GOVERNMENT ASSOCIATION OF CPAs (GACPA)

SUSTAINING ETHICS AND EXCELLENCE

IN MANAGING GOVERNMENT RESOURCES
SEMINAR/WORKSHOP

Updates on Accounting and

Auditing Rules and
Regulations
Lourdes M. Castillo
Assistant Commissioner
Government Accountancy
Sector
Delivered during the GACPA Seminar at
Commission
on Audit
Prince Plaza Hotel, Baguio City
February 6-8, 2013

1. COA Circular No. 2012-001

dated June 14,
2012
Prescribing the Revised
Documentary Requirements
for Common Government
Transactions

2. COA Circular No. 2012-004,

dated November
28, 2012
Demand for the Immediate
Liquidation and Settlement of
All Cash Advances
Outstanding as of December
31, 2011

3. COA Circular No. 2013-002,

dated January
30, 2013
Adoption of the Revised Chart
of Accounts for National
Government Agencies

4. COA Resolution No. 2013-007,

dated
January 29, 2013
Adoption of the Philippine
Public Sector Standards of
Auditing

5. Permanent Committee (COA-DBM-DOF)

Joint Circular No. 4-2012,
dated Sept. 11, 2012
Rules and Regulations Implementing
Executive Order No. 431 dated
August 30, 2005, Directing the
Reversion of All Dormant Accounts,
Unnecessary Special Trust Funds to
the General Fund and For Other
Purposes

6. National Budget Circular No. 546,

dated January 17, 2013

Rules and Regulations on the

Grant of Representation and
Transportation Allowances

COA Circular No. 2012-001,

dated June
14, 2012
Prescribing the Revised
Documentary Requirements
for Common Government
Transactions

OUTLINE
Fundamental Principles PD 1445
General Requirements for all Types of
Disbursements
Specific Requirements for Each Type of
Disbursement
Cash Advances
Fund Transfers to NGOs/Pos
Fund Transfers to Implementing

Agencies/From Trust Fund to Gen Fund for

Unspent Balance
Salary

OUTLINE
Allowances, Honoraria and Other Forms of

Compensations
Other Expenditures
Extraordinary and Miscellaneous Expenses
Prisoners Subsistence Allowance
Procurement
Cultural and Athletic Activities
Human Resource Development and
Training Program
Financial Expenses
Road Right-of-Way (ROW)/Real Property

Fundamental Principles,
Sec. 4, P.D. 1445
No money shall be paid except in pursuance of an

appropriation law or other specific statutory authority

Use solely for public purpose
Trust funds only for the specific intended purpose
Fiscal responsibility shared by all those exercising
authority over finance, transactions and operations
Disbursements or dispositions should bear approval of
proper officials
Claims should be supported with complete
documentation
Faithful adherence to all pertinent laws and regulations
Observance of GAAP and practices as well as sound
management and fiscal administration, provided they do
not contravene with existing laws and regulations

General Requirements for All

Types of Disbursements
Certification of Availability of Fund by
Chief Accountant
Lawful and sufficient allotment duly
obligated as certified, except for GOCCs
and GFIs
Legality of transaction and conformity
with laws, rules and regulations
Approval of expenditure by Head of
Office or authorized representative
Sufficient and relevant documents to
establish validity of claim

1.0 Cash Advances

General Guidelines COA Circs. 97-002, 2009-002,

Sec. 89 of PD 1445, pertinent GAA provisions

Specific Guidelines and Documents Required
Types of Cash Advances (Payroll Fund, PCF,
Field/Activity COE, TA (local and foreign)
Granting of Cash Advance
General Guidelines
Documents Required Common to All CAs except
for travel
Additional Documents per type of Cash
Advance
Liquidation of Cash Advances

2.0 Fund Transfers to NGOs/POs

General Guidelines pertinent provision of

the GAA for the year, Sec. 4.5.6 COA Circular

2007-001 and GPPB Res. 12-2007

Specific Guidelines and Documentary

Requirements
Release of Funds
Implementation and Liquidation of Funds
Released
Staggered Release of Funds to NGO/PO

3.0 Fund Transfers

General Guidelines COA Cirular 94-013, COA

Memo 2010-014
Specific Guidelines and Documents Required
Transfer to Implementing Agencies
Transfer
Implementation and Liquidation by
Implementing Agency
Liquidation by Source Agency
From Trust Fund to General Fund for
Unspent/Excess Amount

4.0 Salary
General Guidelines- 35 FY2012 GAA or pertinent

provision of the GAA for the year, RA 6758 as amended

(Pres. Veto message, 020810,p. 1236, RA 9970)
Specific Guidelines and Documents Required -Sec.325,
RA 7160 LGU Code, EO 292, CSC MC 14 s. 1999, CSC
Res. 02-1490, COA Cir 2000-006, DBM Local Budget
Circular 2009-91, DBM National Compensation Circular
67, s. 1992, CSC Circular 06, s.2005, etc.

Individual Claims
First Salary
Salary (if deleted from the payroll)
Salary of Casual/Contractual Personnel
Salary Differential due to Promotion and/or Step
Increment
Last Salary
Salary due to heirs of deceased employee
Maternity Leave
General Claims through the ATM

5.0 Allowances, Honoraria and other

Forms of Compensation
General Guidelines
Specific Guidelines and Documents Required

Personnel Economic Relief Allowance

Representation and Transportation Allowance (for individual and

general claims)
Clothing/Uniform Allowance (Individual and General claims
Subsistence, Laundry and Quarters Allowances
Productivity Incentive Allowance (individual and general claims)
Special Counsel Allowance
Honoraria
Personnel Involved in Government Procurement
Teaching Personnel (DepED, TESDA, SUCs and other
educational institutions)
Governing Boards of Collegial Bodies
Lecturer/Coordinator
Special Projects
Science and Technological Activities

6. Other Expenditures
General Guidelines Sec. 57, 2012 GAA or
pertinent provision of the GAA for the
year, Sec 43, Chapter 5 and 80, Chapter7,
Book V1 EO 292, Sec 58, 2012 GAA, etc.
Specific Guidelines and Documents
Required
Utility Expense
Telephone/Communication Services

7. Extraordinary and
Miscellaneous Expenses
General Guidelines Sec. 57, 2012 GAA or
pertinent provision of the GAA for the year,
Sec 43, Chapter 5 and 80, Chapter7, Book
V1 EO 292, Sec 58, 2012 GAA, etc.
Specific Guidelines and Documents
Required
Utility Expense
Telephone/Communication Services

8. Prisoners Subsistence
Allowance
General Guidelines Item 1 and 2,
Special Provision for BJMP and Bu Cor,
2012 GAA or pertinent provisions for the
year
Specific Guidelines and Documents
Required
By administration thru cash advance
By catering contract

9. Procurement

General Guidelines ( RA 9184, Sec 85 2012 GAA or pertinent provisions

of GAA for the year), Sec 85 2012 GAA or pertinent GAA provision for
the year, Sec. 7 IRR of RA 9184, Sec 7, RA 9184, Rule XVI Revised IRR
RA 1984, Sec. 13.1, RA 1984;
Specific Guidelin, es and Documents Required

Procurement thru Public Bidding GAA for the year, Sec. 2-7, 9-10 and 12 of
EO 182 s. 1997 and Sec. 87 of GAA 2012, COA Circular 2009-001, 2005-0087

Infrastructure

Consulting Services Annex E Revised IRR RA 9184, Annex D. COA Memo 2005-027
Goods- RA 9184, Sec 5r Revised IRR, 2012 GAA Provisions, Sec. 20

Supplies, Materials, Equipment and Motor Vehicles

General Support Services (janitorial, security, maintenance, garbage collection and
disposal and similar services)
Rental Contracts
Repair and Maintenance of Aircraft, Equipment and Motor Vehicles
Advertising Expenses

Procurement thru Alternative Modes COA Cir. 2009-001, RA 9184 pertinent

provisions

Requirements Common to all alternative modes

Specific requirements

Advance Payment
Variation Order/Change Order/Extra Work Order
Progress Payment
Final Payment
Release of Retention Money

Limited Source Bidding

Direct Contracting
Repeat Order
Shopping
Negotiated Procurement

Procurement thru Automatic Debit Arrangement or direct payment

10. Cultural and Athletic

Activities
General Guidelines Sec 25 of GAA
2012 or pertinent provision of GAA for
the year
Documents Required
Budget estimates approved by the Head
of Agency
Same requirements under procurement
depending on the nature of expense and
the mode of procurement adopted

11. Human Resource Development

and Training Program
General Guidelines CSC Guidelines Sec. 27
2012 GAA and pertinent provisions of the
GAA for the year
Documents Required
Budget estimates approved by the Head of
Agency
Schedule of the training approved by the Head
of the Agency
Same requirements under procurement
depending on the nature of expense and the
mode of procurement adopted

12. Financial Expenses

General Guideline appropriate provision of
the New Government Accounting System and
other pertinent laws, rules and regulations
Documents Required
Loan Agreements/Memoranda of Agreement
together with supporting documents
Statement of Accounts
Bank Debit Memos
Others necessary depending on the nature of the
transactions

13. Road Right-of-Way/

Real Property
General Guidelines RA 8974 and its IRR
Documents Required
Land Sec.8 RA 8974 on Environment Clearance
Certificate
Negotiated Purchase
If Registered land
If Unregistered land EO 1035 on
Claimants Surety/Indemnity Bond
For Payment by Court Decision
Structure/House
Improvements (trees, plants, growing fruits,
etc.) DENR rules and regulations

COA Circular No. 2012-004,

dated
November 28, 2012
Demand for the Immediate
Liquidation and Settlement of
All Cash Advances
Outstanding as of December
31, 2011

Addressed to the following:

All Heads of National Government Departments,
Bureaus and Agencies;
Provincial Governors, City/Municipal Mayors;
Managing Heads of Government-owned and/or
Controlled Corporations;
All Treasurers, Finance Officers, Regular and
Special Disbursing Officers, and Other Accountable
Officials of the aforesaid Government Agencies;
COA Directors, Regional Directors, and Heads of
Auditing Units, and All Others Concerned

Rationale
As a general rule, cash advances must be
liquidated within the prescribed periods depending
on the nature and purpose of the cash advance:

Salaries and wages

Petty and field operating expenses
Local travel and foreign travel
Honoraria and similar payments to officials and employees
Expenses for special projects/activities such as
anniversary celebration
Cultural and athletic activities

The above cash advances must be liquidated

within twenty (20) days from the
accomplishment of the purpose.

Settlement and Liquidation

of Cash Advance
A cash advance is settled and liquidated either by:
1. Returning the money advanced if unspent,
2. Or by the presentation of regularly
accomplished vouchers, giving satisfactorily
detail of the items thereon paid which must
be in accordance with the purpose for
which the cash advance was granted, and
further supported by proper receipts and
other evidence of payment, subject to the
result of the post-audit thereof by the
auditor concerned.

Primary responsibility of Heads of

Agencies
Section 2 of Presidential Decree (P.D.)
No. 1445, the Government Accounting
Code of the Philippines, places the
responsibility to faithfully take care that
government funds and property be
safeguarded from wastage directly with
and primarily on the chief or head of the
government agency concerned

Legal presumption against nonliquidation of cash advance

Article 217 of the Revised Penal Code states in
unequivocal terms that:
The failure of a public officer to have
duly forthcoming any public funds or
property with which he is chargeable, upon
demand by any duly authorized officer,
shall be prima facie evidence that he has
put such missing funds or property to
personal use.

Final demand to settle unliquidated

cash advance
Final notice and demand is hereby made to all
concerned to settle and liquidate all
outstanding cash advances as of December 31,
2011, on or before January 31, 2013.
Provided, however, that those who have been
issued by the Commission on Audit notice and
demand, prior to the issuance of this Circular,
to settle and liquidate their cash advances
within a specified period, shall do so within
the period specified in the said notice.

An accountable officer refers to:

A public officer or employee who, in the
discharge of his office, receives money
from the government which he is bound
to later account for. Transfer, separation
or retirement from the government does
not operate to discharge the said person
from coverage of the definition and
corresponding duty to account for the
unliquidated advances.

This Circular shall serve as the

demand required under appropriate
law, rules and regulations to settle
the accountable officers
unliquidated cash advance as well as
all those who are already separated
from the service or have transferred
to other agency.

Duties of Agency officials:

a. On or before December 15, 2012, all heads of
government agencies shall disseminate in writing
this Circular to all Accountable officials and
employees within their respective agencies and
serve a written notice to and demand settlement
of the outstanding cash advances as of December
31, 2011.
b. The Chief Accountant shall, within the same
period, furnish the head of agency and the head of
the auditing unit thereat a list of accountable
officers with unliquidated and outstanding cash
advances.

Duties of the Commission on Audit:

Ensure that the outstanding cash advances are
liquidated within the specified periods
Shall Evaluate the cash advances of Accountable
Officers to determine compliance with pertinent COA
Rules and Regulations and to report violations thereof
Shall report on or before February 28, 2013 to the
agency head and to the Director, FAIO, compliance
with this Circular including the ageing of the cash
advances showing the purpose and other
information
Submit to the respective COA Directors the vouchers
and all supporting documents relative to the grant of
the cash advance, copy furnished the COA Chairperson

Consequences of failure to liquidate

Failure of an accountable officer to liquidate his
outstanding cash advance on or before January 31,
2013 shall constitute cause for the filing of
malversation charge under Article 217, failure to
liquidate cash advance under Article 218, both of the
Revised Penal Code or criminal prosecution under
Section 128 of P.D. 1445.

The suspension of salaries of the accountable officers

shall be ordered by the auditor concerned to the
propers agency official through the head of the Agency.

Appropriate administrative proceedings shall

likewise be instituted.

COA Revised Chart of Accounts

for National Agencies
Legal Basis:
COA Circular No. 2013-002
Dated January 30, 2013

Effectivity:
January 01, 2014

Objectives:
To provide new accounts for the adoption of the
Philippine Public Sector Accounting Standards
(harmonized with IPSAS)

To provide uniform accounts for national

government accounting and budget systems to

facilitate the preparation of harmonized financial
and budgetary accountability reports

To expand the account code from three (3) digits

in the NGAS Chart of Accounts to eight (8) digits,

to allow expansion or creation of new accounts as
may be necessary to implement new standards or
policies.

The COA Revised Chart of Accounts

is integrated in the Unified Account
Code Structure (UACS) under the
Philippine Public Financial
Management (PFM) Reform Program
jointly undertaken by DBM, DOF and
COA.

Major Changes
a. Coverage is limited only to all
national government agencies
b. Expanded account code structure from three (3) digits to eight (8)
digits

Account Code Structure

Account Groups:
Codes are assigned to account groups to facilitate
location of accounts in the general and subsidiary
ledgers, to provide systematic arrangement and
classification of accounts and facilitate
preparation of the consolidated financial reports
as follows:
Code Account Groups
1
Assets
2
Liabilities
3
Equity
4
Income
5
Expenses

Asset Without Contra Account

Ex. Cash, Collecting
Officer

Asset Without Contra Account

Ex. Accounts Receivable

Major Changes
c. New Accounts were provided for
the implementation of the
Philippine Public Sector
Accounting Standards

New Accounts
Example

Major Changes
d. Some accounts were deleted since
these accounts are for use by local
government units or governmentowned and/or controlled corporations
while other accounts are no longer
applicable to national government
agencies.

Deleted Accounts
Example

Major Changes
e. Some accounts were either
expanded or compressed. For
instance, expense accounts for
repairs and maintenance and
depreciation of property, plant and
equipment which were previously
presented per asset account were
compressed based on the major
account classification.

Compressed Accounts
Example

Expanded Account
Example

A
R
D

T
F

UNIFIED ACCOUNTS CODE STRUCTURE (UACS)

FUNDING SOURCE
6 Digits

Financing
Source
1 digit

Required

Authorizatio
n
2 digits

ORGANIZATION
12 digits

Fund
Categor
y
3 digits

LOCATION
9 digits

Department
2 digits

Agency
3 digits

Operating
Unit
7 digits

Region
2 digits

Province
2 digits

City,
Municipality
2 digits

Required

Required

Required

Require
d

Optional

Optional

* Chart of Accounts

Barangay
3 digits

MFO/
PROGRA
M,
ACTIVITY
and
PROJECT
9 digits

OBJECT CODE
10 digits

MFO/PAP
Code
9 digits

COA
CoA*
Object
8
digits

Unique for
each
Department/A
gency

Uniform across Government

Sub-Object
2 digits

The Unified Account Code Structure (UACS)

Jointly developed by DBM, DOF and COA

It is a government-wide coding framework
to provide a harmonized budgetary and
accounting code classification that will
facilitate reporting of actual revenues and
collections and expenditures compared with
programmed revenues and expenditures,
starting fiscal year 2014

 The UACS is to be adopted in identifying,

aggregating, budgeting, accounting, auditing
and reporting the financial transactions of the
government.

Enhance the quality and timeliness of financial

data for the generation of the required reports
and analysis of the same.

Strengthen financial controls and

accountability.

Key Elements of the UACS

Funding Source Codes: Six (6) digit code to
reflect the Financing Source, Authorization and
Funding Category

Organization Codes: Twelve (12) digit code to

reflect the Department, Agency and Sub-Agency
or Operating Unit/Revenue Collecting Unit

 Location Codes: Nine (9) digit code to reflect

the Region/Province/Municipality/Barangay
following the Philippine Standard Geographic
Code prescribed by the National Statistical
Coordination Board

Major Final Output (MFO)/Program, Activity and

Project (PAP) codes: Nine (9) digit code to
reflect the MFO/PAP codes

Object codes: Assets, Liabilities, Equity,

Revenues, and Expenses following the COA
Chart of Accounts by object and sub-objects
provided by BTr, BIR, DOF, BOC and DBM

GOVERNMENT ASSOCIATION OF CPAs (GACPA)

SUSTAINING ETHICS AND EXCELLENCE
IN MANAGING GOVERNMENT RESOURCES
SEMINAR/WORKSHOP

Executive Order No. 55

dated September 6, 2011
(Subject of COA Memorandum 2011-020 dated September 6, 2011)

Directing the Integration and

Automation of Government Financial
Management System

Rationale
It is the policy of the State to adopt and
implement full public disclosure of all its
transactions involving public interest and
recognize the right of the people to
information on matter of public concern as
embodied under Section 28, Article II and
Section 7, Article III of the 1987
Constitution

The present administration

subscribes to emerging global thrust
towards open government and
greater budget transparency and
accords the highest priority to public
sector initiatives that promote
transparency, accountability and
good governance as contained in
the Presidents Social Contract with
the Filipino people.

Objectives of Government Integrated

Financial Information System (GIFMIS)
1. To facilitate the generation of vital
information on any and all aspects of
government financial transactions that can
be made accessible to the public through
I.T., subject to existing laws,
2. Greater participation of civil society
organization in fiscal governance,
3. Effective and efficient delivery of public
services.

4. Allow greater financial management and

control at oversight and agency levels,
5. Ensure stricter compliance of the budget
to appropriation laws and corresponding
rules and regulations,
6. Significantly improve Treasury cash
management, and
7. Facilitate keeping of general accounts of
government and management reporting at
various levels of government

The following agencies of the government

signed a Memorandum of Agreement (MOA):
Commission on Audit (COA),
Department of Budget and Management (DBM),
Bureau of Treasury (BTr)/Department of Finance
(DOF) which created the Steering Committee on
Cooperation to Foster the Development of a
GIFMIs and implement a Public Financial
Management (PFM) Reforms Roadmap and
operationalize a Treasury Single Account (TSA)

Philippine Public Financial

Management
Accounting and Auditing Reforms (AAR) PIU
Philippine Public Financial Management
Status Report

Philippine Public Financial Management

KEY ACCOMPLISHMENTS
Priority Area #1 - ACCOUNTING
a. Harmonize PGAS with IFRS and IPSAS
23 Philippine Public Sector Accounting Standards (PPSAS)
which are intended for implementation in 2013 are
being exposed to various COA sectors and concerned
organizations like PICPA, GACPA, AGAP, PAGBA, EUC and
PHALGA
b. On-going evaluation of eight comments received from
agencies/organizations
Five of the 23 PPSASs, PPSAS 5, 13, 17, 29 and 31 were
revised as result of the issuance of the 2012 IPSAS
Handbook which contains the newly-issued IPSAS 32,
Service Concession Arrangements: Grantor dated
October 2011

Priority Area #2 - AUDITING

a. Develop Philippine Public Sector Standards on Auditing
(PPSSA) COA resolutions to adopt/implement the following
were signed by the COA Commission Proper (CP):
24 PPSSAs
COAs Framework of Professional Standards
11 PPSSAs are being finalized and for submission to the
CP for approval
18 ISAs/ISSAIs are on-going evaluation for adoption as
PPSSAs

GOVERNMENT ASSOCIATION OF CPAs (GACPA)

SUSTAINING ETHICS AND EXCELLENCE
IN MANAGING GOVERNMENT RESOURCES
SEMINAR/WORKSHOP

National Budget Circular No. 546

dated January 17, 2013
Rules and Regulations on the
Grant of Representation and
Transportation Allowances

Salient Features
Purpose:
Issued to prescribe rationalized and updated
rules and regulations on the grant of
Representation Allowance (RA) and
Transportation Allowances (TA)

Coverage:
Generally, those holding regular and
contractual positions entitled to RATA under the
pertinent general provisions of the annual GAA
Others as authorized and enumerated in the
NBC

Authorized Monthly RATA Rates:

Highest rate is P14, 000.00 for RA and P14,000.00 for TA
Lowest rate is P5,000.00 for RA and P5,000.00 for TA
Officials who are assigned or who use government
vehicles are not entitled to TA
The grant of RATA shall be based on the actual work
performance in a month on a pro-rata basis, exclusive of
leaves of absence with pay as follows:
No. of Workdays
of Actual Work Performance

Actual RATA for a Month

1 to 6 workdays

25% of the monthly RATA

7 to 12 workdays

50% of the monthly RATA

13 to 18 workdays

75% of the monthly RATA

19 workdays or more

100% of the monthly RATA

 For the issued government vehicle, but in some

eventful cases were prevented to use it such as
when the vehicle undergoes repair and no
replacement is provided, the grant of TA maybe
allowed on pro-rata bases.
RATA for OICs of positions entitled to those
allowances maybe allowed but not to OICs of
positions internally created organizational units
whose staffing are not authorized by DBM
Monthly RATA while on concurrent capacity
Monthly RATA while on full-time detail or
reassignment
Monthly RATA while on scholarship/study/training
grant

Fund Sources:
Charged against the agency budgets/appropriations
for the purpose for NGAs
For GOCCs and GFIs, charged against the corporate
operating budgets
The reimbursible RATA for those in detail to other
government agencies shall be charged against the
budgets of the parent agencies

Effectivity:

January 01, 2013

Thank you!