INTRODUCTION
Sec. 01. Objectives of the Manual. The New Government Accounting System Manual
presents the basic policies and procedures; the new coding system and chart of accounts;
the accounting books, reports/forms and financial statements, and illustrative accounting
entries to be adopted by all local government units effective January 1, 2002. The
objectives of the Manual are to prescribe the following:
a)
b)
c)
Sec. 02. Coverage. This Manual shall be used by all local government units (LGUs).
4.
Chart of Accounts and Account Codes. A new coding structure and a new chart
of accounts with a three-digit account numbering system shall be adopted.
5.
6.
Journals
7.
Ledgers
8.
All the above records shall be maintained by the accounting unit of the LGUs.
However, treasurers and disbursing officers shall also maintain their respective
cash records such as:
Sec. 03. Legal Basis. This Manual is prescribed by the Commission on Audit pursuant to
Article IX-D, Section 2 par. (2) of the 1987 Constitution of the Republic of the Philippines
which provides that:
"The Commission on Audit shall have exclusive authority, subject to the limitations in
this Article, to define the scope of its audit and examination, establish the techniques and
methods required therefor, and promulgate accounting and auditing rules and regulations,
including those for the prevention and disallowance of irregular, unnecessary, excessive,
extravagant, or unconscionable expenditures, or uses of government funds and
properties". (underscoring supplied)
Chapter 2.
Sec. 04. Basic Features and Policies. The new government accounting system has the
following basic features and policies, to wit:
1.
2.
3.
9.
Balance Sheet
Statement of Income and Expenses
Statement of Cash Flows
Accounting Unit to control the appropriations, allotments and obligations for each
of the four classes of expenditures, namely:
21. Completed public infrastructures funded out of a loan shall, however, be retained
in the books of accounts until the loan is fully paid.
22. A Summary of all Public Infrastructures (based on the different registries) shall be
prepared annually and included in the Notes to Financial Statements.
23. Depreciation. The straight-line method of depreciation shall be used. A residual
value equivalent to ten percent (10%) of the cost shall be set-up and depreciation
shall start on the second month after purchase/completion of the property, plant
and equipment. Public infrastructures shall not be charged any depreciation.
14. Financial Expenses. Financial expenses such as bank charges, interest expenses,
commitment fees and other related expenses shall be separately classified from
Maintenance and Other Operating Expenses (MOOE).
15. Perpetual Inventory of Supplies and Materials. Supplies and materials purchased
for inventory purpose shall be recorded using the perpetual inventory system.
Regular purchases shall be coursed thru the inventory account and issuances
thereof shall be recorded as they take place except those purchased out of petty
cash fund which shall be for immediate use and not for stock. Such case shall be
charged immediately to the appropriate expense accounts.
25. Allowance for Doubtful Accounts. An Allowance for Doubtful Accounts shall be set
up for estimated uncollectible receivables. This will allow for a fair valuation of
receivables. Allowance for Doubtful Accounts shall be provided only for trade
receivables.
16. Valuation of Inventory. Cost of ending inventory of supplies and materials shall be
computed using the moving average method.
17. Maintenance of Supplies and Property, Plant and Equipment Ledger Cards. The
Accounting Unit shall maintain Supplies Ledger Cards by stock number and
Property, Plant and Equipment Ledger Cards by category of assets.
18. Construction of Assets. For assets under construction, the Construction Period
Theory shall be applied for costing purposes. Bonus paid to the contractor for
completing the work ahead of time shall be added to the total cost of the project.
Liquidated damages charged and paid for by the contractor shall be deducted
from the total cost of the asset. Any related expenses incurred during the
construction of the project, such as, license fees, permit fees, clearance fees, etc.
shall be capitalized.
19. Public Infrastructures. Public infrastructures are assets for use of the general
public, such as roads, bridges, waterways, railways, plazas, monuments, etc. A
Registry of Public Infrastructures (RPI) shall be maintained according to
classification to record all infrastructures for use of the general public. The
following are the Registries to be maintained, classified by category of property,
plant and equipment:
20. During construction these infrastructures shall be recorded in the books under the
account Construction in Progress. Upon completion, the completed asset shall
be transferred to the account Public Infrastructure. At the end of the year,
completed assets under Public Infrastructure shall be transferred to the
respective registry.
disbursements. The source documents and accounting forms shall be the basis for the
preparation of reports by the Office of the Treasurer. The Office of the Accountant shall
record the transactions to the registries or to the corresponding books of original entry.
Posting to the books of final entry and preparation of the financial reports shall also be
undertaken by the Office of the Accountant.
The General Accounting Plan (Table 1) is presented as to the following type of
transactions:
1)
2)
3)
4)
B.
BUDGETARY ACCOUNTS
The local sanggunian approves the annual budget thru the issuance of appropriation
ordinance. On the first business day of the fiscal year, the entire annual budget of the local
government unit shall be recorded in the Registry of Appropriations, Allotments and
Obligations (RAAO). The appropriations, in the amounts approved by the legislative body
and confirmed by the reviewing authorities, are recorded in the registries maintained by
the accountant where they may be compared with the actual developments of the period.
Budgetary reserves which are stand by appropriations ready for release in case of
calamities, as well as supplemental budget are similarly recorded in the RAAO. In case the
LGU is operating on a re-enacted budget, said re-enacted budget shall likewise be
recorded in the registry. Once current budget is approved, the necessary adjustments shall
be made in the registry.
Separate registries shall be maintained for the four classes of expenditures per
responsibility center, to wit:
1.
2.
3.
4.
Sec. 08. Accounting for Allotments. Allotment is the authorization issued by the
Local Chief Executive (LCE) to a department/office of the LGU, which allows it to incur
obligations, for specified amounts, within the appropriation ordinance. Allotments are
released quarterly based on the Work and Financial Plan and Request for Release of
Allotment. The Accountant, upon receipt of the Advice of Allotment, shall enter the
allotment in the RAAOs.
Sec. 09. Accounting for Obligations. Obligations refer to the amounts committed to
be paid by the LGU for any lawful act made by an accountable officer for and in behalf of
the local government unit concerned.
Obligations shall be taken up in the registries as they are incurred. For each obligation, the
requesting department/office shall prepare the Allotment and Obligation Slip (ALOBS)
signed by the department or office head as requesting official and forward this, together
with the supporting documents, to the Budget Officer.
The Budget Officer shall certify to the existence of appropriation that has been legally
made for the purpose by signing the appropriate box in the ALOBS and assign the ALOBS
number thereto. The Accountant shall review the ALOBS and certify as to obligation of the
allotment by signing the appropriate box in the ALOBS. He shall also fill up the Status of
Obligation. The Accountant shall record the amount of obligation in the RAAOs.
Sec. 10. Adjustment of Obligations. The Chief Accountant shall record paid
disbursement vouchers in the Status of Obligation portion (Payments) of the ALOBS. Any
balance appearing in the ALOBS after full payment of obligations shall form part of
unobligated allotment. The Chief Accountant shall adjust accordingly the amount of
recorded obligations in the RAAO using the same ALOBS number as reference. At the end
of each month, the Chief Accountant and the Budget Officer shall reconcile their records on
allotments available for obligation.
PERSON / UNIT
RESPONSIBLE
a)
Office of the
Accountant
c)
Office of the
Accountant
Heads of
departments/offices
Budget Officer
f)
Certifies the ALOBS as to the
obligations of allotments. Records the
obligation in the appropriate column of
the RAAOs and in the Status of Obligation
portion (Obligation) of the ALOBS.
Chief Accountant
Office of the
Accountant
For this purpose, the following specific expenditures shall be recorded in the appropriate
RAAOs:
a. RAAOCO
b. RAAOPS
c. RAAOMO
d. RAAOFE
C.
Bank Charges
Interest Expenses
Commitment Charges
Other Financial Charges (e.g. underwriting fees, guarantee fees)
Loan Amortization
Sec. 13. Separation of Books and Depository Accounts. Local accountants and
treasurers shall maintain separate books and depository accounts, respectively, for each
fund in their custody or administration.
Sec. 14. Depository Accounts. Local treasurer shall maintain depository accounts in
the name of their respective local government units with banks, preferably governmentowned, located in or nearest to their respective areas of jurisdiction. Earnings of its
depository accounts shall accrue exclusively thereto.
Sec. 15. Remittance of Government Monies to the Local Treasury. Officers of the
local government authorized to receive and collect monies arising from taxes, revenue, or
receipts of any kind shall remit the full amount received and collected to the treasury of
such local government unit which shall be credited to the particular account or accounts to
which the monies in question properly belong.
Sec. 16. Sources of Income of LGUs. The main sources of income of LGUs are as
follows:
a.
b.
c.
The sources of income are further classified into general income accounts and specific
income accounts.
Sec. 17. General Income Accounts. The following shall comprise the General Income
Accounts applicable to LGUs:
a.
b.
c.
d.
e.
f.
g.
h.
i.
j.
k.
l.
m.
Sec. 18. Specific Income Accounts. The following major classification comprise the
specific income accounts for LGUs:
1.
2.
3.
4.
Property Taxes
Taxes on Goods and Services
Other Taxes
Other Specific Income
Sec. 19. Methods of Accounting for Income. The following accounting methods
shall be adopted in recording income:
a.
b.
c.
Cash Basis Cash basis of accounting shall be used for all other taxes,
fees, charges and other revenues.
Sec. 20. Basis of Recording Real Property Tax/Special Education Tax. Real
Property Tax Receivables/Special Education Tax Receivables shall be established at the
beginning of the year based on Real Property Tax Account Register/Taxpayers index card.
At the beginning of the year, the Treasurer shall furnish the Chief Accountant of a duly
certified list showing the name of taxpayers and the amount due and collectible for the
year. Based on the list, the Chief Accountant shall draw a Journal Entry Voucher (JEV) to
record the debit to Real Property Tax Receivable/Special Education Tax Receivable and
crediting to Deferred Real Property Tax Income/Deferred Special Education Tax Income.
Upon collection of Real Property Taxes from taxpayers, the account Deferred Real Property
Tax Income/Deferred Special Education Tax Income shall be debited while the Real Property
Tax Income due to the municipality is recognized/credited. The share of the Province and
Barangay shall also be credited to Due to LGUs.
Every end of the week, thereafter the Municipal Accountant shall furnish the Provincial
Accountant with a summary of the JEVs showing the breakdown of the amounts Due to
LGUs. The summary, which shall be supported with copies of the JEVs, shall be the basis
of the Provincial Accountant to draw the JEV taking up the RPT Income. The account Due
from LGU shall be debited and Real Property Tax Income credited.
At the end of the month, the Municipal Accountant shall likewise prepare the Abstract of
Real Property Tax to facilitate the distribution of real property tax collection. A copy of the
abstract shall be furnished the Provincial Accountant, for purposes of reconciliation with
the weekly summary of JEVs.
Sec. 21. Delinquencies for Real Property Tax/Special Education Tax Prior to CY
2002. Payment of delinquencies for real property taxes/special education taxes prior to
CY 2002 shall be recognized as a direct credit to Real Property Tax Income/Special
Education Tax Income account.
Sec. 22. Discount on Real Property Tax/Special Education Tax. Discounts for
advance and prompt payment of Real Property Tax and the additional one percent (1%) tax
accruing to the Special Education Fun shall be recognized in the year the taxes are due.
Said discounts shall be apportioned to the concerned LGUs in accordance with the sharing
prescribed for real property tax and additional one percent (1%) tax under the Local
Government Code.
Sec. 23. Fines and Penalties. Fines and Penalties, either from tax revenue or other
specific income, shall be recognized as income of the year it was collected.
Fines and Penalties arising from real property taxes shall be distributed to concerned LGUs
in accordance with the sharing prescribed under the Local Government Code for Real
Property Tax and the additional one percent (1%) tax for the Special Education Fund.
Sec. 24. Other Receipts. Other receipts of the local government units shall be
comprised of, but not limited to, the following:
a.
b.
c.
d.
Borrowings
Sale of Property, Plant and Equipment
Refund of Cash Advances
Receipt of Performance/Bidders Bonds
Sec. 25. Borrowings. Borrowings are proceeds of repayable obligations, generally with
interest from the bank, national agency, another local government unit, and private sector.
All borrowings incurred shall be recorded direct to the appropriate liability accounts. Upon
receipt of the advice from the bank or lending agency informing the release of the
proceeds, the Accountant shall draw a Journal of Entry Voucher taking up the transaction.
Sec. 26. Sale of Property, Plant and Equipment. Sale of property, plant and
equipment refers to the proceeds from the sale of land, buildings, equipment, furniture and
other similar property which are recorded in the books as Property, Plant and Equipment.
The appropriate Property, Plant and Equipment account shall be credited upon transfer of
ownership.
Sec. 27. Refund of Cash Advances. Cash advances for official travel shall be taken
up as a receivable from the concerned official or employee. Refunds made shall be
credited to the receivable account previously set up. Cash advances for salaries and
wages shall be recorded as debits to the account Cash Disbursing Officer. Any refund
made shall be credited to this account.
Sec. 28. Receipt of Performance Bonds. Performance bond posted by contractor or
supplier to guaranty full and faithful performance of the their work may be in the form of
cash, certified check or surety. Performance bond in cash or certified check shall be
acknowledged by the issuance of official receipt and recorded in the books by the
Accountant drawing a JEV for the purpose. In case of surety bond, an acknowledgment
receipt shall be issued by the authorized official.
Sec. 29. Reporting for Collections and Deposits. Collectors/tellers shall issue a
receipt to acknowledge collections made. The receipt maybe in the form of pre-numbered
Official Receipts, or cash tickets and the like. At the close of each business day, these
collectors/tellers shall accomplish the Report of Collections and Deposits (RCD) in four
copies. The original and two copies, together with the duplicates of the official receipts
issued, shall be submitted to the treasurer/cashier to whom the cash collected shall be
turned over. The fourth copy of the RCD shall be retained by the collector/teller
concerned. Barangay Treasurers deputized to collect taxes imposed by provinces, cities
and municipalities shall follow the same procedures in turning over their collections to the
treasurer/cashier concerned.
In the case of collectors assigned to the field, where travel time from their places
of assignment to the Treasurers Office is more than one day, turnover of collections shall
be made at least once a week or as soon as the collections reach P5,000.00.
Sec. 30. Verification of Collections and Accountable Forms. The Treasurer/Cashier
shall verify the Report of Collections and Deposits; check the statement of accountable
forms as to initial balances on hand, receipts, issues and the ending balances on hand;
make a physical count of the accountable forms remaining in the custody of the
collector/teller and check the same against the new balances on hand column. He shall
indicate his verification by affixing his signature at the back of the triplicate copy of the
last official receipt issued. He shall count the money turned over to him and sign the
certification and receipt portion of all copies of RCD.
Sec. 31. Designation of Liquidating Officers. The Treasurer may designate
liquidating officers from among the collectors/tellers whenever necessary.
a.
b.
c.
Collectors/telle
rs shall turn over their collections to their designated liquidating officer. The
RCD shall however be prepared in five copies, four copies to be submitted to
the liquidating officer, the fifth copy to be retained by the collector/teller.
The liquidating
officer shall perform the procedures for the receipt and verification of
collections turned over to him. He shall also accomplish the RCD in four
copies to summarize the collections turned over to him by the
collectors/tellers as well as his own collections.
The liquidating
officer shall turn over intact the cash collections to the Treasurer/Cashier
together with the originals and two copies of the RCDs of collectors/tellers
and the duplicates of the official receipts issued. The Treasurer/Cashier shall
acknowledge receipt of the cash and all accompanying documents by signing
all copies of the RCD of liquidating officer on the certification and receipt
portion of the form. The fourth copy of the RCD of the liquidating officer and
RCDs of collectors/tellers shall be retained by the liquidating officer.
Sec. 32. Deposit of Collections. The Treasurer/Cashier shall deposit intact all his
collections as well as all collections turned over to him by the collectors/tellers with the
authorized depository bank daily or not later than the next banking day. He shall record all
deposits made in the cashbook and prepare the RCD.
The barangay treasurer shall deposit all collections intact with the city/municipal treasurer,
or in a depository bank account maintained in the name of the barangay, within five (5)
days from receipt thereof.
PERSON / UNIT
RESPONSIBLE
Collector/Teller
Liquidating Officer
Treasurer
Treasurer
Treasurer
Accountant
Sec. 36. Proforma Accounting Entries. The following are pro-forma accounting
entries for income, collection and deposit:
Particulars
Account Title
Acct
.
Cod
e
Debit
Credi
t
Particulars
Receipts from
Markets
Garbage Fees
INCOME
1. Real Property Tax Basic
A. Books of the
Municipality
b. Deposit of
Collections
a. Setting-up of RPT
Receivable
RPT = P1,000
RPT Sharing: Municipal
- 40%
Province - 35%
Barangay - 25%
b. Receipt of
Payment
Cash in Treasury
Real Property Tax
Receivable
c. Distribution of
Collection
RPT Sharing:
Municipal - 40%
Province - 35%
Barangay - 25%
Deferred Real
Property Tax Income
Real Property Tax
Due to LGUs
d. Deposit of
Collections
110
101
100
e. Remittance of Share
(Province)
Due to LGUs
Cash in Bank LCCA
431
110
35
f. Remittance of Share
(Barangay)
Due to LGUs
Cash in Bank LCCA
431
110
25
B.
124
448
101
1,000
100
124
448
711
431
100
100
Acct
.
Cod
e
783
772
Debit
Credi
t
90
10
110
101
100
1,000
100
1,000
40
60
a. Receipt of Notice of
Funding Check Issued
from the DBM and
credit memo from
the bank for Share
from Internal Revenue
Collections
110
b. Receipt of Notice of
Funding Check Issued
from the DBM for
Share from Internal
Revenue Collections
130
746
1,000
1,000
746
1,000
b. Upon receipt of
share
131
711
110
131
35
35
35
Cash in Treasury
Income from Grants
and Donations
101
b. Receipt of grants
and donations in kind Motor Vehicle:
Original Cost
P1,000
Less: Acc. Depn.
200
Book Value
P
800
Motor Vehicles
Invested Equity
218
537
800
537
800
Government Equity
501
35
101
100
110
651
100
800
800
5. BORROWINGS
a. Receipt of borrowed
funds from bank -
a. Receipt of grants
and donations in cash
(Donations in kind shall
be booked-up using the
appropriate asset
account)
25
Books of the
Province
a. Receipt of Income
Account Title
403
1,000
1,000
100
Acct
.
Cod
e
951
952
110
Particulars
Account Title
Debit
Principal P1,000
Bank Charges 10
Interest Expense12
Bank Charges
Interest Expenses
Cash in Bank LCCA
b. Receipt of borrowed
funds from other
agency Principal P1,000
Interest Expense 6
Cash in Treasury
Loans Payable
Current, domestic
Interest Expenses
101
1,000
403
952
110
c. Payment of loan
amortization
Loans Payable
Current, Domestic
Cash in Bank - LCCA
Credi
t
10
12
Debit
Credi
t
500
403
110
Receipt of subsidy
from
General Fund Proper
Subsidy to Other
Funds
Cash in Bank LCCA
897
110
200
b. To take up refund of
cash advance
Cash in Treasury
Due from Officers &
Employees
200
500
898
500
128
110
10
101
10
128
10
10
Cash Disbursing
Officers
Cash in Bank LCCA
Cash in Treasury
Cash Disbursing
Officers
107
110
10
101
10
10
107
10
500
500
605
606
Accounts
500
b. To take up refund of
cash advance
Cash in Treasury
Subsidy from Other
Funds
110
500
1,000
Transfer of subsidy to
Special Account
Acct
.
Cod
e
110
22
Receipt of subsidy
funds from Other funds
Account Title
Cash in Bank LCCA
6. SUBSIDIES
Transfer of subsidy
to Special Education
Fund (Aid to SEF to
finance its projects)
Particulars
a. To take up receipt of
performance bond in
cash
Cash in Treasury
Performance/
Bidders/ Bail Bonds
Payable
101
50
b. To take up deposit of
performance bond
110
101
50
c. To take up refund of
performance bond
Performance/
Bidders/ Bail Bonds
Payable
Cash in Bank LCCA
414
50
414
110
50
50
50
D. DISBURSEMENTS
Sec. 37. Disbursements. Disbursements refer to the settlement of government
payables/obligations by cash or by check.
Typical transactions for which disbursements are made are as follows:
1.
2.
3.
4.
Personal Services
Maintenance and Other Operating Expenses
Capital Outlay
Financial Expenses
2.
3.
Certification that funds are available for the purpose by the Local Treasurer. (Box
C of DV)
Sec. 42. Release of Checks. The Treasurer shall release the check only to the payee
or his duly authorized representative. For purposes of releasing checks, the Treasurer shall
maintain a Check Register where all checks issued shall be recorded chronologically and
where the claimants shall be required to acknowledge receipt thereof.
Sec. 43. Reporting of Checks Issued. The checks released to claimants shall be
reported in the Report of Checks Issued (RCI) which shall be prepared daily by the
Treasurer for each fund. It shall be submitted to the Accountant for preparation of Journal
of Entry Voucher based on individual checks issued and recording in the Check
Disbursements Journal.
Sec. 44. Check Disbursement Process. The steps in disbursements through
issuance of check is shown below:
PROCESS
PERSON / UNIT
RESPONSIBLE
Concerned Office
b.
Supervisor/Head of
Department
c.
Check completeness of
documents, assign number to
DV, sign Box B and forward to
Treasurer.
Accounting Unit
d.
Treasurer
f.
Treasurer
g.
Administrator/ Vice-
10
PROCESS
forward to Accountant for
preparation of the
Accountants Advice of Local
Check Disbursements.
h.
i.
j.
k.
PERSON / UNIT
RESPONSIBLE
Mayor
for the Local
Sanggunian
Disbursements
Sec. 47. Cash Advances for Travel. Cash advances for travel shall be recorded as
debit to the account Due from Officers and Employees and a credit to Cash in Bank Local
Currency, Current Account.
Accountant
For liquidation of travel where the amount of cash advance is equal to or more than the
travel expenses incurred, the Liquidation Report form shall be prepared by the
officers/employees concerned and submitted to the accounting unit as basis for
preparation of the JEV to record liquidation. In case the amount of cash advance is less
than the travel expenses incurred, a Disbursement Voucher shall be prepared to liquidate
the previous cash advance and serve as a claim for reimbursement of the deficiency in
amount.
Treasurer
Sec. 48. Payments out of the Petty Cash Fund. Petty cash fund shall be maintained
under the imprest system. The fund shall be sufficient for the non-recurring, emergency
and petty expenses of the LGU for one month. Disbursements from the fund shall be
through the Petty Cash Voucher (PCV) which shall be signed by the payee to acknowledge
the amount received. The official receipt shall be attached to the PCV.
Accounting Unit
Accountant
Petty cash fund shall be set up at the beginning of the year. An ALOBS shall be prepared
for the fund, recorded in the RAAO and obligated as Other Expenses.
Payments out of the fund shall be made through the use of PCVs duly supported by official
receipts and other required documents. Each PCV shall not exceed Php1,000.00.
A Disbursement Voucher shall be prepared for replenishments of the petty cash fund
during the year duly supported by a list/summary of PCVs, the PCVs and its supporting
documents. ALOBS shall be prepared for each replenishment and recorded in the RAAO
based on actual expenses incurred.
Sec. 45. Payments in Cash. Disbursements by cash shall be made from a cash
advance drawn and maintained in accordance with COA rules and regulations. Cash
payments shall be made only on duly approved payrolls/disbursement vouchers. Cash
advances, by regular and special disbursing officers shall be recorded through a debit to
Cash Disbursing Officers and a credit to Cash in Bank Local Currency, Current Account
(LCCA).
Sec. 46. Reporting of Cash Disbursements. To account for cash disbursements, from
regular and special cash advances, the Accountable/Disbursing Officer shall prepare the
Report of Disbursements and submit the original and duplicate copy with
vouchers/payrolls/petty cash vouchers to the Accountant. He shall ensure that receipt of
the report and supporting documents, are properly acknowledged by the Accountant. The
Accountant shall verify the report including the completeness of the supporting
documents, prepare the Journal of Entry Voucher (JEV) and record the transaction in the
Cash Disbursements Journal.
At the end of the year, the petty cash fund shall be fully liquidated by preparing a Report
of Disbursement supported by the list/summary of PCVs, the PCVs and its supporting
documents. The ALOBS setting up the fund at the beginning of the year shall be cancelled.
Another ALOBS shall be prepared taking up the liquidation and recorded in the RAAO based
on the actual expenses incurred. Unused cash shall be returned to the Treasurer who shall
issue an Official Receipt to acknowledge the amount returned. A new Cash Advance for
Petty Cash Fund shall be set up in the ensuing year.
Sec. 49. Cash Disbursement Process. Disbursement process for payment of salaries
and wages out of cash advances is as follows:
PROCESS
PERSON / UNIT
RESPONSIBLE
a)
Concerned offices
b)
Office of the
Treasurer
11
PROCESS
c)
d)
Check completeness of
documents/ previous cash advance
liquidated, assign number to DV,
sign Box B and forward to
Approving Officer.
PERSON / UNIT
RESPONSIBLE
Accounting Unit
e)
Treasurer
f)
Administrator
g)
Accountant
h)
Treasurer/ Disbursing
Officer
Disbursing Officer
Disbursing Officer
Accountant
j)
k)
PERSON / UNIT
RESPONSIBLE
i)
PROCESS
Accountant
12
Particulars
1.
Account Title
Acct
.
Cod
e
Debit
Credit
Particulars
Account Title
Acct
.
Cod
e
Debit
Credit
Cash Disbursing
Officers
Cash in Bank LCCA
2. Liquidation of cash
advance for payroll
107
110
21,000
801
804
18,000
3,000
805
5,000
21,000
3. Liquidation at year
end
410
411
412
2,000
1,500
1,500
107
21,000
817
1,500
818
411
412
1,500
105
110
6,000
500
849
2,500
882
950
110
1,000
800
4,800
Traveling Expenses
Local
Office Supplies
Expenses
Petty Cash Fund
831
1,000
849
105
4,000
5,000
4. Return of unused
Petty Cash Fund.
Cash in Treasury
Petty Cash Fund
101
105
1,000
128
110
1,000
831
900
1,000
831
Cancel RAAOMO for setting up of petty cash fund at the start of the year
and refund for a total of P6,000.
1. Release of cash
advance for petty cash
fund miscellaneous
expenses
Traveling Expenses
Local
Office Supplies
Expenses
Office Equipment
Maintenance
Other Expenses
Cash in Bank LCCA
2. Replenishment of
petty cash fund during
the year
6,000
2. Liquidation of cash
advance during the
current year
(assuming only P900
was utilized and P100
was refunded)
1,000
128
900
110
100
13
Particulars
refunded where official
receipt was issued
Account Title
Due from Officers
and Employees
Acct
.
Cod
e
Debit
128
Credit
Particulars
Account Title
Acct
.
Cod
e
100
2. Receipt of office
equipment
Office Equipment
Cash in Bank LCCA
222
110
Debit
Credit
6,000
6,000
2. Payment by Check
a. Maintenance and Other Operating Expenses
Enter obligation in RAAOMO for rent P3,000
1. Payment of rent
Rent Expense
Cash in Bank LCCA
841
110
3,000
3,000
Electricity
Telephone/Telegraph
and Internet
Cash in Bank LCCA
835
1,500
837
110
2,000
Training and
Seminar Expenses
Cash in Bank LCCA
833
110
2. Payment of second
billing 100%
accomplishment
3,500
3. Remittance of
taxes withheld
1,000
Construction in
Progress Roads,
Highways and
Bridges
232
Withholding Taxes
Payable
Cash in Bank LCCA
410
110
Withholding Taxes
Payable
Cash in Bank LCCA
410
110
80,000
Public Infrastructure
Construction in
Progress Roads,
Highways and
Bridges
243
800,00
0
Government Equity
Public
Infrastructures
501
243
400,00
0
40,000
360,000
80,000
1,000
If funded from regular agency income
b. Financial Expenses
4. To take up roads
completed
Bank Charges
Cash in Bank LCCA
951
110
300
300
5. To transfer
completed roads to
Registry of Public
Infra- structures at the
end of the year
Interest Expenses
Cash in Bank LCCA
952
110
400
No entry
800,000
800,00
0
800,000
400
232
Note: Using the JEV for the above transactions, the public infrastructures
shall
be recorded in the Registry of Public Infrastructures.
If funded from a
14
Acct
.
Cod
e
Particulars
loan
Account Title
6 To record completed
Public
Infrastructures
Construction in
Progress Roads,
Highways and
Bridges
243
Government Equity
Public
Infrastructures
501
243
roads
At year end,upon
full payment of laon
Debit
Credit
800,00
0
232
800,000
800,00
0
Account Title
Progress Agency
Assets
Withholding Taxes
Payable
Cash Disbursing
Officers
7. Remittance of
withholding tax
800,000
Particulars
Disbursing Officer of
paid payroll
8. Accomplishment
Report approved by
the LCE
Acct
.
Cod
e
230
Debit
380,00
0
410
30,000
107
350,000
Withholding Taxes
Payable
Cash in Bank LCCA
410
Buildings
Construction in
Progress Agency
Assets
204
30,000
110
30,000
970,00
0
230
970,000
No entry
f. Acquisition of Land
2. Issue PO for
building materials:
Lumber, nails, cement,
sand and gravel,
paints, etc. =
P600,000
3. Payment for
construction materials
received
4. Issuance of
materials P590,000
Credit
No Entry
Construction
Materials Inventory
Withholding Taxes
Payable
Cash in Bank LCCA
Construction in
Progress Agency
Assets
Construction
Materials Inventory
156
410
110
600,00
0
2. Remittance of
withholding tax
60,000
540,000
Cash Disbursing
Officers
Cash in Bank LCCA
6. Liquidation by
Construction in
201
2M
410
110
Withholding taxes
Payable
410
110
200,000
1.8M
200,00
0
200,000
590,00
0
156
590,000
Land
Withholding Taxes
Payable
Cash in Bank LCCA
107
110
350,00
0
350,000
Enter obligation in RAAOCO for P600,000 for land and P400,000 for
building
1. Payment of the
land and building
(assessed value of
land is P600,000) for
P1,000,000
Land
Building
Withholding Taxes
Payable
Cash in Bank LCCA
2. Remittance of
withholding tax
Withholding Taxes
Payable
Cash in Bank LCCA
201
204
410
600,00
0
400,00
0
110
410
110
100,000
900,000
100,00
0
100,000
15
Particulars
Account Title
Acct
.
Cod
e
Debit
Credit
h. Purchase of Inventories
Enter obligation in RAAOMO for purchase of P2,500 worth of spare arts
1. Payment of
delivered spare parts
Spare Parts
Inventory
Withholding Taxes
Payable
Cash in Bank LCCA
155
2,500
410
250
110
2,250
Office Supplies
Inventory
Withholding Taxes
Payable
Cash in Bank LCCA
149
3,000
410
110
300
2,700
j. Fund Transfers
Enter obligation in RAAOMO for subsidy to LGU XYZ
1. Cash assistance to
LGU XYZ
Subsidy to Local
Government Units
Cash in Bank LCCA
895
110
30,000
30,000
Subsidy to Other
Funds
Cash in Bank LCCA
897
110
10,000
10,000
Grants and
Donations
Cash in Bank LCCA
889
110
500,00
0
500,000
Sec. 54. Loss of Cash and Property. Loss of cash and property may be due to
malversation, theft, robbery or other causes.
Cash shortage discovered during cash examination conducted by auditors is reported
through the Report of Cash Examination within ten (10) working days from the completion
of examination pursuant to COA Memorandum No. 84-373A. The auditor issues an audit
report in case of shortage in property accountability. As soon as a shortage is definitely
established, the Auditor shall issue a memorandum pertaining thereto and the Accountant
shall draw a Journal of Entry Voucher to take up the shortage as a receivable from the
accountable officer concerned.
In case of loss of property due to other causes (theft, force majeure, fire, etc.), a report
thereon shall be prepared by the accountable officer concerned for purposes of requesting
relief from accountability. No accounting entry shall be made but the loss shall be
disclosed in the notes to financial statements pending result of request for relief from
accountability.
Sec. 55. Grant of Relief from Accountability. When a request for relief for shortages
or loss of funds is granted, a copy of the decision shall be forwarded to the Chief
Accountant who shall draw a JEV to record the transaction. The loss shall be debited to the
Loss of Assets account and credited to the appropriate receivable account. In case the
request for relief is denied, immediate payment of the shortage shall be demanded from
the accountable officer. Restitution shall be acknowledged by the issuance of an official
receipt.
In case the request for relief from accountability for loss of property caused by fire, theft,
force majeure or other causes is granted, a copy of the decision shall likewise be
forwarded to the Chief Accountant for the preparation of the JEV. The loss shall be debited
to the Loss of Assets account and credited to the appropriate asset account. If request for
relief from accountability is denied, the loss shall be taken up as a receivable from the
accountable officer/persons liable and shall be credited to the appropriate asset account.
Sec. 56. Cash Overage. In case the cash examination disclosed cash overage, as
determined by the auditor, the amount shall be forfeited in favor of the government and
an official receipt shall be issued by the collector/teller. The cash overage shall be taken up
as Other Specific Income.
Sec. 57. Dishonored Checks. A check is said to be dishonored when upon its being
duly presented for payment, such payment is refused or cannot be obtained.
E. MISCELLANEOUS TRANSACTIONS
Upon receipt of the debit memo and the dishonored check(s) from the bank, constructive
cancellation of the official receipt covering the dishonored check shall be immediately
effected by the Treasurer on the copy in his possession. The Treasurer shall immediately
16
photocopy the dishonored checks and record as credit in the CashbookCash in Bank and
cancel payment in the taxpayers index card. He shall also notify the collector/teller of the
dishonor and the cancellation of the official receipt. The collector/teller shall note the
cancellation in the triplicate copies of the receipt. The Treasurer shall then inform the
Auditor who shall effect the cancellation in the duplicate copy of official receipt, in case the
same has already been submitted for audit.
The Treasurer shall forward the debit memo and the photocopy of the dishonored checks
to the Accountant. The Accountant shall cancel the official receipt if still in his possession.
He shall prepare the Journal of Entry Voucher (JEV) taking up the dishonored check by
crediting the Cash in Bank account and debiting the appropriate income account. In case
of dishonor of check payments for Real Property Tax (RPT) or Special Education Tax (SET),
the RPT/SET Receivables and corresponding Deferred RPT/SET Income shall be restored.
The accounts Due to LGUs, RPT Income, Cash in Bank and RPT Discount shall be adjusted
accordingly. He shall furnish the Treasurer with a copy of the duly approved JEV. The
Treasurer shall record the JEV number in the Cashbook-Cash in Bank as reference in the
entry effecting the cancellation of the dishonored check.
Sec. 58. Cancellation of Lost Check Issued. A check is considered lost when it is
misplaced, waylaid or left behind inadvertently/negligently by the payee or holder in due
course or by the custodian/carrier thereof and after diligent search cannot be found or
located; or when it is lost due to fortuitous event, theft or robbery.
Upon submission of sworn statement from the payee that a check issued by the
LGU is lost, the treasurer shall immediately notify the bank concerned for the stoppage of
payment. He shall forward the sworn statement to the accountant who shall prepare the
JEV to cancel the payment made. Copy of the JEV shall be furnished the treasurer as basis
for him to debit the amount in the Cashbook Cash in Bank.
Sec. 59. Spoiled and Stale Checks. Checks may be cancelled when they become
spoiled or stale. A check is considered spoil when, it is torn, mutilated, defaced or with
erasures/errors affecting the genuineness of any material information contained therein.
certified copy of the DV shall be requested from the Auditor for presentation
to the Administrator/Local Chief Executive who shall countersign the check.
The cancelled check shall be reported and attached to the RCI prepared at
the period of cancellation. The replacement check shall also be reported
chronologically in the RCI.
Sec. 60. Suspensions, Disallowances and Charges. Disallowances and charges
shall be taken up in the books of accounts only when they become final and executory. The
Accountant shall prepare the Journal of Entry Voucher (JEV) to take up the Receivable
Disallowances and Charges and credit the appropriate expense account for the current
year or prior years adjustment if pertaining to expenses of previous years.
Cash settlement of disallowances shall be recorded thru the JEV by debiting Cash in
Treasury and crediting the Receivable Disallowances and Charges account.
Suspensions in audit and settlement thereof shall not be recorded in the books of
accounts.
Sec. 61. Pro-forma Accounting Entries. The following the are pro-forma accounting
entries for miscellaneous transactions:
Particulars
1.
2.
3.
Debit
Credi
t
1. Cash Shortage
a. Cash shortage of the of the Disbursing Officer
To take up cash
shortage
It is stale, if it has been outstanding for over six months from date of issue or as prescribed
by the depository bank. At least one month before a check becomes stale, the Treasurer
shall send a written notice to the payee of the existence of the check.
A spoiled or stale check shall be marked cancelled on its face and reported as follows:
Account Title
Acct
.
Cod
e
128
50
107
50
128
101
50
50
Loss of Assets
(current year) or
Prior Years
adjustments (prior
128
50
107
948
50
50
17
Particulars
Account Title
years)
Due from Officers
and Employees
Acct
.
Cod
e
Debit
128
Credi
t
Particulars
Account Title
Acct
.
Cod
e
Debit
Credi
t
50
7. Disallowances and Charges
Cash in Treasury
Due from Officers
and Employees
101
50
128
50
4. Cash Overage
To take up cash
overage discovered
during cash
examination
Cash in Treasury
Other Specific
Income of LGU
101
50
792
50
5. Dishonored Checks
Receipt of
refund/settlement
When the
disallowance becomes
final and executory
Overpayment of Office
Supplies
Amount paid - P100
Should be
90
Difference
10
Settlement of
Disallowance
Receivables
Disallowances/
Charges
Office Supplies
Expense
Cash in Treasury
Receivables
Disallowances/
Charges
138
10
849
101
10
10
138
10
From payment of real property tax in the current year or prior year
Upon receipt of advice
of dishonored check
and cancellation of
Official Receipt
a.
124
When the
disallowance becomes
final and executor
50
448
Receivables
Disallowances/
Charges
Prior Years
Adjustments
138
10
533
10
50
Due to LGUs
Real Property Tax
Income
Cash in Bank LCCA
431
30
711
110
20
Cash in Treasury
Real Property Tax
Receivable
101
50
124
Settlement of
disallowance
50
Cash in Treasury
Receivables
Disallowances/
Charges
101
10
138
10
c. Settlement of Charges
50
c.1 Recording of charges which collection were made in the current
year
6. Lost/Destroyed/Stale/Obsolete Checks
Check issued in the current/prior year for replacement
Check cancellation
110
401
50
Replacement
Accounts Payable
Cash in Bank LCCA
401
110
50
50
50
Receivables
Disallowances/
Charges
Franchise Tax
138
724
10
10
18
Particulars
Account Title
Acct
.
Cod
e
Debit
Credi
t
Particulars
ensuing year
F.
Settlement
Cash in Treasury
Receivables
Disallowances/
Charges
101
10
138
10
c.2 Recording of charges which collection were made in the prior year
When the charge
becomes final and
executory
Settlement
Receivables
Disallowances/
Charges
Prior Years
Adjustments
Cash in Treasury
Receivables
Disallowances/
Charges
To record refund of
overpayment
Cash in Treasury
Due from Officers
and Employees
Credi
t
10
Sec. 62. Adjusting Entries. Adjusting entries are accounting journal entries made in
order to ensure that revenues and expenses are recorded in the period when they are
earned or incurred following the revenue recognition and the matching principles.
Adjusting entries are required every time financial statements are prepared. The
use of the adjusting entries makes it possible to report on the Balance Sheet the
appropriate assets, liabilities and equity accounts at the statement date and the
Statement of Income and Expenses the net income/(loss) for the period.
10
533
101
10
10
Prepaid expenses are expenses paid in cash and recorded as assets before they are used
or consumed. Prepaid expenses expire either with the passage of time (e.g. rent) or
through use and consumption (e.g. supplies). The adjusting entry for prepaid expenses is a
debit to the expense account and a credit to the asset account. Examples are rent,
supplies, etc. Acquisition of productive facilities is viewed essentially as long term
prepayments, hence, periodic adjusting entries for depreciation are included in this
category. For depreciation, the entry is a debit to depreciation expense and a credit to
accumulated depreciation. The depreciable or estimated life for different types of agency
assets are presented in Table 2 (Annex 7).
10
Unearned revenues are recorded as a liability when received and considered earned upon
rendition of service (e.g. tuition fees) or the passage of time (e.g. advance payment of real
property taxes). The adjusting entry for unearned revenues is a debit to a liability account
and a credit to revenue account.
10
801
101
10
128
Prepayments; and
Accruals
Sec. 64. Prepayments. Prepayments are expenses paid or revenues received before
they are incurred or earned. Adjusting entries for prepayments are required at the
statement date to record the portion of the prepayment that represents the expense
incurred or the revenue earned in the current accounting period. Sub-categories of
prepayments are prepaid expenses and unearned revenues.
10
138
128
a.
b.
10
Debit
Sec. 63. Types of Adjusting Entries. There are two types of adjusting entries:
138
8. Refund of Overpayment
To record overpayment
of salaries and wages
(When overpayment is
ascertained)
Account Title
Adjustments
Acct
.
Cod
e
533
Refund of
overpayment of
Salaries and Wages
Regular Pay during the
current year
To take up refund of
over payment in the
Cash in Treasury
Salaries and Wages
Regular Pay
Cash in Treasury
Prior Years
101
10
801
101
10
Particulars
Account Title
1. Report of supplies
utilized for P2,000.
Office Supplies
Expense
Office Supplies
Inventory
Acct
.
Cod
e
Debit
849
2,000
149
Credi
t
2,000
10
19
2.
Application
of advance
RPT for
P2,500.
Deferred Credits to
Income
Real Property Tax
440
711
4.
2,500
2,500
5.
6.
Sec. 65. Accruals. Accruals are revenues earned and expenses incurred in the current
accounting period that have not yet been recorded. Adjusting entries for accruals are
required to record revenues earned and expenses incurred in the accounting period.
Adjusting entry for accrued revenues is a debit to a receivable account and a credit to an
income account. Examples are interest, share from internal revenue collections covered
by notice of funding checks issued, etc.
Adjusting entry for accrued expenses is a debit to the appropriate expense
account and a credit to a payable account. Examples are accrued salaries, bad debts, etc.
For bad debts, the entry is a debit to Bad Debts Expense and a credit to Allowance for
Doubtful Accounts.
Illustrative accounting entries:
Particulars
Account Title
1. Receipt of the
Notice of Funding
Check Issued for the
December Share from
Internal Revenue
Collections for
P20,000.
2. Unpaid salaries
and wages of
employees, at end of
accounting period,
P50,000.
Acct
.
Cod
e
Debit
130
20,000
746
801
428
2.
3.
Particulars
Account Title
1. To close the
Revenue accounts to
the Income and
Expense Summary
account.
Credi
t
20,00
0
50,000
50,00
0
Sec. 66. Closing Journal Entries. Closing journal entries are the accounting entries
prepared to reduce all balances of the nominal accounts to zero at the end of the
accounting period in order to prepare the accounts for the next accounting period. The
procedure followed in the reduction of the balances is called the closing process. The
closing process is as follows:
1.
Credit the debit balance of the Income and Expense Summary account
and debit the amount in the Retained Operating Surplus account, in case
of a net loss.
Debit all credit balances of the intermediate accounts and debit the total
to the Government Equity account.
Credit all debit balances of the intermediate accounts and credit the
total to the Government Equity account.
Debit all revenue accounts balances and credit the total to the Income
and Expense Summary account.
Credit all expense accounts balances and cost of goods sold and debit
the total to the Income and Expense Summary account.
Debit the credit balance of the Income and Expense Summary account
and credit the amount in the Retained Operating Surplus account, in
case of a net income.
2.
To close the
Income and Expense
Summary to Retained
Operating Surplus
account.
3.
Retained Operating
Surplus
Government Equity
To close the
Retained
Operating
Surplus to
Government
Equity
account.
Acct
.
Cod
e
Debit
711
100
746
10,000
723
761
50
20
532
532
10,170
5,670
534
534
501
Credit
5,670
5,670
5,670
20
a.
b.
c.
Sec. 69. Procedures in the Preparation of the Trial Balance. The procedures in
trial balance preparation shall be:
a.
b.
c.
List the account titles and their debit/credit balances based on the
accounts and amount reflected in the general ledger;
Total the debit and credit columns; and
Prove the equality of the two columns.
The post-closing trial balance with supporting schedules shall be distributed as follows:
COA Central Office thru the Unit Auditor
COA Regional Office
COA Unit Auditor
Local Chief Executive
Local Sanggunian
Local Treasurer
Local Accountant
Sec. 73. Interim Reports. Interim reports are financial statements required to be
prepared at any given period or at a financial reporting period shorter than a full financial
year, without closing the books of accounts. The following interim financial statements and
the Notes to Financial Statements shall be prepared and submitted quarterly:
Sec. 70. Pre-Closing Trial Balance. The pre-closing trial balance is the trial balance
prepared from the general ledger accounts after the adjusting journal entries have been
journalized and posted. This is also termed as adjusted trial balance.
Monthly pre-closing trial balance for each fund shall be submitted not later than the
twentieth day after the end of the month. It shall be supported by the Status of
Appropriations, Allotments and Obligations, for both the current and continuing
appropriations.
Obligatio
n
Unobligat
ed
Balance
Sec. 72. Post-closing Trial Balance. Post-closing trial balance is the trial balance
prepared at the end of the year after the closing entries are journalized and posted in the
general ledgers. In the Post-closing Trial Balance, all the nominal accounts (revenue,
expense and intermediate) are closed and the real accounts (assets, liability and equity)
are shown with balances. It shall be submitted not later than the fourteenth day of
February after the end of the calendar year with the following supporting schedules:
a.
b.
c.
Balance Sheet;
Statement of Income and Expenses; and
Statement of Cash Flows
The interim reports shall be prepared employing the same accounting principles used for
annual reports. Adjusting entries shall be prepared for the interim period.
Sec. 74. Worksheet. A worksheet is the accountants informal device for accumulating
and sorting information needed for the financial statements. It is a columnar sheet of
paper used to adjust the account balances and prepare the financial statements.
The trial balance at the end of the quarter shall also be supported by a schedule of
subsidiary ledger balances of the controlling accounts in the General Ledger and an
additional copy shall be submitted to the COA Regional Office thru the Unit Auditor.
Appropriation
s
a.
b.
c.
To facilitate the preparation of the interim financial statements, the use of the worksheet is
recommended.
Function/Program/
Project/ Activity
1 copy
1 copy
1 copy
1 copy
1 copy
1 copy
1 copy
The use of the worksheet facilitates the end-of-period accounting and reporting process.
Also, it helps accountants prepare the financial statements on a more timely basis. The
following worksheet format shall be used:
Name of LGU
Worksheet
As of ____________, 20_____
Accounts
Trial
Balance
Adjustment
s
Adjusted
T/B
Title
Dr.
Dr.
Dr.
1.
2.
3.
4.
5.
Cod
e
Cr.
Cr.
Cr.
Statement
of Income
&
Expenses
Dr.
Cr.
Balance
Sheet
Dr.
Cr.
Account title and code columns show the account titles/codes of the general
ledger accounts.
Trial balance column reflects amounts obtained from the general ledger balances.
Adjustment columns are the adjustments effected for the prepayments and
accruals.
Adjusted trial balance shows the balances of all the accounts after the adjustment
at the end of the accounting period.
Statement of Income and Expenses shows all the debit and credit items in the
adjusted trial balance for all the income and expense accounts. The difference
between the income and expenses shall be reflected as Net Income/Loss to be
extended to the credit column of the Balance Sheet.
21
6.
Balance Sheet show all the debit and credit items in the adjusted trial balance of
all the asset, liability, equity and intermediate accounts affecting directly the
Government Equity account.
Balance Sheet;
Statement of Income and Expenses; and
Statement of Cash Flows
The Chief Accountant shall likewise prepare the consolidated financial statements for all
funds and the Notes to the Financial Statements.
Sec. 77. Balance Sheet. The Balance Sheet (Annex 3) shows the financial condition of
the agency at a specific date. It presents information on the assets, liability and the
government equity of the agency.
Sec. 78. Statement of Income and Expenses. The Statement of Income and
Expenses (Annex 4) shows the income and expenses of the agency at the end of a
particular period. It presents the detailed information of the income and expenses
recognized during the period covered.
Sec. 79. Statement of Cash Flows. The Statement of Cash Flows (Annex 5) shows
the agencys cash activities. It reports cash receipts and cash payments and net change
in cash resulting from operating, investing and financing activities of an agency during a
period, in a format that reconciles the beginning and ending cash balances.
Sec. 80. Notes to the Financial Statements. The Notes to the Financial Statements
(Annex 6) are the accountants means of amplifying or explaining the items presented in
the main body of the statements. These are explanatory notes on the accounts and/or
accounting policies which will give additional information value to the financial statements.
In the Notes, the accountant is expected to report the economic substance rather than the
legal form of the transactions and to make adequate disclosure.
The Notes to Financial Statements include the following:
1.
2.
3.
4.
5.
22
Construction, repair and maintenance of school buildings and other facilities of public
elementary and secondary schools;
Establishment and maintenance of extension classes when necessary; and
Holding of sports activities at the division, district, municipal, and barangay levels.
certifications of the local budget officer and the accountant thereon shall serve as their
certification of the disbursement as required by law.
Sec. 90. Certification as to Cash Availability. The Treasurer shall certify as to cash
availability for the fund in the Disbursement Voucher and Purchase Request. For
infrastructure projects undertaken by contract, the Treasurer shall also certify as to cash
availability in the contract. This certification shall serve as the required certification under
the law.
Sec. 84. Basis of Recording Special Education Tax Special Education Tax
Receivables shall be established at the beginning of the year based on Real Property Tax
Account Register/Taxpayers index card. At the beginning of the year, the Treasurer shall
furnish the Chief Accountant with a duly certified list of the name of taxpayers and the
amount due and collectible for the year. Based on the list, the Chief Accountant shall draw
a Journal Entry Voucher (JEV) to record the Special Education Tax Receivables.
Sec. 85. Delinquencies for Special Education Tax prior to CY 2002. Payment of
delinquencies for special education taxes prior to CY 2002 shall be recognized as a direct
credit to Special Education Tax Income account.
Sec. 92. Inventory Process. The perpetual inventory method and the moving average
method shall likewise be adopted in the accounting and costing of inventory. The general
procedures, the forms and reports for the holding of inventory shall also be followed.
However, separate perpetual inventory records and stock cards shall be maintained by the
Accounting Unit and the General Services Officer or the Treasurer, as the case maybe.
Likewise, separate weekly Summary for Supplies and Materials Issued pertaining to the
fund shall be prepared.
Sec. 86. Collection Procedures for the Special Education Tax. The additional one
percent (1%) tax on real property shall be collected simultaneously with the basic real
property tax. A single official receipt shall be issued for both taxes, indicating therein the
amount paid for the basic tax and the additional one percent tax. However, the collecting
officer shall prepare separate reports of collections for the two taxes. Further, the proceeds
of the additional one per cent tax shall be deposited in a separate depository account.
Sec. 93. Pro-forma Accounting Entries. Pro-forma accounting entries for the fund,
follows:
Procedures for the turn over of collections, frequency of deposit of collection with
the bank, preparation of report of collections, verification of collections and accountable
forms, preparation of report of accountability for accountable forms as well as
consolidation of reports of accountable forms shall be the same as that prescribed for
collections in the General Fund.
Sec. 87. Separate Cashbooks for Special Education Fund. The Treasurer and/or the
concerned accountable officers shall maintain separate cashbooks for the SEF which shall
be in accordance with the prescribed format.
1. Set-up Special
education Tax
Sec. 88. Separate Registries, Books of Accounts, and Financial Reports for
Special Education Fund. The Chief Accountant shall maintain separate registries for
appropriation, allotment and obligations and books of accounts for SEF. He shall likewise
prepare separate financial reports such as the Trial Balance, Balance Sheet, Statement of
Income and Expenses, Statement of Cash Flows and supporting schedules, to be submitted
within the prescribed timeframe.
For disbursements, separate set of JEVs shall also be prepared which shall be
numbered in accordance with the prescribed codes.
Sec. 89. Preparation and Control of ALOBS for Special Education Fund. The
Allotment and Obligation Slips (ALOBS) pertaining to the fund shall be prepared and signed
by authorized official of the requesting department or office. This shall be forwarded to the
Budget Officer who, based on the approved school board budget, shall verify the existence
of appropriation for the proposed expenditure. He shall certify the ALOBS to that effect and
number the same in accordance with the prescribed codes. This shall then be forwarded
to the Chief Accountant who shall certify as to obligations of allotments and shall record
the same in the appropriate Registry of Appropriations, Allotments and Obligations (RAAO).
The ALOBS shall form an integral part of the disbursement voucher/payroll and the
I.
Particulars
Receivable
Total Receivables
Account Title
Acct
.
Cod
e
Special Education
Tax Receivable
125
Deferred Special
Education Tax
Income
449
Debit
Credit
500,00
0
500,00
0
P500,000
Provincial Share
P250,000
2. Collection of
Special
Education Tax
P200,000.
Cash in Treasury
Special Education
Tax Receivable
Computation of
Shares of LGUs in RPT
50% of
Deferred Special
Education Tax
Income
101
200,00
0
125
449
200,00
0
200,00
0
Special Education
23
I.
Particulars
Share
3. Deposit of
collections with
authorized depository
bank
Account Title
Tax
Acct
.
Cod
e
713
Due to LGUs
431
110
101
Debit
200,00
0
Credit
100,00
0
100,00
0
200,00
0
I.
500
Particulars
PhilHealth
4. Remittance of share
to Province ( Special
Education Tax)
P100,000
Due to LGUs
(Province)
431
110
100,00
0
100,00
0
Account Title
Acct
.
Cod
e
GSIS Payable
PAG-IBIG Payable
411
412
2,850
600
PHILHEALTH
Payable
413
500
Withholding Taxes
Payable
GSIS Payable
PAG-IBIG Payable
PHILHEALTH Payable
Cash in Bank LCCA
Memo entry in
Registry of
Appropriations ,
Allotments and
Obligations
(Personal
Services (RAAOPS,
MOOE RAAOMO,
Capital Outlay
RAAOCO)
Memo entry in
RAAOPS
6. Obligation for PS
Salaries of teachers for
extension class
P30,000
Memo entry in
RAAOPS
11. Payment of
Government Share
7. Grant of cash
advance for payroll
Cash Disbursing
Officers
Cash in Bank LCCA
8. Payment of Salaries
Salaries per Payroll
P 30,000
Less: Deductions
(Personal Share)
Life & Ret. P 2,850
Pag-ibig
600
5. Receipt of allotment
for Allotment Class:
Personal Services P50,000
MOOE
20,000
Capital Outlay
30,000
Total P100,000
107
110
801
25,000
Debit
410
411
412
1,050
2,850
600
413
110
500
817
2,850
818
500
819
110
600
128
110
500
Credit
5,000
3,950
25,000
30,000
107
25,000
410
1,050
12. Obligation of
Traveling Expenses
P500
Memo entry in
RAAOMO
500
24
I.
Particulars
Account Title
Traveling Expenses
Local
Due from Officers &
Employees
Acct
.
Cod
e
831
Memo entry in
RAAOMO
Cash in Treasury
Due from Officers &
Employees
101
110
Cash in Treasury
101
Memo entry in
RAAOMO
19. Payment of
MERALCO bill P800
Electricity
Cash in Bank LCCA
Memo entry in
RAAOMO
Office Supplies
Inventory
Withholding Taxes
Payable
Cash in Bank LCCA
22. Obligation of
Equipment per
Purchase Order
P30,000
Memo entry in
RAAOCO
Credit
480
128
15. Adjustment of
obligation of travel.
Debit
I.
Particulars
Account Title
Acct
.
Cod
e
Debit
30,000
23. Payment of
equipment with
Invoice/Delivery
Receipt
Office Equipment
Withholding Taxes
222
Payable
Cash in Bank LCCA
410
110
110
Credit
3,000
27,000
480
605
5,000
Adjusting Entries:
20
128
5,000
20
20
20
1. Depreciation of
Equipment using the
Straight Line Method:
Equipment :
Life Amount
5 yrs. P6,000
DepreciationOffice
Equipment
Accumulated
Depreciation
Office
Equipment
922
6,000
322
6,000
Closing Entries :
1. Closing of Income
835
110
Accounts
800
800
2. Closing of Expense
Accounts
149
410
110
500
20
480
Special Education
Tax
Subsidy from Other
Funds
Income and Expense
Summary
Income and Expense
Summary
Salaries & Wages
Regular Pay
Life & Retirement
Insurance
Contributions
PAG-IBIG
Contributions
PHILHEALTH
Contributions
Traveling Expenses
Local
Electricity
DepreciationOffice
Equipment
713
100,0
00
605
5,000
532
532
105,000
41,23
0
801
30,000
817
2,850
818
600
819
500
831
835
480
800
922
6,000
25
I.
Particulars
3. Closing of Income
and Expense Summary
4. Closing of Retained
Operating Surplus
Account Title
Acct
.
Cod
e
532
Sec. 98. Separate Cashbooks for Trust Fund. The Treasurer and/or the concerned
accountable officers shall maintain separate cashbooks for the Trust Fund which shall be in
accordance with the prescribed format.
Debit
63,77
0
534
Retained Operating
Surplus
534
Government Equity
501
Credit
63,770
63,77
0
63,770
Sec. 99. Separate Books of Accounts and Financial Reports for Trust Fund. The
Chief Accountant shall maintain separate books of accounts for Trust Fund. He shall
likewise prepare separate financial reports such as the Trial Balance, Balance Sheet,
Statement of Cash Flows and supporting schedules, to be submitted within the prescribed
timeframe.
Sec. 100. Disbursements within Trust Agreement/Approved Budget.
Disbursements from trust funds shall be in accordance with the specific purpose stated in
the trust agreement/approved budget between the trustor and trustee (LGU) as certified
by the Chief Accountant. The certification on the DV as to existence of funds held in trust
shall serve this purpose.
Sec. 101. Certification and Approval of Disbursements from Trust
Funds. Disbursements from the Trust Fund shall require:
a.
B. TRUST FUND
Sec. 94. Definition of Trust Fund. Trust Fund shall consist of private and public
monies which have officially come into the possession of the local government or of a local
government official as trustee, agent or administrator, or which have been received as a
guaranty for the fulfillment of some obligation. A trust fund shall only be used for the
specific purpose for which it was created or for which it came into the possession of the
local government unit.
Sec. 95. Receipts Accruing to the Trust Fund. Grants and donations
coming from foreign funding institutions, other levels of government and private
institutions/individuals for specific projects/purpose shall accrue to the Trust Fund. Equity
of the LGU on projects under a trust agreement shall also accrue to the Trust Fund. These
receipts shall be credited to the Project Equity account.
b.
c.
d.
Sec. 102. Disbursement Process. Disbursements from the Trust Fund shall be as
follows:
a.
Disbursement by check
PROCESS
PERSON / UNIT
RESPONSIBLE
Loans of LGUs for income generating projects from the Municipal Development Fund Office
(MDFO) requiring counterpart funding from LGUs shall not be recorded in the Trust Fund
but as a Special Account in the General Fund.
1.
Concerned Office
Sec. 96. Collection Procedures for the Trust Fund. Cash collections for the Trust
Fund shall be acknowledged through the issuance of an official receipt. Procedures for the
turn over of collections, frequency of deposit of collection with the bank, preparation of
report of collections, verification of collections and accountable forms, preparation of
report of accountability for accountable forms as well as consolidation of reports of
accountable forms shall be the same as that prescribed for collections in the General Fund.
2.
Supervisor/Head of
Department
3.
Accounting Unit
In case of receipt of funds through the bank, the Accountant shall draw a JEV based on the
bank credit memo.
4.
Treasurer
Sec. 97. Project Expenditures. The construction period theory shall apply for
expenditures on infrastructure projects of the Trust Fund. For other projects, expenditures
shall be debited to the appropriate expenditure account. Expenditures shall be closed to
Project Equity account at year-end or upon project completion, whichever comes first.
5.
26
PROCESS
6.
7.
PERSON / UNIT
RESPONSIBLE
Treasurer
Particulars
Administrator
8.
Accountant
9.
Treasurer
Accounting Unit
Accountant
b.
For payments through cash advances, procedures 1 to 5 for check disbursement shall be
followed. The rest of the procedures shall be the same as that of the General Fund.
Sec. 103. Inventory Process. The perpetual inventory method and the moving
average method shall likewise be adopted in the accounting and costing of inventory. The
general procedures, the forms and reports for the holding of inventory shall also be
followed. However, separate perpetual inventory records and stock cards shall be
maintained by the Accounting Unit and the General Services Officer or the Treasurer as the
case maybe. Likewise, separate weekly Summary for Supplies and Materials Issued
pertaining to the fund shall be prepared.
Sec. 104. Pro-forma Accounting Entries for Trust Funds. Accounting entries for
typical transactions under the trust funds are as follows:
1.
Account Title
Acct
.
Cod
e
II.
III. Debi
t
Credit
a. Receipt of grant
direct to bank from
NGA for:
a. Construction
of road P2M
b. Purcha
se of
constr
uction
Equipment
P500,000
b. Issuance of
check with approved
DV for payment to
contractor upon
receipt of first billing
50% accomplished
Construction in
Progress
Roads, Highways
& Bridges
Withholding Taxes
Payable
Cash in Bank LCCA
110
2,500,00
0
502
232
410
110
c. Submission of
statement of
disbursements to
grantor
2,500,00
0
1,000,00
0
100,000
900,000
No entry
d. Issuance of
check with approved
DV for payment to
contractor upon
receipt of second
billing 100%
accomplished
Construction in
Progress Roads,
Highways &
Bridges
Withholding Taxes
Payable
Cash in Bank LCCA
e. Transfer of
completed
construction to
Public Infrastructure
Public
Infrastructures
Construction in
Progress
Roads, Highways
& Bridges
232
1,000,00
0
410
110
243
232
100,000
900,000
1,000,00
0
1,000,00
0
27
Particulars
Account Title
Acct
.
Cod
e
f. Remittance of
taxes w/held
Withholding Taxes
Payable
Cash in Bank LCCA
410
110
200,000
212
500,000
g. Purchase of
equipment
h. Payment of
withholding tax
i. Submission of full
liquidation to
grantor and transfer
of completed road
and equipment to
GF for LGU use
Construction and
Heavy Equipment
Withholding Taxes
Payable
Cash in Bank LCCA
Withholding Taxes
Payable
Cash in Bank LCCA
Project Equity
Public
Infrastructures
Construction and
Heavy Equipment
II.
III. Debi
t
Credit
200,000
410
110
50,000
450,000
410
110
50,000
502
243
2,500,00
0
50,000
212
2,000,00
0
500,000
Invested Equity
Government Equity
537
502
2,500,00
0
b. Transfer of Public
Infra- structure to
RPI
Government Equity
Public
Infrastructures
502
243
2,000,00
0
2.
Account Title
II.
III. Debi
t
110
502
2,000,00
0
Credit
Grantor
Building 1.2M
Equipment .
3M
LGU Funded
Office supplies
-1M
Salaries of project
Personnel - .
4M
Total
2M
b.
Receipt of funds
from foreign
funding
institution thru
national
government
agency
2,000,00
0
2,500,00
0
c. Issuance of check
with approved DV
for payment to
contractor for
Construction of
Building, 50%
accomplished.
Construction in
Progress
Agency Assets
Withholding Taxes
Payable
Cash in Bank LCCA
2,000,00
0
d. Remittance of
withholding tax
Withholding Taxes
Payable
Cash in Bank LCCA
Particulars
a. Project budget as
agreed upon
between grantor
and LGU for project:
Acct
.
Cod
e
889
500,000
110
230
500,000
500,000
410
110
410
110
50,000
450,000
50,000
50,000
28
Particulars
Account Title
Acct
.
Cod
e
e.
Cash Disbursing
Officers
Cash in Bank LCCA
107
110
Issuance of
check with
approved DV for
cash advance
on salaries and
wages of
project
administrative
personnel
f. Liquidation of
Cash Advances
g.
Remittance of
tax withheld
h. Issuance of
check with approved
DV for purchase of
supplies and
materials
i. Issuance of office
supplies
j. Purchase of IT
equipment
k.
Remittance of
withholding tax
II.
III. Debi
t
Credit
Particulars
Account Title
Cash in Bank LCCA
Acct
.
Cod
e
110
170,000
l. Issuance of check
for installation of
equipment
IT Equipment and
Software
Cash in Bank LCCA
215
110
50,000
502
260,000
200,000
410
30,000
107
170,000
410
110
149
110
30,000
30,000
100,000
Succeeding year
n.
Issuance of
check with approved
DV for payment to
contractor for
Construction of
Building 100%
accomplished.
IT Equipment and
Software
Withholding Taxes
Payable
Cash in Bank LCCA
Withholding Taxes
Payable
849
60,000
149
215
60,000
410
p.
Transfer of
construction in
progress to
property, plant and
equipment account
250,000
410
110
Project Equity
502-02 P260,000
Salaries and Wages
Casual/
Contractual
Office Supplies
Expenses
Construction in
Progress
Agency Assets
Withholding Taxes
Payable
Cash in Bank LCCA
50,000
803
200,000
849
60,000
230
700,000
410
110
70,000
630,000
100,000
o.
Remittance
of withholding tax
Office Supplies
Expenses
Office Supplies
Inventory
Credit
25,000
170,000
End of Year
m.Closing. of
expenses to Project
Equity
803
II.
III. Debi
t
25,000
225,000
q.
Issuance of
check for cash
advance on salaries
and wages
Withholding Taxes
Payable
Cash in Bank LCCA
Property Plant and
Equipment
Building
Construction in
Progress Agency
Assets
Cash Disbursing
Officers
Cash in Bank LCCA
410
110
70,000
204
1,200,00
0
70,000
230
107
110
1,200,00
0
170,000
170,000
25,000
29
Particulars
r.
Liquidation
of salaries and
wages
s. Remittance of
withholding tax
t. Issuance of office
supplies
End of Year
u. Closing of
expenses to
Project Equity
Project
Completion
v. Transfer of
building and
equipment to the
General Fund as
follows:
General Fund
Books:
At end of year:
Account Title
Salaries and Wages
Casual/Contractual
Withholding Taxes
Payable
Cash Disbursing
Officers
Withholding Taxes
Payable
Cash in Bank LCCA
Office Supplies
Expenses
Office Supplies
Inventory
Acct
.
Cod
e
II.
III. Debi
t
803
200,000
Credit
Chapter 6.
410
30,000
107
170,000
410
110
30,000
30,000
SPECIAL ACCOUNTS
Sec. 105. Special Accounts in the General Fund. Local government units shall
maintain special accounts in the General Fund for public utilities and other economic
enterprises, loans, interests, bond issues, and other contributions for specific purposes;
and development projects funded from the share of the local government concerned from
the internal revenue collections and development of national wealth and such other
special accounts which may be created by law or ordinance.
Sec. 106. Objectives for the Maintenance of Special Accounts. Accounting
procedures for the operation of the special accounts are adopted in order to:
849
40,000
149
a.
b.
40,000
Project Equity
Salaries and Wages
Casual/
Contractual
Office Supplies
Expenses
502
240,000
Project Equity
Building
IT Equipment and
Software
502
204
Building
204
IT Equipment and
Software
Invested Equity
1,200,00
0
215
537
300,000
Invested Equity
537
1,500,00
0
Government Equity
501
803
200,000
849
40,000
1,500,00
0
215
1,200,00
0
300,000
1,500,00
0
1,500,00
0
SUB-CODE
01
02
03
04
05
06
07
08
09
10
11
12
13
14
15
16
17
30
SPECIAL ACCOUNT
SUB-CODE
Transaction
Cash in Treasury
108,500
Cash in Treasury
40,000
Discount on RPT
18
19
20
21
22
23
Discount on RPT
Sec. 109. Profit from Operation. Profits or income derived from the operation of
public utilities and other economic enterprises, after deduction of the cost of improvement,
repair and other related expenses of the public utility or economic enterprises concerned,
shall first be applied for the return of the advances or loans made therefor, any excess
shall form part of the general fund of the local government unit concerned.
Sec. 110. Reporting. At the end of the year, post-closing trial balance shall be
prepared for each special account. Also, the following financial statements shall be
prepared:
a.
b.
c.
Balance Sheet
Statement of Income and Expenses
Statement of Cash Flows
These reports shall form part of the schedules of the General Fund trial balance.
Sec. 111. Pro-forma Accounting Entries.
Transaction
Acct.
Code
110
Debit
100,00
0
(01)
(18)
20,000
Share from Internal Revenue Collections
(IRC)
Share from IRC
(01)
80,000
(18)
20,000
746
100,000
Credit
6,500
RPT Receivable
RPT Receivable
65,000
Business Taxes & Licenses
Business Taxes & Licenses
50,000
Receipts from Markets
Receipts from Markets
40,000
Acct.
Code
148,50
0
Credit
(02)
937
6,500
(01)
(01)
124
65,000
723
50,000
783
40,000
(01)
(02)
No accounting entry
101
Debit
(01)
149
20,00
0
8,000
(02)
31
Transaction
Office Supplies Inventory
2,000
Cash in Bank LCCA
Cash in Bank - LCCA
7,600
IV.
Cash in Bank - LCCA
9,500
Cash in Bank - LCCA
1,900
Withholding Taxes Payable
400
500
Acct.
Code
Debit
Credit
(01)
110
19,000
(01)
(02)
(18)
410
1,000
2,000
849
(01)
(02)
3,000
2,000
6,000
149
(01)
(02)
(18)
222
8,800
(01)
(02)
240
200
(18)
1,000
Office Supplies Inventory
Office Equipment
4,800
Office Equipment
4,000
Withholding Taxes Payable
1,000
i.
Credit
(18)
Operation of Market
2,000
Debit
(02)
3,000
Acct.
Code
(18)
100
3,000
Transaction
(01)
4,560
(02)
3,800
410
440
110
8,360
6,000
j.
1,000
k. Transfer of the funds for P12,000.
Subsidy to Special Accounts
g.
No accounting entry
5,000
4,000
898
110
12,00
0
12,000
(01)
32
Acct.
Code
Transaction
l.
Debit
Credit
110
12,00
0
606
12,000
Chapter 7.
SUPPLIES OR PROPERTY
Sec. 114. Perpetual Inventory Method. Purchase of supplies and materials for stock,
regardless of whether or not they are consumed within the accounting period, shall be
recorded as inventory following the perpetual inventory method. Under the perpetual
inventory method, an inventory control account is maintained in the General Ledger on a
current basis. In addition, detailed inventory records are maintained for each inventory
item.
Regular purchases shall be coursed thru the inventory account and issuances
thereof shall be recorded as they take place, except those purchased out of the petty cash
fund which shall be for immediate use and for stock in which case shall be charged
immediately to the appropriate expense accounts.
The Chief Accountant shall maintain the perpetual inventory records comprising
of Supplies Ledger Cards (SLC) for each commodity/stock, Property, Plant and Equipment
Ledger Card (PPELC) for each category of plant, property and equipment and Work, Other
Animals and Breeding Stocks Ledger Card (WOABSLC) for each type of livestock. Such
ledger cards shall contain the details of the property, plant and equipment and livestock
account in the inventory control account in the general ledger.
The General Services Officer or the Municipal Treasurer, as the case maybe shall
likewise maintain stock cards and property cards for supplies; property, plant and
equipment; and work animals in their custody to account for the receipt and disposition of
the same. The balance per stock card/property cards should always reconcile with the
ledger cards of the accounting unit. They should also reconcile with other property records
like Acknowledgement Receipt for Equipment (ARE).
Sec. 115. Moving Average Method. The moving average method of costing shall be
used for costing inventories. This is a method of calculating cost of inventory on the basis
of weighted average on the date of issue. The Chief Accountant shall compute the
inventory cost monthly using the method. Illustrative calculation of inventory using this
method is as follows:
Sec. 113. Classification of Supplies or Property. Supplies or property shall have the
following classification:
a.
b.
c.
Ball pen
Reference
Beg.
Balance
per actual
inventory
Delivery
Receipt/
Invoice
No.
RIS No.
Delivery
Receipt/
Invoice
No.
RIS No.
Date
Received
Issued
Jan.
1
Jan
12
200 @
P10
400
@ 12
4,80
0
Jan.
16
Jan.
26
Balance
600 @
11.33
500
@
11.3
3
5,66
5
300
@ 11
6,800
100 @
11.35
1,135
400 @
11.09
3,30
0
Jan.
29
P2,00
0
4,435
200
@
11.0
2,21
8
200
@11.0
2,217
33
9
Delivery
Receipt/
Invoice
No.
Jan.
30
100
@ 12
1,20
0
9
300 @
11.39
The purchase order or contract shall be released only to, and signed for by, the awardee
or his duly authorized representative.
3,417
(On Jan. 12, the new unit cost of P11.33 was found by dividing P6,800, the total
cost, by 600, the number of units at hand. Then on Jan. 16, the peso balance, P1,135
represented the previous balance P6,800 less P5,665, the cost assigned to the 500 units
issued on this date. New unit costs were calculated on Jan. 26 and 30 when additional
units were acquired. )
Sec. 116. Requisition Procedures. (a) Requirement of Requisition - Any order for
supplies shall be filled by the provincial general services officer, the city general services
officer, or the municipal treasurer, as the case maybe, for any office or department of the
LGU concerned only upon written requisition.
(b) Forms to be used - Requisitions shall be accomplished using the following
forms:
(1)
(2)
(c) Preparation of Requisition - At the beginning of the year, the Office of the
General Services Officer (GSO) or the Municipal Treasurer, as the case maybe, shall
prepare a PR for supplies and materials needed for the quarter based on the approved
Annual Procurement Program. Subsequent requisition from stock shall be made by the
head of office or department needing the supplies. A Supplies Availability Inquiry (SAI)
shall be used to inquire as to availability of supplies needed from the Office of the Chief
Accountant. If supplies are available, the RIS shall be prepared and submitted to the
GSO/Local Treasurer for the issuance of supplies. If the supplies needed are not available
from stock, a PR shall be prepared.
The head of office or department needing the supplies shall certify as to their
necessity for official use and shall specify the project or activity where the supplies or
property are to be used.
(d) Certification on Allotment and Obligation Slip (ALOBS) - Every PR must be
accompanied by an ALOBS showing the certification of the local budget officer and the
local accountant, that an appropriation therefore exists; and that the estimated amount
of such expenditure has been obligated. The Local Treasurer shall certify as to cash
availability in the purchase request.
(e) Approval of Requisitions - Approval of requisitions by the head of office or
department concerned who has administrative control of the appropriation against which
the proposed expenditure is chargeable is deemed sufficient, except in case of requisition
for supplies to be carried in stock which shall be approved by the local chief concerned.
Sec. 117. Issuance of Purchase Orders or Contract. Immediately after the LGU
has performed all the required procedures adopting a particular mode of procurement, a
purchase/letter order or contract shall be issued.
The date when the purchase/letter order was received by the supplier or contractor shall
be indicated clearly.
34
PROCESS
b. Prepare ALOBS covering the
requisition under the PR.
GSO/Local Treasurer
f.
g.
h.
i.
PROCESS
the AIR.
j.
Requisitioning Unit
k.
Verify
records,
advise
requisitioning unit.
Accounting Unit
l.
Requisitioning Unit
GSO/Local Treasurer
GSO/Local Treasurer
Accounting Unit
m. Release
supplies/equipment
and
record issuance in the
stock
cards/property
cards.
GSO/Local Treasurer
n.
GSO/Local Treasurer
o.
Accounting Unit
Sec. 123. Receipts of Issuance. All issuances of supplies or property shall be properly
receipted using the forms prescribed under applicable rules and regulations on supply and
property management in local government units.
For transfer of equipment, the
Acknowledgement Receipt for Equipment (ARE) shall however be used.
35
Sec. 124. Inventory of Supplies or Property. The local chief executive shall require
periodic physical inventory of supplies or property. Physical count of inventory items by
type shall be conducted semestrally and reported in the Report of the Physical Count of
Inventories (RPCI). This shall be submitted to the Auditor concerned not later than July 31
and January 31 of each year for the first and second semesters, respectively.
Physical count of property, plant, and equipment by type shall be made annually
and reported on the Report on the Physical Count of Property, Plant and Equipment
(RPCPPE). This shall be submitted to the Auditor concerned not later than January 31 of
each year.
Sec. 125. Disposal of Supplies or Property. - Disposal procedures shall be in
accordance with applicable rules and regulations on supply and property management in
local government units. The Waste Materials Report (WMR) and the Inventory and
Inspection Report of Unserviceable Property (IIRUP) shall be used .
Sec. 126.
ProForma Accounting Entries. The following are the pro-forma
accounting entries for supplies or property:
Particulars
Account Title
If
Procurement
is on Cash
Spare
parts worth P50
used for repairs of
motor vehicles.
Spare
Parts
Inventory
Withholding Taxes
Payable
Cash in Bank LCCA
Motor Vehicles
Maintenance
Spare Parts
Inventory
Acct
.
Cod
e
155
401
401
Debit
Issuance
of PR for office
supplies P100.
Record
delivery of items
and charge
invoice, if
procurement is on
credit.
Payment of
Charge
Invoice
Credit
Account Title
Debit
Credit
Office
Supplies -
If
procurement
is on cash
basis
100
(Enter obligation in
the RAAOMO-P100)
Office Supplies
Inventory
Accounts Payable
149
Accounts Payable
Withholding Taxes
Payable
Cash in Bank LCCA
401
Office Supplies
Inventory
Withholding Taxes
Payable
Cash in Bank LCCA
Office Supplies
Expenses
Office Supplies
Inventory
100
401
100
100
410
110
149
20
80
100
410
110
849
80
20
100
149
100
Withdrawal of
Office
Supplies for
office use.
100
20
80
1.3
100
410
110
878
155
1.2
100
410
110
155
Particulars
Acct
.
Cod
e
80
50
20
Accountable
Forms Issuance
of PR for
accountable forms
50
Procurement
on a cash
basis
(Enter obligation in
the RAAOMO
P100.00)
Accountable Forms
Inventory
Withholding Taxes
Payable
Cash in Bank LCCA
Accountable Forms
Expenses
148
100
410
110
848
20
80
100
36
Particulars
al
of
supplies
Withdraw
office
Account Title
Accountable Forms
Inventory
Acct
.
Cod
e
Debit
148
Credit
100
Office
Equipment Issuance of
PR for Office
Equipment
-P20,000
Record
charge
invoice and
Delivery of
item.
Receipt
of
monthly
Billing- P10,000
(Enter obligation in
RAAOCO-P20,000)
Office Equipment
Accounts Payable
Accounts Payable
Withholding Taxes
Payable
Cash in Bank LCCA
222
401
401
20,000
20,000
20,0
00
410
110
2,000
18,000
Payment of
delivered
Equipment
2.2
Issuance of
PR
for
Furniture and
Fixture
P20,000
Record
Charge
Invoice and
delivery of
item
Payment of
delivered
furniture and
fixture
3.1 Security
Services Issuance of
contract for
security
services P120,000
2. Equipment
2.1
Particulars
Payment of
monthly
billing
Furniture
and
Fixtures
Accounts Payable
Receipt of
monthly
billing
P10,000
Accounts Payable
Withholding Taxes
Payable
Cash in Bank LCCA
224
401
20,000
401
20,000
410
110
20,000
Debit
Credit
(Enter obligation in
the RAAOMOP120,000)
Security and
Janitorial
Services
Accounts Payable
858
401
10,000
401
10,000
Accounts Payable
Withholding Taxes
Payable
Cash in Bank LCCA
410
110
10,000
1,000
9,000
3.2 Plumbing
Services Signing of
contract for
Plumbing
Services
P120,000
(Enter Obligation in
RAAOCO-P20,000)
Account Title
Acct
.
Cod
e
(Enter obligation in
the RAAOMOP120,000)
General Services
Accounts Payable
857
401
10,000
Accounts Payable
Withholding Taxes
Payable
Cash in Bank LCCA
401
10,000
410
110
10,000
1,000
9,000
Payment of
Monthly
Billing
2,000
18,000
3. Non-Personal Services
37