Government Accounting

&
Accounting for non-profit organizations
 Chapter 1
Overview of Government Accounting
 

Learning Objectives
 Differentiate government accounting
from the accounting for business entities.
 State the government entities charged
with accounting responsibility.
 Describe briefly the GAM for NGAs.
 State the basic principles used in
government accounting.
 State the recognition criteria for assets.
Definition of Government Accounting
 

“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.” (State Audit Code of the
Philippines, P.D. No. 1445, Sec. 109)
Objectives of Government Accounting
 
 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
offices in the receipt, disposition and utilization of funds
and property; and
 To report on the financial position and the results of
operations of government agencies for the information
and guidance of all persons concerned

(State Audit Code of the Philippines, P.D. No. 1445, Sec.

110)
Government Accounting vs. Business Accounting
 
Compared to the accounting for business
entities, government accounting places
greater emphasis on the following:
 Sources and utilization of government
funds; and
 Responsibility, accountability and liability
of entities entrusted with government
funds and properties.
 Responsibility, Accountability and
Liability over Government Funds and
Property 
 Government resources must be utilized
efficiently and effectively in accordance with
the law.
 The head of a government agency is directly
responsible in implementing this policy.
 All other personnel entrusted with the custody
of government resources are responsible to
the head of the government agency, are
accountable for the safeguarding thereof, and
are liable for any losses.
 Accounting responsibility

 
The following offices are charged with
government accounting responsibility:
1. Commission on Audit (COA)
2. Department of Budget and
Management (DBM)
3. Bureau of the Treasury (BTr)
4. Government agencies
 Commission On Audit (COA)

 
Responsibilities of COA
 Promulgate accounting and auditing
rules
 Keep the general accounts
 Submit financial reports

-Article IX-D, Section 2 par. (2) of the

1987 Constitution of the Philippines
-Presidential Decree No. 1445
Department of Budget and Management (DBM)
 

Responsibility of DBM
 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 funds and revenues
to effectively achieve the country’s
development objectives
-Section 2, Chapter 1, Title XVII, Book IV of the
Administrative Code of the Philippines
(Executive Order No. 292)
 Bureau of the Treasury (BTr)
 
Responsibility of BTr: cash custody and
control of disbursements.
 Receive and keep national funds,
management and control the
disbursements thereof;
 Maintain accounts of financial
transactions of all national government
offices, agencies and instrumentalities.
-Revised Administrative Code
Government Agencies 
Responsibility of government agencies
 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.
 The GAM for NGAs
 
 The Government Accounting Manual
for National Government Agencies
(GAM for NGAs) is promulgated by the
COA under the authority conferred to it
by the Philippine Constitution.
 The GAM for NGAs was promulgated
primarily to harmonize the government
accounting standards with the
International Public Sector Accounting
Standards (IPSAS). The IPSASs are
based on the IFRSs.
 Private Sector   Public Sector

GAAP GAGAP
Philippine Financial Philippine Public
Reporting Standards Sector Accounting
(PFRS) Standards (PPSAS)

Government
Accounting Manual
(GAM) for NGAs
• Volume I
• Volume II
• Volume III
 Objectives of the GAM for NGAs
 
To update the following:
 Standards, policies, guidelines and
procedures in accounting for
government funds and property;
 Coding structure and accounts; and
 Accounting books, registries,
records, forms, reports and financial
statements.
 Basic Accounting and Budget reporting Principles

 
 Compliance with PPSAS and relevant
laws, rules and regulations
 Accrual basis of accounting 
 Budget basis for presentation of budget
information in the financial statements
 Revised Chart of Accounts  
 Double entry bookkeeping
 Financial statements based on
accounting and budgetary records
 Fund cluster accounting
Fund clusters

 
 Qualitative Characteristics

 
 Understandability
 Relevance
Materiality
 Reliability
Faithful representation
Substance over form
Neutrality
Prudence
Completeness
 Comparability
Components of General Purpose Financial Statements

1. Statement of Financial Position;

2. Statement of Financial
Performance;
3. Statement of Changes in Net
Assets/Equity;
4. Statement of Cash Flows;
5. Statement of Comparison of
Budget and Actual Amounts; and
6. Notes to the Financial Statements
 APPLICATION OF CONCEPTS
 

ASSIGNMENT
OPEN FORUM
QUESTIONS????
REACTIONS!!!!!
END