## 1.     Priority Recommendations

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---

### Summary of mission outcomes and priority recommendations
- Mission: A GFS mission visited Amman, Jordan during the period October 18–31, 2018 to provide technical assistance (TA) to further improve GFS compilation and dissemination, consistent with the Government Finance Statistics Manual 2014 (GFSM 2014) and developing GFS that can better support IMF surveillance.
- Key problems identified:
  - The mapping from AFMIS to the classification of GFS and COFOG had become out of date, requiring review and update in line with GFSM 2014.
  - These mapping and institutional issues were the key reasons for authorities discontinuing to produce GFS consistent with GFSM 2014, while financial data continued to be produced on time according to the national methodology.
- Mission achievements:
  - Updated AFMIS bridge tables to enable producing Budgetary Central Government (BCG) data according to GFSM 2014 economic (object) and functional (COFOG) classifications.
  - Reviewed government debt compilation, assisted developing bridge tables for extrabudgetary units, and provided hands-on training for GFS compilers in compiling general government data.
  - GFS compilers completed GFS annual datasets for FY2016 and FY2017 using GFSM 2014 templates for the first time, and produced some stock data.
  - Updated bridge tables enabled monthly GFS data production for the BCG.
  - Improvements were made on COFOG accuracy for central government expenditure on-budget and donor-implemented projects.
- Remaining capacity and institutional issues:
  - Capacity for GFS compilation remains slim; management support is critical to maintain and improve GFSM 2014 compliance.
  - Issues with stock data accounting: stocks of assets and liabilities are not properly reconciled and carried forward; reconciliation of opening and closing balances should be introduced first in the Treasury.
  - Some accounting and recording decisions have not aligned with GFSM 2014 (e.g., classification of non-financial assets acquired and disposed, segregation of transactions from holding gains/losses, treatment of government claims on banks for currency and deposits set aside for future claims against letters of credit).
  - Data dissemination interrupted by inability to continue support for the Treasury website; alternative publication channels for monthly and annual BCG and quarterly debt data not identified.
  - Cooperation among departments requires improvement; little cooperation outside routine PFM processes complicates resolution of source data issues and maintenance of the Chart of Accounts including GFS and COFOG bridge tables.
- Recommended institutional steps:
  - Publication of GFS and government debt data should resume. Current production timeliness: monthly BCG data within three weeks after the end of a month; quarterly government debt data within a month after the end of a quarter; audited BCG budget account within six months after the end of the year.
  - Establish a GFS Technical Working Group to coordinate GFS reforms, address GFSM 2014 application issues, and advise MoF management.
  - Update AFMIS Chart of Accounts (CoA) with GFS and COFOG mapping tables and ensure appropriate maintenance thereafter.
  - Adopt a GFSM 2014 migration plan to coordinate reforms and allocate resources.

### Priority recommendations (Multi-Year GFSM 2014 and PSDS Work Plan — Table 1)
- April/2019 — Resume publishing monthly and annual GFS and quarterly government debt statistics
  - Responsible Institutions: MoF, Treasury
- April/2019 — Establish a GFS Technical Working Group (GFS working group) to coordinate GFS reforms and to improve the alignment of the budgeting and accounting framework with the GFSM 2014 methodology.
  - Responsible Institutions: MoF, Treasury, Budget, and Revenue directorates
- June/2019 — Update mapping tables of AFMIS with codes for GFS and COFOG
  - Responsible Institutions: MoF, Treasury, Budget
- December/2019 — Adopt a plan for migration to GFSM 2014.
  - Responsible Institutions: MoF, GFS Working Group

### Further improving GFS compilation and dissemination — Applying GFSM 2014 for BCG operations
- Legal and procedural context:
  - The Public Finance and Expenditure Management Law (PFEML) mandates the use of IMF GFS methodology in budget presentation, classification and reporting.
  - A new template based on GFSM 2014 cash basis was adopted at the end of 2017 for budget preparation starting from FY 2018 (solar year 1397).
- Problems encountered with AFMIS and mapping:
  - AFMIS upgrade starting from FY2017 proceeded without adding a new bridge table from the object (economic) classification to GFS.
  - Previous mapping based on GFSM 2001 had become outdated; no agreement on a new mapping without external TA.
  - Shortage of GFSM 2014 expertise and lack of institutional arrangements for maintaining mapping to GFS coding led to deterioration in GFS reporting facilities.
- Mission technical fixes and outputs:
  - Bridge tables for BCG were updated during the mission to comply with GFSM 2014; IMF GFS codes styled as numerical 7digit codes in bridge tables.
  - Updated bridge tables were used to convert BCG data into GFSM 2014 structure for compiling GFS for FY2016 and FY2017; compilers should seek approval and upload to AFMIS.
  - GFS compilers can now produce BCG data according to GFSM 2014, including monthly GFS data.
- Recommended actions and timeline:
  - MoF should set up a GFS Technical Working Group by April 2019 to address GFS compilation and GFSM 2014 application issues.
  - MoF should review and approve mapping from object code to GFS code and upload bridge tables to AFMIS by June 2019.
  - MoF should adopt a plan to prepare a financial balance sheet for the Treasury and BCG by July 2019.

### Compilation of Public Sector Debt Statistics (PSDS)
- Current coverage and practices:
  - Debt statistics currently compiled and reported cover external loans of the BCG, Special Drawing rights (SDR) liabilities, and domestic securities issued to Da Afghanistan Bank (DAB) to compensate for Kabul Bank losses in 2010.
  - Debt includes loans from foreign governments and international financial institutions.
  - Borrowing from the IMF is recorded as SDR liabilities only in DAB’s accounts; proceeds passed to government are recorded as a domestic loan from DAB.
  - Treasury records debt data into CS-DRMS based on loan disbursement and amortization transactions; DMU staff reconcile transactions with AFMIS; inconsistencies usually rectified within a month.
- Methodological gaps versus GFSM 2014 and PSDSG 2013:
  - Debt reporting does not follow GFSM 2014 and PSDSG 2013 valuation methodology (prescribe reporting debt according to both nominal value and market value, which include interest accrued and not paid at reporting date).
  - Afghanistan MoF does not add interest accrued not paid to the debt stock at the end of the reporting period due to domestic legal requirement of recognizing transactions and balances strictly on cash basis.
  - Accounts payable for BCG units are not added to the stock of debt; AFMIS recognizes transactions of goods received before payment initiation, but outstanding accounts payable balances are not maintained and carried forward.
  - MoF occasionally requires BCG units to report outstanding arrears but data are not comprehensive for financial reporting.
- Coverage gaps:
  - Debt incurred by extrabudgetary units (EBU), public corporations (state-owned enterprises), and municipalities is not reported to the DMU.
  - EBUs prepare annual accrual-basis financial statements and include debt data, but arrangements to forward that data to the DMU are absent.
  - Public corporations report to the State-owned enterprise department of the MoF; no arrangements to receive their debt data in the Treasury DMU.
  - Debt liabilities incurred by entities managed by foreign donors in the interest of the Government of Afghanistan are not reported to the MoF.
  - Municipalities do not produce comprehensive financial accounts and do not report debt data to the MoF.

### Valuation methods according to the PSDS (PSDSG 2013 references)
- Market value (PSDSG 2013 - 2.115)
  - "2.115 ..., financial assets and liabilities (including debt instruments) should be valued in macroeconomic statistics at market value, that is, as if they were acquired in market transactions on the balance sheet reporting date (reference date)."
- Nominal value (PSDSG 2013 - 2.120)
  - "2.120 The nominal value of a debt instrument is a measure of value from the viewpoint of the debtor: at any moment in time it is the amount that the debtor owes to the creditor."
- Face value (PSDSG 2013 - 2.121)
  - "2.121 The face value of a debt instrument is the undiscounted amount of principal to be repaid at maturity."

### Reporting of assets, liabilities, and accounting systems
- Findings:
  - Cash basis focus of the accounting systems in BCG and municipalities does not facilitate comprehensive recording of assets and liabilities or improving useful information for better financial management.
  - The accounting guidance and records in public corporations require further assessment for the purposes of public debt reporting.
- Recommended Action (deadlines preserved exactly):
  - The DMU should ensure reporting debt at market value and nominal value consistent with the PSDSG 2013 methodology by June 2021.
  - The MoF should adopt a plan to update accounting and reporting to ensure the collection of accounts payable data and arrears data by the units of the general government by June 2020.
  - The MoF should engage CS-DRMS suppliers to configure the system to produce the debt data according to PSDS methodology, specifically ensuring the computation of accrued interest and debt in nominal value by December 2020.
  - The DMU should engage counterpart agencies to acquire the debt data from municipalities, public corporations, and other entities holding public debt on their record to the degree possible by January 2021.

### Developing sources of GFS data for extrabudgetary units (EBUs) and municipalities
- Findings:
  - Annual GFS data is being compiled for the general government. EBU comprises extrabudgetary units and donor-managed aid operations benefitting the government.
  - Significant amounts of donor aid are donor executed and do not appear in the BCG accounts, which include only the aid flows channelled through the Treasury.
  - Military and security aid from foreign governments has been largely donor executed and treated as extrabudgetary operations.
  - Data for U.S. military and security assistance are compiled based on cost to the donor from donor government publications and from the US Treasury and Congress websites for overall outlays and expenditure structure.
  - Transfers by the Government of the USA to UNDP for funding police salaries are subtracted from total extra-budgetary funding and reflected as flows processed through BCG.
  - MoF engages foreign governments and international organizations to obtain data on donor-executed aid compiled based on cost to donors; some donor activities should be excluded if they do not benefit government operations.
  - Donor Assistance Database (DAD) was reviewed to assign GFS and COFOG codes to donor-executed projects; a methodology to estimate quarterly data on donor-managed aid operations should be devised.
  - Institutional table changes: Afghanistan Investment Support Agency incorporated into BCG (no longer an EBU); ATRA and TDF added to GFS compilation for the first time.
  - Mapping of EBU financial data to GFS Yearbook templates was developed; further review to identify public corporations for reclassification should engage CSO and DAB.
  - MoF and IDLG collect quarterly financial accounts from municipalities; MoF reports reduced cooperation and non-compliance from municipalities despite PFEML requirements and potential administrative penalties.
  - Segregation of municipal staff producing revenue and expenditure data prevents consolidated municipal financial views; reconciliation procedures between central and local governments not yet adopted; consolidation currently based on BCG data only.
- Recommended Action (deadlines preserved exactly):
  - The MoF should seek technical assistance to improve accounting standards, recording, procedures, and reports for the BCG, EBUs, and municipalities to supply the data for GFS compilation; initial focus on aligning classification with GFSM 2014 and enabling reconciliation of cash and debt stocks with flows; unified forms should provide core information for GFS compilation.
  - The MoF should revise the regulations to strengthen the responsibility of government units and public corporations for reporting and the ability of the Treasury to enforce these requirements by June 2020.
  - The MoF in collaboration with the CSO and DAB should review the institutional table with focus on the public corporations that should be reclassified within the general government sector in compiling GFS by June 2020.
  - The MoF should revise according to GFSM 2014 methodology the accounting guidance and reporting forms for general government units, including municipalities, EBUs, and public corporations, to enable the Treasury to compile quarterly GFS for the general government December 2021.
  - The MoF should develop approach to engage foreign donors to facilitate the data flow and accuracy as well as the estimating of quarterly operations by December 2021.

### Compilation of COFOG for the general government
- Findings:
  - COFOG data for BCG compiled based on bridge tables in AFMIS; mapping based on activity structure in program classification for BCG budget.
  - Budget General Directorate responsible for assigning COFOG coding; mission identified deficiencies and updated mapping due to lack of clarification of key outputs/outcomes in program activities.
  - COFOG for donor-managed aid assigned to over 600 projects extracted from DAD; annually reassigning COFOG is labor intensive and error prone.
  - COFOG compilation for municipalities requires most improvement; MoF currently estimates purposes of municipal own operations; COFOG can be derived from donor funding passed through Treasury; surveys should be considered if improved reporting is not practical.
- Recommended Action (deadlines preserved exactly):
  - The MoF internal procedure should be adopted to mandate assigning a COFOG code to all program activities and projects at the time of establishing a classification item as well as coordinating to use single coding in budget preparation and budget execution by September 2019.
  - The MoF should adopt a plan for municipality reporting on the purposes of the expenditure or survey municipalities to establish the COFOG breakdown of the expenditures by September 2020.

### Dissemination of GFS and PSDS
- Findings:
  - Treasury discontinued publication of monthly and annual GFS in 2016 when external support for the Treasury webpage expired; GFS for BCG compiled monthly and annually (cash basis) but disseminated by e-mail to key recipients due to no operating website.
  - Debt data compiled quarterly (normally within one month after quarter end) but not publicly reported; debt reports provided by e-mail upon request.
  - Issues updating economic (object) mapping to GFS codes have disrupted reporting GFS to STA over the past few years; AFMIS bridge tables update needed.
  - Publication of financial data of other general government units lacks systematic pattern despite PFEML mandates; no comprehensive guidance for publication by government units not part of BCG.
- Recommended Action (deadlines preserved exactly):
  - The Treasury should resume the publication of monthly and annual financial data and quarterly debt data on its website or make arrangements for the publication on the MoF’s website by April 2019.
  - The Treasury should resume the submission of annual and monthly (high-frequency) GFS to STA by April 2019.
  - The MoF should mandate extrabudgetary units, municipalities, and public corporations to publish their quarterly financial data, as well as establish dissemination requirements by June 2021.
  - The MoF should enable the compilation and dissemination debt statistics at market value and nominal value by June 2021.

### Further steps to transition to full GFS (GFSM 2014)
- Findings:
  - AFMIS has a powerful general ledger and double entry accounting system suitable for comprehensive record of stocks and flows.
  - Reforms in accounting over last two decades improved outlook for better financial data.
  - Transition to accrual accounting and budgeting should not be considered the ultimate objective; priorities include meeting PFEML reporting requirements for assets and liabilities, preservation of government-controlled assets, and comprehensive measurement and control of costs.
  - First steps should focus on reconciliation and carry forward of closing balances of stocks to subsequent accounting periods; partially completed for currency and deposits but should be extended to all financial assets and liabilities.
  - Financial record of non-financial assets could be substantially improved; asset management plan mandated in Financial Regulations; recording of goods and services received in AFMIS has been made mandatory.
- Recommended Action (deadline preserved exactly):
  - The GFS Technical Working Group should develop a GFSM 2014 migration plan incorporating key accounting and reporting measures and secure the management approval by December 2019.

### Addressing capacity constraints
- Findings:
  - Authorities have achieved good outcomes in GFS compilation and dissemination despite limited capacity.
  - Donor fatigue and declining interest reduce resource allocation for reforms and sustaining achievements; donors expected Afghan authorities to gradually take over funding responsibilities.
  - Ambiguous reform agenda and resource constraints pose risks; Budget Department allocated key responsibilities for budget classification has limited GFS experience.
  - Resources for GFS compilation and dissemination remain limited; progress depends on a small team of qualified accounting staff and it would be critical to supplement the GFS team by a statistician.
  - Large scale staff rotations and increased politically appointed management without technical expertise increase risks for implementation.
  - GFS Technical Working Group should be the focus of capacity development and GFS/PSDS compilers should apply for available IMF capacity development facilities.
  - GFS compilation methods and data sources should be documented to enable continuity and transition of tasks.
- Recommended Action (deadline preserved exactly):
  - The MoF should ensure that the GFS and PSDS compilation are adequately staffed and encourage GFS and PSDS compilers to apply for the available IMF training.
  - The GFS Technical Working Group should develop and adopt a GFS Compilation Guide for the use of the GFS compilers by December 2020 and continue updating thereafter.

### Detailed technical assessment — Priority Action/Milestone (selected outcomes and target completion dates)
- Legal and institutional environment:
  - H Legal framework requires update to allocate the responsibilities for reporting the financial statistics by all general government entities to the MoF, including adequate enforcement penalties for non-compliance. — June 2020
- Sectorization and institutional table:
  - H Afghanistan’s Public Sector Institutional Table requires update and arrangements at the government level should be made to ensure timely supply of the data and compilation. — June 2020
- Financial reporting for EBUs and municipalities:
  - L Financial reporting requirements should be updated and improved for EBUs and municipalities to comply with GFSM 2014. — December 2021
- Dissemination:
  - H The dissemination of monthly and annual GFS should be restarted on the MoF and/or Treasury websites. — April 2019
  - H General government data should be compiled and published on the MoF or the Treasury website. — April 2019
- Coverage and reporting templates:
  - L Data coverage and reporting templates should be improved for municipalities to comply with GFSM 2014 scope. — December 2021
- Balance sheets and accounting framework:
  - L Asset and liability accounting and management guidelines promulgated. — December 2020
  - L Opening and closing balances for all financial assets and liabilities reconcile with transactions and other flows. — December 2022
  - L Comprehensive accounting framework, enabling compilation of balance sheets, enacted with minor deviations from IPSAS for all sub-sectors of the general government. — December 2026
- Public-sector debt statistics (PSDS):
  - M The Government of Afghanistan collaborates with CS-DRMS to improve the functionality that permits compilation of debt data on a market value and nominal value basis. — December 2020
  - M The Government of Afghanistan disseminates PSDS to the World Bank-IMF Debt Database on a nominal value basis. — June 2021
- GFSM 2014 migration:
  - M The Government of Afghanistan updates the accounting and reporting framework to improve the following of the concepts and definitions of the GFSM 2014. — December 2020
  - L The GFSM 2014 Statement of Operations is prepared using accrual basis accounting data and estimates. — December 2026
- Quarterly data and high-frequency reporting:
  - M Issue binding instructions to EBUs and municipalities to report quarterly GFS. Agree on the methodology to estimate quarterly data for donor-implemented foreign aid. — December 2021
  - M Quarterly GFS for GG are compiled and disseminated to the IMF and to the public. — December 2022
  - M Municipalities report their expenditure COFOG breakdown once quarterly to make data available for compilation and dissemination. — December 2022
- Documentation and procedures:
  - M A volume on GFS compilation and dissemination methods and procedures is developed. — December 2020

*Source: 1afgea2019002 - 1.     Priority Recommendations _____________________________________________________________________ 6*

### 1.     Priority Recommendations _____________________________________________________________________ 6

### 1.     Priority Recommendations _____________________________________________________________________ 6

### Summary of mission outcomes and priority recommendations
- A GFS mission visited Amman, Jordan during the period October 18–31, 2018 to provide technical assistance (TA) to further improve GFS compilation and dissemination, consistent with the Government Finance Statistics Manual 2014 (GFSM 2014) and developing GFS that can better support IMF surveillance.
- Key problems identified:
  - The mapping from AFMIS to the classification of GFS and COFOG had become out of date, requiring review and update in line with GFSM 2014.
  - These mapping and institutional issues were the key reasons for authorities discontinuing to produce GFS consistent with GFSM 2014, while financial data continued to be produced on time according to the national methodology.
- Mission achievements:
  - Updated AFMIS bridge tables to enable producing Budgetary Central Government (BCG) data according to GFSM 2014 economic (object) and functional (COFOG) classifications.
  - Reviewed government debt compilation, assisted developing bridge tables for extrabudgetary units, and provided hands-on training for GFS compilers in compiling general government data.
  - GFS compilers completed GFS annual datasets for FY2016 and FY2017 using GFSM 2014 templates for the first time, and produced some stock data.
  - Updated bridge tables enabled monthly GFS data production for the BCG.
  - Improvements were made on COFOG accuracy for central government expenditure on-budget and donor-implemented projects.
- Remaining capacity and institutional issues:
  - Capacity for GFS compilation remains slim; management support is critical to maintain and improve GFSM 2014 compliance.
  - Issues with stock data accounting: stocks of assets and liabilities are not properly reconciled and carried forward; reconciliation of opening and closing balances should be introduced first in the Treasury.
  - Some accounting and recording decisions have not aligned with GFSM 2014 (e.g., classification of non-financial assets acquired and disposed, segregation of transactions from holding gains/losses, treatment of government claims on banks for currency and deposits set aside for future claims against letters of credit).
  - Data dissemination interrupted by inability to continue support for the Treasury website; alternative publication channels for monthly and annual BCG and quarterly debt data not identified.
  - Cooperation among departments requires improvement; little cooperation outside routine PFM processes complicates resolution of source data issues and maintenance of the Chart of Accounts including GFS and COFOG bridge tables.
- Recommended institutional steps:
  - Publication of GFS and government debt data should resume. Current production timeliness: monthly BCG data within three weeks after the end of a month; quarterly government debt data within a month after the end of a quarter; audited BCG budget account within six months after the end of the year.
  - Establish a GFS Technical Working Group to coordinate GFS reforms, address GFSM 2014 application issues, and advise MoF management.
  - Update AFMIS Chart of Accounts (CoA) with GFS and COFOG mapping tables and ensure appropriate maintenance thereafter.
  - Adopt a GFSM 2014 migration plan to coordinate reforms and allocate resources.

### Priority recommendations (Multi-Year GFSM 2014 and PSDS Work Plan — Table 1)
- April/2019 — Resume publishing monthly and annual GFS and quarterly government debt statistics
  - Responsible Institutions: MoF, Treasury
- April/2019 — Establish a GFS Technical Working Group (GFS working group) to coordinate GFS reforms and to improve the alignment of the budgeting and accounting framework with the GFSM 2014 methodology.
  - Responsible Institutions: MoF, Treasury, Budget, and Revenue directorates
- June/2019 — Update mapping tables of AFMIS with codes for GFS and COFOG
  - Responsible Institutions: MoF, Treasury, Budget
- December/2019 — Adopt a plan for migration to GFSM 2014.
  - Responsible Institutions: MoF, GFS Working Group

### Further improving GFS compilation and dissemination — Applying GFSM 2014 for BCG operations
- Legal and procedural context:
  - The Public Finance and Expenditure Management Law (PFEML) mandates the use of IMF GFS methodology in budget presentation, classification and reporting.
  - A new template based on GFSM 2014 cash basis was adopted at the end of 2017 for budget preparation starting from FY 2018 (solar year 1397) (see Appendix I).
- Problems encountered with AFMIS and mapping:
  - AFMIS upgrade starting from FY2017 proceeded without adding a new bridge table from the object (economic) classification to GFS.
  - Previous mapping based on GFSM 2001 had become outdated; no agreement on a new mapping without external TA.
  - Shortage of GFSM 2014 expertise and lack of institutional arrangements for maintaining mapping to GFS coding led to deterioration in GFS reporting facilities.
- Mission technical fixes and outputs:
  - Bridge tables for BCG were updated during the mission to comply with GFSM 2014; IMF GFS codes styled as numerical 7digit codes in bridge tables (see Appendix II).
  - Updated bridge tables were used to convert BCG data into GFSM 2014 structure for compiling GFS for FY2016 and FY2017; compilers should seek approval and upload to AFMIS.
  - GFS compilers can now produce BCG data according to GFSM 2014, including monthly GFS data.
- Recommended actions and timeline:
  - MoF should set up a GFS Technical Working Group by April 2019 to address GFS compilation and GFSM 2014 application issues.
  - MoF should review and approve mapping from object code to GFS code and upload bridge tables to AFMIS by June 2019.
  - MoF should adopt a plan to prepare a financial balance sheet for the Treasury and BCG by July 2019.

### Compilation of Public Sector Debt Statistics (PSDS)
- Current coverage and practices:
  - Debt statistics currently compiled and reported cover external loans of the BCG, Special Drawing rights (SDR) liabilities, and domestic securities issued to Da Afghanistan Bank (DAB) to compensate for Kabul Bank losses in 2010.
  - Debt includes loans from foreign governments and international financial institutions.
  - Borrowing from the IMF is recorded as SDR liabilities only in DAB’s accounts; proceeds passed to government are recorded as a domestic loan from DAB.
  - Treasury records debt data into CS-DRMS based on loan disbursement and amortization transactions; DMU staff reconcile transactions with AFMIS; inconsistencies usually rectified within a month.
- Methodological gaps versus GFSM 2014 and PSDSG 2013:
  - Debt reporting does not follow GFSM 2014 and PSDSG 2013 valuation methodology (prescribe reporting debt according to both nominal value and market value, which include interest accrued and not paid at reporting date).
  - Afghanistan MoF does not add interest accrued not paid to the debt stock at the end of the reporting period due to domestic legal requirement of recognizing transactions and balances strictly on cash basis.
  - Accounts payable for BCG units are not added to the stock of debt; AFMIS recognizes transactions of goods received before payment initiation, but outstanding accounts payable balances are not maintained and carried forward.
  - MoF occasionally requires BCG units to report outstanding arrears but data are not comprehensive for financial reporting.
- Coverage gaps:
  - Debt incurred by extrabudgetary units (EBU), public corporations (state-owned enterprises), and municipalities is not reported to the DMU.
  - EBUs prepare annual accrual-basis financial statements and include debt data, but arrangements to forward that data to the DMU are absent.
  - Public corporations report to the State-owned enterprise department of the MoF; no arrangements to receive their debt data in the Treasury DMU.
  - Debt liabilities incurred by entities managed by foreign donors in the interest of the Government of Afghanistan are not reported to the MoF.
  - Municipalities do not produce comprehensive financial accounts and do not report debt data to the MoF.

### Valuation methods according to the PSDS (PSDSG 2013 references)
- Market value (PSDSG 2013 - 2.115)
  - "2.115 ..., financial assets and liabilities (including debt instruments) should be valued in macroeconomic statistics at market value, that is, as if they were acquired in market transactions on the balance sheet reporting date (reference date)."
- Nominal value (PSDSG 2013 - 2.120)
  - "2.120 The nominal value of a debt instrument is a measure of value from the viewpoint of the debtor: at any moment in time it is the amount that the debtor owes to the creditor."
- Face value (PSDSG 2013 - 2.121)
  - "2.121 The face value of a debt instrument is the undiscounted amount of principal to be repaid at maturity."

*Source: 1afgea2019002 - 1.     Priority Recommendations _____________________________________________________________________ 6*

### 19. The requirements of the PFEML to report assets and liabilities have not been fully

### 1afgea2019002 - 19. The requirements of the PFEML to report assets and liabilities have not been fully

### Reporting of assets, liabilities, and accounting systems
- Findings:
  - Cash basis focus of the accounting systems in BCG and municipalities does not facilitate comprehensive recording of assets and liabilities or improving useful information for better financial management.
  - The accounting guidance and records in public corporations require further assessment for the purposes of public debt reporting.
- Recommended Action:
  - The DMU should ensure reporting debt at market value and nominal value consistent with the PSDSG 2013 methodology by June 2021.
  - The MoF should adopt a plan to update accounting and reporting to ensure the collection of accounts payable data and arrears data by the units of the general government by June 2020.
  - The MoF should engage CS-DRMS suppliers to configure the system to produce the debt data according to PSDS methodology, specifically ensuring the computation of accrued interest and debt in nominal value by December 2020.
  - The DMU should engage counterpart agencies to acquire the debt data from municipalities, public corporations, and other entities holding public debt on their record to the degree possible by January 2021.

### Developing sources of GFS data for extrabudgetary units (EBUs) and municipalities
- Findings:
  - Annual GFS data is being compiled for the general government. EBU comprises extrabudgetary units and donor-managed aid operations benefitting the government.
  - Significant amounts of donor aid are donor executed and do not appear in the BCG accounts, which include only the aid flows channelled through the Treasury.
  - Military and security aid from foreign governments has been largely donor executed and treated as extrabudgetary operations.
  - Data for U.S. military and security assistance are compiled based on cost to the donor from donor government publications and from the US Treasury and Congress websites for overall outlays and expenditure structure.
  - Transfers by the Government of the USA to UNDP for funding police salaries are subtracted from total extra-budgetary funding and reflected as flows processed through BCG.
  - MoF engages foreign governments and international organizations to obtain data on donor-executed aid compiled based on cost to donors; some donor activities should be excluded if they do not benefit government operations.
  - Donor Assistance Database (DAD) was reviewed to assign GFS and COFOG codes to donor-executed projects; a methodology to estimate quarterly data on donor-managed aid operations should be devised.
  - Institutional table changes: Afghanistan Investment Support Agency incorporated into BCG (no longer an EBU); ATRA and TDF added to GFS compilation for the first time.
  - Mapping of EBU financial data to GFS Yearbook templates was developed; further review to identify public corporations for reclassification should engage CSO and DAB.
  - MoF and IDLG collect quarterly financial accounts from municipalities; MoF reports reduced cooperation and non-compliance from municipalities despite PFEML requirements and potential administrative penalties.
  - Segregation of municipal staff producing revenue and expenditure data prevents consolidated municipal financial views; reconciliation procedures between central and local governments not yet adopted; consolidation currently based on BCG data only.
- Recommended Action:
  - The MoF should seek technical assistance to improve accounting standards, recording, procedures, and reports for the BCG, EBUs, and municipalities to supply the data for GFS compilation; initial focus on aligning classification with GFSM 2014 and enabling reconciliation of cash and debt stocks with flows; unified forms should provide core information for GFS compilation.
  - The MoF should revise the regulations to strengthen the responsibility of government units and public corporations for reporting and the ability of the Treasury to enforce these requirements by June 2020.
  - The MoF in collaboration with the CSO and DAB should review the institutional table with focus on the public corporations that should be reclassified within the general government sector in compiling GFS by June 2020.
  - The MoF should revise according to GFSM 2014 methodology the accounting guidance and reporting forms for general government units, including municipalities, EBUs, and public corporations, to enable the Treasury to compile quarterly GFS for the general government December 2021.
  - The MoF should develop approach to engage foreign donors to facilitate the data flow and accuracy as well as the estimating of quarterly operations by December 2021.

### Compilation of COFOG for the general government
- Findings:
  - COFOG data for BCG compiled based on bridge tables in AFMIS; mapping based on activity structure in program classification for BCG budget.
  - Budget General Directorate responsible for assigning COFOG coding; mission identified deficiencies and updated mapping due to lack of clarification of key outputs/outcomes in program activities.
  - COFOG for donor-managed aid assigned to over 600 projects extracted from DAD; annually reassigning COFOG is labor intensive and error prone.
  - COFOG compilation for municipalities requires most improvement; MoF currently estimates purposes of municipal own operations; COFOG can be derived from donor funding passed through Treasury; surveys should be considered if improved reporting is not practical.
- Recommended Action:
  - The MoF internal procedure should be adopted to mandate assigning a COFOG code to all program activities and projects at the time of establishing a classification item as well as coordinating to use single coding in budget preparation and budget execution by September 2019.
  - The MoF should adopt a plan for municipality reporting on the purposes of the expenditure or survey municipalities to establish the COFOG breakdown of the expenditures by September 2020.

### Dissemination of GFS and PSDS
- Findings:
  - Treasury discontinued publication of monthly and annual GFS in 2016 when external support for the Treasury webpage expired; GFS for BCG compiled monthly and annually (cash basis) but disseminated by e-mail to key recipients due to no operating website.
  - Debt data compiled quarterly (normally within one month after quarter end) but not publicly reported; debt reports provided by e-mail upon request.
  - Issues updating economic (object) mapping to GFS codes have disrupted reporting GFS to STA over the past few years; AFMIS bridge tables update needed.
  - Publication of financial data of other general government units lacks systematic pattern despite PFEML mandates; no comprehensive guidance for publication by government units not part of BCG.
- Recommended Action:
  - The Treasury should resume the publication of monthly and annual financial data and quarterly debt data on its website or make arrangements for the publication on the MoF’s website by April 2019.
  - The Treasury should resume the submission of annual and monthly (high-frequency) GFS to STA by April 2019.
  - The MoF should mandate extrabudgetary units, municipalities, and public corporations to publish their quarterly financial data, as well as establish dissemination requirements by June 2021.
  - The MoF should enable the compilation and dissemination debt statistics at market value and nominal value by June 2021.

### Further steps to transition to full GFS (GFSM 2014)
- Findings:
  - AFMIS has a powerful general ledger and double entry accounting system suitable for comprehensive record of stocks and flows.
  - Reforms in accounting over last two decades improved outlook for better financial data.
  - Transition to accrual accounting and budgeting should not be considered the ultimate objective; priorities include meeting PFEML reporting requirements for assets and liabilities, preservation of government-controlled assets, and comprehensive measurement and control of costs.
  - First steps should focus on reconciliation and carry forward of closing balances of stocks to subsequent accounting periods; partially completed for currency and deposits but should be extended to all financial assets and liabilities.
  - Financial record of non-financial assets could be substantially improved; asset management plan mandated in Financial Regulations; recording of goods and services received in AFMIS has been made mandatory.
- Recommended Action:
  - The GFS Technical Working Group should develop a GFSM 2014 migration plan incorporating key accounting and reporting measures and secure the management approval by December 2019.

### Addressing capacity constraints
- Findings:
  - Authorities have achieved good outcomes in GFS compilation and dissemination despite limited capacity.
  - Donor fatigue and declining interest reduce resource allocation for reforms and sustaining achievements; donors expected Afghan authorities to gradually take over funding responsibilities.
  - Ambiguous reform agenda and resource constraints pose risks; Budget Department allocated key responsibilities for budget classification has limited GFS experience.
  - Resources for GFS compilation and dissemination remain limited; progress depends on a small team of qualified accounting staff and it would be critical to supplement the GFS team by a statistician.
  - Large scale staff rotations and increased politically appointed management without technical expertise increase risks for implementation.
  - GFS Technical Working Group should be the focus of capacity development and GFS/PSDS compilers should apply for available IMF capacity development facilities.
  - GFS compilation methods and data sources should be documented to enable continuity and transition of tasks.
- Recommended Action:
  - The MoF should ensure that the GFS and PSDS compilation are adequately staffed and encourage GFS and PSDS compilers to apply for the available IMF training.
  - The GFS Technical Working Group should develop and adopt a GFS Compilation Guide for the use of the GFS compilers by December 2020 and continue updating thereafter.

### Detailed technical assessment — Priority Action/Milestone (selected outcomes and target completion dates)
- Legal and institutional environment:
  - H Legal framework requires update to allocate the responsibilities for reporting the financial statistics by all general government entities to the MoF, including adequate enforcement penalties for non-compliance. — June 2020
- Sectorization and institutional table:
  - H Afghanistan’s Public Sector Institutional Table requires update and arrangements at the government level should be made to ensure timely supply of the data and compilation. — June 2020
- Financial reporting for EBUs and municipalities:
  - L Financial reporting requirements should be updated and improved for EBUs and municipalities to comply with GFSM 2014. — December 2021
- Dissemination:
  - H The dissemination of monthly and annual GFS should be restarted on the MoF and/or Treasury websites. — April 2019
  - H General government data should be compiled and published on the MoF or the Treasury website. — April 2019
- Coverage and reporting templates:
  - L Data coverage and reporting templates should be improved for municipalities to comply with GFSM 2014 scope. — December 2021
- Balance sheets and accounting framework:
  - L Asset and liability accounting and management guidelines promulgated. — December 2020
  - L Opening and closing balances for all financial assets and liabilities reconcile with transactions and other flows. — December 2022
  - L Comprehensive accounting framework, enabling compilation of balance sheets, enacted with minor deviations from IPSAS for all sub-sectors of the general government. — December 2026
- Public-sector debt statistics (PSDS):
  - M The Government of Afghanistan collaborates with CS-DRMS to improve the functionality that permits compilation of debt data on a market value and nominal value basis. — December 2020
  - M The Government of Afghanistan disseminates PSDS to the World Bank-IMF Debt Database on a nominal value basis. — June 2021
- GFSM 2014 migration:
  - M The Government of Afghanistan updates the accounting and reporting framework to improve the following of the concepts and definitions of the GFSM 2014. — December 2020
  - L The GFSM 2014 Statement of Operations is prepared using accrual basis accounting data and estimates. — December 2026
- Quarterly data and high-frequency reporting:
  - M Issue binding instructions to EBUs and municipalities to report quarterly GFS. Agree on the methodology to estimate quarterly data for donor-implemented foreign aid. — December 2021
  - M Quarterly GFS for GG are compiled and disseminated to the IMF and to the public. — December 2022
  - M Municipalities report their expenditure COFOG breakdown once quarterly to make data available for compilation and dissemination. — December 2022
- Documentation and procedures:
  - M A volume on GFS compilation and dissemination methods and procedures is developed. — December 2020

*Source: IMF technical assessment and recommendations as presented in the supplied chapter.*

### Appendix I.  Budget Framework Presentation for FY 2018

### Appendix I.  Budget Framework Presentation for FY 2018

### Document title and jurisdiction
- Appendix I.  Budget Framework Presentation for FY 2018
- ISLAMIC REPUBLIC OF AFGHANISTAN

### Publisher
- INTERNATIONAL MONETARY FUND

### Pages and visible pagination
- Page 19
- Page 20
- Page 21

### Visible page content (verbatim fragments)
- "Appendix I.  Budget Framework Presentation for FY 2018"
- "ISLAMIC REPUBLIC OF"
- "AFGHANISTAN"
- "INTERNATIONAL MONETARY FUND"
- "ISLAMIC REPOUBLIC OF" (spelling as presented)
- "ISLAMIC REPUBLIC OF AFGHANISTAN"

*Source: 1afgea2019002 - Appendix I.  Budget Framework Presentation for FY 2018*

### Appendix II. Mapping of AFMIS Economic (Object) Code to GFS

### Appendix II. Mapping of AFMIS Economic (Object) Code to GFS

### Taxes and trade-related taxes (AFMIS object codes mapped to GFS)
- 11100 Licensed Merchants → 1111000 Taxes on income, profits, and capital gains Payable by individuals
- 11101 Mills, grinders, extractors → 1111000 Taxes on income, profits, and capital gains Payable by individuals
- 11102 Cinema theatres, exhibitions → 1112000 Taxes on income, profits, and capital gains Payable by corporations and other enterprises
- 11103 Money changers → 1113200 Unallocable taxes on income, profits, and capital gains
- 11105 Fixed Taxes on Imports Unlicensed Buss. → 1151000 Customs and other import duties
- 11106 Fixed Taxes on Imports Licensed Businesses: → 1151000 Customs and other import duties
- 11108 Fixed tax on Vehicles: Taxes collected from the owners of vehicles. → 1145100 Motor vehicle taxes
- 11109 Tax on Exports of licensed Businesses → 1152000 Taxes on exports
- 11200 Employee salary and wages (PIT-Dep.) → 1111000 Taxes on income, profits, and capital gains Payable by individuals
- 11202 Profits of private entities (CIT) → 1112000 Taxes on income, profits, and capital gains Payable by corporations and other enterprises
- 11204 Withholding Taxes on Interest → 1113200 Unallocable taxes on income, profits, and capital gains
- 11205 Withholding Taxes on Dividends → 1113200 Unallocable taxes on income, profits, and capital gains
- 11700 Overdue income tax (IT - Penalties) → 1430000 Fines, penalties, and forfeits
- 12000 Customs Duties Imports → 1151000 Customs and other import duties
- 12002 Customs duty exports → 1152000 Taxes on exports

### Turnover, specific and other indirect taxes
- 11400 Gross receipts SOE (BRT-SOE's) → 1141300 Turnover and other general taxes on goods and services
- 11402 Gross receipts private entity. (BRT) → 1141300 Turnover and other general taxes on goods and services
- 11403 Business Receipt Tax on total values of good Imported → 1141300 Turnover and other general taxes on goods and services
- 11405 5% Business Receipt Tax → 1141300 Turnover and other general taxes on goods and services
- 13206 Mobile telephone services → 1145000 Taxes on specific services
- 13315 Airport Departure Fee → 1144000 Taxes on specific services
- 13330 Telecommunication fees 10% → 1145230 Radio and television licenses

### Fees, sales, administrative receipts and incidental sales
- 12003 Temporary Tax return fee (ReturmT1 Aqicoda) → 1422000 Administrative fees
- 12004 Fastening Services Fee → 1422000 Administrative fees
- 12006 Income from sale of goods confiscated by the Customs Department → 1423000 Incidental sales by nonmarket establishments
- 13104 Rents and plane fees → 1422000 Administrative fees
- 13105 Rent Government Housing → 1423000 Incidental sales by nonmarket establishments
- 13107 Rent/Lease Non Agricultural Government land → 1415000 Rent
- 13201 Dairy Delivery → 1423000 Incidental sales by nonmarket establishments
- 13210 Commercial Adverts. → 1421000 Sales by market establishments
- 13211 Sale of passport (booklet) → 1422000 Administrative fees
- 13212 Sales of Driving Permits: → 1422000 Administrative fees
- 13217 Tickets → 1423000 Incidental sales by nonmarket establishments
- 13218 Sale- movable items → 3612200 Disposal of Machinery and equipment other than transport equipment
- 13225 Incidental Sales of Goods → 3620000 Disposal of Inventories
- 13303 Passport revenue → 1422000 Administrative fees
- 13304 Vehicle -transfer and renewal → 1422000 Administrative fees

### Rents, royalties, extractive sector receipts and related penalties
- 13400 Sale of natural gas → 3642000 Disposal of Mineral and energy resources
- 13401 Sales of Oil and Oil Products → 3642000 Disposal of Mineral and energy resources
- 13402 Sales of Minerals → 3642000 Disposal of Mineral and energy resources
- 13403 Extractive mines fee → 1146000 Other taxes on goods and services
- 13600 Extractive License Fee → 1146000 Other taxes on goods and services
- 13601 Extractive Royalty Fee → 1145250 Other taxes on use of goods and on permission to use goods or perform activities not elsewhere classified
- 13603 Extractive Land Fee → 1415000 Rent
- 13604 Extractive Rental → 1415000 Rent
- 13606 Extractive Royalty for Fines delay → 1430000 Fines, penalties, and forfeits
- 13699 Penalties from late Payment of Royalties → 1430000 Fines, penalties, and forfeits

### Grants, contributions, transfers and reimbursements
- 14000 Cash and non-cash assistance → 1441200 Other current transfers not elsewhere classified
- 14001 Share in Government enterprise → 1412200 Dividends From residents
- 14002 Transfers from prior years → 1162000 Payable by other than business or unidentifiable
- 15000 State-owned arable land → 3641000 Disposal of Land
- 15100 Sales of shares in Enterprises → 3215100 Domestic assets - Equity
- 15200 Major one of Revenues by Govt. Entities → 1441200 Other current transfers not elsewhere classified
- 17102 Net Investment Income → 1421000 Sales by market establishments
- 19100 Current grant - Foreign government → 1311000 Grants From foreign governments - Current
- 19101 Capital grant - Foreign government → 1312000 Grants From foreign governments - Capital
- 19200 Current grant - International → 1321000 Grants from international organizations - Current
- 19201 Capital grant - International → 1322000 Grants from international organizations - Capital
- 19300 Current grants - Other Organization → 1331000 Grants from other general government units - Current
- 19301 Capital grants - Other Organization → 1332000 Grants from other general government units - Capital

### Compensation, wages, allowances and employee-related items
- 21100 Civilian employees (permanent) → 2111000 Wages and salaries in cash
- 21101 Civilian employees (workers) → 2111000 Wages and salaries in cash
- 21102 Military officers → 2111000 Wages and salaries in cash
- 21106 Doctors → 2111000 Wages and salaries in cash
- 21107 Teachers - Primary → 2111000 Wages and salaries in cash
- 21124 Overtime → 2111000 Wages and salaries in cash
- 21140 Wages → 2111000 Wages and salaries in cash
- 21200 Food for employees → 2112000 Wages and salaries in kind
- 21201 Housing for employees → 2112000 Wages and salaries in kind
- 21300 Wages and salary advance → 2111000 Wages and salaries in cash
- 21400 Assist payments to employees → 2731000 Employment-related social benefits in cash
- 21401 Severance payments → 2731000 Employment-related social benefits in cash
- 21600 National Expeditionary Pay (Uniformed) → 2111000 Wages and salaries in cash
- 21998 Exchange Fluctuation of Salaries → 2111000 Wages and salaries in cash
- 21999 Return of salaries expenditure → 2111000 Wages and salaries in cash

### Use of goods and services, goods, utilities, repairs and vehicles
- 22100 Allowance - Domestic → 2200000 Use of goods and services
- 22101 Allowance - International → 2200000 Use of goods and services
- 22102 Travel - Domestic → 2200000 Use of goods and services
- 22201 Food - non salary → 2200000 Use of goods and services
- 22300 Public relations, advertising → 2200000 Use of goods and services
- 22302 Accounting and Audit → 2200000 Use of goods and services
- 22306 Training courses and seminars → 2200000 Use of goods and services
- 22400 Vehicles → 2200000 Use of goods and services
- 22402 Transport equipment → 2200000 Use of goods and services
- 22408 Office Equipment and Computers → 2200000 Use of goods and services
- 22500 Electricity → 2200000 Use of goods and services
- 22501 Water → 2200000 Use of goods and services
- 22601 Fuel - vehicles → 2200000 Use of goods and services
- 22700 Medical and laboratory → 2200000 Use of goods and services
- 22801 Fees, License and permits → 2200000 Use of goods and services
- 22807 Insurance → 2831100 Premiums payable
- 22808 Rent of Land → 2814000 Rent
- 22803 Taxes, Duties and Tariffs → 2821000 Current transfers not elsewhere classified

### Social benefits, pensions and social assistance
- 24700 Civil Service Pensions - Pre pay & Grade - Regular Payment Old Age → 2731000 Employment-related social benefits in cash
- 24701 Civil Service Pensions - Pre pay & Grade - Regular Payment Survivors → 2731000 Employment-related social benefits in cash
- 24712 Civil Service Pensions -Pay & Grade - Lump Sum Payment Old Age → 2731000 Employment-related social benefits in cash
- 24720 Security Sector pensions -Regular Payment Old Age → 2731000 Employment-related social benefits in cash
- 24730 Disability Pensions → 2721000 Social assistance benefits in cash
- 24740 Pensions for Families of Martyrs → 2721000 Social assistance benefits in cash
- 24800 Student benefits → 2821000 Current transfers not elsewhere classified
- 24802 Social Assistance Returning Refugees → 2721000 Social assistance benefits in cash
- 24900 Advance - Subsides, grants → 2721000 Social assistance benefits in cash
- 24999 Return of Social benefits → 2731000 Employment-related social benefits in cash

### Capital expenditure, acquisitions and disposals (assets)
- 25100 Acquisition of dwellings → 3511100 Acquisition of Dwellings
- 25103 Acquisition of buildings → 3511200 Acquisition of Buildings other than dwellings
- 25106 Constructions of roads → 3511300 Acquisition of Other structures
- 25200 Vehicles → 3512100 Acquisition of Transport equipment
- 25201 Construction equipment → 3512200 Acquisition of Machinery and equipment other than transport equipment
- 25211 Military Equipment → 3514000 Acquisition of Weapons systems
- 25218 Hardware Equipment’s → 3512211 Acquisition of Information, computer, and telecommunications (ICT) equipment
- 25219 Soft Ware Equipment → 3513231 Acquisition of Computer software
- 25700 Heritage assets → 3530000 Acquisition of Valuables
- 25800 Purchase of land → 3541000 Acquisition of Land
- 25902 Acquisition of Assets LC Advance → 3212000 Domestic assets - Currency and deposits
- 25999 Return of capital expenditure → 3212000 Domestic assets - Currency and deposits

### Loans, repayments, domestic and foreign liabilities and assets
- 18100 Current Loan - Foreign Government → 3324000 Foreign liabilities - Loans
- 18101 Capital Loan - Foreign Government → 3324000 Foreign liabilities - Loans
- 18200 Current Loan - International → 3324000 Foreign liabilities - Loans
- 18300 Current Loans - Domestic - Other General Government → 3314000 Domestic liabilities - Loans
- 23200 Repayment Loan - World Bank → 3324000 Foreign liabilities - Loans
- 23204 Repayment of Domestic loans - General Government → 3314000 Domestic liabilities - Loans
- 24301 Loans - Local Government → 3214000 Domestic assets - Loans
- 24302 Loans - Central Government → 3214000 Domestic assets - Loans
- 24303 Loans - State Owned Enterprises → 3214000 Domestic assets - Loans
- 32200 Loans to government employees → 3214000 Domestic assets - Loans
- 33100 Bank Deposits LCs → 3212000 Domestic assets - Currency and deposits
- 39000 Inter Fund Clearing Operating → 3218200 Domestic assets - Miscellaneous other accounts receivable

### Clearing accounts, payables, receivables and miscellaneous liabilities
- 31910 Clearing - Revenue Province → 3318200 Domestic liabilities - Miscellaneous other accounts payable
- 31920 Clearing - Revenue TSA → 3218200 Domestic assets - Miscellaneous other accounts receivable
- 31960 Clearing - Expenditure TSA → 3318200 Domestic liabilities - Miscellaneous other accounts payable
- 31961 Return Sweep to TSA → 3318200 Domestic liabilities - Miscellaneous other accounts payable
- 32300 Advances - Salary → 3218200 Domestic assets - Miscellaneous other accounts receivable
- 32503 Taxes Paid in Advance → 3218200 Domestic assets - Miscellaneous other accounts receivable
- 33100 Bank Deposits LCs → 3212000 Domestic assets - Currency and deposits
- 41100-41199 Suppliers → 3318200 Domestic liabilities - Miscellaneous other accounts payable
- 42102 Donors Initial Deposit → 3328200 Foreign liabilities - Miscellaneous other accounts payable
- 42200 Exchange rate gain and loss → 4212000 Holding Gains- Financial assets:  Domestic    - Currency and deposits
- 51100 Retained earnings → 6000000 Net worth (retained earnings)
- 52100 Capital → 6000000 Net worth (retained earnings)
- 44302 Loans - IMF → 3321200 Special Drawing Rights

*Source: Appendix II. Mapping of AFMIS Economic (Object) Code to GFS*

### Appendix III. Bridge Table for Extrabudgetary Units

### Appendix III. Bridge Table for Extrabudgetary Units

### EBU Classification — Micro-finance Investment Support for Afghanistan (MISFA)
- Interest and similar income
  - 1411200 Interest From residents other than general government
- Provision against loans and MFIs and banks
  - 2822000 Capital transfers not elsewhere classified
- Provision against microfinance loan portfolio
  - 2822000 Capital transfers not elsewhere classified
- Operating grant income
  - 1331000 Grants from other general government units - Current
- Salaries
  - 2111000 Wages and salaries in cash
- Insurances
  - 2831100 Premiums payable
- Flood donation
  - 2821000 Current transfers not elsewhere classified
- Total other administrative expenses
  - 2200000 Use of goods and services
- Finance cost
  - 1411205 Interest From residents other than general government
- Foreign exchange gain/(loss) - net
  - 4212000 Holding Gains- Financial assets:  Domestic - Currency and deposits
- Development grant income
  - 1331000 Grants from other general government units - Current
- Grants to MFIs, banks and NGOs
  - 2822000 Capital transfers not elsewhere classified
- Taxation
  - 2821000 Current transfers not elsewhere classified

### MISFA — Change in assets and liabilities (balances mapped to GFS codes)
- Cash and cash equivalents
  - 3212000 Domestic assets - Currency and deposits
- Short-term placement with bank
  - 3212000 Domestic assets - Currency and deposits
- Capital notes issued by DAB
  - 3213000 Domestic assets - Debt securities
- Loans to MFIs and banks
  - 3214000 Domestic assets - Loans
- Microfinance loan Portfolio
  - 3214000 Domestic assets - Loans
- Advance against Sub-Grants
  - 3218200 Domestic assets - Miscellaneous other accounts receivable
- Advance prepayments and other receivables
  - 3218100 Domestic assets - Trade credit and advances
- Operating Fixed assets
  - 3512210 Acquisition of Information, computer, and telecommunications (ICT) equipment
- Loan and borrowings
  - 3314000 Domestic liabilities - Loans
- Deferred tax liability
  - 3318200 Domestic liabilities - Miscellaneous other accounts payable
- Deferred grants
  - 3318200 Domestic liabilities - Miscellaneous other accounts payable
- Accrued and other liabilities
  - 3318200 Domestic liabilities - Miscellaneous other accounts payable

### EBU Classification — Afghanistan Telecommunications Regulatory Authority (ATRA)
- Fee
  - 1422000 Administrative fees
- Other revenue
  - 1422001 Administrative fees
- GIFTs
  - 1331000 Grants from other general government units - Current
- Employee remuneration
  - 2111000 Wages and salaries in cash
- Pension
  - 2731000 Employment-related social benefits in cash
- use of good and services
  - 2200000 Use of goods and services
- Bank Charges
  - 2200000 Use of goods and services

### ATRA — Change in assets and liabilities (balances mapped to GFS codes)
- Property and equipment
  - 3512220 Acquisition of Machinery and equipment not elsewhere classified
- Intangible assets
  - 3613231 Disposal of Computer software
- Cash and cash equivalents
  - 3212000 Domestic assets - Currency and deposits
- Fees and other receivable
  - 3218200 Domestic assets - Miscellaneous other accounts receivable
- Long term payable
  - 3318200 Domestic liabilities - Miscellaneous other accounts payable
- Account and other payable
  - 3318200 Domestic liabilities - Miscellaneous other accounts payable
- Unearned revenue
  - 3318200 Domestic liabilities - Miscellaneous other accounts payable

### Observations on mapping approach
- The bridge table presents a direct mapping between EBU classifications (revenue, expense, asset, liability items) and GFS codes (7 Digit GFS Code and Description).
- Several EBU items map to the same GFS code where classification overlap exists (for example, multiple items mapped to 2822000; multiple liabilities to 3318200).

### Appendix IV. Officials Met During the Mission
- Assadullah Ahmadi — Accounting and Reconciliation, Senior Manager, Treasury
- Ahmad Zia Hairat — Accounting and Reconciliation, Manager, Treasury
- Milad Ahmad Hamedi — Debt Manager, Treasury
- Ajmal Waziree — Planning and Policy Specialist, Budget

*ISLAMIC REPUBLIC OF AFGHANISTAN — INTERNATIONAL MONETARY FUND*

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_Source: https://www.imf.org/-/media/files/publications/cr/2019/1afgea2019002.pdf_