The study was conducted to describe how Addis Ababa University prepare andrnadminister recurrent budget (The Case Study Of Technology Faculty North CampusrnBudget System).rnWhile budgets are a useful management tool, they must be applied correctly forrnmanagement to reap the greatest benefit. Certainly, budgets are not a substitute forrnskilled management, and it must be remembered that they depict only a series ofrnestimates, which appear to represent good means of measurement at the time thernbudget is established. Nevertheless, in the budget system of AAU there is discrepancyrnbetween policy and reality since sound policy decision-making and proper budgetingrnare not implemented well.rnSpending units do not have work plan and program priority for their budget request atrnall. Their expenditure plan is merely copy of previous year and no reasonablernjustification. Thus the approved budget is insufficient and there is high volume ofrnbudget transfer within the budget line. Due to lack of coordination and transparencernamong the various units results a rush to expend all the available money in the monthrnof Sene and there is commonly inferior, defective and obsolete items are procured inrnthe faculty. In general this all is the result of mismanagement of limited resource . ..rnThe study is descriptive type and includes in-depth interviews that were conductedrnwith department heads and budget center heads to collect the required data. Besidesrnthe AAU financial policy and procedures are included.rnOut of an over all analysis of the responses, it can be said that the management andrnspending unit's emphasis toward reCUlTent budget is still quiet low and it lacksrnopenness and coordination. Thus, further consolidation of the financial managementrnsystem based on strict and accurate rules of high transparency and responsibility isrnfundamental. This might not always work for every ones satisfaction.