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Page 107 Manual of Public Financial Management Policies and Procedures: Ministry of Finance and Economic Planning, Government of Rwanda 8.11 Treatment of returned payments 8.11.1 Returned payments relate to the pay ments instructions issued by the Treasury or budget agency but rejected by BNR or com mercial banks as unpaid transactions.
This may be for a variety of reasons such as the use of wrong bank accounts. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
8.11.2 For all the unpaid transactions, BNR or the relevant Commercial Bank shall notify the Treasury or the relevant budget agency providing the following details; a) Bank Transaction ID b) Reference number (Payment Voucher/In struction Number c) Description d) Amoun e) Beneficiary name (Payee) f) Bank Account g) Currency and h) Reason why payment instruction could not be effected 8.11.3 Upon receipt of the notification, the Treasury or relevant budget agency, as the case may be, shall record the unpaid transactions in the IFMIS with all the above details and the fol lowing accounting entries; Debit; Appropriate Bank Account (TSA or Budget Agency bank account) Credit: Returned payments liability Account (Below-the-Line Account) (Beneficiary Name) 8.11.4 Upon taking the necessary corrective action, the claimant or concerned budget agen cy, as the case may be, shall initiate a claim for payment of the returned payment with the fol lowing details; a) Claim reference number b) Payment order reference number (Payment Voucher/Instruction Number), c) Returned payment Transaction ID issued by the Bank d) Amount of the returned payment, e) Reason for not applying/rejecting the pay ment instruction in the first place f) Beneficiary name g) Beneficiary National ID/Passport Number h) Beneficiary Bank Account details i) Supporting documents to the claim 8.11.5 On approval of the claim by the Chief Budget Manager and where payment has to be made from the bank account maintained by the budget agency or entity, the following en tries will be passed. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
Debit: Returned payment liability Account (Below-the-Line Account) (Beneficiary Name) Credit: Bank account of the budget agency 8.11.6 If payment is to be made by the Trea sury, the Chief Budget Manager shall upon final verification, transmit the claim to the Treasury for payment. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
When payment is even tually effected by the Treasury, the following accounting entries will be effected; Debit: Returned payment – liability account Credit: TSA Bank Account In this case no accounting entries are to be raised by the budget agency. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
8.11.7 Any returned payments that remain unclaimed for over 2 years shall be recognised as other revenues with the following entries Debit: Returned payment liability Account (Below-the-Line Account) (Beneficiary Name) Credit: Other miscellaneous Revenue Page 108 Manual of Public Financial Management Policies and Procedures: Ministry of Finance and Economic Planning, Government of Rwanda 8.11.8 If it is confirmed that the deposited amount on bank account results from a genuine transaction which was not properly recorded rather treated as a returned payment or funds held on behalf of third party, such liability will be distinguished by making an adjusting entry to the surplus/ deficit (prior year adjustment) in the year of reporting unless it is possible for a retrospective adjustment 8.12 Expenditure scenarios 8.12.1 Compensation of employees 8.12.1.1 In line with paragraph 8.3.1(a), compensa tion to employees shall include; “Salaries and Wages” and “Social Contributions” (also referred to as employee benefits). | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
8.12.1.2 The compensation of employees shall not include: i.
Reimbursements of payments incurred by employees on tools, equipment, uni forms and other items that are needed to enable them to carry out their work.
For example, uniforms provided to police officers do not fall under compensation of employees, but goods and services.
Equally allowances to employees to pur chase an item such as uniform that will mainly be used at work are classified as goods and services.
ii. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
ii.
Payments for travel and subsistence while on government duty away from duty station.
These are classified under goods and services depending on how the travel and substance was utilized.
iii.
Purchases of services provided by peo ple who are not government employees, for example, consultants, architects and occasional workers.
These are classified under goods and services.
iv.
Communication and lunch allowance provided to staff.
v. Lump sum and mileage allowance.
vi. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
v. Lump sum and mileage allowance.
vi.
Employer social benefits such as medi cal allowance and costs abroad, educa tional loans, deceased and funeral costs, and terminal benefits.
These are classi fied as social benefits. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
These are classi fied as social benefits.
8.12.1.3 Compensation of employees is accounted for on accrual basis except for post-employ ment benefits including retirement benefits such as pensions and other post-employ ment benefits such as life insurance and medical care, termination benefits and short term compensated absence such as paid an nual leave and paid sick leave which will be treated on cash basis. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
8.12.1.4 Once Government implements the accrual basis IPSAS, the accounting for compensa tion of employees shall comply with IPSAS 25: ‘Employee benefits’.
8.12.2 Maternity leave contributions 8.12.2.1 Article 7 of the Law No.
003/2016 of 30/03/2016 establishing and Governing Maternity Leave benefits scheme provides for monthly maternity leave contributions at the rate of 0.3 % of the gross salary by each employee and an additional 0.3 % of the gross salary by the employer. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
8.12.2.2 For purposes of determining the materni ty leave contributions and in accordance with article 6 the Ministerial Order No. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
007/16/10/TC of 28/10/2016, the gross salary shall be calculated to also include any benefits in kind such as accommoda tion facilitation; mobile tools of communi cation; sports and recreational facilitation; leave or vacation facilitation; meals; compa Page 109 Manual of Public Financial Management Policies and Procedures: Ministry of Finance and Economic Planning, Government of Rwanda ny shares; work uniforms; and any other al lowance that may be considered as such. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
In this regard, the chief budget manager shall ensure that all components of calculating the gross pay are part of the payroll.
8.12.2.3 To facilitate the budgeting and payment of the maternity leave benefits, the following shall be adhered to: a) An employer’s contributions to the ma ternity leave scheme shall be budgeted for using an appropriate budget line. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
b) All maternity leave contributions shall be accounted for separately and should have their own payroll deduction code different from that of other statutory de ductions such as RAMA or CSR.
c) Declarations of the maternity leave con tributions shall be made and shown sep arately on the declaration form.
d) Payments of any maternity leave contri butions to RSSB shall be paid into a spe cific bank opened and maintained for this purpose. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
e) To facilitate the payment process and in line with Article 23 of the Ministerial Or der No.
007/16/10/TC of 28/10/2016, the employer shall pay the woman ma ternity leave benefits due and those ben efits shall be reimbursed by RSSB within thirty (30) days of the receipt of request of reimbursement.
Staff on maternity leave shall therefore be paid 100% of their salary throughout the leave period by their respective entities as part of the normal payment process. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
8.12.2.4 Using a standard reimbursement form is sued by RSSB, public entities shall ensure that they seek a reimbursement from RSSB for the salaries paid to their staff on ma ternity leave for the last six (6) weeks. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
It shall be the responsibility of every public entity to ensure that the funds so claimed are paid into the correct bank account from which the salaries were initially paid; The Treasury Single Account in case the salaries were processed and paid through the Cen tral Treasury; and to the respective entity bank account for salaries that were paid di rectly form an entity’s bank account. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
8.12.3 Accounting treatment for maternity leave contributions and benefits 8.12.3.1 In accordance with sub - paragraphs 8.12.2.3 (e) and 8.12.2.4 above, the following accounting entries shall be passed for the various transactions relating to the woman maternity leave contributions and benefits: For the accounting entries, assume the fol lowing payroll amounts for illustrative pur poses; - A monthly salary of Frw 100 - Government Contribution to CSR- Frw 5 - Government Contribution to RAM – Frw 7.5 - Government Contribution to Maternity Leave Scheme – Frw 0.3 - PAYE is Frw 30 a) As part of the monthly payroll commit ments, separate commitments relat ing the employer’s contribution to the MLBS of 0.3% will be created in addition to the employee’s contribution of 0.3% that will part of the gross salary expen diture. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
Accordingly the monthly payroll expenditure and associated payables will be recognised as follows upon cre ation of the salary commitments in the IFMIS; Page 110 Manual of Public Financial Management Policies and Procedures: Ministry of Finance and Economic Planning, Government of Rwanda b) On the payment of the maternity leave contribution to RSSB, accounting entries will be effected by the entity as follows: Where the National Treasury makes payment. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
as a direct payment Description Dr Cr Dr. Salary Expenditure Dr. Government Contribution to CSR Dr. Government Contribution to ML Cr.
Salary Net Payable Cr.
Salary CSR Payable Cr.
Salary RAMA Payable Cr.
Salary MLC Payable Cr.
Salary PAYE Payable 100 5 0.35 112.8 59.2 8 15 0.6 30 112.80 Description Dr Cr Dr. Salary MLC Payable Cr.
Treasury Direct Payment 0.6 0.6 0.6 0.6 Where payment is made form the entity’s bank account.
Description Dr Cr Dr. Salary MLC Payable Cr. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
Description Dr Cr Dr. Salary MLC Payable Cr.
Cost Center Bank account 0.6 0.6 0.6 0.6 c) With the monthly payroll commitments, separate commitments relating to the benefits paid from week 7 to week 12 to the eligible staff on Maternity Leave (ML) that are to be reimbursable by RSSB shall be created .
The commit ments for such amounts will not require budgetary provisions but will be treated as an accounts receivable to be settled by the RSSB. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
The Salary Expenditure and Related Payables for a mother on ML from week 7 week to week 12 (6 weeks) will be recognized as follows; d) The employer’s contribution to the MLBS shall in all cases be expenses and must be budgeted for under a specific expenditure sub item relating to con tribution to maternity leave payable by employer.
e) Both employer’s and employee’s con tribution (0.6%) shall be processed and paid to RSSB as it is with other Pension Scheme contributions payable to RSSB. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
A specific budget line is necessary in this case so as to facilitate monitoring and prevent mis-postings.
f) The concerned entity shall create its claim from the IFMIS for amount to be reimbursed by the RSSB.
The claim shall specify the following details; - Claim number - Employee’s ID and Name - Starting Date of Leave - Ending Date of Leave - RSSB affiliation number - Amounts paid and reimbursable by RSSB - OP/PV - Source bank Account for the payment. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
- Total Amount reimbursable by RSSB (This may involve a total of two pay ments straddling over a period of two months).
g) The claim shall be equal to the total re ceivables amount equivalent to 6 weeks pay of salary.
h) The claim shall specify the Bank account into which the refund has to be made and this shall be automatically linked to the bank account from which the bene fits were paid to staff in the first instance. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
i) Payments by RSSB shall be linked to the associated claim which will be account ed for as follows upon receipt of pay ment.
Dr. Receivable from RSSB………………….
XXXX Cr.
Bank Account / Direct Payment (If salary is processed by Central Treasury XXXX Page 111 Manual of Public Financial Management Policies and Procedures: Ministry of Finance and Economic Planning, Government of Rwanda Where payments are paid back to the Treasury In the Books of the entity Description Dr Cr Dr. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
Transfer ( Inter Entity to Treasury) Cr.
RSSB ML Receivable 150 150 150 150 Description Dr Cr Dr. Treasury Bank account Cr.
Transfer from Cost center 150 150 150 150 In the Books of the Treasury.
Where RSSB refund is paid to the entity Description Dr Cr Dr.
Cost Center Bank account Cr. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
Cost Center Bank account Cr.
RSSB ML receivable 150 150 150 150 j) A reconciliation of the accounts receiv able from RSSB shall be carried out be tween the entity and RSSB and a note disclosure of a breakdown of the out standing amount at the reporting date with the following details shall be in cluded in the entity financial statements; - National ID of staff - RSSB affiliated No. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
- Name of Staff - amount still pending - Total amount pending 8.12.4 Payroll procedures 8.12.4.1 Detailed payroll procedures are contained in instructions issued by the Ministry in charge of public service and labor and the following section is therefore restricted to accounting procedures related to the man agement of the payroll. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
8.12.4.2 The officer in-charge of the Human Re source function shall prepare, on a monthly basis, a payroll in accordance with the es tablished laws and regulations, procedures and systems as advised by the Ministry in charge of public service.
8.12.4.3 The payroll shall be approved by the Chief Budget Manager before deductions and payments are effected.
8.12.4.4 All staff shall be paid monthly salaries in arrears by direct bank transfer through their bank accounts. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
8.12.4.5 Payments for terminal benefits and com pensation shall be in accordance with rules and regulations issued by the Ministry re sponsible for public service.
8.12.4.6 Taxes and other deductions related to pay roll shall be remitted to relevant authori ties alongside the net salary payments and filing of payroll declarations made within statutory due dates. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
8.12.4.7 The human resource manager preparing the payroll, as well as the Head of Finance and CBM or Head of Corporate Services in the budget entity, should sign each page of the payroll to evidence their approval/authori zation of the payroll contents.
The payment processing shall then follow the normal commitment and payment procedures as outlined in Chapter 8 of this manual. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
8.12.4.8 CBM shall ensure that, on a monthly basis, changes in payroll are approved and com municated to the Ministry in charge of pub lic service and labor.
8.12.4.9 There should be summary schedules for each type of payroll deductions for each budget entity.
These schedules should ac company payrolls and may include the fol lowing: Page 112 Manual of Public Financial Management Policies and Procedures: Ministry of Finance and Economic Planning, Government of Rwanda i.
Pay As You Earn tax (TPR); ii. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
Pay As You Earn tax (TPR); ii.
Social Security – employee contribution; iii.
Social Security – employer contribution; iv.
Health Insurance – employee contribu tion; v. Health Insurance – employer contribu tion; and vi.
Any other payroll deduction made.
8.12.4.10 All salaries must be paid via personal bank accounts of the beneficiaries. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
Thus, banking lists showing the particulars of the each em ployee’s bank account to which the salary dues are to be remitted should be annexed to each payroll 8.12.5 Accounting policy for payroll expenditure a) Illustration: Payroll computation for an individual staff # A B C D E F G H I J K L M Payroll item Basic Salary Housing Allowance Transport allowance RAMA Patr/Health insurance by employer CSR Patr/pension contribution by employer Maternity Patr/maternity leave benefits scheme by employer Gross Salary Taxable amount TPR/PAYE CSR Pers//pension contribution by employee Rama pers/Health insurance by employee Maternity Pers/maternity leave benefits scheme by employee Net Pay How this is computed Based on the salary scale Basic slary divided by 7(542,435/7) Basic slary divided by 7 (542,435/7) Basic salary * 7.5% (542,435*7.5%) (Basic+housing+other allowances)*5% =(542,435+77,491)*5% (Basic+housing+other allowances)*0.3% = (542,435+77,491)*0.3% A+B+C = G Equals the Gross Salary (A+B+C) (H - 100,000)*30%+14,000 (Basic+housing+other allowances)*3% Basic* 7.5% (Basic+housing+other allowances)*0.3% taxable-TPR-CSR Pers-Rama Pers- Maternity Pers =H -I-J-K-L) Illustrative amount 542,435 77,491 77,491 40,683 30,996 1,860 697,416 697,41 193,225 18,598 40,683 1,860 443,050 Page 113 Manual of Public Financial Management Policies and Procedures: Ministry of Finance and Economic Planning, Government of Rwanda b) Illustration: Payroll accounting During the month of March 20x5, the gross salaries payable to the public | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
20x5, the gross salaries payable to the public officers under the Ministry of Health (MINISANTE) excluding any benefits in kind and before the maternity leave contributions totalled Frw 99,495,450 made up of the following: Net salary Frw 73,680,450; TPR (PAYE) Frw 15,300,000; Employee Social Security contributions Frw 3,015,000; Employee Medical Insurance contributions Frw 2,500,000; Other employee contributions Frw 5,000,000 As the employer, Government contribution towards social security and medical insurance was Frw 5,025,000 and Frw 2,500,000 respectively. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
The payroll deductions of 0.3% equal to Frw 300,000 (0.3% x 100 million) are to be made from the employees as maternity leave contributions.
Similarly, the employer’s contribution will also amount to Frw 300,000, being 0.3% of the gross salaries payable by the entity including the benefits in kind.
The salaries are centrally settled through the Central Treasury account. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
Assume the payrolls were forwarded and received in the Treasury on 25th of the month and that the relevant Payment Order was sent to BNR on 30th March.
The ledger entries for the above transactions are as follows: In the books of MINISANTE 25th March 20x5: Debit: Salary in cash 99,495,450 Debit: Employer Social contrib.
5,025,000 Debit: Employer medical contrib.
2,500,000 Debit: Employer Maternity Leave contrib. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
2,500,000 Debit: Employer Maternity Leave contrib.
300,000 Credit: Accounts payable (net salary) 73,380,450 Credit: Accounts payable (TPR) 15,300,000 Credit: Accounts payable (Social Security) 8,040,000 Credit: Accounts payable (Medical Insurance) 5,000,000 Credit: Accounts Payable (Maternity Contrib. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
RSSB) 600,000 Credit: Accounts payable (other) 5,000,000 (Being recognition of March salary) Upon payment by Treasury 30th March 20x5: Debit: Accounts payable (net salary) 73,380,450 Debit: Accounts payable (TPR) 15,300,000 Debit: Accounts payable (Social Security) 8,040,000 Debit: Accounts payable (Maternity leave _RSSB) 600,000 Debit: Accounts payable (Medical Insurance) 5,000,000 Debit: Accounts payable (other) 5,000,000 Credit: Treasury direct payments a/c 107,320,450 (Being payment of March salary) In the books of the Treasury 25th March 20x5: No entry as the liability is for the entity. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
30th March 20x5: Debit: MINISANTE direct payment 107,320,450 Credit: Bank Account 107,320,450 (Being payment of March salary) In the books of the Treasury 25th March 20x5: No entry as the liability is for the entity.
30th March 20x5: Debit: MINISANTE direct payment 107,320,450 Credit: Bank Account 107,320,450 (Being payment of March salary) Returned salaries 8.12.6 These are returned payments in re spect of salary payment instructions issued to the bank. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
Accordingly the procedures pre scribed under section 8.8 of this manual shall generally apply to the treatment of unclaimed or returned salaries.
8.12.7 Payrolls are mainly processed by public entities and paid centrally from TSA by Treasury as direct payments.
There are in stances where salaries processed particularly through the TSA are returned back for example due to mismatch in beneficiary bank accounts details. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
8.12.8 Since the returned salaries had already been charged to a particular expenditure line by the public entities and paid from TSA, the returned salaries should be accounted for by Treasury as an accounts payable (Returned sal ary) until they are paid back to the beneficiary employee.
The concerned public entity is not required to pass any accounting entry unless the payment was processed from the entity ac count. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
8.12.9 The following shall be considered while processing a refund to the beneficiary: i.
Ensure that the amount being refunded match to the amount that had been re ceived back to the account; ii.
The beneficiary has requested for the refund in writing and this has been ap proved by CBM; iii. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
The cause of return of the salary has been identified and resolved; 8.12.10 There are instances where the returned salary (goes unclaimed for periods in excess of two years (from the date when the payment is returned).
In such cases, the returned sala ry should be written back from the accounts payable and be recognized as an income (other miscellaneous revenues) in the year of write back. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
8.12.11 The following accounting entries ap ply: Page 114 Manual of Public Financial Management Policies and Procedures: Ministry of Finance and Economic Planning, Government of Rwanda Upon sighting the returned salaries on the bank statement Debit: Bank account xxxx Credit: Accounts payable – returned salaries xxxx (Being recognition of returned salary) IFMIS Receipt Module to be used to capture bounced payments Upon the beneficiary claiming the salary and being paid Debit: Accounts payable – returned salaries xxxx Credit: Bank account xxxx (Being payment of salary claimed back) IFMIS, Receipt Module to be used to record and process the claim and the payment module takes care of the process to effect payment to the claimant Upon a “write-back” of the accounts payable related to returned salary Debit: Accounts payable – returned salary xxxx Credit: Other revenue – Other miscellaneous revenues xxxx (Being write back of unclaimed salaries) 8.12.12 Where the beneficiary of an unclaimed salary submits a claim after the entity has rec ognized the unclaimed salaries as revenue, the payment of the claim shall be done through the appropriation using an appropriate budget line. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
Such a claim must be duly certified and approved by a Public entity and shall be sub mitted to MINECOFIN for payment if the un claimed salaries amount was returned into the Treasury Single account or its sub-accounts.
8.13 Payments relating to the annual staff performance based bonus 8.13.1 Annual performance based bonus is currently paid to staff and this is calculated as 5% of the basic pay for scores above 80% and 3% for scores 70% - 80%. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
The amount is determined after staff performance evaluation following the end of the financial year and is usually paid during the period August – De cember of the following financial year.
8.13.2 As prescribed under paragraph 3.2.3 and as a year-end procedure, the annual staff performance based bonus will be accounted on accrual basis at the time when such bonus can be estimated reliably and the payment pro cess will go through the normal commitment control. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
In case, the staff performance evalua tion has been completed before the end of fis cal year and the amount to be paid has been determined but not paid before the year end, the amount payable of the annual performance based bonus shall be made by each public en tity and accrued and following accounting en tries shall apply; At year end and upon the determination of the best estimate for the annual performance bonus payable by the public entity. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
Debit: Appropriate expenditure item xxxx Credit: Accounts payable xxxx (Being recognition of the annual performance based bonus accrued at year-end) 8.14 Post-employment benefits for government employees 8.14.1 Post-employment benefits to civ il servants that include pension benefits and post-employment medical are managed by the Rwanda Social Security Board (RSSB) and cur rently include. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
Page 115 Manual of Public Financial Management Policies and Procedures: Ministry of Finance and Economic Planning, Government of Rwanda Benefit Terminal benefits Pension scheme organized through the RSSB Description A lump sum payment is made to a civil servant, depending on seniority under a post-employment defined benefit scheme, when he or she leaves his or her position as a civil servant. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
If the person leaves the current position to continue working as a civil servant in a different department, the seniority continues to evolve and no payment is made.
It is only when a civil servant leaves the system (retirement, death, or departure to work as a private employee/self- employed person), there is payment.
After 5 years, people receive 1 month of salary, after 10 years 2 months of salary, etc.
with a maximum of 6 months. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
with a maximum of 6 months.
The RSSB provides pensions not only to employees of the government, but also to members of the public.
There is mandatory affiliation to all salaried employees and active political representatives.
There is voluntary affiliation for other people by applying to join and by paying the necessary contributions.
IPSAS 39 only relates to employees of the government and as such it is imperative to make a distinction between social benefits and employee benefits. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
Contributions are 3% for the individual and 5% for the employer.
For people who are not employed, the individual needs to pay the full 8% of contribution Payment is made as a defined benefit at retirement The benefit depends on the years of contribution to scheme: If people have contributed for less than 15 years (in total, it doesn’t have to be consecutive), they receive a lump sum payment at the retirement period.
The formula is defined by Law. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
The formula is defined by Law.
Notes/Remarks This is a typical example of a post-employment defined benefit scheme for which a full valuation must be made.
benefit scheme for which a full valuation must be made. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
Page 116 Manual of Public Financial Management Policies and Procedures: Ministry of Finance and Economic Planning, Government of Rwanda Post-retirement medical insurance (formal format) organized through the RSSB The RSSB provides medical insurance coverage not only to employees of the government (civil servants), but for all employees who have contributed to the system.
There is continued affiliation for pensioners who have contributed to the system.
There is automatic affiliation to all civil servants. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
Private institutions can also join the scheme by applying to join and by paying the necessary contributions.
Note that not all institutions are accepted.
Again, one must be careful.
As such, IPSAS 39 only relates to employees of the government and therefore it is important to make the distinction between social benefits and employee benefits Contributions are 7.5% for the individual and 7.5% for the employer. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
For pensioners, only the individual contribution remains and this is deducted from the monthly pension.
The benefits are not only provided during active service but also post-retirement.
Benefits consist of 85% of medical treatment and prescribed drugs.
The remaining cost is to be covered by the patient.
As the benefits are provided during retirement, these benefits are considered a post-employment defined benefit scheme for which a full valuation must be made. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
Community Based Health Insurance (CBHI) This health insurance system covers all people who are not affiliated to the formal format.
Four categories are distinguished.
Contribution depends on the category to which the individual belongs.
This is a typical example of a social benefit, which is not covered by IPSAS 39.
If people have contributed for at least 15 years, as of age retirement, a monthly pension is paid out. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
The benefit is 2% for each year of contribution: If you have contributed for 15 years, you will receive 30% of the average last 5 salaries.
If you have contributed for 20 years, you will receive 40% of the average of last 5 salaries.
If people leave the system, they need to wait until the retirement age to receive the pension benefits. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
This is a typical example of a post-employment defined Page 117 Manual of Public Financial Management Policies and Procedures: Ministry of Finance and Economic Planning, Government of Rwanda 8.14.2 As part of the financial statements sub mitted to the Ministry, the RSSB shall ensure that appropriate financial information is ob tained by the Accountant General in respect of the post-employment benefits payable to gov ernment employees based on a full valuation. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
8.15 Payments relating to acquisition of assets 8.15.1 Entities may procure capital assets (assets of value above Frw 100,000 and useful life of more than one year) that include assets such as vehicles, furniture, equipment, finance leases, plant and tools and investment proper ty.
These shall be expensed and charged to the statement of financial performance as capital expenditure during the year of acquisition and as revenue in the category of proceeds from disposal in the year of disposal. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
8.15.2 Depreciation/impairment of assets and revaluations will not be recognized in the financial statements rather this will be reflect ed in the fixed asset register in accordance with the Government asset management policies and procedures prescribed under chapter 14 of this manual.
8.15.3 The measurement base to be applied in the preparation of financial statements shall be historical cost unless otherwise stated. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
The historical cost is the amount of cash or cash equivalent paid or received or fair value of any other consideration given or received in rela tion to an asset.
8.15.4 Under the accrual basis of accounting, the acquisition of capital assets shall be recog nized as an asset in the statement of financial position when the asset is purchased with the consumption of the asset (depreciation) being recognized in the statement of financial perfor mance. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
Further details relating to the manage ment and accounting of the non-current assets are provided in chapter 14 of this manual.
8.15.5 The following accounting entries apply: Upon receipt of invoice or cash purchase of capital assets Debit: Acquisition of assets xxxx Credit: Accounts payable or bank account xxxx (Being recognition of purchase of capital assets on credit or cash terms as applicable) 8.16 Prepayments 8.16.1 Entities may prepay for expenditure before consumption of the service or goods. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
8.16.2 The prepayments are recognized as an accounts receivable when cash is paid out and which is expensed when service or goods are consumed.
However, this should be differ entiated to installment payments where such installement is accounted for as normal expen diture and expensed in the books of accounts. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
8.16.3 Commitments for all prepayments shall be recorded on the appropriate underly ing budget line and will be cleared into an ac tual expenditure for the budget line when the associated goods or services are delivered. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
8.16.4 The following accounting entries apply: Upon prepayment of an expenditure Debit: Accounts receivable (commitment recorded on the underlying budget line) xxxx Credit: Bank account xxxx (Being recognition of prepayment in respect of an expenditure) Upon delivery and receipt of goods or services Debit: Underlying expenditure item xxxx Credit: Bank account xxxx (Being recognition of actual expenditure when goods or services are delivered/consumed from the prepaid expenses) 8.16.5 Public entities paying expenses cover ing more than one fiscal year shall continue to expense the total amount paid until such time when the relevant IPSAS will be complied to. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
At this point, expenses not yet consumed will be apportioned and treated as an asset (pre paid).
Page 118 Manual of Public Financial Management Policies and Procedures: Ministry of Finance and Economic Planning, Government of Rwanda 8.17 Payments in-advance and deposits (e.g.
for contractor) 8.17.1 In some circumstances entities may be required to pay for a deposit related to a certain expenditure.
For example foreign em bassies may pay rent deposit to secure office space. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
8.17.2 Payments in-advance and deposits shall be accounted for under the accrual basis of accounting.
The deposit shall be accounted for as an accounts receivable and expensed when the service is consumed.
For the embas sies rent deposit, the receivable is expensed at the end of the lease contract when the deposit is refunded back to the embassy. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
8.17.3 Following entries apply: Illustration: Payment in advance and deposit On 1st July 2015, Embassy of Tokyo paid Frw 12,000,000 equivalent in foreign currency for a year rent in advance for an operating lease of office space for the embassy.
Monthly rent is Frw 1,000,000 payable in arrears.
Assume at the end of the lease contract, the landlord refunds Frw 10,000,000 as he has incurred an expenditure of Frw to bring back the office space to the state it was in at the time of contracting. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
This was pursuant to the lease agreement and has been agreed upon by both parties. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
The payment in advance also known as rent deposit will be accounted for as follows: Upon payment of the deposit Debit: Accounts receivable third parties (per SCoA) 12,000,000 Credit: Bank account 12,000,000 Upon expiry of the lease contract and refund of the deposit Debit: Bank account 10,000,000 Debit: Rental Expenditure (per SCoA) 2,000,000 Credit: Accounts receivable third parties (per SCoA) 12,000,000 8.17.4 Contractually where any prepaid rent is not refundable, then any prepayment made shall be expensed directly and not accrued as an accounts receivable. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
8.18 Penalties for late deliveries or poor quality.
8.18.1 There are circumstances when suppliers are penalized for late deliveries or poor quali ty with deductions made from their payment invoices.
In line with article 7 of the Organic Law on State Finances and property and article 25 of the Ministerial Order No. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
001/16/10/TC of 26/01/2016 relating to financial regulations, all such deductions either by the Treasury or a Central Government Entity shall be paid to a designated bank account of the RRA that shall in turn recognize the revenue collected under an appropriate revenue item. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
Penalty deduc tions by decentralized entities shall be collect ed and deposited in the designated district bank account 8.18.2 The sequence of accounting entries involved in the treatment of penalties for both payments made by the Central Treasury or a Budget Agency shall be as follows; Upon receipt of goods with the issue of Goods Received Note. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
Debit: Expenditure item xxxx Credit: VAT Account xxxx Credit: Supplier Account xxxx Upon initiating payment of invoice Debit: Supplier Account (WHT & Penalties) xxxx Credit: WHT Account xxxx Credit: Penalties* xxxx Upon effecting payment (“Sign as paid” of payment order/ voucher) Debit: WHT account (RRA) xxxx Debit: VAT account (RRA) xxxx Debit: Penalties account * xxxx Debit: Supplier account xxxx Credit: Bank (Treasury/Budget Agency) xxxx The IFMIS Payment module shall be used to effect the deductions and generate all the accounting entries automatically. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
8.18.3 For the avoidance of doubt, tax com putations and remittances to the RRA shall not be affected by any penalties paid by suppliers for poor quality or late deliveries.
8.19 Treatment of discounts received 8.19.1 Discounts may be offered to a public entity by suppliers on sales of goods or ser vices for a variety reasons including to attract the entity to buy more.
The accounting treat ment for discount received shall depend on the nature of the discount. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
Discounts may be clas Page 119 Manual of Public Financial Management Policies and Procedures: Ministry of Finance and Economic Planning, Government of Rwanda sified into two types: (a) Trade Discounts: offered at the time of purchase for example when goods are pur chased in bulk or to retain loyal customers.
(b) Cash Discount: offered to customers as an incentive for timely payment of their liabil ities in respect of credit purchases. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
8.19.2 Trade discounts shall generally be ig nored for accounting purposes and therefore shall not be recorded in the accounting records of the public entity.
Accordingly, the procure ment, commitments along with any payables shall be recorded net of any trade discounts of fered.
Illustration: Treatment of trade discounts Akagera Ltd as part of its sales promotion campaign offers to sell its vehicles to a district hospital at a 5% discount on their quoted price of Frw 50 Million. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
In this case the district hospital will create its purchase orders, commitments and associated payables net of the trade discount, i.e Frw 47.5 Million per vehicle.
8.19.3 Cash discounts result in the reduction of procurement costs during the period and the amount payable in respect of the procure ments.
In this case, the purchase orders, com mitments and accounts payable will be record ed at the gross amount (after deducting any trade discounts though!) | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
and subsequently re ducing the payment amount by the amount of discount that is actually received.
In line with paragraph 8.18.1 above, the discounts received will be paid to the credit of the RRA bank ac count in case of central government entities and the RRA shall recognise the discounts as revenue in its accounting records.
Cash dis counts to decentralized entities shall also be collected by the RRA under an MoU signed between the RRA and the decentralized entity. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
8.19.4 The chronology of the accounting en tries for the recognition of the cash discounts received shall be as follows; Upon receipt of goods with the issue of Goods Received Note. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
Debit: Expenditure item xxxx Credit: VAT Account xxxx Credit: Supplier Account xxxx Upon initiating payment of invoice Debit: Supplier Account (WHT & Discount received) xxxx Credit: WHT Account xxxx Credit: Discount received – Liability xxxx Upon effecting payment (“Sign as paid” of payment order/voucher) Debit: WHT account (RRA) xxxx Debit: VAT account (RRA) xxxx Debit: Discount received account xxxx Debit: Supplier account xxxx Credit: Bank (Treasury/Budget Agency) xxxx The IFMIS Payment module shall be used to recognize the cash discounts and generate the relevant accounting entries automatically. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
8.19.5 As is with penalty deductions, dis counts received from suppliers shall not affect the tax computations and payments to RRA.
8.20 Grant and transfer payments – inter entity transactions.
8.20.1 Inter-entity payments relates to a pay ment made by a Government entity to another and classified as a reporting entity.
8.20.2 Following guide applies: i.
All central (including projects) and local government entities (except subsidiary entities) are reporting entities.
Public enterprises are not.
ii. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
Public enterprises are not.
ii.
The associated receipt by recipient enti ty must be in relation to an activity that has been budgeted for by the receiving entity or is in its activity plan.
iii. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
To ensure there is adequate documenta tion and all inter entity transactions are correctly classified, a memorandum of understanding shall be signed between the sending and receiving entities clear ly indicating the basis of the inter entity transactions; where in any doubt, the concerned parties shall seek the neces Page 120 Manual of Public Financial Management Policies and Procedures: Ministry of Finance and Economic Planning, Government of Rwanda sary clarification from the Head of the National Budget Directorate at MINE COFIN. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
iv.
Where the amounts are sent on a dif ferent currency such as is the case with embassies, any associated exchange or translation differences should be accom modated by the receiving entity such that the amount recorded by both par ties equal the amount recorded by the sending entity in Rwandan Francs.
In this regard, the sending entity shall en sure that all the relevant information in cluding the SWIFT transfer information and payment amount in Frw is sent to the receiving entity. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
v. For the avoidance of doubt, all transfer charges shall be borne by the sending entity.
vi.
Funds received by a public entity for the purpose of onward transfer to an agent of the sending entity (principal) are not treated as inter-entity transactions.
In ef fect the funds are just transiting through the entity and are therefore not meant for executing the entity’s budget. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
This arrangement is common with embas sies where public entities pass funds through the embassies for purposes of transacting with the embassy host coun try.
vii.
Funds received by a public entity for safe custody until a certain event where the funds are remitted to the beneficiary are not inter-entity transactions rather Funds held in-trust (refundable depos its). | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
8.20.3 The following accounting entries re late to inter-entity payments: Upon sending of funds Debit: Inter-entity transfer xxxx Credit: Bank account xxxx IFMIS payment module to be used with the selection of the different transfer commitment types designed in the system.
8.20.4 The sending entity should carry out direct confirmations from the receiving enti ty to ensure that both parties have treated the amounts as inter entity transactions and that the amounts are equal. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
8.20.5 Where the receiving entity receives the funds in a different fiscal year, this normally causes a timing difference.
To enable govern ment carry out inter-entity reconciliations while preparing consolidated financial state ments, it is a policy that all inter-entity trans fers must be accommodated during the same financial period.
To achieve this, the receiving entity should accrue (anticipate) the revenue. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
The following accounting entries apply: Receiving entity accruing the revenue Debit: Accounts receivable – government entity (select name of entity) xxxx Credit: Inter-entity transfer – select name of entity xxxx Upon receipt of cash in the following year Debit: Bank account xxxx Credit: Accounts receivable – government entity (select name of entity) xxxx Intra-entity transactions 8.20.6 Intra-entity transactions relate to pay ment or receipts made between departments or sub-units of a reporting entity. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
For instance, the Supreme Court is a reporting entity which has lower courts as subsidiary entities whose fi nancial results are consolidated with the head quarters to arrive at entity (Supreme Court) financial statements.
A transfer between the head quarter and the lower courts is therefore an intra-entity transaction.
8.20.7 Intra-entity transactions should be eliminated while preparing the periodic finan cial statements of the reporting entity. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
8.20.8 The following accounting entries re late to intra-entity transactions: Upon sending of funds Debit: Intra-entity transfer (per SCoA) xxxx Credit: Bank account xxxx IFMIS payment module to be used with the selection of the different transfer commitment types designed in the system.. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
Page 121 Manual of Public Financial Management Policies and Procedures: Ministry of Finance and Economic Planning, Government of Rwanda 8.21 Expenditure related to donations in kind 8.21.1 A donation in kind entails donations that are done in goods and services rather than money (or cash). | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
To record such donations, it is important to ascertain the value of the do nation usually by requesting the donor to pro vide an estimate in writing of how the item do nated cost or by comparing its price with that of similar commodities in the market.
8.21.2 Once the value is established, the do nated asset or service should be recorded both as revenue and as expenditure. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
8.21.3 Further guidance on recognition and measurement (including valuation) of capital items donated to a Government entity is pro vided in Chapter 14 of this manual. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
8.21.4 The following accounting entries apply: Under cash basi Upon ascertaining the value of donated item or service Debit: Expenditure – depending on nature classify per SCoA xxxx Credit: Revenue – grants either domestic of foreign as may apply xxxx Under accrual basis Upon ascertaining the value of donated item or service Debit: Asset Account – depending on nature classify per SCoA xxxx Credit: Revenue – grants either domestic of foreign as may apply xxxx 8.22 Accountable Imprest and mission advance 8.22.1 An accountable imprest is a disburse ment of funds that is provided to an employee to carry out an activity other than travel and on the condition that the recipient will spend the funds for approved purposes only. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
The em ployee is expected to account to the Govern ment for spend funds, and return to the Gov ernment by a specified date any portion of the funds that is not spent or accounted for (mis sion returns).
8.22.2 A mission advance is a disbursement of funds that is provided to an employee to travel, abroad or locally, on the condition that the recipient will spend the funds for approved purposes only.
The employee is paid the ad vance based on Government specified rates specific for the area of travel. | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
The accountabil ity report of the mission advances shall form part of the mission report.
8.22.3 The following procedure apply to ac countable imprest and mission advances (a) Applying for the accountable imprest and mission advance 8.22.4 Staff requesting for an accountable im prest or mission advance should complete an imprest/mission advance voucher form (see appendix ii). | https://transfered-docs-lawep.s3.amazonaws.com/thematic1e/pw_1/1725650204348.pdf | https://www.minecofin.gov.rw/fileadmin/user_upload/Minecofin/Publications/REPORTS/Accountant_General/IPSAS_Implementation/New_PFM_Manual.pdf | RWANDA |
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