NEW GOVERNMENT ACCOUNTING SYSTEM (NGAS)

NEW GOVERNMENT ACCOUNTING SYSTEM

Pursuant to the Commission on Audit Circular No. 2001-004 dated October 30, 2001, all government agencies were prescribed to use the New Government Accounting System (NGAS) effective January 1, 2002. The NGAs is a simplified set of accounting concepts, guidelines and procedures designed to ensure correct, complete and timely recording of government financial transactions, and productions of accurate and relevant financial reports.

GOVERNMENT ACCOUNTING -encompasses the process of analyzing, recording, classifying, summarizing and communicating all transactions involving the receipt and disposition of government funds and property, and interpreting the results thereof. (Sec.109, PD 1445)

OBJECTIVES OF GOVERNMENT ACCOUNTING(Sec. 110, PD 1445) 1. produce information concerning past operations and present conditions;

2. provide a basis for guidance for future operations;

3. provide for control of acts of public bodies and officers in the receipt, disposition and utilization of funds and property; and

4. report on the financial position and the results of operation of government agencies for the information of all persons concerned.

GENERALLY ACCEPTED GOVERNMENT ACCOUNTING PRICIPLES(Sec. 112, PD 1445)

Accounts of an agency shall be kept in such detail as in necessary to meet the needs of the agency and at the same time be adequate to furnish the information neededHighest standards of honesty, objectivity and consistency shall be observed.The government accounting system shall be on a double entry basis with the general ledger in which all financial transactions are recorded.The chart of accounts for government agencies shall be prescribe by COA.

GENERALLY ACCEPTED GOVERNMENT ACCOUNTING PRICIPLES(Sec. 112, PD 1445)To permit effective budgetary control and to establish uniformity in financial reports, accounts shall be classified in balanced fund groups. The group for each fund shall include all accounts necessary to set forth its operation and condition. All financial statements shall follow this classification

Common terminology and classification shall be used consistently throughout the budget, the accounts and the financial reports.

The general accounting system shall include the budgetary control accounts for revenues,expenditures, and debt, as provided by PD 1177

BUDGETARY AND ACCOUNTING SYSTEMS

Allotment Release Order (ARO) - This is a formal document issued by the Department of Budget and Management to the head of the agency containing the authorization, conditions and amount of an agency allocation. This maybe in the form of: a. Agency Budget Matrix b. Special Allotment Release Order

RECORDING OF ALLOTMENTS Upon receipt of the approved ABM and ARO, the designated Officer shall record the allotment in the respective registries through the Allotment and Obligations Slips (ALOBS). Separate registries shall be maintained for the four allotment classes by Program/Project/Activity (P/P/A), to wit:1.Registry of Allotment and Obligations Personal Services (RAOPS)2.Registry of Allotment and Obligations Maintenance and Other Operating Expenses (RAOMO)3.Registry of Allotment and Obligations - Capital Outlay (RAOCO)4.Registry of Allotment and Obligations Financial Expenses (RAOFE)

REGISTRY OF ALLOTMENTS AND OBLIGATIONSPERSONAL SERVICES (RAOPS)_________________Agency PPA : ________ Sheet No. : _________

DateReferenceAccountCodeAllotment ReceivedObligationIncurredBalance

REGISTRY OF ALLOTMENTS AND OBLIGATIONSMAINTENANCE AND OTHER OPERATING EXPENSES (RAOMO)_________________Agency PPA : ________ Sheet No. : _________

DateReferenceAccountCodeAllotment ReceivedObligationIncurredBalance

REGISTRY OF ALLOTMENTS AND OBLIGATIONSCAPITAL OUTLAY (RAOCO)_________________Agency PPA : ________ Sheet No. : _________

DateReferenceAccountCodeAllotment ReceivedObligationIncurredBalance

REGISTRY OF ALLOTMENTS AND OBLIGATIONSFINANCIAL EXPENSES (RAOFE)_________________Agency PPA : ________ Sheet No. : _________

DateReferenceAccountCodeAllotment ReceivedObligationIncurredBalance

ACCOUNTING FOR OBLIGATION Obligation Defined refers to a commitment by a government agency arising from an act of a duly authorized official which binds the government to the immediate or eventual payment of a sum of money. The agency is authorized to incur obligations only in the performance of activities which are in pursuits of its functions and programs authorized in appropriation acts/laws within the limit of the ARO. (Sec. 14, Vol. I, NGAS)

Obligations shall be taken up in the Registries through the Allotment and Obligations Slip (ALOBS).

DISBURSEMENT

Disbursement Defined Disbursements constitute all cash paid out during a given period either in currency (cash) or by check. It may also mean the settlement of government payables/obligations by cash or by check. It shall be covered by Disbursement Voucher (DV)/Petty Cash Voucher (PVC) or payroll. (Sec. 27, Vol. 1, NGAS Manual)Disbursement System The Disbursement System involves the preparation and processing of disbursement voucher (DV); preparation and issuance of check; payment by cash; granting, utilization, and liquidation/replenishment of cash advances.

BASIC REQUIREMENTS FOR DISBURSEMENTS (Sec. 28, Vol. 1, NGAS Manual)

Existence of lawful and sufficient allotment certified as available by the Budget Officer;

Existence of a valid obligation certified by the Chief Accountant/Head of Accounting Unit;

Legality of transactions and conformity with laws, rules and regulation;

Approval of the expense by the Chief of Office or by his duly authorized representative; and

Submission of proper evidence to establish the claim.

CLASSIFICATION OF EXPENDITURES a. Current Operating Expenditures refer to appropriations for the purchase of goods and services for current consumption or for benefits expected to terminate within the fiscal year.

Current Operating Expenses are classified into:1. Personal Services 2. Maintenance and Other Operating Expensesb. Capital Outlays refer to appropriations for the purchase of goods and services, the benefits of which extend beyond the fiscal year and which add to the assets of government, including investments in the capital of government-owned and controlled corporations and their subsidiaries as well as investments in public utilities such as public markets and slaughter houses.

CLASSIFICATION OF EXPENSES a.Personal Services (PS) include basic pay, all authorized allowances, bonus, cash gifts, incentives and other personnel benefits of officials and employees of the government.b.Maintenance and Other Operating Expenses (MOOE) these accounts include expenses necessary for the regular operations of an agency like, among others traveling expenses, training and seminar expenses, water, electricity, supplies expense, maintenance of property, plant and equipment, and other maintenance and operating expenses.c. Financial Expenses (FE) these accounts include bank charges, interest expense, commitment charges, documentary stamp expense and other financial charges. It also includes losses incurred relative to foreign exchange transactions and debt service subsidy to GOCCs.

UnitDPRMCOADC Fiscal DivFS/14th1352467981011122 daysMOL 3 days1/2 day1 day1/2 day2-3 daysa. Submission of Supporting Documents b. Preparation of DV & review of supporting documents c. Preparation of Memo for DPRMExamination/processing of DVReview necessary requirements & request of fund release to DCIssuance of NFAPreparation of ALOBS/funding of DVCertifies the ALOBS for ObligationPre-AuditIssuance of NCAJournalization/certifies the correctness of chargesPreparation/issuance of checkCounter-signing of check of Ex-O/DDC/DCSigning & release of checkReview/recording of abstractPost AuditPay & Allowances ClaimsDC Acctg DivDC Budget DivDC Mgt Div1 day1 day1 day1/2 day14131 hour

DOCUMENTARY REQUIREMENTS

First SalaryAppointment duly approved by appointing authorityOath of OfficeStatement of Assets and LiabilitiesCertificated of service or daily time recordCertificate of assumption

Promotions and Salary DifferentialsApproved appointment or notice of salary adjustmentCertificate of service or daily time recordCertificate of assumption/duty statusPayslip

Terminal Leave

Approved application for leaveComplete service recordClearance from money, property and legal accountabilityCopy of last appointmentCommutation order and certification of exigency of service

Lump-sum/Retirement Pay

Retirement OrderService RecordCertificate of last paymentMoney/property clearanceNon-pending case clearance from IAS/RIAS; Napolcom; Ombudsman Statement of assets and liabilitiesLatest salary adjustment/promotion orderCertification of deletion of CFC from Finance Center

Replacement Clothing Allowance Unit EndorsementOrder of EntitlementCertificate of Clothing SettlementStatement of ServiceAbsorption /Appointment OrderCertificate of Duty Status

Reimbursement of Hospitalization

Unit IndorsementApproved Report of Adjudication BoardCertificate of Duty Status from PAISCertificate of Non-payment signed by the Chairman Regional Adjudication Board (pers assigned with PROs)Official Receipt (for Medicines)Photocopy of PNP IDLetter Request from ClaimantCS Verification

Other Collaterals Allowances

Unit EndorsementOrder of EntitlementCertificate of Duty StatusRoster of Personnel (in case of Cash Advances

End UserAD, DCBD, DCMD, DCFS/14thFD, DC1362457981011121 day1 day1 day1 to 2 days10 min/claim1 day1 to 2 days1 dayPO/WOCertifies availability of funds/signature of C, ADPreparation of ALOBSCertification of ALOBSPre-Audit (ICIS)Request for inspection for the deliveryInspectionProcessing of DVPre-Audit of DV (CES)N C AJournalization Exam of DV Final ExamIssuance of checks DC countersign D,FS sign ReleasingM O O E

Travel Domestic

Travel orderApproved Itinerary of TravelCertificate of AppearanceCertificated of Travel CompletedTicketsNote: For Foreign travels, the requirements are the same as enumerated above except that the travel authority would come from the SILG or Office of the President.

Training and Seminar Expenses

Memorandum/Directive of SeminarContractOriginal InvoiceDelivery ReceiptList of ParticipantsPNP Accreditation/Phil GePSCertificate of Business

Water/Electricity/Telephone Expenses

Original Statement of Account Rent ExpenseContractStatement of accountsCertificate of Liability from the End-userOfficial Receipt in case of reimbursements

Purchases or Printing of FormsRequisition and Issue Slip (RIS)Supply Availability Inquiry (SAI)Purchase Request (PR)Reasonableness of PriceCertificate of Inspection and Acceptance ReportManagement Inspection ReportOriginal InvoiceOriginal Delivery ReceiptPurchase OrderPNP Accreditation/Phil GePSCertificate of Business Name

PURCHASE OF SUPPLIES

Requisition and Issue Slip (RIS)Supply Availability Inquiry (SAI)Purchase Request (PR)Reasonableness of PriceCertificate of Inspection and Acceptance ReportManagement Inspection ReportOriginal InvoiceOriginal Delivery ReceiptPurchase OrderPNP Accreditation/Phil GePSCertificate of Business Name

EMERGENCY PURCHASE

Canvass papersAt least 3 price quotations from bonafide dealersCertificate of emergency purchasePURCHASE THRU EXCLUSIVE DISTRIBUTIORS

Certificate of exclusive distributorshipCertificate that there are no sub-dealers selling at lower prices and that no suitable substitute are availablePUBLIC BIDDING

Abstract of bids supported by winning bidders offer and bid tenders of other participants Letter of award/acceptancePerformance bond of winning bidder

Repair of Equipment/Vehicle

Notice to ProceedCertificate of CompletionOriginal InvoiceOriginal Delivery ReceiptGuaranty of the RepairmanCertificate that damage is due to fair wear & tear and not to negligenceWork OrderReport of Waste MaterialManagement Inspection ReportInspection & Acceptance ReportPNP Accreditation/Phil GePSCertificate of Business Name

Repair of Equipment/Vehicles

Notice to ProceedCertificate of CompletionOriginal InvoiceOriginal Delivery ReceiptGuaranty of the RepairmanCertificate that damage is due to fair wear & tear and not to negligenceWork OrderReport of Waste MaterialManagement Inspection ReportInspection & Acceptance ReportPNP Accreditation/Phil GePSCertificate of Business Name

Repair of Buildings/Facilities

Notice to ProceedCertificate of CompletionOriginal Invoice/BillingContractCertificate of Final Inspection & AcceptanceEstimate Cost/ Bill of MaterialsPre & Post Repair Inspection/Management Inspection ReportInspection & Acceptance ReportPNP Accreditation/Phil GePSCertificate of Business

BUILDINGContractNotice to ProceedCertificate of CompletionBilling/InvoiceEstimate Cost/Bill of MaterialsPlans and SpecificationProgress ReportPre and Post Repair InspectionPNP Accreditation/Phil GePSCertificate of Business Name

SUCCEEDING PAYMENTSAll requirements mentioned aboveManagement Inspection Report

FINAL PAYMENTAll requirements mentioned aboveManagement Inspection ReportCertificate of Final Inspection & AcceptanceContractors Affidavit Re-payment of Laborers

EQUIPMENT/MOTOR VEHICLE

Requisition and Issue Slip (RIS)Supply Availability Inquiry (SAI)Purchase Request (PR)Reasonableness of PriceCertificate of Inspection and Acceptance ReportManagement Inspection ReportOriginal InvoiceOriginal Delivery ReceiptPurchase OrderPNP Accreditation/Phil GePSCertificate of Business NameAcknowledgement Receipt for Equipment

PREPARATION OF THE TRIAL BALANCE AND OTHER FINANCIAL STATEMENTSIn preparing the Trial Balance and other Financial Statements, these Basic Features and Polices of the New Government Accounting System are observed (Sec. 4, NGAS Manual):

a. Accrual Accounting a modified accrual basis of accounting shall be used. Under this method, all expenses will be recognized when incurred and reported in the financial statements in the period to which they relate. Income shall be on accrual basis except for transactions where accrual basis is impractical or when other method is required by law.

One Fund Concept this system adopts the one fund concept. Separate fund accounting shall be done only when specifically required by law or by donor agency or when otherwise necessitated by circumstances subject prior approval of the Commission.

Chart of Accounts and Account Codes a new chart of accounts and coding structure with a three-digit account numbering system shall be adopted.

Books of Accounts all national agencies shall maintain two set of books, namely:Regular Agency (RA Books) books used to record the receipt and utilization of Notice of Cash Allocation (NCA) and other income/receipts which the agencies are authorized to use and to deposit with Authorized Government Depository Bank (AGDB) and the National Treasury.National Government (NG) Books these shall be used to record income which the agencies are not authorized to use and are required to be remitted to the National Trasury.

The following statements shall be prepared: Balance Sheet Statement of Government Equity Statement of Income and Expenses Statement of Cash Flow

Two-Money Column Trial Balance Trial Balance- The Trial Balance shows the equality of debit and credit balances of all general ledger accounts as of a given period. It is prepared and submitted monthly, quarterly and annually at the end of the fiscal year, the pre-closing and post-closing trial balances shall be prepared.

These reports are submitted to the following offices:- COA- Accountancy Office- DBM- Senate and Congress for Budget hearing

Purposes of the Trial Balance

Prove the mathematical equality of the debits and credits after posting;

Uncover errors in journalizing and posting;

Serve as basis of the preparation of the financial statements.

Books of Accounts

Books of Original Entry

1. Checks Disbursement Journal (CDJ)CDJ - MDSThis journal is used to record/check disbursements based on the report of checks issued for payment of expenditures and/or prior year accounts payable prepared by the Disbursing Officers (Finance) and submitted to the Accounting Division.CDJ - CFCThis journal is used to record monthly Pay and Allowances, monthly Initial Pension, Regular Pension, Mid-Year Bonus and Christmas Bonus printed by Computer Service.

2. Report of Disbursements by Disbursing Officers

This journal is used to record disbursements out of Cash Advance based on the Report of Disbursement with the vouchers/payrolls and supporting documents submitted by the Disbursing Officers.

3. Cash Receipt Journal (CRJ)

This journal is used to record all collections and deposits based on the Reports of Collections together with the duplicate copies of official receipts, remittance advices and deposit slips submitted by the collecting officers.

4. General JournalThis is used to record transactions that cannot be recorded in any of the special journals. Books of Final Entry

1. General Ledger - This is used to record transactions from different journals.2. Subsidiary Ledger- This contains the details or breakdown of the balances of the controlling accounts appearing in the General Ledger.

Financial Statements1. Balance Sheet - is a formal statement which shows the financial condition of the agency as of a certain date. It includes information on the three elements financial position assets, liabilities and government equity. It shall be prepared from information taken directly from the year-end post-closing trial balance.2. Statement of Income and Expenses - It shows the results of operation/performance of the agency at the end of a particular period. This statement shall be prepared from information taken directly from pre-closing trial balance.

3. Statement of Government Equity - shows the financial transactions which resulted to the change in Government Equity account at the end of the year.

4. Statement of Cash Flows - is a statement summarizing all the cash activities of an agency. The primary purpose of the statement of cash flows is to give relevant information on the agencys over all cash position, liquidity and solvency. Using the statement of Cash Flows, managers, investors, and creditors could easily assess if the agency could meet its obligation in operating, investing and financing activities.

Statement of Management Responsibility for Financial Statements.Shall serve as the covering letter in transmitting the agencies financial statements to the COA, DBM, other oversight agencies and other parties.Shows the agencys responsibility for the preparation and presentation of the financial statements. Shall be signed by the Director of Finance and Management Office or Comptrollership Office, or the Chief of Office who has direct supervision and control over the agencys accounting and financial transactions, and the Head of Agency or his authorized representative.

THANK YOU AND GOOD DAY!!!