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The New Barangay Accounting System

Basic Feature and Policies


1. Accounting Method
IPASBs Conceptual Framework
-deals with concepts that apply to general purpose financial reporting under
the
accrual basis of accounting.
Under this method, the transactions and events are recorded in the
accounting records and recognized in the financial statements of the
periods to which they relate.
2. Recognition of Liability
Liabilities shall be taken up only for goods actually delivered and accepted
or services rendered or upon receipt of bills from suppliers/creditors.
3. Purchase of Supplies and Materials and Small Items
Purchase of Supplies and Materials and Small Items with serviceable life of
more than one year shall be recorded as Inventories upon acquisition and
Expense upon issuance. Other tangible assets not included in the list shall
be classified as PPE, subject to depreciation.
4. Cash Advance
Cash Advance for payment of personnel services shall be accounted for as
Advances for Payroll; while cash advance for travel and other special
time-bound undertaking shall be accounted for as Advances to Officers
and Employees.
5. Audit Disallowances
Shall be recorded only when they become final and executory.
6. Barangay Accounts
Shall be kept within the framework of the New Government Accounting
System (NGAS) chart of accounts.
7. Processing of Transaction and Recording in the Books
8. Certified Registers
Cash Receipts Registers
Cash on Hand and in Bank Registers
Cash Disbursement Registers
Check Disbursement Registers
Petty Cash fund Registers
9. Status of Appropriations, Commitments and Balances
Shall be consolidated by the City/Municipal Budget Officer.
10.Trial Balance shall be presented in two money column format;
11.Financial Statements the city/municipal level accountant shall prepare the
financial statements (FS) within thirty days after the close of each month.
Copies are furnished to the Sangguniang Barangay and the audit team
leader;

The FS shall include detailed and condensed copies of the Balance Sheet
and the Income and Expense Summary. Other FS includes Cash Flows
prepared under the direct method and Statement of Changes in
Government Equity.
12.Supporting Schedules the barangay shall prepare the following supporting
schedules relating to: Public Infrastructures and Reforestation Projects;
Accounts Payable, and Accounts Receivable.
13.E-NGAS the new electronic system shall be used to speed up the recording
of transactions at the barangay and to hasten the process of consolidation of
financial statements at all levels.

Barangay Accounting System Plan


Shows the accounting flow of barangay transactions in the books maintained
by the City/Municipal accountant.
It includes:
Receipts and Deposits
Disbursement (Cash or Check)
Public Infrastructures and Reforestation Projects
Registries of Public Infrastructures and Reforestation Projects
Major Financial Transactions
Appropriations - Appropriations are funds that are authorized by the
Sanguaniang Bayan or the local legislative body to spend funds for a project
or undertaking where services or goods have already been received.
Appropriations are charged against several sources: General Fund, 20%
Development Fund, Calamity Fund, Sangguniang Kabataan Fund, and Gender
and Development Fund.
Illustrations:
On January 2, 2014, the Barangay Jose Rizal of Dinalupihan, Bataan receives of
copies of General Appropriation Ordinance (GAO) for the following approved
appropriations for the fiscal year:
General Fund:
Personnel Services
P60000
Maintenance and other operating expenses
25000
Financial Services
2500
Capital Outlay
32000
Calamity Fund
10000
20% Development Fund
40000
Sangguniang Kabataan Fund
20000
Gender and Development Fund
10000
Journal Entry/ Memo Entry
To record approved appropriations in the respective Registry of Appropriations
and Commitments

Commitments - are specific funds that are earmarked by an authorized


barangay official that commits the barangay to pay a specific sum of money.
Charges for the specific fund shall be based upon the commitment of funds
by the barangay as evidenced by Contracts and Purchase orders,
Disbursement vouchers, and Payroll for specific services.

Illustrations:
On January 15, 2014, the Barangay Jose Rizal incurred the
following commitments/charges:
General Fund:
Salaries & wages-regular
P20000
Repairs of office equipment
12000
Supplies and Materials
5000
Bank charges
250
IT equipments
22500
Calamity Fund-Medical & dental supplies
5000
20% Development Fund- Repairs of Roads
25000
Sangguniang Kabataan Fund
-Office equipment
15000
Gender and Development Fund-Salaries Regular
3500
Journal entry/Memo entry
To record commitment/charges incurred.

Receipts and Deposits collections made for local licenses and fees shall be
deposited intact in the next banking day
Illustrations:
During January, the Barangay Jose Rizal made the following
collections and remitted/deposited the same to city treasurer and
AGDB, respectively.
Community tax certificate(as deputize by city treasurer)
20000
Barangay:
Permit fee
5000
Clearance and Certificate fees
8000
Garbage fees
10000

Disbursements payments of local government expenses used for day to day


operations.

Supplies and Materials; Plant, Property and Equipment, Public Infrastructure


and Reforestation- are charged against their respective appropriations and
capital outlay

Trial Balance and Adjusting/ Closing Entries


Types of Trial Balance
1. Pre-Closing Trial Balance
-prepared after all the adjusting entries have been recorded in the
general journal and the accounts are posted to the General Ledger and
respective Subsidiary Ledger.
2. Pre-Closing Trial Balance
-prepared at the year-end after all the closing journal entries have been
recorded in General Journal and the accounts are posted to the General
Ledger.
Adjusting Journal Entries
Closing Journal Entries

-prepared to close the balance of nominal accounts.


Financial Statements and Supporting Schedules
Balance Sheet
A formal statement showing financial condition of the barangay
as of a particular date.
Statement of Income and Expense
A statement showing the results of the operations of the
barangay for a particular period.
Statement of Cash Flows
A statement summarizing all cash transaction of the barangay.
Statement of Change in Government Equity
A statement showing the result or changes on Government
Equity account as of given period
Notes to Financial Statements
An integral part of the financial statements.