1. Dir. Marietta M. Lorenzo Government Accountancy Sector

3. OUTLINE

4. OUTLINE

6. LEGAL BASIS Mandate pursuant to the 1987 Philippine Constitution: Section 2 (1), Article IX-D The Commission on Audit shall keep the general accounts of the Government and preserve the vouchers and other supporting documents relative to such account.

7. I. KEEPING THE GENERAL ACCOUNTS (KGA) OF THE GOVERNMENT CONTEMPORARY INTERPRETATION  Takes into account challenges in the accounting profession which requires due regard for international principles and standards of accounting;  Makes full use of advances in technology through computerized accounting and budget systems and shared data base to facilitate preparation of financial reports;

8.  Mindful of the constitutional mandate and the spirit of the law which vest in COA the authority and responsibility to account for government appropriations and expenditures and to present a consolidated financial report; KEEPING THE GENERAL ACCOUNTS (KGA) OF THE GOVERNMENT CONTEMPORARY INTERPRETATION

9. KEEPING OF THE GENERAL ACCOUNTS FRAMEWORK DBM COA NGAs KGA GAA/ABM/SAROs/ ABM/SARO/NCA FS/FR/TB/SAOB/ROI NGAS, eNGAS, eBudget Monitoring FS/FR/TB/SAOB Review Results SAAB

10. KEEPING OF THE GENERAL ACCOUNTS EXPANDED FRAMEWORK NGAs DOF-BTr COA DBM AGDB GAA BESF/NEP ABM/SARO/ ABM/SAROs Cash Ceiling NCA ACIC LDC RFR LAR Bank Statement BRS CSAAB Review Results FS/FR/TB/SAOB/ROI FS/FR/TB/SAOB D/MAD Findings NGAS, eNGAS, eBudget Monitoring

11. COA KGA OVERVIEW ROI – Report of Income SAA – Summary of Appropriations and Allotments SAAB - Statement of Appropriations, Allotments and Balances SASPF – Summary of Appropriations for Special Purpose Funds SAOB – Statement of Allotments, Obligations and Balances SAAOB – Statement of Appropriations, Allotments, Obligations and Balances SBUB – Statement of Budget Utilization and Balances TB – Trial Balance JEV JAA RAPAL RASPF GJ ROI SAAOB GL SAOB (NGAs) SAAB (DBM) FR/FS TB ABM/ SARO GAA & Sp. Laws SAOB SBUB SASPFSAA LEGEND: DBM – Department of Budget and Management NGAs – National Government Agencies FR – Financial Report FS- Financial Statements GJ – General Journal GL – General Ledger JAA – Journal of Appropriations and Allotments JEV – Journal Entry Voucher RAPAL – Registry of Appropriations and Allotments RASPF – Registry of Appropriations for Special Purpose Funds

13. II.a Joint Circular: COA,DBM and DOF 1.0 Rationale The Commission on Audit (COA) is mandated under Section 2 (1), Article IX (D) of the 1987 Philippine Constitution “to keep the general accounts of the Government”. This constitutional mandate vests in COA the authority and responsibility to account for total appropriations and expenditures. It is imperative for COA to monitor, account and verify the overall budget of the national government.

14. 1.0 Rationale The full use of advances in technology through computerized systems and shared databases will facilitate the timely preparation of a consolidated financial report for the national government showing how the budget was allocated, released and utilized. Joint Circular: COA,DBM and DOF

15. 2.0 General Guidelines 2.1 Budgetary information/transactions shall be recorded in appropriate registries. 2.1.1 The Registry of Appropriations, Allotments and Balances (RAAB) (Annex A) shall be maintained by the Department of Budget and Management (DBM) to control and monitor appropriations and allotments. Joint Circular: COA,DBM and DOF

16. 2.1.2 The Registry of Allotments and Obligations (RAO) shall continue to be maintained by the national government agencies (NGAs) to control and monitor allotments and obligations. For agencies authorized to use income, the Registry of Budget and Utilization (RBU) shall also be maintained. Joint Circular: COA,DBM and DOF

17. 2.2 Budgetary reports shall be generated from the different registries as follows: 2.2.1 The Statement of Appropriations, Allotments and Balances (SAAB – Annex D) by department/agency from the RAAB; 2.2.2 The Statement of Allotments, Obligations and Balances (SAOB -Annex E) from the RAOs; Joint Circular: COA,DBM and DOF

18. 2.2.3 The Statement of Budget, Utilization and Balances (SBUB – Annex F) from the RBU; and 2.2.4 The Statement of Appropriations, Allotments, Obligations and Balances (SAAOB -Annex G) from the RAPAL and RASPF combined with data from the SAOB. Joint Circular: COA,DBM and DOF

19. 2.3 Books of accounts shall be kept by COA to record the appropriations, allotments and balances reflected in the RAPAL and RASPF. Data on actual income, obligations and related accounts shall also be recorded in the COA books based on financial reports from the agencies. Joint Circular: COA,DBM and DOF

20. 3.0 Specific Responsibilities 3.1 The DBM shall: 3.1.1 Transmit to GAS, COA, complete and timely budget documents and reports as bases for recording in the books of accounts. a. Copies of GAA and other special appropriation laws; Joint Circular: COA,DBM and DOF

21. b. Copies of ABMs, SAROs and other documents related to augmentation/ transfer/realignment of appropria- tions/allotments together with the Transmittal List (Annex H) issued by DBM central and regional offices immediately upon issuance to the agencies but not beyond ten days from end of the month; Joint Circular: COA,DBM and DOF

22. 3.1.2 Maintain RAAB by department/ agency/region; 3.1.3 Prepare Statement of Appropriations, Allotments and Balances (SAAB) showing data by department/agency/region and submit to DBM Central Office for consolidation; Joint Circular: COA,DBM and DOF

23. 3.1.4 Consolidate the central and regional offices SAAB and submit a Consolidated Statement of Appropriations, Allotments and Balances (CSAAB – Annex I) by department/agency to GAS, COA within 30 days after each quarter for reconciliation; 3.1.5 Effect appropriate adjustments based on the result of reconciliation of budget data with GAS, COA; Joint Circular: COA,DBM and DOF

24. 3.1.6 Provide GAS, COA, access to the DBM e-Budget system to facilitate the monitoring and recording of budget/ appropriations and allotments; and 3.1.7 Ensure compliance with the cut-off date for the issuance of SAROs at yearend. Joint Circular: COA,DBM and DOF

25. 3.2 Bureau of the Treasury (BTr) shall: 3.2.1 Prepare and submit to GAS, COA on or before February 14 of the ensuing year the following reports: a. Report of Current Year’s Receipts from Borrowings (Annex J); b. Analysis of Loans Payable – Foreign (Annex K-1), Analysis of Loans Payable – Domestic (Annex K-2), and Analysis of Bonds Joint Circular: COA,DBM and DOF

26. Payable – Foreign (Annex K-3) and Analysis of Bonds Payable –Domestic (Annex K-4); and c. Report of Income (National Government and Regular Agency Books) Joint Circular: COA,DBM and DOF

27. 3.3 National Government Agencies (NGAs): 3.3.1 The budget Unit shall: a. Continue to maintain the RAO and the RBU by allotment class and by program, activity and project; b. Provide the Chief Accountant access to the RAO/RBU any time for certification as to availability Joint Circular: COA,DBM and DOF

28. of fund and correctness of SAOB, Statement of Budget, Utilization and Balances (SBUB), and other related reports. c. Prepare the following quarterly reports: 1. Statement of Allotments, Obligations and Balances; 2. Detailed Statement of Obligations, Disbursements and Balances (Annex L); Joint Circular: COA,DBM and DOF

29. 3. List of Allotment Releases, by ABM and SAROs (Annex M); and 4. List of Not Yet Due and Demandable Obligations, Current Year and Prior Years (Annex N). Joint Circular: COA,DBM and DOF

30. d. For agencies authorized to use income, prepare the following additional quarterly reports: 1. Statement of Budget, Utilization and Balances; and ; 2. Detailed Statement of Utilization, Disbursements and Balances (Annex O); Joint Circular: COA,DBM and DOF

31. e. Submit the above financial reports in accordance with the following reporting deadlines, copy furnished the auditor: Office/UnitConsolidated byQuarterlyYear-end Operating Units with books of accounts Regional Office 10 days after each quarter January 10 of each year DepEd Operating Units with books of accounts Division Office 10 days after each quarter January 10 of each year DepEd Division Offices Regional Office 15 days after each quarter January 20 of each year Regional OfficesCentral Offices 20 days after each quarter January 30 of each year Central OfficesGAS, COA 30 days after each quarter February 14 of each year Joint Circular: COA,DBM and DOF

32. 3.3.2 The Accounting Unit shall: a. Submit separate Report of Income for NG and RA books on a quarterly basis; and b. Sign the SAOB, DSODB, SBUB, DSUDB jointly prepared with the Budget Unit. Joint Circular: COA,DBM and DOF

33. 3.4 COA – GAS shall: 3.4.1 Record in the RAPAL and RASPF (a) budget/appropriations and (b) allotment releases to agencies, based on GAA, Special Laws, ABMs and SAROs; 3.4.2 Record in the books of accounts (a) budget/appropriations, (b) allotment releases to agencies, and (c) unallotted appropriations Joint Circular: COA,DBM and DOF

34. (d) expenditures/obligations incurred, and (e) unexpended allotments based on SAOB; (f) income not authorized for use based on the Report of Income of NGAs; and (g) prior years’ adjustments affecting the surplus of the government; Joint Circular: COA,DBM and DOF

35. 3.4.3 Coordinate and reconcile pertinent data on appropriations and allotments with the DBM based on SAAB; 3.4.4 Analyze and reconcile allotments with agencies based on SAOB and coordinate discrepancies noted; Joint Circular: COA,DBM and DOF

36. 3.4.5 Prepare a report on the results of the review of budget documents and control of budget/appropriations ; Joint Circular: COA,DBM and DOF 3.4.6 Prepare the trial balances and financial statements based on the COA books maintained, and Statement of Appropriations, Allotments, Obligations and Balances.

37. 3.5 COA Auditing Unit shall: 3.5.1 Verify the completeness of the budgetary documents recorded in the RAOs, coordinate with GAS, COA for discrepancies noted and inform the agency accordingly; and Joint Circular: COA,DBM and DOF

38. 3.5.2 Verify the correctness and completeness of entries in the RAOs and data shown in the SAOB/SBUB and DSODB/ DSUDB submitted by NGAs to GAS, COA. Joint Circular: COA,DBM and DOF

39. 4.0 Repealing Clause All circulars, memoranda and other issuances or parts thereof which are inconsistent with the provisions of this Circular are hereby repealed/modified accordingly. Joint Circular: COA,DBM and DOF

40. 5.0 Effectivity This Circular shall take effect January 1, 2011. FLORENCIO B. ABAD CESAR V. PURISIMA Secretary Secretary Department of Budget and Management Department of Finance Reynaldo A. Villar Chairman Commission on Audit Joint Circular: COA,DBM and DOF

42. Subject: Guidelines on the Enhancement of Some Policies on the New Government Accounting System (NGAS)

43. 1.0 Purpose: The constitutional mandate to promulgate accounting rules and regulation vests in COA authority to prescribe accounting policies and guidelines in the recording of government financial transactions and submission of financial statements and reports.

44. 1.0 Purpose: In the implementation of NGAS by national government agencies (NGAs) starting January 1, 2002, some accounting issues and concerns were raised by accountants and budget officers. In view thereof, this Circular is issued to enhance some NGAS policies and procedures.

45. COA Circular 2.0 General Guidelines 2.1 The “Statement of Income and Expenses” shall be modified and renamed “Statement of Subsidy/ Income and Expenses” (Annex A).

46. COA Circular 2.2 The account “Subsidy Income from National Government” (Account 651) shall be renamed “Subsidy from National Government” and appropriate disclosure shall be included in the Notes to Financial Statements (FS) to show its analysis/breakdown.

47. 2.3 The lapsed Notice of Cash Allocation (NCA) shall be recorded in the General Journal thru the Journal Entry Voucher. COA Circular

48. Lapsed NCA – Regular & AP Accounts Dr. Cr. Subsidy from Nat’l. Govt. xx Cash – Nat’l Treas., MDS xx NCA for Trust Liabilities Due from Nat’l. Treas. xx Cash – Nat’l Treas., MDS xx

49. 2.4 The restoration of the amount of cash equivalent to the total unreleased MDS checks at yearend required in Section 2.3 of COA Government Accounting and FMIS Circular Letter No. 2002-001 dated December 16, 2002 shall be discontinued. The amount shall instead be disclosed in the Notes to Financial Statements. COA Circular

50. 2.5 Transactions shall be accounted by fund and separate financial statements and reports shall be submitted; and COA Circular

51. 2.6 The use of the Registry of Dormant Accounts (RDA) shall be discontinued. The amount of dormant accounts shall be restored in the books of accounts and disclosed in the Notes to FS.

52. 2.7 The transfer of assets acquired in prior years shall be recorded using the Government Equity account. COA Circular

55. Recommended for Implementation in CY 2012 IPSAS Topics 1. IPSAS 1 – Presentation of FS 2. IPSAS 2 – Cash Flow Statements 3. IPSAS 3 – Accounting Policies, Changes in Accounting Estimates and Errors 4. IPSAS 4 – The Effects of Changes in FOREX Rates 5. IPSAS 5 – Borrowing Costs 6. IPSAS 9 - Revenue from Exchange Transactions

56. 3. PPSAS (cont.) IPSAS Topics 7. IPSAS 12 – Inventories 8. IPSAS 13 – Leases 9. IPSAS 14 – Events after the Reporting Date 10. IPSAS 16 – Investment Property 11. IPSAS 17 – Property, Plant and Equipment 12. IPSAS 20 – Related Party Disclosures 13. IPSAS 23 – Revenue from Non-Exchange Transactions (Taxes and Transfers)

57. IPSAS Topics 14. IPSAS 24 – Presentation of Budget Information in Financial Statements 15. IPSAS 27 – Agriculture 16. IPSAS 31 – Intangible Assets

58. Status Number of IPSASs 1.Compliant2 2.Substantially Compliant4 3. Partially Compliant6 4. For Compliance 15 5. Not Applicable 3 Total 30 Compliance of NGAS/PGAS with the IPSAS SUMMARY

60. IV.A Accounting Issues/Concerns and Results of Review of CY 2009 Financial Statements and Reports I.Financial Statements 1.Lack of signature on the “Certified Correct” portion of the Pre and Post Closing Trial Balances. 1.Comply with the requirement of Section 71 of the NGAS Manual for the NGAs. ISSUES/CONCERNSRESOLUTION

61. II.Quarterly Reports on Cumulative Allotments,Obligations and Balances 1.Consolidation of Quarterly Reports on Cumulative Allotments, Obligations and Balances (Annex A) and Detailed Statement of Cumulative Expenditures/ 1. Consolidate at the regional level the required quarterly reports (ROs,DOs & IUs) to facilitate submission to GAS within the prescribed deadline.. Accounting Issues/Concerns and Results of Review of CY 2009 Financial Statements and Reports

62. Obligations Incurred, Obligations Liquidated/ Disbursements and Unliquidated Obligations (Annex B), by Province/ by City. Accounting Issues/Concerns and Results of Review of CY 2009 Financial Statements and Reports

63. 2. Use of quarterly report format not in accordance with in COA Circular No. 96-006 dated May 2, 1996 2. Strictly follow the report format prescribed in COA Circular No.96- 006. Accounting Issues/Concerns and Results of Review of CY 2009 Financial Statements and Reports

64. 3.Non-submission of Quarterly List of ABMs and SAROs 3.Submit the List of ABMs and SAROs received thirty days after the end of every quarter.

65. IV.B Analysis and Review of CY 2009 Financial Statements 1.Huge Balances of Cash in Bank  Local Currency Accounts (all funds) Current Account P4,280,751,560.57 Savings Account P6,614,240.55 ISSUES/CONCERNS RESOLUTIONS 1.For ROs and OUs- ensure that remittances of salary deductions per RPSU payrolls are within the prescribed period for timely disbursement.

66. Note: Per DepED Notes FS, 85.37% or P3,654,275,632.55 pertains to salary deductions for remittance to cover RPSU payrolls for December 2009. Analysis and Review of CY 2009 Financial Statements

67. Breakdown of Cash, LCCA REGION 2009 IP168,844,774.68 II184,414,385.46 III235,912,433.67 IV-A65,875,326.96 IV-B40,361,331.76 V169,201,784.16 VI408,217,785.53 VII388,457,509.84 VIII509,122,519.30 IXP376,081,623.89 X 237,018,581.85 Analysis and Review of CY 2009 Financial Statements

68. REGION2009 XI 43,385,101.01 XII 268,876,340.68 XIII 126,966,196.67 NCR23,297,687.23 CAR408,242,249.86 R.O Desks149,980,561.16 OSEC, Bureaus & Cntrs.96,316,118.74 FAPs376,328,308.74 Attached Agencies3,850,939.38 TotalP4,280,751,560.57 Analysis and Review of CY 2009 Financial Statements

69. 2.Huge Balances of Outstanding Cash Advances Payroll Fund P1,291,286,563.32 Due from Officers and Employees- P76,765,695.28 2. For heads of DepED - Closely supervise accountable officers and ensure that their cash advances are liquidated within the prescribed period and previous cash advances are Analysis and Review of CY 2009 Financial Statements

70. Advances to Officers and Employees- P1,537,683,900.04 liquidated before new cash advances are granted. At yearend all cash advances must be fully liquidated Analysis and Review of CY 2009 Financial Statements

71. Breakdown of Outstanding Cash Advances RegionPayroll FundDue from Officers and Employees Advances to Officers and Employees TOTAL IP7,657,375.23P1,179,937.05P30,161,873.12P38,999,185.40 II1,640,255.1147,082,518.8523,378,622.2272,101,396.18 III100,413,777.24717,695.9541,675,675.62142,807,148.80 IV-A5,895,229.75-138,099,990.80143,995,220.60 IV-B3,783,219.80-38,911,686.6342,694,906.43 V36,037,489.54-46,530,614.99825,681,104.53 VI670,515,696.6113,556,460.01415,760,116.841,099,832,273 VII94,955,913.38-28,574,443.11123,530,356.50 Analysis and Review of CY 2009 Financial Statements

72. RegionPayroll FundDue from Officers and Employees Advances to Officers and Employees TOTAL VIIIP18,961,702.3 0 -P113,764,975.61P132,726,677.90 IX189,857,567.24-95,536,645.91285,394,213.10 X2,144,831.37-54,536,462.5056,681,293.87 XI17,856,631.40-45,067,729.3157,924,360.71 XII24,006,876.57-74,093,773.51 98,100,650.08 CARAGA53,998,111.11P6,886.5742,663,533.8096,668,531.48 CAR25,231,340.843,028,585.9232,165,000.1960,424,926.95 NCR35,130,645.7710,815,256.7751,384,157.7697,330,060.30 Analysis and Review of CY 2009 Financial Statements

73. RegionPayroll FundDue from Officers and Employees Advances to Officers and Employees TOTAL RO Desks 0.00-P248,306.74 OSECP2,788,660.63-238,419,388.04241,208,048.60 FAPs411,239.43P378,354.1625,227,979.86267,275,622.10 Attached Agencies 0.00-1,482,883.48 TOTALP1,291,286,563.32P76,765,695.28P1,537,683,900.04P3,742,300,017.95 Analysis and Review of CY 2009 Financial Statements

74. 3.Huge balances of receivable accounts 3.The heads of DepED should demand prompt submission of reports needed for the liquidation of funds entrusted to NGOs/POs. Implementation must be strictly performed.  Due from NGOs/POs – 36,925,072.63  Due from GOCCs – P 272,400,691.15 Analysis and Review of CY 2009 Financial Statements

75. 4. Unreconciled Reciprocal Accounts Due from Central Office- P 93,441,114.66 Due to Regional Offices/ Staff Bureaus- 613,627,961.56 Difference (P520,186,846.90) Analysis and Review of CY 2009 Financial Statements

76. Due from Regional Offices/Staff Bureaus P 926,319,754.91 Due to Operating Units 48,769,441.85 Difference P877,550,313.06 Analysis and Review of CY 2009 Financial Statements

77. Due from Operating Units P 2,259,796,856.69 Due to Regional Offices/Staff Bureaus 613,627,961.56 Difference P 1,646,168,895.13 Analysis and Review of CY 2009 Financial Statements

78. Subsidy from Central Office P200,708,240.39 Subsidy from Regional Offices/Staff Bureaus 61,946,867.76 Subsidy from Operating Units 150,367,808.02 Total P413,022,916.17 Analysis and Review of CY 2009 Financial Statements

79. Subsidy to Regional Offices/Staff Bureaus P 5,561,918.73 Subsidy to Operating Units 2,166,046,357.76 Total P 2,171,608,276.49 Difference(P1,758,585,360.32) Analysis and Review of CY 2009 Financial Statements

80. V. Monitoring of Quarterly Reports CY 2010 Target Receipt Percent Annex A 796 309 39 Annex B 796 294 37

81. Breakdown REGION Target Receipt Percent OSEC A 4 0 0 B 4 0 0 NCR A 60 9 15 B 60 9 15 CARA 32 16 50 B 32 16 50 Region IA 60 41 68 B 60 40 67 V. Monitoring of Quarterly Reports

82. Breakdown Region Target Receipt Percent Region II A 32 8 25 B 32 8 25 Region III A 72 30 42 B 72 29 40 Region A 60 24 40 IV-A B 60 24 40 Region A 32 6 19 IV-B B 32 6 19

83. Breakdown Region Target Receipt Percent Region V A 56 12 21 B 56 12 21 Region VI A 72 41 57 B 72 41 57 Region VII A 64 7 11 B 64 7 11 V. Monitoring of Quarterly Reports

84. Breakdown Report Target Receipt Percent Region VIII A 44 23 52 B 44 23 52 Region IX A 36 19 53 B 36 19 53 Region X A 52 39 75 B 52 30 58 V. Monitoring of Quarterly Reports

85. Breakdown Region Target Receipt Percent Region XI A 40 12 30 B 40 12 30 Region XII A 40 12 30 B 40 9 23 Region XIII A 40 10 25 B 40 9 23 As of January 21, 2011 V. Monitoring of Quarterly Reports

86. CY 2010 Target Receipt Percent ABM 3,638 3,638 100 SAROs15,772 14,040 89 V. Monitoring of ABMs/SAROs

87. Breakdown Region Target Receipt Percent OSEC ABM 25 25 100 SARO 76 76 100 NCR ABM 302 302 100 SARO 1029 1029 100 CAR ABM 98 98 100 SARO 437 437 100 Region I ABM 235 235 100 SARO 1,477 1236 84 V. Monitoring of ABMs/SAROs

88. Breakdown Region Target Receipt Percent Region II ABM 174 174 100 SARO 752 752 100 Region III ABM 366 366 100 SARO 1,367 1367 100 Region IV ABM 386 386 100 SARO 1,483 1483 100 V. Monitoring of ABMs/SAROs

89. Breakdown Region Target Receipt Percent Region V ABM 236 236 100 SARO 1128 1128 100 Region VI ABM 790 790 100 SARO 2,481 1803 73 Region VII ABM 198 198 100 SARO 724 621 86 V. Monitoring of ABMs/SAROs

90. Breakdown Region Target Receipt Percent Region VIII ABM 143 143 100 SARO 1,041 1021 98 Region IX ABM 115 115 100 SARO 649 551 85 Region X ABM 100 100 100 SARO 690 452 65 V. Monitoring of ABMs/SAROs

91. Breakdown Region Target Receipt Percent Region XI ABM 144 144 100 SARO 1027 842 82 Region XII ABM 100 100 100 SARO 540 540 100 Region XIII ABM 226 226 100 SARO 877 702 80 V. Monitoring of ABMs/SAROs As of January 21, 2011