Government

Accounting
 ༝ “
Government Accounting
encompasses the processes of
analysing, recording, classifying,
summarizing and communicating all
transactions involving the receipt,
disposition and utilization of
government funds and property and
interpreting the results thereof.

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 Primary purpose of
Government Business
༝ To render service to the public as distinguished
from the usual profit motive of the private
business.

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Peculiarities of
Government Business
What makes it different?
Peculiarities of Government Business

As to Purpose As to Ownership
༝ to render service ༝ There are no defined
to the public at the individual ownership
lowest cost interests in the
possible government business
that can be acquired,
sold, transferred, or
redeemed in the
commercial sense.
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Peculiarities of Government Business
As to Management As to Income
Managers of private Government derives
businesses have most of its income
relatively few internal from the collection of
limitations unlike the taxes and fees.
officers and
administrators of the
government business
who are governed by
specific laws and
regulations.
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Basic Objectives of the Government
Accounting

༝ To provide information
concerning past operations and
present conditions.
༝ To provide as a basis for
guidance for future operations.

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Basic Objectives of the Government
Accounting
༝ To provide for control the acts of public
bodies and offices regarding the
receipt, disposition, and utilization of
government funds and property.
༝ To report on the financial condition and
the results of operations of government
agencies for the information of all
persons concerned.
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Responsibility over Government Funds and
Property
༝ The head of the government agency is
directly responsible in implementing
this policy and is primarily
responsible for government
resources entrusted to his agency.
Those who are entrusted with the
possession of government resources
are directly responsible to the head of
the agency. 9
Responsibility over Government Funds and
Property

༝ All those who are exercising

authority over a government
agency shall share fiscal
responsibility

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Liability over
Government Funds
and Property
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.
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Accountability over Government
Funds and Property

The transfer of
government funds
from one officer to
another shall, except
as allowed by law, be
made only after the
authorization of the
COA.

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Accounting Responsibility

1 2 3 4

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Government Accounting Manual
for National Government
Agencies

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Coverage of GAM for NGAs
༝ Preparing general ༝ Reporting of budget,
purpose financial revenue and
statements in expenditure in
accordance with the accordance with
Philippine Public
laws, rules and
Sector Accounting
Standards (PPSAS)
regulations.
and other financial
reports as may be
required by laws,
rules and regulations;
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Objective of GAM
for NGAs
Basic Accounting
and Budget
Reporting Principles
1. Philippine Public Sector
Accounting Standards (PPSAS)
and relevant laws, rules and
regulations;
2. Accrual basis of accounting –
transactions are recognized
when they occur and not only
when cash is received or paid.
3. Budget basis for presentation of
budget information in the
financial statements;
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1. Revised chart of accounts
prescribed by COA;
2. Double entry bookkeeping;
3. Financial statements based on
accounting and budgetary records;
and
4. Fund cluster accounting – the books
of accounts are maintained by fund
cluster (according to the type of
funds being accounted for).

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Qualitative Characteristics of
Financial Reporting

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Qualitative Characteristics

༝ Understandability
༝ Relevance
༝ Materiality
༝ Timeliness

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Qualitative Characteristics

༝ Reliability
༝ Faithful Representation
༝ Substance over form
༝ Neutrality

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Qualitative Characteristics

༝ Prudence
༝ Completeness
༝ Comparability

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Components of
General Purpose
Financial Statements
Statement of Financial Position
Statement of Financial Performance
Statement of Changes in Net Assets/Equity
Statement of Cash Flows
Statement of Comparison of Budget and Actual
Amounts
Noted to the Financial Statements, comprising a
summary of significant accounting policies and other
explanatory notes.
The Budget Process
Government accounting is primarily budgetary
accounting. Government accounting does not only
aim to provide information on past events and
transactions but also budget information in
accordance with PPSAS 24.

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The National Budget

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THE BUDGET CYCLE

༝ The Budget Preparation

༝ The Budget Legislation
༝ The Budget Execution
༝ The Budget Accountability

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BUDGET PREPARATION

1, Budget Call 2. Budget Hearings

The budget The budget hearings
preparation starts are conducted after
when the DBM issues the agencies submit
a budget call to all their budget
government agencies proposals. .

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BUDGET PREPARATION

3. Presentation to the Office of the

President
The President and Cabinet members review
the proposed budget. After the President
approves the proposed budget, the DBM
finalizes the budget documents to be
submitted to the Congress. At this point, the
proposed budget is referred to as the
“President’s Budget.”
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BUDGET LEGISLATION
4. House Deliberations 5. Senate Deliberations
Upon receipt of the The Senate conducts
President’s Budget, the its own deliberations
House of on the GAB. These
Representatives
normally start after the
conducts hearings to
scrutinize the various
Senate receives the
agencies’ respective GAB from the House of
proposed programs and Representatives.
expenditures.
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BUDGET LEGISLATION
6. Bicameral Deliberations 7. President’s Enactment
After deliberations in both The President enacts the
houses are finished, a
committee called the
budget, which is now
Bicameral Conference known as the General
Committee is formed to Appropriations Act
harmonize any conflicts (GAA).
between the Representatives
and Senate versions of the
GAB.

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BUDGET EXECUTION
8. Release guidelines and 9. Allotment
BEDs
The DBM formulates the
The DBM issues Allotment Release
guidelines on the Program (ARP) to sort
release and utilization the limit for allotment
of funds while the releases during the
various agencies upcoming year.
submit their Budget
Execution Documents.
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BUDGET EXECUTION
10. Incurrence of 11. Disbursement
Obligations Authority
Government agencies The DBM issues
incur obligations which disbursement authority
will be paid by the to the government
government. agencies.

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POINTS TO REMEMBER

༝ Appropriation –
authorization by a
legislative body to
allocate funds for
specified purposes.

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POINTS TO REMEMBER

༝ Allotment –
authorization to
agencies to incur
obligations.

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POINTS TO REMEMBER

༝ Obligation –
amount contracted
by an authorized
officer for which
government is held
liable.

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POINTS TO REMEMBER

༝ Disbursement –
actual amount paid
out of the budgeted
amount.

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BUDGET ACCOUNTABILITY
12. Budget Accountability 13. Performance
Reports Reviews
Government agencies The DBM and COA
are required to submit perform periodic
the following reviews of the agencies’
accountability reports performance and budget
accountability and
report to the President.

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BUDGET ACCOUNTABILITY
12. Audit
The COA audits the agencies

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THANK YOU.
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