The study has examined expenditure decentralization in Ethiopia fiscal federalism frame works by mainly emphasizing on sub-national government using descriptive study. The study used interview and document review to collect primary and secondary data respectively. The objective of the study was to identify the trends, performance, and constraints of expenditure decentralization at sub-national governments in Ethiopia. The study found, expenditure decentralization at sub-national governments in Ethiopia is constrained by inadequate legal frame works that divides expenditure among three levels of government which involves lack of clarity and details in expenditure division that leads to ambiguity, confusion, overlapping and duplication of duties and responsibility which weaken  local accountability; variation of constitutional stipulation from practical application in some functional responsibilities; absence of provision for duties and functional responsibilities of local governments in national constitution that impact uniformity in expenditure decentralization at local governments as well as mismatch between revenue and expenditure decentralization. These problems resulted in none autonomous, inefficient and ineffective local governments which may lead to poor local service provision, wastage and low accountability. The limitations are very crucial in nature and it requires immediate action on such areas as revision of legal framework which govern expenditure decentralization by clearly detailing and listing the duties and responsibilities of each level of government; elimination of duplication and overlapping of functional responsibilities; enforcement of constitutional provision of some functional responsibilities and provision of duties and expenditure responsibilities of local government in national constitution.

Keywords: Expenditure Decentralization, Expenditure Assignment, Fiscal Decentralization, Fiscal Federalism, Local Governments, Sub National Governments, Division of Expenditure.