This document provides an overview of the topics and learning outcomes covered in Lessons 1-3 of ACCT 1133, which introduce government accounting. The lessons cover the differences between government and business accounting, the entities responsible for government accounting, and the Government Accounting Manual (GAM) for National Government Agencies (NGAs). They also discuss the budget process, responsibility accounting principles, and the qualitative characteristics and components of general purpose financial statements. Key terms in government accounting like allotment, appropriation, and approved budget are also defined.
This document provides an overview of the topics and learning outcomes covered in Lessons 1-3 of ACCT 1133, which introduce government accounting. The lessons cover the differences between government and business accounting, the entities responsible for government accounting, and the Government Accounting Manual (GAM) for National Government Agencies (NGAs). They also discuss the budget process, responsibility accounting principles, and the qualitative characteristics and components of general purpose financial statements. Key terms in government accounting like allotment, appropriation, and approved budget are also defined.
This document provides an overview of the topics and learning outcomes covered in Lessons 1-3 of ACCT 1133, which introduce government accounting. The lessons cover the differences between government and business accounting, the entities responsible for government accounting, and the Government Accounting Manual (GAM) for National Government Agencies (NGAs). They also discuss the budget process, responsibility accounting principles, and the qualitative characteristics and components of general purpose financial statements. Key terms in government accounting like allotment, appropriation, and approved budget are also defined.
This document provides an overview of the topics and learning outcomes covered in Lessons 1-3 of ACCT 1133, which introduce government accounting. The lessons cover the differences between government and business accounting, the entities responsible for government accounting, and the Government Accounting Manual (GAM) for National Government Agencies (NGAs). They also discuss the budget process, responsibility accounting principles, and the qualitative characteristics and components of general purpose financial statements. Key terms in government accounting like allotment, appropriation, and approved budget are also defined.
ACCT 1133 (Accounting for Government and Non- Profit Organizations)
2nd Semester Academic Year 2020-2021
Lesson 1,2 and 3, Week 1 and 2: Introduction to Government Accounting
Topics: a. Overview of Government Accounting
b. The Budget Process c. Responsibility Acconting
Learning Outcomes: At the end of this module, you are expected to: 1. Differentiate government accounting from the accounting for business entities. 2. State the government entities charged with accounting responsibility. 3. Describe briefly the GAM for NGAs. 4. State the basic principles used in government accounting. 5. State the recognition criteria for asset 6. Enumerate the steps in the budget process. 7. Describe briefly the principles of responsibility accounting.
Lesson Proper:
Government Accounting -encompasses the processes of analysing, recording, classifying, summarizing and communicating all transactions involving the receipt and disposition of government funds and property and interpreting the results thereof.
The objectives of government accounting are:
1. To produce information concerning past operations and present conditions; 2. To provide a basis for guidance for future operations; 3. To provide for control of the acts of public bodies and officers in the receipt, disposition and utilization of funds and property; and 4. To report on the financial position and the results of operations of government agencies for the information of all person concerned.
Responsibility, Accountability and Liability over Government Funds and
Property a. Responsibility over Government Funds and Property 1. Government resources 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.
2. Fiscal responsibility shall, to the greatest extent, be shared by all those exercising authority over the financial affairs, transactions, and operations of the government agency.
3. The head of any agency of the government is immediately and primarily responsible for all government funds and property pertaining to his agency. Persons entrusted with the possession or custody of the funds or property under the agency head shall be immediately responsible to him, without prejudice to the liability of either party to the government. (
b. Accountability over Government Funds and Property
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1. Every officer of any government agency whose duties permit or require the possession or custody of government funds or property shall be accountable therefor and for the safekeeping thereof in conformity with law. Every Accountable Officer shall be properly bonded in accordance with law.
2. Transfer of government funds from one officer to another shall, except as allowed by law or regulation, be made only upon prior direction or authorization of the Commission or its representative.
3. When government funds or property are transferred from one AO to another, or from an outgoing officer to his successor, it shall be done upon properly itemized invoice and receipt which shall invariably support the clearance to be issued to the relieved or outgoing officer, subject to regulations of the Commission.
c. Liability over Government Funds and Property
1. Expenditures of government funds or uses of government property in violation of law or regulations shall be a personal liability of the official or employee found to be directly responsible therefor.
2. Every officer accountable for government funds shall be liable for all losses resulting from the unlawful deposit, use, or application thereof and for all losses attributable to negligence in the keeping of the funds.
3. No Accountable Officer shall be relieved from liability by reason of his having acted under the direction of a superior officer in paying out, applying, or disposing of the funds or property with which he is chargeable, unless prior to that act, he notified the superior officer in writing of the illegality of the payment, application, or disposition. The officer directing any illegal payment or disposition of the funds or property shall be primarily liable for the loss, while the Accountable Officer who fails to serve the required notice shall be secondarily liable.
4. When a loss of government funds or property occurs while they are in transit or the loss is caused by fire, theft, or other casualty or force majeure, the officer accountable therefor or having custody thereof shall immediately notify the Commission or the auditor concerned and, within 30 days or such longer period as the Commission or auditor may in the particular case allow, shall present his application for relief, with the available supporting evidence. Whenever warranted by the evidence, credit for the loss shall be allowed. An officer who fails to comply with this requirement shall not be relieved of liability or allowed credit for any loss in the settlement of his accounts.
Accounting Responsibility The following offices are charged with government accounting responsibility: a. Commission on Audit b. Department of Budget and Management c. Bureau of Treasury d. Government Agencies
The GAM for NGAs
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. This Commission revised the New Government Accounting System (NGAS) Manual prescribed under Commission on Audit (COA) Circular No. 2002-002 dated June 18, 2002 to make it responsive to dynamic changes and modern technology.
Sec. 1. 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, ACCT 1133- Accounting for Government and Non-Profit Organizations| 2 unnecessary, excessive, extravagant, or unconscionable expenditures, or uses of government funds and properties".
Sec. 2. Coverage. This Manual 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 and other pertinent laws, rules and regulations. It includes the Revised Chart of Accounts (RCA) prescribed under COA Circular No. 2013-002 dated January 30, 2013, as amended; the accounting procedures, books, registries, records, forms, reports, and financial statements; and illustrative accounting entries. 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.
Sec. 3. Objective of the Manual. 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.
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.
a. Allotment – is an authorization issued by the DBM to NGAs to incur obligations forspecified amounts contained in a legislative appropriation in the form of budget release documents. It is also referred to as Obligational Authority. ACCT 1133- Accounting for Government and Non-Profit Organizations| 3 b. Appropriation – is the authorization made by a legislative body to allocate funds for purposes specified by the legislative or similar authority. c. Approved Budget – is the expenditure authority derived from appropriation laws, government ordinances, and other decisions related to the anticipated revenue or receipts for the budgetary period. The approved budget consists of the following:
UACS Code New General Appropriations 01 Continuing Appropriations 02
Supplemental Appropriations 03 Automatic Appropriations 04 Unprogrammed Funds 05 Retained Income/Funds 06 Revolving Funds 07 Trust Receipts 08 d. Automatic Appropriations – are the authorizations programmed annually or for some other period prescribed by law, by virtue of outstanding legislation which does not require periodic action by Congress.
e. Budget Information – the budgetary information consists of, among others, data on appropriations or the approved budget, allotments, obligations, revenues and other receipts, and disbursements.
f. Continuing Appropriations – are the authorizations to support obligations for a specific purpose or project, such as multi-year construction projects which require the incurrence of obligations even beyond the budget year.
g. Disbursements – are the actual amounts spent or paid out of the budgeted amounts.
h. Final Budget – is the original budget adjusted for all reserves, carry-over amounts, transfers, allocations and other authorized legislative or similar authority changes applicable to the budget period.
i. New General Appropriations – are annual authorizations for incurring obligations during a specified budget year, as listed in the GAA.
j. Obligation – is an act of a duly authorized official which binds the government to the immediate or eventual payment of a sum of money. Obligation maybe referred to as a commitment that encompasses possible future liabilities based on current contractual agreement.
k. Original Budget – is the initial approved budget for the budget period usually the General Appropriations Act (GAA). The original budget may include residual appropriated amounts automatically carried over from prior years by law such as prior year commitments or possible future liabilities based on a current contractual agreement.
l. Revenues – are increases in economic benefits or service potential during the accounting period in the form of inflows or increases of assets or decreases of liabilities that result in increases in net assets/equity, other than those relating to contributions from owners.
m. Supplemental Appropriations – are additional appropriations authorized by law to augment the original appropriations which proved to be insufficient for their intended purpose due to economic, political or social conditions supported by a Certification of Availability of Funds (CAF) from the BTr.
RESPONSIBILITY ACCOUNTING Responsibility Accounting – provides access to cost and revenue information under the supervision of a manager having a direct responsibility for its performance. It is a system that measures the plans (by budgets) and actions (by actual results) of each responsibility center.
Responsibility Center – is a part, segment, unit or function of a government agency, headed by a manager, who is accountable for a specified set of activities. Except for some, which derive most of their income from ACCT 1133- Accounting for Government and Non-Profit Organizations| 4 collection of taxes and fees, NGAs are basically cost centers which primary purpose is to render service to the public at the lowest possible cost. Cost centers are established to provide each government agency’s accessibility to cost information and to facilitate cost monitoring at any given period.
Objectives of Responsibility Accounting
Responsibility accounting aims to: a) ensure that all costs and revenues are properly charged/credited to the correct responsibility center so that deviations from the budget can be readily attributed to managers accountable therefor; b) provide a basis for making decisions for future operations; and c) facilitate review activities, monitoring the performance of each responsibility center and evaluation of the effectiveness of agency’s operations.
Responsibility Center Code Structure
Each NGA shall be assigned a responsibility center code defined as organization code in the UACS Manual. For monitoring revenue and expenses, additional three digit codes for the agency’s major offices/departments shall be appended to the organization code. The organization code and the agency’s major offices/departments’ code shall consist of 15 digits as follows:
REFERENCES
1. Millan, Z. (2018). Government Accounting & Accounting for Non-Profit Organizations. Bandolin Enterprise, Baguio City. 2. GAM for NFAS Volume I
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