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INTRODUCTION
Government is the political system by which a country or community is administered and

regulated. Government is necessary to the existence of civilized society.
Functions of the Government

• Maintain law and order
• Protection of the environment
• Regulate labor markets
• National defense
• Macro-economic stability
• Reduce market failure
• Minimize inequality
• Provide public goods
• Raise taxes
Transparency and Accountability
Fiscal policy refers to the "measures employed by governments to stabilize the economy,
specifically by manipulating the levels and allocations of taxes and government expenditures.
Declared policy of the State that all resources of the government shall be managed, expended
or utilized in accordance with laws and regulations, and safeguarded against loss or wastage
through illegal or improper disposition, with a view to ensuring efficiency, economy and
effectiveness in the operations of government. The responsibility to take care that such policy is
faithfully adhered to rests directly with the chief or head of the government agency concerned.
(Sec. 2, P.D. No. 1445)
Government Budget is the financial plan of a government for a given period, usually for a fiscal
year, which shows what its resources are, and how they will be generated and used over the
fiscal period. The budget is the government's key instrument for promoting its socio-economic
objectives. The government budget also refers to the income, expenditures and sources of
borrowings of the National Government (NG) that are used to achieve national objectives,
strategies and programs.
Government Accounting encompasses the processes of analyzing, recording, classifying,

summarizing and communicating all transactions involving the receipt and disposition of
government funds and property, and interpreting the results thereof. (Sec. 109, Presidential
Decree (P.D.) No. 1445)
GOVERMENT BUDGET
Revenue:
Taxes
Grants
PAGCOR
+ Loans
= Expenses/Capital Expenditures
PHILIPPINE GOVERNMENT ACCOUNTING SYSTEM

OGAS, Old Government System – as of 2001 has been in used for about five decades
NGAS, New Government System – replaced the OGAS in 2002
GAM, Government Accounting Manual – replaced the NGAS on January 1, 2016
The Government Accounting Manual is the manual prescribed by the Commission on
Audit (COA) for use of all National Government Agencies.
Recent developments brought about by the Philippine Public Financial Management Reforms
and significant changes in the field of accounting prompted the harmonization of the existing
accounting standards with the international accounting standards.
GAM presents the basic accounting policies and principles in accordance with the Philippine
Public Sector Accounting Standards (PPSAS) adopted thru COA Resolution No. 2014-003
dated January 24, 2014
GAM shall be used by all National Government Agencies (NGAs) in the:

a) preparation of the general-purpose financial statements in accordance with the PPSAS
and other financial reports as may be required by laws, rules and regulations; and
b) reporting of budget, revenue and expenditure in accordance with laws, rules and
regulations.
Objective of the Manual (GAM)

The Manual aims to update the following:
a) standards, policies, guidelines and procedures in accounting for government funds and
property;
b) coding structure and accounts;
c) accounting books, registries, records, forms, reports and financial statements
INTERNATIONAL PUBLIC SECTOR ACCOUNTING STANDARDS

• The GAM for NGAs was promulgated primarily to harmonize the Philippine
government accounting standards with the International Public Sector Accounting
Standards (IPSAS).
• The Philippine Government has adopted the IPSAS throu gh the Philippine Public
Sector Accounting Standards (PPSAS).
• The provisions of the PPSAS are incorporated in GAM for NGAs
Financial Reporting System for the National Government

The financial reporting system of the Philippine government consists of accounting system on
accrual basis and budget reporting system on budget basis under the statutory responsibility of
the NGAs, Bureau of the Treasury (BTr), Department of Budget and Management (DBM), and
the COA, as follows:
a. Each entity of the National Government (NG) maintains complete set of accounting books by
fund cluster which is reconciled with the records of cash transactions maintained by the BTr.
b. The BTr accounts for the cash, public debt and related transactions of the NG.
c. Each entity maintains budget registries which are reconciled with the budget records
maintained by the DBM and the Government Accountancy Sector (GAS), COA.
d. The COA, through the GAS:
1. maintains budget records showing the overall approved budget of the NG and its
execution/implementation;
2. consolidates the FS sand budget accountability reports of all NGAs and the BTr with
COA's records to come up with an Annual Financial Report (AFR) for the NG as required in
Section 4, Article IX-D of the 1987 Philippine Constitution; and
3. prepares other financial reports required by law for submission to oversight agencies.
MAJOR PARTICIPANTS IN THE GOV'T FISCAL SYSTEM

DEPARTMENT OF BUDGET AND MANAGEMENT (DBM)
• The Department of Budget and Management, created under Executive Order No. 21
dated April 25, 1936, is mandated under this Order and by subsequent issuances to
promote the sound, efficient and effective management and utilization of government
resources (i.e., technological, manpower, physical and financial) as instrument in the
achievement of national socioeconomic and political development goals.
• BUREAU OF TREASURY manages the cash resources, collect taxes made by the
National Government (NG) and guarantee forward cover fees due NG, control and
service its public debt, both foreign or domestic
• COMMISSION ON AUDIT (COA) an indepndent Constitutional commission which
has primary function to examine, audit and settle accounts and expenditures of the
funds and properties of the Philippine Goventment.
IMPLEMENTING AGENCIES/DEPARTMENTS
• Implementation of the government projects and performing designated governmental
functions.
• Each is required by law to have accounting unit/division/department.
BUDGET AND FINANCIAL REPORTING SYSTEM

Department
A B C D
Budget Registries =GAA
Book of Accounts
Financial Statements =AFR

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INTRODUCTION

Government is the political system by which a country or community is administered and

Functions of the Government

Transparency and Accountability

Government Accounting encompasses the processes of analyzing, recording, classifying,

PHILIPPINE GOVERNMENT ACCOUNTING SYSTEM

GAM shall be used by all National Government Agencies (NGAs) in the:

Objective of the Manual (GAM)

INTERNATIONAL PUBLIC SECTOR ACCOUNTING STANDARDS

Financial Reporting System for the National Government

MAJOR PARTICIPANTS IN THE GOV'T FISCAL SYSTEM

BUDGET AND FINANCIAL REPORTING SYSTEM

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