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Decentralized Accounting

The document discusses decentralization under the New Government Accounting System of the Philippines. It notes that decentralization has long been practiced through regional offices and operating units. Under the Integrated Reorganization Plan, measures were adopted to establish regional offices in all government departments, provide a unified pattern for local government organization, and clearly define the authority of regional offices. The system also establishes a home and branch office accounting system between central, regional, and operating units to reconcile accounts and transactions. A key milestone was the 1991 Local Government Code, which recognized the need to decentralize power and funding to local government units to improve self-reliance in delivering basic services.

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539 views10 pages

Decentralized Accounting

The document discusses decentralization under the New Government Accounting System of the Philippines. It notes that decentralization has long been practiced through regional offices and operating units. Under the Integrated Reorganization Plan, measures were adopted to establish regional offices in all government departments, provide a unified pattern for local government organization, and clearly define the authority of regional offices. The system also establishes a home and branch office accounting system between central, regional, and operating units to reconcile accounts and transactions. A key milestone was the 1991 Local Government Code, which recognized the need to decentralize power and funding to local government units to improve self-reliance in delivering basic services.

Uploaded by

Martin Acantilado
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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NEW GOVERNMENT

ACCOUNTING SYSTEM OF THE


PHILIPPINES(NGAS):
ON DECENTRALIZATION
Decentralization is not a new concept under the New Government
Accounting System of the Philippines (NGAS). This has been in
practice in the regional offices and operating units long before the
adoption of the Integrated Reorganization Plan (IRP), PD No.1 by the
National Government. However, under PD No. 1 the following
measures were adopted:

1. The regional offices shall be established by all government


departments;
2. There should be a provision for a unified pattern of a local
government organization;
3. The general and specific authority given to regional offices should
be clearly spelled out.
Decentralized Accounting System means establishing a
Home and Branch office accounting system, like the
traditional methods followed in commercial
establishments. Under this system, the books of
accounts are kept by the Regional Office (RO) and the
Operating Unit (OU) to meet its financial requirements
with the Central Office and fiscal agencies that may be
in need of it. Inter-office transfer of accounts is done
to reflect transaction with the agencies. These
transactions are reconciled and eliminated to reflect
the true consolidated amount between the Central
Office and the Regional Office.
It was a historic milestone when the first Local
Government Code of 1991 recognized the need for
decentralization of Local Government Units
(LGUs)to become more self reliant. This was done
by giving them full autonomy in the delivery of
basic social services – such as health, education,
and infrastructure among other services. This
code also provided for the system of assigning
revenue and expenditures to make the
decentralization process doable.
Decentralization in the Philippines also took the form of
delegation, or what other author calls as
“debureaucratization”. This was the result of the overcoming
demand for participatory governance and active citizenship
during the ouster of the late President Ferdinand Marcos
through the People’s Power Revolution and even prior to and
after the said historic event. The author of the Constitution
saw it fit, as a response to the call of the times, to put
greater emphasis on the involvement of non- government
organizations, people’s organizations, and the private sector
in governance.
Due to our country’s bent towards democracy, the Philippines
has a “higher form of decentralization” as compared to other
countries (Ibid. ). The central government has transferred
more powers and functions to the local governments and has
provided more avenues for civil society engagement in local
governance. Role of Local Fiscal Administration in a
Decentralized Setup The transfer of powers and functions to
local government units (LGUs) necessitates the transfer and
redistribution of financial resources. LGUs need sources and
means to finance devolved services.
Local Fiscal Administration 20 Years after the Code’s
Enactment A closer look at the 20- year Philippine experience
of decentralization, however, shows that the country has
succeeded only to a certain extent in its decentralization
efforts. Llanto, in his discussion paper, “The Assignment of
Functions and Intergovernmental Fiscal Relations in the
Philippines Twenty Years after Decentralization”, has observed
that expenditure responsibilities with benefits confined within
the territorial jurisdiction of local governments were correctly
assigned to LGUs.
Two aspects that were recently decentralized to local government units
are planning and goal setting. These two areas have always been
subjected to the city and municipal government control and the LGUs
have a little say about it. With the recent change in governance, the
LGUs have now been given the free hand to pursue their own
development plans.

Hence, LGUs no longer have to submit their proposed development


programs to the central government or to the Department of the
Interior and Local Government (DILG) for review prior to
implementation. Recent changes mandate the creation of the Planning
and Development Coordination position in every LGUs whose primary
task is to prepare studies, researches, and formulates fiscal plans and
development programs for submission to the local development council.
In addition, the LGUs were given the power on
financial management to increase their resources
through tax impositions and adoption of local
fees. Their share of the internal revenue
allotment has also increased from 20
percent to 40 percent beginning 1992. All these
measures were earmarked to give fiscal autonomy
to LGUs in effectively managing their own
operations.
Sources:

New Government Accounting System of the


Philippines, 2013 by Angelito Puzalan, Milagros
Cardona

ADB-World Bank Report on Strengthening Local


Government Financing & Resource Management in
the Short Term, 2003

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