MIDTERM EXAMS
FUNDS AND PROPERTY
TOPICS:
1. BASIC CONCEPTS IN GOVERNMENT
ACCOUNTING
(INCLUDING UIEEU) (10%)
2. BUDGETARY PROCESS (5%)
3. GAM for NGAS (chapters 1-6, 8 and 10)
- Receipts/Income (10%)
- Disbursements (24%)
- Inventories (10%)
- PPE (17%)
4. GAM for LGUs
- RPT, SET (8%)
- Receipts / Income / IRA (8%)
- Disbursements (8%)
BASIC GOVERNMENT CONCEPTS
Government accounting – encompasses the
processes of analyzing, recording, classifying,
summarizing and communicating all transactions
involving, the receipt and disposition of government
funds and property, and interpreting the results
thereof.
The objectives of government accounting:
a) To produce information concerning past
operations and present conditions;
b) To provide basis for guidance for future
operations;
c) To provide for control of the acts of public
bodies and officers in the receipt, disposition
and utilization of funds and property; and
d) To report on the financial position and the
results of operations of government agencies
for the information of all persons concerned.
Like the accounting for business entities,
government accounting is also a process of
producing information that is useful I making
economic decisions.
Sources of government funds:
- Receipts from taxes and other fees, borrowings,
and grants from other governments and
international bodies.
Utilization of government funds:
- Expenditures on programs, projects,
unanticipated losses from calamities and the
like.
Responsibility, Accountability and Liability over
government funds and property
1. Government resources shall be utilized
efficiently and effectively in accordance with the
law.
Head of a government agency – directly
responsible for implementing policy and for
government resources entrusted to his agency.
2. All those who are exercising authority over a
government agency shall share fiscal
responsibility.
ACCOUNTABILITY OVER GOVERNMENT
1. A government officer entrusted with the
possession of government resources is
responsible for the safekeeping therefore in
accordance with the law. Every accountable
officer shall be properly bonded.
2. The transfer of government funds from one
officer to another shall, except as allowed by
law, be made only after the authorization of
the COA. The transfer shall be properly
documented in an invoice and receipt.
When government funds or property are transferred from
one accountable officer to another, or from an outgoing
officer to his successor, it shall be done upon properly
itemized invoice and receipt which shall invariably
support the clearance to be issued to the relieved or out-
going officer, subject to regulations of the Commission.
LIABILITY OVER GOVERNMENT FUNDS AND
PROPERTY
1. The unlawful use of government resources shall
be the personal liability of the employee
found to be directly responsible therefore.
2. Every accountable officer shall be liable for all
losses resulting from the unlawful use or
negligence in the safekeeping of government
resources.
3. No accountable officer shall be relieved from
liability merely because he has acted under the
direction of a superior officer in unlawfully
utilizing the government resources entrusted to
him, unless before that act, he has notified the
superior officer, in writing, that the utilization is
illegal.
The superior officer shall be primarily liable
while the accountable officer who fails to serve
the required notice shall be secondarily liable
4. An accountable officer shall immediately
notify the COA for any loss of government
funds from unforeseen events (force majeure)
within 30 days. Failure to do so will not relieve
the officer of liability.
ACCOUNTING RESPONSIBILITY
1. Commission on Audit (COA)
- Should be viewed as a guardian that will help the
government to be able to comply
- with all the government rules and regulations as
stated in the government accounting manual.
- Supreme auditing body of the Philippines
a. Has the exclusive authority to promulgate accounting
and auditing rules and regulations.
b. Keeps the general accounts of the government,
supporting vouchers, and other documents.
c. Submits financial reports to the President and
Congress.
2. Department of Budget and Management (DBM)
- Responsible for the formulation and implementation
of the national budget with the goal of attaining the
nation’s socio-economic objectives.
3. Bureau of Treasury
- Cash custodian of the government
- The Bureau of Treasury (BTr) functions under the
Department of Finance and is authorized to:
- January 1, 2016 – NGAS was replaced by the GAM
for NGAS (Government Accounting Manual for
National Government Agencies)
LEGAL BASIS
The GAM for NGAS is promulgated by the
Commission on Audit (COA) based on the authority
conferred to it by the Philippine Constitution.

a. Receive and keep national funds and manage and COVERAGE:

control the disbursements thereof; and
b. Maintain accounts of financial transactions of all
national government offices, agencies and
instrumentalities.
4. Government Agencies
- Government agency refers to any department,
bureau or office of the national government, or any
of its branches and instrumentalities, or any political
subdivision, as well as any government owned or
controlled corporation (GOCC), including its
subsidiaries, or other self-governing board or
commission of the government. (P.D. No. 1445)
- The government agencies are responsible in
directly implementing the projects of, and
performing the functions delegated by, the
government.
- Each agency (entity) shall maintain accounting
books and budget registries which are reconciled
with the cash records of the BTr and the budget
records of the COA and DBM. Government
agencies are required by law to have accounting
units/divisions/departments.
The GAM for NGAs provides the basic concepts to
be used in:
A. Preparing the general-purpose financial
statements in accordance with the Philippine
Public Sector Accounting Standards (PPSAS)
and other financial reports as may be required
by laws, rules, and regulations; and
B. Reporting of budget, revenue, and expenditure
in accordance with laws, rules, and regulations.
OBJECTIVES:
The GAM for NGAs aims to update the following:
A. Standards, policies, guidelines, and procedures
in accounting for government funds and
property;
B. Coding structure and accounts; and
C. Accounting books, registries, records, forms,
reports, and financial statements.
BASIC ACCOUNTING AND BUDGET
REPORTING PRINCIPLES
1. Philippine Public Sector Accounting Standards
(PPSAS) and Relevant laws, rules, and
regulations.
2. Accrual basis of accounting
3. Budget basis for presentation of budget
information in the financial statements
4. Revised chart of accounts prescribed by COA
5. Double Entry Bookkeeping
6. Financial statements based on accounting and
budgetary records; and
7. Fund cluster accounting.

GOVERNMENT ACCOUNTING MANUAL FOR

NATIONAL GOVERNMENT AGENCIES

- The primary purpose of GAM for NGAs is

promulgated to harmonize the government
accounting standards with the international
accounting standards or also known as the
International Public Sector Accounting
Standards (IPSAS) which is based on the
International Financial Reporting Standards
(IFRS).
- The Philippine Government has adopted the IPSAS
through the Philippine Public Sector Accounting
Standards (PPSAS). The provisions of the PPSAS
are incorporated in the GAM for NGAs.

- An old government accounting system had been

used for about five decades before it was replaced
by the New Government Accounting System (NGAS)
in 2002.
QUALITATIVE CHARACTERISTICS OF CHAPTER 3: RECEIPTS/INCOME
FINANCIAL REPORTING

a. Understandability
- information is understandable when users can
reasonably be expected to comprehend its
meaning.
- Accordingly, users are assumed to have:
i. Reasonable knowledge of the entity’s
activities; and
ii. Willingness to study the information

Information about complex matters is not excluded

simply because it may be too difficult for certain
users to understand.

b. Relevance
c. Materiality
d. Timeliness
e. Reliability
f. Faithful representation
g. Substance over form
h. Neutrality
i. Prudence
j. Completeness
k. Comparability

CHAPTER 2: THE BUDGET PROCESS