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Income/Collections and Deposits System (Revised)

Fundamental Principles for Revenue.

All revenues accruing to the NGAs shall be governed by the following fundamental principles:
a. Unless otherwise specifically provided by law, all revenues accruing to an entity by virtue of the provisions
of existing law, orders and regulations shall be deposited/remitted in the National Treasury (NT) or in any
duly authorized government depository, and shall accrue to the General Fund (GF) of the NG.
(Sec. 65(1), P.D. No. 1445)

b. Except as may otherwise be specifically provided by law or competent authority, all moneys and property
officially received by a public officer in any capacity or upon any occasion must be accounted for as
government funds and government property. (Sec. 42, Chapter 7, Title I(B), Book V, E.O. No. 292)

c. Amounts received in trust and from business-type activities of government may be separately recorded and
disbursed in accordance with such rules and regulations as may be determined by a Permanent Committee
composed of the Secretary of Finance as Chairman, and the Secretary of Budget and Management and the
Chairman, COA, as members. (Sec. 65(2), P.D. No. 1445)

d. Receipts shall be recorded as revenue of Special, Fiduciary or Trust Funds or Funds other than the GF, only
when authorized by law as implemented by rules and regulations issued by the Permanent Committee.
(Sec. 66, P.D. No. 1445)

e. No payment of any nature shall be received by a collecting officer without immediately issuing an official
receipt in acknowledgement thereof. The receipt may be in the form of postage, internal revenue or
documentary stamps and the like, officially numbered receipts, subject to proper custody, accountability,
and audit. (Sec. 68(1), P.D. No. 1445)

f. Where mechanical devices (e.g. electronic official receipt) are used to acknowledge cash receipts, the COA
may approve, upon request, exemption from the use of accountable forms. (Sec. 68 (2), P.D. No. 1445)

g. At no instance shall temporary receipts be issued to acknowledge the receipt of public funds. (Sec. 72,
GAAM Volume I)

h. Pre-numbered ORs shall be issued in strict numerical sequence. All copies of each receipt shall be exact
copies or carbon reproduction in all respects of the original. (Sec. 73, GAAM Volume I)

i. An officer charged with the collection of revenue or the receiving of moneys payable to the government
shall accept payment for taxes, dues or other indebtedness to the government in the form of checks issued
in payment of government obligations, upon proper endorsement and identification of the payee or
endorsee. Checks drawn in favor of the government in payment of any such indebtedness shall likewise be
accepted by the officer concerned. At no instance should money in the hands of the CO be utilized for the
purpose of cashing private checks. (Sec. 67(1) and (3), P.D. No. 1445)

j. Under such rules and regulations as the COA and the Department of Finance (DOF) may prescribe, the
Treasurer of the Philippines and all AGDB shall acknowledge receipt of all funds received by them, the
acknowledgement bearing the date of actual remittance or deposit and indicating
The Income, collection and deposit system covers the processes of acknowledging and reporting
income/collections, deposits of collections with Authorized Government Depository Bank (AGDB) or through the
AGDB for the account of the Treasurer of the Philippines, and recording of collections and deposits in the books
of accounts of the agency.

The sources of income and collections made by Agency are:


1. Taxes 4. Borrowings
2. Operating and Service Income 5. Miscellaneous Receipts
3. Grants and Donations

Methods of Accounting for Income:


1. Accrual Method used when income is realized (earned) during the accounting period regardless
of cash receipt. Account Receivable is set up and the general or specific income accounts
according to nature and classification are credited.

2. Modified Accrual income of an agency is recorded as Deferred Credits to Income and the
appropriate receivable account is debited. The income account is recognized upon
receipt of collection and the Deferred Credits to Income account is adjusted
accordingly.

3. Cash Basis - shall be used for all other taxes, fees, charges and other revenues where accrual
method is impractical. The income account is credited upon collection of the cash
or its equivalent.

All collecting officers shall deposit intact all their collections with AGDB daily or not later than the next
banking day and shall record all the deposits made in the Cash Receipts Record.

Only National Government Agencies maintain one set of books:


1. Regular Agency books this shall be used to record the regular transactions of the agency like the
receipt and utilization of Notice of Cash Allocation (NCA), and collections of income and
other receipts which the agency are authorize to use. This shall consist of journals and
ledgers, as follows:
Journals:
Cash Receipts Journal (CRJ)
Cash Disbursement Journal (CDJ)
Check Disbursement Journal (CkDJ)
General Journal (GJ)

Ledgers:
General Ledger (GL)
Subsidiary Ledgers (SL)

Receipt and Collection Process

1. The Collecting Officer (CO)receives payment from creditors and issues Official Receipt.
2. The CO records collections in Cash Receipt Record.
3. The CO deposits collections.
4. The CO records deposit in Cash Receipt Record.
5. The CO prepares the Report of Collections and Deposits and forwards to accounting unit with copies of
official receipts and validated Deposit Slips.
6. The accounting unit prepares Journal Entry Voucher (JEV) and records in the Cash Receipts Journal.

Types of collections as to authority to use:


1. Without authority to use.
2. With authority to use.
3. Authority with limitations
4. Income from sale of equipment.
5. Grants and donations intended for agency use.
6. Miscellaneous collections.

Illustrative Accounting Entries:

A. Without Authority to Use

As a general rule, all revenues regardless of amount and frequency of collection are to be
remitted to the National Treasury. NG books shall be discontinued.

1. Receipt of cash payment of hospital fees

Cash collecting officers 10101010 xxx


Hospital fees 40202170 xxx

2. Remittance to the treasury

Accumulated Surplus 30101010 xxx


Cash-collecting officers 10101010 xxx

B. With Authority to Use (RA Bks)

For agencies which are authorized to use income for their operations, the collections shall be
recorded as income in the Regular Agency (RA) books

1. Collection of prior years receivables

Cash- collecting officers 10101010 xxx


Accounts Receivables 10301010 xxx

2. Issuance of bill for the rent of an office space.

Accounts Receivables 10301010 xxx


Rent/Lease income 40202050 xxx
3, Record collection of rent payment.

Cash collecting officer 10101010 xxx


Accounts Receivable 10301010 xxx

4..Record temporary deposit to the NT thru the AGDB bank.

Cash-Treasury/Agency Deposit Trust 10104010 xxx


Cash collecting officer 10101010 xxx

5Release of NCA by DBM after request is made to the Bu of Treasury to use the deposited
collections as augmentation of MOOE.

Cash MDS, Trust 10101060 xxx


Cash-Treasury/Agency Deposit Trust 10104010 xxx

6.. Record disbursement for the repair (use of income).

Repairs and Maintenance Buildings


And Other Structures 50213040 xxx
Cash- MDS, Trust 10101060 xxx

C. Authority with Limitations

If the authority is subject to the limitation that any excess shall be remitted to the
National Treasury, such collections, ex.seminar and convention fees, the collections shall be
recorded in the RA books. The expenses shall be journalized, the balance/excess to be
remitted to the National Treasury.

1. Record collection of (ex.)seminar fees.

Cash collecting officer 10101010 xxx


Seminar/Training fees 40202040 xxx

2. Record deposit of collection.

Cash in Bank Local Currency Current Account 10102020 xxx


Cash collecting officer 10101010 xxx

3. Record payment of expenses.

Office supplies expense 50203010 xxx


Cash in Bank Local Currency Current Acct 10102020 xxx
4. Record the unused collections.

Cash collecting officer 10101010 xxx


Cash in Bank Local Currency Current Acct 10102020 xxx

5. Record remittance of excess to the Bu of Treasury through the AGDB.

Accumulated Surplus 30101010 xxx


Cash-collecting officers 10101010 xxx

D. Cash from another agency to implement its project (Inter-agency Transferred Funds). Under
existing regulations, the collections made by an Implementing Agency (IA) of cash from a
source agency (SA) to implement the latters project shall be remitted by the recipient agency,
the IA, to the BTr. The IA shall request the necessary NCA from the DBM)

1. Receipt of the check from the SA.

Cash collecting officers 10101010 xxx


Due to NGAs( SA) 20201050 xxx

2. Remittance of cash to the BTr

Cash-Treasury/Agency Deposit Trust 10104010 xxx


Cash-Collecting officers 10101010 xxx

3. Receipt of NCA from DBM

Cash-, MDS, Trust 10104060 xxx


Cash-Treasury/Agency Deposit Trust 10104010 xxx

4. Purchase of technical equipment

Technical & Scientific Equipment 10605140 xxx


Cash- MDS, Trust 10104060 xxx
Due to BIR 20201010 xx

5. Submission of liquidation report to the SA.and remittance to BIR.

Due to NGAs 20201050 xxx


Due to BIR 20201010 xxx
Technical and Scientific Equipment 10605140 xxx
Cash- MDS, Trust 10104060 xxx

If there is still a balance of funds transferred..

Due to NGAs 20201050 xxx


Cash- MDS, Trust 10104060 xxx