The topics for this review weredetermined by the Government in consultation with a coregroup of donors at a workshop in Brussels organized by theEuropean Commission in November 2000. The Governmentsuggested reviewing public expenditures at the regionallevel, starting with three regions. This public expenditurereview (PER) marks the first explicit attempt at RegionalPERs. This integrated report draws on draft reports from theJanuary-April 2000 mission as well as from a workshop heldin Addis Ababa during September 17-18, 2001. The theme amdthe focus topics for this PER emerged out of consultationsbetween the Ethiopian governmentand a core donor group at aworkshop in Brussels organized by the European Commission inNovember 2000. This PER is set on three premises: 1) It isthematically set in the context of the Poverty ReductionStrategy Paper and the Heavily Indebted Poor Countriesdocument; 2) It focuses on getting a better understanding ofthe budgetary institutions, systems and processes at theregional level; and 3) the PER analysis and recommendationsare intended to harmonize with the sequence and pace of theGovernment of Ethiopia's Expenditure Management andControl Program.