Chapter 1 Nature and Scope of the NGAS
Accounting rules and regulations
COA – under Section 2(2) Article IX-D of the 1987
Constitution prescribed NGAS
NGAS introduced:
1. The basic policies and procedures
2. The new coding system
3. The accounting system, books, registries, records,
forms, reports and financial statements to be
adopted
Effective January 1, 2002
Objectives of NGAS:
1. The adoption of a system that is in conformity with
the IAS.
2. Pursuit of eventual computerization, which will
include responsibility accounting, thereby ensuring
the generation of various reports that are useful to
management, lawmakers, and the general public.
3. Generate relevant and periodic financial
statements.
4. Effective tool for managers and executives for the
efficient and effective monitoring of agency
performance.
Government Accounting – encompasses the process of
analyzing, recording, classifying, summarizing and
communication all transactions involving the receipt and
disposition of government fund and property and
interpreting the results thereof
Objectives of Government Accounting
1. To produce information concerning past operation
and present conditions.
2. To provide a basis for guidance for future
operations.
3. To provide for control of the acts of public bodies
and offices in the receipt, disposition, and
utilization of government fund and property.
4. To report in the financial position and the results of PPSAS – shall apply to all NGAs, LGUs, GOCCs not
operation of government agencies for the
information and guidance of all persons concerned.
COA as a member of INTOSAI – encourage to adopt
relevant IAS
PSASB – formulate and implement PSAS and establish
linkages with international bodies, professional organization
and academe on accounting related fields on financial
management
In developing standards of PPSAS, PSASB considers
1. Existing laws
2. Financial reporting
3.
4. Pronouncements issued by IPSASB
Processes in developing standards of PPSAS
1. Applicability of IPSAS
2. Exposure draft of PPSAS
3. Fundamental issues
4. Statutory authority
5. Disclosure requirements
6. PPSAS numbering
7. Financial reporting issues not dealt with by IPSAS
8. Submission of draft to PSASB for consideration of
COA
9. If considered appropriate, focus group discussions
will be held
Accounting Responsibility – emanates from the
constitution, laws, policies, rules and regulation
a. Mandates the keeping of the general account of
the government
b. Promulgation of accounting rules
c. Submission of reports
Offices charged with accounting responsibility
A. Commission on Audit
a. Keeps the general account of the government
b. Promulgates accounting rules and regulation
c. Submit to the president and congress an annual
report (not later than the last day of September
each year)
Article IX-D, Section 2 Par. 2
 Define the scope of its audit and examination
 Establish the techniques and methods required
 Promulgate accounting and auditing rules and
regulation
Joint Circular No. 2013-1 UACS – consistency of account
classification and coding structure with the Revised Chart of
Account shall be the responsibility of COA
PSASB – assist the commission in formulating and
implementing PPSAS
considered GBE
Characteristics of GBE
1. An entity with the power to contract its own name
2. Has been assigned the financial and operational
authority to carry on a business
3. Sells goods and services to other entities at a profit
4. Not reliant to continuing government funding to be
a going concern
5. Controlled by a public sector entity
B. Department of Budget and Management
Section 2, Chapter 1, Title XVII, Book IV of the
Administrative Code of the Philippines
 Responsible for the formulation and
implementation of the National Budget = national
socio-economic plans and objectives
 Responsible for the efficient and sound utilization
of government funds and revenues = achieve
country’s development objective
DBM is task to control and monitor appropriations and
allotments through registries
1. Registry of Appropriation and Allotment – control
approved Appropriation and Allotment released
2. Registry of Special Purpose Fund Appropriation –
contain funds
3. Registry of Allotments and NCA – control and
monitoring of NCA releases
Joint Circular No. 2013-1 UACS – validation and assignment
of new codes for funding source organization, sub-object
codes for expenditure items shall be the responsibility of
the DBM
C. Bureau of Treasury – plays a pivotal role in the cash
operations of the national government
Accounting rules and regulations pertaining to cash
operations, collections, remittances and disbursement
including public borrowings – issued by COA jointly with
DBM and DOF
Appropriations and Allotment – no longer journalize,
maintain in registry
1. Registry of Allotments, Obligations and
Disbursements – PERSONNEL SERVICES
 Basic pay, all authorized allowances, bonuses, cash gift
2. Registry of Allotments, Obligations and
Disbursements – MAINTENANCE AND OTHER
OPERATING EXPENSES
 Travelling expenses, supplies and materials, repairs and
maintenance of PPE, representative expenses, training
and seminar expense
3. Registry of Allotments, Obligations and
Disbursements – CAPITAL OUTLAY
 Purchase and construction of PPE
4. Registry of Allotments, Obligations and
Disbursements FINANCIAL EXPENSES
 Commitment fees, bank charges, interest expenses,
documentary stamps expenses
NGAS – simplified set of accounting concepts, procedures
and guidelines designed to ensure correct, complete and
timely recording of government financial transactions and
produce accurate and relevant financial reporting

Revised Administrative Code

1. Receive and keep the national funds, manage and
control the disbursements thereof
2. Maintain accounts of financial transactions of all
national government offices, agencies and
instrumentalities

Registry of NCA and Replenishment – control and

monitoring of NCA released by DBM, monitor bank
transfers it makes in replenishing its MDS account

Government Finance Statistics – shall be the responsibility

of DOF-BTr

D. Government Agencies
a. Maintain and keep current the accounts of the
agency
b. Provide advice on the financial conditions and
status of the appropriations and allotments
c. Develop and conduct procedures assigned to meet
the needs of management
NCA – journalize, identifies the share of agency in the
income of the national government
Chapter 2 Accounting for Budgetary Accounts
“No money shall be paid out of the Treasury except in
pursuance of an appropriation by law.”
- No public fund may be spent if there is no law authorizing Budget
the payment of money and specifying the purpose
General Appropriation Act
- Enactment began the accounting for budgetary
accounts
- Contains legal authorization to use public money for b
various programs of the national government
Approved Appropriations – bases of DBM for issuing
allotments/ authority of government agencies to incur
obligations enter into commitments to spend government
funds
Level of allotments – defines the amount of cash allocations
which shall be released by the DBM
General Accounting Plan
- Shows the overall accounting system of a government
agency
- Includes the source documents, flow of transactions
and accumulation in the books of account and finally
the conversion into financial data
Accounting Systems
1. Budgetary Accounts System
2. Receipt/Income and Deposit System
3. Disbursement System
4. Financial Reporting System
National Budget
a. Planning – development of future objectives and
preparation of various budget
b. Control – steps taken by management to ensure
that the objective set down at the planning stage
are attained
– to ensure all parts of the organization
function are in a manner consistent with
organization policies
Government Budget
– plan for financing the government activities for a
fiscal year prepared and submitted by responsible
executive to a representative body
– definite proposal of estimate that may be approved
or rejected
– detailed demonstration of the revenue and
expenditures of the government
– detailed data regarding the cost entailed in
maintaining particular units of organization and in
performing activities
– estimate of the propped expenditures for specified
purposes and periods
– embodies the means for financial them during the
same time frames
– provides the means for controlling the estimated
amount to be raised, the proposed amount to be
spent for specified object
– program that guides all activities relating to the
collection and expenditures
– framework of the accounts by which transactions
affecting such collections and expenditures shall be
recorded
Budget proposal of the President
1. current operating expenditure
2. capital outlay
3. funds necessary for the operation of programs,
projects and activities of the various departments
and agencies
Kinds of Budget
I. As to Nature
a. Annual – one year, basis of an annual appropriation
b. Supplemental – supplemental/adjust a previous
budget which is deemed inadequate
c. Special – special nature and submitted in special
form
II. As to Basis
a. Performance – emphasizing the program/services
conducted and based on functions, nature of work
to be done
b. Line-Item – objects of expenditure = salaries and
wages, travelling, freight, supplies
III. As to Approach and Technique
a. Zero-based Budgeting – systematic consideration of
all programs with the use of ranking procedure
b. Incremental Approach – only additional
requirement needed justification
THE BUDGET PROCESS
1. BUDGET PREPARATION
2. LEGISLATIVE AUTHORIZATION
3. BUDGET EXECUTION AND OPERATION
4. BUDGET ACCOUNTABILITY
*Pls refer to notebook