Professional Documents
Culture Documents
Part 1 and Part II of AA 4102 Hand Outs 1
Part 1 and Part II of AA 4102 Hand Outs 1
the business. The government is vested the exclusive right to demand involuntary
contributions from its constituent in the form of taxes.
1. Objective –
CA – is geared towards income measurements aside from control of company
resources,
GA - is control of government funds to see to it that they are properly utilized
and provide
data to management for decision.
2. Basis of Accounting -
CA – either cash or accrual method is used but not a combination of both.
GA - the modified accruals basis of accounting is used.
Purposes:
1. Enables the Government Accountancy Office (GAO), GAS, COA to conduct
extensive analysis/review of the submitted FSs/reports.
2. Enables the auditor to tag as 'Audited' the FSs/reports in the central
database.
3. Facilitates the monitoring by COA of agencies' compliance with the required
submission of FSs/reports .
4. Facilitates consolidation of financial information needed in the preparation of
the AFR.
5. Provides real-time consolidation of financial information at the national level.
6. Provides e-learning modules/online video tutorials to capacitate the users on
how to use the system without undergoing a classroom-type of training
The Budget and Financial Accountability Reports ( BFRS ) prescribed under COA-
DBM Joint Circular # 2014-1 dated July 2, 2014 shall also be submitted to the
Government Accounting Sector: (GAS), COA and Agency’s COA Auditor, in addition to
the financial statements and reports stated above.
BFRS:
-. 1 -Statement of Appropriations, Allotments, Obligations, Disbursements and
Balances
(SAAODB)
- 1-A - Statement of Appropriations, Allotments, Obligations, Disbursements and
Balances
by Object of expenditures (SAAODBOE)
-. 1-B - List of Allotments and Sub-Allotments (LASA)
-. 2 - Statement of Approved Budget, Utilizations, Disbursements and Balances
(SABUDB)
- 2-A - Statement of Approved Budget, Utilizations, Disbursements and Balances
by
Object of Expenditures (SABUDBOE)
- 3 - Aging of Due and Demandable Obligations (ADDO)
- 4 - Monthly Report of Disbursements
- 5 - Quarterly Report of Revenue and other Receipts
Purpose:
- Easier and more efficient submission .by NGAs of the following financial
accountability
reports (FARs) required by COA pursuant to COA-DBM Joint Circular No.
2013-1
dated August 6, 2013:
- Enables the GAS to conduct extensive analysis/review of the submitted FARs.
- Facilitates the monitoring by COA of agencies' compliance with the required
submission of the FARs.
- Provides a central database for monitoring each agency's appropriations,
allotments,
obligations and disbursements on a quarterly basis, at the national level.
- Facilitates the consolidation of financial/budget information needed in the
preparation of
the required Annual Report on Appropriations, Allotment, Obligations and
Disbursements (ARAAOD)
- Provides e-learning modules/online video tutorials to capacitate the users on
how to
use the system without undergoing a classroom-type of training
4. Control Mechanism –
CA – none
GA – Fund accounting, obligation accounting and CDC accounting
5. Books of Accounts –
CA - only one set is kept
GA - one set of books is kept , Regular Agency (RA) Book, and maintain
Registries for budgetary accounts.
The financial resources of the Government are very limited. It relies heavily on collected
taxes. This means that it has to operate through a system of fiscal and accounting
controls. The following control mechanisms adopted as sub-systems of government
accounting are not adopted in commercial accounting:
Fund Accounting
Obligation Accounting
Cash Disbursement Ceiling (CDC) Accounting
Fund Accounting. A fund is a sum of money or other resources set aside for
the purpose of carrying out specific activities or attaining certain objectives in
accordance with specific regulations, restriction, and limitations.
The two major classification of funds as to purpose for which they may be used:
1. General Fund – one which is generally available for all functions of the government .
2. Special Fund - one which, by legislative action, segregates specified revenues for specific
purposes.
for which recipient agencies/departments have not yet identified during budget
preparation. Ex.
Calamity fund, contingent fund, pension and gratuity fund.
release to government agencies in the form of allotments, and any additional amount
granted by the DBM to liquidate or pay existing valid obligation.
The ultimate authority for decision-making in the Philippine government rests with the
people. This authority is exercised through duly elected representatives, acting as
agents of the people. It is the sovereign right of the people to change them if the
authority is misused or abused.
The President, as chief executive, formulates national policies, which specify the goals
of government and determine the courses of action that the government should take in
different aspects of public affairs.
On the basis of national policy, the President submits a budget to the legislative body for
consideration and processed until approved and passed into a law.
At all levels of government, decision-making should comply with existing laws and
regulations. Questions and issues involving the settlement of money claims,
determination of dispute or settlement of a controversy on the issue as to legality and/or
propriety of such claims are submitted for resolution to the COA in connection with the
discharge of its audit function. Questions involving legal interpretation and/or application
of law are submitted for decision to the courts.
The Head of the agency is made immediately and primarily responsible for all
government funds and property pertaining to his agency. Secondary responsibility is
made to rest on the persons entrusted with the actual possession or custody of the funds
or property. They are the accountable officers and are immediately responsible to
the agency head.
The imposition of primary responsibility on the agency head for government funds and
property is in keeping with the concept of fiscal responsibility now lodge with agency
head.
The head of the agency shall exercise the diligence of a good father or a family in
supervising accountable officers to prevent the occurrence of loss/wastage of
government funds and property, otherwise, he shall be jointly and solidarily liable with
the person primarily accountable thereof.
The Commission on Audit serves as the external auditor of the government agencies.
It is a constitutional office and its mandates are provided in Section 2, Art. IX-D of the
1986 Constitution of the Philippines. The COA keeps the general accounts of the
national government , prescribes the standard chart of accounts, promulgates
accounting rules and regulations and exercise technical supervision over the accounting
functions of each agency. The office is mandated by the Constitution to submit to the
President and the legislative body within the time frame fixed by law, an annual audit
report of the government, its subdivision, agencies and instrumentalities including
government owned or controlled corporations and recommend measures necessary to
improve efficiency and effectiveness.
The DBM determines the accounting and other item of information needed to monitor
budget performance and assess effectiveness of the agency operation. It prescribes the
forms, schedules of submission and other component of reporting system needed to
accomplish and submit the required information. It approves the Agency Budget Matrix
and issues the allotments to agencies in accordance with the approved budget and issues
Notice of Cash Allocation.
The Bureau of Treasury (BTr) performs banking function for the national government.
It receives and keeps government funds, controls the disbursements thereof and maintain
accounts of the financial transactions of national government agencies. It is required to
prepare and submit to the COA and other fiscal activities, a daily statements of cash
receipts, disbursements and fund balances in the National Treasury.
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 or the BTr and the budget records of the COA and
DBM.
In government, authority is often used interchangeably with the term "power". However,
their meanings differ: while "power" is defined as 'the ability to influence somebody to
do something that (s)he could not have done' , "authority" refers to a claim of legitimacy,
the justification and right to exercise that power.
Pursuant to this policy, the State requires from public officers and employees the
following:
1. Compliance with laws and regulations, Laws and rules, Agency policies, Agency
manuals of operations; and Provisions of contracts, MOA
2. Safeguarding of government resources from loss and waste
3. Achieving goals and objectives
Primary sources:
1. Pronouncement of the Commission on Audit - COA is mandated by the
Philippine Constitution to promulgate accounting rules and regulations to
facilitate the keeping and enhance the informational value of the accounts of
the government.
2. Provision of law - Sec. 112 of the PD 1445 provides that generally accepted
accounting principles should be observed in government accounting entities a
provided they do not contravene existing laws and regulations.
Secondary source:
From the pronouncements and issuances by other government agencies.
What is Assertions?
Assertion is the expressed or implied representation by management that is
reflected in their transactions, accounts, financial statements, records, reports and that
they are claiming that they have complied with the accountability requirements of the
state policy.
When the agencies issue their financial reports and statements they are asserting the
following:
2. Completeness – This deals with whether all transactions and accounts that should
be presented in the financial statements are included.
3. Rights and Obligations - This deals with whether assets are actually owned by
the agency and liabilities are the obligation of the agency at a given date.
4. Valuation or Allocation - This deals with whether or not the asset, liability,
revenue and expenses components have been included in the financial statements
at appropriate amounts.
5. Presentation and Disclosure – This deal on whether particular components of the
financial statements are properly classified, described and disclosed.
Assertions on Achievement of Goals and Objectives (Performance or Value for Money
Accountability)
When the agencies prepare and submit to proper authorities their reports on the
performance of an activity or a project, the agency is asserting that they used and
managed the resources for that activity or project in an economical, efficient and effective
manner.
Efficiency refers to the relationship between goods or services produced and resources
used to produce them. The measurement of efficiency involves the determination of
whether an agency is managing or utilizing its resources in an efficient manner as well as
establishing the causes of any inefficiencies, including inadequacy in management
information systems, administrative procedures or organizational structure.
Effectiveness is concerned with the relationship between the outputs and the goals of the
agency. Measuring effectiveness will determine whether the desired results are achieved,
whether the objectives set by the agency are met, and whether the agency has considered
alternatives that yield desired results at a lower cost.
PART II
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.
Sec. 1. Legal Basis. The Government Accounting Manual (GAM) is prescribed by COA
pursuant to Article IX-D, Section 2 par. (2) of the 1987 Constitution of the Republic of
the Philippines which provides that:
“The Commission on Audit shall have exclusive authority, subject to the
limitations
in this Article, to define the scope of its audit and examination, establish the
techniques
and methods required therefor, and promulgate accounting and auditing rules
and
regulations, including those for the prevention and disallowance of irregular,
unnecessary, excessive, extravagant, or unconscionable expenditures, or uses of
government funds and properties". (Underscoring supplied)
Coverage:
This Manual presents the basic accounting policies and principles in accordance with
the Philippine Public Sector Accounting Standards (PPSAS) adopted thru COA
Resolution No. 2014-003 dated January 24, 2014 and other pertinent laws, rules and
regulations. It includes the Revised Chart of Accounts (RCA) prescribed under COA
Circular No. 2013-002 dated January 30, 2013, as amended; the accounting procedures,
books, registries, records, forms, reports, and financial statements; and illustrative
accounting entries. It shall be used by all National Government Agencies (NGAs) in the:
a. preparation of the general purpose financial statements in accordance with the
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.
BASIC FEATURES AND POLICIES. The GAM has the following basic features and
policies,
to wit:
a. Accrual Accounting. A modified accrual basis of accounting shall be used.
Under this
method, all expenses shall be recognized when incurred and reported in the
financial
statements in the period to which they relate. Income shall be on accrual basis
except for
transactions where accrual basis is impractical or when other methods
required by law.
b. One Fund Concept. This system adopts the one fund concept. Separate fund
accounting
shall be done only when specifically required by law or by a donor agency or
when
otherwise necessitated by circumstances subject to prior approval of the
Commission.
c. Chart of Accounts and Accounts Codes. A new chart of accounts and coding
structure with eight mandatory digits shall be adopted. (See Revised Chart of
Accounts, COA C2020-001,)
d. Books of Accounts and Registries. The books of accounts and registries of the NG
entities consist of:
a. Journals
1. General Journal (GAM Appendix 1)
2. Cash Receipts Journal (GAM Appendix 2)
3. Cash Disbursements Journal (GAM Appendix 3)
4. Check Disbursements Journal (GAM Appendix 4)
b. Ledgers
1. General Ledgers (GAM Appendix 5)
2. Subsidiary Ledgers (GAM Appendix 6)
c. Registries
1. Registries of Revenue and Other Receipts (GAM Appendices 7, 7A, 7B, 7C
and 7D)
2. Registry of Appropriations and Allotments (GAM Appendix 8)
3. Registries of Allotments, Obligations and Disbursements – for PS, MOOE,
CO and FE
(GAM Appendices 9A, 9B, 9C and 9D)
4. Registries of Budget, Utilization and Disbursements (GAM Appendices 10A,
10B, 10C
and 10D)
f. Two-Money Column Trial Balance. The two - money column trial balance
showing the account balances shall be used.
h. Notice of Cash Allocation (NCA). The receipts of NCA by the agency shall
be recorded in the books as debit to account "Cash- Modified Disbursement
System
(MDS) Regular" and credit to account "Subsidy from National
Government". (Refer to the latest issuance by DBM as regards to releases of
NCA) (COA-Circular#_____)
w. Petty Cash Fund. The Petty Cash Fund shall be maintained under the
imprest system. As such, all replenishment shall be directly charged to the
expense account and at all times,
the Petty Cash Fund shall be equal to the total cash on hand and
unreplenished expenses. The Petty Cash Funds shall not be used to purchase
regular inventory/items for stock.