REVIEW MEMORANDUM- Session 1

SAAG

Original Revised Action

Taken/Reason/s
I. Learning Objective: For this session, our learning objective is:
given the lectures, video presentation and
Given the lectures, video presentation and discussion, the participants be able to: discussions, the participants be able to This was modified to conform
 Identify the basic laws, rules and regulations governing all government identify the governing laws, rules and to the manner of preparing
expenditures as provided under Sec 4 of PD 1445, COA Circular 2012-001 regulations applicable to the audit of Learning Objective per
 Explain the processes on how the funds of the agency is appropriated and government expenditures and basic seminar on Course Design
the different modes of disbursements requirements common to all types of
expenditures/ disbursement( COA Circular
As evaluated by the Resource Person and co-participants
2012-001 ) as evaluated by the Resource
Person (RP) and peers.

II. Session Overview The session will discuss on the following:

 Legal basis in the audit of
 Link the Course to the audit cycle (planning IRRBA, execution, government expenditures
Revised since original SAAG
communicating the results and monitoring and follow up amd this Course is incomplete
pertains to the execution and communicating the results phases  Discussion of the important of audit
of government expenditures.
 State the declaration of policy as provided under Section 2 of PD 1445
 State that the Course focuses on compliance audit on the residual risk as a  Discussion that session will cover
result of IRRBA the budget process, the types and
modes of disbursements and the
 Recall the Standards of Auditing as provided under PPSA 100
fundamental principles, laws , rules
 Recall the basic concepts of Audit Program and regulations applicable to all
expenditures and the IIUUEE
expenditures
III Basic Concept
1. Definition of expenditures
2. Definition of expenses
3. Types of expenditures
Allotment - an authorization issued by the
DBM to NGAs to incur obligations. Also Definitions aligned with GAM
called obligational authority !
Appropriation – the authorization made by a
legislative body to allocate funds for purposes
specified by the legislative or similar authority.
(Sec 2 Chapter 3 GAM).
Approved Budget- the expenditure authority
derived from appropriation laws, government
ordinances, and other decisions related to the
anticipated revenue or receipts for the budgetary
period.
Disbursement- the actual amount spent or paid
out of the budgeted amounts
Expenditure- the incurring of a liability, the
payment of cash, or the transfer of
property for the purpose of acquiring an
asset or service or settling a loss.
Expense is a term used for a financial
transaction or event that would result to a
decrease in assets, example paying the
expenses through cash, or an increase in
liabilities, such procurement on account,
with the corresponding decrease in equity.
Obligation – an act of a duly authorized
official which binds the government to the
payment of money. It is a commitment to
future
IV. KTP KTP 1
KTP 1 Budget Process
Revised since original SAAG
The basic laws, rules and regulations applicable to all expenditures is incomplete
1. Fundamental principles of government expenditures under Section 4 of PD 1445
2. Basic requirements applicable to all classes of disbursements (COA Circular 97- KTP 2 Types and modes of disbursements
004, COA Circular 2012-001):
2.1 Existence of a lawful and sufficient appropriation certified as available by the
proper officer
2.2 Legality of transaction and conformity with applicable laws, rules and regulations
Supporting documents
2.3 Approval of the expense by the head of the agency, or government corporation or KTP 3
authorized representative The basic laws rules and regulations applicable
2.4 Submission of proper evidence to support the claim to all expenditures, fundamental principles and
3. Prevention of IUUEE expenditures (COA Circular 2012-003) IUUEU
KTP 2
Appropriation and Allotment Process
1. Budget Cycle for National Government Sector
2. Budget Cycle for Local Government Sector
KTP 3
Modes of Disbursements
1. Payment through Cash
1.1 Petty Cash Fund
1.2 Cash Advances (COA Circular 97-002)
1.3 Bonding of Accountable Officers
2. Payment through Checks
3. Payment though other Modes of Disbursements
3.1 Advice to Debit Account (LDDAP)
3.2 Tax Remittance Advice

Prepared By; FAJimenez