Federal Block Grants and Budgets in Ethiopia3 Sample Clauses

Federal Block Grants and Budgets in Ethiopia3. The block grant is allocated to every Woreda using a formula that is designed to give every citizen access to basic services. In accordance with international standards, the formula is based on the following variables: population size of the region; an expenditure assessment, which estimates resources needed to provide all people of the region with basic services; a revenue assessment (in other words an estimate of the revenue potential in the region, based on previous years’ performance and divided per capita); and an infrastructure deficit index, which favors disadvantaged regions in terms of schools, health clinics, roads and other infrastructure. There are two main budget and expenditure categories: • Recurrent budget: to pay for expenses that are repeated every year, e.g. salaries for teachers, health workers and development assistants, offices’ operational costs, medicines, books and electricity. • Capital budget: to pay for items that last for several years, e.g. buildings, roads and water points. Maintenance and service provision will be in the recurrent budget. The recurrent budget is financed in principle by taxation, and the capital budget is financed through external borrowing and grants from donors. Regions have a monitoring and oversight role on Woreda budget, but Xxxxxxx are the ones who decide the allocation and spending of their budgets. One way to monitor the use of Woreda budgets is through Woreda Performance Agreements4, which combine federal and regional development objectives with local priorities.
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