M1: THE BASIC FEATURES OF
GOVERNMENT ACCOUNTING
Government
- Tax collection - collect taxes for
funds
- Corruption
- Laws
- administrations/responsibility to
people - namamalakad
The Branches of the Government
LEGISLATIVE
- make laws, alter, and repeal
them through the power vested in
the Philippine Congress
- Divided into Senate and House
of Representatives
- Senate: 24 senators members
- House of representatives: 250
members
EXECUTIVE
- Enforces the Law
- President, Vice President, the
Cabinet, executive departments,
independent agencies, boards,
commissions, and committees
JUDICIAL
- interprets the meaning of laws,
applies laws to individual cases,
and decides if laws violate the
Constitution.
- Supreme Court, which has a
Chief Justice as its head and 14
Associate Justices, all appointed
by the president on the
recommendation of the Judicial
and Bar Council and other types
of court
Branches of Accounting
Government Accounting
- Encompasses the process of
analyzing, recording, classifying,
summarizing, and communicating
all transactions involving the
receipt and disposition of
government fund and property
and interpreting result thereof
(Section 109 of Presidential
Decree 1445).
- Places greater emphasis on
sources and utilization of fund,
and responsibility, accountability
and liability over government
funds and properties
- Strictly government entities -
delivery of their services
Financial Accounting
- a specific branch of accounting
involving a process of recording,
summarizing, and reporting the
myriad of transactions resulting
from business operations over a
period of time.
- Main goal: To provide the
information needs of external
users that have no capability to
request information directly from
management. Financial
accounting summarizes financial
information gathered within a
specified period. Thus, provides
information that is HISTORICAL
- strictly business (private)
 - financial/finance
Management Accounting
- practice of identifying, measuring,
analyzing, interpreting, and
communicating financial
information to managers for the
pursuit of an organization's goals.
- information is
FORWARDLOOKING. It contains
forecasted information used by
managers in planning.
- With a little bit of government
- Internal help managers/higher
position to see overall and yung
nasa baba
Cost Accounting
- a form of managerial accounting
that aims to capture a company's
total cost of production by
assessing the variable costs of
each step of production as well
as fixed costs, such as a lease
expense.
Tax accounting
- Withholding taxes for payroll, tax
pay to bureau of revenue
The difference of government
accounting to other branches: it put
emphasis on sources and utilization of
funds; and responsibility, accountability,
and liability of entities entrusted with the
government fund and properties.
Sources: taxes and other fees,
borrowings and grants from other
government and international bodies
Utilization: includes expenditures on
programs
Objectives of Government
Accounting
1. To provide information
concerning past operations and
present conditions (budgeting
process)
2. To provide a basis for guidance
for future operations
3. To provide for control of the
acts of public bodies and offices
in the receipt, disposition, and
utilization of funds and property
4. To report on the financial
position and the results of
operations of government
agencies for the information and
guidance of all persons
concerned
- Information from the past can
help the future as well
Legal Bases
● Philippine Constitution – Art IX
Sec 2(2) exclusive authority
granted to COA to promulgate
accounting and auditing rules and
regulations
○ COA - responsible fo rules
and regulations for
auditing
● PD 1445 - Government Auditing
Code ; like a bible, guide
- Concuculars - updates
- Government accounting manual
followed by everyone
Responsibility, Accountability and
Liability over Government Funds and
Property
Main Concept:
- “Efficiently and effectively
utilization of government
resources in accordance with the
law. Government officials are
responsible in implementing this
policy, are accountable for the
government resources in their
custody, and are liable for any
loss.”
- Battle of disallowances - flagged
by COA = may mali >
compensate/payment
- Government things: you are held
liable or if there is wrong,
negligence, you are held liable
- Government = very strict
Government Accounting
Framework/Process
Offices with government accounting
responsibility
1. Commission on Audit (COA)
- Responsible for keeping
the government’s general
accounts
- Disseminates accounting
rules to be used by all
agencies
- Agencies submitted their
files to COA
- Keeps the record and
promulgate auditing rules
2. Department of Budget and
Management (DBM)
- Formulation and
implementation of the
National Budget with the
goal of attaining our
national socio-economic
plans and objectives
- Efficient utilization of
government funds and
revenues
- Lookout for the
performances of agencies
- COA & DBM collaborate during
issuances
3. Bureau of Treasury (BTr)
- Safekeeping of the
national funds
- Management and control
of the financial
transactions
- Where agencies remit their
collections
- Collector offices = factor in
distributing budget
- DBM & BTr collab during the issuance
of budget
4. Government Agencies (GA)
- Implementation of projects
and performance of
delegated functions
Financial Reporting System of
National Government
Rules and Regulations for
Government Accounting
- need to be updated
1. Government Accounting
Manual for National
Government Agencies (GAM for
NGAs)
2. Government Accounting
Manual for Local Government
Unit (GAM for LGUs)
3. International Public Sector
Accounting Standard (IPSAS)
4. COA Circulars
5. DBM Issuances
6. BIR Issuances
7. CSC Policies/issuances - if you
are undere government (civil
service commission); parang
DOLE
- PPSAS same with IFRS = PPRS
Coverage of GAM
- Published 2015
- Basis of updates counldn’t be seen in
GAM but to COA and DBM issuance
1. Preparing financial statements
and other reports in accordance
with PPSAS
2. Reporting of budget , revenue
and expenditure in accordance
with existing laws, rules and
regulations
Objective of GAM
- general financial provided by GAM
1. Standards, policies, guidelines
and procedures in accounting for
government funds and property;
- Standards - uniformity
2. coding structure and accounts;
and
- Issued chart of accounts
3. accounting books, registries,
records, forms, reports and
financial statements.
Basic Government Accounting and
Budget Reporting Principles
I. generally accepted government
accounting principles in
accordance with the PPSAS and
pertinent laws, rules and
regulations; - should follow what
is expected
II. accrual basis of accounting in
accordance with the PPSAS;
III. budget basis for presentation of
budget information in the financial
statements (FSs) in accordance
with PPSAS 24;
IV. Revised Chart of Accounts
prescribed by COA;
V. double entry bookkeeping;
VI. financial statements based on
accounting and budgetary
records; and
VII. fund cluster accounting.
VIII. Adopting Cash Based Budgeting
System beginning fiscal year
2019
Qualitative Characteristics of
Financial Reporting
FUNDAMENTAL
● Relevance - make a difference
○ Materiality - factor
● Faithful representation
○ Completeness - complete
 ○ Reliability - free from
material error
○ Neutrality - free from bias
(not to please just one
user)
■ Prudence
ENHANCING
● Understandability - clear report ;
can be understand by the users
● Timeliness - submitted within the
deadline; if not submitted on time,
relevance can’t be seen
● Comparability - compare prior or
other agencies
Components of General Purpose
Financial Statements
I. Statement of Financial Position
II. Statement of Financial
Performance
III. Statement of Changes in Net
Assets/Equity
IV. Statement of Cash Flows
V. Statement of Comparison of
Budget and Actual Amounts; and
(only in government, businesses
don’t have this
VI. Notes to the Financial
Statements, comprising a
summary of significant
accounting policies and other
explanatory notes
Responsibility Accounting
Responsibility Accounting
- mprovides access to cost and
revenue information under the
supervision of a manager having
a direct responsibility for its
performance. It is a system that
measures the plans (by budgets)
and actions (by actual results) of
each responsibility center.
Responsibility Center
- is 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 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.
* know the revenue and responsibility
center
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 therefor; (deviation -
- mas madali matukoy)
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 A. A distinction is made
agency’s operations. between controllable and
non-controllable costs.
CONCEPTS OF RESPONSIBILITY ■ A cost is considered
ACCOUNTING controllable at a
I. Responsibility accounting given level of
involves accumulating and managerial
reporting data on revenues and responsibility if the
costs on the basis of the manager has the
manager’s action who has power to incur it
authority to make the day-to-day within a given
decisions about the items; period of time. It
II. Evaluation of a manager’s follows that (1) all
performance is based on the costs are
matters directly under his control; controllable by top
III. Responsibility accounting can be management
used at every level of because of the
management in which the broad range of its
following conditions exist: activity; and (2)
A. Cost and revenues can be fewer costs are
directly associated with the controllable as one
specific level of move down to lower
management level of managerial
responsibility; responsibility
B. Costs and revenues are because of the
controllable at the level of manager’s
responsibility with which decreasing
they are associated; and authority.
C. Budget data can be ■ Non-controllable
developed for evaluating costs are costs
the manager’s incurred indirectly
effectiveness in controlling and allocated to a
the costs and revenues. responsibility level.
* if not responsible, it is not included B. Performance reports either
IV. The reporting of costs and emphasize or include only
revenues under responsibility items controllable by
accounting differs from budgeting individual manager.
in two respects: * controllable only to be considered

Responsibility Center Code Structure

 - Each NGA shall be assigned a
responsibility center code defined
as organization code in the
UACS Manual. For monitoring
revenue and expenses, additional
three digit codes for the agency’s
major offices/departments shall
be appended to the organization
code. The organization code and
the agency’s major
offices/departments’ code shall
consist of 15 digits as follows:

* lower level operating unit - can be

changed