ACCGOVT
 Commission on Audit (COA)
CHAPTER 1: overview of government
accounting
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.
Objectives: (Sec. 110 of PD 1445)
1. Information – Past Operations and Present Conditions
2. Basis for guidance for future operations
3. Control of the acts of public bodies and officers
4. Report on the financial position and the results
Government Accounting, however, places greater emphasis on the ff.
1. Sources and utilization of government funds
2. Responsibility, accountability and liability of entities
entrusted with government funds and properties.
 The sources of government funds include receipts from
taxes and other fees, borrowings and grants from other
governments and international bodies.
 The utilization of government funds includes expenditures on
programs, projects, unanticipated losses from calamities and
the like.
Responsibility over Government Funds and Property
 The head of a government agency is directly
responsible in implementing this policy and primarily
responsible for government resources entrusted to his
agency. (State Audit Code of the Phil., P.D. No. 1445)
Accountability over Government Funds and Property
 A government officer entrusted with the possession of
government resources is responsible for the
safekeeping therefor in accordance with the law. Every
accountable officer shall be properly bonded.
 The transfer of government funds from one officer to
another shall be made only after the authorization of the
COA.
Liability over Government Funds and Property
 The unlawful use of government resources shall be the
personal liability of the employee found to be directly
responsible therefor.
 An accountable officer shall immediately notify the COA
within 30 days.
Main Concept: Government resources must be utilized
efficiently and effectively in accordance with the law.
Government officials are responsible in implementing
this policy, are accountable for the government
resources in their custody, and are liable for any loss.
Accounting Responsibility
 Department of Budget and Management (DBM)
 Bureau of Treasury (BTr)
 Government Agencies
COMMISSION OF AUDIT (COA)
 Promulgate accounting and auditing rules and regulations
 Keeps the general accounts of the government, supporting
vouchers, and other docs.
 Submits financial reports to the President and Congress
DEPARTMENT OF BUDGET AND MANAGEMENT (DBM)
 Formulation and implementation of the national budget with
the goal of attaining the nation’s socio-economic objectives.
BUREAU OF TREASURY (BTr)
 Functions under the Department of Finance and is the cash
custodian of the government
 Receive and keep national funds and manage and control the
disbursements
 Maintain accounts of financial transactions of all national
government offices, agencies and instrumentalities
GOVERNMENT AGENCIES
 Responsible in directly implementing the projects of, and
performing the functions delegated by, the government.
 Required by law to have accounting
units/divisions/departments.
Entity – refers to a government agency, department or operating/field unit.
Financial Reporting – the process of preparation, presentation and submission of
general purpose financial statements and other reports.
The GAM for NGAs
 Promulgated primarily to harmonize the government
accounting standards with international accounting
standards, particularly the IPSAS. The IPSASs are based on
IFRS.
 Promulgated by the COA based on the authority conferred to
it by the Phil. Consti
 Philippine Government has adopted the IPSAS through the
PPSAS.
 Coverage:
a. Preparing general purpose fs in accordance with the PPSAS
b. Reporting of budget, revenue and expenditure in accordance with
laws, rules and regulations.
 Objectives: • Government-Owned and/or Controlled Corporations (GOCCs)
a. Standards, policies, guidelines and procedures in accounting for not considered as Government Business Enterprises
government funds and property; (GBEs)
b. Coding Structure and Accounts
c. Accounting books, registries, records, forms, reports and fs. GOCCs considered as GBEs
1. Has the power to contract its own name
Basic Accounting and Budget reporting Principles
2. Has been assigned the financial & operational authority to carry on
1. Philippine Public Sector Accounting Standards (PPSAS)
a business
2. Accrual basis of accounting
3. Sells goods & services, in the normal course of business, to other
3. Budget basis
entities at a profit or full cost recovery
4. Revised chart of accounts
4. Not reliant on a continuing government funding to be a going
5. Double Entry bookkeeping
concern (other than purchase of outputs at arm’s length)
6. FS based on accounting and budgetary records
5. Controlled by a public sector entity
7. Fund cluster accounting
1. Regular Agency Fund
2. Foreign Assisted Projects Fund
3. Domestic Grants Fund
4. Foreign Grants Fund
5. Internally Generated Funds
6. Business Related Funds
7. Trust Receipts

Qualitative Characteristics of Financial Reporting

- attributes that make info useful to users

1. Understandability
2. Relevance
3. Materiality FACTS ABOUT GBEs
4. Timeliness 1. Include both trading enterprises and financial institutions
5. Reliability 2. Generally operate to make a profit
6. Faithful Representation 3. Uses PFRS and relevant standards issued by FRSC, BOA & PRC
7. Substance over form COA Circular No. 2015-003 dated April 16, 2015
8. Neutrality
9. Prudence
10. Completeness NGA DBM
11. Comparability

Components of General Purpose FS

- GPFS are those intended to meet the needs of users who are
not in a position to demand reports tailored to meet OFFICE OF
their particular information needs. Consist of; CONGRESS THE
PRESIDENT
1. Statement of Financial Position
2. Statement of Financial Performance
3. Statement of Changes in Net Assets/Equity
4. Statement of Cash Flows
5. Statement of Comparison of Budget and Actual Amounts BUDGET
6. Notes to the Financial Statements LAW
(GAA)
Philippine Public Sector Accounting Standards (PPSAS)
• National Government Agencies (NGAs)
• Local Government Units (LGUs)
 Basic Requirements for Disbursements and the Required Budget Preparation
Certifications • PH uses a bottom-up approach and zero-based
1. Availability of budget for obligation certified by the Budget budgeting approach
Officer • Estimation of government revenues
2. Obligation properly charged against available budget by the • Determination of budgetary priorities & activities
Chief Accountant
within the constraints imposed by available revenues and
3. Availability of funds certified by the Chief Accountant
by borrowing limits
4. Availability of cash certified by the Chief Accountant
5. Legality of the transaction and conformity with existing rules • Translation of approved priorities and activities into
and regulations ensured by the requesting and approving expenditure levels
official
6. Submission of proper evidence to establish validity of the 1. Budget Call
claim  contains budget parameters (including
7. Approval of the disbursement by the Head of Agency or by his macroeconomic and fiscal targets and agency
duly authorized representative budget ceilings) as set by the Development
Budget Coordination Committee

 BALANCE BUDGET
Basic Requirements

SDs (Supporting
 ANNUAL BUDGET
Documents)
 SPECIAL BUDGET
 LINE ITEM BUDGET
ORs (Obligation Request
 PERFORMANCE BUDGET
and Status)  OBLIGATIONS BUDGET
DV (Disbursement 2. Budget Hearings
Voucher)
 Each agency defends its budget proposal
before the DBM. The DBM deliberates on the
budget proposals, makes recommendations,
and consolidates the deliberated proposals
into the National Expenditure Program (NEP)
CHAPTER 2: THE BUDGET PROCESS
and Budget of Expenditures and Sources of
The National Budget Financing (BESF).

 Approved by legislation 3. Presentation to the Office of the President

 Government’s estimate of the sources and uses of  The President and Cabinet members review
government funds within a fiscal year the proposed budget. After the President
 Financial blueprint of a country’s development plan approves the proposed budget, the DBM
 Basis for expenditures and is the government’s key finalizes the budget documents to be
instrument for promoting its socio-economic objectives submitted to the Congress.
No money shall be paid out of the Treasury except in pursuance of an  We now call the proposed budget as
appropriation law. PRESIDENT’S BUDGET

The Philippine Constitution and other laws require government funds to be

PRESIDENT’S BUDGET
utilized in accordance with a NATIONAL BUDGET that is duly approved by
legislation.  PRESIDENT’S BUDGET MESSAGE
 NATIONAL EXPENDITURE PROGRAM
(NEP)
 BUDGET OF EXPENDITURES AND
THE BUDGET CYCLE SOURCES OF FINANCING (BESF)
1. Budget Preparation  OTHER DOCUMENTS
2. Budget Legislation
3. Budget Execution
The President shall submit the proposed budget to the Congress
4. Budget Accountability
within 30 days from the opening of every regular session
Budget Preparation 1. New General Appropriations
• Second phase of the budget process relative to the • Annual authorizations
enactment of the General Appropriation Bill based on the 2. Continuing Appropriations
President’s Budget. • Authorizations to support
• Starts upon the receipt of the President’s Budget by the obligations for a specific
House Speaker and ends with the President’s Enactment purpose. e.g multi-year project
of the GAA. 3. Supplemental Appropriations
• Additional appropriations
4. House Deliberations (House of Representatives) 4. Automatic Appropriations
 General Appropriations Bill (GAB) • Programmed annually
5. Unprogrammed Funds
5. Senate Deliberations (Senate) • Standby appropriations
authorized by Congress
6. Bicameral Deliberations 6. Retained Income/Funds
 Bicameral Conference Committee is formed • Collections which are
to harmonize any conflicts between the House authorized by law to be used
of Rep. and Senate directly by agencies
 Harmonized GAB (‘Bicam’ version) is 7. Revolving Funds
submitted back to both Houses for ratification. • Receipts derived from
After ratification, the final GAB is submitted to business-type activities of
the President for enactment. agencies to be constituted as
such and deposited in an AGDB
7. President’s Enactment 8. Trust Receipts
 General Appropriations Act (GAA) • Receipts by any government
 The President enacts the budget, which is now agency acting as trustee,
known as the General Appropriation Act (GAA). agent or administrator for the
Before enactment though, President may fulfilment of some obligations
exercise is veto power as conferred to him or conditions
under Philippine Constitution.
Budget Execution
When the proposed budget is not enacted before the fiscal year • This is the phase where government funds are spent.
starts, the last year’s GAA is automatically reenacted. The
last year’s GAA shall be used in the current year until a new
8. Release guidelines and BEDs
general appropriations bill is passed by the Congress.
 begins with the issuance by DBM of guidelines
on the release and utilization of funds
The Approved Budget  agencies are required to submit BUDGET
EXECUTION DOCUMENTS (BEDs)
 The expenditure authority derived from  major recipients of budget: NGAs, LGUs, and
appropriation laws, government GOCCs
ordinances, and other decisions related
to the anticipated revenue or receipts
Budget Execution Documents

Financial Plan (BED No. 1)

for the budgetary period.
Unified Accounts Code Structure (UACS) refers to the
standard coding system used in financial reporting of the Physical Plan (BED No. 2)
(BEDs)

National Government
Monthly Disbursement Program
 Appropriation – authorization made by a (BED No. 3)
legislative body to allocate funds for
purposes specified by the legislative or Annual Procurement Plan for
Common-Use Supplies and
similar authority. Equipment (BED No. 4)
 Budget Execution Documents (BEDs) 10. Incurrence of Obligations
• summarizes an agency’s fiscal year plans  government agencies incur obligations which
and performance targets will be paid by the government
• serves as bases to facilitate the release
of funds and enable to prompt 11. Disbursement Authority
implementation of programs and projects  DBM issues disbursement authority to the
including the conduct of early government agencies. This is the point where
procurement activities government agencies obtain access to the
• serves as yardstick to measure agency government funds
financial and physical performance
Notice of Cash • issued by DBM to Central/Regional/Provincial Offices to cover
Allocation cash requirements

Notice of Transfer • issued by Central Office to its regional & operating units cover
Allocation latter’s cash requirements

• issued by DBM to agencies to cover liquidations of their actual

Non-Cash obligations incurred against available allotments for
Availment Authority availment of proceeds from loans/grants through supplier’s
credit/constructive cash

• issued by DBM to agencies such as DOLE and DFA with foreign

Cash Disbursement
operations allowing them to use the income collected by their
9. Allotment Ceiling
Foreign Service Posts to cover their operating requirements
 The DBM formulates Allotment Release
Program (ARP), to set the limit for allotment
releases during the upcoming year. Alongside,
is a Cash Release Program (CRP), which Appropriation authorization by a legislative body to allocate funds for specified
sets the disbursement limits for the year, for purposes
each quarter and for each month
Allotment
authorization to agencies to incur obligations
 Allotment - authorization issued by the
DBM to government agencies to incur Obligation amount contracted by an authorized officer for which the
obligations for specified amounts government is held liable
contained in a legislative appropriation in
the form of budget release documents. It Disbursement
is also called Obligational Authority. actual amount paid out of the budgeted amount
 Obligation – an act of a duly authorized
official which binds the government to
the immediate payment of a sum of Budget Accountability
money.  This phase occurs concurrently with the Budget
serves as obligational authority for Execution phase. As the budget is being executed, it is
comprehensive release of budgetary items
appropriated in the GAA, categorized as
regularly monitored to determine the conformance of
General Appropriations Act
For Comprehensive Release. actual results with planned targets
Release Document (GAARD)
General Appropriations Act as an 12. Budget and Financial Accountability Reports (BFARS)
Allotment Order (GAAAO).

13. Performance Reviews

covers budgetary items under For Later
Special Allotment Release Order Release in the entity’s submitted BEDs,
(SARO) subject to compliance of required 14. Audit
documents/clearances.

General Allotment Release covers automatically appropriated

expenditures common to most agencies
Order (GARO) without need of special clearance.
•Budget Call •House Deliberations
•Budget Hearings •Senate Deliberations
•Presentation to the •Bicameral
Office of the Deliberations
President •President's
Enactment
Budget Budget
Preparation Legislation

Budget Budget
Accountability Execution

•Budget and •Release Guidelines

Financial and BEDs
Accountability •Allotment
Report (BFARs) •Incurrence of
•Performance Obligations
Reviews •Disbursement
•Audit Authority