Professional Documents
Culture Documents
Government Accounting Notes
Government Accounting Notes
Compared to the accounting of business entities, government accounting places greater emphasis on
the following:
a. Government resources must be utilized efficiently and effectively in accordance with the law.
b. The head of a government agency is directly responsible in implementing this policy.
c. All other personnel entrusted with the custody of the government resources are responsible to
the head of the government agency, are accountable for the safeguarding thereof, and are liable
for any losses.
COMMISSION ON AUDIT
Responsibilities of COA
Responsibilities of DBM
a. Implementation of the national budget (set the goals and prioritization of the budget)
BUREAU OF TREASURY
Responsibilities of BTr
GOVERNMENT AGENCIES
a. 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
a. 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
b. The Gam for NGAs was promulgated to harmonize the government accounting standards with
the International Public Sector Accounting Standards (IPSAS). The IPSASs are based on the IFRS.
a. Standards, policies, guidelines and procedures in accounting for government funds and property
b. Coding structure and accounts; and
c. Accounting books, registries, records, forms, reports and financial statements
QUALITATIVE CHARACTERISTICS
a. Understandability
b. Relevance
c. Materiality
d. Timeliness
e. Reliability
f. Faithful Representation
g. Substance over Form
h. Neutrality
i. Prudence
j. Completeness
k. Comparability
NATIONAL BUDGET (government budget) is the government’s estimate of the sources and uses of
government funds within a fiscal year. This forms the basis for expenditures and is the government’s key
instrument for promoting its socio-economic activities.
Performance-Informed Budgeting (PIB) – National Expenditure Plan (NEP) and GAA 2014 will show the
link between the fund allocated for government programs and the projected results and outcomes of
these.
1. Budget Preparation
a. Budget Call – issued by DBM. It includes next year fiscal year’s targets, agency’s budget
ceiling and other guidelines in the completion and submission of agency budget proposal.
b. Budget Hearings – Government agencies defend their budget before the technical panel of
DBM and subject for review and recommendation.
c. Presentation to the Office of the President – proposed budget is presented by DBM to the
President and its cabinet members for further refinement.
2. Budget Legislation
a. House Deliberations – c/o the House Appropriation Committee (composed of 129
members/representatives). End product is House version of General Appropriations Bill
(GAB)
b. Senate Deliberations – c/o Senate Finance Committee. End product is Senate version of
General Appropriations Bill (GAB).
c. Bicameral Deliberations – to harmonize the two GABs.
d. President’s Enactment – President and DBM will review the GAB. End product is General
Appropriations Act (GAA)
The Approved Budget
Appropriation – is the authorization made by a legislative body to allocate funds for purposes
specified by the legislative or similar authority.
3. Budget Execution
a. Release Guidelines and BEDs – DBM will issue guidelines in the release and utilization of
funds. Agency’s are required to submit their Budget Execution Documents (BED) as
reporting requirements to the DBM every November 30 before that particular financial year.
c. Incurrence of Obligations
d. Disbursement Authority – DBM issues disbursement authority. This is the point where the
government agencies obtain access to government funds.
I. Notice of Cash Allocation (NCA) – authority issued by the DBM to central, regional
and provincial offices and operating units to cover their cash requirements. The NCA
specifies the maximum amount of cash that can be withdrawn from a government
servicing bank in a certain period.
II. Notice of Transfer of Allocation – authority issued by an agency’s Central Office to
its regional and operating units to cover the latter’s cash requirements.
III. Non-Cash Availment Authority – authority issued by the DBM to agencies to cover
the liquidation of their actual obligations incurred against available allotments for
availment of proceeds from loans/grants through supplier’s credit/constructive
cash.
IV. Cash Disbursement Ceiling – authority issued by the DBM to agencies with foreign
operations allowing them to use the income collected by their Foreign Service Posts
to cover their operating requirements.
4. Budget Accountability – this phase occurs concurrently with budget execution. Budget is
regularly monitored to determine the conformance of actual results with planned target.
a. Budget Accountability Reports – government agencies are required to submit the following
accountability reports:
i. Monthly Report of Disbursements
ii. Quarterly Physical Report of Operations
iii. Statement of Appropriation, Allotment, Obligation and Disbursement Balances
iv. Summary of Appropriation, Allotment, Obligations, Disbursements Balances by
Object of Expenditure
v. List of Allotments and Sub-allotments
vi. Statement of Approved Budget Utilization, Disbursements and Balances
vii. Summary of Approved Budget Utilization, Disbursements and Balances by Object of
Expenditure
viii. Quarterly Reports of Revenue and Other Receipts
ix. Aging of Due and Demandable Obligation
Submission of Reports
i – every month
b. Performance Reviews – done by COA and DBM. Performed the periodic reviews in agency’s
performance and budget accountability and report to the President.
1. Journals
a. General Journal
b. Cash Receipt Journal
c. Cash Disbursements Journal
d. Check Disbursements Journal
2. Ledgers
a. General Ledgers
b. Subsidiary Ledgers
a. Registries of Revenue and Other Receipts (RROR) – used to monitor the revenue and other
receipts estimated or budgeted, collected and remitted/deposited to the National
Government/Bureau of Treasury.
b. Registry of Appropriations and Allotments (RAPAL) – used and monitor when there is
appropriations and allotment movement.
c. Registries of Allotments, Obligations and Disbursements (RAOD) – shows the allotment received
for the year, obligations incurred, and the actual disbursement.
d. Registries of Budget, Utilization and Disbursements (RBUD) – to record the approved special
budget and the corresponding utilization of disbursement that is charged to Retained Earnings.
Object of Expenditures
Obligation Request Status – another form used by the government in terms of monitoring
disbursements and budget
1. Receipt of Appropriation
PS 100,000.00
MOOE 60,000.00
FE -
CO 200,000.00
Total Appropriations
for CY 2020 360,000.00
PS 90,000.00
MOOE 40,000.00
FE -
CO 170,000.00
Total Allotments
for CY 2020 300,000.00
Registries and
Other Records Journal Entry
RAPAL None
RAOD - PS
RAOD - MOOE
RAOD - CO
3. Incurrence of Obligation
Registries and
Other Records Journal Entry
RAOD - PS None
RAOD - MOOE
RAOD - CO
3 ORS
Note: In government entity, obligation means an act of a duly authorized official which binds the
government to the immediate or eventual payment of a sum of money. In business entity,
another term for liability.
Notice of Obligation Request and Status Adjustment (NORSA)
4. Notice of Cash Allocation (NCA) – specifies the maximum amount of withdrawal that an entity can
make from a government bank for the period indicated. Collecting officers shall not issue an
Official Receipt (OR) for the receipt of NCA.
Entity A receives NCA from the DBM amounting to P200,000, net of tax
Registries and
Other Records Journal Entry
RANCA Cash - MDS Regular 200,000
Subsidy from National Government 200,000
Registry of Allotments and Notice of Cash Allocation (RANCA) – used to determine the amount of
allotment not covered by NCA and to monitor the available balance of NCA.
Registry of Allotment and Notice of Transfer of Allocation (RANTA) – used to determine the
amount of allotments not covered by NTA and to monitor the available balance of NTA
5. Disbursement
Registries and
Grant of cash Other Records Journal Entry advance for
payroll ORS Advances for Payroll 25,000
CASH - MDS, Regular 25,000
Registries and
Other Records Journal Entry
Liquidation of Due to Officers/Employees 25,000 Payroll Fund
Advances for Payroll 25,000
Registries and
Other Records Journal Entry
Cash - TRA 10,000.00
Subsidy from the National Government 10,000.00
To recognize the constructive receipt of NCA for TRA
Due to BIR 10,000.00
Cash - TRA 10,000.00
To recognize the constructive remittance of taxes withheld
to the BIR through TRA
6. Collection
- PD 1445 requires all collections must be remitted to the National Treasury
- Collection and Remittance are recorded in the Cash Receipts Journal
P100,000 from the billed revenue and remits the collection to the BTr
Cash – CO 100,000.00
To recognize remittance of income to BTr
Government entities are required to revert any unused NCA at the end of the accounting period.
170,000.00 end
Registries and
Other
Records Journal Entry
Subsidy from
RANCA National Government 170,000.00
1. Appropriation
2. Allotment
3. Incurrence of Obligation
4. Disbursement Authority - NCA
5. Disbursements
6. Billings, Collections and Remittances
7. Unadjusted Trial Balance
8. Adjusting Entries
9. Pre-closing Trial Balance
10. Closing Entries
11. Post-Closing Trial Balance
12. Preparation of Financial Statements
Revenue – gross inflow of economic benefits or service potential during the reporting period
when those inflows result in and increase in equity, other than increases relating to
contribution from owners. Received or receivable.
Receipts – is the actual cash collections from all sources during a period.
Amounts received in trust and from business-type activities of government may be separately
recorded and disbursed in accordance with such rules and regulations.
Receipts shall be recorded as revenue of special, fiduciary or trust funds or funds other than the
GF, only when authorized by law as implemented by rules and regulations issued by the
Permanent Committee.
No payment of any nature shall be received by a collecting officer without immediately issuing
an official receipt in acknowledgment thereof.
Where mechanical devices (e.g. electronic official receipt) are used to acknowledge cash
receipts, the COA may approve, upon request, exemption from the use of accountable forms.
At no instance shall temporary receipts be issued to acknowledge the receipt of public funds.
Pre-numbered ORs shall be issued in strict numerical sequence. All copies of each receipt shall
be exact copies or carbon reproduction in all respects of the original.
An officer charged with the collection of revenue or the receiving of moneys payable to the
government in the form of checks issued in payment of government obligations, upon proper
endorsement and identification of the payee or endorsee.
At no instance should money in the hands of the CO be utilized for the purpose of cashing
private checks.
Under such rules and regulations as the COA and the Department of Finance (DOF) may
prescribe, the Treasurer of the Philippines and all AGDB shall acknowledge receipt of all funds
received by them, the acknowledgment bearing the date of actual remittance or deposit and
indicating from whom and on what account it was received.
Example: Assume that on August 5, 2020 , Entity A received a 60-day, 9%, P12,000
promissory note from X entity for accounting manuals sold. On October 4, 2020,
Entity X paid cash in settlement of its note.
Oct-04
Cash - Collecting Officers 10101010 12,180.00
Notes Receivable 10301020 12,000.00
Interest Income 40202210 180.00
To recognize the collection of notes receivable
Revenue from non-exchange transactions are derived mostly from taxes, fines and
penalties, gifts, donations and goods in kind.
Tax Revenue
Others
Other Receipts
Regular
Cash - Modified Disbursement
System (MDS) - Regular 10104040 100,000.00
Subsidy from Nat'l Government 40301010 100,000.00
To recognize receipt of NCA for Regular Agency Fund
Special Account
Cash - Modified Disbursement
System (MDS) - Special Account 10104050 100,000.00
Cash-Treasury Agency Deposit,
Special Account 10104020 100,000.00
To recognize receipt of NCA for Special Account in the General Fund
Receipt of NCAA
Cash-Constructive Income
Remittance 10104080 80,000.00
Subsidy from Nat'l Government 40301010 80,000.00
To recognize receipt of CDC from DBM
2. BTr Books
Receipt of Subsidy/Assistance from other NGAs, LGUs, GOCCs and Other Funds
Cash-Treasury/Agency Deposit,
Trust 10104030 100,000.00
Cash-Collecting Officers 10101010 100,000.00
To recognize remittance of collections to BTR
Dishonored Checks
a. Collections remitted to BTr
a. Cash Overage
Account Title Account Code Debit Credit
Cash - Collecting Officers 10101010 xxx
Miscellaneous Income 40609990 xxx
To recognize forfeiture of cash overage of the Collecting Officer
Cash-Treasury/Agency Deposit, Regular 10104010 xxx
Cash - Collecting Officers 10101010 xxx
To recognize the remittance of forfeited cash overage to the BTr
a. Cash Shortage
Account Title Account Code Debit Credit
Due from Officers and Employees 10305020 xxx
Cash - Collecting Officers 10101010 xxx
To recognize cash shortage of Collecting Officer