CHAPTER 1: NATURE AND SCOPE OF NGAS

COA, in exercise of the authority granted under

Section 2(2), Article IX-D of the 1987
Constitution, prescribed the NGAS.
NGAS introduced the basic policies and
procedures, the new coding system, the acctg
systems, books, registries, records, forms, reports
and FS to be adopted by all national government
agencies effective JANUARY 1,2002.
OBJECTIVES
Old GAS manual, numerous special journals
complete with several wide columns (complex and
tedious); generated FS provided financial info, w/c
often proved ineffectual to those who dont have
background in govacc.

course of action; proper analysis

of funds needed for project
2. To provide a basis for guidance for future
operations
3. To provide for control the act of the acts of
public bodies and offices in the receipt and
disposition, and utilization of funds and
property
4. To report on the financial position and the
results of the operations of govt agencies
for the info and guidance of all persons
concerned.
Accounting data shows:

The shift to NGAS (simplified and updated)

was made in order to respond to the need for
the ff:

if agency is achieving its mandates and

operational objectives
obligations of agency and how such
obligations have been incurred (sources of
resources that will meet these obligations;
analysis of inflow and outflow of
resources, esp FR)

1. The adoption of a system that is in conformity

with IAS

Financial reports extent of agencys financial

and nonfinancial resources, which have useful
lives

2. Pursuit of eventual computerization, which will

include responsibility accounting, thereby ensuring
the generation of various reports that are useful to
management, lawmakers and general public.

EVALUATION SERVICE POTENTIAL of

agencys resources; indication when additional
resources are needed

3. Generation of relevant and periodic FS

COA, member of the International Organization of

Supreme Audit Institutions (INTOSAI)

4. Effective tool for managers and executives in

effective and efficient monitoring of Agency
Performance
Government Accounting pursuant to Section
109 of PD 1445; encompasses the process of
ARCSC
(analyzing,
recording,
classifying,
summarizing and communicating) all transactions
involving the receipt and disposition of govt fund
and property and interpreting the result thereof.
SECTION 110, PD 1445
OBJECTIVES OF NGAS
1. To produce information concerning past
operations and present conditions
a. Evaluation of performance of
agency from one period to another

adopt relevant IAS

PSASB (PUBLIC SECTOR ACCOUNTING

STANDARDS BOARD) created in 2008 under
COA Resolution No. 2008-12 dated October 10,
2008 to formulate and implement public sector
accounting standards and establish linkages with
intl bodies, professional orgs, and academe on
acctg related fields on finman.
PPSAS PHILIPPINE PUBLIC SECTOR OF
ACCOUNTING STANDARDS
IPSASB INTERNATIONAL PUBLIC SECTOR
ACCOUNTING STANDARDS BOARD
PROCESSES AND OTHER CONSIDERATIONS
IN DEVELOPING A STANDARD OF PPSAS:

1. Applicability of IPSAS
Existing IPSAS were assessed to
determine
applicability
of
provisions in the Phil setting as
bases in devt of PPSAS
2. Exposure Draft of PPSAS
PSASB issues exposure drafts of
all proposed PPSAS for comment
by interested parties including COA
officials and auditors, agency
finance
personnel,
oversight
agencies,
professional
org,
academe and other stakeholders..
PSASB sets a reasonable time to
allow interested parties to consider
and comment on its proposals.
PSASB evaluates all comments
received on exposure drafts and
makes such modifications, where
appropriate.
3. Fundamental Issues
When an accounting principle or
significant element of a disclosure
requirement contained in IPSAS is
considered to be in conflict with
Philippine
laws,
rules
and
regulations, this is a fundamental
issue and the actg principle or
disclosure requirement may be
changed.
4. Statutory Authority
Where the international standard
deviates from the Philippine
regulatory
or
legislative
environment,
Phil
application
guidance
shall
be
issued
accordingly.
5. Disclosure Requirement
Disclosure requirements may be
amended when the amendments
are regarded as being significant
for improving fair presentation of
the matter.
6. PPSAS Numbering
PPSAS assigned the same number
as IPSAS to maintain the link

Where a PPSAS is developed and

no IPSAS equivalent, the standard
will be assigned a number in a
series of PPSAS starting with 101.
When
IPSASB
issues
the
equivalent standard as an IPSAS,
the 100 series PPSAS will be
withdrawn and reissued as PPSAS
with the IPSAS number.
Standards of PPSAS have equal
authority
regardless
of
the
numbering used.

7. Financial Reporting Issues Not Dealt

With By IPSAS
Where issues related to financial
reporting emerged, researchers
were done and a discussion
document prepared based on other
relevant acctg standards not in
conflict with Phil laws.
8. Submission of Draft to PSASB for
Consideration of the COA
Where there are significant
changes or unresolved issues
associated an exposure draft, the
PSASB may decide to re-expose a
proposed PPSAS.
9. If considered appropriate, focus group
discussions will be held to obtain further
opinions on issues identified by the
exposure process.
Accounting Responsibility emanates from the
Constitution, laws, policies, rules and regulations.
Constitution of the Phils fundamental law of
the land mandates the keeping of the general
accounts of the government, promulgation of actg
rules and the submission of reports covering the
financial condition and operation of the
government.
The offices charged
responsibility are:

with

the

1. COA (Commission on Audit)

accounting

2. DBM (Department of Budget and

Management)
3. BTr (Bureau of Treasury)
4. Government agencies discharging the
functions of government to enable it to
attain its commitments to the Filipino
people.
Commission on Audit

keeps the general accounts of the

government
promulgates
accounting
rules
and
regulations, and submits to the Pres 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
govt owned or controlled operations.
Shall have exclusive authority, subject to
the limitation in Article IX-D Section 2 par.
(2) of 1987 Constitution, 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,
Revised
the
previous
government
accounting system

Pursuant to the COA, DBM, and DOF Joint

Circular No. 2013-1 dated August 6, 2013, Unified
Accounts
Code
Structures
(UACS),
the
consistency of account classification and coding
structures with the Revised Chart of Accounts shall
be the responsibility of the COA.
Pursuant to the 1987 Phil Constitution Sec 2(2),
Art IX-D, which vests the exclusive authority to
promulgate accounting rules and regulations,
created the Public Sector Accounting Standards
Board (PSASB) under COA Resolution 2008-12
dated October 10, 2008.

PSASB shall assist the commission

formulating and implementing PPSAS

in

PPSAS - shall apply to National Government

Agencies (NGAs), Local Government Units
(LGUs),
and
Government-Owned
and/or
Controlled Corporations (GOCCs) not considered
as Government Business Enterprises (GBEs), in
which case, the PFRS and relevant standards
issued by FRSC, BOA and PRC shall apply.
Government Business Enterprise (GBE) an
entity that has all the following characteristics:
(AHSNC)
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 arms length) and
5. Controlled by a public sector entity
In developing standards of PPSAS, the PSASB
considers and make use of the existing laws,
financial reporting, acctg rules and regulations,
and pronouncements issued by International
Public Sector Accounting Standards Board
(IPSASB)
Department of Budget and Management
Pursuant to Sec 2 Chap 1, Title XVII, Book IV of
the Administrative Code of the Philippines (EO
292)
DBM shall be responsible for the formulation and
implementation of the National Budget with the
goal of attaining our national socio-economic plans
and objectives

Shall be responsible for the efficient and

sound utilization of government funds and
revenues to effectively achieve the
countrys development objectives
Tasked
to
control
and
monitor
appropriations and allotments through the
registries it shall maintain

Registry of Appropriations and

Allotments (RAPAL);
o Registry of Special Purpose Fund
Appropriation (RESPFA);
Under NGAS, it shall also maintain the
Registry of Allotments and Notice of Cash
Allocations (RANCA) for its control and
monitoring of notice of cash allocation
releases

GFS coding will generally not be shown to be part

of the UACS, GFS data will be obtained from
reference table inside the system that will map
GFS function coding from MFO/PAP codes, as
well as GFS economic classifications coding from
object codes for non-financial assets, financial
assets, liabilities, revenues and expenses.

As provided by Joint Circular No. 2013-1 dated

August 6,2013, Unified Account Code Structures
(UACS), the validation and assignment of new
codes for funding source organization, sub-object
codes for expenditure items shall be the
responsibility of the DBM.

Depts, bureaus, offices and other instrumentalities

of the National Govt, including 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, w/c
are to be the same level with other units/div/dept in
the agency and under the direct supervision of the
Head of the Agency.

*In addition, the validation and assignment of new

program, activity and project codes shall be
decided jointly by the proponent agency and DBM.
The Bureau of Treasury
Bureau of Treasury plays a pivotal role in the
cash operations of the natl govt.
*Accounting rules and regulations pertaining to
cash operations, collections and remittances and
disbursements, including public borrowings, are
issued by the COA, jointly or with the concurrence
of the Dept of Finance and DBM.
Under the Revised Administrative Code, the
Bureau of Treasury, as one of the operating
bureaus of DOF is authorized to:
1. Receive and keep national funs, manage
and control the disbursements thereof; and
2. Maintain accounts of financial transactions
of all national government offices, agencies
and instrumentalities.
Bureau of Treasury shall maintain the Registry of
NCA and Replenishments (RENREP) for control
and monitoring of NCA released by the DBM. It
shall monitor bank transfers it makes in
replenishing its MDS accounts.
DOF BTr responsibility; UACS, consistency of
accounts classification and coding standards iwith
the Govt Finance Statistics (GFS)

The Government Agencies

Accounting Personnel shall

1. Maintain and keep current accounts of the
agency
2. Provide advice upon the financial condition
and status of the appropriations and
allotments of the agency as its Head may
require
3. To develop and conduct procedures and
comply with the reporting requirements of
the COA, DOF and DBM. Failure to comply
with these reqts is sufficient ground for
dismissal from the government service
*The agency shall now journalize the Notice of
Cash Allocation (NCA) it receives, which in effect,
identifies the share of the agency in the income of
Natl Govt. Govt Agencies will no longer journalize
its appropriations and allotments, instead, it shall
maintain the following four registries for the
allotments it receives and for the obligations it
incurs:
1. Registry of Allotments and Obligations
Personnel Services (RAOPS)
2. Registry of Allotments and Obligations
Maintenance
and
Other
Operating
Expenses (RAOMO)
3. Registry of Allotments and Obligations
Capital Outlay (RAOCO)
4. Registry of Allotments and Obligations
Financial Expenses (RAOFE)

BASIC FEATURES AND POLICIES OF NGAS

NGAS simplifies set of accounting concepts,
guidelines, and procedures designed to ensure
correct, complete, and timely recording of
government financial transactions, and production
of accurate and relevant financial reports.
BASIC FEATURES:

Accounting Methods
IPSASB develops IPSASs which apply
to the accrual basis of accounting and
IPSASs which apply to cash basis of
accounting.
IPSASs set out requirements dealing
with transactions and events in general
purpose financial reports of all public
sector entities other than GBEs.

IPSASB develops accrual IPSASs that:

1. Are converged with IFRS issued by the
IASB by adapting them to a public sector
context where appropriate.
2. Deals with public sector financial reporting
issues that are either not addressed by
adapting IFRSs or for which IFRSs have
not been developed by the IASB.
Conceptual Framework for Financial Reporting
relevant reference for users of IPSASs.

Deals with concepts that apply to GPFR

under accrual basis. (occur not paid;
recorded and recognized to the period
which they relate)
Public Sector Conceptual Framework

IPSASB attempts to facilitate compliance with

accrual based IPSASs through the use of
transitional provisions in certain standards.
Where transitional provisions exist, they may allow
an entity additional time to meet the full
requirements of a specific accrual based IPSAS or
provide relief from certain requirements when
initially applying an IPSAS.
An entity may at any time elect to adopt the
accrual basis of accounting in accordance with

IPSASs. Transitional provisions would govern the

length of time available to make the transition.
IPSASB has also issued a comprehensive cash
basis IPSASs that includes mandatory and
encouraged disclosure sections.
The cash basis IPSASs encourages an entity to
voluntary disclose accrual based information,
although its core financial statements will
nonetheless be prepared under the cash basis of
accounting.
The entity in the process of conversion may wish
to include particular accrual based disclosures
during the process.
The status (audited or unaudited) and location of
additional information (notes to FS or in a separate
supplementary section of the financial report) will
depend on the characteristics of the information
(reliability and completeness), and any legislation
or regulations government financial reporting
within a jurisdiction.
One Fund Concept
Fund both a sum of money set aside for a
specific purpose and an independent fiscal and
accounting entity.

Created by the Constitution and by

legislative enactments, which direct that
certain receipts to be collected or
collections generated and accounted for as
a special resource to carry out specific
activities or attain certain objectives.

Under the old GAS, all income accruing to the

agencies shall accrue to the General Fund of the
government, and all money collected on any tax
levied for a special purpose shall be treated as a
Special Fund.
NGAS adopts One Fund Concept, General
Fund, generally available for all functions of
government
Special Fund Accounting shall be done only
when specifically required by law or by a donor
agency or when otherwise necessitated by

circumstances subject to prior approval of the

Commission (Special Purpose Fund)
Special Purpose Fund fund appropriated for
purposes other than those provided in the regular
funds of government agencies such as;

Miscellaneous Personnel Fund used to

cover personnel benefits which are not
provided for in the regular budget of the
agency
Calamity Fund used to cover relief,
rehabilitation, reconstruction and other
services in connection with calamities that
may occur during the budget year
Organizational Allotment Fund used to
cover budgetary requirements of a newly
created
organization,
program/project/activity within an agency

Chart of Accounts and Account Codes

COA, member of INTOSAI, ENCOURAGED to
adopt relevant IAS.
IPSASB of International Federation of Accountants
which promulgates IPSASs, acknowledges the
right of governments and national standard-setters
to establish their respective accounting standards
and guidelines for financial reporting in their
jurisdictions.
COA recognizes the need to revise the existing
NGAS Chart of Accounts prescribed in COA Cir.
No. 2004-008 dated September 20, 2004. (NGA
and budget systems) COA Cir. No. 2013-002
dated January 30, 2013, Adoption of the Revised
Chart of Accounts for National Government
Agencies, is adopted.
UACS coding framework for the natl govts
financial transactions in all phases of budget
cycles.

information under the supervision of a manager

having direct responsibility for its performance

Responsibility Center a part, segment, unit of

function of a govt agency, headed by a manager,
who is accountable for a specified set of activities.
*Except for some, which derive most of their
income from collection of taxes and fees,
national government agencies are basically
cost centers, whose primary purpose is to render
service to the public at lowest possible cost.
Cost Center established to provide each
governments agency accessibility to cost
information and to facilitate cost monitoring at any
given period.
Responsibility Accounting aims to:
1. Ensure that all costs and revenues are
properly charged/credited to the correct RC
so that deviations from the budget can be
readily attributed to managers, accountable
therefor
2. Provide a basis for making decisions for
future operations
3. Facilitate review activities, monitoring the
performance of each RC and evaluation of
the effectiveness of the agencys
operations
Concepts of Responsibility Accounting

Responsibility Accounting
Responsibility Accounting system that relates
the financial results to a responsibility center,
which provides access to cost and revenue

A system that measures the plan by

budget, and actions by actual results of
each responsibility center
Done only under the computerized
accounting system

Responsibility
Accounting
involves
accumulating and reporting data on
revenues and costs on the basis of the
managers actions, who has the authority
to make the D2D decisions about the items
Evaluation of a managers performance
is based on the matters directly under his
control
Responsibility accounting can be used
at every level of management in which the
following conditions exist:

Costs and revenues can be directly

associated with the specific level of
management responsibility
o Costs
and
revenues
are
controllable at the level of
responsibility with which they are
associated
o Budget data can be developed for
evaluating
the
managers
effectiveness in controlling the
costs and revenues.
The reporting of costs and revenues under
responsibility accounting differs from
budgeting in 2 aspects:
o A distinction is mage between
controllable and non-controllable
costs
A cost is considered
controllable at a given level
of
managerial
responsibility.
Noncontrollable costs are
costs incurred indirectly
and
allocated
to
a
responsibility level
o Performance
reports
either
emphasize or include only items
controllable by individual manager
A responsibility reporting system involves
the preparation of a report for each level of
responsibility; compare actual costs with
flexible budget data; controllable costs only
no distinction between fixed and variable
costs
o

Evaluation of a managers performance for

cost centers is based on his ability to meet
budgeted goals for controllable costs.

Books of Accounts
Only the General Journal shall be used. The
books of original entry or journals shall be used
to record in time sequence, financial transactions
and information presented in duly certified and
approved accounting documents.
Journal Entry Voucher (JEV) is the basis for
recording in journals
While waiting, CDJ, CRJ, CRJa