FAR EASTERN UNIVERSITY, MANILA CAMPUS

INSTITUTE OF ACCOUNTS, BUSINESS AND FINANCE

1ST SEMESTER, 2020-2021
ACT1203 – ACCOUNTING FOR GOVERNMENT AND NON-PROFIT ORGANIZAITON

CHAPTER II
ACCOUNTING FOR BUDGETARY ACCOUNTS / BUDGET PROCESS
- Accounting for budgetary accountsformally commences upon enactment of the General Appropriation Act
(GAA)
- General Accounting Plan (GAP) shows the overall accounting system of a government agency/unit.
o Budgetary Accounts System
o Receipt/Income and Deposit System
o Disbursement System
o Financial Reporting System
- National Budget (NB) is a plan for financing the government activities for a fiscal year prepared and
submitted by responsible executive to a representative body whose approval and authorization are
necessary before the plan can be executed.
o It is the financial blueprint of a country’s development plan.
o In preparation of NB for fiscal year 2014, DBM introduced Performance-Informed Budgeting (PIB)
through issuance of NBM No. 117. Now, National Expenditure Plan (NEP) and GAA 2014 will show the
link between the fund allocated for government programs and the projected results and outcomes of
these.
PIB
- It is a budgeting approach that uses performance information to assist in deciding where the funds will go.
- Lower performance or a decline in performance serve as in alarm to consider a closer look in determining the
cause. (holding constant the level of future funding and/or subjecting future allocations conditional to
improve in conditions related to performance)
- It focuses more on outputs and outcomes rather than inputs.
REGISTRIES
1. Registry of Appropriation and Allotments (RAPAL)
2. Registry of Allotments and Notice of Cash Allocation (RANCA)
3. Registry of Allotments, Obligations and Disbursements (RAOD) – PS, MO, FE & CO
4. Obligation Request Status (ORS)

Budget Cycle
1. Budget Preparation
Issuance of “Budget Call” by DBM,
which contains the policy guidelines
and procedures in the preparation
and submission of agency budget
proposals.
To increase citizen participation in
the budget process, departments Government Agencies defend their
and agencies are tasked to partner proposed budgets before the
Submission of Agency Budget
with Civil Society Organization technical panel of DBM, and will be
Proposals to DBM.
(CSOs) and other citizen- subject for recommendations and
stakeholders as they prepare their review.
agency budget proposals.

Recommendations will be Proposed Budget is presented by

DBM consolidates
presented before Executive Review DBM, together with the DBCC, to President and Cabinet approve the
recommendations on Agency
Board and deliberation that entails the President and Cabinet for proposed NEP.
budgets into NEP and BESF.
prioritization of programs are made. further refinements

DBM prepares and finalizes the

Submission of “President’s Budget”
budget documents to be submitted
to Congress
to Congress

2. Budget Legislation

ProfJ/FEUManila/1STSEM20-21/ACTGOV/ChapterII
 Assign President’s Budget to the
Receipt of President’s Budget by
House Appropriation
the House Speaker
Committee
GAB’s Approval on the 2nd and
Deliberation of HAC and Sub-
3rd reading before transmission
committee on GAB
of House version of GAB

Senate Conducts hearing & GAB’s Approval on the 2nd and

Assign GAB to Senate Finance
Receipt of GAB by Senate plenary deliberation on the 3rd Reading before finalization
Committee
GAB. of Senate version of GAB.

To harmonize the both versions

of GAB, Bicameral Conference
Committee will be constituted.
They will harmonize the
conflicting provisions of the
House & Senate Versions of GAB
Bicam Version of GAB will then
be returned to both houses for
ratification and submit to the
President
President and DBM review the
General Appropriation Act
GAB and prepare Veto Message

3. Budget Execution and Operation

- It begins with DBM’s issuance of guidelines on the release and utilization of funds.
- Agencies are required to submit their Budget Execution Documents (BED) as reporting requirements
submitted to DBM every November 30 before that particular financial year.
i. BED No. 1: Financial Plan (FP)
ii. BED No. 2: Physical Plan (PP)
iii. BED No. 3: Monthly Disbursement Program (MDP)
iv. BED No. 4: Annual Procurement Plan for Common-Use Supplies and Equipment
- DBM set limit for allotments issued to an agency and on the aggregate by preparing Allotment Release
Program (ARP) which corresponds to the total amount of the agency-specific budget under the GAA.
- CRP is also formulated alongside to set a guide for disbursement levels for the year and for every month and
quarter.
 Budgetary Accounts
o Appropriation – made by law or other legislative enactment directing payment of goods and services out of
government funds
o Allotment – issued by DBM which allows it to incur obligations, for specified amounts, within the legislative
appropriation
Obligational Authority or Allotment
 GAARD
 SARO
 GARO
o Obligation – commitment by a government agency
Disbursement Authority
 NCA – authority to pay expenses/expenditures through the issue of MDS checks, ADA or other
mode of disbursement
 NCAA – authority by DBM to cover the liquidation of their agencies’ actual obligations against
proceeds from loans/grants
 CDC – issued to DFA and DOLE to utilize their income collected
 NTA – from CO to its regional and operating units.
4. Budget Accountability
- This phase happens alongside the Budget Execution Phase.
- Agencies are held accountable not only for how these use public funds ethically, but also on how these attain
performance targets and outcomes using available resources.
- BFARs are submitted by agencies on monthly and quarterly basis that show how agencies used their funds and
identify their corresponding physical accomplishments
i. Quarterly Physical Report of Operation (QPRO)
ii. Statement of Appropriations, Allotments, Obligations, Disbursements and Balances (SAAODB)
iii. Summary of Appropriations, Allotments, Obligations, Disbursements and Balances by Object of
Expenditures (SAAODBOE)
iv. List of Allotments and Sub-Allotments (LASA)
v. Statement of Approved Budget, Utilizations, Disbursements and Balances (SABUDB)
vi. Summary of Approved Budget, Utilizations, Disbursements and Balances by Object of Expenditures
(SABUDBBOE)
vii. Aging of Due and Demandable Obligations (ADDO) 2
viii. Monthly Report of Disbursements (MRD)
ix. Quarterly Report of Revenue and Other Receipts

ProfJ/FEUManila/1STSEM20-21/ACTGOV/ChapterII