PRELIM
8/12/2020 Wednesday
diff objectives between private and govt
companies
P: for profit
G: non profit
GAM for NGAS - standards for Govt
Definition of GA - in State Audit Code of
the PH
- similarly defined w acctg
- "involving transactions "
- for disposition of public infrastructure
PD no. 1445 - signed by Pres. Marcos
- taxes are part of the country's equity
-other receipts and revenues of the govt:
donations from other countries
-plans first before disbursing budgets
4 offices responsible for GA
responsibilities
1. COA - keeping the books of accts of
all govt entities
- visit website and find the auditing
reports of your LGU
2. DBM - responsible for creating the
national budget
- implementation of natl budget ->from
Preparation to Accountability phase
- release the diff allocation and
appropriations of NGAs budget
3. BTr - keepers of funds
- financial managers of the PH (find
ways to generate passive income)
- under Dept. of Finance
Mandates:
1. assist in formulation of policies
2. formulate
3. maintain BoA of cash transactions
4. manage cash transactions, collect
taxes, control & service public debt
Government Agencies - maintains a
complete set of acctg books
GAM for NGAs - promulgated to
harmonize govt acctg standards with
IPSAS
(based on IFRSs)
Intl Org of Supreme Audit Institution
(INTOSAI) - implements Intl standards
for GAcctg
- members should adapt IPSAS (Intl
Public Sector Acctg Standards)
SEARCH!!
Chairperson: Michael G. Aguinaldo
Commissioner: Roland Cafe Pondoc
DBM secretary: Wendel E. Avisado
National Treasurer: Rosalia V. De Leon
8/14/2020 Friday
ppt slide 11
GAM - compilation of all public sector
acctg standards
- promulgated to harmonize
standards with IPSAS
IPSASB - creates the GA standards
- general in approach
>> What if a government agency
DEPARTS from PPSASB?
It is allowed!! as long as it can be
justified by the agency
GAM Coverage:
Volume 1 - acctg policies, guidelines,
procedure on how it to use
Volume 2 - Acctg books (journal,
ledger, etc), registries, records, forms
and reports
Volume 3 - Revised Chart of Accounts
>> Do diff GAs have the same Chart of
Accounts? YES!
Basic Acctg and Budger Reporting
Principles:
- GAAP in accordance w PPSAS
- Accrual basis of acctg (recorded when
earned)
* BIR is cash basis
* also Modified basis (both cash and
accrual)
-Budget basis for presentation of budget
info in FS
- uses the Revised Chart of Accts
- Double Entry of bookkeeping
GA
- FS based on acctg and budgetary
records
- Fund cluster Acctg
FUND CLUSTERS - recordings of diff
uses of funds in GAs
01 – Reg. Agency Fund (only 4:
personal, capital outlay, maintenance &
other operating exp., financial)
02 - Foreign Assisted Projects
Fund - donations from other
03 - Special Acct - Locally
Funded/ Domestic Grants Fund
04 - Special Acct – Foreign
Funded/ Foreign Grants Fund
05 - from operations of GAs -
revenues i.e. payment of claiming of
Birth Certs, Driver's license fee
06 - Business Related Funds
07 - Trust Receipts
QUALITATIVE CHARACTERISTICS of
FINANCIAL INFORMATION
- Understandability
- Relevance
- Materiality (threshold)
- Reliability = Faithful Representation THE BUDGET PROCESS
- Comparability
Intercomp - one acct to another General Acctg Plan - acctg cycles and
acct of GA rules that NGAs adapts for diff
transactions
Intracomp - within the same GA
- Substance Over Form
National Budget
*form over substance in reality??
- estimate of the sources and uses of
govt funds within a fiscal yr
GOVERNMENT ACCTG in Concepts
- key instrument for promoting its
and Principles
socioeconomic objectives
- Fair presentation in accord. w PPSAS
- Going Concern
Types of Govt Budget:
- Consistency of Presentation
Accdg to Law:
- Materiality and Aggregation
1. Annual / General Budget - most
- Offsetting - not allowed in general comprehensive bc it entails all sectors of
accts Govt

- Comparative Information - minimum of - made by Congress

2 yrs

a. General Appropriation Act -

COMPONENTS OF GENERAL source of law pertaining to General
PURPOSE FS Budget

1. Statement of Financial Position - Bal

sheet
2. Supplemental Budget - an addition
2. Statement of Income statement to Annual budget

3. Statement of Changes in Equity - if GB needs additional

4. Statement of Cash flows i.e. emergency funds, COVID funds

5. Statement of Comparison of Budget

and Actual Amounts
b. Supplemental Appropriation
6. Notes to FS Act - i.e. Bayanihan Act

> Surplus instead of Net Profit

> Deficit instead of Loss
3. Special Budget - to be spent on the
creation of a certain/new govt agency
c. Special Appropriation Act -
Accdg to Basis:
1. Line- item budget - typical budget
approach
- based on previous period's budget,
modifying to a current one
* objects of expenditures
2. Performance Budget - in terms of
the performance of the agency
- measured quantitatively
- focused on performance, not
objects of expenditures
- only necessary for
objectives of the NGA
Accdg to Approach and Technique:
1. Incremental Budgeting - increasing
a certain amt from the prior year
- benchmarking from last year
2. Zero-based Budget - do not look
backwards
- start as if there was no
comparison to previous budget
~ actual budgeting
MAIN OBJECTIVE OF GB: TO HAVE A
BALANCED BUDGET –
Expected revenue = expected expenses
Wed 0826
The PH Budget Cycle
1. Preparation
a. Budget Call - each NA must submit
target programs and budget
Probable sources of fund - from the
surplus budget that they had the
previous year
- borrow from other countries or World
Bank
b. Stakeholder Engagement - each NA
must look into the needs of the poorest
areas of the country
the
so that they could include it in the
budget
c. Technical Budget Hearing - each
NA will defend the validity of their
budget proposals in front of DBM
- the budget may increase or
decrease in this process
-
d. Executive Review - the Executive
Review Board will deliberate the
approved budgets and prioritize them
- still under DBM
e. Consolidation, Validation, and
Confirmation - will all put into National
Expenditure Program

f. Presentation to the President and
Cabinet - during the cabinet meeting
- if approved, DBM will prepare
and finalize docs to be submitted to
Congress
g. President's Budget -
> PBM - explains policy
framework
> BESF - what programs and
what probable source of fund
> NEP - budget for each proj
> Details to Selected Programs
and Projects
2. Legislation - on the day of SONA,
the President will submit the PB to the
Congress
* Aug - Oct - House Deliberation:
- House Committee
Appropriation - analysis of the budget
- Senate Comm. on Finance -
analysis of the budget
a. House Deliberation - until Oct
b. Senate Deliberation - Sept
c. Bicameral Deliberations - will
discuss, consolidate, and harmonize
conflicting provisions of both
deliberations
- Before December
- Bicameral Conference Comm.
- will then called General
Appropriation Bill (GAB)
- will then be signed/vetoed by
the President
* cannot be full vetoed by the Pres
since the govt cannot operate wo the
budget
* only partial veto or line-vetoed is
allowed
* if approved, it will be called (GAA)
General Appropriation Act
d. Ratification and Enrollment
e. The Veto Message
f. Reenactment
3. Execution - implementation of GAA
- by the Executive Dept
a. Release Guidelines and Program
on
b. Budget Execution Docs (BEDs) -
consists of 4 docs:
> Physical and Financial Plan
> Monthly Cash Program
> Estimate of Monthly Income -
contains the monthly expenses and
revenue of the proj
> List of Obligations that are not
yet due and demandable -
- these docs outline agency plans
and performance targets
 - Cash Release Program (CRP)
- to set a guide for disbursement levels

Wed 0902
Allotment Release Order Documents:
1. GAARD - comprehensive
Budget Execution -
release of the funds
a. Release Guidelines & Program
- contains the NGA
Appropriation - legislation of a budget individual budgets

Allotment - permission given by DBM to - per-item basis

the NGA so that they can enter into a
2. SARO - lump sum release of
contract/obligation
money for a specific project of each
Allocation - manner in which the NGA agency
has been notified by DBM for the
3. GARO - by-category basis
release of the budget
d. Allotment Release (SAROs)
- first journal entry (when NCA
is received) e. Incurring Obligations - obligations
are liabilities legally incurred which the
govt will pay for
b. Budget Execution Documents (BEDs)
f. The GAA as Allotment Release
- Physical Plan - expected
g. Cash Allocation - to authorize an
physical output of the NGA
agency to pay obligations it incurs
- Financial Plan - monetary value
- DBM issues a disbursement
associated w the PP
authority
- Monthly Cash Program - how
Disbursement Authorities:
much should be disbursed each month
1. NCA - most common type of
- List of Obligations that are not
disbursement authority given by DBM to
yet due and demandable
NGA
> listing of all liabs and
Dr. Cash-MDS, Regular
obligations
Cr. Subsidy Income from NG
Others:
c. Allotment & Cash Release
Programming 2. NCAA - to authorize non-cash
disbursements
- Allotment Release Program
(ARP) - to set a limit for allotments 3. CDC - for depts w overseas
issued operations
 4. NTA – for regional and
operating units

Dr. Cash in Bank - Foreign Currency

Fri 0904 (Current/Savings Acct)
Cr. Cash-collecting Officers
(to recog. deposit of collection to
NCA - max amt of withdrawal authorized bank)

FSPs (Foreign Service Posts)

Dr. Cash - MDS, Regular Dr. Cash-Constructive Income
Cr. Subsidy from Natl Govt Remittance
Cr. Subsidy Income from
Natl Government
NCAA - for non-cash transactions - to recog receipt of CDC from
(loans/grants) DBM

- liquidation of actual obligations

Dr. Quarter Allowances
Agency Books: Dr. Rent
Cr. Cash in Bank –Foreign
Dr. Comm. Equipment Currency
Cr. A/P (to recog. payment of expenses charged
to CDC)
Dr. A/P
Cr. Subsidy from NG BTR
Dr. Sub to NGA
BTR Books: Cr. CC remit

Dr. Subsidy to NGAs !! No money shall be disbursed by any

NGAs unless there is authority to
Dr. Loans Payable - Foreign
disburse from DBM!!

CDC - for foreign operations of Foreign

NTA - issued by Central office to other
Service Posts (DFA and DOLE)
regional/operating units

DFA/DOLE
h. Disbursement - final step, monies
Dr. Cash-Collecting Officers are actually spent
Cr. Passport and VISA fees
(to recog coll. Of income)
 > Modified Disbursement Dr. A/p
Scheme – disbursements are Cr. Cash
chargeable against Treasury
Seller
Dr. A/R 200,000
BTR Cr. Sales 176,000
Cr. Output Vat 24,000
Dr. Subsidy
Cr. Cash NGA:
Buyer:
4. Budget Accountability - process of
checking and verifying whether the Dr. Office Supplies 200,000
executed budget was disbursed accdg Cr. A/P 200,000
to the law
- fidelity and honesty Dr. A/P 180,000
Cr. due to BIR 10,000
a. Performance and Target outcomes Cr.Cash-MDS, Reg 170,000
b. BARs Seller
Dr. A/R 170,000
c. No report, no release – MPBF Cr. Sales 170,000
Miscellaneous Personal Benefits Fund
- semester basis - biannual j.
(every 6mos) w/ no TRA advice

d. Review of Agency Performance – Dr. Due to BIR

Budget Performance Assessment Cr. Cash
Review (BPAR)
e. Audit - COA Dr. Cash
Cr. Subsidy
f. Performance-Based Incentive
system if problem is silent, use w TRA advice

k.
Fri 0911
l. accrued revenue
Practice Exercise:
i. m.
Private Entity:
n.
Buyer
Dr. Office Supplies Dr. Subsidy 305,000
Cr. A/P Cr. Cash-MDS, Reg. 305,000