Government Accounting - 2018 Edition Punzalan and Cardona Chapter 1 – Nature and Scope o NGAS !ue"tion" # An"$er"% 1. Define Define government government account accounting. ing. Answer: Purs Pursua uant nt to Sect Sectio ion n 109 109 of PD 1445 1445,, governm rnment accounting is the one which “encompasses the process of ana!"ing, recor#ing, cassif!ing, summari"ing an# communi communicat cating ing a transacti transactions ons invov invoving ing the rece receip iptt an# an# #isp #ispos osit itio ion n of gov governme ernment nt fun# fun# an# propert! rt! thereof.$
an#
interpr rpreting
the
resut
%. &numerat &numerate e the o'(ectives o'(ectives of the gove government rnment accounting accor#ing to Section 110, Presi#entia Decree 1445. Answer: Section 110, Presi#entia Decree 1445 Answer: sets #own the foowing government accounting:
o'(ectives
of
a. )o pro# pro#uc uce e info informa rmati tion on conc concerni erning ng past past operations an# present con#itions* 1
2
'. )o provi# provi#e e a 'asis 'asis for gui#ance gui#ance for future future operations* c. )o provi#e for contro of the acts of pu'ic 'o#ies an# offices in the receipt, #isp #ispos osit itio ion n an# an# uti utii" i"at atio ion n of fun# fun#s s an# an# propert!* an# #. )o report report on the financi financia a position position an# the the resuts of operations of governm rnment agencies for the information an# gui#ance of a persons concerne#. +. &p &pai ain n 'rie 'rief f! ! the the purpo purpose ses s of creati creating ng
the the
Pu' Pu'ic ic Sect Sector or Acco Accoun unti ting ng Stan Stan#a #ar# r#s s -oar -oar# # PSAS-/. Answer: Primari!, the Pu'ic Sector Accounting Answer: Stan Stan#a #ar#s r#s -oar# -oar# PSAS-/ PSAS-/ was create# in %00 un#er 2A 3esoution o. %001% #ate# 2cto'er 10, 10, %00 %00,, in or#e or#err to formu formua ate te an# an# imp impem emen entt pu'ic sector accounting stan#ar#s an# esta esta' 'is ish h in6 in6ag ages es with with inte interna rnati tion ona a 'o#i 'o#ies es,, prof rofessio ssion na accounting
organ rgani" i"a ation ions an# an# aca#em a#eme e on reate# fie#s on financia
manage agemen ment, Acco ccor#in r#ing g! !, the PSA PSAS- sha sha assist the commission in formu rmuating an# 2
impementing
Phiippine
Pu'ic
Sector
Accounting Accounting Stan#ar#s PPSAS PPSAS/.7 /.7 4. &pain
the
processes
of
#eveoping
the
Phiippine Pu'ic Sector Accounting Stan#ar#s PPSAS/. PPSAS /. Answer: )he foo oow wing ing are are the the proc proces esse ses s an# an# other consi#erations in #eveoping the Phiippine Pu'ic Sector Accounting Stan#ar#s PPSAS/: a. Appic Appica'i a'iit it! ! of 8PSAS. 8PSAS. &isting 8PSAS #etermine the
were assesse# appica'iit! of
to the
pro provisio isions ns in the the Phi Phiip ippi pine ne sett settin ing g as 'ases in the #eveopment of PPSAS. '. &posure &posure #raft of PPSAS. PPSAS. )he PSAS- issues eposure #rafts of a propose# PPSAS for comment '! intereste# parties incu#ing 2A officias an# an# au#it au#itors, ors, agenc agenc! ! finan finance ce person personne ne,, oversight agencies, professiona organi"ations,
aca#eme
an#
other
sta6eho#ers. )he PSASsets a reasona'e time to aow intereste# 3
4
parties to consi#er an# comment on its proposas. )he PSAS- evauates a comm commen ents ts rece receiv ive# e# on epo eposu sure re #raf #rafts ts an# an# ma6 ma6es suc such mo#i mo#ifi fica cati tion ons, s, wher where e appropriate. c. un#amen un#amenta ta issues. issues. here
an
accounting
significant eement of re;uirement containe#
principe a in
or
a
#iscosure 8PSAS is
consi#ere# to 'e in confict with the Phi Ph iip ippi pine ne a aws ws,, ru rue es s an an# # re regu gua ati tion ons, s, this wou# 'e regar#e# as a fun#amenta issu is sue e an# the acc ccou oun nti ting ng pri rin ncip ipe e or #iscosure re;uirement ma! 'e change#. #. Statut Statutor! or! authori authorit! t!.. here the internationa stan#ar# #eviates from the Phiippine reguator! or egisative appication
environment, gui#ance sha
accor#ing!. e. Discos Discosure ure re;uire re;uirement ments. s.
4
Phiippine 'e issue#
Discosure re;uirements ma! 'e amen#e# when the when the am amen en#m #men ents ts are are re rega gar# r#e# e# as 'eing significant for improving fair presentation of the matter. f. PPSA PPSAS S num num'e 'eri ring ng.. )he PPSAS is assigne# the same num'er as the 8PSAS to maintain the in6. here a PPSAS is #eveope# an# there is no 8PSA 8PSAS S e;ui e;uiva vae ent nt,, the the stan stan#a #ar# r# wi wi 'e assigne# a num'er in a series of PPSAS starting with 101. hen 8PSASsu'se;uent! issues the e;uivaent stan#ar# as an 8PSAS, the 100 series PPSAS wi 'e with#rawn an# reissue# as a PPSAS with the 8PSAS num'er. Stan#ar#s of PPSAS have e;ua authorit! regar#ess of the num'ering use#. g. inanc inancia ia reporting reporting issues issues not #eat #eat with with '! 8PSAS. here issues reate# to financia reporting emerge#, researches were #one an# a #iscussion #ocument prepare re# # 'ase# on other reevant accounting 5
6
stan#a sta n#ar#s r#s not in co conf nfict ict wit with h Ph Phii iipp ppine ine aws. h. Su'mission
of
#raft
to
PSAS-
for
consi#eration consi#eration of 2A. 2A. here here ther there e are are sign signif ific ican antt chan change ges s or unre unreso sov ve e# issue ssues s assoc sociat iate# with ith an eposure #raft, the PSAS- ma! #eci#e to reepose a propose# PPSAS. i. 8f consi#ere# re# approp ropriate, focus grou roup #iscussions wi 'e he# to o'tain further opinions on issues i#entifie# '! the eposure process. 5. ha hat are the the gov governme rnment offi offic ces prim rimari! ri! charge rge# with accounting res responsi'iit!< &pain their respective responsi'iit!. Answer: )he offices charge# with the accounting responsi'iit! are the ommission on Au#it 2A 2A//, the Departm rtment of -u#get an# =anagement D-= D-=//, the -ureau of )reasur! -)r /, /, an# the government Agencies. Agencies . Commi""ion on Audit
6
)he omm ommiss ission ion on Au#it Au#it 2A/ 6eeps the genera accounts of the promugates accounting
govern rnm ment, rues an#
reguatio regua tions, ns, an an# # su' su'mit mits s to the Pre Presi# si#ent ent an# ongress, within the time fie# '! aw not a not ate terr th than an th the e ast ast #a #a! ! of Se Sept ptem em'e 'er r each !ear > Section 41, PD 1445/, an annua report of the government, its su'#ivisions, agenci age ncies es an# ins instrum trument entai aitie ties, s, inc incu u#in #ing g governmentowne# corporations.
or
controe#
As man#ate# '! Artice 8?D, Section % par. %/of the 19@ onstitution of the Phi Phiip ippi pine nes, s, to wit: wit: “)he “)he omm ommis issi sion on on Au#it sha have ecusive authorit!, su'(ect to the imitation in this Artice, to #efine the scope of its au#it an# eamination, esta'ish the techni;ues an# metho#s re;uire# therefor, an# promugate accounting reguations, prevention irreguar,
an# au#iting rues incu#ing those for an# #isaowance unnecessar!,
etravag aga ant, epen# e pen#itures itures,,
or or uses uses 7
an# the
of 8 eg ega a, ecessive,
unconsciona'e of gove governmen rnmentt
8
fun#s an# properties,$ the ommission on Au#it rev revise# ise# the the accounting s!stem.
pre previous ious
governme rnment nt
Pursuant to the 2A, D-= an# D2 oint ircuar o. %01+1 #ate# August B, %01+, Cnifi Cnifie# e# Accoun Accounts ts o#e o#e Struct Structure ures s CAS CAS/, /, the consi consiste stenc nc! ! of accoun accountt cass cassifi ifica cati tion on an# an# co#i co#ing ng stru struct ctur ures es with with the the 3evise vise# # hart of Accounts sha 'e the responsi'iit! of the 2A. 2A. As man#ate# '! Artice 8?D Section % par. %/ of the the 19@ 19@ ons onsti titu tuti tion on of the the Phi Phiip ippi pine nes, s, the the ommission on Au#it sha have ecusive authorit!, authorit!, su'(ect to the imitation in this Artice, Art ice, to #efine the scope of its au#it an# eamination, esta'ish the techni;ues an# metho#s re;uire# therefore, re, an# promugate accounting an# au#i au#iti ting ng rues rues an# an# regu reguat atio ions ns,, inclu including ding tho tho"e "e or the prevention and di"allo$anc di"allo$ance e o% 1& '( '((E (EG) G)*A *A( (
E+PE E+ PEN, N,' ')( )(ES ES
epen#iture
is
incurre# re#
esta'ishe#
rues
an#
signif!
without regu eguations,
that
a#hering
the to
proce#ura
gui# gui#e ein ines es,, poi poici cies es,, prin princi cip pes es an# an# prac practi tice ces s that that hav have gain gaine# e# reco recogn gnit itio ion n in aw* aw* incu incurre rre# # with withou outt conf confor ormin ming g to or o'se o'servi rving ng pres prescr cri' i'e# e# usag usages es or 8
rues of #iscipine, esta'ishe# pattern, course, mo#e of action, 'ehaviour 'ehaviour or con#uct. Ca"e" con"idered irregular u"e" o government und" includ inc lude e the the ollo ol lo$in $ing g% a. Pa!ment Pa!ment of saaries saaries,, aowance aowances s an# other forms forms of a##itiona compensation such as: 1. onoraria an# other forms forms of aowances aowances such as per #iems, #iems, representat representation ion aowa aowance, nce, hristma hristmas s 'onus, 'onus, gift chec6s pai# to Departme tment Secretaries, Cn#e Cn#ers rsec ecre reta tari ries es,, Assi Assist stan antt Secr Secret etar arie ies s or thei their r aterna rnates as mem'ers of governi rning 'oar#s r#s of co coeg egia ia 'o#i 'o#ies es as thes these e parta6 parta6e e of the the natu nature re of a##iti a##itiona ona compe compensa nsatio tionE nE remune remunerat ration ion proscr proscri'e i'e# # un#er the Phi. onstitution F3 Gs14@+9%, 15B9%, 1+49/* %. Pa!ment of aowances an# per #iems to -2D, Secretariat an# other officers of F2 su'si#iaries that were ac;uire# through Procamation 50* +. Pa!ment of a##itiona 'enefits to officiasEempo!eesE-2D of F2s 'ase# on issuance issuances s of the Department Department Secretar! Secretar! to which the F2 is attache#* 4. Pa!me Pa!ment nt of &=&s &=&s &mrgen &mrgenc! c! =eeti =eeting ng &pen &penses ses// to mem'ers of the -2D* 9
10
5.onoraria grante# to specia committees which are performing functions inherent functions of the agenc!*
in
the
reguar
B.o B. ono norar raria ia grant grante# e# to priv privat ate e in#i in#ivi vi#u #ua as s sitt sittin ing g as mem' mem'er ers s of spec specia ia comm commit itte teeE eEs s of a gov governme ernment nt agen agenc! c! with withou outt auth author orit it! ! or appr approv ova a from from prop proper er authorities D-=E2P/* @.onorariaE3A)A grante# to mem'ers of committeeEs in regionaE#istrict offices in vioation of Section 4, -u#get ircuar o. %00+5/ . onorar raria pai# to mem'ers of
the -AE)F in
ecess of the rates provi#e# in D-= ircuar %0045A an# for procurement activities pertai taining to contracts not !et awar#e# to winning 'i##er* 9.Frant of o!at!Eservice awar#s to empo!ees not in accor# with the re;uirements of S =&=2 irc. o. 4% F314%@B0/* 10. 10. Pa!m Pa!men entt of A A cash cash 'ene 'enefi fits tsEs Esig igni ning ng 'onu 'onuse ses s to mem'ers of governin rning g 'oar#s r#s an# nonorga rganic personne an# those occup!ing manageria positions higher than a #ivision chief an# pa!ment to ran6 an# fie in ecess of P5,000.00* 11. Frant of honoraria honoraria for performing performing function functions s inherent in the reguar personneEofficia*
function
10
of
the
government
1%. 1%. Frant Frant of 3A 3A) )A an# other other 'enef 'enefits its to 2F 2F aw!e aw!ers rs ren#ering ega assistance to F2s in the a'sence of thre three e conc concurri urring ng con# con#it itio ions ns re;u re;uir ire# e# un#e un#err &2 @ 2A Dec. %00B0+0/* 1+. Pa!me !ment of 2HA 2HA an# an# other ao owance nces #eeme# me# integrate# in the saar! F3G15+%BB/* 14. 14. Frant Frant of foo# foo# 'as6 'as6et et ao aowa wance nceEri Erice ce su'si# su'si#!Eh !Ehea eath th care aowanceEheath care insurance in the a'sence of a aw authori"ing authori"ing the same* 15. Premiums Premiums pai# for the personne personne acci#ent acci#ent insurance insurance of officers an# empo!ees of F2s in the a'sence of a prior authorit! from the 2P an# an# D-=* 1B. 1B. Pa!me Pa!ment nt of A A cash cash incent incentiv iveE eE'en 'enef efit it to ran6 ran6 an# an# fie empo!ees where the con#itions for #etermining “sa “saving vings$ s$ per per PSH= PSH= an# an# DD-= = regu reguat atio ions ns are are not not met* 1@. 1@. Pa!me Pa!ment nt of saar saaries ies an# wages wages wherei wherein n signa signatu tures res per per og' og'oo oo6 6 var! var! with with thos those e in the the pa!r pa!ro oE ED) D)3* 3* or unau unauth thor ori" i"e# e# pa!m pa!men entt to pers person onEs Es othe otherr than than the the pa!ee* 1. Pa!ment
of
perso rsonne
su'si#! to HFCs* 19. 2verti rtime pa! for
servi rvices out
servi rvicesEtas6s
un#erta6en #uring reguar hours*
11
of that
financia can
'e
12
'. irin iring g of priva ivate aw aw!ers: rs: 1/ '! F2 F2sEF sEFA As to han# han#e e case cases s an# an# ega ega matt matter ers s with withou outt the the prio prior r writt written en author authorit! it! from from the the 2FE 2FESo Soici icitor tor Fenera Fenera as the case ma!'e an# the prior written concurrence of 2A* or %/ '! HFCs HFCs ecep eceptt in cases cases where the cit!E municipait! is the part! a#verse to the provincia government or to another component cit! or municipait!* municipait!* c. iring iring of consu consuta tant nts s an# an# contr contract actua uas s to perfo perform rm functions that wi eercise contro an# supervision over reguar empo!ees S =emo irc. G %B/* #. Attorne!Is positions*
fees
to
aw!ers
ho#ing
pantia
e. Pa!me a!ment nt of rent renta a cont contra ract cts s for servi service ce vehic hices covering a continuous perio# of more than 15 #a!s in the a'sence of a prior authorit! from the D-=, appropriation an# A* f. Pa!ment Pa!ment for #eive #eiveries ries of goo#s witho without ut passin passing g the re;uire# ;uait! test such as that that of the -u. of Pant 8n#ustr!, in case of see#s* g. Acceptance of a infrastructure/
pro(ect
not
cons constru truct cte# e# in acco accor#a r#anc nce e with with pan pans s an# an# spec specs s an# with note# #eficiencies* h. 3eeas ease e of fun# fun#s s to F2s F2sEP EPo os for mone mone! ! mar6 mar6e et pacementEtime #epositEinvestments* 12
i. Cse of fun#s inten#e# for specific purpo rpose/ for purpo rposes other than its origina intent uness rea reaig ignmen ment the thereof reof is autho thori"e i"e#Ea #Eappro pprov ve# '! proper authorities* reease of fun#s in the form of assistance to unauthori"e# unauthori"e# 'eneficiaries 'eneficiaries (. =e#ia a#vertisements a#vertisements for anniversariesEpu'icit! anniversariesEpu'icit! propaga propagan#a n#a e ecept cept when when the natu nature re of agenc agenc!I !Is s man#ate re;uires such an# those re;uire# for the issu issuan ance ce of agen agenc! c! gui# gui#e ein ines esEru Erue esE sEreg regu uat atio ions ns,, con#uct of pu'ic 'i##ing, #issemination important pu'ic announcements/* announcements/*
of
6. Frant of cash a#vance a#vance for for no specific specific purpose* purpose* . Donat nations, ons, contri' tri'u ution ions, gran grants ts an# cash gift ifts, ecept when such activit! is un#erta6en in pursuit of the man#ate of the #onoragenc! A2 10+, #ate# +1 Aug. %004/ 2& '**'GA* E+PEN,')(ES pertain to those incurre# in vioation vioatio n of the aw an# its 833. 'llu"trative ca"e" include the ollo$ing pa.ment"% 1. ontr ontract acts s awar#e awar#e# # un#er un#er an aterna aternativ tive e mo#e mo#e of proc procur urem emen entt for for item items s tha that shou shou# # hav have 'een 'een su'(ect of pu'ic 'i##ing*
13
14
%. Awar Awar# # of cont contrac racts ts to 'i##e 'i##ers rs who who fai fai to meet meet the minimum amounts re;uire# to 'e put up at the time the 'i#s were su'mitte#* +. Dei Deive veri ries es of e;ui e;uipm pmen entt that that #o not not conf conform orm to specs per P2Econtract an# 'i# invitation* 4. ommunication e;uipment without the purchaserIs purchaserIs an# #eaerIs permit from the ationa ationa )eeco ecomm mmun unic icat atio ions ns omm ommis issi sion on 3 3A A +4B +4B on 3a#io ontro Haw/ 5. Purchase Purchases s from o''ersEmi## o''ersEmi##emen emen government government purchases sha 'e with reputa'e manufacturersE icense# #istri'utors/ B. Pa!ment Pa!ment of caims caims awar#e# awar#e# not strict! strict! in accor# accor# 3A 914 an# its 833* @. Pa!ment for contracts
which
has
no
prior
appro approva vaEa Eaut uthor hori"a i"ati tion on of the oca oca Sanggu Sanggunia nian n 3A91B0/* . Pa!ment of compensation government personne not
or 'enefits to in accor# with
provisions of eisting aws such as the foowing: a/ A##i A##iti tion ona a reti retire reme ment nt 'ene 'enefi fits ts 'e!o 'e!on# n# that that ao aow we# un#er eisting aws '/ a"ar# a"ar# pa! to heath wor6ersEperso wor6ersEpersonne nne not assigne# assigne# in esta'ishment not specifica! mentione# in Section
14
%1, 3.A.@+05 an# without proof of eposure to pu'ic heath ha"ar#s for at east 50J of wor6ing hours c/ a"a a"ar# r# ao aow wance ance to emp empo! o!ee ees s not not enga engage ge# # in the the #eiver! of heath or heath reate# services such as the socia insurance group 9. Cse of pu'i pu'ic c fun#s fun#s for for private private purpose purpose such as: as: i#eningErepairEimprovement of roa#s in private su'#ivisions/ ownership for which ha# not 'een forma! turne# tur ne# over over to the government government 10.
&ntering in into a co contrac ract, am amount fo for wh which is is ov over an an# 'e!on# 'e!on# eistin eisting g approv approve# appropria appropriation tionsEno sEnott cove covere# re# '!
an appropriation aw* 11. )ransportation aowance
pai#
to
assigne# or using government vehice 1%. &ntering into a contract without
officias the
with
covering
certific certificat ate e of avai avaia' a'ii iit! t! of fun#s fun#s signe signe#Ei #Eissu ssue# e# '! the the hief Accountant, even if the contract is signe# '! sai# hie hieff Acco Accoun unta tant nt as witn witnes ess s F31 F3151 51+@ +@+ +@4 @4,, 1@ ov ov. %005/* 1+. 14.
Frant of of cas cash a# a#vance wi with no no sp specific pu purpo rpose &penses for foreign trave of officiasEempo!ees inc incu u#i #ing ng unif uniform orme# e#ED ED8H 8HFE FED DD/ D/ who who are are #ue #ue to reti retire re with within in one one 1/ 1/ !ear !ear afte afterr the the comp compe eti tion on of sai# sai# trav trave e.. FAA provision/*
15
16
15.
Frant of &=& in ecess of amounts authori"e# un#er
eisting H33s* 1B. 2verpr rpricing of of goo goo#sEservi rvices pu purchase#.* 1@.
Frant of ?mas 'on 'onuses, cas cash gi gift an# an# oth other 'enefits to consutants, mem'ers mem'ers of governing governing 'oar#s who are not
organic personne of the government government agenc!* 1. Frant of ameioration aowance Esimiar 'enefits to private empo!ees empo!ees of service contractors A2 o. +B5, F3 G15@001/ /& E+CESS'E E+PEN,')(ES unrea reasona ona'e 'e epense enses s at
sign signif if! ! incu incurre rrenc nce e of imm immo#era #erate te ;uantit ntit! !
an#Eor eor'itant price* epenses that ecee# what is usua or proper such as the foowing: foowing : a/ Fran Frantt of cash a#van #vanc ce in ecess ess of estim stima ate# 'u#getEre;uirement* '/ Suppi Suppies es an# an# mate materia rias s incu incu#in #ing g fue fue inve invento ntor! r! in ;uant antitie ities s ecee#ing ing the the norma rma thre three emo month nth re;uirement, ecept for circumstances authori"e# '! aw* c/ Fran Frantt of cash a#van vance for int inteig ige ence nce fun# un# in ecess of onemonth re;uirement ecept in emer emerge genc nc! ! case cases s whic which h shou shou# # not not ecee# cee# the the threemonth re;uirement* #/ 3eease of fun#s to F2sEPos approve# approve# pro(ect re;uirements* r e;uirements* 16
in
ecess
of
e/ 8ncusion
of
unnecessar!
item itemsE sEma mate teri ria asE sEe; e;ui uipm pmen entt in an infr infras astr truc uctu ture re contract act i.e. motor vehice, computers, etc/ resuting in increase pro(ect costs* f/ Proc Procur urem emen entt an# an# #ist #istri ri'u 'uti tion on of see# see#s s to farmers farmers in ecess of re;uirements re;uirements per hectare/*
as
per
stu#!
g/ 2verpricing of purchases in ecess currentEprevaiing mar6et price '! 10J*
on of
h/ 3epa 3epair ir of e;ui e;uipm pmen entt at a cost cost ecee# cee#in ing g +0J +0J of the current mar6et price of the sameEsimiar item* item* i/ Pro Provisio ision n of more more than than one 1/ unit unit mo'i mo'ie e phon phone e for each entite# officia which shou# not 'e ower than Division hief hief ran6* (/ Provision Provision of more
than
one
1/
unit
#es6topEaptopEother eectronic ga#get to officias entite# thereto* 6/ Procurement re;uirem rements
of items in ecess of the specia! those with nearEshort
epira pirati tion ons s #ate #ates s such such as vacc vaccin ines es,, me#i me#ici cine nes, s, see#s, fertii"ers, pestici#es, etc.* / 8nstaation of materiasEitems in ecess of re;uirements or in paces where there is no nee# for the sameEwith area#! eisting instaations that a##i a##iti tion ona a item itemEs Es resu resut t to re#u re#un# n#an anc c! s suc uch h as 17
18
inst insta aa ati tion on of came camera raEs Es with with eist istin ing g func functi tion ona a items/* m/ ontinuous etension of servi rvices of
foreign
consutantEs for reative! simpe supervisor! wor6 #uring the fina stages of the pro(ect, tas6s which can can 'e un#e un#erta rta6 6en '! oca oca cons consu uta tant ntEs Es or the the impementing impementing agenc! itsef F3101+@0/* F3101+@0/* &)n &)nnec nece"" e""ar ar. . ep epend enditu iture re" " pertai tain to those that cannot pass the test of pru#ence or the #iigence of a goo# father of a fami!, there'! #enoting non respon responsiv siven eness ess to the eige eigenci ncies es of the service service** the! the! are not supporti rtive of the impementation of the o'(ectives, goas an# missionEman#ate of a government agenc!* incurrence of epen#iture not #ictate# '! the #eman#s of goo# governance* governance* not essentia to or can 'e #isp #ispen ense se# # with with with withou outt incu incurri rring ng oss oss or #ama #amage ge to propert!* such as: a/ iring of pu'ic reations reations companies* '/ reat reation ionEco Econti ntinue nue# # opera operati tion on of su'si su'si#ia #iar!Eies r!Eies that #upicate the functions government agenc!*
of
the
parent ent
c/ 3eea ease of fun fun#s as fina inancia ncia assis ssista tan nce to civi civic c orga organi ni"a "attions ionsEn Enon on prof profit it corpo corpora rattions ionsEE foun#ations* 18
#/ P3 epense epenses s of insurance insurance corporatio corporations ns with its mem'ers when its insurance compusori! compusori! re;uire#*
servi rvices
are
e/ iring iring of consu consutan tants ts for for funct function ions s incu incu#e #e# # in the the pa pantia ia posit sition ions suc such as tho those of the the procurementEfinanciaEme#ia consutants* procurementEfinanciaEme#ia consutants* f/ iring iring of of consutants consutants for services not aigne# aigne# to to the man#ate of the agenc!* g/ 3epeat 3epeate# e# renewa of consuta consutanc! nc! services over over an# a'ove agenc! re;uirements* h/ Purchase Purchase of highen#E highen#Ee epens pensive ive mo#esE'ran# mo#esE'ran#s s of eectronic ga#gets phonesE phonesE#es6topsEaptops, phonesE#es6topsEaptops, etc./*
ce
i/ onstruction of structuresE'u structuresE'ui#in i#ingsEp gsEprocurem rocurement ent of e;uipme e;uipment nt not rea! nee#e#Enot compete#Ecou# not
put 'e
to
useEnot proper!
maintaine#Eoperations maintaine#Eoperations not sustaine#* (/ onstruction of housing units
not
#istri'ute#Eawar#e#E#ispose# within consi#era'e perio# of time as evi#ence# evi#ence# '! the #eterioration #eterioration of the units* 6/ 3e 3epacement of structureEe;uipment
19
servicea'e
20
/ ont ontin inuo uous us repa repair ir of vehi vehic ces an# an# e;ui e;uipm pmen entt consi#ere# evi#ence#
'e!on#
economic '!
repair as fre;uent
'rea6#ownsEunsev 'rea6#ownsEunsevicea'iit! icea'iit! after repair* m/ onstruction of roa#sE'ri#ges uncompete# for for a num'er of !ears* n/ ons onstr truc ucti tion on of stru struct ctur ures esE' E'ui ui# #in ings gs an! inten#e# purpose* structureE'ui#ingEassets other
eft with withou outt
using than
a the
inten#e# purpose ma! aso 'e an in#ication that the ac;uisition of the same is not necessar!* 3&Etravagant 3&Etravagant ependiture" sign signif if! ! thos those e incu incurre# rre# witho without ut restra restraint int,, (u#ici (u#icious ousnes ness s an# an# econ econom! om!** the! the! ece ecee# e# the the 'oun 'oun#s #s of prop propri riet et! ! 'ein 'eing g immo immo#e #era rate te,, pro#iga, avish, uurious an# in(u#icious such as the foowing: a/ 3enta
of
epensive
hasErooms
in
pushEuur!
hotes tesEr Eres esta taur uran ants ts for purpo rposes ses of ho#in #ing g offi office ce meetingsEfunctions, ecept for government sponsore# internationa conventions, meetings an# the i6e* '/ Procuremen Procurementt of uur! uur! vehic vehices es ecep eceptt when aowe# aowe# '! H33s* c/ Frant of
eor'itant
'enefits* 20
'onusesEaowancesEfringe
#/ 8nst 8nsta aa ati tion on of high high! ! soph sophis isti tica cate te# # out# out#oo oorr sign signs, s, 'i'o 'i'oar#s ar#s an# an# neon neon signs signs a#ve a#vertisi rtising ng a gov government ernment agen agenc! c!Eo Eoffi ffice ce,, ecept cept for for 'an6 'an6s, s, tra# tra#in ing g agen agenci cies es,, hotes, 'ui#ings for cuture cuture an# arts* e/ 8nsta 8nstaa atio tion n of uur uuriou ious s 'ui# 'ui#ing ing furnish furnishing ings s ece ecept pt those those inten inten#e# #e# for for showc showcase ase,, tra#e tra#e an# comme commerce, rce, promotion of arts an# cuture an# for use of foreign #ignitaries* f/ iring iring of epen epensiv sive e transpo transport rt service service when when there there are avai avaia' a'e e pu'i pu'ic c conv conve! e!an ances ces ece ecept pt in merito meritorio rious us cases an# (ustifie# circumstances* g/ Purchase Purchase of wines, wines, i;uors, cigars, cigars, cigarettes cigarettes ecep eceptt when when serve serve# # in sta state fun function tions s an# governme rnment sponsore# internationa conferenceEconv conferenceEconventions* entions* h/ 2ut of town meetingsEconf meetingsEconferences erences #espite #espite avaia'iit! avaia'iit! of venueEs venueEs within office premisesEocait!* premisesEocait!* i/ iri iring ng of epe epens nsiv ive e vans vans,, cars, cars, aircraf aircrafts ts when when there there are avaia'e or#inar! pu'ic conve!ances, ecept in meritorious casesE(ustifie# '! prevaiing circumstances* (/ 8nstaation 8nstaation of high! sophisticate# sophisticate# out#oor signs, 'i'o 'i'oar#s ar#s,, neon neon signs, signs, etc., etc., a#ve a#vertisi rtising ng the the entit entit! !, ecept for 'an6s, tra#ing entities, hotes or venues for cuture an# arts*
21
22
6/ Havi Havish sh cee' cee'rat ration ions s of hrist hristma mas, s, anniv anniver ersar saries ies,, an# an# other specia occasions. B&)nco )ncon"cio n"ciona4l na4le e
ependitu epe nditure" re"
perta pertain in
to epen pen#i #itu ture res s
ac;uire# in unreasona'e an# immo#erate price or ;uant ;uantiti ities, es, an# which which no reason reasona' a'e e person personEpe Eperson rson in his right min# wou# incurEma6e, nor wou# a fair an# honest man man wou# wou# accept accept as reason reasona' a'e* e* those those incurre# incurre# witho without ut consi#ering ethica an# mora stan#ar#s. 8ustrative cases are the foowing pa!ment of epen#itures: epen#itures: 1. Hivein Hivein seminars seminars in fivesta fivestarr hotes with significan significantt num'er of participants an# unreasona'e ength of time* %. &ce &cessi ssive ve an# unrea unreason sona' a'e e retire retireme ment nt 'ene 'enefit fits, s, 'onuses, aowances an# fringe 'enefits* +. 3eease of significant amounts to F2sEPos without the necessit! of
(ustificationEevauation the pro(ect, nee#s of
'eneficiaries, reasona'eness re;uirements, etc.
on the inten#e#
of
pro(ect
4. Franting oans to un;uaifie# 'orro rrowers 'orrows uni6e! uni6e! to pa!'ac6 the oans*
an#
5. iring of personne who previous! opte# to retireE'e separate# from the service as a resut of rationai"ation,
within 22
five
5/
from
such
retirementEseparation from service D-= irc. o. %010+ K pertinent S reguations/* re guations/* B. 3eim' im'urse ursem ment of epenses ses for unauth author ori" i"e# e# atten#ance functions
in
conferen rencesEmeetingsEoff ffic iciia
2r uses of government government fun#s an# properties. Pursuant to the 2A, D-= an# D2
oint
ircuar o. %01+1 #ate# August B, %01+, )niied Accoun countt" Cod Code Struc tructu ture re" " 5)ACS )ACS66 wi 'e #iscusse# in #etai in hapter +/, the consistenc! consistenc! of account cassific cassification ation an# co#ing struct structure ures s with with the the 3evi 3evise# se# hart hart of Accou Accounts nts wi 'e #iscusse# in #etai in hapter 4/ sha 'e the responsi'iit! of 2A. 2A. PSAS- sha assist 2A in formu rmuating
an#
impementing Phiippine Pu'ic Sector Accounting Accounting Stan#ar#s Stan#ar#s PPSAS/. PPSAS/. )he PPSAS PPSAS sha app app! ! to a a app app! ! to a a at ationa iona Fov Fovernmen rnmentt Agencies FAs/, Hoca Fovernm rnment Cnits HFCs/ an# Fov Fovernme nment2wne# an# an#Eor ontroe# orporations F2s/ not consi#ere# as Fovernment -usiness &nterprises F-&s/, in which which case, case, the the Phii Phiippi ppine ne inan inancia cia 3epo 3eporting rting Stan#ar#s P3S/ an# reevant stan#ar#s issue# '! the the ina inanc ncia ia 3eporti eporting ng Stan Stan#a #ar#s r#s oun ounci ci, , 23
24
-oar#
of
Accountanc!,
an#
Professiona
3eguation ommission sha app!. Accou Account nting ing rues rues an# an# regua reguatio tions ns pertain pertaining ing to cash cash opera operati tion ons, s, co coec ecti tion ons, s, remi remitt ttan ance ces s an# an# #is'ursements, incu#ing pu'ic 'orrowings, are issue# '! the ommission on Au#it 2A/, (oint! or with the concurr concurrence ence of the D2 an# D-=. G7E(NEN 9)S'NESS ENE(P('SE 5G9E6 1. An
C:A(ACE('S'CS% entit! with the power
to
contract in its own name* %. as as 'een een assig signe# the fina inancia ia an# operationa authorit! to carr! on a 'usiness* +. Se es goo#s an# servi servic ces, in the norma rma
course
of
'usiness,
to
other entities at a profit or fu cost recover! recover!** 4. ot
reiant
on
continuing
government fun#ing to 'e a going conc concer ern n oth other er than than purc purcha hase se of outputs at armIs ength/* an#
24
5. ontroe#
'!
a
pu'ic
sector
entit!. ,epartment o 9udget and anagement Pursua rsuant nt to Sect ection ion %, ha hapter pter 1, )ite ite ?L88, -oo6 8L of the A#ministrative o#e of the Phiippines &2 %9%/, “)he Department of -u#get an# =anagement sha 'e responsi'e for the formuation an# impe pementat tation ion of the ation iona -u# -u#get with the goa of attaining our nationa socioec socioecono onomic mic pans pans an# o'(ectiv o'(ectives. es. )he Depa Departm rtmen entt sha sha 'e resp respon onsi si' 'e e for the the efficient an# soun# utii"ation of government fun#s an# revenues to effective! achieve the countr!Is #eveopment o'(ectives.$ An#, as provi#e# '! the oint ircuar o. %01+1 #ate# August B, %01+, Cnifie# Accounts o#e Structures CAS/, the vai#ation vai#at ion an# assignment of new co#es for fun#in fun# ing g so sour urce ce or orga gani ni"a "attio ion, n, su su' 'o' o'(e (ect ct co#e co #es s fo forr e epe pen# n#it itur ure e it item ems s sh sha a 'e th the e responsi'iit! of the D-=. D-= . 8n a##ition, the 25
26
vai#ation an# assignment of new program, acti activi vit! t!,, pro( pro(ec ectt co#e co#es s sha sha 'e #eci #eci#e #e# # (oint! '! the proponent proponent agenc! an# an# D-=. 9ureau o rea"ur. Cn#er the 3evise# A#ministrative o#e, the -ureau of )reasur!, )reasur!, as one of the operating 'ure 'ureau aus s of the the Depa Departme rtment nt of ina inanc nce e is authori"e# to: 1. 3eceive an#
6eep
nationa
fun#s,
manage an# contro the #is'ursements thereof* an# %. =aintain accounts of financia transacti transactions ons of a nationa nationa government government offices, agencies an# instrumentaities. )hus, the -ureau of )reasur! sha contro an# monitor the otice of ash Aocation A/ reease# '! the Department of -u#g -u#get et an# an# =ana =anage geme ment nt** as we as the the 'an6 transfers it ma6es in repenishing its =o#ifie# Dis'ursement accounts.
S!stem
=DS/
Accor#ing to the oint ircuar o. %01+1 #ate #ate# # Augu August st B, %01+ %01+,, Cnif Cnifie ie# # Acco Accoun unts ts 26
o#e Structures CAS CAS/, /, the consistenc! of accounts cassification an# co#ing stan st an#a #ar#s r#s with with th the e Fo Fov ver ernme nment nt ina inanc nce e Statistics FS/ sha 'e the responsi'iit! of Department of inance -)r . National Government Agencie" Depa Departme rtment nts, s, 'urea 'ureaus us,, offic offices es an# an# othe other r instrumentaities of the ationa Fov Fovernment rnment,, inc incu#i u#ing ng the the ong ongres ress, s, the the u#ici u#iciar!, ar!, the onstitut onstitutiona iona 'o#ies, 'o#ies, state state co coege eges s an# an# univ unive ersiti rsities es,, an# an# othe otherr sef sef containe containe# # institut institutions ions an# hospita hospitas s are re;uire# '! aw to have accounting units unitsE#i E#ivis vision ionsE# sE#ep epartme artments nts,, which which are to 'e of the same eve with other units unitsE#i E#ivis vision ionsE# sE#ep epartme artments nts in the agenc agenc! ! an# un#er the the #irec irectt sup supervis rvision ion of the the ea# of the Agenc!. Accounting personne sha 1./ 1./ main mainta tain in an# an# 6eep curre current nt the the accounts of the agenc!, %./ provi#e a#vice on the financia con#ition an# status of the appropriations
an#
aotments
of
the
agenc! as its ea# ma! re;uire, an# +./ to #eveop an# con#uct proce#ures #esigne# 27
28
to meet meet the the nee# nee#s s of mana manage geme ment nt.. )he! )he! sha perform the aforesai# #uties in accor#a r#ance with eisting aws, ru rues, regu reguat atio ions ns,, proc proce# e#ur ures es an# an# comp comp! ! with with the reporting re;uirements of the omm ommis issi sion on on Au#i Au#it, t, the the Depa Departme rtment nt of inance an# the Department of -u#get an# =anagement. B. &numera ratte
the
reg re gistries
of
the
ationa
Fovernment Agencies FAs Fovernment FAs// as as pro provi# vi#e# e# '! the Fovernment Accounting =anu a FA=/. Answer: Cn#er the new accounting s!stem, the Answer: government agencies sha maintain the foowing foowing registries: a. 3egistr! 3egistr! of 3eve 3evenue nue an# 2ther 2ther 3eceip 3eceipts ts > Summar! 3323S/. )his summar! sha 'e 6ept '! the -u#get DivisionECnit for each custer maintaine# '! the entit!
fun#
'. 3egistr! 3egistr! of 3eve 3evenue nue an# 2ther 2ther 3eceip 3eceipts ts > 3eguar Agenc! an# oreign oreign Assiste# Pro(ects un# 33233AKAP 33233AKAP/. /.
28
)his registr! sha 'e maintaine# '! the -u#get DivisionECnit of the entit! for the foowing fun# custers: 1./ 3egu guar Agenc! un#* an#, %./ oreign Assiste# Pro(ect fun#. c. 3egistr! 3egistr! of 3eve 3evenue nue an# 2ther 2ther 3eceip 3eceipts ts > Specia Account Hoca! un#e#EDomestic Frants Specia Account Assist siste# e#E Eo oreig reign n SADF/. SADF /.
Fran Frants ts
un# an# oreign un#
3323
)his registr! sha 'e maintaine# '! the -u#get DivisionECnit of the entit! for the foowing fun# custers: 1./ Specia Accou oun nt Hoc oca a ! ! un#e #e# #ED EDo omest stic ic Frants un#* an#, %./ Specia Account > oreign Assiste#Eoreign Frants un# . #. 3egistr! 3egistr! of 3eve 3evenue nue an# 2ther 2ther 3eceip 3eceipts ts > 8nterna! Fenerate# un#s 2ff -u#getar! un#s > 3etaine# 8ncome un# un#s/ s/E-u E-usi sine ness ss 3eat eate# e# un# un#s s 3323 8FE-3/. 8FE-3 /. )his registr! sha 'e maintaine# '! the -u#get DivisionECnit of the entit! for the 29
30
fo o owin ing g fu fun# n# cus uste ters rs:: 1. 1.// 8n 8nte terna rna ! ! Fenerate# un#s 3etaine# 8ncome
2ff-u#getar! > un#s/* an#, %./
-usiness 3eate# un#s. un#s . e. 3egistr! 3egistr! of 3eve 3evenue nue an# 2ther 2ther 3eceip 3eceipts ts > )rust 3eceiptsE8nteragenc 3eceiptsE8nteragenc! ! )ransferre# )ransferre# un#s 3323)3E8A) 3323)3E8A)/. /. )his registr! sha 'e maintaine# '! the -u#get DivisionECnit of the entit! for the )rust 3ece 3eceiptsE8nteragenc iptsE8nteragenc! ! )ran )ransferre# sferre# un#s. f. 3egistr! of Appropriation Aotments 3APAH/. 3APAH/.
an#
)his registr! registr ! sha 'e maintaine# maintaine# '! fun# cu ust ster er '! th the e -u -u#g #get et Di Divi visi sion onEC ECni nitt of each en enttit it! ! to ensu ensure re tha hatt a o otme men nt reeases are within the authori"e# appropriation. Separate appropriation. Separat e registr! sha sha 'e maintaine# for prior !earIs appropriations. g. 3egis 3egistr! tr! of Aotm Aotmen ents, ts, 2'igat 2'igation ions s an# an# Dis'ur s'urse seme men nts > Person rsonne ne Servi ervic ces 3A2DPS/. 3A2DPS /. 30
)his registr! sha 'e maintaine# '! the -u#g -u#get et Divi Divisi sion onEC ECni nitt '! Appr Approp opri riat atio ion n Act, fun# custer, '! =a(or ina 2utput =2/ or ProgramEAct ProgramEActivit! ivit!EPro(e EPro(ect ct PAP AP// for personne services. h. 3egis 3egistr! tr! of Aotm Aotmen ents, ts, 2'igat 2'igation ions s an# an# Dis'ursements > =aintenance an# 2ther 2perating &penses 3A2D=22& 3A2D=22&/. /. )his registr! sha 'e maintaine# '! the -u#g -u#get et Divi Divisi sion onEC ECni nitt '! Appr Approp opri riat atio ion n Act, fun# custer, '! =a(or ina 2utput =2/ or Program ProgramEAc EActiv tivit! it!EPr EPro(e o(ect ct PAP/ for main mainte tena nanc nce e an# an# othe otherr oper operat atin ing g epenses. i. 3egis egistr tr! ! of Ao Aotm tmen ents ts,, 2'i 2'iga gati tion ons s an# an# Dis'ur s'urse seme men nts 3A2D& 3A2D&/. /.
>
inan inanc cia ia
&pen penses ses
)his registr! sha 'e maintaine# '! the -u#g -u #get et Di Divi visi sion onEC ECni nitt '! Ap Appr prop opri riat atio ion n Act, fun# custer, '! =a(or ina 2utput =2/ or Program =2/ ProgramEAct EActivit! ivit!EPro(e EPro(ect ct P PA AP/ for financia epenses. epenses . 31
32
(. 3egistr! of Aotments, 2'igations 2'igations an# Dis'ursements > apita 2uta!s 3A2D 2/. )his registr! sha 'e maintaine# '! the -u#g -u #get et Di Divi visi sion onEC ECni nitt '! Ap Appr prop opri riat atio ion n Act, fun# custer, '! =a(or ina 2utput =2/ = 2/ or Program ProgramEAct EActivit! ivit!EPro(e EPro(ect ct P PA AP/ for capita outa!s. 6. 3egistr!
of
-u#get,
Dis'ur s'urse seme men nts 3-CDPS 3-CDPS/. /.
>
Ctii"ation
Person rsonne ne
an#
Servi ervic ces
)his registr! sha 'e maintaine# '! the -u#get DivisionECnit '! fun# custer, '! =a(o (orr i in na 2ut utp put =2/ or Pro rogr gram am Acti tiv vit it!E !EP Pro ro(e (ec ct P PA AP/ for pers rso onn nne e services. . 3egistr!
of
-u#get,
Ctii"ation
an#
Dis'ursements > =aintenance an# 2ther 2perating &penses 3-CD=22& 3-CD=22&/. /. )his registr! sha 'e maintaine# '! the -u#get DivisionECnit '! fun# custer, '! =a(o (orr i in na 2ut utp put =2/ or Pro rogr gram am 32
Activ Ac tivit! it!EPr EPro(e o(ect ct P PA AP/ fo forr mai mainte ntena nance nce an# other operating epenses. m. 3egistr!
of
-u#get,
Dis'ur s'urse seme men nts 3-CD&/. 3-CD& /.
>
Ctii"ation
inan inanc cia ia
an#
&pen penses ses
)his registr! sha 'e maintaine# '! the -u#get DivisionECnit '! fun# custer, '! =a(o (orr i in na 2ut utp put =2/ or Pro rogr gram am Activit!EPro(ect PAP/ for financia epenses. n. 3egistr!
of
-u#get,
Ctii"ation
an#
Dis'ursements > apita 2uta!s 3-CD 2/. )his registr! sha 'e maintaine# '! the -u#get DivisionECnit '! fun# custer, '! =a(o (orr i in na 2ut utp put =2/ or Pro rogr gram am Activit!EPro(ect PAP/ for capita outa!s. o. 3egistr! of Aotments an# otice of ash Aocation 3AA 3AA// )his registr! sha 'e maintaine# '! the Acco Accoun unti ting ng Divi Divisi sion onEC ECni nitt to #ete #etermin rmine e the amount of aotments not covere# '! A an# to monitor avaia'e A. 33
34
p. 3egistr! of Aotments an# otice of )ransfer of Aocation 3A)A 3A)A// )his registr! sha 'e maintaine# '! the Acco Accoun unti ting ng Divi Divisi sion onEC ECni nitt to #ete #etermin rmine e the amount of aotments not covere# '! )A an# to monitor avaia'e )A. @. h ha at are th the e 'asi sic c accoun unttin ing g an# 'u# u#ge gett reporting principes un#er FA=< Answer: )he Answer: )he foowing are the 'asic accounting an# 'u#get reporting principes as provi#e# '! FA=: a. Fenera! Fenera! accepte# accepte# government government accountin accounting g prin princi cip pes es in acco accor#a r#anc nce e with with the the PPSA PPSAS S an# pertinent aws, rues an# reguations. 2A 3esoution o. %01400+ #ate# anuar! %4, %014 prescri'e# the a#option of twent! five %5/ Phiippine Pu'ic Sector Accounting Stan Stan#a #ar# r#s s PPS PPSAS ASs/ s/ effe effect ctiv ive e anua anuar! r! 1, %014. )hese PPSASs were 'ase# on 8ntern terna ationa iona Pu'i u'ic c Sector tor Acco ccounti unting ng Stan#ar#s 8PSASs/ which were pu'ishe# in the %01% %01% an#' an#'oo6 oo6 of 8nternat 8nternation iona a Pu'i Pu'ic c 34
Secto Sectorr Accou Accounti nting ng Pronou Pronounce ncemen ments ts of the the 8PSAS-. '. Accrua Accrua 'asis 'asis of accou account nting ing in accor accor#an #ance ce with the PPSAS. Accrua 'asis means a 'asis of accounting un#er which transactions an# other events are are reco recogn gni" i"e e# when when the! the! occu occurr, an# an# not not when cash or its e;uivaent is receive# or pai#. )hus, the transaction an# events are reco recogn gni" i"e# e# in the the acco accoun unti ting ng reco recor#s r#s an# an# reco recogn gni" i"e# e# in the the fina financ ncia ia stat statem emen ents ts of the perio#s to which eements recogni"e#
the! reate. )he un#er accrua
accounting are assets, ia'iities, assetsEe;uit!, revenue, an# epenses.
net
c. -u#get #get 'asis asis for pres prese entation ion of 'u#ge u#gett info informa rmati tion on in the the fina financ ncia ia stat statem emen ents ts in accor#ance with PPSAS %4. 8PSAS
%4,
Presentation
of
-u#get
8nformation in inancia Statements, re;u re;uire ires s a comp compar aris ison on of 'u#g 'u#get et amou amount nts s an# the actua amounts arising from eecut ecutio ion n of the the 'u#g 'u#get et to 'e inc incu#e u#e# # in the financia statements of entities that are 35
36
re;uire#
to,
or
eect
to,
ma6e
pu'ic!
avai avaia' a'e e their their approv approve# e# 'u#ge 'u#getEs tEs,, an# for for whic which h the the! are, re, theref erefo ore, re, he# pu'i u'ic c! accou accounta nta'e 'e.. 8t aso aso re;uir re;uires es #isc #iscosu osure re of an epa epana natio tion n of the reason reasons s for for mate materia ria #ifferences 'etween the 'u#get an# actua amounts. #. 3evise# ise# har hartt of Acco Accoun unts ts pres prescr cri' i'e# e# '! ommission on Au#it. )he ommission on Au#it as mem'er of the 8nternationa 2rgani"ation of Supreme Au#it 8nstitutions 8)2SA8 8)2SA8// is encourage# to a#op a#optt ree reeva vant nt 8nte 8nterna rnattiona iona Acco Accoun unti ting ng Stan#a Stan#ar#s. r#s. )he 8PSAS8PSAS- of the 8nternationa e#eration of Accountants which promugates the 8PSASs, ac6nowe#ges the right of governments an# nationa stan#ar#ssetters to respective accounting
esta'ish stan#ar#s
their an#
gui# gui#e ein ines es for for fina financ ncia ia repo reporti rting ng in thei their r (uris#ictions. (uris#ictions. An# to provi#e provi#e new accounts for the a#option of the PPSAS which were harmoni"e# with the 8PSAS to enhance the accounta'iit! an# tran ransparen renc! of the 36
finan financia cia reports, reports, an# an# ensur ensure e compa compati' ti'ii iit! t! of fina financ ncia ia inf informati rmation on,, the the 2A rev revo6 o6es es 2A ir. o. %00400 an# the 2A ircuar o. %01+00% #ate# anuar! +0, %01+ , A#option of the 3evise# hart of Accounts for ationa a#opte#.
Fovernm rnment
Agencies,
is
urthermore, urtherm ore, 2A issue# ircuar o. %014 00+, 00+, #ate #ate# # Apri Apri 15, 15, %014 %014,, 8m 8mp pem emen enti ting ng 3ues an# Fui#eines on the onversion from fr om th the e Ph Phi iip ippi pine ne Fo Fov vernm rnmen entt h har artt of Accoun Acco unts ts un un#e #err th the e F FAS AS to th the e 3e 3evi vise se# # hart of Accounts for ationa Fovernment Agencies* an# ircuar o %015 > 00@, #ate# 2cto'er %%, %015, Prescri'ing the Fov Fovernment ernment Accou Accounti nting ng =anu =anua a for for Cse of A ationa Fovernment Agencies. e. Dou'e Dou'e entr! entr! 'oo66e 'oo66eeping eping 8t is a s!stem of 'oo66eeping where ever! (ourna entr! to corre rrespon#ing an#
account opposite
re;uires entr! to
a a
#ifferent account. 8n the #ou'eentr! accounting s!stem, two accounting entries are are re; re;uire uire# # to rec recor# or# eac each acc accounti untin ng 37
38
transa transacti ctions ons.. 3ecor 3ecor#in #ing g of a #e'i #e'itt amount amount to one or more accounts an# an e;ua cre#it amount to one or more accounts resuts in tota #e'its 'eing e;ua to tota cre#its for a accounts in the genera e#ger. f. ina inanc ncia ia stat statem emen ents ts 'ase 'ase# # on acco accoun unti ting ng an# 'u#getar! recor#s. )he o'(ectives of genera purpose financia repo re portin rting g in the pu'ic sector shou# 'e to a/ prov provi#e i#e info informa rmati tion on usef usefu u for for #eci #ecisi sion on ma6ing, an# '/ to #emonstrate the accounta'iit! of the entit! resources entruste# to it, '!: a/ Provi#ing sources,
for
the
information a'out the aocation, an# uses of
financia resources* '/ Pro Provi#in i#ing g info informa rmati tion on a'ou a'outt how how the the enti entit! t! fina financ nce# e# its its acti activi viti ties es an# an# met met its cash re;uirements* c/ Pro Provi#in i#ing g info informa rmati tion on that that is usef usefu u in evauating the entit!Is a'iit! to finance its activities an# to meet its ia'iities an# commitments* commitments*
38
#/ Provi#ing
information
a'out
the
fina financ ncia ia con# con#it itio ion n of the the enti entit! t! an# an# changes in it, an#* e/ Provi# Provi#ing ing aggregate information information usefu in evaua evauating ting the entit!I entit!Is s performance performance in terms terms of servi service ce cost costs, s, effi effici cien enc c! an# accompishments* accompishments* . &pain 'rief! the un# uster Accounting. Accounting. Answer: u un# n# c cust uster er refe refers rs to an acco accoun unti ting ng proce#ure for recor#ing epen#itures an# revenues associate# with a specific activit! for whic which h acco accoun unti ting ng reco recor#s r#s are are main mainta tain ine# e# an# an# perio#ic financia reports are prepare#. 9. ow
wou#
the
genera
purpo rpose
financia
reportin reporting g in the the pu'ic pu'ic secto sectorr provi provi#e #e usefu usefu information for #ecision ma6ing an# #emonstrate the government agenc!<
accounta'iit!
of
the
Answer: 2A ircuar o. %01500% #ate# =arch Answer: 2A 9, %015, Suppementar! gui#eines on the prep prepar arat atio ion n of fina financ ncia ia stat statem emen ents ts an# an# othe other r rep reports orts,, the the tran transi sittiona iona prov rovisio ision ns on the impementation of the PPSAS, an# other co#ing 39
40
struc tructu ture res, s, prov rovi#e i#es that hat for the purpo urpose se of prep prepar arin ing g the the Ann Annua ua inanc inancia ia 3e 3epo port rt an# th the e Annua Au#it 3eports, 3eports , a ationa ationa Fove Fovernment rnment Agencies FAs/ sha su'mit to the 2A Au#itors an# the Fovernm rnment Accountanc! Sector FAS/, 2A, the #etaie# financia state sta temen ments ts an an# # tr tria ia 'a 'aan ances ces co conso nsoi# i#at ate# e# '! the fun# custer as foows: a/ 3eguar 3eguar Agenc Agenc! ! un# un# '/ oreign oreign Assiste# Assiste# Pro(ects Pro(ects un# un# c/ Specia Accounts > Hoca! un#e#EDomestic un#e#EDomestic Frants un# #/ Specia Accounts >
oreign
Assiste#Eoreign Frants un# e/ 8nterna! 8nterna! Fenerate Fenerate# # un#s un#s f/ -usine -usiness ss 3eat 3eate# e# un#s un#s g/ )rust )rust 3eceip 3eceiptE8nt tE8nterage eragenc! nc! )ransf )ransferre# erre# un#s 8A)/ 8A)/ )he )h e
o'( '(e ectiv ive es
of
gen ge ner era a
purp pu rpo ose fin ina anc ncia ia
report rtiing in the pu'ic sector shou# 'e to provi# pro vi#e e info informatio rmation n usef usefu u for #eci #ecision sion ma6i ma6ing, ng, an# to #e an# #emo mons nstr trat ate e th the e ac acco coun unta ta'i 'ii it! t! of th the e entit! for the resources entruste# to it , '!:
40
a. Provi Provi#in #ing g informa informati tion on a'out a'out the source sources, s, aocation, resources*
an#
uses
of
financia
'. Provi# Provi#ing ing informatio information n a'out how the entit! entit! fina financ nce# e# its its acti activi viti ties es an# an# met met its its cash cash re;uirements* c. Provi#ing informa rmation that is usefu in evauating the entit!Is a'iit! to finance its acti activi viti ties es an# an# to meet meet its its ia' ia'i iit itie ies s an# an# commitments* #. Provi Provi#in #ing g informa informati tion on a'out a'out the the finan financia cia con#ition of the entit! an# changes changes in it* e. Provi Provi#in #ing g aggregat aggregate e informa informati tion on usefu usefu in evaua auatting ing the the enti entit! t!IIs perf perfo ormanc rmance e in term terms s of servi servic ce costs sts, eff ffic icie ienc nc! ! an# accompishments. 10. &numerate an# epain
the
concept
of
concepts
of
responsi'iit! accounting. accounting. Answer:
)he
foowing
are
the
responsi'iit! accounting: accounting: 1. 3esponsi'iit! accumuating
accounting an#
reporti rting
invoves #ata
on
rev revenues nues an# an# cost costs s on the the 'asi 'asis s of the the mana manage gerI rIs s acti action on,, who who has has auth author orit it! ! to 41
42
ma6e the #a!to#a! #ecisions a'out the items* %. &vauat &vauation ion of a managerIs managerIs perf performance ormance is 'ase# on the matters #irect! un#er his contro* +. 3espo 3esponsi nsi'i 'iit! it! accoun accountin ting g can can 'e use# at ever! ever! ev eve of manag manageme ement nt in which which the foowing con#itions eist: a. ost an# revenues can
'e
#irect!
asso associ ciat ate# e# with with the the spec specif ific ic ev eve of management responsi'iit! r esponsi'iit!** '. osts osts an# reven revenues ues are contro controa a'e 'e at the the ev eve of resp respon onsi si'i 'ii it! t! with with whic which h the! are associate#* associate#* an# c. -u#get #ata can 'e #eveope#
for
evauating the managerIs effectiveness in controing the costs an# revenues. 4. )he report rtiing of costs an# revenues un#e un #err re resp spon onsi si'i 'ii it! t! ac acco coun unti ting ng #i #iff ffer ers s from 'u#geting in two aspects : a. A
#istinction
is
ma#e
'etween
controa'e an# noncontroa'e costs. 1. A cost is consi#ere# controa'e at a given eve of manageria 42
resp respon onsi si'i 'ii it! t! if that that mana manage gerr has has the power to incur it within a given perio# of time. 8t foows that a costs are controa'e '! top manag managem emen entt 'eca 'ecaus use e of the the 'roa 'roa# # range of its activit!, an# fewer costs are controa'e as one moves #own to ower eve of management responsi'iit! 'ecause of the managerIs #ecreasing authorit!. %. o on nco cont ntro roa a' 'e e co cost sts s are costs incurre# in#irect! an# aocate# to a responsi'iit! eve. '. Perfo Performance rmance reports either either emphasi" emphasi"e e or inc incu#e u#e on! on! item items s cont contro roa a' 'e e '! in#ivi#ua manager. 5. A responsi'i responsi'iit! it! reporting s!stem s!stem invo invove ves s the preparation of a report for each eve of res respon ponsi' si'iit iit! !. 3e 3espon sponsi'i si'iit! it! reports usua! compare actua costs with fe f ei' i'e e 'u#g 'u#get et #a #ata ta.. )he repo reports rts sho show on! controa'e costs an# no #istinction is ma#e costs.
'etween
43
varia'e
an#
fie#
44
B. &va &vaua uati tion on of a mana manage gerI rIs s perf perfor orma manc nce e for cost centers is 'ase# on his a'iit! to meet eet 'u#g 'u#ge ete# te# goas as for contro troa' a'e e costs.
44
Answers Answ ers to =utipe hoice hapter 1/ 1. C ) h is
is
the
#efinition
of
government
account ountin ing g pursu rsuant ant to Sect ection ion 109 of PD 1445. %. , )he )he
governm rnment
off ffiices
charge# ge#
with
the
government government accounting accounting responsi'iit! are: a. ommissio ommission n on on Au#i Au#itt '. Department Department of -u#get -u#get an# an# =anageme =anagement nt c. -ureau -ureau of )reas )reasur! ur! #. ationa ationa Fovernment Fovernment Agencie Agencies s +. A Cn#er Cn#er the the 3evi 3evise# se# A#mini A#ministr strat ative ive o#e, o#e, the the -urea -ureau u of )reasu easur!, r!, as one one of the the oper operat atin ing g 'ureaus of the Departm rtment of authori"e# to: 1.
inance is
3eceive an# 6eep nationa fun#s, mana manage ge an# an# cont contro ro the the #is' #is'ur urse seme ment nts s
thereof* an# %. =aintain
accounts
of
financia
transa transact ction ions s of a a nati nationa ona gov government ernment offices, agencies an# instrumentaities. 45
46
4. 9 )he ommission on Au#it 'ase# on the autho authorit rit! ! grante# grante# un#er un#er Sectio Section n %%/, %%/, Artice Artice 8?D of the 19@ onstitution of the 3epu'ic of the Phiippines prescri'e# the ew Fovernment Accounting S!stem. 5. , Per 2A ir. o. %01+00% #ate# anuar! +0, %01+ %01+ effec effectiv tive e anu anuar! ar! 1, %014 %014,, the accoun accountt co#e structure consists of eight / man#ator! #igi #igits ts,, whic which h is comp compos ose# e# of the the fo foow owin ing: g: Account Froup: one #igit* =a(or Account Froup Froup:: two two #igit #igits* s* Su'=a Su'=a(or (or Accoun Accountt Froup Froup:: two #igit igits s* Fene enera ra He#ge #ger Acc Accounts unts:: two #igits* an# FH ontra Accounts: one #igit. B. A )he 'oo6s of origina entr! or (ournas, sha 'e use# to recor# in time se;uence, financia transactions an# information presente# in #u! certifie# an# approve# accounting #ocuments. )he 'asis for recor#ing in the (ournas sha 'e the ourna &ntr! Loucher Loucher &L/. @. C 46
)he re rece ceip iptt of o oti tice ce of a ash sh A Ao oca cattio ion n is recor#e# in the 3eguar Agenc! 'oo6s repr re pres esen enti ting ng the the ag agen enc! c!Is Is su su's 'si# i#! ! fr from om th the e nationa government. . A )he D-=, D2-)r, an# 2A are coective! responsi'e for the CAS.. CAS Specif ecific ica a! !, vai#a vai#atio tion n an# an# assig assignme nment nt of new new co#es co#es for for fun# fun#in ing g sour source ces, s, orga organi ni"a "ati tion on,, su' su'o' o'(e (ect ct co#es for epen#iture items sha 'e the responsi' responsi'iit! iit! of D-= D-=** consistenc! of account cass cassifi ifica catio tion n an# an# co#in co#ing g struct structure ure with with the the 3evise# hart of Accounts sha 'e the responsi'iit! of 2A* consistenc! of account cassification an# co#ing stan#ar#s with the Fov Fovernme ernment nt ina inanc nce e Stat Statis isti tics cs sha sha 'e the the responsi'iit! of D2-)r* D2-)r* an# vai#ation an# assignment of new Program, Activit!, Pro(ect o#es sha 'e #eci#e# (oint! '! the proponent agenc! an# D-=. 9& , See epanation in o. . 10. 9 See epanation in o. . 47
48
11& 9 )he PPSAS Fov Fovernmen rnmentt
sha 'e appie# Agen gencies, ies, Hoca Hoca
to ationa Fov Fovernme rnment
Cnits, an# Fovernment2wne# an#Eor ont ontro ro e# e# orpo orpora rattions ions not not cons consi# i#er ere# e# as Fovernment -usiness &nterprises, where the Phi Phiip ipp pine ine ina inancia ncia 3eporti portin ng Stan tan#ar# #ar#s s P3S/ an# reevant stan#ar#s r#s 3S, -2A, an# P3 sha app!. 1%. )he )he
Pu'ic
Sector
Accounting
issue#
'!
Stan#ar#s r#s
-oar# was create# in %00 un#er 2A 3esou souti tion on o. o. %00 %001 1% % #at #ate# 2cto 2cto'e 'err 10, 10, %00 to assist the commission in formuating an# an# imp impem emen enti ting ng pu' pu'ic ic sect sector or acco accoun unti ting ng stan#ar#s an# esta'ish internationa 'o#ies.
in6ages
with
1+. )his )his is the the inst instruc ructi tion on pro provi#e vi#e# # '! FA= FA= for for 3egis egistr tr! ! of 3APAH/.
Appr Approp opri riat atio ions ns an# an# Ao Aotm tmen ents ts
14. A )his )his is the the inst instruc ructi tion on pro provi#e vi#e# # '! FA= FA= for for 3egistr! of Aotments, 2'igations an# 48
Dis'ursements for Personne Services 3A2D PS/. 15. A )his )his is the the inst instruc ructi tion on pro provi#e vi#e# # '! FA= FA= for for -u#get Ctii"ation 3e;uest Status -C3S/. 1B. ) h is
is
the
#efinition
of
un#
uster
accounting. Chapter 2 – )niied Account" Code Structure 5)ACS6 !ue"tion" # An"$er" 1& ;hat are the
Epl Eplai ain n
An"$er% he
50
was enha enhanc nce# e# '! a##i a##ing ng anot anothe herr two two #igits co#e for the un# uster for purpo purpose ses s of acco accoun unti ting ng,, 'an6 'an6in ing, g, an# an# reporting* thus, thus , it 'ecomes eight #igits. %. 2rg 2rgani ani"a "ati tion on o#es o#es 8t is i s a twe tweve ve#igit #igit co#e to ref refec ectt the the Department, Agenc! an# Su'Agenc! or 2peratin 2perating g CnitE3e CnitE3eve venue nue oecti oecting ng Cnit. Cnit. )he first two #igits 1 st an# % n#/ represent the Dep Departm artme ent o#e o#e. )he )he net thre three e #igits +r# to 5 th/ are for the Agenc! o#e. )he net seven #igits B th to 1%th/ are for 2perating Cnit assification o#e. +. Ho Hoca cati tion on o#es o#es Hocation co#e
is
a
nine ni ne# #ig igit it
co#e co #e
compose# of 3egion, Province, it!E=un it!E=unicip icipait! ait!,, an# -aranga! -aranga!.. 3egion co#e is a two#igit co#e 1 st an# %n#/ that i#entifies a specific region. Province co#e is a two#igit co#e + r# an# 4th/ that i#entifies the province. =unicipait! co#e is a two#igit co#e 5 th an# Bth/ that genera! #efines the reative apha'etica se;uence of municipaities 50
within within the provin province. ce. -aranga! co#e is a three#igit co#e @ th to 9th/. 4. =a(or
ina
2utput
=2/EProgram,
Activit! an# Pro(ect PAP/ o#es As provi#e# '! oint ircuar o. %01+1 #ate #ate# # Augu August st B, %01+ %01+,, it is a nine#igit co#e compris prise e# of Prog Progra ram m, =2, 1 st Heve Activit!, an# % n# Heve Activit!. )he first #igit is for Program. Program . )he net two #igits %n# an# +r#/ are for the =2. =2 . )he net ne t tw two o #i #igi gits ts 4th an# 5th/ are for 1 st Heve Activit!. An# An#, the the net four #igits Bth to 9th/ are for the % n# Heve Activit!. Activit !. ow owever, th this is wa was s enha enhanc nce# e# '! oin ointt ircu ircuar ar o. o. %014 %0141 1 #ate #ate# # ov ovem'er em'er @, %014 %014 '! inc incu# u#in ing g a three#igit co#e for Secto Se ctorr 2ut 2utcom comes es an# a tw two o#ig #igit it co co#e #e for ori"onta 2utcomes as prefi . Aso inc incu#e# u#e# is ano another her #igit igit for the the ast ast catego egor! of =2EPAP to ensure that there is sufficient num'er of co#e vaues 'ringing this to five #igits from 5 #igit #igit co#e/. co#e/. 8n tota, this 6e! eement is now compose# compose# of 15 #igits. #igits . 51
52
5. 2' 2'(ec (ectt o# o#es es 8t is i s a ten ten#igit #igit co#e comp compos ose# e# of the the first eight #igits 1 st to th/ are for 2A hart of Accounts 2'(ect, an# the net two #ig igit its s 9th an# 10th/ are for Su' 2'(ect. 8f #i #isagg saggrega regatio tion n is ne nece cessa ssar!, r!, su'o'(ect co#es sha 'e use# to show the 'rea6#own of seecte# assets, inco in come me an an# # ep pen ense ses. s. 2t 2the herw rwis ise, e, tw two o "eros wi 'e use#. 2& &pain the purpose of CAS. CAS. Answer: Answe r: )he o'(e o'(ectiv ctive e or purpose of CAS CAS is is to esta' sta'i ish sh the acc accoun ounts an# co# co#es nee#e# #e# in reporti rting the financia transactions of the ati ationa ona Fov Fovernment ernment Agenc Agencies ies.. 8t provi#es a framewor6 for i#entif!ing, aggre ggrega gatting ing an# reporti rting financia transactions in 'u#get preparation, eecution, accounting an# au#iting. )he 6e! pu purpo rpose se of th the e CAS S is to ena'e the time! an# accurate reporting of actua revenue coecti coections ons an# epen# epen#itures itures against against 'u#gete# 'u#gete# programme# revenues an# epen#itures. /& &num &numer erat ate e the the repo reportin rting g re;u re;uire ireme ment nts s that that wi 'e 'est serve# '! CAS. 52
Answer: 3eporting Answer: 3eporting re;uirements that wi 'e 'est serve# '! the CAS incu#e: 1. ina inanc ncia ia repo reports rts as re;u re;uir ire# e# '! the the DD-= = an# 2A. %. ina inanc ncia ia sta stateme tement nts s as re;u re;uir ire# e# '! the the Pu'ic Sector Accounting Stan#ar#s -oar# of the Phiippines. Phiippines. +. =anage agemen ment rep reports as re; re;uire# ire# '! the eec eecuti utive ve offici officias asEhe Ehea# a#s s of #epartme #epartment nts s an# agencies* an# 4. &con &conom omic ic sta statisti istics cs cons consis iste tent nt with with the the Fovernm rnme ent in ina anc nce e =anua %001. %001 .
Statis isttic ics s
FS/
& hat are the sources of account #escriptions #escriptions an# co#es in the CAS o'(ect co#ing eements< Answer: )he sour source ces s of acco accoun untt #esc #escri ript ptio ions ns an# co#es in the CAS o'(ect co#ing eements incu#es the foowing: 1. )he co#es co#es from the 2A 3evi 3evise se# # hart hart of Accounts prepare# for accrua 'asis financia reporting. %. )he a##ition a##ition of some su'o'( su'o'(ect ect co#es* co#es* an# an# 53
54
+. A##iti A##itiona ona epen epen#it #iture ure accou account nts s #esig #esigne ne# # for cash 'asis 'u#geting, such as those of capita outa!s. outa!s . 3& &num &numer erat ate e #esc #escri ript ptio ions ns an# an# co#e co#es s of un# un# uster as provi#e# '! oint ircuar o. %014 1 #ate# ovem'er @, %014. Answer:
)he
un#
uster
o#e
Laues,
as
provi provi#e# #e# '! oint oint ircu ircuar ar o. o. %014 %0141, 1, were were as foows: un# uster
un# uster Description
o#e 01
3eguar Agenc! un#
0%
oreign un#
0+
Specia Accounts > Hoca! un#e#EDomestic Frants
Assiste#
Pro(ect
un# 04
Specia Accounts > oreign Assiste#Eoreign Frants un#
05
8nterna! Fenerate# un#s
0B
-usiness 3eate# un#s 54
0@
)rust 3eceipts
>& Discuss Discuss the significa significance nce of the enhancem enhancement ent of Sector an# ori"onta 2utcomes as pro provi#e vi#e# # '! oint oint irc ircu uar ar o. o. %014 %0141 1 #ate #ate# # ovem'er @, %014. Answer: Answ er: As provi#e# '! oint ircuar o. %014 1, #ate #ate# # ov ovem'er m'er @, %014 %014,, =2E =2EP PAP o#e o#es s is now a 15 now 15# #ig igit it co#e co#e #u #ue e to en enha hanc ncem emen entt . )he signif sig nifica icance nce of thi this s en enhan hancem cement ent is to provi#e the a'iit! to trac6 'u#gets to the sector outc outcom omes es,, thus thus,, a +#i +#igi gitt co#e co#e for for the the Sect Sector or 2utcomes was a##e# as a prefi of the =2EPAP o#es. An# to provi#e the tagging of the hori" hori"ont onta a outcom outcomes, es, anoth another er %#igi %#igitt co#e co#e was was a##e#, a##e#, for for ori"on ori"onta ta 2utcom 2utcomes, es, net net to Sector Sector 2utcomes, ?& hat is a municipait! i#entifier< i#entifier< Answer: )he =unicipait! 8#entifier is Answer: )he is a four#igit num'er that #efines the i#entit! of the municipait!. 8t is the core of the nationa stan#ar# geographic s!stem, an# is compose# of the Pr Pro ovin ince ce o o# #e, fo o owe# '! =un unic icip ipa ai it! t! o#e** ther o#e theref efor ore, e, the the muni munici cipa pai it! t! i#en i#enti tifi fier er not not 55
56
on! i#e i#entif tifies ies the mun municip icipa ait it! ! 'ut aso so the province province to which it 'eongs. An a##e# feature of the th e mu munic nicipa ipait it! ! i#e i#ent ntifi ifier er is its in# in#ep epen# en#enc ence e from the 3egion o#e. o#e . 3egar#ess of the region, the the muni munici cipa pai it! t! i#en i#enti tifi fier er for a certa certain in tow town remains the same as ong as it is part of that province. 8& &pain the government
transitor! measure to agenciesEoperating
aow units
suffici suffi cien entt ti time me in the fami famii iar ari" i"at atio ion n of th the e CAS co#es. co#es . Answer: ircuar
Accor#i r#ing to the ationa -u#get o. 554, “onversion of o#es to
onform to the CAS,$ as a transition measure to aow aow Fov Fovernment ernment Agenc Agencies iesE2p E2pera eratin ting g Cnits Cnits sufficient time in the famiiari"ation of the CAS co#es, th the e DD-= = sh sha a st sti i ref refe ect ct th the e pr prev evio ious us co#es aongsi#e the CAS co#es in the reease #ocuments. owev owever er,, a ationa ationa Fove Fovernment rnment Agencies an# 2perating Cnits are authori"e# to ma6e the necessar! conversion of the appr approp opri riat ate e co#e co#es, s, partic particu uar ar! ! on the the fun# fun#in ing g sour source ce an# an# orga organi ni"a "ati tion on co#e co#es, s, to conf conform orm to the the pres prescr cri' i'e# e# CAS co#e co#es. s. 8n case of an! #iscrepanc! note# in the in#icate# CAS co#es 56
perr SA pe SA32 32E EA A vi vis sM Mvi vis s th the e CAS =a =anu nua a,, th the e co#es per CAS =anua sha 'e a#opte# '! the agenc! concern. An"$er" to ultiple Choice 5Chapter 26 1. A un#ing Source o#e is an eight#igit co#e to ref refec ectt the the un# un# us uste terr Sour Source ce,, ina inanc ncin ing g Source, Authori"ation, an# un# ategor!. )he first two #igits are for un# uster which was inc incu#e# as prefi refi #ue to enhan hancemen ment '! oint oint ircu ircuar ar o. o. %014 %0141 1 #ate #ate# # ov ovem'er em'er @, %014. )he net #igit is for inancing Source. )he net two #igits are for Authori"ation. An# the ast three #igits are for the un# ategor! %., %., Hocation Hocation co#e is a nine#igit co#e compose# of 3egion, Province, it!E=unicipait!, an# -aranga!. +. , 2rgani" 2rgani"at ation ion o#es o#es is a twev tweve e#ig #igit it co#e co#e to refect the Departm rtment, Agenc! an# Su' Agenc! Agenc! or 2peratin 2perating g CnitE3e CnitE3eve venue nue oecti oecting ng Cnit. 57
58
4. , or purposes of CAS, onstitutiona 2ffices, the u#iciar! an# the Hegisature are categori"e# categori"e# as #epartmenteve #epartmenteve entities. 5. 9 A program is an integrate# group of activities that contri'utes to an agenc! or #epartmentIs continuing o'(ective. &es incu#e: Fenera Fenera A#minist A#ministrati ration on an# Support, Support, Support Support to 2perations, an# 2perations. B. C or purpo purpose ses s of the the CAS, an agen agenc! c! is an enti entit! t! un#e un#err a #epa #epartm rtmen entt whos whose e 'u#g 'u#get et is #irect! reease# to the atter, an# ma! incu#e the summation of a 'u#gets of su'agencies iste# un#er it, if an!. ?& 8n
9 or#er
to
harmoni"e
'u#getar!
an#
accounting co#e cassification that wi faciitate the efficient an# accurate financia repo reportin rting g of actu actua a rev revenue enue co coec ecti tion ons s an# an# epen# pen#it itur ures es comp compar are# e# with ith prog progra ramm mme# e# revenues an# epen#itures, the oint ircuar 58
o.
%01+1
#ate#
August
B,
%01+,
the
Departm rtment of -u#get an# =anagement D-=/, ommission on Au#it 2A/, Department of inance D2/, an# -ureau of )reasu easur! r! -) )r/ (oint! #ev #eveope# eope# the Cnifie# Accounts o#e Structure CAS /. 8&
9 Province is a poitica corpo rporate unit of gov governm ernmen entt whic which h cons consis ists ts of a cust uster er of municipaities, or municipaities an# comp omponen onentt cit cities. ies. 8t serve serves s as a #!na !namic mechanism for #eveopmenta processes an# effe effect ctiv ive e gov governa ernanc nce e of oca oca gov governmen rnmentt units within its territoria (uris#iction.
@&
9 )his is the #efinition of Fenera un# provi#e# provi#e# '! FA=.
10& , )his is the #efinition of ew Fenera Appropriations provi#e# '! FA=.
59
60
Chapter / – he (evi"ed Chart o Account" !ue"tion" # An"$er" 1. De Defi fine ne an# an# #i #isc scus uss s th the e un un#e #er! r!in ing g
reas re ason on
wh! a chart of accounts is prescri'e# in ew Accounting S!stem. S!stem . Answer: )he )he chart art of acco ccounts unts prov rovi#e i#es the framewor6 within which the accounting recor#s are constructe# constructe#.. 8t is #efine# as #efine# as a ist of genera e#ge e#gerr accou accounts nts consis consistin ting g of rea rea an# an# nomin nomina a accounts. )he chart of accounts is prescri'e# for use '! a a nati nation ona a gov government rnment agen agenci cies es an# an# oca oca gov governme ernment nt unit units. s. )he #e #esc scri ript ptio ion n of a a th the e accou ount nts s an# the in inst stru ruc ctio ion ns as to wh whe en these are to 'e #e'ite# an# cre#ite# are provi#e# to achie provi#e# achieve ve uniformit! uniformit! in the recor#ing of gov government ernment financia transactions . %. Discuss Discuss wh! the the 3evise 3evise# # hart of Accounts Accounts in 2A ircuar o. %01+00% #ate# anuar! +0, %01+ was create#. Answer : )he ommission on Au#it as mem'er of the 8nternationa 2rgani"ation of Supreme Au#it 60
8nstitutions 8)2SA8 8)2SA8// is encourage# 1/to a#opt ree reeva vant nt 8nte 8nterna rnati tion ona a Acco Accoun unti ting ng Stan Stan#a #ar#s r#s.. An# %/to provi#e new accounts for the a#option of the Phiippine Pu'ic Sector Accounting Stan#ar#s PPSAS PPSAS// which were harmoni"e# with the 8PSAS to enha enhanc nce e the the acco accoun unta ta'i 'ii it! t! an# an# transparenc! of the financia reports, an# ensure compa compati ti'i 'iit! it! of financ financia ia informa informatio tion, n, the 2A 2A recogni"es the nee# to revise the eisting FAS har hartt of Acco Accoun unts ts pres prescr cri' i'e# e# in 2A 2A ir ir. o. o. %00400 00 #ate# Septem'er %0, %004. +/)he /)he ommission aso recogni"es the nee# for unifo iform accou counts nts to 'e use# se# in the nation iona gov government ernment accou accounti nting ng an# 'u#ge 'u#gett s!ste s!stems ms to faciitate faciitate the preparation of harmoni"e# financia an# 'u#get accounta'iit! reports. Accor#ing!, the 2A revo6es 2A ir. o. %00400 an# the 3evise# hart of Accounts in ircuar o. %01+ 00% #ate# anuar! +0, %01+ is a#opte#. +. hat are the five 5/ cassifications of epenses in the 3evise# hart of Accounts in 2A ircuar o. %01+00% #ate# anuar! +0, %01+ %01+< < Fiv Five the the su'm su'ma( a(or or acc accou ount nt grou group p cassifications. 61
62
Answer: Per Per 2A 2A ircu ircuar ar o. o. %01+0 %01+00% 0% #ate #ate# # anu anuar! ar! +0, +0, %01+ %01+,, 3evi 3evise se# # hart hart of Acco Accoun unts ts,, the epense accounts are cassifie# into: 1. Personne Services:: Services a. Saaries an# wages '. 2ther ompensation c. Personne -enefit ontri'utions ontri'utions #. 2ther Personne -enefits %. Maintenance and Other Operating Expenses: a. )raveing &penses '. )raining an# Schoarship &penses c. Suppies an# =aterias &penses #. Ctiit! &penses e. ommunication &penses f. Awar#sE3ewar#s an# Pri"es g. Surve!, 3esearch, &poration an# Deveopment &penses h. DemoitionE3eocation an# DesitingEDre#ging DesitingEDre#ging &penses i.
Feneration,
)ransmission
Distri'ution &penses
62
an#
(. onfi#entia, onfi#entia, 8nteigence, 8nteigence, &traor#inar! &penses 6. Professiona Professiona &penses . Fenera Services m. 3epairs an# =aintenance n. inancia AssistanceESu'si#! AssistanceESu'si#! o. )aes, 8nsurance Premiums an# 2ther ees p. Ha'or an# ages ;. 2ther =aintenance an# 2perating &penses +. inancia &penses : inancia &penses 4. Direct osts: osts : a. ost of Foo#s =anufacture# =anufacture# '. ost of Saes 5. onash &penses : a. Depreciation '. Amorti"ation c. 8mpairment Hoss #. Hosses
63
64
4. &numerate the five 5/ account co#e structure of the 3e 3evi vise# se# h hart art of Acc Accoun ounts ts con consis sistin ting g of eight / man#at man#ator! or! #igits. &pain 'rief! . Answer: 2A ircuar o. %01+00% provi#es Answer: 2A provi#es that the the accoun accounts ts co#e co#e struct structure ure consi consists sts of of eight eight / man#ator! #igits, as foows: foows: 1. Ac Acco coun untt Fr Frou oup p > )hi )his represents the acc accoun ounts cassif sifica ication ion as to Asse ssets, ts, Hia'iities, &;uit!, 8ncome an# &penses. %. =a(or =a(or Ac Accou count nt Fro Froup up > )his )his repr repres esen ents ts cassif cassificat ication ion within within the account account group* e.g., for asset ma(or accounts: ash an# ash &;uivaent, 8nvestment, 3eceiva'es, etc. +. Su'=a(or
Account
Froup
>
) his
represents cassification cassification within the ma(or acco accoun untt group group** e.g. e.g.,, for for ash ash an# an# ash ash &;uivaent: ash on an#, ash in -an6 > Hoca Hoca urrenc urrenc! !, ash ash in -an6 -an6 > oreig oreign n urrenc!, etc. 4. Fenera
He#ger
Accounts
>
)his
represents the accounts to 'e presente# in #eta #etai ie# e# fina financ ncia ia sta stateme tement nts* s* e.g. e.g.,, 64
ashoecting 2fficer, Pett! ash, etc. )his )his is comp compos ose# e# of two two segm segmen ents: ts: the the first two #igits from the eft is the genera e#ger co#e, an# the ast #igit is reserve rve# for contra accounts, i6e: Aowance Aowa nce for 8mp 8mpairment, airment, Acc Accumu umuate ate# # Depreciation,, etc. Depreciation 5. Fenera ra He#ger ontra raA Ac ccounts > ontraaccounts are shown as re#uction from the reate# accounts, an# this inc incu#es u#es,, amon among g othe others rs,, Ao owance nce for for 8mpairme 8mpairment, nt, Accum Accumua uate te# # Deprec Deprecia iatio tion, n, etc. as shown in the prece#ing item Fenera He#ger Accounts/. Accounts/.
65
66
Answers Answ ers to =utipe hoice hapter +/ 1. 9 o#es are assigne# to account grou roups to faci faciita itate te ocat ocation ion of accoun accounts ts in the gene genera ra an# su'si#iar! e#gers, to provi#e s!stematic arrang arrangem emen entt an# an# cass assif ific icat atio ion n of acco accoun unts ts an# faciitate faciitate preparation of financia reports. %. A =a(or account group represents cassification within the account group* e.g. for assets ma(or account: cash an# cash e;uivaents, investments, receiva'es, investment propert!, etc.
inventories,
+. A ash an# cash e;uivaent is a ma(or account group. group. Asset Asset is an accoun accountt group. group. Pett! cash is a genera e#ger account. 4. A Due
from
ongovernment
2rga 2rgani ni"a "ati tion onEP EPeo eop peI eIs s 2rga 2rgani ni"a "ati tion on is othe other r receiv receiva' a'es es.. Due from -ureaus -ureaus an# an# Due from entra 2ffice are intraagenc! receiva'es. receiva'es .
66
5. A 2ther 2ther receiv receiva' a'es es are other other receiv receiva' a'es. es. Due from F2 an# Due from HFC are interagenc! receiva'es. B. A Ha'or Ha' or an an# # wa wages ges acc accoun ountt is use# to recor# the cost incurre# for a'or an# wages, which incu#e a'or pa!ro pai# for pro(ects un#erta6en '! a#ministration, for agricutura activities invoving invoving hire# a'or, a'or, stu#ent wages, wages , etc. ) his account is presente# as =aintenance an# 2ther 2perating &penses in the 3evise# 3evise# hart of Accounts. @.
A 8nvestment account is a ma(or account group. ash in 'an6 > oca currenc! is a su'ma(or accou ccoun nt gro group. up. )rea easu sur! r! 'i 'i s s ac acco coun untt is a genera gene ra e#ge e#gerr accou account nt..
.
9 Hia'iities account is an account group. Hoans an#
receiva'es
account
is
a
su'ma(or
account group. Sin6ing fun# is a genera e#ger account. 67
68
9.
C inancia assets he# for tra#ing is a genera e#ger e#g er acco account. unt. A Aow owan ance ce fo forr imp impairme airment nt > invest inv stme ment nt in tr trea easu sur! r! 'o 'on# n#s s ac acco coun untt is a genera e#ger contra account . 8nve 8nvestm stment ent is a ma(or account group.
10. A )he 'asis for co#ing the o'(ect cassification in the 2A 3evise# hart of Accounts is accrua accounting , which re;uires tran transa sac ctio tions to 'e rec recor#e# r#e# in the perio rio# when the! occur an# not when cash or its e;uiv ;uiva aen ent is rec receive ive# or pai#/. i#/. )hu )hus, the the transa transacti ction ons s an# an# even events ts are recor# recor#e# e# in the accou ccoun nting ting rec recor#s r#s an# reco recogn gni" i"e e# in the financia statements of the perio#s to which the! reate.
68
Chapter – Accounting or 9udgetar. Account" !ue"tion" # An"$er" 1. hat
is
the
Fene Fe nera ra
Acco Ac coun unti ting ng
Pan P an
of
gove government rnment agenciesE agenciesEunit units< s< &numerat &numerate e an# epain the accounting s!stems in the FAS ationa. Answer: )he Fenera Accounting Pan
FAP/
sho shows the overa ra account ountin ing g s!stem tem of a gov governmen rnmentt agen agenc c!Eun !Eunit it.. 8t inc incu#e u#es s a/ the the source #ocuments, '/ the fow of transactions an# its accumuation in the 'oo6s of accounts an# an# c/ fina fina ! ! the the con conversi ersion on into into fina financ ncia ia info informa rmati tion onE# E#at ata a pres presen ente te# # in the the fina financ ncia ia reports. )he foowing foowing are the accounting accounting s!stem: 1. -u#getar! Accounts S!stem )he 'u#getar! accounts s!stem encompasses the processes of preparing the 'u#ge 'u#gett reea reease# se# #ocume #ocument nt former! 6nown as Agenc! -u#get =atri =atri,, 'ut was repace# '! %014 Fenera Appropriations Act starting %014/, monitoring an# 69
70
recor#i recor#ing ng of aot aotme ments nts receiv receive# e# '! the agen agenc c! from from the the Depa Departm rtmen entt of -u#g -u#get et an# =anagement, reeasing of Su' Aotment A#vices SAAs/ to 3egio egiona na 2ffi 2ffic ces 32 32// '! the entra 2ffic fice 2/, issuance of SAAsEHAAs to SAAsEHAAs to 2perating Cnits 2C/ '! the 3egiona 2ffice, an# recor#ing an# monitoring of o'igations. o'igations. %. 3ec 3eceiptsE8ncome eiptsE8ncome an# Depositor! S!stem )his s!s s!stem tem co cove vers rs the ac6nowe#ging an#
proc rocesses of reporting
incomeEcoections, #eposits of coe coecti ction ons s with with Autho Authori" ri"e# e# Fov Fovernment ernment Depo eposit sitor! -an -an6 AFD-/ or thro throug ugh h the the AFD- for the account of )reasurer of the Phii Phiippi ppine nes, s, an# an# recor#i recor#ing ng of coec coectio tions ns an# #eposits in the 'oo6s of accounts of the the agen agenc! c!.. A A co coec ecti ting ng offic officer ers s sha sha #eposit intact a their coections, as we as coections turne# over over to them '! su' coe coecto ctorsEt rsEte eers, ers, with with their their AFDAFD- #ai! #ai! or not not ate aterr than than the the ne net 'an6 'an6in ing g #a! #a!. )he! sha recor# a #eposits ma#e in the ash 3eceipts 3ecor#. At the en# of eac each h 70
'usiness #a!, the coecting officers sha accompish the 3eport of oections an# Deposits 3D/. +. Dis'ursement S!stem Dis'ursements cons consti titu tute te a a cash cash pai# pai# out #uring a given perio# either in currenc! cash/ or '! chec6. 8t ma! aso mean the settement of governm rnment pa!a'esEo'igations '! cash or '! chec6. 8t sha 'e covere# '! Dis'ursement Loucher DL/EPett! DL/EPett! ash Loucher PL/ PL/ or or Pa!ro. Pa!ro. )he Dis'ursement S!stem invo invov ves es the prepar preparat ation ion an# proces processin sing g of #is'ursement voucher, preparation an# issuance of chec6* pa!ment '! cash* granting, utii"ation, i;ui#ationErepenishment of
an# cash
a#vances. 4. inancia 3eporting S!stem Fenera Fene ra ! !, th ther ere e ar are e eigh eightt st step eps s in th the e accounting c!ce : ana!"ing the transactions, (ournai"ing the transactions, posting the (ourna entries, 71
72
preparation of tria 'aance, a#(usting the accounts, cosing the accounts, prepara preparati tion on of the finan financia cia state stateme ments nts,, an# rev reversin rsing g the accoun countts. Cn Cn#e #err th the e ew e w Fovern rnme men nt Ac Acc count ntin ing g S!s !sttem em,, financia reporting incu#es preparation an# su'mission of
the tria
'aances, financia statements an# other repo reports rts nee# nee#e# e# '! fisc fisca a an# an# regua reguato tor! r! agencies. )he su's!stems are as foo foows ws:: 1./ 1./ prepar preparat ation ion an# su'mis su'missio sion n of tria tria 'aa 'aanc nces es an# an# othe otherr repo reports rts** an# an# %./ preparation an# su'mission of financia statements. %.&pain the ationa -u#get. Answer : )he atio ationa na Fov Fovernment ernment// -u#ge -u#gett is a pan pan for for finan financin cing g the gov government ernment activi activitie ties s for for a fisc fisca a !ear !ear prep prepar are# e# an# an# su'm su'mit itte te# # '! resp respon onsi si' 'e e eecut ecutiv ive e to a repr repres esen enta tati tiv ve 'o#! 'o#! whos whose e appr approv ova a an# an# auth author ori" i"at atio ion n are are necessar! 'efore the pan can 'e eecute#. 8t is
a
#efinite
proposa
of
estimate
or
stateme state ment nt of rec receip eipts ts an# an# e epen pen#it #iture ures s tha thatt ma! ma ! 'e ap appr pro ove# or re re(e (ec cte te# # . As such, it 72
shou shou# # pres presen entt a #eta #etai ie# e# #emo #emons nstr trat atio ion n of the revenues an# epen#itures of the gov government ernment for for the past past an# an# ensui ensuing ng !ears, !ears, an# shou# furnish not on! #efinite information information regar#ing the genera genera characte characterr, purpose an# amount of government epen#itures, epen#itures, 'ut aso #etaie# #ata regar#ing the the cost cost enta entai ie# e# in main mainta tain inin ing g parti particu cua ar r units of organi"ation an# in performi rming particuar units of organi"ation an# in perf perfor ormi ming ng parti particu cua arr acti activi viti ties es.. 8n other wor#s, it is the inancial countr." development plan. plan .
4lueprint
o
a
)o strengthen the in6 'etween panning an# 'u#geting an# to simpif! the presentation of the 'u#get, the D-= intro#uce#, in the preparation of the propose# ationa -u#get for for N %014 %014,, a new new appr approa oach ch to 'u#g 'u#get etin ing. g. )hrough ationa -u#get =emoran#um -=/ o. 11 o. 11@, @, the the DD-= = intr intro# o#uc uce# e# Perf rfo orma rmanc nce e 8nfor 8nf orm me# -u# -u#get geting ing P8 P8- /, whic which h wi i ensur nsure e that pu'ic res resource rces are manage# more effi effici cien ent t! ! an# an# with with the the grea greate test st #egre #egree e of #iscip #iscipin ine e '! re#ire re#irecti cting ng fun#s fun#s to program programs s that wou# 'e responsive to the nee#s of the 73
74
peop peope e espe especi cia a! ! thos those e in regio regions ns 'ese 'esett '! povert!. +. &nume &numerat rate e an# an# epa epain in the the #iffe #ifferen rentt 6in#s 6in#s of 'u#get. Answer: Cn#er the new accounting s!stem, the Answer: #ifferent 6in#s of 'u#get are: 1. As to to atu ature re a. Annua -u#get > -u#get > a 'u#get which covers a perio# of one !ear. 8t is the 'asis of an annua appropriation. appropriation. '. Suppeme Suppementa nta -u#g -u#get et > a 'u#get whic which h suppe suppemen mentt or a#(us a#(ustt a previ previou ous s 'u#ge 'u#gett which is #eeme# ina#e;uate for the purpose it is inten#e#. 8t is the 'asis for a suppementa suppementa appropriation. appropriation. c. Sp Speci ecia a -u# -u#ge gett > a 'u#get of specia nature an# genera! su'mitte# in specia forms forms on acco accoun untt that that item itemi" i"at atio ions ns are are not a#e;uate! provi#e# in the Appropriation Act or that the amounts are not not at a a inc incu# u#e# e# in the the Appr Approp opri riat atio ion n Act. 74
%. As to -asi -asis s a. Perf rfo orma rman nce -u# -u #get > emphasi"ing the program gram
a 'u#get or servi rvices
con#ucte# an# 'ase# on functions, activities, an# pro( ro(ects, which focus attention upon the genera character an# nat nature ure of wor6 wor6 to 'e #one #one,, or upon upon the the services to 'e ren#ere#. '. Hine8tem -u#get > -u#get > a 'u#get the 'asis of whic which h are are the the o'(e o'(ect cts s of epen# pen#it itur ures es suc such as: as: saa saari ries es an# an# wages ages,, trav trave eing ing epenses, freight, suppies an# materias, e;uipment, etc. +. As to Appr Approac oach h an# an# )ech )echni; ni;ue ue a. Oero-ase# -u#geting -u#geting > a process which re;uire re;uires s s!ste s!stema matic tic consi# consi#era eratio tion n of a a programs, pro(ects an# activities with the use of #efine ran6ing proce#ures. 8n this appr approa oac ch, activ tivitie ities s are ana!" !"e# an# presente# in “#ecision pac6ages$ or 6e! 'u#getar! incusions. incusions.
75
76
'. 8ncre 8ncrement menta a Appro Approach ach > a 'u#get where on! a##itiona (ustifications. (ustifications. 8t
re;uirements nee# focuses focuses ana!sis of
incr increm emen enta ta chan change ges s in the the 'u#g 'u#get et an# an# ma!'e #one within the contet of performance an# program 'u#geting . 4. Discuss 'rief! the 'u#get processEc!ce processEc!ce.. Answer: )he Answer: )he -u#get ProcessE!ce: 1. 9udget Preparation )his covers estimation of governm rnment rev revenue enues, s, the the #ete #etermin rminat atio ion n of 'u#g 'u#get etar! ar! priorities an# activities within the cons constra train ints ts impo impose se# # '! avaia'e reve revenues nues an# '! 'orrowing imits, imits , an# the transation of appr approv ove# e# prio priori riti ties es an# an# acti activi viti ties es into into epen# epen#iture iture eves. eves. &stimat &stimates es are prepare# prepare# '! the various government agencies, reviewe# an# finai"e# '! the Presi#ent of the Phiippines, an# then su'mitte# to the Hegis egisa attive ive Dep Departm artme ent as 'asis sis for the the preparation of the annua Appropriation Appropriation Act.
76
)he 'u#get pre rep paration 'egi gin ns with the issuance of a “'u#get ca$ '! the Department of -u#get an# =anagement. )o ensure that the ationa -u#get is enacte# on time, the D-=, un#er the A;uino A#ministration, tra#ition of
has esta'ishe# 'eginning the
a new -u#get
Prep Prepar arat atio ion n phas phase e eari earier er.. Cn#e Cn#err the the new new -u#g -u#get et Prep Prepar arat atio ion n ae aen# n#ar ar,, the the -u#g -u#get et a a is issu issue# e# in Dece Decem' m'er er,, uni uni6 6e in the the past where it was issue# in Apri* an# the su'mission of the Presi#entIs 'u#get a #a! aft after the the Stat tate of the the ation ion A##re ##res ss, in contra ras st to ear riier prac acttice where it is su'mitte# to ongress within +0 #a!s from the opening of ever! reguar reg uar session. %.
*egi"lative Authorizati Authorization on 8t is the se seco con# n# ph phas ase e of the 'u#get proc proces ess s rea reati tiv ve to the the enac enactm tmen entt of the the Fene Fenera ra Appr Approp opri ria ation tion -i -is s 'ase 'ase# # on the the 'u#get of receipts an# epen#itures su'mitte#
'!
the
Presi#ent
of
the
Phiippines. )his phase start rts s upon the rec re ceip iptt of the Pre res si# i#en enttIs -u# u#g get '! th the e 77
78
ouse
Spea6er
an#
Presi#entIs enactment Appropriation Act.
en#s of
with
the
the
Fenera
)he ouse ouse of 3epres 3epresen enta tati tive ves, s, in pena penar!, r!, assigns the Presi#entIs -u#get to the ouse Appropr Appropria iatio tions ns ommi ommitte ttee, e, which which con#uc con#uctt hearing an# scrut rutini"e their respective prog progra rams ms an# an# pro( pro(ec ects ts.. 8t then then craf crafts ts the the Fenera Appropriation -i FA-/. 8n penar! sess sessio ion, n, the the FAFA- is spon sponso sore# re#,, pres presen ente te# # an# #efen#e# '! the Appropriations ommittee an# Su'ommittee hairmen. orma!, after receiving the FA- from the ouse of 3epresentatives, the Senate con#u co n#ucts cts it its s ow own n co commi mmitte ttee e heari hearings ngs an# penar! #ei'erations #ei'erations on the FA- . 2nce 'oth ouse ouses s of on ongres gress s have finis inishe he# # their heir #ei #ei'e 'era rati tion ons, s, the! the! wi wi each each cons consti titu tute te a pane to the -icamera onference ommittee. )his committee #iscuss an# harmo rmoni"e the provisions
of
the
Lersions Lersions of the FA-.
78
ouse
wi then conficting
an#
Senate
)he armoni"e# or “-icam$ Lersion is then su'mitte# to 'oth ouses, which wi then vote to ratif! the fina FA- for su'mission to the Presi#ent. 2nce su'mitte# to the Presi#ent for his approva, the FA- is consi#ere# enroe#. )he Presi#ent an# D-= then th en re rev vie iew w th the e FA FA- an an# # pr prep epar are e a Leto =essage, where 'u#get items su'(ecte# to #ire #i rect ct ve veto to or co con# n#it itio iona na im imp pem emen enta tati tion on are i#entifie#, an# where genera o'servations are ma#e. Cn#er the onstitution, the FA- is the on! egisative measure where the Presi#ent can impose a ineveto in a other cases, a aw is either approve# or vetoe# in fu/. Appropriations are approve# '! the egisative 'o#! in form of 1/ a Fenera Appropriation Haw which covers most of the epen#itures of government* %/ ontinuing Appropriations for various pu'ic wor6s pro(ects* +/ Suppementa Appropriations aws that are passe# from time to time, to 79
80
augment or correct an area#! eisting appropriation* appropriation* an# 4/ ertain automatic appropriations inten#e# purposes.
for
fie#
an#
specific
+. 9udget Eecution and 7peration )he th thir ir# # ph phas ase e of
the 'u#get process
cov covers ers the the vari variou ous s opera operati tion ona a aspe aspect cts s of 'u#geting. )his phase of 'u#get c!ce 'egins with D-=Is issuance of gui#eines on the reease an# utii"ation of fun#s. Agencies are re;uire# to su'mit their -u#get &ecution Documents -&Ds/ -&Ds/ at the start of 'u#get eecution. )hese #ocuments outine agenc! pans an# performa rmance target targets. s. )he DD-= = set a imit imit for for aot aotme ments nts issue# to an agenc! an# on the aggregate '! preparing an Aotment 3eease Program A3P/.. A ash 3eease Program 3P A3P/ 3P// is aso formuate# aongsi#e to set a gui#e for #is' #is'ur urse seme ment nt ev eves for the the !ear !ear an# an# for for ever! ever! month an# ;uarter ;uart er.. 8n imp impem emen enti ting ng progr program ams, s, acti activi viti ties es an# an# pro(ects, agencies incur ia'iities on 'ehaf 80
of the government. government. 2'igations are ia'iities ega! incurre#, which the government wi pa! for. )o authori"e an agenc! to pa! the o'igations it incurs, D-= issues a #is'ursement authorit!. =ost of the time, it ta6es the form of a otice of ash Aoca A ocatio tion n A/* an# in specia spe cia cases cas es,, the on ona ash sh Avai Avaim men entt Auth Author orit it! ! AA/ an# ash Dis'ursement eiing D D/. /. 4. 9udget Accounta4 Accounta4ilit. ilit. )he ast phase of 'u#get process consists of the the fo foow owin ing: g: 1/ 1/ peri perio# o#ic ic repo reportin rting g '! the gov government ernment agenc agencies ies of perf performan ormances ces un#er
their
approve#
'u#get*
%/
top
management review of government activities an# the fisca poic! impementations impementations thereof* an# +/ the actions of ommis mmissi sio on on Au#it #it in assuri surin ng the fi#eit! of officias an# empo!ees '! carr!i rr!in ng out the intent of the ationa Assem'! regar#ing the han#ing of receipts an# epen#itures. )his )his phas phase e happ happen ens s aon aongs gsi# i#e e the the -u#get &ec & ecut utio ion n phase. )hrough -u#get 81
82
Accounta'iit!,
the
D-=
monitors
the
effi fic cienc! of fun# utii"ation, assesses agen ag enc c! pe perf rfor orma manc nce e an an# # pr pro ovi# i#es es a vi vita ta 'asis for reforms an# new poicies . Agencies are he# accounta'e not on! for how how thes these e use use pu' pu'ic ic fun# fun#s s ethi ethica ca! !,, 'ut 'ut aso on how these attain performa rmance targets an# outcomes using avaia'e res resourc ource es. Su'mit mitte# te# '! agen agenc cies ies on a month! an# ;uarte rter! 'asis, 1/ -u#get Accounta'iit! 3eports -A3s -A3s// are re;uire# reports that show how agencies use# their fun#s an# i#entif! their corre rrespon#ing ph!s ph!sic ica a acco accomp mpi ish shme ment nts. s. %/ An annu annua a -u#g -u#get et Perf Performa ormanc nce e Asse Assess ssme ment nt 3evi 3eview ew -PA3/ is con#ucte# to #etermi -PA3/ rmine each agenc!Is agenc!Is accompishments an# performance '! the !ear !earen en#. #. )he D-= reguar! reports resuts to the Presi#ent. Presi#ent . Au#itting is not within the D-=Is (uris#iction, Au#i an# is instea# o#ge# un#er the ommission on Au#i Au#itt 2 2A/. one oneth the ees ess, s, au#i au#iti ting ng is critica in ensuring agenc! accounta'iit! in the use of pu'ic fun#s. )he D-= uses 2AIs au#it reports in confirming agenc! 82
performance perf ormance,, #ete #etermining rmining 'u#g 'u#getar! etar! ev eves es for agencies an# a##ressing issues in fun# usage. 5.
&numerate
an#
epain
the
-u#getar!
accounts. Answer:
-u# -u#getar etar! !
accou counts nts
consist sist
of
the the
foowing: 1. Appropriation Appropriation > > an authori"ation ma#e '! aw or other egisative enactment, #irecting pa!ment of goo#s an# services out out of gov governme ernment nt fun# fun#s s un#e un#err spec specif ific ic con#itions or for specia purpose. %. Allotment > Allotment > an authori"ation issue# '! the Departme Department nt of -u#ge -u#gett an# =anag =anageme ement nt to the government agenc!, which aows it to incur o'igations, for specifie# amounts, within appropriation.
the
egisative
+. 74ligation > a commitment commitment '! a government agenc! arising from an act of #u! #u! auth author ori" i"e# e# offic officia ia whic which h 'in# 'in#s s the the
83
84
government to the imme#iate or eventua pa!ment of a sum of mone!. mone!. B. &pain the Performance8nforme# Performance8nforme# -u#geting. Answer: Perf Performan ormance ce8n 8nfo forme# rme# -u#get -u#geting ing is a 'u#geting approa roach that uses performa rmance information to assist in #eci#ing where the fun#s wi wi go. go. Perf Performan ormance ce informa informatio tion, n, 'oth financia an# nonfinancia information, is presente# in the appropriations appropr iations #ocument #ocument,, whic which h pro provi#es i#es the the contet for the programs, activities an# pro(ects pursue# '! the #ifferent agencies of gov governmen rnment. t. Pe Perfo rformance rmance inf informat ormation ion t!pic t!pica! a! incu#e inc u#es s the t he fo foowin owing g: 1. )he purpose for for the the fun#s fun#s re;uire#. re;uire#. %. )he )he outp output uts s that that wou# ou# 'e pro# pro#uc uce# e# or the services serv ices that wou# 'e ren#ere#. +. )he outco outcome mes s that that wou# wou# 'e achi achiev eve# e# '! the outputs an#Eor services. 4. )he )he cost cost of the the prog progra rams ms an# an# acti activi viti ties es propose# to achieve the o'(ectives. Perfo Pe rformancein rmanceinforme# forme# 'u# 'u#getin geting g #iffe #iffers rs from the tra#itiona ine item'ase# 'u#geting in a wa! that it focuses more on outputs an# outc ou tcom omes es an an# # p pac aces es e ess ss em emph phas asis is on th the e 84
inputs. 8t inputs. 8t in6s fun#ing to resuts, resuts , an# provi#es a framewor6 for more informe rme# res resource rce aocation an# management. )his new face of the ationa -u#get wi no onger contain an ecessive! #etaie# ine item #ocument, 'ut a 'u#get that presents performance information aigne# to panne# resources that promises accessi'e
to to
'e un#erstan#a'e an# the peope 'ecause of its
simpicit!. @.
&numerate
an#
epain
authorities prescri'e# '! Accounting Accounting =anua FA=/
the the
o'igationa Fovernm rnment
Answer : 2'igationa Authorit! or Aotment > the foowing are the #ocuments which authori"e the entit! to incur o'igations: a/ Fenera ra Approp ropriation
Act
3eease
Document FAA3D FAA3D// ) h is
serves
authorit! reease
as
for of
the
o'igationa
the comprehensive 'u#getar! items
appropriate# in the Fenera Approp ropriation Act FAA/, FAA/, categori"e# as or omp ompre rehe hens nsiv ive e 3eea eease se 3 3/. /. 85
86
)his wi a'oish the ength! process of ree reeas asin ing g ao aotm tmen ents ts to #epa #epartme rtment nts s an# an# agenci agencies* es* there' there'! !, enhan enhancin cing g the the opera operati tion ona a effic efficie ienc nc! ! of a a agen agenci cies es acros across s the 'ureau 'ureaucra crac! c!,, aow aowing ing the the D-= to spee# up government #is'ursements an# fasttrac6 the impementation of programs pro(ects set for the !ear. '/ Specia SA32/
Aotment
3eease
an#
2r#er
)his cove covers rs 'u#getar! 'u#getar! items items un#er un#er or or Hater 3eea ease H3/ negat negativ ive e ist/ ist/ in the entit! su'mitte# -u#get &ecution Documents -&Ds/, -&Ds /, su'(ect to compiance of #ocu #o cume ment ntat atsE sEc ce ear aran ance ces. s.
re;uire# 3eeas eases es of
aotm aotmen ents ts for for Specia Specia Purpose Purpose un#s un#s SPs/ e.g., aamit! un#, ontingent un#, un#, &Fo &Fov vernment ernment un#, un#, easi easi'i 'iit it! ! Stu#ies un#, 8nternationa ommitments
un#,
=isceaneous
Person Personne ne -enef -enefits its un# un#,, an# an# Pensi Pension on
86
an# Fratuit! un#/ are aso covere# '! SA32s. c/ Fenera
Aotment
3eease
2r#er
FA32/ ) h is
is
a
issue# to agencies,
comprehensive a in
nationa genera,
authorit!
governm rnment to incur
o'igations not ecee#ing an auth author ori" i"e# e# amou amount nt #uri #uring ng a spec specif ifie ie# # perio# for the purpose in#icate# therein. 8t covers automatica! appropriat appropriate# e# epen# epen#iture itures s common common to most, if not a, agencies without nee# of specia specia cear cearanc ance e or appro approva va from from competent authorit!. . &num &numer erat ate e an# an# epai pain n the the #is' #is'ur urse seme ment nt authorities prescri'e# '! FA=. Answer: Dis'ursem sement Authorit! > the foo foowi wing ng #ocu #ocumen ments ts author authori"e i"e the entit! entit! to pa! o'igations an# pa!a'es: a. otice otice of of ash Aocat Aocation ion A/
87
88
)his is the authorit! issue# '! the D-= to centra ra, regio egion na, an# provincia offices an# operating units to pa! operating epenses, purchases of suppi suppies es an# an# mate materia rias, s, ac;u ac;uisi isitio tion n of PP&, accounts pa!a'e, an# other autho authori" ri"e# e# #is'ur #is'ursem sement ents s throug through h the issue of =o#ifie# Dis'ursements S!stem =DS/ chec6s, Authorit rit! to De'it De'it Account Account ADA/ or other mo#es of #is'ursements. '. onash onash Avaim Avaiment ent Authorit Authorit! ! AA/ )his is the authorit! issue# '! the D-= to agencies to cover the i;ui#ation of their actua o'igations incurre# against avaia'e aotments for avaiment of procee#s from oansEgrants through cre#itEconstructive cash.
suppierIs
c. ash Dis'urseme Dis'ursements nts eiin eiing g D D// )his is the authorit! issue# '! the D-= to the the Depa Departm rtmen entt of oreig reign n Af Affa fair irs s DA/ an# Departm rtment of Ha'or an# 88
&mpo!ment
D2H&/
to
utii"e
their
income coecte#Eret retaine# '! their oreig oreign n Service Service Posts Posts SPs/ SPs/ to cove cover r their operating re;uirements, 'ut not to ece ecee# e# the the ree reeas ase# e# ao aotm tmen entt to the the sai# post. #. otice otice of )ransfe )ransferr of Aocat Aocation ion )A/ )his is the authorit! issue# '! the entra 2ffice to its regiona an# oper ating units operating unit s to pa! pa! thei theirr oper operat atin ing g epe epens nses es,, purc purcha hase ses s of supp suppi ies es an# an# materia materias, s, ac;uisit ac;uisition ion of PP& PP&,, accounts pa!a'e, an# other authori"e# #is' is'ursem rsemen entts throug rough h the the issu issue e of =DS chec6s, ADA or othe ther mo#es of #is'ursements. 9. &pain
'rief!
the
ta
remittance
a#vice
)3A/ Answer: Pursuant Answer: Pursuant to the )a 3emittance A#vice )3A )3A// S!stem, as provi#e# for in oint ircuar o. 1%000 #ate# anuar! anuar! +, %000, as amen#e# '! o. 1%=2A #ate# u! +1, %001 of the Depa Departm rtmen entt of ina inanc nce, e, the the Depa Departm rtmen entt of 89
90
-u#get an# =anagement an# the ommission on Au#it, the otice otice of ash Aocati Aocation on A/ reease# to the government agenc! is re#uce# '! the amount epecte# to 'e
of the estimate# taes remitte# '! the agenc!
through the )a )a 3emittance 3emittance A#vice. &stimate# &stimate# tae taes s are are comp comput ute# e# 'ase 'ase# # on the the fo foow owin ing g percentages: Personne Servic vices > J** J =aintenance an# 2ther 2perating &penses > 5J* an# apit apita a 2uta uta! ! > 5J 5J.. )he otice of ash ash Aoc Aocat ation ion receiv receive# e# '! the gov government ernment agen agenc c! from from the the Depa Departm rtmen entt of -u#g -u#get et an# an# =anagement is net of the appica'e perce percentag ntage e of )a 3emit 3emittan tance ce A#vic A#vice e 'ase# 'ase# on the otice of ash Aocations Aocations receive#. 10.ha 10.hatt are the #ocum #ocumen entsE tsErepo reports, rts, which which are re;uire# re# '! the D-= to 'e su'mitte# on a reguar 'asis< &pain 'rief!. Answer:
ationa
-u#get
ircuar
o.
50@
provi provi#e #es s that that the Departme Department nt of -u#ge -u#gett an# an# =anagement re;uire# agencies to su'mit, on a
reguar
'asis,
a/
-u# -u#get get
Documents -&Ds -&Ds// an# '/ Accounta'iit! 3eports -A3s/. 90
&e &ecutio ution n -u#get -u#get
&ecution &ecut ion Docum Documents ents are annua annua #ocu #ocumen ments ts re;uire# on the onset of the 'u#get eecution phas ph ase e that contain the agenciesI targets an# pans for the current !ear* whie -u#get Accou Ac count nta'i a'iit it! ! 3eports 3eports are reports rts which cont contai ain n info informa rmati tion on on the the agen agenci cies esII actu actua a acco accomp mpi ish shme ment ntsE sEpe perf rfor orma manc nce e for for a giv given perio#. An"$er" to ultiple Choice 5Chapter 6 1. 9 )his is the #efinition of 'u#getar! accounting. accounting. %. , )he )he nati nation ona a 'u#g 'u#get etar! ar! s!st s!stem em cons consis ists ts of metho#s an# practices of the government for pan anning ing, progr rogram amm ming ing an# 'u#ge #geting ing. 8ts primar! concern is the avaia'iit! an# use of mone! to prov rovi#e the necessar! servi rvices epecte# of the government. +. C )he nationa government 'u#get is a sta statement ent of esti estim mate# rece receip iptts 'ase# se# on eisting an# propose# revenue measures, an#
91
92
of estim estimat ate# e# epen epenses ses,, which which serves serves as the the 'asis for a genera appropriation appropriation 'i. 4. A Pursuant to Sec. %%, Artice L88 of the Phii Phiippi ppine ne onst onstitu itutio tion, n, the Presi# Presi#ent ent of the Phiippines sha su'mit to ongress within +0 #a!s from the opening of ever! reguar session, as the 'asis of the genera appr approp opri riat atio ion n 'i 'i,, a 'u#g 'u#get et of epen pen#i #itu tures res an# an# source sources s of financ financing ing,, incu incu#in #ing g receip receipts ts from eisting an# propose# revenue measure. 5. 9 )his phase phase of 'u#get 'u#get proce processE ssEc! c!c ce e inv invove oves s the review an# approva of the 'u#get '! the egisative an# the formuation of an appropriation 'i. B. C )his phase phase of 'u#get 'u#get proce processE ssEc! c!c ce e inv invove oves s the impementation of the 'u#get '! #ifferent government government agencies. @. 9 )his phase phase of 'u#get 'u#get proce processE ssEc! c!c ce e inv invove oves s the comparison of performance with 92
pre# pre#et eterm ermin ine# e# pan pans. s. )he epen pen#i #itu ture res s an# an# performance are evauate#. . , )his is pursuant to Sec. %91/, Artice L8 of the 19@ onstitution. onstitution. 9. A Pursuant to Sec. %1/, -6 L8, 19@ A#m. o#e, appropriations refers to an authori"ation ma#e '! aw or other egisative enactment, #irect #irecting ing the the pa!men pa!mentt of goo# goo#s s an# an# services services out of governm rnment fun#s un#er specifie# con#itions or for specia purposes. 10. C )his is the #efinition of aotment. aotment. 11. A )his is the #efinition of o'igation. o'igation. 1%. A )his is the #efinition of program. 1+. A Cn#er
the
new
accounting
s!stem,
government agenciesEunits sha (ournai"e the receipt of otice of 93
now ash
94
Aoc Aocat ation ion using using this this (ourna (ourna entr!. entr!. Hi6ew Hi6ewise ise,, the the acco accoun unta tant nt of gov governme ernment nt agen agenc! c! sha sha cre#it cre#it “ash “ash > ati ation ona a )reasu reasur!, r!, =DS$ =DS$ each each time time pa!m pa!men entt is ma#e ma#e charge arge# # agai agains nstt the the otice of ash Aocation. Aocation. 14. C 8n
government
accounting,
'u#getar!
accounts consist of the foowing: foowing: 1. Appropriation > Appropriation > an authori"ation ma#e '! aw or other egisative enactment, #irecting pa!ment of goo#s an# services out out of gov governme ernment nt fun# fun#s s un#e un#err spec specif ific ic con#itions or for specia purpose. %. Allotment > Allotment > an authori"ation issue# '! the Departme Department nt of -u#ge -u#gett an# =anag =anageme ement nt to the government agenc!, which aows it to incur o'igations, for specifie# amounts, within appropriation.
the
egisative
+. 74ligation > a commitment commitment '! a government agenc! arising from an act of #u! #u! auth author ori" i"e# e# offic officia ia whic which h 'in# 'in#s s the the
94
government to the imme#iate or eventua pa!ment of a sum of mone!. mone!. 15. A )he A Ao otm tmen entt 3e 3ee eas ase e 2r# 2r#er er is a forma #ocument issue# '! the Department of -u#get an# an# =ana =anage geme ment nt to the the hea# hea# of the the agen agenc c! conta containi ining ng the autho authori" ri"at ation ion,, con#i con#itio tions ns an# amount of an #ocument ma!
agenc! aocation. )he 'e the %014 Fenera
Approp Appr opri riat atio ions ns Act Act F FAA AA/, /, a 'u#g 'u#get et reea reease se #ocu #o cume ment nt th that at re rep pac ace# e# th the e Ag Agen enc! c! -u -u#g #get et =atri A-=/, or the 3eease 2r#er SA32/.
Specia
Aotment
1B. , )he )he accounts person sonne servi rvices incu#e 'asic 'asic pa! pa!, a a autho authori" ri"e# e# ao aowa wance nces, s, 'onu 'onus, s, cash cash gift gifts, s, ince incent ntiv ive es an# an# othe otherr pers person onne ne 'enefits of off ffic iciia an# empo!ees of the government. )eeph )eephone one charge, charge, 3ent, 3ent, an# =ea aowa aowance nce for overtime wor6 are incorrect 'ecause these are maintenance epenses.
an#
95
other
operating
96
1@. C Purch Purchase ase an#Eo an#Eorr const construct ruction ion of fie# fie# asset assets s suc such as 'ui 'ui#i #ing ng an# an# struc structu ture res, s, an# an#,, an# an# impr improv ovem emen ents ts,, e;ui e;uipm pmen ent, t, etc. etc. are are char charge ge# # against the capita outa!. Saaries
an#
wages ges
account
is
incorre rrect
'ecause this is Personne service. 3epairs an# maintenance is incorre rrect 'ecause this is main mainte tena nanc nce e an# an# othe otherr opera operati ting ng epe epens nse. e. =erch =erchan# an#ise ise inv inventor! entor! is incorrec incorrectt 'ecau 'ecause se this is current asset. 1. C -u#gett & -u#ge &ec ecut ution ion Doc Docume ument nts s is the the annua #ocuments re;uire# '! the D-= at the onset of the 'u#get eecution phase, which contain the foowing: foowing : 1./ Ph!sica an# inancia Pan, %./ =onth! Dis'ursements Program, +./ &sti &stima mate te of =ont =onth h! ! 8nco 8ncome me,, an# an# 4./ 4./ Hist Hist of ot Net Due an# Deman#a'e 2'igations. 19. A Ph!s !sic ica a an# in ina anc ncia ia Pa an n is a 'u#get eecut ecutio ion n #ocu #ocume ment nt that that serve serves s as overa ra pan of the government agencies 96
encompa mpassing
the
ph!sica
an#
financia
aspects, consistent with their approve# 'u#get get ev eve for the !ear, 'ro6 ro6en #ow #own '! ;uarter. %0. , Statement of Aotment, 2'igations an# -aances is a 'u#g 'u#get et acco accoun unta ta'i 'ii it! t! repo report rt which serve as the agenciesI summar! report of aotm otme ents rece receiv ive e# an# corresp rrespon on# #ing ing o'igat o'igations ions incurre# incurre# #uring the month from month from a sources '! o'(ect of epen#iture, an# sha 'e reporte# on month! 'asis . =onth! Dis'ursements Program, ist not !et #ue an# #eman#a'e o'igations, an# estimate of month! income are 'u#get eecution #ocuments. %1. 9 otice of ash Aocation A/ is a #is' #is'ur urse seme ment nt auth author orit it! ! use use for for pa!m pa!men entt of perso personn nne e servic services es,, main mainte tena nanc nce e an# an# othe other r operatin operating g epens epenses, es, capita capita outa! outa!,, financia financia epenses, foreign assiste# pro(ects, an# prior !earsEcurrent !earsI accounts pa!a'e. pa!a'e. %%. C 97
98
- o. 550 set the #ea#ine for agenc! su'mission of the -&Ds to D-= on ovem'er +0. )his #ea#ine was reiterate# in - o. 551 #ate# anuar! %, %014. %+. C -aanc -aa nce# e# 'u 'u#g #get et is a 'u#get where the prop propos ose# e# epen pen#i #itu ture res s are are e;ua e;ua to or ess ess than than the estima estimate te# # reven revenues ues.. urrent urrent! !,, the the government is operating with a 'u#get #eficienc!. As such, it is serving government prio priori riti ties es to ach achiev ieve a 'aa 'aanc nce# e# 'u#g 'u#get et '! increasing revenues epen#itures. %4. A Perf Pe rforma ormanc nce e8n 8nfo forme# rme#
an#
cutting
-u#g -u #get etin ing g
is
on
a
'u#g 'u#get etin ing g appr approa oach ch that that uses uses perf performa ormanc nce e info informa rmati tion on to assi assist st in #eci #eci#i #ing ng wher where e the the fun#s wi go. Performance information, 'oth fina financ ncia ia an# an# non nonfi fina nanc ncia ia info informa rmati tion on,, is pres presen ente te# # in the the appr approp opri riat atio ions ns #ocu #ocume ment nt,, which provi#es the contet for the programs, activities
an#
pro(ects
pursue#
#ifferent agencies of government. government. %5. 9 98
'!
the
8t is the secon# phase of the 'u#get process re reative to the enactment of the Fenera App Approp ropriat iation ion -i -i 'ase 'ase# # on the the 'u# 'u#get of receipts an# epen#itures, genera!, su'mitte# '! the Presi#ent of the Phiippines within within +0 #a!s from the opening opening of its reguar session, as the 'asis of the genera appro appropr pria iati tion on 'i 'i.. ow owever ver, in cont contras rast, t, the su'm su 'mis issi sion on of th the e Pr Pres esi# i#en entI tIs s 'u 'u#g #get et un un#e #er r the A;uino A#ministration is a #a! after the State of the ation A##ress. )his is to ensure that the ationa -u#get is enacte# on time . )hiis phase start )h rts s upon the receipt of the Presi#entIs -u#get '! the ouse Spea6er an# en#s en #s wi with th th the e Pr Pres esi# i#en entI tIs s en enac actm tmen entt of th the e Fenera Appropriation Act. Act . %B. C Hine item 'u#get is a 'u#get the 'asis of which which is the the o'(ec o'(ectt of epen epen#it #iture ures s such such as: as: saaries an# wages, traveing epenses, frei freigh ght, t, supp suppi ies es an# an# mate materi ria as, s, e;ui e;uipm pmen ent, t, etc. %@. 9
99
100
Specia 'u#get is a 'u#get of specia nature nature an# genera! su'mitte# in specia forms on account that itemi"ation are not a#e;uate! provi#e# provi#e# in the Appropriation Act or that the amounts are not at a incu#e# in the Appropriation Act. %. C )he 'u#get preparation 'egins with the issuance of a “-u#get a$ '! the D-=. )his #ocument outines the priorit! areas of government government activit! appica'e to the 'u#get !ear, which 'egins a !ear an# one month hence. %9. 9 anitoria anitoria services serv ices account is a professiona service un#er =aintenance an# 2ther 2perating &penses. +0. A )o
faciitate
impementation a#mi a#mini nist stra rattion ionIs
the
swift
of the epen# pen#it itur ure e
an#
efficient
government prog progra ram, m, the the
Departm rtment of -u#get an# =anagement D-=/ pha phase# se#ou outt th the e Ag Agenc enc! ! -u -u#ge #gett =a =atr tri i A-=// from the 'u#get process starting %014 . A-= 100
)he )he
Fenera
Approp ropriations
Act
3eease
Doc Documen ment FAA3D/, as a 'u#get reease #ocument, sha serve as o'igationa authorit! an# wi repace the A-=, in or#er to eiminate the nee# to prepare A-=* there'!, a'oishing the ength! an# ea'orate process of re ree eas asin ing g a ao otm tmen ents ts to #e #epa partme rtment nts s an an# # agencies.
101
102
Sugge"te Sugg e"ted d An"$er" An"$e r" to Pro4lem Pro 4lem"% "% 5Chapte 5Ch apterr 6 6 1. 3eease#
3eease#
Cnfun#e#
A
Aotments
Aotments 150,000
1%0,000
+0,000
1%0,000
90,000
+0,000
%+0,000
%00,000
+0,000
14,000
1%,000
%,000
1%5,000
%5,000
54@,000
11@,000
Specia Purpose un# 150,000 )ota BB4,000 %. 2'igations Cno'igate# 8ncurre# Aotments
3eease# Aotments 150,000
100,000
50,000
1%0,000
0,000
40,000
%+0,000
10,000
50,000
14,000
10,000
4,000
Specia Purpose un# 102
150,000 )ota
1%0,000
+0,000
490,000
1@4,000
BB4,000 /. ash > =DS, 3eguar Su'si#! income from nationa government
103
54@,00 0 54@,000
104
Chapter 3 – Accounting or ,i"4ur"ement" and (elated ran"action ran"action" " !ue"tion" # An"$er" 1. &num &numer erat ate e the the fun#amenta principes for the #is'ursement of pu'ic fun#s. fun#s . Answer: A financia transactions an# oper operat atio ions ns of an! an! gov governmen rnmentt enti entit! t! sha sha 'e governe# '! the foowing fun#amenta principes prov rovi#e# in Section 4 of P.D. o. 1445, the Fovernment Au#iting o#e of the Phiippines: a/ o mone! sha 'e pai# out of an! pu'ic treasur! or #epositor! ecept in pursuance of an appr approp opri ria ation tion aw aw or othe otherr spec specif ific ic sta statuto tutor! r! authorit!* '/ Fovernment fun#s or propert! sha 'e spen spentt or use# use# soe soe! ! for for pu' pu'ic ic purpo purpose ses* s* c/ )rust fun#s sha 'e avaia'e an# ma! 'e spent on! for the specific purpose for which the trust was create# or the fun#s receive#* #/ #/ isca resp respon onsi si'i 'ii it! t! sha sha, , to the the great greates estt ete etent nt,, 'e share# '! a those eercising authorit! over the financia affairs, transactions, an# operations of the governm rnment agenc!* e/ Dis' is'ursem rsemen entt or #isp isposit sition ion of governmen rnmentt fun#s n#s or prop ropert! sha invaria'! 'ear the approva of the proper 104
off ffic iciias* f/ ai aims ms agai agains nstt gov government rnment fun# fun#s s sha 'e supporte# with #ocumentation* g/ A aws an#
compete reguations
app appic ica' a'e e to fina financ ncia ia tran transa sact ctio ions ns sha sha 'e faithfu faithfu! ! a#here# to* an# h/ Fenera! accepte# principes an# practices of accounting as we as of soun# management an# fisca a#ministration sha ha 'e o'serve serve# #, pro provi#e i#e# tha that the! #o not contravene eisting aws an# reguations. %. 8#entif! the 'asic re;uirements an# certi rtifications for #is'ursem sement of pu'ic fun#s. Answer:
)he
foowing
are
the
'asic
re;uirements an# certifications for #is'u #is'ursem rsement ents s of gov government ernment:: a/ Avai Avaia'i a'iit it! ! of ao aotm tmen entE tE'u 'u#g #get et for for o'i o'iga gati tion onEu Euti tii i"a "ati tion on certif rtifie# ie# '! the -u# -u#get get 2ffice 2fficerE rEea# ea# of -u -u#ge #gett Cnit* '/ 2'igationsECtii"ations proper! charge# agains againstt avai avaia' a'e e aot aotme mentE ntE'u# 'u#get get '! the hief AccountantEea# of Avaia'iit! of fun#s
Accounting certi rtifie# '!
Cnit * c/ the hief
Accountant* #/ Avai vaia' a'i iit it! ! of cash cash certif certifie ie# # '! the h hie ieff Ac Acco coun unta tant nt** e/ Hegait! of the transactions an# conformit! with eisting rues 105
106
an#
reguations*
f /
Su'mission
of
proper
evi#ence evi#ence to esta'ish vai#it! of the caim* an# g/ Appr Appro ova of the the #is' #is'ur urse seme ment nt '! the the e ea# a# of Agenc! or '! his #u! authori"e# representative . +. &pain &pain the the use of otice of ash Aoca Aocation tion.. Answer : )he )he A A sha sha 'e the the autho thorit! it! of an agenc! to pa! operating epenses, purchases of suppies an# materias, ac;uisition of PP&, accounts pa!a'e, an# other authori"e# #is'ursem sements through the issue of a =DS chec6s, '/ ADA AC)238)N )2 D&-8) A2C)/ or c/ other mo#es of #is'ursements. )he )he A specifies the maimum amount of with#rawa awa that an entit! can ma6e from rom a government 'an6 for the perio# in#icate#. 4. &pain the use of Aocation.
otice of
)ransfer of
Answer : )h ) he )A sha sha 'e the the auth author orit it! ! of the the regiona an# operating units to pa! their operatin operating g epense epenses, s, purchase purchases s of suppies suppies an# materias, ac;uisition of PP&, accounts pa!a'e, an# other authori"e# #is'ursements through the
106
issue of a/ =DS chec6s, '/ ADA or c/ other mo#es of #is'ursements. 5. &numerate an# #iscuss the two t!pes of chec6s 'eing issue# '! government agencies. Answer: )her )here e are are two two t!pes !pes of chec chec6 6s 'ein 'eing g issu issue# e# '! gov governme ernment nt agen agenci cies es as fo foow ows: s: a/ odii iied ,i"4 i"4ur"e r"ement S."te "tem Che Chec<" – are chec6s issue# '! government agencies chargea'e against the account of the )reasurer of the the Phi Phiip ippi pine nes, s, whic which h are are main mainta tain ine# e# with with #ifferent =DSFS-s* an# '/ Commercial Commercial Chec<" > Chec<" > are chec chec6s 6s issue issue# # '! FAs FAs charg chargea' ea'e e agains againstt the Agenc! hec6ing hec6ing Account Account with FS-s. )hese sha sha 'e cove covere# re# '! incomeEr incomeEreceip eceipts ts authori" authori"e# e# to 'e #eposite# with AFD-s. B. Hist Hist #own #own the 2A rues an# reguatio reguations ns an# other her issu issuan anc ces/ governing rning the the i;ui#ation i;ui#ation of cash a#vances.
gran grantt
an# an#
Answer: )he )he 2A ru rues an# regu eguations an# other issuances/ governi rning the grant an# i;ui#ation i;ui#ation of cash a#vances are as foows: foows: a/o cash a#vance sha 'e given uness for a ega! autho authori" ri"e# e# specif specific ic purpose* purpose* '/ A cash a#vance 107
108
sha 'e reporte# on an# i;ui#ate# as soon as the purpose rpose for whic which h it was give iven has has 'een een serve serve#* #* c/ c/ o a##itiona cash a#vance sha 'e aow aowe# e# to an! offici officia a or empo empo!e !ee e uness uness the previous cash a#vance given to himEher is first sette#Ei;ui#ate# or a proper accounting thereof is ma#e ma#e** #/ &cept &cept for cash a#vance a#vance for officia trav trave e, no offic officer er or emp empo! o!ee ee sha sha 'e grant grante# e# cash a#vance uness heEshe is proper! 'on#e# in accor#ance with eisting aws or reguations . )he )he amount of cash a#vance which ma! 'e gran grante te# # sha sha not not ecee# ee# the the mai maimu mum m cash cash accou accounta nta'i 'iit! it! cov covere# ere# '! hisEh hisEher er 'on#* 'on#* e/ 2n! permanent! appointe# officias sha 'e #esi #esign gnat ate# e# as #is' #is'ur ursin sing g offic officer ers* s* f/ 2n! 2n! #u! #u! appointe# or #esignate# #is'ursing officer ma! perform #is'ursi rsing functions. 2ff ffiicers an# emp empo! o!e ees who who are are give given n cash cash a#va a#vanc nces es for officia trave nee# not 'e #esignate# as Dis'ursing 2fficers* g/ )ransf )ransfer er of cash a#vance a#vance from one accounta'e officer to another sha not 'e aowe#* an# h/ )he cash a#vance sha 'e use# soe! for specific ega purpose for which it was was grante# grante#.. Cn#er no circumstance sha it 'e
108
use# for encashment of chec6s or for i;ui#ation of a previous cash a#vance. a#vance. @. Discuss what what a )a )a 3emittance 3emittance A#vice A#vice is. Answer : )he )a )a 3emittance A#vice )3A )3A// refers to a seria!num'ere# #ocument prescri'e# '! the D-= that shou# 'e use# '! the FAs in the remi remitt ttan ance ce of with withhe he# # tae taes s on fun# fun#s s comi coming ng from D-=. D-=. ith the incusion incusion of a FAs among the tapa apa! !ers who who are man#ate# to use the the &ec &ectr tron onic ic ii iing ng an# an# Pa!m Pa!men entt S!ste !stem m e PS/ PS/ un#er the -ureau of 8nterna 3evenue 3eguations o. 1%01+ #ate# anuar! %+, %01+, the )3A is accompishe# onine which is cae# the &ectronic )3A e e )3A/. )3A/. )he e)3A is certifie# correct '! the hief AccountantEea# of Acco Accoun unti ting ng Divi Divisi sion onEC ECni nitt an# an# appr approv ove# e# '! the the ea# of Agenc!EAuthori"e# 2fficia, an# use# to recor# recor# the the remitt remittanc ance e of taes taes withh withhe# e# to the -83. )he same #ocument sha 'e the 'asis for the -83 an# the -)r to #raw a &L to recor# the ta ta co co ec ecti tion on an an# # #e #epo posi sitt in th thei eirr re resp spec ecti tive ve 'oo6s of accounts. accounts . )he &L sha 'e recor#e# in the the F. F. )he e )3A )3A sha 'e supporte# with the Summa Su mmar! r! of )ae es s ith ithhe he# # S) S)/ / ce certifie rtifie# # '! 109
110
the hief Accountant. )he S) is the #ocument which summari"es the t!pe an# amount of taes with withhe he# #.. )he Acco Accoun unti ting ng Divi Divisi sion onEC ECni nitt sha sha maintain SH to moni monito torr remi remitt ttan ance ces s of ta taes withhe# from in# in#ivi ivi#ua #ua em empo po!e !ees es,, sup suppi piers ers an# contractors. . Define Define an# #iscuss #iscuss what a ash Dis'urse Dis'ursement ment eiing is. Answe Ans wer: r: D D is an authori"ation issue# '! the D-= to DA an# other agen agenc cies ies with ith foreig reign n posts to utii"e their coections retaine# '! their oreign oreig n Servic Service e Po Posts sts to cov cover opera peratting ing re;u re;uire ireme ment nts, s, 'ut 'ut not not to ecee# cee# the the ree reeas ase# e# aotment to the sai# post. )he foowing are the accounting poicies regar#ing #is'ursements '! oreig oreign' n'ase ase# # Fov Fovernment ernment Agenc Agencies ies:: a/ -ase# on the propose# 'u#get of SPEoreign Attach, a o or6in r6ing g un un# # sha sha 'e esta esta' 'is ishe he# # to cov cover pa!m pa!men entt of PS an# an# =22& =22&.. )he )he inance 2fficer sha 'e re;uire# to maintain -3e 3eg g an# D3eg to monitor an# contro the or6ing un#* an# '/ A #is'ursements from the or6ing un# sha 'e covere# '! #u! approve# DLEPa!ro with the re;uir re; uire# e# SD SDs s. At the the en# en# of the the mo month, the the 110
ina inance 2ff ffiicer cer of SP SPsE sEore oreign ign Attach Attachs s sha sha prep prepar are e an# an# su'm su'mit it 3D Dis is' ' toge togeth ther er with with the the SDs to the entra
111
112
2ffi 2ffice ce conc concer erne ne# # for for prep prepar arat atio ion n of &L &L to recor# the accounta'e
i;ui#ation ma#e officer. )he &L
'! the sha 'e
reco recor# r#e# e# in the the 6D an# D 'ase# on the -3eg an# D3eg, respective!. An"$er to ultiple Choice" 5Chapter 36 1. %. +. 4. D 5. B. A @. . 9. 10. A 11. 1%. A 1+. 14. 15. D 1B. 1@. A 1. 112
19. A %0. An"$er" to Pro4lem" 5Chapter 36 1-A ost ost per per unit unit P4,9 P4,950 50,0 ,000 00EB EB
P%5,00
units
0
8f the promotiona item receive# receive# is the same as the PP& purchase#, the tota purchase price sha 'e aocate# to the tota ;uantit! purchase# pus the promotiona item. B-
onstructive receipt of A for withho#ing ta./ ash )3A
1010
%9@,
40@0
000
Su'si#! from
40+0
ationa Fovernment
1010
%9@,000
Pa!ment Pa!ment of accounts pa!a'e./ pa!a'e./ %010 1010
Accounts pa!a'e
4,950 ,000
ash > =DS, 3eguar
1010 4040
4,B5+,000
Due to -83
%0%0
%9@,000
113
114
1010 3emittance 3emittance of withho#ing withho#ing ta through )3A./ %0%0
Due to -83
1010
%9@,000
1010 40@0
ash )3A
%9@,000
2-
ost per un unit 1%,00 ,000 > 1,%0 ,%00/EB /EB un units its P1, 1,00 8f the promotiona item receive# is #ifferent from the PP& purchase#, the fair vaue of the prom romotio otiona na item sha sha 'e the the cost cost of the the prom romotio otiona na ite item an# #e#ucte cte# from from the tota price pai#. )he 'aance sha 'e aocate# to the tota ;uantit! purchase#. 9Purchase of furniture an# fitures./ urniture an# fitures Accounts pa!a'e
10B0 @010
10,00
%010 1010
10,00
3eceipt 3eceipt of promotiona item./ 2ffice e;uipment
10B0 114
1,%00
50%0 Accounts pa!a'e
%010 1010
1,%00
Pa!ment Pa!ment of accounts pa!a'e./ pa!a'e./ %010 1010
Accounts pa!a'e ash > =DS, 3eguar
1%,000
1010
11,%0
4040 %0%0
Due to -83
@%0
1010
ote: )a rates: LA) is 5J an# &) for goo#s is 1J. 3emittance 3emittance of withho#ing withho#ing ta to -83./ %0%0
Due to -83
1010
Su'si#! from
40+0
nationa government
1010
@%0 @%0
-ase# on re;uirement “'$, the A receive# is net of )3A )3A. 8n othe otherr wor# wor#s, s, the the su's su'si# i#! ! from from nati nation ona a gov governme ernment nt reco recor#e r#e# # '! the the agenc! upon receipt of A #oes not incu#e the portion for )3A* thus, the a'ove (ourna entr!. 115
116
116
Chapter > – Accounting or 'ncomeB Collection" and (elated ran"action ran"action" " !ue"tion" # An"$er" 1. Differentiate Differentiate revenue revenue from from revenue revenue fun#s. fun#s. An"$er% (evenue pertains pertains to the gross infow of econ econom omic ic 'ene 'enefi fits ts or servic service e pote potent ntia ia #uri #uring ng the reporting perio# when those infows resut in an inc increas rease e in net asset ssetsE sEe e;uit! it!, other her than han increases reating to contri'utions from owners. (evenue (eve nue un und" d" on the other han# comprise a fun#s #erive# from the income of an! agenc! of the gove government rnment an# avaia' avaia'e e for appropriat appropriation ion or epen#iture in accor#ance with aw. %. &numerate
the
fun fu n#ame men nta ta
pri rinc ncip ipe es s
governing revenues accruing to the FAs . Answer: 3evenue nues accruin ruing g to the the FA FAs are governe# '! the foowing fun#amenta principes: a/ Cness otherwise specifica! pro provi#e# i#e# '! aw aw, a a rev revenues nues accr accrui uing ng to an entit! '! virtue of the provisions of eisting aw, or#ers an# reguations sha 'e #eposite#Eremitte# in the ationa )reasur! )/ 117
118
or in an! #u! authori"e# government #epositor!, an# sha accrue to the Fenera un# F/ F/ of of the F* '/ &cept as ma! otherwise 'e specifica! prov rovi#e# i#e# '! aw aw or compet petent ent autho thorit! it!, a mone mone!s !s an# an# prop proper ert! t! offi offici cia a! ! rece receiv ive e# '! a pu'ic officer in an! capacit! or upon an! occasion must 'e accounte# for as government fun#s an# governm rnment propert! rt!* c/ c/ Amounts receive# in trust an# from 'usinesst!pe activ tivitie ities s of gov governme rnment ma! 'e sep separa arate! recor#e# an# #is'urse# in accor#ance with such rues an# reguations as ma! 'e #etermine# '! a Permanent ommittee compose# of the Secre rettar! of inance as hairm rma an, an# the Secr Se cret etar! ar! of -u#g -u#get et an an# # =a =ana nage geme ment nt an an# # th the e hairman, 2A, as mem'ers* mem'ers * #/ 3eceip ceiptts sha sha 'e rec recor#e# r#e# as rev revenue of Specia, i#uciar! or )rust un#s or un#s other than the the F, F, on! whe when author thori" i"e# e# '! aw aw as impemente# '! rues an# reguations issue# '! the Permanent ommittee* e/ o pa!ment of an! nature sha 'e receive# '! a coecting officer without imme#iate! issuing an officia in ac6nowe#gemen ac6nowe#gementt thereof. )he receipt ma! 'e in the form of postage, interna revenue or 118
#ocumentar!
stamps
an#
the
i6e,
officia!
num'ere# rece num'ere# receipts ipts,, su'( su'(ec ectt to prop proper er cust custo# o#! !, accou accounta nta'i 'iit! it!,, an# an# au#it* au#it* f/ here mechan mechanica ica #evices e.g. eectronic officia receipt/ are use# to ac6 ac6now nowe#g e#ge e cash cash rece receip ipts ts,, the the 2A 2A ma! ma! approve, upon re;uest, eemption from the use of acco accoun unta ta' 'e e forms forms** g/ At no in inst stan ance ce sh sha a tempor temp orar! ar! rece receip ipts ts 'e is issu sue# e# to ac ac6n 6now owe e#g #ge e the receipt of pu'ic fun#s* h/ Prenum'ere# 23s sha 'e issue# in strict numerica se;uence. A copies of each receipt sha 'e eact copies or car'on repro#uction in a respects of the origina* i/ i/ An An officer charge# with the coection of revenue or the receiving of mone!s pa!a'e to the government sha accept pa!ment for taes, #ues or other in#e'te#ness to the government in the form of chec6s issue# in pa!ment of govern rnm ment o'igations , upon proper en#orsement an# i#entification of the pa!ee or en#orsee. hec6s #rawn in favor of the government in pa!ment of an! such in#e'te#ness sha i6ewise 'e accepte# '! the officer concerne#. At no instance shou# mone! in the han#s of the 2 'e utii"e# for the purpose of cashin shing g priv priva ate chec6s* an# ( (// Cn# Cn#er suc such 119
120
rues
an#
reguations
as
the
2A
an#
the
Department Department of inance inance D2/ ma! prescri'e, prescri'e, the )reasurer of the Phiippines an# a AFD- sha ac6 ac6now nowe#g e#ge e rece receip iptt of a a fun# fun#s s rece receiv ive e# '! them, the ac6nowe#gement 'earing the #ate of actua remittance or #eposit an# in#icating from whom an# on what account it was receive#. receive#. +. Discus scuss s when hen rev revenues are accrue# rue# to the the Fene Fenera ra fun# fun# or Spec Specia ia, , i#u i#uci ciar ar! ! or )rust ust un#s. Answer : A
reven revenues ues inc income/ ome/ accru accruing ing to to the
#epartments, offices an# agencies '! virtue of the prov rovisions of eisting aws, or#e r#ers an# reguations sha 'e #eposite# in the ) ) or or in the #u! #u! auth author ori" i"e# e# #epo #eposi sito tor! r! of the the Fov Fovernme ernment nt an# sha a accr crue ue to the the Fe Fen nera ra un un# # of th the e Fovern rnm ment, uness otherwise specifica! provi#e# '! aw. aw . 3eceipts
sha
'e
recor#e#
as
revenue
of
Specia, i#uciar! or )rust un#s )/ or un#s other than the F, on! when authori"e# '! aw an# foowing such rues an# reguations as ma! 'e issue# '! the Permanent ommittee consisting of the Secretar! of inance as 120
hairman, an# the Secretar! of the -u#get an# the hairman, mem'ers.
ommission
4. 8#entif! an# #ifferentiate revenue of FAs.
on
the
Au#it,
sources
as
of
Answer: )he sources of revenues of FAs are a/ Answer: )he echange an# '/ nonechange transactions. Echange tran"action" are tran"action" are transactions in which one entit! receives assets or services, or has ia'iities etinguishe#, etinguishe#, an# #irect! gives gives approimate! approimate! e;ua vaue primari! in the form of cash, goo#s, services, or use of assets/ to another entit! in echange. Non-echange Non-echa nge tran"actio tran"action" n" are transa transacti ctions ons in which an entit! another entit!
either receives vaue from rom without #irect! giving
approimate! e;ua vaue in echange, or gives vaue to another entit! without #irect! receiving approimate! e;ua vaue in echange. 5. ow are echange an# nonechange transactions recogni"e# an# measure#< 121
122
Answer:
3ev 3e ven enue ue fr from om echa hang nge e
tran tr ansa sact ctio ion n
sha 'e measure# at fair vaue of the consi#eration receive# or receiva'e an# it sha 'e recogni"e# when it is pr pro' o'a' a'e e th that at fu futu ture re economic 'enefits or service potentia wi fow to the entit! an# these 'enefits can 'e measure# reia'!. 2n the other han#, the cash 'asis of accounting sha 'e appie# '! a government agencies in the the reco recogn gnit itio ion n of rev revenue nue from from nonechange transaction unti a reia'e mo#e of measure reme men nt of this re rev venue is #eveope# . 3eve 3evenue nue from none nonech change ange transact transactions ions sha sha 'e meas measur ure# e# at the am amou ount nt of th the e in incr crea ease se in net assets recogni"e# '! the entit!, uness it is aso re aso re;u ;uire ire# # to re reco cogn gni" i"e e a i ia' a'i iit it! ! . here a ia'iit! is recogni"e# an# su'se;uent! re#uce#, 'ecause the taa'e event occurs, or a con#ition is sati satisfi sfie# e#,, the amount amount of the the re#uct re#uction ion in the ia'iit! wi 'e recogni"e# as revenue. B. 8#entif! 8#entif! the the sources sources of revenue revenue of FAs un#er un#er echange an# nonechange transactions.
122
Answer: 3evenues receive# '! the FAs from echange transactions are #erive# #erive# from the a/ sae of goo#s or provisions provisions of services to thir# parties or to other FAs an# '/ use '! other entit! of assets !ie#ing interest, ro!aties ro!aties an# #ivi#en#s or simiar #istri'utions #istri'utions whie revenue of the FAs from nonechange nonechange transactions are #erive# most! from taes, gifts an# #onations, goo#s in 6in# an# fines an# penaties. @. Discuss Discuss what what a Dishonore# Dishonore# hec6 hec6 is. Answer: A chec chec6 6 is #ish #ishon onor ore# e# eith either er '! non non pa!ment or nonacceptance. Dishonor '! nonpa!ment occurs nonpa!ment occurs when a a// the chec6 is #u! presente# for pa!ment an# pa!ment is refuse# or cannot 'e o'taine#* or '/ presentment is ecuse# an# the chec6 is '/ over#ue an# unpai#. Dishonor '! nonacceptan nonacceptance ce happens happens when a a// the the chec chec6 6 is #u! #u! presen presente te# # for for accept acceptanc ance, e, an# such an acceptance as is prescri'e# '! aw aw is refu refuse se# # or cann cannot ot 'e o'ta o'tain ine# e#** or ' '// presen presentme tment nt for for acce accepta ptance nce is ecu ecuse# se# an# an# the chec6 is not accepte#. 123
124
A #ishonore# chec6 ma! aso 'e #efine# as a chec6 pai# to the agenc! that was #ishonore# '! the AFD- #ue to “Drawn Against 8nsu 8nsuffi ffici cien entt un# un# D DA A8/$ 8/$ or “D “Draw rawn n Agai Agains nstt Cnceare# Deposits DACD/.$ . ow ow is ash ash Shorta Shortage geE2 E2ve verag rage e of Dis' Dis'ur ursin sing g 2fficer accounte# for '! FAs< Answer: ash overage #iscovere# overage #iscovere# '! the Au#itor that that cann cannot ot 'e sati satisf sfac acto tori ri! ! epa pain ine# e# '! the the Dis'u Dis'ursin rsing g 2ffice 2fficerr sha sha 'e forf forfei eite# te# in favo favorr of the the gov government ernment an# an offici officia a receip receiptt sha sha 'e issu issue# e# '! the the o oec ecti ting ng 2ffi 2ffice cerE rEa ash shie ier. r. )he )he cash overage overage sha 'e ta6en ta6en up as =isceaneous =isceaneous 8ncome. ash shortage shortage which is not restitute# '! the the Dis' is'ursin rsing g 2ff ffic ice er #espit spite e #eman man# in writing '! the Au#itor sha 'e ta6en up as receiva'e from the Dis'ursing 2fficer. 9. Defin Define e an# provi#e provi#e the account accounting ing treat treatme ment nt for ancee# hec6s. Answer: hec hec6s 6s ma! ma! 'e canc cance ee e# # when when the! the! 'ecome a/ stae, e, '/ voi#e i#e# or c/ spo spoie# e#. )he #epo #e posi sito tor! r! 'a 'an6 n6 co cons nsi# i#er ers s a che hec c6 st sta ae, e, if it has 'een outstan#ing for over si months from 124
#ate of issue or as prescri'e#. A stae, voi#e# or spoie# chec6 sha 'e mar6e# cancee# on its face an# reporte# as foows: a/ Loi#e# Loi#e#,, spoie# spoie# or uncaime# stae chec6s with the ashier sha 'e reporte# as cancee# in the Hist of Cnreease# hec6s that hec6s that wi 'e attache# to the 38 report report or registr! registr! of chec chec6s 6s issue# issue#// an# '/ ew chec6s ma! 'e issue# for the repacement of staeEspoie# chec6s in the han#s of the pa!ees or ho#ers in #ue course, upon su'm su'mis issi sion on of the the sta staeE eEsp spoi oie e# # chec chec6s 6s to the the Accounting Accounting DivisionECnit. DivisionECnit. A certifie# cop! cop! of the pre previou vious s! ! pai# pai# DLs sha sha 'e atta attac che# to the the re; re;uest uest for rep repace aceme men nt. A &L sha 'e pre repa pare re# # to ta ta6 6e up th the e can cance ce a atio ion n. )he repacement chec6 chec6 sha 'e reporte# in the 38. An"$er to ultiple Choice" 5Chapter >6 1. %. D +. 4. A 5. B. D @. . D 125
126
9. 10. 11. 1%. 1+. 14. 15. 1B. 1@. A 1. A 19. D %0. Chapter ? – rial 9alanceB inancial (eport" and Statement" !ue"tion" # An"$er" 1. Discuss Discuss the purpose purpose of inancia inancia Statemen Statements. ts.
126
Answer:
)he
purpose purp ose
of
inancia statements is to a'out the financia
genera
purpose purp ose
provi#e informatio information n position, financia
performance, an# cash cash fows fows of of an entit! that is usefu to a wi#e range of users in ma6ing an# evauating #ecisions a'out resources.
the aocation
of
Specifica!, the o'(ective o'(ectives s of genera purpose financia reporting in the pu'ic sector are a/ to provi#e provi#e information usefu for #ecision ma6ing, an# '/ to #emonstrate #emonstrate the accounta'iit! accounta'iit! of entruste# to it.
the entit! for the resources
Fener Fenera a purpose purpose finan financia cia stat statem ement ents s can can aso aso have a pre#ictive or prospective roe, provi#ing inf informa rmation ion usefu sefu in pre# re#icti ictin ng the ev eve of resources re;uire# for continue# operations, the resources that ma! 'e generate# '! continue# operations, an# the associate# ris6s an# uncertainties. %. ho isEa isEare re resp respon onsi si' 'e e for for the the prep prepara arati tion on of inancia Statements<
127
128
Answer: )he Answer: )he responsi'iit! for the preparation of the Ss rests with the hea# of the entit!E#epartment centra office 2f/ or regiona off ffic ice e 32/ or op ope era rattin ing g unit 2C 2C// or his isEh Ehe er autho au thori" ri"e# e# rep repres resent entat ativ ive e (oi (oint nt! ! wi with th th the e hea hea# # of the financeEaccounting #ivisionEunit in#ivi#ua entit!E#epartm tme ent Ss* an#
for for
#epa #epartm rtmen entE tEen enti tit! t! Ss Ss as a sing singe e enti entit!, t!, the the resp respo onsi' si'iit iit! ! for the the prep prepa arat ration ion of the the Ss Ss rests with the hea# of the entit!E#epartment 2f (oint! with the hea# of the finance unit. +. Define what a Statement 3esponsi'iit! is.
of
=anagement
An"$er% A he Statement o anagement (e"pon"i4ilit. or inancial Statement" "hall "erve "erv e a" th the e co cove veri ring ng le lett tter er in tran tran"m "mit itti ting ng the th e en enti tit. t. i ina nanc ncia iall "t "tat atem emen ent" t" to the the C7 C7AB AB and other regulator. agencie" and other entitie"&& 't "ho$" the entit." re"pon"i4ilit. entitie" or or the the prep prepar arat atio ion n and and pre" pre"en enta tati tion on o the the inancial "tatement"& "tatement"&
128
4. &numerate an# epain epain 'rief! the omponents omponents of Fenera Purpose inancia Statements Statements Answer : A comp compet ete e set of finan financia cia state statemen ments ts con#ense# an# '! fun# custer/ to 'e su'mitte# '! an entit! sha incu#e the foowing: a/ St Stat atem emen entt o i ina nanc ncia iall Po Po"i "iti tion on is is a forma statement which shows the fina financ ncia ia con# con#it itio ion n of the the enti entit! t! as at a certain certain #ate #ate.. 8t inc incu# u#es es info informat rmation ion on on the three three eeme eements nts of finan financia cia posit position ion,, name!, assets, ia'iities ia'iit ies an# e;uit!. )he Statem Statement ent of inancia inancia Positio Position n sha 'e pres pr esen ente te# # in comp compar arat ativ ive, e, #e #eta tai ie# e# an an# # con#ense# format. '/ St Stat atem emen entt
o
ina i nanc ncia iall
Per Pe ror orma manc nce e
shows the resuts of operationEperformance operationEperformance of the entit! at the en# en# of a partic particu uar ar peri perio#. o#. A items of rev re venue an# epen pense re rec cogn gni" i"e e# in a perio# sha 'e incu#e# in surp rpus or #eficit uness a PPSAS re;uires otherwise. 129
130
c/ Statement
o
Change"
in
Net
A""et"DEuit. )he Statement of hanges in et Asset AssetsE& sE&;ui ;uit! t! shows shows the chan changes ges in e;uit! 'etween 'etween two accounting perio#s refecting the increase or #ecrease in the entit!Is net assets #uring the !ear. #/ St Stat atem emen entt o Ca Ca"h "h l lo$ o$" " summar summari"e i"es s the cash fows from operating, investing an# financing activities of an entit! #uri #uring ng a give given perio perio#. #. 8t i#en i#enti tifi fies es the the sou source rces of cash inf info ows, the item items s on which cash was epen#e# #uring the reporting perio#, an# the cash 'aance as at the reporting #ate. ash fow info informa rmati tion on pro provi#es i#es user users s of fina financ ncia ia statements with a 'asis to assess a/ the a'iit! of the entit! to generate cash an# cash e;uivaents, e;uivaents, an# '/ the nee#s of the entit! to utii"e those cash fows. e/ Statement o Compari"on o 9udget and Actual Actu al Amou Amount" nt" > > A separate a##itiona fina financ ncia ia
sta stateme tement nt for for
comp compar aris ison on of
'u#get an# actua amounts sha 'e prepare prepare# # since since the the financ financia ia state stateme ments nts 130
an# 'u#get of FAs are not on the same accounting 'asis. f/ Note" to the inancial Statement" comprising a summar! of significant accounting poicies an# other epanator! notes. otes to financia statements are integra parts of the financia statements. otes provi#e a##itiona information an# hep hep carif arif! ! the the item items s pres presen ente te# # in the the financia statements. 8t provi#es narrative #escription or #isaggregation of item items s in the fin financia ia sta statements an# informat mation a'out them ;uaif! for recognition.
that
#o
not
5. 8#enti entiff! an# #isc iscuss 'rief ief! the the ;uai uaittative ive characteristics characteristics of inancia Statements. Statements. Answer: An entit tit! sha ha pres prese ent inf informat rmation ion incu incu#in #ing g accou accounti nting ng poic poicies ies in a manne mannerr that that meets meets the foow foowing ing ;uaita ;uaitativ tive e characte characteristi ristics cs enumerate# in PPSAS 1: a.
Cn#erstan#a'iit! – informatio information n is un#erstan#a'e when users might 131
132
reasona'! 'e epecte# to comprehen# its meaning. or this purpo rpose, users are assume# to have a reasona'e 6nowe#ge of the entit!Is activities an# the environment in whic which h it oper operat ates es,, an# an# to 'e wi wiin ing g to stu# stu#! ! the the info informa rmati tion on.. 8nformati 8nf ormation on a'out comp co mpe e ma matt tter ers s sh shou ou# # no nott 'e ecu u#e #e# # from the financia statements mere! on the groun#s that it ma! 'e too #ifficut for certain users to un#erstan#. '.
3eevance – 3eevance – information is reevant reevant to users if it can 'e use# to assist in evauating past, present or future events or in confirming, evau vauat atio ions ns.. 8n
or corr ecting, past or#er to 'e reevant,
information must aso 'e time! . c.
=ateriait! – the
reevance
of
inf informa ormattion ion is affe affect cte# e# '! its its nat nature ure an# an# materiait! materiait!.. 8n 8nfo forma rmati tion on is ma mate teri ria a if it its s omission omiss ion or mi misst sstat ateme ement nt co cou# u# inf infue uence nce the #ecisions of users or assessments ma#e on th the e 'a 'asi sis s of th the e fi fina nanc ncia ia st stat atem emen ents ts.. =ateriait! #epen#s on the nature or si"e of the the item item or error error, (u#g (u#ge# e# in the the partic particu uar ar 132
circumstances
of
its
omission
or
misstatement. #.
)imeiness – the usefuness of financia statements is impaire# if the! are not ma#e avaia'e to users within a reasona'e perio# after the reporting #ate. 2ngoing factors such as the compeit! of an enti titt!I !Is s oper era atio ion ns are not su suff ffic icie ient nt reason for faiing to report on a time! 'asis. =ore =ore spec specif ific ic #ea# #ea#i ine nes s are are #ea #eatt with with '!
egisation an# (uris#ictions. (uris#ictions.
reguations
in
man!
8f there is an un#ue #ea! in the reporting of in info forma rmati tion on,, it ma ma! ! o ose se it its s re ree eva vanc nce e. )o provi#e information on a time! 'asis, it ma! often 'e necessar! necessar! to report 'efore 'efore a aspe aspect cts s of a tran transa sact ctio ion n are are 6now 6nown, n, thus thus impair impa irin ing g rei re ia' a'i iit it! !. onverse!, if repo reportin rting g is #ea #ea!e !e# # unti unti a a aspe aspect cts s are are 6nown, the informa rmation ma! 'e high! reia'e 'ut of itte use to users who have ha# to ma6e #ecisions in the interim. 8n achieving a 'aance 'etween reevance an# 133
134
reia' re ia'ii iit! t!,, th the e ov overri erri#in #ing g co consi nsi#er #erat ation ion is how 'e how 'est st to sa sattis isf! f! th the e #e #eci cisi sion onm ma6 a6in ing g nee#s nee #s of o f use users rs.. P PPSAS 1/ e.
3eia'iit! – reia'e information is free from materia error an# 'ias, an# can 'e #epen#e# on '! users to represent faithfu! that which it purports to represent or cou# reasona'! 'e epecte# to represent.
f.
aithfu
representation
–
information to represent faithfu! transactions an# other events, it shou# 'e presente# in accor#ance with the su's su'sta tanc nce e of the the tran transa sact ctio ions ns an# an# othe other r events, an# not mere! their ega form. g.
Su'stance
over
form
–
if
inf informa ormattion ion is to repr repres esen entt faithf ithfu u! ! the the transactions an# other events that it purpor purports ts to repre represe sent nt,, it is nece necess ssar! ar! that that the! 'e accounte# for an# pres resente# in accor#ance
with
their
su'stance
an#
economic reait!, an# not mere! their ega form. )he )h e su su's 'sta tanc nce e of tr tran ansa sact ctio ions ns or 134
other events is not awa!s consistent with their ega form. form . h.
eutrait! – informatio information n is neutra neutra if it is free from 'ias. 'ias . inancia statements statements are not neutra if the informa rmation the! contain has 'een seecte# or presente# in a manner #esigne# to infuence the ma6ing of a #ecision or (u#gment in or#er to achieve a pre#etermine# resut or outcome.
i.
Pru#ence – is the incusion of a #egre egree e of cautio tion in the eercis rcise e of the (u#gments nee#e# in ma6ing the estimates estimates re;u re;uire ire# # un#e un#err con# con#it itio ions ns of unce uncertai rtaint nt! !, such that assets or revenue are not oversta verstate# te# an# ia'i ia'iiti ities es or epen epenses ses are not un#erstate#. owever, the eercise of pru#ence #oes not aow, for eampe, the creation creat ion of of hi# hi##en #en res reserve erves s or e ece cessi ssive ve provisions, provisio ns, the #ei'erate un#erstatement un#erstatement of assets or revenue, or the #ei'erate overst rstat atem emen entt of i ia' a'i iit itie ies s or e epe pens nses es,, 'ecause the financia statements wou# not 'e neutr tra a an#, there reffore re,, not have the ;uait! of reia'iit! reia'iit!.. 135
136
(.
ompeteness – the information in finan inanci cia a stateme ements sh shou ou# # 'e co comp mpe ete te within the 'oun#s of materia materiait! it! an# cost .
6.
ompara'iit! – inf informa rmation ion in fina financ ncia ia stat statem emen ents ts is comp compar ara' a'e e when when user users s are are a'e a'e to i#en i#enti tif! f! simi simia ari riti ties es an# an# #iff #iffer eren ence ces s 'etw 'etwee een n that that info informa rmati tion on an# an# information in other reports. ompara'iit! appies to the comparison of financia statements of #ifferent entities an# compa co mparis rison on of th the e fin financ ancia ia sta state teme ments nts of the same entit! over perio#s of time. An important important impica impication tion of the charact characterist eristic ic of comp compar ara' a'i iit it! ! is that that users sers nee# nee# to 'e inf informe orme# # of the the poi poici cies es emp empo o!e# in the the preparation of financia statements, changes changes to those poicies, an# the effects of thos hose changes. ges. -ec -ecause use users wish wish to compare the performance of an entit! over time, it is important that financia statements show correspon#ing information for prece#ing perio#s.
136
B. hat
are
information
#iscose# in Statements<
the
that
otes
nee#s to
Answer : )he )he otes to inancia shou# contain the foowing: a.
to
'e
inancia
Statements
a sta stateme tement nt of comp compi ian ance ce with ith PPSASs*
'.
summar! of significant accounting poicies a#opte# an# foowe# reporting entit! sha incu#e: incu#e: i.
'!
the
the measurement 'asis or 'ase 'ases/ s/ use# use# in prep prepar arin ing g the the fina financ ncia ia statements*
ii.
the etent to which the entit! has appie# an! transitiona provisions in an! PPSAS* an#
iii.
the other other accoun accountin ting g poici poicies es use# that are reevant to an un#erstan#ing of the financia statements*
137
138
c.
supp suppor orti ting ng inf informa ormattion ion for item items s presente# on the face of the Statement of inanc inancia ia Posit Position ion,, State Stateme ment nt of inanc inancia ia Performance, Statement of hanges in et AssetsE&; AssetsE&;uit! uit! or Statemen Statementt of ash ows, ows, in the the or#e or#err in whic which h each each stat statem emen entt an# an# each ine item is presente#* an#
#.
a##itiona a##itiona informatio information n re;uire# re;uire# '! PPSAS that is not shown on the face of the fina financ ncia ia stat statem emen ents ts 'ut 'ut is reev reevan antt to an un#erstan#ing of an! of them which incu#es the foowing: i. #isc #iscosur osure e tha that the the 'u#g 'u#get ete# e# amou amount nts s have not 'een ecee#e#. 8f an! 'u#gete# amount ounts s or appro ppropr pria iattion ions have 'ee 'een ecee# cee#e# e# or epen pense ses s incu incurre# rre# with withou outt appropriationEaotment, then #etais sha 'e #iscose#* Par. Par. %4 '/ PPSAS 1 /
ii. nature an# etent of prior perio# errors* PPSAS + / iii. events after the reporting #ate that have a materia effect on the financia statements* PPSAS PPSAS 14 / 138
iv.. cont iv contin inge gent nt
ia' ia'i iit itie ies s
PPSAS
19 /,
an#
unrecogni"e# contractua commitments* commitments* v. reate# part! #iscosure #iscosure PPSAS PPSAS %0 /* /* an# vi. nonfinancia #iscosures, e.g., the entit!Is financia ris6 management o'(ectives an# poicies. PPSAS PPSAS 15 / @. hat are the the &vents &vents After After the 3eporting 3eporting Date< Answer: &ve &vents after ter the rep reporti orting ng #ate are those th ose ev even ents, ts, 'o 'oth th fa favo vora' ra'e e an an# # un unfa favo vora' ra'e, e, that occur 'etween the reporting #ate an# the #ate when the financia statements are authori"e# for issue. )wo t!pes of events can 'e i#entifie# : a.
A#(usting events after the reporting #ate > #ate > those that provi#e evi#ence of con#i con#itio tions ns that that eist eiste# e# at the reportin reporting g #ate* an#
'.
ona#(usting events after the reporting #ate > #ate > those that are in#icative of con# con#it itio ions ns that that aros arose e afte afterr the the repo reportin rting g #ate. Par. Par. 5, PPSAS 14 / 139
140
)he rep reportin orting g #a #ate te is set ever! en# of the caen en#ar #ar !ear whie hie the #at #ate on whi hic ch th the e financia fina ncia stat statemen ements ts are auth authori" ori"e# e# for issue is the #ate when the Statement of =anag =a nageme ement ntIs Is 3espo 3esponsi nsi'i 'iit! it! is app appro rov ve# '! the hief &ecutive or his authori"e# representative an# the ea# of inance Department. . 8s chang hange e of Acco Accoun unti ting ng Poic ic! ao aow we# for government government agencies< Answer: han Answer: hange ge is not aowe# in PPSAS uness the change is a/ re;uire# '! PPSAS or '/ resuts in the financia statements that provi#ing reia'e an# more reevant information a'out the effects of transactions, other events an# con# con#it itio ions ns on the the enti entit! t!IIs fina financ ncia ia posi positi tion on,, financia performance, or cash fows. 9. Diff Differ eren enti tiat ate e curren currentt peri perio# o# errors errors from from prio prior r perio# erro rrors an# prov rovi#e treatment for each item.
the
accounting
Answer: urre rrent nt peri rio o# erro rrors rs > are error errors s committe# an# #iscovere# re# within the same 140
peri perio# o#..
8t sha sha 'e corre correct cte# e# '! an a#(u a#(ust stin ing g
entr!, within the same !ear 'efore the financia statements statements are authori"e# for issue. Priorr pe Prio peri rio# o# erro errors rs > are are omis omissi sion ons s from from,, an# an# misstatements in, the entitiesI financia statements for one or more prior perio#s arising from faiure to use, or misuse of reia'e informati information on that that was was avai avaia a' 'e e when when fina financ ncia ia statements statements for those perio#s were authori"e# authori"e# for issue an# cou# reasona'! 'e epecte# to have 'een 'een o'ta o'tain ine# e# an# an# ta6 ta6en into into acco accoun untt in the the preparatio preparation n an# presenta presentation tion of those those financia financia statements. statements. An entit! sha correct materia materia prior peri perio# o# errors errors retro retrosp spec ecti tive ve! ! in the the first set of financia fina ncia sta statem tements ents auth authori" ori"e# e# for issue issue after thei theirr #isc #isco over! '! rest resta ating ting the the comp compar arat ativ ive e amoun amounts ts for for prior prior perio perio#s #s// presen presente# te# in which which the error occurre# or if the error occurre# 'efore the eariest prior perio# presente#, restating the open opening ing 'aan 'aances ces of asset assets, s, ia'i ia'iiti ities es an# net net assetsEe;uit! for the earie iest prior perio# presente#. Par. Par. 4@, PPSAS + /. /. )he correction of a prior perio# error is ecu#e# from the compu puta tattio ion n of in inc com ome e an# epen ense se for th the e perio# peri o# in which w hich the t he erro er rorr is #iscovere# #i scovere# . 141
142
10. hat
are
ret retros rospec pective ive errors<
the
imitations
rest resta atemen ment
of
for
prior ior
the perio rio#
Answer: )h Answer: )he imitations of retro ros spective restatement of prior perio# errors are as foows: a.
A prior perio# error sha 'e correcte# '! retrospect retros pective ive resta restatem tement, ent, e ecep ceptt to the etent that it is impractica'e to #etermine eithe itherr the per perio# io# spe specif cific effe effec cts or the cumua uative ive eff effect of the error rror. Par Par. 4, 4, PPSAS + /
'.
hen it is impractica'e to #etermine the perio#specific effects of an error ror on comp compar arat ativ ive e info informa rmati tion on for for one one or more more prio priorr peri perio# o#s s pres presen ente te#, #, the the enti entit! t! sha sha rest resta ate the the openin ning 'aan ances ces of assets sets,, ia ia'iit iitiies, es, an# net asset setsEe sEe;uit uit! for the eari riest perio# for which retrospective rest restat atem emen entt is prac practi tica ca' 'e e w whi hic ch ma ma! ! 'e the current perio#/. Par Par.. 49, PPSAS + /
c.
hen it is impractica'e to #etermine the cumu cumua ati tive ve effe effect ct,, at the the 'egi 'eginn nnin ing g of the the curren rent perio#, of an error ror on a prior 142
perio#s,
the
entit!
sha
restate
the
compara parattive ive inf informa rmation ion to corre orrect ct the error error pros prospe pect ctiv ive e! ! from from the the eari earies estt #ate #ate practica'e. Par. Par. 50, PPSAS + / 11. 11. hat hat are are 8nte 8nteri rim m ina inanc ncia ia Stat Statem emen ents ts< < Answer: 8nte 8nteri rim m i ina nanc ncia ia St Stat atem emen ents ts are ina inanc ncia ia Sta Stateme tement nts s tha that are are re;u re;uir ire# e# to 'e prep prepar are# e# at an! an! give given n peri perio# o# or at a fina financ ncia ia rep reporti ortin ng perio erio# # wi with thou outt co osi sing ng th the e 'o 'oo6 o6s s of accounts. )he interim interim financia statements statements sha 'e prep repare# are# empo po!ing ing the the same same accoun countting ing principes use# for for annua reports. reports . A#(usting an# cosing (ourn rna a entries sha 'e prepare# . owever owev er,, on! the a#(u a#(usting sting (ourna entr entries ies are recogni"e# in the 'oo6s of accounts . )o faciitate the preparation of the interim financia statements, the use of the wor6sheet is recommen#e#. 1%. 1%. Diff Differ eren enti tiat ate e )ria ia -aa -aanc nce e from from Prec Preco osi sing ng )ria -aance an# Postcosing )ria -aance. An"$er% rial 9alance 59 6 is is a ist of a the FH acco accoun unts ts an# an# thei theirr 'aa 'aanc nces es at a giv given time time.. )he Pre-Clo"ing rial 9alance sha 'e prepare# 143
144
after posting the A& in the F an# the same to the FH. 8t sh show ows s th the e a# a#(u (ust ste# e# 'a 'aa anc nces es of a a accounts as at a given perio# . )his is aso #escri'e#Eterme# as the A#(uste# )ria -aance. -aance . )he Po"t-Clo"ing rial 9alance sha sha 'e prepare# at the en# of the !ear after preparing an# posting the cosing (ourna entries in the F an# posting to the FH. Since revenue an# epense accounts have 'een cose# out, the on! accoun acco unts ts wit ith h 'a 'aa anc nces es ar are e 'a 'aa anc nce e sh shee eett or rea accounts. An"$er to ultiple Choice" 5Chapter ?6 1.
1+.
D
%.
-
14.
A D
D
1B.
1. 19.
A
%0.
-
+. 4. 5. B. @. . 9.
15.
1@.
10.
D
11.
A
1%.
D
144
Sugge"ted An"$er" to Pro4lem" 5Chapter ?6 1. apita
14,%50,000
outa! =22&
11,400,000
)ota )ota A receive# Hess pa!ments: Heft wing constructio
15,B50,000
B,500,00 0
n 3ight wing repainting )o )ota Hess: Eta 5J Q
%,000,00 0 ,500,00 0 595,000
%J/ Purchase of furniture an# fitures an#
+,000,00 0
@,905,00 0
e;uipment Purchase of office
%,500,00 0
suppies )o )ota Hess:
5,500,00 0 ++0,000
Eta 5J Q 1J/
5,1@0,00 1+,0@5,000 0
ash
%,5@5,000
'aance 2& Su'si#! from nationa nationa government Hess: Cnutii"e# A 3efun# of ecess
5%0,00 0 100,00 0 5,000
cash a#vance
105,00 0
-aance
415,00 0
Hess &penses: Saaries an# wages
150,00 0
P& P&3A 3etirement an# ife
50,000 1,000
insurance premiums Pag8-8F premiums Phiheath premiums )raveing )raveing epenses oca
%,500 4,500 1+,000
&ectricit! epenses )eephone epenses
1%,000 10,000
3entEease epenses 2ffice suppies
%5,000 %0,000
epenses Depreciation
15,000
=achiner!
0
&cess of income over epenses
95,000
/. urrent assets Propert!, pant an#
500,000 00,000
e;uipment )ota assets Hess: urrent ia'iities Accumuate# surpusEDeficit
1,+00,00 0 %00,000 1,100,00 0
4.
&cess of income over over
+%0,00
500,000
epenses Depreciation =achiner! 8ncrease in accounts pa!a'e 8ncrease in #ue to -83
5,000 +0,000 5,000
8ncrease in #ue from FA
55,000 /
8ncrease in office suppies inventor!
%5,000 /
ash provi#e# '! operating activities
4B0,000
Chapter 8 – 9an< (econciliation !ue"tion" # An"$er" 1. Define 'an6 reconciiation. reconciiation. -an6 -a n6
reco re conc nci iia iati tion on
is
the
settement
of
#iffe #ifferenc rences es conta containe ine# # in the the 'an6 'an6 state stateme ment nt an# the cash account in the agenc!IsEentit!Is 'oo6s. 8t compares the 'an6 'aance with the entit! 'aance an# epains an! #ifferences. %. Accor#ing to the FA=, what are the o'(ectives of the -an6 3econciiation Statement -3S/< Answer: Accor#ing to 3econciiation Statement
FA=, -3S// -3S
the -an6 sha 'e
prepare# in or#er to: a. hec6 hec6 correctness correctness of 'oth the the 'an6Is 'an6Is an# agenc!IsEentit!Is recor#s, '. Serve as as a #eterment #eterment to to frau#, frau#, an# an# c. &na'e &na'e the agenc!E agenc!Eenti entit! t! or 'an6 to ta6e up charges or cre#its recogni"e# '! the 'an6 or agenc!Eentit! 'ut not !et 6nown to the agenc!Eentit! or 'an6.
+. &pain 'rief! the importance of using a 'an6 as a #epositor! an# cearing house for chec6s issue# an# receive# '! an entit!. Answer : hen an agenc!Eentit! uses a 'an6 as a #epo #eposi sito tor! r! an# an# ceari earing ng hous house e for chec chec6s 6s issue# an# chec6sEcash receive#, the use of a 'an6, among others, faciitates the contro of cash, 'ecause it creates a #ou'e recor# of a 'an6 transactions > one '! the agenc!Eentit! an# one '! the 'an6. 4. hat are the two accounts in 3evise# hart of Acco Accoun unts ts of ati ation ona a Fov Fovernme ernment nt Agen Agenci cies es cov covere# ere# '! this this chapt chapter er for for purpose purposes s of 'an6 'an6 reconciiation< reconciiation< &numerate the components components of each account. Answer : )he )he 'an6 'an6 reco reconc nci iia iattion ion sta stateme tement nt is prepare# for a/ AFD- accounts an# '/ )reasur! )reasur! acco accoun untt for for =o#i =o#ifi fie# e# Dis' Dis'ur urse seme ment nt S!st S!stem em =DS/ accounts. AFD- accounts accounts comprise# of ash in -an6 > urrent Accounts* Accounts * whie the )reasur! account for =DS accounts comprise# comprise# of: a/ ash > =DS, 3eguar* '/ ash > =DS, Specia Accounts* an# c/ ash > =DS, )rust.
5. &pain 'rief! the reconciiation proce#ure as provi#e# '! the FA=. Answe Ans wer: r: )he hie hieff Acco Accountan untantEDe tEDesign signate ate# # Staf Staff f sha ha re reco con nci ie e the mo mon nth h! ! together with the pai#
'an6 sta tattem eme ent chec6s, #e'it
memo memora ran# n#um um,, i6 i6e 'an6 'an6 servi service ce charge arge,, an# an# cre#it cre#it memora memoran#u n#um, m, i6e i6e intere interest st earne#, earne#, from from Fov Fovernment Servicing -an6s. -an6s. 8n other other wor#s, wor#s, in reconciing the 'an6 account, it is customar! to reconcie the 'aance per 'oo6s an# 'aance per 'an6 to their a#(uste# cash 'aances. )he month! -3S sha 'e prepare# '! the hief Acco Accoun unta tant ntED EDes esig igna nate te# # Staf Stafff for eac each of the the 'an6 accounts maintaine# '! the agenc!Eentit! using the A#(uste# -aance =etho# . Cn#er this metho#, the 'oo6 'aance an# the 'an6 'aance are are 'rou 'rough ghtt to an a#(u a#(ust ste# e# cash cash 'aa 'aanc nce e that that must appear Position.
in
the
Statement
of
inancia
B. &num &numer erat ate e the the reco reconc nci iin ing g item items s for ash ash > =DS accounts. ash > Accounts
=o#ifie#
Dis'ursement
S!stem
-an6
otice of ash Aocation A/ receive# '! the entit! 'ut not !et recogni"e# '! the 'an6 Hapse#Eunuse# Hapse#Eunuse# A
2utstan#ing chec6s 2utstan#ing Authorit!
Accounts ADA/ &rrors committe# '! the 'an6
to
De'it
Agenc!E&ntit! A receive# '! the 'an6 'ut not !et
recogni"e# '! the agenc!Eentit! ancee# chec6s Hapse# As not !et a#(uste# '! the agenc!Eentit! -an6 charges &rrors committe# '! the agenc!Eentit! agenc!Eentit!
@. &numerate the reconciing items for Authori"e# Fovernment Fovernment Depositor! -an6 accounts. Answer: Au Auth thor ori" i"e# e# -an6 Accounts
Fov Fo vernm rnmen entt
Depo De posi sito tor! r!
-an6 Cnrecor#e# #epositE#eposit in transit
2utstan#ing chec6s
&rrors committe# '! the 'an6
Agenc!E&ntit! Depo Deposi sitt per per 'an6 'an6 stat statem emen entt 'ut 'ut not not
!et recor#e# in the 'oo6s. ancee# chec6s
3eturne# chec6 #eposit -an6 charges
&rrors committe# '! the agenc!Eentit! agenc!Eentit!
. Diffe iffere ren ntia tiate
the the
cre# re#it
mem memoran# ran#u um
from rom
#e'it memoran#um. Answer:
re#it re #it me memor moran# an#um um
is a #ocument
issue# '! the 'an6 informing an increase in the #eposito #epositorIs rIs agenc!I agenc!IsEe sEentit! ntit!Is/ Is/ account account,, such such as previous 'an6 #e'it erro rrors an# coections #irect! #eposite# to the agenc!IsEentit!Is 'an6 account. hie, #e' #e 'it me memo mora ran# n#um um is #ocument issue# '! the 'an6 informing
a a
#ecrease in the account, such as previous 'an6 cre#it errors or service charges an# fees.
An"$er" to ultiple Choice 5Chapter 86 1.
> 2utstan#ing chec6s
%.
> otice of ash Aocation Aocation
+.
- > -an6 statement
4.
- > ancee# chec6s D > re#it memoran#um
5. B. @.
A > De'it memoran#um D > A of the a'ove
& > A, -, an# 9. & > hief Accountant Accountant or Designate# Staff .
10.
- > hief Accountant
Chapter @ – Accounting or *ocal Government )nit" !ue"tion" # An"$er" 1. &numera meratte an# epain ain the the thre three e sep separa arate 'oo6s that sha 'e maintaine# '! oca government units as re;uire# un#er sections +0 to +10 of the oca Fovernment Fovernment o#e. Answer: )he three separate 'oo6s that sha 'e Answer: )he maint maintain aine# e# '! oca oca gov government ernment units units un#er un#er Sectio tion +0 +0 > +10 of the the oca oca governme rnment nt co#e are: a. Fe Fene nera ra un un# # )his )his cons consis ists ts of moni monies es an# an# reso resour urce ces s not accruing to an! other fun# an# sha 'e avaia'e for pa!ment of epen#itures,
o'ig o'igat ation ions s or purposes purposes not not specif specifica ica! ! #ecare# '! aw as chargea'e to or pa!a'e from, an! other fun#, though transfers therefrom
of to
monies or other fun#s
governme nment ma! appropriation.
'e
ma#e
resources of oca '!
proper
'. Spec Specia ia &#uca &#ucation tion un# )his consists of the respective shares of provinces, cities an# municipaities in the proc procee ee#s #s of the the a##i a##iti tion ona a one one perc percen entt 1J/ 1J/ ta ta on the the asse assess sse# e# vau vaue e of rea rea prop proper ert! t! for for e#uc e#uca ation tion purpo purpose ses s un#e un#er r the 3ea Propert! )a o#e. )his amount accruing to specia e#ucation fun# sha 'e auto automa mattica ica! ! ree reeas ase# e# to the the oca oca schoos. c. )ru rust st un un# # )his consists of private an# pu'ic monies receive#, '! oca government or of a oca government officia as trustee, agent or a#ministrator, as a guarant! for the fufi fim me ent of some ome o'i o'ig gation ions. A
trust fun# sha on! 'e use# for the specific purpose inten#e#.
for
which
it
was
%. &numerate the specia specia accounts accounts in the genera genera fun# fun# of oca oca gov governmen rnmentt unit unit that that sha sha 'e supporte# '! su'si#iar! e#gers. Answer:
Spec Specia ia acco accoun unts ts main mainta tain ine# e# in the the
Fenera un# that sha 'e supporte rte# su'si#iar! e#gers are the foowing:
'!
a.
Pu' Pu'ic ic uti utiit itie ies s an# an# othe otherr econ econom omic ic enterprises*
'.
Hoans Hoans,, intere interests sts,, 'on#s 'on#s issue issue#, #, an# other contri'utions for specific purposes*
c.
Dev Deveop eopme ment nt pro( pro(ec ects ts fun# fun#e# e# from from the Share in the 8nterna 3evenue
oections* oections* an# #. 2th 2ther spe specia ia accoun ounts, whic which h ma! 'e create# '! aw or or#inance. +. 8#entif! 8#entif! an# #iscuss #iscuss the two #ifferen #ifferentt 6in#s of 'oo6s of acco ccounts unts to 'e use# '! the the oc oca government unit. Answer: )he accounting unit of the Hoca Fovernment Cnits sha maintain the foowing 'oo6s of accounts:
ournas 1. ash 3eceipt ourna 3/ %. ash Dis'ursements ourna ourna D/ +. hec6 Dis'ursements ourna ourna 6D/ 4. Fenera ourna F/ He#gers 1. Fenera He#ger FH/ %. Su'si#iar! He#gers: a. ash '. 3eceiva'es c. 8nventories #. 8nvestments e. Propert!, Pant an# &;uipment f. Hia'iities g. 8ncome h. &penses 8n a##ition to the prece#ing recor#s r#s, the treasu treasurers rers an# an# #is'u #is'ursin rsing g office officers, rs, how however ever,, sha maintain their respective cash recor#s, such as: 1. ash 'oo6 > ash in )reasur! %. ash 'oo6 > ash in -an6 +. ash 'oo6 > ash A#vances
4. hat
are
the
two
parts
of
the
oca
government 'u#get< Answer: )he oca government 'u#get primari! Answer: consists of two parts, name!: 1. )he
estimates
of
income
certifie#
coecti'e '! the treasurer * an# %. )he )he
tota ta
appro pprop pria riation ions
cov coverin ring
the the
curren currentt oper operat atin ing g epe epen# n#it itur ures es an# an# the the capita outa!s. 5. &nume &numerat rate e the three three main source sources s of incom income e of oca government government units. Answer: )he )he main main sour source ces s of inco income me of oca oca government units are as foows: 1. )a )a revenues, revenues, fees an# charges. charges. %. Share from 8nterna 3eve 3evenue nue oections. oections. +. Share Share from ationa ationa eath eath.. )he source sources s of income income are further further cass cassifi ifie# e# into genera income ac acc cou oun nts an# specific income accounts. B. &numerate an# epain accounting for income.
the
metho#s
of
Answer: )he Answer: )he foowing accounting metho#s sha 'e a#opte# in recor#ing income: 1. Accrua =etho# > Accrua metho# of accounting sha 'e use# to recor# Share from 8nterna 3evenue oections in the 'oo6 'oo6s s of acco accoun unts ts.. Cpon Cpon rece receip iptt of the the otice of un#ing hec6 8ssue# from the Department of -u#get an# =anagement, Share from 8nterna 3evenue oections sha sha 'e ta6e ta6en up as Due from ationa Fove Fovernment rnment Agencies Agencies an# an# cre#i re#itte# to Share from 8nterna 3evenue oections . owever, ash in -an6 account sha 'e #e'ite# upon receipt of -an6 re#it A#vi A#vice ce as to rece receip iptt of the the Shar Share e from from 8nterna 8nterna 3eve 3evenue nue oecti oections ons regar#ess regar#ess of whether or not the otice of un#ing hec6 8ssue# has 'een receive# from the Department of -u#get an# =anagement. =anagement. %. =o#i #iffie ie# # Accr crua ua =et eth ho# > =o#ifie# accru accrua a meth metho# o# of acco accoun unti ting ng sha sha 'e use# for rea propert! taes* that is, 3ea Propert! rt! )a 3eceiva'e an# Specia &#uc #ucation ion )a 3eceiva iva'e sha 'e
esta'ishe# at the 'eginning of the !ear. )his in view of the nee# to recor# in the 'oo6 'oo6s s the the actu actua a rece receiv iva' a'e es s from from sai# sai# ta taes an# an# not not mere mere inco income me esti estima mattes from rea propert! taes. +. ash ash -as -asis is > ash ash 'asi 'asis s of acco accoun unti ting ng sha sha 'e use# use# for a a othe otherr tae taes, s, fees, ees, charges an# other revenues. @. Five Five at east east four four eam eampe pes s of other other receip receipts ts that ma! 'e recogni"e# '! govern government ment units. &pain 'rief!.
the
oca
Answer: 2ther receipts of the oca government Answer: units sha 'e comprise# of, 'ut not imite# to, the foowing: 1. -orr owings > -orrowings are procee#s of repa!a'e repa!a'e o'igation o'igations, s, genera! genera! with interest from the 'an6, nationa agenc!, another oca governm rnment unit, an# priva private te sector sector.. A A 'orrow 'orrowing ings s incurre# incurre# sha 'e recor#e# #irect! to the appropriate ia'iit! accounts. %. Sa Sae e of of Pr Prop oper ert! t!,, Pan Pantt an# &;u &;uip ipme ment nt > Sae Sae of prop propert! ert!,, pan pantt an# an# e;ui e;uipm pmen entt
refers to the procee#s from the sae of fie fie# # asse assets ts,, such such as: as: an# an#,, 'ui 'ui#i #ing ngs, s, e;ui e;uipm pmen ent, t, furnit furnitur ure e an# an# fit fitur ures es,, etc. etc. Simi Simia arr to comm commer erci cia a acco accoun unti ting ng,, the the appica'e asset accounts sha 'e cancee# from the 'oo6s upon #isposa. +. 3efun#
of
ash
A#vances
>
ash
a#vances for offic ficia trave sha 'e recor#e# as a receiva'e from the concerne# officia or empo!ee. 3efun#s ma#e sha 'e cre#ite# cre#ite# to the receiva'e receiva'e account previous! recor#e#. ash a#vances for saaries an# wages sha 'e recor#e recor#e# # as #e'its #e'its to the the accoun accountt ash Dis'ursing 2fficers , an# an! refun# sha 'e cre#ite# to the same account. 4. 3e 3ece ceip iptt of Per erfo forman rmance ceEE-i# i##e #ersI rsI -on -on#s #s > Simiar to nationa government accounting, performance 'on# poste# '! cont contrac racto torr or supp suppi ier er to guara guarant nt! ! fu fu an# an# fait faithf hfu u perf performa ormanc nce e of thei theirr wor6 wor6 ma! 'e in form of cash, certifie# chec6 or suret!. Performance 'on# in cash or certifie certifie# # chec chec6 6 sha sha 'e ac6n ac6now owe# e#ge ge# # throug through h the the issua issuanc nce e of offici officia a receip receiptt
an#
recor#e#
in
the
'oo6s
'!
the
accountant using a ourna &ntr! Loucher. 8n case of suret! 'on#, this is recogni"e# '! an ac6nowe#gment rece receip iptt to 'e issu issue# e# '! the the auth author ori" i"e# e# officia. . &numerat &numerate e the reasons reasons 'ehin# the a#optio a#option n of specia accounts of oca government government units. Answer:
Accounting
proce#ures
for
the
operations of the specia accounts a#opte# for the foowing purposes: 1. )o
#etermine
whether
the
are
income
generate# '! the pu'ic utiities or econ econom omic ic ente enterpr rpris ises es are are suff suffic icie ient nt to meet their respective operating costs. %. )o provi#e a#e;uate information as to the assets, ia'iities specia account. 9. hat are accounts<
the
an#
su'co#es
e;uit!
for
the
of
each
specia
Answer: )he foowing sha 'e the su'co#es for Answer: )he the specia accounts:
SP&8AH A2C)S
SC- 2D&
Fenera un# Proper
01
=ar6et 2peration
0%
Saughterhouse 2peration
0+
aterwor6s S!stem
04
&ectricit!, Hight an# Power S!stem
05
)eephone S!stem
0B
)o 3oa#s, -ri#ges an# erries
0@
)ransportation S!stem
0
ospita
09
Schoo
10
Sport enter
11
3ecreationa enter
1%
ousing Pro(ects
1+
onventionEonference enter
14
Par6ing Space
15
8ce Pant
1B
emeter!
1@
%0J Deveopment un#
1
0J Share from &nerg! Sources
19
Share from Deveopmen Deveopmentt of ationa eath
%0
Hoans
%1
8nterests
%%
-on# 8ssues
%+
10.&nume 10.&n umerat rate e an# an# epa epain in the cass cassifi ifica catio tion n of suppies or propert! propert !. Answer : Suppies or propert! rt! sha have the foowing cassification: a. &pen#a'e Suppies Suppies or Propert! Propert ! )hes )hese e are are arti artic ces, es, whic which h are are norma norma ! ! consume# in use within one !ear or converte# in the process of manufacture or constru struc ction ion, or tho those having ing a ife ife epect pectan anc c! of more more than than one one !ear !ear 'ut 'ut which sha have #ecrease# su'stantia! in vau vaue e afte afterr 'ein 'eing g put put to use use for on! on! one one !ear !ear.. & &es es are stati statione oner!, r!, fue, fue, spare parts, etc. &pen#a'e suppies are part part of the the main mainte tena nanc nce e an# an# oper operat atin ing g epenses of the Hoca Fovernment Cnit. '.
onepen#a'e onepen#a'e Suppies or Propert! )hese are artices, which are not consume sume# # in use an# or#in r#ina ari! ri! reta retain in
their origina i#entit! #uring the perio# of use, whose servicea'e ife is more than one !ear an# which a## to the assets of the government. &es are furniture, fitur fitures, es, transp transport ort e;uip e;uipme ment, nt, etc. etc. on on epen#a'e suppies or capita outa!s of HFC. c.
propert! rt!
are
onPersonne onPersonne Services )hese artices incu#e, 'ut not imite# to repa repair irin ing, g, ceani eaning ng,, re#e re#eco cora ratting, ing, an# an# furni furnish shin ing g of nece necess ssar ar! ! repa repair ir parts parts or othe ther suppie ies as part of the servi service ces s perfo rforme#. rme#. &a &es es are con contrac tracttua ua services i6e truc6ing, hauing, (anitoria, securit! an# reate# servic vices. on Personne services are charge# to maint maintena enance nce an# an# opera operati ting ng epen epenses ses of HFC.
An"$er" to ultiple Choice 5Chapter @6 1. , 2ne
of
the
'asic
features
of
the
Hoca
Fovernme rnmen nt Cnit is the onefu fun# conc oncept. ept. ow owever ever,, separa separate te fun# fun# accou account nting ing sha sha 'e #one when specifica! re;uire# '! aw or '! a #onor agenc! or when otherwise necessitate# '! circumstances su'(ect to prior approva of the the omm ommis issi sion on.. As re;ui re;uire re# # un#e un#err Sect Sectio ion n +0, +0, +09 +09 an# an# +10 +10 of the the Hoca Hoca Fov Fovernmen rnmentt o#e, separate 'oo6s sha 'e maintaine# for the Fenera un#, Specia &#ucation un# an# )rust un# , respective!. %. C ourna &ntr! Loucher &L/ sha 'e use# for a the whether
transactions of the cash receipts,
governme nment, cashEchec6
#is' #is'ur ursem semen ents ts,, or non nonca cash sh tran transa sact ctio ions ns.. 8t sha 'e prepare# re# '! the Accounting Cnit 'ase 'ase# # on tran transa sact ctio ion n #ocu #ocume ment nts s pres presen ente te# # an# sha 'e the 'asis of recor#ing the transactions in the appropriate (ournas. +. 9
ash receipt (ourna sha 'e use# to recor# a a co coec ecti tion ons s an# an# #epo #eposi sits ts repo reporte# rte# #uri #uring ng the month for the 3eguar Agenc! 'oo6s. )he sources of entries are the (ourna na entr! vouc vouche hers, rs, which which sha sha 'e prepar prepare# e# 'ase# 'ase# on the 3eports of oections oections an# Deposits. 4. A )he accounting unit of oca government units sha maintain the 'oo6s of accounts, such as, (ourna an# e#gers. 5. 9 )he trea treasu surer rers s an# an# #is' #is'ur ursin sing g offi office cers rs sha sha maintain their respective cash recor#s, such as, ash 'oo6 > ash in )reasur!, ash 'oo6 > ash in -an6, an# ash 'oo6 > ash A#vances. B. C hec6 #is'ursements (ourna sha 'e use# to recor# recor# chec chec6 6 pa!me pa!ments nts ma#e ma#e '! the cashie cashier r or #is'ursing officers. 3ecor#ing to this (ourna sha 'e 'ase# on the &Ls supporte# with pai# #is'ursement vouchers an# #upicate #upicate copies of chec6s chec6s iste# in the 3eport 3eport
of
hec6s
8ssue#
su'mitte#
'!
the
ashierEDis'ursing ashierEDis'ursing 2fficers. 2fficers . @. A 8n or#er to monitor aotments receive#, o'igations incurre rre#, As receive# an# utii"e#, pu'ic infrastruc ructures, #orma rmant account ounts, s, accou counts writ writtten off ff,, oa oans an# an# gran rants, among other, regi egistries sha 'e mainta intain ine# e# '! the concern cerne# e# governme rnment agencies. . A Section B1 of the FAS manua provi#es that i;u i;ui# i#at atio ion n repo report rt sha sha 'e prep prepar are# e# '! the the conc concer erne ne# # emp empo! o!e eesEo esEoff ffic icer ers s to i;u i;ui# i#at ate e cash a#vances for trave or for other purposes ecept those cash a#vances grante# 3eguarESpecia 3eguarESpecia Dis'ursing 2fficers.
to
9. 9 Section 5+ of the FAS manua provi#es that 3e;uis ;uisit itio ion n an# an# 8s 8ssu sue e Sip ip sha sha 'e use# use# to re;u re;ues estt for for supp suppi ies es an# an# mate materi ria as s that that are are carrie# on stoc6. 10.. C 10
Fran Frants ts an# an# #ona #onattions ions comi coming ng from from fore foreig ign n fun#ing institutions, other eves of government an# private institutionsEin#ivi#uas for for specif specific ic pro(ec pro(ectsE tsEpurpo purpose se sha sha accrue accrue to the )rust un#. )he e;uit! of the oca governmen rnmentt unit on pro(e ro(ec cts un#e n#er a trus trustt agre greement sha aso accrue rue to the )rust ust un#. 11.. A 11 Cn#er the FAS %00%/, Prior Perio# A#(u A#(ust stme ment nts s acco accoun untt is use# use# to reco recor# r# the the a#(ustment of prior !earsI transaction affe affect ctin ing g rev revenue nue an# an# epens penses es an# an# othe other r a#(us a#(ustme tments nts which which increas increase e or #ecrea #ecrease se the 3etaine# 2perating Surpus of the governm rnment. )he )he !earen# #e'it or cre#it 'aance of this account is cose# to 3etaine# 2pera peratting ing Surpu rpus s acco ccount. unt. ow owever, the the 3evise# ise# har hartt of Acco Accoun unts ts of 2A 2A irc ircu uar ar %01+ %01+0 00% 0% #ate #ate# # +0 anu anuar ar! ! %01+ %01+ no ong onger er recogni"es the Prior Perio# A#(ustment account. 8nstea#, the prior perio# a#(ustment is #irect! cre#ite# to the Fovernment &;uit! account.
2)&: )he )he
2A
ircuar
%01+00%
#ate#
anuar! nuar! +0, +0, %01+ %01+,, A#op A#opti tion on of the the 3evise# ise# hart hart of Acco Accoun unts ts for for ati ation ona a Fov Fovernme ernment nt Agencies, provi#es the revise# chart of accou accounts nts for for atio ationa na Fov Fovernmen ernmentt Agenc Agencies ies on!. Hi6ewise, the 2A ircuar o. %01400+ #ate #ate# # Apri Apri 15, 15, %014 %014 aso aso pro provi#es i#es that that the the hart of Accounts of F2s an# Hoca Fov Fovernment ernment Cnits Cnits HFC HFCs/ s/ an# an# its conve conversio rsion n to the ew hart of Accounts sha 'e covere# '! separate gui#eines* thus, pen#ing the new circuars for Hoca Fovernment Cnits, current circuars for accounting for HFC sha 'e use#. 1%.. C 1% Cpon receipt of the otice of un#ing hec6 8ssu 8s sue# e# from from the the Depa Departm rtmen entt of -u#g -u#get et an# an# =ana =anage geme ment nt,, Shar Share e from from 8nte 8nterna rna 3evenue nue oections sha 'e ta6en up as Due Due from from ationa Fovernment Agencies an# cre#ite# to Share from rom 8nte 8ntern rna a 3evenue oe oec ctio tions . owever, ash in -an6 account sha 'e #e'ite# upon receipt of -an6 re#it A#vice as to receipt of the Share from 8nterna 3evenue oe oect ction ions s regar#e regar#ess ss of whethe whetherr or not not the
otic otice e of un#ing #ing hec hec6 8ssue sue# has 'een receive# from the Department of -u#get an# =anagement. 1+. , 1+. Approva of #is'ursements '! the Hoca hief &ecutive himsef sha 'e re;uire# whenever oca fun#s are #is'urse#, ecept for reguar! recu recurrin rring g a#mi a#mini nist stra rati tive ve epen pense ses s such such as: as: pa!ros for reguar or permanent empo!ees, epenses teegraph
for
ight, water, teephone serv ices, remittances
an# to
governmen rnmentt cre# cre#it itor or agen agenc cies ies an# othe thers, rs, where the authorit! to approve ma! 'e #eegate#. 1& A )he )he peri perio# o#ic ic ph!s ph!sic ica a coun countt of inv inventor! ntor! of suppi suppies es or propert! propert! ever! ever! semest semester er sha sha 'e reporte# in the 3eport of the Ph!sica ount of 8nventor! 3P8/ an# sha 'e su'mitte# to the au#itor not ater than u! +1 an# anuar! +1 of each !ear for the first an# secon# seme semest ster ers, s, resp respec ecti tive ve! !.. hie hie the the ph!s ph!sic ica a count of propert!, pant pant an# e;uipment '! t!pe sha sha 'e ma#e ma#e annu annua a! ! an# an# reporte reporte# # on the the 3eport ort on the the Ph!sic sica ou ount of Prop ropert! ert!,,
Pan Pantt an# an# e;ui e;uipm pmen entt 3 3P PPP PP&/ &/ an# an# sha sha 'e su'mitte# to the au#itor anuar! +1 of each !ear.
not
ater
than
15. , 15. )he transfer or issuance of the e;uipment to the 2ffice of the =unicipa &ngineer is recogni"e# on! '! using the Ac6nowe#gment 3eceipt for the e;uipment. Chapter 10 – he Ne$ 9aranga. Accounting S."tem !ue"tion" # An"$er" 1. hat are the the 'asic fea feature tures s an# poicies poicies of of the new 'aranga! accounting accounting s!stem< Answer : )he 'asic features an# poicies of the new 'aranga! accounting s!stem are: a. Accounting =etho# )he 8PSAS-Is onceptua ramewor6 #eas with concepts that app! to genera purpose finan financia cia reportin reporting g un#er the accrua 'asis of accounting. Cn#er this metho#, transactions an# other events are
reco re cogn gni" i"e# e# in fi fina nanc ncia ia st sta atem emen ents ts wh when en the! occur an# not on! when cash or its e;ui e; uiva vae ent nt is re rece ceiv ive e# or pa pai# i#.. ) herefore, the transactions an# events are recor#e# in the the acco accoun unti ting ng recor recor#s #s an# an# reco recogn gni" i"e# e# in the the fina financ ncia ia stat statem emen ents ts of the the peri perio# o#s s to which the! reate. )he 8PSAScomprehe ehensive
has cash
aso issue# a 'asis 8PSASs that
incu#es man#ator! an# encourage# #iscosures #iscosures sections. )he cash 'asis 8PSASs encourages encourages an entit! entit! to vount vountar! ar! #iscos #iscose e accrua 'ase# information, athough its core fina financ ncia ia sta stateme tement nts s wi wi none noneth the ees ess s 'e prepare# un#er the cash 'asis of accounting. '. 3ec 3ecognition ognition of Hia'iit! Hia'iities sha 'e ta6en up on! for goo#s actua! #eivere# an# accepte# or services ren#ere# or upon suppiersEcre#itors.. suppiersEcre#itors
receipt ash
of 'is from receive# to
guarant! faithfu performance of an activit! sha 'e recor#e# as a ia'iit!. Suret! 'on#s sha not 'e recor#e# in the 'oo6s .
c. Purch rchase of Suppies an# =aterias an# Sma 8tems Purch rchase of supp uppie ies an# mat materias ias an# sma sma item items s with with servi service cea' a'e e ife ife of more more than than one !ear !ear,, i6e i6e stape staperr, punch puncher er,, ruer ruer, mechanica ica toos oos,, etc., tc., sha sha 'e #irec irectt! charge# to tra ran nsport rtiing
epense suppies
'aranga! sha 'e &pense$ account.
account. ost an# materias
charge#
to
of to
“Deiver!
#. ash A#vances ash a#va a#van nce for pa!me !ment of perso rsonne nne services sha 'e accounte# for as “A#vances for Pa!ro$* Pa!ro $* whie cash a#vance grante# for trave an# other specia time > 'oun 'oun# # un#e un#erta6 rta6in ing g sha sha 'e acco accoun unte te# # for for as “A#vances to 2fficers an# &mpo!ees$. e. Au#it Disaowances Au#it #isaowances sha 'e recor#e# on! when the! 'ecome fina an# eecutor!. f . -aranga! Accounts
-aranga! accounts sha 'e 6ept within the framewor6 Accounting
of the S!stem
ew Fovernment FAS/ chart of
accounts. g. Processing of )ransaction an# 3ecor#ing in the -oo6s Processing of transactions sha 'e #one at the the 'aran 'aranga ga! ! ev eve* wh whi ie e re reco cor#i r#ing ng in th the e 'oo6s 'o o6s thr throug ough h o ourna urna &nt &ntr! r! Louc uche herr sha sha 'e #one '! the it!E=unicipa accountant. )he )h e
fin ina ancia ia
reco re cor# r#s s
Fe Fen nera ra
ourna rna, ,
Fenera Fene ra He He#g #ger er,, Su Su's 'si# i#ia iar! r! He He#g #ger er// of th the e 'aranga!s sha 'e 6ept in the office of the it! E=unicipa it!E=uni cipa Accou Accountan ntantt . 3ecor#ing in the 'aranga! 'oo6s sha 'e 'ase# on the reports su'mitte# '! the -aranga! )reasurerE-aranga! 3ecor# Reeper 3eports 3eports an# an# #ocum #ocument ents s suppo supporting rting entri entries es in the reports sha remain with the -aranga! )reasurerE-aranga! 3ecor# Reeper in the -aranga! an# sha 'e ma#e avaia'e to the ommission an!time for eamination.
on
Au#it
h. ertifie ertifie# # 3egis 3egister ters s 8n accor#ance with the ew -aranga! Acco Accoun unti ting ng S!st S!stem em,, the the fo foow owing ing certifie certifie# # registers sha 'e use#: 1. ash 3eceipt 3egisters %. ash on an# an# in -an6 3egisters +. ash Dis'ursement 3egisters 4. hec6 Dis'ursement 3egisters 5. Pett! ash fun# 3egisters i. Stat Status us if Appr Approp opri riat atio ions ns,, omm ommit itme ment nts s an# an# -aances )he Status of Appropriations, ommitments an# an # -a -aa anc nces es of ea each ch 'a 'aran ranga ga! ! un un#e #err th the e cit!Em cit! Emun unic icip ipa ait it! ! sh sha a 'e co cons nso oi# i#at ate# e# '! the cit!Emunicipa -u#get 2fficer . (.. )ria -a ( -aance )he two twomon mone! e! coum coumn n tria tria 'aan 'aance ce sha sha 'e use#. 6. inancia inancia Stat Stateme ements nts )he )he
ew
-aran ranga!
Accounting
S!stem
re;u re;uir ires es the the prep prepar arat atio ion n of the the fo foow owin ing g financia statements: statements:
1. -aance
Sheet
on#ense#/ %. Stat tatement of
Detaie#
an#
8ncome come an# &p &pense nses
Detaie# an# on#ense#/ +. Statement of ash ows
Direct
=etho#/ 4. State Stateme ment nt of hange hanges s in Fov Fovernment ernment &;uit! )he it!E=unicipa accountant sha furnish the Sangguniang -aranga! an# the Au#i Au#ito torE rEAu Au#i #itt )eam Hea# Hea#er er with with fina financ ncia ia statements within thirt! +0/ #a!s after the cose cose of each month. H. Sche#ues Statements
Supporting
the
inancia
)he )he foo owing ing sch sche#ues es supp upportin rting the financia statements prepare# '! -aranga!s sha 'e use# 1. Sche Sche#u #ue e of Pu'i Pu'ic c 8nfra 8nfrastruc structur tures es an# 3eforestation Pro(ects %. Sche#u Sche#ue e of Accounts Accounts Pa!a' Pa!a'e e +. Sche#u Sche#ue e of Accounts Accounts 3eceiv 3eceiva'es a'es m.
&FAS
henever
possi'e,
the
use
of
the
&ec &ectr tron onic ic ew ew Fov Fovernmen rnmentt Acco Accoun unti ting ng S!stem stem at the it!E it!E= =unic unicip ipa ait! it! ev eve is encoura ourage ge to faciit iita ate the the rec recor#i or#ing ng of 'ara 'arang nga! a! tran transa sact ctio ions ns an# an# to hast hasten en the the consoi#ation of a 'aranga! statements statements an# reports. report s. %. Desc Descri ri'e 'e pan.
the the
'ara 'arang nga! a!
acco accoun unti ting ng
financia
s!st s!stem em
Answer: )he -aranga! Accounting S!stem Pan Answer: shows the accounting fow of 'aranga! transa transacti ction ons s in the 'oo6s 'oo6s maint maintain aine# e# '! the it!E= it!E=un unici icipa pa accou accounta ntant. nt. 8t starts starts with with the receipt of the certifie# registersEreports from the -aranga! 3ecor# Reeper on or 'efore the 5th #a! of the foowing foowing month, the recor#ing of the 'aran ranga! fina inancia ncia tran transa sact ctio ion ns in the the 'oo6s of the origina an# fina entr! an# the utimate conversion into financia information as pres resent ente# in the the fin financia ncia sta statemen ments. Presente# in the Accounting S!stem Pan are the foowing: foowing : 1. 3eceip 3eceipts ts an# an# Deposits Deposits %. Dis'urseme Dis'ursements nts ash ash or hec6s hec6s//
+. Pu'i Pu'ic c 8nfrast 8nfrastruct ructure ures s an# an# 3efo 3eforest restat ation ion Pro(ects 4. 3egi 3egist stri ries es of Pu' Pu'ic ic 8nfr 8nfras astru truct ctur ures es an# an# 3eforestation Pro(ects +. hat hat are are the the
ma(or ma(or finan financia cia trans transact action ions s of
'aranga!s< 'aranga!s < &pain 'rief!. Answer:
)he
new
Fovernm rnment
Accounting
S!stem for -aranga!s prescri'es the foowing ma(or categories of financia transactions: transactions : a/ Appropriations Appropriations an# ommitments Appropriations are amounts in the annua Appropriations are or suppementa 'u#get that are authori"e# '! o'igate# for
the the
Sanggunian to 'e un#erta6ing of a
particu particuar ar functi function, on, program, program, activi activit! t! or pro(ec pro(ect. t. )he approv approve# e# approp appropria riatio tions ns of 'aranga!s are covere# '! Appropriation 2r#inance FA2/ FA2/..
Fenera
ommitments are ommitments are amounts earmar6e# '! the 'aranga! arising from an act of a #u! authori"e# officia, which 'in#s the
'aran 'aranga ga! ! to the the imme imme#i #iat ate e or eventua ntua pa!ment of mone!. '/ 3eceipts an# Deposits 3eceipts r epresent epresent a coections in form of cash an# chec6s receive# '! the -aranga! for a given perio# suc such as as:: sha sh are in natio ion na ta ta es an# re rev venu nue es, -aranga! taes, other revenues an# other sources. Deposits represent mone! or e;uivaent receive# '! the 'an6
its for
safe6eeping an# for cre#it to a chec6ing, sav savings ings or time ime #epo eposit sit accoun countt of an agenc!. )he
-ar aran ang ga!
)rea easu sure rer r
sha
'e
resp respo onsi' si'e in han han#in ing co coe ectio tions of income an# other receipts of the -aran arang ga! an# the #eposit sit of the same with with Autho Authori" ri"e# e# Fov Fovernment ernment Deposi Depositor! tor! -an6 AFD-/, such as: Deveopment -an6 of the Phiippines, Han# -an6 of the Phiippines, an# Letera teran ns -an6 of the Phii iippin ppine es. ow o wever, ag agen enci cies es ma ma! ! se see6 e6 au auth thor orit it! !
from
=onetar!
-oar#
of
the
-an6o
Sentra Sent ra ng Pi Pii ipi pina nas s to #e #esi sign gna ate ot othe her r #epositor! 'an6s. c/ Dis'ursements Dis'ursements ref refer to a cas cashEc hEchec6 ec6 pai# out #uring a settement of
given
perio# for government
epen#ituresEpa!a'es. 8t aso represents the movement of cash from an AFD- or from from the -arang -aranga! a! )reas )reasurer urerEau Eautho thori" ri"e# e# #is' #is'ur ursin sing g offi office cerr to the the fina fina recip recipie ient nt.. &is &isti ting ng rues rues an#s an#s regu reguat atio ions ns re;u re;uire ire that a #is'ursements of pu'ic fun#s 'e supp suppor orte te# # '! #ocu #ocume ment nts s nece necess ssar ar! ! to prove their vai#it!, propriet!, an# egait!. #/ Supp Suppi ies es an# an# =ate =ateri ria as, s, Prop Propert! ert!,, pan pantt an# &;uipment, Pu'ic 8nfrastructuresE3eforestation 8nfrastructuresE3ef orestation Pro(ect 3e;uisition, procu ocurem rement, issuance, ph!s ph!sic ica a inv invento entor! r! an# an# oss oss of supp suppi ies es an# an# mate materi ria as s are are gov governe# erne# '! eis eisti ting ng gov government ernment rues rues an# an# reguat reguation ion.. &cept in emer erge genc nc! ! case ses, s, a pro roc cure rem men entt
sha
'e
covere#
'!
Approve#
Procur Proc urem emen entt Pr Prog ogram ram as re; re;ui uire# re# in 3A 914.. Proc 914 Procur urem emen entt of supp suppi ies es sha sha 'e charge rge# #irect! to =aintenance an# 2the 2therr 2per 2perat atin ing g &pe &pens nses es an# an# sha sha 'e recor#e recor#e# # using using the the appropr appropria iate te epen epense se accounts. Suppies, inspecte# '! 8nspection ommittee, sha 'e accepte# '! -aran -aranga! ga! )r )reasu easurer rer , who wi act as the Propert! 2fficer of the 'aranga! . )he cost of supp suppies ies an# mate materia rias s ac;ui ac;uire# re# through purchase sha 'e 'ase# on the invoice cost. cost . Simi Simia arr with with supp suppi ies es an# an# mate materi ria as, s, a a procurement of propert! rt!, pant an# e;uipm ipment ent sha ha 'e in ac acco cor# r#an ance ce wit ith h the re;uirements of 3A 914 , an# sha 'e insure# with FS8S. FS8S . A #eiveries sha 'e inspecte# '! the 8nsp 8nspecti ection on omm ommitte ittee e hea#e# '! -aranga! )reasurer with #esi sig gnate# 6ag aga awa# as mem' m'e e r, an# sha 'e accepte# '! the -aranga! )reasurer, who sha act as the propert! office officerr of the 'arang 'aranga! a!.. Procur Procureme ement nt of propert!, pant an# e;uipment an#
constru struct ctio ion n
of
pu'i u'ic c
inf infrast rastru ruct ctu ures res
sha 'e charge# against appropriation of capi capita ta out outa! a! an# an# sha sha 'e reco recor# r#e# e# in Propert! Propert!,, Pant Pant an# an# &;uip &;uipmen mentt 3egis 3egistr! tr! for contro an# monitoring purposes. )he cost of prop proper ert! t!,, pan pantt an# an# e;ui e;uipm pmen entt ac;ui ac;uire# re# throug through h purch purchase ase sha sha incu incu#e #e the purchase cost an# epenses incurre# in 'ringing the asset to its inten#e# oc ocation ion an# an# ma6e it operat rationa iona. . )he )he prop propert! ert!,, pan pantt an# an# e;ui e;uipm pmen entt sha sha 'e su'(ect to #epreciation using the straight ine i ne me meth tho# o#.. A resi#ua vaue of ten percent 10J/ of the cost sha 'e provi#e#. )he estimate# usefu ife of the PP& as prescri'e# '! 2A sha 'e use# in comp comput utin ing g the the rate rate of #epr #eprec ecia iati tion on.. 3ecipient of PP& sha 'e covere# re# '! Propert! Propert! Ac6now Ac6nowe#ge e#gement ment 3eceipt. 3eceipt. An! unservic unse rvicea ea' 'e e PP PP& & sh sha a 'e retu returne# rne# to the -aranga! )reasurer for the canceation of the Propert! Ac6nowe#gemen Ac6no we#gementt 3ece 3eceipt ipt an# sha 'e reporte# reporte# in the 8nv 8nvento entor! r! an# an# 8nspe 8nspect ction ion 3eport of Cnservicea'e Propert!.
8nfrastructures an# reforestation pro(ects which are for pu'ic use an# not for the ecusive use of the 'aranga! are consi#ere# pu'ic infrastructu infrastructureErefo reEreforesta restation tion pro(ects. pro(ects. )he cost cost of the the pro( pro(ec ects ts an# an# the the cumu cumua ati tive ve cost of repairs an# maintenance sha 'e monitore# using the appropriate registries such as, 'ut not imite# to: 1. 3egistr! of Pu'ic 8nfrastructure 3oa#s, highwa!s an# 'ri#ges
>
%. 3egistr! of Pu'ic 8nfrastructure Par6s, pa"as an# monuments
>
+. 3egistr! 3egistr! of 3efo 3eforesta restation tion Pro(ec Pro(ects ts 4. hat hat are are the the five five fun# fun#s s to 'e recor recor#e #e# # in the 3egistr! 3egistr! of Appropriat Appropriations ions an# ommitments ommitments of 'aranga!s< Answer: )he five fun#s to 'e maintaine# in the Answer: 3egistr! of Appropriations an# ommitments of 'aranga!s are: 1. %.
Fenera un# %0J Deveopment Deveopment un#
+. aamit! un# 4. Sanggunia Sangguniang ng Ra'ata Ra'ataan an un# un#
5. Fen#er Fen#er an# Deve Deveopm opment ent un# un# 5.&pain 'rief! the appropriations commitments commitments transaction of 'aranga!s.
an#
Answer: Sect Sectio ion n %9, %9, par par 1 of the the ons onsti titu tuti tion on provi#es that: o mone! sha 'e pai# out of the treasur! ecept in pursuance of an appr approp opri riat atio ion n ma#e ma#e '! aw aw. Haws Haws,, rues rues an# an# reguations of the government provi#e that a #is'u #is'ursem rsement ents s of pu'i pu'ic c fun#s, fun#s, ece ecept pt those those receive# for specific purpo rposes, sha 'e covere# '! an approve# Fenera Appropriation 2r#ina 2r#inance nce FA2/ authori"ing appropriation for the annua 'u#get, the epen#itures items of which sha 'e in accor#ance Phiip iippi pin ne Fovernme rnmen nt hart hart of
with the Accou counts
un#e un#err FAS FAS.. Cne Cness ss auth author ori" i"e# e# '! the the DD-= = an# covere# re# '! su'se;uent Sangguniang -aranga! 3esoution approving the appropriation, appropriation, in no case sha commitments ecee# the approve# appropriation. harges #e#uctions/ against the appropriate# fun#s n#s sha sha 'e 'ase# se# on the the commit mitment ents ma#e '! the -aranga! as shown in the Dis'ursement Louchers, Pa!ro for personne
services, servic es, on ontra tracts cts or Pur Purch chase ase 2r#e 2r#ers, rs, an an# # Purchase 3e;ues Purchase 3e;uests ts.. &pe &pens nses es for for perso personn nne e servic services es,, main mainte tena nanc nce e an# an# othe otherr oper operat atin ing g epens penses es,, an# an# fina financ ncia ia epens penses es sha sha 'e charge arge# # agai agains nstt resp respec ecti tiv ve appr approp opri ria ation* ion* whie investments, investments , purchase of propert!, pant an# an# e;ui e;uipm pmen ent, t, an# an# cons constr truc ucti tion on of pu' pu'ic ic infr infras astr truc uctu ture res s an# an# refo refore rest sta ation tion pro( pro(ec ects ts sha sha 'e charge arge# # agai agains nstt appr approp opri riat atio ion n for for capita outa!. outa! . B.&pain
'rief!
the
receipt
an#
#eposit
transaction of 'aranga!s. Answer:) Answer: )he
-aranga!
)reasurer
sha
'e
responsi'e in han#ing coections of income an# an# othe otherr rece receip ipts ts of the the -ara -arang nga! a! an# an# the the #eposit of the same with Authori"e# Fovernment Depositor! -an6 AFD-/, such as: Dev Deveopm opmen entt -an6 -an6 of the the Phi Phiip ippi pine nes, s, Han# Han# -an6 of the Phiippines, an# Leterans -an6 of the Phiippines. owever, agencies ma! see6 auth author orit it! ! from from =one =oneta tar! r! -oar -oar# # of the the -an6 -an6o o Sentra
ng
Piipinas
#epositor! 'an6s.
to
#esignate
other
A coections sha 'e ac6nowe#ge# '! the issuance of a prenum'ere# 2fficia 3eceipt or its e;uivaent i6e 3ea Propert! )a 3eceipt an# ommu mun nit it! ! )a er erti tiffic ica ate su su' '(e (ec ct to pro rope perr cus usto to# #!, ac acc cou oun nta ta'i 'ii itt! an# au#i #itt, which sha 'e secure# from the it!E=unicipa )reasurer. A coec ecttions ions '! the the -aran aranga ga! ! )reasurer for the -aranga! sha 'e reporte# in the the Sum Summa mar! r! of o oec ectio tions ns an an# # De Depos posits its,, an# sha 'e #eposite# with AFD- #ai! or not ater than the foowing 'an6ing #a!. @. &nume &numerat rate e the 'asic 'asic re;uir re;uireme ements nts appic appica' a'e e to a casses of 'aranga! #is'ursement. Answer : -asi -asic c re;u re;uir irem emen ents ts app appic ica' a'e e to a a casses casses of 'aranga! #is'ursements are: a/ &iste isten nce of appr approp oprriat iation ion cover the epenses.
suff suffic icie ien nt
to
'/ Hegai Hegait! t! of the the epen epenses ses an# in conf conformit ormit! ! with rues an# reguation reg uations. s. c/ App Approv rova of the epense enses s '! the Punong -aranga!. #/ Su'mis 'miss sion ion of
#ocu ocumenta entar! r!
evi#e i#ence
esta'ish the vai#it! of the epenses. epenses.
to
. hat
are
the
registries
that
sha
'e
maintaine# for 'aranga! #is'ursements< Answer:
)he
foowing
registries
sha
'e
maintaine# for 'aranga! #is'ursements: 1. hec6 hec6 Dis'ursemen Dis'ursements ts 3egister 3egister %. Pett! Pett! ash ash un# un# 3egiste 3egisterr +. ash Dis'urseme Dis'ursements nts 3egis 3egister ter 4. ash on on an# an# an# in -an6 -an6 3egister 3egister 9. hat are the two mo#es of #is'ursement appica'e to 'aranga!s< &pain 'rief!. 'rief!. Answer:
=o#es
of
#is'ursements
cassifie# into two, name!: 1./ -! chec6 omme mmercia rcia
ma!
chec6s
'e for
#is'ursements is covere# '! #eposit with AFD-. )he chec6 sha 'e signe# '! the -ara -arang nga! a! )reas reasure urerr an# an# coun counte tersi rsign gne# e# Punong -aranga!. %./
-!
cash
through
-aranga!
)reasurerEAccounta' )reasurerEAccounta'e e 2fficer/ ash ash a#va a#van nce was give iven to -ara -aran nga! ga! )reas )reasure urerEA rEAcco ccount unta' a'e e 2ffice 2fficerr an# an# sha sha 'e use# use# soe soe! ! for for pa!m pa!men entt of saa saari ries es,,
hono honorar raria ia,, an# an# othe otherr ao aow wance ance #ue #ue the the 'aranga! officias an# empo!ees. empo!ees. Dis'ursements ma#e '! pett! cash custo#ian out of his pett! cash fun#. )he pett! cash fun# sha 'e maintaine# using the imprest s!stem. 10.& 10.&p pa ain in 'rie 'rief f! ! the the acco accoun unti ting ng for for supp suppi ies es an# materias. Answer: 3e;u 3e;uis isit itio ion, n, proc procur urem emen ent, t, issu issuan ance ce,, ph!s ph!sic ica a inv invento entor! r! an# an# oss oss of supp suppi ies es an# an# materias are governe# '! eisting gov governmen rnmentt rue rues s an# an# regu regua ati tion on.. &c &cept ept in emer emergen genc! c! case cases, s, a a proc procur urem emen entt sha sha 'e covere# '! Approve# Procurement Program as re;uire# in 3A 914. Procurement of suppies sha 'e charge# #irect! to =aintenance an# 2ther 2perating &penses an# sha 'e recor#e# using the appropriate epense accou accounts nts.. Suppi Suppies, es, inspe inspecte cte# # '! 8nspe 8nspecti ction on omm ommit itte tee, e, sha sha 'e acce accept pte# e# '! -ara -arang nga! a! )reasurer, who wi act as the Propert! 2fficer of the 'aranga!. )he cost of supp suppi ies es an# an# materias ac;uire# through purchase sha 'e 'ase# on the invoice cost. cost .
8ssu 8s suan ance ce of supp suppi ies es an# an# mate materi ria as s sha sha 'e covere# '! an approve# 3e;uisition an# 8ssue Sip. )he rec recip ipie ient nt of sm sma a it item ems s wi with th mo more re than one !ear ife sha 'e responsi'e for its up6ee up6 eep p #ur #uring ing the estimat estimate# e# if ife e of th the e ite item m an# sh an# sha a 'e is issu sue# e# an 8n 8nv vent ntor! or! u ust sto# o#ia ian n Sip. 11. &numerate the reports that sha 'e prepare# for propert!, pant an# e;uipment of 'aranga!s. Answer : )he foowing reports sha 'e prepare# for Prop Proper ert! t!,, Pan Pantt an# an# &;ui &;uipm pmen entt PP& PP&// of 'aranga!s: 1. %. +.
8nventor! an# 8nspection Cnservicea'e Propert!
3eport
of
3eport on on th the Ph Ph!sica o ount of of Pro Propert! rt! 8nspection an# Acceptance 3e 3eport
1%. hat are the two t!pes of tria 'aance< Answer : )he two t!pes of )ria )ria -aance are: 1. Pre Preosin osing g )ria )ria -aance -aance 8t is prepare# after a the a#(usting entries have 'een recor#e# in the Fenera ourna
an# the accounts are poste# to the Fenera He#ger an# respective Su'si#iar! He#ger. He#ger. %. Po Post stosin osing g )ria )ria -aance 8t is prepare# re# at !earen# after a the cosing (ourna entries have 'een recor#e# in the Fenera ourna an# the accounts are poste# to the Fenera He#ger. 1+. &num numera erate the the fina inancia ia sta stateme ements an# supporting sche#ues sche#ues for 'aranga!s. Answer:
)he
financia
statements
an#
supporting sche#ues for 'aranga!s are: 1. -aan -aance ce shee sheett %. Statem Statement ent of income an# an# epens epenses es +. Statem Statement ent of of cash fow fows s 4. Statem Statement ent of net assetsE assetsEe;ui e;uit! t! 5. otes otes to financia financia statem statements ents B. Sche#u Sche#ue e of pu'ic infrastructu infrastructures res @. Sche#u Sche#ue e of reforesta reforestation tion pro(ect pro(ects s . Sche#u Sche#ue e of accounts accounts receiva' receiva'e e 9. Sche#u Sche#ue e of accounts accounts pa!a' pa!a'e e 14.&numerate the #uties an# responsi'iities of the cit!Emunicipa accountant.
Answer:
)he
foowing
responsi'iities accountant:
are
of
the
the
#uties
an#
cit!Emunicipa
a/ =aintain the Fenera ourna rna, Fenera He#ger He#ger,, Su'si#ia Su'si#iar! r! He#gers, He#gers, an# 3egistri 3egistries es of Pu'ic 'ic 8nf 8nfrast rastru ruct ctu uresE resE3 3eforest resta ation ion Pro( Pro(ec ects ts for for each each of the the 'aran 'aranga ga!s !s un#e un#er r the cit!Emunicipait!. '/ Prepare ourna &ntr! Loucher to recor# the financ financia ia transa transacti ctions ons of 'arang 'aranga!s a!s 'ase# 'ase# on the the certi certifi fie# e# regi regist ster ers s an# an# supp suppor orti ting ng #ocuments su'mitte# 3ecor# Reeper. Reeper.
'!
the
-aranga!
c/ 3eco 3ecor# r# the the ourna ourna &ntr! &ntr! Louche uchers rs in the the Fenera ourna an# post (ourna entries to the Fenera He#gers.
He#gers
an#
Su'si#iar!
#/ Prepare the re;uire# month! an# !earen# )ria ia -aa -aanc nces es,, ina inanc ncia ia Stat Statem emen ents ts an# an# reportsEsche#ues for each of the 'aranga!s.
e/ Prepare an# su'mit the -an6 3econciiation Statement to 2A au#itorEau#it team ea#er concerne#. f/ onsoi#ate the !earen# tria 'aances an# financia statements an# reportsEsche#ues of the 'aranga!s. g/ Su'mit
month!
an#
!earen#
'aran ranga!
in#ivi#ua financia reports to the Sangguniang -aranga!, an# the printe# an# #igita #igita copies copies of the consoi# consoi#ate ate# # !earen !earen# # tria tria 'aa 'aanc nces es,, fina financ ncia ia sta stateme tement nts s an# an# reportsEsche#ues of the 'aranga!a together with those of the cit!Emunicipait! to FA=8 =8S2 2A an# to the the au#ito itorEau rEau#i #itt team ea#er concerne#.
An"$er" to ultiple Choice 5Chapter 106 1. A Purchase of suppies an# materias an# sma items with servicea'e ife of more than one !ear !ear, i6e i6e staper staper,, puncher puncher,, ruer, ruer, mechan mechanica ica toos, etc., sha 'e #irect! epense account. ost of
charge# to transporting
supp suppi ies es an# an# mate materi ria as s to 'aran 'aranga ga! ! sha sha 'e charge# to “Deiver! &pense$ account. %. 9 )he 8PSA 8PSASS-Is Is onc oncep eptu tua a rame ramewo wor6 r6 #ea #eas s with concepts that app! to genera purpose financia reporting un#er the accrual 4a"i" of accounti accounting. ng. Cn#er Cn#er this metho#, metho#, transact transactions ions an# other events are recogni"e# in financia sta statements whe when the the! occur an# not on! when when cash cash or its its e;ui e;uiva vae ent nt is rece receiv ive e# or pai#. )herefore, the transactions an# events are are recor recor#e #e# # in the the acco accoun unti ting ng recor recor#s #s an# an# recogni"e# in the financia statements of the perio#s to which the! reate. )he 8PSAS- has aso issue# a comprehensive cash cash 'asis 'asis 8PSASs 8PSASs that that incu incu#es #es man#a man#ato tor! r! an# an# enco encour urag age# e# #isc #iscosur osures es sect sectio ions ns.. )he )he
cash cash 'asi 'asis s 8PSA 8PSASs Ss enco encour urage ages s an enti entit! t! to vountar! #iscose accrua 'ase# information, ath athou ough gh its its core core fina financ ncia ia stat statem emen ents ts wi wi nonetheess 'e prepare# un#er the ca"h 4a"i" of accounting. )herefore Accrua accounting. +. C ash
a#vance
for
an#
ash
pa!ment
of
'asis
of
personne
services sha 'e accounte# for as “A#vances for for Pa!ro Pa!ro$ $** whie whie cash cash a#van a#vance ce grante# grante# for for trave an# un#erta6ing
other sha
specia time > 'oun# 'e accounte# for as
“A#vances to 2fficers an# &mpo!ees$. 4. C Proc Proces essi sing ng of tran transa sact ctio ions ns sha sha 'e #one #one at the 'aran ranga! ev eve* whie hie rec recor#i or#in ng in the the 'oo6s through ourna &ntr! Loucher sha 'e #one '! the it!E=unicipa accountant. 5. C Section %9, par 1 of the onstitution provi#es that: o mone! sha 'e pai# out of the treasur! ecept in pursuance of an appr approp opri riat atio ion n ma#e ma#e '! aw aw. Haws Haws,, rues rues an# an#
reguations of the government provi#e that a #is'u #is'ursem rsement ents s of pu'i pu'ic c fun#s, fun#s, ece ecept pt those those receive# for specific purpo rposes, sha 'e covere# '! an approve# Fenera Appropriation 2r#inance FA2/ authori"ing appropriation for the annua 'u#get, the epen#itures items of which sha 'e in accor#ance with the Phiip iippi pin ne Fovernme rnmen nt un#er FAS.
hart hart
of
Accou counts
B. A )he Fener Fenera a un# un# of 'arang 'aranga!s a!s is compo compose# se# of personne services, maintenance an# other operating epenses, capita outa!, an# financia epenses, which are recor#e# in the resp respe ectiv tive 3egis egistr tr! ! of App Approp ropria riation ions an# an# ommitments. @. , &penses for personne services, serv ices, maintenance an# an# other other operat operating ing epe epense nses, s, an# an# financ financia ia epenses sha 'e charge# against respective appropriation* whie investments, purchase of propert!,
pant
an#
e;uipment,
an#
constru struc ctio tion of pu'i u'ic c inf infrast rastru ruct ctu ures res an# reforestation pro(ects sha 'e charge# agains againstt appropr appropria iatio tion n for for capita capita outa outa! !. )he
'aan 'aance ce of appropr appropria iatio tions ns for for apita apita 2uta! 2uta!,, %0J Deveopm opmen entt un#, an# Sanggun ggunia iang ng Ra'ataan un# sha 'e vai# unti fu! spent or unti unti the the pan panne ne# # acti activi vit! t! is comp compe ete te#. #. -aan -aance ces s at !ear !earen en# # of other other approp appropria riati tions ons sha revert to unappropriate# status. . A )he -aranga! )reasurer sha 'e responsi'e in han# han#i ing ng co coec ecti tion ons s of inco income me an# an# othe other r rece receip ipts ts of the the -ara -arang nga! a! an# an# the the #epo #eposi sitt of the same with Authori"e# Fovernment Depositor! -an6 AFD-/, such as: Dev Deveopm opmen entt -an6 -an6 of the the Phi Phiip ippi pine nes, s, Han# Han# -an6 of the Phiippines, an# Leterans -an6 of the Phiippines. owever, agencies ma! see6 auth author orit it! ! from from =one =oneta tar! r! -oar -oar# # of the the -an6 -an6o o Sentra ng Piipinas to #esignate other #epositor! 'an6s. 9. A re#it memo receive# from the 'an6 for #irect remittance ma#e '! Hoca Fovernment Cnits HFC/
or
the
Department
of
-u#get
an#
=ana =anage geme ment nt for for the the -aran -aranga ga! ! shar share e in rea rea propert! ta or the interna revenue aotment, respe respecti ctive ve! !,, sha sha 'e recor# recor#e# e# #irect #irect to the the
ash on an# an# in -an6 3egister an# in the ash ash 3eceip ceipts ts an# an# Depo Deposi sits ts 3egis egiste terr. )he )he HFC or the D-= ma6ing the #irect remittance sha furnish the -aranga! a cop! of he a#vice for information an# counterchec6ing with the cre#it memo receive# from the 'an6. 10. , )he pett! cash fun# sha 'e maintaine# using the imprest s!stem. )he amount of the pett! cash fun# sha 'e #etermine# '! the Sangguniang -aranga! 'ut not to ecee# %0J of the fun#s avaia'e an# to the cre#it of the -aranga! )reasurer )reasurer Sec. ++4 '/ 3A @1B0/. 11. C 11. &cept in emergenc! cases, a procurement sha sha 'e cov covere# '! Appr Approv ove# e# Proc Procur urem emen entt Program as re;uire# in 3A 914. Procurement of suppies sha 'e charge# #irect! to =aint =aintena enance nce an# 2ther 2ther 2perat 2perating ing &pen &penses ses an# an# sha sha 'e recor recor#e #e# # usin using g the the appr approp opri riat ate e epens pense e acco accoun unts ts.. Supp Suppi ies es,, insp inspec ecte te# # '! 8nspe 8nspecti ction on ommit ommittee tee,, sha sha 'e accept accepte# e# '! -aranga! )reasurer, who wi act Propert! 2fficer of the 'aranga!. 'aranga!.
as
the
1%.. , 1% )he 'u#get officer sha consoi#ate the Statem Statement ent of Appropriat Appropriations ions,, ommitme ommitments nts an# -aa -aanc nces es of each each 'ara 'arang nga! a! for for the the five five fun# fun#s, s, such as: Fenera un#, %0J Deveopment un#, aam aamit! it! un# un#,, Sangg Sanggun unian iang g un#, un#, an# Fen#er Fen#er an# Deveopment un#. )he )he 'u#get office icer, i6ewise, su'mit the onsoi#ate# Statement of Approp Appropria riatio tions, ns, ommit ommitme ments nts an# -aan -aance ces s of a 'arang ranga a!s un#er the the cit!E it!Emu mun nicip icipa ait it! ! FA=8S2A through the au#itorEau#it tea
to
