ACCOUNTING MANUAL Version1.26

ISLAMIC REPUBLIC OF AFGHANISTAN MINISTRY OF FINANCE TREASURY GENERAL DIRECTORATE ACCOUNTING MANUAL Version1.26 16 Hoot 1390

Islamic Republic of Afghanistan Ministry of Finance Treasury Department Treasury Accounting Manual Version_1.26 16 Hoot 1390 ii

TABLE OF CONTENTS 1.0 INTRODUCTION... 1 1 1.1 PURPOSE... 1 1 1.2 OBJECTIVE... 1 1 1.3 AUTHORITY... 1 1 1.4 APPLICABILITY... 1 2 1.5 REFERENCES... 1 2 2.0 GOVERNANCE AND ACCOUNTING FRAMEWORK... 2 1 2.1 GENERAL... 2 1 2.2 OFFICE OF THE PRESIDENT... 2 1 2.3 CABINET... 2 1 2.4 NATIONAL ASSEMBLY... 2 1 2.5 MINISTRY OF FINANCE... 2 1 2.6 BUDGET UNITS... 2 4 2.7 LINE MINISTRIES AND INDEPENDENT AGENCIES... 2 5 2.8 LINE DIRECTORATES (PROVINCIAL LINE MINISTRIES)... 2 7 2.9 CENTRAL AUDIT OFFICE... 2 7 2.10 DA AFGHANISTAN BANK (DAB)... 2 8 3.0 ACCOUNTING INFORMATION SYSTEM... 3 1 3.1 GENERAL... 3 1 3.2 AFGHANISTAN FINANCIAL MANAGEMENT INFORMATION SYSTEM (AFMIS)... 3 1 3.3 FUND ACCOUNTING... 3 3 3.4 CASH BASIS OF ACCOUNTING... 3 3 3.5 CHART OF ACCOUNTS... 3 3 3.6 STANDARDS AND ETHICS... 3 5 4.0 BUDGET EXECUTION AND CONTROL... 4 1 4.1 OVERVIEW... 4 1 4.2 APPROPRIATIONS (APPROVED BUDGET)... 4 1 4.3 ALLOTMENTS... 4 2 4.4 FINANCIAL BUDGETING (SUBALLOTMENTS)... 4 3 4.5 COMMITMENTS... 4 3 4.6 BUDGET CONTROL LEDGERS... 4 5 5.0 ACCOUNTING FOR EXPENDITURES... 5 1 5.1 GENERAL... 5 1 5.2 ORDINARY AND DEVELOPMENT EXPENDITURES NON SALARY... 5 2 5.3 ORDINARY AND DEVELOPMENT EXPENDITURES SALARIES... 5 10 5.4 DEVELOPMENT BUDGET EXPENDITURES... 5 16 5.5 ADVANCES AND ACQUITTALS... 5 17 5.6 TRAVEL EXPENDITURES AND ADVANCES... 5 22 6.0 PETTY CASH FUND... 6 1 6.1 GENERAL... 6 1 6.2 SETTING UP A PETTY CASH FUND... 6 2 6.3 PETTY FUND CASHBOOK... 6 5 6.4 PETTY CASH ACCOUNTING AND DISBURSEMENT... 6 6 iii

6.5 PETTY CASH REPLENISHMENT AND ACQUITTAL... 6 9 6.6 CASH COUNTS AND MONITORING OF PETTY CASH FUNDS... 6 11 7.0 ACCOUNTING FOR REVENUE... 7 1 7.1 GENERAL... 7 1 7.2 REVENUE COLLECTION PRIMARY BUDGET UNITS... 7 1 7.3 REVENUE COLLECTION DEDUCTIONS FROM M 16 PAYMENT ORDERS... 7 6 7.4 REVENUE COLLECTION MUSTOFIATS... 7 7 8.0 ASSETS AND INVENTORY... 8 1 9.0 REPORTING... 9 1 9.1 OVERVIEW... 9 1 9.2 BUDGET AND EXPENDITURE REPORTS MANUAL... 9 1 9.3 BUDGET AND EXPENDITURE REPORTS AUTOMATED (AFMIS)... 9 5 9.4 FINANCIAL STATEMENTS... 9 6 10.0 RECONCILIATIONS AND YEAR END CLOSING... 10 1 10.1 OVERVIEW... 10 1 10.2 OFFICIAL BANK ACCOUNTS... 10 1 10.3 M 30 BANK LEDGER... 10 2 10.4 T 8 BANK RECONCILIATION STATEMENT... 10 2 10.5 JOURNAL VOUCHERS AND CORRECTING ENTRIES... 10 2 10.6 MONTHLY RECONCILIATION... 10 3 10.7 ANNUAL RECONCILIATIONS AND CLOSING PROCEDURES... 10 3 11.0 OTHER ACCOUNTING PROCEDURES... 11 1 11.1 LETTERS OF CREDIT... 11 1 11.2 DISBURSEMENT OF DISASTER FUNDS... 11 1 11.3 ACCOUNTING FOR GOVERNMENTAL TRADE AGENCIES... 11 1 11.4 INTERGOVERNMENTAL ACCOUNTING... 11 1 11.5 TAMINAT ACCOUNTING... 11 1 11.6 TAZMINAT (BID SECURITY) ACCOUNTING... 11 1 11.7 TRUST FUND ACCOUNTING... 11 2 11.8 EMERGENCY EXPENDITURES... 11 2 11.9 CONFIDENTIAL FUNDS... 11 2 APPENDIX A: ACRONYMS...A 1 APPENDIX B: DEFINITIONS... B 1 APPENDIX C: LIST OF REASONS TO REJECT M 16 PAYMENT ORDER... C 1 APPENDIX D: FORM INSTRUCTIONS... D 1 M 2 CASH PURCHASE ORDER... D 3 M 3 PURCHASE ORDER... D 6 M 7 GOODS RECEIVED NOTE... D 9 M 10 REQUEST FOR ADVANCE... D 12 M 11 MISCELLANEOUS COMMITMENT DOCUMENT... D 15 M 12 ADVANCE ACQUITTAL... D 17 M 13 TRAVEL ORDER FORM... D 20 M 16 PAYMENT ORDER... D 23 M 20 ALLOTMENT CONTROL LEDGER... D 28 M 22 MONTHLY STATUS OF ALLOTMENT REPORT... D 31 M 25 MISCELLANEOUS REVENUE COLLECTION... D 40 iv

M 26 REVENUE DEPOSIT FORM... D 43 M 27 REVENUE COLLECTION VOUCHER... D 45 M 29 MONTHLY REVENUE COLLECTION REPORT... D 47 M 30 BANK LEDGER... D 49 M 33 JOURNAL VOUCHER... D 51 M 38 BUDGET CONTROL LEDGER... D 53 M 40 PAYROLL LEDGER (INDIVIDUAL PAY AND DEDUCTION REPORT)... D 58 M 41 PAYROLL... D ERROR! BOOKMARK NOT DEFINED. M 50 AUTHORIZED SIGNATORY SIGNATURE SAMPLE... D 63 M 75 REQUEST FOR ESTABLISHMENT OR UPDATE OF PETTY CASH FUND... D 65 M 76 CASHBOOK... D 68 M 80 SUBALLOTMENT CONTROL LEDGER... D 70 M 90 UNAPPLIED BALANCES LEDGER... D 72 M 91 FINAL ACCOUNTING REPORT... D 74 T 8 BANK RECONCILIATION STATEMENT... D 77 APPENDIX E: GUIDING PRINCIPLES FOR FINANCIAL CONTROLLERS (NEED TO REVISE TRANSLATION)... E 1 APPENDIX F: SUBMISSION REQUIREMENTS TO TREASURY BY SELECT FORM... F 1 Table of Figures FIGURE 1: SAMPLE M 20 ALLOTMENT CONTROL LEDGER... 4 10 FIGURE 2: PHASE #1 ORDINARY AND DEVELOPMENT EXPENDITURE WITH POST PAYMENT... 5 3 FIGURE 3: PHASE #2 ORDINARY AND DEVELOPMENT EXPENDITURE WITH POST PAYMENT... 5 3 FIGURE 4: ORDINARY EXPENDITURE WITH POST PAYMENT AND PARTIAL PREPAYMENT... 5 6 FIGURE 5: SALARY EXPENDITURE PAYMENT THROUGH A BONDED TRUSTEE... 5 11 FIGURE 6: SALARY EXPENDITURE PAYMENT THROUGH DIRECT DEPOSIT... 5 15 FIGURE 7: TYPICAL ADVANCE AND ACQUITTAL PROCESS... 5 18 FIGURE 8: TRAVEL EXPENDITURES AND ADVANCES... 5 24 FIGURE 9: PETTY CASH SETUP PROCESS... 6 3 FIGURE 10: SAMPLE CASHBOOK... 6 5 FIGURE 11: PETTY CASH TRANSACTION PROCESS... 6 7 FIGURE 12: PETTY CASH REPLENISHMENT AND ACQUITTAL PROCESS... 6 10 FIGURE 13: ORDINARY REVENUE COLLECTION PRIMARY BUDGET UNITS... 7 3 FIGURE 14: REVENUE COLLECTION ENTRY IN AFMIS BY MUSTOFIAT... 7 8 FIGURE 15: LIST OF FORMS AND LEDGERS... D 2 v

1.0 Introduction 1.1 Purpose The Treasury Account Manual ( Accounting Manual or Manual ) sets forth the general policies, procedures and rules to be followed by state administrations and budget units in the accounting and administration of the Government of the Islamic Republic of Afghanistan ( GoIRA ), also referred to as the Government in this Manual. In addition to acting as the primary policy document of the GoIRA Treasury Department ( Treasury ) on all accounting matters, the purpose of the Accounting Manual is to provide a comprehensive set of instructions which allows accounting officers and other users of the Manual to complete the various procedures that constitute the GoIRA accounting cycle. The Manual includes step by step instructions on filling out accounting forms, process flows, descriptions of roles and responsibilities within the GoIRA governance structure, reporting and reconciliation requirements, key definitions, descriptions of IT systems, and accounting standards and principles. Supervisory and accounting personnel and other employees of the government concerned with budgeting, accounting and other fiscal operations of the government should use this manual for reference to the policies, procedures and rules directly affecting their work and the units to which they are assigned. This Manual also serves as a means of orienting accounting personnel to the general functions and objectives of financial administration and training new employees in the duties and responsibilities of their positions. 1.2 Objective The objective of the Account Manual is to provide the basis of an Accounting Information System on behalf of the GoIRA that provides transparency in financial transactions, public trust in financial management and for the effective implementation of national public policy priorities and programs through effective budget execution and reporting. 1.3 Authority This Manual is enacted in consideration of the Constitution of Afghanistan and the Public Finance and Expenditure Management Law ( PFEML ). As per Article 75 of the Constitution of the GoIRA, the Ministry of Finance has the authority to conduct the financial affairs of the Republic, protect public assets, prepare the budget, and manage the public expenditures of the state. Under Article 4 Ministry of Finance Responsibilities and Authorities of the PFEML, the Ministry of Finance is responsible for implementing the provisions of the PEFML as it relates to the setting of financial and public expenditure policies and has full authority to set financial and public expenditure policy of Afghanistan and to adopt procedures (tarzulamal) and rules (layeha), for [ensuring] better implementation of this [PEFM] law. Furthermore, under Article 90 of the Finance Regulations The MOF issues procedures mandating the forms, use, and presentation of the accounting documents, ledgers, and reports. Under Article 7 Treasury Responsibilities and Authorities the Treasury is charged with implementing the budget and performing expenditure controls in accordance with revenue and expenditure plans and providing information pertaining to funds, assets and commitments, appropriations and allotments in accordance with the provisions of this law and other Treasury instructions. GoIRA Accounting Manual 1 1

Completing updates and changes to the Accounting Manual are the responsibility of the Treasury. Amendments to any section of the manual are approved by the Treasury before being submitted to the Ministry of Finance for final approval. The Treasury also supervises distribution of updated versions of the Manual and amendments thereto. 1.4 Applicability 1.4.1 General Applicability of the Accounting Manual is based on the Coverage Section of Article #1 of the Finance Regulations. Specifically, under Paragraph (3), These Financial Regulations shall apply to all units of the State and the staff involved in the financial management for the government units and are be used together with the annual budget procedures adopted by the National Assembly, the PFEML, procedures, rules, and treasury instructions issued by the MOF for the purposes of managing public finance and expenditure. As per Article #2 of the Finance Regulations, the regulations are applicable up on all governmental office (budget units) that manage their expenditures according to the allotment advice. This includes State Administrations as defined under Article 2 of the PEFML as all administrations which are established within the framework of the Executive, the Legislative or the Judiciary inside or outside Afghanistan, in accordance with law. 1.4.2 Exceptions As per Paragraph (2) of Article #2 of the Finance Regulations all other units of the state(governmental companies, enterprises and the companies that government has more than 51% share have their own documentations and thus the general guidelines and procedures in the Accounting Manual do not apply. In addition, as per Paragraph (3) of Article #2, The Ministry of Finance may establish exceptions in applying these regulations for the entities of the State other than the entities operating on for profit basis. This regulation applies to the Accounting Manual. 1.5 References Additional references and information related to accounting and financial transactions can be obtained from the following sources: The Constitution of Afghanistan, Year 1382 Public Expenditure and Financial Management Law (PEFML) Financial Regulations Developed pursuant to Public Finance and Expenditure Management Law, Gazette #893 Afghanistan Procurement Rules of Procedure, 2007. Procurement Law, revised January 2009. Chart of Accounts 1 Afghanistan Income Tax Law 2009 Afghanistan Reconstruction Trust Fund (ARTF) Manual for 1389 1 The Chart of Accounts is updated and approved by the Ministry of Finance on an annual basis. As of the original publication of this document, the Chart of Account was Version 3 for 1389. GoIRA Accounting Manual 1 2

A Handbook for Accounting and Reporting of Development Budget Transactions in the Provincial Mustofiats SDU Procedure Guidelines for Implementing Agencies Ministry of Finance Budget Manual for 1389 IFRS Cash Basis Accounting from IPSAS, 2010 Handbook Verification Payroll Program(VPP) Manual GoIRA Accounting Manual 1 3

2.0 Governance and Accounting Framework 2.1 General Primary responsibility for the government s financial administration is shared between the Ministry of Finance and its Mustofiats, which are the provincial departments of the Ministry of Finance. The Treasury Directorate within the Ministry of Finance administers the Accounting Information System and is responsible for making all payments for the GoIRA. The functions and responsibilities of these organizations have been assigned and defined by the PEFML and Finance Regulations in addition to subsequent administrative rules and regulations issued by the Minister of Finance and the Cabinet. In addition, several offices within State Administrations, most notably the Directorates of Finance, play an important role in the administration and management of the GoIRA Accounting Information System. 2.2 Office of the President The President has sole authority to pass decrees of an administrative nature including those that may impact or require changes to existing accounting policies and procedures. In addition, the President signs the annual budget, makes appointments within the Ministry of Finance and approves legislation presented by the National Assembly. 2.3 Cabinet The Cabinet reviews and approves the draft annual budget submitted by the Ministry of Finance. The Cabinet also has the authority to adopt regulations to be implemented by the line ministries. 2.4 National Assembly The National Assembly has the authority to ratify, modify, or abrogate laws and legislative decrees. This includes review and approval of the final annual budget law and changes to the PEFML. 2.5 Ministry of Finance The Minister for Finance is the Chief Financial Officer of the GoIRA and as such is assigned primary responsibility for the administration of the financial affairs of the government. In this responsibility, the Minster is assisted by three departments: Revenue, Treasury and Budget and its provincial Mustofiats. The Ministry of Finance is also able to delegate specific budgeting and accounting functions to State Administrations. Specifically, the Minister of Finance is responsible for completing tasks as follows: 1) Prescribes and requires the installation of uniform systems of bookkeeping, accounting and reporting for the state administrations and budget units of the government; 2) Prescribes the form of the National Budget and the methods and procedures for its preparation and execution; 3) Submits the National Budget to the Cabinet and National Assembly; 4) Determines the apportionment of appropriation and establishes contingency reserves and savings accounts at DAB 5) Provides oversight of the Revenue, Treasury and Budget General Departments 6) Formulates procurement policies and procedures within its Procurement Policy Unit (PPU) 2.5.1 Treasury General Department The Treasury is primarily responsible for the disbursement of allotted funds and the completion of accounting functions including recording of transactions and financial reporting. It also has GoIRA Accounting Manual 2 1

other responsibilities related to financial, cash and debt management of GoIRA funds. Specific responsibilities and tasks to be completed by the Treasury are as follows: 1) Collects financial data and compiles the financial statements for the GoIRA 2) Processes payments for state administration expenditures in the ordinary and development budget 3) Manages the Special Disbursements Unit which is responsible for processing payments for expenditures from line ministry development projects funded by international donors appropriated in the development budget 4) Maintains official accounting records related to exchange of assets between budget units 5) Issues allotment advice authorizing primary budget units to make commitments and expenditures 6) Reviews line ministry contracts 7) Manages GoIRA cash assets and financial investments 8) Manages GoIRA debt payments and servicing 9) Acts as the GoIRA Agent for municipal borrowings 10) Provides instructions for the setup and maintenance of official bank accounts and payment procedures within the Treasury Single Account; defines the Treasury Single Account structure of accounts and sub accounts and ensures necessary cooperation from the DAB for opening and closing official bank accounts 11) Executes the budget and performs expenditure controls in accordance with revenue and expenditure plans and provides information pertaining to funds, assets and commitments, appropriations and allotments in accordance with the provisions of the PEFML and other Treasury instructions 12) Maintains the GoIRA General Ledger and records transactions according to budget classification and accounting rules 13) Provides regular reports on the implementation of the government s budget and other financial matters for the Ministry of Finance 14) Upon the confirmation of the Ministry of Finance, issues necessary instructions covering financial management and accounting policies and procedures 15) Supervises, develops and maintains the Afghanistan Financial Management Information System (AFMIS) and other accounting systems 16) Advises and assists budget unit accounting personnel with specific accounting and technical problems 17) Supervises petty cash funds and provides advances to budget units 18) Opens Letter of Credit for budget units 19) Prepares Financial Plans for the budget units to assist in the efficient allotment and disbursement of budgeted funds 20) Manages the Verification Payroll Program 21) Performs other responsibilities delegated in accordance with provisions of the PEFML. GoIRA Accounting Manual 2 2

2.5.2 Revenue General Department The Revenue General Department is responsible for the administration of all taxes and revenue sources other than customs duties. The Revenue General Department is responsible for the assessment and collection of taxes, developing revenue policy and procedures, formulating proposals for new revenue measures, forecasting revenue for budget formulation and management purposes and maintaining and operating revenue information systems. 2.5.3 Customs General Department Customs General Department is responsible for the collection, transfer and reporting of customs revenue at Afghanistan border crossings. 2.5.4 Budget General Department The Budget General Department is responsible for tasks as follows: 1) Manages the annual budget process 2) Issues procedures to state administrations for preparation and requesting of budget and appropriations 3) Coordinates with the Budget Committee 4) Prepares the Fiscal Strategy Report 5) Prepares the unconsolidated budget 6) Appropriates funds based on the final approved budget 7) Allots appropriations to the line ministries and other primary budget units on a quarterly basis 8) Managing changes to appropriations and allotments after the initial budget execution 9) Maintains a close working relationships with Treasury and line ministry budget and finance offices to assure the availability of financial data for budgetary purposes 2.5.5 Mustofiats Mustofiats are the 34 provincial offices of the Ministry of Finance that provide most of the same services as the Ministry of Finance but for provincial and district offices of the line ministries including controlling, accounting for and reporting financial transactions. Each Mustofiat includes a Revenue Collection Office, Treasury financial controllers and Accounting Office. Mustofiats tasks are as follows: 1) Process payments of line directorate expenditures 2) Receive suballotments from the primary budget units for the line ministry functions in the provinces 3) Records, controls and reports financial transactions in AFMIS and other control ledger accounts 4) Process all expenditure in accordance with rules and regulations though relevant Governor s Office 5) Maintain summary accounting records for all government funds which reflect all the assets, liabilities, reserves, surpluses or deficits, revenues, receipts and expenditures 6) Record, control and report revenues to the Treasury collected by line directorates on time and on regular basis 7) Acquit advances provided to line directorates 8) Receive and process regular financial reports from district offices GoIRA Accounting Manual 2 3

Mustofiats are under the direct operations of the Ministry of Finance and must comply with all sections of this Manual, if appropriate. 2.5.6 Treasury Financial Controllers Finance controllers are employees of the Treasury or Mustofiats responsible for pre audit controls of all accounting transactions according to the directions issued by the Ministry of Finance and the Treasury. Financial controllers although employed directly by the Treasury are located at the line ministries and review transaction and other supporting documents prior to sending them to the Treasury or Mustofiats for payment processing. Financial Controllers play a very important role in the Accounting Information System related to managing the internal control procedures of this Manual and other policies that are key to eliminating waste, abuse and fraud in the GoIRA. Given this importance, the Treasury has developed a set of guiding principles to be used by all financial controllers. These guiding principles are displayed in Appendix E Guiding Principles for Financial Controllers. 2.5.7 Treasury Special Disbursements Units (SDU) Special Disbursement Unit (SDU) is an unit within the Treasury Department of the Ministry of Finance that is responsible for processing payment requests for donor grants/loans and accounting thereof. Apart from making the disbursement, the unit is also responsible for liaison with the donors and liaison with the Implementing Agencies in respect of donor related issues. 2.6 Budget Units 2.6.1 General As defined by Article 7 of the Finance Regulations, budget units are state administrations with authorities and responsibilities related to the financial management of the GoIRA. Budget units are setup and created by the Ministry of Finance and the Cabinet. As defined by Chapter 2 of the Finance Regulations, they have the following tasks and authorizations: 1) Receive Advice of Allotments 2) Employ permanent and temporary civil servant staff to complete assigned tasks 3) Enter into contracts to acquire goods and services necessary for executing the delegated functions 4) Ensure safe custody and purposeful utilization of assets and cash entrusted 5) Settle commitments by working with the Treasury to disburse allotted funds 6) Execute contractual obligations 7) Ensure due diligence and independent processing of accounting transactions 8) Maintain accurate accounting records and documents, and production of timely and truthful reports compliant with procedures and directions issued by the Ministry of Finance 2.6.2 Primary Budget Units Primary budget units are state administrations that receive allotments directly from the Ministry of Finance. Primary budget units consist of line ministries and independent agencies that are identified by the first two digits of the Organization Code in the Chart of Accounts coding block. (See 3.5 Chart of Accounts for more detailed information on the Organization Code.) Primary budget units have the authority to delegate their responsibilities as per the Finance Regulations to secondary budget units. They are also responsible for the suballotment of funds to secondary budget units. GoIRA Accounting Manual 2 4

2.6.3 Secondary Budget Units Secondary budget units consist of offices of primary budget units that have been delegated responsibilities for financial management. Secondary budget units most often consist of the line directorates completing the duties of the line ministries in the provinces and districts. Secondary budget units receive suballotments. In addition, rather than being assigned directly to the Treasury in receiving support in the completion of financial management duties, secondary budget units are assigned directly to Mustofiats in the provinces they are located. Secondary budget units are identified by their Organization Code and Location Code in the Chart of Accounts coding block.. (See Section 3.5 Chart of Accounts for more detailed information on the Organization and Location Code.) 2.7 Line Ministries and Independent Agencies(Primary Budget Units) 2.7.1 General Line ministries and independent agencies are the primary budget units to which budget funds are allotted after the approval of the annual National Budget by Parliament and the Cabinet. Responsibilities of line ministries/independent agencies are hereby explained from the context of accounting and financial management. Specific responsibilities of the central line ministries are as follows: 1) Control, accounting and reporting financial transactions and events to Ministry of Finance 2) Prepare of consolidated budget for line ministry and line directorates 3) Track the payment made to vendors by installment along with its allocation 4) Receive Allotment for facilitating partner, implementing partners, vendors, salaries and other activities as per the major expenditure object codes (21, 22, 23, 24, 25) for Treasury and provincial line directorates. 5) Issuing suballotments to relevant line directorates 6) Ensure all expenditures are in accordance with donor and governmental requirements 7) Track all the commitment against the allocations received to avoid payments in excess to the allocation received 8) Receive provincial expenditure statements through relevant program office or line directorate 9) Reconcile the M 20 Allotment/Suballotments Control Ledger with AFMIS system on monthly basis. 10) Acquit the advances on monthly basis with Ministry of Finance 11) Perform regular monthly bank reconciliations 12) Process the salaries of all staff members in accordance with rules and regulations of the government 13) Report revenues on monthly basis to the Revenue Unit of Treasury and perform its reconciliation with the relevant bank statements accordingly 14) Prepare true and fair annual financial reports at the end of the fiscal year and reconcile them with Treasury Qatia section 15) Perform cut off procedure as per the accounting manual, circulars and prescribed state rules and regulation at the end of the year GoIRA Accounting Manual 2 5

16) Prepare and submit the draft budget to the Ministry of Finance, submit reports of the ongoing financial affairs of their area of responsibility, and to ensure that laws are applied in regard to expenditure commitments within the budget allotments, regulation for the financial system and effective controls are adhered to within their administrations. Line ministries have several program offices that have responsibilities related to the financial management and the Accounting Information System. A discussion of the roles and responsibilities of these offices follows. Note: The organization structure including delegated roles and responsibilities will vary by line ministry. Thus, the descriptions of line ministry and independent agency organizational structure and offices in this section are general and may vary by budget unit. 2.7.2 Program Offices Program offices are the front line offices that provide the goods and service and complete the necessary tasks to meet public mission of the line ministry. Their activities generate the expenditures, revenues and other economic activities for which the Accounting Information System collects information, measures and records. 2.7.3 Directorate of Finance The Directorate of Finance is responsible for line ministry accounting activities and other tasks delegated by the Ministry of Finance. Each Directorate of Finance has an Accounting Office with three departments separating accounting procedures. Bookkeeping Office Responsible for all bookkeeping and accounting tasks including maintaining control ledgers, recording expenditures including advance acquittals, completing budget execution activities, bank reconciliations and preparing financial reports. Payment Office Responsible for processing purchase orders/invoices, requesting payments from the Treasury, managing advances and acquittals, and filing of transactions documents. Payroll Office The Payroll Office is responsible for managing the monthly payroll and ensuring the payment of employee salaries. The Payroll Office manages the Verification Payroll Plan administered by the Treasury to automate payroll payments and provide for direct deposit of salaries to employees. Revenue Collection Office The Revenue Collection Office is responsible for the collection and reporting of any revenues collected by the line ministry. The Revenue Collection Office will work closely with the Program Office that generates government revenue. Budget Office The Budget Office is responsible for budget formulation by implementing the procedures and polices outlined by the Budget General Directorate as part of the annual process. GoIRA Accounting Manual 2 6

2.7.4 Procurement Office The Procurement Office is responsible for the procurement of goods and services for the line ministry by following the requirements of the Procurement Law and regulations issued by the Ministry of Finance Procurement Policy Unit. 2.7.5 Procurement Office Warehouse The Warehouse is responsible for the receipt, review and acceptance of goods and services procured by the line ministry. The Warehouse ensures that procured goods and services meet the requirements of the original requisition and determine if full payment should be made or if deductions should be made to the purchase order/invoice. The location and organization of the Receiving Office may vary by line ministry. The Warehouse is also responsible for inventory, asset registration, storage and maintenance of procured goods. 2.8 Line Directorates (Provincial Line Ministries) (Secondary Budget Units) Line Directorates are branch offices of line ministries providing government services at the provincial and district level. Line Directorates are secondary budget units that receive suballotments directly from their line ministry rather than the Ministry of Finance. Line Directorates are identified by a combination of the two (2) digits Organization Code and two (2) digits Location Code of the Chart of Accounts. Responsibilities of Line Directorates (Provincial Line Ministries) are hereby explained from the context of accounting and financial management. Specific responsibilities of the provincial line ministries are as follows: 1) Assists in preparation of provincial budgeting 2) Processes payment to district offices through Mustofiats 3) Acquits the advances on quarterly basis with line ministry and Mustofiat, as required 4) With Mustofiat perform regular monthly bank reconciliation and informs line ministry of any discrepancies 5) Processes the salaries of all staff members in accordance with rules and regulations of the government 6) Assists in the preparation of true and fair annual financial report at the end of the fiscal year 7) Performs cut off procedure as per the accounting manual, circulars and prescribed state rules and regulation at the end of the year Line directorate program offices are similar to those of the primary line ministry discussed in Section 2.7 Line Ministries, but with more sharing of responsibilities due to resource limitations in the provinces. 2.9 Central Audit Office The Central Audit Office is responsible for post auditing of all government financial transactions to ensure that all expenditures of the government are made in accordance with applicable laws, rules and regulations, and that all assets of the government are properly accounted for and safeguarded against unauthorized use. GoIRA Accounting Manual 2 7

2.10 Da Afghanistan Bank (DAB) Da Afghanistan Bank is the central bank of Afghanistan and is responsible for maintaining all official bank accounts of the GoIRA based on instructions received from the Treasury for the disbursement or transfer of funds. The DAB administers the GoIRA Treasury Single Account (TSA). GoIRA Accounting Manual 2 8

3.0 Accounting Information System 3.1 General The GoIRA Accounting Information System is a fund based, centralized system with overall accounting responsibilities held by the Treasury and its provincial offices in the Mustofiats. Primary budget unit accounting offices within the Directorate of Finance also play an important role in managing the accounting information system as they are the original sources of all transactions and complete the initial documentation, processing and recording of revenue and expense transactions 2. They also have budget execution responsibilities related to allocation of funds to their line directorates in the provinces. Secondary budget units have more a more limited role in accounting information system as many of their bookkeeping and payment tasks are completed by the Mustofiats. The GoIRA Accounting Information System is a hybrid system that has both automated and manual components. The system is managed and operated using a centralized financial management application called the Afghanistan Financial Management Information System ( AFMIS ) but also makes use of several paper accounting forms for transaction processing, ledgers and reports. This includes purchase orders (M 3), travel forms (M 13), goods received notes (M 7), advance requests (M 10), revenue collection forms (M 27 and M 29) payment orders (M 16) and acquittals forms (M 12). Line ministries and Mustofiats are still required to submit monthly and annual financial reports despite the existence of AFMIS. The GoIRA Accounting Information System consists of one General Ledger (managed in AFMIS by the Treasury) with no subsidiary ledgers. However, primary budget units and Mustofiats on behalf of secondary budget units maintain several budget and cash control ledgers and registers. Disbursements are processed by the Treasury or its Mustofiats using official bank accounts held at the DAB. 3.2 Afghanistan Financial Management Information System (AFMIS) AFMIS is a customized version of the Free Balance Financial Accountability application and is the financial management system used by the GoIRA to record accounting transactions for all primary and secondary budget units and is the backbone of the GoIRA Accounting Information System. The Financial Accountability application is a licensed software owned by Free Balance Inc. which uses a client/server design model. This allows users from several locations including Mustofiats and bookkeeping offices in the provinces to access the system to post transactions and run reports. The Financial Accountability application is specifically designed for the public sector with an emphasis on fund accounting. AFMIS has been configured as a cash basis accounting system that records debits and credits of advances, transfers, expenditures and revenues. It also provides a check payment functionality that debits and credits bank account information which can be used to reconcile cash with accounting records. The primary benefits of AFMIS include: Centralization of financial Information Enabling bookkeeping offices to initiate and track information request efficiently Easy access to financial Information (revenue and expenditures by province, etc.) 2 At the time of the original publication of the Accounting Manual, asset and liabilities were not being recorded in the Accounting Information System. However, the Treasury intends to develop and support an asset registration module. GoIRA Accounting Manual 3 1

Improvements to the manual accounting processes and procedures, by providing transparency and control AFMIS is a double entry accounting system that requires both the credit and debit of an account code for each journal entry, although the user may not be required to enter both sides of the journal entry directly. AFMIS will complete the second the debit or credit based on the configuration setup in the Controls Module. For example, since AFMIS includes functionality both for recording expenditures and making payments there is time difference between the expenditure journal entry and the payment entry. Thus, the initial expenditure is debited and a payable liability account is credited. When the disbursement is made through AFMIS, the payable liability account is debited and the bank account is credited. Thus, after the completion of both transactions payment credits equal expenditure debits and the accounts payable account balance is zero (i.e. there is no accounts payable because the expenditure has been paid). The Financial Accountability application is a module based system which allows governments to choose modules to include in their setup based on their current and future needs. The initial setup of AFMIS included the following modules: Appropriations budget execution module used to record budget transactions Control module used to configure the application by defining parameters and controls, e.g. the control module is used to create the government chart of accounts and define user roles General Ledger serves as the central repository for all transactions that have been entered in the AFMIS whether they are expenses, revenues or budget transactions. The General Ledger module also includes the ability to enter journal voucher information not posted in other modules to the General Ledger. Expenditure module used to record expenditures and cash sales which are posted to the General Ledger module. Future enhancements to AFMIS may include the Asset Accountability, Purchasing and Revenue Accountability modules. Journal entries in AFMIS are entered manually based on paper transaction forms (M 29, M 16, M 33) prepared by primary and secondary budget unit bookkeeping offices. AFMIS has been distributed in all line ministries and independent agencies as well the 34 provincial Mustofiats, but responsibility for entry of data into electronic vouchers within AFMIS varies by transaction, location and fund type. At the center, primary budget units are responsible for posting revenue and expenditure transactions for both operating and development budgets with review and approval by the Treasury. At the provincial level however, the Mustofiats have full responsibility for posting operating budget expenditure transactions, as secondary budget units do not have access to AFMIS. Mustofiats do not enter development budget expenditures. These are managed directly by the Treasury SDU. In addition, with some exceptions Mustofiats do not record revenue transactions, but forward revenue forms to the Treasury for posting into AFMIS. However, as of the issue date of this Accounting Manual there are six provinces where Mustofiats do enter revenue transaction data directly into AFMIS and then forward transaction documents to the Treasury for reconciliation and final review. Since the AFMIS General Ledger has allowed the GoIRA to centralize its accounting system and given accounting officers direct access to the main accounting system, several ledgers, reports and transaction GoIRA Accounting Manual 3 2

forms from the prior accounting system have replaced or superseded. This includes the A 17 General Ledger Form which was a ledger template to maintain general and subsidiary ledgers and the A 35 Daily Summary of Expenditure sand Daily Summary of Revenues sheets, which were prepared by the primary and secondary budget units and provided to the Treasury to enter into the main general ledger. Due to the direct posting of revenues and expenditures by the Mustofiats and line ministries these sheets are no long necessary. In addition, due to the new Appropriations module, forms A 1 Advice of Allotments and A 39 Agency Advice of Allotments are no longer required. 3.3 Fund Accounting The GoIRA Accounting Information System makes use of fund accounting to report and measure the financial performance of the GoIRA. A fund is a self balancing set of accounts, segregated for specific purposes in accordance with laws and regulations or special restrictions and limitations. A separate set of self balancing general ledger accounts is maintained for each fund (within the chart of accounts in AFMIS). These accounts include general ledger and other control accounts required to reflect the assets, liabilities, resources, obligations, revenues and expenditures of each fund. In case of GoIRA there are four major Fund types: 1 General Fund 2 Discretionary Development Fund (Special Fund) 3 Development Budget Grants (Special Fund) 5 Development Budget Loans (Special Fund) In general, because the GoIRA receives a large portion of both its development and operating budget from numerous international donors with their own specific reporting and use requirements, special funds need to be setup for each donor grant. General Funds are used to manage the operations of the GoIRA and is the equivalent to the operating budget, while special funds make up the development budget of GoIRA, although there exceptions to this rule as some development projects are funded from General Funds. 3.4 Cash Basis of Accounting The GoIRA uses cash basis accounting with double entry transactions managed in AFMIS. Under the cash basis of accounting revenue is recorded when cash is received by the Treasury and expenditures are recorded when payments are made by the Treasury. Asset and liabilities impacted by flow of resources must be entered separately. Since the recording of revenue and expenses under cash based accounting is directly linked with cash transactions, all accounting records of revenues and expenses should match with the statements of banks where the transactions take place. Thus, cash basis of accounting requires a strenuous reconciliation of bank statements with accounting records. If the accounting records do not match the bank statements, then an error has either occurred in the recording of a transaction or requested bank transfers have not been made. This reconciliation process is discussed in more detail in Section 9.0Reporting. 3.5 Chart of Accounts A chart of accounts is the list of all the accounts included in the general ledger and its subsidiary ledgers. Each accounting information system has its own unique chart of accounts customized to meet the GoIRA Accounting Manual 3 3

business requirements of the organization. The GoIRA chart of accounts is based on the guidelines outlined in the International Monetary Fund s ( IMF ) Government Financial Statistics ( GFS ) manual which is designed to support fiscal analysis and accounting in the public sector. The structure for each account is a coding block with six segments. Each of which provides relevant information. A discussion of the six segments follows: Organization Code: The Organization Code is the five (5) digit segment of the code structure that provides detailed information on the organization in which a transaction takes place. The five (5) digit code can be subdivided as follows: 2 digit code identifies the line ministry or independent agency; e.g. 50 is the code for Ministry of Justice 4 digit code identifies the suborganization within the line ministry or independent agency; e.g. 5020 is the code for the Presidency of Jails within the Ministry of Justice 5 digit code identifies the unit within the line ministry or independent agency; e.g. 50300 is the code for the Justice Department within the Ministry of Justice Project Code: The Project Code is the six (6) digit segment of the code structure that provides information related to donor funded projects. In case where a transaction is not related to a project the project code will be posted as 000000. The first two digits of the Project Code identify the line ministry or independent agency where the project is located. Program Code: The Program Code is the five (5) digit segment of the code structure that provides information related to the economic activity and programs within the ministry or independent agency. The five (5) digit code can be subdivided as follows: 2 digit code identifies the line ministry or independent agency; e.g. 20 is the code for the Ministry of Finance 3 digit code identifies the program within the ministry of independent agency; e.g. 201 is the code for the program Public Financial Management 4 digit code identifies the subprogram within the ministry or independent agency; e.g. 2012 is the code for subprogram Treasury Operations 5 digit code identifies the specific activity within the ministry or independent agency; e.g. 20120 is the code for activity Support to Treasury Operations (O) Fund Code: The Fund Code is the five (5) digit segment of the code structure that provides fund information. The five (5) digit code can be subdivided as follows: 1 digit code identifies the fund type; e.g. 1 is the code for General Fund type 2 digit code identifies the fund; e.g. 10 is the code for the fund Recurrent Budget 4 digit code identifies the sub fund; e.g. 1000 is the code for sub fund Recurrent Operating 5 digit code identifies the fund component; e.g. 10000 is the code for fund component operating budget Location Code: The Location Code is the four (4) digit segment of the code structure that provides geographical location of the transaction. The four (4) digit code can be subdivided as follows: 2 digit code identifies the province; e.g. 03 is the code for Parwan Province GoIRA Accounting Manual 3 4

4 digit code identifies the district; e.g. 0302 is the code for Bagram District in the Parwan Province Object Code: The Object Code is the five (5) digit segment of the code structure that provides. The five (5) digit code can be subdivided as follows: 2 digit code identifies the major object; e.g. 21 is the code for the major object Wages and Salaries 3 digit code identifies the minor object; e.g. 214 is the code for the minor object Social Benefits In Cash 5 digit code identifies the object code; e.g. 21401 is the code for the object severance payments Please refer to the following chart which summarizes the coding block for each budget execution type which can be used as a reference table when preparing documents. Coding Block Segment Allotment #1 (Appropriations) Allotment #2 (Allotment) Financial Budget (Suballotment) Commitmen (Expenditure No. of Description No. of Description No. of Description No. of Descripti Digits Digits Digits Digits Organization 2 Primary Budget 4 Suborganization 4 Suborganization 5 Unit Unit Project 6 Project 6 Project 6 Project 6 Project Program 3 Program 3 Program 3 Program 5 Activity Fund 1 Fund Type 5 Fund Component 5 Fund Component 5 Fund Com Location N/A N/A N/A N/A 2 Province 4 District Object 2 Major Object Code 3 Minor Object Code 3 Minor Object Code 5 Object Co Figure 1 Coding Blocks by Budget Execution Type The Chart of Accounts is updated on an annual basis and approved by the Treasury. As the GoIRA further develops its budgeting, reporting, and program capabilities, the Chart of Accounts is welldesigned to accommodate additional information requirements based on enhancements to AFMIS and further use of GFS manual guidelines. 3.6 Standards and Ethics The fundamental principle of any public servant is to operate within ethical guidelines and provide a level of principle in day to day operations. The accounting professional within the GoIRA is to be above reproach and does not partake in collusion or illegal activities. The accounting professionals in the GoIRA should abide by the following general principles: Integrity To be straightforward and honest in all professional relationships Objectivity To not allow bias, conflict of interest or undue influence of others to override professional judgments Professional Competence To maintain professional knowledge and skill at the level required to ensure that the public received competent and professional services Professional Behavior To comply with relevant laws and regulations and avoid actions that are against the law GoIRA Accounting Manual 3 5

Confidentiality To maintain confidential any government information deemed not to be for public knowledge Accounting professionals with the GoIRA should clearly abide by specific principles in any Code of Ethics published by the Treasury even if working with other line ministries or independent agencies, as well any guiding principles by any Afghanistan or international professional accounting and management organizations in which employees are members. GoIRA Accounting Manual 3 6

4.0 Budget Execution and Control 4.1 Overview The Budget Department of the Ministry of Finance is has the responsibility to working with the Line Ministries to develop and formulate the annual budget for Afghanistan. They manage the budget process by providing guidance to Line Ministries through Budget Circulars and other instructions. The Accounting Information System (or Treasury) is not used in the budget formulation process other than to provide historical expenditure data and other financial reports. However, the Accounting Information System is essential to budget execution after the annual budget has been approved by Parliament and the Budget. Functions associated with budget execution include: allocating funds to primary and secondary budget units through appropriations, allotments, and suballotments using commitment accounting to reserve allotted funds in order to prevent over commitment of funds establishing internal controls to review and approving expenditure monitoring and reviewing of internal processes A key tool in the budget execution process is AFMIS as it is used to record budget transactions including appropriations, allotments and suballotments. Commitment/obligations are recorded for projects in the development budget. In addition, AFMIS has several internal controls built into its design and use. Specifically, each level of budget execution (appropriation, allotment, expenditure, etc.) cannot be processed unless the previous level has been completed and recorded in AFMIS. For example, no allotments can be made unless an appropriation has been approved and recorded in AFMIS or no expenditure can be made without an allotment. In addition, total transactions of one budget execution level cannot exceed the recorded amount of the previous level, e.g. suballotments cannot exceed allotments. Each step of budget execution is processed using a budget form. They are as follows: B 3 Approved Budget (Appropriations) B 20 Suballotments B 23 Request for Budget Transfer B 27 Allotments Since AFMIS has enabled the Ministry of Finance to centralize budget execution process as per the requirements of the PEFML, much of budget execution is the responsibility of the Treasury, specifically the Allotments and Commitments Unit. Primary and secondary budget units also play an important role in budget execution. 4.2 Appropriations (Approved Budget) An Appropriation is the first step in the budget execution process and matches the final output of the budget formulation process, the published National Budget which is approved annually by Parliament and the Cabinet. Specifically, Appropriations grant the Ministry of Finance the budget authority, in accordance with the annual budget procedures, to begin processing allotments to primary budget units. An Appropriation provides budget information at the primary budget unit level, but does not include detailed budget information such as location, fund component or object code. Appropriations are coded as per the Chart of Accounts as follows: GoIRA Accounting Manual 4 1

Organization Code 2 digit code identifying the Ministry/Independent Agency (Primary Budget Unit) Project Code 6 digit code identifying the specific project funds that have been appropriated Program Code 3 digit code used to identifying the program office within the line ministry/independent agency which is receiving the appropriations Fund Code 1 digit code that identifies the type of Fund (1 General Fund, 2 Discretionary Development Fund, 3 Development Budget Grants, 4 Multi Donor Grant, 5 Development Budget Loans) Location Code not used Object Code 2 digit code describing the five major object codes (21 Salaries and Wages, 22 Use of Goods and Services, Interest and Repayment of Loans, 24 Subsidies, Grants and Social Payments, 25 Acquisition of Assets) Appropriations are processed by the Allotments and Control Unit of Treasury which consists of creating and approving a B 3 Approved Budget Form for each appropriation and then entering the amount and coding block of each appropriation into AFMIS in the Budget Module under Allotment #1. If appropriations are not posted in AFMIS, then no allotments can be made. Furthermore, the amount entered in AFMIS is the ceiling on total Appropriations. Appropriations can be processed as soon as the National Budget is approved. In general, appropriations can only be changed by an act of Parliament and in the annual budget process adjustments to original appropriations are made in the middle of the year based on updated revenue and expenditure data as well revised national priorities. However, the Ministry of Finance in consultation with the Parliament Budget Committee may adjust up to 5% of a state administration s original appropriations with some restrictions by transferring authority between major object codes and programs. Restrictions include the transferring of funds from restricted codes (e.g. in 1390 it was prohibited to transfer funds from major object code 21 Salary and Wages). Please refer to the annual budget procedures for more information on restricted codes. 4.3 Allotments Allotments or advice of allotments are the second step in the budget execution process and are used by the Ministry of Finance to allocate funds to the primary budget units (Line Ministries and Independent Agencies). Allotments are processed by the Commitments and Allotments Control Unit within the Ministry of Finance using a B 27 Allotments Form. Like Appropriations, Allotments are recorded in AFMIS in the Budget Model under Allotment #2. Once allotments have been approved, primary budget units have the authority to make expenditures or suballot funds to secondary budget units (Line Directorates).The DAB will not release any funds for disbursement unless the expenditure has been approved by an allotment. In addition, expenditures should never exceed the approved allotment amount. Allotments provide more detailed information than Appropriations are coded as per the Chart of Accounts as follows: Organization Code 4 digit code identifying the suborganization within ministry/independent agency GoIRA Accounting Manual 4 2

Project Code 6 digit code identifying the specific project funds Program Code 3 digit code used to identifying the program office within the Ministry/Independent Agency which is receiving the appropriations Fund Code 5 digit code that identifies the Fund Component Location not used Object Code 3 digit code describing the minor object code (e.g. 224 Repairs and Maintenance) The Ministry of Finance has the full authority to change allotments to manage the budget or expenditures for the fiscal year. Furthermore, the Ministry of Finance can change allotments to correct mistakes in prior allotments. 4.4 Financial Budgeting (Suballotments) Suballotments or Advice of Suballotments are the third step in the budget execution process and are used to allocate funds to the secondary budget units (Line Directorates). Suballotments are processed by line ministries using a B 20Suballotment Form. Suballotments are recorded in AFMIS in the Budget Model under Financial Budgeting. Once Suballotments have been approved, secondary budget units can begin making expenditures. Suballotments are coded as per the Chart of Accounts as follows: Organization Code 4 digit code identifying the suborganization within the ministry/independent agency that is receiving the suballotment Project Code 6 digit code identifying the specific project funds Program Code 3 digit code used to identifying the program within the ministry/independent Agency which is receiving the suballotment Fund Code 5 digit code that identifies the Fund Component Location 2 digit code that identifies the province in which the secondary budget unit is located Object Code 3 digit code describing the minor object code (e.g. 211 Salaries and Wages) Suballotments are entered into AFMIS for information purposes and allocating funds at secondary budget level. Line Directorates are not allowed to make expenditures unless funds have been suballoted to them similar to line ministries not being able to make expenditures without allotments. However, AFMIS only records suballotments under the Financial Budget, but is not used to enforce budget execution process. Technically, a Mustofiat is able disburse funds to a Line Directorate or secondary budget unit without the processing of a B 20 Form, although this is not allowed under budget rules. 4.5 Commitments 4.5.1 Overview Commitments and/or obligations 3 set aside funds within an allotment in order to reserve those funds for future expenditures. As defined in the Finance Regulations, a commitment is defined as any order placed, contract awarded, service received or similar transaction that will require payment as a 3 Under its budget execution procedures, the GoIRA does not make a distinction between commitments and obligations and they are considered to be the same. Thus, in this document the word commitment is used to refer to both obligations and commitments. GoIRA Accounting Manual 4 3

settlement. Commitments are set up to control large expenditures and ensure the appropriation authority is not completely depleted by unanticipated expenditures. Commitments are not expenditures because no cash has been disbursed, but the funds are no longer available for use. As payments are made, commitments are liquidated. In the current Accounting Information System commitments are recorded in two ways depending on the type of commitment and if the commitment is recorded in the Ordinary Budget (Fund Code 1 or General Fund) or the Development Budget (Fund Code 2, 3, and 5). Commitments that result from purchase orders, vendor contracts, and travel orders are controlled by line ministries using the M 20 Allotment/Suballotment Control Ledger. Commitments can have one of two statuses: commitments incurred and commitments liquidated. Commitments incurred is the amount of commitment which is recorded based on processed commitment documents. It is recorded in the Commit Incurred column of the M 20 ledger. Commitments liquidated is the amount of the original commitment that has been either paid or canceled. In order to have effective control over allotments, commitments are recorded in the M 20 Ledger for each procurement to reserve a specific amount for its payment. This ensures the availability of sufficient allotment at the time of payment. Commitments are recorded based on the values in commitments documents (M 3, M 11 and M 13) in the Commit. Incurred column of the M 20 Ledger. After the payment is made through an M 16 Payment Order, then the amount is recorded in the Commit. Liquidated column of the M 20 Ledger. If the payment is cancelled then the commitment is reversed by recording a negative entry in the Commit. Incurred column. Note: The total value of commitments cannot exceed the allotment total. This process is explained in more detail in Section 4.6.3M 20 Allotment/Suballotment Control Ledger. 4.5.2 Commitment Control in AFMIS Projects in the development budget include contracts between donors and the GoIRA that require setasides for expected expenditures up to the value of allotment advice. Budget units need to record commitments based on development contracts in the AFMIS Commitment Module. Other types of commitments (e.g. purchase order or travel approvals in the ordinary budget) are not posted in AFMIS. Contract commitment information is processed by the Special Disbursements Unit using a nonnumbered budget form called the Budget Set Aside Registration of Supplier Selection (Commitments). Special contract commitments are coded as per the Chart of Accounts using the same coding block as expenditures: Organization Code 5 digit code identifying the unit within ministry/independent agency Project Code 6 digit code identifying the specific project funds Program Code 5 digit code used to identifying activity in the program office within the ministry/independent agency Fund Code 5 digit code that identifies the Fund Component Location Code 4 digit code that identifies the province and district Object Code 5 digit code describing the detailed object code The posting of the commitment in AFMIS ensures that these funds are set aside and cannot be used for any other purchases or expenditures. The commitments are automatically reduced or liquidate in AFMIS when expenditures are made from the same coding block as the commitment. GoIRA Accounting Manual 4 4

Contracts that require the posting of commitment may be longer than one fiscal year. In these cases, an annual commitment of the amount anticipated to be spent in the given year will need to be set up at the beginning of the year. At the end of the year, all outstanding commitments must be liquidated or cancelled. If the contract crosses fiscal years, at the beginning of the year, a new commitment should be set up for the ensuing fiscal year. It is the responsibility of the budget unit to manage the commitments and request funding in the next annual budget. If the contract is cancelled, the commitment must be liquidated upon receipt of the final billing from the contractor or supplier. 4.6 Budget Control Ledgers As part of their budget control procedures line ministries and Mustofiats maintain several budget control ledgers. This section describes these ledgers and provides instructions on how to maintain them. 4.6.1 M 38aBudget Control Ledger The M 38aBudget Control Ledger is used by primary budget units to record changes in appropriations and allotments and to maintain a running balance of the funds still available to be allotted from appropriations. Budget execution transactions are recorded in the M 38a Ledger after the approval of any of the three budget forms (B 3, B 23, and B 27). A separate M 38a Budget Control Ledger is maintained for each primary budget unit appropriation as per Allotment Code #1. In addition, the transactions posted to the M 38a are used to complete the M 91 Qatia at year end. (Please refer to Appendix D?? for detailed instructions on how to fill out the M 38 Ledger.) Instructions Each transaction in the M 38a Ledger will be posted in Fields 7 to 10, 12 to 14 and 16 based on the budget execution document. In addition, Fields 11 Total Appropriations, Field 15 Final Balance of Appropriations, and Field 17 Remaining Balance of Allotment are calculated. A brief description of how to calculate Fields 11, 15 and 17 is given below. The balance of Field 11 Total Appropriations is affected by the following fields: Field 7 Initial Appropriation is added to the balance Field 8 An increase in the Difference between Estimated and Actual Transfers is added to the balance Field 8 A decrease in the Difference between Estimated and Actual Transfers is subtracted from the balance Field 9 An increase in Internal Transfers is added to the balance Field 9 A decrease in Internal Transfers is subtracted from the balance Field 10 An increase in External Transfers is added to the balance Field 10 A decrease in External Transfers is subtracted from the balance The balance of Field 15 Final Balance of Appropriations is affected by the following fields: Field 11 Total Appropriations is added to the balance Field 12 Supplemental Budget is added to the balance Field 13 An increase in Mid Year Budget Review s is added to the balance Field 13 A decrease in Mid Year Budget Review is subtracted from the balance Field 14 Reserve Code is added to the balance GoIRA Accounting Manual 4 5

The balance of Field 17 Remaining Balance of Allotment is affected by the following fields: Field 15 Final Balance of Appropriation is added to the balance Field 16 Allotment is subtracted from the balance Figure 2: Sample M 38a Budget Control Ledger shows a sample M 38a ledger with several budget execution transactions. Transactions Details Transaction Amounts 4. Item No. 5. Post Date 6. Doc Ref. 7. Initial Appropriation 8. Difference between Estimated & Actual 14. Mid Year Budget Transfer 9. Internal Transfers 10. External Transfers Review Increase Decrease Increase Decrease Increase Decrease Increase Decrease 11. Total Appropriations 12. Reserve Code 13. Supplemental Budget 15. Final Balance of Appropriatins 16. Allotments 17. Remaining Balance of Allotment 1 15/2/1391 B-3 1,000,000 1,000,000 1,000,000 1,000,000 2 18/2/1391 B-23: 1000 24,000 1,024,000 1,024,000 1,024,000 3 29/2/1391 B-27: 1032-91 1,024,000 1,024,000 250,000 774,000 4 5/3/1391 B-23: 1001 50,000 1,074,000 1,074,000 824,000 5 8/3/1391 B-23: 1002 75,000 999,000 999,000 749,000 6 15/3/1391 B-23: 1003 25,000 1,024,000 1,024,000 774,000 7 16/3/1391 B-23: 1098 1,024,000 1,024,000-10,000 784,000 8 27/3/1391 B-23: 1004 15,000 1,009,000 1,009,000 769,000 9 5/4/1391 B-23: 1005 1,009,000 50,000 1,059,000 819,000 10 7/5/1391 B-3 1,009,000 80,000 1,139,000 899,000 11 3/7/1391 B-3 1,009,000 30,000 1,109,000 869,000 Figure 2: Sample M 38a Budget Control Ledger The set of transactions shown in Figure 2are described below: Transaction #1: Records the initial appropriation for the year approved on 15/2/1391 as per a B 3 Form in Field 7 Initial Appropriations. This increases the Total Appropriations balance to 1,000,000 AFN, the Final Balance of Appropriations balance to 1,000,000 AFN, and the Remaining Balance of Allotment to 1,000,000 AFN. Transaction #2: Records carryover fund of 24,000 AFN from 1390 allotments as per a B 23 Form approved on 18/2/1391 with serial no. 1000 in Field 8 Difference between Estimated and Actual Transfer (Increase). This increases the Total Appropriations balance to 1,024,000 AFN, the Final Balance of Appropriations balance to 1,024,000 AFN, and the Remaining Balance of Allotment to 1,024,000 AFN. Transaction #3: Records the first quarter allotment of 250,000 AFN as per a B 27 Form approved on 18/2/1391 with serial no. 1032 91 in Field 16 Allotments. This decreases the Remaining Balance of Allotment to 774,000 AFN. Transaction #4: Records an internal transfer increase of 50,000 AFN as per a B 23 Form approved on 29/2/1391 with serial no. 1000 in Field 9 Internal Transfers (Increase). This increases the Total Appropriations balance to 1,074,000 AFN, the Final Balance of Appropriations balance to 1,074,000 AFN, and the Remaining Balance of Allotment to 824,000 AFN. Transaction #5: Records an internal transfer decrease of 75,000 AFN as per a B 23 Form approved on 5/3/1391 with serial no. 1001 in Field 9 Internal Transfers (Decrease). This GoIRA Accounting Manual 4 6

decreases the Total Appropriations balance to 999,000 AFN, the Final Balance of Appropriations balance to 999,000 AFN, and the Remaining Balance of Allotment to 749,000 AFN. Transaction #6: Records an external transfer increase of 25,000 AFN as per a B 23 Form approved on 8/3/1391 with serial no. 1002 in Field 10 External Transfers (Increase). This increases the Total Appropriations balance to 1,024,000 AFN, the Final Balance of Appropriations balance to 1,024,000 AFN, and the Remaining Balance of Allotment to 774,000 AFN. Transaction #7: Records a reduction of 10,000 AFN as per a B 23 Form approved on 15/3/1391 with serial no. 1098 in Field 16 Allotments. This increases the Remaining Balance of Allotment to 784,000 AFN. Transaction #8: Records an external transfer decrease of 15,000 AFN as per a B 23 Form approved on 16/3/1391 with serial no. 1004 in Field 10 External Transfers (Decrease). This increases the Total Appropriations balance to 1,009,000 AFN, the Final Balance of Appropriations balance to 1,009,000 AFN, and the Remaining Balance of Allotment to 759,000 AFN. Transaction #9: Records a transfer of 50,000 AFN from the foreign exchange reserve fund as per a B 23 Form approved on 5/4/1391 with serial no. 1005 in Field 12 Reserve Code. This increases the Final Balance of Appropriations balance to 1,059,000 AFN, and the Remaining Balance of Allotment to 809,000 AFN. Transaction #10: Records a supplemental budget increase of 80,000 AFN as per a B 3 Form approved on 7/5/1391 in Field 13 Supplemental Budget. This increases the Final Balance of Appropriations balance to 1,139,000 AFN, and the Remaining Balance of Allotment to 889,000 AFN. Transaction #11: Records the mid year budget decrease of 30,000 AFN as per a B 3 Form in Field 14 Mid Year Budget Review (Decrease). This increases the Final Balance of Appropriations balance to 1,109,000 AFN, and the Remaining Balance of Allotment to 859,000 AFN. 4.6.2 M 38b Suballotment Control Ledger The M 38bSuballotment Control Ledger is used by line ministries to record allotments and suballotments and to maintain a running balance of available suballotments. Budget execution transactions are recorded in the M 38b Ledger after the approval of any of three budget forms (B 20, B 23, and B27). Line ministries will maintain one M 38b Ledger for each allotment they receive from the Ministry of Finance. The M 38b Ledger allows line ministries to conduct financial planning by tracking the percentage of their allotments that have been suballoted and to determine the remaining allotment funds available for suballotment. (Please refer to Appendix D?? for detailed instructions on how to fill out the M 38b Ledger.) Instructions GoIRA Accounting Manual 4 7

Each transaction in the M 38b Ledger will be posted in Fields 8 to 9 changing the suballotment balance, which is recorded in Field 10 Suballotment Balance. The suballotment balance will either increase or decrease as follows: Field 8 An increase in Allotments is added to the balance Field 8 A decrease in Allotments is subtracted from the balance Field 9 An increase in Suballotments is added to the balance Field 9 A decrease in Suballotments is subtracted from the balance Figure 3: Sample M 38bSuballotment Control Ledger shows a sample M 38b ledger with several budget execution transactions. 4. Item No. 5. Post Date 6. Doc Ref. 7. Province Code Transactions 8. Allotment 9. Suballotment Increase (+) Decrease (-) Increase (-) Decrease (+) 10. Suballotment Balance 1 29/2/1391 B-27: 1032-91 01 250,000 250,000 2 16/3/1391 B-23: 1098 01 10,000 240,000 3 24/3/1391 B-20: 1 05 25,000 215,000 4 24/3/1391 B-20: 2 07 25,000 190,000 5 21/4/1391 B-20: 3 07 5,000 195,000 Figure 3: Sample M 38bSuballotment Control Ledger The set of transactions shown in Figure 3are described below: Transaction #1: Records the first quarter allotment of 250,000 AFN as per a B 27 Form approved on 29/2/1391 with serial no. 1032 91 in Field 8 Allotment (Increase). This increases the Suballotment Balance to 250,000 AFN. Transaction #2: Records a reduction of 10,000 AFN of the original allotment as per a B 23 Form approved on 15/3/1391 with serial no. 1098 in Field 8 Allotment (Decrease). This decreases the Suballotment Balance to 240,000 AFN. Transaction #3: Records a suballotment of 25,000 AFN to Logar Province as per a B 20 Form approved on 24/3/1391 with serial no. 1 in Field 9 Suballotment (Increase). This decreases the Suballotment Balance to 215,000 AFN. Transaction 4: Records a suballotment of 25,000 AFN to Laghman Province as per a B 20 Form approved on 24/3/1391 with serial no. 2 in Field 9 Suballotment (Increase). This decreases the Suballotment Balance to 190,000 AFN. Transaction #5: Records a reversal of 5,000 AFN from the Laghman Province suballotment as per a B 20 Form approved on 21/4/1391 with serial no. 3 in Field 9 Suballotment (Decrease). This increases the Suballotment Balance to 195,000 AFN. GoIRA Accounting Manual 4 8

4.6.3 M 20 Allotment/Suballotment Control Ledger The M 20 Allotment/Suballotment Control Ledger is used by line ministry and Mustofiat bookkeeping offices to control commitments and expenditures in a specific allotment or suballotment (as per a B 27 or B 20). Each M 20 Ledger maintains a running total of uncommitted balances 4 by recording expenditures, advances, prepayments, commitments and refunds against allotment totals. Transactions in the M 20 Ledger are posted after the approval of accounting forms, e.g. the M 3 Purchase Order. Expenditures are recorded after the approval of the M 16 Payment Order or the M 12 Advance Acquittal forms, while the following forms will require the posting of a commitment in the M 20 Ledger: M 3 Purchase Order Form M 11 Miscellaneous Commitment Form M 13 Travel Order Form The M 20 Allotment Control Ledger is managed byline ministries/mustofiats and its transactions are not entered into AFMIS. This is an internal ledger used by the bookkeeping offices to manage allotments and suballotments. A summary of the M 20 ledger transactions and balances are reported to Treasury using the M 22 Monthly Status of Allotment Report. Line ministries must maintain an M 20 Ledger for each advice of allotment received from the Ministry of Finance. Mustofiats will maintain one M 20 ledger for each suballotment received from a line ministry. Instructions Each transaction in the M 20 Ledger will be posted in Fields 7 to 14 changing the uncommitted balance of the allotment, which is recorded in Field 15 Balance. The uncommitted allotment balance changes as follows: Field 7 Post Payment is subtracted from the Balance Field 8 Advance Payment is subtracted Field 9 Acquittal is neither added nor subtracted from the Balance Field 10 Commit. Incurred is subtracted from the Balance Field 11 Commit. Liquid. is added to the Balance Field 12 Refund is added to the Balance Field 13 Allotment is added to the Balance Field 14 Suballotment is subtracted from the Balance It is important to add the accuracy of transaction in the M 20 Ledger. As a quick check of accuracy the sum of Field 11 Commit. Liquid. should equal the sum of Field 7 Post Payment and Field 8 Advance Payment. Expenditures are calculated as sum of Field 7 Post Payment and Field 9 Acquittal less Field 12 Refund. Figure 4: Sample M 20 Allotment/Suballotment Control Ledger shows a sample M 20 ledger with several budget execution transactions. 4 Uncommitted balances are allotments that have not been either committed or disbursed. GoIRA Accounting Manual 4 9

4. Document Ref. No. Transaction Details 5. Commit. Doc. No. 6. Description Transaction Amounts 7. Post 8. Advance Payment (-) Payment (-) 9. Acquittal 10. Commit. 11. Commit. 12. Refund 13. Allotment 14. Suballot. Incurred (-) Liqu. (+) (+) (+) (-) 15. Balance B-27/01 1st Quarter Allotment 150,000 150,000 M-10/016 Purchase of Computer 100,000 50,000 M-16/011 M-10/016 Post Payment of M-3/016 100,000 100,000 50,000 M-10/017 Purchase of Printer 25,000 25,000 Prepayment for M-3/017 M-16/012 M-10/017 25,000 25,000 25,000 with M-10/011 M-12/015 Acquittal of M-10/017 25,000 25,000 Purchase of Office M-3/018 10,000 15,000 Equipment Prepayment for M-3/018 M-16/013 M-10/018 10,000 10,000 15,000 with M-10/012 M-12/016 Acquittal of M-10/019 8,000 15,000 Refund of Prepayment from Awaiz-20 2,000 17,000 M-16/013 Suballotment to Herat B-20/001 5,000 12,000 Province M-13/004 Commitment for Travel 5,000 7,000 Advance Payment for travel M-16/014 M-13/004 5,000 5,000 7,000 from M-13/004 Acquittal of travel from M- M-12/017 5,000 7,000 13/004 Actual travel costs above M-13/004 2,000 5,000 estimate from M-13/004 Payment for M-13/004 M-16/015 M-13/004 5,000 additional costs 2,000 2,000 Figure 4: Sample M 20 Allotment/Suballotment Control Ledger The set of transactions shown in Figure 4 are described below: Recording of Allotment in M 20 Ledger Transaction #1: Records an allotment as per a B 27 Form with a serial number of 01 and is posted in Field 13 Allotment. This increases the allotment balance to 150,000 AFN. Recording of Post Payment in M 20 Ledger Transaction #2: Records a commitment of 100,000 as per a M 3 Purchase Order Form with a serial number of 016 and is posted in Field 10 Commitment Incurred. This decreases the uncommitted allotment balance by an amount of 100,000 AFN. This amount will be reserved from this M 3 commitment form until its liquidation and cannot be used for other expenditures. Transaction #3: Records the payment of the M 3 Purchase Order Form with a serial number of 016. The net effect on uncommitted balance is zero because the payment is posted in Field 7 Post Payment which reduces the balance by 100,000 AFN, but the liquidation of the commitment posted in Field 11 Commit. Liquid. increases the balance by 100,000 AFN. The funds are no longer committed, but have expended. Recording of Transactions where Prepayment equals Expenditure Transaction #4: Records a commitment of 25,000 as per a M 3 Purchase Order Form with a serial number of 017 and is posted in Field 10 Commitment Occurred. This decreases the uncommitted allotment balance by25,000 AFN to 25,000. GoIRA Accounting Manual 4 10

Transaction #5: Records the prepayment of the M 3 Form with a serial number of 017 by posting 25,000 AFN in Field 8 Advance Payment and 25,000 AFN in Field 11 Commit. Liquid. The net effect on the uncommitted allotment balance is 0. Transaction #6: Records the acquittal of the prepayment made from the M 16 Form with serial number 012 and M 10 Request for Advance Form with serial number 017. This has no effect on the uncommitted allotment balance. Recording of Transactions with Prepayment greater than Expenditure Transaction #7: Records a commitment of 10,000 as per a M 3 Purchase Order Form with a serial number of 018 and is posted in Field 10 Commitment Occurred. This decreases the uncommitted allotment balance by 10,000 AFN to 15,000. Transaction #8: Records the prepayment of the M 3 Form with a serial number of 018 by posting 10,000 AFN in Field 8 Advance Payment and 10,000 AFN in Field 11 Commit. Liquid. The net effect on the uncommitted allotment balance is 0. Transaction #9: Records the partial acquittal of 8,000 AFN from the prepayment made from the M 16 Form with serial number 013 and M 10 Request for Advance Form with serial number 019. This has no effect on the uncommitted allotment balance. Transaction #10: Records the refund of the prepayment made from the original M 16 serial number 013 of 2,000 AFN. This amount is posted in Field 12 Refunds and Field 9 Commitments Liquid. The net effect on the uncommitted allotment balance is an increase of 2,000 AFN. Recording of Suballotment in M 20 Ledger Transaction #11: Records the suballotment of 5,000 AFN to Herat Province based on the B 20 Form with serial number 001 in Field 14 Suballot. This reduces the uncommitted allotment balance by 5,000 AFN to 12,000 AFN. Recording of Transactions with Prepayment less than Expenditure Transaction #12: Records a travel commitment based on the M 13 Travel Order Form with serial number 004 by posting 5,000 AFN in Field 10 Commit. Incurred. This reduces the uncommitted allotment balance to 7,000 AFN. Transaction #13: Records the payment of the travel estimated in the M 13 Travel Order Form with serial number 004 by posting 5,000 AFN in Field 8 Advance Payments and Field 11 Commit. Liquid. This has no effect on the uncommitted allotment balance. Transaction #14: Records the acquittal of the M 10 Form with serial number 004 by posting 5,000 AFN in Field 9 Acquittal. This has no effect on the uncommitted allotment balance. Transaction #15:Records a commitment based on the actual costs of travel reported in the finalized M 13 Travel Order Form with serial number 004 which are 2,000 AFN greater than the original estimate of 5,000. This reduces the uncommitted allotment balance to 5,000. GoIRA Accounting Manual 4 11

Transaction #16:Records the payment of the additional travel costs in the M 13 Form with serial number 004 and liquidates the commitment incurred by posting 2,000 AFN in Field 11 Commit. Liquid. and Field 7 Post Payments. The effect on uncommitted allotment amount is 0. M 20 Accuracy Check Total Commit. Incurred = Total Post Payment + Total Prepayment 142,000 AFN = 102,000 AFN + 40,000 AFN Total Commit. Incurred = Total Commit. Liquidate 142,000 AFN = 142,000 AFN Apply the following formula to identify total expenditures: Total Expenditure = Total Post Payment + Total Acquittal Total Refund 140,000 AFN = 102,000 AFN + 40,000 AFN 2,000 AFN 4.6.4 M 80 Mustofiat Suballotment Control Ledger The M 80 Mustofiat Suballotment Control Ledger is used by Mustofiats to control suballotments received from the line ministries through the B 20 Form. The M 80 Ledger records the distribution of a suballotment to the provincial center and district level. Similar to the M 20 Ledger, which controls expenditures within an allotment, the M 80 records the distribution of funds between districts within a suballotment. (Please refer to Appendix D 60 for detailed instructions on how to fill out the M 80 Ledger.) Mustofiats will maintain one M 80 Ledger for each allotment that receives suballotments from a line ministry in the province. 4.6.5 M 90 Unacquitted Advance Payments Register One month after the end of the fiscal year, primary budget units are required to submit to Treasury the M 90 Prior Years Unacquitted Advance Payments Register for all their bonded trustees with outstanding advances. The data for the M 90 register comes directly from each M 20 Allotment Control Ledger. At the end of the year the primary budget will have tracked all M 10 Request for Advances and M 12Advance Acquittal forms on the M 20 ledger. Each outstanding advance should be entered in the M 90 Register. In general, all funds advanced to bonded trustees need to be returned at the end of the fiscal year. If the funds are returned in within a set deadline and no justification is given for keeping the funds, then a fine maybe imposed on the bonded trustee. (See Appendix D 62 with detailed instructions on how to prepare the M 90 Register.) GoIRA Accounting Manual 4 12

5.0 Accounting for Expenditures 5.1 General The procedures detailed in this section include several control procedures designed to prevent waste, abuse and fraud of GoIRA resources and public money. Control procedures include proper authorization of all transactions and other accounting activities, specific roles and responsibilities for each step of a procedure including clearly defined separation of duties between recording and handling cash, and the use of source documentation and records to allow for the audit of each transaction. Under the cash basis of accounting, expenditure is recorded at the same time as the payment of funds. Therefore, accounting for expenditures not only includes the process of preparing procurement, commitment and accounting forms, but also includes the preparation of payment orders. The GoIRA Accounting Information System uses a voucher system managed by the Treasury to verify the accuracy of expenditure requests by primary and secondary budget units and to authorize payments. All payments except those made from petty cash funds are processed through the voucher system, whereby a check is issued. Petty cash payments are made directly from cash rather than by check. The voucher system plays an important role in establishing and maintaining effective internal controls of expenditures and payments. This includes procedures to verify, classify and record expenditure as well as to authorize payments. In addition, the voucher system separates the various duties and responsibilities in its process among multiple persons to prevent improper payments through error, fraud and abuse. In the Treasury voucher system, the M 16 Payment Order Form acts as the payment voucher. It is the information in the M 16 Payment Order Form that is used as the input to the electronic voucher in AFMIS that posts expenditure data to the General Ledger. The M 16 Payment Order is also the legal document that authorizes payment. M 16 Payment Order Forms are prepared based on proof of expenditure by a budget unit as evidenced by supporting documentation. (Please refer to Appendix F Submission Requirements by Select Form for a list of supporting documentation to be submitted with a M 16 Form and other forms.) Supporting documentation includes invoices, purchase orders, and other approval documentation. This includes the M 3 Purchase Order Form and the M 7 Goods Received Note which together verify that a vendor has delivered goods and services requested by a budget unit, the M 13 Travel Order Form which verifies travel expenses by government employees, and the M 41 Payroll Form which validates employee attendance, salaries and deductions.. The M 16 Payment Order Form is also used to authorize prepayments and other types of advances. In these cases, no expenditures have been incurred but future delivery of goods and services is expected. A more detailed description of accounting and payment requirements for advances is provided in Section 5.4 Advances and Acquittals. Primary budget units and Mustofiats on behalf of secondary budget units are also required to track commitments and expenditures that are created as a result of the processing of the M 16 and other accounting forms. Although the electronic vouchers approved in AFMIS are posted to the General Ledger, budget units will still need to maintain the M 20 Allotment and Expenditure Control Ledger to track of available funds in allotments. GoIRA Accounting Manual 5 1

Note: Secondary budget units located in the Center process their expenditures directly from the Treasury and track their commitments and expenditures using the M 20 ledgers without the support of the Kabul Mustofiat. 5.2 Ordinary and Development Expenditures Non Salary 5.2.1 Overview Non salary expenditures in the Ordinary Budget are the most common and typical type of transactions and all other transaction types are a variation of the processes detailed in this Section. Specifically, the roles and responsibilities identified in each step of the scenarios and the different internal controls will be the same or similar for other procedures with modifications. In addition, internal controls and procedure steps will vary between transactions completed at the Treasury and those completed at the Mustofiats. Therefore, additional steps and internal control requirements for Mustofiats are highlighted. Disbursements of expenditure can either be made using direct deposits from Treasury bank accounts or the issue of checks directly to bonded trustees. However, the accounting procedure will be same in either case until the disbursement step. Therefore each scenario is applicable to both types of payments (i.e. checks or direct deposit). 5.2.2 Scenario #1 Ordinary and Development Expenditures with Post Payment Scenario #1 consists of recording ordinary expenditures with prepared commitment and/or obligation documentation and disbursement of funds after receipt of goods and services. This is most common type of transaction and can be considered a typical expenditure transaction. It is often called a post payment in contrast to a prepayment. This scenario is divided into two phases. Phase #1 consists of the steps to process a M 3 Purchase Order Form and accept the receipt of goods and services. Phase #2 consists of the steps to process an M 16 Payment Order Form. Phase #1 M 3 Purchase Order Processing Figure 5: Phase #1 Ordinary and Development Expenditure with Post Payment provides a graphical overview of the procedure. A more detailed description follows the Figure. GoIRA Accounting Manual 5 2

Treasury/ Mustofiat Receiving Office Vendor Financial Controller Authorizing Authority Bookkeeping Office Payment Office Procurement Office Figure 5: Phase #1 Ordinary and Development Expenditure with Post Payment GoIRA Accounting Manual 5 3

Detailed Steps: Step #1: As requested, complete a requisition as per the requirements of the Procurement Law and other relevant laws, regulations and program/project guidelines. This will result in the issuance of a Purchase Requisition and Requisition No. Note: Prior to engaging in the requisition process, items should be requested from inventory using the FS 9 Request of Goods form to determine if any items are available. If the request is rejected then proceed with Step #1. Responsible Party: Procurement Office Step #2: Fill out Fields 1 to 5 and 8 to 14 for one original and three (3) copies of the M 3 Purchase Order Form. Use the Requisition No. from Step #1 to reference the Purchase Order to the requisition. Sign and date Field 18 Procurement Officer. Send the original and three (3) copies to the Payment Office. (Please refer to Appendix D 6 for detailed instructions on how to fill out the M 3 Form.) Responsible Party: Procurement Office Step #3: Verify that sufficient funds are available in the Allotment from which the purchase will take place. Enter the Allotment Number in Field 6 Coding Block (Allotment #). Sign and date Field 19 Accounting Officer. This will certify that sufficient funds are available in the Allotment Advice. Send the original and three (3) copies to the appropriate Authorizing Authority for final approval. Responsible Party: Payment Office Step #4: Review the M 3 Purchase Order Form for accuracy and completeness. Sign and date Field 20 Authorizing Authority. Send the original and three (3) copies to the Financial Controller. Responsible Party: Individual in the budget unit authorized to approve purchases. This will vary based on the size of the purchase. Step #5: Review the M 3 Purchase Order Form for accuracy and completeness. Sign and date Field 21 Financial Controller for final approval. Provide any additional remarks in Field 22 Remarks. Return the original and two (2) copies to the Procurement Office and one (1) copy to the Payment Office. Responsible Party: Financial Controller Step #6: File one (1) copy of the M 3 Purchase Order Form and send the original to the vendor to complete the order. Send one (1) copy to the Warehouse. Note: In cases where the M 3 Purchase Order Form will be used in replace of a signed contract, then the original and all copies of the M 3 Form should be provided to the vendor for their signature as proof that they agree to the specifications in the purchase order. GoIRA Accounting Manual 5 1

Responsible Party: Procurement Office Step #7: Complete the requirements of the purchase order and deliver to the Warehouse of the state administration making the purchase. Provide an invoice to the Payment Office. If the M 3 Purchase Order Form is being used as a contract, sign and date Field 23 Vendor Acknowledgement. Return the original and copies to the state administration. Retain one (1) copy. Responsible Party: Registered Vendor Step #8: Receive goods and services and verify that the requirements of the purchase order have been met. Fill out an original and one (1) copy of the M 7 Goods Received Note documenting the results of the review of goods and services. File one (1) copy of the M 7 Form and send the original to the Payment Office. (Please refer to Appendix D 9 for detailed instructions on how to fill out the M 7 Form.) Responsible Party: Warehouse Step #9: Compare the information in the M 3 Purchase Order Form, M 7 Goods Received Note, and vendor invoice. Based on this comparison determine the payment due to the vendor. The payment should never be greater than the purchase order regardless of the actual invoice. Payment amounts may be less than the purchase order amount, if the goods received note indicates that not all goods or services were delivered. In this case the payment amount would be reduced by an appropriate amount. File the copies of the M 3 Purchase Order Form and M 7 Goods Received Note. Responsible Party: Payment Office Step #10: Update the M 20 Allotment Expenditure Ledger by posting the purchase order amount as a commitment. (See Appendix D 28 for more detailed instructions on posting transactions to the M 20.) Responsible Party: Bookkeeping Office Phase #2 M 16 Payment Order Processing Figure 6: Phase #2 Ordinary and Development Expenditure with Post Payment provides a graphical overview of the procedure. A more detailed description follows Figure 6. GoIRA Accounting Manual 5 2

Figure 6: Phase #2 Ordinary and Development Expenditure with Post Payment Detailed Steps: Step #1: Prepare one (1) original and one (1) copy of the M 16 Payment Order Form. (Please refer to Appendix D 23 for detailed instructions on how to fill out the M 16 Payment Order Form.)Sign and date Field 28 Payment Manager. Provide the original and two (2) copies to the Finance Director. Responsible Party: Payment Office Step #2: Review the M 16 Payment Order Form for accuracy and completeness. Sign and date Field 29 Finance Director. Send the original and copy to the Financial Controller. Responsible Party: Finance Director GoIRA Accounting Manual 5 3

Step #3: Review the M 16 for accuracy and completeness. Verify the coding block information. Sign and date Field 32 Financial Controller and enter any relevant remarks in Field 33 Remarks. Return the original and copy to the final Authorizing Authority for approval. Responsible Party: Financial Controller Step #4: Review the M 16 Payment Order Form for accuracy and completeness. Sign and date Field 30 Authorizing Authority. Stamp Field 31 Stamp of the Directorate Send the original and copy to the Payment Office. Responsible Party: Individual in the budget unit authorized to approve purchases. This will vary based on the size of the purchase. Step #5: Create a new electronic voucher in the Expenditure Module in AFMIS. Enter the expenditures listed in the M 16 including the full object code and amount. Temp Save the electronic voucher. Print three copies of the Temp Save screen called the AFMIS Registration Form and attach to the M 16 Form. Responsible Party: Payment Office Step #6: Send the originalm 16 Form to the Treasury or Mustofiat for payment. In addition send all necessary supporting documentation with the M 16 Form. Supporting documentation will vary depending on the requirements of the purchase order, contract and budget type (Operating vs. Development Budget). The delivery of the M 16 forms to the Treasury or Mustofiat should be completed by a liaison officer and not by an employee of the State Administration. If the M 16 is not delivered by the liaison officer, then the M 16 will be rejected. File the M 16 Form. Responsible Party: Payment Office, Liaison Officer Step #7: Update the M 20 Allotment Expenditure Ledger by posting the M 16 amount to liquidate the commitment created after posting the M 3 Purchase Order and record expenditure. (See Appendix D 28 for more detailed instructions on posting transactions to the M 20 Allotment Expenditure Ledger.) Responsible Party: Bookkeeping Office Step #8: The Treasury or Mustofiat will process the payment based on their internal control procedures. If during the review, the M 16 is rejected for any reason, the M 16 will be sent back to the Payment Office for revision. Responsible Party: Treasury/Mustofiat. 5.2.3 Scenario #2 Ordinary and Development Expenditures with No Commitment No expenditures without an approved commitment are allowed unless the purchase is made from a petty cash fund. As discussed in Section 4.0 Budget Execution and Control, the following documents are GoIRA Accounting Manual 5 4

considered commitment documents: M 3 Purchase Order, M 11 Miscellaneous Commitment Document, and M 13 Travel Order Form. One of these documents should have been prepared and approved by the proper authorizing authority prior to any commitment. 5.2.4 Scenario #3 Ordinary and Development Expenditure with Post Payment and Partial Prepayment Scenario #3 consists of recording ordinary expenditures with prepared commitment documentation and a partial disbursement of funds as a prepayment to the vendor and final payment after receipt of goods and services. This scenario is divided into three phases. Phase #1 consists of the steps to process a commitment document with a full or partial payment. Phase #2 consists of the steps necessary to complete purchase and is very similar to Scenario #1 Ordinary Expenditure with Commitment. Phase #3 consists of the steps necessary to acquit the prepayment advance to the vendor. Phase #1 Prepare M 3 Purchase Order with Full or Partial Advance Figure 7: Ordinary Expenditure with Post Payment and Partial Prepayment provides a graphical overview of the procedure. A more detailed description follows the Figure. GoIRA Accounting Manual 5 5

Ordinary and Development Expenditure with Postpayment and Partial Prepayment Procurement Office 1 Purchase Requisition 2 Prepare Commitment Document Complete Purchase Payment Office 6 Prepare M-10 Form 9 Prepare M-16 13 Create EV @ Temp Save 14 Update M-20 Ledger File Acquittal Process Bookkeeping Office 3 Validate Availability of Funds 15 Update M-20 Ledger 10 Finance Director Review M-16 Authorizing Authority 4 Authorize Purchase 7 Authorize Advance 12 Authorize Payment Financial Controller 5 Review Commitment Document 8 11 Review M-10 Form Reconcile M-16 and M-10 Treasury/ Mustofiat 16 Process Payment Figure 7: Ordinary Expenditure with Post Payment and Partial Prepayment GoIRA Accounting Manual 5 6

Detailed Steps: Step #1: As requested by a Program Office, complete a requisition as per the requirements of the Procurement Law of 2009 and other relevant laws, regulations and program/project guidelines. This will result in the issuance of a Purchase Requisition and Requisition No. Responsible Party: Procurement Office Step #2: Prepare an original and at least one copy of a commitment document based on the requirements of the procurement in Step #1. This commitment document will be the source document in the accounting information system used to set aside funds for the advance. Commitment documents include the M 3, M 11, and M 13 forms. Sign and date the commitment document. Send the original and copies of the commitment document to the Bookkeeping Office. Note: The Procurement Office is responsible for preparing the M 3 Purchase Order Form and the Payment Office will prepare the M 11 Miscellaneous Commitment Document. Responsible Party: Procurement Office/Payment Office Step #3: Verify that sufficient funds are available in the Allotment from which the purchase will take place. Sign and date the commitment document. This will certify that sufficient funds are available in the Allotment Advice. Send the original and copies to the appropriate Authorizing Authority for final approval. Responsible Party: Bookkeeping Office Step #4: Review the commitment document for accuracy and completeness. Sign and date the appropriate field in the commitment document. Send the original and copies of the commitment document to the Financial Controller. Responsible Party: Individual in the budget unit authorized to approve the commitment. This will vary based on type of commitment and amount. Step #5: Validate the commitment document and reconcile with any supporting documentation. Sign and date the appropriate field in the commitment document. If necessary, enter remarks on the commitment form. Send the original and copies of the commitment document to the Payment Office. Step #6: Fill out Fields 1 to 9 for an original and one (1) copy of the M 10 Request for Advance Form based on the commitment document. Sign and date Field 11 Accounting Officer. In addition, obtain the signature of the advance applicant (e.g. individual requesting a travel advance, procurement officer). They will sign in Field 10 Applicant Signature. Send the original and copy to the appropriate Authorizing Authority for final approval. Responsible Party: Payment Office GoIRA Accounting Manual 5 7

Step #7: Review the M 3 Purchase Order and the M 10 Request for Advance Forms for accuracy and completeness. Based on the review determine the amount of the advance and enter the amount in Field 14 Amount Approved for Advance in the M 10 Form. Sign and date Field 13 Authorizing Authority in the M 10 Form. Send both set of originals and copies to the Financial Controller. Responsible Party: Individual in the budget unit authorized to approve purchases. This will vary based on the size of the purchase. Step #8: Review M 10 Request for Advance for accuracy and completeness. Sign and date Field 20 Financial Controller for final approval. Provide any additional remarks in Field 21 Remarks. Send the originalm 10 Request for Advances Form to the Payment Office. Retain one copy to use reconcile with the M 16 Payment Order Form. Responsible Party: Financial Controller Step #9: Prepare one original and one (1) copy of the M 16 Payment Order Form. (Please refer to Appendix D 23 for detailed instructions on how to fill out the M 16 Payment Order Form.)Sign and date Field 28 Payment Manager. Provide the original and two (2) copies to the Finance Director for review. Responsible Party: Payment Office Step #10: Review the M 16 Payment Order Form for accuracy and completeness. Sign and date Field 29 Finance Director. Send the original and one (1) copy to the Financial Controller Responsible Party: Finance Director Step #11: Review the M 16 Payment Order Forms for accuracy and completeness. Reconcile the M 16 with M 10 Request for Advances Form. In the M 16 Payment Order Form sign and date Field 32 Financial Controller for final approval. Provide any additional remarks in Field 33 Remarks. Return the copy of the M 10 Request for Advance Form and the original and two (2) copies of the M 16 Payment Order to the final Authorizing Authority for approval. Responsible Party: Financial Controller Step #12: Review the M 16 Payment Order Form for accuracy and completeness. Sign and date Field 30 Authorizing Authority. Stamp Field 31 Stamp of the Directorate Send the original and two (2) copies to the Payment Office. Responsible Party: Individual in the budget unit authorized to approve purchases. This will vary based on the size of the purchase. GoIRA Accounting Manual 5 8

Step #13: Create a new electronic voucher in the Expenditure Module in AFMIS. Enter the advance listed in the M 16 including the full object code and amount. Temp Save the electronic voucher. Print three copies of the Temp Save screen called the AFMIS Registration Form and attach to the M 16 Form. Responsible Party: Payment Office Step #14: Send the original M 16 Form and one (1) copy of the M 10 Form to the Treasury or Mustofiat for payment. The delivery of the M 16 and M 10 forms to the Treasury or Mustofiat should be completed by a liaison officer and not by an employee of the State Administration. If the M 16 is not delivered by the liaison officer, then the M 16 will be rejected. File the M 10 and M 16 Forms. Responsible Party: Payment Office, Liaison Officer Step #15: Update the M 20 Allotment Expenditure Ledger by posting the purchase order amount as a commitment. Post the M 10 advance amount in the M 20 Allotment Expenditure Ledger as a prepayment. (See Appendix D 28 for more detailed instructions on posting transactions to the M 20.) Responsible Party: Bookkeeping Office Step #16: The Treasury or Mustofiat will process the payment based on their internal control procedures. If during the review, the M 16 is rejected for any reason, the M 16 will be sent back to the budget unit for revision. Responsible Party: Treasury/Mustofiat. Phase #2 Finalize M 3 Purchase Order after Receipt of Goods and Services and Prepare M 16 Payment Order After the processing of the vendor prepayment, the rest of the process consists of the same steps Scenario #1 Ordinary Expenditure with Commitment. The only difference is that the final payment amount will be reduced by the original amount of the prepayment. Phase #3 Acquit the M 10 Advance Payment See Section 5.5Advances and Acquittals for instructions on how to process an acquittal using the M 12 Advance Acquittal Form. 5.2.5 Notes All M 16 Order for Payment Forms must be approved by authorizing authority prior to disbursement of funds. Approval levels will vary based on the size of the expenditure and its purpose. In addition, authorizing authorities can delegate approval authority to replacements. All persons who have been designated as requiring the authority to approve M 16s need to prepare an M 50 Authorized Signatory Signature Sample Form. This Form collects signature samples in order to have a record of the authority s signature for audit purposes and approves the authority to authorized payments of the M 16 GoIRA Accounting Manual 5 9

based on a set amount and for a specific ministry/independent agency. (See Appendix D 50 with detailed instructions on how to prepare the M 50 Authorized Signatory Signature Sample Form.) The goods and services procured through the M 3 Purchase Order may be delivered in installments rather than all at once. In this case, the M 7 Good Received Note will indicate only a partial delivery requiring only a partial payment. Thus, multiple M 16 Payment Order and M 7 Goods Received Notes may be applied to one M 3 Purchase Order. 5.3 Ordinary and Development Expenditures Salaries 5.3.1 Overview The process to record salary expenditures and make payments is similar to the process used for ordinary expenditures of goods and services but with some important differences. First, salary expenditures do not require the use of commitment forms and are considered post payments for time accrued by state employees. The amount of expenditures to be recorded in the M 16 Form is based on attendance sheets obtained from Human Resources and the M 41 Payroll form. The M 41 is a summary of the total amount due each employee in a budget unit based on a calculation of all earning types and deductions from salaries resulting in a net payment to the state employee. Furthermore, the M 16 Form used for salary expenditures is a modified version called M 16a. Second, salaries in the center and some provinces 5 are disbursed using electronic payments whereby the DAB transfers funds directly into commercial bank accounts registered with the Treasury. The commercial banks then distribute the funds to state employees based on M 41 Forms and electronic funds transfer instructions provided by the Treasury. The electronic payments process is managed by the Verified Payroll Planning ( VPP ) unit in the Treasury and uses the Computerized Payroll System ( CPS ). The VPP unit is responsible for setting up the CPS in the primary and secondary budget units and registering state employees for the program. The main benefit of using the VPP is that allows for the direct deposit of funds into commercial banks where employees can withdraw their salaries using debit cards reducing the potential for abuse and fraud. In addition, CPS is able to automatically create electronic versions of the M 16a and M 41 forms using attendance data entered directly into the system. This saves both time and improves accuracy of reporting. Note: The electronic payment processes described in this section provide an overview of the steps related to accounting, but does not discuss either comprehensive or specific details of the VPP not directly related to the Accounting Information System. Further information about the VPP is described in the VPP Manual. Salaries that are not distributed through the VPP are distributed through the use of bonded trustees. In these cases the Treasury will write out a check to the bonded trustee who will then be responsible for disbursing the funds as per the information in the M 41 and M 16a Forms. 5.3.2 Scenario #1 Salary Expenditure Payment througha Bonded Trustee Scenario #1 consists of recording salary expenditures but disbursements are still made through the use of a Bonded Trustee. Figure 8: Salary Expenditure Payment through a Bonded Trustee provides a graphical overview of the procedure. A more detailed description follows the Figure. 5 At the time of the original publication of the Accounting Manual, only some Mustofiats were using the VPP, but is expected that the process and its systems will be delivered to all provinces in the future. GoIRA Accounting Manual 5 10

Salary Expenditure Payment Through Bonded Trustee Human Resources 4 Prepare P-2 Attendance Report Payroll Office 1 Prepare M-40 3 File 16 Update M-40 Payment Office 5 Prepare M-41 Form 6 Complete Preparation of M-16 10 Create EV @ Temp Save 11 Prepare M-16 Package File 15 File 7 Finance Director Review and Approve M-16 Authorizing Authority 9 Authorize Salary Payments Bookkeeping Office 12 Update M-20 Ledger Financial Controller 2 Validate M-40 8 Reconcile M- 16a and M-41 Treasury/ Mustofiat 13 Complete Payment Proces Bonded Trustee M-41 14 Disburse Salaries Figure 8: Salary Expenditure Payment through a Bonded Trustee GoIRA Accounting Manual 5 11

Detailed Steps: Step #1: At the beginning of the year, fill out Fields 1 to 8 for an original and one (1) copy of the M 40 Payroll Ledger (Individual Pay and Deduction Report) Form for each state employee in the budget unit. Send the original and copy to the Financial Controller for their review and approval. Responsible Party: Payroll Office Step #2: Review the M 40 Form for accuracy and completeness. Sign and date Field 9 Financial Controller in the M 16a Form and enter any relevant remarks in Field 10 Remarks. Return the original and copies of the M 40 Forms to the Payment Office. Return the original M 40 Form back to the Payment Office. Responsible Party: Financial Controller Step #3: File a copy M 40 Form for each employee to be used as a reference document for monthly processing of salary expenditures. Send the original to the Payment Office for future processing of monthly payroll. The M 40 Form is the payroll and deduction report for each individual employee. Therefore, it may be updated during the year based on changes to employee status or compensation (e.g. promotion, eligible for new benefits requiring a deduction, etc.) The Payroll should send an updated copy of the M 40 Form to the Payment Office to allow them to update the original. Responsible Party: Payroll Office Step #4: Record daily attendance of state employees and maintain attendance sheets. Each budget unit can use its own format to record attendance. At the end of each month create a monthly attendance report call the P 2 Attendance Report for all employees and send to the Payroll Office. Responsible Party: Human Resources Step #5: Based on the P 2 Attendance Report from Step #4 and the M 40 Payroll Ledger (Individual Pay and Deduction Report), fill out Fields 1 to 11 for original and one copy of the M 41 Payroll Form. Use as many sheets as necessary to include all state employees in the budget unit. Send the original M 41 and attendance sheets to the Payment Office to be used as inputs for processing of the M 16a Payment Order Form. Responsible Party: Payroll Office Step #6: Prepare one (1) original and one (1) copy of the M 16a Payment Order Form. (Please refer to Appendix D 23 for detailed instructions on how to fill out the M 16 Payment Order Form.)Sign and date Field 28 Payment Manager. Provide the original and two (2) copies of the M 16 Form to the Finance Director for review. Send the original M 41 and M 40 forms and attendance sheet to the Financial Controller. GoIRA Accounting Manual 5 12

Responsible Party: Payment Office Step #7: Review the M 16a Payment Order Form for accuracy and completeness. Sign and date Field 29 Finance Director. Send the original and one (1) copy to the Financial Controller. Responsible Party: Finance Director Step #8: Reconcile the attendance sheets, M 16a, M40 and M41 Forms. Check calculations for accuracy and completeness. Reconcile values from the previous month. Verify the coding block information. Sign and date Field 32 Financial Controller in the M 16a Form and enter any relevant remarks in Field 33 Remarks. Sign and date Field 17 Financial Controller in the M 41 Form and enter any relevant remarks in Field 18 Remarks. Return the original and copies of the M 16a andm 41 forms to the Payment Office. Return the original M 40 Form back to the final Authorizing Authority for Approval. Responsible Party: Financial Controller Step #9: Review the M 16a Payment Order Form for accuracy and completeness. Sign and date Field 30 Authorizing Authority. Stamp Field 31 Stamp of the Directorate Send the original and two (2) copies to the Payment Office. Responsible Party: Individual in the budget unit authorized to approve purchases. This will vary based on the size of the purchase. Step #10: Create a new electronic voucher in the Expenditure Module in AFMIS. Enter the expenditures listed in the M 16a including the full object code and amount. Temp Save the electronic voucher. Print three copies of the Temp Save screen called the AFMIS Registration Form and attach to the M 16a Form. Responsible Party: Payment Office Step #11: File one (1) copy of the M 16a and the original M 41 Form. Send the original M16a Form and one (1) copy of the M 41 Form to the Treasury or Mustofiat for payment. The delivery of the M 16a forms to the Treasury or Mustofiat should be completed by a liaison. If the M 16 is not delivered by the liaison officer, then the M 16 will be rejected. Send a copy of the M 16 and M 41 forms to the Bookkeeping Office. Responsible Party: Payment Office, Liaison Officer Step #12: Update the M 20 Allotment Expenditure Ledger by posting the M 16 expenditure amount. (See Appendix D 28 for more detailed instructions on posting transactions to the M 20.) Responsible Party: Bookkeeping Office GoIRA Accounting Manual 5 13

Step #13: The Treasury or Mustofiat will process the payment based on their internal control procedures. If during the review, the M 16a is rejected for any reason, the M 16a and M 41 Forms will be sent back to budget unit for revision. Send the original M 41 Form to the Bonded Trustee responsible for disbursement of salaries to the state employees. Responsible Party: Treasury/Mustofiat. Step #14: In the presence of two witnesses, withdraw the disbursement funds for salaries and make cash payments to the state employees using the M 41 Form as the receipt of funds document. Require each employee to sign the M 41 Form in Field 12 Employee Signature in the line with their name and employee ID. Responsible Party: Bonded Trustee Step #15: Return the M 41 Form to the Treasury or Mustofiat with the signatures of all employees that have received their salaries. Responsible Party: Bonded Trustee Step #16: Update the original M 40 Payroll (Individual Payroll Ledger) based on the returned M 41 Form. Reference the M 41 Form when filling out the M 40 Form. File the M 41 Form returned by the Bonded Trustee which includes employee signatures. File the M 40 Payroll Form for future use. Responsible Party: Payment Office 5.3.3 Scenario #2 Salary Expenditure Payment through Direct Deposit Scenario #2 consists of recording salary expenditures with disbursements processed through VPP and direct deposit. Figure 9: Salary Expenditure Payment through Direct Deposit provides a graphical overview of the procedure. A more detailed description follows Figure. GoIRA Accounting Manual 5 14

Salary Expenditure Payment through Direct Deposit Human Resources 2 Prepare Attendance Sheet Payroll Office 1 Prepare M-40 File 14 Update M-40 Payment Office 3 Prepare M-41 Form 6 Prepare M-16 10 Create EV @ Temp Save 11 Prepare M-16 Package File Finance Director 4 Cerfity M-41 Form 7 Review and Approve M-16 Authorizing Authority 9 Authorize Salary Payments Bookkeeping Office 12 Update M-20 Ledger Financial Controller 5 Validate M-41 Form 8 Reconcile M- 16a and M-41 Treasury/ Mustofiat 13 Complete Payment Proces Figure 9: Salary Expenditure Payment through Direct Deposit GoIRA Accounting Manual 5 15

Detailed Steps: Step #1: Complete Steps 1 to 13 of Scenario #1 Salary Expenditure Payment through a Bonded Trustee. Step #2: The Treasury or Mustofiat will process the payment based on their internal control procedures. If during the review, the M 16 is rejected for any reason, the M 16 will be sent back to the budget unit for revision. In this case the disbursements will be made through direct payments from the Treasury bank accounts. Responsible Party: Treasury/Mustofiat. Step #3: Update the original M 40 Payroll (Individual Payroll Ledger) based on the returned M 41 Form. Reference the M 41 Form when filling out the M 40 Form. File the M 41 Form after verifying the payment of funds by Treasury through direct deposit. Responsible Party: Payment Office 5.3.4 Notes Salary payments take place at the end of each month with some limited exceptions for emergency payments within a month. 5.4 Development Budget Expenditures The recording of expenditure and disbursement of development funds are managed by the Special Disbursements Unit within the Treasury. In general, the procedures for line ministries are the same as for ordinary expenditures described in Sections 5.2 and 5.3 with some differences in the preparation and submission of accounting forms, budget execution procedures, and the recording of provincial expenditures. More detailed instructions on processing development budget expenditures are provided in the SDU Procedure Guidelines for Implementing Agencies document. Development projects require the use of commitments to set aside funds after allotment. These commitments are assigned a commitment number which is required on several documents including the M 16 Payment Order and M 12 Advance Acquittal forms. The commitments/obligations functionality in AFMIS is described in Section 4.5 Commitments/Obligations. The supporting documentation required to be submitted with development budget M 16 Payment Order and other forms will be different. (Please refer to Appendix F Submission Requirements by Select Form for specific requirements.) Another current difference in the process flow of development budget expenditures is that Mustofiats do not record expenditures from projects in provinces directly in AFMIS. Rather expenditures are processed in the SDU of Treasury. While Mustofiats still make payments from cash transfers received from the Treasury, the process of recording the transfers and expenditures differs between the operating and development budgets. Under the operating budget, cash transfers from the Treasury to Mustofiats are recorded in the AFMIS Financial Budget module as part of budget execution when a B 20 Form is processed by line ministries to suballot funds to their line directorates. Under the development budget, cash transfers are posted as an internal advance recorded in the General Ledger using an expenditure object advance code. As part of its payment process, the Mustofiat will prepare three GoIRA Accounting Manual 5 16

documents called the M 21 Payment Ledger, Commitment Register and Bank Book to record payments and expenditures. On a monthly basis the Mustofiat sends copies of the Commitment Register and Bank Book to the Treasury. The Treasury will then acquit the original advance and update AFMIS after reconciling the Commitment Register and Bank Book. For more information on the Mustofiat payment process for development projects please refer to A Handbook for Accounting and Reporting of Development Budget Transactions in the Provincial Mustofiats. Any future changes to development budget/sdu procedures will be made known through official circulars. 5.5 Advances and Acquittals 5.5.1 Overview Under some circumstances, budget units will need to disburse funds prior to the receipt of goods and service. In these cases, the disbursements are not recorded as expenditures but rather are recorded as advances using the M 10 Request for Advances Form. There are different types of advances including payments to individuals for travel, salary advances in unusual circumstances, and prepayments to vendors for goods and services. Other advances include disbursements to petty cash funds. Most often advances are paid directly into the account of a bonded trustee who then distributes the funds to the correct beneficiary. In the case of direct payments to vendors it is important that these payments are made strictly in accordance with the Procurement Law. Procurement advances are given as per the policies and procedures of the Ministry of Finance considering the requirements of the budget unit. Advances are not considered expenditures, but are still recorded using a five (5) digit expenditure object code which is then later acquitted. Each advance code is indirectly linked with a set of major and minor expenditure object codes. Therefore, the advance is required to be acquitted in its relative expenditure object code. For example, an initial advance for travel would be recorded in object code 22105 and acquitted using a five (5) digit object code under the minor object code 221 Travel. 5.5.2 Typical Advance and Acquittal All advances are required to be acquitted. Acquittal is the process of recording the actual expenditure code after the advance has been used to make a purchase. Since at the time of advance, the full five (5) digit expenditure codes are not known and the initial transaction is posted as an advance, an adjustment must be made after the delivery of the goods and services must be made. This adjustment is called an acquittal and is processed using the M 12 Advance Acquittal Form. Process provides a graphical overview of the procedure. A more detailed description follows. GoIRA Accounting Manual 5 17

M-16 Preparation and Approval Process Procurement Office 1 Purchase Requisition 14 Complete Procurement Process Payment Office 2 Prepare M-10 6 Prepare M-16 10 Create EV @ Temp Save 11 Prepare M-16 Package File 15 Certify M-12 18 Prepare M-12 Package File 21 Return Excess Cash Finance Director 7 Review and Approve M-16 16 Authorize Acquittal Authorizing Authority 4 Authorize Advance 9 Review and Approve M-16 Bookkeeping Office 3 Verify M-10 12 Update M-20 Ledger 19 Update M-20 Ledger Financial Controller 5 Review M-10 8 Reconcile M-16 and M-10 17 Reconcile M-10 and M-12 Treasury/ Mustofiat 13 Process Payment 20 Process Acquittal Figure 10: Typical Advance and Acquittal Process GoIRA Accounting Manual 5 18

Detailed Steps: Step #1: As requested, complete a requisition as per the requirements of the Procurement Law and other relevant laws, regulations and program/project guidelines. This will result in the issuance of a Purchase Requisition and Requisition No. Responsible Party: Procurement Office Step #2: Fill out Fields 1 to 9 for an original and one (1) copy of the M 10 Request for Advance Form. Sign and date Field 11 Accounting Officer. In addition, obtain the signature of the advance applicant (e.g. individual requesting a travel advance or the procurement office requesting a prepayment advance for a vendor). They will sign in Field 10 Applicant Signature. Send the original and copy of the M 10 Request for Advance Form to the Bookkeeping Office. Responsible Party: Payment Office Step #3: Verify that sufficient Allotment Funds are available for the requested advance amount as per Field 10 Coding Block (Allotment #2) and Field 5 Advance Request Amount. In addition, determine if the advance applicant does not have any outstanding advances that have not been acquitted and is eligible for a new advance. Send the original and copy to the Authorizing Authority. Responsible Party: Bookkeeping Office Step #4: Review the M 10 Request for Advance Forms for accuracy and completeness. Based on the review determine the amount of the advance and enter the amount in Field 14 Amount Approved for Advance in the M 10 Form. Sign and date Field 13 Authorizing Authority in the M 10 Form. Send both the original and copy to the Financial Controller. Responsible Party: Individual in the budget unit authorized to approve purchases. This will vary based on the size of the purchase. Step #5: Review the M 10 Request for Advance Form and sign and date Field 20 Financial Controller for final approval. Provide any additional remarks in Field 21 Remarks. Send the original and copy of M 10 Request for Advance Form to the Payment Office. Responsible Party: Financial Controller Step #6: Complete the preparation of one original and one (1) copy of the M 16 Payment Order Form based on the M 10 Form. (Please refer to Appendix D 23 for detailed instructions on how to fill out the M 16 Payment Order Form.)Sign and date Field 28 Payment Manager. Provide the original and two (2) copies to the Finance Director for review. Responsible Party: Payment Office Step #7: Review the M 16 Payment Order Form for accuracy and completeness. Sign and date Field 29 Finance Director. Send the original and two (2) copies to the Financial Controller. GoIRA Accounting Manual 5 19

Responsible Party: Finance Director Step #8: Review the M 10 Request for Advance and M 16 Payment Order Forms for accuracy and completeness. Reconcile the two the forms and verify that the advance applicant is eligible to receive the advance based on previous advances. In the M 16 Payment Order Form sign and date Field 32 Financial Controller for final approval. Provide any additional remarks in Field 33 Remarks. Provide the copies of M 10 Request for Advance Form and the M 16 Payment Order Form to the final Authorizing Authority for approval. Responsible Party: Financial Controller Step #9: Review the M 16 Payment Order Form for accuracy and completeness. Sign and date Field 30 Authorizing Authority. Stamp Field 31 Stamp of the Directorate. Send the original and two (2) copies to the Payment Office. Responsible Party: Individual in the budget unit authorized to approve purchases. This will vary based on the size of the purchase. Step #10: Create a new electronic voucher in the Expenditure Module in AFMIS. Enter the expenditures listed in the M 16 including the full object code and amount. Temp Save the electronic voucher. Print three copies of the Temp Save screen called the AFMIS Registration Form and attach to the M 16 Form. Responsible Party: Payment Office Step #11: Send the original M 16 Form and one (1) copy of the M 10 Form to the Treasury or Mustofiat for payment. The delivery of the M 16 and M 10 forms to the Treasury or Mustofiat should be completed by a liaison officer and not by an employee of the state administration. If the M 16 is not delivered by the liaison officer, then the M 16 will be rejected. File the copies of the M 10 and M 16 forms. Responsible Party: Payment Office, Liaison Officer Step #12: Post the M 10 advance amount in the M 20 Allotment Expenditure Ledger as a prepayment. (See Appendix D 28 for more detailed instructions on posting transactions to the M 20.) Responsible Party: Bookkeeping Office Step #13: The Treasury or Mustofiat will process the payment based on their internal control procedures. If during the review, the M 16 is rejected for any reason, the M 16 will be sent back to the Line Ministry for revision. Responsible Party: Treasury/Mustofiat. GoIRA Accounting Manual 5 20

Step #14: Use the advance to purchase goods and services as needed and maintain records of the purchase including invoices and bank records. In addition, the procurement rules of the Procurement Law apply to any purchases made from the advance. If necessary complete steps #1 to #10 of Section 5.2 Scenario #1 Ordinary Expenditure with Commitment/Obligation. Refer to Section 6.0 for petty cash purchase requirements and Section 5.5 for travel advance purchase requirements. Responsible Party: Procurement Office Step #15: After the purchase of goods and services using the advance, acquit the advance using the M 12 Advance Acquittal Form. Fill out Fields 1 to 18 for an original and one (1) copy of the M 12 Advance Acquittal Form. Attach supporting documentation verifying the purchases and list them in Field 18 List of Attachments. Sign and date Field 19 Certification of Document verifying that the acquittal is supported by documentation and is accurate. Send the original copy of the M 12 to the proper Authorizing Authority for approval. Update Fields 15 to 19 in the M 10 tracking the advance of the acquittal. Responsible Party: Payment Office Step #16: Review the M 12 Advance Acquittal Form for accuracy and completeness. Sign and date Field 20 Authorizing Authority. Send copies to the Financial Controller. Responsible Party: Finance Director Step #17: Review the M 12 Advance Acquittal Form for accuracy and completeness. Reconcile the two the forms and verify that the advance amount is recorded correctly in the M 10 Form. Send the original and one (1) copy of the M 12 Form to the Payment Office. For verification of the figures in M 12, reconcile the M 12 with the supporting documentation of the vendor including the M 3, M 7 and invoices. Responsible Party: Financial Controller Step #18: Send the copy of the M 12 Form to the Treasury or Mustofiat for payment with the supporting documentation verifying the expenditures. Include a copy of the original M 16 Order Payment used to pay the original advance as part of supporting documentation. The delivery of the M 12 forms to the Treasury or Mustofiat should be completed by a liaison officer and not by an employee of the state administration. If the M 12 is not delivered by the liaison officer, then the M 12 will be rejected. File the original M 12 Form. Responsible Party: Payment Office, Liaison Officer Step #19: Return any excess cash that was not distributed and acquitted back to the Treasury. Additional money should be deposited back into either the Special Donor Account or TSA Revenue Account. Send the bank deposit slip to the Treasury. Responsible Party: Payment Office, Liaison Officer GoIRA Accounting Manual 5 21

Step #20: Post the M 12 Advance Acquittal Form expenditures in the M 20 Allotment Expenditure Ledger to acquit the original prepayment from the M 10 Form. (See Appendix D 28 for more detailed instructions on posting transactions to the M 20.) Responsible Party: Bookkeeping Office Step #21: The Treasury or Mustofiat will process the M 12 acquittal and reconcile with the original M 10, and copies of the M 7 and M 3 forms. The Treasury will record the object codes identified in M 12 Advance Acquittal Form to AFMIS. The received forms and documents are filed. Responsible Party: Treasury/Mustofiat. 5.5.3 Petty Cash Advance and Acquittal See 6.0Petty Cash Fund for further details on Petty Cash Advances. 5.5.4 Travel Advance and Acquittal See 5.6Travel Expenditures and Advances for further details on Travel Expenditures and Advances. 5.5.5 Notes Advances used to pay suppliers in development budget funds require a bank guarantee; otherwise the advance will not be approved. Advances in development budget funds must be denominated in AFN. 5.6 Travel Expenditures and Advances 5.6.1 Overview Due to the nature of travel and its specific requirements, additional procedures and forms are required to approve and record travel expenditures and advances. As travel is an expenditure that must be paid prior to departure, most travel makes use of an advance. In addition, the travel must be pre approved by both the traveler s supervisor and the budget unit Bookkeeping Office. Previously, the pre approval, advance and acquittal process made use of three forms: M 8 Order for Personnel Transportation, M 9 Travel Request and Authorization, and M 13 Payment Request for Travel Expenses. These forms have now been consolidated into one form: M 13 Travel Order Form. The M 13 Travel Order Form is used both as a preapproval and commitment document prior to travel and used to account for travel expenses and supporting documentation for payment post travel. The travel advance is considered a loan which is repaid by the traveler by finalizing the M 13 Travel Order Form. Any unused portion of the travel advance must be returned to the budget unit. Cash advances will not be issued to employees who already have an outstanding balance. The procedure for an employee who travels or who is responsible for obtaining an advance must provide the following: 5.6.2 Travel Expenditures and Advances Although the general process of requesting, recording and disbursing funds related to travel expenditures is the same as for other goods and services (See Section 5.2 Ordinary Expenditures Good and Services), there are some additional requirements needed for travel expenses. These GoIRA Accounting Manual 5 22

requirements are discussed in this Section. Figure 11: Travel Expenditures and Advances provide a graphical overview of the procedure. A more detailed description follows Figure. GoIRA Accounting Manual 5 23

Travel Expenditure with Advance Traveler 1 Prepare M-13 Form 17 Complete Travel 18 Certify Expenses M-13 Payment Office 5 Review M-13 Form 6 Prepare M-10 Form 9 Complete Preparation of M-16 13 Create EV @ Temp Save 14 Prepare M-16 Package File 20 Approve Final M-13 21 Acquittal Process 10 Finance Director Review M-16 Authorizing Authority 2 Authorize Travel 7 Authorize Advance 12 Authorize Payment 19 Verify Expenses M-13 Financial Controller 4 Review M-13 Form 8 Review M-10 Form 11 Reconcile M-16 Bookkeeping Office 3 Validate Availability of Funds 15 Update M-20 Ledger Treasury/ Mustofiat 16 Process Payment 22 23 Process Process Return of Payment Funds Figure 11: Travel Expenditures and Advances GoIRA Accounting Manual 5 24

Detailed Steps: Step #1: After identifying the need for travel, fill out Fields 1 to 8 and 10 for an original and two (2) copies of the M 13 Travel Order Form. (Please refer to Appendix D 20 for detailed instructions on how to fill out the M 13 Travel Order Form.)Sign and date Field 17 Traveler. This is necessary in order for the Traveler to attest to the accuracy of travel estimates recorded in Field 10 Statement of Travel Expenses. Send the original and copies to the manager approving travel. Responsible Party: Program Office and Traveler Step #2: Review the M 13 Travel Order Form for accuracy and completeness. Sign and date Field 20 Travel Authorization. Send the original and two (2) copies to the Bookkeeping Office. Responsible Party: Manager in the budget unit with the authority to approved the travel. This will vary based on the extent of the travel and number of persons involved. Step #3: Verify that sufficient funds are available in the Allotment Advice from which the travel will take place. Enter the Allotment Number in Field 9 Coding Block (Allotment #). Fill out Fields 12 to 14 of the M 13 Form and verify the calculations in Field 10 Statement of Travel Expenses. Sign and date Field 19 Accounting Officer. This will certify that sufficient funds are available in the Allotment Advice. Send the original and two (2) copies to the Payment Office. Responsible Party: Bookkeeping Office Step #4: Check the M 13 Travel Order Form errors or misstatements. Sign and date Field 20 Accounting Officer. Send the original and two (2) copies to the Authorizing Authority. Responsible Party: Payment Office Step #5: Fill out Fields 1 to 9 for an original and one (1) copy of the M 10 Request for Advance Form. Sign and date Field 11 Accounting Officer. In addition, obtain the signature of the advance applicant (e.g. individual requesting a travel advance or the procurement office requesting a prepayment advance for a vendor). They will sign in Field 10 Applicant Signature. Send the original and copy of the M 10 Request for Advance Form to the Authorizing Authority. Responsible Party: Payment Office Step #6: Review the M 10 Request for Advance Forms for accuracy and completeness. Based on the review determine the amount of the advance and enter the amount in Field 14 Amount Approved for Advance in the M 10 Form. Sign and date Field 13 Authorizing Authority in the M 10 Form. Send both the original and copy of the M 13 Form to the Financial Controller. Responsible Party: Individual in the budget unit authorized to approve advances. This will vary based on the size of the purchase. GoIRA Accounting Manual 5 25

Step #7: Check the M 10Request for Advances Form and reconcile with M 13 Travel Order Form. Find out eligibility of individual for advances based on the M 10 Form or previous accumulated advances. Sign and date Field 20 Financial Controller and fill out Field 21 Remarks of the M 10 Form. Sign and date Field 24 Financial Controller and fill out Field 25 Remarks of the M 13 Form. Return the all copies and originals of the M 10 and M 13 forms to the Payment Office. Responsible Party: Financial Controller. Step #8: Complete the preparation of one original and one (1) copy of the M 16 Payment Order Form. (Please refer to Appendix D 23 for detailed instructions on how to fill out the M 16 Payment Order Form.)Sign and date Field 28 Payment Manager. Provide the original and two (2) copies to the Finance Director for review. Responsible Party: Payment Office Step #9: Review the M 16 Payment Order Form for accuracy and completeness. Sign and date Field 29 Finance Director. Send the original and one (1) copy to the final Authorizing Authority for Approval. Responsible Party: Finance Director Step #10: Review the M 13 Travel Order Form, M 10 Request for Advance and M 16 Payment Order Forms for accuracy and completeness. Reconcile the three the forms and verify that the advance applicant is eligible to receive the advance based on previous advances. In the M 10 Request for Advance Form sign and date Field 20 Financial Controller for final approval. Provide any additional remarks in Field 21 Remarks. In the M 16 Payment Order Form sign and date Field 32 Financial Controller for final approval. Provide any additional remarks in Field 33 Remarks. In the M 13 Travel Order Form sign and date Field 23 Financial Controller for final approval. Provide any additional remarks in Field 24 Remarks. Return the originals and copies of M 10 Request for Advance Form, M 13 Travel Order Form and the M 16 Payment Order Form to the Authorizing Authority. Responsible Party: Financial Controller Step #11: Review the M 16 Payment Order Form for accuracy and completeness. Sign and date Field 30 Authorizing Authority. Stamp Field 31 Stamp of the Directorate Send the original and two (2) copies to the Payment Office. Reconcile the M 16 Form with the M 13 and M 10 forms. Responsible Party: Individual in the budget unit authorized to approve purchases. This will vary based on the size of the purchase. Step #12: Send the original M 16 Form and originals of the M 10 and M 13forms to the Treasury or Mustofiat for payment. The delivery of the M 16, M 13 and M 10 forms to the Treasury or Mustofiat should be completed by a liaison officer and not by an employee of the state GoIRA Accounting Manual 5 26

administration. If the M 16 is not delivered by the liaison officer, then the M 16 will be rejected. File copies of the M 13, M 10 and M 16 forms. Responsible Party: Payment Office, Liaison Officer Step #13: Create a new electronic voucher in the Expenditure Module in AFMIS. Enter the advance listed in the M 16 including the full object code and amount. Temp Save the electronic voucher. Print three copies of the Temp Save screen called the AFMIS Registration Form and attach to the M 16 Form. Responsible Party: Payment Office Step #14: Post the approved travel advance amount from Field 14 Advance Payment Amount of the M 13 Travel Order amount in the M 20 Allotment Expenditure Ledger as a prepayment. Post the expected travel costs from Field 13 Total Travel Expenses After Objection (See Appendix D 28 for more detailed instructions on posting transactions to the M 20.) Responsible Party: Bookkeeping Office Step #15: The Treasury or Mustofiat will process the M 16 Payment Order Form and reconcile with the M 13 and M 10 forms. Payment will be made to a bonded trustee to distribute the advance to the traveler. The received forms and documents will be filed by Treasury. Responsible Party: Treasury/Mustofiat Step #16: Complete the travel and keep and maintain all original invoices, receipts and records of travel to be used as documentation for reimbursement or acquittal of travel expenditures and advances. Keep a journal of expenditure, which will be presented for acquittal at end of trip Note: If the traveler does not receive or retain their receipts for travel, they may not be eligible for full reimbursement of costs. Responsible Party: Traveler Step #17: Fill out and update Field 10 Statement of Travel Expenses of the retained M 13 Travel Order Form including the subfield Actual Total under Field 10. Sign and date Field 24 Traveler. Send the M 13 Travel Order Form to the manager in the budget unit for approval of the actual expenditures. Provide the Payment Office original copies of all travel receipts. Responsible Party: Traveler Step #18: Review the M 13 Travel Order Form for accuracy and to approve actual travel expenses. Sign and date Field 25 Travel Authorization. Send the retained copy to the Payment Office. Responsible Party: Manager in the budget unit with the authority to approved the travel. This will vary based on the extent of the travel and number of persons involved. GoIRA Accounting Manual 5 27

Step #19: Compare the information in the M 13Travel Order Form and traveler s receipts. Based on this comparison determine the payment due the traveler or the amount to be refunded to the government. Fill out either Field 20 Payable to Traveler and Field 21 Refund to the Government depending on the whether the travel advance was greater or less than actual costs. Sign and date Field 25 Accounting Officer to approve the final payment amount for travel expenses. Responsible Party: Payment Office Step #20: Acquit the original advance. Refer to Section 5.5 Advances and Acquittals for instructions on how to acquit travel advances. Responsible Party: Payment Office Please complete Step 21if the original advance amount is less than actual travel expenses: Step #21: Complete the steps in Phase #2 of Ordinary and Development Expenditures with Post Payment. In this case the only difference is that the commitment document is the M 13 Travel Order Form and not the M 3 Purchase Order Form. Please complete Step 22if the original advance amount is greater than actual travel expenses: Step #22: Refund of advances back to the budget unit. Responsible Party: Traveler and Bonded Trustee 5.6.3 Notes Disposition of advances must be accounted for within 30 days of completed travel through the submission of a Travel Expense Voucher and prompt return of any unused monies. Domestic Travel Domestic travel is defined as travel away from the normal duty station of the employee in excess of 20 kilometers. Travel expenses must be claimed on the M 16 Forms within three (3) months of incurring the expenses. If the traveler does not claim their travel expenses within 3 months, for each month after, 1/3 of the travel expenses will be excluded in reimbursement. After six (6) months, the employee will not be reimbursed for the travel expenses incurred. International Travel International travel is defined as travel out of the country of Afghanistan. In most cases, another country will invite the employee to the country for meetings or training. The GoIRA will only pay for the per diem as allowed by law. In many cases, the travel costs will be paid by the sponsoring nation. The employee can only be reimbursed for the travel costs based on their grade level as follows: Employees having a grade 2 or higher will be reimbursed after the Ministry of Foreign Affairs and the President's Office approve the expenditure. GoIRA Accounting Manual 5 28

An employee of below grade 2 will be reimbursed foreign travel expenses based on Presidential Decree 50. Unlike ordinary advances, prior travel advances do not need to be fully acquitted for additional travel advances to be approved by the Treasury. GoIRA Accounting Manual 5 29

6.0 Petty Cash Fund 6.1 General A petty cash fund is a small amount of cash held onsite by a budget unit to pay for small, incidental expenses. The purpose of the fund is to improve administrative efficiency and to limit the need and frequency for small value checks to be requested from Treasury or Mustofiat. The general rule is that the petty cash fund should be limited in value to an advance of 50,000 AFN, but the limit can be increased with approval from Treasury depending on the need of the budget unit. Since the advance used to establish the petty cash fund is not an expense, it is merely a transfer of funds from the Treasury to another budgetary unit in the GoIRA, the advance amount will need to be reimbursed at the time of dissolution of the petty cash or at year end, although reimbursement can take place through acquittal of expenditures rather than repayment of funds through a cash payment. The petty cash fund limit can be increased above 50,000 AFN through a formal letter request to Treasury. The letter including the justification for requesting the increased amount must be submitted by the Custodian to the Director General of Treasury. The Director General will authorize or reject the request. In general, the allowable limit of the petty cash fund will depend on the frequency of small value procurements and frequency of replenishment of the fund. To maximize efficiencies the petty cash fund should be sufficient in size to only require replenishment once a month. Procurements out of petty cash should be done in accordance with Procurement Law. Normally, this will consist of a single source procurement and will be recorded using an object code under major object code 22 excepting travel advances. Unless otherwise agreed by the Treasury small value procurements should not exceed payments for goods and services greater than1,000 AFN in value. Expenditures are also limited to the minor object code 221 Goods and Services Non Utilities. Using the petty cash fund to pay wages and salary under minor object code 210 is strictly prohibited. Similar to requesting an increase in the petty cash fund limit above 50,000 AFN, the custodian can request to increase the one time allowable expenditure up to 5,000 AFN. The ceiling amount of the petty cash one time payment is based on the requirements of the budget unit. Purchases made from petty cash must still be undertaken in accordance with all applicable Laws and Regulations, and in particular the Procurement Law of 2009. Petty Cash funds cannot cross the boundaries of allotments, and where petty cash is required for spending out of more than one allotment, a separate petty cash fund must be established for each allotment. Petty cash funds are administered and managed by the following two individuals: Fiduciary of the Fund: ( Fiduciary ) The Fiduciary has overall responsibility for the fund. This will be a senior level or manager in the organization requesting the petty cash fund. Custodian of the Fund/Bonded Trustee: ( Custodian ) The Custodian must be a different person to the Fiduciary. The Custodian is responsible for custody of the petty cash and maintenance of the cashbook for accounting for all transactions of the petty cash fund. The Custodian can be the bonded trustee of the unit / office, but can also be a government employee that is not a bonded trustee. GoIRA Accounting Manual 6 1

Note: There must be no family relationship between the Fiduciary and the Custodian, and both officers must be required to sign a declaration to this effect. Each fund must have a separate Custodian; however, a Fiduciary can be responsible for more than one account. The following procedures must be followed for the Petty Cash Fund: New Petty Cash advances will not be payable unless the old advance is acquitted. Only one person (the Custodian) should have physical custody of the fund, including possession of the keys to access the security container where the petty cash fund is stored. This person should not have custody of accounting records. The Fiduciary of the petty cash fund should establish an alternate Custodian to take over in the Custodian s absence (proof of absence will be on file with the Fiduciary). The fund and all receipts and vouchers must be maintained properly and in the physical location noted in the establishment request as per the M 75 Form. Any failure to properly follow these procedures will result in immediate dissolution of the petty cash fund. 6.2 Setting up A Petty Cash Fund 6.2.1 Overview The Petty Cash Fund is setup using the standard advance procedures detailed in Section 5.4 Advance and Acquittals with some differences related to the administration and use of the petty cash funds. When a new petty cash fund is established, a check will be issued in the name of the fund and the Custodian will become responsible for managing, accounting and securing the assets of the fund. All petty cash funds must be approved by the Director General of the Treasury. In order to request the creation of a petty cash fund, the budget unit should make the request in the form of a letter and attach the M 75 Request of Petty Cash Fund Form to be filed as at the Treasury. The request letter requires the following information: Amount requested Purpose of the fund (i.e., reason the fund is needed). Physical location of the fund Plans for safeguarding the fund (e.g., locked in safe, etc.) Name and job title of the Custodian Name and job title of the Fiduciary Budget units may have more than one petty cash account, where geographic circumstances dictate. The need for multiple accounts, and their locations, needs to be addressed in each application letter. 6.2.2 Petty Cash Setup Process This section provides detailed instruction on how to setup a petty cash fund. Figure 12: Petty Cash Setup Process provides a graphical presentation of the process. More detailed instructions follow. GoIRA Accounting Manual 6 2

Petty Cash Setup Process Payment Office Fiduciary Custodian 1 2 3 Prepare M-75 Review M-75 and Approve Request Petty Cash Approval File 5 Process Advance to Setup Petty Cash Fund 6 Post Advance in M-76 and Setup Cash Box Process Payment for Petty Cash Expenditures Treasury 4 Approve Setup of Petty Cash Fund Figure 12: Petty Cash Setup Process Detailed Steps: Step #1: Fill out Fields 1 to 5 and 7 to 11 for an original and one (1) copy of the M 75 Request of Establishment or Update of the Petty Cash Fund Form. (Please refer to Appendix D 55 for detailed instructions on how to fill out the M 75 Form.) Sign and date Field 13 Custodian. Obtain the Allotment Code from the Bookkeeping Office and the code in Field 6 Coding Block (Allotment #2). Prepare a request letter with the information described in Section 6.2.1Overview. Send the request letter and the original and copy of the M 75 Form to the Fiduciary for review and approval. Responsible Party: Custodian Step #2: Review the M 75 Request of Establishment or Update of the Petty Cash Fund Form and verify the petty cash limit, the purpose of the petty cash fund and plan for safeguarding the petty cash fund. Sign and date Field 12 Authorizing Authority to approve the setup or changes to the petty cash fund. Review and sign the request letter. GoIRA Accounting Manual 6 3

Send the request letter and the M 75 Form to Payment Office. Responsible Party: Fiduciary Step #3: Complete Steps #1 to #12 of the Advance and Acquittal Process (See Section 5.5Advances and Acquittals) to request and process an advance for the petty cash fund. Send the M 16, M 10 and M 75 Forms, as well as the Request Letter to the Treasury. This step also includes validation of the availability of funds for the advance. Responsible Party: Payment Office Step #4: Review the M 75 Request for Establishment or Update of Petty Cash Fund. Approve or reject the request and notify the budget unit. Responsible Party: Treasury Step #5: Complete the steps in Scenario #3 Ordinary Expenditure with Commitment and Partial or Full Prepayment (See Scenario #3 Ordinary and Development Expenditure with Post Payment and Partial Prepayment) in order to acquire the items necessary to setup and manage the petty cash fund. This consists of two parts. First, process an advance to receive the petty cash funds using an M 10 Form. Second, process an M 16 Payment Order for purchasing equipment required for physical custody and maintenance of the petty cash fund including safes, keys and other tools. After completion of this process, a copy of the M 75 should be filed along with the M 16 and M 10 Forms at the Payment Office. Responsible Party: Payment Office Step #6: After the receipt of funds from the processing of the M 16 for the petty cash advance, post the first entry in the M 76 Cashbook Ledger recording the advance of funds.(please refer to Section 6.3 Petty Fund Cashbook for more details on how to post debits and credits to the cashbook.)setup of the petty cash box and ensure safekeeping of funds. Responsible Party: Custodian 6.2.3 Notes In order to make changes to a petty cash fund including raising the limit, changing the Custodian, updating the location, etc. use the relevant steps identified in Section 6.2.2 Petty Cash Setup Process. For example, if the update to the petty cash fund consists of merely changing the Alternative Custodian, complete step #1 and #2. However, if the petty cash fund limit is increased then steps #1 to #3 and #5 will need to be completed. In order to make a permanent change to the Fiduciary, Custodian, or fund location, a new petty cash fund request letter should be sent to the Treasury. When the Fiduciary or Custodian of a petty cash fund changes, the fund should be reimbursed to its original amount based using the Petty Cash Replenishment Process as described in Section 6.5Petty Cash Replenishment and Acquittal. GoIRA Accounting Manual 6 4

6.3 Petty Fund Cashbook 6.3.1 Overview A cashbook is a ledger that records debits and credits of transactions for the petty cash fund. Budget units that setup a petty cash fund are required to use the M 76 Cashbook Form as their cashbook or a format (i.e. Excel, pdf, ledger book) that includes the same information and fields. Note: A separate cashbook must be maintained for each individual petty cash fund approved for a budget unit. One cashbook cannot be used for two petty cash funds even if they are located in the same budget unit and have the same Fiduciary. 6.3.2 Sample Cashbook Transactions The cashbook records simple transactions related to deposits of cash and withdrawals of cash. If cash is added to the petty cash fund (e.g. initial setup, by refunds from employees who received advances to make petty purchases or replenishments) then the amount cash account is debited. Withdrawals result in a credit to the cash account. Figure Sample Cashbook provides an illustrated example of several hypothetical transactions which are recorded in the Cash Control Register section of the M 76 Cashbook Form. A description of each transaction follows: Cash Control Register 7. Object 9. M-12 5. Post Date 6. Document Ref. 8. Recipient Code (5) Acquittal 10. Description 11. Debit 12. Credit 13. Balance 11/28/2011 M-10: S3 22900 Jamil : Custodian Initial advance to setup petty cash fund 50,000 50,000 11/30/2011 M-2: S1 22701 Zabi Khetab Advance to purchase office supplies 5,000 45,000 12/15/2011 WSlip No. #2 22704 Hamid Ayer Advance to purchase group dinner 5,000 40,000 12/16/2011 Dslip No. #1 22701 Jamil : Custodian Return of Funds for purchase of office supplie 1,000 41,000 12/31/2011 M-10: S7 22900 Jamil : Custodian Replenishment of Funds 9,000 50,000 3/31/2011 M-29: S98 22999 Treasury Return of Remaining Petty Cash Funds 50,000 0 Figure 13: Sample Cashbook The first transaction in petty fund cashbook consists of the posting the original advance by debiting the cash book. In the sample above, the posting takes place on 1/28/2011 (Field 5), the date the cash was received and added to the physical cash box. The advance was processed using an M 10 Request for Advance Form with the Application No. of S3 (Field 6). The five (5) digit object code is 22900 Petty Cash Advances (Field 7) and the recipient of the cash is Jamil Besmillah who is the petty cash fund Custodian (Field 8). Since this increases the petty cash fund balance, the cash account is debited (Field 11). Finally, a running balance is maintained in Field 12 of the cashbook. Since this is the first transaction, the balance equals the amount of the first debit of 50,000 AFN. Now that the petty cash fund has been setup, the Custodian can now make advances to employees in the budget unit to make small or petty purchase. The first advance posted in the sample cashbook is for purchases of office supplies with an estimated cost of 10,000 AFN. The advance is given to Zabi Khetab and the object code matching the description of the purchase is 22701 Office Equipment and Supplies 6. The Document Ref. is an M 2 Petty Cash Purchase Order with an Application No. of S1. Finally, since cash is being withdrawn from the petty cash fund, the cashbook is debited resulting in a new balance of 45,000 AFN. 6 It is not required that the Custodian enter the object code in the Cashbook. However, by adding the object code at the time of advance, this will simplify the acquittal process necessary to replenish the petty cash fund. GoIRA Accounting Manual 6 5

An advance for the purchase of a group dinner is the second transaction posted in the sample cashbook. In this case an M 2 Petty Cash Purchase Order has not been filled out, thus in this case the Document Ref. is the slip number that the Custodian provided to the recipient at the time of advance. The 5,000 AFN debit of this transaction reduces the balance to 40,000. The third transaction is the return of cash to the petty cash fund after the purchase of office supplies from the 11/30/2011 advance. In this case the original advance was for 10,000 AFN, but the cost of office supplies was less than expected. Thus, the employee Zabi Khetab was able to return 1,000 AFN. This amount is credited to the cashbook and the balance is now 41,000 AFN. The next posting is a replenishment transaction that is processed using an M 10 Form. In this case the replenishment is the difference between the petty fund cash limit (50,000 AFN) and the current balance (41,000 AFN) or 9,000 AFN. At the end of this transaction the balance is 50,000 AFN. The final posting is a transaction to close a petty cash fund. In this case the remaining funds in the petty cash are being returned to the Treasury. The Document Ref. is an M 27 Revenue Collection Form. The recipient is the Treasury and the cashbook account is credited. The balance after this transaction should be equal to 0 AFN. 6.3.3 Notes It is recommended that the full chart of accounts coding block is recorded in the Cashbook in order to simplify the replenishment and acquittal process, however this information is not essential, and Custodians and Bookkeeping Offices may choose not to maintain this information in the cashbook. The cashbook may be maintained either in hard copy or electronically. 6.4 Petty Cash Accounting and Disbursement 6.4.1 Overview The primary document used to manager petty cash disbursements is the M 2 Cash Purchase Order Form. The M 2 Cash Purchase Order Form can be considered a voucher that is used to approve the use of funds for a cash advance very similar to the way the M 3 Purchase Order is used to commit funds for ordinary expenditures. Specifically, petty cash purchases have simpler procurement requirements and will not necessarily require a requisition number or the need for a purchasing committee or competitive statement. The state administration or program office requesting to make a purchase from the petty cash fund will fill out the M 2 Cash Purchase Order and after approval by the appropriate authorizing authority send it to the Custodian for review. The Custodian will review the M 2 Cash Purchase Order for accuracy and check the M 76 Cashbook to verify that sufficient cash is available to make the purchase. Assuming sufficient funds are available the Custodian will provide the state employee with necessary cash and post the withdrawal in the M 76 Cashbook. The state employee will make the purchase and return any excess cash and invoices/receipts back to the Custodian who will then file the M 2 Cash Purchase Order and receipts and make a final posting to the M 76 Cashbook as necessary. GoIRA Accounting Manual 6 6

In general, it is recommended that the M 2 Cash Purchase Order Form be used as the voucher and document of record for petty cash transactions, but since petty cash transactions are only maintained for internal accounting purposes, budget units have the option to use their own vouchers or documentation to record transactions in the M 76 Cashbook if they have already something in place or special requirements. 6.4.2 Petty Cash Transaction Process This Section describes the steps used to process a petty cash transaction. Figure 14: Petty Cash Transaction Process provides a graphical overview. Detailed instructions follow. Petty Cash Purchase Procurement/ Employee 1 Prepare M-2 5 Purchase Goods Authorizing Authority 2 Approve Purchase Custodian 3 Provide Cash for Purchase 4 Post Withdrawal in M-76 Cashbook 7 Update M-2 8 Post Any Return of Fudns in M-76 Cashbook File 6 Receiving Officer Inspect Goods Figure 14: Petty Cash Transaction Process Detailed Steps: Step #1: Fill out Fields 1 to 4, 6, and 8 to 11 for an original and one (1) copy of the M 2 Cash Purchase Order Form. In most cases the petty cash purchase will not require a requisition, thus in Field 4 Requesting Unit and Requisition No., the Requisition No. is not needed. (Please refer to Appendix D 3 for more details on how to fill out the M 2 Cash Purchase Order Form.) Sign and date Field 19 Procurement Officer. Send the original and copy of the M 2 Form to the manager/employee with the authority to approved petty cash fund purchases. Responsible Party: State Administration/Procurement Office GoIRA Accounting Manual 6 7

Step #2: Review the M 2 Purchase Order Form for accuracy and completeness. Sign and date Field 20 Authorizing Authority. Send the original and copy of the M 2 Form to the petty cash fund custodian. Responsible Party: Authorizing Authority in the budget unit to approve petty cash purchases. Step #3: Review the M 2 Purchase Order Form for accuracy and completeness. After completing the review of the M 2 Form, provide the state employee charged with making the petty cash purchase, the cash amount recorded in Field 14 Total and Field 11 Price Est. Send a copy to the Warehouse or other office responsible for reviewing the goods received. If the Custodian is responsible for reviewing received goods, then the second copy is not necessary. The second copy will be retained in order to send to the Payment Office as part of the petty cash replenishment process described in 6.5Petty Cash Replenishment and Acquittal. Responsible Party: Custodian Step #4: Post the withdrawal of cash in the M 76 Cashbook including the name of person who received the cash in Field 8 Recipient. Update the petty cash fund balance in Field 12 Balance. Responsible Party: Custodian Step #5: Purchase goods and services identified in M 2 Cash Purchase Order. Make sure to obtain a copy a receipt for all purchases. Provide the goods and services to the Warehouse or other unit responsible for verifying goods received. In many instances this will be the Custodian. Return any excess cash back to the Custodian. Responsible Party: Procurement Office or State Employee tasked with making the petty cash purchase. Step #6: Reconcile the goods and services identified in the M 2 Cash Purchase Order Form with actual goods received. Initial each item in the Form for which the good or services was delivered. Sign and date Field 13 Warehouse Officer. Add any additional remarks in Field 18. Send one (1) copy of the M 2 Cash Purchase Order to the Custodian and file one (1) copy. Responsible Party: Warehouse or designated State Employee to receive petty cash purchases. Step #7: Accept any excess cash received from employee who made the petty cash purchase depositing into petty cash fund. In the case of the employee using their own money to complete a purchase due to insufficient funds, withdraw funds from the petty cash fund and provide to the employee. Complete the original and one copy of the M 2 Cash Purchase Order Form by filling out Fields 12 and 15 to 17. Sign and date Field 20 Custodian. GoIRA Accounting Manual 6 8

Responsible Party: Custodian Step #8: Update the M 76 Cashbook recording either a debit or credit based on whether or not the petty cash recipient returned the funds or requested additional funds. File one (1) copy of the M 2 Form and send one (1) copy to the Bookkeeping Office for their reference. Responsible Party: Custodian 6.4.3 Notes Purchases made from petty cash fund must still be undertaken in accordance with all applicable Laws and Regulations, and in particular the Procurement Law of Afghanistan. The balance in the cash book must always equal the summation of each M 2 Cash Purchase Order and cash on hand in the petty cash fund. 6.5 Petty Cash Replenishment and Acquittal 6.5.1 Overview Once a petty cash fund has used up 80% of its cash then it can be reimbursed to its authorized limit. This process consists both of an acquittal using an M-12 Advance Acquittal Form, original receipts and a request for a new petty cash advance using the M-10 Request for Advance Form. This process is very similar to the advances and acquittal process described in Section 5.5. 6.5.2 Petty Cash Replenishment and Acquittal Process This Section provides instructions Petty Cash Replenishment and Acquittal Process. Process provides a graphical overview of the procedure. A more detailed description follows the Figure. GoIRA Accounting Manual 6 9

Petty Cash Replenishment and Acquittal Process 1 Provide M-2 Forms with Receipts and Copy of M-76 4 Post Advance to M-76 Cashbook 2 3 Process M-12 Acquittal Process Advance to Replenish Petty Cash Fund Figure 15: Petty Cash Replenishment and Acquittal Process Detailed Steps: Step #1: Provide M 2 forms, receipts and copy of the M 76 Cash Book to the Payment Office. Responsible Party:Custodian Step #2: Follow the instructions in Section 5.5Advances and Acquittals to processan M 12 Advance Acquittal Form based on the documentation provided by the Custodian. Responsible Party: Payment Office Step #3: Follow the instructions insection 5.5Advances and Acquittals to replenish the petty cash fund using M 10 and M 16 forms. Responsible Party: Payment Office Step #4: After the receipt of replenishment funds from a bonded trustee, update the M 76 Cashbook by debiting cash and using the M 10 as the document reference. Responsible Party:Custodian 6.5.3 Notes Acquittals must be provided either monthly or whenever the cash balance on the fund is less than 20% of the total fund value whichever is sooner Stale Balances 1. At the ends of eachmonth the Advances and Petty Cash Unit of Treasurywill run an advances report on the object 22900 Petty Cash Advance. GoIRA Accounting Manual 6 10

2. The Advances and Petty Cash Unit of Treasury will review this report and find any balances on the petty cash advance detailed object where there have been no transactions for acquittal of the balance in the previous two months. 3. If stale balances are found, the Advances and Petty Cash Unit will officially inform the budget unit on the status of their advances and acquittal. The unit will state that an M 12 acquittal must be provided or else the approval for the petty cash fund will be revoked. 4. If a letter had already been sent on the stale balance in the previous month, and no acquittal has been received, the advances unit will prepare the letter for revoking the approval for the petty cash fund requesting that within 10 days all outstanding expenditures are acquitted in an M12, and that any remaining cash on the fund be returned to the Mustofiat. 6.6 Cash Counts and Monitoring of Petty Cash Funds 6.6.1 Weekly Counts The fund should be counted/totaled and balanced each week it is used but at least once per month. Differences should be investigated and adjusted promptly. At all times M 2 Cash Purchase Order voucher amounts plus cash on hand, or cash book balance, must equal the authorized amount of the petty cash fund. 6.6.2 Surprise Counts Ministry of Finance staff (under authority of Director General Treasury / Treasurer of Mustofiat) and Internal or External (National Audit Office) Audit can go to the Custodian at any time for performing a surprise cash count. The Custodian must give access to the cash and watch the count as it is done. If no discrepancies are found, the Custodian should document that the cash count was completed and correct. Internal or External Audit may at any time require a copy of the register of approved Petty Cash Funds from Treasury or the Mustofiat. Discrepancies found in a surprise cash count must immediately be investigated, and no further transactions undertaken against the petty cash fund until such time as the discrepancy is resolved. Limitations on Petty Cash Expenditures Petty cash funds must not be used to pay any of the following expenditures: Any form of salaries, including allowances, overtime or bonuses (Major Object Code 21). Contracted services in Major Object Code 22 in the nature of salaries or wages. The simple test for whether a payment for contracted services is in the nature of salaries or wages is whether or not wage withholding tax must be withheld from the payment in accordance with the Income Tax Law of Afghanistan. Loans to any person or organization. Expenses that are not within the scope of the fund's purpose may not be paid from the petty cash fund. A purchase amount above the petty cash fund s established maximum single disbursement amount. The Fiduciary of the fund must approve any disbursements over the maximum amount. GoIRA Accounting Manual 6 11

Revenues must not be used to establish or increase the size of a petty cash fund. GoIRA Accounting Manual 6 12

7.0 Accounting for Revenue 7.1 General Management and preparation of policies related to revenue collection is the overall responsibility of the Revenue General Department within the Ministry of Finance with actual collection of funds managed by the primary and secondary budget units. Accounting for revenues is still managed however by the Treasury, Mustofiats and the Directorates of Finance in the primary budget units. Accounting for revenue is the responsibility of the Revenue General Department, while monitoring the bank transfers to TSA is the responsibility of the Treasury. Most revenue is collected in the provinces from customs revenues at border crossings. Therefore, both Mustofiats and Customs Offices play a significant role in revenue collection and accounting. Similar to accounting for expenditures, Mustofiats complete revenue accounting tasks on behalf of the line directorates including the receipt of funds in the provincial revenue bank account. Line ministries are responsible for revenue collection and reporting at the center. Similar to the M 16 Payment Order Form, the M 27 Revenue Collection Voucher is the transaction document used as the source to the record revenue in AFMIS and the General Ledger. In order to ensure accurate and timely reporting of revenue M 27 Revenue Collection Vouchers should be continuously processed as funds are received from taxes, fees and other revenue sources. The revenue data in the M 27 Voucher originates from a bank receipt called the Awaiz, which provides proof that receipts for revenue collected were deposited in or transferred to a provincial revenue bank account in DAB. The funds from revenue bank accounts are swept into the TSA account. Revenue collection is supported by a document called the Tarafa and the M 25 Miscellaneous Revenue Collection Form(Please refer to Appendix D 34 for detailed instructions on how to fill out the M 25 Miscellaneous Revenue Collection Form.), but with the same general purpose of providing instructions to taxpayers and calculating receipts. Either a taxpayer presents the Tarafa to a DAB bank branch and deposits the receipts. The M 25 Form is the official copy maintained by the Payment Office and Revenue Collection Office. The DAB bank branch then issues an Awaiz as proof of payment. Each primary budget unit or Mustofiat keep a revenue ledger of revenue collected. The source document of the revenue ledger is the Awaiz. Treasury does not provide a prescribed format 7 for this revenue ledger but it should include a reference to the Awaiz and bank deposit slip, posting date, organization code, revenue object code, debits and credits and maintain a running balance. The revenue ledger will be used to prepare M 27 Revenue Collection Vouchers and the M 29 Monthly Revenue Collection Report. 7.2 Revenue Collection Primary Budget Units 7.2.1 Overview Line ministries and independent agencies collect receipts from taxes and fees from government services provided to the public in compliance with rules and regulations. The Revenue Collection Office which is part of the Directorate of Finance is responsible for compiling Arwaiz, recording transactions into the 7 As of the date of the original distribution of the Accounting Manual, revenue collection was supported by an application and database called the Revenue Collection Database ( RCD ). The RCD consisted of individual instances of a database that acted as a revenue ledger and was available to all 34 provinces and 29 line ministries. GoIRA Accounting Manual 7 1

revenue ledger, preparing M 27 Revenue Collection Vouchers, and preparing the M 29 Monthly Revenue Report. The Revenue Collection Office sendsm 27 Forms on a weekly basis to Treasury input revenue data into AFMIS and sends M 29 Reports on a monthly basis with bank statements to the Treasury to begin the reconciliation process. The DAB is responsible for sweeping collected revenue from revenue accounts into the TSA. After each transfer the DAB will forward the record of the sweep called the Transfer Awaiz to both the Revenue Collection Office and the Treasury. 7.2.2 Ordinary Revenue Collection Primary Budget Units The following section describes the typical revenue collection procedure used by the line ministries and independent agencies in the center. Figure 16: Ordinary Revenue Collection Primary Budget Units provides a graphical overview of the procedure. A more detailed description follows. GoIRA Accounting Manual 7 2

Revenue Collection Line Ministry/Independent Agency Payment Office 1 Prepare M-25 File Authorizing Authority 2 Authorize Collection 12 Review and Approve M-27 Financial Controller 3 Review M-25 Form 13 Verify M-27 Revenue Collection Office 4 Receive M-25 Form 5 Prepare M-26 and Tara afa File 9 Enter Data in Ledger 10 Prepare M-27 File 14 Prepare M-27 Package 11 Revenue Collection Manager Review M-27 Taxpayer 6 Receive Ta arafa and Deposit Funds 8 File Arwais and Ta arafa DAB Branch File 7 Prepare Arwais Treasury 15 Process Revenue Figure 16: Ordinary Revenue Collection Primary Budget Units GoIRA Accounting Manual 7 3

Detailed Steps: Step #1: Prepare an original and one (1) copy of the M 25 Miscellaneous Revenue Collection Form by filling out Fields 1 to 15. Send the original and copy to the Authorizing Authority. Responsible Party: Payment Office Step #2: Review and approved the M 25 Miscellaneous Revenue Collection Form. Sign and date Field 16 Authorizing Authority and provide remarks in Field 17 Remarks. Send the original and copy to the Financial Controller. Responsible Party: Individual in the budget unit authorized to approve revenue collection. This will vary based on the type of revenue. Step #3: Verify that the M 25 Miscellaneous Revenue Collection Form is calculated correctly and it is correctly stated in both word and figures. Send the original and copy of the M 25 Form to the Revenue Collection Office. Responsible Party: Financial Controller Step #4: Review the M 25 Miscellaneous Revenue Collection Form and file one copy. Send the original back to the Payment Office. Responsible Party: Revenue Collection Office Step #5: Prepare an original and copy of both a M 26 Form and a Tara afa based on the approved M 25 Form. Provide the Tara afa to the taxpayer and file a copy. Responsible Party: Revenue Collection Office Step #6: Follow the instructions of the Tarafa, deposit funds in the official bank account and receive the Awaiz. Responsible Party: Taxpayer Step #7: Review the instructions the Tarafa and verify that the deposit amount is correct. Make a copy of the Tarafa and return the original to the taxpayer. Prepare an original and two (2) copies of the Awaiz. File one (1) copy and give one (1) copy to the Taxpayer/Collection Officer and send the original to the Revenue Collection Office. Responsible Party: DAB Bank Step #8: Retain a copy of both the Awaiz and Tarafa as proof of payment. Responsible Party: Taxpayer GoIRA Accounting Manual 7 4

Step #9: Enter the Awaiz data received from DAB into the revenue ledger based upon the reconciliation of the M 26Form and Awaiz. Responsible Party: Revenue Collection Office Step #10: Either generate an original and one (1) copy of the M 27 Revenue Collection Voucher from the RCD or manually enter Fields 1 to 12 of the M 27 Form based on the information in the Awaiz. Sign and date Field 13 Prepared By. (Please refer to Appendix D 36 for detailed instructions on how to fill out the M 27 Revenue Collection Form.) Send the original and one (1) copy of the M 27 Voucher and Awaiz to the Revenue Collection Manager. Note: The M 27 Revenue Collection Voucher can include data from multiple Awaiz. Responsible Party: Revenue Collection Office Step #11: Verify the information in the M 27 Revenue Collection Voucher. Sign and date Field 14 Collection Manager. Send the original and one (1) copy of the M 27 Voucher and Awaiz to the Authorizing Authority. Responsible Party: Revenue Collection Manager Step #12: Review the M 27 Revenue Collection Voucher to approve the revenue collection. Sign and date Field 15 Authorizing Authority. Send the original and one (1) copy of the M 27 Voucher and Awaiz to the Financial Controller. Responsible Party: Individual in the budget unit authorized to approve final acceptance of revenue. Step #13: Review the M 27 Revenue Collection Voucher and reconcile with the attached Awaiz and bank statements. Sign and date Field 15 Financial Controller. Provide any additional remarks in Field 16 Remarks. Send the original and one (1) copy of the M 27 Voucher and Awaiz to the Collection Office. Responsible Party: Financial Controller Step #14: Send the original M 27 Revenue Collection Voucher, bank statement and Awaiz to the Treasury and Revenue Department. File one (1) copy of the M 27 Form and Awaiz. Responsible Party: Revenue Collection Office Step #15: After reconciling the M 27 with the Transfer Awaiz and bank statements, the Treasury will finalize the posting of revenue through their internal control procedures and bank GoIRA Accounting Manual 7 5

reconciliations. If during the review, the M 27 is rejected for any reason, the M 27 will be sent back to the line ministry for revision. Responsible Party: Treasury/Revenue Department 7.2.3 Notes The coding block for revenues is the same as for expenditures. 7.3 Revenue Collection Deductions from M 16 Payment Orders 7.3.1 Overview The Treasury Voucher System (AFMIS) is able to make deductions from M 16 Payment Orders for both individual and business taxes as well security deposits, distribute the funds to multiple accounts and record transactions in the correct object code. All revenues deducted through the M 16 Form and their specific codes are recorded into the system and a Deduction Report is sent back to the relevant budget unit. The budget unit will use this information to reflect the amount of deducted revenue into the M 29 Monthly Revenue Collection report. The Deduction Report is sent by Treasury or Mustofiat to the relevant budget unit. 7.3.2 Revenue Collection M 16 Payment Order The following section describes the typical revenue accounting as a result of payments from the deductions of the M 16 Payment Order Form that are revenue to the Government. These are the deductions in Field 18 Payment Details. A description of the steps necessary to record this revenue follows. Detailed Steps: Step #1: Processes an M 16 Payment Order Form and makes payments for the deductions in Field 18 Payment Details. Create a new electronic voucher in the Expenditure Module in AFMIS. Enter the revenue amounts listed in the M 16 Payment Order in Field 18 Payment Details. The deductions in Field 18 Payment Details are recorded into AFMIS through an electronic voucher. Prepare the Deduction Report from AFMIS and send to the budget unit verifying that the revenue was posted in the General Ledger in AFMIS. This will enable this information to be included in the M 29 reconciliation process at the end of the month. Responsible Party: Treasury/Mustofiat Step #2: Reconcile the Deduction Report from AFMIS with M 16 Payment Orders. Write the serial number of the M 16 Payment Order next to the record in the Deduction Report. This will be used to prepare the M 29 Monthly Revenue Collection Report during the monthly revenue reconciliation process. Responsible Party: Revenue Collection Office GoIRA Accounting Manual 7 6

7.3.3 Notes The Deduction Report from AFMIS is an electronic report that provides a list of all revenue transactions posted using electronic vouchers in the Expenditure Module of AFMIS. This is the equivalent of a M 29 Monthly Revenue Collection Report used to reconcile other revenue types. 7.4 Revenue Collection Mustofiats 7.4.1 Overview Mustofiats have responsibility for revenue collection on behalf of all line directorates except for Custom s branches but full responsibility for revenue accounting including revenue collected by Customs. Mustofiats issue the M 25 Miscellaneous Revenue Collection forms, accept deposits at their DAB revenue bank accounts, process and record Awaiz into their revenue ledgers, prepare M 27 Vouchers, prepare M 29 Reports and manage monthly reconciliations. A limited number of Mustofiats also have responsibility for posting revenue transactions in AFMIS as cash sales using the correct revenue object code. The revenue collection process used by these Mustofiats is described in Error! Reference source not found. Error! Reference source not found.. The process for Mustofiats that do not process cash sales vouchers is described in 7.4.3Ordinary Revenue Collection Entry by Treasury in AFMIS. 7.4.2 Ordinary Revenue Collection Entry in AFMIS by Mustofiat The following section describes the typical procedure for revenue collected by line directorates and in which the Mustofiat post the transactions in AFMIS. 8 This process is similar to the process used by primary budget units to process revenues at the center. Figure 17: Revenue Collection Entry in AFMIS by Mustofiat provides a graphical overview of the procedure. A more detailed description follows. 8 At the time of the original publication the Accounting Manual six provinces (Herat, Balkh, Kandahar, Nangahar, Kunduz, and Nimroz) are able to enter post revenue transactions in AFMIS. GoIRA Accounting Manual 7 7

Revenue Collection Mustofiat Payment Office 1 Prepare M-25 File Authorizing Authority 2 Authorize Collection 12 Reconcile M-29 with T-8 and Bank Statements Financial Controller 3 Review M-25 Form 13 Verify M-29 Revenue Collection Office 4 Receive M-25 Form 5 Prepare M-26 and Tara afa File 9 Enter Data in Ledger 10 Prepare M-29 File 14 Prepare M-29 Package 11 Revenue Collection Manager Review M-29 Taxpayer 6 Receive Ta arafa and Deposit Funds 8 File Arwais and Ta arafa DAB Branch 7 Prepare Arwais File Treasury/ Revenue Directorate 15 Process Revenue Figure 17: Revenue Collection Entry in AFMIS by Mustofiat GoIRA Accounting Manual 7 8

Detailed Steps: Step #1: Prepare an original and one (1) copy of the M 25 Miscellaneous Revenue Collection Form by filling out Fields 1 to 15. Send the original and copy to the Authorizing Authority. Responsible Party: Payment Office Step #2: Review and approved the M 25 Miscellaneous Revenue Collection Form. Sign and date Field 16 Authorizing Authority and provide remarks in Field 17 Remarks. Send the original and copy to the Financial Controller. Responsible Party: Individual in the budget unit authorized to approve revenue collection. This will vary based on the type of revenue. Step #3: Verify that the M 25 Miscellaneous Revenue Collection Form is calculated correctly and it is correctly stated in both word and figures. Send the original and copy of the M 25 Form to the Revenue Collection Office. Responsible Party: Financial Controller Step #4: Review the M 25 Miscellaneous Revenue Collection Form and file one copy. Send the original back to the Payment Office. Responsible Party: Revenue Collection Office Step #5: Prepare an original and copy of both a M 26 Form and a Tara afa based on the approved M 25 Form. Provide the Tara afa to the taxpayer and file a copy. Responsible Party: Revenue Collection Office Step #6: Follow the instructions of the Tarafa, deposit funds in the official bank account and receive the Awaiz. Responsible Party: Taxpayer Step #7: Review the instructions the Tarafa and verify that the deposit amount is correct. Make a copy of the Tarafa and return the original to the taxpayer. Prepare an original and two (2) copies of the Awaiz. File one (1) copy and give the original and one (1) copy to the Taxpayer/Collection Officer. Responsible Party: DAB Bank Step #8: Retain a copy of both the Awaiz and Tarafa as proof of payment. Responsible Party: Taxpayer GoIRA Accounting Manual 7 9

Step #9: Enter the Awaiz data received from DAB into the revenue ledger based upon the reconciliation of the M 26 Form and Awaiz. Responsible Party: Revenue Collection Office Step #10: Either generate an original and one (1) copy of the M 29 Monthly Revenue Collection Report from the RCD or manually enter Fields 1 to 8 of the M 29 Report based on the information in the Awaiz. Sign and date Field 9 Prepared By. (Please refer to Appendix D 41 for detailed instructions on how to fill out the M 29 Revenue Collection.) Send the original and one (1) copy of the M 29 Report and Awaiz to the Authorizing Authority (Head of the Collection Office). Responsible Party: Revenue Collection Office Step #11: Verify the information in the M 29Monthly Revenue Collection Report. Sign and date Field 10 Revenue Collection Manager. Send the original and one (1) copy of the M 27 Voucher and Awaiz to the Authorizing Authority. Responsible Party: Revenue Collection Manager Step #12: Review the M 29Monthly Revenue Collection Report to approve the revenue collection. Sign and date Field 11 Authorizing Authority. Send the original and one (1) copy of the M 29 Report and Awaiz to the Financial Controller. Responsible Party: Individual or committee to approve final acceptance of revenue. Step #13: Review the M 29Monthly Revenue Collection Report and reconcile with the attached Awaiz and bank statements. Sign and date Field 12 Financial Controller. Provide any additional remarks in Field 13 Remarks. Send the original and one (1) copy of the M 29 Voucher and Awaiz to the Revenue Collection Office. Responsible Party: Financial Controller Step #14: Send the original M 29 Monthly Revenue Collection Report, bank statement and Awaiz to the Treasury and Revenue Department. File one (1) copy of the M 29 Report and Awaiz. Responsible Party: Revenue Collection Office Step #15: After reconciling the M 29 Report with the Transfer Awaiz and bank statements, the Treasury will finalize the posting of revenue through their internal control procedures and bank reconciliations. If during the review, the M 29 Report is rejected for any reason, the M 29 Report will be sent back to the Mustofiat for revision. GoIRA Accounting Manual 7 10

Responsible Party: Treasury/Revenue Department 7.4.3 Ordinary Revenue Collection Entry by Treasury in AFMIS The following section describes the typical revenue collection procedure beginning with the issuing of the M 25 Miscellaneous Revenue Collection Form and ends with the recording of the revenue in AFMIS and the sweep of funds into the TSA Revenue Account. This process may vary slightly by revenue type or line ministry but provides the overall process flow for a revenue transaction. A list of the necessary steps to complete this process follows. Detailed Steps: Step #1: Complete steps #1 to #8 from the Ordinary Revenue Collection Process Entry in AFMIS by Mustofiat. This completes the preparation of the M 27 Revenue Collection Voucher. Step #2: Prepare the M 29 Report, T 8, Bank Statement and a table of bank transfers on monthly basis and provide them to the Treasury. Responsible Party: Mustofiat or Revenue Collection Office Step #3: The Treasury will finalize the collection of revenue through their internal control procedures and bank reconciliations. If during the review, the M 29 is rejected for any reason;both will be sent back to the Mustofiat for revision. Responsible Party: Treasury 7.4.4 Notes Customs offices are responsible for recording and collecting revenue unlike other line directorates. They issue Tarafa and collect funds directly at border crossings. They deposit the receipts into local and provincial bank branches of DAB, whose funds are then manually transferred to the Mustofiat revenue bank account. Customs offices also provide the Mustofiats and Revenue Department with the M 27 Revenue Collection Voucher. The Mustofiat prepares the M 29 Monthly Revenue Collection form at the end of each month along with its required attachments and provides it to Revenue Department and Treasury. GoIRA Accounting Manual 7 11

8.0 Assets and Inventory This space is reserved for future use. GoIRA Accounting Manual 8 1

9.0 Reporting 9.1 Overview As a result of the implementation of AFMIS, several of the previous ledgers, registers and reports from the Accounting Manual 1342 are no longer required and have been replacedby electronic reports and the General Ledger in AFMIS. This has reduced the reporting burden of budget units and centralized more reporting at the Treasury. However, Mustofiats and primary budget units still have to prepare both monthly and annual reports from information related to the control ledgers they maintain. 9.2 Budget and Expenditure Reports Manual 9.2.1 M 22 Monthly Status of Allotment Report Primary budget units and Mustofiats and are required to report to the Treasury information related to allotment expenditures using the M 22 Monthly Status of Allotment Report. The M 22 Report is due five days after the end of the month. There are three versions of the M 22 Status of Allotment which vary by the level of consolidation of allotment expenditure data. The three versions are as follows: Preliminary Monthly Status of Allotment Report Consolidated Monthly Status of Allotment Report by Province Consolidate Monthly Status of Allotment Report by Primary Budget Unit The original source data of the M 22 Report comes directly from the M 20 Allotment/Suballotment Control Ledger. Preliminary M 22 Monthly Status of Report The following steps provide instructions on how to transfer information from an M 20 Allotment/Suballotment Control Ledger to the Preliminary M 22 Report. Mustofiats and primary budget units should apply the steps to report each allotment and suballotment which are tracked in M 20 ledgers. The information from one M 20 Ledger will be one row in the M 22 Report. Mustofiats should be aware that each Preliminary M 22 Report is prepared for one line directorate only. The Preliminary M 22 Report should not mix line directorates. Step #1: Enter the Ministry or Organization name in Field 1 Ministry/Org., the Location Name and Code of the Province in Field 2 Location Name and Code and the month and year of the reporting period in Field 3 Report Period. Step #2: Copy the account information from Field 3 Coding Block (Allotment #2 or Financial Budgeting (Suballotment)) of the M 20 ledger and insert into Field 4 Coding Block (Allotment #2) of the Preliminary M 22 Report in a single row. However, do not include the Location Code because it has already been copied in Field 2 Location Name and Code. Step #3: Sum the value of each record in Field 6 Post Payment of the M 20 ledger and insert into Field 5 Post Payments of the Preliminary M 22 Report in the same row as the coding block in Step #2. Step #4: Sum the value of each record in Field 7 Advance Payment of the M 20 ledger and insert into Field 6 Advance Payments of the Preliminary M 22 Report in the same row as the coding block in Step #2. GoIRA Accounting Manual 9 1

Step #5: Sum the value of each record in Field 8 Acquittal of the M 20 ledger and insert into Field 7 Acquittals of the Preliminary M 22 Report in the same row as the coding block in Step #2. Step #6: Sum the value of each record in Field 9 Commit. Incurred of the M 20 ledger and insert into Field 8 Commitments Incurred of the Preliminary M 22 Report in the same row as the coding block in Step #2. Step #7: Sum the value of each record in Field 10 Commit. Liquidated of the M 20 ledger and insert into Field 9 Commitments Liquidated of the Preliminary M 22 Report in the same row as the coding block in Step #2. Step #8: Sum the value of each record in Field 11 Refund of the M 20 ledger and insert into Field 10 Refunds of the Preliminary M 22 Report in the same row as the coding block in Step #2. Step #9: Sum the value of each record in Field 12 Allotment of the M 20 ledger and insert into Field 11 Allotments of the Preliminary M 22 Report in the same row as the coding block in Step #2. Step #10: Calculate Field 12 Balance by adding or subtracting the values of the columns in the records above as follows: ( ) Subtract Post Payments ( ) Subtract Advance Payments ( ) Subtract Commitments Incurred (+) Add Commitments Liquidated (+) Add Refunds (+) Add Allotments (For use by Line Ministries/Independent Agencies only) (+) Add Suballotments (For use by Mustofiats only) Consolidate M 22 Consolidated Monthly Status of Allotment Report by Province The following steps provide instructions on how to transfer data from the preliminary M 22 reports to the Consolidated M 22 Monthly Status of Allotment Report by Province. In this case the Mustofiat will transfer each record in each Preliminary M 22 Report to the Consolidated M 22 Report. The Consolidated M 22 Report will be sent to the Treasury for reconciliation with the General Ledger in AFMIS. Step #1: Enter Mustofiat name in Field 1 Mustofiat Name, the Location Name and Code of the Province in Field 2 Location Name and Code and the month and year of the reporting period in Field 3 Report Period. Step #2: Copy the account information from Field 4 Coding Block of the Preliminary M 22Report from each row and insert into Field 4 Coding Block (Financial Budget (Suballotment) of the M 22 Consolidated Report. Step #3: Copy the account information from Field 5 Post Payments of the Preliminary M 22 Report from each row and insert into Field 5 Post Payments of the M 22 Consolidated Report. GoIRA Accounting Manual 9 2

Step #4: Copy the account information from Field 6 Advance Payments of the Preliminary M 22 Report from each row and insert into Field 6 Advance Payments of the M 22 Consolidated Report. Step #5: Copy the account information from Field 7 Acquittals of the Preliminary M 22 Report from each row and insert into Field 7 Acquittals of the M 22 Consolidated Report. Step #6: Copy the account information from Field 8 Commitments of the Preliminary M 22 Report from each row and insert into Field 5 Commitments of the M 22 Consolidated Report. Step #7: Copy the account information from Field 9 Refunds of the Preliminary M 22 Report from each row and insert into Field 9 Refunds of the M 22 Consolidated Report. Step #8: Copy the account information from Field 10 Allotments of the Preliminary M 22 Report from each row and insert into Field 10 Allotments of the M 22 Consolidated Report. Step #9: Calculate Field 11 Balance by adding or subtracting the values of the columns in the record as follows: ( ) Subtract Post Payments ( ) Subtract Advance Payments ( ) Subtract Commitments Incurred (+) Add Commitments Liquidated (+) Add Refunds (+) Add Allotments Consolidate M 22 Consolidated Monthly Status of Allotment Report by Primary Budget Unit The Preliminary M 22 reports used to create the M 22 Consolidated Monthly Status of Allotment Report by Primary Budget Unit consist of the both the Preliminary M 22 reports prepared by Mustofiats for suballotments issued by the primary budget units and the Preliminary M 22 reports prepared by primary budget units for allotments. Mustofiats will provide copies of the Preliminary M 22 reports prepared for line directorates to the relevant primary budget units. After the receipt of the Preliminary M 22 reports from Mustofiats, primary budget units will consolidate this information with the Preliminary M 22 reports prepared for the allotments at the center. The consolidation is completed by aggregating the value of each of the fields in each suballotment in the provinces with each of the fields in the allotment in the center. The following steps provide instructions on how to transfer data from the Preliminary M 22 Reports to the Consolidated M 22 Monthly Status of Allotment Report by Primary Budget Unit using a M 22 Worksheet designed to assist in the consolidation. Step #1: Enter the Ministry or Organization name in Field 1 Ministry/Org. and Code and the month and year of the reporting period in Field 2 Report Period. Use the M 22 Worksheet to consolidate provincial M 22 data with central M 22 for one allotment based on steps #2 to #12. GoIRA Accounting Manual 9 3

Step #2: Add the coding block from Field 4 in the Preliminary M 22 used at the center in the M 22 Worksheet. Step #3: Enter the name or code of the province in Field 1 Province for each allotment or suballotment. In the first record enter Center or Kabul. Step #4: Copy the account information from Field 5 Post Payments of the Preliminary M 22 Report from the relevant row based on allotment code and insert into Field 2 Post Payments of the M 22 Worksheet. Step #5: Copy the account information from Field 6 Advance Payments of the Preliminary M 22 Report from the relevant row based on allotment code and insert into Field 3 Advance Payments of the M 22 Worksheet. Step #6: Copy the account information from Field 7 Acquittals of the Preliminary M 22 Report from the relevant row based on allotment code and insert into Field 4 Acquittals of the M 22 Worksheet. Step #7: Copy the account information from Field 8 Commitments of the Preliminary M 22 Report from the relevant row based on allotment code and insert into Field 5 Commitments of the M 22 Worksheet. Step #8: Copy the account information from Field 9 Refunds of the Preliminary M 22 Report from the relevant row based on allotment code and insert into Field 6 Refunds of the M 22 Worksheet. Step #9: Copy the account information from Field 10 Allotments of the Preliminary M 22 Report from the relevant row based on allotment code and insert into Field 7 Allotments of the M 22 Worksheet. (Note: Insert the amount of allotment received by the primary budget unit in the relevant coding block from the Ministry of Finance in Field 7 of the M 22 Worksheet. Do not enter amounts for any suballotments.) Step #10: Calculate Field 11 Balance by adding or subtracting the values of the columns in the record as follows: ( ) Subtract Post Payments ( ) Subtract Advance Payments ( ) Subtract Commitments Incurred (+) Add Commitments Liquidated (+) Add Refunds (+) Add Allotments Step #11: Sum each of the columns in the M 22 Worksheet from Steps #4 to #10. Step #12: Transfer the information from the Step #11 into the Consolidated M 22 Monthly Status of Allotment Report by Primary Budget Unit. Repeat steps #2 to #12 for each allotment. GoIRA Accounting Manual 9 4

(See Appendix D 30 with detailed instructions on how to prepare the M 22 Report.) All secondary budget units provide versions of their M 22 Monthly Status of Allotment Reports to their primary budget unit after reconciling their accounting ledgers with those of their Mustofiats. Mustofiats prepare the consolidated M 22 Report for all the secondary budget units in their province and send this consolidated report to the Treasury at the beginning of each month. The consolidation of the M 22 Report by Mustofiats includes reconciliation with bank statements. Bank statements are attached with every M 22 Report that is sent to the Treasury. 9.3 Budget and Expenditure Reports Automated (AFMIS) The general ledger from AFMIS,which contains all the accounting transactions related to budget execution, revenue, expenditures, asset and liabilities provides a data source that allows for the creation of both summary and detailed data reports which the Treasury can prepare and provide to Mustofiats and budget units. AFMIS reports consist of several standard templates which can be provided in multiple media types. This section describes a list of commonly used and important standard reports used by the Treasury for reporting and reconciliation purposes. This is not a complete list, as AFMIS technical staff have the ability to create ad hoc reports based on the needs of management and the number and format standard reports changes on a regular basis. 9.3.1 Account Analysis Reports Summary This report in AFMIS allows the user to obtain summary expenditure data using the following coding block: Organization Code 2 digit code that identifies the ministry/independent agency or 5 digit code identifying the unit within a ministry/independent agency Fund Code 1 digit code that identifies the Fund Type or the 5 digit code that identifies the fund component Location Code 2 digit code that identifies the province and 4 digit code that identifies the district Object Code 5 digit code that identifies the full expenditure code The report is provided to line ministries/independent agencies to allow them to reconcile their internal accounting records. The report can be run for the period of time determined by the user including month and year. 9.3.2 Account Analysis Report Detail This AFMIS report allows the user to pull detailed expenditure or revenue data using the following coding block: Organization Code 5 digit code identifying the unit within a ministry/independent agency Program Code 5 digit code identifying the sector of the program Fund Code 5 digit code that identifies the fund component Location Code 4 digit code that identifies the district Object Code 5 digit code that identifies the full expenditure and revenue code The report is provided to the Treasury, Mustofiats and line ministries/independent agencies to allow them to reconcile their internal accounting records and bank statements with AFMIS. The report can be run for the period of time determined by the user including month and year. GoIRA Accounting Manual 9 5

9.3.3 Financial Budget Reports This AFMIS report allows the user to pull data related to the financial budget with the following coding block: Organization Code 4 digit code identifying the ministry/independent agency suborganization Project Code 6 digit code identifying the project Program Code 3 digit code identifying activity Fund Code 2 digit code that identifies the fund Location Code 2 digit code that identifies the province Object Code 3 digit code that identifies the minor object code The report is prepared on a yearly basis. 9.3.4 Allotment Reports This AFMIS report allows the user to pull data related to the appropriated budget with the following coding block: Organization Code 2 digit code identifying the ministry/independent agency Program Code 3 digit code identifying the program Fund Code 2 digit code that identifies the fund Object Code 2 digit code that identifies the major object code The report is prepared on a yearly basis. 9.4 Financial Statements 9.4.1 M 91 Qatia Report All line ministries and independent agencies at the end of each fiscal year close their ledgers and accounts and prepare M 91 Qatia Reports, which is then reconciled by Treasury and used to create a consolidated M 91 Report (Qatia) for the whole government. The M 91 Report includes summary information on ministry/independent agency appropriations, adjustments, allotments, expenditures, commitments and liquidations, prepayments/advances and acquittals including remaining allotment and appropriations balances. The budget and accounting information is categorized by major object expenditure code. The source data of the M 91 Qatia Report is the final Consolidated M 22 Monthly Status of Allotment Report by Primary Budget Unit of the fiscal year and the M 38aBudget Control Ledger maintained by the line ministries and independent agencies. These two documents are segregated by either allotment or appropriation and thus are also categorized by major object expenditure code. As an intermediate step transfer M 22 and M 38a data into the M 91 worksheet to consolidate data by major object code. Thus, one M 91 worksheet will be used for each major object code. The following steps provide detailed instructions on how to prepare the M 91 Report. (For full instructions on how to prepare the M 91 Qatia Report refer to Appendix D??). Instructions Step #1: Sort each of the M 38a Budget Control ledgers by major object code. Each M 38a Ledger has an appropriations coding block in Field 3 which includes a two digit major object code. At the completion of this step there should be a stack of M 38a ledgers for each major object code. GoIRA Accounting Manual 9 6

Complete steps 2 to 12 for each M 38a Ledger in a stack. Use a different M 91 worksheet for each stack. Step #2: Copy the data from Field 3 Coding Block (Allotment #1) of the M 38a Ledger and insert into Field 1 Coding Block of the M 91 worksheet in a single row. Step #3: Copy the data from Field 6 Initial Appropriations of the M 38a Ledger and insert into Field 2 Initial Appropriations of the M 91 worksheet in a single row. Step #4: Copy the data from Field 7 Difference between Estimated and Actual Transfer of the M 38a Ledger and insert into Field 3 Difference between Estimated and Actual Transfer of the M 91 worksheet in a single row. (Both increase and decrease) Step #5: Copy the data from Field 8 Internal Transfers of the M 38a Ledger and insert into Field 4 Internal Transfers of the M 91 worksheet in a single row. (Both increase and decrease) Step #6: Copy the data from Field 9 External Transfers of the M 38a Ledger and insert into Field 5 External Transfers of the M 91 worksheet in a single row. (Both increase and decrease) Step #7: Calculate Field 6 Total Appropriations of the M 91 worksheet as follows: (+) Add Initial Appropriations (+) Add increases in Difference between Estimated and Actual Transfer (+) Add increases in Internal Transfers (+) Add increases in External Transfers ( )Subtract decreases in Difference between Estimated and Actual Transfer ( )Subtract decreases in Internal Transfers ( ) Subtract decreases in External Transfers Verify the calculated amount by comparing it to Field 10 Total Appropriations of the M 38a Ledger. The two values should be the same. Step #8: Copy the data from Field 12 Reserve Code of the M 38a Ledger and insert into Field 7 Reserve Code of the M 91 worksheet in a single row. Step #9: Copy the data from Field 13 Supplemental Budget of the M 38a Ledger and insert into Field 8 Supplemental Budget of the M 91 worksheet in a single row. Step #10: Copy the data from Field 14 Mid Year Budget Review of the M 38a Ledger and insert into Field 9 Mid Year Budget Review of the M 91 worksheet in a single row. Step #11: Calculate Field 10 Final Balance of Appropriations of the M 91 worksheet as follows: (+) Add Total Appropriations (+) Add Reserve Code (+) Add Supplemental Budget (+) Add Mid Year Budget Review increases ( ) Subtract Mid Year Budget Review decreases GoIRA Accounting Manual 9 7

Verify the calculated amount by comparing it to Field 15 Final Balance of Appropriations of the M 38a Ledger. The two values should be the same. Step #12: Copy the data from Field 16 Allotments of the M 38a Ledger and insert into Field 10 Allotments of the M 91 worksheet in a single row. Use the Final Consolidated M 22 Report to complete steps 13 to 17. Step #13:Copy the data from Field 3 Coding Block (Allotment #2) of the M 22 Report and insert into Field 1 Coding Block (Major Object Code) of the M 91 worksheet. Include onlythe records in the M 22 Report whose first two digits of the object code matches the two (2) digit object code of the M 91 worksheet. For example, the minor code 251 matches the major code 25. Step #14: Copy the data from Field 4 Post Payments of the M 22 Report and insert into Field 11 Post Payments of the M 91 worksheet. Step #15: Copy the data from Field 5 Advance Payments of the M 22 Report and insert into Field 12 Advance Payments of the M 91 worksheet in a single row. Step #16: Copy the data from Field 6 Acquittals of the M 22 Report and insert into Field 13 Advance Payments Acquitted of the M 91 worksheet in a single row. Step #17: Copy the data from Field 7 Refunds of the M 22 Report and insert into Field 14 Refunds of the M 91 worksheet in a single row. Step #18: Calculate Field 15 Balance Due of Advance Payments of the M 91 worksheet as follows: (+) Add Advance Payments ( ) Subtract Advance Payments Acquitted Step #19: Calculate Field 16 Total Expenditures of the M 91 worksheet as follows: (+) Add Post Payments (+) Add Advance Payments Acquitted ( ) Refunds Step #20: Calculate Field 17 Remaining Balance of Allotments of the M 91 worksheet as follows: (+) Add Allotments ( ) Subtract Total Expenditures Step #21: Calculate Field 18 Remaining Balance of Appropriations of the M 91 worksheet as follows: (+) Add Total Appropriations ( ) Subtract Allotments Step #22: Calculate Field 19 Final Balance of the M 91 worksheet as follows: GoIRA Accounting Manual 9 8

(+) Add Remaining Balance of Allotments (+) Add Remaining Balance of Appropriations Step #23: Sum all the rows for fields 2 to 19except for Field 14 Refunds of the M 91 worksheet. Step #24: Transfer the sums calculated in Step #21 from the M 91 worksheet into the appropriate row of M 91 Qatia Report based on major object code. Repeat steps 2 to 24 for each major object code. Line ministries and independent agencies are required to submit a version of the M 91 report for the General Fund (Operating Budget) and one version of the M 91 all other funds (Development Budget). Both versions are due to the Treasury one month after the end of the fiscal year. Each primary budget unit has a Qatia Unit that compiles data from the center and line directorates. After the Qatia unit fills out all required fields of M 91 Report and obtains final approval by the authorizing authority, it will send the M 91 Report to Treasury. The Treasury will consolidate information in the M 91 from each line ministry and independent agency to create the Qatia, which is the official set of financial statements of the GoIRA by line ministry/independent agency and major object code. The Qatia is delivered to the Control and Audit Office three months after the end of the fiscal year and is sent to the Parliament for final approval six months after the end of the fiscal year when it becomes the official financial statements of the GoIRA. 9.4.2 IPSAS Statements This space is reserved. GoIRA Accounting Manual 9 9

10.0 Reconciliations and Year End Closing 10.1 Overview A key internal control process under the cash basis of accounting is the reconciliation of bank statements with accounting records. Since revenues are earned when cash or deposits are received and expenses are incurred when cash is withdrawn from bank accounts, revenues and expenditures should match bank statements exactly. 9 Accordingly, primary budget units and Mustofiats are required to reconcile their bank statements on a monthly basis and provide these reconciliations to the Treasury. The different types of reconciliations include expenditure, revenue, and advances. Based on the results of the reconciliations, budget units will then use the M 33 Journal Voucher to post corrections in the General Ledger in AFMIS or formally request DAB to transfer funds between bank accounts. 10.2 Official Bank Accounts The GoIRA uses a Treasury Single Account (TSA) to manage its bank accounts. The TSA consists of set of linked designated official bank accounts through which the GoIRA makes all of its transactions. The key concept of TSA is to consolidate and centralize funds into a single account regardless of the original source of the funds (e.g. revenue from a customs office in Herat will be deposited in the central TSA account rather than in a Customs Office bank account) and then disbursed through the budget execution process. All designated official bank accounts in the TSA are setup in the name of the Ministry of Finance, but the bank accounts will be administered by both the Treasury and Mustofiats. In some cases the Ministry of Finance will approve allowing line ministries or independent agencies to open bank accounts to make payments directly to vendors if requested by donors. Regardless of which entity administers an official bank account, the administration and use of the accounts is strictly proscribed by regulations published in Treasury circulars. All official bank accounts are held with the DAB regardless if they are in the center or in the provinces. The Treasury administers all accounts at the center including: TSA Account central account where all funds are swept and the original source of all expenditures TSA Dollar Account central account where dollar revenues are swept and dollar expenditures are disbursed ARTF and UNDP Accounts There are accounts used to receive fund transfers from the ARTF or UNDP. These funds are then swept into the TSA. Mustofiats administer provincial accounts including: Revenue Accounts account where all revenue collections are deposited and then transferred to the central Provincial Revenue Account Expenditure Accounts account from which payments for expenditures are made after the transfer of funds from the Provincial Expenditure Account at the center. The Mustofiat is strictly 9 This is not completely accurate when transfers of funds are made between two GoIRA accounts. For example, the transfer of funds from a Treasury account to a Mustofiat account is considered an advance and not an expenditure or revenue. GoIRA Accounting Manual 10 1

forbidden from depositing funds into this account. All expenditure account funds must come from the Treasury. Other official bank accounts include: Special Accounts (foreign currency and AFN) accounts setup to receive donor discretionary and non discretionary funds for grants and loans in the development budget Clearing Accounts accounts used to make internal transfers between Mustofiat revenue and expenditure accounts and the TSA Provincial and Local Customs Accounts official banks used to collect customs revenue which is then transferred to the provincial revenue account 10.3 M 30 Bank Ledger The M 30 Bank Ledger is used to keep a running balance of transactions in a Mustofiat expenditure or revenue bank account. It records all credits and debits from bank transfers, disbursements or revenue deposits. All Mustofiats should maintain the M 30 Bank Ledger for each of their bank accounts. (See Appendix D 38 with detailed instructions on how to prepare the M 30 Bank Ledger.) 10.4 T 8 Bank Reconciliation Statement All Mustofiats and line ministries/independent agencies are required on a monthly basis to reconcile any bank statements with accounting transactions. They do this by preparing a T 8 Form using the M 30 Bank Ledger as the source and comparing it to the Treasury for review. The T 8 Form provides summary information on a bank account records including opening and closing balances, deposits, withdrawals, and unpresented checks 10. It also details banking transactions that have not been recorded in the budget unit s accounting records. (See Appendix D 68 with detailed instructions on how to prepare the T 8 Bank Reconciliation Statement.) Any discrepancies identified in the T 8 form between bank transactions and accounting records must be reviewed and promptly fixed. Corrections in the General Ledger are processed by preparing the M 33 Journal Voucher and recording the adjustment in AFMIS. If adjustments to bank records are required, then the Treasury will send a letter to DAB detailing the discrepancy and request the appropriate transfer of funds. 10.5 Journal Vouchers and Correcting Entries All correcting entries of accounting transactions are process through the use of the M 33 Journal Voucher Form. It can be used to change any account including corrections to expenditures, revenues or advances. In many cases the M 33 Form will be required as a result of the reconciliation processes described in Section 9.0 Reporting and Reconciliation. Treasury or Mustofiat personnel will prepare the M 33 Form and then enter the information in AFMIS. They will file the copy. (See Appendix D 40 for more detailed instructions on how to prepare the M 33 Form.) 10 These are checks that have been issued by the Treasury or Mustofiat but have not been cashed. GoIRA Accounting Manual 10 2

10.6 Monthly Reconciliation 10.6.1 Revenue Reconciliation and M 29 Monthly Revenue Collection Report Mustofiats and primary budget units are required to prepare an M 29 Monthly Revenue Collection Report which summarizes revenue collections recorded from the M 27 Revenue Collection Vouchers or the Account Analysis Report for Revenue from AFMIS. The M 29 Report summarizes revenue data for primary and secondary budget by five (5) digit object code. In order to complete the reconciliation, the data in the M 29 Report is compared to the T 8 Bank Reconciliation Statement. (See Appendix D 39 with detailed instructions on how to prepare the M 29 Monthly Revenue Collection Report.) 10.6.2 Expenditure Reconciliation Mustofiats and primary budget units are required to complete reconciliations of expenditures with bank statements on a monthly basis similar to the revenue reconciliation process. AFMIS expenditure data is compared the T 8 Bank Reconciliation Statement as part of the reconciliation. Results of the reconciliations are sent to the Treasury for their review. 10.6.3 Advance Reconciliation Report Primary budget units are required to reconcile advances with acquittals on a monthly basis. If advances have not been acquitted in 30 days, then the budget units should make a priority to acquit the advances, if possible. As discussed in Section 5.5Advances and Acquittals all advances are processed through an M 16 Payment Order Form. Therefore responsible authorities are requested to consider that all prepayments should be listed in the M 16 Form in specific major and minor object code. Prepayments should be recorded in the AFMIS system using the advance object codes. Acquittal should be made using related expenditure object codes. Budget units that confront problems in reconciliation of advance should contact the Advances and Reconciliation Unit of the Treasury. 10.7 Annual Reconciliations and Closing Procedures Annual closing procedures vary from year to year. Therefore detailed instructions on closing procedures are provide through a Circular an annual basis. This includes the closing of accounts, the preparation of annual reports and the setup of the new accounts in the next fiscal year. This section provides a brief description the general closing and reconciliation processes. 10.7.1 Annual Budget Reconciliation For each allotment issued from an Allotment and Budget Unit every primary budget unit must bring its relevant budget documentation (See Section 4.0 Budget Execution and Control) including but not limited to quarterly allotments, adjustments and attachments of budget for reconciliation to the Reconciliation Unit of Treasury. 10.7.2 Reconciliation of Acquittal Documents One of the key responsibilities of a budget unit is the provision of their acquittal documents within thirty (30) days after an advance is provided. In addition, budget units are compelled to acquit all their advances and prepayments at end of the fiscal year and state this information in the M 91 Unapplied Balances Ledger. If advances cannot be acquitted during the process of closing accounts, then any remaining advance balances from M 20 ledger will be closed and the accumulated remaining advance should be calculated and entered into M 90 Ledger. GoIRA Accounting Manual 10 3

During the annual closing process budget units are advised to take decisive action regarding acquittal of previous accumulated advances. If necessary, budget units should work the Treasury Qatia and Due Balance Unit to remediate any problems associated with acquitting advances. 10.7.3 Expenditure Reconciliation After the budget section of primary budgetary units complete their reconciliations with Qatia Unit, the bookkeeping unit of primary budget units will receive their twelve (12) month expenditure report from Treasury prepared from AFMIS. Budget units will then reconcile this report with their maintained M 20 ledgers. If there no differences then the primary budget unit will send a signed report to the Qatia Unit verifying that AFMIS information reconciles with their ledger accounts. If differences exist between the M 20 Ledger and AFMIS, the discrepancies should be reported to Reconciliation Unit of Treasury. The Reconciliation Unit will review the discrepancies and make correction entries as required. GoIRA Accounting Manual 10 4

11.0 Other Accounting Procedures 11.1 Letters of Credit This space is reserved. 11.2 Disbursement of Disaster Funds This space is reserved. 11.3 Accounting for Governmental Trade Agencies This space is reserved. 11.4 Intergovernmental Accounting This space is reserved. 11.5 Taminat Accounting Due to the nature of the public works contracts, a performance security may be required for large projects. A Taminat is required at a rate of 10% of the contract to be kept in a special trust account as designated by the Ministry of Finance. The taminat may be provided at the beginning of the contract for the entire 10% of the total contract amount. If the vendor does not have the cash to upfront the costs, the 10% may be deducted from each request for payment and held in trust for the vendor to be released at the end of the contract period. Taminat is Contractor s Performance Bond. Taminat is deducted from payment to the Contractor and held in the Special account or transferred to a separate government account for taminat at the closure of the grant. The Contractor would receive the taminat payment only after the end of guaranty period and if there are no defects or problems with goods received according to the terms of the contract. It is the responsibility of Implementing Agency to deduct the taminat and to refund it to the Contractor upon achievement of the conditions for the refund. 11.6 Tazminat (Bid Security) Accounting To ensure performance of bidders based on the procurement contract award, the bid required amount will include a specified amount to be included as the bid security. This security may be in the form of a cash deposit on account, a bank guarantee, or an equivalent instrument such as a letter of credit or collateral (e.g. land, buildings, etc.) pledged by the bidder. The bid security is not recorded in the financial ledgers of the government as it is not a receipt due to the ministry. Bid securities are recorded on the [form number] Security Registration Form including the vendor name, address, amount paid, and date. In compliance with the bidding document, a bid security may be forfeited in the following circumstances: 1. Modification or withdrawal of a bid after the deadline for submission of bids 2. Refusal by a bidder to accept a correction of a mathematical error appearing on the face of the bid document. 3. Failure by the successful bidder to sign a procurement contract in good faith within the terms of the bidding document. 4. Failure by the successful bidder to provide the performance security as required by the bidding document. 5. Dishonest or false information provided by the bidder about their eligibility. GoIRA Accounting Manual 11 1

All funds of the bid security will be held in the sub account of the Treasury Single Account opened for revenue collection by the ministry responsible for the bidding documents. If the ministry does not operate a revenue collection sub account, the ministry must provide information to the Treasury Department before allowing the bidders to submit bid securities. The Treasury Department will open a separate sub account in DAB for the revenue collection of the bid security for the ministry or government agency. The ministry will track receipt of bid securities through the bank receipts and by the Security Registration Form. The total amount of bid security received in the bank account must be recorded in the M 29 Revenue Collection Report and reconciled with the bank account and the individual balances recorded in the trust account. 11.7 Trust Fund Accounting Funds held in trust which are subject to payment back to the original depositor upon specific conditions (e.g. retention of performance contract, taminat), are to be accounted for as a liability rather than a revenue. Examples of funds in trust for retention are the following: Security deposit from different entities performing activities under the government order or upon government authorization. Funds belonging to an individual or entities temporarily in custody of a government entity. (e.g. prisoner funds) In cases of entities performing activities under the government authorization and it becomes ineligible for refund of the trust fund; such funds will be booked as government revenue. Any funds belonging to individuals or entities not claimed for more than five years should be regarded as forfeited and recorded as unanticipated revenue available to spend by the ministry. 11.8 Emergency Expenditures Where work is to be carried out in cases of emergency, the appropriate delegated authority may proceed to carry out the necessary work, and subject to the condition that they immediately inform the Director General of Treasury as to the nature and need of the emergency. If the emergency need falls within current allocation of funds, the delegated authority may provide justification on Treasury forms. If the emergency need does not fall within current allocation of funds (i.e. specific line item will be overspent) or if contingency funds are needed, then the delegated authority must immediately inform the Director General of Budget and the Director General of Treasury as to the nature and need of the emergency. 11.9 Confidential Funds Confidential funds are those funds which are kept secret for the national security. These funds are not disclosed in public documents. GoIRA Accounting Manual 11 2

Appendix A: Acronyms AFMIS Afghanistan Financial Management Information System AFN Afghani (Local Currency) CAO Central Audit Office (Control & Audit Office) CoA Chart of Account DAB Da Afghanistan Bank DAD Donor Assistance Database DDF Disbursement and Disaster Fund FY Fiscal Year GAAFR Governmental Accounting, Auditing, and Financial Reporting GoIRA Government of the Islamic Republic of Afghanistan IFRS International Financial Reporting Standards IPSAS International Public Sector Accounting Standards PFEML Public Finance and Expenditure Management Law PPU Procurement Policy Unit PRR Public Restructuring Reform SDU Special Disbursement Unit SE State (owned) Enterprises. TSA Treasury Single Account UNDP United Nations Development Program VPP Verified Payroll Plan GoIRA Accounting Manual Page A 1

Appendix B: Definitions Accounting The systematic recording, reporting, and analysis of financial transactions of a business is called accounting. Accounting Information System The accounting information system consists of the resources and procedures in an organization that collects, processes, and communicates financial information. Accounts Payable Is a "creditor" to the business (you owe them money). Accounts Receivable Is a "debtor" to the business (they owe you money). Acquittal Is the act of dismissing charges brought against advances taken. Advance Done, sent, or supplied beforehand (advance is the prepayment for procuring items or payment to the contractor prior to the completion of contract). Advance Justification The clearance of the advances is called advance justification. Allotment The authorization to make expenditures of the amount approved in accordance with appropriations. Appropriation The authority granted to the Ministry of Finance, in accordance with the annual budget procedures, for issuance of an allotment form. Awaiz A receipt produced by DAB verifying that a deposit was made at the bank. Assets Property owned by a person or company, regarded as having value and available to meet debts, commitments. Balance Balance is the sum of all credits and debits in an account or ledger. Balance Sheet A balance sheet is a statement of the book value of all assets and liabilities including equity of a business or other organization or person at a particular date, such as the end of a financial year. It is known as a balance sheet because it reflects an accounting identity: the components of the balance sheet must (by definition) be equal, or in balance; in the most basic formulation, assets must equal liabilities and net worth, or equivalently, net worth must equal assets minus liabilities. Beneficiary A person who derives advantage from something or someone. Bonded Trustee A person who keeps collateral against public money and has the right with specified duties and responsibilities to retain and distribute on behalf of the Government. Bookkeeping The recording of all financial transactions undertaken by an individual or organization. Bookkeeping is "keeping records of what is bought, sold, owed, and owned; what money comes in, what goes out, and what is left." GoIRA Accounting Manual Page B 1

Budget An estimation of the revenue and expenses over a specified future period of time is called budget. Cash Money in coins or notes, as distinct from checks, money orders, or credit. Chart of Accounts The complete listing of accounts used by an organization in its accounting information system. Coding Block The set of numbers that identify budget and accounting transactions. A coding block in the GoIRA accounting information system identifies organization, project, program, fund, location and account information. Collection The act or process of collecting tax or revenue. Complete Delivery Delivering the purchased items all at once to the buyer. Control Ledger subsidiary ledger, special or supporting ledger (such as cost ledger, purchases summary account (called control ledger). Credit In double entry accounting a credit is the right side of an account. Credits decrease assets and expenses and increase liabilities and revenues. Debit In double entry accounting a debit is the left side of an account. Debits increase assets and expenses and decrease liabilities and revenues. Debt That which is owed usually referencing assets owed, but the term can cover other obligations. Decrease An instance or example of becoming less or smaller is called decrease. Deduction An amount that is or may be deducted from something, from taxable income or tax to be paid. Electronic Voucher Is voucher which is generated in AFMIS (Afghanistan Financial Management Information System) Excess An amount or quantity beyond what is normal or sufficient. Expenditure The action of spending fund is called expenditure. Financial Controller Financial Controller is an accounting/audit expert in a business who oversees accounting practices. Transaction A transaction is any business event which can be measured in terms of money and which must be recorded in the accounting information system. Fund A fund is self balancing set of accounts that makes economic sense. GoIRA Accounting Manual Page B 2

General Ledger The collection of all accounts in an accounting information system. In the GoIRA Accounting Information System, the General Ledger is located in AFMIS. Goods Received Note Is a document produced when goods are received into the company/factory. Grant A grant is a sum of money given by an organization, entity or donor to a government for a particular purpose. Income Generally defined, is the money that is received as a result of the normal business activities of an individual or a business. Increase An instance of growing or making greater is called increase. Invoice A commercial document issued by a seller to a buyer, indicating the products, quantities and agreed prices for products or services with which the seller has already provided the buyer. An invoice indicates that payment is due from the buyer to the seller according to the payment terms. Journal Voucher A form used to record changes (debits and credits) to a specific account. Ledger A book in which to record accounting transactions. Different types of ledgers include the General Ledger, control ledgers and subsidiary ledgers. Liability A thing for which someone is responsible, a debt or financial obligation. Loan An arrangement in which a lender gives money or property to a borrower and the borrower agrees to return the property or repay the money within specific period of time. Mustofiat Provincial directorate of the Ministry of Finance is called Mustofiat. Commitment or Commitment Incurred Any order placed, contract awarded, service received or similar transaction that will require payment as a settlement. Commitment Liquidated Commitment liquidated is the clearance of a commitment either through expenditure or cancellation of the commitment. Owner s Equity Is the difference after subtracting all liabilities from assets is the owner s investment in the business is the amount owed by the business to the owner. Partial Delivery Delivering the purchased items in several partial to the buyer. Payment The partial or complete discharge of an obligation by its settlement in the form of the transfer of funds, assets, or services equal to money. Payroll The sum of all financial records of salaries, wages, bonuses, and deductions. Post Payment The payment to a vendor or a contractor after the delivery of goods and services. GoIRA Accounting Manual Page B 3

Primary Budget Unit A primary budget unit is a legal entity (person) of the Government having appropriation provided pursuant to an act of the National Assembly. Prepayment A type advance used to make a payment to a vendor or a contractor prior to delivery of goods and services. Purchase Order A purchase order is a buyer generated document that authorizes a purchase transaction. Reconciliation Under cash basis of accounting, reconciliation consists of the act checking accounting transactions against bank statements. Refund Money that is paid back to the Government. Register A book used to record accounting information that is also included in the General Ledger. A register records information in a format relevant to business requirements. Regulation A regulation is a principle, rule, or law designed to control or govern conduct. Report A document that provides summary and detailed information derived from the accounting information system. Requisition A formal written request to procure goods and services. Revenue All receipts of the Government to which the Government has beneficial rights, except those leading to the increase of debt, repayment of loans extended, or reduction in expenditure. Salary Fixed compensation for services, paid to a person on a regular basis. Separation of Duties concept that different persons complete different tasks for a specific business process among multiple users Secondary Budget Unit The secondary budget unit is the provincial office of a primary budget unit or a line directorate. State Administration A state administration is any administration which is established within the framework of the Executive, the Legislative or the Judiciary inside or outside Afghanistan, in accordance with law. Sub Allotment A portion of an allotment this allocated by a primary budget unit to a secondary budget unit. Tara afa A document prepared by the revenue collection office providing instructions to a taxpayer to deposit funds in an official bank account in order to collect revenue. Taminat Taminat is a contractor performance bond that is held by the Treasury until all contractor. GoIRA Accounting Manual Page B 4

Tax Identification No. A Taxpayer Identification Number or TIN is an identifying number used for tax purposes in Afghanistan. Tax Return A tax return is the document giving the tax collector information about the taxpayer's tax liability. Transfer Awaiz A document showing that revenue collected at provincial DAB branches has been transferred from provincial revenue accounts to the TSA. Treasury A place in which private or public funds are received, kept, managed, and disbursed Treasury Single Account The Treasury Single Account is the set of official bank accounts in the Da Afghanistan Bank or any other financial institution designated and controlled by the Ministry of Finance to centralize public money and other receipts held in trust and to manage authorized payments. Trial Balance A worksheet where in all the balances of each ledger are entered in two columns namely debit and credit. Trial balance is prepared in each financial period as a summary of the closing of the previous ledger. The total of the debit side should always be equal to the total of the credit side, which proves the arithmetic accuracy of the ledger entry. Voucher A serially numbered form that authorizes an organization to recognize an obligation or revenue and to make payments. Voucher System A voucher system is a method of verifying claims and payments or verifying revenue collection. Wage A compensation which workers receive in exchange for their labor. GoIRA Accounting Manual Page B 5

Appendix C: List of Reasons to Reject M 16 Payment Order Development Budget 1. M 16 has the incorrect coding block. 2. Original invoice is missing. 3. Supporting documents/contracts are missing. 4. B 27 and PCS forms are missing. 5. No Objection Letter from the World Bank/Donor is missing. 6. Bank details information is missing or incorrectly entered into the M 16. 7. Invoice amount is less than M 16 amount. 8. Coding block differs in M 16 from B 27 and PCS. 9. The M 16 is not signed by the Authorizing Authority. 10. Applicable taxes are not deducted or deducted incorrectly. 11. Insufficient funds are available to make a payment. 12. A rejected M 16 is brought without further amendment from previous review. 13. Name/ID number of the Bonded Trustee is not recorded or is incorrect. 14. M 16 and other supporting documentation have been amended after the Authorizing Authority signed the M 16 Form. 15. Petty cash advances have not been fully acquitted. 16. The allotment reports identified in the M 16 coding block has not entered in the system. 17. Commitment/Oblig. # has not been entered in AFMIS. 18. There are insufficient funds in the DAB special account for the project. 19. Financial controller has not signed and verified the M 16 Form. 20. M 16 has a calculation error. Ordinary Budget 1. Incorrect accounting codes used in M 16s. 2. Incorrect object codes used in M 16s. 3. No authorized signature taken or signed over than the authorization. 4. Signature of Bonded Trustee not taken on the back side of the M 16. 5. Purchasing committee is not introduced for the M16. 6. Over writing in rectification fluid not certify by the authority. 7. Tax deduction Account not mentioned in the M 16. 8. Discrepancy in the balance of net amount after tax deduction with the grass amount. 9. Incorrect Object code used in M16 instead of goods type in M 16. 10. Form M 41 (Payroll) not attached with salary payment. 11. NO signature taken from authorized controller on M 16. 12. M 41 (Payroll) not visa by MoF controller. 13. Photo copy of the decree is not related to the M16 expenditure. 14. Food allowances are not acceptable or shouldn t be include with bonus payment. 15. Re submit (rejected) payment not resolves previous rejection reasons. 16. No enough allotment available in the M 16 Object code. GoIRA Accounting Manual Page C 1

17. Bonded Trustee ID card Number is not mentioned in the M 16. 18. M 16 not recorded in the Accounting department 19. Related ministry name and code are not mentioned in the M 16 20. Advance and petty cash acquittals not completed. 21. M16 number is duplicated or repeat number brought. 22. Vender account should be rectifying by the photocopy and formal letter. 23. No tax deduction made from vender payment and no details are given for the tax exemption. 24. Tax and Sukuk is not deducted base on Procurement Law. 25. List of Paid payment not attached with M 16. 26. The threshold for the Bonded Trustee is from 5000.00 AFN up to 50,000.00 AFN more than mentioned amount will not be paid. 27. Payment for over than amount of 50,000.00 AFN will be transferred to Account. 28. Payments of the vendor will only be transferred to the Director and Deputy Director of company account the license number and the contract number should be attached with M 16. 29. The Bonded Trustee ID Card and account of the Vendor should be recorded in the Treasury Allotment Unit before submission of the M 16. 30. The original amount of the contractor should be including in the information table of the M 16. 31. Over time payment in the construction and purchasing contracts will not be applicable without MOF agreement. 32. Sukuk and individual tax not deducted from the Temporary employee s and Gov.employee base on Law. 33. Over time payment will not applicable from PRR salary payment. 34. In purchasing of vehicles the MOF agreement should be taken without MoF agreement the M 16 will be rejected. 35. Copy of the order which attached from the related organization copy is accordance with original should be signed with stamp by the organization. 36. Contracts for the goods and services for more than 5 Million AFN and for public works more than 25 Million AFN should have a commitment obligation number. 37. The commitment obligation number which is mentioned in the M 16 should be accordance with the AFMIS number. 38. The number of employees in salary M16 is not mentioned for each budget line. GoIRA Accounting Manual Page C 2

Appendix D: Form Instructions Form No. Name Type Format* M 2 Cash Purchase Order Commitment PDF, Excel M 3 Purchase Order Commitment PDF, Excel M 7 Goods Received Note Administrative PDF, Excel M 10 Request for Advance Commitment PDF, Excel M 11 Miscellaneous Commitment Document Commitment PDF, Excel M 12 Advance Acquittal Transaction PDF, Excel M 13 Travel Order Form Commitment PDF, Excel M 16 Payment Order (Expenditures) Transaction PDF, Excel M 16A** Payment Order (Salaries) Transaction PDF, Excel M 20 Allotment/SuballotmentControl Ledger Ledger Excel, Ledger M 22 Monthly Status of Allotment Report (Preliminary and Report PDF, Excel Consolidated) M 25 Miscellaneous Revenue Collection Form Administrative PDF, Excel M 26 Revenue Deposit Tara afa Transaction PDF, Excel M 27** Revenue Collection Voucher Transaction PDF, Excel M 29** Monthly Revenue Collection Report Report PDF, Excel M 30 Bank Ledger Ledger Excel, Ledger M 33 Journal Voucher Transaction PDF, Excel M 38a Budget Control Ledger Ledger PDF, Excel, Ledger Book M 38b Suballotment Control Ledger Ledger PDF, Excel, Ledger Book M 40 Payroll Ledger (Individual Pay and Deduction Report) Ledger PDF, Excel M 41** Payroll Commitment PDF, Excel M 50 Authorized Signatory Signature Sample Administrative PDF, Excel M 75 Request for Establishment or Update of Petty Cash Commitment PDF, Excel Fund M 76 Petty Cash Book Ledger PDF, Excel, Ledger Book M 80 Suballotment Control Ledger for Mustofiat Ledger PDF, Excel, Ledger Book M 90a Unacquitted Advances Worksheet Report PDF, Excel M 91 Qatia Report Report Ledger, Excel T 8 Bank Reconciliation Report Report PDF, Excel T 10 Taminat Ledger Ledger PDF, Excel, Ledger Book B 3 Approved Budget Budget PDF, Excel B 20 Request for Suballotments Budget PDF, Excel B 23 Request for Budget Transfer Budget PDF, Excel B 27 Request for Allotments Budget PDF, Excel N/A Budget Set Aside Registration of Planned Commitment PDF, Excel Procurement (Commitment A) N/A Cancellation of Planned Procurement Commitment PDF, Excel Registered/Release Budget N/A Budget Set Aside Registration of Supplier Selection Commitment PDF, Excel N/A Budget Set Aside Amendment of Registered Commitment B Commitment PDF, Excel GoIRA Accounting Manual Page D 1

Figure 18: List of Forms and Ledgers *All forms have a standard template available in both PDF and Excel version. The Excel version allows electronic data entry, includes calculated fields and field protection. Ledger formats can consist of several different formats at the discretion of the primary budget units and Mustofiats. Potential formats include electronic database applications (e.g. Access), Excel spreadsheets, pdf, and paper ledger books. **Sample forms provided in this Accounting Manual are the PDF version that can be printed out and used manually. However, electronic versions of several forms are now automatically created from Treasury systems, e.g. Excel versions of the M 41 and M 16a Forms are automatically created and filled out by the Verification Payroll System. The M 27 Revenue Voucher and M 29 Revenue Collection Form are automatically created by the Revenue General Department s RCD database system. GoIRA Accounting Manual Page D 2

M 2 Cash Purchase Order Section A: (This Section shall be filled by Custodian) 1. Cash Purchase 2. Ministry/Org. Order No. Ministry of Finance - Treasury Department Form M-2 Cash Purchase Order 3. Issue Date 4. Requesting Unit & Requisition No. 5. M-75 Ref. No. 6. Item No. 7. Object Code (5) 8. Qty 9. Unit 10. Description 11. Price Est. 12. Price Paid 13. Warehouse Officer (Sign and Date) 14. Total 15. Cash Advance Received from Custodian 16. Balance Refunded to Custodian 17. Additional Cash Received from Custodian 18. Remarks Section B: Review and Authorization 19. Recipient 20. Authorizing Authority (Sign & Date) (Sign & Date) 21. Custodian (Sign & Date) 22. Recipient (Sign & Date) Section C: (This Section shall be filled by Financial Controller) 23. Financial Controller (Sign & Date) 24. Remarks GoIRA Accounting Manual Page D 3

M 2 Instructions Purpose: To authorize the disbursement of cash from petty cash funds for minor expenditures. The form is also used as a receipt of goods form once the purchases have been made. Prepare an original and two (2) copies as follows: Section A: (This Section shall be filled by Procurement Office and/or Custodian) 1) Cash Purchase Order No. Serial number which creates a unique identifier and reference for the cash purchase order that is assigned consecutively prefixed by the ministry symbol number. 2) Ministry/Org. Enter the name of the organization/ministry from which the cash purchase order is issued. 3) Issue Date Enter the date that the cash purchase order form is prepared. 4) Requesting Unit and Requisition No. Enter the name of the department or office for which the cash purchase order applies, thus enabling proper delivery of the goods. If applicable, enter the requisition number created as part of a procurement process. 5) M 75 Ref. No. Enter the serial number of the M 75 Request for Establishment or Update of Petty Cash Fund Form from which the cash purchase order will be made 6) Item No. Number each good to be purchased, beginning with 1 for the first item, 2 for the second item, etc. 7) Object Code Insert the five (5) digit Object Code to which the cash purchase order item applies. 8) Qty Enter the unit of measurement such as meter, liter, or khwarhar to measure the commodities received for each item, in this column. 9) Unit Enter the unit of measure for each cash purchase order items, e.g. kilograms, kharwar, meter, or for single objects type each. 10) Description Enter a brief description of each cash purchase order item. 11) Price Est. This column is used to show the estimated cost of articles required as a basis for advancing the cash. Enter the best estimate of the purchase price if the actual price is unknown. 12) Price Paid After the cash purchase is made enter the actual price paid for each item. 13) Warehouse Officer This space is provided for the person in warehouse, office or storeroom responsible for receipt and review of purchased goods to sign and date verifying the receipt of goods. 14) Total Sum the total price estimate and price paid for all items in the cash purchase order. 15) Cash Advance Received From Custodian The amount of cash advanced by the Custodian will be entered here. This amount will be the same as the total of Field 11 (Price Est.). The purchasing committee, procurement office staff or other individuals receiving cash from the Custodian will initial this line. 16) Balance Refunded from Custodian If the Total Price Paid (Field 12) is less than the amount of cash advanced (Field 15); the difference is to be refunded to the Custodian. When the Custodian receives the refunded amount, they will initial this block and enter the amount. GoIRA Accounting Manual Page D 4

17) Additional Cash Received from Custodian When the Total Price Paid (Field 12) exceeds the amount of the cash advance (Field 1); the difference will be entered here by the Custodian. When this amount is paid by the Custodian a member of the purchasing committee or other individuals for purchase will initial this line. 18) Remarks This space is provided to the Warehouse Officer to note any exceptions to the condition of the goods and to record the item numbers of goods not received. Also, the Custodian may record any information which they consider essential to the clarity of the cash purchase order. Section B: Review and Authorization 19) Recipient (Sign and Date) This space is provided for the procurement officer, purchase committee representative or other individuals responsible for purchasing to sign and date the form indicating receipt of cash to make purchase. 20) Authorizing Authority (Sign and Date) This space is provided for the manager or other representative who has the authority to approved purchases for the cash advance identified in Field 5 Advance Ref. No. 21) Custodian (Sign and Date) This space is for the Custodian responsible for the cash advance to sign and date to certify the cash advance was disbursed to purchase the items listed in the cash purchase order. 22) Recipient (Sign and Date) This space is provided for the Recipient to sign after they have made the required purchase to verify that they have either returned any unused cash or been reimbursed for any out of pocket expenses that the original cash advance did not cover.. Section C: (This Section shall be filled by Financial Controller) 23) Financial Controller This space is provided for the Financial Controller to sign and date after their review and approval. 24) Remarks This space is provided for the Financial Controller to provide additional remarks and comments. AFMIS Transactions: None Distribution: Original and copy Custodian (one to be forwarded to Payment Office for Replenishment) Copy Warehouse Copy Procurement Office GoIRA Accounting Manual Page D 5

M 3 Purchase Order Ministry of Finance - Treasury Department Form M-3 Purchase Order Section A: (This Section shall be filled by Procurement and Bookkeeping Office) 1. Purchase 2. Ministry/Org. 3. Issue Date 4. Purchase Requisition No. Order No. 5. Vendor ID 6. Coding Block (Allotment #2) 7. Delivery Date 8. Delivery Address Org. (4) Project (6) Program (3) Fund (5) Object (3) 9. Item No. 10. Description 11. Object Code (5) 12. Qty 13. Unit 14. Unit Price 15. Total Price 17. Goods Received Note (1) 18. Goods Received Note (2) GRN No. 16. Total Amount 19. Goods Received Note (3) Date Section B: Review and Authorization 20. Procurement Officer 21. Bookkeeping Officer (Sign & Date) (Sign & Date) 22. Authorizing Authority (Sign & Date) 23. Vendor Acknowledgement (Sign and Date) Section C: (This Section shall be filled by Financial Controller) 24. Financial Controller (Sign & Date) 25. Remarks GoIRA Accounting Manual Page D 6

M 3 Instructions Purpose: To request vendors to provide materials, supplies, equipment, and services to a ministry or independent agency. Prepare an original and two (2) copies as follows: Section A: (This Section shall be filled by Procurement Office) 1) Purchase Order No. Insert the serial number, beginning with 1 for each fiscal year, prefixed by the ministry symbol. 2) Ministry/Org. Enter the name of the organization/ministry from which the purchase order is issued. 3) Issue Date Enter the date the purchase order is transmitted to the vendor. This date should be inserted by the purchasing office when the order is issued. 4) Purchase Requisition No. Purchase orders usually will be issued in response to Requests for Purchase. The serial number appearing on the Request for Purchase is to be inserted in this space. This is for the purpose of cross reference and to make it easy for the office which requested the purchase to identify its copy of the purchase order with its Request for Purchase 5) Vendor ID Enter the AFMIS Vendor Identification Number from which the purchase will be made. If the vendor is not registered in AFMIS, the vendor will have to be registered prior to the approval the of the purchase order. 6) Coding Block (Allotment #2) For each item enter each section of the allotment #2 coding block that applies to the items to be purchased. a. Org. (4) Insert the four (4) digit Suborganization Code of the ministry where the purchase order is issued. b. Project (6) Insert the six (6) digit Project Code to which the purchase order item applies. c. Program (3) Insert the three (3) digit Program Code to which the purchase order item applies. d. Fund (5) Insert the five (5) digit Fund Component to which the purchase order item applies. e. Object (3) Insert the three (3) digit Minor Object Code to which the purchase order item applies. 7) Delivery Date Enter the date the vendor is expected to deliver the goods listed in the purchase order 8) Delivery Address. Enter the address of the location where the goods are to be delivered. 9) Item No. Number each good to be purchased, beginning with 1 for the first item, 2 for the second item, etc. 10) Description Enter a brief description of the goods to be purchased. 11) Object Code Insert the five (5) digit Object Code to which the cash purchase order item applies. 12) Qty Enter the number of units for each cash purchase order item. 13) Unit Enter the unit of measure for each cash purchase order items, e.g. 14) Unit Price Enter the price for each unit in this column. 15) Total Price Enter the total price which is derived by multiplying the number of units by the unit price. 16) Total Amount Sum the total price of all items in the Total Price column 13 17) Goods Received Note (1) Enter the Goods Received Note No. and Issue Date of the M 7 Form which records the full or partial good receipt of goods in the purchase order. 18) Goods Received Note (2) Enter the Goods Received Note No. and Issue Date of the M 7 Form which records the remaining or partial receipt of goods in the purchase order. 19) Goods Received Note (3) Enter the Goods Received Note No. and Issue Date of the M 7 Form which records the full or partial good receipt of goods in the purchase order. GoIRA Accounting Manual Page D 7

Section B: Review and Authorization 20) Procurement Officer (Sign & Date) This space is provided for the procurement officer or other purchasing agent to sign and date for their approval. 21) Bookkeeping Officer(Sign and Date) This space is provided for the Accounting Officer to sign and date to verify that sufficient funds are available in the allotment(s) where the purchase order items will be expensed. 22) Authorizing Authority (Sign & Date) This space is provided for the Authority to sign and date for their approval. 23) Vendor Acknowledgement This space is provided to the vendor to verify that they accept the conditions of the purchase order. Section C: (This Section shall be filled by Financial Controller) 24) Financial Controller (Sign & Date) This space is provided for the Financial Controller to sign and date after their review and approval. 25) Remarks This space is provided for the Financial Controller to provide additional remarks and comments. AFMIS Transactions: None Distribution: Original Vendor Copy Procurement Office Copy Payment Office Copy Warehouse GoIRA Accounting Manual Page D 8

M 7 Goods Received Note Ministry of Finance - Treasury Department Form M-7 Goods Received Note (GRN) Section A: (This Section shall be filled by Warehouse) 1. Goods Received 2. Ministry/Org. 3. Issue Date 4. Purchase Order Ref No. Note No. 5. Vendor ID 6. Item No. 7. Asset Tag No. 8. Qty 9. Unit 10. Description 11. Unit Price 12.Total Price 13. Remarks 14. Total Amount Section B: Review and Authorization 15. Warehouse Officer's Certification: I hereby certify that I have received the articles or services as stated above: that I have carefully weighed, counted, or measured the articles listed; that the services were satisfactory and the articles in good condition & Goods or Services were in compliance with Purchase Order Form and Purchase Requisition except as noted in the remarks column. 16. Warehouse Officer (Sign & Date) 17. Head of Warehouse (Sign & Date) 18. Delivery Status Complete Delivery Partial Delivery 19. Reconciliation with and Recording in Purchase Order Section C: (This Section shall be filled by Financial Controller) 20. Financial Controller (Sign & Date) 21. Remarks GoIRA Accounting Manual Page D 9

M 7 Instructions Purpose: To record and certify the receipt of purchases of materials, supplies, equipment, and contractual services Prepare an original and one (1) copy as follows: Section A: (This Section shall be filled by Warehouse) 1) Goods Received Note No. Enter the serial number beginning with 1 for each fiscal year prefixed by the ministry number. 2) Ministry/Org. Enter the name of the organization/ministry from which goods received note is issued. 3) Issue Date Enter the date the form is filled out and the goods are received. 4) Purchase Order Ref No. Enter the serial number of the Purchase Order or ordering document on which the items were ordered. A copy of the ordering document should be on file in the procurement office. 5) Vendor ID Enter the AFMIS Vendor Identification Number from which the goods were purchased. 6) Item No. Number each good to be purchased, beginning with 1 for the first item, 2 for the second item, etc. 7) Asset Tag No. If applicable, enter any tag number by which the asset will be identified or recorded. 8) Qty Enter the total quantity of each of the goods received 9) Unit Enter the unit of measurement such as meter, liter, or khwarhar to measure the commodities received for each item, in this column. 10) Description Enter a brief description of each of the good(s) received. 11) Unit Price Enter the unit price of each good in the item list. 12) Total Price Calculate this amount by multiplying the number of units (Qty) by the unit price. 13) Remarks Enter any comments related to quality of goods received, e.g. the field can be used to report broken or damaged items. 14) Total Amount Sum the Field 12 Total Price of each item. This is the total value of the goods received. Section B: Review and Authorization 15) Warehouse Officer s Certification This space is reserved for the certification that the Warehouse Officer attests that all goods or services have been reviewed and are in good condition. 16) Warehouse Officer (Sign & Date) This space is for the Warehouse Officer or other agent to sign and date verifying the receipt of goods. 17) Head of Office (Sign & Date) This space is for the head of the Warehouse to sign and date the goods received note. 18) Delivery Status This space is used to show the delivery status of the goods received. If the delivery is complete according to the purchase order, mark X in the block Complete Delivery. If only a portion of the goods ordered are delivered according to the purchase order, mark X in the block Partial Delivery. 19) Reconciliation with Purchase Order Mark x in the block in this field to document that the completion of the Goods Received Note has been recorded in the associated M 3 Purchase Order Form in Fields 15 to 17. Section C: (This Section shall be filled by Financial Controller) GoIRA Accounting Manual Page D 10

20) Financial Controller (Sign & Date) This space is provided for the Financial Controller to sign and date after their review and approval. 21) Remarks This space is provided for the Financial Controller to provide additional remarks and comments. AFMIS Transactions: None Distribution: Original Payment Office Copy Warehouse GoIRA Accounting Manual Page D 11

M 10 Request for Advance Ministry of Finance - Treasury Department Form M-10 Request for Advance Section A: (This Section to be filled out by Payment Office) 1. Application No. 2. Ministry/Org. 3. Issue Date 4. Requesting Unit/Employee Name and ID 5. Advance Request Amount 8. Repayment Schedule 6. Outstanding Advance 7. Advance Request Type Salary Travel Purchase Other Other (Specify) 9. Advance Justification 10. Coding Block (Allotment #2) Org. (4) Project (6) Program (3) Fund (5) Object (3) 11. Applicant's Signature (Sign & Date) 12. Bookkeeping Officer (Sign & Date) Section B: Review and Authorization 13. Authorizing Authority (Sign & Date) 14. Amount Approved for Advance Section C: Status of Advance 15. Date 16. Reference 17. Advance Amount 18. Acquitted Amount 19. Balance Section D: (This Section to be filled out by Financial Controller) 20. Financial Controller (Sign & Date) 21. Remarks GoIRA Accounting Manual Page D 12

M 10 Instructions Purpose: To authorize cash advances for prepayment of vendors, travel advances and payments to petty cash funds Prepare an original and one (1) copy as follows: Section A This Section to be filled by the Payment Office. 1) Application No. This number will be entered when the application is received with approval signature. Each approved form will be numbered consecutively, beginning with 1 prefixed by the ministry symbol. 2) Ministry/Org. Enter the name of the organization/ministry to which the advance will apply. 3) Issue Date Enter the date the request for advance is filled out and signed by the applicant requesting the advance. 4) Requesting Unit/ Employee Name and ID Enter the name and employee of the individual to receive the advance and the office/department for which they are receiving the funds. 5) Advance Request Amount Enter the advance amount requested by the applicant. 6) Outstanding Advance On receipt of this form, the Accounting Officer will check if there is any outstanding advance against the applicant. 7) Advance Request Type Mark the box identifying the type of advance being requested (i.e. Salary, Travel, Purchase, Other). If Other is selected, specify the advance type in the space provided. 8) Repayment Schedule Insert here the manner or schedule by which the applicant agrees to repay the advance. In the case of a salary advance, the agreement would be to make payroll deduction of a specified amount each month for a calculated number of months. 9) Advance Justification: Provide a justification for the advance. For example, in the case of travel advance, the justification would state that the money is to be used to cover travel expenses authorized by M 13 Travel Request and Authorization Form. 10) Coding Block (Allotment #2) Enter each section of the Allotment #2 coding block to which the advance will be applied. a. Org. (4) Insert the four (4) digit Suborganization Code of the ministry. b. Project (6) Insert the six (6) digit Project Code. c. Program (3) Insert the three (3) digit Program Code. d. Fund (5) Insert the five (5) digit Fund Component. e. Object (3) Insert the three (3) digit Minor Object Code. 11) Applicant s Signature (Sign & Date) This space is provided for applicant to provide their signature and date. 12) Bookkeeping Officer (Sign & Date) This space is for the signature of the bookkeeping officer or his designee and signifies that funds are available in the allotment identified in the coding block. Section B: Review and Authorization 13) Authorizing Authority This space is provided to the officer/manager authorized to sign and date in order to grant the advance. 14) Amount Approved for Advance Enter the amount of advance approved by the authorizing authority. This will be the amount to be paid to the applicant. Section C: Status of Advance 15) Date Insert the date appearing on the document recording the payment of advance. 16) Reference Document Enter the serial number of the transaction document (e.g. M 16 No). 17) Advance Amount Enter the total amount advanced as per the transaction document. GoIRA Accounting Manual Page D 13

18) Acquitted Amount As acquittal of the advance or portions thereof is made, record the amount here. For example, if repayment is made by payroll deduction, record the amount of deduction shown on the payroll M 16. 19) Balance After data is entered in Field 18 Acquitted, bring forward the new balance. Section D: (This Section is to be filled by the Financial Controller) 20) Financial Controller This space is provided for the Financial Controller to sign and date the form for their approval. 21) Remarks This space is provided for the Financial Controller to provide additional remarks and comments. AFMIS Transactions: None Distribution: Original Accounting Office Copy Treasury/Mustofiat GoIRA Accounting Manual Page D 14

M 11 Miscellaneous Commitment Document Ministry of Finance - Treasury Department Form M-11 - Miscellaneous Commitment Document Section A: (This Section to be filled out by Payment Office) 1. Miscellaneous Commitment No. 2. Ministry/Org. 3. Issue Date 4. Coding Block (Allotment #2) Org. (4) Project (6) Program (3) Fund (5) Object (3) Object (3) 5. Object Code (5) 6. Description 7. Amount 8. Total Section B: Review and Authorization 9. Payment Officer (Sign & Date) 10. Authorizing Authority (Sign & Date) Section C: (This Section shall be filled by Financial Controller) 11. Financial Controller (Sign & Date) 12. Remarks GoIRA Accounting Manual Page D 15

M 11 Instructions Purpose: To obligate appropriation for miscellaneous expenses for which a another commitment document cannot be used Prepare an original copy as follows: Section A: (This Section to be filled out by Payment Office) 1) Miscellaneous Commitment No. Enter the serial number for a miscellaneous commitment, beginning with 1 for each fiscal year, prefixed by the ministry symbol. 2) Ministry/Org. Enter the name of the organization/ministry to which the cash purchase order applies. 3) Issue Date Enter the data that the form is prepared. 4) Coding Block (Allotment #2) Enter each section of the Allotment #2 coding block to which the miscellaneous commitment will be applied. a. Organization (4) Insert the four (4) digit Suborganization Code of the ministry. b. Project (6) Insert the six (6) digit Project Code. c. Program (3) Insert the three (3) digit Program Code. d. Fund (5) Insert the five (5) digit Fund Component. e. Object (3) Insert the three (3) digit Major Object Code Allotment. 5) Object Code (5) Insert the three (5) digit Minor Object Code Expenditure. 6) Description Provide a full explanation of the commitment being created. 7) Amount Enter the amount of the commitment chargeable to allotment coding block. 8) Total Sum the amount of each obligation as described above. Section B: Review and Authorization 9) Payment Officer (Sign and Date) This space is for the signature of the Payment Officer after filling out the form. The Payment Office will verify that sufficient funds are available to make payment. 10) Authorizing Authority (Sign and Date) This space is provided to the appropriate authorizing authority in the suborganization/budget unit to sign and date for approval. Section C: (This section to be filled out by the Financial Controller) 11) Financial Controller This space is provided for the Financial Controller to sign and date the form for their approval. 12) Remarks This space is provided for the Financial Controller to provide additional remarks and comments. AFMIS Transactions: None Distribution: Original Payment Office Copy Treasury/Mustofiat GoIRA Accounting Manual Page D 16

M 12 Advance Acquittal Ministry of Finance - Treasury Department Form M-12 Advance Acquittal Section A: (This Section to be filled out by Payment Office) 1. Acquittal No. 2. Ministry/Org. 3. Issue Date 4. Grant/Loan No. and Name 5. Name of Advance Recipient 6. Type of Advance to be Acquitted Salary Travel Purchase Other Other (Specify) 7. Commit/Oblig # 8. M-10 Reference No. 9. M-16 Reference No. 10. Amount of Prepaid M-16 11. Prior Acquittals Amount 12. Acquittal by this M12 13. Outstanding Balance 14. Remarks 15. Coding Block (Expenditure) Org. (4) Project (6) Program (5) Fund (5) Location (4) Object (5) 16. Acquittal Amount 17. Total 18. List of Attached Documents Section B: Review and Authorization 19. Certification of Documentation: I hereby, certify that the above acquittal of advance is supported by proper documents in conformity with and in manner prescribed by law and regulation and and is within the limit of allotment 20. Authorizing Authority (Sign & Date) Section C: (This Section to be filled out by Financial Controller) 21. Financial Controller (Sign & Date) 22. Remarks GoIRA Accounting Manual Page D 17

M 12 Instructions Purpose: To acquit prior advances by providing expenditure data on purchased goods and services Prepare an original and one (1) copy as follows: Section A: (This Section to be filled out by Payment Office) 1) Acquittal No. Enter the serial number, beginning with 1 for each fiscal year, prefixed by the ministry symbol. 2) Ministry/Org. Enter the name of the organization/ministry to which the acquittal will apply. 3) Issue Date Insert the date that the form is prepared. 4) Grant/Loan No. and Name Enter the grant or loan name and number to which an advance was given and is being acquitted. This Field is only required for projects in the development budget. 5) Name of Advance Recipient Enter the name of the recipient of the advance as per the M 10 Request for Advance Form that received that advance that is being acquitted. Most of often this will be a Bonded Trustee. 6) Type of Advance to be Acquitted Mark the box identifying the type of advance being acquitted (i.e. Salary, Travel, Purchase, Other). If Other is selected, specify the advance type in the space provided. 7) Commit/Oblig # Enter the number of the commitment/obligation used to set aside funds from which are being acquitted. This Field is only required for projects in the development budget. 8) M 10 Reference No. Enter the M 10 serial number of the advance which is being acquitted. 9) M 16 Reference No. Enter the original M 16 serial number used to disburse the advance from the M 10. 10) Amount of Prepaid M 16 Enter the original amount of the advance as documented in the M 16 Form. 11) Prior Acquittals Amount Enter the cumulative amount of acquittals prior to the processing of this Form. This information should be available in Section C: Status of Advances of the related M 10 Form. 12) Acquittal by this M12 Enter the amount of advance to be acquitted by this Form. 13) Outstanding Balance Calculate the outstanding balance of the advance yet to be acquitted. It is calculated as the Field 10 Amount of Prepaid M 16 less Field 11 Prior Acquittals Amount less Field 12 Acquittal by this M 12 Form. 14) Remarks This space is provided to add any relevant comments related to the acquittal. 15) Coding Block (Expenditure) Enter each section of the expenditure coding block to which the acquittal will be applied. a. Organization (4) Insert the four (4) digit Suborganization Code of the ministry. b. Project (6) Insert the six (6) digit Project Code. c. Program (5) Insert the five (5) digit Program Code. d. Fund (5) Insert the five (5) digit Fund Component. e. Location (4) Insert the four (4) digit district code. f. Object (5) Insert the three (5) digit Object Code. 16) Acquittal Amount Enter the amount to be acquitted for each coding block. 17) Total Sum the amount of the acquittal amount for each coding block. 18) List of Attached Documents Provide a list of any additional documentation attached to the M 12 Form. Section B: Review and Authorization GoIRA Accounting Manual Page D 18

19) Certification of Documentation This is provided for the Payment Officer to sign and data in order to certify that the information on the form is correct. 20) Authorizing Authority (Sign & Date) This space is provided to the appropriate authorizing authority in the budget unit to sign and date for approval of expenditures. Section C: (This Section to be filled out by Financial Controller) 21) Financial Controller (Sign & Date) This space is provided for the Financial Controller to sign and date the form for their approval. 22) Remarks This space is provided for the Financial Controller to provide additional remarks and comments. AFMIS Transactions: None Distribution: Original Payment Office Copy Treasury/Mustofiat GoIRA Accounting Manual Page D 19

M 13 Travel Order Form Ministry of Finance - Treasury Department Form M-13 Travel Order Form Section A: (This Section shall be filled out by the Administrative Office) 1. Travel Order No. 2. Ministry/Org. 3. Issue Date 4. Lead Traveler & Employee ID 5. Estimated Date of Travel 6. Actual Date of Travel 7. Travel 8. Purpose of Travel Start End Duration Start End Duration From To Section B: (This Section to be filled out by Bookkeeping Office) 9. Coding Block (Allotment #2) Org. (4) Project (6) Program (3) Fund (5) Object (3) 10. M-10 Advance Amount & Ref. No. 11. Statement of Travel and Expenses Object Item No. Expenses Type Code (5) Qty Unit Price Estimated Cost Actual Cost 12. Total Travel Expenses 13. Accounting Office Objection 14. Total Travel Expenses after Objection 15. Advance Payment Amount 16. Payable to Traveler 17. Refund to Government Section C: Review and Authorization Before & After Travel 18. Traveler (Sign & Date) 19. Travel Authorization (Sign & Date) 20. Bookkeeping Officer (Sign & Date) 22. Traveler Authorization (Sign & 21. Traveler (Sign & Date) 23. Payment Officer (Sign & Date) Date) Section D: (This Section shall be filled out by Financial Controller) 24. Financial Controller (Sign & Date) 25. Remarks GoIRA Accounting Manual Page D 20

M 13 Instructions Purpose: To authorize the post payment of travel expense or the advance payment of travel expenses. This is not a replacement for either Form M 10 Request for Advance or Form M 16 Payment Order. This form supplements the information in those two forms and provides a certification by the traveler and recipient of funds that the expense amounts are correct. Prepare an original and two (2) copies as follows: Section A: (This Section shall be filled out by the Administrative Office) 1) Travel Order No. Enter the serial number for a travel payment order number, beginning with 1 for each fiscal year, prefixed by the ministry symbol. 2) Ministry/Org. Enter the name of the organization/ministry which will approve the payment request for travel. 3) Issue Date This date will be entered by the Payment Office when the order is ready for payment. This date should match the related M 16 Form. 4) Lead Traveler & Employee ID Enter the name of the bonded trustee or the lead traveler receiving cash advances for travel. 5) Estimated Date of Travel Enter the estimated start and end date of travel. 6) Actual Date of Travel Enter the actual start and end dates of travel. 7) Travel Enter the location of where the travel starts and the location of where it ends. 8) Purpose of Travel Describe the business purpose of the travel. Section B: (This Section to be filled out by the Payment Office) 9) Coding Block (Allotment #2) Enter each section of the Allotment #2 coding block to which the travel expenditures will be applied. a. Organization (4) Insert the four (4) digit Suborganization Code of the ministry. b. Project (6) Insert the six (6) digit Project Code. c. Program (3) Insert the three (3) digit Program Code. d. Fund (5) Insert the five (5) digit Fund Component. e. Location (4) Insert the four (4) digit District Code. f. Object (3) Insert the three (3) digit Minor Object Code. 10) M 10 Advance Amount and Ref. No. If a travel advance was provided, please record the amount of the travel advance and serial number from the related M 10 Form. 11) Statement of Travel and Expenses a. Item No. Number each travel expense, beginning with 1 for the first item, 2 for the second item, etc. b. Object Code Insert the five (5) digit Object Code to which the travel expense applies. c. Expenses type Describe the type of travel expense (i.e. airfare, accommodation, per diem, etc.) d. Qty Enter the number of units for each travel type. e. Price per Unit Enter for each item the price per unit shown. f. Estimated Cost Calculate the estimated cost of the travel expense by multiplying the Qty and Price per Unit g. Actual Cost Record actual cost of each type of travel expense after completion of travel 12) Total Travel Expenses Sum the total of travel expenses of the Estimated Cost and Actual Cost columns fromfield 10 Statement of Travel and Expenses. GoIRA Accounting Manual Page D 21

13) Accounting Office Objection Enter the amount funds to which the Bookkeeping Office deems ineligible from the Statement of Actual Travel and Expenses 14) Total Travel Expenses after Objection Subtract the amount in Field 13 Accounting Office Objection from Field 12 Total Travel Expenses 15) Advance Payment Amount If this form is used to record actual expenses this field will be blank. 16) Payable to Traveler Enter the payment due to the traveler if the form is being used for post payment and any previous advances are less than actual total travel expenses. This is equal to the Field 14 Total Travel Expenses after Objection less Field 15 Advance Payment Amount. 17) Refund to Government Enter the payment due to the government if the form is being used for post payment and previous advances are greater than actual total expenses. This is equal to Field 16 Advance Payment Amount less Field 14 Total Travel Expenses after Objection. Section C: Review and Authorization Before & After Travel 18) Traveler (Sign & Date) This space is provided to the traveler to sign and date before travel. 19) Traveler Authorization (Sign and Date) This space is provided to the appropriate authorizing authority in the department/office to sign and date for approval of traveler before travel 20) Bookkeeping Officer (Sign & Date) This space is for the signature of the Bookkeeping Officer or their designee and signifies that funds are available in the allotment identified in the coding block before travel. 21) Traveler (Sign & Date) This space is provided to the Traveler to sign and date after travel certifying actual cost of travel. 22) Traveler Authorization (Sign and Date) This space is provided to the appropriate authorizing authority in the department/office to sign and date for approval of traveler after travel verifying the actual cost of travel and approving final cost for reimbursement. 23) Bookkeeping Officer (Sign & Date) This space is for the signature of thebookkeepingofficer or their designee and signifies that funds have been spent in the allotment identified in the coding block after travel. Section D: (This Section to be filled out by the Financial Controller) 24) Financial Controller This space is provided for the Financial Controller to sign and date the form for their approval before travel verifying the amount for commitment. 25) Remarks This space is provided for the Financial Controller to provide additional remarks and comments. AFMIS Modules/General Ledger Transactions: None Distribution: Original Payment Office Copy Traveler Copy Treasury GoIRA Accounting Manual Page D 22

M 16 Payment Order Ministry of Finance - Treasury Department Form M-16 - Payment Order Section A: (This Section shall be filled by Payment Office) 1. M16 No. 2. Ministry/Org. 3. Issue Date 4. No. of Enclosed Sheets 5. Budget Type 6. Payment Category 7. Electronic Voucher # Ordinary Development Postpaid Prepaid 8. Grant/Loan No./Name 9. Commit/Oblig. # 10. Payment Type Letter of Credit Direct Bank Special Account No. 11. Procurement Details 12. Description of Expenditure Quantity Price Total Unit Total Unit 13. Coding Block (Expenditure) Org. (4) Project (6) Program (5) Fund (5) Location (4) Object (5) 14. Category Code 15. Amount 16. Total (In Words) 17. Total (In Figures) 18. Payment Details 19. Object Code20. Bank Acct. No 21. Amount Total Amount of Invoice Less - Company Tax Less - Individual Tax Less - Taminat 42104 Less - Returned Amount (Only for Operating Budget) 41212 Less - Other Deductions 41210 22. Net Amount (In Words 23. Net Amount (In Figures) 24. Beneficiary's Information 25. Beneficiary's Banking Information a. Beneficiary Name b. Tax Identification No. a. Beneficiary Bank Account Name b. Beneficiary Account Number c. Vendor ID c. Invoice No./Identification No. 26. Details of Grant/Credit and Contract d. Bank Name a. Contract Ref No. e. Bank Address b. Procurement Type f. IBAN No. c. Post/Prior Review g. Bank SWIFT Code d. Contract Amount h. Correspondant Bank Name e. Currency i. Correspondant Bank Address f. GRN Report No. j. Correspondant Bank Account No. g. No Objection Date k. Correspondant Bank SWIFT Code Section B: Review and Authorization 27. Bookkeeping Manager (Sign & Date) 28. Payment Manager (Sign & Date) 29. Finance Director (Sign & Date) 30. Authorizing Authority (Sign & Date) 31. Stamp of Directorate Section D: (This Section shall be filled by Financial Controller) 32. Financial Controller (Sign & Date) 33. Remarks GoIRA Accounting Manual Page D 23

M 16 Instructions Purpose: To authorize the payment of monies and to show the purpose of the expenditure and the distribution of the expenditure to budgetary and operating accounts. Prepare an original and one copy as follows: Section A Prepared by the Administrative Office of the Authorizing Ministry 1) M16 No. Enter the serial number of the payment order. The serial number will begin with 1 for each fiscal year. All numbers must be accounted for to determine that no payment order is missing. 2) Ministry/Org. Enter the name of the organization/ministry which will be making the payment. 3) Issue Date Enter the date that the form is prepared. 4) No. of Pages Enter the number of pages of the M 16 Form. Additional pages provide expenditure and coding block information that will not fit on the first page. 5) Budget Type Mark x in the check box to indicate the budget type. Type budget type will determine which administrative office will process the form and the procedure to be followed. Payments for operating expenditures are processed by the Ordinary Budget Unit, while development expenditures are processed by the Special Disbursements Unit (SDU). 6) Payment Category Mark x in the check box to indicate payment type of the payment order for the expenditures. The payment types are either Prepayment of Post Payment. 7) Electronic Voucher # Enter the electronic voucher number(s) associated with the M 16 from AFMIS. There may more than one electronic voucher number if the M 16 has been modified. 8) Grant/Loan No./Name Enter information identifying the purpose of the payment order which may include information related to specific grant and number, loan number information or name of the payment. 9) Commit/Oblig. # If commitments have been issued for the expenditures in this form, insert the commitment number in this field. Only development expenditures will have a commitment number. 10) Type of Payment Mark x in the check box indicating the type of payment used to distribute funds. Use the following check boxes: Line of Credit (LC), Bank, or Direct. If the Bank payment type is chosen, please provide any special bank account number to deposit the funds. 11) Procurement Details Provide details related to the procurement of the goods and services related to the payment order. The procurement details should provide the following information: a. Quantity Total For each item enter the usual unit of measurement, such as kilogram, liter, each, and so on. b. Quantity Unit For each item enter the total number of units. c. Price Total If applicable, enter for each item the price per unit shown. d. Price Unit Enter the total price for each item. Usually this will be the figure under Total Quantity multiplied by the figure under Unit Price. 12) Description of Expenditures Provide details related to the purchase order associated with the expenditure. Refer to the M 3 form associated with the order for payment to reference the correct information including description of the purchase, the date and period and purchase order number. 13) Coding Block (Expenditure) Enter each section of the coding block to which the M 16 will make a payment and record an expenditure. a. Org. (4) Insert the four (4) digit Suborganization Code of the ministry. b. Project (6) Insert the six (6) digit Project Code. c. Program (5) Insert the five (5) digit Program Code. GoIRA Accounting Manual Page D 24

d. Fund (5) Insert the five (5) digit Fund Component. e. Location (4) Insert the four (4) digit District Code. f. Object (5) Insert the five (5) digit Object Code. 14) Category Code Enter the category code used by a grant to identify an expenditure. This field will be only be used by development projects and its format is based on the requirements of the grant. 15) Amount Enter the amount of each expenditure as referenced by the coding block. 16) Total (In Words) Sum the total amount of expenditures on the M 16 form and write out the amount in this field. 17) Total (In Figures) Sum the total amount of expenditures on the M 16 form and insert the amount in numbers in this field. 18) Payment Details a. Total Amount of Invoice Enter the gross amount of the invoice prior to deductions. The amount is equal to the value in Total (In Words). No object code or bank account number is required for this field. b. Less Company Tax Enter the amount of company taxes to deduct from the payment amount for this M 16. This deduction will apply to payments to vendors and other service providers. Insert the revenue object code appropriate for the type of tax which is being deducted and insert the bank account number to which these funds will be transferred. c. Less Individual Tax Enter the amount of individual income taxes to deduct from the payment amount for this M 16. This deduction will apply to salary payments. Insert the revenue object code appropriate for the type of tax which is being deducted and insert the bank account number to which these funds will be transferred. d. Less Taminat Enter the amount of Taminat to deduct from the payment for this M 16. The Taminat may be required for large projects and consists of security payments to be kept in a special trust account as designated by the Ministry of Finance. The amount may be up to 10% of the project value.. The asset object code 42104 Taminat will be pre populated. Insert the bank account number to which these funds will be transferred. e. Less Returned Amount (Operating Only) Enter the amount of any funds that should be returned to the Ministry to overpayments and/or other payment errors. The asset object code 41212 Return of Salary and Expenses will be pre populated. Insert the account number to which these funds will be transferred. f. Less Other Deductions Enter the amount of any other deductions required not specified above. The liability object code 41210 Other Deductions will be pre populated in the first row. Two additional rows have been provided without an object code. Insert the bank account number to which these funds will be transferred. 19) Object See 17 above. 20) Acct No. See 17 above. 21) Amount See 17 above. 22) Net Amount (In Words) Calculate the total amount of the M 16 by subtracting the deductions from the Total Invoice Amount. Write out this amount in words and enter in this Field. 23) Net Amount (In Figures) Calculate the total amount of the M 16 by subtracting the deductions from the Total Invoice Amount. Enter this amount in this Field. 24) Beneficiary Information For all payment types provide the following beneficiary information: a. Beneficiary Name Enter the name of the person, firm or organization to be paid. GoIRA Accounting Manual Page D 25

b. Tax Identification No. Enter the tax identification number of the person, firm or organization to be paid. c. AFMIS Vendor ID Insert the AFMIS vendor ID of the person, firm or organization to be paid. 25) Beneficiary Banking Information If the payment consists of a transfer of funds to a bank account or is a letter of credit please provide the following information: a. Beneficiary Bank Account Name Enter the name of the bank account where payments will be made to the beneficiary. b. Beneficiary Account No. Enter the bank account number where payments will be made to the beneficiary. c. Invoice No./Identification No. Enter the invoice number provided by the vendor/person requesting payment. d. Bank Name Enter the name of the bank where the payment will be deposited. e. Bank Address Enter the address of the bank where the payment will be deposited. f. IBAN No. If the payment is to be made in Euros or other foreign currencies, enter the International Bank Account Number of the bank. g. Bank Swift Code Enter the Swift Code of the bank. This is a bank s unique identifier of Bank Identification Code (BIC). h. Correspondent Bank Name Enter the name of the correspondent bank that will process the payment on behalf of the beneficiary s bank. i. Correspondent Bank Address Enter the address of the correspondent bank that will process the payment on behalf of the beneficiary s bank. j. Correspondent Bank Account No. Enter the bank account number of the correspondent bank that will process the payment on behalf of the beneficiary s bank. k. Correspondent Bank Swift Code Enter the bank swift code of the correspondent bank that will process the payment on behalf of the beneficiary s bank. 26) Details of Grant/Credit and Contract In this section provide additional details of project related information. This information will not be required for operating expenditures. a. Contract Ref. No. Enter the reference number of the contract that applies to the project code. b. Procurement Type Enter the procurement type used to procure the project. c. Post/Prior Review Indicate whether the current review of the M 16 is either a prior review or post review of expenditures. d. Contract Amount Enter the full contract amount. This is not the same as the Total Payment Amount. e. Currency Enter the currency in which the project contract is to be paid. f. GRN Report No. Enter the serial number of the M 7 Form Goods Received Notice validating that the goods purchased were received in good condition. g. No Objection Date Enter the date of GRN Report No. which certifies that there is no objection to payment of the invoice. Section B: Review and Authorization 27) Accounting Manager This space is provided to the accounting manager at the Ministry to sign and date in order to approve the M 16 Form. GoIRA Accounting Manual Page D 26

28) Payment Manager This space is provided to the Payment Manager at the Treasury to sign and date in order to approve the M 16 Form. 29) Finance Manager This space is provided to the Finance Manager at the Treasury to sign and date in order to approve the M 16 Form. 30) Authorizing Authority This space is provided to the Authorizing Authority at the Treasury to sign and date in order to approve the M 16 Form. The Authorizing Authority will vary depending on the size of the order for payment as follows: Senior General Manager in salary up to 2 million AFN and other expenditure up to 1 million AFN Payment Director in salary up to 5 million AFN and in expenditure up to 3 million AFN Director General in salary unlimited and in expenditure up to 10 million AFN Deputy Minister of Finance same authorization of Director General Minister of Finance unlimited authorization 31) Stamp of Directorate This space is provided to place the Treasury stamp for final approval. Section C: (This Section shall be filled by Financial Controller) 32) Financial Controller This space is provided for the Financial Controller to sign and date the form for their approval. 33) Remarks This space is provided for the Financial Controller to provide additional remarks and comments. AFMIS Transactions Expenditures reported in Field 15 Amount should be debited in the AFMIS Expenditure Module in the account recorded in Field 13 Coding Block. Deductions reported in Field 21 Amount should be credited in the AFMIS Revenue Module in the account recorded in Field 19 Object Code. Distribution: Original Treasury/Mustofiat Copy Payment Office GoIRA Accounting Manual Page D 27

M 20 Allotment/Suballotment Control Ledger Ministry of Finance - Treasury Department Form M-20 Allotment/Suballotment Control Ledger 1. Ministry/Org. 2. Fiscal Year 3. Coding Block (Allotment #2 or Financial Budgeting (Suballotment)) Org. (4) Project (6) Program (3) Fund (5) Location (2) Object (3) Transaction Details Transaction Amounts 4. Document Ref. No. 5. Commit. Doc. No. 6. Description 7. Post 8. Advance Payment (-) Payment (-) 9. Acquittal 10. Commit. Incurred (-) 11. Commit. Liqu. (+) 12. Refund (+) 13. Allotment (+) 14. Suballot. (+/-) 15. Balance GoIRA Accounting Manual Page D 28

M 20 Instructions Purpose: To record commitments, post and advance payments, acquittals and refunds within available funds of an allotment or suballotment to track the allotment balance available for expenditures Maintain the ledger as follows: 1) Ministry/Org. Enter the name of the organization/ministry to which the Ledger of Expenditures by Allotment applies. 2) Fiscal Year Enter the fiscal year in which the allotment and expenditures are tracked. 3) Coding Block (Allotment #2 or Financial Budgeting (Suballotment)) Enter each section of the allotment or suballotment coding block to which the expenditures will be recorded. a. Org. (4) Insert the four (4) digit Suborganization Code of the ministry. b. Project (6) Insert the six (6) digit Project Code. c. Program (3) Insert the three (3) digit Program Code. d. Fund (5) Insert the five (5) digit Fund Component. e. Location (2) Insert the two (2) digit Province Code. (Leave blank for allotments.) f. Object (3) Insert the three (3) digit Object Code. 4) Document Ref. No. Enter the document type and serial number from which a transaction is recorded (i.e. M 3,M 16,M 12,M 10 etc.) 5) Commit. Doc. No. If applicable, enter the document type and serial number of the original commitment document that either a post payment or advance payment is liquidating. 6) Description Enter a description which will identify the item posted. For example in posting a Meezon Payroll, the description would be payroll Meezan. When posting a purchase order of order for payment, write the name of the supplier. 7) Post Payment ( ) Enter the amount paid after receipt of goods or services. This is a minus column and the amount posted in this column is subtracted from the Field 15 Balance. 8) Advance Payment ( ) Enter the amount paid in advance of the receipt of goods or services. This is a minus column and the amount posted in this column is subtracted from the Field 15 Balance. 9) Acquittal Enter the amount of a prepayment that has been acquitted. Amounts posted in this column do not affect the uncommitted balance. 10) Commit. Incurred ( ) Enter the approved amount of the commitment document. This is a minus column the amount posted in this column is subtracted from Field 15 Balance. 11) Commit. Liquidated (+) Enter amount of previously recorded commitments which are being liquidated (paid). This is a plus column the amount posted in this column is added to Field 15 Balance. 12) Refund (+) Enter the amount received from vendors as a result of returning goods or recovering overpayments. This is a plus column. The amount in this column is added to Field 15 Balance. 13) Allotment (+) Enter the amount of allotment received. This is a plus column. The amount posted here is added to Field 15 Balance. 14) Suballot. ( ) Enter the amount of suballotment issued to a line directorate from this allotment. The amount posted here is subtracted from Field 15 Balance. 15) Balance This column is used to show the running balance available for commitment. The amount in this column is brought forward and adjusted after each entry. AFMIS Transactions: None GoIRA Accounting Manual Page D 29

Distribution: Original Bookkeeping Office GoIRA Accounting Manual Page D 30

M 22 Preliminary Monthly Status of Allotment Report Ministry of Finance - Treasury Department Form M-22 Preliminary Monthly Status of Allotment Report Section A: (This Section to be filled out by Payment Office) 1. Ministry/Org. 2. Location Name and Code 3. Report Period Month Year 4. Coding Block (Allotment #2 or Financial Budgeting (Suballotment)) Org. (4) Project (6) Program (3) Fund (5) Object (3) 5. Post Payments 6. Advance Payments 7. Acquittals 8. Commitments Incurred Liquidated 9. Refunds 10. Allotments 11. Balance Section B: Review and Authorization Certification Match: I hereby, certify that the items of this report are matched with M-20. 12. Bookkeeping Manager (Sign & Date) 13. Authorizing Authority (Sign & Date) GoIRA Accounting Manual Page D 31

M 22 Instructions Purpose: To report the monthly status of budget unit allotments and expenditures Prepare an original and one (1) copy as follows: Section A: (This Section to be filled out by Payment Office) 1) Ministry/Org. Enter the name of the organization/ministry to which the allotment report applies. 2) Location Name and Code Insert name and location code of the budget unit 3) Report Period Insert the month and year for which allotment report is being prepared. 4) Coding Block (Allotment #2 or Financial Budget (Suballotment)) Enter each section of the Allotment #2 coding block to which the expenditures and commitments will be recorded. a. Org. (4) Insert the four (4) digit Suborganization Code of the ministry. b. Project (6) Insert the six (6) digit Project Code. c. Program (3) Insert the three (3) digit Program Code. d. Fund (5) Insert the five (5) digit Fund Component. e. Object (3) Insert the three (3) digit Object Code. 5) Post Payments Enter the totals for the post payment amount as recorded in the Allotment Control Ledger (M 20) for each allotment expenditure account. 6) Advance Payments Enter the totals for the pre payment amount as recorded in the Allotment Control Ledger (M 20) for each allotment expenditure account. 7) Acquittals Enter the totals for the payment applied as recorded in the Allotment Control Ledger (M 20) for each allotment expenditure account. 8) Commitments Enter both obligation and liquidation information in this Field. a. Incurred Enter the commitments/obligations incurred as recorded in the Allotment Control Ledger (M 20) for each allotment expenditure account. b. Liquidated Enter the amount of the obligation that has been liquidated as recorded in the Allotment Control Ledger (M 20) for each allotment expenditure account. 9) Refunds Enter the totals for any refunds of expenditures as recorded in Allotment Control Ledger (M 20) for each allotment expenditure account. 10) Allotments Enter the totals for allotments as recorded in Allotment Control Ledger (M 20) for each allotment expenditure account. 11) Balance Enter the totals for balance as recorded in the Allotment Control Ledger (M 20) for each allotment expenditure account. Section B: Review and Authorization Certification Match Each reviewer of the Monthly Status of Allotment Report will certify that the information is correct and matches the Allotment/Suballotment Control Ledger (M 20). 12) Bookkeeping Manager (Sign & Date) This spaced is provided for the Payment Manager to sign and date to certify that the information in the report matches the Allotment Control Ledger (M 20). 13) Authorizing Authority (Sign & Date) This spaced is for the authorizing authority in the ministry/organization to sign and date to certify that the information in the report matches the Allotment Control Ledger (M 20). AFMIS Transactions: GoIRA Accounting Manual Page D 32

None Distribution: Original Bookkeeping Office/Mustofiat Copy Bookkeeping Office of Primary Budget Unit GoIRA Accounting Manual Page D 33

M 22 Consolidated Monthly Status of Allotment Report by Primary Budget Unit Ministry of Finance - Treasury Department Form M-22 Consolidated Monthly Status of Allotment Report by Primary Budget Unit Section A: (This Section to be filled out by Payment Office) 1. Ministry/Org. 2. Report Period Month Year 3. Coding Block (Allotment #2) Org. (4) Project (6) Program (3) Fund (5) Object (3) 4. Post Payments 5. Advance Payments 6. Acquittals 7. Commitments Incurred Liquidated 8. Refunds 9. Allotments 10. Balance Section B: Review and Authorization Certification Match: I hereby, certify that the items of this report are matched with M-20. 12. Bookkeeping Manager (Sign & Date) 13. Authorizing Authority (Sign & Date) GoIRA Accounting Manual Page D 34

M 22 Instructions Purpose: To report the monthly status of budget unit allotments and expenditures consolidated for a complete primary budget unit. The information in this report consists of all the Preliminary M 22 Reports completed by the line ministry and its line directorates. Prepare an original and one (1) copy as follows: Section A: (This Section to be filled out by Bookkeeping Office) 1) Ministry/Org. Enter the name of the organization/ministry to which the allotment report applies. 2) Report Period Insert the month and year for which allotment report is being prepared. 3) Coding Block (Allotment #2) Enter each section of the Allotment #2 coding block to which the expenditures and commitments will be recorded. a. Org. (4) Insert the four (4) digit Suborganization Code of the ministry. b. Project (6) Insert the six (6) digit Project Code. c. Program (3) Insert the three (3) digit Program Code. d. Fund (5) Insert the five (5) digit Fund Component. e. Object (3) Insert the three (3) digit Object Code. 4) Post Payments Enter the sum of all post paymentsfrom the M 22 worksheet.this includes all the M 22 Preliminary Reports for the primary budget unit in an allotment. 5) Advance Payments Enter the sum of all post payments advance payment from the M 22 worksheet. This includes all the M 22 Preliminary Reports for the primary budget unit in an allotment. 6) Acquittals Enter the sum of all acquittals from the M 22 worksheet. This includes all the M 22 Preliminary Reports for the primary budget unit in an allotment. 7) Commitments Enter both obligation and liquidation information in this Field. a. Incurred Enter the sum of all commitments incurred from the M 22 worksheet. This includes all the M 22 Preliminary Reports for the primary budget unit in an allotment. b. Liquidated Enter the sum of all commitments liquidated from the M 22 worksheet. This includes all the M 22 Preliminary Reports for the primary budget unit in an allotment. 8) Refunds Enter the sum of all refunds from the M 22 worksheet. This includes all the M 22 Preliminary Reports for the primary budget unit in an allotment. 9) Allotments Enter the sum of all allotments from the M 22 worksheet. This includes all the M 22 Preliminary Reports for the primary budget unit in an allotment. 10) Balance Enter the sum of all balances from the M 22 worksheet. This includes all the M 22 Preliminary Reports for the primary budget unit in an allotment. Section B: Review and Authorization Certification Match Each reviewer of the Monthly Status of Allotment Report will certify that the information is correct and matches the Allotment/Suballotment Control Ledger (M 20). 11) Bookkeeping Manager (Sign & Date) This spaced is provided for the Payment Manager to sign and date to certify that the information in the report matches the Allotment Control Ledger (M 20). 12) Authorizing Authority (Sign & Date) This spaced is for the authorizing authority in the ministry/organization to sign and date to certify that the information in the report matches the Allotment Control Ledger (M 20). AFMIS Transactions: GoIRA Accounting Manual Page D 35

None Distribution: Original Treasury Copy Bookkeeping Office GoIRA Accounting Manual Page D 36

M 22 Consolidated Monthly Status of Allotment Report by Province Ministry of Finance - Treasury Department Form M-22 Consolidated Monthly Status of Allotment Report by Province Section A: (This Section to be filled out by Payment Office) 1. Mustofiat Name 2. Location Name and Code 3. Report Period Month Year 4. Coding Block Org. (4) Project (6) Program (3) Fund (5) Object (3) 5. Post Payments 6. Advance Payments 7. Acquittals 8. Commitments Incurred Liquidated 9. Refunds 10. Allotments 11. Balance Section B: Review and Authorization Certification Match: I hereby, certify that the items of this report are matched with M-20. 12. Bookkeepoing Manager (Sign & Date) 13. Authorizing Authority (Sign & Date) GoIRA Accounting Manual Page D 37

M 22 Instructions Purpose: To report the monthly status of allotments and expenditures consolidated by province. Each report will include all the information from the Preliminary M 22 Reports prepared for each line directorate. Prepare an original and one (1) copy as follows: Section A: (This Section to be filled out by Payment Office) 1) Mustofiat Name Enter the name of Mustofiat that is preparing the report.. 2) Location Name and Code Insert province name and location code of the Mustofiat. 3) Report Period Insert the month and year for which allotment report is being prepared. 4) Coding Block Enter each section of the allotment coding block to which the expenditures and commitments will be recorded. a. Org. (4) Insert the four (4) digit Suborganization Code of the ministry. b. Project (6) Insert the six (6) digit Project Code. c. Program (3) Insert the three (3) digit Program Code. d. Fund (5) Insert the five (5) digit Fund Component. e. Object (3) Insert the three (3) digit Object Code. 5) Post Payments Enter the amount of the post payment recorded in the relevant Preliminary M 22 report in the province. 6) Advance Payments Enter the amount of the advance payment recorded in the relevant Preliminary M 22 report in the province. 7) Acquittals Enter the amount of the acquittal recorded in the relevant Preliminary M 22 report in the province. 8) Commitments Enter both commitment and liquidation information in this Field. a. Incurred Enter the amount of the commitment incurred recorded in the relevant Preliminary M 22 report in the province. b. Liquidated Enter the amount of the commitment liquidated recorded in the relevant Preliminary M 22 report in the province. 9) Refunds Enter the amount of the refund recorded in the relevant Preliminary M 22 report in the province. 10) Allotments Enter the amount of the allotment recorded in the relevant Preliminary M 22 report in the province. 11) Balance Enter the amount of the balance recorded in the relevant Preliminary M 22 report in the province. Section B: Review and Authorization Certification Match Each reviewer of the Monthly Status of Allotment Report will certify that the information is correct and matches the Allotment/Suballotment Control Ledger (M 20). 12) Bookkeeping Manager (Sign & Date) This spaced is provided for the Payment Manager to sign and date to certify that the information in the report matches the Allotment Control Ledger (M 20). 13) Authorizing Authority (Sign & Date) This spaced is for the authorizing authority in the ministry/organization to sign and date to certify that the information in the report matches the Allotment Control Ledger (M 20). AFMIS Transactions: None GoIRA Accounting Manual Page D 38

Distribution: Original Treasury Copy Mustofiat GoIRA Accounting Manual Page D 39

M 25 Miscellaneous Revenue Collection Ministry of Finance - Treasury Department Form M-25 - Miscellaneous Revenue Collection Section A: (This Section to be filled out by Revenue Collection Office) 1. Mis c. Revenue Collection 2. Ministry/Org. 3. Issue Date Form No 4. Revenue Collection Office 5. Attached Documents 6. Deposit Made By 7. Collection Officer Name 8. Description of Revenue 9. Amount 11. Total 10. Total (In Words) (In Figures) Accounting Columns 12. Coding Block (Revenue) 13. 14. Bank Deposit Slip Org. (4) Project (6) Program (3) Fund (5) Location (4) Object (5) Amount No. Date Section B: Review and Authorization 15. Authorizing Authority (Sign & Date) 16. Remarks Section C: (This Section to be filled out by Financial Controller) 17. Financial Controller (Sign & Date) 18. Remarks GoIRA Accounting Manual Page D 40

M 25 Instructions Purpose: Instructions provided to taxpayers enabling them to deposit funds in official bank accounts Prepare an original and one (1) copy as follows: Section A: (This Section to be filled out by Revenue Collection Office) 1) Misc. Revenue Collection No. Enter the serial number for the Miscellaneous Revenue Collection Form. The numbers should be consecutively increased, beginning with 1 prefixed by the ministry symbol. 2) Ministry/Org. Enter the name of the organization/ministry to which the Miscellaneous Revenue Collection Form applies. 3) Issue Date Enter the date the Form is issued. 4) Revenue Collection Office Enter the name of the office within the line directorate responsible for collection of receipts. 5) Attached Documents List any attached documentation with the Form. 6) Deposit Made By Enter the name of the individual who made the revenue deposit into the provincial bank. 7) Collection Officer Name Enter the name of the Collection Officer responsible for collecting this revenue. 8) Description of Revenue Enter a description of the revenue source in the Form. 9) Amount Enter the amount of the revenue reported in the Form. 10) Total (In Words) Sum the amount of each revenue item and enter the amount in words. 11) Total (In Figures) Sum the amount of each revenue item and enter the amount in figures. 12) Coding Block (Revenue) Enter each Revenue Object Code that applies to a given Bank Deposit Slip. a. Org. (4) Insert the four (4) digit Suborganization Code of the ministry. b. Project (6) Insert the six (6) digit Project Code. c. Program (3) Insert the three (3) digit Program Code. d. Fund (5) Insert the five (5) digit Fund Component. e. Location (4) Insert the four (4) digit District Code. f. Object (5) Insert the five (5) digit Revenue Object Code. 13) Amount Enter the amount of the Bank Deposit Slip for the coding block. 14) Bank Deposit Slip Enter information related to the Bank Deposit Slip. a. No. Enter the Bank Deposit Slip number. b. Date Enter the date of the Bank Deposit Slip. Section B: Review and Authorization 15) Authorizing Authority (Sign & Date) This space is provided for the Authorizing Authority at the Collection Office to sign and date to approve the Form. 16) Remarks This space is provided for the Authorizing Authority at the Collection Office to provide additional remarks and comments Section C: (This Section to be filled out by Financial Controller) 17) Financial Controller (Sign & Date) This space is provided for the Financial Controller to sign and date the form for their approval. 18) Remarks This space is provided for the Financial Controller to provide additional remarks and comments. GoIRA Accounting Manual Page D 41

AFMIS Transactions: None Distribution: Original Revenue Collection Office Copy Taxpayer GoIRA Accounting Manual Page D 42

M 26 Revenue Deposit Form Ministry of Finance - Treasury Department M-26 - Revenue Deposit Voucher This Section shall be filled out by Revenue Collection Office 1. Serial No. 2. Ministry/Org 3. Issue Date 4. M-25 Ref No. 5. Tax Payer Name 6. Tax Payer's Father Name 7. Bank Account No. 8. Description of Revenue 9. Amount 11. Total in 10. Total in Words Figures Relevant DAB Branch is requested to receive the metioned amount of revenue from the tax payer and provide a copy of the Bank Deposit Slip officialy to the stated government administrtion. With Regards This Section shall be filled out by Manager of Revenue Collection Office 12. Revenue Collection Manager (Date & Sign) 13. Remarks GoIRA Accounting Manual Page D 43

M 26 Instructions Purpose: Instructions provided to taxpayers enabling them to deposit funds in official bank accounts Prepare an original and one (1) copy as follows: Section A: This Section Shall be Filled out by Revenue Collection Office: 1) Serial No. Enter the serial number for the Miscellaneous Revenue Collection Form. The numbers should be consecutively increased, beginning with 1 prefixed by the ministry symbol. 2) Ministry/Org. Enter the name of the organization/ministry to which the Miscellaneous Revenue Collection Form applies. 3) Issue Date Enter the date the Form is issued. 4) M 25 Ref No.: Enter the number of M 25 form received from Payment office 5) Tax Payer Name: Enter Name of the Tax payer 6) Tax Payer s Father Name: Enter Father name of the tax payer 7) Bank Account No.: Enter Revenue Bank Account Number where the amount should be deposited 8) Description of Revenue: Enter the short description of the revenue received in account of. 9) Amount: Enter the amount of the Revenue to be received 10) Amount in Words: Enter the amount of total revenue in words 11) Amount in Figure: Enter the amount of total Revenue in Figures Section B: This Section Shall be Filled out by Revenue Collection Office: 12) Revenue Collection Manager (Sign & Date): Revenue Collection Manager confirm authenticity of the form by signing and date of this field. 13) Remarks: This field is used for adding any additional comments or details. AFMIS Transactions: None Distribution: Original DAB Branch GoIRA Accounting Manual Page D 44

M 27 Revenue Collection Voucher Ministry of Finance - Treasury Department Form M-27 Revenue Collection Voucher Section A: (This Section shall be filled by Revenue Collection Office) 1. Revenue Report No. 2. Revenue Collection Office Name 3. Issue Date 4. Collection Officer Name 6. Revenue Object Code (5) 7. Bank Slip No. 8. Date of Deposit Collection Details 9. Description 10. Amount 11. Total of Collection in Figures 12. Total Collection in Words Section B: Review and Authorization 13. Prepared by (Sign & Date) 14. Collection Manager (Sign & Date) 15. Authorizing Authority (Sign & Date Section C: (This Section shall be filled by Financial Controller) 16. Financial Controller (Sign & Date) 17. Remarks GoIRA Accounting Manual Page D 45

M 27 Instructions Purpose: Used as a revenue voucher to report revenue in the General Ledger. Prepare an original and one (1) copy as follows: Section A: (This Section to be filled out by Revenue Collection Office) 1) Revenue Report No. Enter the serial number for the Revenue Collection Voucher. The numbers should be consecutively increased, beginning with 1 prefixed by the ministry symbol. 2) Revenue Collection Office Name Enter the name of the office within the budget unit responsible for collection of receipts. 3) Issue Date Enter the date the voucher is issued. 4) Collection Officer Name Enter the name of the Collection Officer responsible for collecting this revenue. 5) Revenue Object Code (5) Insert the five (5) digit Revenue Object Code. 6) Bank Slip No. Enter information related to the Bank Deposit Slip. 7) Date of Deposit Enter the date of the Bank Deposit Slip. 8) Description Enter a description of the revenue collected. 9) Amount Enter the amount of revenue collected. 10) Total of Collection in Figures Sum the total amounts in Field 10 and insert the amount in figures. 11) Total Collection in Words Sum the total amounts in Field 10 and insert the amount in words. Section B: Review and Authorization 12) Prepared By (Sign & Date) This space is provided for the Collection Officer or another preparer of the voucher to sign and date to approve the voucher certifying that the information has been entered correctly. 13) Collection Manager (Sign & Date) This space is provided for Collection Office manager to sign and date verifying they reviewed the voucher document and the information is correct. 14) Authorizing Authority (Sign & Date) This space is provided for the Authorizing Authority at the Collection Office to sign and date approving the revenue voucher. Section C: (This Section to be filled out by Financial Controller) 15) Financial Controller (Sign & Date) This space is provided for the Financial Controller to sign and date the form for their approval. 16) Remarks This space is provided for the Financial Controller to provide additional remarks and comments. AFMIS Transactions: Revenue object codes in the expenditures module or cash sale function. Distribution: Original Revenue Collection Office Copy Treasury GoIRA Accounting Manual Page D 46

M 29 Monthly Revenue Collection Report Ministry of Finance - Treasury Department Form M-29 Revenue Collection Report Section A: (This Section shall be filled by Collection Office) 1. Ministry/Org. 2. Month 3. Year 4. Coding Block (Revenue) Project Program Org. (5) (6) (5) Fund (5) Location (5) Collection Details Object (5) 5. Current Month 6. Previous Months 7. Total Collections Section B: Review and Authorization 9. Prepared By (Sign & Date) 8. Total of Collections 10. Collection Manager (Sign & Date) 11. Authorizing Authority (Sign & Date) Section C: (This Section shall be filled by Financial Controller) 16. Financial Controller (Sign & Date) 17. Remarks GoIRA Accounting Manual Page D 47

M 29 Instructions Purpose: To record and consolidate collection of payment tara afa records in M 27 form Prepare an original and two (2) copies as follows: Section A Prepared by the Administrative Office of the Authorizing Ministry 1) Ministry/Org. Enter the name of the organization/ministry to which the Monthly Revenue Collection Report. 2) Month Enter the month for which the monthly revenue and collections are being reported. 3) Year Enter the year for which the monthly revenue and collections are being reported. 4) Coding Block (Revenue) Enter each section of the account code that applies. a. Org. (5) Enter the four (4) digit Organization Code of the suborganization. b. Project (6) Enter the six (6) digit Project Code. c. Program (5) Enter the five (5) digit Program Code. d. Fund (5) Enter the five (5) digit Fund Component. e. Location (4) Enter the four (4) digit District Code. f. Object (5) Enter the five (5) digit Object Code that best describes the revenue expense type. 5) Current Month Enter the revenue collected for the current month for the referenced coding block. 6) Previous Months Enter the revenue collected for months prior to the current month for the referenced coding block. 7) Total Collections Sum the total of Current Month and Previous Months revenue collection for the referenced coding block. 8) Total of Collections Sum each of the Total Collections for each referenced coding block. Section B: Review and Authorization 9) Revenue Collection Officer (Sign & Date) This space is provided to the Collection Manager to sign and date after completing the Form. 10) Reconciler (Sign& Date) This space is provided to the individual assigned to sign and date after reconciling the Form with the Tarafa documentation. 11) Authorizing Authority (Sign & Date) This space is provided to the Authorizing Authority of the budget unit to sign and date for approval. Section C: (This Section to be filled out by Financial Controller) 12) Financial Controller (Sign & Date) This space is provided for the Financial Controller to sign and date the form for their approval. 13) Remarks This space is provided for the Financial Controller to provide additional remarks and comments. AFMIS Transactions: Amounts reported in the Collection Detail section should be credited in the AFMIS Expenditure Module or Cash Sale Function in the account recorded in Field 4 Coding Block. Distribution: Original Revenue Collection Office Duplicate Revenue Directorate Triplicate Treasury GoIRA Accounting Manual Page D 48

M 30 Bank Ledger Ministry of Finance - Treasury Department Form M-30 Bank Ledger 1. Ministry/Org. 6. Date 2. Location Name & Code 3. Bank Account No. 4. Bank Name 5. Bank Reconciliation Period From: To: 7. Check Received 8. Check Paid Check No. Amount Check No. M16 No. Amount 9. Balance Expiration Date GoIRA Accounting Manual Page D 49

M 30 Instructions Purpose: To record bank transactions for Mustofiats bank accounts and track balances Maintain the ledger as follows: 1) Ministry/Org. Enter the name of the organization/ministry to which the ledger applies. 2) Location Name & Code Enter the location name and four (4) digit location code of the office where the bank account is managed. 3) Bank Account No. Enter the bank account number which the ledger is tracking. 4) Bank Name Enter the bank name of the account. 5) Bank Reconciliation Period Enter the period of time that the M 30 Bank Ledger is recording by adding a From date and To date. 6) Date 7) Checks Received Provide information related to checks received or electronic transfers received. a. Check No. Enter the check number or transaction code for electronic transfers. b. Amount Enter the amount of the check or electronic transfer. 8) Checks Paid a. Check No. Enter the check number or transaction code for electronic transfers. b. M 16 No. Enter the M 16 Form serial number which was used to process the check or electronic transfer. c. Amount Enter the amount of the check or electronic transfer. d. Expiration Date Enter the expiration of the check disbursed by Treasury. 9) Balance Maintain a running balance of the bank account. Each time a transaction or check is posted to the ledger update the balance either by debiting or crediting it by the amount of the Check Received or Check Paid. AFMIS Transactions: None Distribution: Original Bookkeeping Office/Mustofiat GoIRA Accounting Manual Page D 50

M 33 Journal Voucher Ministry of Finance - Treasury Department Form M-33 Journal Voucher Section A: (This Section shall be filled by Payment Office) 1. Journal Voucher No. 2. Doc Name & Ref No. 3. Original EV No. 4. Solar Year 5. Post Date 6. Coding Block Org. Program (6) Project (5) (5) Fund (5) 7. Amount Location (4) Object (5) Debit Credit 8. Total 9. Remarks Section B: Review and Authorization 10. Authorizing Authority (Sign & Date) 11. Authorizing Authority (Sign & Date) GoIRA Accounting Manual Page D 51

M 33 Instructions Purpose: To record accounting transactions not specifically provided for by other accounting records (adjustment). Prepare an original as follows: Section A: (This Section is to be filled by the Bookkeeping Office) 1) Journal Voucher No. Enter a Journal Voucher serial number beginning with 1 prefixed by the ministry number. 2) Doc Name & Ref No. Enter the serial number of the M 16 Form or M 29 Form from the original transaction this Journal Voucher will be modifying. 3) Original EV No. Enter the electronic voucher number of the original transaction this Journal Voucher will be modifying. 4) Fiscal Year Enter the fiscal year in which the original transaction occurred. 5) Post Date Enter the posting date of the Journal Voucher transaction. 6) Coding Block Enter each section of the expenditure coding block to which transactions in the Journal Voucher will apply. a. Org. (4) Insert the four (4) digit Suborganization Code of the ministry. b. Project (6) Insert the six (6) digit Project Code. c. Program (5) Insert the five (5) digit Program Code. d. Fund (5) Insert the five (5) digit Fund Component. e. Location (4) Insert the four (4) digit District Code. f. Object (5) Insert the five (5) digit Object Code. 7) Amount a. Debit Enter the debit amount of the transaction to be processed referenced by the coding block. b. Credit Enter the credit amount of the transaction to be processed referenced by the coding block. 8) Total Sum the total debits and credits for the referenced coding blocks. 9) Remarks Enter any additional comments describing the Journal Voucher transactions. Section B: Review and Authorization 10) Authorizing Authority (Sign & Date) This space is provided to the appropriate authorizing authority to sign and date in order to approve the Journal Voucher. AFMIS Transactions: The debits and credits should be posted in the appropriate AFMIS Module using the account recorded in Field 6 Coding Block. Distribution: Original Treasury GoIRA Accounting Manual Page D 52

15. Final Balance of Appropriatins 16. Allotments 17. Remaining Balance of Allotment M 38a Budget Control Ledger Ministry of Finance - Treasury Department Form M-38a Budget Control Ledger 1. Ministry/Org. 2. Fiscal Year 3. Coding Block (Allotment #1) Org. (2) Project (6) Program (3) Fund (1) Object (2) Transactions Details Transaction Amounts 12. Reserve Code 13. Supplemental Budget 4. Item No. 5. Post Date 6. Doc Ref. 8. Difference between Estimated & Actual Transfer 9. Internal Transfers 10. External Transfers 14. Mid Year Budget Review Increase Decrease Increase Decrease Increase Decrease Increase Decrease 7. Initial Appropriation 11. Total Appropriations GoIRA Accounting Manual Page D 53

M 38a Instructions Purpose: To record appropriations and allotments received from the Ministry of Finance. Maintain one copy as follows: 1) Ministry/Org. Enter the name of the line ministry/independent agency to which the Budget Control Ledger applies. 2) Fiscal Year Insert the fiscal year for which the budget transactions are being reported. 3) Coding Block (Allotment #1) For each item enter each section of the allotment #1 coding block that applies to Allotment Control Ledger. a. Org. (2) Insert the two (2) digit Organization Code. b. Project (6) Insert the six (6) digit Project Code. c. Program (3) Insert the three (3) digit Program Code. d. Fund (1) Insert the one (1) digit Fund Type. e. Object (2) Insert the two (2) digit Major Object Code. 4) Item No. Enter the item number of the budget transaction that is recorded in the ledger beginning with 1 for the first item, 2 for the second item, etc. 5) Post Date Enter the issue date of document being posted to the ledger. 6) Doc Ref. Enter the serial number of the document being posted to the ledger. 7) Initial Appropriation Enter the amount of the initial appropriation as per the approved budget and approved by the B 3 Form. 8) Difference between Estimated and Actual Transfers (Development Budget Only) Enter the difference in estimate transfer of funds from prior year B 27 forms and actual transfer of funds. This difference would not be recorded in the initial appropriation. a. Increase (+) Enter any transfers increasing the original appropriation amount. b. Decrease ( ) Enter any transfers decreasing the original appropriation amount 9) Internal Transfers Enter the amount of the internal transfer as per the B 23 Form. a. Increase (+) Enter any transfers increasing the original appropriation amount. b. Decrease ( ) Enter any transfers decreasing the original appropriation amount 10) External Transfers Enter the amount of the external transfer as per the B 23 Form. a. Increase (+) Enter any transfers increasing the original appropriation amount. b. Decrease ( ) Enter any transfers decreasing the original appropriation amount 11) Total Appropriations Calculate the Total Appropriation as the sum of Field 7 Initial Appropriations, Field 8 Difference between Estimated and Actual Transactions (Increase), Field 9 Internal Transfers (Increase), Field 10 External Transfers (Increase) less Field 8 Difference between Estimated and Actual Transactions (Decrease), Field 9 Internal Transfers (Decrease), Field 10 External Transfers (Decrease). 12) Reserve Code (Development Budget Only) Enter any transfer of funds from the reserve fund used to make foreign exchange transactions. 13) Supplemental Budget Enter any supplemental budget appropriations as per the B 3 Approved Budget Form. These funds are in addition to the original approved budget. 14) Mid Year Budget Review Enter the appropriation approved by Parliament at mid year after the approval of the B 3 Approved Budget form. a. Increase (+) Enter any increases in the original appropriation amount. GoIRA Accounting Manual Page D 54

b. Decrease ( ) Enter any decreases in the original appropriation amount 15) Final Balance of Appropriations Calculate the Final Balance of Appropriations as the sum of Field 11 Total Appropriations, Field 12 Reserve Code, Field 13 Supplemental Budget and Field 14 Mid Year Budget Review (Increase) less Field 14 Mid Year Budget Review (Decrease). 16) Allotments Enter any allotments as per the B 27 Form. 17) Remaining Balance of Allotments Calculate the Remaining Balance of Allotments by subtracting Field 16 Allotments from Field 15 Final Balance of Appropriations. AFMIS Transactions: None Distribution: Original: Bookkeeping Office GoIRA Accounting Manual Page D 55

M 38b Suballotment Control Ledger Ministry of Finance - Treasury Department Form M-38b Suballotment Control Ledger 1. Ministry/Org. 2. Fiscal Year 3. Coding Block (Allotment #2) Org. (4) Project (6) Program (3) Fund (5) Object (3) Transaction Details 4. Item No. 5. Post Date 6. Doc Ref. 7. Province Code (2) 8. Allotment Transaction Amounts 9. Suballotment Increase (+) Decrease (-) Increase (-) Decrease (+) 10. Remaining Balance of Suballotment GoIRA Accounting Manual Page D 56

M 38b Instructions Purpose: To record allotments received from the Ministry of Finance and record sub allotments issued to secondary budget units in the province. Maintain one copy as follows: 1) Ministry/Org. Enter the name of the line ministry/independent agency to which the Suballotment Control Ledger applies. 2) Fiscal Year Insert the fiscal year for which the budget transactions are being reported. 3) Coding Block (Allotment #2) For each item enter each section of the allotment #1 coding block that applies to Allotment Control Ledger. a. Org. (4) Insert the four (4) digit Suborganization Code. b. Project (6) Insert the six (6) digit Project Code. c. Program (3) Insert the three (3) digit Program Code. d. Fund (5) Insert the five (5) digit Fund Component. e. Object (2) Insert the three (3) digit Minor Object Code. 4) Item No. Enter the item number of the budget transaction that is recorded in the ledger beginning with 1 for the first item, 2 for the second item, etc. 5) Post Date Enter the issue date of document being posted to the ledger. 6) Doc Ref. Enter the serial number of the document being posted to the ledger. 7) Province Code Enter the two (2) digit province code of where the suballotment is applied. In the case of allotment transactions, the location code is 01. 8) Allotment Enter the allotment received from the Ministry of Finance after the approval of the B 27 Request for Allotment or B 23 Request for Budget Transfers forms. a. Increase (+) Enter allotment increases or transfers in b. Decrease ( ) Enter allotment decreases or transfers out 9) Suballotment Enter the suballotment given to the secondary budget unit after the approval the B 20 Request for Suballotment form. a. Increase Enter suballotment increases or transfers in b. Decrease Enter suballotment decreases or transfers out 10) Remaining Balance of Suballotment Enter the balance of the suballotment. The balance in this column is to be adjusted after each entry. The balance is adjusted by either increases or decreases in both Field 8 Allotment and Field 9 Suballotment. AFMIS Transactions: None Distribution: Original: Bookkeeping Office GoIRA Accounting Manual Page D 57

M 40 Payroll Ledger (Individual Pay and Deduction Report) Ministry of Finance - Treasury Department Form M-40 Payroll Ledger (Individual Pay and Deduction Report) Section A: (This Section shall be filled by Payroll Office) 1. Ministry/Orgr 2. Complete Name and Father Name 3. Job Title 4. APIN No. 5. Fiscal Year 6. Grade 7. Step 8. Earnings/Deductions a. b. c. d. e. f. g. h. other bonus Total Month a. b. c. d. e. f. g. h. other deductions Total Hamal Sawr Jawza Saratan Asad Sunbula Meezan Aqrab Qaws Jadi Dalwa Hoot 9. Total Payable Amount Remarks GoIRA Accounting Manual Page D 58

M 40 Instructions Purpose: This form provides the information for payroll preparation, and bears the record of payments to each employee during one year Prepare in duplicate as follows: Section A (Prepared by the Payroll Office) 1) Ministry/Org. Enter the name of the organization/ministry to which the employee is assigned. 2) Complete Name & Father Name Enter the full name of the employee and his/her father s name. 3) Job Title Enter the Job Title of the Employee. 4) APIN No. Enter the employee s Identification Number/Afghan Personnel Identification Number generated by CPS (Computerized Payroll system). 5) Fiscal Year Enter the Fiscal year of the Ledger. 6) Grade: Enter Grade of the Employee. 7) Step: Enter Step of the Employee if applicable. 8) Earning and Deductions: Enter the amount of Earning at the top and Deductions at the bottom row of against each employee name from (a h). Other Earning: Enter the amount of other earning not matching the fields from a h. Other Deductions: Enter the amount of other deductions not matching the field from a h. Total: Enter the total of Earning and Deductions row. Net Payable: Calculate the Net payment after deducting the Total of Deductions from earnings Remarks: Enter any comments about any employee which can not be expressed using any field. 9) Total: Enter the total amount of each Earning and Deductions at the bottom of each column. AFMIS Transactions: None Distribution: Original Payroll Office Duplicate Payment Office GoIRA Accounting Manual Page D 59

M 41 Payroll Section A: (This Section shall be filled by Payroll Office) 1. Payroll No. 2. Ministry/Org. 3. Department 4. Coding Block Program (5) Location (4) 5. Payroll Period Month Year 6. No. of Pages No. of page Total Page No 7. No. 8. APIN No. 9. Complete Nam & Father Name 10. Grading 11. Earnings/Deductions Grade a. b. c. d. e. f. g. other Earning Total Step a. b. c. d. e. f. g. Other Deduction Total 12. Net Payment 13. Employee Sign Account Number 14. Remarks 15. Total Section B: Review and Authorization 16. Prepared by (Sign & Date) 17. Certified by (Sign & Date) 18. Authorizing Authority (Sign & Date) Section C: (This Section shall be filled by Financial Controller) 19. Financial Controller (Sign & Date) 20. Remarks GoIRA Accounting Manual Page D 60

M 41 Instructions Purpose: This form provides the information for payroll preparation, and bears the record of payments to each employee during one year Prepare an original and one (1) copy as follows: Section A: (This Section shall be filled by Payroll Office) 1) Payroll No. Enter the serial number to create a Payroll No., beginning with 1 for the first Payroll Form, prefixed by the ministry symbol. 2) Ministry/Org. Enter the name of the organization/ministry to which the Payroll Form applies. 3) Department Name: Enter the name of the department. 4) Coding Block For each item enter each section of the coding block that applies to the Payroll Form. a. Program (5) Enter the five (5) digit Program Code. b. Location (4) Enter the four (4) digit District Code identifying the location of the payroll distribution. 5) Payroll Period Insert the month and year for which the allotments are being reported. 6) No. of Pages Enter the number of pages of the M 41 Form. Additional pages provide employee information that will not fit on the first page. 7) No. Enter the Serial Number of each employee. 8) APIN No. Enter the employee s Identification Number/Afghan Personnel Identification Number generated by CPS (Computerized Payroll system). 9) Complete Name & Father Name Enter the full name of the employee and his/her father s name. 10) Grading Enter the grade and Step if applicable of employee. 11) Earning and Deductions: Enter the total earning at the top and deductions in bottom row. 12) Net Payment: Enter amount of Net payment to be made to Employee. 13) Employee Sign & Bank Account No.: Enter the bank account number if salary is being transferred through bank account otherwise receive signature of employee after payment. 14) Remarks: Enter any comments about any employee. 15) Total: Enter the total amount of each Earning and Deductions at the bottom of each column. Section B: Review and Authorization 16) Prepared by: (Sign and Date) This space is provided to Preparer to sign and date verifying the information in the M 41 Payroll Form. 17) Certified By (Sign and Date) This space is provided to the person designated to certify the M 41 Payroll Form to sign and date. 18) Authorizing Authority (Sign & Date) This space is provided to the Authorizing Authority for final approval of the M 41 Payroll Form. Section B: (This section to be filled by Financial Controller) 19) Financial Controller (Sign & Date) This space is provided for the Financial Controller to sign and date the form for their approval. 20) Remarks This space is provided for the Financial Controller to provide additional remarks and comments. GoIRA Accounting Manual Page D 61

AFMIS Transactions: None Distribution: Original Treasury/Mustofiat Copy Payment Office GoIRA Accounting Manual Page D 62

M 50 Authorized Signatory Signature Sample Ministry of Finance - Treasury Department Form M-50 Authorized Signatory Signature Sample Section A: (This Section shall be filled out by the the Payment Office) 1. Ministry/Org. 2. Receiver 3. Issue Date 4. Name and Title of the Employee 5. Signature Samples 6. The employee whose signature sample is introduced in fields 4 and 5 is authorized to sign M-16 payments up to the following amounts: Salary Payment Limit Non- Salary Payment Limit 7. Ministry/Org. or Related Projects A. B. C. D. Section B: Review and Authorization 8. Authorizing Authority (Sign & Date) 9. Remarks GoIRA Accounting Manual Page D 63

M 50 Instructions Purpose: This form provides the information for the delegation of signature authority to an individual. Prepare an original and one (1) copy as follows: Section A: (This Section shall be filled by Payment Office) 1) Ministry/Org. Enter the name of the organization/ministry to which the M 50 Authorized Signatory Signature Sample Form applies. 2) Receiver Enter the receiver of Signature sample (i.e. payment Unit of Ministry of Finance Treasury department. 3) Issue Date Enter the date that the form is completed 4) Name and Title of the Employee Enter the full name and title of the employee whose signature is being authorized. 5) Signature Sample This space is provided for the authorizing authority to place their signature sample in the three separate boxes. 6) Signatory Limits Enter the ceiling amount of salary and non salary expenditures that the signatory will be authorized to approve on M 16 Forms. 7) Ministry /Org. or Related Projects Enter the name of the Organization or related project to which the signatory for which the signatory will be authorized to approve. Section B: (Review and Authorization) 8) Authorizing Authority (Sign & Date) This space is provided to the Authorizing Authority for final approval of the Authorized Signatory Signature Sample Form. 9) Remarks This space is provided for the Authorizing Authority to provide additional remarks and comments. AFMIS Transactions: None Distribution: Original Administrative Office Copy Treasury GoIRA Accounting Manual Page D 64

M 75 Request for Establishment or Update of Petty Cash Fund Ministry of Finance - Treasury Department Form M-75 - Request For Establishment or Update of Petty Cash Fund Section A: (This Section shall be filled by Treasury Advances Unit and Custodian) 1. Item No. 2.Ministry/Org. 3. Issue Date 4. Custodian Name & MOF ID 5. Purpose of the Form 6. Fund Limit New Update 7. Coding Block (Allotment #2) Org. (4) Project (6) Program (3) Fund (5) Object (3) 8. Alternative Custodian 9. Fiduciary Name 10. Physical Location 11. Purpose 12. Plan for Safeguarding Fund Section B: Review and Authorization 13. Custodian (Sign & Date) 14. Authorizing Authority (Sign & Date) 15. Reasons for Disapproval Section C: (This Section shall be filled by Financial Controller) 16. Financial Controller (Sign & Date) 16. Remarks GoIRA Accounting Manual Page D 65

M 75 Instructions Purpose: To setup or make changes to a petty cash fund. The Form, properly completed, provides the information Treasury needs to approve a line ministry s petty cash fund request. Prepare an original and one (1) copy as follows: Section A: (This section shall be filled out by Treasury and Custodian) 1) Item No. Number each good to be purchased, beginning with 1 for the first item, 2 for the second item, etc. 2) Ministry/Org. Enter the name of the Ministry/Organization where the petty cash fund is maintained. 3) Issue Date Enter the date the request form is completed. 4) Custodian Name & MOF ID Enter the name of Custodian and their Ministry of Finance identification number. This person will be responsible for managing the petty cash or cash book. 5) Purpose of the Form Indicate whether the Form is to be used for the establishment of a new petty cash fund or to make changes to an existing petty cash fund. 6) Fund Limit Enter the amount that is being requested as the ceiling of the petty cash fund. 7) Coding Block (Allotment #2) Enter each section of the Allotment coding block from which the petty cash fund advance will be applied. a) Org. (4) Insert the four (4) digit Suborganization Code of the ministry. b) Project (6) Insert the six (6) digit Project Code. c) Program Code (3) Insert the five (5) digit Program Code. d) Fund (5) Insert the five (5) digit Fund Component. e) Object (3) Insert the three (3) digit Object Code. 8) Alternative Custodian Enter the name and Ministry of Finance identification number of the person designated as the alternative Custodian in circumstances where the Custodian is unable to perform their duties. 9) Fiduciary Name Enter the name and Ministry of Finance identification number of the person who has been designated as the petty cash fund Fiduciary. 10) Physical Location Provide a brief description of where and how the cash in the petty cash fund will be stored. 11) Purpose Explain the business purpose of the petty cash fund and why it is necessary for the office/department to setup the fund. 12) Plan for Safeguarding Fund Provide a brief description of the plan the Custodian will use to keep the petty fund cash secure. Section B: (Review and Authorization) 13) Custodian (Sign & Date) This space is provided to the Custodian to sign and date in order to request the setup or changes to the petty cash fund. 14) Authorizing Authority(Sign & Date) This space is provided to the Authorizing Authority who will approved the setup or changes to the petty cash fund. 15) Reasons of Disapproval If the setup or changes to the petty cash fund is not approved, describe the reasons for disapproval by the Authorizing Authority. Section C: (This section shall be filled out by Financial Controller) GoIRA Accounting Manual Page D 66

16) Financial Controller (Sign & Date) This space is provided for the Financial Controller to sign and date after their review and approval. 17) Remarks This space is provided for the Financial Controller to provide additional remarks and comments. Distribution Original: Administrative Office Copy: Treasury/Mustofiat GoIRA Accounting Manual Page D 67

M 76 Cashbook Ministry of Finance - Treasury Department Form M-76 - Cash Book 1. Custodian Name 2. Name and Location Code 3. Coding Block (Allotment #2) Org. (4) Project (6) Program (5) Fund (5) Object (3) 4. Fund Limit Cash Control Register 5. Post Date 6. Doc Ref. 7. Object Code (5)8. Recipient 9. M-12 Acquittal 10. Description 11. Debit 12. Credit 13. Balance 11/28/2011 M-10: S3 22900 Jamil : Custodian Initial advance to setup petty cash fund 50,000 50,000 11/30/2011 M-2: S1 22701 Zabi Khetab Advance to purchase office supplies 5,000 45,000 12/15/2011 WSlip No. #2 22704 Hamid Ayer Advance to purchase group dinner 5,000 40,000 12/16/2011 Dslip No. #1 22701 Jamil : Custodian Return of Funds for purchase of office supplies 1,000 41,000 12/31/2011 M-10: S7 22900 Jamil : Custodian Replenishment of Funds 9,000 50,000 3/31/2011 M-29: S98 22999 Treasury Return of Remaining Petty Cash Funds 50,000 0 GoIRA Accounting Manual Page D 68

M 76 Instructions Purpose: This ledger will be maintained by the petty cash fund Custodian. Properly maintained, it will furnish the Custodian with record of cash payments and cash receipts, and thus will provide an up to date current cash balance. Maintain as follows: 1) Custodian Name Enter the name of the Custodian responsible for managing the petty cash or cash book. 2) Name and Location Code Enter the four (4) digit Location Code and name of the office where the petty cash fund has been setup. 3) Coding Block (Allotment #2) Enter each section of the coding block to which the cash book applies. a. Org. (4) Insert the four (4) digit Suborganization Code of the ministry. b. Project (6) Insert the six (6) digit Project Code. c. Program (3) Insert the three (3) digit Program Code. d. Fund (5) Insert the five (5) digit Fund Component. e. Object (3) Insert the three (3) digit Object Code. 4. Fund Limit Enter the petty amount for which the petty cash fund has been approved. 5. Post Date Enter the post date of the cash transaction. 6. Doc Ref. Enter the document name and reference number which records the petty cash transaction. 7. Object Code (5) Enter the five (5) digit Object Code describing the cash transaction. This includes the Object Code for Advances, Acquittals and Refunds. 8. Description Enter a brief description of the transaction and its purpose. 9. M 12 Acquittal Enter the serial number of the M 12 Form used to acquit an expense item. 10. Debit Enter the debit amount of the cash transaction. 11. Credit Enter the credit amount of the cash transaction. 12. Balance Maintain a running balance of the cash position of the petty cash or cash book. AFMIS Transactions: None Distribution: Original Custodian GoIRA Accounting Manual Page D 69

M 80 Suballotment Control Ledger Ministry of Finance - Treasury Department Form M-80 Suballotment Control Ledger 1. Ministry/Org. 2. Province Name 3. Coding Block (Financial Budget) 4. Page No. Org. (4) Project (6) Program (3) Fund (5) Location (2) Object (3) 5. Date 6. Ref. No. 7. Total Suballotment 8. Distribution of Suballotment Issued to the Provincial Center and Districts Center GoIRA Accounting Manual Page D 70

M 80 Instructions Purpose: To record the distribution of sub allotments made by line ministries to line directorates at provincial and district level. There is on M 80 Form for each line directorate that operations in a Province. Maintain the original as follows: 1) Ministry/Org. Enter the name of the organization/ministry to which the Suballotment Control Ledger applies. 2) Province Name Enter the name of the province for which the Suballotment Ledger applies. 3) Coding Block (Financial Budget) Enter each section of the allotment #2 coding block to which the Suballotment Control Ledger applies. a. Org. (4) Insert the four (4) digit Suborganization Code. b. Project (6) Insert the six (6) digit Project Code. c. Program (3) Insert the five (5) digit Program Code. d. Fund (5) Insert the five (5) digit Fund Component. e. Location (2) Insert the two (2) digit Province Code. f. Object (3) Insert the three (3) digit Minor Object Code. 4) Page No. Enter the page number of the M 80 Suballotment Control Ledger. Additional pages provide suballotments that will not fit on the first page. 5) Date Enter the date the suballotment was issued to the Line Directorate. 6) Ref. No. Enter the reference number of suballotment document. 7) Total Suballotment Enter the total suballotment amount received from the Line Ministry. 8) Distribution of Suballotment Issued to Districts Enter the name of each district in a separate column, and the amount sub allotted entered next to the name. Thus, each district represented will have its own suballotment amount and reference. The provincial center is already pre populated. AFMIS Transactions: None Distribution Original Mustofiat GoIRA Accounting Manual Page D 71

M 90 Unacquitted Advance Payments Register Ministry of Finance - Treasury Department M-90 Ledger - Unacquitted Advance Payments Register Section A: (This section shall be filled out Bookkeeping Office) 1. Ministry/Org 2. Budget Type Ordinary Development 3. Post Date 4. Description 5. Carried Over Balance 6. Previous Periods Balances 7. Current Period Balances 8. Total Receipt Acquitted Unacquitted Receipt Acquitted Unacquitted 9. Penalty ( ) % 10. Final Unapplied Balance GoIRA Accounting Manual Page D 72

M 90 Instructions Purpose: This ledger is to be used in maintaining records of unacquitted prepayments from the previous fiscal year for all types of advances given to budget units. Prepare an original and one (1) copy as follows: Section A: (This Section shall be filled out by Bookkeeping Office) 1) Ministry/Org. Enter the name of the organization/ministry to which the Advances Remaining on Bonded Trustee register applies. 2) Budget Type Indicate whether M 90 Ledger applies to the Operating or Development Budget by marking the appropriate box with an X. 3) Post Date Enter the date the carry over balance was posted to the M 90 Ledger from the M 20 Ledger. 4) Description Provide a brief description of the reason the advance was not acquitted and needed to be carried over. 5) Carried Over Balance Enter the amount of the carry over balance. 6) Previous Period Balances This space is used to record advances that have not been acquitted for any periods prior to the period that just ended (e.g. for the year ending 1389, record unacquitted advance for 1388 and prior years.). a) Receipt Enter the full amount of the advance received. b) Acquitted Enter the amount of the advance that has been acquitted. c) Unacquitted Enter the amount of the advance that has not been acquitted. 7) Current Period Balances This space is used to record advances that have not been acquitted for the period that just ended a) Receipt Enter the full amount of the advance received. b) Acquitted Enter the amount of the advance that has been acquitted. c) Unacquitted Enter the amount of the advance that has not been acquitted. 8) Total Enter the total amount of unacquitted advances. This is the sum of Fields 6 and 7. 9) Penalty ( ) %Enter the penalty amount to be applied to the unacquitted advances. The amount is calculated as the penalty % in Field 9 multiplied by the Field 8. 10) Final Unapplied Balance Enter the sum of Field 8 and Field 9. AFMIS Transactions: None Distribution Original Bookkeeping Office Copy Treasury GoIRA Accounting Manual Page D 73

23. Total Balance M 91 Qatia Report Ministry of Finance - Treasury Department Form M-91 Qatia Report 1. Ministry/Org. 2. Issue Date 3. Report Duration (Month-Year) 4. Name of Preparer From: To: 11. Reserve Code 12. Supplemental Budget 17. Advance Payments 18. Advance Payments Acquitted 19. Balance Due of Advance Payments 20. Total Expenditure 21. Balance of Allotments 22. Balance of Appropriations 5. Coding Block (Major Object) 7. Difference between Estimated & Actual Transfer 8. Internal Transfers 9. External Transfers Appropriations Allotments and Expenditures Balances 13. Mid Year Budget Review 6. Initial Appropriation 10. Total Appropriations 14. Final Balance of Appropriations 15. Allotments 16. Post Payments Major Code Code Description Increase Decrease Increase Decrease Increase Decrease Increase Decrease 21 Wages and Salaries 22 Goods and Services 23 Interest & Repayment of Loans 24 Subsidies, Grants & Social Benefits 25 Acquisition of Assets GoIRA Accounting Manual Page D 74

M 91 Instructions Purpose: To present a complete and final reporting on the transactions of a ministry/independent agency. The report includes appropriations, prime allotments, all payments, commitments, and remaining unspent balances Prepare an original and one (1) copy as follows: 1) Ministry/Org. Enter the name of the line ministry/independent agency to which the Qatia applies. 2) Issue Date Enter the date the report is completed. 3) Report Duration (Month Year) Enter the duration (start & end) of year and month of the Final Accounting Report Form. 4) Name of Preparer Enter the name of the individual who prepared the Final Accounting Report. 5) Coding Block(Major Object) Enter two (2) digit object code blocks will be pre populated data for the Final Accounting Report. 6) Initial Appropriation Enter the appropriation given to the line ministry/independent agency at the beginning of the year. 7) Difference between Estimated and Actual Transfers(Development Budget Only) a. Increases Enter the total increases of the differences between estimated transfer of funds from prior allotments and actual transfers. b. Decreases Enter the decreases of the differences between estimated transfer of funds from prior allotments and actual transfers 8) Internal Transfers a. Increases Enter the total increases in internal transfers of funds between appropriations of the line ministry/independent agency. b. Decreases Enter the total decreases in internal transfers of funds between appropriations of the line ministry/independent agency. 9) External Transfers a. Increases Enter the total appropriations received from other line ministries/independent agencies. b. Decreases Enter the total appropriations transferred to other line ministries/independent agencies. 10) Total Appropriations Calculate total appropriations as the sum of Field 6 Initial Appropriation, Field 7 Difference between Estimated and Actual Transfers, and Field 8 Internal Transfers, and Field 9 External Transfers. 11) Reserve Code (Development Budget Only) Enter any funds that were transferred to the line ministry/independent agency from the reserve funds used to make foreign exchange disbursements. 12) Supplemental Budget Enter any additional appropriations received from supplemental budgets enacted by Parliament. 13) Mid Year Budget Review a. Increases Enter the total of any increases in appropriations as a result of the mid year budget review. b. Decreases Enter the total of any decreases in appropriations as a result of the mid year budget review. GoIRA Accounting Manual Page D 75

14) Final Balance of Appropriations Calculate the Final Balance of Appropriations as the sum of Field 10 Total Appropriation, Field 11 Reserve Code, and Field 12 Supplemental Budget, and Field 13 Mid Year Budget Review. 15) Allotments Enter the amount of allotments received by the line ministry/independent agency. 16) Post Payments Enter total value post payments made by the line ministry/independent agency. 17) Advance Payments Enter the total value advance payments made by the line ministry/independent agency. 18) Advance Payment Acquittals Enter the total value of prepayments that were acquitted. 19) Balance Due of Advance Payments Calculate the Balance of Due Advance Payments by subtracting Field 18 Advance Payment Acquittals from the Field 17 Advance Payments. 20) Total Expenditures Calculate total expenditures by line ministry/independent agency as the sum of Field 16 Post Payments and Field 18 Advance Payment Acquittals. 21) Balance of Allotments Calculate Balance of Allotments by subtracting Field 20 Total Expenditures from Field 15 Allotments. 22) Balance of Appropriations Calculate Balance from Appropriations by subtracting Field 15 Allotments from Field 14 Final Balance of Appropriations. 23) General Balance Calculate the General Balance as the sum of Field 21 Balance of Allotments and Field 22 Balance from Appropriations. AFMIS Transactions: None Distribution: Original Bookkeeping Office Copy Treasury GoIRA Accounting Manual Page D 76

T 8 Bank Reconciliation Statement Ministry of Finance - Treasury Department Form T- 8 - Bank Reconciliation Statement Section A: (This Section shall be filled by Accounting Office) 1. Budget Unit 2. Bank Name 3. Bank Account No. 4. Month 5. Year 6. Bank Unit Records a. Opening Bank Balance Amount b. Total Receipts c. Total Withdrawals d. Closing Bank Balance 7. Deduct: Unpres ented Checks Date Check No. Issued To Amount 8. Total Unpresented Checks 9. Subtotal (Closing Bank Balance - Total Unpresented Checks) 10. Add/Deduct: Entries Not in Bookkeeping Entry No. Entry Details Amount 11. Total of Entries Not in Bookkeeping 12. Balance as per Payment Unit Records (Subtotal +/- Entries not in Bookkeeping) Section B: Review and Authorization 13. Payment Manager (Sign & Date) 14. Bank Manager (Sign & Date) 15. Authorizing Authority (Sign & Date) GoIRA Accounting Manual Page D 77

T 8 Instructions Purpose: To reconcile expenditures with bank statements Prepare an original and one (1) copy as follows: Section A: (This section shall be filled by Bookkeeping Office) 1. Unit Enter the name of the organizational unit to which the T 8 Form applies. 2. Bank Name Enter the name of the bank used by the unit. 3. Bank Account No. Enter the bank account number which is being reconciled. 4. Month Enter the month of the T 8 reconciliation. 5. Year Enter the year of the T 8 reconciliation. 6. Bank Unit Records Record information related to cash deposits and withdrawals from the budget unit bank account. a. Opening Bank Balance Enter the opening bank balance of the based on the closing bank balance of the T 8 Form from the previous month. b. Total Receipts Enter total receipts that have been deposited in the bank account with a deposit date in the month. c. Total Withdrawals Enter total withdrawals that have been taken from the bank account with a deposit date in the month. d. Closing Bank Balance Calculate the Closing Bank Balance by adding Total Receipts and Opening Bank Balance and subtracting Closing Bank Balance. 7. Deduct: Unpresented Checks Provide information related to checks that have been written but not yet presented to the bank for cashing. a. Date Enter the date of the unpresented check. b. Check No. Enter the check number of the unpresented check. c. Issue To Enter the name of the person to which the check was presented. d. Amount Enter the amount of the unpresented check. 8. Total Unpresented Checks Sum the Amount of all the unpresented checks listed in Field 7. 9. Subtotal (Closing Bank Balance Total Unpresented Checks) Subtract Field 8 Total Unpresented Checks from the Field 6d Closing Bank Balance. 10. Add/Deduct: Entries Not in Bookkeeping In this section add or deduct any bank transactions (withdrawals/deposits) that are known not to be in accounting ledger. a. Entry No. Enter the entry no. of the bank transaction. b. Entry Details Enter details related to the bank transaction. c. Amount Enter the amount of the bank transaction not in bookkeeping 11. Total of Entries Not in Bookkeeping Sum the Amount of entries not in bookkeeping listed in Field 10. 12. Balance as per Payment Unit Records (Subtotal +/ Entries not in Bookkeeping) Add Field 11 Total of Entries Not in Bookkeeping to Field 9 Subtotal. Section B: Review and Authorization 13. Payment Manager (Sign & Date) This space is for the Payment Manager to sign and date after filling out the Form. GoIRA Accounting Manual Page D 78

14. Bank Manager (Sign & Date) This space is for the bank manager to sign and date to verify the accuracy of the Form. 15. Authorizing Authority (Sign & Date) This space is for the Authorizing Authority at the Mustofiat to sign and date in order to approve the final T 8 Form. AFMIS None Distribution: Original Bookkeeping Office/Mustofiat Copy Treasury/Mustofiat GoIRA Accounting Manual Page D 79

Appendix E: Guiding Principles for Financial Controllers(Need to Revise Translation) Article 1: Article 2: Article 3: Article 4: Article 5: Article 6: Article 7: Controlling sub section of the Treasury has been established for scrutinizing and ensuring accounting transactions Financial controllers receive their expenses and salaries from the Ministry of Finance. Monitoring and scrutinizing control department for completing and organizing accurate accounting documents accurate account transaction, full agreement on rules and regulation, statutory and accounting Manual and to ensure MOF of other official letters In reading carefully and monitoring controlling unit, monitoring, controlling and checking and verify to acquire expenditure cash transaction revenue materials and valued paper includes in it. In scrutinizing and vising cash expense documents before executing statutory rules and regulations, accounting orders and accounting manual guidance takes into considerations In scrutinizing vising and controlling vouchers via statutory rules and regulation, accounting procedures orders and Accounting Manual related to accounting transactions take the following into considerations Documents should be organize according to guidance and Accounting Manual Transaction should be accurate and must be according to rules and regulations Documents should have authorized officials signature All supportive copies of document that is under process should be sent to controlling unit before sending Documents before checking and controlling in no case is issued and distributed and is not executable All columns of accounting forms should be filled in completely and accurately according to the Accounting Manual guidance.documents after control Its check is done via controlling unit and returns to related accounting unit Feed forward control officials are obliged in checking, verifying and reconciling expenditure documents via article 33 guidance of budget and Accounting law which are as follows and take into accounts seriously((payment expense thereof budget that is from accountants in generalconsists the following: Authorized official has the authority for expenditure Expenditure must match object, commitment and allotment codes Documentation must be complete Expenditure must comply with laws and regulations Recipient must be clearly identifiable in documentation Article 8: Article 9: Article 10: Article 11: In scrutinizing and vising documents related to payment and executing Expenditure as well as indispensable allotment, expenditure should take place for providing goods and services for government and just for official uses of the organization unless execution takes place according to budget and Accounting law article. In procuring goods and or services and also in procurement and core Services should be considered Procuring goods and services should be approved by authorized officials. In scrutinizing and vising all documents related to fund voucher for procurement documents need verification and evaluation via technical employees and having protocols, conditions and other Documents related to bids according to rules and regulation of Procurement. GoIRA Accounting Manual Page E 1

Article 12: Article 13: Article 14: Article 15: Article 16: Article 17: Article 18: Article 19: Article 20: Article 21: Article 22: Article 23: Article 24: Article 25: Article 26: For visa and control of purchasing goods and services as well as protocols and procurement orders, document examining and description and their agreements on protocol in view of quality and quantity and submission site, goods rates, and contracts, lack and returning of goods, approved discounts. All should be considered such as insurance documents and other items. In documents control and visa related to overtime wages, internal and external travels, remittal, extra rights and other financial incentives Should be approved and considered according to rules and regulations. Protocol and contracts related to financial transactions organizations ( Revenue and Expenditure ) that are done between actual people and line ministries. This should be scrutinized and visa according to rules and regulation before execution by control unit. Control unit officials in all central and provincial organizations in Scrutinizing and vising documents consider acquiring revenue such as sales, goods and services and any types of product and tax according to rules and regulations for the purpose of public It is the job of control unit officials to monitor and check accurately that the estimation of officials and accountants in line ministries are According to rules and regulations. Previous control officials try that estimated and expected revenue of related organization is submitted to its revenue account on time. Control unit has the responsibility to keep track of industrial Expenditure and surplus salaries in clearance and reduction till bonded Trustee, officials and watchmen are debtors to do their clearance before the end of fiscal year. Bookkeeping unit of ministries are responsible to inform and provide Information to control unit at times regarding employees debt, remaining of salaries and expenditures. By no means the control unit officials can be assigned for procurement commission, goods and services procurement, procure goods, evaluate bids and on sales items. Control unit officials have responsibilities and authority of their jobs in line ministries work according to rules and regulations to cooperate with line ministries employees for the purpose of quick budgetary affairs. Control unit officials cannot process nullification documents and cannot tear the documents but they can verify the documents from one point of view without vising the document. Control unit officials should have broad views and prevent useless tasks in line ministries. Control unit officials in line ministries should prevent vising any types of documents and papers related to line ministries financial transaction (revenue and expenditure documents) for their own benefits. As part of their duties, the control unit officials prevent vising any documents related to financial income in getting revenue and expenditure that is illegal and should return to related unit of ministries to correct and adjust the document. Line ministries cannot force or by any means get control officials to be encouraged in order for paying or vising illegal documents and accounting and financing orders GoIRA Accounting Manual Page E 2

Article 27: Article 28: Article 29: Article 30: Article 31: Article 32: Article 33: Article 34: Article 35: Article 36: Article 37: Article 38: Article 39: Line ministries cannot pay control officials such as incentives. Whenever they think of this issue they, should share it with the Treasury. account documents and supportive papers related to revenue and expenditure that controllers receive from visa and after scrutinizing in case there are flaws and legal mistakes, the document should be send back to concerning unit and controllers provide oral feedback and advice In case the Payment Office/Book keeping Office ignores rules and regulations, control unit officials protest and Payment Office object the of line ministry in written in order to make them pay attention to their errors Whenever designed documents of cash Revenue and expenditure, materials and valued papers etc. and Ministry s other financial transactions are in opposition with rules and regulations and do not meet and satisfy control unit employees requirements. Control unit officials should not vise their other documents. General Surveillance control management officials work under Accounting Department Supervision of MoF and at times monitor and guide the unit of duties and tasks. General Surveillance control management of line ministries in Accounting department are to strengthen professional accounting. Control and related organizations to judge parties concepts and satisfy parties of accounting affairs. Whenever officials or previous control officials create use less arguments and conflict that wastes time and prevent tasks and meet with these officials according to rule and regulations. Previous control department Sr. Managers keep their unit under the general management of Surveillance controllers of Accounting Department and other Authorities Control unit Sr. managers must enhance the skills, knowledge and attitude of his/her employees and assist accounting department and training and development unit of MoF via organizing on the job training courses, workshops technical seminars to enhance their capacity. Control Unit Sr. Managers should verify office discipline related to him/her and create coordination and cooperation among employees working in the same unit help in work environment Sr. control Managers keep the control unit official attendance in central Government organizations and has the responsibility and commitment to supervise them Control unit s officials are under the supervision of the Sr. Managers and Sr. manager has the responsibility of their attendance line ministry and Accounting department monitors and ensure their attendance in line Ministry Treasury is responsible for the control unit officials and evaluate successful performance and unsuccessful performance of control unit. GoIRA Accounting Manual Page E 3

Appendix F: Submission Requirements to Treasury by Select Form Form No. Name Status of Sending to Treasury General Directorate M 2 Cash Purchase Order No M 3 Purchase Order Yes M 7 Goods Received Note Yes M 10 Request for Advance Yes M 11 Miscellaneous Commitment Document Yes M 12 Advance Acquittal Yes M 13 Travel Order Form Yes M 16 Payment Order (Expenditures) Yes M 16A** Payment Order (Salaries) Yes M 22 Monthly Status of Allotment Report (Preliminary and Yes Consolidated) M 25 Miscellaneous Revenue Collection Form No M 26 Revenue Deposit Tara afa No M 27** Revenue Collection Voucher Yes M 29** Monthly Revenue Collection Report Yes M 33 Journal Voucher Treasury prepares this form M 41** Payroll Yes M 50 Authorized Signatory Signature Sample Yes M 75 Request for Establishment or Update of Petty Cash Yes Fund M 90a Unacquitted Advances Worksheet Yes M 91 Qatia Report Yes T 8 Bank Reconciliation Report Yes M 12 Advance Acquittal Invoices or Statement of Expenditures Copy of original M 16 Payment Order M 16 Payment Order Operating Budget Invoice Copy of Bank ID card Contract payment Copies of all M16 related to the payment Taminat payment Letter of Implementing Agency for taminat payment Taminat payment Development Budget Checklist of Attached Documents All types B27 Budget Form All types PCS Project Coding Sheet All types CS Coding Sheet All types Vendor Details All types GoIRA Accounting Manual Page F 1

Invoice Contract payment Cost Estimate and Breakdown of Calculation Contract payment Contractor Certificate Contract payment Copy of Contract Contract payment M 7 Goods Received Note Contract payment Copy of Bank ID card Contract payment Copy of Bank Guaranty Advance to vendor payment Treasury Form (information about Project) All types except for salary payment Copies of all M16 related to the payment Taminat payment Letter of Implementing Agency for taminat payment Taminat payment M 16a Payment Order Operating Budget M 41 Payroll Form Attendance Sheet Development Budget B27 Budget Form PCS Project Coding Sheet CS Coding Sheet M 41 Payroll Form Attendance sheet GoIRA Accounting Manual Page F 2

Approval of the Accounting Manual This Accounting Manual is approved by Minister of Finance prepared in 11 Chapters and 6 appendices (A F). Accounting Manual is applicable after its approve by all state administrations. Recommended by; Approved by: H.E Mohammad Aqa Director General Treasury H.E Dr.Hazrat Omar Zakhelwal Minister of Finance GoIRA Accounting Manual Page F 3