Ex CL 802 (Xxiv) I - e

AFRICAN UNION UNION AFRICAINE
UNIO AFRICANA
Addis Ababa, ETHIOPIA P. O. Box 3243 Telephone: 517 700 Fax: 5130 36
website: www. www.au.int
FINANCIAL RULES AND REGULATIONS
January 2014
AFRICAN UNION
REVISED FINANCIAL RULES AND REGULATIONS

EX.CL/802(XXIV)i
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TABLE OF CONTENTS
Contents
Preamble .......................................................................................................................................... 7
PART I: PRELIMINARY ................................................................................................................... 8
Article 1 ..............................................................................................................................8
Definitions......................................................................................................................... 8
Article 2 ............................................................................................................................12
Scope and Purpose........................................................................................................ 12
Article 3 ............................................................................................................................12
Effective date .................................................................................................................. 12
Article 4 ............................................................................................................................12
Applicability and Authority........................................................................................... 12
Article 5 ............................................................................................................................12
Interpretation ................................................................................................................. 12
Responsibility and Accountability ............................................................................... 13
Article 7 ............................................................................................................................14
Delegation of Authority ................................................................................................ 14
Article 8 ............................................................................................................................14
Compliance and Sanctions for Breach of Rules and Regulations ........................... 14
PART II: GENERAL PRINCIPLES ................................................................................................. 15
Article 9 ............................................................................................................................15
General Framework/Provisions .................................................................................... 15
Article 10 ..........................................................................................................................15
Utilisation of the Financial Resources of the Union .................................................. 15
PART III: BUDGET ......................................................................................................................... 17
Article 11 ..........................................................................................................................17
Budget Preparation ....................................................................................................... 17
Article 12 ..........................................................................................................................17
Presentation and Content of the Budget ................................................................... 17
Article 13 ..........................................................................................................................18
Submission, Approval and Adoption of Budget Estimates ...................................... 18
Article 14 ..........................................................................................................................18
Internal Programme and Budget Committee ............................................................ 18
Article 15 ..........................................................................................................................19
Functions of the Internal Programme and Budget Committee .............................. 19
Article 16 ..........................................................................................................................20
Peace Support Operations Budgets ............................................................................ 20
African Union Financial Rules and Regulations- 2013-Revised Draft

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Article 17 ........................................................................................................................................ 21
PART IV: SOURCES OF REVENUE ............................................................................................. 23
Article 18 ..........................................................................................................................23
Financial Resources of the Union ................................................................................ 23
Article 19 ..........................................................................................................................23
Contributions from Member States. ........................................................................... 23
Article 20 ..........................................................................................................................23
Voluntary Contributions, Gifts and Donations .......................................................... 23
Article 21 ..........................................................................................................................24
Revenue Generating Activities ..................................................................................... 24
Article 22 ..........................................................................................................................24
Article 23 ..........................................................................................................................24
Miscellaneous Revenue ................................................................................................ 24
PART V: FUNDS OF THE UNION .............................................................................................. 25
Article 24 ..........................................................................................................................25
General Fund .................................................................................................................. 25
Article 25 ..........................................................................................................................25
Working Capital Fund ................................................................................................... 25
Article 26 ..........................................................................................................................26
Reserve Fund .................................................................................................................. 26
Article 27 ..........................................................................................................................26
Special Fund ................................................................................................................... 26
Article 28 ..........................................................................................................................27
Article 29 ..........................................................................................................................27
Article 30 ..........................................................................................................................28
Establishment of Funds of the Union ......................................................................... 28
PART VI: UTILIZATION OF FINANCIAL RESOURCES ........................................................... 29
Article 31 ..........................................................................................................................29
Availability of Appropriations ...................................................................................... 29
Article 32 ..........................................................................................................................29
Authorisation to Expend Appropriations ................................................................... 29
Article 33 ..........................................................................................................................30
Reallocation of Resources between Organs .............................................................. 30
Article 34 ..........................................................................................................................30
Financial and Management Reporting ....................................................................... 30
PART VII: CUSTODY/MANAGEMENT OF FUNDS AND PAYMENTS ............................... 31
Article 35 ..........................................................................................................................31
Bank Accounts and Management ............................................................................... 31
Article 36 ..........................................................................................................................31
Imprest Accounts ........................................................................................................... 31

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Article 37 ..........................................................................................................................32
Petty Cash Float ............................................................................................................. 32
Article 38 ..........................................................................................................................32
Accountable Imprest ..................................................................................................... 32
Article 39 ..........................................................................................................................33
Transportation of Cash ................................................................................................. 33
Article 40 ..........................................................................................................................33
Advance Payments ........................................................................................................ 33
Article 41 ..........................................................................................................................33
Ex gratia Payments ........................................................................................................ 33
PART VIII: PROCUREMENT ........................................................................................................ 34
Article 42 ..........................................................................................................................34
General Principles .......................................................................................................... 34
Article 43 ..........................................................................................................................34
Authority and Responsibility ........................................................................................ 34
Article 44 ..........................................................................................................................35
Authority Levels ............................................................................................................. 35
Article 45 ..........................................................................................................................35
Structures Responsible for Procurement.................................................................... 35
Article 46 ..........................................................................................................................36
AU Tender Board ........................................................................................................... 36
Article 47 ..........................................................................................................................36
Tender and Procurement Committee ......................................................................... 36
Article 48 ..........................................................................................................................36
Composition of the Internal Procurement Committee ............................................ 36
Article 49 ..........................................................................................................................37
Procurement Unit. ......................................................................................................... 37
PART IX: INVESTMENTS ............................................................................................................. 38
Article 50 ..........................................................................................................................38
Investments of the Union ............................................................................................. 38
Article 51 ..........................................................................................................................38
Criteria for Selecting Investments ............................................................................... 38
Article 52 ..........................................................................................................................38
Investment Committee ................................................................................................. 38
Article 53 ..........................................................................................................................39
Investment Ledger ......................................................................................................... 39
Article 54 ..........................................................................................................................39
Custody of Securities..................................................................................................... 39
Article 55 ..........................................................................................................................39
Loss of Cash or Negotiable Instruments .................................................................... 39

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PART X: SUPPLIES, PLANT, PROPERTY AND EQUIPMENT ................................................ 40

Article 56 ..........................................................................................................................40
Inventory, Plant, Property and Equipment ................................................................. 40
Article 57 ..........................................................................................................................41
Board of Survey.............................................................................................................. 41
Article 58 ..........................................................................................................................41
Composition of the Board of Survey .......................................................................... 41
Article 59 ..........................................................................................................................41
Disposal Proceeds ......................................................................................................... 41
PART XI: FINANCIAL IRREGULARITIES AND LOSSES .......................................................... 42
Article 60 ..........................................................................................................................42
Financial Irregularities ................................................................................................... 42
Article 61 ..........................................................................................................................42
Handling Irregularities .................................................................................................. 42
Article 62 ..........................................................................................................................43
Article 63 ..........................................................................................................................43
Handling of Losses ........................................................................................................ 43
PART XII: ACCOUNTING RECORDS ......................................................................................... 45
Article 64 ..........................................................................................................................45
Responsibility ................................................................................................................. 45
Article 65 ..........................................................................................................................45
Accounting Policy .......................................................................................................... 45
Article 66 ..........................................................................................................................45
Retention and Disposal of Records ............................................................................. 45
PART XIII: INTERNAL CONTROLS, ........................................................................................... 46
Article 67 ..........................................................................................................................46
System of Internal Controls .......................................................................................... 46
Article 68 ..........................................................................................................................46
Risk Management .......................................................................................................... 46
Article 69 ..........................................................................................................................47
Sub-Committee of PRC on Audit Matters .................................................................. 47
Article 70 ..........................................................................................................................47
Internal Audit Progress Committee ............................................................................ 47
Article 71 ..........................................................................................................................47
Office of the Internal Audit .......................................................................................... 47
PART XIV: FINANCIAL STATEMENTS ...................................................................................... 49
Article 72 ..........................................................................................................................49
Preparation of Financial Statements ........................................................................... 49
PART XV: KEY FUNCTIONS/RESPONSIBILITIES .................................................................... 50
Article 73 ..........................................................................................................................50

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General Responsibilities of Officers of the Union ..................................................... 50

Article 74 ..........................................................................................................................50
Responsibilities of the Financial Controller ................................................................ 50
Article 75 ..........................................................................................................................51
Conflict of Responsibilities ........................................................................................... 51
Article 76 ..........................................................................................................................52
Role of Permanent Representative Committee ......................................................... 52
PART XVI: EXTERNAL AUDIT ..................................................................................................... 53
Article 77 ..........................................................................................................................53
The Board of External Auditors .................................................................................... 53
Article 78 ..........................................................................................................................53
Composition of the Board of External Auditors ........................................................ 53
Article 79 ..........................................................................................................................54
Audit Terms of Reference ............................................................................................. 54
Article 80 ..........................................................................................................................54
Authority and Independence of the Board of External Auditors ............................ 54
Article 81 ..........................................................................................................................55
Facilitation and Conduct of Audit ............................................................................... 55
Article 82 ..........................................................................................................................56
Reporting by the Board of External Auditors ............................................................ 56
Article 83 ..........................................................................................................................56
Audit Opinion ................................................................................................................. 56
Article 84 ..........................................................................................................................57
Management Letter ....................................................................................................... 57
PART XVII: OUTSTANDING STATUTORY CONTRIBUTIONS ............................................. 59
Article 85 ..........................................................................................................................59
Dealing with Outstanding Contributions to the Budget .......................................... 59
PART XVIII: REQUIREMENTS FOR DRAFT RESOLUTIONS ................................................. 61
Article 86 ..........................................................................................................................61
Consideration and Adoption of Draft Decisions and Resolutions .......................... 61
PART XIX: IMPLEMENTATION AND REVOCATION OF REGULATIONS ......................... 64
Article 87 ..........................................................................................................................64
Implementation, Institutionalisation of Rules and Regulations .............................. 64
Article 88 ..........................................................................................................................64
Amendment of the Rules and Regulations ................................................................ 64

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ABBREVIATIONS
AHRM- Administration and Human Resources management

Assembly- Assembly of Heads of State and Government of the African Union
AU- African Union

AUC- African Union Commission
FRR- Financial Rules and Regulations

IFRS- International Financial Reporting Standards
IPSAS- International Public Sector Accounting Standards
PBFA- Programming, Budgeting and Accounting

PRC- Permanent Representative Committee
PSC- Peace and Security Council of the Union

SPPMERM- Strategy, Policy, Planning, Monitoring, Evaluation and Resource
Mobilization
WGD- Women and Gender Development

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AFRICAN UNION FINANCIAL RULES AND REGULATIONS
Preamble
The African Union Financial Rules and Regulations (FRR) govern the broad financial
management of the Union. The existing FRR were adopted by the Assembly of Heads
of State and Government of the African Union (Assembly) on 25-29 June 2006 in
Banjul, The Gambia. These together with isolated applicable International Financial
Reporting Standards (IFRS) have formed the basis for preparing the African Union
financial statements
As part of the African Union (AU) institutional reforms the Executive Council, in
January 2013, by its decision, EX.CL/Dec.728(XXII)2013, adopted the International
Public Sector Accounting Standards (IPSAS). The adoption of IPSAS necessitated the
revision of the FRR in order to produce IPSAS-compliant financial statements.
Now therefore the Assembly adopts this Financial Rules and Regulations of the
African Union. The previous Financial Rules and Regulations is here by repealed.

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PART I: PRELIMINARY
Article 1
Definitions
For the purpose of these Rules and Regulations, and unless the context otherwise
requires. These definitions are supplemented by the terms used under the
International Public Sector Accounting Standards:
i. Accounting Officer means an officer of the Union with ultimate accounting

authority for all resources of the Union and who is also the Chairperson of the
African Union Commission (AUC);
ii. Accountable Imprest means cash given to an officer, in respect of approved
expenses that an officer may incur in the course of official travel or for
purposes of facilitating workshops and other official activities of the Union
and to be accounted for upon completion of the said activity.
iii. Advances means cash outflow to be paid back in full based on a prior
agreed upon terms and conditions
iv. Appropriation means the total amount approved by the Assembly for
specified purposes for the current budget against which commitments may be
made for those purposes up to the amount so approved;
v. Assembly means the Assembly of Heads of State and Government of the
Union;
vi. Board of External Auditors means the Board established under Article 80 of
these Rules and Regulations
vii. Board of Survey means the Board established under Article 60 of these Rules
and Regulations
viii. Budget means the estimates of income and expenditure of the Union
adopted by the Assembly for specific purposes related to the activities of the
Union , for a defined period
ix. "Cash Equivalent shall include cheques, irrevocable letters of credit and other
similar financial instruments that are short term, highly liquid, readily
convertible to known amounts of cash and subject to insignificant risk of
changes in value.
x. Constitutive Act means the Constitutive Act of the African Union;

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xi. Commission means the African Union Commission which is also the
Secretariat of the Union;
xii. "Commitment" means a legally binding obligation on the Unions part arising
from a written contract or other written agreement entered into by the Union
that is expected to result in the disbursement of the Unions financial
resources
xiii. Competent Authority means any person who lawfully acts on behalf of the
Chairperson of the African Union Commission or the Head of Unions Organ;
xiv. "Contribution" means all resources, including in-kind resources, provided by
the Member States and Development Partners in support of the Unions
mandate
xv. "Contribution-in-kind" shall mean resources of goods, services or property
received at minimal or no cost to the Union;
xvi. Controlling Officer means the Deputy Chairperson of the African Union
Commission, Heads of Organs and Institutions of the Union, where applicable,
with accounting authority for resources of their respective Organs and
Institutions and who shall be accountable to the Accounting Officer;
xvii. Deputy Chairperson means the Deputy Chairperson of the African Union
Commission;
xviii. Development partner means an organization or country that has availed
resources, either in the form of cash or in kind to the Union for purposes of
assisting the Union in its programs and operations;
xix. Disbursement means the actual amount paid out;
xx. Duty station means a place of posting where an employee carries out
his/her duties;
xxi. Elected Officials means officials of Organs of the African Union elected by
the Policy Organs and appointed by Assembly.
xxii. Ex- gratia means gift which has a monetary value.
xxiii. Expenditure means the sum of disbursements and accrued expenses for
goods and services rendered;
xxiv. Executive Council means the Executive Council of Ministers of the Union;
xxv. Finance Officer means an officer appointed by the Accounting
Officer/Controlling Officer who shall be responsible for the accounting
transactions of the Union in a finance office;

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xxvi. Financial Controller means Chief Finance Officer of the Union and the
Director of PBFA of the AU Commission, solely responsible for receiving,
disbursing, accounting and reporting the financial resources of the Union
xxvii. Financial Year means one (1) financial year beginning from 1 January and
ending 31 December of the same year;
xxviii. Financial Rules and Regulations means the Financial Rules and Regulations
of the Union;
xxix. General Fund means such fund established under article 27 of these Rules
and Regulations;
xxx. Internal Programmes and Budget Committee means the Committee that
shall coordinate the planning and budgeting processes within the Union as
established under Article 14 of these rules and regulations;
xxxi. Imprest System means cash on hand maintained to ensure the settlement
of certain expenses which, by their lesser importance, unforeseen character or
urgency, may not follow the normal procedure laid down governing expense
payments
xxxii. Loan means a present long term or short term obligation of the Union
arising from borrowing in the past, the settlement of which is expected to
result in an outflow of resources from the Union embodying economic
benefits;
xxxiii. Staff Member means a person employed by the Union as a continuing
regular, regular, fixed term or short-term personnel on the basis of a daily
wage or monthly salary as provided for in Staff Regulations and Rules.
xxxiv. Obligation means the amount of the order placed, contract awarded, and
other transactions for which goods have been received or services rendered
during the current financial year and which require payment during the
financial year or at a future period;
xxxv. Organ means an Organ of the Union as defined in the Constitutive Act and
any other institutions of the AU that is designated with the status of an Organ;
xxxvi. Peace fund means a special funds established under art28of the Financial
Rules and Regulations to finance emergent Peace Support Operations
xxxvii. PRC means the Permanent Representatives Committee of the Union;
xxxviii. Procurement Office means the Department/Division/Unit charged with
procurement functions of the Union

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xxxix. Programme Manager" means any officer duly appointed by the Accounting
Officer/Controlling Officer who is personally responsible and accountable for
the implementation and management of programme(s) within a Unit, Division,
Department or Regional Office;
xl. Reserve Fund means a fund established by the Executive Council, in which
surplus income from contributions that exceed the amounts required to
finance the Union programme and budget appropriations, are deposited;
xli. Revenue means inflow of economic benefits during the financial year that
results in an increase in net assets/equity.
xlii. Special Funds means resources with related accounts held by the African
Union and available only for specific purposes
xliii. Special Account means a bank account for monies not being part of the
appropriations but administered by the Union on behalf of contributors for
specific activities;
xliv. Trust Funds shall mean funds held by the Union on behalf of other entities;
xlv. Union means the African Union established by the Constitutive Act;
xlvi. Unliquidated obligation means valid financial commitments entered into
before, but could not satisfy the delivery principle as at, the end of a given
financial period
xlvii. Unutilised Financial Resources means all financial resources of the Union not
spent during the course of the financial year to which they relate;
xlviii. Working Capital Fund shall mean the fund established under Article 28 of
these Rules and Regulations.

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PART II
Article 2
Scope and Purpose

The purpose of these Rules and Regulations is to;-
(a) define the fundamental principles and conditions of prudent financial

management of the resources of the Organs and Institutions of the Union;
and
(b) lay down the general principles for financial and resource management which
shall govern the utilization of the resources of the Organs and Institutions of
the Union effectively, efficiently and economically.
Article 3
Effective date
These Rules and Regulations shall come into effect upon adoption by the Assembly.
Article 4
Applicability and Authority

(1) These Rules and Regulations shall govern the financial administration and
management of the resources of the Organs and Institutions of the Union
except where there are specific provisions to the contrary.
(2) These Rules and Regulations may be amplified by the Accounting Officer
through appropriate administrative issuances or directives establishing
procedures and instructions for the proper administration of these Rules and
Regulations.
(3) In the application of these Financial Rules and Regulations, all officials of the
Union shall be guided by the principles of effective and efficient financial
management and the exercise of economy.
Article 5
Interpretation
The interpretation of these Rules and Regulations shall vest with the Accounting
Officer on the advice of the Legal Counsel.

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Article 6
Responsibility and Accountability

(1) The Accounting Officer shall be the responsible for the administration and
enforcement of these Rules and Regulations.
(2) The Accounting Officer shall assume the overall responsibility for the
administrative operations to ascertain the solvency of the Union, and the
settlement and incurring of expenses.
(3) Ultimate authority to enter into commitments and to make disbursements
chargeable to the resources of the Union shall vest with the Accounting
Officer and shall strictly be in accordance with the appropriations made in the
budget of the Union;
(4) The Accounting Officer shall grant authority to incur expenses and make
commitments chargeable to the budget in accordance with the appropriations
made in the budget of the Union to the Controlling Officers who shall be
directly accountable to him/her.
(5) The Controlling Officers shall be in charge of Administration and Finance of
their respective Organs and Institutions of the Union. In carrying out this
task, they shall all be accountable to the Accounting Officer of the Union.
(6) The Controlling Officers shall handle the day-to-day administrative operations
of the respective Organs and Institutions of the Union.
(7) The Financial Controller, who shall be solely responsible for keeping the
accounts of the Union, shall handle transactions connected with collection of
incomes and their disbursement.
(8) The functions of the Accounting Officer and those of the Financial Controller
shall not be exercised by one and the same person.
(9) All members of staff of the Union shall be responsible to their respective
Controlling Officers for the regularity of their actions in the course of their
official duties.
(10) The Accounting Officer of the Union shall be responsible and accountable to
Executive Council.

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Article 7
Delegation of Authority
(1) The Accounting Officer may delegate, his or her authority under these Rules
and Regulations to the Controlling Officers, and where applicable Competent
Authorities of the Union as deemed appropriate.
(2) In the administration of these Rules and Regulations, the Accounting Officer
or his/her delegate shall be responsible for reviewing and approving all
financial processes as well as prescribing and arranging for the maintenance
of financial records of the Union.
(3) Delegation under Sub regulation (2) shall be in writing.
(4) In the implementation of these Financial Rules and Regulations the
Controlling Officers and competent authorities shall be accountable to the
Accounting Officer.
(5) The Controlling Officers of the union may in turn delegate by administrative
instruction authority for specified aspects of these Financial Rules and
Regulations to Competent Authorities. These administrative instructions shall
state whether the delegated official may assign aspects of this authority to
other officials.
(6) In the application of these Financial Rules and Regulations, all officials of the
Union shall be guided by the principles of effective and efficient financial
management and the exercise of economy
Article 8
Compliance and Sanctions for Breach of Rules and Regulations

(1) All members of staff shall comply with these Rules and Regulations and with
any other Rules and Regulations, administrative instructions and procedures
issued by the Accounting Officer in connection with these Rules and
Regulations.
(2) Any staff member who contravenes or breaches these Rules and Regulations
or any administrative instructions and procedures issued in connection with
these Rules and Regulations shall be held personally responsible, financially
liable, and shall be disciplined in accordance with the provisions of the Staff
Rules and Regulations of the Union.

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(3) Depending on the gravity of the breach and the size of the irregularity, in
addition to the sanctions and disciplinary measures provided for in the
Staff Rules and Regulations, other sanctions could include waiver of
immunity, investigation and prosecution according to the laws of the AU
Member States and Host Countries.
(4) In the event that the breach has been caused by an elected official-, the
matter shall be referred to the Executive Council.
PART II: GENERAL PRINCIPLES
Article 9
General Framework/Provisions
(1) The financial year of the Union shall cover a period of twelve (12) months,
starting on 1st of January and ending on 31st of December of the same
year. Unliquidated commitment arising from events entered into prior to 31st
December of the financial year, but which could not be completed before that
date shall be finalized within the first three (3) months of the following
financial year. The appropriation for these un liquidated commitment shall be
carried forward to the following year.
(2) The Unions accounting procedures shall be as laid down in the Financial
Procedures Manual and in so far as they are not incompatible with these
Financial Rules and Regulations shall be adhered to at all times.
(3) The monetary unit of the Union shall be the United States Dollar (USD). The
Executive Council may, upon the proposal of the Accounting Officer, adopt
another monetary unit for the Union.
Article 10
Utilisation of the Financial Resources of the Union

(1) The financial resources of the Union shall be utilized in accordance with
appropriations made in the budget of the Union.
(2) The Budget of the Union shall provide the basis for authorization of the
financial commitments, expenditure and revenue of the Union and determine
their nature and amount.

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(3) The financial resources from development partners shall be declared and
included in the budget of the Union for the years the funds are to be utilized.
(4) The Assembly shall approve and adopt for each financial year the budget of
the Union.
(5) The budget of the Union shall be drawn up by the Accounting Officer on an
annual basis and adopted by the Assembly, after consideration by the
Executive Council upon the recommendation of the PRC in conformity with
the provisions of the Constitutive Act, the Rules of Procedure of the Assembly,
the Executive Council, and the PRC and the current Financial Rules and
Regulations.
(6) The draft budget drawn up and presented by the Accounting Officer
shall be supported by reports on the implementation of the budget for
the current and previous financial year as stipulated in financial procedures
manual.
(7) The proposed budget shall consist of two (2) parts thus estimates of revenue
and expenses.
(8) The proposed budget shall be accompanied by such information, annexes and
explanatory statements as may be requested by or on behalf of the Assembly.
(9) The budget proposal shall be presented in terms of realistic estimates with
expected output and results;
(10) The proposed budget shall also include a brief statement on the main
changes to the programme content in comparison with the previous financial
period and such further annexes or statements as may be deemed necessary
and useful.
(11) In the financial year, the Executive Council or any other duly delegated
organ, may approve supplementary Budget proposals, provided additional
financial resources are available to meet the additional financial
commitments. The supplementary Budget proposals shall be in a form
consistent with the approved Budget.

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PART III: BUDGET
Article 11
Budget Preparation
(1) The budget of the Union shall be prepared by the Accounting Officer.
(2) The Accounting Officer shall convene a pre-budget conference with the
Internal Programmes and Budget Committee and the key stakeholders of the
Union before the preparation of the budget proposals, to discuss the priorities
and requirements for the financial year.
(3) The PRC shall consider the detailed budget of the Union presented by the
Accounting Officer before presentation to the Executive Council for
consideration.
(4) The Executive Council shall consider and present the budget proposal to the
Assembly for approval.
Article 12
Presentation and Content of the Budget

(1) The proposed annual budget shall be prepared in accordance with the
principles and format determined and adopted by the Executive Council.
(2) The proposed budget shall cover income and expenditures for the financial
period to which it relates and shall be presented in United States dollars.
(3) All expenses shall be classified and grouped under expenses provided for in
the Budget of the Union and shall be divided into four (4)Components:
(a) Staff Costs
(b) Operating Expenses
(c) Capital Expenses
(d) Programmes
(4) For the purpose of comparison, the proposed budget shall be presented
alongside the actual expenses for the preceding financial year and estimates
for the following financial year.
(5) The proposed annual budget shall cover all the activities and the revenue and
expenses of the Organs and Institutions of the Union for the financial year to

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which they relate and the projections for the next two years in a consolidated
form, as well as separately for each Organ and Institution.
(5) The proposed annual budget shall also be accompanied by such information,
annexes and explanatory statements as may be deemed necessary.
Article 13
Submission, Approval and Adoption of Budget Estimates

(1) The Accounting Officer shall submit budget framework, highlighting the
priorities of the Union, to the PRC for consideration not later than 1 st of
November each year.
(2) The PRC shall consider and recommend the budget proposals to the Executive
Council not later than 31st of May of the year preceding budget year.
(3) The Executive Council shall consider the budget proposal and recommend to
the Assembly for approval and adoption during the July summit.
(4) Budget estimates shall be approved by the Assembly within appropriate time
limits, in such a way that the budget execution may begin from 1st January,
date of commencement of the financial year.
(5) The Budget thus approved, together with a list of assessed contributions shall
be immediately communicated to all Member States by the Accounting
Officer.
(6) If, for any reason, the Assembly has not approved the Budget of the Union
before 1st January, the Executive Council may, in consultation with the PRC,
authorize the Accounting Officer to disburse provisionally, one-twelfth of the
Budget of the previous financial year until the new Budget is adopted.
(7) The PRC shall thereupon, authorize the transfer of adequate funds from the
Working Capital Fund established under these Financial Rules and
Regulations.
Article 14
Internal Programme and Budget Committee

(1) The- Accounting Officer shall establish an Internal Programme and Budget
Committee to coordinate the planning and budgeting processes within the
Union.
(2) The Internal Programme and Budget Committee shall comprise the following:-

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Deputy Chairperson -Chairperson

Commissioner of Economic Affairs -Vice Chairperson
Heads of Organs and Institutions -Members
Director of SPPMERM -Member
Director of AHRM - Member
Administrative Heads of organs and Institutions - Members
Director of PBFA - Secretary
(3) The Chairperson of the Committee may co-opt any other person to the
Programme and Budget Committee as deemed necessary.
Article 15
Functions of the Internal Programme and Budget Committee

The Internal Budget Committee shall be responsible for;-
(a) Considering the budget framework of the Union

(b) preparing and issuing planning and budget preparation guidelines for the
Union for each financial year;
(c) scrutinizing budget proposals from all organs and institutions of the
Union;
(d) consolidating and compiling the budget estimates of the Union, for
submission to the Accounting Officer;
(e) reviewing the performance of the budget of the Union in relation to the
programmes;
(f) considering and re
(g) commending budget reallocations to the Accounting Officer; and
(h) Considering and recommending supplementary budgets to the
Accounting Officer.

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Article 16
Peace Support Operations Budgets

(1) Where the Peace and Security Council (PSC) of the Union has authorised Peace
support Operation pursuant to Article 7.(c) of the Peace and Security Council
protocol, the appropriations for such operations shall be financed by contributions
from Member States according to the scale of assessments approved by the
Assembly, unless alternative source funding is identified and secured. The payment
of assessed contributions for peace support operations shall also be governed by
these Financial Rules and Regulations.
(2) The Accounting Officer shall prepare and submit special budget for emergent
Peace Support Operations of the Union. Such Budgets shall set out the objectives,
expected accomplishments and outputs. The Peace and Security Council of the Union
shall consider and recommend such budget submitted by the Accounting Officer to
the PRC for approval.
(3) The content and presentation of the budget for Peace Support Operations shall
be in accordance with the defined framework under Article 17 of these Rules and
Regulations.
(5) Financial resources to finance emergent Peace Support Operations budget shall
be drawn from the Peace Fund of the Union established under these Rules and
Regulations and supplemented by voluntary contributions from member states as
well as partners of the Union.
(6) The Accounting Officer shall submit on a semi-annual basis to the Assembly for
informational purposes a table summarizing the budgetary requirements of each
peace support operation for the financial period from 1 January to 31 December,
including a breakdown of expenditure by major budget categories and the
aggregate total resource requirement.

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Article 17
Supplementary budget and Reallocation (Virement)
(1) Supplementary Budget proposals may be submitted in respect of the

current financial year;-
a. Activities relating to exigencies that require immediate action of the
Union;
b. for urgent activities which could not have been foreseen at the time
of submission of the initial Budget;
c. in respect of special decisions taken by the Policy Organs of the
Union; and
d. In respect of changes in expenditure requirements associated with
inflation and currency fluctuations
(2) The reallocation of financial resources within the approved budget categories
shall be authorized by the Accounting Officer.
(3) Notwithstanding Sub-Article 17(2) above, no reallocation shall be made to

mission budget lines without approval of the PRC.
(4) The Accounting Officer may reallocate financial resources between budget
categories up to (5%) of the Operating budget of the Union to meet certain
unforeseen, urgent and necessary expenditures solely for the furtherance of
the objectives of the Union with subsequent notification to PRC.
(5) All reallocations between budget categories and above 5% of the Operating
budget shall be authorized by the PRC.
(6) The PRC may, at the request of the Accounting Officer, authorize transfer of
funds, as the need arises. The request shall be supported by relevant
documents and having regard to actual service needs and requirements,
provided sufficient savings can be found within the limit of funds appropriated
under the relevant part of the Budget.

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(7) The PRC may, in exceptional cases, authorize transfer of funds appropriated
for personnel emoluments or mission for the benefit of equipment or other
expenses.
(8) The changes to the establishment, recruitment, appointment, promotion

and alterations to the structure or system of remuneration, for a
particular financial period, shall be undertaken solely within the limit of
funds allocated under the various headings of the Budget of the Union,
subject to prior approval of the Executive council or through its duly
delegated Policy Organ.

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PART IV: SOURCES OF REVENUE
Article 18
Financial Resources of the Union

The financial resources of the Union shall include:
(a) Statutory contributions made by Member States in accordance with the

Scale of Assessment approved by the Executive Council;
(b) Revenue from any other Financing modalities that may be agreed upon
by the Union;
(c) Revenue earned from commercial activities undertaken, and fees earned
from services rendered, by the Union;
(d) Voluntary Contributions , donations and bequests;
(e) Advances from the Working Capital Fund;
(f) Revenue from investments. loans and advances; and
(g) Miscellaneous revenue from any other source other than the above.
Article 19
Contributions from Member States.

(1) Statutory Contributions from Member States shall be based on the Scale of
Assessment approved by the Executive Council.
(2) All contributions by Member States shall be paid in the designated currency of
the Union.
(3) The contributions by Member States shall be considered due on the 1st of
January of each financial year.
(4) The Accounting Officer shall report at each meeting of the Executive Council
the status of the contributions by the Member States.
(5) Sanctions imposed on any Member State that defaults in the payment of
assessed contribution shall be implemented in accordance with Article 23(1) of
the Constitutive Act and Rule 35 of the Rules of procedure of the Assembly
Article 20
Voluntary Contributions, Gifts and Donations

(1) The Accounting Officer may accept a voluntary contribution, gift or donation,
provided that the purposes for which the contribution, gift or donation is
made are consistent with the policies, aims and activities of the Union.

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(2) Collection of all direct or indirect contributions not authorized by the

Executive Council, in whatever form or denomination, shall be prohibited. Any
officer perpetrating such collections shall be subjected to disciplinary
measures, including recovery of such contributions.
(3) Likewise, a staff member shall be subjected to similar disciplinary measures for
having deliberately or otherwise, and for whatever reason, contributed
to the reduction in the amount of authorized income.
Article 21
Revenue Generating Activities

(1) The Executive Council shall authorize the Organs and Institutions of the Union
to render services and to charge fees for these services.
(2) No organ shall charge another organ for any service rendered except if it is for
the purpose of recovery of a cost incurred directly as a result of rendering the
service
Article 22
Article 23
Miscellaneous Revenue
(1) Miscellaneous revenue shall include all revenue other than the following:-
(a) statutory contributions by the Member States to the annual budget;
(b) direct refunds of expenditure made during the financial year;
(c) revenue earned from the sale of goods and services rendered; and
(d) Contributions, grants and donations.
(2) All financial resources in respect of which no purpose is specified shall be
treated as miscellaneous revenue and shall be reported in the financial
statements of the financial year in which they are received.
(3) Refunds of expenses, which are charged in the same financial year, may be
credited to the same accounts, but refunds of expenses of prior financial years
shall be credited to respective funds as miscellaneous revenue.
(4) Unless otherwise provided by the Executive Council, such revenue shall be
administered in accordance with these Rules and Regulations

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PART V: FUNDS OF THE UNION

Article 24
General Fund
There shall be established a General Fund for the purpose of accounting for the
expenses of the Union, in which the following categories of accounts shall be
maintained;-
(a) Annual Contributions paid by Member States;

(b) Advances from the Working Capital Fund; and
(c) Transfers from the Reserve Fund;
Article 25
Working Capital Fund

(1) A Working Capital fund shall be established out of the reserve fund of the
Union to;-
(a) provide advances necessary to meet commitment pending receipt of
contributions due from Member States;
(b) provide advances necessary to meet commitment and unforeseen or
extraordinary expenses arising from implementation of resolution and
decisions adopted by the Executive Council or the Assembly.
(2) The proportion and ceiling of the Working Capital Fund shall not be less than
one (1) month requirement of the operational budget of the Union.
(3) Advances from the Working Capital Fund may be made only for the purposes
and within the terms and conditions prescribed by the Executive Council and
only on the basis of written authorization signed by the Accounting Officer.
(4) Advances drawn from the Working Capital Fund to finance budget allocations
during any financial period shall be paid back into the Working Capital Fund
as soon as funds are available for this purpose and in proportion to the
amount of resources collected.
(5) Except for cases where such advances may be recovered from extra budgetary
funds or other authorized sources, all advances drawn from the Working
Capital Fund for unforeseen or extra-ordinary expenses or for any other
purpose, shall be reimbursed by means of supplementary budgetary
appropriations.

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Article 26
Reserve Fund
(1) There shall be a Reserve Fund of the Union where any unutilized funds or
surplus shall be recorded.
(2) The Reserve Fund shall be utilized in accordance with a decision of the PRC for
urgent or unforeseen expenditure.
(3) The minimum balance in the Reserve Fund shall be at least three (3) months
operating budget requirement of the Union
(4) Where the Reserve Fund is more than three (3) months operating budget
requirement , any supplementary budget that has been approved by the
Assembly shall first draw its funds from the Reserve Fund up to the extent
that the balance is not less than the threshold stated in sub-article 3 above.
(5) When the funds in the Reserve Fund float exceed three (3) months operating
budget requirement, any excess funds shall be invested according to Article
53 of the Rules and Regulations.
Article 27
Special Fund
(1) The Accounting Officer may establish special funds for specific purposes
provided such activities are meant for the furtherance of the objectives of the
Union.
(2) The Accounting Officer may accept, on behalf of the Union, gifts, legacies,
voluntary contributions and donations made to the Union, from development
partners, provided the objectives and the purpose of these are not
inconsistent with the purpose and objectives of the Union, for such
established special funds.
(3) The purpose and limits of any special fund shall be clearly defined by the
Accounting Officer.
(4) The special funds shall be administered in accordance with these Rules and
Regulations.
(5) Contributions to the Union which remain unexpended after the activities for
which they were provided are completed, shall be treated in accordance with
the agreement under which the contributions were made and provisions of
these Rules and Regulations.

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(6) Monetary donations made for no specific purposes shall be considered as

miscellaneous revenue and credited to the General Fund
(7) The Accounting Officer shall prepare and submit reports of these special funds
to the PRC and at each meeting of the Executive Council.
Article 28
Peace Fund
(1) A Special fund known as Peace Fund shall be established to provide the financial
Resources for Peace support Operations and other operational activities relating to
Peace and Security.
(2) Peace Fund shall be made up of:
(a) Appropriations from regular budget of Union based on a percentage of

the annual operational budget to be recommended by the Peace and
Security Council and approved by the Assembly;
(b) Voluntary contribution from member states including other sources

from the continent; and
(c) Monies from fund raising mechanisms as may be approved the

Executive council.
(3) The Accounting Officer may accept voluntary contributions from partners outside
Africa provided they are consistent with the objectives and principles of the Union
(4) No expenditure shall be charged to the Peace Fund unless authorized by the
Accounting Officer and upon the approval by the Peace and Security Council.
Article 29
Peace Revolving Trust Fund
(1) There shall be established in accordance with Article 21 of the Peace Security
Council Protocol a Peace Revolving Trust Fund as a cash flow mechanism to:
(a) Ensure rapid response of the Union during the start-up phase of new
peacekeeping operations;
(b) Fund expansion of existing peace support operations; and

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(c) meet any unforeseen and extraordinary expenditure requirements

related to peacekeeping operations.
(2) The level of the fund and the means of finance by Member States and
Development Partners shall be determined by the Peace Security Council and
approved the Assembly.
(3) The Chairperson shall prepare and submit statement of accountability of the
fund to the Peace and Security Council through the PRC.
Article 30
Establishment of Funds of the Union

(1) The Chairperson may establish fiduciary funds, reserves and special funds
outside the Budget appropriations in respect of specific activities entrusted to
the Union, subject to the approval of the Executive Council on
recommendation of the PRC.
(2) The objectives of these Funds shall be determined by the Executive Council.
(3) These Funds shall be administered in accordance with the Financial Rules and
Regulations of the Union.
(4) Separate accounts shall be opened for the Funds referred to in Sub paragraph
(1) above.
(5) The Financial Controller shall be responsible for keeping these accounts and
shall submit financial statements relating to the management of these
accounts to the Accounting Officer who shall in turn report to the Executive
Council through the PRC.
(6) If such Funds have remained dormant for a period of five (5) years, they shall
be analyzed and may be closed from the books of accounts. Adjustments,
which arise subsequent to the closing of such Funds, shall be classified
as miscellaneous income and credited to the Reserve Fund.

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PART VI: UTILIZATION OF FINANCIAL RESOURCES
Article 31
Availability of Appropriations
(1) All appropriations shall be available to meet commitment of the Union for the
financial year to which they relate.
(2) The appropriations shall remain available for three (3) months following the
end of the financial year to which they relate in so far as they are required to
discharge unliquidated commitment made during the financial year which
they have not been settled.
(3) Un liquidated commitment shall be based on a contract, purchase order,
agreement or other forms of undertakings/commitments by the Union or
based on a liability recognized by the Union. Such commitments shall be
supported by an appropriate obligating document. In the event that an the
obligation remains un liquidated beyond three months, the Accounting Officer
shall approve the payment and charge it against the reserve fund after
approval of the PRC.
Article 32
Authorisation to Expend Appropriations

(1) The appropriations approved by the Assembly shall constitute authorization
for the Union to incur commitment and make payments for the purposes for
which the appropriations were voted and up to the amounts so voted.
(2) The Accounting Officer shall, by administrative instruction lay down rules,
guidelines, circulars and limits within which Controlling Officers may authorize
expenses of the Union as provided in these Rules and Regulations
(3) The Accounting Officer shall only note and draw up creditors claims for
goods actually received and services actually rendered.
(4) The Accounting Officer shall designate an officer who shall certify for services
rendered.
(5) All expenditure shall be justified by supporting documents. The required
supporting documents for each type of expenditure shall be laid down in
Financial Procedures Manual prepared under these Rules and Regulations.

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(6) No Organ or Institution, Officer or Representative of the Union shall contract

any obligation or commitment whatsoever, on behalf of the Union, without
the written authorization of the Accounting Officer.
Article 33
Reallocation of Resources between Organs

(1) The reallocation of resources between Organs of the Union shall only be made
if such reallocation is to be used for the furtherance and achievement of the
aims and objectives of the Union.
(2) A request for reallocation from an Organ of the Union shall be submitted to
and considered by the Programme and Budget Committee for
recommendation to the Accounting Officer.
(3) The Accounting Officer shall submit a request for reallocation of resources
between Organs, to the PRC for approval.
Article 34
Financial and Management Reporting

(1) All Controlling Officers shall prepare regular financial reports and submit them
to the Financial Controller.
(2) The Financial Controller shall regularly consolidate the financial reports and
submit them to the Accounting Officer
(3) The Accounting Officer shall submit to the PRC and Executive Council
quarterly and semi-annual budget performance reports, indicating against
each budget category, and line items;-
(a) the budgetary appropriation;
(b) actual expenditure;

(c) commitments; and
(d) Challenges and Recommendations

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PART VII: CUSTODY/MANAGEMENT OF FUNDS AND PAYMENTS

Article 35
Bank Accounts and Management

(1) The Controlling Officers shall designate the banks in which the funds of the
Union shall be kept.
(2) The Controlling Officers shall appoint a panel of bank signatories who shall
be grouped as Panel A and Panel B. Panel A shall only include mandatory
signatories from Directorate of Finance or Finance-Units of the Organs
while Panel B shall include countersigning signatories from other
Directorates or Units
(3) Two signatures, one from each Panel as provided in sub regulation (2)
above, or their electronic equivalent, shall be required on all cheques and
other withdrawal instructions, including electronic modes of payment
(4) Bank signatory authority and responsibility is assigned on a personal basis
and cannot be delegated. Bank signatories cannot exercise the functions of
an approving officer.
(5) At the end of every month, the Directorate of PBFA of AUC or Financial Unit
of an organ/institution shall draw up Bank Reconciliation Statements of all
bank accounts of the Union. Any cause for discrepancy shall be
investigated so as to restore the situation with the least possible delay.
(6) The Accounting Officer shall establish appropriate signing thresholds and
arrangements for all bank accounts of the Union.
Article 36
Imprest Accounts
(1) The Accounting Officer may approve the opening of one or more Imprest
Accounts upon a duly justified proposal by the Financial Controller.
(2) The purpose of Imprest Accounts shall be to ensure the settlement of
certain expenses which, by their lesser importance, unforeseen character or
urgency, could hardly be subjected to the normal rules and regulations
governing expense payments (obligation, liquidation and written order to
pay and payment) without serious repercussions on service operations.
(3) The Officer in charge of the Imprest Accounts shall handle the administrative
and accounting aspects of all expenses relating to the Imprest.

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(4) In case of irregularity the Officer in charge of the Imprest shall be personally
and pecuniary responsible, and shall refund any amounts irregularly paid out
and be subjected to unexpected inspections. .
Article 37
Petty Cash Float

(1) The Controlling Officer shall establish a petty cash float for the African
Union Organs and Representational and Specialized Offices both in local
and foreign currencies. The limits shall be based on the determined
operational requirements of each office.
(2) The petty cash shall be maintained by authorized officer on the imprest
system and shall be kept in safe custody.
Article 38
Accountable Imprest
(1) An officer may be given an accountable Imprest in respect of approved
expenses that an officer may incur in the course of official travel or for
purposes of facilitating workshops and other official activities of the Union
(2) When an officer is given imprest, he or she shall take full and personal
responsibility and accountability of the money involved and shall provide
supporting documents as laid down in the Financial Policies and Procedures
manual.
(3) All Imprest shall be retired with 7 working days after the responsible officer
returns from an official trip or after the completion of an official activity for
which the imprest was designated.
(4) All Imprest not retired beyond the period provided under sub regulation (3)
above shall be recovered in full from the salary, wages and any other
payments due to the responsible officer.
(5) No further Imprest shall be given to an officer before the previous imprest is
fully accounted for.

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Article 39
Transportation of Cash
(1) Only Finance Officers shall be allowed to carry cash of the Union, for purposes
of official activities where necessary.
(2) Any other member of staff of the Union shall only carry cash upon written
authority from the Financial Controller, or Controlling Officer or Head of
Finance as applicable.
(3) Any other member of staff that is given the responsibility to carry cash in
place of a Finance Officer shall have the same responsibility for the cash as the
Finance Officer would have been.
(4) The Financial Controller shall ensure that all cash in transit is properly insured
against losses before it is entrusted to a member of staff.
Article 40
Advance Payments
(1) Except where normal commercial practice or where the interest of the Union
so requires, no contract or purchase order which requires a payment or
payments on account in advance of the delivery of goods or performance of
contractual services shall be made on behalf of the Union.
(2) An officer shall not make advance payments unless authorized by the
Controlling Officer.
Article 41
Ex gratia Payments
The Accounting Officer may make such ex gratia payments as are deemed to be
necessary in the interest of the Union, provided that a Statement of such payments
shall be submitted to the Board of External Auditors with the financial statements.

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PART VIII: PROCUREMENT
Article 42
General Principles
(1) Procurement functions include all actions necessary for the acquisition, by
purchase or lease, of property, including products and real property, and of
services, including works. The following general principles shall be given due
consideration when exercising the procurement functions of the Union:
(a) Value for money;
(b) Fairness, integrity and transparency;
(c) Effective competition;
(d) Efficiency and Economy;
(e) The interest of the African Union.
(2) All Procurement processes shall be conducted in accordance with the AU

Procurement Procedures Manual.
(3) Notwithstanding sub regulation (2) above, all procurements related to Peace
Support Operations, pursuant to Articles 4(h) and (j) of the Constitutive Act of
the Union, resulting from a grave circumstances in a Member State, an
exception shall be made to procurement procedures to accommodate the
rapid response to the situation. Such exception shall be authorized by the
Accounting Officer and also apply to exigencies relating to emergencies where
humanitarian assistance and disaster relief are required. The manner and
procedure shall be prescribed by the Accounting Officer and reported to the
PRC.
(4) In all procurement processes due consideration should be given to indigenous
African suppliers unless an express stipulation by a donor imposing a
restriction.
Article 43
Authority and Responsibility

(1) The Accounting Officer shall have ultimate authority and responsibility for all
procurements of the Union.

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(2) Notwithstanding sub article 46 (1) above and for purposes of these Rules and
Regulations, the Accounting Officer may delegate his/her authority and
responsibility to Controlling Officers of AU Organs and Institutions.
(3) The Controlling Officers of the Union shall be responsible for establishment of
all necessary procurement systems and processes and designate relevant
officials responsible for performing procurement functions within their
respective Organs and Institutions.
(4) The Controlling Officers shall all be responsible to the Accounting Officer in
execution of their procurement responsibilities.
Article 44
Authority Levels
(1) There shall be a Tender Board at the AU Headquarters that shall consider all
other procurements above thresholds of respective Internal Procurement
Committee (IPCs).
(2) Each AU Organ and Institution shall constitute an Internal Procurement
Committee (IPC).
(3) Internal Procurement Committees for the Union shall be categorized and
thresholds, methods and process of procurement shall be determined in
accordance with the AU Procurement Manual. The is outlined in the
Procurement Manual
Article 45
Structures Responsible for Procurement

There shall be the following structures and institutions responsible for all
procurement processes of the Union;
(a) Accounting Officer

(b) The AU Tender Board
(c) Internal Procurement Committee
(d) Procurement Unit

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Article 46
AU Tender Board
(1) There shall be established an AU Tender Board appointed by the Accounting
Officer to deal with all procurements of the Union with values exceeding the
limits contained in the categories of each IPC.
(2) The composition of the AU Tender Board shall be determined in the AU
Procurement Manual.
Article 47
Tender and Procurement Committee

(1) The Controlling Officers shall;-
(a) establish the Procurement Committees for the Organs and Institutions
of the Union, and any other committees necessary for the
procurement processes of the Union ;
(b) appoint the members of the Internal Procurement Committee and
other committees necessary for the procurement processes of the
Union;
(2) The IPCs shall take full responsibility for all procurement processes of the
Organs and Institutions of the Union.
Article 48
Composition of the Internal Procurement Committee

(1) The Internal Procurement Committee shall comprise the Chairperson of the
Committee and 5 (Five) other senior members appointed by the Controlling
Officer. Where applicable, Heads of Finance and the Officer responsible for
Legal matters shall be members.
(2) The members of the Internal Procurement Committee shall be appointed in
their individual capacities.
(3) The Controlling Officers, Commissioners of the Commission, members of staff
of Internal Audit function and members of staff of the Procurement Unit shall
not be members of the Internal Procurement Committee.
(4) Head of a department charged with procurement functions shall not be
chairperson of the IPC.

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(5) The Head of procurement Unit shall provide secretarial and technical services
to the Internal Procurement Committee.
Article 49
Procurement Unit.
(1) All Organs and Institutions shall establish their own Procurement Units
charged with management and coordination of all procurement activities as
stipulated in the procurement manual.

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PART IX: INVESTMENTS
Article 50
Investments of the Union

For purposes of these Rules and Regulations, investments of the Union shall include
all activities of committing money or capital of the Union into fixed deposits or to
purchase financial instruments or other assets in order to gain profitable returns in
form of interest, income, or appreciation of the value of the instrument or asset
ultimately for the benefit of the Union.
Article 51
Criteria for Selecting Investments

The following criteria shall be considered in selecting investments of the Union;-
(a) safety and risk associated with an investment in terms of potential loss of
principal or interest;
(b) liquidity or marketability of an investment or the ease with which it can be
converted into cash where necessary in the interest of the Union;
(c) earnings an investment provides, usually expressed as an annual Rate of
Return (ROR).
Article 52
Investment Committee
There shall be established an Investment Committee at each organ charged with
investment matters, comprising the following-
(a) Controlling Officer - Chairperson

(b) Head of Finance of Organ - Member
(c) Head of AHRM - Member
(d) Any other members co-opted by the Chairperson of the committee

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Article 53
Investment Ledger
All investments of the Union shall be registered in an investment ledger to be
maintained by the Director of Finance which shall indicate the relevant details for
each investment, including the face value of the deposit, proceeds of sale and
revenue derived.
Article 54
Custody of Securities
All securities of the Union shall be deposited in any of the following-
(a) duly appointed banker;
(b) the safe deposit vaults maintained by a recognized financial institution

designated by the PRC; or
(c) the safe vaults of the Union under the direct control of the Controlling
Officer
Article 55
Loss of Cash or Negotiable Instruments

(1) Loss of cash or negotiable instruments shall immediately be brought to the
attention of the Accounting Officer who shall take the necessary measures
including holding an investigation and where necessary have recourse to the
law enforcement agencies for assistance.
(2) Except in so far as it may be deemed consistent with the promotion of the
Union interests or good image, no amount due to the Union may be waived
without the authorization of the Executive Council, in which case the persons
or organization in debt, and the amount and the circumstances to justify the
waiver shall be indicated.
(3) A member of staff who loses cash or a negotiable instrument through

negligence or fraud shall be personally and pecuniary responsible for the
loss incurred.

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PART X: SUPPLIES, PLANT, PROPERTY AND EQUIPMENT
Article 56
Inventory, Plant, Property and Equipment

(1) The Union shall maintain records for Inventory and Property, Plant and
Equipment for the purpose of accounting for the Unions non-current assets.
(2) The Accounting Officer shall establish such controls necessary for the
recording, utilization, safekeeping, maintenance, disposal, sale or transfer of
inventory and property, plant and equipment and intangible assets for which
records shall be maintained and the nature and extent of the records to be
kept, consistently with the purpose of these Rules.
(3) Physical verifications for existence of inventory and property, plant and
equipment owned by or entrusted to Union shall be made annually or at
such intervals as deemed necessary, to ensure adequate control over such
assets.
(4) The selection of items for which physical verifications shall be carried out
shall be the responsibility of the Controlling Officer who shall also establish
the criteria for the conduct of physical verifications and for the asset
valuation. The Controlling Officer may delegate the responsibility for the
maintenance of asset records as well as the conduct of physical verifications
to the Heads of the Offices concerned.
(5) All inventory and property, plant and equipment received by Union shall
immediately be inspected to ensure that the items comply with the
specifications of the purchase contract and that their condition is
satisfactory. As each item is received, an appropriate receiving report shall be
issued and the item shall be entered into the appropriate property records.
(6) The cost or re-valued amount of the assets classified as property, plant
and equipment shall be capitalized in the books of accounts of the Union
and depreciated on a straight-line basis over the expected useful lives, as
outlined in the Financial Policies and Procedures manual.
(7) The disposal of inventory, property, plant and equipment or intangible assets
which have become surplus to Unions operating requirements or
unserviceable through obsolescence and normal wear and tear shall be
handled by the Board of Survey.

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Article 57
Board of Survey
There shall be established a Board of Survey which shall be responsible for;-
(a) reporting on Inventory, plant, property and equipment that have been
issued for use which are considered to be of no further use or value to the
Union;
(b) examining damaged, unserviceable or obsolete machinery, equipment and
other property;
(c) Making appropriate recommendations on the mode of disposal to the
controlling officer.
Article 58
Composition of the Board of Survey

The Board of Survey shall comprise of the Chairperson of the Committee and 5 (Five)
other senior members appointed by the Controlling Officer. Heads of Accounting
and Administrative Services shall be members, where applicable.
Article 59
Disposal Proceeds
(1) All proceeds from sale of assets and supplies of the Union shall be managed
according to the provisions of these Rules and Regulations.
(2) All proceeds from disposal of assets of the Union shall primarily be applied
towards replacement of the disposed assets, unless decided otherwise by the
Accounting Officer.

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PART XI: FINANCIAL IRREGULARITIES AND LOSSES
Article 60
Financial Irregularities
The following shall, inter alia, constitute irregularities in the context of these Rules
and Regulations:
(a) A written order for payment without service performed or any commitment
made;
(b) Effecting expenditure without being qualified to do so or without having been
specifically delegated to do so;
(c) Effecting payments without proper authorisation.
(d) Effecting unauthorised expenditure from the Budget of the Union;
(e) Ordering expenditure without reference to the proper procurement
procedures provided for in these Rules and Regulations;
(f) Acquiring an asset unconnected with the services of the Union;
(g) Allocation and use of an asset of the Union for personal purposes;
(h) Effecting expenditure in excess of authorised funds, or without availability of
funds
(i) Recruitment and effective appointment of staff without establishment for the
post and when financial provision has not been made in the Budget, or
without authority to recruit;
(j) Committing funds without reference to their initial purposes;
(k) Purchases effected under conditions unrelated to the interests of the Union;
(l) Unauthorised allocation of funds; and
(m) Non-issuance of receipt in respect of money received for the Union.
Article 61
Handling Irregularities
(1) Irregularity shall be reported to the Controlling Officer.
(2) The Controlling Officer may call upon the office of the Internal Audit or Board
of External Auditors to make thorough audit investigations and draw up
reasonable conclusions there from. Based on the recommendations, the
Controlling Officer shall take appropriate action in compliance with all relevant
and applicable AU policies.

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Article 62
Losses
(1) The following shall, inter alia, constitute losses in the context of these Rules
and Regulations:
(a) loss to the Union occasioned by theft, negligence or, inefficiency;
(b) improper payment of the Union's monies,
(c) fraudulent payment,
(d) misappropriation or for any payment of monies which is not
vouched;
(e) misuse, damage, destruction of supplies and other property,
(f) loss of monies and securities, of the Union;
Article 63
Handling of Losses
(1) The Controlling Officer may after full investigation and consultation with the
Accounting Officer, shall take appropriate action in the treatment of losses.
(2) The Controlling Officer shall, whenever the need arises, appoint a Losses
Committee and determine its composition and terms of reference.
(3) The Committee shall meet to consider all losses reported and make its
recommendations to the Controlling Officer.
(4) If, after investigation, it appears to the Controlling Officer that any staff
member who is or was an employee of the Union has caused a loss, he/she
shall be required by the Controlling Officer to indemnify the Union against
such established loss.
(5) Where accounting errors or omissions which have resulted in a loss to the
Union are detected and confirmed, after thorough investigations of the
accounts and the Accounting Officer or his/her designated officer is
ultimately unable to satisfy himself/herself, the person identified as
responsible shall be surcharged with the amount of the said loss.
(6) The Accounting Officer may, on the recommendation of the Losses
Committee, withdraw or vary a surcharge in respect of which an
explanation satisfactory to him/her has been received or fresh evidence has

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come to light which negates wholly or partially the basis of the surcharge. A
detailed report on such cases shall be submitted to the PRC.
(7) Depending on the gravity of the irregularity and the amount involved, the PRC
may recommend that the matter be referred to the Joint Disciplinary Board for
additional disciplinary action.

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PART XII: ACCOUNTING RECORDS
Article 64
Responsibility
The Financial Controller shall maintain the books of accounts and prepare the
financial statements of the Union.
Article 65
Accounting Policy
(1) The Union shall apply Accrual basis International Public Sector Accounting
Standards (IPSAS).
(2) The Accounting Officer shall recommend to the Policy Organs for adoption,
relevant internationally accepted accounting standards, conventions and
practices that may become applicable before implementation.
(3) For purposes of consistency, no changes shall be adopted and implemented
to the accounting policies in the course of a financial year.
(4) Any changes to the accounting policies of the Union shall be approved by the
Executive Council before adoption and implementation upon
recommendation of the PRC.
Article 66
Retention and Disposal of Records

(1) All accounting and other financial records of the Organs and Institutions of
the Union shall remain the property of the Union.
(2) All accounting documents shall be at the disposal of the PRC, the Board of
External Auditors and any other officer designated by the Accounting Officer.
(3) The accounting and other financial records shall be retained for a minimum of
ten years, after which, the Accounting Officer may authorize their disposal.
(4) Notwithstanding sub regulation (3) above, all personnel related physical
records shall be retained for minimum of fifteen years.

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PART XIII: INTERNAL CONTROLS,
Article 67
System of Internal Controls

The Accounting Officer shall establish a system of internal controls that ensure that
within all the Organs and Institutions of the Union:
(a) revenue is properly collected;
(b) expenses are valid and correctly authorized;
(c) revenue, expenses, assets and liabilities are properly recorded and accounted
for;
(d) financial and operating information is accurate and reliable;
(e) assets are safeguarded against loss or destruction;
(f) resources of the Union are employed and managed in an effective, economic
and efficient manner;
(g) there is no waste with respect to the utilization of the resources of the Union;
(h) outputs and provisions are consistent with those specified in the approved
Budget;
(i) relevant international standards, and Rules and Regulations, policies and
procedures of the Union are being applied and complied with;
(j) there is effective and efficient management of the financial resources of the
Union.
Article 68
Risk Management
(1) The Accounting Officer shall establish a risk management policy for the Union
and maintain a risk-management system to manage and control financial and
other types of risks, including the identification, evaluation, and measurement
of possible impact on Union, and the selection and maintenance of various
solutions to mitigate risk.
(2) All Controlling Officers of the Union shall develop appropriate risk
management frameworks and maintain risk management registers to be
updated on annual basis.

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Article 69
Sub-Committee of PRC on Audit Matters

(1) The PRC Sub Committee responsible on Audit Matters shall also deal with risk
management issues.
(2) The PRC Sub-Committee on Audit Matters shall assist the PRC fulfill its
oversight responsibilities on the financial reporting process, the internal
control systems, the audit process, and the Union's compliance with rules and
regulations.
(3) The composition of the Sub-Committee of PRC on Audit Matters shall be
determined by the PRC.
(4) The roles and responsibilities of the PRC Sub Committee on Audit Matters are
set forth in its terms of reference.
Article 70
Internal Audit Progress Committee

(1) There shall be an Internal Audit Progress Committee established by the
Accounting Officer.
(2) The Internal Audit Progress Committee shall be responsible for assisting the
Accounting Officer in the examination, evaluation and follow up of
implementation of internal and external audit recommendations.
(3) The composition, roles and responsibilities of the Internal Audit Progress
Committee shall be set forth in its terms of reference.
Article 71
Office of the Internal Audit

(1) There shall be Office of the Internal Audit charged with reviewing the internal
controls, systems, processes and procedures of the Union to ensure they are
effective and operate as intended.
(2) The Office of Internal Audit shall provide independent and objective appraisal
of the activities of all Organs and Institutions of the Union in order to add
value and improve their administrative and operational efficiency.

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(4) The Office of Internal Audit shall help all Organs and Institutions of the Union
to accomplish their strategic objectives by utilizing a systematic and
disciplined approach to evaluate and improve the risk management, internal
control systems and administrative processes compliant with relevant statutes,
directives, guidelines, policies and governance standards.
(5) The mandate, responsibility, authority, independence and reporting of Office
of Internal Audit shall be defined in the AU Internal Audit Regulations serving
as its audit charter.

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PART XIV: FINANCIAL STATEMENTS
Article 72
Preparation of Financial Statements

(1) The Accounting officer shall prepare financial statements of the Union for
each financial year and submit to the Board of the External Auditors by 31st
March of the following year.
(2) The financial statements shall include

(a) a statement of financial position;
(b) a statement of financial performance;
(c) a statement of changes in net assets/ equity;
(d) a cash flow statement;
(e) a comparison of budget and actual amounts;
(f) notes, comprising a summary of significant accounting policies and
other explanatory notes supporting the financial statements;

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PART XV: KEY FUNCTIONS/RESPONSIBILITIES
Article 73
General Responsibilities of Officers of the Union

(1) The Accounting officer, Controlling Officers, Competent Authority or other
staff members including, Programme Managers, Heads of Department and
Divisions, Heads of Regional and Representational Offices responsible for
the budgetary and financial management of the Union, shall be held
personally and pecuniary responsible for;-
(a) implementation of the measures and decisions they take in the
execution of their functions;
(b) any negligence resulting in financial loss;
(c) commitments on a service which cannot be completed with funds
authorized for the service in the Budget resulting in excess expenditure
and losses;
(d) violation of these Financial Rules and Regulations and any other
administrative instructions.
(2) All Officers of the Union shall be required if found liable, to reimburse the
losses occasioned from above.
(3) (Officers of the Union should always safe-guard the interests of the Union in
carrying out their official duties.)
Article 74
Responsibilities of the Financial Controller

(1) The Financial Controller shall be ultimately responsible for keeping the
books of accounts of the Union as a whole.
(2) Specifically the Financial Controller shall;-
(a) be the receiver, the paymaster and the Chief Finance Officer of the
Union;
(b) receive revenue in accordance with the written order to collect,
drawn up by the Accounting Officer or his/her designated
official.

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(c) effect payments regularly in accordance with the written order to

pay and contracts or agreements signed by the Accounting Officer
or his/her designated official.
(d) ensure the protection and management of funds, securities and
assets of the Union;
(e) supervise and guide the day-to-day Financial management activities
of the Union in accordance with the Union policies, these Rules and
Regulations, relevant procedures, practices and decisions of the
policy organs;
(f) advise on changes and adjustments to these Rules and Regulations,
methods and procedures with a view to improving the Union
financial and management system;
(g) carry out regular consultations with the relevant Organs,
Departments or Representational and Specialized offices on
financial matters;
(h) ensure safe custody of the Union assets;
(i) enhance financial accountability and reporting;
(j) ensure an orderly and accurate management and accounting of the
financial resources, maintaining up to date financial records in order
to reflect the correct financial situation of the Union;
(k) organize and coordinate the preparation and the implementation of
the budget;
(l) carry out any duties he/she may be assigned in accordance with
these Rules and Regulations; and
(m) promote awareness of best practices in the area of finance.
Article 75
Conflict of Responsibilities
(1) A payment request by the Accounting Officer may be refused by the
Financial Controller when the amount exceeds the limit of funds allotted to
it or if there is any omission, gross error or irregularity in the request or
supporting document.
(2) In such a case, the Accounting Officer may overrule the objection raised by
the Financial Controller. This instruction addressed to the Financial

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Controller shall be in writing, and shall be included among the supporting

documents relating the said expenditure. The effect of the request shall be
to transfer the responsibilities of the Financial Controller to the Accounting
officer.
The same provisions in the preceding sections (1) and (2) shall apply to Controlling
Officers and respective Heads of Finance in the Organs
Article 76
Role of Permanent Representative Committee

(1) The PRC shall consider all Budgetary and Financial matters of the Union in
accordance with Rule 4 of the Rules of Procedure of the PRC. The PRC shall
be responsible for:
(a) Examining all requests for transfer of authorized budgetary funds
submitted by the Accounting Officer in order to cope with any urgent
decisions or projects;
(b) Examining all unforeseen or unauthorized expenditure which may be
occasioned by the implementation of new and urgent decisions or
projects;
(c) Considering the Budget Framework and budgetary estimates of the
Union drawn up by the Accounting Officer;
(d) Submitting to the Executive Council the final Draft Budget proposals
accompanied by its comments, observations and recommendations;
(e) Advising the Executive Council on all other administrative, budgetary,
financial matters;
(f) Considering the Financial Report of the Accounting Officer;
(g) Considering the Report of the Board of External Auditors and submit its
written comments thereon to the Executive Council;
(h) Considering the Report of the Office of the Internal Audit and submit its
written comments thereon to the Executive Council; and
(i) Such other duties as may be delegated by Executive.

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PART XVI: EXTERNAL AUDIT
Article 77
The Board of External Auditors

(1) There shall be established a Board of External Auditors whose function shall
be to audit the accounts of the Union.
(2) The audit shall be conducted in accordance with Internationally Accepted
Auditing Standards. The Board of External Auditors shall be appointed by the
Executive Council.
Article 78
Composition of the Board of External Auditors

(1) The Board of External Auditors shall comprise of Heads of Supreme Audit
Institutions from Member States of the Union appointed by the Executive
Council.
(2) A Board of External Auditors shall be composed of Five (5) members, one from
each region of Africa, to be appointed by the Executive Council.
(3) The Board shall elect a Chairperson from amongst its members to serve for a
period of one term.
(4) If a member of the Board ceases to hold office as Auditor-General (or
equivalent title) in her/his country, the tenure of office is terminated and the
person who succeeds her/him becomes the new Board member to serve the
rest of the term. A Board member may not otherwise be removed during
her/his tenure except by a decision of the Executive Council
(5) The members of the Board of the External Auditors shall be responsible to the
Executive Council of the Union through the PRC.
(6) Membership of the Board shall be open to all Member States, with the
exception of those affected by sanctions in conformity with the relevant rules
of the Union.
(7) Their term of office shall be two (2) years. They shall be eligible for re-
appointment only once. The terms of office of one (1) of the members shall
expire at the end of every term. One member should also remain to serve a
second term for the purpose of institutional memory. Consequently, the
Executive council shall appoint every two years four (4) members.

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Article 79
Audit Terms of Reference

(1) Specific Terms of Reference of the Board of External Auditors shall be to:
(a) Carry out an a posteriori external auditing of the accounts of the Union;
(b) Ensure that the audit shall be conducted in conformity with generally
accepted auditing standards and guidelines and subject to any
special directions of the Executive Council
(c) Verify the way and manner in which the Accounting Officer and those
answerable to him/her have performed their accounting duties and
responsibilities;
(d) Formulate all proposals likely to increase the efficiency of methods of
budgetary and financial management, including the accounting system
and internal liaisons between the various authorities responsible for
the framing, preparation and administration of the annual Budget;
(e) The Board of External auditors shall perform certain specific
examinations and issue separate reports on the results as may be
requested by the PRC.
(f) Honoraria shall be paid to Members of the Board for services rendered
as per the scale of the Union for such activities.
Article 80
Authority and Independence of the Board of External Auditors

(1) The Board of External Auditors shall be completely independent and solely
responsible for the conduct of the audit of the Union.
(2) The Board of External Auditors shall neither be influenced nor subject to the
direction or control of any person or authority.
(3) The Board of External Auditors shall, during the course of the audit, have
access to all accounts, documents, registers and records of the Union,
and to all other supporting evidence of any of its transactions it considers
necessary to consult for the effective discharge of its duties.
(4) The Board of External Auditors shall have no power to disallow any items in
the Accounts but shall draw the attention of the Accounting Officer for

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appropriate action on any transaction to which it entertains doubt as to the

legality or propriety. Audit objections to these or any other transactions
arising during the examination of the accounts shall be communicated
immediately to the Accounting Officer.
Article 81
Facilitation and Conduct of Audit

(1) The Accounting Officer shall provide the Board of External Auditors with
records, information books of accounts and other documents and all the
facilities the Board of External Auditors may require in the performance of the
audit.
(3) Information which is classified as privileged or confidential and which is
required by the Board of External Audit for the purposes of an audit shall be
made available on request.
(4) The Board of External Auditors shall respect the privilege and confidential
nature of any information so classified which is made available to the Board
and shall not make any other use of the information except in direct
connection with the performance of the audit.
(5) The Board of External Auditors shall inform the Executive Council of any
refusal of information, classified as privileged, which in its opinion, was
required for purpose of the audit.
(6) Considering that the period for preparation of financial statement of each
financial year should be definitively completed by 31st March following
the year end, auditing operations by the Board of External Auditors shall
start during the first week of April.
(7) The final report on the auditing operations of the Union, containing the
observations of the External Auditors, and which is to be laid before the
Executive Council, shall be handed over to the PRC by 31st May of each
year at the latest in order to enable it to be submitted to the PRC for
consideration before submission to the Executive Council by July session
of summit.
(8) The financial statements of the AU Commission shall be signed by the
Accounting officer and the Director of PBFA and in the case of the other
Organs, the respective competent Authority and Head of Finance.

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Article 82
Reporting by the Board of External Auditors

(1) The Board of External Auditors shall submit its reports to the Sub Committee
of the PRC on Audit Matters.
(2) The Chairperson of the Board of External Auditors shall attend the meetings of
the PRC whenever the report of the Board of External Auditors is being
discussed.
(3) Refusal or delay in the submission of the Financial Statement , shall be
brought to the attention of the PRC by the Board of External Auditors.
(4) The PRC shall make appropriate recommendations thereon to the Executive
Council.
(5) If the Financial Statement presented by the Accounting Officer meets
with no objection, the Executive Council shall deliver a discharge to the
Accounting Officer.
Article 83
Audit Opinion
(1) The Board of External Auditors shall express an audit opinion on the Financial
Statements of the Union
(2) The opinion of the Board of External Auditors shall state whether:-
(a) the financial statements present fairly the financial position as at the
end of the financial year and the result of the operations for the period
then ended;
(b) the financial statements were prepared in accordance with International
Public Sector Accounting Standards (IPSAS);
(c) the accounting principles were applied on a basis consistent with that
of the preceding period; and
(d) the transactions carried out in the financial year were in accordance
with these Rules and Regulations .
(3) The audit report and opinion of each organ shall be signed by the Chairperson
of the Board of External Auditors

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Article 84
Management Letter
(1) The report of the Board of External Auditors shall state;-
(a) the type and scope of the examination by the Board of External
Auditors ;
(b) matters affecting the finality or accuracy of the accounts including
where appropriate;-
(i) information necessary to the correct interpretation of the

accounts;
(ii) any amounts which ought to have been received but which
have not been brought to account;
(iii) any amounts for which legal or contingent obligation exist

and which have not been recorded or reflected in the
financial statements;
(iv) Expenses not properly substantiated; and

(c) whether the International Public Sector Accounting Standards
(IPSAS) are applied in a consistent manner, and where there are
deviations, whether the deviations have a material impact and are
disclosed in the notes to financial statements;
(d) other matters which should be brought to the notice of the Executive
Council including-
(i) cases of fraud or presumed fraud;
(ii) wasteful or improper expenditure of the money or other

assets of the Union, notwithstanding that the accounting
for the transactions may be correct;
(i) expenditure likely to commit the Union to unnecessary

further financial commitment;
(iv) any defect in the general system governing the control of

receipts, disbursement or of supplies and equipment;

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(v) expenses not in accordance with the intention of the

Executive Council, after making allowance for duly
authorized transfers within the budget; and;
(vi) expenses not in conformity with the authority, which

governs it;
(e) The accuracy or otherwise of the supplies and equipment record as

determined by stock and examination of the records; and
(f) Where appropriate, transactions accounted for in a previous year

concerning which further information has been obtained or
transactions in a later year concerning which it seems desirable that
the Executive Council should have advance knowledge:
(i) The Board of External Auditors shall make such

observations, findings, comments resulting from the
audit, as the Board of External Auditors may deem
appropriate.
(ii) Whenever the scope of the audit is restricted or the
Board of External Auditors is unable to obtain sufficient
evidence, the Board of External Auditors shall refer to
the matter in its report, making clear the reason for its
comments and the effect on the financial position and
the financial transactions as recorded.
(iii) The Board of External Auditors shall at an audit
clearance meeting obtain explanation of any matter
under observation before including such matter in the
audit management report. The Board shall not conclude
its report without first affording the Accounting Officer
an adequate opportunity of explanation on the matter
under observation.

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PART XVII: OUTSTANDING STATUTORY CONTRIBUTIONS
Article 85
Dealing with Outstanding Contributions to the Budget

(1) Statutory Contributions by Member States are due 1st January of the Financial
Year
(2) The Commission shall send reminder statements periodically to Member
States and all appropriate action should be taken to recover arrears of
contributions.
(3) Specific provision shall be made for all known long outstanding contributions
receivables from Member States. The rates of provision that shall be in
compliance with relevant provisions in the Financial Policies and Procedures
Manual
(4) Any Member State of the Union with an outstanding contribution to the
Unions Budget in accordance with its obligations as enacted in the
Constitutive Act where the amount of its arrears is equal or in excess of the
contribution due by such Member State for the last two (2) complete financial
years shall be deprived of certain rights in accordance with the Rules of
Procedure of Assembly.
(5) The Assembly shall determine, on the basis of the recommendation of
the Executive Council and the PRC, as well as information provided by the
Commission, sanctions to be imposed as provided for in relevant provisions of
the Constitutive act and Rules of Procedures.
(6) Subject to paragraph 1 of the Rules of Procedure of the Assembly, sanctions
against Member States that default in the payment of their
contributions to the Budget shall be implemented by the Assembly in the
following manner:
(a) When in arrears of payment amounting to two (2) years but
not exceeding five (5) years of its assessed contribution, suspension
of the Member States rights to:
i. speak, vote and receive documentation at meetings of the
Union;
ii. offer to host sessions of the Assembly or of the Executive
Council or any other meetings of the Union; and

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iii. present a candidate for any position or post within the Union.
iv. When in arrears of payments contributions amounting to five (5)
years or more, in addition to the sanctions in paragraph 2 (a) of
the Rules of Procedure, suspension of Member States rights to;-
(i) Have the contracts of employment of its national renewed;

and Provision, by the Union, of funds for new projects in
Member States.
(7) When a Member State is under sanctions for non-payment of its contributions
as described in the preceding paragraphs, the sanctions may be lifted
temporarily if the Member State pays at least fifty per cent (50%) of its
outstanding arrears, provided that such payment is made thirty (30) days
before the commencement of the session of the Executive Council preceding
that of the Assembly.

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PART XVIII: REQUIREMENTS FOR DRAFT RESOLUTIONS
Article 86
Consideration and Adoption of Draft Decisions and Resolutions
1. Every Draft Decision and Resolution tabled for consideration by any Organ of
the Union shall be accompanied by a presentation of its financial implications,
if any, before adoption.
2. The Executive Council may only adopt decisions involving financial
implications if the necessary funds have been availed, or additional funding
sources are identified.

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PART XIX: IMPLEMENTATION AND REVOCATION OF REGULATIONS
Article 87
Implementation, Institutionalisation of Rules and Regulations
(1) For the purposes of these Rules and Regulations, the Accounting Officer shall
issue administrative instructions, guidelines, and procedures.
(2) The administrative instructions, guidelines, procedures issued by the Accounting

Officer shall be in accordance with these Rules and Regulations and other
statutes of the Union.
(3) The Accounting Officer shall ensure that the administrative instructions,
guidelines, procedures issued are properly implemented and complied with.
These Rules and Regulations shall come into force following their adoption by
the Assembly.
(4) Upon the adoption of these Rules and Regulations, the Accounting Officer shall
take the necessary measures to implement the provisions of the said Rules and
Regulations, which shall be made available to all the staff members and Member
States of the Union.
Article 88
Amendment of the Rules and Regulations

(1) These Rules and Regulations may be amended by the Assembly upon
recommendation of the Executive Council.
(2) The Accounting Officer of the Union shall make proposals for amendment
through the PRC and submit them to the Executive Council for consideration
and approval.
(3) An amendment to these Rules and Regulations shall not apply retrospectively.

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Article 89
Applicability
These Rules and Regulations shall supersede all provisions in existing Financial Rules
and Regulations adopted in June 2006 and any other relevant existing Executive
Council and Assembly decisions, Rules and Regulations of the Union that may
conflict with provisions contained herein, upon the date of adoption
DONE at Addis Ababa on the 31 day of January in the year Two Thousand and
fourteen (2014).

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List of All Member States

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65

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AFRICAN UNION UNION AFRICAINE

FINANCIAL RULES AND REGULATIONS

REVISED FINANCIAL RULES AND REGULATIONS

African Union Financial Rules and Regulations- 2013-Revised Draft

African Union Financial Rules and Regulations- 2013-Revised Draft

African Union Financial Rules and Regulations- 2013-Revised Draft

PART X: SUPPLIES, PLANT, PROPERTY AND EQUIPMENT ................................................ 40

African Union Financial Rules and Regulations- 2013-Revised Draft

General Responsibilities of Officers of the Union ..................................................... 50

African Union Financial Rules and Regulations- 2013-Revised Draft

AHRM- Administration and Human Resources management

AU- African Union

FRR- Financial Rules and Regulations

IPSAS- International Public Sector Accounting Standards

PBFA- Programming, Budgeting and Accounting

PSC- Peace and Security Council of the Union

African Union Financial Rules and Regulations- 2013-Revised Draft

AFRICAN UNION FINANCIAL RULES AND REGULATIONS

African Union Financial Rules and Regulations- 2013-Revised Draft

i. Accounting Officer means an officer of the Union with ultimate accounting

African Union Financial Rules and Regulations- 2013-Revised Draft

African Union Financial Rules and Regulations- 2013-Revised Draft

African Union Financial Rules and Regulations- 2013-Revised Draft

African Union Financial Rules and Regulations- 2013-Revised Draft

Scope and Purpose

(a) define the fundamental principles and conditions of prudent financial

Applicability and Authority

African Union Financial Rules and Regulations- 2013-Revised Draft

Responsibility and Accountability

African Union Financial Rules and Regulations- 2013-Revised Draft

Compliance and Sanctions for Breach of Rules and Regulations

African Union Financial Rules and Regulations- 2013-Revised Draft

PART II: GENERAL PRINCIPLES

Utilisation of the Financial Resources of the Union

African Union Financial Rules and Regulations- 2013-Revised Draft

African Union Financial Rules and Regulations- 2013-Revised Draft

PART III: BUDGET

Presentation and Content of the Budget

(b) Operating Expenses

(c) Capital Expenses

African Union Financial Rules and Regulations- 2013-Revised Draft

Submission, Approval and Adoption of Budget Estimates

Internal Programme and Budget Committee

African Union Financial Rules and Regulations- 2013-Revised Draft

Deputy Chairperson -Chairperson

Functions of the Internal Programme and Budget Committee

(a) Considering the budget framework of the Union

African Union Financial Rules and Regulations- 2013-Revised Draft

Peace Support Operations Budgets

African Union Financial Rules and Regulations- 2013-Revised Draft

(1) Supplementary Budget proposals may be submitted in respect of the

(3) Notwithstanding Sub-Article 17(2) above, no reallocation shall be made to

African Union Financial Rules and Regulations- 2013-Revised Draft

(8) The changes to the establishment, recruitment, appointment, promotion

African Union Financial Rules and Regulations- 2013-Revised Draft

PART IV: SOURCES OF REVENUE

Financial Resources of the Union

(a) Statutory contributions made by Member States in accordance with the

Contributions from Member States.

Voluntary Contributions, Gifts and Donations

African Union Financial Rules and Regulations- 2013-Revised Draft

(2) Collection of all direct or indirect contributions not authorized by the

Revenue Generating Activities