1. To provide information concerning past operations and government affairs.

The data will serve as a guide in the

present conditions - enable the evaluation of the performance of their duties.
The Need to Study Government Accounting performance of an agency from one period to the next. 4. The students of public finance and political and other
2. To provide basis for guidance for future operations - social scientists who need financial information in the
Firstly, it is a board subject. Secondly, additional employment results of the evaluation may guide the manager on pursuit of their research/studies; and
opportunity, such as: what proper course of action to follow in a future 5. The resource providers of the government such as:
operations. a) donors and grantors - assess how well the
a) Biggest employer of accounting graduates and CPAs 3. To provide for control of the acts of public bodies and objective of a donation or grant have been
b) Other forms of employment such as computer offices in the receipt, disposition and utilization of funds accomplished;
programmer, financial management analyst and properties. b) taxpayers - know how the services provided
c) There are various job opportunities open 4. To report on the financial position and the results of by the government are likely to affect the
operations of government agencies for the information amount and fees they will be required to
The general public can understand and analyze government
and guidance of all persons concerned - show the extent pay; and
financial statements published for their scrutiny and better
of the agency’s financial and non-financial resources. c) lenders, suppliers and employees - know
judgment.
whether the government can pay its
Government Accounting obligation to them
Section 109 of PD 1445 defines government accounting as:
Is a service activity with the main purpose of providing quantitative Accounting Concepts and Conventions
Government Accounting encompasses the processes of
information, primarily financial in nature about the government
analyzing, recording, classifying, summarizing and communicating
entity that is useful in: Concepts - provides the rules of accounting that should be followed
all transactions involving the receipts and disposition of
of all accounts and financial statements. It provides the foundation
government funds and property and interpreting the results 1. Assessing the stewardship and the aspects of for accounting processes.
thereof (ARCSCI). performance of public officials for which they are
accountable 1. Entity Concept - a separate identity apart from its owner
Types of government organizational:
2. Planning, program selection and budgeting 2. Money Measurement Concept - all transactions are
1. National Government - include all departments, 3. Making decision involving the effective and efficient assumed to be measured and recorded in stable
bureaus, offices, boards, commissions, councils, allocation and control of government resources monetary units. Only those transactions which can be
authorities, administrations, institutions, state colleges measured in terms of money are recorded.
PROCESS 3. Modified Accrual Concept - for each accounting period,
and universities and other organizational units under
the national government. expenses are recognized when they are incurred not
Consolidates all activities pertaining to the gathering of data, which
2. Local Government - political subdivisions of the necessarily when cash is disbursed and income is
are to be used as the basis for fiscal management decisions:
Philippines having substantial control over local affairs, recognized when earned not necessarily when cash is
consisting of provinces, cities, municipalities and 1. Bookkeeping , referring to as analysis and recording; received except for transactions where accrual basis is
barangays. 2. Posting, grouping or classifying of similar items impractical or when other basis may be required by law.
3. Government Corporations - agencies organized by law 3. Preparation of periodic financial reports 4. Going-Concern Concept - an entity is an on-going
or pursuant to law, vested with functions relating to 4. Analysis of the financial reports - determine their concern and will continue in operations for the
public needs whether government or proprietary in accuracy and adequacy as well as the efficiency and foreseeable future.
nature, owned by the government directly or through effectiveness of agency operations 5. Dual-Aspect Concept - every transaction affects two or
its instrumentalities either wholly or, where applicable more accounts.
as in case of stock corporation, to the extent of at least Users of Government Accounting Information (MALe GeStuRe) 6. Cost Concept - the value of an asset is to be determined
fifty percent of its capital stock. on the basis of historical cost i.e. acquisition cost.
PRIMARY OBJECTIVE OR PURPOSE - to provide information 7. Objectivity Concept - recorded in an objective manner,
“Government” means the National Government, including the concerning government operation free from the personal bias of either management or
Executive, Legislative, the Judicial Branches and the Constitutional the accountant who prepares the accounts.
1. The general public or the citizenry – the group which has
Commissions. (PD 1177 otherwise known as the Budget Reform 8. Timeliness Concept - this principle states that the
interest on the information about government services.
Decree of 1077). information should be provided to the users at the right
2. The legislative body - uses the financial data to see to it
time for decision making purposes.
Objectives of Government Accounting: that policies are being implemented and that funds are
being properly handled. Conventions - custom or generally accepted practice which is
Section 10 of PD 1445 sets down the objectives or functions of 3. The managers/administrators - responsible for the adopted either by general agreement or common consent among
government accounting: implementation of the policies and daily conduct of accountants.
 1. Full Disclosure - information relating to the entity’s Accountability over Government Funds and Property COMMISSION ON AUDIT
affairs which are of material interest to the users should
be completely disclosed 1. A government officer entrusted with the possession of The Commission on Audit serves as the external auditor of the
2. Consistency - “the accounting methods and practices government resources is responsible for the government agencies. It is a constitutional office and its mandates
should be applied on a uniform basis from period to safekeeping therefor in accordance with the law. Every are provided in Section 2, Art. IX-D of the 1987 Constitution of the
period”. accountable officer shall be properly bonded. Philippines.
3. Conservatism Concept - avoidance of overstating 2. The transfer of government funds from one officer to
another shall, except as allowed by law, be made only The COA examine, audit and settle all accounts pertaining to
estimates. (3) Qualitative characteristics of financial
after the authorization of the COA. The transfer shall be revenues or receipts and expenditures or uses of government funds
statements namely: ◈ prudence ◈ neutrality ◈ faithful
properly documented in an invoice and receipt. and property, keeps the general accounts of the national
representation of alternative values
government , prescribes the standard chart of accounts,
4. Materiality - strict adherence to GAAP is not required
Liability over Government Funds and Property promulgates accounting rules and regulations and exercise
when the items are not significant enough to affect
technical supervision over the accounting functions of each agency.
evaluation, decision and fairness of the financial 1. The unlawful use of government resources shall be the
statements. According to an American Accounting personal liability of the employee found to be directly The office is mandated by the Constitution to submit to the
Association, “an item should be regarded as material if responsible therefor. President and the legislative body within the time frame fixed by
there is reason to believe that knowledge of it could 2. Every accountable officer shall be liable for all losses law, an annual audit report of the government, its subdivision,
influence decision of informed parties”. resulting from the unlawful use or negligence in the agencies and instrumentalities including government owned or
safekeeping of government resources. controlled corporations and recommend measures necessary to
“Accountability”
3. No accountable officer shall be relieved from liability improve efficiency and effectiveness.
❖ is the obligation of a public officer/employee to answer merely because he has acted under the direction of a
superior officer in unlawfully utilizing the government Department of Budget and Management (DBM)
for the responsibility conferred on him/her.
resources entrusted to him, unless before that act, he
The DBM is responsible for the design, preparation, and approval
“Responsibility” has notified the superior officer, in writing, that the
of the accounting systems of government agencies, determines the
utilization is illegal. The superior officer shall be
❖ to respond to the concerns of individuals or groups, the accounting and other item of information needed to monitor
primarily liable while the accountable officer who fails
public he/she is to serve, within the overall context of budget performance and assess effectiveness of the agency
to serve the required notice shall be secondarily liable.
his/her obligations for which he/she has the operation
4. An accountable officer shall immediately notify the COA
appropriate Authority. for any loss of government funds from unforeseen The DBM is responsible for the formulation and implementation of
events (force majeure) within 30 days. Failure to do so the national budget with the goal of attaining the nation’s socio-
“Authority”
will not relieve the officer of liability. economic objectives.
❖ is often used interchangeably with the term "power".
Accounting Responsibility - Under PD 1445, accounting Bureau of Treasury
However, their meanings differ: while "power" is
responsibility for all government funds and property is entrusted,
defined as 'the ability to influence somebody to do
immediately and primarily, to the head of the government agency The Bureau of Treasury (BTr) function under the Department of
something that (s)he could not have done', "authority"
or office. It is the duty of the head of the agency to take reasonable Finance and is the cash custodian of the government. The BTr is
refers to a claim of legitimacy, the justification and right
steps to minimize, if not to avoid the risk of losses, defalcations and authorized to:
to exercise that power.
other types of irregularities in the utilization of all government
resources (to safeguard the resources of the government under his a) Received and keep national funds and manage and
Responsibility, Accountability, and Liability over Government
custody) and periodic reporting to concern authorities. His control the disbursements thereof.
Funds and Property
responsibility, however, is supervised by higher authorities and b) Maintain accounts of financial transactions of all
Responsibility over Government Funds and Property government bodies. national government offices, agencies, and
instrumentalities.
1.) Government Resources shall be utilized efficiently and The following offices are charged with government accounting
effectively in accordance with the law. The head of a responsibility: Government Agencies
government agency is directly responsible in
a) Commission on Audit (COA) Government Agency refers to any department, bureau, or office of
implementing this policy and is primarily responsible for
b) Department of Budget and Management (DBM) the national government, or any of its branches and
government resources entrusted to his agency.
c) Bureau of Treasury (BTr) instrumentalities, or any political subdivision, as well as any
2.) All those who are exercising authority over a
d) Government Agencies government owned and controlled corporation (GOCC), including
government agency shall share fiscal responsibility
its subsidiaries, or self-governing board or commission of the
government.
The government agencies are responsible in directly implementing
the projects of and performing the functions delegated by the
government.

Each agency 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 the DBM.

Government agencies are required by law to have accounting

units/office/departments.

GAM for NGAs

An old accounting system has been used for about five decades
before it was replaced by the New Government Accounting System
(NGAs) in 2002. However, on January 1, 2016, the NGAS was
replaced by the Government Accounting Manual for National
Government Agencies (GAM for NGAs)

The GAM for NGAs was promulgated primarily to harmonize the

government accounting standards with international accounting
standards, particularly, the International Public Sector Accounting
Standards (IPSAS).

The GAM for NGAS was promulgated by the COA based on the
authority conferred to it by the Philippine Constitution.

Objectives of GAM for NGAS:

❖ 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

The financial records and reports of government entities shall

comply with the following:

❖ Philippine Public Sector Accounting Standards (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 prescribed by COA.
❖ Double entry bookkeeping
❖ Financial statements based on accounting and
budgetary records
❖ Fund clustering accounting