Harmonization of Government

Accounting Standards with the

International Public Sector
Accounting Standards
(IPSAS)

Asst. Commissioner Lourdes Castillo

Government Accountancy Sector
Commission on Audit
Delivered during the AGAP Convention
LFisher Hotel, Bacolod City
October 14-17, 2013

ROAD MAP to HARMONIZATION

PROCESS
I.
II.
III.

AUTHORITY/LEGAL BASIS
CREATION OF THE PUBLIC SECTOR
ACCOUNTING STANDARDS BOARD (PSASB)
PREPARATION OF THE PHILIPPINE
PUBLIC SECTOR ACCOUNTING
STANDARDS (PPSAS)
INTERNATIONAL PUBLIC SECTOR
ACCOUNTING STANDARDS (IPSAS)
PHILIPPINE APPLICATION GUIDANCE
(PAG)

IV.

IMPLEMENTATION

AUTHORITY/LEGAL BASIS
1987 Philippine Constitution,
Article IX D, 2(2) Section
The Commission shall have exclusive
authority, subject to the limitations in this Article,
to XXX ... 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 funds and properties.

AUTHORITY/LEGAL BASIS
Presidential Decree (PD) 1445, State
Audit Code of the Philippines,
Sec. 25 (4) (4) To promulgate auditing and

accounting rules and regulations so

as to facilitate the keeping, and
enhance the information value, of the
accounts of the government.

II. Creation of the

PUBLIC SECTOR
ACCOUNTING
STANDARDS BOARD
(PSASB)

PUBLIC SECTOR ACCOUNTING

STANDARDS BOARD (PSASB)

Creation
2008 Commission on Audit (COA)
Organizational Restructuring pursuant to the
1987 Philippine Constitution, Section 2(2)
Article IX-D.

COA Office Order No. 2010-118 dated

February 19, 2010

PUBLIC SECTOR ACCOUNTING

STANDARDS BOARD (PSASB)

Function
Assist the COA Commission Proper in
formulating and implementing
accounting standards for the public
sector

PUBLIC SECTOR ACCOUNTING

STANDARDS BOARD (PSASB)

Function
Establish and maintain linkages with
international bodies, professional
organizations and academe on
accounting related fields on financial
management.

III. Preparation of the

PHILIPPINE PUBLIC
SECTOR ACCOUNTING
STANDARDS (PPSAS)

OVERVIEW
PPSAS
BASIS
OBJECTIVE
SCOPE
METHODOLOGY
CONTENT

Philippine Public Sector Accounting Standards

Basis
Pronouncements issued by IPSASB
(IPSASs), IASB, PICPA, International
Organization of Supreme Audit
Institutions and others.
Relevant factors, including best
accounting practices, and
Capacity of agencies to comply with
PPSAS
IPSAS
Overview

Philippine Public Sector Accounting Standards

Objective
The PPSAS set out the recognition,
measurement, presentation and disclosure
requirements for financial reporting in the
Philippine Government.
Transitional provisions shall be issued to
address specific concerns not yet covered
by the PPSAS.
Supplemental guidelines shall be issued
when the need arises

Philippine Public Sector Accounting Standards

Scope
PPSASs

set out requirements dealing

with transactions and other events in
general purpose financial reports.

PPSASs

are designed to apply to the

general purpose financial reports of all
public sector entities other than
Government
Business
Enterprises
(GBEs).

IPSAS

Overview

Philippine Public Sector Accounting Standards

Scope
applies to all NGAs, LGUs and
GOCCs
not
classified
as
Government
Business
Enterprises GBEs

Philippine Public Sector Accounting Standards

Methodology
I. Evaluation of IPSAS
Study and detailed evaluation of each IPSAS
to determine applicability.

II. Development of PPSAS

Provide the Philippine Application Guidance
(PAG) for IPSAS provisions which were
revised/modified or not to be adopted.
Exposure Drafts
Fundamental Issues (addressed by change in
policy or disclosure requirements )
Focus Group Discussions

Philippine Public Sector Accounting Standards

Methodology
III. Preparation/Update of
Government Accounting Manual
As PPSAS are being developed, provisions of the
Government Accounting Manual are being
studied and enhanced/modified, accordingly

IV. Revision of the Chart of Accounts

Chart of accounts was revised to conform
with the PPSAS
COA Circular 2013-002 dated Jan. 30, 2013
IPSAS
Overview

Philippine Public Sector Accounting Standards

Content

PPSAS

consist of

International Public Sector Accounting

Standards (IPSASs) (Accrual Based IPSAS
per 2012 Handbook) developed by
IPSASB
and
published
by
the
International Federation of Accountants
(IFAC), and
Philippine Application Guidance (PAG)
IPSAS
Overview

Philippine Public Sector Accounting Standards

Philippine Application
Guidance (PAG)

Provides supplementary guidance

of IPSASs.
States the reason for not adopting
or modifying some paragraphs of
the IPSASs to suit the Philippine
public sector situation.
IPSAS
Overview

IV. Implementation of
PHILIPPINE PUBLIC
SECTOR ACCOUNTING
STANDARDS (PPSAS)

Philippine Public Sector Accounting Standards

Approach to Implementation
28 out of 32 IPSAS shall be implemented

Phased Implementation

Phase 1 (25 PPSAS for

implementation in 2014)

Phase 2 (3 PPSAS for

implementation in 2015)

Philippine Public Sector Accounting Standards

Phase 1 For

implementation in 2014
1. PPSAS 1 Presentation of Financial
Statements (IPSAS 1)
2. PPSAS 2 Cash Flow Statements (IPSAS 2)
3. PPSAS 3 Accounting Policies, Changes in
Accounting Estimates and Errors (IPSAS 3)
4. PPSAS 4 The Effects of Changes in FOREX
rates (IPSAS 4)

Philippine Public Sector Accounting Standards

Phase 1 for implementation in

2014
PPSAS 5 Borrowing Costs (IPSAS 5)
PPSAS 6 Consolidated and Separate
Financial Statements (IPSAS 6)
7.
PPSAS 8 Interests in Joint Venture
(IPSAS 8)
8.
PPSAS 9 Revenue from Exchange
Transactions (IPSAS 9)
9.
PPSAS 12 Inventories (IPSAS 12)
10. PPSAS 13 Leases (IPSAS 13)
5.
6.

Philippine Public Sector Accounting Standards

Phase 1 (cont)
11. PPSAS 14 Events after the
Reporting Date (IPSAS 14)
12. PPSAS 16 Investment Property
(IPSAS 16)
13. PPSAS 17 Property, Plant and
Equipment (IPSAS 17)
14. PPSAS 19 Provisions, Contingent
Liabilities and Assets (IPSAS 19)

Philippine Public Sector Accounting Standards

Phase 1 (cont)

15. PPSAS 20 Related Party Disclosures

(IPSAS 20)
16. PPSAS 21 Impairment of Non-Cash
Generating Assets (IPSAS 21)
17. PPSAS 23 - Revenue from NonExchange Transactions (Taxes and
Transfers) (IPSAS 23)
18. PPSAS 24 Presentation of Budget
Information in Financial Statements
(IPSAS 24)

Philippine Public Sector Accounting Standards

Phase 1 (cont)
19. PPSAS 26 Impairment of Cash
Generating Assets (IPSAS 26)
20. PPSAS 27 Agriculture (IPSAS 27)
21. PPSAS 28 Financial Instruments:
Presentation (IPSAS 28)
22. PPSAS 29 Financial Instruments:
Recognition and Measurement (IPSAS
29)

Philippine Public Sector Accounting Standards

Phase 1 (cont)
23. PPSAS 30 - Financial Instruments
Disclosure (IPSAS 30)
24. PPSAS 31 Intangible Assets (IPSAS
31)
25. PPSAS 32 - Service Concession
Arrangements: Grantor (IPSAS 32)

Philippine Public Sector Accounting Standards

Phase 2

For
implementation in 2015
1. PPSAS 18 Segment Reporting
2. PPSAS 22 Disclosure of
Information About the General
Government Sector
3. PPSAS 25 Employee Benefits

PPSAS SUMMARY

IPSAS
Overview

PPSAS 1 Presentation of FS
Objective of the Standard

To set overall considerations for the:

IPSAS
Overview

Presentation
Structure
Minimum content of Financial
Statements

PPSAS 1 Presentation of FS
Salient Features

Accrual basis except for transactions

required by law to be on modified
accrual basis
Comparative Information
- for all amounts reported in the FS
- for all relevant narrative and
descriptive information
IPSAS
Overview

PPSAS 1 Presentation of FS
Complete set of Financial Statements
1. Statement of financial position
2. Statement of financial performance
3. Statement of changes in net assets/equity
4. Notes, comprising a summary of significant
accounting policies and other explanatory
notes
5. Separate additional financial
statement for comparison of budget
and actual amounts shall be prepared
and submitted.
IPSAS
Overview

PPSAS 2 Cash Flows Statement

Objective of the Standard
Provision of information about changes in
cash and cash equivalents by means of a
cash flow statement.
Classifies cash flows during the period
from operating, investing, and financing
activities.

IPSAS
Overview

PPSAS 2 Cash Flows Statement

Salient Features

Cash flows for operating activities are

reported using the direct method.
Cash flows exclude movements between
items that constitute cash or cash
equivalents,
Investing and financing transactions that do
not require the use of cash shall be
excluded from the cash flow statement, but
they shall be separately disclosed.
IPSAS
Overview

PPSAS 3 - Accounting Policies,

Changes in Accounting Estimates
and Errors
Salient Features
CHANGE IN ACCOUNTING POLICY

Follow transition requirements

If the change is voluntary, apply the new
accounting policy retrospectively by
restating prior periods.
IPSAS
Overview

PPSAS 3 - Accounting Policies, Changes

in Accounting Estimates and Errors
Salient Features
Changes in Accounting Estimates

Effect of a change in estimate is accounted

for by including it in net income or
comprehensive income as appropriate in:
a. The period of change if the change
affects that period only
b. The period of change and future
periods if the change affects both
IPSAS
Overview

PPSAS 4 - The Effects of Changes

in Foreign Exchange Rates

Salient Features

Covers Foreign currency transactions

and Foreign operations
Translation should be done for foreign
currency items into functional currency
Initial recognition and measurement
record the spot exchange rate
IPSAS
Overview

PPSAS 5 - Borrowing Costs

Salient Features
Borrowing costs shall be charged to expenses in
the period when they are incurred. (Benchmark
treatment)
Borrowing costs directly attributable to the
acquisition, construction, or production of a
qualifying asset shall be capitalized as part of the
cost of that asset. (Allowed Alternative Treatment)

IPSAS
Overview

PPSAS 5 - Borrowing Costs

Salient Features

For borrowing costs pertaining to loans

borrowed by the National Government (NG)
which are recorded by the Bureau of the
Treasury, the benchmark treatment shall be
used. However for loans borrowed directly by
the NGAs and LGUs, the allowed alternative
treatment shall be used.

IPSAS
Overview

PPSAS 6 - Consolidated and

Separate Financial Statement

Salient Features
prescribes requirements for preparing and
presenting consolidated FS for an economic
entity under the accrual basis of accounting
A controlled entity is an entity controlled by
another entity, known as the controlling
entity.
Balances, transactions, revenue and
expenses between entities within the
economic entity are eliminated in full.
IPSAS
Overview

PPSAS 8 - Interests in Joint Ventures

Salient Features
The key characteristic of a joint venture is a
binding arrangement whereby two or more
parties are committed to undertake an activity
that is subject to joint control.
Joint ventures may be classified as jointly
controlled operations, jointly controlled assets
and jointly controlled entities. Different accounting
treatments apply for each type of joint venture.

IPSAS
Overview

PPSAS - 9 Revenue from Exchange

Transactions

Salient Features
Applies to revenue arising from the following
exchange transactions and events:
The rendering of services;
The sale of goods, and
The use of others of entity assets
yielding interest, royalties and dividends.
Revenue shall be measured at the fair value
of the consideration received or receivable.
IPSAS
Overview

PPSAS 12 - Inventories

Salient Features
Inventories are measured at the lower of cost
and net realizable value.
If acquired through a non-exchange transaction,
their cost shall be measured as their fair value
as at the date of acquisition.
Cost is determined on weighted average basis
Write-downs to net realizable value are
recognized as an expense. Reversals arising
from an increase in net realizable value are
recognized as a reduction of the inventory
expense in the period in which they occur.
IPSAS
Overview

Salient Features

PPSAS 13 Leases

Lease is classified as a Finance lease if:

(a) The lease transfers ownership of the asset to
the lessee by the end of the lease term;
(b) The lessee has the option to purchase the
asset at a price that is expected to be
sufficiently lower than the fair value
(c) The lease term is for the major part of the
economic life of the asset
Operating lease does not transfer substantially all
the risks and rewards incidental to ownership of the
asset.
IPSAS
Overview

PPSAS 14 Events After the

Reporting Date

DEFINITIONS
Adjusting events after the reporting date events
that provide evidence of conditions that existed at
the reporting date
Non-adjusting events after the reporting date those that are indicative of conditions that arose
after the reporting date

An entity shall disclose :

the date its financial statements were authorized
for issue and
who gave that authorization.
IPSAS
Overview

IPSAS 16 Investment Property

Salient Features
Investment property - is property (land or a building
or part of a building or both) held to earn rentals or
for capital appreciation, or both, rather than for:
a) Use in the production or supply of goods
or services, or for administrative
purposes; or
b) Sale in the ordinary course of operations.

Investment property shall be measured initially at cost.

If acquired through non-exchange transaction Fair
value as at date of acquisition.
IPSAS
Overview

PPSAS 17 - Property, Plant and

Equipment

Salient Features
Recognition of Heritage Assets
Initial recognition is at cost. Where an asset is
acquired at no cost, or for a nominal cost, its cost
is its fair value as at the date of acquisition.
Infrastructure assets are accounted as PPE
The carrying amount of an item of property, plant,
and equipment shall be derecognized:
(a) On disposal; or
(b) When no future economic benefits or service
potential is expected from its use or disposal.
IPSAS
Overview

PPSAS 19 - Provisions, Contingent

Liabilities and Contingent Assets

Salient Features
Recognize a provision only when:
a past event has created a present legal or
constructive obligation,
an outflow of resources to settle the
obligation is probable, and
there is a reliable estimate of the obligation

IPSAS
Overview

PPSAS 19 - Provisions, Contingent

Liabilities and Contingent Assets

Salient Features
Contingent liability arises when there is:
possible obligation to be confirmed by a
future event that is outside the control of the
entity; or
a present obligation may, but probably will
not, require an outflow of resources; or
a reliable estimate cannot be made.
Contingent liabilities require disclosure only (no
recognition). If the possibility of outflow is remote, then
no disclosure.
IPSAS
Overview

PPSAS 20 - Related Party Disclosures

Salient Features
Related parties are parties that control or have
significant influence over the reporting entity
and parties that are controlled or significantly
influenced by the reporting entity

Requires disclosure of:

relationships involving control, even when
there have been no transactions in between;
related party transactions; and
management compensation
IPSAS
Overview

PPSAS 21 - Impairment of NonCash-Generating Assets

Definition
Cash-generating assets - are assets held with the
primary objective of generating a commercial return.
Non-cash-generating assets - are assets other than
cash-generating assets
Impairment - a loss in the future economic benefits
or service potential of an asset, over and above the
systematic recognition of the loss of the assets
future economic benefits or service potential through
depreciation.
IPSAS
Overview

PPSAS 21 - Impairment of NonCash-Generating Assets

Salient Features
A non-cash-generating asset is impaired when
the carrying amount of the asset exceeds its
recoverable service amount.
An impairment loss shall be recognized
immediately in surplus or deficit.
After the recognition of an impairment loss, the
depreciation charge for the asset shall be
adjusted in future periods
IPSAS
Overview

PPSAS 23 - Revenue from Non-Exchange

Transactions (Taxes and Transfers)

Non-exchange transactions
Examples:
(a) Taxes; and
(b) Transfers (whether cash or noncash)
An asset acquired through a non exchange
transaction shall initially be measured at its fair
value as at the date of acquisition.
An entity shall recognize an asset in respect of
taxes when the taxable event occurs and the
asset recognition criteria are met.
IPSAS
Overview

PPSAS 24 - Presentation of Budget Information

in Financial Statements

Salient Features

PPSAS 24 requires
Presentation of budget information in the
financial statements when the reporting entity
is publicly accountable for its budget.
Disclosure of an explanation of the reasons for
material differences between the budget and
actual amounts.

IPSAS
Overview

To ensure that public sector entities discharge

their accountability obligations and enhance the
transparency of their financial statements

PPSAS 26 - Impairment of CashGenerating Assets

Definition
Cash-Generating Assets (CGA) assets held
with the primary objective of generating a
commercial return.
Impairment - a loss in the future economic benefits
or service potential of an asset

An impairment loss of a cash-generating asset

is the amount by which the carrying amount of an
asset exceeds its recoverable amount.
IPSAS
Overview

PPSAS 27 - Agriculture

Salient Features

Prescribes the accounting treatment

and disclosures related to agricultural
activity

Agricultural activity - management by an

entity of the biological assets for sale, or
for distribution at no charge or for a
nominal charge or for conversion into
agricultural produce or into additional
biological assets.

IPSAS
Overview

PPSAS 28 - Financial Instruments:

Presentation

Prescribes principles for classifying and presenting financial

instruments as liabilities or net assets/equity, and for
offsetting financial assets and liabilities.
IPSAS 29 Financial Instruments:
Recognition and Measurement

Establishes principles for recognizing, derecognizing and

measuring financial assets and financial liabilities.
IPSAS 30 Financial Instruments:
Disclosure
Prescribe disclosures that enable financial statement users to
evaluate the significance of financial instruments to an entity, the
nature and extent of their risks, and how the entity manages
IPSAS
those risks.
Overview

PPSAS 31- Intangible Assets

Salient Features
Intangible Asset is an identifiable non-monetary
asset without physical substance.
An intangible asset, whether purchased or selfcreated, is recognized if:
it is probable that the future economic
benefits or service potential that are
attributable to the asset will flow to the entity;
and
the cost or fair value of the asset can be
measured reliably.

All research costs are charged to expense when

IPSAS
Overview incurred.

PPSAS 32SERVICE CONCESSION

ARRANGEMENTS: GRANTOR

Grantor public sector entity grants

service concession arrangements
Operator private sector which manages
the service concession asset
Service concession arrangement sets
performance standards, mechanisms for
adjusting prices, and arrangements for
arbitrating disputes.
Service concession assets turned over to
the grantor
IPSAS
Overview

PPSAS 32SERVICE CONCESSION

ARRANGEMENTS: GRANTOR

Recognize by the grantor if:

It controls or regulates services (what, to
whom and at what price) and
It controls any significant residual
interest at the end of the arrangement
Initial recognition fair value
Measurement after recognition cost (like
PPE or Intangible Assets)
IPSAS
Overview

PPSAS 32SERVICE CONCESSION

ARRANGEMENTS: GRANTOR

Recognize liability when the grantor

recognizes a service concession asset
Financial liability
Unearned income
Initial measurement same amount as the
asset adjusted by any consideration given
by the grantor or the operator or from the
operator to the grantor.
IPSAS
Overview

PPSAS 32SERVICE CONCESSION

ARRANGEMENTS: GRANTOR

(b) The operator is compensated for its

services over the period of the service
concession arrangement.

IPSAS
Overview

Significant COA Issuances on

ACCOUNTING and AUDITING
RULES AND REGULATIONS

62

Significant COA ISSUANCES

1. COA Circular No. 2013-002

dated January 30, 2013
Adoption of the Revised Chart of
Accounts for National Government
Agencies
2. COA-DBM-DOF Joint Circular No. 2013-1
dated March 15, 2013

Adoption of the Unified Accounts Code

Structure (UACS)
63

Significant COA ISSUANCES

3. COA Circular No. 2013-003 dtd. Oct. 29, 2013

Updated Guidelines on the Prevention and

Disallowance of Irregular, Unnecessary,
Excessive, Extravagant and Unconscionable
Expenses
4. COA Circular No. 2013-007 dtd. Sept. 18, 2013

Revised Guidelines on the Submission of

Quarterly Accountability Reports on
Appropriations, Allotments, Obligations and
Disbursements

64

Significant COA ISSUANCES

5. COA Circular No. 2012-005 dtd. Dec. 7, 2012

Revocation of COA Circular No. 2009-008

dtd. Nov. 9, 2009 and Prescribing the Use of
Punong Barangays Certification (PBC) and
COA Auditors Advice (CAA)
6. eNGAS Rollout in the Local Government
Units

65

COA REVISED
CHART OF ACCOUNTS

COA Circular No. 2013-002

dated January 30, 2013
Effectivity date: January 01, 2014
66

OBJECTIVES

To provide new accounts for the adoption

of the Philippine Public Sector Accounting

Standards (harmonized with IPSAS)
To provide uniform accounts for national

government accounting and budget

systems to facilitate the preparation of
harmonized financial and budgetary
accountability reports
67

OBJECTIVES

To expand the account code from three (3)

digits in the NGAS Chart of Accounts, to eight

(8) digits, to allow expansion or creation of new
accounts as may be necessary to implement
new standards or policies and provide up to four
levels of consolidation depending on the users
information needs.

68

MAJOR CHANGES

a. Coverage is limited only to all national

government agencies and GOCCs
receiving funds constituted a SAGF
from the National Government
b. Expanded account code structure
from three (3) digits to eight (8) digits

69

MAJOR CHANGES

c. New accounts were provided for the

implementation of the Philippine Public
Sector Accounting Standards (PPSAS)
d. Some accounts were deleted since these
accounts are for use by local government
units or government-owned and/or
controlled corporations, while other
accounts are no longer applicable to
national government agencies.
70

MAJOR CHANGES

e. Some accounts were either

expanded or compressed. For instance,
expense accounts for repairs and
maintenance and depreciation of property,
plant and equipment which were previously
presented per asset account were
compressed based on the major account
classification

71

COA-DBM Joint Circular No. 2013-1

dated March 15, 2013
Revised Guidelines on the Submission
of Quarterly Accountability Reports on
Appropriations, Allotments, Obligations
and Disbursements

72

RATIONALE

COA and DBM requirement for agencies

to submit BAR/FAR.

DBM uses the reports to monitor agency

performance for policy making purposes.

COA uses the report to prepare the AFR.

73

PURPOSES

1. To prescribe harmonized formats of the

financial accountability reports (FAR) on
appropriations, allotments, obligations,
disbursement authorities, disbursements
and balances; and
2. To prescribe guidelines on the preparation
and timely submissions of FARs by the
agencies to the DBM and the COA after
the end of each quarter.
74

COVERAGE

The Circular covers all departments,

bureaus, offices and agencies of the
national government and governmentowned and/or controlled corporations
maintaining Special Accounts in the
General Fund.

75

GUIDELINES

A. Head of Office to submit the following

reports to COA and DBM:
1. Statement of Appropriations, Allotments,
Obligations, Disbursements and
Balances (SAAODB))
2. List of Agency Budget Matrix (ABM) or
SAROs and Sub-AROs
76

GUIDELINES

3. Detailed Statement of Current Years

Obligations, Disbursements and Unpaid
Obligations (SODUO-CY)
4. Summary of Prior Years Obligations,
Disbursements and Unpaid Obligations
(SODUO-PY)

5. Summary of Report of Disbursements

77

GUIDELINES

A. The FARs prescribed in the Circular shall

replace the following DBM and COA reports
as follows:

1. DBM
Statement of Allotments, Obligations and
Balances (SAOB) - BAR No. 4
Financial Report of Operations - BAR No. 2)
Financial Report of Operations - BAR No. 2)
78

GUIDELINES

2. COA

SAOB
Detailed Breakdown of Obligations
Detailed Breakdown of Disbursements
Regional Breakdown of Expenses
Statement of Cumulative Allotments, Obligations
Incurred and Unobligated Balances
Detailed Statement of Cumulative Expenditures/
Obligations Incurred, Obligations
Liquidated/Disbursements and Unliquidated
Obligations
79

RESPONSIBILITIES

1. The FARs shall be prepared and certified correct

by the following officials:
Budget Officer/Head of Budget Unit for the
portion of the report pertaining to appropriations,
allotments, obligations, unobligated allotments and
unreleased appropriations

Chief Accountant/Head of Accounting Unit for

the portion of the report pertaining to disbursements
and unpaid obligations

The FARs shall be signed by the Agency Head as the

approving official. He/she shall ensure the timely
submission of the accurate and reliable FARs.

80

DUE DATES OF SUBMISSION to

COA and DBM

All Departments/Agencies not later than

the 30th day after the end of each quarter
The Lower Operating Units within (5) days
after the end of each quarter for consolidation
The Agency Regional Offices to submit
the consolidated report to COA (GAS) and
DBM CO within (10) days after the end of
each quarter
81

COA Circular No. 2012-003

dated October 29, 2012
Updated Guidelines for the Prevention of
Disallowance of Irregular, Unnecessary,
Excessive, Extravagant and Unconscionable
Expenses as enumerated under COA Circular
No. 85-55A dated Sept. 8, 1985

82

LEGAL BASIS

Section 2(2), Article IX-D of the 1987

Constitution

Section 33 of P.D. 1445

83

DEFINITION

1. Irregular Expenditures
Expenditures incurred without adhering to
established rules, regulations, procedural
guidelines, policies, principles or practices
that have gained recognition in laws
Transactions conducted in a manner that
deviates or departs from, or which does not
comply with standards set
84

DEFINITION
2. Unnecessary Expenditures
Expenditures which could not pass the test of prudence
or the diligence of a good father of a family, thereby
denoting non-responsiveness to the exigencies of the
service
Not supportive of the implementation of the objectives
and mission of the agency relative to the nature of its
operation
Not dictated by the demands of good government, and
those, the utility of which cannot be ascertained at a
specific time
Not essential or that which can be dispensed with
without loss or damage to property

85

DEFINITION

3. Excessive Expenditures

Signify unreasonable expense or expense

incurred at an immoderate quantity and
exorbitant price

Include expenses which exceed what is

usual or proper, as well as expenses which
are unreasonably high and beyond just
measure or amount
86

DEFINITION

4. Extravagant Expenditures

Signify those incurred without

restraint, judiciousness and economy

Exceed the bounds of propriety

Immoderate, prodigal, lavish,
luxurious, grossly excessive, and
injudicious
87

DEFINITION

5. Unconscionable Expenditures

Pertain to expenditures which are

unreasonable and immoderate, and
which no man in his right sense
would make, nor a fair and honest
man would accept as reasonable,
and those incurred in violation of
ethical and moral standards
88

COA Circular No. 2013-007

dated September 18, 2013
Guidelines for the Use of Electronic
Official Receipts (eORs) to
Acknowledge Collection of Income
and Other Receipts of Government

89

LEGAL BASIS

Section 7 of R.A. No. 8792, otherwise

known as the Electronic Commerce
Act of 2000

COA Circular No. 2004-006 dated

Sept. 9, 2004, setting the guidelines
and principles on the acceptability of
evidences of receipt of payments
90

RATIONALE/SCOPE
Electronic Collection System is an active online facility
provided by government agencies that enables debtors,
creditors and other clients to pay government dues and
charges through a computer or telephone.
A system for receiving, sending, storing, generating, or
otherwise processing electronic data messages or
electronic documents pertaining to receipt and deposit of
government collections.
A system for receiving, sending, storing, generating, or
otherwise processing electronic data messages or
electronic documents pertaining to receipt and deposit of
government collections.
91

SALIENT FEATURES

The electronic document maintains its

integrity and reliability and can be
authenticated.

For evidentiary purposes, an electronic

document shall be the functional
equivalent of a written document under
existing laws.
92

GENERAL GUIDELINES
1. All collections shall be acknowledged by the
government agency concerned through the
issuance of official receipts to establish that these
have been received.
2. Receipt of collections/revenue through electronic
means shall be acknowledged by an eOR.
3. The eORs shall have met the minimum data content.
4. Collections of NGAs shall be deposited to the
national Treasury while those f or LGUs and
GOCCs shall be deposited to their respective
accounts.
93

GENERAL GUIDELINES
5. All collections through electronic system shall be
recorded/accounted for in the books of the
concerned government agency.
6. The government agency concerned shall comply
with the Joint Administrative Order No. 02,
s.2006, Guidelines Implementing R.A. No. 8792
on EPCS in Government.
7. The government agency shall provide the Auditor
the read/view and print access rights in the
computerized system.
94

COA Circular No. 2012-005

dated December 7, 2012
Revocation of COA Circular 2009-008
dated Nov. 9, 2009 and Prescribing the
Use of Punong Barangays Certification
(PBC) and COA Auditors Advice (CAA)

95

SALIENT FEATURES

The responsibility to initiate , process, approve

financial transactions and issue Punong
Barangays Certification (PBC) under oath rests
with the Barangay officials.

The PBC to be issued only under oath after the PB

has duly examined and been satisfied that:

The DVs are duly certified and approved,

The expenditure or disbursement is proper and
valid, and
The supporting documents are complete.
96

SALIENT FEATURES

The PB shall be primarily accountable for all

losses arising from issuance of the PBC.

The Authorized Government Depository

Bank (AGDB) shall encash the checks

issued if the corresponding PBC is issued.

Checks encashed without the corresponding

PBC or with falsified PBC shall be the
responsibility of the AGDB.

The PBC shall be numbered sequentially by

year and by barangay and in (4) copies.

97

SALIENT FEATURES

The PBC (4th) copy shall be submitted to the

accountant for recording within (10) days
after end of month and subsequently
submitted to the COA auditor for audit.

Non-submission of PBCs within (15) days

after demand by the Auditor shall be a

ground for preparation of the COA Auditors
Advice (CAA) to the AGDB to hold further
payments of checks issued by the said
barangay.

98

eNGAS Rollout in the LGUs

Will now resume with the assistance of the
eNGAS Users Circle (EUC), the lone
organization who signified interest in helping
COA with the rollout in the LGUs.

Memorandum of Agreement (MOA) will be

made to embody the terms and conditions for
the rollout.

This activity to be headed by the COA

Information Technology Office (ITO) and with the
active participation of the Government
Accountancy Sector (GAS).
99

When the people become involved

in their government,
government becomes more accountable,
and our society is stronger,
more compassionate, and better prepared
for the challenges of the future.
- Arnold Schwarzenegger

100

We have a problem
when the same people
who make the law
get to decide whether or not
they themselves
have broken the law.
- Michael Templet

101

I am responsible.
Although I may not be able to prevent
the worst from happening,
I am responsible for my attitude toward the
inevitable misfortunes that darken life.

-Walter Anderson

102

Thank You!