Gov. Acctg. 1

• Government accounting places greater emphasis on the sources and utilization of government funds, and responsibility, accountability and liability of entities entrusted with government funds and properties
• Responsibility over government funds and property

  Government resources shall be utilized efficiently and effectively in accordance with the law. The head of a government agency is directly responsible in implementing this policy and is primarily responsible for government resources entrusted to his agency. Those who are entrusted with the possession of government resources are directly responsible to the head of the agency. All those who are exercising authority over a government agency shall share fiscal responsibility.
• Accountability over government funds and property

  A government officer entrusted with the possession of government resources is responsible for the safekeeping thereof in accordance with the law. Every accountable officer shall be properly bonded. The transfer of government funds from one officer to another shall, except as allowed by law, be made only after the authorization of the COA. The transfer shall be properly documented in an invoice and receipt.
• Liability over government funds and property

  The unlawful use of government resources shall be the personal liability of the employee found to be directly responsible therefor. Every accountable officer shall be liable for all losses resulting from the unlawful use or negligence in the safekeeping of government resources. No accountable officer shall be relieved from liability merely because he has acted under the direction of a superior officer in unlawfully utilizing the government resources entrusted to him, unless before that act, he has notified the superior officer, in writing, that the utilization is illegal. The superior officer shall be primarily liable while the accountable officer who fails to serve the required notice shall be secondarily liable. An accountable officer shall immediately notify the COA for any loss of government funds from unforeseen events (force majeure) within 30 days. Failure to do so will not relieve the officer of liability.
• 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 loss.
• Unless before that act, he has notified the superior officer, in writing, that the utilization is illegal. The superior officer shall be primarily liable while the accountable officer who fails to serve the required notice shall be secondarily liable.
• An accountable officer shall immediately notify the COA for any loss of government funds from unforeseen events (force majeure) within 30 days. Failure to do so will not relieve the officer of liability.
• (P.D. No. 1445)
• Overseas workers


  Unsung heroes
• Accounting

  A tool for planning and control, contributes to the achievement of this goal by providing information that is useful in planning the sources and uses of government funds and comparing actual results with expected results to promote the efficient and effective utilization of government funds.
• Offices charged with government accounting responsibility

  • Commission on Audit (COA)
  • Department of Budget and Management (DBM)
  • Bureau of Treasury (BTr)
  • Government agencies
• Commission on Audit (COA)


  • Has the exclusive authority to promulgate accounting and auditing rules and regulations
  • Keeps the general accounts of the government, supporting vouchers, and other documents
  • Submits financial reports to the President and Congress
• Department of Budget and Management (DBM)


  • 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)


  • Functions under the Department of Finance and is the cash custodian of the government
  • Authorized to receive and keep national funds and manage and control the disbursements thereof
  • Authorized to maintain accounts of financial transactions of all national government offices, agencies and instrumentalities
• Government agency


  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
• Government agencies are responsible in directly implementing the projects of, and performing the functions delegated by, the government.
• Each agency (entity) 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.
• Government agencies are required by law to have accounting units/divisions/departments.
• Even a barangay (the smallest administrative division in the Philippines) is required to have an accounting unit, e.g., the barangay's "bookkeeper."
• Financial Reporting System of the National Government

  1. Each entity maintains accounting books and budget registries

  2. Each entity reconciles accounting books with cash records of BTr

  3. Each entity reconciles budget registries with budget records of COA

  4. Each entity reconciles budget registries with budget records of DBM

  5. Each entity submits financial reports to COA for consolidation

  6. COA consolidates financial reports of government agencies and submits it to the President and Congress
• Entity


  Refers to a government agency, department or operating/field unit
• Financial Reporting


  The process of preparation, presentation and submission of general purpose financial statements and other reports. The objective of financial reporting is to provide information about the entity that is useful to users for accountability purposes and decision-making.
• An "old" government accounting system had been used for about five decades before it was replaced by the New Government Accounting System (NGAS) in 2002. However, on January 1, 2016, the NGAS was replaced by the Government Accounting Manual for National Government Agencies (GAM for NGAs).
• GAM for NGAs


  Promulgated primarily to harmonize the government accounting standards with international accounting standards, particularly the International Public Sector Accounting Standards (IPSAS). The IPSASS are based on the International Financial Reporting Standards (IFRS).
• 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.
• Since the PPSAS are based on the IPSAS, which are in turn based on the IFRSS/PFRSS, most of the concepts that we will be learning in this book would be very familiar to you ☺.
• Legal basis of GAM for NGAs

  Promulgated by the Commission on Audit (COA) based on the authority conferred to it by the Philippine Constitution
• Relevant provision of law: "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." (Art. IX-D. Sec. 2(2), Philippine Constitution)
• Coverage of GAM for NGAs

  • Provides the basic concepts to be used in preparing general purpose financial statements in accordance with the Philippine Public Sector Accounting Standards (PPSAS) and other financial reports as may be required by laws, rules and regulations
  • Provides the basic concepts to be used in reporting of budget, revenue and expenditure in accordance with laws, rules and regulations
• Objective of GAM for NGAs

  • Aims to update the standards, policies, guidelines and procedures in accounting for government funds and property
  • Aims to update the coding structure and accounts
  • Aims to update the accounting books, registries, records, forms, reports and financial statements
• Basic Accounting and Budget reporting Principles

  • Comply with Philippine Public Sector Accounting Standards (PPSAS) and relevant laws, rules and regulations
  • Use accrual basis of accounting
  • Use budget basis for presentation of budget information in the financial statements
  • Use Revised Chart of Accounts prescribed by COA
  • Use double entry bookkeeping
  • Prepare financial statements based on accounting and budgetary records
  • Use fund cluster accounting
• Fund cluster accounting


  The books of accounts are maintained by fund cluster (i.e., according to the types of funds being accounted for)
• Fund clusters

  • Regular Agency Fund
  • Foreign Assisted Projects Fund
  • Special Account-Locally Funded/Domestic Grants Fund
  • Special Account-Foreign Assisted/Foreign Grants Fund
  • Internally Generated Funds
  • Business Related Funds
  • Trust Receipts
• Qualitative Characteristics of Financial Reporting

  • Understandability
  • Relevance
  • Materiality
  • Timeliness
  • Reliability
  • Faithful representation
  • Substance over form
  • Neutrality
  • Prudence
  • Completeness
  • Comparability
• Understandability


  Information is understandable when users can reasonably be expected to comprehend its meaning. Users are assumed to have reasonable knowledge of the entity's activities and willingness to study the information.
• Relevance


  Information is relevant if it can assist users in evaluating past, present or future events or in confirming or correcting past evaluations. Information must also be timely.
• Materiality


  Information is material if its omission or misstatement could influence the decisions of users. Materiality depends on the nature or size of the item or error, judged in the particular circumstances of its omission or misstatement.
• Timeliness


  Information loses its relevance if there is undue delay in its reporting. The complexity of an entity's operations is not a sufficient reason for failing to report on a timely basis.
• Reliability


  Reliable information is free from material error and bias, and can be depended on by users to represent faithfully that which it purports to represent or could reasonably be expected to represent.
• Faithful representation


  For information to represent faithfully transactions and other events, it should be presented in accordance with the substance of the transactions and other events, and not merely their legal form.