External Financial Resources are mobilized from various Bi-lateral and Multi-lateral sources in the form of Grants and Loans. These resources are disbursed using three channels for the implementation of different programs/projects. The three disbursement channels are described as follows.
Channel One: The Channel One conducts disbursement of funds and financial accounting based on the government’s financial system, i.e. through the Treasury and Government Accounts Directorates of Ministry of Finance (MoF) respectively. Thus, fund will flow from Treasury Account to the account of implementing institutions at Federal level and to the account of Regional Bureau of Finance & Economic Development (BoFEDs). Regional BoFEDs also disburse to the account of Regional Sector Bureaus and to the accounts of Woreda office of Finance and Development (WoFED). Similarly, expenditure reporting will follow the same route upward from Woreda to Region and then to Ministry of Finance.
Channel Two: External financial resources under channel 2 pass to program/project implementing sectors directly, not through MoF. Depending on the strength of the accounts section of an institution, channel 2 financial disbursement accounts can be handled by the accounts section of the institution or by organizing such an accounting section within the project. The accounting system for the most part is based on the requirements of lending and aid agencies. Monthly/quarterly or annual financial reports are presented to the Government Accounts Directorate of MoF. The report is also included in the Federal Governments’ fiscal budget report.
Channel Three: With this channel, donations are directly deposited by aid agencies in cash and in kind for the program executing institution and withdrawals for implementations are mainly booked by the aid agencies. Using this method, no direct link has been established with MoF that enables submission of accounts report for such activities to MoF. Since the booking of accounts is made by each donor country or organization on the basis of their own accounting system, there is no condition under which a coherent report could be produced.
Duties and Responsibilities of Channel One Programs Coordinating Directorate (COPCD)
The Channel One Programs Coordinating Directorate is currently responsible for the coordination/implementation of programs with a wide range of activities. Every year, about 50 billion birr (on average) is disbursed through this channel to federal, regional and woreda level government institutions for the implementation of the following Channel One Programs. The programs include: Enhancing Shared Prosperity through Equitable Services (ESPES) Program for Results (P4R), Productive Safety Net Program (PSNP)-Rural, Urban Productive Safety Net & JOB Program (UPSNJP), Urban Institutional & Infrastructure Development Program (UIIDP), General Education Quality Improvement Program for Equity (GEQIP-E) P4R, Water, Sanitation, and Hygiene (WASH), and Climate Action through Land Scape Management (CALM).
In relation to these programs, the Channel One Programs Coordinating Directorate is generally responsible for the broadly categorized functions: i.e. Program implementation and coordination, Financial Management, Budget preparation/control or follow-up, Fund flow/Transfer, Administration of bank account, Payments/Disbursements, Procurement (for ESPES at Federal Level), Accounting, Reporting, Auditing, and Follow-up & Monitoring of program activities. The main duties and responsibilities of Channel One Programs Coordinating Directorate are the following:
Actively participate and contribute in the designing of Channel One Programs,
Manage, Coordinate, Implement and Monitor Enhancing Shared Prosperity through Equitable Services (ESPES) program
Manage, Coordinate, Implement and Monitor the IDA financed Ethiopia Social Accountability Program (ESAP),
Participate & contribute in the preparation, implementation and monitoring of the Multi-Donor Trust Fund (MDTF) financed Ethiopia Social Accountability Program,
Design, prepare, implement, administer and monitor the IDA financed Investment Project Financing (IPF)
Coordinate the activities of all channel one programs,
Transfer program funds to the respective implementing entities and monitor fund utilization.
Review & monitor Programs implementation through various mechanisms and platforms, such as, the bi-annual Joint Review and Implementation Support (JRIS) mission and task force meeting on a regular basis.
Work to keep programs on schedule, within allocated budgets, and functioning smoothly,
Prepare & administer budgets for program components/activities and record in data base systems,
Review and consolidate implementation reports of Disbursement Linked Results (DLRs), and facilitate their verification based on the agreed verification protocols,
Conduct DLR-based assessments and produce analytical reports to be posted on MoF website,
Prepare quarterly and annual financial reports of programs, facilitate audits, and ensure that corrective actions have been taken on audit findings,
Take all necessary actions for the timely disbursement of program funds from development partners,
Undertake and manage program related donor financed procurement activities for goods & Services,
Assist and review electronics payments for rural productive safety net beneficiaries,
Manage and administer Channel One Programs contract staff,
Conduct various program/project related studies, and
Organize program related trainings, seminars & workshops.