Government Accounting

GOVERNMENT
ACCOUNTING
INTRODUCTION
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)
OBJECTIVES OF GOVERNMENT
ACCOUNTING
🞂To provide information concerning past operations and

present conditions;
🞂To provide a basis for guidance for future operations;

OBJECTIVES OF GOVERNMENT
ACCOUNTING
🞂To provide for control of the acts of public bodies and

officers in the receipt, disposition and utilization of
funds and property; and
🞂To report on the financial position and the results of

operations of government agencies for the information
of all persons concerned.
EMPHASIS OF GOVERNMENT ACCOUNTING
a. Sources and utilization of government funds; and
b. Responsibility, accountability and liability of entities

entrusted with government funds and properties.
RESPONSIBILITY, ACCOUNTABILITY AND LIABILITY
OVER GOVERNMENT FUNDS AND PROPERTY
Government resources must be utilized efficiently and

effectively in accordance with the law. Government
officials are responsible in implementing this policy, are
accountable for the government resources in their
custody, and are liable for any loss.
GOVERNMENT BUDGET
❏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.
❏Government’s key instrument for promoting its socio-

economic objectives
Government Budgetary Process
❏Budget Preparation
❏Budget Legislation or Authorization
❏Budget Execution
❏Budget Accountability
BUDGET PREPARATION
❏The step wherein the President, through the assistance

of the Department of Budget and Management, shall
prepare and submit to the Congress a budget of
expenditures and sources of financing, including
receipts from existing and proposed revenue measures.
BUDGET AUTHORIZATION
❏Involves the enactment by the Congress of the General

Appropriation Act based on the budget submitted by
the President. The initiative for the enactment of the
appropriation law shall come from the House of
Representatives.
BUDGET EXECUTION
❏Involves the implementation of the general

appropriation act which includes the release of
revenue allotment under the supervision of
Department of Budget and Management.
BUDGET ACCOUNTABILITY
❏Involves the submission of proper documentary

reports by responsible officer, liquidation of
expenditures and audit conducted by Commission on
Audit to ensure that public funds are spent in
accordance with the appropriation act.
ACCOUNTING RESPONSIBILITY
The following offices are charged with government
accounting responsibility:
a. Commission on Audit (COA)

b. Department of Budget and Management (DBM)
c. Bureau of Treasury (BTr)
d. Government agencies
COMMISION ON AUDIT (COA)
a. Has the exclusive authority to promulgate accounting

and auditing rules and regulations.
b. Keeps the general accounts of the government,

preserve the vouchers, and other supporting papers.
c. Submits financial reports to the President and

Congress.
DEPARTMENT OF BUDGET AND
MANAGEMENT (DBM)
It is responsible for the formulation and implementation

of the national budget with the goal of attaining the
nation’s socio-economic objectives.
BUREAU OF TREASURY (BTr)
It functions under the Department of Finance and is the
cash custodian of the government.
It is authorized to:
a. Receive and keep national funds and manage and
control the disbursements thereof; and
b. Maintain accounts of financial transactions of all

national government offices, agencies and
instrumentalities.
GOVERNMENT AGENCIES
❏ Refers to any department, bureau or office of the national
government, or any of its branches and instrumentalities, or
any political subdivision, as well as any government owned
or controlled corporation (GOCC), including its
subsidiaries, or other self-governing board or commission
of the government.
❏ Each agency shall maintain accounting books and budget

registries which are reconciled with the cash records of the
BTr and the budget records of the COA and DBM.
THE GOVERNMENT ACCOUNTING
MANUAL FOR NGAs
🞂 On January 1, 2016, the New Government Accounting
Standards (NGAS), effectives since 2002, was replaced by the
Government Accounting Manual for National Government
agencies.
🞂 The GAM for NGAs was promulgated primarily to harmonize

the government accounting standards with international
accounting standards, particularly the International Public
Sector Accounting Standards (IPSAS), which are based on the
IFRS.
THE GAM FOR NGAs
🞂This manual presents the basic accounting policies and

principles in accordance with PPSAS.
🞂The Philippine government has adopted the IPSAS

through the Philippine Public Sector Accounting
Standards (PPSAS). The provisions of the PPSAS are
incorporated in the GAM for NGAs.
GAM FOR NGAs: LEGAL BASIS
The Government Accounting Manual (GAM) is prescribed by
COA pursuant to 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".
GAM FOR NGAs: COVERAGE
It 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.
GAM FOR NGAs: OBJECTIVES
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; and
c. accounting books, registries, records, forms, reports and

financial statements.

Basic Government Accounting and Budget
Reporting Principles
Each entity shall recognize and present its financial

transactions and operations conformably to the
following:
❏generally accepted government accounting principles

in accordance with the PPSAS and pertinent laws,
rules and regulations;
❏accrual basis of accounting in accordance with the

PPSAS;
❏budget basis for presentation of budget information in

the financial statements (FSs);
🞂Revised Chart of Accounts prescribed by COA;
🞂double entry bookkeeping;
🞂financial statements based on accounting and budgetary
records; and
🞂fund cluster accounting.
Code Description
01 Regular Agency Fund

02 Foreign Assisted Projects Fund
03 Special Account-Locally Funded/Domestic Grants Fund
04 Special Account-Foreign Assisted/Foreign Grants Fund
05 Internally Generated Funds

06 Business Related Funds
07 Trust Receipts
Components of General Purpose
Financial Statements.
The complete set of GPFSs consists of:

a. Statement of Financial Position;
b. Statement of Financial Performance;
c. Statement of Changes in Net Assets/Equity;
d. Statement of Cash Flows;
e. Statement of Comparison of Budget and Actual Amounts;
and
f. Notes to the Financial Statements, comprising a summary
of significant accounting policies and other explanatory
notes.
BOOKS OF ACCOUNTS of NGAs
❏General Journal
❏Cash Receipts Journal
❏Cash Disbursements Journal
❏Check Disbursements Journal
❏General Ledgers
❏Subsidiary Ledgers
REGISTRIES OF NGAs
❏Registries of Revenue and Other Receipts
❏Registries of Appropriations and Allotments
❏Registries of Allotments, Obligations and

Disbursements
❏Registries of Budget, Utilization and Disbursements

OBJECT OF EXPENDITURES
❏Personnel Services
❏Maintenance and Other Operating Expenses
❏Financial Expenses
❏Capital Outlay
FUNDAMENTAL PRINCIPLES OF
REVENUE
Unless otherwise specifically provided by law, all

revenues accruing to an entity by virtue of the provisions
of existing law, orders and regulations shall be
deposited/remitted in the National Treasury or in any duly
authorized government depository, and shall accrue to the
General Fund of the National Government.
FUNDAMENTAL PRINCIPLES FOR
DISBURSEMENT OF PUBLIC FUNDS
No money shall be paid out of any public treasury or

depository except in pursuance of an appropriation law or
other specific statutory authority.
Important Terms
❏Appropriation
❏Allotment
❏Approved Budget
❏Notice of Cash Allocation

Government Accounting

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GOVERNMENT

Encompasses the processes of analyzing, recording,

🞂To provide information concerning past operations and

🞂To provide a basis for guidance for future operations;

🞂To provide for control of the acts of public bodies and

🞂To report on the financial position and the results of

a. Sources and utilization of government funds; and

b. Responsibility, accountability and liability of entities

Government resources must be utilized efficiently and

❏The financial plan of a government for a given period,

❏Government’s key instrument for promoting its socio-

❏Budget Legislation or Authorization

❏The step wherein the President, through the assistance

❏Involves the enactment by the Congress of the General

❏Involves the implementation of the general

❏Involves the submission of proper documentary

a. Commission on Audit (COA)

a. Has the exclusive authority to promulgate accounting

b. Keeps the general accounts of the government,

c. Submits financial reports to the President and

It is responsible for the formulation and implementation

b. Maintain accounts of financial transactions of all

❏ Each agency shall maintain accounting books and budget

🞂 The GAM for NGAs was promulgated primarily to harmonize

🞂This manual presents the basic accounting policies and

🞂The Philippine government has adopted the IPSAS

a. Preparation of the general purpose financial statements in

b. Reporting of budget, revenue and expenditure in accordance

b. coding structure and accounts; and

c. accounting books, registries, records, forms, reports and

Each entity shall recognize and present its financial

❏generally accepted government accounting principles

❏accrual basis of accounting in accordance with the

❏budget basis for presentation of budget information in

01 Regular Agency Fund

04 Special Account-Foreign Assisted/Foreign Grants Fund

05 Internally Generated Funds

❏Registries of Appropriations and Allotments

❏Registries of Allotments, Obligations and

❏Registries of Budget, Utilization and Disbursements

❏Maintenance and Other Operating Expenses

Unless otherwise specifically provided by law, all

No money shall be paid out of any public treasury or

❏Notice of Cash Allocation

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