afar midterm Flashcards by Clari Han

encompasses 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

Government Accounting

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Objectives of Government Accounting

✓ To produce information concerning past operations and present conditions;
✓ To provide a basis for guidance for future operations;
✓ To provide for control of the acts of public bodies and officers in the receipt, disposition and utilization of funds and property, and;
✓ To report on the financial position and the results of operations and government agencies for the information of all persons concerned.

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Government accounting places greater emphasis on…

✓ sources and utilization of government funds

✓ Responsibility, accountability and liability of entities entrusted with government funds and properties

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include receipts from taxes and other fees, borrowings and grants from other government and international bodies

sources of government funds

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includes expenditures on programs, projects, unanticipated losses from calamities and the like

Utilization of Government Funds

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directly responsible in implementing policies, and primarily responsible for government resources entrusted to his agency

Head of a Government Agency

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shall be shared by those who are exercising authority over a government agency

Fiscal Responsibility

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government resources shall be utilized efficiently and effectively in accordance with the law

Responsibility Over Government Funds and Property

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a government officer entrusted with the possession of government resources is responsible for the safekeeping therefore in accordance with the law. Every accountable officer shall be properly bonded

Accountability Over Government Funds and Property

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The transfer of government funds from one person to another shall, except as allowed by law, be made only after the authorization of the…

Commission on Audit

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transfer of government funds shall be properly documented in…

Invoice and Receipt

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the unlawful use of government resources shall be the personal liability if the…

Employee found to be directly responsible

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shall be liable for all losses resulting from the unlawful use or negligence in the safekeeping of government resources

every Accountable Officer

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No accountable officer shall ve relieved from liability merely because he has acted under thee direction of a superior officer in unlawfully utilizing the government resources entrusted to him, unless before that act, …

The … shall be primarily liable while the accountable officer who fails to serve the required notice shall be secondarily liable

He has notified the superior officer, in writing, that the utilization is illegal

superior officer

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An accountable officer shall immediately notify the … for any loss of government funds from unforeseen events (force majeure) within … days. Failure to do so will not relieve the officer of liability.

COA

30 days

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Offices charged with government accounting responsibility

✓ Commission on Audit
✓ Department of Budget and Management
✓ Bureau of Treasury
✓ Government Agencies

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has the exclusive authority to promulgate accounting and auditing rules and regulations

COA

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keeps the general accounts of the government, supporting vouchers and other documents

COA

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submits financial reports to the President and Congress

COA

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responsible for the formulation and implementation of the national budget with the goal of attaining the nation’s socio-economic objectives

DBM

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functions under the Department of Finance and is the cash custodian of the government

Bureau of Treasury

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The Btr is authorized to:

✓ receive and keep national funds and manage and control the disbursements thereof; and

✓ maintain the accounts of financial transactions of all national government agencies and instrumentalities

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refers to any department, bureau or office of the national government, or any of its branches and instrumentalities, or any political subdivision, as well as any GOCC, including its subsidiaries, or other self-governing board or commision of the government

Government Agency

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responsible in directly implementing the projects of, and performing the functions delegated by, the government

Government Agencies

each agency shall maintain accounting books which are reconciled with the cash records of

BTr

Government agencies are required by law to have accounting units/divisions/departments

True

each agency shall maintain budget registries which are reconciled with the budget records of

DBM and COA

each entity submits financial report to ... for consolidation

COA

refers to a government agency, department or operating field/unit

Entity

the process of preparation, presentation and submission of general purpose financial statements and other reports.

Financial Reporting

Objective of Financial Reporting

to provide information about the entity that is useful to users for accountability purposes and decision-making

An "old" government system had been used for about 5 decades before it was replaced by the New Government Accounting System (NGAS) in 2002. However on January 2, 2016, the NGAS was replaced by the

Government Accounting Manual for National Government Agencies (GAM for NGAs)

promulgated primarily to harmonized the government accounting standards with international accounting standards, particularly the International Public Sector Accounting Standards (IPSAS)

Government Accounting Manual for National Government Agencies (GAM for NGAs)

IPSASs are based on

International Financial Reporting Standards

GAM for NGAs was promulgated by COA based on the authority conferred to it by the

Philippine Constitution

(Coverage) GAM for NGAs provides the basic concepts to be used in:

✓ preparing general purpose financial statements in accordance with the Philippine Public Sector Accounting Standards (PPSAS) and other financial reports as may be required by laws, rules and regulations; and ✓ reporting of budget, revenue, and other expenditure in accordance with laws, rules, and regulations

(Objective) GAM for NGAs aims to update the:

✓ standards, policies, guidelines and procedures in accounting for government funds and property; ✓ coding structure and accounts; and ✓ accounting books, registries, records, forms, reports and financial statements

(Basic Accounting and Budget Reporting Principles) The financial records and reports of government entities shall comply with:

Philippine Public Sector Accounting Standards (PPSAS) and relevant laws, rules, and regulations Accrual basis of accounting Budget Basis for presentation of budget information in the FS Revised Chart of Accounts prescribed by COA Double entry bookkeeping FS based on accounting and budgetary records Fund Cluster Accounting

transactions are recognized when they occur (and not only when cash is received or paid). Therefore, transactions are recognized in the period to which they relate

Accrual Basis of Accounting

Types of Funds in Fund Cluster

01 - Regular Agency Fund 02 - Foreign Assisted Project Funds 03 - Special Account-Locally Funded/Domestic Grants Fund 04 - Special Account-Foreign Assisted/ Foreign Grants Fund 05 - Internally Generated Funds 06 - Business Related Funds 07 - Trust Receipts

the attributes that make information useful to users

Qualitative Characteristics

Qualitative Characteristics of Financial Reporting

Understandability Relevance Materiality Timeliness Reliability Faithful Representation Substance over form Neutrality Prudence Completeness Comparability

information is understandable when users can reasonably be expected to comprehend its meaning. Accordingly, users are assumed to have: reasonable knowledge of the entity's activities; and willingness to study the information

Understandability

information can assist users in evaluating past, present or future events or in confirming or correcting past evaluations.

Relevance

In order to be relevant, information must also be...

timely

affects the relevance of information. depends on the nature or size of the iten or error, judged in the particular circumstances of its omission or misstatement

Materiality

Information loses its relevance if there is undue delay in its reporting. The complexity of an entity's operation is not a sufficient reason for failing to report on a timely basis

Timeliness

information is free from material error and bias, and can be depended on by users to represent faithfully that which it purports to represent or could reasonably be expected to represent

Reliability

To provide timely information, it may be necessary to report before all aspects of a transaction are known, thus impairing reliability. Conversely, if reporting is delayed until all aspects are known, the information may be highly reliable but of little use to users who need to make decision in the interim. To achieve balance, the overriding consideration is how user's needs are best satisfied

Trade-offs between Relevance and Reliability

information is presented in accordance with the substance of the transactions and other events, and not merely their legal form.

Faithful Representation

The substance of transactions or other events is not always consistent with their legal form. If information is to represent faithfully the transactions and other events that it purports to represent, it is necessary that they be accounted for and presented in accordance with their substance and economic reality, and not merely their legal form.

Substance over form

information is free from bias. information shall not be selected or presented in a manner that is designed to influence the user's decision in order to achieve a predetermined outcome.

Neutrality

the exercise of a degree of caution when making estimates under condition of uncertainty, such that assets or revenue are not overstated and liabilities or expenses are not understated.

Prudence

information should be complete within the bounds of materiality and cost

Completeness

information enables users to identify similarities and differences between that information and information in other reports requires that users must be informed of the entity's policies, changes to those policies, and the effects of those changes and that financial statements show corresponding information for preceding periods.

Comparability

those intended to meet the needs of users who are not in a position to demand reports tailored to meet their particular information needs

General Purpose Financial Statements

Complete set of general purpose financial statements

Statement of Financial Position Statement of Financial Performance Statement of Changes in Net Assets/Equity Statements of Cash Flows Statement of Comparison of Budget and Actual Amounts Notes to the Financial Statements

comprise all funds derived form the income of any agency of the government and available for appropriation or expenditure in accordance with law

Revenue Funds