Article (5)
Rules for Preparing the Draft Final Account
When preparing their draft final account for the completed fiscal year, Federal Entities shall
comply with the following basic rules:
1. Submit to the Supreme Audit Institution all documents arising from changes or
modifications in the final account data, and attach a copy of the correspondences and
related documents to the Ministry;
2. Ensure accuracy in accounting classifications in accordance with the proper Chart of
Accounts, and avoid misclassifications intended to conceal any budget overruns or justify
transfers between line items;
3. Carry out transfers in a manner that precludes the improper reliance on manual
adjustment entries in the general ledger system; and
4. Complete the annual closing procedures on or before the date specified for it in
accordance with the Financial Circular, in accordance with the following:
a. Procurement.
b. Cash management system.
c. Receipt system.
d. Payment system.
e. Payroll system.
f. Reconciliation of advance accounts.
g. Financial transfers.
h. General ledger.
i. Closing of the value-added tax (VAT) input and output accounts into the net VAT
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account, recording all non-recoverable taxes in the appropriate account, and ensuring
that all recoverable VAT amounts from the Federal Tax Authority are posted to their
respective accounts and that their balances reconcile with the VAT returns submitted
by the Entity.
5. The deadlines specified in the Financial Circular for completing the closings shall be
complied with. A Federal Entity may not extend these deadlines except upon a justified
request and with the Ministry’s approval, and shall bear full responsibility for any
consequences resulting from its non-compliance.
6. The draft final account shall be prepared by the specified deadline in accordance with the
Financial Circular, and shall include the following:
a. Acknowledgment and undertaking form regarding confirming the accuracy and
comprehensiveness of the data contained in the preliminary draft final account in
accordance with the form prepared by the Ministry.
b. The explanatory memorandum, which includes the following:
1) General budget data at the level of groups and an explanation of the adjustments
made during the fiscal year (transfers/additional allocations), in addition to the
actual data achieved during the current fiscal year with an analysis of any
differences in the implementation of the budget (excess expenditures/unutulized
allocations). Projection of the extent to which the Federal Entity has achieved the
approved activities and objectives for the fiscal year, and to compare all these data
with the data of the previous fiscal year.
2) Disclosure of any adjustment entries made during the fiscal year related to
previous years, including their reasons, and the extent of their impact on the
financial position of the Federal Entity.
3) Disclosure of any endowments, subsidies or grants, whether in cash or in kind,
received by the Federal Entities that are not included in their budget, and a
statement of their source and how to dispose of them.
4) Disclosure of any financial transactions that took place outside the Government
financial system, such as bank accounts allocated for advances.
5) Disclosure of open bank accounts, statement of the final balance position and
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bank settlement.
6) Disclosure of the efforts and procedures of the Federal Entity to follow up and
settle the asset and liability account balances and their development.
7) Disclosure of the efforts of any exchange or non-exchange operations that took
place between the concerned Federal Entity and other Federal Entities that directly
affect their revenues or expenditures.
8) Disclosure of the tax status including its compliance with filing tax returns to the
Federal Tax Authority by their due dates, its receipt of tax refunds due to it, and
disclosure of any late payment penalties incurred and the amount of non-
recoverable taxes.
9) The following common financial evidence measurement indicators and analysis of
the reasons for the deviations, if any:
a. Accuracy of revenue financial planning indicator.
b. Accuracy of expenditure financial planning indicator.
c. Budget preparation accuracy indicator.
10) Trial balance as on December 31 of the relevant fiscal year.
11) Final account forms (electronic copy only) as stipulated in the Financial Circular.
12) Statement of financial performance - for independent Federal Entities only.
13) Statement of financial position - for independent Federal Entities only.
14) Cash flow statement - for independent Federal Entities only.
7. As for the independent Federal Entities that apply the accrual basis in recording their
financial and accounting operations, they shall restate their data to present them on the
modified cash basis (the statement of financial performance, the statement of financial
position).This procedure shall be in force until the Government officially announces its
shift to applying accrual-based accounting.
8. Send its draft final accounts that complete the attachments set forth in Clause (5) of this
Article, and performance measurement indicators to Supreme Audit Institution, and a
copy of them to the Ministry no later than the date specified in the Financial Circular, with
attaching a CD that includes an electronic copy of the final account and all its attachments
in the form appropriate electronic form in accordance with the nature of the report.
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9. The Supreme Audit Institution shall exercise its control over the draft final accounts and
all their attachments, including the restated data into the modified cash basis, issue a
report thereon and send it to the Federal Entities and the ministry, within the period
specified in the annual Financial Circular.
10. Implement the necessary modifications to its final accounts drafts based on the audit and
recommendations of the Supreme Audit Institution , if any, and sending them to the
Supreme Audit Institution and the Ministry within the period specified by the Financial
Circular.
11. Reply to the reports of the Supreme Audit Institution - if any - within five working days
from the date of receipt, provided that a copy of it shall be submitted to the Ministry on
the same date.
12. The independent Federal Entities that are not covered by the General Budget Law shall
coordinate directly with the Supreme Audit Institution regarding the submission of their
draft final accounts, in accordance with the date specified in the Financial Circular.
13. Insure that the General Ledger period is adjusted in accordance with the transaction date
during the two accounting periods of December of the fiscal year for which the draft final
account is prepared and January of the subsequent fiscal year.
14. Apply the principle of annual budgeting, and refrain from charging the current fiscal year’s
budget with expenditures related to prior or future fiscal years.
15. Refrain from overspending budget line items and from submitting a final account that
includes entries contrary to their nature.
16. The Federal Entity, that has joined the phased implementation project for the transition to
accrual-basis accounting shall prepare dual final reports (Dual Reporting) as follows:
a. A draft final account in accordance with the provisions of this article shall be submitted
to the Supreme Audit Institution, with a copy to the Ministry for the purposes of
preparing the consolidated final account. This procedure shall remain in effect until
the Minister issues a Circular announcing the government’s full transition to accrual-
based accounting.
b. Financial statements and reports shall be prepared in accordance with the instructions
issued by the Ministry, provided that the data and reports are submitted for review to
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ensure their quality and compliance with the accounting standards approved by the
Government in this regard.
17. Upon the Minister’s approval of the decision for the Federal Government to adopt accrual-
based accounting, the Ministry shall issue the decisions that Federal Entities shall be
required to comply with for the preparation of financial reports and data in accordance
with the accounting standards adopted by the Federal Government.
