1. Updates on Accounting and Auditing Regulations
LOURDES M. CASTILLO
Assistant Commissioner
Government Accountancy Sector
Commission on Audit
Delivered during the GACPA Seminar
at The Oriental Hotel, Taysan Hill, Sto. Niňo Village, Legaspi City
October 19, 2013

2. “Adoption of the Unified Accounts Code Structure (UACS)”
Topical Outline
COA Circular No dated January 30, 2013
“Adoption of the Revised Chart of Accounts for National Government Agencies”
COA-DBM-DOF Joint Circular No dated August 06, 2013
“Adoption of the Unified Accounts Code Structure (UACS)”

3. COA Circular No. 2013-003 dtd. Oct. 29, 2013
COA-DBM Joint Circular No dtd. March 15, 2013
“Revised Guidelines on the Submission of Quarterly Accountability Reports on Appropriations, Allotments, Obligations and Disbursements”
COA Circular No dtd. Oct. 29, 2013
“Updated Guidelines on the Prevention and Disallowance of Irregular, Unnecessary, Excessive, Extravagant and Unconscionable Expenses”

4. COA Circular No. 2013-007 dtd. Sept. 18, 2013
“Guidelines for the Use of Electronic Official Receipts (eORs) to Acknowledge Collection of Income and other Receipts of Government”
COA Circular No dtd. Dec. 7, 2012
“Revocation of COA Circular No dtd. Nov. 9, 2009 and Prescribing the Use of Punong Barangay’s Certification (PBC) and COA Auditor’s Advice (CAA)”

5. Other Matters
Updates on the Philippine Public Sector Accounting Standards (PPSASs) as harmonized with the IPSAS
eNGAS Rollout in the Local Government Units

6. COA REVISED CHART OF ACCOUNTS
The practical implication include problems that we have experienced within NIH related to Congressionals, FOIA request and Litigation.
I’ve done numerous presentations across NIH with the NIH FOIA Officer and she has stressed the problems caused when records that should have been destroyed, later turned up and became accessible under FOIA for issues that were then involved in litigation.
I believe Karen has some other examples…

7. COA Circular No. 2013-002 dated January 30, 2013
Legal Basis
COA Circular No dated January 30, 2013
Effectivity Date: January 01, 2014
The practical implication include problems that we have experienced within NIH related to Congressionals, FOIA request and Litigation.
I’ve done numerous presentations across NIH with the NIH FOIA Officer and she has stressed the problems caused when records that should have been destroyed, later turned up and became accessible under FOIA for issues that were then involved in litigation.
I believe Karen has some other examples…

8. 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
The practical implication include problems that we have experienced within NIH related to Congressionals, FOIA request and Litigation.
I’ve done numerous presentations across NIH with the NIH FOIA Officer and she has stressed the problems caused when records that should have been destroyed, later turned up and became accessible under FOIA for issues that were then involved in litigation.
I believe Karen has some other examples…

9. Objectives
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 and provide up to four levels of consolidation depending on the users’ information needs.
The practical implication include problems that we have experienced within NIH related to Congressionals, FOIA request and Litigation.
I’ve done numerous presentations across NIH with the NIH FOIA Officer and she has stressed the problems caused when records that should have been destroyed, later turned up and became accessible under FOIA for issues that were then involved in litigation.
I believe Karen has some other examples…

10. Major Changes
Coverage is limited only to all national government agencies and GOCCs receiving funds constituted a SAGF from the National Government
Expanded account code structure from three (3) digits to eight (8) digits
The practical implication include problems that we have experienced within NIH related to Congressionals, FOIA request and Litigation.
I’ve done numerous presentations across NIH with the NIH FOIA Officer and she has stressed the problems caused when records that should have been destroyed, later turned up and became accessible under FOIA for issues that were then involved in litigation.
I believe Karen has some other examples…

11. Account Code Structure
The practical implication include problems that we have experienced within NIH related to Congressionals, FOIA request and Litigation.
I’ve done numerous presentations across NIH with the NIH FOIA Officer and she has stressed the problems caused when records that should have been destroyed, later turned up and became accessible under FOIA for issues that were then involved in litigation.
I believe Karen has some other examples…

12. Account Groups 1 Assets 2 Liabilities 3 Equity 4 Income 5 Expenses
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
The practical implication include problems that we have experienced within NIH related to Congressionals, FOIA request and Litigation.
I’ve done numerous presentations across NIH with the NIH FOIA Officer and she has stressed the problems caused when records that should have been destroyed, later turned up and became accessible under FOIA for issues that were then involved in litigation.
I believe Karen has some other examples…

13. Asset without Contra Account
Ex. Cash, Collecting Officer A
The practical implication include problems that we have experienced within NIH related to Congressionals, FOIA request and Litigation.
I’ve done numerous presentations across NIH with the NIH FOIA Officer and she has stressed the problems caused when records that should have been destroyed, later turned up and became accessible under FOIA for issues that were then involved in litigation.
I believe Karen has some other examples… G

14. Asset with Contra Account
Ex. Accounts Receivable
The practical implication include problems that we have experienced within NIH related to Congressionals, FOIA request and Litigation.
I’ve done numerous presentations across NIH with the NIH FOIA Officer and she has stressed the problems caused when records that should have been destroyed, later turned up and became accessible under FOIA for issues that were then involved in litigation.
I believe Karen has some other examples…

15. Asset with Contra Account
Ex. Allowance for Impairment –
Accounts Receivable
The practical implication include problems that we have experienced within NIH related to Congressionals, FOIA request and Litigation.
I’ve done numerous presentations across NIH with the NIH FOIA Officer and she has stressed the problems caused when records that should have been destroyed, later turned up and became accessible under FOIA for issues that were then involved in litigation.
I believe Karen has some other examples…

16. Major Changes
New accounts were provided for the implementation of the Philippine Public Sector Accounting Standards (PPSAS)
The practical implication include problems that we have experienced within NIH related to Congressionals, FOIA request and Litigation.
I’ve done numerous presentations across NIH with the NIH FOIA Officer and she has stressed the problems caused when records that should have been destroyed, later turned up and became accessible under FOIA for issues that were then involved in litigation.
I believe Karen has some other examples…

17. New Accounts 1 01 04 010 Cash-Treasury/Agency Deposit, Regular
Deposit, Special Account
Cash-Treasury/Agency
Deposit, Trust
The practical implication include problems that we have experienced within NIH related to Congressionals, FOIA request and Litigation.
I’ve done numerous presentations across NIH with the NIH FOIA Officer and she has stressed the problems caused when records that should have been destroyed, later turned up and became accessible under FOIA for issues that were then involved in litigation.
I believe Karen has some other examples…

18. New Accounts
Investments in Treasury Bills – Local In compliance with IPSAS Allowance for Impairment - Investments In compliance with in Treasury Bills - Local IPSAS Investment Property, Land In compliance with IPSAS Allowance for Impairment - Investment In compliance with Property, Land IPSAS 16 & 21
The practical implication include problems that we have experienced within NIH related to Congressionals, FOIA request and Litigation.
I’ve done numerous presentations across NIH with the NIH FOIA Officer and she has stressed the problems caused when records that should have been destroyed, later turned up and became accessible under FOIA for issues that were then involved in litigation.
I believe Karen has some other examples…

19. New Accounts Examples:
The practical implication include problems that we have experienced within NIH related to Congressionals, FOIA request and Litigation.
I’ve done numerous presentations across NIH with the NIH FOIA Officer and she has stressed the problems caused when records that should have been destroyed, later turned up and became accessible under FOIA for issues that were then involved in litigation.
I believe Karen has some other examples…

20. Major Changes
Some accounts were deleted since these accounts are for use by local government units or government-owned and/or controlled corporations, while other accounts are no longer applicable to national government agencies.
The practical implication include problems that we have experienced within NIH related to Congressionals, FOIA request and Litigation.
I’ve done numerous presentations across NIH with the NIH FOIA Officer and she has stressed the problems caused when records that should have been destroyed, later turned up and became accessible under FOIA for issues that were then involved in litigation.
I believe Karen has some other examples…

21. Deleted Accounts Examples:
The practical implication include problems that we have experienced within NIH related to Congressionals, FOIA request and Litigation.
I’ve done numerous presentations across NIH with the NIH FOIA Officer and she has stressed the problems caused when records that should have been destroyed, later turned up and became accessible under FOIA for issues that were then involved in litigation.
I believe Karen has some other examples…

22. Major Changes
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
The practical implication include problems that we have experienced within NIH related to Congressionals, FOIA request and Litigation.
I’ve done numerous presentations across NIH with the NIH FOIA Officer and she has stressed the problems caused when records that should have been destroyed, later turned up and became accessible under FOIA for issues that were then involved in litigation.
I believe Karen has some other examples…

23. Compressed Accounts Examples:
811 Repairs and Maintenance Repairs and Office Buildings Maintenance- 812 Repairs and Maintenance - Buildings and Other School Buildings Structures 813 Repairs and Maintenance - Hospitals and Health Centers 814 Repairs and Maintenance - Market and Slaughterhouses 815 Repairs and Maintenance - Other Structures
The practical implication include problems that we have experienced within NIH related to Congressionals, FOIA request and Litigation.
I’ve done numerous presentations across NIH with the NIH FOIA Officer and she has stressed the problems caused when records that should have been destroyed, later turned up and became accessible under FOIA for issues that were then involved in litigation.
I believe Karen has some other examples…

24. Compressed Accounts Examples:
811 Depreciation-Office Depreciation -
Buildings Buildings and
812 Depreciation-School Other Structures
Buildings
813 Depreciation-Hospitals
and Health Centers
814 Depreciation-Market
and Slaughterhouses
815 Depreciation-Other
Structures
Depreciation-Office Buildings
Depreciation-School Buildings
Depreciation-Hospitals and Health Centers
Depreciation-Market & Slaughterhouses
Depreciation-Other Structures
Depreciation-Buildings and Other Structures
The practical implication include problems that we have experienced within NIH related to Congressionals, FOIA request and Litigation.
I’ve done numerous presentations across NIH with the NIH FOIA Officer and she has stressed the problems caused when records that should have been destroyed, later turned up and became accessible under FOIA for issues that were then involved in litigation.
I believe Karen has some other examples…

25. Repairs and Maintenance – Buildings and Other Structures
Subsidiary Ledgers:
01 - Buildings
02 - School Buildings
03 - Hospitals and Health Centers
04 - Markets
05 - Slaughterhouses
06 - Hostels and Dormitories
99 - Other Structures
The practical implication include problems that we have experienced within NIH related to Congressionals, FOIA request and Litigation.
I’ve done numerous presentations across NIH with the NIH FOIA Officer and she has stressed the problems caused when records that should have been destroyed, later turned up and became accessible under FOIA for issues that were then involved in litigation.
I believe Karen has some other examples…

26. Depreciation - Buildings and Other Structures
Subsidiary Ledgers:
01 - Buildings
02 - School Buildings
03 - Hospitals and Health Centers
04 - Markets
05 - Slaughterhouses
06 - Hostels and Dormitories
99 - Other Structures
The practical implication include problems that we have experienced within NIH related to Congressionals, FOIA request and Litigation.
I’ve done numerous presentations across NIH with the NIH FOIA Officer and she has stressed the problems caused when records that should have been destroyed, later turned up and became accessible under FOIA for issues that were then involved in litigation.
I believe Karen has some other examples…

27. Expanded Account
Example:
716 Subsistence, Laundry Subsistence and Quarters Allowance Allowance Laundry Allowance Quarters
The practical implication include problems that we have experienced within NIH related to Congressionals, FOIA request and Litigation.
I’ve done numerous presentations across NIH with the NIH FOIA Officer and she has stressed the problems caused when records that should have been destroyed, later turned up and became accessible under FOIA for issues that were then involved in litigation.
I believe Karen has some other examples…

28. Expanded Account Example:
Cash - National Cash-Modified Disbursement Treasury, System (MDS), Regular Modified Cash-Modified Disbursement Disbursement System (MDS), Special System (MDS) Account Cash-Modified Disbursement System (MDS), Trust
The practical implication include problems that we have experienced within NIH related to Congressionals, FOIA request and Litigation.
I’ve done numerous presentations across NIH with the NIH FOIA Officer and she has stressed the problems caused when records that should have been destroyed, later turned up and became accessible under FOIA for issues that were then involved in litigation.
I believe Karen has some other examples…

29. The Revised Chart of Accounts As Object Code in the Unified Account Code Structure

30. Purposes of Object Classification and Coding
To capture all financial transactions such as goods or services acquired, payments made, revenue sources and the causes of increases or decreases in assets and liabilities.
To enable the classification and coding of transactions for reporting of impact of government revenues and expenditures on the economy as well as internal departmental analysis and decision-making by oversight agencies.
The practical implication include problems that we have experienced within NIH related to Congressionals, FOIA request and Litigation.
I’ve done numerous presentations across NIH with the NIH FOIA Officer and she has stressed the problems caused when records that should have been destroyed, later turned up and became accessible under FOIA for issues that were then involved in litigation.
I believe Karen has some other examples…

31. The object coding in the information system provides a repository of government-wide information which can be used by oversight agencies without requiring departments and agencies to respond to individual requests.
Provides a basis for coding the object classification which uses accrual accounting requiring transactions to be recorded in the period when they occur and not only when cash or equivalents are received or paid.
The practical implication include problems that we have experienced within NIH related to Congressionals, FOIA request and Litigation.
I’ve done numerous presentations across NIH with the NIH FOIA Officer and she has stressed the problems caused when records that should have been destroyed, later turned up and became accessible under FOIA for issues that were then involved in litigation.
I believe Karen has some other examples…

32. COA-DBM Joint Circular No. 2013-1 dated March 15, 2013
Legal Basis
COA-DBM Joint Circular No dated March 15, 2013
“Revised Guidelines on the Submission of Quarterly Accountability Reports on Appropriations, Allotments, Obligations and Disbursements”
The practical implication include problems that we have experienced within NIH related to Congressionals, FOIA request and Litigation.
I’ve done numerous presentations across NIH with the NIH FOIA Officer and she has stressed the problems caused when records that should have been destroyed, later turned up and became accessible under FOIA for issues that were then involved in litigation.
I believe Karen has some other examples…

33. Rationale COA and DBM requirement for agencies to submit BAR/FAR.
DBM uses the reports to monitor agency performance for policy making purposes.
The practical implication include problems that we have experienced within NIH related to Congressionals, FOIA request and Litigation.
I’ve done numerous presentations across NIH with the NIH FOIA Officer and she has stressed the problems caused when records that should have been destroyed, later turned up and became accessible under FOIA for issues that were then involved in litigation.
I believe Karen has some other examples…
COA uses the report to prepare the AFR.

34. Purposes
To prescribe harmonized formats of the financial accountability reports (FAR) on appropriations, allotments, obligations, disbursement authorities, disbursements and balances; and
To prescribe guidelines on the preparation and timely submissions of FARs by the agencies to the DBM and the COA after the end of each quarter.
The practical implication include problems that we have experienced within NIH related to Congressionals, FOIA request and Litigation.
I’ve done numerous presentations across NIH with the NIH FOIA Officer and she has stressed the problems caused when records that should have been destroyed, later turned up and became accessible under FOIA for issues that were then involved in litigation.
I believe Karen has some other examples…

35. Coverage
The Circular covers all departments, bureaus, offices and agencies of the national government and government-owned and/or controlled corporations maintaining Special Accounts in the General Fund.
The practical implication include problems that we have experienced within NIH related to Congressionals, FOIA request and Litigation.
I’ve done numerous presentations across NIH with the NIH FOIA Officer and she has stressed the problems caused when records that should have been destroyed, later turned up and became accessible under FOIA for issues that were then involved in litigation.
I believe Karen has some other examples…

36. Definition of Terms
Appropriation – an authorization made by law or other legislative enactment, directing the payment of goods and services out of government funds under specified conditions or for specified purposes.
Allotment – a specific authority in the form of Agency Budget Matrix (ABM) or Special Allotment Release Order (SARO) issued by DBM to identified agencies to incur obligations not exceeding a given amount during a specified period for the purpose indicated therein.
The practical implication include problems that we have experienced within NIH related to Congressionals, FOIA request and Litigation.
I’ve done numerous presentations across NIH with the NIH FOIA Officer and she has stressed the problems caused when records that should have been destroyed, later turned up and became accessible under FOIA for issues that were then involved in litigation.
I believe Karen has some other examples…

37. Sub-Allotment – a specific authority in the form of Sub-Allotment Release Order (Sub-ARO) issued by the Central Office (CO)/Regional Office (RO) of a department/office/ agency to its ROs/lower operating units (i.e. field office, district office or provincial office ) which allow them to incur obligations within a specified amount during a specified period. The Sub-ARO should not exceed the allotment releases to the CO.
Obligation – a commitment by the government agency arising from an act of a duly authorized official which binds the government to the immediate or eventual payment of a sum of money. The agency is authorized to incur obligations only in the performance of activities which are in pursuit of its functions and programs authorized in the appropriation acts/laws within the limit of the allotment released by the DBM.
The practical implication include problems that we have experienced within NIH related to Congressionals, FOIA request and Litigation.
I’ve done numerous presentations across NIH with the NIH FOIA Officer and she has stressed the problems caused when records that should have been destroyed, later turned up and became accessible under FOIA for issues that were then involved in litigation.
I believe Karen has some other examples…

38. Commitment – an obligation incurred by government agencies for which items have not yet been delivered and services not yet rendered. This is also called “Obligations Not Yet Due and Demandable”.
Unpaid Obligation – this is the balance of an accounts payable or commitment.
Operating Unit – a “national government agency” or a unit thereof receiving direct release of a Notice of Cash Allocation (NCA) from the DBM.
The practical implication include problems that we have experienced within NIH related to Congressionals, FOIA request and Litigation.
I’ve done numerous presentations across NIH with the NIH FOIA Officer and she has stressed the problems caused when records that should have been destroyed, later turned up and became accessible under FOIA for issues that were then involved in litigation.
I believe Karen has some other examples…

39. Guidelines
Head of office to submit the following reports to COA and DBM:
Statement of Appropriations, Allotments, Obligations, Disbursements and Balances (SAAODB)
The practical implication include problems that we have experienced within NIH related to Congressionals, FOIA request and Litigation.
I’ve done numerous presentations across NIH with the NIH FOIA Officer and she has stressed the problems caused when records that should have been destroyed, later turned up and became accessible under FOIA for issues that were then involved in litigation.
I believe Karen has some other examples…
List of Agency Budget Matrix (ABM) or SAROs and Sub-AROs

40. Summary of Report of Disbursements
Detailed Statement of Current Year’s Obligations, Disbursements and Unpaid Obligations (SODUO-CY)
Summary of Prior Year’s Obligations, Disbursements and Unpaid Obligations (SODUO-PY)
The practical implication include problems that we have experienced within NIH related to Congressionals, FOIA request and Litigation.
I’ve done numerous presentations across NIH with the NIH FOIA Officer and she has stressed the problems caused when records that should have been destroyed, later turned up and became accessible under FOIA for issues that were then involved in litigation.
I believe Karen has some other examples…
Summary of Report of Disbursements

41. Statement of Allotments, Obligations and Balances (SAOB) – BAR No. 4
The FARs prescribed in the Circular shall replace the following DBM and COA reports as follows:
DBM
Statement of Allotments, Obligations and Balances (SAOB) – BAR No. 4
Financial Report of Operations (BAR No. 2)
The practical implication include problems that we have experienced within NIH related to Congressionals, FOIA request and Litigation.
I’ve done numerous presentations across NIH with the NIH FOIA Officer and she has stressed the problems caused when records that should have been destroyed, later turned up and became accessible under FOIA for issues that were then involved in litigation.
I believe Karen has some other examples…
Monthly Report of Disbursements – Bar No. 3

42. COA SAOB Detailed Breakdown of Obligations
Detailed Breakdown of Disbursements
Regional Breakdown of Expenses
Statement of Cumulative Allotments, Obligations Incurred and Unobligated Balances
Detailed Statement of Cumulative Expenditures/ Obligations Incurred, Obligations Liquidated/Disbursements and Unliquidated Obligations
The practical implication include problems that we have experienced within NIH related to Congressionals, FOIA request and Litigation.
I’ve done numerous presentations across NIH with the NIH FOIA Officer and she has stressed the problems caused when records that should have been destroyed, later turned up and became accessible under FOIA for issues that were then involved in litigation.
I believe Karen has some other examples…

43. Responsibilities
The FARs shall be prepared and certified correct by the following officials:
Budget Officer/Head of Budget Unit – for the portion of the report pertaining to appropriations, allotments, obligations, unobligated allotments and unreleased appropriations
The practical implication include problems that we have experienced within NIH related to Congressionals, FOIA request and Litigation.
I’ve done numerous presentations across NIH with the NIH FOIA Officer and she has stressed the problems caused when records that should have been destroyed, later turned up and became accessible under FOIA for issues that were then involved in litigation.
I believe Karen has some other examples…

44. Chief Accountant/Head of Accounting Unit – for the portion of the report pertaining to disbursements and unpaid obligations
The FARs shall be signed by the Agency Head as the approving official. He/she shall ensure the timely submission of the accurate and reliable FARs.
The practical implication include problems that we have experienced within NIH related to Congressionals, FOIA request and Litigation.
I’ve done numerous presentations across NIH with the NIH FOIA Officer and she has stressed the problems caused when records that should have been destroyed, later turned up and became accessible under FOIA for issues that were then involved in litigation.
I believe Karen has some other examples…

45. Due Dates of Submission to COA and DBM
All Departments/Agencies – not later than the 30th day after the end of each quarter
The Lower Operating Units – within (5) days after the end of each quarter for consolidation
The Agency Regional Offices – to submit the consolidated report to COA (GAS) and DBM CO within (10) days after the end of each quarter
The practical implication include problems that we have experienced within NIH related to Congressionals, FOIA request and Litigation.
I’ve done numerous presentations across NIH with the NIH FOIA Officer and she has stressed the problems caused when records that should have been destroyed, later turned up and became accessible under FOIA for issues that were then involved in litigation.
I believe Karen has some other examples…

46. Penalty Clause
COA and DBM shall regularly monitor agency/OU compliance with the reporting requirements prescribed in the Circular.
For failure to submit the FARs, the “no report, no release” policy of the DBM shall be enforced.
The practical implication include problems that we have experienced within NIH related to Congressionals, FOIA request and Litigation.
I’ve done numerous presentations across NIH with the NIH FOIA Officer and she has stressed the problems caused when records that should have been destroyed, later turned up and became accessible under FOIA for issues that were then involved in litigation.
I believe Karen has some other examples…

47. Administrative sanctions on the automatic suspension of the payment of salaries of the officials concerned.
Violation for three (3) times without justifiable cause during the year, shall constitute a ground for the filing of an administrative/disciplinary action against the officials for inefficiency and incompetence.
The practical implication include problems that we have experienced within NIH related to Congressionals, FOIA request and Litigation.
I’ve done numerous presentations across NIH with the NIH FOIA Officer and she has stressed the problems caused when records that should have been destroyed, later turned up and became accessible under FOIA for issues that were then involved in litigation.
I believe Karen has some other examples…

48. COA Circular No. 2012-003 dated October 29, 2012
“Updated Guidelines for the Prevention of Disallowance of Irregular, Unnecessary, Excessive, Extravagant and Unconscionable Expenses as enumerated under COA Circular No A dated Sept. 8, 1985”

49. Legal Basis Section 2(2), Article IX-D of the 1987 Constitution
Section 33 of P.D. 1445

50. Definitions “Irregular” Expenditures
Expenditures incurred without adhering to established rules, regulations, procedural guidelines, policies, principles or practices that have gained recognition in laws
Transactions conducted in a manner that deviates or departs from, or which does not comply with standards set

51. “Unnecessary” Expenditures
Expenditures which could not pass the test of prudence or the diligence of a good father of a family, thereby denoting non-responsiveness to the exigencies of the service
Not supportive of the implementation of the objectives and mission of the agency relative to the nature of its operation
Not dictated by the demands of good government, and those, the utility of which cannot be ascertained at a specific time
Not essential or that which can be dispensed with without loss or damage to property

52. “Excessive” Expenditures
Signify unreasonable expense or expense incurred at an immoderate quantity and exorbitant price
Include expenses which exceed what is usual or proper, as well as expenses which are unreasonably high and beyond just measure or amount

53. “Extravagant” Expenditures
Signify those incurred without restraint, judiciousness and economy
Exceed the bounds of propriety
Immoderate, prodigal, lavish, luxurious, grossly excessive, and injudicious

54. “Unconscionable” Expenditures
Pertain to expenditures which are unreasonable and immoderate, and which no man in his right sense would make, nor a fair and honest man would accept as reasonable, and those incurred in violation of ethical and moral standards

55. 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

56. 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

57. Common Types of Disbursements
Cash Advances
COA Circular No. dtd. Feb.10, 1997
COA Circular No dtd. May 18, 2009
Section 89 of P.D. 1445
The practical implication include problems that we have experienced within NIH related to Congressionals, FOIA request and Litigation.
I’ve done numerous presentations across NIH with the NIH FOIA Officer and she has stressed the problems caused when records that should have been destroyed, later turned up and became accessible under FOIA for issues that were then involved in litigation.
I believe Karen has some other examples…

58. 1. 1 No cash advance shall be given unless
for a legally authorized specific
purpose.
1.2 No additional cash advance shall be
granted unless the previous cash
advance are fully liquidated.
1.3 No cash advance shall be granted for
payment of infrastructure projects or
undertaken on project basis.
1. The PSASB shall determine the PPSAS for the following government agencies:
1. National Government Agencies (NGAs) which refer to departments, agencies, bureaus, state universities and colleges, government instrumentalities and commissions including the judiciary and constitutional commissions
2. Local Government Units (LGUs) which refer to provinces, cities, municipalities and barangays
3. Government Owned and/or Controlled Corporations (GOCCs)
2. PPSAS shall apply to all national and local government agencies.
3. The Philippine Financial Reporting Standards (PFRS), codified and issued by the Philippine Institute of Certified Public Accountants (PICPA) shall apply to all government owned and/or controlled corporations and their subsidiaries.  
 For verification with CGS

59. 1.4 A cash advance shall be reported on and liquidated as soon as the purpose for which it was granted has been served.
1.5 Only officials with permanent appointment shall be designated as disbursing officers. Elected officials shall be granted cash advances for their official travels.
1.6 Transfer of cash advances from one administrative officer to another shall not be allowed.
1. The PSASB shall determine the PPSAS for the following government agencies:
1. National Government Agencies (NGAs) which refer to departments, agencies, bureaus, state universities and colleges, government instrumentalities and commissions including the judiciary and constitutional commissions
2. Local Government Units (LGUs) which refer to provinces, cities, municipalities and barangays
3. Government Owned and/or Controlled Corporations (GOCCs)
2. PPSAS shall apply to all national and local government agencies.
3. The Philippine Financial Reporting Standards (PFRS), codified and issued by the Philippine Institute of Certified Public Accountants (PICPA) shall apply to all government owned and/or controlled corporations and their subsidiaries.  
 For verification with CGS

60. Documentary Requirements
Authority from the Head of Agency stating therein the maximum cash accountability
Certification from the accountant that previous cash advances were fully liquidated/accounted for
Approved application for bond
1. The PSASB shall determine the PPSAS for the following government agencies:
1. National Government Agencies (NGAs) which refer to departments, agencies, bureaus, state universities and colleges, government instrumentalities and commissions including the judiciary and constitutional commissions
2. Local Government Units (LGUs) which refer to provinces, cities, municipalities and barangays
3. Government Owned and/or Controlled Corporations (GOCCs)
2. PPSAS shall apply to all national and local government agencies.
3. The Philippine Financial Reporting Standards (PFRS), codified and issued by the Philippine Institute of Certified Public Accountants (PICPA) shall apply to all government owned and/or controlled corporations and their subsidiaries.  
 For verification with CGS

61. Fund Transfers to NGOs/POs
COA Circular No dtd. Oct. 25, 2007
COA Circular No dtd. Sept. 25, 2009
GPPB Resolution dtd. June 29, 2007
Pertinent Provisions of the GAA for the Year
1. The PSASB shall determine the PPSAS for the following government agencies:
1. National Government Agencies (NGAs) which refer to departments, agencies, bureaus, state universities and colleges, government instrumentalities and commissions including the judiciary and constitutional commissions
2. Local Government Units (LGUs) which refer to provinces, cities, municipalities and barangays
3. Government Owned and/or Controlled Corporations (GOCCs)
2. PPSAS shall apply to all national and local government agencies.
3. The Philippine Financial Reporting Standards (PFRS), codified and issued by the Philippine Institute of Certified Public Accountants (PICPA) shall apply to all government owned and/or controlled corporations and their subsidiaries.  
 For verification with CGS

62. 2. 1 Ensure that the NGOs/Pos are legitimate and qualified.
2.2 Strict compliance with the Memorandum of Agreement (MOA).
2.3 Report on the fund releases indicating the names of NGOs/POs are submitted to the Senate Committee on Finance and House Committee on Appropriations.
2.4 Ensure that the funds are disbursed strictly in accordance with the project identified in the MOA.
1. The PSASB shall determine the PPSAS for the following government agencies:
1. National Government Agencies (NGAs) which refer to departments, agencies, bureaus, state universities and colleges, government instrumentalities and commissions including the judiciary and constitutional commissions
2. Local Government Units (LGUs) which refer to provinces, cities, municipalities and barangays
3. Government Owned and/or Controlled Corporations (GOCCs)
2. PPSAS shall apply to all national and local government agencies.
3. The Philippine Financial Reporting Standards (PFRS), codified and issued by the Philippine Institute of Certified Public Accountants (PICPA) shall apply to all government owned and/or controlled corporations and their subsidiaries.  
 For verification with CGS

63. Fund Transfers to Implementing Agencies
COA Circular No dtd. Dec. 13, 1994
3.1 Should be strictly taken up in the books of both agencies.
3.2 Used only for the purpose intended.
3.3 Properly accounted for and reported.
1. The PSASB shall determine the PPSAS for the following government agencies:
1. National Government Agencies (NGAs) which refer to departments, agencies, bureaus, state universities and colleges, government instrumentalities and commissions including the judiciary and constitutional commissions
2. Local Government Units (LGUs) which refer to provinces, cities, municipalities and barangays
3. Government Owned and/or Controlled Corporations (GOCCs)
2. PPSAS shall apply to all national and local government agencies.
3. The Philippine Financial Reporting Standards (PFRS), codified and issued by the Philippine Institute of Certified Public Accountants (PICPA) shall apply to all government owned and/or controlled corporations and their subsidiaries.  
 For verification with CGS

64. Procurement
Shall be governed by R.A. No. 9184
Other Issuances of the General Procurement Policy Board
Pertinent Provisions of the GAA
4.1 PhilGEPS as the primary source of information on government procurement.
4.2 Included in the Annual Procurement Plan (APP).
4.3 Ensure transparency in the process.

65. COA Circular No. 2012-005 dated December 7, 2012
“Revocation of COA Circular dated Nov. 9, 2009 and Prescribing the Use of Punong Barangay’s Certification (PBC) and COA Auditor’s Advice (CAA)”

66. Salient Features
The responsibility to initiate , process, approve financial transactions and issue Punong Barangay’s Certification (PBC) under oath rests with the Barangay officials.
The PBC to be issued only under oath after the PB has duly examined and been satisfied that:
The DVs are duly certified and approved,
The expenditure or disbursement is proper and valid, and
The supporting documents are complete.

67. Salient Features
The PB shall be primarily accountable for all losses arising from issuance of the PBC.
The Authorized Government Depository Bank (AGDB) shall encash the checks issued if the corresponding PBC is issued.
Checks encashed without the corresponding PBC or with falsified PBC shall be the responsibility of the AGDB.
The PBC shall be numbered sequentially by year and by barangay and in (4) copies.

68. Salient Features
The PBC (4th) copy shall be submitted to the accountant for recording within (10) days after end of month and subsequently submitted to the COA auditor for audit.
Non-submission of PBCs within (15) days after demand by the Auditor shall be a ground for preparation of the COA Auditor’s Advice (CAA) to the AGDB to hold further payments of checks issued by the said barangay.

69. COA Circular No. 2013-007 dated September 18, 2013
“Guidelines for the Use of Electronic Official Receipts (eORs) to Acknowledge Collection of Income and Other Receipts of Government”

70. Legal Basis
Section 7 of R.A. No. 8792, otherwise known as the Electronic Commerce Act of 2000
COA Circular No dated Sept. 9, 2004, setting the guidelines and principles on the acceptability of evidences of receipt of payments

71. Rationale/Scope
Electronic Collection System is an active online facility provided by government agencies that enables debtors, creditors and other clients to pay government dues and charges tharough a computer or telephone
A system for receiving, sending, storing, generating, or otherwise processing electronic data messages or electronic documents pertaining to receipt and deposit of government collections.
Due to the growing adoption of electronic transactions, there is a need for guidelines on what maybe considered an electronic forms of evidence of payment for collections of income and other receipts.

72. Salient Features
The electronic document maintains its integrity and reliability and can be authenticated.
For evidentiary purposes, an electronic document shall be the functional equivalent of a written document under existing laws.

73. Definition of Terms
Authorized Government Depository Bank (AGDB) – refers to a bank where Government Entities are allowed by law to deposit their funds and maintain depository accounts, or by way of exception, a bank authorized by the Department of Finance and Monetary Board to be a government depository bank.
Digital Signature – is an electronic signature consisting of a transformation of an electronic document or an electronic data message using an asymmetric or public cryptosystem such that a person having an initial untransformed electronic document and the signer’s public key can accurately determine: (i) whether the transformation was created using the private key that corresponds to the signer’s public key; and (ii) whether the initial electronic document had been altered after the transformation was made.

74. Electronic Data Message – refers to information generated, sent, received or stored by electronic, optical or similar means.
Electronic Document– refers to information or the representation of information, data, figures, symbols or other modes of written expression, described or however represented, by which a right is established or an obligation extinguished, or by which a fact may be proved and affirmed, which is received, recorded, transmitted, stored, processed, retrieved or produced electronically.
eOR – refers to a proof of payment generated/issued through an Electronic Payment and Collection System (EPCS) with unique or sequential reference numbers that can be validated using the same system. More specifically, the eOR refers to an evidence of payment for collection received by the agency from clients generated through the agency’s electronic collection system.

75. EPCS – refers to a system that accepts and processes Electronic Payments, authenticates the payor and payee, validates availability of funds and executes the appropriate debit and credit instructions for the fund source and destination accounts, generated and forwards electronic proof of payment or eOR to the payor, or allows secure access thereto and creates, retains and safeguards the resulting detailed electronic transaction records which are accessible by authorized personnel.
Electronic Signature – refers to any distinctive mark, characteristic and/or sound in electronic form, representing the identity of a person and attached to, or logically associated with, the electronic data message or electronic document or any methodology or procedures employed or adopted by a person and executed or adopted by such person with the intention of authenticating or approving an electronic data message or electronic document.

76. Payor or Originator – refers to a person or entity by whom, or on whose behalf, the electronic data message or electronic document has been created, generated and/or sent. The term does not include a person acting as an intermediary with respect to that electronic data message or electronic equivalent.

77. General Guidelines
All collections shall be acknowledged by the government agency concerned through the issuance of official receipts to establish that these have been received.
Receipt of collections/revenue through electronic means shall be acknowledged by an eOR.
The eORs shall have met the minimum data content.
Collections of NGAs shall be deposited to the national Treasury while those f or LGUs and GOCCs shall be deposited to their respective accounts.

78. General Guidelines
All collections through electronic system shall be recorded/accounted for in the books of the concerned government agency.
The government agency concerned shall comply with the Joint Administrative Order No. 02, s.2006, “Guidelines Implementing R.A. No on EPCS in Government”.
The government agency shall provide the Auditor the read/view and print access rights in the computerized system.

79. Other Matters Updates on Accounting Reforms
Twenty-five (25) Philippine Public Sector Accounting Standards (PPSASs) prepared, discussed with users and are now presented to the COA Commission Proper for adoption thru the issuance of a CP Resolution.
Six (6) remaining PPSASs are 45% completed.
1. The PSASB shall determine the PPSAS for the following government agencies:
1. National Government Agencies (NGAs) which refer to departments, agencies, bureaus, state universities and colleges, government instrumentalities and commissions including the judiciary and constitutional commissions
2. Local Government Units (LGUs) which refer to provinces, cities, municipalities and barangays
3. Government Owned and/or Controlled Corporations (GOCCs)
2. PPSAS shall apply to all national and local government agencies.
3. The Philippine Financial Reporting Standards (PFRS), codified and issued by the Philippine Institute of Certified Public Accountants (PICPA) shall apply to all government owned and/or controlled corporations and their subsidiaries.  
 For verification with CGS

80. Philippine Public Sector Accounting Standards (PPSAS)
Scope
The PPSAS shall apply to all NGAs and LGUs while GOCCs and subsidiaries under their ownership and control follow the PFRS, codified and issued by the PICPA
1. The PSASB shall determine the PPSAS for the following government agencies:
1. National Government Agencies (NGAs) which refer to departments, agencies, bureaus, state universities and colleges, government instrumentalities and commissions including the judiciary and constitutional commissions
2. Local Government Units (LGUs) which refer to provinces, cities, municipalities and barangays
3. Government Owned and/or Controlled Corporations (GOCCs)
2. PPSAS shall apply to all national and local government agencies.
3. The Philippine Financial Reporting Standards (PFRS), codified and issued by the Philippine Institute of Certified Public Accountants (PICPA) shall apply to all government owned and/or controlled corporations and their subsidiaries.  
 For verification with CGS

81. Objective of PPSAS
The PPSAS set out the recognition, measurement, presentation and disclosure requirements for financial reporting in the Philippine Government.
The Standards of PPSAS set out the recognition, measurement, presentation and disclosure requirements for financial reporting in the Philippine Government.
The Standards of PPSAS are the IPSAS (Revised December 2006), developed by the International Public Sector Accounting Standards Board (IPSASB) and published by the International Federation of Accountants (IFAC), and the Philippine Application Guidance (PAG) to provide direction for IPSAS implementation to conform with the Philippine public sector situation.

82. Preparation/Update of GAS Manual Revision of the Chart of Accounts
Methodology
Evaluation of IPSAS
Development of PPSAS
Preparation/Update of GAS Manual
Revision of the Chart of Accounts
Conduct of Training
In the development and implementation of the PPSAS, the following were/shall be undertaken:
Study and detailed evaluation of each IPSAS to determine which provisions have to be revised/modified or not to be adopted.
Based on the evaluation, PPSAS is developed by providing the PAG for IPSAS provisions which were revised/modified or not to be adopted. Thus the PPSAS is IPSAS plus PAG.
As PPSAS are being developed, the provisions of the Government Accounting System Manual (based on the New Government Accounting System Manual) are being studied and enhanced/modified, accordingly.
Likewise, the NGAS chart of accounts was revised to conform with the PPSAS and/or provide/modify accounts to align with the PPSAS and to enhance the financial reporting in government.
The draft of the PPSAS, the revised NGAS Manual and the Chart of Accounts are exposed to various sectors of COA and in various government agencies and private organizations. Focus group discussions shall also be conducted.
The relevant comments and recommendations gathered during these exposures shall be integrated in the finalized PPSAS, GAS Manual and Chart of Accounts.
Extensive training shall be conducted for auditors, agency accountants and other finance officers/personnel including budget officers, other preparers and users of government financial statements
Implementation shall start at the beginning of the year 2014.

83. Approach to Implementation
Phased Implementation
Phase 1 (25 PPSAS for implementation in 2014)
Phase 2 (3 PPSAS for implementation in 2015)
The PPSAS is targeted to be implemented in two phases. 23 PPSAS is targeted for the Phase 1 implementation in and 6 PPSAS for 2014.

84. Phase 1 – for implementation in 2014
PPSAS 1 – Presentation of Financial Statements (IPSAS 1)
PPSAS 2 – Cash Flow Statements (IPSAS 2)
PPSAS 3 – Accounting Policies, Changes in Accounting Estimates and Errors (IPSAS 3)
4. PPSAS 4 – The Effects of Changes in FOREX rates (IPSAS 4)
PPSAS 1 - Presentation of Financial Statements sets out the overall considerations for the presentation of financial statements, guidance for their structure and minimum
requirements for the content of financial statements prepared under the accrual basis of accounting.
PPSAS 2 - Cash Flow Statements requires the provision of information about the changes in cash and cash equivalents during the financial period from operating, investing and financing activities.
PPSAS 3 - Accounting Policies, Changes in Accounting Estimates and Errors specifies the accounting treatment for changes in accounting estimates, changes in accounting policies and the correction of material errors.
PPSAS 4 - The Effects of Changes in Foreign Exchange Rates deals with accounting for foreign currency transactions and foreign operations, sets out the requirements for determining which exchange rate to use for the recognition of certain transactions and balances, and prescribes how to recognize the financial effect of changes in exchange rates within the financial statements.

85. Phase 1 – for implementation in 2014
5. PPSAS 5 – Borrowing Costs (IPSAS 5)
PPSAS 6 – Consolidated and Separate Financial Statements (IPSAS 6)
PPSAS 8 – Interests in Joint Venture (IPSAS 8)
PPSAS 9 – Revenue from Exchange Transactions (IPSAS 9)
PPSAS 12 – Inventories (IPSAS 12)
PPSAS 13 – Leases (IPSAS 13)
PPSAS 5 - Borrowing Costs prescribes the accounting treatment for borrowing costs and requires either the immediate expensing of borrowing costs or, as an allowed alternative treatment, the capitalization of borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset.
PPSAS 6 - Consolidated and Separate Financial Statements requires all controlling entities to prepare consolidated financial statements, which consolidate all controlled entities on a line-by-line basis.
PPSAS 8 – Interests in Joint Venture sets out the principles and procedures in accounting for interests in joint ventures and reporting for joint venture assets, liabilities, revenue and expenses in the financial statements of venturers and investors, regardless of the structures or forms under which the joint venture activities take place.
PPSAS 9 - Revenue from Exchange Transactions establishes the conditions for the recognition of revenue arising from exchange transactions, and requires such revenue to be measured at the fair value of the consideration received or receivable.
PPSAS 12 - Inventories establishes the measurement requirements for inventories (including those held for distribution at no or nominal charge), and provides guidance on the assignment of costs.
PPSAS 13 - Leases establishes requirements for the accounting treatment of operating and finance leases by lessees and lessors.

86. Phase 1 – for implementation in 2014
PPSAS 14 – Events after the Reporting Date (IPSAS 14)
PPSAS 16 – Investment Property (IPSAS 16)
PPSAS 17 – Property, Plant and Equipment (IPSAS 17)
PPSAS 19 – Provisions, Contingent Liabilities and Assets (IPSAS 19)
PPSAS 20 – Related Party Disclosures (IPSAS 20)
PPSAS 14 - Events After the Reporting Date establishes requirements for the treatment of certain events that occur after the reporting date, and distinguishes between adjusting and non-adjusting events.
PPSAS 16 - Investment Property establishes the accounting treatment and related disclosures for investment property, providing for application of either a fair value or historical cost model. As UNESCO does not currently hold any investment property, this standard is currently not directly related to its operations.
PPSAS 17 - Property, Plant and Equipment (PP&E) establishes the accounting treatment for property, plant and equipment, including the basis and timing of their initial recognition, and the determination of their ongoing carrying amounts and related depreciation.
PPSAS 19 - Provisions, Contingent Liabilities and Contingent Assets establishes requirements for the recognition and measurement of provisions, and the disclosure of contingent liabilities and contingent assets.

87. Phase 1 – for implementation in 2014
PPSAS 21 – Impairment of Non-Cash Generating Assets (IPSAS 21)
PPSAS 23 - Revenue from Non-Exchange Transactions (Taxes and Transfers) (IPSAS 23)
PPSAS 24 – Presentation of Budget Information in Financial Statements (IPSAS 24)
PPSAS 26 – Impairment of Cash Generating Assets (IPSAS 26)
PPSAS 20 - Related Party Disclosures establishes requirements for the disclosure of transactions with parties that are related to the reporting entity.
PPSAS 21 - Impairment of Non-Cash-Generating Assets prescribes the procedures that an entity applies to determine whether a non-cash-generating asset is impaired and to ensure that impairment losses are recognized.
PPSAS 23 - Revenue from Non-Exchange Transactions deals with issues that need to be considered in recognizing and measuring revenue from non-exchange transactions, which are the main source of government’s revenue.
PPSAS 24 - Presentation of Budget Information in Financial Statements sets out the requirement for a comparison of budget amounts and the actual amounts arising from execution of the budget to be included in the financial statements, and a reconciliation of the actual amounts in the budget to actual amounts in the financial statements.

88. Phase 1 – for implementation in 2014
PPSAS 27 – Agriculture (IPSAS 27)
PPSAS 28 – Financial Instruments: Presentation (IPSAS 28)
PPSAS 29 – Financial Instruments: Recognition and Measurement (IPSAS 29)
PPSAS Financial Instruments Disclosure (IPSAS 30)
PPSAS 31 – Intangible Assets (IPSAS 31)
PPSAS Service Concession Arrangements: Grantor (IPSAS 32)
PPSAS 26 - Impairment of Cash-Generating Assets prescribes the procedures that an entity applies to determine whether a cash-generating asset is impaired and to ensure that impairment losses are recognized.
PPSAS 27 - Agriculture prescribes the accounting treatment and disclosures for agricultural activity.
PPSAS 28 - FINANCIAL INSTRUMENTS: PRESENTATION establishes the principles for presenting financial instruments as liabilities or net assets/equity and for offsetting financial assets and financial liabilities. It applies to the classification of financial instruments, from the perspective of the issuer, into financial assets,
financial liabilities and equity instruments; the classification of related interest, dividends or similar distributions, losses and gains; and the
circumstances in which financial assets and financial liabilities should be offset.
PPSAS FINANCIAL INSTRUMENTS: RECOGNITION AND MEASUREMENT – establishes the principles for recognizing and measuring financial assets, financial liabilities and some contracts to buy or sell non-financial items. Requirements for presenting information about financial instruments are in IPSAS 28, Financial Instruments: Presentation. Requirements for disclosing information about financial instruments are in IPSAS 30,.

89. Phase 2 – for implementation in 2015
PPSAS 18 – Segment Reporting
PPSAS 22 – Disclosure of Information About the General Government Sector
PPSAS 25 – Employee Benefits
PPSAS Financial Instruments: Disclosures provides disclosures in their financial statements that enable users to evaluate:
(a) The significance of financial instruments for the entity’s financial position and performance; and
(b) The nature and extent of risks arising from financial instruments to which the entity is exposed during the period and at the end of the
reporting period, and how the entity manages those risks.
PPSAS INTANGIBLE ASSETS prescribes the accounting treatment for intangible assets that are not dealt with specifically in another Standard. This
Standard requires an entity to recognize an intangible asset if, and only if, specified criteria are met. The Standard also specifies how to measure the
carrying amount of intangible assets, and requires specified disclosures about intangible assets.
PPSAS Service Concession Arrangements: Grantor prescribes the accounting for service concession arrangements by the grantor, a public sector entity.

90. Phase 2 – For implementation in 2015
PPSAS 18 – Segment Reporting
PPSAS 22 – Disclosure of Information About the General Government Sector
PPSAS 25 – Employee Benefits

91. eNGAS Rollout in the LGUs
Will now resume with the assistance of the eNGAS Users’ Circle (EUC), the lone organization who signified interest in helping COA with the rollout in the LGUs.
Memorandum of Agreement (MOA) will be made to embody the terms and conditions for the rollout.
This activity to be headed by the COA Information Technology Office (ITO) and with the active participation of the Government Accountancy Sector (GAS).

92. “When the people become involved in their government, government becomes more accountable, and our society is stronger, more compassionate, and better prepared for the challenges of the future.”
- Arnold Schwarzenegger

93. “We have a problem when the same people who make the law get to decide whether or not they themselves have broken the law.” - Michael Templet

94. - Walter Anderson “I am responsible.
Although I may not be able to prevent
the worst from happening,
I am responsible for my attitude toward the inevitable misfortunes that darken life.”
- Walter Anderson

95. THANK YOU!