GOVERNMENT ACCOUNTING

BUDGET- It is a plan for financing the government activities for a fiscal year prepared and submitted by responsible
executive to a representative body whose approval and authorization are necessary before the plan can be executed. It
shows source and the use of the available resources.

Budget Deficit- the excess of government spending on goods and services over net tax revenue

Budget Surplus- the excess of revenue over government spending on goods and services

Balanced budget- government expenditure is equal to government revenues

Revenues- refer to projected cash inflows like collections from taxes by BIR/BOC and other tax agencies, and fees and charges
imposed by the government agencies, as well as proceeds from grants

Expenses/Expenditures- refers to the project costs, fees and charges incurred by the agencies.

STAGES OF BUDGETING

1. Budget Preparation- includes the estimation of the government revenues, the determination of budgetary
priorities and activities within the constraints imposed by available revenues and by borrowing limits and the
translation of approved priorities and activities into expenditure levels.
2. Budget authorization- this includes the legislative authorization, review and approval of budget.
3. Budget execution and operations- this covers the operational aspects of budgeting. It includes release of
allotments and implementation of budget to the other departments.
4. Budget Accountability- the last phase of the budget process that includes reporting of the government agencies
and the audit of Commission on Audit.

ALLOTMENT AND OBLIGATION

Allotment- is the authorization issued by the Department of Budget and Management which shows the allowable
amount of appropriation.

Obligation- the commitment by the government agency arising from an act of a duly authorized official that binds the
government to the immediate or eventual payments of sum of money.

Appropriation- it is the authorization that allows disbursement out of the general funds of the government.

General Appropriation Act (GAA)- provides a reliable source of appropriation guidance for the government
budget.

Continuing Appropriations- appropriations previously started and continue to be valid and available for
Government Projects.
Unprogrammed Appropriations- provide contingent appropriation for priority programs and projects. Exists whenever
actual collection exceeds target revenue.

ACCOUNTING METHODS

Government accounting- 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. The principles were set out Philippine Public Sector Accounting Standards (PPSAS). PPSAS applies to all Local
Government Units (LGUs), National Agencies and Government Owned and Contolled Corporations not considered as
Government Business Enterprises.
Books used in Government Accounting

a) Journal of Obligations
b) General Journal- used in the government accounting manual
c) Journal of allotment- used to record allotment to government agencies

Responsibility accounting- is a system that measures the plans and actions of each responsibility center. It involves the
accumulation and reporting data on revenues and cost on the basis of manager’s action who has the authority to make
day to day decisions about items, as well as, the evaluation of the manager’s performance in meeting the budgeted
objectives and the costs.

Responsibility Center- is part, segment or function, headed by a manager, who is accountable for a specified set of
activities.

Unified Accounts Code Structure (UACS)- budgetary, treasury and accounting code classification structure jointly
developed by the DBM, COA, DOF and BTr which aims to facilitate financial reporting and consolidation of actual
revenue collection and expenditures, enable the assessment of outturns against transparency/accountability and
improve efficiency in terms of utilization of government funds.

Authorization Code- is the basis for which Funds are appropriated and distributed.

Location Code- it provides UACS coding based on location

GENERAL FUNDS AND SPECIAL FUNDS

General Fund- Used to account for all financial resources that are not restricted to specific purposes or otherwise
required to be accounted for in another fund. New constitution states that no money shall be paid out of the National
Treasury except in the pursuance of Appropriation.

Principal users of General Fund includes:

a. Citizens
b. Lenders
c. Donors
d. Congress and Senate

Special Funds- Other receipts and collections shall be designated as Special Funds only if the law authorized it as well as
compliance with the rules and obligations is observed.
Funding Clusters – the aggregation of funding sources for the purpose of recording transactions and preparing reports in the Budget,
Treasury and Accounting processes.