GOVERNMENT ACCOUNTING HANDOUTS Accountability over government funds and

(CHAPTER 1) property
• government officer is responsible in
Government Accounting safekeeping of the gov. resources in
• encompasses the processes of (ARCSCI) accordance with the law
analyzing, recording, classifying, • every accountable officer shall be properly
summarizing, communicating all bonded
transactions involving receipt and disposition • transfer of gov. funds be made only after the
of the government funds and property, and authorization of COA
interpreting the results thereof. (State Audit • transfer shall be documented in an invoice
Code of the Philippines, P.D. No 1445, sec. and receipt
109)
Liability over government funds and property
Objectives of GA: • unlawful use of gov. resources shall be the
• produce information concerning past and personal liability of the employee found to be
present conditions directly involved
• basis for future operations • every accountable officer shall be liable for
• control of the acts of public bodies and all losses
officers • no accountable officer shall be relieved from
• report on financial position liability merely because he has acted under
• process of producing information that useful the direction of superior officer, unless before
in making economic decisions that act, he has notified the superior that the
act is illegal then the superior is primarily
GA places greater emphasis on the ff.: liable and the officer is secondarily liable
• sources and utilization of government funds
• responsibility, accountability, and liability of Offices charged w/ Accounting Responsibility:
government entities
1. COA – Commission on Audit
Sources • authority to promulgate accounting
– government funds include receipts from taxes and and auditing rules and regulations
other fees, borrowings and grants. • authority conferred to it by the
Philippine Constitution
Utilization • keeps the general accounts,
– government funds include expenditures on supporting vouchers, and other
programs, projects, unanticipated losses from documents of the gov.
calamities. • submits financial reports to the
President and Congress
Responsibility over government funds and
property 2. DBM – Department of Budget and
• resources shall be utilized efficiently and Management
effectively in accordance with the law • responsible for formulation and
• all those who are exercising authority over implementation of the national
gov. agency shall share fiscal budget
responsibility
3. BTr – Bureau of Treasury
Head of government agency • under the Department of Finance
- directly responsible in implementing policy • cash custodian of the government
- primarily responsible for gov. resources • receive and keep national funds and
entrusted to his agency manage and control the
- those who are entrusted with the possession disbursement
of gov. resources are directly responsible to • maintain accounts of financial
him transactions of all national gov.
offices, agencies, and
instrumentalities
 4. Government Agencies IPSAS – (International Public Sector Accounting
• any department, bureau or office of Standards)
the national government - based on International Financial Reporting
• political subdivision Standards (IFRS)
• government owned or controlled - adopted through Philippine Public Sector
corporation (GOCC) Accounting Standards (PPSAS)
• responsible in directly implementing
the projects and perform the Basic Accounting and Budget Reporting Principles
functions delegated by the gov.
• each agency shall maintain Financial records and reports of government entities
accounting books and budget shall comply with the following:
registries to be reconciled with the
cash records of the BTr and budget 1. PPSAS – Philippine Public Sector
records of COA and DBM Accounting Standards and relevant laws,
• required by law to have accounting rules and regulations
units/divisions/departments 2. Accrual basis for accounting –
• even the barangay is required to transactions are recognized when they occur
have accounting unit or bookkeeper and not only when cash is received or paid
3. Budget basis – for presentation of budget
Entity information in the FS
– refers to a gov. agency, department or 4. Revised Chart of Accounts – prescribed by
operating/field unit COA
5. Double Entry Bookkeeping
Financial Reporting 6. FS based on accounting and budgetary
– process of preparation, presentation, and records
submission of general-purpose FS and other reports 7. Fund Cluster accounting – books of
– to provide information that is useful to users for accounts are maintained by fud cluster
accountability and decision-making
Fund Clusters and Code (RFSSIBT)
GAM for NGAs – Government Accounting
Manual for National Government Agencies • Regulatory Agency Fund 01
- old government accounting had been used • Foreign Assisted Projects Fund 02
for 5 decades • Special Account-Locally Funded/
- in 2002 the New Government Accounting Domestic Grants Fund 03
System (NGAS) was used • Special Account-Foreign Assisted/
- on January 1, 2016, NGAS was replaced by Foreign Grants Fund 04
the GAM for NGAs • Internally Generated Funds 05
- promulgated primarily to harmonize the • Business Related Funds 06
government accounting standards with • Trust Receipts 07
international accounting standards
particularly the IPSAS Qualitative Characteristics of Financial
- promulgated by the COA Reporting

Coverage Qualitative characteristics – attributes that make

- prepare general purpose FS in accordance information useful to users
with IPSAS
- reporting of budget, revenue, and 1. Understandability – users can reasonably
expenditure be expected to comprehend its meaning
Objective 2. Relevance – it can assist users in evaluating
- update the standards, policies, guidelines, past, present or future events. Information
and procedures in accounting for must be timely
government funds and property 3. Materiality – information is material if its
- update coding structure and accounts omission or misstatement could influence the
- update accounting books, registries, records, decisions or users
forms, reports, and FS
 4. Timeliness – information losses its Elements of Financial Statements
relevance it there is undue delay in its
reporting ASSETS
5. Reliability – free from material error and bias - resources controlled by an entity as a result
of past events, and from which future
- To achieve a balance between relevance and economic benefits or service potential are
reliability, the overriding consideration is how expected to flow to the entity
users’ needs are best satisfied features:
- controlled by the entity
6. Faithful Representation – it should be - benefits have arisen from a past events
presented in accordance with the substance - future economic benefits must be expected
of the transactions and not merely on legal to flow to the entity
form recognition:
7. Substance over form – not always - probable economic benefits will flow to entity
consisted with their legal form - measured reliably
8. Neutrality – free from bias and not designed measurement:
to influence the user’s decision in order to - valuation method
achieve predetermined outcome - faithful representation
9. Prudence – exercise of the degree of - reliable information
caution
10. Completeness – information should be Control – ability to benefit from an asset or prevent
complete within the bounds of materiality and other from benefitting from that asset
cost
11. Comparability – users are able to identify Benefit – ability to use, exchange, lease, sell, or use
similarities and differences, comparison of asset to settle liabilities or distribute to owners
FS over different periods
Past event – transaction giving rise to control future
Mnemonics: economic benefits must have occurred.
(URMTRFSNPCC) or "Unicorn Rides Make Trips
Really Fun, So Never Pass on Cotton Candy." LIABILITIES
- present obligations of the entity arising from
General Purpose Financial Statements past events
- Intended to meet the needs of users who are EQUITY
not in a position to demand reports tailored - residual interest in the assets less liabilities
to meet their particular information needs REVENUE
- gross inflow of economic benefits
Complete set of general purpose FS:
contribution from owners – benefits contributed to
1. Statement of Financial Position the entity by external parties
2. Statement of Financial Performance
3. Statement of Changes in Net revenue funds – comprise all funds derived from
Assets/Equity the income of any agency
4. Statement of Cash Flows
5. Statement of Comparison of Budget and EXPENSES
Actual Amounts - decreases in economic benefits or service
6. Notes to the FS potential during reporting period

FS unique to government entity: distribution to owners – future economic benefits

- Statement of Comparison of Budget and distributed by the entity to its owners, either as a
Actual Amounts return on investment or return of investment

GOOD LUCK AND GOD BLESS FUTURE CPA’s!