Chapter Four
Monthly Reports
1.1 Revenue/Assistance/Loan Report
According to MOFED and DSA Project manual, December 2002, the only monthly reports verified by Ministry of Finance and Economic Development are the transfer report and the Trial Balance. The transfer Report is verified by Ministry of Finance and Economic Development to ensure that all disbursements to an accounting Unit by Ministry of Finance and Economic Development and all disbursements from an Accounting Unit to Ministry of Finance and Economic Development are accounted for within the accounting system to enhance control over cash transfers.
The Trial Balance is verified by Ministry of Finance and Economic Development to ensure that the total debits and credits are equal and that general Ledgers are balanced. Also, Ministry of Finance and Economic Development verify the cash balance for the domestic source of finance from the trial Balance to enhance cash management practices at federal level.
All other monthly reports that are submitted to Ministry of Finance and Economic Development serve as input documents to consolidate reports and produce financial statements at the Federal Level. The Inspection Department and the Office of The Auditor General verify these reports. All monthly reports are prepared in two copies. The original copy is sent to Ministry of Finance and Economic Development and the second copy is retained as a permanent record at the reporting entity. The Revenue/Assistance/Loan Report provides information on the year-to-date revenues of an accounting unit from each source of finance. The purpose of the revenue/Assistance/Loan Report is to facilitate consolidation of the actual revenues, assistance and loan collected by the FGE and Regional State to facilitate comparison of budgeted revenues to actual revenues by account category (MOFED and DSA Project manual, January, 2002).
The Accountant prepares a revenue/Assistance/Loan report for the Accounting Unit. The source document to prepare the revenue/Assistance/Loan report is the general Ledger. Each item of revenue, assistance or loan is identified by account code. The amount from the balance column in the general ledger card is transcribed into the revenue/assistance/Loan Report. The grand totals from each revenue/Assistance/Loan report are carried forward to the trial Balance. Balances in the Revenue/Assistance/Loan Report are normally credits. Each accounting Unit prepares one revenue/assistance/Loan Report as indicated in figure 1.1 below.
1.2. Recurrent Expenditure Report
The recurrent expenditure report provides information on the year-to-date recurrent expenditures of each budgetary Institution managed by an accounting Unit. The purpose of the recurrent expenditure report is to facilitate consolidation of the actual recurrent expenditures made by the FGE and regional state to facilitate comparison of budgeted expenditure to actual expenditure. The Accountant prepares the recurrent expenditure report for each BI. The source document to prepare the recurrent expenditure report is the subsidiary ledger. The balance of each subsidiary ledger card is transcribed to the appropriate account code or in the recurrent expenditure report. Balances in the recurrent expenditure Report are normally debits. Each accounting unit prepares a recurrent expenditure Report for each BI that it manages (MOFED and DSA Project manual, December 2002). The format of the report is indicated below
1.3 Capital Expenditure Report
In Manual 3 volume I, Accounting for modified cash basis transactions, which is prepared by MOFED &DSA Project, in December 2002, the Capital expenditure Report, provides information on the year-to-date capital expenditures of each BI managed by an Accounting Unit. The purpose of the capital expenditure report is to facilitate consolidation of the actual capital expenditures made by the FGE and state governments and to facilitate comparison of budgeted expenditure to actual expenditure. The Accountant prepares the capital expenditure Report for each BI. The source document to prepare the Capital expenditure Report is the subsidiary Ledger. The amount from the balance column in each subsidiary Ledger card is transcribed to the appropriate account code in the recurrent expenditure Report. Balances in the Capital Expenditure Report are normally debits, which are similar to the capital expenditure. Each Accounting Unit prepares a capital expenditure Report for each BI that it manages. The format of the report is indicated below.
1.4 Transfer Report
Transfer report delivers information of cash flow made between the accounting unit and MOFED/State year-to-date and during the month. The transfer report consists of two parts:
Part 1 summarizes transfer account balances from the general Ledger.
Part 2 provides information on each monthly cash transfer between the accounting Unit and Ministry of Finance and Economic Development.
The purpose of the transfer report is to serve as a control tool to verify cash transfers between Ministry of Finance and Economic Development and an accounting Unit and vice versa. The Accountant prepares a transfer Report for each accounting Unit. The source documents to prepare the Transfer Report are the General Ledger Cards. Balances in the Transfer Report are debits or credits depending on the nature of the transfer account. One Transfer report is prepared for each Accounting Unit (MOFED AND DSA Project, December, 2002)
Part 1
The amount from the Balance Column in the General Ledger Card is transcribed into the transfer report - Part 1as indicated in figure 1.4. The grand totals from each Transfer report - Part 1 are carried forward to the trial Balance.
Part 2
Each cash transfer during the month between the accounting Unit and Ministry of Finance and Economic Development is listed individually in Part 2 of the Transfer Report. The information required for Part 2 is transcribed from the following cash transfer account Ledger cards:
4001: recurrent salary and allowances
4002: Recurrent operating expenditure
4003: capital salary and allowances
4004: capital expenditure
4005: Staff advances
4006: SSDP funds
4007: Grace period payables
Any other transfer code used during the month to transfer Funds to /from MOFED
Columns are identified by account code. The date and amount of each transaction recorded in the account code's Ledger card during the month are transcribed in the corresponding sub-column of the Transfer report. Each transaction is recorded in a separate row. Transfers received from Ministry of Finance and Economic Development are credits. Transfers of cash to Ministry of Finance and Economic Development are debits. Debit and credit sub-columns are totaled and the total is recorded in the total row (MOFED and DSA Project, January 2002).
The difference between the totals in the debit and credit sub-columns for each account code is calculated. If the total of debits is greater than the total of credits, the difference is recorded in debit sub-column of the Net activity row. If the total of credits is greater than the total of debits, the difference is recorded in credit sub-column of the Net activity row. The balance from the account code's Ledger Card at the beginning of the month is recorded in the beginning of month (BOM Balance) row. The amount in the Net Activity row is combined with the amount in the BOM Balance row and recorded in the end of month (EOM Balance) row. The EOM Balance must equal the balance in the account code's Ledger Card at the end of the month, which equals the balance recorded for the account code in Part 1 of the Transfer Report (MOFED and DSA Project manual, January 2002).
Transfer Report - Part 2 is shown in Figure 1.5
1.5. Receivables Report
The receivables report provides information on the year-to-date receivables owed to an accounting unit. The purpose of the receivables Report is to facilitate consolidation of the actual receivables owed to the FGE. The accountant prepares a receivables Report for each accounting unit. The source document to prepare the receivables report is the general ledger. Each item of receivable is identified by account code. The amount from the balance column in the general ledger card is transcribed into the receivables report. The grand totals from each receivable report are carried forward to the trial balance. Balances in the receivables report are normally debits. One receivables report is prepared for each accounting unit (MOFED and DSA, Project manual, January 2002).
Figure 1.6 Receivables Report
1.6. Payables Report
The payables report provides information on the year-to-date payables owed by an accounting unit. The purpose of the payables report is to facilitate consolidation of the actual payables owed by the FGE or regional state. The accountant prepares a payables report for the accounting unit. The source document to prepare the payables report is the general ledger. Each payable item is identified by account code and the amount from the balance column in the general ledger card is transcribed into the payables report. The grand totals from each payables report are carried forward to the trial balance. Balances in the payables report are normally credits. One payable report is prepared for each accounting unit (MOFED and DSA Project manual, December 2002).
1.7. Trial Balance
The trial balance is the summary of the net cumulative debit and credit balances contained in the general ledger at the end of each month for each account code represented by a general ledger card. The trial balance proves the arithmetical accuracy of the general ledger. The total amount of the debit column must equal the total amount of the credit column in the trial balance. The trial balance serves as a basis to produce financial statements. The accountant prepares the Trial balance for each Accounting Unit (MOFED and DSA Project, December 2002).
According to MOFED and DSA Project also, the source documents to prepare the Trial Balance are:
Revenue/Assistance/Loan Report,
Recurrent Expenditure Report,
Capital Expenditure Report,
Transfer Report,
Receivables Report,
Payable Report, and
The General Ledger.
Please note that in profit-making organizations, trial balances are prepared directly form the general ledger accounts and each account will be listed in the trial balance as long as it has a balance. However, in FGE system of accounting, the trial balance is prepared from the reports already produced for it facilitates the process and provide pertinent figures for the period end reports. In addition to the reports mentioned above, some balance amounts are directly taken from the general ledger accounts. The account codes that are taken from the general ledger directly to the trial Balance are:
Letters of Credit - balances in each account should be credits.
Net Assets/Equity - balance should be credit.
Cash and Cash Equivalents - balances in each account should be debits.
1.8. Submitting Monthly Reports to the Ministry of Finance and Economic Development
Monthly reports will be prepared and submitted to concerned body or Ministry of Finance and Economic Development within two weeks of the last day of the month by all Accounting Units.
All transactions that occur during a month should be recorded daily on the Transaction Register and into the appropriate General and Subsidiary Ledgers. However, if some transactions for the month are not entered into the Transaction Register by the end of the month, they will not be included in the report of the specified month.
According to MOFED and DSA Project manual, December 2002, if there is a reporting entity that is distinct from the accounting unit, the reports must be sent to the reporting entity before the end of the second week of the month. The reporting entity should:
Verify the mathematical accuracy of all reports.
Verify that totals in the revenue/assistance/loan report, recurrent expenditure report, capital expenditure report, transfer report, receivables report, and payable report are carried forward to the trial balance.
Verify that the end of month balance in Part 2 of the transfer report is carried forward to part 1 of the transfer report.
Visit any accounting unit that does not report within two weeks and assist in the preparation of monthly reports.
The reporting entity does not consolidate reports. The reports from the accounting units are forwarded to Ministry of Finance and Economic Development intact. The reporting entity is required to send their monthly reports to the Ministry of Finance and Economic Development during the third week of the month.
Central Accounts Department at Ministry of Finance and Economic Development will:
Verify the mathematical accuracy of all reports.
Verify that totals in the revenue/assistance/loan report, recurrent expenditure report, capital expenditure report, transfer report, receivables report, and payable report are carried forward to the trial balance.
Verify that the EOM Balance in Part 2 of the transfer report is carried forward to part 1 of the transfer report.
Reconcile individual transfers recorded on the transfer report with its records.
Visit any reporting entity that does not report within three weeks to identify and assist with monthly reporting.
Prepare and distribute various reports for FGE.
Consolidate balances for each account into a FGE Financial Statement.
