afar midterm Flashcards
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
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.
Government accounting places greater emphasis on…
✓ sources and utilization of government funds
✓ Responsibility, accountability and liability of entities entrusted with government funds and properties
include receipts from taxes and other fees, borrowings and grants from other government and international bodies
sources of government funds
includes expenditures on programs, projects, unanticipated losses from calamities and the like
Utilization of Government Funds
directly responsible in implementing policies, and primarily responsible for government resources entrusted to his agency
Head of a Government Agency
shall be shared by those who are exercising authority over a government agency
Fiscal Responsibility
government resources shall be utilized efficiently and effectively in accordance with the law
Responsibility Over Government Funds and Property
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
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
transfer of government funds shall be properly documented in…
Invoice and Receipt
the unlawful use of government resources shall be the personal liability if the…
Employee found to be directly responsible
shall be liable for all losses resulting from the unlawful use or negligence in the safekeeping of government resources
every Accountable Officer
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
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
Offices charged with government accounting responsibility
✓ Commission on Audit
✓ Department of Budget and Management
✓ Bureau of Treasury
✓ Government Agencies
has the exclusive authority to promulgate accounting and auditing rules and regulations
COA
keeps the general accounts of the government, supporting vouchers and other documents
COA
submits financial reports to the President and Congress
COA
responsible for the formulation and implementation of the national budget with the goal of attaining the nation’s socio-economic objectives
DBM
functions under the Department of Finance and is the cash custodian of the government
Bureau of Treasury
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
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
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
