Accounting for Budgetary Accounts

No many shall be paid out of treasury, except in pursuance of an appropriation by law.

Accounting for budgetary accounts formally commences upon enactment of General
Appropriations Act (GAA).
• Basis of DBM for allotments (the amount of cash allocations to be released) or authority
to agencies to incur obligations.
Accounting System
General Accounting Plan (GAP) - shows the overall accounting plan, including sources dos,
transaction flows and accumulation and the conversion to FS.
1. Budgetary Accounting System
2. Receipt/Income and Deposit System
3. Disbursement System
4. Financial Reporting System
Fundamental Principles of Fiscal Operations (Implementation of Budgetary Policies)
1. No many shall be paid out of treasury, except in pursuance of an appropriation by law
2. Government funds and property- pubic purpose only.
3. Trust fund- only for specific purpose
4. Fiscal Responsibility- shared by those exercising authority over government agency.
5. Disbursement or disposition of funds- approval of proper officials
6. Claims against funds- documented
7. Laws and regulations shall be faithfully adhered.
8. Principles and practices in accounting, and sound management and fiscal administration shall
be observed.
The National Budget
-Financial blueprint of a country’s development plan
-Prepared and submitted by the responsible executive to representative body whose approval
and authorization are necessary before the plan is executed.
National Budget Memorandum (NBM) No. 117, DBM introduced Performance-Informed
Budgeting (PIB)- strengthen link between planning and budgeting through National Expenditure
Plan and General Appropriations Act.
Balanced Budget
Expenditure is less than or equal to estimated revenues.
Surplus Budget- expenditure is less than revenues.
Deficit- revenue is less than expenditure.
Performance-Informed Budgeting (PIB)
Use performance to decide where the funds should go.
Focus on outputs and outcomes and less emphasis to inputs.
Kinds of Budget
1. As to Nature
a. Annual Budget
b. Supplemental Budget- supplemental appropriation
c. Special Budget- not included in appropriation act
2. As to Basis
a. Performance Budget- based on function, activities and budget
 b. Line-Item Budget- object of expenditure
3. As to Approach and Technique
a. Zero-based Budgeting- consideration of all Program/Activity/Projects (PAPs)
b. Incremental Approach- incremental changes

The Budget Cycle

1. Budget Preparation
Preparation by government agencies, review and finalized by the President, then submitted to
the Legislative department as basis for Appropriation Act.
Budget Call by the DBM (December)- defend to DBM (Executive Review Board)- The propose
budget (National Expenditure Program and Budget of Expenditures and Sources of Financing)
presented to the President and Cabinet- DBM prepares the finalized budget( President’s
Budget) submitted to the congress
Bottom up budgeting to engage grassroots communities

2. Legislative Authorization (Budget Legislation)

Submission of President’s Budget is a day after the SONA.
House of representatives receives the Budget- the crafting of the General Appropriation Bill-
approved in second or third reading before transmission to senate- discussion to harmonize
conflicts between houses- Final GAB submitted to president
*even before the receipt, the senate conducts its own hearing and deliberations on the GAB
* if GAA is unenacted, the previous GAA is automatically used.
Appropriations are approved by the legislative body in the form of:
a. General Appropriation Law
b. Supplemental Appropriation Law
c. Certain Automatic Appropriation

3. Budget Execution and Operation/ Implementation

Includes the development of operating budget
DBM issuance of guidelines on the release and utilization of funds- agencies are required to
submit their Budget Execution Documents (BEDs)- agency plans and targets
DBM sets the Allotment Release Program (ARP)- limit for allotments
Cash Release Program (CRP) – guide for disbursements level
Allotments- authorization to agency to enter into obligation
New obligation authority; General Appropriations Act Released Document (GAARD), Special
Allotment Release Order (SARO), and General Allotment Release Order (GARO)

4. Budget Accountability (happens alongside budget execution)

Funds are accounted to ensure the proper use of it.
DBM monitors efficiency of utilization, agency performance, basis for reforms and policies.
Budget and Financial Accountability Reports (BFARs)- required reports by agencies to show
how they use funds and accomplishments. (monthly and quarterly)
Failure to submit- DBM withhold funds charged to Miscellaneous Personnel Benefits
(MPBF)
Budget Performance Assessment Reviews (BPAR)- agencies accomplishment and
performance by year end.
Auditing- performance and determining budgetary levels for agencies (Commission on Audit)

Budgetary Accounts System

Allotment Release Program (ARP)- ceiling for aggregate releases, equal to appropriations for
following sources:
1. New Appropriations- specific budget or additional releases from Special Purpose Funds
(SPFs)
2. Automatic Appropriations- for Retirement and Life Insurance Premiums (RLIP), Special
Accounts in General Funds (SAGFs)
3. Continuing Appropriations- charged against unreleased appropriations for the MOOE
and CO

Budgetary Accounts
1. Appropriations- made by law or legislative enactment for special purpose, payment for
goods or service
 2. Allotments- authorization by the DBM to incur obligations within legislative appropriation
3. Obligations- authorized commitment by government, payment for money

Monitoring Budget
Monitor through maintenance of following registries:
1. Registry of Revenue and Other Receipts (RROR)
2. Registry of Appropriations and Allotments (RAPAL)
3. Registry of Allotments, Obligations and Disbursements (RAOD)
4. Obligation Request and Status (ORS)
5. Registry of Budget, Utilization and Disbursement (RBUD)- special budget
Maintained separately:
a. Personnel Services
b. Maintenance and Other Operating Expenses
c. Financial Expenses
d. Capital Outlays

Fund Release Documents

Unified Accounts Code Structures (UACS) and Performance-Informed Budgeting (PIB)
1. Obligation Authority or Allotment
a. General Appropriation Act Release Document (GAARD)- appropriated in GAA
b. Special Allotment Release Order (SARO)- For Later Release (FLR) (negative list)
c. General Allotment Release Order (GARO)- appropriated expenditure common to
most
2. Disbursement Authority
a. Notice of Cash Allocation (NCA)- for central, regional and provincial
b. Non-Cash Availment Authority (NCAA)- cover actual obligations
c. Cash Disbursement Ceiling (CDC)- issued to the DFA and DOLE
d. Notice of Transfer Allocation (NTA)- issued by central office to regional

Objects of Expenditure

1. Personnel Services – salaries, wage, compensation/ personnel benefits

2. Maintenance and Other Operating Expenses (MOOE)- travelling, supplies and material;,
training and scholarship, utility, communication, rent, repairs and maintenance, general
3. Financial Expenses- interest, bank charges, guarantee, commitment fees and other
financial charges
4. Capital Outlays- PPE, investment

General Guideline on the Release of Funds

Pending effective date of GAA- authorized to incur overdraft charged against the re-enacted
budget (preceding year budget)
GAA’s effective date- 15 days following the publication in the official gazette
• Allotment Release Program (ARP) limit allotments- composed of :
 1. Obligations incurred
2. Obligations authorized for overdraft
3. Special Allotment Release Order (SAROs)- issued from beg year to GAA effective date
4. Releases from Unprogrammed Fund (UF)- from multi-user Special Purpose Funds
(SPFs)

Guidelines on the Release of Disbursement Authorities

1. Release of NCA
• Based on the submitted Monthly Disbursement Program (MDP)
• Additional NCA through Continuing Appropriations and Supplemental Appropriations
• Monitored through Registry of Allotments and Notice of Cash Allocations (RANCA)
2. Release of NCAA
• the liquidation of actual obligations incurred by the agency
3. Release of CDC
• Issued to DFA and DOLE to utilize their income collected and retained by their Foreign
Service Posts (FSPs)
4. Release of NTA
• No MDS check- chargeable against the account of Treasurer /ADA is issued without
covering NTA
• MNS check </= NTA received

Reporting Requirements
Budget Execution Documents (BEDs) and Budget- contains the target and plans and Financial
Accountability Reports (BFARs)- contains accomplishments.
Both are for monitoring and the necessity to provide information to the President.
Budget Execution Documents (BEDs)
The preparation is based on the National Expenditure Program (NEP), without waiting the
approval of GAA. If upon its approval, there are changes made by the Congress from the NEP,
then adjust the PAPs and MFOs.
BEDs to be submitted:
• BED No. 1: Financial Plan (FP)
Comparative obligation level of budget year and current year
• BED No. 2: Physical Plan (PP)
Performance indicators and targets of department/agency
Major Final Outputs
Programs and Projects committed to the President
• BED No. 3: Monthly Disbursement Program
Level of monthly NCA/ other disbursement authorities
Notice of Cash Allocation (NCA)
Cash Disbursement Ceiling (CDC)
Non-Cash Availment Authority (NCAA)
Tax Remittance Advice (TRA)
Other Tax Expenditures
• BED No. 4: Annual Plan for Common-Use Supplies and Equipment (APP-CSE)
Monthly quantity and cash requirements categorized into Available at Procurement
Service Stores, and other items not available at Procurement Service.

Budget and Financial Accountability Reports (BFARs)

Effectively report, monitor and/or evaluate agency performance versus plans and targets.
The following reports/documents are required for submission to the DBM and COA:
1. Quarterly Physical Report of the Operation (QPRO)- BAR No. 1
Agency’s actual physical accomplishment in terms of performance measures in
Physical Plan BED No. 2.
2. Statement of Appropriations, Allotments, obligations, Disbursements and Balances
(SAAODB)- FAR No. 1.
• Fund authorization
• Major Final Output (MFO)
• Program/Activity/Project (PAP)
• Major Programs/ Projects
3. Summary of Appropriations, Allotments, Obligation, Disbursements and Balances by
Object of Expenditures (SAAODBOE)- FAR No. 1-A
4. List of Allotments and Sub-Allotments (LASA)- FAR No. 1-B
5. Statement of Approved Budget, Utilizations, Disbursements and Balances (SABUDB)-
FAR No. 2 (for Off-Budget Fund)
Agency authorized by law to use their income
6. Summary of Approved Budget, Utilizations, Disbursements and Balances by Object of
Expenditures (SABUDBOE)- FAR No. 2-A (for Off- Budget Fund)
details
7. Aging of Due and Demandable Obligations (ADDO) –FAR No. 3
 The balance of unpaid obligation
8. Monthly Report of Disbursements (MRD)- FAR No. 4
Track the actual disbursement of the department/ agencies against their distribution
program
9. Quarterly Report of Revenue and Other Receipts (QRROR)
Reflect report on actual revenue and other receipts of the agency

Validity of Appropriations
Appropriations be available for release and obligation for specific purpose:
• PS- current year
• MOOE and CO- current year
• Continuing Appropriations- prev to current year
• Supplemental Budget for MOOE and CO- Special Budget Request
• All programmed automatic appropriations

Conduct of the Agency Performance Review

Performance Based Budgeting- quarterly valuation comparing Budget Execution Documents
(BEDs) and Budget Financial and Accountability Reports (BFARs)

Common Fund System

For use of PS, MOOE, CO and FE without realignment

Registry of Appropriations and Allotments (RAPAL)

Monitor allotments and appropriations
• Total Appropriations
Sum of per class- PS, MOOE, CO and FE
• Total Adjustment/s on Appropriations
Amount of adjustment
• Total Adjusted Appropriations
• Total Allotments
Allotment received per class
• Total Adjustment/s on Allotments
• Unreleased Appropriations
Running balance of appropriations (adjusted appropriation less adjusted allotment)
• Total Unreleased Appropriations

Registry of Allotment and Notice of Cash Allocation (RANCA)

Determine the amount of allotment not covered by NCS and monitor available NCA
Forms to be accomplished:
• Fund Cluster- name/code
• Date- reference document
• Reference- GAARD/SARO/GARO/JEV/DV/ Payroll
• Allotment Received- amount received GAARD/SARO/GARO
 • NCA received
• NCA utilized- base on processed DV/Payroll
• Balance Unutilized NCA
• Balance allotment- running balance of allotment not covered by the NCA

Obligation Request and Status (ORS)

Incurrence of obligation is made thru ORS.
Record monitor obligation
Adjustment of incurred obligation be made after processing the claims thru Notice of Obligation
Request and Status Adjustment (NORSA)

Registry of Allotments, Obligations and Disbursements (RAOD)

Record allotments received, obligations incurred against allotment and actual disbursements.
The following info for accomplishment:
• UACS Object Code/ Expenditures
• Obligations
Obligations based on the approved ORS and adjustment based on NORSA
• Unobligated Allotments
Can still be obligated
• Disbursements
Amounts paid based on Report of Checks Issued (RCI)/ Report of Authority to Debit
Account Issued (RADAI)/ Tax Remittance Advice (TRA)/ Journal Entry Voucher (JEV)
• Unpaid Obligation- Due and Demandable
• Unpaid Obligations- Not Yet Due and Demandable