GOVERNMENT ACCOUNTING

CHAPTER 1

General Provision, Basic

Standard and Policies
Summary of Chapter 1:

1. General provision from existing laws, rules and regulation, Basic

Standards/Fundamental accounting principle for Financial
reporting by National Government Agencies.

2. What is Government Accounting Manual in Accordance with the

Philippine Public Sector Accounting Standard (PPSAS) adopted
through COA Resolution No. 2014-003 dated January 24,2014
and other pertinent laws, rules and regulation
 What is Government Accounting?

Government Accounting – is defined pursuant to section

109 PD 1445, as one which ‘encompasses the process of
analyzing, recording, classifying, summarizing and
communicating all transaction 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 operations

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
funds and property
4. To report on the financial position and the results of
operation of government agencies for the information
and guidance of all persons concerned.
 Government Business Enterprises

 An Entity with the power to contract in its own name.

 Has been assigned the financial and operational authority to carry
on a business
 Sells goods and services in the normal course of its business, to
other entities at a profit or full cost recovery
 Not reliant on continuing government funding to be a going
concerns.
 Controlled by a Public Sector Entity.
Public Sector Accounting Standard
Board (PSASB)

 PSASB was created in 2008 under COA Resolution NO. 2018-12

Function:
 To Develop standards of the Philippine Public Sector
Accounting Standards (PPSAS)
 To make use of among others, existing laws, financial
reporting, accounting rules and regulations and
pronouncement issued by the international Public Sector
Accounting Standard Board (IPSASB)
 Assist the commission in formulating and implementing
Philippine Public Sector Accounting Standard (PPSAS)
Process in Developing the (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 discussion will
be held to obtain further opinions on issues identified
by the exposure process
 Accounting Responsibility

Commission on Audit:
 Keeps the general account of the government
 Promulgate accounting rules and regulation
 Submit the Annual reports to the president and congress within
the time fixed by law (Last Day of September)
 Authority to Audit and Examine the Annual reports and
Techniques and methods used.
 Promulgate accounting and Auditing rules and regulations,
including those for prevention and disallowance of irregular,
unnecessary, excessive, extravagant or unconscionable
expenditures or uses of government funds and properties.
Accounting Responsibility

Department of Budget and Mana

• Responsible for the formulation and Imple

national Budget with the goal of attaining
– economic plans and objectives

• Responsible to Efficient utilization and sou

government funds and revenues to effecti
country’s development objectives.

• Validation and assignment of new codes f

organizations, subject codes for expenditu
 Accounting Responsibility
Bureau of Treasury :

1. Received and keep national funds, manage and control

disbursement thereof:
2. Maintain accounts of financial transaction of all national
government offices, agencies and instrumentalities.
 Accounting Responsibility
National Government Agencies:
All Agencies are required by law to have accounting units/division/Department

Accounting Personnel shall:

1. Maintain and keep current the accounts of the agency

2. Provide advice on the financial condition and status of the appropriation
and allotment of the agency as its head may require
3. To develop and conduct procedures designed to meet the needs of
management.
 Accounting Responsibility
New Accounting System, Government Agencies shall maintain the ff:
registries:

1. Registries of Revenue and other Receipts – summary (RRORS) – The RROR

shall be maintained by the Budget Division/Unit of NGA to monitor the revenue and
other receipts estimated/budgeted, collected and remitted/deposited
2. Registry of Revenue and Other Receipts – Regular Agency and Foreign
Assisted Projects Fund (RROR- RA & FAP) – This registry shall be maintained by
the budget division/unit of the entity. (RAF,FAPF)
3. Registry of Revenue and Other receipts – Special Account locally funded
domestic grants fund and special accounts foreign assisted foreign grants
fund (RROR-SADFGF) - This registry required to maintained by the budget
division/unit of the entity.
4. Registry of Revenue and other Receipts – Internally Generated funds (Off
budgetary funds – retained income funds) business related funds (RROR –
IGF/BRF) – This registry required to maintained by the budget division/unit of the
entity.
 Accounting Responsibility
New Accounting System, Government Agencies shall maintain the ff:
registries:

5. Registry of Revenue and Other Receipts – Trust Receipts/Inter Agency

Transferred Funds (RROR – TR/IATF) – This registry shall be maintained by the
budget division/unit of the entity. (RAF,FAPF)
6. Registry of Appropriation and Allotment (RAPAL) – this registry shall be
maintained by fund cluster by the budget division unit of each entity to ensure that
allotment releases are within the authorized appropriation.
7. Registry of Allotments, Obligation and Disbursement – Personal Services
(RAOD–PS) - this registry shall be maintained by the Budget Division/Unit by
appropriation act fund cluster, by major final output (MFO) or
program/Activity/Project (PAP) for Personal Services.
8. Registry Allotment, Obligation and Disbursement – Maintenance and other
Operating Expense (RAOD-MOOE) This registry shall be maintained by the
budget division unit by appropriation act, fund cluster, by major final output (MFO)
or Program/ Activity/Project (PAP) for maintenance and other operating expenses.
 Accounting Responsibility
New Accounting System, Government Agencies shall maintain the ff:
registries:

9. Registry of Allotment, Obligation and Disbursement – Financial Expenses

(RAOD-FE) This registry shall be maintained by the budget division unit by
appropriation act, fund cluster, by major final output (MFO) or Program/
Activity/Project (PAP) for Financial Expenses
10. Registry of Allotment, Obligation and Disbursement – Capital Outlay (RAOD-
CO) This registry shall be maintained by the budget division unit by appropriation
act, fund cluster, by major final output (MFO) or Program/ Activity/Project (PAP) for
Capital Outlay
11. Registry of Budget, Utilization and Disbursement – Personal Services This
registry shall be maintained by the budget division unit by fund cluster, Major Final
Output (MFO) Program activity /Project (PAP) for Personal Services
12. Registry of Budget, Utilization and Disbursement – Maintain and Other
operating Expenses (RBUD – MOOE) This registry shall be maintained by the
budget division unit by fund cluster, Major Final Output (MFO) Program activity
/Project (PAP) for Maintenance and Other Operating Expenses
 Accounting Responsibility
New Accounting System, Government Agencies shall maintain the ff:
registries:

13. Registry of Budget, Utilization and Disbursement - Financial Expense (RBUD-

FE) This registry shall be maintained by the budget division unit by fund cluster,
Major Final Output (MFO) Program activity /Project (PAP) for Finance Expenses
14. Registry of Budget, Utilization and Disbursement – Capital Outlay (RBUD-CO)
This registry shall be maintained by the budget division unit by fund cluster, Major
Final Output (MFO) Program activity /Project (PAP) for Capital Outlay
15. Registry of Allotment and Notice of Cash Allocation (RANCA) This registry
shall be maintained by the accounting division unit to determine the amount of
allotment not covered by NCA and to monitor available NCA
16. Registry of Allotment and Notice of Transfer of Allocation (RANTA) This
registry shall be maintained by the accounting division/unit to determine the amount
of allotment not covered by NTA and to monitor available NTA.
 Basic Accounting and Budget
Reporting Principles.
It requires each government entity to recognize and present its
financial transaction and operation in conformity with the ff:

 GAAP – Generally Accepted Accounting Principle in accordance

with the PPSAS and Pertinent laws and regulation.

 Accrual Basis of Accounting - a basis of accounting which

transaction and other events are recognized when occur, and
not when cash or its equivalent is received or paid.

 Budget basis for presentation of budget information in the

financial statement in accordance with PPSAS 24.
 Basic Accounting and Budget
Reporting Principles.
It requires each government entity to recognize and present its
financial transaction and operation in conformity with the ff:

 Revised Chart of Account Prescribed by Commission on

Audit.

 Double Entry Bookkeeping – It is a system of bookkeeping

where every journal entry to account requires a corresponding
and opposite entry to a different account.

 Financial Statement based on accounting and budgetary

records - The Objectives of general purpose financial reporting
in the public sector should be to provide information useful for
decision making and to demonstrate the accountability of the
entity for the resource entrusted.
 Basic Accounting and Budget
Reporting Principles.
Financial Statement based on Accounting and Budgetary
records objectives:

 Providing Information about the source, allocation , and

uses of financial resources
 Providing information about how the entity finance its
activities and met its cash requirements
 Providing information that is useful in evaluating the entity
ability to finance its activities and to meet its liabilities and
commitments
 Providing information about the financial condition of the
entity and change in it
 Providing aggregate information useful in evaluating the
entity’s performance in terms of service cost, efficiency and
accomplishment.
 Basic Accounting and Budget
Reporting Principles.
It requires each government entity to recognize and present its
financial transaction and operation in conformity with the ff:

 Fund Cluster Accounting – Refer to an accounting entity for

recording expenditures and revenues associated with a specific
activity for which accounting records are maintained and
periodic financial reports are prepared.

Fund Clusters Account as follow:

a. Regular Agency Fund
b. Foreign Assisted Projects Fund
c. Special Accounts – locally funded/ Domestic grants fund
d. Special accounts – Foreign Assisted/Foreign Grants Fund
e. Internally General Funds
f. Business Related Funds.
g. Trust Receipt/Inter agency Transferred Funds (IATF)
 Responsibility Accounting
Responsibility Accounting is a system that relates the financial results to a
responsibility center, which provides access to cost and revenue information
under the supervision of a manager having direct responsibility for its
performance it is a system that measures the plans (by Budget) and action (by
Actual results) of each responsibility center.

Responsibility Accounting Aims:

1. Ensure that all costs and Revenues are properly charged/credited to the
correct responsibility center so that deviations from the budget can be readily
attributed to managers accountable.
2. Provide a basis for making decision for future operations
3. Facilitate review activities monitoring the performance of each responsibility
center and evaluation of the effectiveness of agency operation.
END OF CHAPTER 1…