Government Accounting

 PD 1445
o Technically speaking, it is the Old basis
o State Audit Code of the Philippines
o Former President Ferdinand Marcos
 1987 Philippine Constitution
o Official Legal Basis
o Appointed official commission which is the Commission on Audit

COA (Commission on Audit)

1. Audit according to PPSAS (Philippine Public Sector Accounting Standards)
2. Examines and Investigate according to PPSAS
Nature of Government Accounting:
OGAS (Old Government Accounting Standards)

NGAS (New Government Accounting Standards)

GAM (Government Accounting Manual)

 ONGAS:
1. Not in conformity with the IAS (International Accounting Standards)
2. Many columns
3. Many books of accounts
4. Manual

 NGAS:
 GAM:
1. Conformity to IAS > IPSAS/IPSASB
2. Limited book of accounts
3. Two columns
4. Computerized e-NGAs as of today

Reasons for shifting from old to new government accounting standard

1. To Computerization
2. To conform with the international accounting standards through the application of IPSAS
a. Applicability of IPSAS in our country
b. Make our own exposure draft/consultation to stakeholders
c. Able to integrate fundamental issues in our country to that IPSAS, what if that IPSAS will not solve any
issues to our country, then that IPSAS will not be applied.
d. Making of statutory limit – the difference or conflict in that IPSAS and any loss in our country will be
resolved, as well if it is in conflict with the laws and regulation of the country. Law must always prevail
than the standard
e. There will be disclosure requirements that should be pass by the NGUnits and NGAgencies
f. Numbering system of the oublic sectors
g. Implementation of that IPSAS

3. To generate relevant financial statements

Relevant- imfluence the decidion makers because informations are timely
4. To serve as monitoring tool of agency’s performance

Responsibility Accounting
-the accountability of the person responsible of the actions
-resposibility of the head of accounting
-as to government accounting, it the president of the philippines
Definition of Government Accounting
(Sec. 109, PD No. 144) – Encompasses the process of analysing, recording, classifying, summarizing and communicating
all transactions involving the reciepts and despositions of government funds and property, and interpreting the results
thereof.
Reciepts- inflows, donations
- You need to dispose and utilize(disbursing it with objective) it.

Objectives of Government Accounting:

1. To produce information concerning past operations and present conditions
2. To provide basis for guidance for future operations
3. To provide control of the acts of public bodies and offices in the reciept, dispositions and utilizations of funds
and property; and
4. To report on the financial positions and the results of operations of government agencies for the guidance of all
persons concerned.

Government Accounting Responsibilities

1. COA (Commission on Audit) :
keeper of general accounts of all government units
 Exclusive power and authority subject to limitations to implement all its standards as well as to
examine all the books of accounts of all NGagencies and GOCC’s.
 Also responsible for the implementation of accounting standards in all Government units
 Audit and Implement accounting standards which are incompatible
3 functions of auditing (you cannot combine them in auditing)
1. Authorization – finance officer/ chief finance officer
2. Reporting - controllers department
3. Custody – cashier department
**In any organization, this functions are segregated.
2. DBM (Department of Budget and Management)
-Formulation and implementation of the national budget
DBM Secretary: Benjamin Diokno
COA Commissioner: Michael Aguinaldo

STEPS:
1) Budget preparation
2) Budget legislation
3) Budget execution
4) Budget accountability

3 Books of registries of DBM

 RAPAL - registry of appropriation and allotment
 RESPA – registry of especial purpose fund appropriation
 RANCA – registry of appropriation and notice of cash allocation

o Appropriation – budget law general appropriation act

o Allotment – authority given by DBM sign obligations
o Allocation – allows NGAs to withdraw from the national funds on the amount of their
obligations

 Appropriation – enactment of law which is the General Appropriation Act

 Allotment – an authority given by the DBM to NGAs to incur obligations
Obligational authority:
1) GAARD – General Appropriation Act Released Documents
  Comprehensive release of funds
 **To expedite the release of budget
2) SARO – Special Allotment Release Order
 Lumpsum release of funds
 Budget not included in the GAARD (wala pa siya sa GAARD)
 Submit BEDs (Budget Execution Documents)
 Approved only by the President or the DBM Secretary
 For later release
 Ex: Pork Barrels
3) GARO – General Allotment Release Order
 ABM before (Agency Budget Matrix)
 Coprehensive authority relative to GAARD
 Nasa batas na w/c is GAARD
 Allocations – an authority issued by the DBM to withdraw government funds/ actual release of
cash/or actual reciept of appropriation
o Signals the first entry in the book
o Disbursement authority

4 Allocation/ Disbursements Authority (power to expense)

 NCA – Notice of Cash Allocation
a. Most common type of allocation issued by the DBM to the central/regional/
provincial offices
b. Actual cash Modified Disbursement System Check (modified disbursement
system)

Journal entry:
Cash – MDS Regular XX
Subsidy income from national government XX

 NCAA – Non Cash Availment Authority

 CDC – Cash Disbursement Ceiling
DFA & DOLE – foreign service posts
 NTA – Notice of Transfer of Allocation
-parang NCA
-DBM issue to central office parang NCA pero pwede idistribute na hindi dadaan
kay DBM kung magddistribute si central office.

Basic priciples & features of Government Accounting:

1. COA Circular 2002-002 dated 01/18/2002 – NGAs

COA Circular 2014-003 dated 01/24/2014 – GAM

NGAs:
 IPSAS are adopted
 Manual (how to use NGAs)
 Vol.1 – Accounting policies, procedures & guidelines
 Vol.2 – Accounting books, registries, & forms
 Vol.3 – Chart of Accounts
GAM:
 More IPSAS are adopted
 GAM is the manual itself while NGAs has a different manual
 Vol.1 – Accounting policies, procedures, guidelines & illustrative journal entries
  Vol.2 – Accounting books, records, forms, registries & reports
 Vol.3 – Revised chart of accounts

2. Financial Statements – General Purpose Financial Statement

NGAs:
 Balance Sheet ---- Implicit
 SOIE (Statement of Income and Expense)
 SOGE (Statement of Changes in Governments’ Equity)
 CFS (Statement of Cash flow)

GAM:
 SFP (Statement of Financial Position)
 Current
 Non current
 Offsetting is not allowed
 Aggregation is allowed
 SoFPr (Statement of Financial Performance)
 Revenue
 Expenses
 Net surplus / net deficit
 SNA (Statement of Changes in Net Assets /orEquity)
 SCF (Statement of Cah Flows)
 SCBAA (Statement of Comparison of Budget and Actual Amounts)
Needed are the ff:
 Budget Accountability Reports
Support the statment of your budget
 Financial Accountability Reports
Support the actual amounts
 NFS (Notes to Financial Statements)
 Implicit ito sa NGAs

3. Books of Accounts
NGAs:
 (RA) Regular Agency Books
 Journals:
1. General Journal
 General
 Cash Disbursement
 Check Disbursement
 Check Reciepts
 Purchase Journals
2. Special Journal
 Cash Reciepts
 Cash Disbursement
 Check Reciepts
 Purchase Journals
 Ledgers
1. General Ledger
2. Subsidiary Ledger
 (NG) National Government Books
 Journal
1. General Journal
 2. Cash Journal
 Ledger
1. General Ledger
2. Subsidiary Ledger
**collect, record, disburse
GAM:
 (NG) National Government Books
 Journal
1. General Journal
2. Checks Disbursement Journal
3. Cash Disbursement Journal
4. Cash Reciept Journal
 Ledger
1. General Ledger
2. Subsidiary Legder
4 registries under GAM
1. Registry of revenue and other reciepts
2. Registry of appropriation and allotments
3. Registry of allotment, obligation and disbursement
4. Registry of budget, utilization and disbursement
 Maintain so you can monitoring allotment, appropriation and allocation

4. Fund Maintenance
NGAs – one fund concept
1. General Funds (revenues accruing to NGAs) ***
a. Personnel services
b. Maintenance & other operating services
c. Capital outlay
d. Financial expenses

2. Special – separate projects

a. Calamity fund
b. Miscellaneous personnel fund (other benefits given to employees of NGAs)
c. Organization adjustment fund (support for new organization)

***4 Registries under NGAs

1. RAOPS – Registry of allotment and obligation personnel services
2. RAOMO – Registry of allotment and obligation maintenance and other operating expenses
3. RAOCO – Registry of allotment and obligation capital outlay
e. RAOFE - Registry of allotment and obligation Financial expenses

Under GAM (bago to)

RAODPS
RAODMOOD
RAODCO
RAODFE

GAM – 7 fund clusters

Code 01 – Regular Agency Fund
02 – Foreign Assisted Fund Projects
03 – Special Account – Locally Funded / Domestic Grants Fund
04 – Special Account – Foreign Assisted / Foreign Grants Fund
05 – Internally Generated Fund
 06 – Business Related Funds
07 – Trust Reciepts

Qualitative Characteristics
1. Understandability
2. Relevance External Q.C.
3. Reliability Internal Q.C.
4. Comparability
5. Materiality

General Accounting Plan

-process or the system itself.
1. Budget Cycle
2. Disbursement System
3. Income/ Collection & Deposit System
4. Financial Reporting System

1. Budget Cycle
Budget – it is a plan of financial operations composed of estimates or proposed expenditures for a given
period or purpose and the proposed means of financing them.

Financial Performance Operations:

 R
 Finance

National Budget – plans of financing the activities of the national government

General Phases:
1. Planning – preparation & presentation of the budget
2. Approval – Budget Legislation or Authorization
- Budget Execution
- Budget Accountability

1. Preparation & Presentation of Budget

-covers the estimation, determination & translation of government revenues, priorities and activities
Sub phases:
1. Budget Call
-DBM calls the attention of NGAs to submit their specific budgets
2. Stakeholders engagement
-relatively new sub process
-bottom up budgeting / paarticipative budgeting
3. DBM Technical Budget Hearing
-DBM examines the specific budgets
4. Executive Review
-involves the senior officials & DBM secretary
5. Consolidation, Validation & Confirmation
-to be submitted to the president
6. Presentation to the President
-confirmation
7. Presentation to the Congress
 President Budget
-Congress & Senate

2. Budget Legislation / Legislative Authorization

 enacted into law
 congress (appropriation committee)
 senate of the philippines (finance committee)

consolidated in a Bi- Cameral Session

General Approproation Bill General Appropriation Law

President:
 VETO
 LINE VETO

Kinds of Budget
 As to Nature:
1. Annual Budget
-passed annually
-president’s budget
-under GABill >GAA/GAL
2. Supplemental Budget
-passed time to time
-nasa existing law
-may dagdag sa annual budget
-SAB > SAA/SAL
3. Special Budget
-passed when need arises
-SAB
-wala sa law

3. Budget Execution Process

-various operational aspects of the national budget will be implemented
-PAPS (Program, activities and Projects)
-operational budget (one year)

NGAs shall submit BEDS (Budget Execution Documents) to DBM

 Various activities of NGAs

A. Isuance of DBM’s guidelines on the release & utilization of funds

-produces NBC (National Budget Circulars – policies and regulations)
B. Submission of the NGAs of BEDs
1. BED no.1 – financial plans
-establish obligation program for the budget year broken down by quarter & current year obligations
-to have a basis on overall financial plans
2. BED no.2 – Physical Plans
-physical target for the budget year broken down by quarter & current year accomplishments
3. BED no.3 – Monthly Disbursements
 -projected monthly distribution requirements for the budget year by type of disburse authority. Ex:
NCA, NCAA, CDC and TR
Ex:
Individual sold office equipment to Gov’t.
j/e:
cash 100,000
sales 100,000

gov’t entry:
office equipment 112,000
cash- MDS Regular 100,000
Due to BIR 12,000

individual

BIR

DBM Bureou of Treasury Dept. Of Energy

(NGAs)
 Constructive reciept of NCAllocation
 Constructive remittance of tax

Cash- TRA 12,000

SING 12,000

Due to BIR 12,000

Cash- TRA 12,000

4. Annual Procurement plan for common used supplies & equipment (Basis of Procurement Services)
-projected mnthly procurement in terms of quantity and cash requirements
-MOOE (maitenance and other expenses)