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Overview of Government Accounting

The document provides an overview of government accounting, highlighting its distinction from business accounting and outlining the responsibilities of various government entities such as the Commission on Audit and the Department of Budget and Management. It introduces the Government Accounting Manual (GAM) for National Government Agencies, which aims to align government accounting standards with international norms. Key principles include the use of generally accepted accounting principles, accrual accounting, and the preparation of general purpose financial statements.

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73 views3 pages

Overview of Government Accounting

The document provides an overview of government accounting, highlighting its distinction from business accounting and outlining the responsibilities of various government entities such as the Commission on Audit and the Department of Budget and Management. It introduces the Government Accounting Manual (GAM) for National Government Agencies, which aims to align government accounting standards with international norms. Key principles include the use of generally accepted accounting principles, accrual accounting, and the preparation of general purpose financial statements.

Uploaded by

theresaoclarit08
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© © All Rights Reserved
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INTRODUCTION TO GOVERNMENT ACCOUNTING

LEARNING OBJECTIVES

1. Differentiate government accounting from the accounting for business entities.


2. State Government entities charged with accounting responsibility.
3. Briefly describe the GAM for NGAs.
4. State the basic principle used in the government accounting.

Accounting - is the process of identifying, measuring, and communicating economic information to


make economic decisions.

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.
– Places greater emphasis on the following:
a. Sources and utilization of government funds; and
b. Responsibility, accountability, and liability of entities entrusted with government funds
and properties.

➢ The sources of government funds include receipts from taxes and other fees, borrowings, and
grants from other government international bodies.
➢ The utilization of government funds includes expenditures on programs, projects, unanticipated
losses from calamities and the like.

MAIN CONCEPT:

Government resources must be utilized efficiently and effectively in accordance with the law.
Government officials are responsible in implementing this policy, are accountable for the government
resources in their custody, and are liable for any loss.

Accounting Responsibility

The following offices are charged with the government accounting responsibility:

1. Commission on Audit (COA)


– has the primary function to examine, audit and settle all accounts and expenditures of
the funds and properties of the Philippine government.
–
Has the exclusive authority to promulgate accounting and auditing rules and
regulations.
– Keeps the general accounts of the government, supporting vouchers and other
documents.
– Submits financial reports to the President and Congress.
2. Department of Budget and Management (DBM)
– Responsible for the formulation and implementation of the national budget with the
goal of attaining the nation’s socio-economic objectives.
3. Bureau of Treasury (BTr)
– Under the Department of Finance and is the cash custodian of the government. The BTr
is authorized to:
a. Received and keep national funds and manage and control the disbursements
thereof; and
b. Maintain accounts of financial transactions of all national government offices,
agencies, and instrumentalities.
4. Government Agencies
– Refers to any department, bureau, or office of the national government, or any of its
branches and instrumentalities, or any political subdivision, as well as any government
owned or controlled corporation, including its subsidiaries, or other self-governing
board or commission of the government.

Government Accounting Manual (GAM) for National Government Agencies (NGAs)

An “old” government accounting system had been used for about fie decades before it was replaced by
the New Government Accounting System (NGAS) in 2002. However, on January 1, 2016, the NGAS was
replaced by the Government Accounting Manual for National Government Agencies (GAM for NGAs).

Government Accounting Manual (GAM)


– Was promulgated primarily to harmonize the government accounting standards with
international accounting standards, particularly, the International Public Sector Accounting
Standards (IPSAS).

Legal Basis

– The Government Accounting Manual (GAM) is prescribed by COA pursuant to Article IX-D,
Section 2 par. (2) of the 1987 Constitution of the Republic of the Philippines which provides that:

“The Commission on Audit shall have exclusive authority, subject to the


limitations 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 funds
and properties". (Underscoring supplied)
Coverage
a. 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
b. reporting of budget, revenue, and expenditure in accordance with laws, rules, and regulations.

Objective of the Manual


– The Manual aims to update the following:
o standards, policies, guidelines, and procedures in accounting for government funds and
property.
o coding structure and accounts; and
o accounting books, registries, records, forms, reports and financial statements.

Basic Government Accounting and Budget Reporting Principles.

Each entity shall recognize and present its financial transactions and operations conformably to the
following:

a. Generally accepted government accounting principles in accordance with the PPSAS and
pertinent laws, rules, and regulations.
b. Accrual basis of accounting in accordance with the PPSAS;
c. budget basis for presentation of budget information in the financial statements (FSs) in
accordance with PPSAS 24;
d. Revised Chart of Accounts prescribed by COA;
e. Double entry bookkeeping;
f. Financial statements based on accounting and budgetary records; and
g. Fund cluster accounting.

Components of General Purpose Financial Statements.

a. Statement of Financial Position;


b. Statement of Financial Performance;
c. Statement of Changes in Net Assets/Equity;
d. Statement of Cash Flows;
e. Statement of Comparison of Budget and Actual Amounts; and
f. Notes to the Financial Statements, comprising a summary of significant accounting policies
and other explanatory notes.

Reference :

https://coa.gov.ph/index.php/2013-06-19-13-06-41/manuals/category/5623-government-accounting-
manual-gam-for-national-government-agencies

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