The balanced scorecard has been largely used as strategy and performance framework in privaternsector organizations throughout the world. After the introduction of New Public Management, itrnstarted t o be us ed in pu blic a nd non-profit o rganizations in o rder t o f acilitate t he p erformancernmanagement process. I n spite o f t he increase in t he number o f studies a bout its usefulness a ndrnfutility for t he p rivate s ector, there is still a need t o test the f easibility o f t he B SC a s arnmanagement framework in the government and non-profit domain.rnThe BSC in public sector is recently criticized concerning lack of cause-and-effect relationships,rnlack o f c larity, and failure t o c onsider some t ypes o f stakeholders ( Johanson e t a l. 2006 ;rnNorreklit 2000, 2003). Other researchers/scholars have also raised questions regarding the BSCâ€™srneffectiveness ( Othman e t a l. 2006) a nd t he a dequacy o f B SC in varying c ircumstances a ndrndiffering firm types (Maltz et al. 2003).rnAs o f 2 010 t he balanced scorecard car d ( BSC) strategy a nd p erformance framework has be enrnimplemented in many public sector organizations in Ethiopia. Hence the researcher is motivatedrnto investigate the practice and challenges o f BSC design a nd implementation in Ethiopia publicrnsector i n case o f Ethiopian Revenue and Customs Authority as statement o f t he problem (ThernMinistry of Capacity Building report, 2005).rnThe E thiopian R evenues a nd C ustoms Authority (E RCA) is federal g overnment a gencyrnestablished in 2008 w ith pr oclamation N o. 587/ 2008 to ad ministrate f ederal g overnment t axrnjurisdiction and enforce customs laws (proclamation No. 587/2008).rnThe g eneral o bjective o f t he r esearch is t o a ssess t he p ractice & identify the ch allenges ofrnbalanced s corecard building & its implementation in E RCA a s change, c ommunication andrnstrategic management t ool. To w hat e xtent the strategic p erformance management t ools t hat isrnBSC d esigned a nd implemented ap propriately; a nd w hat ar e t he strengths, w eaknesses,rnchallenges, and lessons of the design and implementing BSC project are the research questions tornbe e xamined. Hopefully the result o f t his investigation w ill contribute to solve problems relatedrnto the design and implementation of the BSC in other public organization. The scope is limited inrnthe BSC building and its implementation. The main limitation of this study lies in its applicationrnto a v ery s ingular t ype o f o rganization t hat operates as a d river t o i mprove t he e fficiency a ndrnnimbleness of other public organizations. D ocument review w as t he p rimary t echnique o f d atarncollection, b esides questionnaire and i nterview w ere also us ed t o ga ther data. O n t he d atarnpresentation, t he top m anagement c ommitment, six st eps of building B SC a nd three s teps ofrnimplementing BSC (System roll out) are comprehensively reviewed.rnIn t he s ummery o f finding t here ar e quite a significant s trength in t he t op m anagementrncommitment and sizeable weakness and strength throughout the nine steps of BSC building andrnits implementation o r s ystem r olls o ut. I n t he concluding r emarks basically t here is a q uiternconsiderable pr oblem in t he design a nd implementation o f B SC in E RCA. Accordingly t hernrecommendation is forwarded to tackle problems