ASDP Basket Fund - Ministry Of Agriculture, Food and Cooperatives

3 Accounting policies and systems3.5 Accounting policies adopted by LGAsAccounting policies and procedures used by councils in preparing financialstatements comply with the requirements of the Local Government Finance Act, theLocal Authority Financial Memorandum, the Local Authorities Accounts Manual, andregulations and circulars derived there from and consistent with NBAA accountingstandards.Every council’s accounting period commences on 1st July and ends on 30th June.The annual accounts, which cover a period of twelve months, are prepared using adouble entry system, on an accrual basis. This basis requires that all revenues andcosts are matched with the period in which they are earned or incurred, irrespectiveof whether they have been paid or not, subject to the operation of the prudenceprinciple. This is in compliance with the Local Authority Financial Memorandum,Section 57 (iii). The observance of the accruals concept implies that the cash accountmust be adjusted for stock, works in progress, debtors, prepayments, creditors,receipts in advance and capital expenditure and receipts.3.6 Books of accounts maintained by LGAsFor purposes of the ASDP, LGAs are required to maintain the following main booksof accounts:• Control cash book• Subsidiary ledger for each account• General ledger, summarising the entries in subsidiary ledgers.In addition to the above books of accounts, the following should also be maintained:• Debtors’ and creditors’ personal accounts specifying particulars of itemssupplied and providing reference to transaction documents• Control accounts for each class of debtor or creditor• Stores account which is debited with purchases and credited with issues• Fixed asset register showing all the authority’s capital assets and the waysthey have been financed.Government of the United Republic of Tanzania18