CHAPTER 1: General Provisions, Basic Standards, and Policies

Government accounting manual

1.​ Standards, policies, guidelines, and procedures in accounting for government funds
and property
2.​ Coding structure and accounts
3.​ Accounting books, registries, records, forms, reports, and financial statements

-​ To be used by all national government agencies (NGAs) in:

a.​ Preparation of general-purpose financial statements in accordance with the
PPSAS and other financial reports as may be required by laws, rules, and
regulations
b.​ Reporting of budget, revenue, and expenditure in accordance with laws,
rules, and regulations

GOVERNMENT ACCOUNTING
-​ Section 109 of PD 1445
-​ Encompasses the process of analyzing, recording, classifying, summarizing, and
communicating all transactions involving the receipt and disposition of government
funds and property and interpreting the results thereof

Objectives (Section 110, PD 1445):

1.​ To produce information concerning past operations and present conditions
2.​ To provide a basis for guidance for future operations
3.​ To provide for control for the acts of public bodies and offices in the receipt,
disposition, and utilization of funds and properties
4.​ To report on the financial position and the results of operations of government agencies
for the information and guidance of all persons concerned

PUBLIC SECTOR ACCOUNTING STANDARDS BOARD (PSASB)

-​ COA Resolution No. 2008-12 (Oct. 10, 2008)
-​ Assist in formulating and implementing Philippine Public Sector Accounting
Standards (PPSAS)

Government Business Enterprise (GBE): covered by IFRS/PFRS but not IPSAS/PPSAS

-​ Entity with the power to contract in its own name
-​ Assigned the financial and operational authority to carry on a business
-​ Sells goods or services, in the normal course of business, to other entities at a profit
or a full cost recovery
-​ Not reliant on continuing government funding to be a going concern (other than the
purchase of outputs at arm’s length)
-​ Controlled by a public sector entity

Considerations in Developing the Philippine Public Sector Accounting Standards (PPSAS)

1.​ Applicability of IPSAS
-​ COA Resolution No. 2014-003 (Jan. 24, 2014)
 2.​ Exposure draft of PPSAS
3.​ Fundamental issues
4.​ Statutory authority
5.​ Disclosure requirements
6.​ PPSAS numbering
7.​ Financial reporting issues not dealt with by IPSAS
8.​ Submission of draft to PSASB for consideration of the COA
9.​ If considered appropriate, focus group discussions will be held to obtain further
opinions on issues identified by exposure processes

ACCOUNTING RESPONSIBILITY
1.​ Commission on Audit (COA)
-​ Keeps the general accounts of the government, promulgates accounting rules and
regulations, and submits to the President and Congress, within the time fixed by
law, an annual report of the government, its subdivisions, agencies, and
instrumentalities, including GOCCs.
-​ Exclusive authority to define the scope of its audit and examination, establish
techniques and methods, 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 fund and properties
-​ RESPONSIBLE FOR: consistency of account classification and coding structures
with the revised chart of accounts
2.​ Department of budget and management (DBM)
-​ Responsible for the formulation and implementation of the National Budget to
attain our national socio-economic plans and objectives
-​ Efficient and sound utilization of government funds and revenues to effectively
achieve the country’s development objectives
-​ Validation and assignment of new codes for funding source organization,
sub-object codes for expenditures items
-​ Validation and assignment of new program, activity, project codes shall be jointly
decided by the proponent agency and DBM
3.​ Bureau of Treasury (BTr)
-​ Cash operations of the national government
-​ Authorized to:
a.​ Receive and keep national funds, manage and control the disbursements
b.​ Maintain accounts of financial transactions of all national government
offices, agencies, and instrumentalities
-​ Control and monitor the Notice of Cash Allocation (NCA) released by DBM; as well
as the bank transfers to replenish its Modified Disbursement System (MDS)
-​ RESPONSIBLE FOR: consistency of account classification and coding standards
with the Government Finance Statistics (GFS)
4.​ Government agencies
-​ Registries to be maintained:
1.​ Registry of revenue and other receipts - summary (RRORS)
2.​ Registry of revenue and other receipts - regular agency and foreign
assisted projects fund (RROR-RA&FAP)
 3.​ Registry of revenue and other receipts - special account locally
funded/domestic grants fund and special account foreign
assisted/foreign grants fund (RROR-SADFGF)
4.​ Registry if revenue and other receipts - internally generated funds
(Off-budget funds-retained income funds)/Business related funds
(RROR-IGF/BRF)
5.​ Registry of revenue and other receipts - trust receipts/ inter-agency
transferred funds (RROR-TR/IATF)
6.​ Registry of appropriation and allotments (RAPAL)
7.​ Registry of allotments, obligations, and disbursements - personnel
services (RAOD-PS)
8.​ Registry of allotments, obligations, and disbursements -
maintenance and other operating expenses (RAOD-MOOE)
9.​ Registry of allotments, obligations, and disbursements - financial
expenses (RAOD-FE)
10.​ Registry of allotments, obligations, and disbursements - capital
outlays (RAOD-CO)
11.​ Registry of budget, utilization, and disbursements - personnel
services (RSUD-PS)
12.​ Registry of budget, utilization, and disbursements - maintenance
and other operating expenses (RBUD-MOOE)
13.​ Registry of budget, utilization, and disbursements - financial
expenses (RBUD-FE)
14.​ Registry of budget, utilization, and disbursements - capital outlays
(RBUD-CO)
15.​ Registry of allotments and notice of cash allocation (RANCA)
16.​ Registry of allotments and notice transfer of allocation (RANTA)

BASIC ACCOUNTING AND BUDGET REPORTING PRINCIPLES

1.​ Generally accepted government accounting principles in accordance with the PPSAS
and the pertinent laws, rules, and regulations
2.​ Accrual basis of accounting in accordance with the PPSAS
3.​ Budget basis for presentation of budget information in the financial statements in
accordance ith PPSAS 24
4.​ Revised chart of accounts prescribed by the COA
5.​ Double entry bookkeeping
6.​ Financial statements based on accounting and budgetary record
7.​ Fund cluster accounting

RESPONSIBILITY ACCOUNTING
-​ A system that relates the financial results to a responsibility center, which provides
access to cost and revenue information under the supervision of a manager having
direct responsibility for its performance
-​ Done in a computerized accounting system only
 ●​ Responsibility center - part, segment, or function of a government agency,
headed by a manager, who is accountable for a specified set of activities
●​ Cost centers - derive most income from the collection of taxes and fees, and
render service to the public at the lowest possible cost

Concepts of responsibility accounting:

1.​ Accumulating and reporting data on revenues and costs on the basis of the manager’s
action, who has the authority to make day-to-day decisions about the items
2.​ Evaluation of manager’s performance is based on the matters directly under his
control
3.​ Used in any level of management when the following conditions exist:

a.​ Cost and revenue are directly associated with the specific level of
management responsibility
b.​ Cost and revenue are controllable at the level of responsibility with which
they are associated
c.​ Budget data can be developed for evaluating the manager’s effectiveness in
controlling costs and revenues

4.​ Difference between reporting costs and revenues from budgeting:

a.​ Distinction between controllable and non-controllable costs
-​ Controllable: the manager has the power to incur it within a given time;
all costs are controllable by top management and it get fewer as one
moves down to lower-level management
-​ Non-controllable: incurred indirectly and allocated to a responsibility
level
b.​ Performance reports either emphasize or include only items controllable by
the individual manager
5.​ Preparation of report for each level of responsibility
6.​ Evaluation of the manager’s performance for cost centers is based on his ability to
meet budgeted goals for controllable costs

QUESTIONS:
1.​ Define government accounting
-​ It encompasses the process of analyzing, recording, classifying,
summarizing, and communicating all transactions involving the receipt and
disposition of government funds and properties, and interpreting the results
thereof
2.​ The objective of Section 110, PD 1445
-​ To produce information concerning past operations and present conditions
-​ To provide a basis for guidance for future operations
-​ To provide control for the acts of public bodies and offices in the receipt,
disposition, and utilization of funds and properties
-​ To report on the financial position and results of operations of government
agencies for the information and guidance of all persons concerned
3.​ Purpose of creating PSASB (Public Sector Accounting Standards Board)
-​ Formulate and implement PSAS and to establish linkages with international
bodies, professional organizations and academe on accounting related fields
on financial management
-​ Assist the commission on formulating and implementing the PPSAS

4.​ Processes of developing the PPSAS:

-​ Applicability of IPSAS
-​ Exposure draft of PPSAS
-​ Fundamental issues
-​ Statutory authority
-​ Disclosure requirements
-​ PPSAS numbering
-​ Financial reporting issues not dealt with by IPSAS
-​ Submission of draft to PPSASB for consideration of the COA
-​ Focus group discussions

5.​ Government offices primarily charged with accounting responsibility:

●​ Commission on audit
-​ Keeps general accounts of the govenemt, promulgates accounting rules
and regulations, and submits to the Presidebt and Congress, within the
time fixed by law an annual report on government, its subdivisions,
agencies and instrumentalities, including GOCC

●​ Department of budget and management

●​ Bureau of treasury
●​ Government agencies

6.​ Registries of NGAs as provided by the GAM.

A.​ Registry of Revenue and Other Receipts– Summary (RRORS)
○​ This summary shall be kept by the Budget Division/Unit for each fund
cluster maintained by the entity
B.​ Registry of Revenue and Other Receipts– Regular Agency and Foreign
Assisted Projects Fund (RROR-RA&FAP)
○​ This registry shall be maintained by the Budget Division/Unit of the
entity for the following fund clusters: 1.) Regular Agency Fund; and,
2.) Foreign Assisted Project fund
C.​ Registry of Revenue and Other Receipts– Special Account Locally
Funded/Domestic Grants Fund and Special Account Foreign Assisted/Foreign
Grants Fund (RROR SADFGF)
○​ This registry shall be maintained by the Budget Division/Unit of the
entity for the following fund clusters: 1.) Special Account - Locallly
Funded/Domestic Grants Fund; and, 2.) Special Account Foreign
Assisted/Foreign Grants Fund.
D.​ Registry of Revenue and Other Receipts– Internally Generated Funds (Off
Budgetary Funds – Retained Income Funds)/Business Related Funds (RROR
IGF/BRF)
 ○​ This registry shall be maintained by the Budget Division/Unit of the
entity for the following fund clusters: 1.) Internally Generated Funds
(Off-Budgetary Retained Income Funds); and, 2.) Business Related
Funds.
E.​ Registry of Revenue and Other Receipts– Trust Receipts/Inter-agency
Transferred Funds (RROR-TR/IATF)
○​ This registry shall be maintained by the Budget Division/Unit of the
entity for the Trust Receipts/Inter-agency Transferred Funds
F.​ Registry of Appropriation Allotments (RAPAL)
○​ This registry shall be maintained by fund cluster by the Budget
Division/Unit of each entity to ensure that allotment releases are
within the authorized appropriation. Separate registry shall be
maintained for appropriations.
G.​ Registry of Allotments, Obligations and Disbursements – Personnel Services
(RAOD-PS)
○​ This registry shall be maintained by the Budget Division/Unit by
Appropriation Act, fund cluster, by Major Final Output (MFO) or
Program/Activity/Project (PAP) for personnel services.
H.​ Registry of Allotments, Obligations and Disbursements – Maintenance and
Other Operating Expenses (RAOD-MOOE)
○​ This registry shall be maintained by the Budget Division/Unit by
Appropriation Act, fund cluster, by Major Final Output (MFO ) or
Program/Activity/Project (PAP ) for maintenance and other operating
expenses
I.​ Registry of Allotments, Obligations and Disbursements – Financial Expenses
(RAOD-FE)
○​ This registry shall be maintained by the Budget Division/Unit by
Appropriation Act, fund cluster, by Major Final Output (MFO) or
Program/Activity/Project (PAP) for financial expenses
J.​ Registry of Allotments, Obligations and Disbursements – Capital Outlays
(RAOD CO).
○​ This registry shall be maintained by the Budget Division/Unit by
Appropriation Act, fund cluster, by Major Final Output (MFO) or
Program/Activity/Project (PAP) for capital outlays
K.​ Registry of Budget, Utilization and Disbursements – Personnel Services
(RBUD-PS)
○​ This registry shall be maintained by the Budget Division/Unit by
fund cluster, by Major Final Output (MFO) or Program
Activity/Project (PAP) for personnel services.
L.​ Registry of Budget, Utilization and Disbursements – Maintenance and Other
Operating Expenses (RBUD-MOOE)
○​ This registry shall be maintained by the Budget Division/Unit by
fund cluster, by Major Final Output (MFO) or Program
Activity/Project (PAP) for maintenance and other operating expenses.
M.​ Registry of Budget, Utilization and Disbursements – Financial Expenses
(RBUD-FE)
 ○​ This registry shall be maintained by the Budget Division/Unit by
fund cluster, by Major Final Output (MFO) or Program
Activity/Project (PAP) for financial expenses
N.​ Registry of Budget, Utilization and Disbursements – Capital Outlays (RBUD
CO)
○​ This registry shall be maintained by the Budget Division/Unit by fund
cluster, by Major Final Output (MFO) or Program Activity/Project
(PAP) for capital outlays
O.​ Registry of Allotments and Notice of Cash Allocation (RANCA)
○​ This registry shall be maintained by the Accounting Division/Unit to
determine the amount of allotments not covered by NCA and to
monitor available NCA
P.​ Registry of Allotments and Notice of Transfer of Allocation (RANTA)
○​ This registry shall be maintained by the Accounting Division/Unit to
determine the amount of allotments not covered by NTA and to
monitor available NTA

7. Basic accounting and budget reporting principles under GAM.

●​ Generally accepted government accounting principles in accordance with the PPSAS
and pertinent laws, rules and regulations.
●​ Accrual basis of accounting in accordance with the PPSAS.