Governm
ent
accountin
g
New Government Accounting System
TABLE OF
CONTENTS
Introducti General accounting
01 02 03
on Budgetary procedures procedures
What is Government Four Phases of Budgetary Familiarize the accounting of the
Accounting? Procedures general fund which is available
for general purposes
04 05
Journal Entries Trial Balance
Typical transaction and the A list of ledger accounts and their
related journal entries debit and credit balances
TABLE OF
CONTENTS
Adjusting
06 07 08
Entries Closing Entries Financial Statements
Accrued Items and Deferred Closing Entries at the End of the After closing entries, Financial
Items Year Statements can be prepared
GOVERNMENT
ACCOUNTING
INTRODUCTION
introduction
Article IX-D, Section 2, par. (2) of the 1987
Constitution 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 therefore, and
promulgate accounting and auditing rules and
regulations, including those for the prevention
and disallowance of irregular, unnecessary,
excessive, extravagant, or unreasonable
expenditures, or uses of government funds and
property
introduction
Pursuant to this mandate, The Commission on
Audit (COA) revised the existing government
accounting system. The New Government
Accounting System (NGAS) took effect last
January 1, 2002. The shift to the new
accounting system, which was about half a
century old, in order to facilitate the process of
recording transactions and the preparation of
financial reports, and ultimately, to computerize
the entire government accounting system. In
addition, the new accounting system includes
Responsibility Accounting, a feature of the new
system, which should be computerized.
introduction
In 2013, the COA, per Circular No. 2013-002
dated 30 January, 2013, amended the existing
New Government Accounting System in order
to provide new accounts for the adoption of the
Philippine Public Sector Accounting Standards
to enhance the accountability and transparency
of the financial reports, and ensure
comparability of financial information.
GOVERNMENT
ACCOUNTING
BUDGETARY
PROCEDURES
BUDGETARY PROCEDURES
An agency of the government is given authority
to expend funds through the use of a control
device called a budget. A budget is a legal
authorization for expenditure based on a plan
which has been received and approved by
Congress through an Appropriation Law.
Four Phases of Budgetary Procedures
PREPARATION AND
PRESENTATION
This phase covers the estimation, determination and
translation of government revenues, priorities and activities.
Under this phase, government agencies prepare their
budgets to be submitted to the Department of Budget and
Management for review. The DBM then consolidates all
budgets to form a government-wide budget estimate. This
shall be submitted to the President for final approval.
Budget Authorization
This phase involves the submission of the national
government budget to the Congress for review and the
formulation of an Appropriation Bill to be forwarded to the
President for approval
Budget Execution and
Operation
This phase covers the implementation of the various
operational aspects of the budget, such as the release of
allotment to the various agencies, the continuing review of
government fiscal position, and other related activities
Budget accountability
This phase involves the evaluation of expenditures and
performance against the predetermined budget. Obligations
incurred, personnel use and work accomplished are
compared with plans and goals of various agencies
submitted at the time their respective budget was prepared.
This is accomplished by the heads of the various agencies
who review the performance of their respective agency and
the Commission on Audit (COA) who examine accounts
and operations of agencies
GOVERNMENT
ACCOUNTING
general accounting
PROCEDURES
General
Accounting
WHAT SETS US APART?
Procedures –
General Fund
MERCUR (Agency Books)
Y
In government accounting, the principal accounting
unit is referred to as a fund. A fund is a sum of money
or other resources set aside for the purpose of carrying
out specific activities in accordance with specific
regulations, restrictions, or limitations. The
government has various types of fund. Students
should be familiar with the accounting of one fund, the
general fund which is available for general purposes.
GOVERNMENT
ACCOUNTING
Trial Balance
TRIAL BALANCE Accou Accou
nt nt Debit Credit
A trial balance is Title Code
a list of ledger
accounts and
their debit and
credit balances.
It is usually
prepared before
adjusting and
closing entries
are prepared.
The column
GOVERNMENT
ACCOUNTING
Adjusting Entries
Adjusting Entries
Before the preparation of financial
statements, adjusting entries are
prepared. As in commercial
accounting, there are two types of
adjustments; accrued items and
deferred items. Depreciation of
fixed assets is computed and
adjusted using straight line
method.
GOVERNMENT
ACCOUNTING
Closing Entries
Closing
Entries
The following shall be closed at the end of the
year:
1. Unused Notice of Cash Allocation
2. Nominal or Temporary Accounts
Unused Notice of Cash
Allocation
This is computed by deducting from the total NCA received
during the year the total MDS checks issued by the agency.
At the end of the year the unused NCA is to be reverted to
Bureau of Treasury, because of the policy of the DBM that
the NCA will only be used for the year it was issued. The
closing entry to close the unused NCA is:
Subsidy Income from National Government xx
Cash-National Treasury-MDS xx
Nominal or Temporary
Accounts
As in commercial accounting, all income and expense
accounts are closed to Income and Expense Summary
account.
Income and Expense Summary account is then closed to
Retained Operating Surplus account.
Finally, the balance of the Retained Operating Surplus
account is closed to Government Equity account.
GOVERNMENT
ACCOUNTING
Financial Statements
Financial Statements
Statement of
Income and Reminders:
Expenses Cash Flow the format of the financial
statements follows that of a
shows the changes in the commercial accounting.
agency’s equity resulting from Balance Sheet Statement
operations during the period provides information on the provides relevant information
agency’s resources, its about the agency’s inflows and
obligations, and the government outflows of cash during the year.
equity in the agency It shows the changes in cash and
cash equivalents for the year.
THANKS
Does anyone have any questions?
Ramon Magsaysay Memorial Colleges-Marbel, Inc.
Unit 7, LV Building, Alunan Avenue, Barangay Zone III, City of Koronadal
rmmc-mi.com
