NEW GOVERNMENT ACCOUNTING SYSTEM

Pursuant to the Commission on Audit Circular No. 2001-004

dated October 30, 2001, all government agencies
were
prescribed to use the New Government Accounting System
(NGAS) effective January 1, 2002. The NGAs is a simplified set
of accounting concepts, guidelines and procedures designed
to ensure correct, complete and timely recording of
government financial transactions, and productions of
accurate and relevant financial reports.
GOVERNMENT ACCOUNTING -encompasses the process of
analyzing,
recording,
classifying,
summarizing
and
communicating all transactions involving the receipt and
disposition of government funds and property, and
interpreting the results thereof. (Sec.109, PD 1445)
OBJECTIVES OF GOVERNMENT ACCOUNTING (Sec. 110,
PD 1445)
1.
Produce information concerning past operations and
present conditions;
2. Provide a basis for guidance for future operations;
3. Provide for control of acts of public bodies and officers in
the receipt,
disposition and utilization of funds and
property; and
4. Report on the financial position and the results of operation
of government agencies for the information of all persons
concerned.
GENERALLY ACCEPTED GOVERNMENT ACCOUNTING
PRINCIPLES
(Sec. 112, PD 1445)
Accounts of an agency shall be kept in such detail as in
necessary to meet the needs of the agency and at the
same time be adequate to furnish the information
needed
Highest
standards
of honesty,
objectivity
and
consistency shall be observed.
The government accounting system shall be on a double
entry basis with the general ledger in which all financial
transactions are recorded.
The chart of accounts for government agencies shall be
prescribed by COA.
To permit effective budgetary control and to establish
uniformity in financial reports, accounts shall be
classified in balanced fund groups. The group for each
fund shall include all accounts necessary to set forth its
operation and condition. All financial statements shall
follow this classification
Common terminology and classification shall be used
consistently throughout the budget, the accounts and
the financial reports.
The general accounting system shall include the
budgetary control accounts for revenues, expenditures,
and debt, as provided by PD 1177
BUDGETARY AND ACCOUNTING SYSTEMS
Allotment Release Order (ARO)
- This is a formal
document issued by the Department of Budget and
Management to the head of the agency containing the
authorization, conditions and amount of an agency allocation.
This maybe in the form of:
a) Agency Budget Matrix
b) Special Allotment Release Order
RECORDING OF ALLOTMENTS

Upon receipt of the approved ABM and ARO, the designated

Officer shall record the allotment in the respective registries
through the Allotment and Obligations Slips (ALOBS).
Separate registries shall be maintained for the four allotment
classes by Program/Project/Activity (P/P/A), to wit:
1. Registry of Allotment and Obligations Personal Services
(RAOPS)
2. Registry of Allotment and Obligations Maintenance and
Other Operating Expenses (RAOMO)
3. Registry of Allotment and Obligations - Capital Outlay
(RAOCO)
4. Registry of Allotment and Obligations Financial Expenses
(RAOFE)
ACCOUNTING FOR OBLIGATION
Obligation Defined refers to a commitment by a
government agency arising from an act of a duly authorized
official which binds the government to the immediate or
eventual payment of a sum of money.
The agency is
authorized to incur obligations only in the performance of
activities which are in pursuits of its functions and programs
authorized in appropriation acts/laws within the limit of the
ARO. (Sec. 14, Vol. I, NGAS)
DISBURSEMENT
Disbursement Defined Disbursements constitute all cash
paid out during a given period either in currency (cash) or by
check. It may also mean the settlement of government
payables/obligations by cash or by check. It shall be covered
by Disbursement Voucher (DV)/Petty Cash Voucher (PVC) or
payroll. (Sec. 27, Vol. 1, NGAS Manual)
Disbursement System The Disbursement System involves
the preparation and processing of disbursement voucher (DV);
preparation and issuance of check; payment by cash;
granting, utilization, and liquidation/replenishment of cash
advances.
BASIC REQUIREMENTS FOR DISBURSEMENTS (Sec. 28,
Vol. 1, NGAS Manual)

Existence of lawful and sufficient allotment certified as

available by the Budget Officer;
Existence of a valid obligation certified by the Chief
Accountant/Head of Accounting Unit;
Legality of transactions and conformity with laws, rules
and regulation;
Approval of the expense by the Chief of Office or by his
duly authorized representative; and
Submission of proper evidence to establish the claim.
CLASSIFICATION OF EXPENDITURES
a.
Current
Operating
Expenditures

refer
to
appropriations for the purchase of goods and services for
current consumption or for benefits expected to terminate
within the fiscal year. Current Operating Expenses are
classified into:
1. Personal Services
2. Maintenance and Other Operating Expenses
b.
Capital Outlays refer to appropriations for the
purchase of goods and services, the benefits of which extend
beyond the fiscal year and which add to the assets of
government, including investments in the capital of
government-owned and controlled corporations and their
subsidiaries as well as investments in public utilities such as
public markets and slaughter houses.
CLASSIFICATION OF EXPENSES
a. Personal Services (PS) include basic pay, all authorized
allowances, bonus, cash gifts, incentives and other personnel
benefits of officials and employees of the government.

b. Maintenance and Other Operating Expenses (MOOE)

these accounts include expenses necessary for the regular
operations of an agency like, among others traveling
expenses, training and seminar expenses, water, electricity,
supplies expense, maintenance of property, plant and
equipment, and other maintenance and operating expenses.

c. Financial Expenses (FE) these accounts include bank

charges,
interest
expense,
commitment
charges,
documentary stamp expense and other financial charges. It
also includes losses incurred relative to foreign exchange
transactions and debt service subsidy to GOCCs.