New Government

Accounting System
(NGAS) in the
Philippines
 1.
Objectives of
NGAS
OBJECTIVES
1. To simplify government
accounting
2. To conform to international
3
accounting standards
3. To generate periodic and
relevant financial reports for
better monitoring of
performance
4
The Manual on the NGAS

Volume I Volume II Volume III

THE ACCOUNTING THE ACCOUNTING THE CHART OF
POLICIES BOOKS, RECORDS, ACCOUNTS
FORMS AND REPORTS

-shows the basic -includes the list of all 5

features and policies - Contains the various accounts and the
on the NGAS, the formats of the books definitions/descriptio
government of accounts, ns of each account
accounting plan, registries, records,
discussion on the forms and reports
financial statements including instruction
and other related on their use.
records required and
the illustrative journal
entries
 2.
Government
Accounting
What is government accounting?

It encompasses the processes of

analyzing, recording, classifying,
summarizing and communicating all 7

transactions involving the receipt

and disposition of government funds
and property, and interpreting the
results thereof.
What are the objectives of
government accounting?
1. To produce information concerning past
operations and present conditions;
2. To provide a basis for guidance for future
operations;
8
3. To provide for control of the acts of public
bodies and offices in the receipt,
disposition and utilization of funds and
property; and
4. To report on the financial position and the
results of operations of government
agencies in the information and guidance of
all persons concerned.
 3.
Accounting
Responsibility
Accounting Responsibility

-emanates from the Constitution,

laws, policies, rules and regulations. The
Constitution of the Philippines, the
fundamental law of the land, mandates the
10
keeping of the general accounts of the
government, promulgation of accounting
rules, and the submission of reports
covering the financial condition and
operation of the government
Offices Charged with the
Accounting Responsibility

1. Commission on Audit (COA)

2. Department of Budget and Management
(DBM)
3. Bureau of Treasury (BTr) 11

4. Government agencies discharging the

functions of government to enable it to
attain its commitments to the Filipino
people
 4.
Basic Features and
Policies of
NGAS
Basic Features
1. Accounting Methods:

Accrual basis-
a basis of accounting under
which transactions and other events are
recognized when they occur (and not only
when cash or its equivalent is received or 13

paid). Therefore, the transactions and

events are recognized in the accounting
records and recognized in the financial
statements of the periods to which they
relate. The elements recognized under
accrual accounting are assets, liabilities,
net assets/equity, revenue, and
expenses.
Basic Features
2. One Fund Concept

In government accounting, fund is both a sum

of money set aside for a specific purpose, and
an independent fiscal and accounting entity. It
is created by the Constitution and by legislative
enactments, which direct that certain receipts
be collected or collections generated and 14
accounted for as a special resource to carry
out specific activities or attain certain
objectives.
Under the old government accounting system,
as provided by the Constitution, all income
accruing of the agencies shall accrue to the
GENERAL FUND of the government; and all the
money collected on any tax levied for a special
purpose shall be treated as a SPECIAL FUND.
The NGAS adopts the ONE FUND CONCEPT, and
that is the GENERAL FUND, which is generally
available for all functions of the government.
Separate fund accounting shall be done only
when specifically required by law o by a donor
agency or when otherwise necessitated by
circumstances subject prior approval of the
Commission, in which case, a Special Purpose
15
Fund may be created.
▹ Miscellaneous Personnel Fund
▹ Calamity Fund
▹ Organizational Adjustment Fund
 5.
Responsibility
Accounting
What is responsibility accounting?

▹ provides access to cost and revenue

information under the supervision of a
manager having a direct responsibility
for its performance. 17

▹ It is a system that measures the plans

(by budgets) and actions (by actual
results) of each responsibility center.
Responsibility Center
▹ a part, segment, unit or function of a government
agency, headed by a manager, who is accountable
for a specified set of activities.
▹ Except for some, which derive most of their
income from collection of taxes and fees, NGAs 18

are basically cost centers which primary purpose

is to render service to the public at the lowest
possible cost. Cost centers are established to
provide each government agency’s accessibility
to cost information and to facilitate cost
monitoring at any given period.
What are the objectives of
responsibility accounting?

a) ensure that all costs and revenues are properly

charged/credited to the correct responsibility
center so that deviations from the budget can be
readily attributed to managers accountable
19
therefor;
b) provide a basis for making decisions for future
operations; and
c) facilitate review activities, monitoring the
performance of each responsibility center and
evaluation of the effectiveness of agency's
operations.
What are the concepts of responsibility
accounting?

a. Responsibility accounting involves accumulating and

reporting data on revenues and costs on the basis of
the manager's action who has authority to make the
day-to-day decisions about the items; 20

b. Evaluation of a manager's performance is based on

the matters directly under his control;

c. Responsibility accounting can be used at every level

of management in which the following conditions exist:
1. Cost and revenues can be directly associated with
the specific level of management responsibility;

2. Costs and revenues are controllable at the level of

responsibility with which they are associated; and 21

3. Budget data can be developed for evaluating the

manager's effectiveness in controlling the costs and
revenues.
d. The reporting of costs and revenues under
responsibility accounting differs from budgeting in
two aspects:
▹ A distinction is made between controllable and
non-controllable cost
▹ Performance reports either emphasize or include
only items controllable by individual manager 22

e. A responsibility reporting system involves the

preparation of a report for each level of responsibility .
It usually compare actual costs with flexible budget
data.
f. Evaluation of a manager’s performance for cost
centers is based on his ability to meet budgeted goals
for controllable costs.
 “
As future public
servants, our goal is for
you to be held
accountable for the
public resources
entrusted to you.

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THANKS! 24

Any questions?