2.
Costs:
i
although
i
allocation
i
decisions
i
may
i
be
i
made
i
at
i
a
i
given
i
level,
i
these
i
may
i
be
i
constrained.
i
They
i
may
i
be
i
constrained
i
by
i
legislation,
i
regulations
i
and
i
by
i
other
i
types
i
of
i
policy.
i
They
i
are
i
also
i
constrained
i
by
i
the
i
degree
i
to
i
which
i
at
i
any
i
given
i
level
i
there
i
exists
i
a
i
choice
i
about
i
costs.
i
The
i
"top"
i
may
i
set
i
in
i
place
i
direct
i
constraints
i
(laws,
i
regulations,
i
etc)
i
and
i
indirect
i
constraints
i
(the
i
fixing
i
of
i
cots,
i
e.g.,
i
national
i
salary
i
scale).
i
Thus,
i
although
i
there
i
may
i
be
i
some
i
discretion
i
over
i
allocation,
i
there
i
may
i
be
i
less
i
discretion
i
over
i
costs.
3.
Policy:
i
A
i
budget
i
is
i
a
i
financial
i
expression
i
of
i
policy.
i
An
i
annual
i
budget
i
reflects
i
the
i
planning
i
of
i
expenditures
i
for
i
that
i
year.
i
Allocations
i
therefore
i
are
i
/should
i
be
i
based
i
on
i
the
i
achievement
i
of
i
a
i
given
i
policy.
4.
Recent
i
Ethiopian
i
Financial
i
Management
i
Reforms
According
i
to
i
Muhammed
i
(2014)
i
after
i
the
i
dawn
i
fall
i
of
i
the
i
Derg
i
regime
i
and
i
replaced
i
by
i
the
i
Ethiopian
i
Federal
i
Democratic
i
Republic
i
of
i
Ethiopia
i
(EPRDF),
i i
The
i
new
i
system
i
which
i
was
i
undertaken
i i
by
i
the
i
change
i
of
i
government
i
in
i
1991
i
required
i
new
i
orientation
i
of
i
the
i
civil
i
service
i
with
i
change
i
in
i
the
i
management
i
structure
i
and
i
system,
i
as
i
well
i
as
i
in
i
attitude.
i
Financial
i
management
i
involves
i
the
i
management
i
of
i
the
i
finance
i
function.
i
It
i
is
i
concerned
i
with
i
the
i
planning,
i
organizing,
i
directing
i
and
i
controlling
i
the
i
financial
i
activities
i
of
i
an
i
enterprise.
i
It
i
deals
i
mainly
i
with
i
raising
i
funds
i
most
i
economically
i
and
i
suitably;
i
using
i
these
i
funds
i
as
i
profitably
i
as
i
possible;
11

i
planning
i
future
i
operations;
i
and
i
controlling
i
current
i
performance
i
and
i
future
i
developments
i
through
i
financial
i
accounting,
i
cost
i
accounting,
i
budgeting,
i
statistics,
i
and
i
other
i
means.
Reform
i
areas
i
include
i
among
i
others:
i
implementing
i
legal
i
and
i
regulatory
i
framework
i
to
i
maintain
i
fiscal
i
discipline;
i
embarking
i
on
i
a
i
medium-term
i
framework
i
for
i
the
i
annual
i
budget
i
process;
i
establishing
i
an
i
effective
i
and
i
efficient
i
cash
i
management
i
system;
i
installing
i
modern
i
accounting
i
function
i
to
i
strengthen
i
its
i
accountability
i
to
i
the
i
legislature
i
and
i
the
i
public
i
at
i
large;
i
strengthened
i
the
i
legal
i
framework
i
for
i
procurement;
i
adopting
i
a
i
strategy
i
for
i
introducing
i
a
i
modern
i
internal
i
and
i
external
i
audit
i
services;
i
and
i
install
i
modern
i
financial
i
information
i
flow.
i
The
i
recent
i
activities
i
of
i
the
i
Program
i
focus
i
on
i
consolidating
i
improved
i
PFM
i
systems
i
and
i
reviewed
i
the
i
previously
i
enacted
i
laws,
i
regulations,
i
and
i
directives
i
because
i
of
i
correcting
i
failures,
i
bottlenecks,
i
and
i
challenges
i
in
i
implementing
i
the
i
reform
i
agendas.

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