Download - Govt Acctg Ch1 Intro of Ngas
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AC 416N – (PHIL) GOVERNMENT ACCOUNTING, NON-PROFIT ENTITIES & SPECIALIZED INDUSTRIES - 54 HRS• GOVT ACCOUNTING – 21 HOURS ....• TEXTBOOK: GOVT ACCTG BY ANGELITO
PUNZALAN AND MILAGROS CARDONA --- PLS SECURE A COPY (BOUND OR XEROX) SAY P350 AT NBS, CONANAN BOOKSHOP
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GOVERNMENT ACCOUNTING
WHY THE NEED TO BE AWARE, KNOW AND STUDY GOVT ACCOUNTING?
• TO PREPARE FOR CPA LICENSURE EXAMINATION, AND
• THE POSSIBILITY OF ONE’S CAREER IN THE GOVERNMENT CIVIL SERVICE
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INTRODUCTION – GOVT ACCTG
• Accounting is tool of management in evaluating the performance of the various agencies of government.
• The performance of the public managers would depend at most, on financial reports generated by the use of accounting systems.
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INTRODUCTION – GOVT ACCTG
• Cognizant of this need, a new accounting system needs to be develop that would help the different agencies to hit on financial targets, and at the same time be understood by all users of financial reports.
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INTRODUCTION – GOVT ACCTG
• With this new development, the Commission on Audit (COA), under the new 1987 Constitution, promulgated the New Government Accounting System in the Philippines (NGAs) for use by all government agencies.
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DEFINE GOVT ACCOUNTING
• Under Section 109, of the Presidential Decree (PD) no. 1445, defines Government Accounting as one that encompasses the process of analyzing, classifying, summarizing and communicating all transactions that are involved in the receipt and disbursement of all government funds and properties, and interpreting the results thereof
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DEFINE GOVT ACCOUNTING
• In pursuant to this definition, objectives were set to cover several areas in government operations.
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OBJECTIVES OF GOVT ACCTG
• 1. To produce relevant financial information about past and present transactions of government.
• 2. To serve as basis for decision making for future operations
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OBJECTIVES OF GOVT ACCTG
• 3. To serve as the control mechanism for the receipt, disposition and utilization of government funds and properties
• 4. To produce financial reports pertaining to financial position and results of operations of various government agencies that are for dissemination to the public
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WHY THE SHIFT TO NGAS?
• 1. Adoption of an accounting system that is in conformity with the International Accounting Standards.
• 2. Computerization of the accounting systems to generate reports that will be easy to understand by the general public.
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WHY THE SHIFT TO NGAS?
• 3. Preparation of regular and routine financial reports.
• 4. The use of the generated financial reports as tools of management in decision making.
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RESPONSIBILITY ACCOUNTING
THIS IS A CONCEPT IMPLYING THAT EVERY ECONOMIC ACTIVITY EVENT AFFECTING AN ORGANIZATION IS THE RESPONSIBILITY OF AND CAN BE TRACED TO AN INDIVIDUAL MANAGER.
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ACCOUNTING RESPONSIBILITY
AGENCIES CHARGED BY THE REPUBLIC’S CONSTITUTION:
• COMMISSION ON AUDIT (COA)• DEPT OF BUDGET AND MANAGEMENT (DBM)• BUREAU OF TREASURY (NATIONAL TREASURY)• VARIOUS GOVT SUBDIVISIONS, AGENCIES,
INCLUDING GOCCs
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COMMISSION ON AUDIT
ACCOUNTING RESPONSBILITY:• KEEPS THE GENERAL ACCOUNTS OF THE
GOVT, PROMULGATES ACCOUNTING RULES AND REGULATIONS AND SUBMITS TO THE PRES OF THE REPUBLIC AN ANNUAL REPORT OF THE GOVERNMENT NOT LATER THAN LAST DAY OF SEPTEMBER OF EACH YEAR
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Q.: WHAT IS THE LEGAL BASIS OF THE COMM ON AUDIT IN PRESCRIBING THE NGAS?a. Presidential Decree 1445b. COA Circular No. 2002 – 001c. The Constitution of the Republicd. PD 1445 and the Constitution
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DEPT OF BUDGET & MANAGEMENT
ACCOUNTING RESPONSIBILITY:• ...SHALL BE RESPONSIBLE FOR THE
FORMULATION AND IMPLEMENTATION OF THE NATIONAL BUDGET WITH THE GOAL OF ATTAINING THE REPUBLIC’S NATIONAL SOCIO-ECONOMIC PLANS AND OBJECTIVES
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BUREAU OF TREASURY
ACCOUNTING RESPONSIBILITY:• RECEIVES AND KEEPS NATIONAL
FUNDS,MANAGE AND CONTROL THE DISBURSEMENTS;
• MAINTAIN ACCOUNTS OF FINANCIAL TRANSACTIONS OF ALL NATIONAL GOVERNMENT OFFICES,AGENCIES AND INSTRUMENTALITIES.
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Q.:WHAT IS THE ROLE OF THE BUREAU OF TREASURY IN RELATION TO GOVERNMENT ACCOUNTING RESPONSIBILITY?a. To design prepare and approve the accounting system of the
national government agencies.b. To keep the general accts of the national governmentc. To receive and keep national funds and manage or control
disbursements thereof.d. To prepare the annual report of national government,
agencies and GOCCs
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OTHER GOVT AGENCIES & GOCCs
ACCOUNTING RESPONSIBILITY:THESE UNITS ARE REQUIRED BY LAW TO HAVE
ACCOUNTING UNITS/ DIVISIONS/ DEPARTMENT TO BE SUPERVISED BY THE HEAD OF THE AGENCY CONCERNED
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Q.: Which is not charged with the government accounting responsibility?a. Upper and lower legislative housesb. Department of Budget and Managementc. National Government Agencies and GOCCsd. Commission on Audit
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WHY THE NEED FOR NGAS?
• TO CONFORM WITH IAS• TO PREPARE FOR AUTOMATION,INCLUDING
RESPONSIBILTY ACCOUNTING• TO GENERATE RELEVENT AND PERIOD
FINANCIAL STATEMENTS• TO PROVIDE GOOLS FOR MANAGERS AND
EXECUTIVES IN THE GOVT FOR THE MONITORING OF AGENCY PERFORMANCE
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Q.: The following are the objectives of NGAS, which is NOT:a. To generate periodic and relevant financial
reports for better monitoring or performance.b.To simplify government accounting.c. To conform to IAS.d.To comply with the requirement of Word
Bank and International Monetary Board
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WHAT IS NGAS? (NEW GOVT ACCTG SYSTEM) • IT IS A SET OF ACCOUNTING CONCEPTS,
GUIDELINES AND PROCEDURES DESIGNED TO ENSURE CORRECT,COMPLETE AND TIMELY RECORDING OF GOVERNMENT FINANCIAL TRANSACTIONS AND THE PRODUCTION OF ACCURATE AND RELEVANT FINANCIAL REPORTS.
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WHAT IS NGAS? (NEW GOVT ACCTG SYSTEM) • THE NGAS INTRODUCED BASIC POLICIES AND
PROCEDURES, NEW CODING SYSTEMS, BOOKS, REGISTRIES, RECORDS, FORMS, REPORTS AND FINANCIAL STATEMENTS TO BE ADOPTED BY ALL NATIONAL GOVT AGENCIES EFFECTIVE 01 JANUARY 2002
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FEATURES OF THE NGAS (1)
ACCOUNTING METHODS:• MODIFIED ACCRUAL BASIS OF ACCOUNTING -• ONE FUND CONCEPT –• CHART OF ACCOUNTS AND ACCOUNT CODES
–• RESPONSIBILITY ACCOUNTING –• BOOKS OF ACCOUNTS –• FINANCIAL STATEMENTS - MORE....
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FEATURES OF THE NGAS (2)
• TWO- MONEY COLUMN TRIAL BALANCE –• ALLOTMENT AND OBLIGATION -• NOTICE OF CASH ALLOCATION – • FINANCIAL EXPENSES –• PERPETUAL INVENTORY OF SUPPLIES &
MATERIALS – • MAINTENANCE OF LEDGER CARDS FOR
SUPPLIES, PROPERTY, PLANT & EQUIPT... more
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FEATURES OF THE NGAS (3)
• CONSTRUCTION OF ASSETS -• REGISTRY OF PUBLIC INFRASTRUCTURES -• REGISTRY OF REFORESTATION PROJECTS -• DEPRECIATION –• RECLASSIFICATION OF ASSETS – • RECOGNITION OF LIABILITY –• ELIMINATION OF CONTINGENT ACCOUNTS –• INTEREST ACCRUAL ..... more
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FEATURES OF THE NGAS (4)
• ACCOUNTING FOR BORROWINGS AND LOANS-• ELIMINATION OF COROLLARY AND NEGATIVE
JOURNAL ENTRIES –• PETTY CASH FUND AND • FOREIGN CURRENCY ADJUSTMENTS
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ACCOUNTING METHODS
• ACCRUAL CONCEPT .... (REMEMBER?)• MODIFIED ACCRUAL ... ACCRUAL IS NOT
APPLIED OR OBSERVED ON CASES WHERE SUCH CONCEPT IS IMPRACTICAL OR WHEN OTHER METHODS ARE REQUIRED BY LAW.
• TAXES ... FOR EXAMPLE – IT IS DIFFICULT TO DETERMINE HOW MUCH AND FROM WHOM TO COLLECT, SO, CASH BASIS IS OBSERVED.
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ONE FUND CONCEPT UNDER NGASPRIOR TO NGAS (PRIOR TO JAN 1, 2002):• ALL INCOME FOR THE AGENCY SHALL ACCRUE TO
GENERAL FUND• ALL MONEY COLLECTED BY THE AGENCY IS TREATED AS
SPECIAL FUNDUNDER NGAS (STARTING JAN 1, 2002) – ONE FUND
CONCEPT• GENERAL FUND IS AVAILABLE FOR ALL FUNCTIONS OF
GOVT• SEPARATE FUND ACCOUNTING IS DONE ONLY WHEN
NECESSITATED BY CIRCUMSTANCES, OR APPROVED BY COA
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CHART OF ACCOUNTS AND ACCT CODES• FROM 6 DIGITS, DOWN TO ONLY 3 DIGITS• SOME ACCOUNT TITLES HAVE BEEN CHANGED,
ADDED• NO MORE CONTINGENT ACCOUNTS• CAPEX ARE NO LONGER SHOWN AS OPEX• SEPARATE EXPENSE ITEMS• INCOME ACCTS FURTHER CATEGORIZED TO
GENERAL INCOME; OR AGENCY-SPECIFIC ACCTS
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RESPONSIBILITY ACCOUNTING
• RECALL THE DEFINITION• IN THE GOVERNMENT – IT MEASURES THE
PLANS REFERRING TO THE BUDGET AND ACTUAL RESULTS OF EACH RESPONSIBILTY CENTER.
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RESPONSIBILITY ACCTG IN GOVT
CONCEPTS UNDER NGAS:• INVOLVES ACCUMULATION OF DATA ON
INCOME AND COSTS ON THE BASIS OF MANAGER’S ACTION (OR INACTION)
• PERFORMANCE EVALUATION• DISTINCTION BETWEEN CONTROLLABLE AND
NON-CONTROLLABLE COSTS• RESPONSIBILITY REPORTING - ACTUAL COSTS
VS BUDGET
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BOOKS OF ACCOUNTS
• USE OF GENERAL JOURNAL• USE OF JOURNAL ENTRY VOUCHER• MAINTENANCE OF REGULAR AGENCY BOOKS• MAINTENALCE OF NATIONAL GOVERNMENT
BOOKS
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Q: THE BOOKS OF ACCOUNTS OF THE GOVERNMENT ARE COMPOSED OF THE FOLLOWING:a. Regular agency books and National
Government books.b. National government books and books of
original entry.c. Journals and general/ subsidiary ledgersd. Regular agency books and books of original
entry.
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Q: THE BOOKS OF ACCOUNTS OF THE GOVERNMENT ARE COMPOSED OF THE FOLLOWING:a. Regular agency books and National
Government books.b. National government books and books of
original entry.c. Journals and general/ subsidiary ledgersd. Regular agency books and books of original
entry.
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FINANCIAL STATEMENTS (REQUIRED)
• BALANCE SHEET• STATEMENT OF INCOME AND EXPENSES• STATEMENT OF GOVERNMENT EQUITY • STATEMENT OF CASH FLOWS • NOTES TO FINANCIAL STATEMENTS, IF
WARRANTED.
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TWO – MONEY COLUMN TRIAL BALANCE• ADOPTION OF TRIAL BALANCE UNDER
COMMERCIAL ACCOUNTING• UNDER THE OLD ACCOUNTING – FOUR
MONEY COLUMN WAS A REQUIREMENT CONSISTS OF DEBIT BALANCE, DEBIT TOTALS, CREDIT TOTALS AND CREDIT BALANCE
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Q.: THE FOLLOWING ARE THE SYSTEMS FOLLOWED IN THE NGAS:
a. Commercial accountingb. Double entry bookkeepingc. Responsibility accountingd. Fund accounting
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Q.: THE FOLLOWING ARE THE SYSTEMS FOLLOWED IN THE NGAS:
a. Commercial accountingb. Double entry bookkeepingc. Responsibility accountingd. Fund accounting
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ALLOTMENT AND OBLIGATION
ALLOTMENT –• THE AUTHORIZATION ISSUED BY DBM THAT
WILL ENABLE THE AGENCY CONCERNED TO INCUR OBLIGATION UP TO A SPECIFIED AMOUNT W/N LEGISLATIVE APPRIATION.
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ALLOTMENT AND OBLIGATION
OBLIGATION –• REFERS TO THE COMMITTEMENT BY AN
AGENCY WHICH BINDS THE GOVT THE EVENTUAL PAYMENT OF SUM/S OF MONEY
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NOTICE OF CASH ALLOCATION
• THIS IS AN AUTHORIZATION ISSUED BY THE DBM TO GOVT AGENCIES TO WITHDRAW CASH FROM THE NATIONAL TREASURY THRU THE ISSUANCE OF CHECKS OR OTHER AUTHORIZED MODE OF DISBURSEMENTS.
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FINANCIAL EXPENSES
• INCLUDES BANK CHARGES, INTEREST EXPENSE, COMMITTMENT CHARGES, DOCUMENTARY STAMPS AND OTHER RELATED EXPENSES.
• THIS WAS REMOVED FROM ‘MAINTENANCE AND OTHER OPERATING EXPENSES’ ACCOUNT.
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PERPETUAL INVENTORY OF SUPPLIES & MATERIALS• PURCHASES FOR MATERIALS AND SUPPLIES
ARE RECORDED UNDER THE ASSET METHOD• USAGE OF THESE CONSUMABLES ARE
REPORTED UNDER THE ‘REPORT ON SUPPLIES AND MATERIALS ISSUED’
• PURCHASES OF THESE ITEMS USING PCF ARE CHARGED TO EXPENSE
• MOVING AVERAGE OF COSTING IS USED.
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MAINTENANCE OF SUPPLIES AND PROPERTY, PLANT AND EQUIPMENT LEDGER CARDS
• FOR CHECK AND BALANCE, PROPERTY CUSTODIANS OR ACCOUNTING UNITS OF AGENCY ARE REQUIRED TO MAINTAIN HARD COPIES OF THESE ASSETS
• THIS IS CLASSIFIED BY CATEGORY OF PPE.
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CONSTRUCTION OF ASSETS
• CONSTRUCTION PERIOD THEORY IS APPLIED FOR COSTING PURPOSES
• BONUS PAID TO CONTRACTOR IS ADDED TO COST.
• LIQUIDATED DAMAGES DUE FROM CONTRACTOR IS DEDUCTED FROM PROJECT COST
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Q.: UNDER THE NGAS, SERVICEABLE ASSETS NO LONGER BEING USED SHALL BE CLASSIFIED AS:a. PPEb. Obsolete propertyc. Depreciated assetsd. Other assetse. Assets for disposal
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Q.: UNDER THE NGAS, SERVICEABLE ASSETS NO LONGER BEING USED SHALL BE CLASSIFIED AS:a. PPEb. Obsolete propertyc. Depreciated assetsd. Other assetse. Assets for disposal
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REGISTRY OF PUBLIC INFRASTRUCTURE AND REGISTRY OF REFORESTATION PROJECTS• THIS APPLIES TO PUBLIC GOODS –
ROADS,BRIDGES, WATERWAYS, RAILWAYS, PLAZA, MONUMENTS, ETC. (BY THE DPWH, OTHER GOCCS)
• ALSO FOR THE REFORESTATION (BY THE DENR, OTHER GOCCS)
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DEPRECIATION
• STRAIGHT LINE METHOD IS USED.• UNIFORM ESTIMATED LIFE OF PUBLIC GOODS,
EXAMPLES:RUNWAYS – 20 YEARSRAILWAYS - 40 YEARS BUILDING MADE OF WOOD – 10 YEARS ...
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RECLASSIFICATION OF ASSETS
• OTHER ASSETS – NO DEPRECIATION UNSERVICEABLE ASSETS
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ALLOWANCE FOR DOUBTFUL ACCTS
• ALLOWANCE FOR DOUBTFUL ACCOUNTS WILL BE SET UP TO ALLOW FAIR VALUATION.
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RECOGNITION OF LIABILITY
• ACCRUALS ....• USUALLY RECOGNIZEDAT THE TIME
GOODSAND SERVICES ARE ACCEPTED OR RENDERED AND SUPPLIER OR CREDITOR BILLS ARE RECEIVED BY THE CONCERNED AGENCY.
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ELIMINATION OF CONTINGENT ACCONTS
• DISALLOWED PAYMENTS, CASH SHORTAGES SHALL BE RECORDED UNDER RECEIVABLE ACCOUNTS.
• USE OF CONTINGENT ACCOUNTS ARE STOPPED.
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INTEREST ACCRUAL• INTEREST INCOME OR EXPENSE, WHEN
APPROPRIATE ARE TO BE RECOGNIZED• INTEREST INCOME – THOSE EARNED ON DEPOSITS WITH BANKS,
LOANS AND INVESTMENT BONDS, TREASURY NOTES, TREASURY BILL AND PROMISSORY NOTES HELD
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INTEREST ACCRUAL• INTEREST EXPENSE – TO RECORD CHARGES IMPOSED AS A
CONSEQUENCE ON USE OF MONEY BELONGING TO OTHER, SUCH US INTEREST IN BONDS, CERTIFICATES OF INDEBTEDNESS, TREASURY BILLS, TREASURY NOTES
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ACCOUNTING FOR LOANS AND BORROWINGS
• ALL LOANS AND BORROWINGS SHALL BE RECORDED UNDER APPROPRIATE LIABILITY ACCOUNTS
• DOMESTIC BORROWINGS• FOREIGN BORROWINGS
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ELIMINATION OF COROLLARY AND NEGATIVE JOURNAL ENTRIES• A COROLLARY ENTRY ARISES FROM
OBLIGATION ACCOUNTING
• A NEGATIVE ENTRY (USUALLY DONE IN RED) IS A MEANS OF EFFECTING A CORRECTION/ ADJUSTMENT BY ENCLOSING THE AMOUNT IN PARENTHESIS
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PETTY CASH FUND
• FOR PAYING SMALL OR MISCELLANEOUS BUT AUTHORIZED EXPENDITURES NOT CONVENIENTLY PAID BY CHECK VOUCHER.
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FOREIGN CURRENCY ADJUSTMENT
• CASH DEPOSITS BY THE GOVERNMENT IN FOREIGN CURRENCY WILL BE COMPUTED AT THE EXCHANGE RATE SET BY THE BANGKO SENTRAL – AS OF BALANCE SHEET DATE
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FOREIGN CURRENCY ADJUSTMENT
• EACH MONTH, ANY GAIN OR LOSS FROM FOREIGN EXCHANGE TRANSACTIONS IS COMPUTED AND RECOGNIZED IN THE BOOKS
• FOR FOREIGN CURRENCY LIABILITY, IT IS TO BE EXPRESSED BOTH IN FOREIGN AND LOCAL CURRENCY.
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NEXT TOPICS
• ACCOUNTING FOR BUDGETARY ACCOUNTS• THIS IS ABOUT WAYS OF RECORDING
APPROPRIATIONS, ALLOTMENTS AND OBLIGATIONS IN THE REGISTRIES MAINTAINED BY THE DBM, BUREAU OF TREASURY AND GOVT AGENCIES/ UNITS/ INSTRUMENTALITIES/ GOCCs