ACCOUNTING FOR BUDGETARY ACCOUNTS (Chapter 4 by

Punzalan)
CHP. 1 GENERAL PROVISIONS, BASIC STANDARDS and POLICIES
CHP.2 THE UNIFIED ACCOUNT CODE STRUCTURE (UACS)
CHP. 3 THE REVISED CHART OF ACCOUNTS
 Art. VI, Section 29 of the 1987 Constitution

1. No money shall be paid out of the Treasury except in pursuance of an appropriation

made by law.
2. No public money or property shall be appropriated, applied, paid, or employed,
directly or indirectly, for the use, benefit, or support of any sect, church, denomination,
sectarian institution, or system of religion, or of any priest, preacher, minister, or other
religious teacher, or dignitary as such except when such a priest, preacher, minster, or
dignitary is assigned to the arm forces, or to any penal institution, or government
orphanage or leprosarium.

3. All money collected on any tax levied for a special purpose shall be treated as a
special fund and paid out for such purpose only. If the purpose for which a special fund
was created has been fulfilled or abandoned, the balance, is nay, shall be transferred to
the general funds of the government.

 ACCOUNTING SYSTEMS
1. Budgetary Accounts System
2. Receipt/Income and Deposit System
3. Disbursement System
4. Financial Reporting System

 BUDGETARY ACCOUNTS
1. APPROPRIATION= an authorization made by law (GAA of 2020) or
other legislative enactment, directing payment of goods and services out of
government funds under specific conditions or for special purpose.

BUDGET CYCLE:

BUDGET PREPARATION
Budget Legislation
BUDGET ACCOUNTA-BILITY (Agency) DBM
(Congress)
(Agency, DBM, COA) OP House of Representative & the
Senate

Budget Execution &

Operation

(DBM)

GENERAL APPRORIATION BILL (GAB) ---

GENERAL APPROPRIATION ACT (GAA) 2020

DEPARTMENT OF BUDGET AND MANAGEMENT (OP)

NATIONAL GOVERNMENT AGENCIES

PROPOSED NATIONAL BUDGET = APPROVED = GENERAL
APPROPRIATION ACT (GAA)
APPROVED BUDGET – is the expenditure authority derived from
appropriation laws, government ordinances, and other decisions related to the
anticipated revenue or receipts for the budgetary period.

The approved budget consists of the following:

1. New General Appropriations - are annual authorizations for incurring
obligations during a specified year, as listed in the GAA.

2. Continuing Appropriations- are the authorizations to support obligations

for a specific purpose or project, such as multi-year construction projects
which require the incurrence of obligations even beyond the budget year.

3. Supplemental Appropriations = are additional appropriations authorized

by law to augment the original appropriations which proved to be insufficient
for their intended purpose due to economic, political or social conditions
supported by a Certification of Availability of Funds (CAF) from the BTr

4. Automatic Appropriations - are the authorizations programmed annually

or for some other period prescribed by law, by virtue of outstanding
legislation which does not require periodic action by the Congress.

5. Unprogrammed Funds = are standby appropriations for priority program

or project of the government. The utilization of these funds may be approved
if any of the following conditions are met:

1. Revenue collections for the year exceeds targets

2. New revenues not included in the original revenue targets are

successfully generated; or

3. Foreign loan proceeds are generated for newly approved projects

covered by perfected loan agreements.

6. Retained Income/ Funds = are collections that are authorized by law to be

used directly by agencies for their operations or specific purpose. These
include but not limited to receipts of the following:
a. State Universities and Colleges - tuition and matriculation
fees and other internally generated receipts.

b. Department of Health - hospital income

7. Revolving Funds = are receipts derived from business type activities of

departments/agencies as authorized by law, and which are deposited in an
Authorized Government Depository Bank (AGDB). These funds shall be
self-liquidating. All obligations and expenditures incurred, due to these
business-type activities, shall be charged against revolving funds.

8. Trust Receipts = are receipts that are officially in the possession of the
government agencies or a public officer as trustee, agent, or administrator, or
which have been received for the fulfillment of a particular obligations.
2. ALLOTMENT = is an authorization issued by the Department of Budget
and Management (DBM) to government agency,which allow it to incur
obligations, for specified amounts, within legislative appropriation.

CLASS OF ALLOTMENT/OBJECT OF ALLOTMENT

1. PERSONNEL SERVICES (PS)-500M - 550M

2. MAINTENANCE AND OTHER OPERATING EXPENSES (MOOE)

3. CAPITAL OUTLAY (CO)
4. FINANCIAL EXPENSES
 REGISTRY OF APPROPRIATION AND ALLOTMENT (R/AP/AL)
 This registry shall be maintained to monitor appropriations and
allotments charged thereto. It shall show the original,
supplemental and final budget for the year and all allotments
received charged against the corresponding appropriations.
 This registry is maintained by Fund Cluster by the BUDGET
DIVISION/UNIT of each entity to ensure that allotment releases
are within authorized appropriation.

Appro = 50B
ALLOTMENT= 50B or less but not more than 51B

ALLOTMENT = EQUAL TO THE APPROPRIATION OR LESS THAN

BUT NOT OVER THE AMOUNT OF APPROPRIATION.

ALLOTMENT v. NCA COULD BE EQUAL OR LESS TO Allotment.

Allotment = 20M
NCA = 20M BUT NOT MORE THAN 20M

3. OBLIGATION

NOTICE OF CASH ALLOCATION (NCA) is an authority issued by the DBM to CENTRAL, REGIONAL, AND
PROVINCIAL OFFICES and operating units to pay operating expenses, purchase of supplies and
materials, acquisition of PPE, accounts payable,and other authorized disbursements through the issue
of Modified Disbursements System(MDS) Checks, Authority to debit account(ADA) or other modes of
disbursements.

Allot./nca AGENCY
DBM LAND BANK
DOH

Cash-Modified
Disbursement System- 20B
BUREAU OF
Regular
Subsidy from National
2B
TREASURY

Government(SuNG) 20B
To record the receipt of
NCA for the first
quarter from DBM
REGISTRY OF
ALLOTMENT and NOTICE OF CASH ALLOCATION
(RANCA)
 This registry shall be maintained by the Accounting
Division/Unit to determine the amount of allotments not
covered by NCA and to monitor available NCA.

DBM ALLOTMENT AGENCY

BTr
NCA NBI

LBP

UPON RECEIPT OF NCA:

CASH-MODIFIED DISBURSEMENT SYSTEM (MDS)-RegularXX
Subsidy from National Government (SuNG) xx

 ACCOUNTING RESPONSIBILITY
 Keeping the general accounts of the government
 Promulgation of accounting and auditing rules and regulations
 Submission of reports covering the financial condition and operation of the
government

 OFFICES CHARGED WITH THE ACCOUNTING RESPONSIBILITY

1. COMMISSION ON AUDIT
 Keeps the general accounts of the government.
 Promulgates accounting and auditing rules and regulations,
including those for the prevention of and disallowance of
irregular, unnecessary, excessive, extravagant, or unconscionable
expenditures, or uses of government funds and properties.

 Submits to the President and Congress, within the time fixed by

law ( not later than the last day of September each year-Sec. 41,
PD 1445, Government Auditing Code of the Philippines) an
annual report of the government, its sub-divisions, agencies and
instrumentalities, including government-owned or controlled
corporations.

 Has an exclusive authority to define the scope of its audit and

examination, establish the techniques and methods required
therefor.

 Pursuant to the COA, DBM and DOF Joint Circular No. 2013-1
dated August 6, 2013:
o Unified Account Code Structures (UACS)
o Revised Chart of Accounts- NGA’s

2. DEPARTMENT OF BUDGET AND MANAGEMENT

 Responsible for the formulation and implementation of the
National Budget with the goal of attaining our national socio-
economic plans and objectives.

 Responsible for the efficient and sound utilization of government

fund and revenues to effectively achieve the country’s
development objectives.

 Responsible for the validation and assignment of new codes for

funding source organization, sub-object codes for expenditures
items, program, project, activity codes shall be decided jointly by
the proponent agency and DBM.

3. BUREAU OF TREASURY
 Receive and keep nationalfunds,manage and control the
disbursements thereof; and
Maintainaccounts of financial transactions of all national
government offices, agencies and instrumentalities.

 Controls and monitors the Notice of Cash Allocation released by

the DBM as well as the bank transfer it makes in replenishing its
Modified Disbursement System (MDS) accounts.

4. NATIONAL GOVERNMENT AGENCIES

  Maintain and keep current the accounts of the agency
NBI
 Provide advice on the financial condition and status of the
COA
appropriations and allotments of the agency as its Head may
require.
 Develop and conduct procedures designed to meet the needs of
management.

 They shall perform the above duties in accordance with existing laws, rules,
regulations, procedures and comply with the reporting requirements of the
Commission on Audit, the Department of finance and the Department of Budget and
Management.

 Failure to comply with these requirements is sufficient ground for dismissal from
government service.

REGISTRIES TO BE MAINTAINED BY GOVERNMENT AGENCIES (16)

 FUNDAMENTAL PRINCIPLES OF FISCAL OPERATIONS
 THE NATIONAL BUDGET

 Plan for financing the government activities for a fiscal year

 Approval and authorization are necessary before it can be executed
 Proposal of estimate or statement of receipts and expenditures that may be
approved or rejected
 Blueprint of a country’s development plan.

 BALANCED BUDGET
 PERFORMANCE-INFORMED BUDGETING (PIB)
 KINDS OF BUDGET

1. AS TO NATURE
A. ANNUAL BUDGET - a budget which covers a period of one year. It is
the basis of annual appropriation

B. SUPPLEMENTAL BUDGET - a budget which supplement or adjust a

previous budget which is deemed inadequate for the purpose it is intended. It is the basis
for a supplemental appropriation.

C. SPECIAL BUDGET - a budget of special nature and generally submitted

in special forms on account that itemizations are not adequately provided in the in the
appropriation Act or that the amounts are not at all included in the Appropriation Act.

2. AS TO BASIS

A. PERFORMANCE BUDGET - a budget emphasizing the program or

services conducted and based on functions, activities, and projects, which focus attention
upon the general character and nature of work done, or upon the services rendered.

PROGRAMS - is an integral group of activities that contributes to an agency or

department’s continuing objective. Examples: General Administration and Support,
support to Operations, etc.

ACTIVITIES = are a work process that contributes to the fulfillment of a

program or project.

PROJECT= is a special department/agency undertakings carried out within a

definite timeframe and which are designed to produce a predetermined measures of goods
or services. It is considered an investment toward expanding the capacity of a
department/agency to deliver Major Final Output (MFOs).
MFO – is a good or service that a department or agency mandated to deliver to external
clients through the implementation of program, activities and projects. It should be
within the department or agency’s control and be measurable, manageable and auditable.
Examples: Regulatory Services; Health Services; Education Services and agricultural
support services.

B. LINE-ITEM BUDGET = a budget the basis of which is the objects of

expenditures such as : salaries and wages, traveling expenses, freight, supplies and
materials, equipment, etc.

3. AS TO APPROACH AND TECHNIQUE

A. ZERO-BASED BUDGETING - a process which requires systematic
consideration of all programs, project and activities with the use of define ranking
procedures. In this approach, activities are analyzed and presented in “decision
packages” or key budgetary inclusions.

b. INCREMENTAL APPROACH- a budget where only additional requirements

need justification. it focuses analysis of incremental changes in the budget and maybe
done within the context of performance and program budgeting.

FUND RELEASE DOCUMENTS:

A. OBLIGATIONAL AUTHORITY or ALLOTMENT = documents which

authorize the entity to incur obligations:

1. GENERAL APPROPRIATION ACT RELEASE DOCUMENT

(GAARD) - serves as the obligational authority for comprehensive release of budgetary
items appropriated in the GAA, categorized as FOR COMPREHENSIVE
RELEASE(FCR).

2. SPECIAL ALLOTMENT RELEASE ODER (SARO)

 This covers budgetary items under For Later Release(FLR) (NEGATIVE
LIST) in the entity submitted Budget Execution Documents (BEDs),
subject to compliance of required documents/clearances.Releases of
Allotments for Special Purpose Funds (SPFs) The following are covered
by SAROs: Examples
a. Calamity Fund
b. Contingent Fund
c. E-Government Fund
d. Feasibility Studies Fund
e. International Commitments Fund
d. Miscellaneous Personnel Benefits Fund
e. Pension and Gratuity Fund

3. GENERAL ALLOTMENT RELEASE ORDER (GARO)

 Is a comprehensive authority issued to all government
agencies, in general, to incur obligations not exceeding an
authorized amount during a specified period for the purpose
indicated therein.
 It covers automatically appropriated expenditures common
to most, if not all, i.e. RETIREMENT and LIFE
INSURANCE PREMIUM

B. DISBURSEMENT AUTHORITY - documents authorize the entity to pay

obligations and payables:

1. Notice of Cash Allocation (NCA)

 Authority issued by the DBM to agencies to cover their
cash requirements
 
Monthly Disbursement Program ( include current year
requirements and prior years’ accounts payable).
 RELEASE OF NCA

1. Initial Comprehensive NCA

 Based on the submitted Monthly Disbursement Plan
 Current year requirements and prior year’s accounts payable.
 Quarterly release

2.Additonal NCA
 For allotments charged against Continuing Appropriations under RA
10633
 Supplemental appropriations under RA 10652
 Prior year’s obligations which becomes accounts payable in the current
year.

3. Succeeding comprehensive NCA

 Subject to the submission of Financial Accountability
Reports(FARs)/Budget Accountability Reports (BARs) and consistent
with the DBCC approved Monthly Disbursement Program.
2. Non-Cash Availment Authority (NCAA)
 Authority issued by the DBM to agencies to cover the
liquidation of their actual obligations incurred against
available allotments for availment of proceeds from
loans/grants through supplier’s credit/constructive cash.

RELEASE OF NON-CASH AVAILEMENT AUTHORITY (NCAA)

 Agencies of the government availing of foreign loan proceeds through direct
payment chargeable against availment allotment shall submit a request for the
issuance of NCAA supported by the following requirements:
1. Photocopy of the application for withdrawal or equivalent
document covering the amount requested.
2. List of Allotments and corresponding obligations incurred for the
specific foreign loan assisted project against which the disbursement shall be
applied;
3. Details of disbursements expressed in peso and equivalent foreign
currency as indicated in the application.
 Request of NCAA shall be used to cover the liquidation of actual obligations incurred
by the agency within their available allotments. (DBM-COA-DOF, JC 2-97 and CL
No. 2003-12).
 It is emphasized that non-issuance of NCAAs for the availments of proceeds from
loan/grants THROUGH direct payments (already taken up as constructive
payments per BTr report) results to accounts payable build up in the agency.

3. CASH DISBURSEMENT CEILING (CDC) – authority issued to DFA and

DOLE to utilize their income collected/retained by their foreign Service Posts (FSPs) to cover
their operating requirements, but not to exceed the released allotment to the said post.
 Non-issuance of CDCs for actual utilization of retained income (already taken up
as revenue and disbursement per BTr report) results to UNRECONCILED
ACCOUNTS between BTr and agency books.
 Request for CDC shall be supported by the following accountability reports:
1. Monthly report of income
2. BTr Certification on actual income collected
as consolidated by DFA and DOLE home office.

4. Notice of Transfer of Allocation (NTA) - this is the authority issued by the

Central Office to its regional and operating units to pay their operating expenses, purchases of
supplies and materials, acquisition of PPE, Accounts Payable, and other authorized disbursement
through the issue of MDS checks, ADA or other modes of disbursement.
 
The total MDS CHECKS issued shall not exceed the total NTA received.
It shall be monitored through the maintenance of Registry of Allotment
and Notice of Transfer Allocation (RANTA)
REPORTING RQUIREMENTS:
1. Budget Execution Documents (BEDs)
 Agencies’ targets and plans
2. Budget and Financial Accountability Reports(BFARs)
 Agencies’ actual accomplishments for a given period.
 For monitoring and providing the necessary information to the
President and fiscal agencies for the purpose of crafting sound policy
decisions.

BUDGET EXECUTION DOCUMENTS

1. BED No. 1 : Financial Plan (FP)
2. BED No. 2: Physical Plan (PP)
3. BED No. 3: Monthly Disbursement Program (MDP)
4. BED No. 4: Annual Procurement Plan for Common-Use Supplies and Equipment
(APP-CSE)

Chapter 3 Sec. 10 of GAM dated Oct. 22, 2015 pertains to REGISTRIES OF

ALLOTMENTS, OBLIGATIONS and DISBURSEMENTS (RAOD) –
 this shall be maintained by the Budget Division/Unit of agencies to record the
allotments, obligations and disbursements.
 It shall show the allotment received for the year, obligations incurred against
corresponding allotment and the actual disbursements made.
 The balance is extracted every time an entry is made to prevent incurrence of
obligations in excess of allotment and overdraft in disbursement against obligations
incurred.
 It shall be maintained by appropriation act, fund cluster, MFO/PAP, and allotment
class.

1. Registry of Allotments, Obligations and Disbursements – Personnel Services

(RAOD-PS) ( Appendix 3-A of Mr. Punzalan; and Appendix 9A of the GAM.
 This shall be used to record the allotment received, obligations incurred and
disbursements classified under PS.

2. Registry of Allotments, Obligations and Disbursements – Maintenance and

Other Operating Expenses (RAOD-MOOE) ( Appendix 9B of the GAM)( Appendix 3B of
Mr. Punzalan)
 This shall be used to record the allotments received, obligations incurred and
disbursements classified under MOOE.
3. Registry of Allotments, Obligations and Disbursements –Financial Expenses (RAOD-
FE) ( Appendix 9C of the GAM and appendix 3C of Mr. Punzalan)

 This shall be used to record the allotments received, obligations incurred and
disbursements classified under FE.

4. Registry of Allotments, Obligations and Disbursements (RAOD-CO)

Section 11 . OBLIGATION REQUEST and STATUS

 The incurrence of obligations shall be made through the issuance of

Obligation Request and Status (ORS) (Appendix 11, GAM).
 This is being prepared by the Requesting/ Originating Office supported by valid
claims documents like Disbursement Vouchers (DVs) payroll, purchase/job
orders, itinerary of travel, etc. The head of the requesting/ Originating Office
or his authorized representative shall certify in the section A of the ORS as to
the necessity and legality of charges to the budget under his supervision, and
validity, propriety and legality of supporting documents (SDs).
  The head of the Budget Division/Unit shall certify to the availability of
allotment and such is duly obligated by signing in Section B of the ORS.

Section 31 . PREPARATION OF THE BUDGET REPORTS

The following budget reports/documents as required by DBM and COA shall
be submitted:

1. Quarterly Physical Report of Operations(QPRO) - Budget Accountability

Report (BAR ) No. 1
 This report shall reflect the Agency’s actual physical accomplishments as
at a given quarter, in terms of the performance measures indicated in its
Physical Plan.
2. Statement of Appropriations, Allotments, Obligations, Disbursements and Balances –
Financial Accountability Report (FAR) No.1
 This report shall reflect the authorized appropriations and adjustments,
total allotments received including transfer, total obligations, total
disbursements and the balances of unreleased appropriations, unobligated
allotments, and unpaid obligations of department/office/entity by source and
by allotment class. It shall be presented By:
1. Fund Authorization
2. Major final Output
3. Program/Activity/Project
4. Major Programs/Project

3. Summary of Appropriations, Allotments, Obligations, disbursements and Balances by

Object of Expenditures-FAR No.1.A (SAAODBOE) ( Appendix 18)
 This shall be prepared by Funding Source Code(FSC) as clustered and shall
reflect the summary of appropriations, allotments, obligations,
disbursements and balances detailed by object of expenditures consistent
with the COA Revised Chart of Accounts per COA Circular NO. 2013-002
dated January 24, 2014

4. List of Allotments and Sub-Allotments _FAR No. 1.B (Appendix 19)

 This report shall reflect the allotments released by the DBM and the sub-
allotments issued by the Entity Central Office/RO, their corresponding
numbers, date of issuance, and amounts by allotment class and FSC
 The total allotments per this report should be equal to the total allotments
appearing in the SAAODB(far No.1)

5. Statement of Approved Budget, Utilizations, Disbursements and Balances-FAR no.2

(Appendix 20)
 This report shall reflect the approved budget, the utilizations, disbursements
and balance of the entity’s income authorized by law to use, such as
OWWA/SUCs, duly approved by their Board of Trustee/Regents and shall
be prepared by FSC as clustered.

6. Summary of Approved Budget, Utilizations, Disbursements and Balances by Object of

Expenditures _FAR No. 2A (Appendix 21)
 This report shall reflect the details of approved budget, utilizations,
disbursements and balance of the entity’s income authorized by law to use
presented by object of expenditures consistent with the COA Revised Chart
of Accounts and shall be prepared by Funding Source C ode as clustered.

7. Aging of Due and Demandable Obligations -FAR NO.3 ( Appendix 22)

 This report shall be prepared by FSC as clustered and shall reflect the
balance of unpaid obligations as indicated in the Obligation Request (ObR)
and the ADDOs as at year-end.

8. Monthly Report of disbursements -FAR No. 4 (Appendix 23). This report shall reflect
the total disbursements made by department, office or entity and operating unit from the
following disbursement authorities:
 1. Notice of Cash Allocation
2. NCA for Working Fund issued to BTR as an advance funding from
loan/grant proceeds in favor of an entity
3. Tax Remittance Advice (TRA) Issued
4. CDC issued by departments with foreign-based agencies or units
5. Non-Cash Availment Authority; and
6. Others, e.g. Customs, Duties and Taxes(CDT), BTr Documentary
Stamps.

The report shall track the actual disbursement of the departments/agencies against their
disbursement program

9. Quarterly Report of Revenue and Other Receipts -FAR No.5 ( Appendix 24)
 This report shall reflect the actual revenue and other receipts/collections
from all sources remitted with the BTr and deposited in other AGDB for the
current year presented by quarter, and by specific sources consistent with
COA Revised Chart of Accounts.
Sec. 32 = SUBMISSION OF BUDGET and FINANCIAL ACCOUNTABILITY REPORTS.
 All departments/agencies shall observe the following timeline in submitting
the required FARs to COA-Government Accounting Sector(GAS) and
DBM.
a. Within thirty (30) days after the end of each quarter

1. SAAODB - FAR NO. 1

2. SAAODBOE-FAR No. 1.A
3. List of Allotments/Sub- Allotments – FAR No. 1.B
4. SABUDB -FAR No.2
5. SABUDBOE – FAR No.2A
6. QRROR – far NO. 5

B. On or before 30th day following the end of the year -

ADDO - FAR No. 3
C. On or before 30th day of the following month covered – MRD-FAR No.4
D. On or February 14 of the following calendar year
o Consolidated Statement of Allotments, Obligations, and Balances
per Summary of Appropriations under For Comprehensive Release
(FCR) under GAA, GARO, and SARO.
TAX REMITTANCE ADVICE (TRA)
JC NO. 1-2000 dated January 3, 2000, as amended by JC no.1-2MOA dated
July 31, 2001 of DOF, DBM and the COA.

The NCA released to government agency is reduced by the amount of the

ESTIMATED TAXES EXPECTED to be remitted by the agency through Tax
Remittance Advice.

Estimated taxes are computed based on the following percentages:

Personnel Services - 8%
MOOE - 5%
CO - 5%

The NCA RECEIVED BY THE GOVERNMENT AGE3NCY FROM dbm IS NET OF

THE applicable percentage of Tax Remittance Advice based on the NCA received.

Journal entry to record receipt of NCA , NET OF TRA

Cash-MDS, Regular xx
SuNG xx
( Note TRA IS NOT RECOGNIZED)

To record the remittance to BIR

Due to BIR xx
SuNG xx