UACS Application Course

Department/Agency
Date

SESSION 1
UACS as Foundation for PFM Reform
 Session Overview
1. Public Financial Management (PFM)
- Scope and Definition
2. PFM Reform Roadmap
- Legal Basis
- Key Reform Initiatives
3. Unified Accounts Code Structure (UACS)
- Purpose
- Benefits
- Where Should UACS be Used?
- UACS Implementation Challenges

Session 1.0 UACS as Foundation for PFM 2

 Learning Objective

At the end of the session, the participants

will be able to explain the benefits of the
Unified Account Code Structure (UACS) and
why it provides a foundation for Public
Financial Management (PFM) reforms.

Session 1.0 UACS as Foundation for PFM 3

 Scope of PFM
Public Financial Management (PFM) covers the
rules, procedures and practices for government
to manage public finances in the areas of

• Budgeting • Public Debt Management

• Accounting • Revenue Generation
• Auditing • Public reporting on
• Cash Management financial operations
• Procurement
Session 1.0 UACS as Foundation for PFM 4
PFM Definition

PFM is a system by which

public financial resources
are planned, directed
and controlled to enable
and influence the
efficient and effective
delivery of public service
goals

Session 1.0 UACS as Foundation for PFM 5

Video Presentation

“The PFM Champions”

on the Philippine PFM
Reform Roadmap

Session 1.0 UACS as Foundation for PFM 6

 PFM Reform Roadmap
Strategic Objectives

1. Spending within means

(Fiscal Discipline)

2. Spending on the right

priorities (Allocation
Efficiency)

3. Spending with value for

Master plan for improving the
Philippine PFM money and results
(Operational Efficiency)
Session 1.0 UACS as Foundation for PFM 7
Legal Basis of PFM Reforms

Session 1.0 UACS as Foundation for PFM 8

 PFM Reform Initiatives
Generate real-time, reliable,
accurate financial info and
reports for policy decision
making
GIFMIS
Harmonize and consolidate
data structures and apply
consistent set of budget and
Treasury Cash Budget
Improve operational efficiency accounting rules for reporting
through more efficient
Management Reporting &
banking arrangements, Operations Performance
improved investment Improvement Standards
revenue, and improved
budget execution

Enhance government
accounting & auditing
Liability Accounting systems & standards &
Improve management of strengthen external and
government’s contingent Management and Auditing
participatory audit capacity
liabilities and financial
exposure

Capacity
Professionalize the PFM
Building
workforce through ongoing,
systematic learning &
development activities on
PFM competencies for staff at
all levels Session 1.0 UACS as Foundation for PFM 9
 GIFMIS
Government Integrated
Financial Management
Information System is
an integrated IT
solution that can collect
and organize financial
information in a central
database
Session 1.0 UACS as Foundation for PFM
• GIFMIS is a tool that will assist
Government to improve the
quality and timeliness of
information, and efficiency and
controls in PFM operations.
• Provide PFM managers and staff
with better information to aid
analysis and decision-making.
Status: Conceptual design
completed in 2012; Procurement
ongoing; Pilot in 2015
10
 Improving Cash Management Operations
• Aims to improve quality and timeliness of
information about Government’s cash position
• Paves the way for creation of the Treasury
Single Account (TSA) under custody of the
Central Bank Treasury Single
• Includes closing of individual bank accounts Account (TSA) is a
and consolidating these in a TSA unified structure of
• Helps reduce borrowing and generate savings
from interest charges
government bank
Status: accounts enabling
• No NGAs will be allowed to open a bank consolidation and
account without approval of the DOF/BTr (BSP optimum use of
Circular 811,s.2013)
• Savings from float to fees – about Php500M to
government cash
Php1B (annually) resources
• Inventory of bank accounts continuously
updated Session 1.0 UACS as Foundation for PFM 11
 Liability Management
• Government needs an accurate view of the scope
and value of its contingent liabilities so that potential
impact on the budget is understood and risks
managed accordingly
• Strategies needed:
– develop a database that provides an estimated
valuation of Government’s contingent liabilities
– define a methodology for ongoing monitoring of
liabilities, including definition of the scope of
liabilities for the monitoring framework

Session 1.0 UACS as Foundation for PFM 12

 Capacity Building
Training and Education to PFM Certificate Program
Support Rollout • Address need of GOP for
• Supports training and sustained learning and
education of agency staff development program for
and managers to put in staff with PFM roles and
practice key reform responsibilities
initiatives as PIB, TSA, UACS • Provide ongoing, systematic,
and other PFM policy and competency-based training
process initiatives program in functional tracks:
Budgeting and Performance,
Accounting, Auditing, Cash
Management & Procurement

Session 1.0 UACS as Foundation for PFM 13

 Accounting and Auditing Reforms
• Enhance quality of accounting & auditing and assurance
standards
• Ensure transparent and comparable financial statements
Status:
• 25 Philippine Public Sector Accounting Standards (PPSAS)
adopted
• 24 out of 73 Philippine Public Sector Standards on Auditing
aligned with international standards and best practice
• Revised Chart of Accounts now conform with PPSAS
• PPSAS training for NGAs from December 2013 to March 2014
• Includes updating of the COA developed e-NGAS and e-Budget
systems for UACS
Session 1.0 UACS as Foundation for PFM 14
 Performance-Informed Budgeting (PIB)
A set of integrated processes that aim to improve the
efficiency and effectiveness of public expenditure by
linking resources to results making systematic use of
performance information
(“Malinaw na kwento sa bawat kwenta”)
Status:
• GAA since 2014 reflects non-financial
performance information alongside budgetary
allocations
• Program, activity, and project clearly linked to
major final outputs that agencies deliver to
support broader outcomes
 Unified Accounts Code Structure
Government-wide
harmonized budgetary,
treasury & accounting
code classification framework
to facilitate reporting of all
financial transactions
of agencies including revenue
reporting

Session 1.0 UACS as Foundation for PFM 16

 Why a UACS?
• Common language: ensures that all processes,
from budgeting and cash management to
accounting and audit will follow a single
classification system
• Easier reporting: easier to collect, aggregate,
consolidate and report financial transactions
across government

Session 1.0 UACS as Foundation for PFM 17

 Main Purpose of UACS
To serve as the foundation for the improvements of
the Public Financial Management (PFM) Reforms

1. Serves as the backbone for recording, accounting,

analyzing, and reporting government finances
2. Enables the oversight agencies improve the way financial
information is utilized
3. Facilitates the integration of financial systems (GIFMIS)
4. Utilized properly to enhance the Internal Control Structure
to provide more complete and effective information

Session 1.0 UACS as Foundation for PFM 18

 Main Purpose of UACS
To enable timely and accurate preparation of the
following documents/ reports
1. Financial Reports as required by the Department of Budget
and Management and the Commission on Audit, including
the Budget and Financial Accountability Reports (BFARS)
2. Financial Statements as required by the Public Sector
Accounting Standards Board of the Philippines,
3. Management Reports as required by the executive
officials/heads of departments and oversight agencies
4. Economic Statistics in accord with Government Finance
Statistics Manual 2001.

Session 1.0 UACS as Foundation for PFM 19

 Main Purpose of UACS
To educate and inform everybody about the new
accounting language – UACS
1. All forms, documents, internal and external reporting must be
updated for UACS, for example:
– SARO, ABM, NCA, ANCAI
– BFARs (BAR and FARs)
– Consolidate Report on Periodical Status of Allotment
Releases
– NCA Utilization Reports
– Monthly Breakdown of NCA Releases by Allotment Class
2. All data sources of DBM must provide information in UACS
format (all agencies)
Session 1.0 UACS as Foundation for PFM 20
 Main Purpose of UACS
To eliminate the problems being encountered from the
existing coding structure
1. The existing coding structure has a disconnect
between budget, accounting, and cash
2. The existing Systems are independent from each
other and unable (or very difficult) to properly
report the problems encountered
3. Until data is properly structured, agencies cannot be
GIFMIS-ready

Session 1.0 UACS as Foundation for PFM 21

 Benefits of UACS
• To enable timely accurate preparation of
financial reports in accord with IPSAS, GFS and
requirement of central oversight agencies

• UACS should allow implementing / spending

agencies to facilitate management reporting
and decision making

• Ability to link / integrate Physical and Financial

Progress information
Session 1.0 UACS as Foundation for PFM 22
 Benefits of UACS
• One coding framework:
– Whole Budget process (Preparation, Legislation, Execution
and Accountability); and
– Reporting Appropriation, Allotment, Obligation,
Disbursement in all systems
• Enable reporting of :
– Allotments released against appropriation,
– Obligations against allotment,
– Disbursements against obligations
• Facilitate compliance with OPIF Reference Guide &
NBC 532
Session 1.0 UACS as Foundation for PFM 23
 Where should UACS be used?
Every IT and Manual system should adopt the UACS for:
• Budget cycle - Preparation, Legislation, Execution and Accounting,
Accountability
• Reporting Appropriation, Allotment, Obligation, Disbursement

• Enabling reporting of actual expenditure against

budget appropriation as envisaged in PFM roadmap
• Payroll, budget, cash management, budget
execution and forward planning
• Performance measurement – performance
indicators linked to UACS MFOs and outcomes
achieved are reported against budget and targets

Session 1.0 UACS as Foundation for PFM 24

 THE UACS JOINT CIRCULAR –
MANDATE
HIGHLIGHTS

COA-DBM-DOF Joint Circular No. 2013-1

August 6, 2013
Update: COA-DBM-DOF Joint Circular 2014-1 on the
Enhancement of the UACS dated November 7, 2014

Session 1.0 UACS as Foundation for PFM 25

JOINT CIRCULAR NO. 2013-1 (page 1)

Session 1.0 UACS as Foundation for PFM 26

JOINT CIRCULAR NO. 2013-1 (page 2)

Session 1.0 UACS as Foundation for PFM 27

JOINT CIRCULAR NO. 2013-1 (page 3)

Session 1.0 UACS as Foundation for PFM 28

JOINT CIRCULAR NO. 2013-1 (page 3)

Session 1.0 UACS as Foundation for PFM 29

JOINT CIRCULAR NO. 2013-1 (page 4)

Session 1.0 UACS as Foundation for PFM 30

 UACS Accomplishments by COA
• Establishment and member of the PFM Committee as an
inter-agency body with a clear mandate for reform allowed
the institutional obstacles to unifying account codes to be
overcome – COA, DBM, and DOF working together for a
common objective
• Completion and Issuance of UACS Manual and Joint Circular
requiring UACS be implemented for Budget Execution,
Accounting and Reporting
• Development and Issuance of the Philippine Public Sector
Accounting Standards (PPSAS) and the Revised Chart of
Accounts (UACS Object Code)

Session 1.0 UACS as Foundation for PFM 31

 Revised Chart of Accounts
COA Circular 2013-002, 30 Jan 2013
• Revised the NGAS chart of accounts to provide new
accounts for adoption of the Philippine Public Sector
Accounting Standards (PPSAS)
• Major component of the Unified Accounts Code
Structure (UACS) to ensure comparability of financial
information from budgeting and accounting systems
• Government-wide training on the revised Chart of
Accounts and new Philippine Public Sector
Accounting Standards (PPSAS)

Session 1.0 UACS as Foundation for PFM 32

UACS Implementation
Challenges

Session 1.0 UACS as Foundation for PFM 33

 UACS Challenges
Implementation of UACS has already started in
various oversight agencies

COA has only Not implemented BTr has yet to

implemented for for DBM as an implement UACS
Chart of Accounts Agency – Budget
Execution

The UACS is not implemented in most Spending

Agencies for Budget Execution, Disbursement,
Accounting, Cash, and Reporting
Session 1.0 UACS as Foundation for PFM 34
 UACS Challenges
Existing Information Systems are not yet UACS
Compliant

COA eNGAS / DBM eBudget

eBudget UACS Most Agencies System is not yet
version not yet have not yet fully compliant
released updated their
Financial Systems

Session 1.0 UACS as Foundation for PFM 35

 UACS Challenges

Establishment of UACS Help Desk

To address questions during the
application of UACS to Budget Execution
process

Should evolve to Financial Management UACS HELP DESK Email

Help Desk uacs@dbm.gov.ph

Establishment of a formal UACS Code Administration

Process
To incorporate additional new Codes when
appropriate
 UACS Challenges
Changes affecting the Code Structure
– If Description is “Others” – Need to add new code that is
specific - Never utilize “Other”
– If code is range (i.e. 301-320) then needs to be specifically
identified and assigned (e.g. 302)
– Never delete or change existing UACS codes – if code
(description or meaning) changes need to “deactivate”
existing code and assign new code with change
– UACS Codes active codes are the codes that should be
utilized currently, deactivated codes are for historical
purposes
– Need to always ensure consistency in UACS codes
Session 1.0 UACS as Foundation for PFM 37
Questions and Comments ?

Session 1.0 UACS as Foundation for PFM 38

www.pfm.gov.ph

Thank You!
Session 1.0 UACS as Foundation for PFM 39