Module 1 - Public Accounting and Budgeting

Public Accounting and
Budgeting
A.Y. 2023-2024, 1st Semester
Prof. Lorenzo B. Cabili, CPA, JD, DM

Module 1:
Introduction to Public Accounting and
Budgeting
Definition
• Government Accounting – defines Government Accounting as one that encompasses the process of
analyzing, classifying, summarizing and communicating all transactions that are involved in the receipt
and disbursement of all government funds and properties, and interpreting the results thereof. [Section
109 of the Presidential Decree (PD) No. 1445]
• Government Budgeting - 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
Manual (GAM) for NG Agencies (NGAs)]
More definitions
• Budget – financial program of the National Government for a designated fiscal year, consisting of the
statements of estimated receipts and expenditures for the fiscal year for which it was intended to be
effective based on the results of operations during the preceding fiscal years.
[Commonwealth Act (CA) No. 246 (Budget Act)]
• Budget – delineation of the services and products, or benefits that would accrue to the public together
with the estimated unit cost of each type of service, product or benefit. [Republic Act (RA) No. 992
(Revised Budget Act)]
Objectives of Government Accounting
• To produce relevant financial information about past and present transactions of government
• To serve as basis for decision making for future operations

• To serve as the control mechanism for the receipt, disposition and utilization of government funds and
properties
• To come up with financial reports pertaining to the results of operations of various government
agencies that are for dissemination to the public.
Objectives of Philippine Budget System
• To carry on all government activities under a comprehensive fiscal plan developed, authorized and
executed in accordance with the Constitution, prevailing statutes and the principles of sound public
management
• To provide for the periodic review and disclosure of the budgetary status of the Government in such
detail so that persons entrusted by law with the responsibility as well as the enlightened citizenry can
determine the adequacy of the budget actions taken, authorized or proposed, as well as the true
financial position of the Government
Government Offices Involved and their Roles
Commission on Audit (COA)

The Commission on Audit shall have the power, authority, and duty to examine, audit, and settle all
accounts pertaining to the revenue and receipts of, and expenditures or uses of funds and property, owned
or held in trust by, or pertaining to, the Government, or any of its subdivisions, agencies, or
instrumentalities, including government-owned or controlled corporations with original charters, and on a
post-audit basis: (a) constitutional bodies, commissions and offices that have been granted fiscal autonomy
under this Constitution; (b) autonomous state colleges and universities; (c) other government-owned or
controlled corporations and their subsidiaries; and (d) such non-governmental entities receiving subsidy or
equity, directly or indirectly, from or through the Government, which are required by law or the granting
institution to submit to such audit as a condition of subsidy or equity. However, where the internal control
system of the audited agencies is inadequate, the Commission may adopt such measures, including
temporary or special pre-audit, as are necessary and appropriate to correct the deficiencies. It shall keep the
general accounts of the Government and, for such period as may be provided by law, preserve the vouchers
and other supporting papers pertaining thereto. (Article IX-D, Section 2(1) of the 1987 Philippine
Constitution)
Commission on Audit (COA)
Following are the principal duties of the Commission:
1.Examine, audit and settle all accounts pertaining to the revenue and receipts of, and expenditures or uses of funds and property owned or held in trust by, or
pertaining to, the government.
2.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.
3.Submit annual reports to the President and the Congress on the financial condition and operation of the government.
4.Recommend measures to improve the efficiency and effectiveness of government operations.
5.Keep the general accounts of government and preserve the vouchers and supporting papers pertaining thereto.
6.Decide any case brought before it within 60 days.
7.Performs such other duties and functions as may be provided by law.
Source: https://coa.gov.ph/index.php/2013-06-19-13-06-03/principal-duties
Department of Budget and Management (DBM)

The DBM, created under Executive Order (EO) No. 25 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.
Source: https://www.dbm.gov.ph/index.php/about-us/mandate
Department of Budget and Management (DBM)
Following are the general functions of the Department:
• Formulates the overall resource application strategy to match the government’s macroeconomic policy; •
Prepares the medium-term expenditure plan, indicating the programming, prioritization, and financing of
capital investment and current operating expenditure requirements of medium-term sectoral development
plans;
• Undertakes the formulation of the annual national budget in a way that ensures the appropriate prioritization
and allocation of funds to support the annual program of government;
• Develops and administers a national accounting system essential to fiscal management and control;
• Conducts a continuing study of the bureaucracy and assesses as well as makes policy recommendation on
its role, size, composition, structure and functions to establish a government bureaucracy imbued with a
spirit of public service;
• Establishes the rules and procedures for the management of government organization resources i.e.,
physical, manpower and other resources, formulates standards of organizational program performance; and
undertakes or provides services in work simplification or streamlining of systems and procedures to
improve efficiency and effectiveness in government operations;
• Conceptualizes and administers the government’s compensation and position classification plan; and
• Monitors and assesses the physical as well as the financial operations of local government units and
Government-Owned and/or Controlled Corporations.
Source: https://www.dbm.gov.ph/index.php/about-us/general-functions
Legal Basis
• Republic Act No. 992 (Revised Budget Act)
• "Art. VI, Sec. 29. No money shall be paid by the Treasury except in pursuance of an appropriation made
by law."
• Section 22, Article VII of the Constitution states that: "The President shall submit to the Congress
within 30 days from the opening of every regular session, as the basis of the general appropriation bill
(GAB), a budget of expenditures and sources of financing including receipts from existing and proposed
revenue measures."
Legal Basis
• Article IX-D, Section 2 par. (2) of the 1987 Constitution of the Republic of the Philippines which
provides that:
“The Commission on Audit shall have exclusive authority, subject to the limitations in this Article, to
define the scope of its audit and examination, establish the techniques and methods required therefor,
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". (Underscoring supplied)
End of Module 1

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Public Accounting and

Prof. Lorenzo B. Cabili, CPA, JD, DM

• To serve as basis for decision making for future operations

Commission on Audit (COA)

Department of Budget and Management (DBM)

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