In order to harmonize the existing accounting standards with the international

accounting standards, the Commission on Audit (COA), as a member of the

International Organization of Supreme Audit Institutions (INTOSAI), through its
authority under Article IX-D, Sec.2, par. 2 of the 1987 Philippine Constitution (to
promulgate accounting and auditing rules and regulations) prescribed the
Government Accounting Manual (GAM) for the National Government Agencies
(NGAs).
This Government Accounting Manual presents the basic accounting policies and
principles in accordance with Philippine Public Sector Accounting Standards
(PPSAS) adopted through COA Resolution No. 2014-003 dated January 24, 2014
and other pertinent laws, rules and regulations.
It shall be used by all National Government Agencies (NGAs) in the:
1.) preparation of the general purpose financial statements in accordance with the
PPSAS and other financial reports as may be required by laws, rules and
regulations; and,
2.) reporting of budget, revenue and expenditure in accordance with laws, rules and
regulations.
GOVERNMENT ACCOUNTING IS DEFINED, PURSUANT TO SECTION
109 OF PD 1445, AS ONE WHICH “ENCOMPASSES THE PROCESS OF
ANALYZING, RECORDING, CLASSIFYING, SUMMARIZING AND
COMMUNICATING ALL TRANSACTIONS INVOLVING THE RECEIPT
AND DISPOSITION OF GOVERNMENT FUND AND PROPERTY AND
INTERPRETING THE RESULT THEREOF.”
• SECTION 110, PD 1445 SETS DOWN THE FOLLOWING OBJECTIVES
OF GOVERNMENT ACCOUNTING:
• 1. TO PRODUCE INFORMATION CONCERNING PAST OPERATIONS
AND PRESENT CONDITIONS;
• 2. TO PROVIDE A BASIS FOR GUIDANCE FOR FUTURE
OPERATIONS;
 • TO PROVIDE FOR CONTROL OF THE ACTS OF PUBLIC BODIES
AND OFFICES IN THE RECEIPT, DISPOSITION AND UTILIZATION
OF FUNDS AND PROPERTY; AND
• 4. TO REPORT ON THE FINANCIAL POSITION AND THE RESULTS
OF OPERATIONS OF GOVERNMENT AGENCIES FOR THE
INFORMATION AND GUIDANCE OF ALL PERSONS CONCERNED
GOVERNMENT BUSINESS ENTERPRISE (GBE) IS AN ENTITY THAT HAS
ALL THE FOLLOWING CHARACTERISTICS
• 1. An entity with the power to contract in its own name;
• 2. has been assigned the financial and operational authority to carry on a
business;
• 3. sells goods and services, in the normal course of its business, to other
entities at a profit or full cost recovery;
• 4. not reliant on continuing government funding to be a going concern
(other than purchase of outputs at arm’s length); and
• 5. controlled by a public sector entity
• ACCOUNTING RESPONSIBILITY
• Accounting responsibility emanates from the Constitution, laws, policies,
rules and regulations. The Constitution of the Philippines, the fundamental
law of the land, mandates the keeping of the general accounts of the
government, promulgation of accounting rules, and the submission of
reports covering the financial condition and operation of the government.
• The offices charged with the accounting responsibility are the Commission
on Audit (COA), the Department of Budget and Management (DBM), the
Bureau of Treasury (BTr), and the government Agencies discharging the
functions of government to enable it to attain its commitments to the Filipino
people.
• COMMISSION ON AUDIT
 • The Commission on Audit (COA) keeps the general accounts of the
government, promulgates accounting rules and regulations, and submits to
the President and Congress, within the time fixed by law (not later than the
last day of September each year – Section 41, PD 1445), an annual report of
the government, its subdivisions, agencies and instrumentalities, including
government owned or controlled corporations.
• The Commission on Audit shall have exclusive authority, subject to the
limitation in this Article, to define the scope of its audit and examination,
establish the techniques and methods required therefor, and promulgate
accounting and auditing rules and regulations, including those for the
prevention and disallowance of irregular, unnecessary, excessive,
extravagant, or unconscionable expenditures, or uses of government
accounting system.
• DEPARTMENT OF BUDGET AND MANAGEMENT
• Pursuant to Section 2, Chapter 1, Title XVII, Book IV of the Administrative
Code of the Philippines (EO 292), “The Department of Budget and
Management shall be responsible for the formulation and implementation of
the National Budget with the goal of attaining our national socio-economic
plans and objectives. The Department shall be responsible for the efficient
and sound utilization of government funds and revenues to effectively
achieve the country’s development objectives.”
• Furthermore, as provided by the Joint Circular No. 2013-1 dated August 6,
2013, Unified Accounts Code Structures (UACS), the validation and
assignment of new codes for funding source organization, sub-object codes
for expenditures items shall be the responsibity of the DBM. In Addition,
the validation and assignment of new program, activity, project codes shall
be decided jointly by the proponent agency and DBM.
BUREAU OF TREASURY
The Bureau of Treasury (BTr) plays a pivotal role in the cash operations of the
national government. Accounting rules and regulations pertaining to cash
operations, collections, remittances and disbursements, including public
borrowings, are issued by the Commission on Audit, jointly or with the
concurrence of the Department of Finance and the Department of Budget and
Management.
Under the Revised Administrative Code, the Bureau of Treasury, as one of the
operating bureaus of the Department of Finance is authorized to:
1. Receive and keep national funds, manage and control the disbursements
thereof; and
2. Maintain accounts of financial transactions of all national government
offices, agencies and instrumentalities.
Thus, the Bureau of Treasury shall control and monitor the Notice of Cash
Allocation (NCA) released by the Department of Budget and Management; as well
as the bank transfers it makes in replenishing its Modified Disbursement System
(MDS) accounts.
NATIONAL GOVERNMENT AGENCIES
Departments, bureaus, offices and other instrumentalities of the National
Government, including the Congress, the Judiciary, the Constitutional bodies, state
colleges and universities, and other self-contained institutions and hospitals are
required by law to have accounting units/divisions/departments in the agency and
under the direct supervision of the Head of the Agency.
Accounting personnel shall (1.) maintain and keep current the accounts of the
agency, (2) provide advice on the financial condition and status of the
appropriations and allotments of the agency as its Head may require, and (3.) to
develop and conduct procedures designed to meet the needs of management.
Under the new accounting system, the government agencies shall maintain the
following registries:
1. Registry of revenue and other receipts – summary (rrors)
• THE RROR SHALL BE MAINTAINED BY THE 4 BUDGET
DIVISION/unit of nga to monitor the revenue and other receipts
estimated/budgeted, collected and remitted/deposited.
2. Registry of revenue and other receipts – regular agency and foreign assisted
project fund (rror-ra&fap)
 • This registry shall be maintained by the budget division/unit of the entity for
the following fund clusters: 1.) regular agency fund; and 2.) foreign assisted
project fund.
3. Registry of revenue and other receipts – special account locally
funded/domestic grants fund and special account foreign assisted/foreign
grants fund (rror-saddfgf)
The registry shall be maintained by the budget division/unit of the entity for
the following fund clusters: 1.) special account-locally funded/domestic grants
fund; and, 2.) special account – foreign assisted/foreign grants fund.
4. Registry of revenue and other receipts – internally generated funds (off-
budgetary funds – retained income funds)/business related funds (rror-
igf/brf)
This registry shall be maintained by the budget division/unit of the entity for
the following fund clusters: 1.) internally generated funds (off-budgetary –
retained income funds); and, 2.) business related funds.
5. Registry of revenue and other receipts – trust receipts/inter-agency
transferred funds (rror-tr/iatf)
This registry shall be maintained by the budget division/unit of the
entity for the trust receipts/inter-agency transferred funds.
6. Registry of appropriation and allotments (rapal)
The rapal shall be maintained to monitor appropriations and
allotments charged thereto. It shall show the original, supplemental and
final budget for the year and all allotments received charged against the
corresponding appropriation.
This registry shall be maintained by fund cluster by the budget division/unit
of each entity to ensure that allotment releases are within the authorized
appropriation. Separate registry shall be maintained for prio
7. Registry of allotments, obligations and disbursements – personnel services
(raod-ps)
The raod shall be maintained to record allotments, obligations and
disbursements. It shall show the allotment received for the year, obligations
 and disbursements. It shall show the allotment received for the year,
obligations incurred, and the actual disbursements made. The incurrence of
obligations shall be made through the issuance of obligations request and
status (Ors).

8. Registry of allotments, obligations and disbursements – maintenance and

other operating expenses (raod-mooe)
This registry shall be maintained by the budget division/unit by
appropriation act, fund cluster, by major final output (mfo) or
program/activity/project (pap) for maintenance and other operating
expenses.
9. Registry of allotments, obligations and disbursements – financial expenses
(raod-fe)
• This registry shall be maintained by the budget division/unit by
appropriation act, fund cluster, by major final output (mfo) or
program/activity/project (pap) for financial expenses.
10. Registry of allotments, obligations and disbursements – capital outlays (raod-
co)
• This registry shall be maintained by the budget division/unit by
appropriation act, fund cluster, by major final output (mfo) or
program/activity/project (pap) for capital outlays.
11. Registry of budget, utilization and disbursements –personnel services
(rbud-ps)
• The rbud shall be used to record the approval special budget and the
corresponding utilizations and disbursements charged to retained income
authorized under ra 8292 for state universities and colleges (sucs) and other
retained income collections of a nga with similar authority.
12. Registry of budget, utilization and disbursements – maintenance and other
operating expenses (rbud-mooe)
• This registry shall be maintained by the budget division/unit by fund cluster,
by major final output (mfo) or program activity/project (pap) for
maintenance and other operating expenses.
13. Registry of budget, utilization and disbursements – financial expenses
(rbud-fe)
• This registry shall be maintained by the budget division/unit by fund cluster,
by major final output (mfo) or program activity/project (pap) for financial
expenses.

14. Registry of budget, utilization and disbursements – capital outlays (rbud –

co)
• This registry shall be maintained by the budget division/unit by fund cluster,
by major final output (mfo) or program activity/project (pap) for capital
outlays.
15. Registry of allotments and notice of cash allocation (ranca)
• This registry shall be maintained by the accounting division/unit to
determine the amount of allotments not covered by nca and to monitor
available nca.
16. Registry of allotments and notice of transfer of allocation (ranta)
• This registry shall be maintained by the accounting division/unit to
determine the amount of allotments not covered by nta and to monitor
available nta.
BASIC ACCOUNTING AND BUDGET REPORTING PRINCIPLES
The government Accounting Manual provides general provisions from existing
laws, regulations; and basic standards/fundamental accounting principles for
financial reporting by national government agencies. It requires each
government entity to recognize and present its financial transactions and
operations in conformity with the following:
1. Generally accepted government accounting principles in accordance with the
PPSAS and pertinent laws, rules and regulations.
COA Resolution No. 2014-003 dated January 24, 2014 prescribed the
adoption of twenty five (25) Philippine Public Sector Accounting Standards
(PPSASs) effective January 1, 2014. These PPSASs were based on
International Public Sector Accounting Standards (IPSASs) which were
published in the 2012 Handbook of International Public Sector Accounting
Pronouncements of the IPSASB.
In adopting International Public Sector Accounting Standards (IPSAS), the
PSASB attempts, wherever possible, to maintain the accounting treatment and
original contents of the IPSASs and its approved amendments, unless there is a
significant accounting issues that warrants a departure. In so doing, the PPSAS
is assigned the same number as the IPSAS to maintain the link.
2. Accrual Basis of Accounting in accordance with the PPSAS
Accrual basis means a basis of accounting under which transactions and
other events are recognized when they occur, and not when cash or its
equivalent is received or paid. Thus, the transaction and events are recognized
in the accounting records and recognized in the financial statements of the
periods to which they relate. The elements recognized under accrual
accounting are assets, net assets/equity, revenue, and expenses.
3. BUDGET BASIS FOR PRESENTATION OF BUDGET INFORMATION
IN THE FINANCIAL STATEMENTS IN ACCORDANCE WITH PPSAS
24
IPSAS 24, Presentation of Budget Information in Financial Statements,
requires a comparison of budget amounts and the actual amounts arising from
execution of the budget to be included in the financial statements of entities that
are required to, or elect to, make publicly available their approved budgets/s,
and for which they are, therefore, held publicly accountable. It is also requires
disclosure of an explanation of the reasons for material differences between the
budget and actual amounts. Compliance with the requirements of this standard
will ensure that public sector entities discharge their accountability obligations
and enhance the transparency of their financial statements by demonstrating:
a) Compliance with the approved budget/s for which they are held publicly
accountable; and
b) Where the budget/s and the financial statements are prepared on the same
basis, their financial performance in achieving the budgeted results.
4. REVISED CHART OF ACCOUNTS PRESCRIBED BY COMMISSION
ON AUDIT
The Commission on Audit as member of the International Organization of
Supreme Audit Institutions (INTOSAI) is encouraged to adopt relevant
International Accounting Standards. The IPSASB of the International
Federation of Accountants which promulgates the IPSASs, acknowledges the
rights of governments and national standard-setters to establish their respective
accounting standards and guidelines for financial reporting in their jurisdictions.
5. Double Entry Bookkeeping
6. Financial Statements based on accounting and budgetary records.
7. Fund Cluster Accounting
The detailed financial statements and trial balances consolidated by the fund
cluster as follows:
a) Regular Agency Fund
b) Foreign Assisted Projects Fund
c) Special Accounts – Locally Funded/Domestic Grants Fund
d) Special Accounts – Foreign Assisted/Foreign Grants Fund
e) Internally Generated Funds
f) Business Related Funds
g) Trust Receipt/Inter-agency Transferred Funds (IATF)