193963008 government accounting

Government accounting has been defined as follows:

Government accounting encompasses all part of the process of recording, collecting and disbursing of government resources, and the making of reports concerning any or all of those operations or about their result.

Government accounting encompasses the processes of analyzing, recording, classifying, summarizing and communicating all transactions involving the receipt and distribution of government funds, and property and interpreting the results thereof.

Presidential Decree (PD) No. 1445 which ordains and institutes a

government accounting code of the Philippines, enumerates the

fourfold objectives of government accounting as follows:

To produce information concerning past operations and present

condition.

To provide a basis for guidance for future operations.

To provide for control of the account of public entities and

officers in the receipt, disposition and utilization of funds and

property.

To report on the financial position and the results of operations

of the government agencies for the information of all persons

concerned.

Section 2(1) The Commission on Audit (COA) 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, commission and offices that have been granted fiscal autonomy under this Constitutions; (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.

(2) The Commission shall have exclusive authority, subject to

limitations in this Article, to define 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 expenditure, or uses of

government funds and properties.

Section 3. No law shall be passed exempting any entity of the

Government or its subsidiary in any guise whatever, or any

investment of public funds, from the jurisdiction of the

Commission on Audit.

Section 4. The Commission on Audit shall submit to the

President and Congress, within the time fixed by law, an

annual report covering the financial condition and operation

of the Government, its subdivisions, agencies, and

instrumentalities, including government-owned or controlled

corporations, and non-governmental entities subject to its

audit, and recommend measurers necessary to improve their

effectiveness and efficiency. It shall submit such other reports

as may be required by law.

The offices responsible for government accounting are the Commission on Audit (COA), the Department of Budget and Management (DBM). The DBM is charged with the design preparation and approval of accounting systems of government agencies per PD 1379 of 1976.

Bureau of Treasury. This is an operating bureau of the Department of Finance which is charged with receiving and keeping national funds, managing and controlling disbursements thereof and maintaining of financial transactions of all national government offices, agencies and instrumentalities.

Government Agencies. Each government agencies records its transactions subject to technical supervision of COA.

Agency :

M O O E

Appropriations Appropriations Appropriations Appropriations

Balance Balance Balance BalanceAppropriations Allotments Appropriations Allotments Appropriations Allotments Appropriations Allotments

Capital Outlay Financial Expenses

DEPARTMENT OF BUDGET AND MANAGEMENT

REGISTRY OF APPROPRIATIONS AND ALLOTMENTS

Personal Services

Sheet No._________

P.P.A.___________

Date Ref.

REGISTRY OF APPROPRIATIONS AND ALLOTMENTS

(RAPAL)

INSTRUCTIONS

1. This form shall be accomplished as follows:

a. Agency - name of the agency b. Sheet No. sheet number which shall be one series per year c. Program/Project/Activity (P.P.A.) - code for program/project/

activity of the agency per General Appropriations Act/Budget

documents

d. Date date of recording e. Reference numbers of the General Appropriations Act,

Agency Budget Matrix (ABM) and Special Allotment Release

Order (SARO)

f. Appropriations amount of appropriations approved for PS, MOOE, FE and CO

g. Allotments - amount of allotments releases per ABM/SARO h. Appropriations Balance running balance of appropriations

2. This Registry shall be maintained by the Department of Budget

and Management for each Department/Agency of the National

Government by Program, Project and Activity to ensure that

allotment releases are within the authorized appropriation.

Department /Agency : Sheet No.:

DEPARTMENT OF BUDGET AND MANAGEMENT

NCADate Reference

REGISTRY OF ALLOTMENTS AND NOTICE OF CASH ALLOCATION (NCA) ISSUED

Allotments

Issued Issued

BalanceUnfunded Allotment

REGISTRY OF ALLOTMENTS and NCA ISSUED (RANCAI)

INSTRUCTIONS

1. This form shall be accomplished as follows:

a. Department/Agency name of the Department/Agency b. Sheet No. sheet number which shall be one series per year c. Date date of the reference document d. Reference reference document such as JEV No., SARO

No., etc.

e. Allotments Issued amount of allotments issued per approved ABM/SARO

f. NCA Issued amount of Notice of Cash Allocation issued to the agency

g. Balance running balance of unfunded allotment

2. At the end of the year, it shall be totaled and ruled.

3. This form shall be used by the Department of Budget and Management for each Department/Agency of the National

Government to ensure that NCAs issued are covered by

allotments released to agencies.

Sheet No.: ______

Date No. Ref. Date No.

Bureau of the Treasury

REGISTRY OF NOTICE OF CASH ALLOCATION AND

REPLENISHMENTS

Notice of

Allocation

Balance

Notice of Cash

Amount Amount

Journal Entry Voucher (JEV)

Replenishments

Cash Allocation

REGISTRY OF NOTICE OF CASH ALLOCATION (NCA)

AND REPLENISHMENTS (RENREP)

INSTRUCTIONS

1. The Registry shall be filled up with the following information:

a. Sheet No. sheet number which shall be one series per year b. Notice of Cash Allocation (NCA)

Date date of the NCA issued by the DBM No.- number of the NCA Amount amount of the NCA

c. Replenishments Ref report received from the bank evidencing the payment of

checks negotiated

Journal Entry Voucher (JEV) 1. Date date of the JEV 2. No. - number of the JEV 3. Amount amount of replenishment made

d. Notice of Cash Allocation Balance balance of the NCA after deducting replenishment made.

2. The RENREP shall be maintained by the Bureau of the Treasury for the year.

All government expenditures must be based on a budget.

Section 22, Article VII of the Constitution states:

The President shall submit to Congress within thirty days

from the opening of every regular session, as the basis of

the general appropriation bill, a budget of expenditures

and sources of financing, including receipts from existing

and proposed revenue measures.

The national budget may therefore be defined as a

statement of the estimated receipts based on existing and

proposed revenue measures and of expenditures which

serves as the basis of the general appropriation bill. The

budget process consist of the following phases:

1. Preparation

2. Authorization

3. Execution

4. Accountability

Budgetary priorities and activities are determined and

translated into budgetary estimates. The various

government agencies prepares their budget which in turn

are reviewed and collated at different department level and

finalized by the President. The national budget is

subsequently submitted to the legislature and serve as

basis in the preparation of the annual appropriation law.

This phase involves the review of the budget by the

legislature and the formulation of an appropriation act in

accordance with the process specified in the constitution.

This phase involves the conversion of the plan into reality.

The different department are informed of their allotment

and cash allocations based on the agency budget.

The different deparments and their sub-units see to it that

the expenditures are made based on plans and the revenue

producing agencies see to it that the budgeted figure is

reached.

This phase involves the comparison of performance with

the predetermined plans. Expenditures and performance

are evaluated. Obligations incurred, personnel utilized and

work accomplishments are compared with the plans and

goals previously submitted by the agencies before the

finalization of the national budget. The DBM and the budget

units of the agencies decide on the budget information they

need such as work performance and staffing pattern.

The COA performs its share in the control of government

operations as provided in PD 898 and the Constitution.

Accounting rules and regulations are issued and technical

supervision is exercised over agency accounting units so

that budget information needed can be immediately

secured.

The different types of budgets that have been introduced in government accounting are enumerated below:

Line Item Budget. This is the simplest type of budget for its refers merely to a listing of the expenditures. The objectives of expenditures are divided into 23 classes ranging from personal services to loans.

Performance Budgeting. This method emphasizes on functions, activities and expected results. The objects of expenditures are classified into (a) personal services, (b) maintenances and operating expenses, (c) financial expenses and (d) capital outlays. This is due to (a) the constraints such as the difficulty in work measurement because many of the agency activities could not be quantitatively measured in a meaningful manner (b) the additional requirement for the manager to be skillful in management and cost accounting.

Planning, Programming Budgeting System (PPBS). This was introduced in 1976 with the organization of NEDA, a superbody on development which gave emphasis on planning. Long-term budgeting, the use of economic tools of analysis such as cost-benefit analysis, cost/utility analysis and ranking of priorities were introduced.

Zero Base Budgeting (ZBB). This technique involves the planning for the current budget period with a zero starting point, that is, unused appropriation in the past are not brought forward to the current budget period. Its emphasis is on objectives, the results that these objectives seek to achieve and the estimated cost involved in their accomplishment.

a. Modified Accrual Basis of Accounting. Expenses shall be

recognized when incurred and reported in the financial

statements in the period to which they relate. Income shall

be on accrual basis except for transactions where accrual

basis is impractical or when other methods are required by

law.

b. One Fund Concept. This system adopt the one fund

concept. Separate fund accounting shall be done only when

specifically required by law or by a donor agency or when

otherwise necessitated by circumstances subject to prior

approval of the COA.

c. Charts of Accounts and Account Code. A new chart of

accounts and coding structure with a three-digit account

numbering system shall be adopted.

d. Books of Accounts. All national agencies shall maintain two

sets of books, namely, the regular agency (RA) books and

the national government (NG) books. The different books of

accounts being used under the manual method are given

below. When agency accounting is already computerized,

only the general journal and the ledgers will remain in use.

Regular Agency (RA) Books. There are for the recording of the

receipt and utilization of Notice of Cash Allocation (NCA)

and other income/receipts which the agencies are

authorized to use and to deposit with Authorized

Government Depository Bank (AGDB) and the National

Treasury.

Journals

Cash Receipts Journal (CRJ)

Cash Disbursement Journal (CDJ)

Check Disbursement Journal (CkDJ)

General Journal (GJ)

Ledgers

General Ledger (GL)

Subsidiary Ledger (SL) for:

Cash Liabilities

Receivables Income

Inventories Expenses

Investments

Property, Plant and Equipment

Construction in Progress

Sheet No. :__________

JEV Account

No. Code Debit Credit

Amount

GENERAL JOURNAL

Agency

___________________________

Particulars PDate

GENERAL JOURNAL (GJ)

INSTRUCTIONS A. This journal shall be accomplished as follows:

1. Agency - name of the agency 2. Month month covered by the journal 3. Sheet No. sheet number of the General Journal, which shall

be one series for each year

4. Date date of the Journal Entry Voucher (JEV) 5. JEV No. assigned JEV number 6. Particulars brief description of the transaction 7. Account Code account code used to record the transaction

8. P (Posting Reference) put a check "" mark to indicate completion of posting in the appropriate GL account

9. Amount Debit - amount debited corresponding to the account 10. Amount Credit amount credited corresponding to the

account

11. Amount Credit amount credited corresponding to the account

B. Only transaction not recorded in the Special Journals shall be recorded in the General Journal.

C. Entries to the journal shall be made only on the bases of duly approved JEVs. Said entries shall be posted individually to the

General Ledger.

D. A new sheet shall be started at the beginning of each month. E. Each sheet shall be footed and the totals carried forward to the next

sheet.

F. Succeeding sheet shall start with the total brought forward. G. At the end of the month, it shall be footed, balanced and ruled. H. The totals of the debit and credit columns must be equal. I. Every page shall be certified correct by the Chief Accountant/Head

of the Accounting Unit as follows:

CERTIFIED CORRECT:

______________________________

Signature

______________________________

Designation

Agency

Account of

Office/Address GL

Contact Person/Number SL

SUBSIDIARY LEDGER

Amount

Balance

Account Code

Debit Credit

Ref.ParticularsDate

SUBSIDIARY LEDGER (SL)

INSTRUCTIONS

A. This ledger shall be accomplished as follows:

1. Agency name of the agency 2. Account of/Office/Address/Contact Person - name of the

individual/company/agency and office address of debtor/creditor. In case of an agency/company, include the contact person and telephone number/e-mail address

3. GL Account Code - General Ledger Account Code as used in the journals

4. SL Account Code - Subsidiary Ledger Account Code as provided by the agency

5. Date date of the source documents (i.e. JEV , OR, etc.) 6. Particulars - other information or details pertaining to the

transaction 7. Ref. - reference document such as the Statement of

Account/Journal Entry Voucher/Official Receipt/Disbursement Voucher number, etc.

8. Debit Column amount being debited to the account 9. Credit Column amount being credited to the account. 10. Balance - the difference between the Debit and Credit

columns. Place parentheses in the amount with a negative balance.

B. Subsidiary Ledgers shall be kept for each control account in the General Ledger. At the end of each month, the totals of the

subsidiary ledger balances shall be reconciled with the corresponding

controlling account.

C. Every sheet shall be footed in pencil. The difference of the totals of Debit and Credit columns should tie-up with the running balance

column. These totals shall be carried forward to the next sheet.

Succeeding sheets start with the totals brought forward.

National Government (NG) Books. These are for the recording

of income which the agencies are not authorized to use and

are required to be remitted to the National Treasury.

Cash Journal (CJ)

General Journal (GJ)

General Ledger (GL)

Subsidiary Ledger (SL)

Date RCD No. JEV No. Name of Collecting Debit Credit

Officer 106 Acct. Code P Amount Acct. Code P Amount 106

C r e d i t D e b i t

R E M I T T A N C E

SUNDRY SUNDRY

CASH JOURNAL

C O L L E C T I O N S

Sheet No.: ______

Agency : __________________________

Month : ___________________________

CASH JOURNAL (CJ)

INSTRUCTIONS A. This journal shall be accomplished as follows:

1. Agency - name of the agency 2. Month - month covered by the journal 3. Sheet No. - number of sheet of the journal, which shall be one

series for each year 4. Date - date of JEV 5. RCD No. Report of Collections and Deposits Number 6. JEV No. - assigned JEV number 7. Name of Collecting Officer - name of the Collecting Officer 8. Collections Debit Column - amount collected based on the

Official Receipt issued 9. Collections Credit Columns amount of income, receivables and

other recurring accounts collected based on the Official Receipt issued

10. Collections Sundry Account Code Column code of accounts credited for which no column has been provided

11. Collections Sundry P (Posting Reference) Column put a check

"" mark to indicate completion of posting in the appropriate GL account

12. Collection Sundry, Amount Column amount to be credited to the account

13. Remittance Debit Columns amount debited upon remittance of collections to the Bureau of the Treasury (BTr)

14. Remittance Sundry Account Code Column code of accounts debited for which no column has been provided

15. Remittance Sundry P (Posting Reference) Column put a check

"" mark to indicate completion of posting in the appropriate GL account

16. Remittance Sundry, Amount Column - amount to be debited to the account

17. Remittance Credit Column - amount deposited to the BTr as deduction to the account of the Collecting Officer

B. This journal shall be used to record cash receipts/collections which are required to be recorded in NG books.

C. The sundry columns shall be summarized/recapitulated and shall be shown below the totals using the format below:

Recapitulation:

D. A new sheet shall be started at the beginning of each month. Each sheet shall be footed and the totals carried forward to the

next sheet. The succeeding sheet shall start with the totals

brought forward.

E. At the end of the month, it shall be footed, balanced and ruled. The ruling shall be made on the line immediately after the last

entry.

F. Posting to the General Ledger (GL) shall be made directly from this journal. A check mark immediately underneath the total of

the special columns shall be made to indicate completion of

posting to the GL.

G. Every sheet shall be certified by the Chief Accountant/Head of Accounting Unit as follows:

CERTIFIED CORRECT:

Signature

Designation

Account Code

Debit

Credit

P

Amount

d. Books of Accounts. All national agencies shall maintain two

sets of books, namely, the regular agency (RA) books and

the national government (NG) books. The different books of

accounts being used under the manual method are given

below. When agency accounting is already computerized,

only the general journal and the ledgers will remain in use.

e. Financial Statements. The following statements shall be

prepared:

Statement of Financial Position

Statement of Government Equity

Statement of Income and Expenses

Statement of Cash Flows

Notes to Financial Statements

f. Two-Money Column Trial Balance. The two-money column

trial balance showing the account balances shall be used.

g. Allotment and Obligation. Obligation accounting is modified to

simplify procedures in the incurrence and liquidation of

obligations and the recording of the budgetary account

(allotments and obligations incurred and liquidated). Separate

registries shall be maintained to control the allotments and

obligations for each of the four classes of allotments, namely:

Registry of Allotments and Obligations Capital Outlay

(RAOCO)

Registry of Allotments and Obligations Maintenance and

Other Operating Expenses (RAOMO)

Registry of Allotments and Obligations Personal Services

(RAOPS)

Registry of Allotments and Obligations Financial Expenses

(RAOFE)

P.P.A. : ______________

Sheet No.: ______________

Date Balance

REGISTRY OF ALLOTMENTS AND OBLIGATIONS

CAPITAL OUTLAY (RAOCO)

___________________________

Agency

ReferenceAllotmentReceived

ObligationIncurred

Account Code


CAPITAL OUTLAY (RAOCO)

INSTRUCTIONS

A. This form shall be accomplished as follows:

1. Agency - name of the agency 2. P.P.A. - code for program/project/activity as shown in the

ABM/SARO

3. Sheet No. sheet number which shall be one series per year 3. Date date of the Allotment and Obligation Slip (ALOBS)

4. Reference ALOBS number 5. Account Code account code used in accordance with the

prescribed Chart of Accounts

6. Allotment Received - amount of allotment received based on the approved ALOBS supported by ABM/SARO.

7. Obligation Incurred - amount of obligation incurred based on the approved ALOBS supported by pertinent documents

8. Balance balance of available allotment

B. This Registry shall be maintained by the Budget Unit of agencies.

C. The RAOs shall be maintained by Program, Project and Activity for Capital Outlay.

D. Separate Registry shall be maintained for each of the following:

1. Allotment chargeable to Current Years appropriations 2. Allotment Chargeable to Prior Years Unalloted Continuing

Appropriations

3. Alloted Continuing Appropriations

P.P.A. :__________

Sheet No. :__________

Date Reference Balance


MAINTENANCE AND OTHER OPERATING EXPENSES (RAOMO)

____________________________

Agency

Allotment Received

ObligationIncurred

Account Code


MAINTENANCE AND OTHER OPERATING EXPENSES (RAOMO)

INSTRUCTIONS


1. Agency - name of the agency 2. Program/Project/Activity (P.P.A.) - code for program/project/

activity as shown in the ABM/SARO.




6. Allotment Received - amount of allotment received based on the approved ALOBS supported by ABM/SARO



C. This Registry shall be maintained by the Budget Unit of agencies.

B. The RAOs shall be maintained by Program, Project and Activity for

Maintenance and Other Operating Expenses.

P.P.A. :__________

Sheet No. :__________



PERSONAL SERVICES (PS)

____________________________

Agency

Allotment Received

ObligationIncurred

Account Code


PERSONAL SERVICES (PS)

(RAOPS)

INSTRUCTIONS











C. The RAOs shall be maintained by Program, Project and Activity for

Personal Services.

D. Separate Registry shall be maintained for Overdraft/Obligations Incurred in Excess of Allotment.

P.P.A. :__________

Sheet No. :__________



FINANCIAL EXPENSES (RAOFE)

____________________________

Agency

Allotment Received

ObligationIncurred

Account Code


FINANCIAL EXPENSES

(RAOFE)

INSTRUCTIONS











C. The RAOs shall be maintained by Program, Project and Activity for

Financial Expenses.

D. Separate Registry shall be maintained for Overdraft/Obligations Incurred in Excess of Allotment.

h. Notice of Cash Allocation (NCA). An agency records receipt

of NCA by debiting Cash-National Treasury, Modified

Disbursement System (NT, MDS) and the entry is as follows:

Cash-NT, MDS xxx

Subsidy Income from

National Government (SING) xxx

i. Financial Expenses. Financial expenses such bank charges,

interest expenses, commitment charges and other related

expenses are classified separately from Maintenance and

Other Operating Expenses (MOOE).

j. Perpetual Inventory of Supplies and Materials . Supplies and

materials purchased for inventory purpose is recorded using

the perpetual inventory system.

k. Inventory Valuation. The moving average method is used in

determining the cost of ending inventory of supplies and

materials.

l. Ledger Cards for Supplies and for Property, Plant and

Equipment. The Accounting Units of agencies as well as the

Property Offices maintain Supplies Ledger Cards / Stock

Cards (by stock number) and Property, Plant and Equipment

Ledger Cards (by their respective categories).

Receipt Balance No. of Days to

Date Reference Qty. Qty. Office Qty. Consume

Issuance

STOCK CARD

_______________________________________________

Agency

Stock No.:

Re-order Point:

Description:Item:

STOCK CARD (SC)

INSTRUCTIONS


1. Agency name of the agency 2. Item/Description name of the item and its description 3. Stock No. stock number assigned by the property personnel for

each kind of supplies

4. Reorder Point quantity of stocks which when reached signal the need to re-order the item

5. Date date of the source document 6. Reference reference document used as a basis in the recording

of the transactions such as the receipt/issuance of supplies

7. Receipt-Qty number of supplies received 8. IssuanceQty./Office number of supplies issued and to what

office/unit issued

9. Balance-Qty the difference between the receipt and issuance which shall be equal to the quantity of supplies on hand by the

Supply Officer

10. No. of Days to Consume estimated number of days for which the stock is to be consumed as determined by the Supply and

Property Unit based on the historical data.

B. The SC shall be maintained by the Supply and Property Unit for each item of supplies to record all receipts and issuances.

C. Transactions shall be posted promptly from source documents.

D. The physical inventory of supplies shall be reconciled every six months with the stock cards and any discrepancy/ies shall be

immediately verified and adjusted.

E. The balance per stock card shall be reconciled regularly with the stock ledger card maintained by the Accounting Unit.

Receipt Balance

Date Reference Qty. Qty. Qty.

Transfers/ Disposal

Office/Officer

PROPERTY CARD

_______________________________________________

Agency

Property Number:

Description:

Property, Plant and Equipment:

PROPERTY CARD (PC)

INSTRUCTIONS


1. Agency name of the agency 2. Property, Plant and Equipment type of fixed asset

(i.e. Xerox machine, filing cabinet, etc.)

3. Description description of the property, plant and equipment (i.e. brand, size, color, serial no., etc.)

4. Property Number assigned property number by the Supply and Property Unit

5. Date date of acquisition/transfer 6. Reference reference document used as a basis in

recording the receipt or issuance of property, plant and

equipment

7. Receipt-Qty quantity of property, plant and equipment received based on source documents

8. Transfer/Disposal-Qty quantity of property, plant and equipment transferred to other NGAs or disposed, issued,

etc.

9. Balance-Qty difference between the quantity of the property, plant and equipment on hand less the transfers,

disposed or issued if any

B. The PC shall be kept for each class of property, plant and equipment to record the description, acquisition,

transfer/disposal and other information about the asset.

C. Transactions shall be posted promptly from source documents. The Supply and Property Unit shall maintain this card.

D. The physical inventory of the property, plant and equipment shall be reconciled with the property cards every year and any

discrepancies should be immediately verified and adjusted.

Transfers/

Date Reference Qty. Unit Cost Total Cost Adjustment Balance

R e c e i p t Accumulated

PROPERTY, PLANT AND EQUIPMENT LEDGER CARD

_______________________________________________

Depreciation

Agency

Account Code:

Est. Useful Life:

Description:Rate of Depreciation:

Propery, Plant and Equipment:

PROPERTY, PLANT AND EQUIPMENT LEDGER CARD

(PPELC)

INSTRUCTIONS


1. Agency name of the agency 2. Property, Plant and Equipment type of property, plant

and equipment (i.e. Xerox machine, filing cabinet, etc.) 3. Description description of the assets (i.e. brand, size,

color, etc.) 4. Account Code account code as provided in the Chart of

Accounts 5. Estimated Useful Life estimated useful life of Property,

Plant and Equipment as determined by the Commission on Audit

6. Rate of Depreciation rate of depreciation per month to be recorded in the books of accounts starting on the 2

nd month

following the date of acquisition/delivery. It shall be computed using the straight-line method of depreciation

7. Date date of the source document. 8. Reference reference documents used as the bases in

recording the transactions such as JEV 9. Receipt-Qty/Unit Cost/Total Cost the quantity received,

the unit cost and the total cost of the property, plant and equipment

10. Accumulated Depreciation the amount of depreciation charged to the property, plant and equipment.

11. Transfer/Adjustment the cost of the asset transferred to other NGAs or disposed/adjusted

12. Balance the difference between the total cost of the asset less the accumulated depreciation and transfers, if any

B. The PPELC shall be kept by the Accounting Unit for each class of asset to record promptly the acquisition, description, custody,

estimated life, depreciation, disposal and other information about the

asset.

C. The physical inventory of the asset shall be reconciled with the property, plant and equipment ledger cards and the control accounts

and any discrepancies shall be immediately verified and adjusted.

Description:

Issuance

Unit Total Unit Total No. of Days

Date Reference Qty. Cost Cost Qty. Qty. Cost Cost to Consume

R e c e i p t B a l a n c e

SUPPLIES LEDGER CARD

_______________________________________________

Item:

Agency

Stock No.:

Re-order Point:

SUPPLIES LEDGER CARDS (SLC)

INSTRUCTIONS


1. Agency name of the agency 2. Item/Description name of the item and its description 3. Stock No. stock number assigned by the property personnel

for each kind of supplies 4. Reorder Point quantity of stocks which when reached

signal the need of re-order of the item 5. Date date of the JEV/RIS 6. Reference reference documents used as a basis in the

recording of the transactions (i.e. JEV for receipt and RIS for issuance, etc.)

7. Receipt-Qty/Unit Cost/Total Cost quantity, unit cost and total cost of the supplies received

8. Issuance quantity of supplies issued 9. Balance-Qty difference between the receipt and issuance,

which shall be equal to the quantity of supplies on hand at the Supply and Property Unit

10. Balance-Unit Cost unit cost of the items based on moving average method

11. Balance-Total Cost total cost of items on hand/stock 12. No. of Days to Consume estimated number of days for

which the stock would be consumed as determined by the Supply and Property Unit based on the previous records

B. The SLC shall be maintained by the Accounting Unit for each type

of supplies to record all receipts and issuances.

C. Transactions shall be posted promptly from source documents.

D. The semestral physical inventory of supplies shall be reconciled with the supplies ledger cards and controlling accounts and any

discrepancy/ies shall be immediately verified and adjusted.

m. Construction Theory. This is applied on assets under

construction for costing purposes. Bonus paid to

contractors for early completion is added to the projects

total cost; liquidated damages charged and paid for by the

contractors are deduction. Any related expenses incurred

during the construction of the project, such as taxes,

interest, license fees, permit fees, clearance fees, etc. are

capitalized; those incurred after the construction are

treated as operating costs.

n. Registry of Public Infrastructure / Registry of Reforestation

Projects. The corresponding registry is to be maintained by

agencies that construct public properties / infrastructure,

such as roads, bridges, waterways, railways, plazas,

monuments, etc. and by those that invest in reforestation

projects. (Public properties/infrastructure are fixed assets

for use of the general public).

A Schedule of Public Infrastructure/Reforestation Projects

is prepared at year-end and included in the Notes to

Financial Statements.

Date Ref. Description Location Amount

REGISTRY OF PUBLIC INFRASTRUCTURES

Sheet No. :_______

Name of Public Intrastructure

Agency

REGISTRY OF PUBLIC INFRASTRUCTURES

(RPI)

INSTRUCTIONS


1. Agency name of the agency 2. Name of Public Infrastructures name of public

infrastructure classified as Highways, Roads, Bridges, Sea Walls, etc.

3. Sheet No. sheet number which shall be one series per year

4. Date date of the Journal Entry Voucher (JEV) or date of the document used as basis of entry in the Registry

5. Reference source documents, such as JEV No. 6. Description specifications such as length, type and

other information related to the infrastructures 7. Location exact location of the project such as

Barangay, Municipality and Province/City 8. Amount cost of the public infrastructures when it was

transferred from Regular Agency books based on the JEV

B. This Registry shall be used to record the cost of public

infrastructure transferred from the RA books.

C. In case the public infrastructures are destroyed due to fortuitous events, the said infrastructures shall be dropped from the Registry through a memorandum entry based on pertinent documents.

D. Every end of the quarter, it shall be footed and the total amount posted directly to the Summary.

E. It shall be maintained by the Accounting Unit and kept in a perpetual manner. No new sheet shall be prepared unless the preceding one is used up.

Date Reference Description Location Amount

REGISTRY OF REFORESTATION PROJECTS

Sheet No. :_______

Agency

REGISTRY OF REFORESTATION PROJECTS (RRP)

INSTRUCTIONS


1. Agency name of the agency 2. Sheet No. sheet/page number 3. Date date of the Journal Entry Voucher (JEV) or date

of the document used as basis of entry in the Registry 4. Reference source documents, such as JEV No., 5. Description specifications such as no. of hectares

planted, type of seedlings and other information related to the reforestation projects

6. Location exact location of the project such as Barangay, Municipality and Province/City

7. Amount cost of reforestation project when it was transferred from Regular Agency books based on the JEV

B. This Registry shall be used to record the cost of reforestation

projects transferred from the RA books.

C. In case the reforestation projects are destroyed due to fortuitous events, the said project shall be dropped from the Registry through a memorandum entry based on pertinent documents.

D. Every end of the quarter, it shall be footed. E. It shall be maintained by the Accounting Unit and kept in a

perpetual manner. No new sheet shall be prepared unless the preceding one is used up.

Public Infrastructures: Amount

Highways xx

Roads xx

Bridges xx

Plaza xx

Seawalls xx

Railways xx

Waterways xx

Irrigation xx

Canals xx

Harbors xx

Aqueducts xx

Laterals xx

Parks xx

Monuments xx

Totals xxxx

Certified Correct:

____________________

Chief Accountant

___________

Date

SCHEDULE OF PUBLIC INFRASTRUCTURES

_______________________

Agency Name

As of ____________________

o. Depreciation. Cost allocation is observed using the straight-

line method. The provision for depreciation starts with the

second month after purchase of property, plant and

equipment and a residual value of 10% of purchase cost is

set-up. . A table of the estimated useful lives of the different

depreciable assets is provided by COA. Public Infrastructure

/ Reforestation projects as well as serviceable assets that

are no longer being used are not charged any depreciation.

Annual Depreciation = Asset Cost less Estimated Residual/Salvage Value

Estimated Useful Life

Asset Cost - Purchase or Acquired Value of the Asset

Estimated Salvage Value - 10% of the asset cost

Estimated Useful Life - Estimated number of years the asset shall be

used as determined by the Commission

on Audit

A sample adjusting journal entry for depreciation expense is

as follows:

Account Title

Account

Code

Debit

Credit

Depreciation-Office Equipment 922 1,000

Accumulated Depreciation-Office

Equipment

322 1,000

p. Reclassification of Asset. Serviceable assets that are no

longer used are reclassified as Other Assets and are not

subject to depreciation.

q. Allowance for Doubtful Accounts. This is set up for

estimated uncollectible trade receivables to allow for their

fair valuation.

The determination of bad debts expense shall be derived from

computations based on percentages and aging of accounts receivable as

follows: Age of Accounts Percentage

1 - 60 days 1 %

61 - 180 days 2 %

181- 1 year 3 %

More than 1 year 5 %

An adjusting journal entry to take up bad debts expense is as follows:

Account Title

Account

Code

Debit

Credit

Bad Debts 929 1,000

Allowance for Doubtful Accounts 301 1,000

r. Elimination of Contingent Accounts. Appropriate accounts

are used in recording all financial transaction. Cash

shortages and disallowed payments, which have become

final and executory are charged to receivable accounts,

Due from Officers and Employees or Receivables

Disallowances/Charges, as the case may be.

s. Recognition of Liability. Liability is recognized at the time

goods and services are accepted or rendered and supplier /

creditor bills are received.

t. Interest Accrual. This is to be observed for both interest

income and interest expense whenever practical and

appropriate.

u. Accounting for Borrowing and Loans. All borrowing and

loans are recorded to the appropriate liability accounts.

v. Elimination of Corollary and Negative Journal Entries.

Acquisitions/dispositions of assets are debited/credited to

the appropriate asset accounts. Errors are corrected by

making a correcting entry.

(Under the old system, corollary entries were used as those

made upon contracting for the purchase of assets by

debiting an account such as Land and Land Improvement in

Process subject to transfer to the Land and Land

Improvement account upon consummation of the purchase

contract. Errors were corrected by making negative entries,

that is both debit and credit amount are negative.)

w. Imprest System for Petty Cash Fund. The Petty Cash Fund

shall be equal to the total cash on hand and the

unreplenished expenses. All expenses are charged to the

expense account at all times. The fund is not to be used to

purchase inventory/items for stock.

x. Foreign Currency Adjustment. Cash deposits in foreign

currency and outstanding foreign loans are computed at the

exchange rate prescribed by the Bangko Sentral ng Pilipinas

at balance sheet date. The total cash deposits and foreign

loans payable are adjusted at the end of each month and

any gain or loss on foreign exchange is recognized. The

subsidiary ledger for foreign currency obligations reflects

the appropriate foreign currency in which the loan is

payable. The liability is expressed both in foreign and local

currency.

BALANCE SHEET:

Assets = Liabilities + Government Equity

STATEMENT OF INCOME AND EXPENSES

Total Income Total Expenses = Excess of Income over

Expenses

STATEMENT OF GOVERNMENT EQUITY:

Government Equity, Beginning xx

Retained Operating Surplus:

Current Operations xx

Adjustment of Prior Years xx xx

Roads, Highways, Bridges (Public Infra) (xx)

Government Equity, End xx

STATEMENT OF CASH FLOWS:

Cash Flow from Operating Activities xx

Cash Flow from Investing Activities xx

Cash Flow from Financing Activities xx

Total Cash Provided by Operation, Investing and

Financing Activities xx

Add: Cash Balance, January 1, 20__ xx

Cash Balance, December 31, 20__ xx

The chart of accounts is a list of general ledger accounts

that are expected to appear in the financial statements.

Thus, the sequence followed in the listing of the accounts is

based on the sequence in which they are to appear in said

statements. Under the NGAS, code are simplified by using

three-digits codes. The grouping is as follows:

ACCOUNTS ACCOUNT

CODE

Assets 100-299

Asset Contra-Accounts 300-399

Liabilities 400-499

Equity 500-549

Income 550-699

Tax Revenue -

National Taxes 550-579

Local Taxes 580-599

General Income -

Permits and Licenses 600-609

Service Income 610-629

Business Income 630-649

Subsidy Income 650-659

Other Income 660-679

Gain or Loss Accounts 680-699

Expenses 700-999

Personal Services 700-749

MOOE 750-969

Financial Expenses 970-999

Cash National Treasury, Modified Disbursement System.

This account is used to record in the regular agency books

the receipt of Notice of Cash Allocation (NCA) from the DBM

and the corresponding withdrawals therefrom by national

government agencies (NGAs) by issuance of MDS checks. At

year-end, it is adjusted (or closed) for its unused portion.

Cash in Bank Local Currency, Current Account. This is

used for deposits/withdrawals of local currency in current

account maintained with accredited government depository

banks (AGDBs).

Due from National Government Agencies (NGAs). This is

used for amounts due from departments, bureaus and

other offices of the national government.

Due to National Treasury. This is used for collections due for

remittance to National Treasury.

Due to NGAs. This is used to record liabilities due to

national government agencies including inter-agency

transfer of funds for the implementation of specific

programs/projects.

Government Equity. It represents the difference between the total

assets and total liabilities of national government agencies.

Retained Operating Surplus. This is the account to which Income

and Expense Summary and Prior Years Adjustment are closed. It

is subsequently closed to the Government Equity account.

Subsidy Income from National Government (SING). This is the

revenue account credit for receipt of NCA, Tax Remittance Advice

(TRA), tax exemptions granted by the national government. At

year-end, it is adjusted for its unused portion and the used

portion is closed to Income and Expense Summary. This account

is also used for payment of national government agencies

liabilities by foreign lending/donor institutions.

National Government (NG) Books

Regular Agency (RA) Books

The national government books maintained by the agency are used to record the following income/receipts.

1. All collections of income not authorized for agency use and required to be remitted to the Bureau of Treasury (BTr). Examples are tax revenue, permits and licenses, operating and service income, business income, rent income, fines and penalties.

2. Income from grants and donations.

All income/receipts are supported by subsidiary ledger entries with the corresponding codes as contained in the Chart of Accounts. These are to be relayed to the BTr in the List of Collections upon remittance.

Illustrative Accounting Entries - Typical Transactions of Agencies with Collections/Income

to be recorded in the National Government (NG) Books

Beginning Balances: Cash - Collecting Officers 106 1,000

Accounts Receivables 121 5,000

Due to National Treasury 433 6,000

Income from Govt. Services 6,000

6,000 6,000

Transactions

Agency - National Government Books

Account Title Account Code

Debit Credit

A. Prior Year's Income

1. Deposit of prior year's collections Due to National Treasury 433 1,000


Cash Collecting Officers 106 1,000

2. Collection of prior years' receivables Cash - Collecting Officers 106 1,500

Accounts Receivables 121 1,500

3. Deposit of collections of prior years' Due to National Treasury 433 1,500

receivables Cash Collecting Officers 106 1,500

Transactions



Debit Credit

B. Current Year's Income

4. Billing of operating and service Accounts Receivables 121 3,000

income Due to National Treasury 433 3,000


5. Collection of billed operating and Cash - Collecting Officers 106 2,500

service income Accounts Receivables 121 2,500

6. Collection of taxes Cash - Collecting Officers 106 2,200


Source Amount Income Tax -Individuals 400

Income Tax-Individuals 400 Income Tax -Partnerships 300

Income Tax -Partnerships 300 Income Taxes -Corporations 1,200

Income Tax -Corporations 1,200 Capital Gross Tax 100

Property Transfer Tax 100 Value Added Tax 150

Value Added Tax 150 Fines and Penalties 50

Fines and Penalties 50

Total 2,200

7. Collection of rentals Cash - Collecting Officers 106 300

Due to National Treasury 433 300

Rent Income 300

Note: Subsidiary Ledger (SL) accounts shall be provided for "Due to National Treasury" account. The

code of the income accounts under the Chart of Accounts shall be used as SL accounts and shall be

indicated in the List of Collections which shall be submitted to the BTr.

Transactions



Debit Credit

8. Deposit of income/collections

to BTr thru AGDB

a. Taxes Due to National Treasury 433 2,200

Income Tax -Individuals 400

Income Tax -Partnerships 300

Income Taxes -Corporations 1,200

Capital Gross Tax 100

Value Added Tax 150

Fines and Penalties 50

Cash - Collecting Officers 106 2,200

b. Rent Income Due to National Treasury 433 300

Rent Income 300

Cash - Collecting Officers 106 300

Transactions



Debit Credit

C. Accounting for Collection of

Out-of-Town Checks with Bank

Charges - Income from Government

Services - P2,000

9. Collection upon issuance of OR Cash - Collecting Officers 106 2,000



10. Remittance/Deposit to BTr Due to National Treasury 433 2,000

thru AGDB Income from Govt. Services 2,000 2,000

Cash - Collecting Officers 106

Note: BTr will record cash (at net amount),

bank charges and income (at gross).

Transactions



Debit Credit

D. Accounting for Foreign Exchange Loss

11. Collection of Income from Cash - Collecting Officers 106 500

Govt. Services - $100 @ P50 Due to National Treasury 433 500

Income from Govt. Services 500

12. Remittance/Deposit to BTr Due to National Treasury 433 500

thru AGDB Income from Govt. Services 500 500

Cash - Collecting Officers 106

Note:There will be no bank charges and and foreign

exchange loss to be ecorded in the agency's

NG books.

Note: Subsidiary Ledger (SL) accounts shall be provided for "Due to National Treasury" account. The

code of the income accounts under the Chart of Accounts shall be used as SL accounts and shall be

indicated in the List of Collections which shall be submitted to the BTr.

Transactions



Debit Credit

The regular agency books are used in recording transactions other than those that have to be recorded in the agency-NG books. Thus, collections and income to be recorded in the agency books are the following:

1. Receipts of Notice of Cash Allocation (NCA)

2. Income authorized for agency use and to be deposited with AGDB. Examples are tuition fees and income from sale of accountable forms and the funds are authorized to be treated as revolving funds.

3. Collection from sale of obsolete, unserviceable and unnecessary equipment authorized for agency use. They are required to be remitted to the Bureau of Treasury and are to be used by the agency upon receipt of Special Allotment Release Order (SARO) and NCA.

4. Non-income collections authorized for agency use, but

required to be remitted to the BTr and to be used by the

agency upon receipt of the NCA. These are as follows:

Inter-agency fund transfers

Receipts from various agencies intended for specific

purpose/project as shown in the Memorandum of

Agreement/Understanding

5. Collections which are subject to refund and are deposited

with the BTr.

Performance/bidders/bail bonds

Guaranty deposits

6. Collection not authorized for agency use but with related

asset/liability accounts recorded in the RA books. Examples are::

Proceeds from sale of assets not authorized for agency use

Proceeds from sale of confiscated properties and conveyances

Grants and donations

Refund of overpayment of expenses

Refund of cash advances

Cash settlement of disallowances and suspensions

Restitution of cash shortages recorded in the books

6. Collections authorized for agency use to defray actual

expenses incurred and paid for the purpose these were

collected. The excess income shall be remitted to the BTr

and recorded in the RA books. Examples are collections for

seminar and convention fees.

Illustrative Accounting Entries - Typical transactions of Central/Regional Offices and Operating Units

(CO/RO/OU) receiving Notice of Cash Allocation direct from DBM.

Account

Code Debit Credit

Beginning Balances Office Equipment 222 1,000

Accounts Payable 401 350

Government Equity 501 650

Transactions

REGULAR AGENCY BOOKS

Account Title

CO/RO/OU

Account

Code Debit Credit

Receipt of allotment and NCA

1. Receipt of allotment for: Posting in allotment column of the

Registry of Allotments and Obligations-

Allotment Class GAA CA 186 Capital Outlay, Maintenance and Other

CO 3,340 Operating Expenses, Personal Services

MOOE 1,010 and Financial Expenses

PS 550 55

FE 100

Total 5,000 55

2. Receipt of Notice of Cash Allocation Cash - National Treasury, MDS 102 4,500

from DBM - P4,500 Subsidy Income from National Government 601 4,500

Payment of Expenses

3. Obligation for PS - P 500 Posting in obligation column of Registry

of Allotments and Obligations - Personal

Services

4. Recording of expenses

Salaries 440 Salaries and Wages - Regular Pay 801 440

PERA 30 PERA 804 30

Additional Compensation 30 Additional Compensation 805 30

Total 500 Due to Officers and Employees 428 400

Less: Salary Deductions. Withholding Tax Payable 410 50

Withholding tax 50 GSIS Payable 411 32

Life & Ret. premiums 30 PAG-IBIG Payable 412 5

PAGIBIG premiums 5 PHILHEALTH Payable 413 3

PHILHEALTH premiums 3 Other Payables 450 10

GSIS-Salary loan 2

Employees' Association 10 100

Net Amount 400

Transactions


Account Title

CO/RO/OU

Account

Code Debit Credit

5. Grant of Cash Advance for payroll - P400 Cash - Disbursing Officers 107 400

Cash - National Treasury, MDS 102 400

6. Liquidation of Cash Advance Due to Officers and Employees 428 400

Cash - Disbursing Officers 107 400

7. Remittance of Salary Deductions GSIS Payable 411 32

PAG-IBIG Payable 412 5

PHILHEALTH Payable 413 3

Other Payables 450 10


Transactions


Account Title

CO/RO/OU

Account

Code Debit Credit

8. Obligation for government share Posting in obligation column of Registry

CA 186 - Life & Ret. Contribution 30 of Allotments and Obligations - Personal

GAA - PAG-IBIG Contribution 5 Services

GAA - PHILHEALTH Contribution 3

38

9. Remittance of Govt. Share

CA 186 - Life & Ret. Contribution 30 Life and Retirement Insurance Contributions 817 30

GAA - PAG-IBIG Contribution 5 PAG-IBIG Contributions 818 5

GAA - PHILHEALTH Contribution 3 PHILHEALTH Contributions 819 3

38 Cash - National Treasury, MDS 102 38

Transactions


Account Title

CO/RO/OU

Account

Code Debit Credit

Receipt of Bills / Claim

10. Obligation for: Posting in obligation column of Registry of

Rent ( for 1 year) 70 Allotments and Obligations - Maintenance

Office Supplies 150 and Other Operating Expenses

MERALCO bill 50

PLDT bill 40

Travelling expense of

Mr. Alex Cruz 110

TOTAL 420

11. Payment of one year rent Prepaid Rent 161 70

(July 1, 2002 to June 30, 2003) Cash - National Treasury, MDS 102 70

12. Advance payment to Procurement Due from NGAs 130 150

Service (PS) for office supplies 150 Cash - National Treasury, MDS 102 150

13. Receipt of office supplies Office Supplies Inventory 149 150

and invoice from Procurement Service. Due from NGAs 130 150

14. Payment of MERALCO bill Electricity 835 50


15. Payment of PLDT bill Telephone/Telegraph and Internet 837 40


Transactions


Account Title

CO/RO/OU

Account

Code Debit Credit

16. Granting of cash advance for travel of Due from Officers and Employees 128 110

Mr. Alex Cruz Cash - National Treasury, MDS 102 110

17. Liquidation of cash advance for travel of Traveling Expense - Local 831 98

Mr. Alex Cruz Due from Officers and Employees 128 98

18. Refund of excess cash advance for travelling Cash - Collecting Officers 106 12

expense of Mr. Alex Cruz Due from Officers and Employees 128 12

19. Adjustment of obligation by P12 for refund Negative posting in obligation column of

of excess advance for traveling expense Registry of Allotments and Obligations -

Maintenance and Other Operating Expenses

20. Deposit of collection from excess advance Subsidy Income from National Government 601 12

to BTr Cash - Collecting Officers 106 12

Transactions


Account Title

CO/RO/OU

Account

Code Debit Credit

Petty Cash Fund

21. Obligation for Petty Cash Fund (PCF) Posting in obligation column of

for - P35 Registry of Allotments and Obligations -


22. Establishment of Petty Cash Fund (PCF) Petty Cash Fund 105 35


23. Obligation of P30 for replenishment Posting in obligation column of

of Petty Cash Fund Registry of Allotments and Obligations -


24. Replenishment of Petty Cash Fund Office Supplies Expenses 849 20

Bond paper 20 Postage and Deliveries 838 10

Postage stamps 10 Cash - National Treasury, MDS 102 30

30

Transactions


Account Title

CO/RO/OU

Account

Code Debit Credit

25. Closing of the Petty Cash Fund within the Cash - Collecting Officers 106 5

year due to retirement of the PCF Custodian Petty Cash Fund 105 5

26. Adjustment of obligation for refunded PCF Negative posting in obligation

per ALOBS supported by Official Receipt Registry of Allotments and Obligations -


27. Deposit of collection from refund of Subsidy Income from NG 601 5

Petty Cash Fund Cash - Collecting Officers 106 5

28. Obligation for Petty Cash Fund for - P35 Posting in obligation column of

for the newly designated PCF Custodian Registry of Allotments and Obligations -


29. Establishment of Petty Cash Fund for Petty Cash Fund 105 35

the newly designated PCF Custodian Cash - National Treasury, MDS 102 35

Transactions


Account Title

CO/RO/OU

Account

Code Debit Credit

Purchase of Equipment

30. Obligation for office equipment per Purchase Posting in obligation column of

Order - P100 Registry of Allotments and Obligations -

Capital Outlay

31. Payment to Procurement Service for office equipment Due from NGAs 130 100


32. Receipt of office equipment based on Invoice/ Office Equipment 222 100

delivery receipt Due from NGAs 130 100

33. Obligation prior to approval of purchase order for Posting in obligation column of

IT Software - P400 Registry of Allotments and Obligations -

Capital Outlay

34. Receipt of IT Software based on invoice/delivery IT Equipment and Software 215 400

receipt from Computer Technologies (corporation) Accounts Payable 421 400

35. Payment of IT Software to Computer Technologies Accounts Payable 421 400

Gross 400 Cash - National Treasury, MDS 102 364

Less: Withholding Tax (VAT) 36 Withholding Taxes Payable 410 36

364

Transactions


Account Title

CO/RO/OU

Account

Code Debit Credit

Construction of Building

36. Obligation for building prior to the signing of the Posting in obligation column of

contract - P700 Registry of Allotments and Obligations -

Capital Outlay

37. Receipt of cash from the contractor paid Cash - Collecting Officers 106 50

as performance bond Performance/Bidders/Bail Bonds Payable 414 50

38. Deposit of ( cash) performance bond Due from National Treasury 134 50

to BTr thru AGDB Cash - Collecting Officers 106 50

39. Payment of 15% of contract amount as advances Advances to Contractors 168 105

to contractor - P700 x 15% Cash - National Treasury, MDS 102 105

40. Receipt of 1st progress billing for building Construction in Progress - Agency Assets 230 350

50% of P700 P350 Accounts Payable 401 300

Less: Recoupment 50 Advances to Contractors 168 50

Net Amount P300

41. Payment of 1st progress billing for building Accounts Payable 421 300

Accounts Payable 300 Cash - National Treasury, MDS 102 238

Less: 10% Retention 35 Guaranty Deposits Payable 408 35

Withholding Tax 27 62 Withholding Taxes Payable 410 27

Net Amount 238

Transactions


Account Title

CO/RO/OU

Account

Code Debit Credit

42. Receipt of final billing for building Construction in Progress - Agency Assets 230 340

50% of P700 (delayed completion) P350 Accounts Payable 401 285

Less: Liquidated Damages 10 Advances to Contractors 168 55

Net Amount P340

Less: Recoupment 55

Amount Due P285

43. Adjustment of RAOCO by P10 to reduce original Posting in obligation column of

amount of obligation due to liquidated damages Registry of Allotments and Obligations -

Capital Outlay

44. Final payment for building Accounts Payable 401 285


Less: 10% Withholding Tax (VAT) 32 Withholding Taxes Payable 410 32

Net Amount 253

45. Turn-over & acceptance of building Buildings 204 690

Contract Amount 700 Construction in Progress - Agency Assets 230 690

Less: Liquidated Damages 10

Net Cost 690

Transactions


Account Title

CO/RO/OU

Account

Code Debit Credit

Transfer of Funds to Implementing Agency

46. Obligation prior to approval of transfer of cash to Posting in obligation column of

another agency for construction of building-P250 Registry of Allotments and Obligations -

Capital Outlay

47. Issuance of check to implementing agency (IA) Due from NGAs 130 250


48. Receipt of liquidation reports/turn-over of building Buildings 204 250

by IA - P250 Due from NGAs 130 250

Transactions


Account Title

CO/RO/OU

Account

Code Debit Credit

Grants and Donations

52. Obligation of amount for tuition fees of employees Posting in obligation column of

(under scholarship grants) - P70 Registry of Allotments and Obligations -


53. Recording of the bill from educational institution for Grants and Donations 889 70

tuition fees of scholars Accounts Payable 401 70

54. Payment of tuition fees of scholars Accounts Payable 401 70


55. Obligation of stipend/book allowances Posting in obligation column of

of scholars - P 50 Registry of Allotments and Obligations -


56. Payment of stipend/book allowance to scholars Grants and Donations 889 50


Transactions


Account Title

CO/RO/OU

Account

Code Debit Credit

Payment thru ADA

57. Receipt of NCA for PY accounts payable - P350 Cash - National Treasury, MDS 102 350

Subsidy Income from National Government 601 350

58. Payment of PY accounts payable - P200 Accounts Payable 401 200


Transactions


Account Title

CO/RO/OU

Account

Code Debit Credit

Public Infrastructures

59. Receipt of cash from contractor paid as performance Cash - Collecting Officers 106 150

bond for the construction of roads Performance/Bidders/Bail Bonds Payable 414 150

60. Deposit of cash (performance bond) to BTr thru AGDB Due from National Treasury 134 150

Cash - Collecting Officers 106 150

61. Obligation for construction of roads prior to signing of Posting in obligation column of

contract - P2,000 Registry of Allotments and Obligations -

Capital Outlay

62. Payment of 15% of contract amount for the Advances to Contractors 168 300

advances to the contractor for the construction of Cash - National Treasury, MDS 102 300

roads P2,000 x 15%

63. Receipt of progress billing for construction of roads Construction in Progress - Roads,

50% of P2,000 1000 Highways and Bridges 232 1,000

Less: Recoupment 150 Accounts Payable 401 850

Net Amount 850 Advances to Contractors 168 150

64. Payment of bill for the construction of roads Accounts Payable 401 850

Accounts Payable (1,000 -150) 850 Cash - National Treasury, MDS 102 660

Less: Withholding Tax 90 Withholding Taxes Payable 410 90

10% Retention 100 190 Guaranty Deposits Payable 408 100

Net Amount 660

Transactions


Account Title

CO/RO/OU

Account

Code Debit Credit

65. Presentation of final billing for roads Construction in Progress - Roads,

50% of P2,000 1,000 Highways and Bridges 232 950

Less: Liquidated Damages 50 Accounts Payable 401 800

Net Cost 950 Advances to Contractors 168 150

Less: Recoupment 150

Amount Due 800

66. Adjustment of RAOCO by P50 to reduce original Negative posting in obligation column of

amount of obligation Registry of Allotments and Obligations -

Capital Outlay

67. Payment of final bill for the construction of roads Accounts Payable 401 800


Less: Withholding Tax 86 Withholding Taxes Payable 410 86

10% Retention 95 181 Guaranty Deposits Payable 408 95

Net Amount 619

68. Turn-over and acceptance of roads Public Infrastructures 243 1,950

Contract amount 2,000 Construction in Progress - Roads,

Less: Liquidated Damages 50 Highways and Bridges 232 1,950

Net Cost 1,950

Transactions


Account Title

CO/RO/OU

Account

Code Debit Credit

Remittance of Withholding Taxes Thru TRA

69. Remittance of Withholding Tax thru TRA Withholding Taxes Payable 410 321

Salaries 50 Subsidy Income from National Government 601 321

IT Software (Corporation) 36

Building (Corporation) 59

Roads (Corporation) 176

Total 321

Release of Performance Bond

70. Receipt of NCA for deposited performance bonds receivedCash-National Treasury, MDS 102 200

from contractors for the construction of the following: Due from National Treasury 134 200

Building 50

Roads 150

Total 200

71. Refund of performance bonds to contractors . Performance/Bidders/Bail Bonds Payable 414 200

Cash-National Treasury, MDS 102 200

Transactions


Account Title

CO/RO/OU

Account

Code Debit Credit

Refund of Retention Fees

72. Refund of retention fees to contractors . Guaranty Deposits Payable 408 406


Building P35

Roads 371

Total 406

Issuance of Supplies and Materials

73. Receipt of the Report of Supplies and Materials Issued Office Supplies Expenses 849 140

from the Property/Supply Unit Office Supplies Inventory 149 140

office supplies - P140

Transactions


Account Title

CO/RO/OU

Illustrative Accounting Entries - Typical transactions of Central/Regional Offices and Operating Units

(CO/RO/OU) receiving Notice of Cash Allocation direct from DBM and ROs/OUs receiving funding checks from CO/RO.

Receipt of Allotment/NCA andTransfer of Subsidy

1. Receipt of allotment for:

Posting in allotment column of Posting in allotment column of Posting in allotment column of

Allotment Class CO RO OU Registry of Allotments and Obligations- Registry of Allotments and Obligations- Registry of Allotments and Obligations-

CO 1,800 Capital Outlay, Maintenance and Other Maintenance and Other Operating Maintenance and Other Operating MOOE 260 Operating Expenses, Personal Services Expenses, Personal Services Expenses, Personal Services

PS 200 250 150

Total 2,260 250 150

2. Receipt of Notice of Allocation CO RO OU Cash - National Treasury, MDS 102 2,000 Cash - National Treasury, MDS 102 250 Cash - National Treasury, MDS 102 150

from DBM 2,000 250 150 Subsidy Income from National Government 601 2,000 Subsidy Income from National Government 601 250 Subsidy Income from National Government 601 150

3. Release of sub-allotment to Regional Offices Negative posting in allotment column of Posting in allotment column of

Allotment Class RO Registry of Allotments and Obligations- Registry of Allotments and Obligations-

MOOE 160 Capital Outlay Capital Outlay

CO 1,500

Total 1,660

4. Release of Letter Advice of Allotment to OU Negative posting in allotment column of Posting in allotment column of

Allotment Class OU Registry of Allotments and Obligations- Registry of Allotments and Obligations-

MOOE 50 Capital Outlay, Maintenance and Capital Outlay, Maintenance and

CO 700 Other Operating Expenses Other Operating Expenses

Total 750

5. Transfer of subsidy to Regional Subsidy to Regional Offices/Staff Bureaus 538 1,400 Cash in Bank-Local Currency, Curr. Acct. 110 1,400

Office thru funding check or fund Cash - National Treasury, MDS 102 1,400 Subsidy from Central Office 602 1,400

transfer 1,400

6. Transfer of subsidy to Operating Subsidy to Operating Units 539 600 Cash in Bank-Local Currency, Curr. Acct. 110 600

Unit thru funding check or fund Cash in Bank-Local Currency, Curr. Acct. 110 600 Subsidy from Regional Office/Staff Bureau 603 600

transfer 600

Payment of Expenses

7. Obligation for Personal Services CO RO OU Posting in obligation column of Posting in obligation column of Posting in obligation column of

140 250 130 Registry of Allotments and Obligations- Registry of Allotments and Obligations- Registry of Allotments and Obligations-

Personal Services Personal Services Personal Services

Transactions

CENTRAL OFFICE (CO) REGIONAL OFFICE (RO)

Account

Code Debit Credit

Account

Code Debit Credit

OPERATING UNITS

Account Title Account Title Account TitleAccount

Code Debit Credit

In accounting for allocations, allotments and obligations,

some of the terms often used are the following:

Appropriation an authorization under past Acts of

Congress or other legislative enactments, for payments

to be made with funds of the government under

specified conditions and/or for specific purposes.

Allotments authorization issued by the DBM to an

agency to enable it to incur obligations up to a specified

amount that is within a legislative appropriation.

Allotments are issued based on the agency budget

matrix (ABM). They are recorded by posting in the

Registries of Allotment and Obligations (RAO). For this

purpose, there are four registries used. They are as

follows:

RAOPS

RAOMO

RAOFE

RAOCO

Allotment Release Order (ARO) a formal document

issued by DBM to the head of an agency containing the

authorization, conditions and amount of agency

allocation. It may be in the form of the ABM or the SARO.

ABM a document showing the disaggregation of

agency expenditures into components like, among

others, by source of appropriation, by allotment class

and by need of clearance.

NCA an authorization issued by the DBM to an agency to withdraw cash from BTr to pay expenses incurred, purchases of materials, purchases of PPE, payment of payables and other authorized disbursements thru the issuance of Modified Disbursement System (MDS) checks.

Obligation commitments by a government agency arising from an act of a duly authorized official which binds the government to the immediate or eventual payment of a sum of money. An obligation is recognized when contracted for and is recorded by a memorandum entry in the RAO.

MDS Checks. These are issued by national government agencies

chargeable to the account of the BTr maintained with different

MDS-Government Servicing Banks (GSBs). They are given to the

agencies based on their cash allocation per NCA and their

issuance reduces the amount of cash available per NCA. MDS

Checks issued are credited to Cash NT, MDS.

Commercial Checks. These are issued for disbursements out of

the agencys receipts/income that is authorized to use. Agencies

are required to deposit their receipts/income in a current

account in the AGDB. Upon said deposit, the account Cash in

Bank Local Currency, Current Account is debited so that upon

issuance against the current account, the credit is to the same

account.

Adjusting entries are similar to those made under

commercial accounting. They include those for accrual of

income and expenses, prepaid expenses, deferred income

tax and provision for depreciation.

Account

Code Debit Credit

Adjusting Entries

74. Recording of depreciation for the following: Depreciation - Buildings 904 35

Cost Depn. Depreciation - IT Equipment 915 40

Buildings 690 35 Depreciation - Office Equipment 922 10

IT Equipment 400 40 Acc. Depn. - Buildings 304 35

Office Equipment 100 10 Acc. Depn. - IT Equipment 315 40

Total 1,190 85 Acc. Depn. - Office Equipment 322 10

75. Rent expense for the year Rent Expense 841 35

Prepaid Rent 161 35

Transactions


Account Title

CO/RO/OU

As in commercial accounting, closing entries are made whereby income and expenses account are closed to Income and Expense Summary. Under the NGAS, the latter is closed to Retained Operating Surplus, which in turn is closed to Government Equity. The latter is reduced upon transfer of public properties/infrastructures to their registries. In addition to these, an entry is made for the unused NCA.

Unused NCA. Whatever cash allocation is still unused at the end of the year has to be reverted back to the national treasury. This is due to the DBM policy that NCA is valid only within the year of issue. The exception of NCA for accounts payable, which is valid for one month after its issuance.

Account

Code Debit Credit

CLOSING ENTRIES

1. Unused NCA Subsidy Income from National Government 601 187


2. Subsidy Income from the National Government Subsidy Income from National Government 601 2,667

and Income Income and Expense Summary 533 2,667

3. Expenses Income and Expense Summary 535 1,131

Salaries and Wages-Regular Payroll 801 440

PERA 804 30

Additional Compensation 805 30

Life and Ret. Insurance Contribution 817 30

PAG-IBIG Contribution 818 5

PHILHEALTH Contribution 819 3

Traveling Expense, Local 831 148

Training and Seminar Fees 833 30

Electricity 835 50

Telephone/Telegraph and Internet 837 40

Postage and Deliveries 838 10

Rent Expenses 841 70

Office Supplies Expenses 849 40

Grants and Donations 890 120

Depreciation - Buildings 904 35

Depreciation - IT Equipment 915 40

Depreciation - Office Equipment 922

193963008 government accounting

Documents

government agencies

government resources

government accounting

audit coa

postaudit basis

special preaudit

utilization of funds

results of operations