GOVERNMENT BUDGETING OVERVIEW

Government budgeting/ 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.”
Objectives of Government Accounting (P.D. No. 1445, Sec. 110)
 To produce information concerning past operations and present conditions;
 To provide a basis for guidance for future operations;
 To provide for control of the acts of public bodies and officers receipt, disposition and utilization
of funds and property; and
 To report on financial position and the results of operation management of government
agencies for the information of all person concerned.
GOVERNMENT ACCOUNTING PLACES GREATER EMPHASIS ON THE FOLLOWING:
1. Sources and utilization of government funds;
Sources- include receipt from taxes and other fees, borrowings, grants from other government and
international bodies.
Utilization- includes expenditures on programs, projects, unanticipated losses from calamities and
the like.
2. Responsibility, accountability and liability of entities entrusted with government funds and
properties.
ACCOUNTING RESPONSIBILITY
The following offices are charged with government
1. Commission on Audit (COA)
2. Department of Budget and Management (DBM)
3. Bureau of Treasury (BTr)
4. Government Agencies
 Commission on Audit (COA)
Has the exclusive authority to promulgate accounting and auditing rules and regulations
Keeps the general accounts of the government, supporting vouchers, and other documents.
Submits financial reports to the President and Congress.
 Department of Budget and Management (DBM)- Is responsible for the formulation and
implementation of the national budget with the goal of attaining the nation’s socio-economic
objectives.
 Bureau of Treasury (BTr)- Functions under the Department of Finance and is the cash custodian of
the government.
The BTr is authorized to:
 Receive and keep nation funds and manage control the disbursements thereof; and
 Maintain accounts of financial transactions of all national government offices, agencies, and
instrumentalities.
Government Agencies
Refer 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
(GOCC), including its subsidiaries, or other self- governing board or commission of the
government.
They are responsible in directly implementing the projects of, and performing the functions
delegated by, the government.
They are required by law to have accounting units/division/departments.
Each agency (entity) shall maintain accounting books and budget registries which are reconciled
with the cash records of the BTr and the budget record of the COA and DBM.
Entity- Refers to a government agency, department, or operating field or unit.
Financial reporting-Is the process of preparation, presentation and submission of general-purpose
financial statements and other reports. The objective of financial reporting is to provide information
about the entity that is useful to users for accountability purposes and decision-making.
The GAM for NGA’s
An “old” government accounting system had been used for about five decades before it was
replaced by the New Government System (NGA’s) in 2002. However, on January 1, 2016, the
NGA’s was replaced by the Government Accounting Manual for the National Government
Agencies (GAM for NGA’s).
 Components of general-purpose financial statements
Coverage: Statement of Financial Position
a. Preparing general purpose financial statement in accordance with the Philippine Public Statement of Financial Performance
Sector Accounting Standards (PPSAS) and other financial reports as may be required by Statement of Changes in Net Assets/Equity
laws, rules, and regulations. Statement of Cash Flows
b. Reporting of budget, revenue, and expenditure in accordance with laws, rules, and Statement of Comparison of Budget and Actual Amounts
regulations. Notes to the Financial Statement

Objective: ELEMENTS OF FINANCIAL STATEMENTS

a. Standards, policies, guidelines, and procedures in accounting for government funds and ASSETS
property; LIABILITIES
b. Coding structure and accounts; and EQUITY
c. Accounting books, registries, records, forms, reports, and financial statements REVENUE
EXPENSES
QUALITATIVE CHARACTERISTICS OF FINANCIAL REPORTING
Information reported shall meet the qualitative characteristics. Qualitative characteristics are  ASSETS- Are resource controlled by an entity as a result of past events, and from which future
the attributes that make information useful to others. economic to flow to the entity.
a. understandability THE KEY BENEFIT OF AN ASSET ARE:
b. relevance Control- means the ability to benefit from an asset or prevent others from benefitting from
c. materiality the asset.
d. timeliness Benefit- means the ability to use, exchange, lease, sell, or use the asset to settle liabilities,
e. reliability or distribute to its owners.
f. Faithful representation Past event- a transaction or event giving rise to control of future economic benefits must
g. Substance over form have occurred. A mere intention to acquire assets in the future does not result to the
h. neutrality recognition of assets in the present.
i. prudence  LIABILITIES
j. completeness Are present obligations of the entity arising from past events, the settlement of which is expected to
k. comparability result in an outflow from the entity of resources embodying economic benefits or service potential.

 EQUITY
Net assets/equity- is the residual interest in the assets of the entity after deducting all its liabilities.
 REVENUE
GENERAL PURPOSE FINANCIAL STATEMENTS Is the gross inflow of economic benefits or service potential during the reporting period when those
GENERAL PURPOSE FINANCIAL STATEMENTS are those intended to meet the needs of users inflows result in an increase in net assets/equity, other than increases relating to contributions from
who are not in a position to demand reports tailored to meet their particular information needs. owners.
 EXPENSES
Are decreases in economic benefits or service potential during the reporting period in the form of
outflows or consumption of assets or incurrence of liabilities that result in decreases in net
assets/equity, other than relating to distribution owners.