Accountability over Government Funds and Property

➢ Every officer of any government agency whose duties permit or require the
possession or custody of government funds or property shall be accountable
therefor and for the safekeeping thereof in conformity with law. Every AO
shall be properly bonded in accordance with law. (Sec. 101, P.D. No. 1445;
Section 50, Chapter 9, Subtitle B, Book V, Executive Order (E.O.) No. 292)

➢ Transfer of government funds from one officer to another shall, except as

allowed by law or regulation, be made only upon prior direction or authorization
of the Commission or its representative. (Sec. 75, P.D. No. 1445)

➢ When government funds or property are transferred from one AO to another,

or from an outgoing officer to his successor, it shall be done upon properly
itemized invoice and receipt which shall invariably support the clearance to be
issued to the relieved or outgoing officer, subject to regulations of the
Commission. (Sec. 77, P.D. No. 1445)
 Liability over Government Funds and Property
1. Expenditures of government funds or uses of government
property in violation of law or regulations shall be a
personal liability of the official or employee found to be
directly responsible therefor. (Sec. 103, P.D. No. 1445)
2. Every officer accountable for government funds shall be
liable for all losses resulting from the unlawful deposit,
use, or application thereof and for all losses attributable
to negligence in the keeping of the funds. (Sec. 105(2),
P.D. No. 1445)
 Liability over Government Funds and Property
3. No AO shall be relieved from liability by reason of his having
acted under the direction of a superior officer in paying out,
applying, or disposing of the funds or property with which he
is chargeable, unless prior to that act, he notified the superior
officer in writing of the illegality of the payment, application,
or disposition.
4. The officer directing any illegal payment or disposition of the
funds or property shall be primarily liable for the loss, while
the AO who fails to serve the required notice shall be
secondarily liable. (Sec. 106, P.D. No. 1445)
 Liability over Government Funds and Property
5. When a loss of government funds or property occurs while
they are in transit or the loss is caused by fire, theft, or other
casualty or force majeure, the officer accountable therefor or
having custody thereof shall immediately notify the
Commission or the auditor concerned and, within 30 days or
such longer period as the Commission or auditor may in the
particular case allow, shall present his application for relief,
with the available supporting evidence.
6. Whenever warranted by the evidence, credit for the loss shall
be allowed. An officer who fails to comply with this
requirement shall not be relieved of liability or allowed credit
for any loss in the settlement of his accounts. (Sec. 73, P.D.
No. 1445)
 Fundamental Principles for Revenue
4. No payment of any nature shall be received by a collecting officer
without immediately issuing an official receipt in acknowledgement
thereof. The receipt may be in the form of postage, internal revenue or
documentary stamps and the like, officially numbered receipts, subject
to proper custody, accountability, and audit. (Sec. 68(1), P.D. No. 1445)

5. 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. (Sec. 68 (2), P.D. No.
1445)

6. At no instance shall temporary receipts be issued to acknowledge the

receipt of public funds. (Sec. 72, GAAM Volume I)
 Fundamental Principles for Revenue
6. 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. (Sec. 73, GAAM
Volume I)

7. An officer charged with the collection of revenue or the receiving of moneys payable to the
government shall accept payment for taxes, dues or other indebtedness to the government
in the form of checks issued in payment of government obligations, upon proper
endorsement and identification of the payee or endorsee. Checks drawn in favor of the
government in payment of any such indebtedness shall likewise be accepted by the officer
concerned.
8. At no instance should money in the hands of the CO be utilized for the purpose of cashing
private checks. (Sec. 67(1) and (3), P.D. No. 1445)

9. 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 acknowledgement bearing the date of actual remittance or
deposit and indicating from whom and on what account it was received. (Sec. 70, P.D. No.
1445)
 Objectives of General Purpose Financial
Statements
1. To provide information about the financial position,
financial performance, and cash flows of an entity that
is useful to a wide range of users in making and
evaluating decisions about the allocation of resources.

2. To provide information useful for decision-making, and

to demonstrate the accountability of the entity for the
resources entrusted to it.
 Fair Presentation
The FSs shall present fairly the financial position, financial
performance and cash flows of an entity. Fair presentation
requires the faithful representation of the effects of
transactions, other events, and conditions in accordance
with the definitions; and

Recognition criteria for assets, liabilities, revenue, and

expenses set out in PPSAS. The application of PPSAS, with
appropriate disclosures, if necessary, would result in fair
presentation of the FS.
 Departure from PPSASs
In the event that Management strongly believes that
compliance with the requirement of PPSAS would
result in misleading presentation that it would
contradict the objective of the FSs set forth in PPSAS,
the entity may depart from that requirement if the
relevant regulatory framework allows, or otherwise
does not prohibit, such a departure.
 Going Concern

The FSs shall be prepared on a going concern basis

unless there is an intention to discontinue the entity
operation, or if there is no realistic alternative but to
do so.
 Consistency of Presentation

The presentation and classification of items in the FSs

shall be retained from one period to the next unless
laws, rules and regulations, and PPSAS require a
change in presentation.
 Statement of Changes in Net Assets/Equity
1. Net Income or Deficit for the period;

2. Each item of revenue and expenses for the period that, as required by
Standards, is recognized directly in net assets/equity, and the total of
these items;

3. Total revenue and expenses for the period; and

4. For each component of net assets/equity separately disclosed, the

effects of changes in accounting policies and corrections of errors
recognized in accordance with PPSAS 3-Accounting Policies, Changes in
Accounting Estimates and Errors.
 Qualitative Characteristics of Financial
Reporting
An entity shall present information including
accounting policies in a manner that meets a number
of qualitative characteristics such as
understandability, relevance, materiality, reliability
and comparability. These qualitative characteristics
are the attributes that make the information provided
in the FSs useful to users.
 Basic Requirements for Disbursements and the
Required Certifications.
1. Availability of allotment/budget for obligation/ utilization certified by the
Budget Officer/Head of Budget Unit;
2. Obligations/Utilizations properly charged against available
allotment/budget by the Chief Accountant/Head of Accounting Unit;
3. Availability of funds certified by the Chief Accountant;
4. Availability of cash certified by the Chief Accountant;
5. Legality of the transactions and conformity with existing rules and
regulations;
6. Submission of proper evidence to establish validity of the claim; and
7. Approval of the disbursement by the Head of Agency or by his duly
authorized representative.
 Prohibition against the Incurrence of Overdraft
Heads of departments, bureaus, offices and agencies
shall not incur nor authorize the incurrence of
expenditures or obligations in excess of allotments
released by the DBM Secretary for their respective
departments, offices and agencies. Parties responsible
for the incurrence of overdrafts shall be held
personally liable therefor. (Book VI, Chapter 5, Section
41 of EO No. 292)
 Classification of Expenditures
1. Entity incurring the obligation;
2. Program, Activity and Project (PAP);
3. Object of expenditures, including personnel services (PS),
maintenance and other operating expenditures (MOOE), financial
expenses (FE), and capital outlays (CO);
4. Region or locality of use;
5. Economic or functional classification of the expenditures;
6. Obligational authority and cash transactions arising from fund
releases; and
7. Such other classifications as may be necessary for the budget
process.
 Disclosures
Disclosure on the face of, or in the notes to, the GPFS (Par. 106, IPSAS 26):
1. The amount of revenue from non-exchange transactions recognized during the
period:
2. Taxes, showing separately major classes of taxes; and ii. Transfers, showing
separately major classes of transfer revenue.
3. The amount of receivables recognized in respect of non-exchange revenue;
4. The amount of liabilities recognized in respect of transferred assets subject to
conditions;
5. The amount of liabilities recognized in respect of concessionary loans that are
subject to conditions on transferred assets;
6. The amount of assets recognized that are subject to restrictions and the nature of
those restrictions;
7. The existence and amounts of any advance receipts in respect of non-exchange
transactions; and
8. The amount of any liabilities forgiven.
 Disclosures
Disclosure in the notes to the GPFS (Par. 107, IPSAS 26):
1. The accounting policies adopted for the recognition of
revenue from non-exchange transactions;
2. For major classes of revenue from non-exchange
transactions, the basis on which the fair value of
inflowing resources was measured;
3. For major classes of taxation revenue that the entity
cannot measure reliably during the period in which the
taxable event occurs, information about the nature of
the tax; and
4. The nature and type of major classes of bequests, gifts,
and donations, showing separately major classes of
goods in-kind received.
 Disclosures
Entities are encouraged to disclose the nature and
type of major classes of services in-kind received,
including those not recognized. Such disclosures may
assist users to make informed judgment about:
1. The contribution made by such services to the
achievement of the entity’s objectives during the
reporting period; and
2. The entity’s dependence on such services for the
achievement of its objectives in the future.