OVERVIEW 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
 OBJECTIVES
❖ To provide quantitative information concerning
past operations and present conditions.
❖ To provide a basis for guidance for future
operations.
❖ To provide for control of the account of public
entities and officers in the receipt, Disposition
and utilization funds and properties, and
❖ To report on the financial position and the result
of the operations of the government agencies
for the information of all persons concerned.
 DISTINCTIONS BETWEEN GOVERNMENT AND COMMERCIAL
ENTERPRISES

Government Commercial

● Entire people in the ● Few

community stockholders,partners
● Renders service as and owners
lowest as possible ● For profit
cost
● Lies in congress ● Succession of
● Exclusive right to responsibility and
demand involuntary authority
contributions ● Voluntary contribution
from members
Features of
Government 1. General Fund – one which is generally
Acounting available for all functions of the
government.
1. Fund Accounting 2. Special Fund - one which, by
legislative action, segregates specified
revenues for limited purposes.

2. Obligation Control by providing a ceiling-

Accounting max extent that can be incur

3. Cash Disbursement
Limitation of cash operation; 1.
Ceiling (CDC) Allotment, 2. Addt’l DBM granted to
Accounting pay valid obligation
Responsibility
Accounting
all government funds and
property is entrusted,
immediately and primarily, to The Head of the agency is made
the head of the government immediately and primarily
agency or office. responsible for all government funds
and property pertaining to his agency.
His responsibility, however, is Secondary
supervised by higher responsibility is made to rest on the
authorities and government persons entrusted with the actual
bodies. possession or custody of the funds or
property. They are the accountable
officers and are immediately
responsible to the agency head.
Commission on Department of Bureau of
Audit Budget and Treasury
- serves as the -
Management,
responsible for the - It receives and keeps
external design, preparation, government funds,
auditor of the and approval of the controls the
government disbursements thereof
agencies. accounting systems of
government agencies
- Promulgate - maintain accounts of
accounting and - determines the the financial
auditing accounting and other
transactions of
standard national government
item of information
agencies.
needed to monitor
budget performance
consist of various organizational units.
and assess
National Government These agencies are required to establish
effectiveness
Agencies (NGAs) and maintain a system of accounting for
their financial resources and operation in
accordance with pertinent rules and
Assertions of Compliance with
Accountability Requirements
When the agencies issue their financial reports and statements they are asserting the
following:
1. Existence or Occurrence - assets or liabilities of the audited agency actually exist
at a given date, and whether recorded transactions have occurred during the given
period.
2. Completeness – whether all transactions and accounts that should be presented in
the financial statements are included.
3. Rights and Obligations - whether assets are actually owned by the agency and
liabilities are the obligation of the agency at a given date.
4. Valuation or Allocation - whether or not the asset, liability, revenue and expenses
components have been included in the financial statements at appropriate amounts.
5. Presentation and Disclosure – whether particular components of the financial
statements are properly classified, described and disclosed.
Assertions on Achievement of Goals
and Objectives (Performance or Value
for
Moneyof Accountability)
Performance government entities is measured from the point of view of
economy,efficiency and effectiveness.

Economy refers to the reasonableness of cost incurred.

Efficiency refers to the relationship between goods or
services produced and resources used to produce them.
Effectiveness is concerned with the relationship
between the outputs and the goals of the agency.
 The GAM
Government Accounting Manual
The Budgetary Process
 THE NATIONAL BUDGET
Budget Reform Decree
or PD No. 1177.

A government budget is a plan for financing

the government activities of a
fiscal year prepared and submitted by
responsible executive to a representative
body
whose approval and authorization are
necessary before the plan can be executed.
Fundamental Principles of
Fiscal Operations
1. All money is paid out if there is only an an appropriation law
2. Solely for public purposes;
3. Trust funds only for the specific purpose
4. Fiscal responsibility shall be shared by all those exercising
authority
5. Disbursements or disposition bear the approval of the proper
officials;
6. Claims shall be supported with complete documentation;
7. All laws and regulations applicable shall be faithfully adhered
to; and
Kinds of Budgets a. Annual Budget – a budget which covers a period of one year.

1. As to Nature b. Supplemental budget – a budget which purports to supplement or

adjust a previous budget

c. Special budget – a budget of special nature and generally

submitted in special forms on account
a. Performance Budget – emphasizing the programs or services
conducted and based on functions, activities and projects which focus
2. As to Basis
attention upon the general character and nature of the work to be done.
b. Line-Item Budget – basis of which are the objects of expenditures
such as salaries and wages, travelling expenses, freight, supplies,
materials and equipments, etc..

a. Zero-Based Budgeting
3. As to Approach
and Technique
b. Incremental Approach
THE BUDGET CYCLE
Preparation, Legislation, Execution,
Accountability
Budget Preparation
Development Budget Coordinating Committee
(DBCC)
-determines the overall expenditure levels, the revenue
projections, the deficit levels and the financing plan.
- Compose of Budget Secretary as Chairman and the
Economic Planning Secretary, the Bangko Sentral ng
PRES.
BUDGET CALL HEARING PRESENTATION
Pilipinas and the Finance Secretary as members. BUDGET
Budget Legislation
The President submits the overall budget that he/she approved
to Congress in the form of a detailed Expenditure Program
(National Expenditure Program) accompanied by the Budget of
Expenditures and Sources of Financing, The President’s Budget
Message and the Regional Allocation of the Expenditure
Program.
HOUSE SENATE BICAMERAL RATIFICATION & PRES.
ENACTMENT
DELIBERATION DELIBERATION DELIBERATION ENROLLMENT

General Appropriation Act

Budget Execution
the DBM requires the different agencies of government to prepare the Agency
Budget Matrix (ABM) to be accompanied by the Annual Cash Program.

Release
Incurrence of Disbursement
Guidelines ALLOTMENT
Obligation of Authority
and BEDs
Budget Accountability
This refers to the evaluation of actual performance and initially
approved work targets. Comparison with the plans and targets
submitted by the agencies at the time that their respective
budgets are prepared.

Budget
Performance
Accountabilit COA Audit
Reviews
y Reports
The Registries
1.Registries of Revenue and Other Receipts
(RROR)
2.Registry of Appropriation and Allotments
(RAPAL)
3.Registries of Allotments, Obligations and
Disbursements (RAOD)
4.Registries of Budget, Utilization and
Disbursement (RBUD)
Technically, only the journals and Ledgers are considered
accounting records. The registries are budget records.
 Records of the Agency
Upon receipt of the approved ABM and ARO, the Budget Officer
shall record the allotment to the respective registries through
the Allotment and Obligation Slips (ALOBS). Although the
agency will not journalize its appropriation and allotments, it
shall maintain four registries for the obligations it incur:

- Registry of Allotment and Obligations – Capital Outlay

(RAOCO)
- Registry of Allotment and Obligations – Maintenance and
Other
Operating Expenses (RAOMO)
- Registry of Allotment and Obligations – Personal Services
(RAOPS)
Personal Services- pertains to all types of employee
benefits.
Eg. salaries , bonuses, allowances, cash gifts.

Maintenance and Other Operating Expenses -

pertains t various operating expenses other than employee
benefits and financial expenses , e.g. travel, utilities,
supplies

Financial Expenses - pertains to finance cost e.g. interest

expense, bank charges etc. also include foreign exchange
transaction
Accounting of Obligations:
a. Receipt of Allotment Posting in the allotment column to the
respective Registries.

b. Incurrence of obligation Posting in the obligation column of the

RAO’s
Ex. RAOPS for PS obligations or expenditures

Notice of Cash Allocation(NCA) specifies the maximum amount of withdrawal that an

agency can make from the National Treasury through the issuance of MDS checks or other
authorized mode of disbursement. This is issued by DBM based on the Annual Cash
Program or as requested and prescribed under the Modified Disbursement System (MDS).

Upon receipt of the NCA, the accountant shall record in the books as:

Cash-National Treasury, MDS 106 XX

Subsidy Income from National
Government 63
XX