supplier Contract Date Contract Amount Contract Supplier to date Supplier to date the current quarter Direct Payment No.
* This is cash outlay
Date ________________________________ Date ____________________________
30
19. Schedule of expenditure subject to prior and post review by

World Bank
Amount
Particulars Birr USD
1. Expenditures subject to prior review
a)
b)
c)
Total expenditure subject to prior review - -

2. Expenditures subject to post review
a)
b)
c)
Total expenditure subject to prior review - -
Total expenditure (prior + post) - -

Date ________________________________ Date ____________________________
31
20. Accounts Receivable/Advance Schedule With Age Analysis
32
21. Accounts Payables Schedule With Age Analysis

Accounts Payables Schedule With Age Analysis - For all implementing entities
Ending Account Less than three Three to six Six months to More than two
Name Payable Balance Months months one year One to two years years Remark
- - - - - -
- - - - - -
- - - - - -
- - - - - -
- - - - - -
- - - - - -
- - - - - -
- - - - - -
Total - - - - - -

Date ________________________________ Date ______________________________
33
22. Account Reconciliation
34

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UWSSP II – FINANCIAL MANAGEMENT MANUAL

ETHIOPIA SECOND URBAN WATER SUPPLY

Ministry of Water, Irrigation and Electricity

1.2. INTRODUCTION .............................................................................................................. 6

3. Financial Management .............................................................................................. 18

3.3. Accounting ....................................................................................................................23

3.4. Financial Management Reporting...................................................................................27

3.5. Fund Flow Arrangement and Disbursement ....................................................................29

5. Notes to the IFR-Discussion of Financial performance, Notes & Explanations ............ - 2 -

6. Statement of Sources and Uses of Fund-In Category ................................................. - 5 -

List of Acronym’s and Abbreviations

1. OVERVIEW AND INTRODUCTION

1.1.1. Second Urban Water Supply and Sanitation Project

1.1.2. Project Components

1.1.3. Basic Implementation Principles

2.1. PROGRAM MANAGEMENT AND IMPLEMENTATION

1.1.4. PROGRAM MANAGMENT

1.1.5. Program Implementation

I. Ministry of Water, Irrigation and Electricity

III. Water Bureau (PMU)

IV. Water Supply and Sewerage Service Enterprise

3.2.1. Budget Preparation

3.2.2. Budget Control

3.2.3. Budget Revision

3.3.1. Accounting Centers

3.3.2. Methods of Accounting

3.3.3. Transaction sources

3.3.4. Transactions, Source Documents and books

Source documents Types of transaction Specifics

CRV Cash receipts Involves Collection of cash

Cash or Bank Payment Cash Payment Involves Cash payment in

Journal Voucher None cash transactions, Transactions not involving

3.3.5. Charts of Accounts

3.3.6. Accounting System

3.3.7. Double Dipping.

3.4.1. Reporting procedures:

3.4.2. Contents of IFR Reports

3.4.3. Balance Sheet

3.4.4. Statement of Special (Designated) Accounts /FUND FLOW/

3.4.5. Statement of Use of Fund

3.4.6. Consolidated Expenditures Summary

3.4.7. Expenditures Forecasts & Cash Requirements

3.4.8. Aging Analysis of payables and receivables

3.4.9. Bank reconciliation and Bank Statements

3.5. Fund Flow Arrangement and Disbursement

Figure 1: Fund Flow and Financial Reporting Arrangement

3.6. Internal Control and Auditing

5.5.1. Internal Control

5.5.2. Journal Vouchers

5.5.3. Control over Cash Receipt

5.5.4. Control over Petty Cash

5.5.5. Control over Bank Payments

5.5.6. Control Over Special Payments

5.5.7. Purchase Advance

5.5.8. Control of Fixed Assets

5.5.9. Control over Payroll

3.7. Annex 1 Chart of Accounts

Account Title Account Number

EXTERNAL LOAN 3000

EXTERNAL ASSISTANCE 2000

Transfers, MOFEC to implementing entities 4006-1

Transfers, MOFEC to BOFED 4006-3

Transfers, BOFED to WOFED 4011-1

Transfers, BOFED to REB 4011-2

__ _