Introduction:

Implementing the Computerized Government Accounting System: Philippine Experience

The Philippine Commission on Audit is granted by its Constitution the exclusive authority to promulgate accounting and auditing rules and regulations, (Paragraph 2, Section 2, Article IX-D, Philippine Constitution). Chairman Guillermo N. Carague is currently the Chairman of the United Nations Board of Auditors and Asian Organization of Supreme Audit Institutions (ASOSAI) This presentation shares the Philippine experience in implementing the manual and computerized (e-NGAS) versions of the new government accounting system.

Carmela S. Perez, DBA

Assistant Commissioner, Government Accountancy and Financial Management Information System Commission on Audit

Outline:
Constitutional Mandate Government Accounting System Simplification and Computerization (New Government Accounting System (NGAS) and Electronic NGAS (eNGAS) Objectives Milestones eNGAS Definition eNGAS Environment/ Technical Features Status of Implementation & Roll Out Beneficiaries

Outline:
Basic Features Financial Statements Generated Financial Reports Generated Conceptual Framework Rollout Status Rollout Strategies Lessons Learned in the Rollout

Outline:
Next Steps Agency Level IFMIS Components Description Objectives Features Conceptual Framework Inter- Agency IFMIS Philippine Government Accounting System (PGAS) Conclusion

Government Accounting System Simplification and Computerization (NGAS and eNGAS)

Chairman Guillermo N. Carague assumed office in February 21, 2001 Design and development of the New Government Accounting System (NGAS) NGAS Steering Committee Manual NGAS was conceptualized, designed and written in 4 months Design and development of the Electronic New Government Accounting System (eNGAS)

Objectives:
Standardize recording and reporting of government financial transactions Consolidate Financial Reports for National Government Agencies (NGAs), Local Government Units (LGUs) amd Government Owned &/or Controlled Corporations (GOCCs) Align the government accounting system with International Accounting Standards (IAS)/ International Financial Reporting Standards (IFRS), International Public Sector Accounting Standards, etc. Ensure accountability and transparency in government financial management

Features of Manual NGAS

Adoption of the modified accrual accounting Asset method for disbursements Use of standard chart of accounts & account codes Maintenance of two sets of books- National Government books and Regular Agency books Generation of standard financial statements and reports Use of two- money column Trial Balance Financial expenses are separately classified from MOOE Adoption of the perpetual inventory system for supplies and materials Application of Construction Period Theory for infrastructures

Features of Manual NGAS

Maintenance of Registry of Public Infrastructures/ Reforestation Projects Computation of depreciation on PPE Reclassification of unserviceable assets as Other Assets Setting up of allowance for doubtful accounts Recognition of liability for borrowings and loans, as well as for benefits, etc. Accrual of interest Adoption of imprest petty cash fund and revaluation of foreign currency deposits and loans at prescribed exchanged rate at Balance Sheet date

Milestones:
NGAS launched in Nov. 14, 2001 Nationwide training conducted in Nov. & December 2001 NGAS implemented in over 1,000 NGAs and 2,000 LGUs in January 2002 By mid- 2001, started the design and development of the electronic NGAS (e NGAS)

Milestones

eNGAS Definition
New Government Accounting System (NGAS) software Ensures correct, reliable and timely recording of government financial transactions Generates financial statement and reports in accordance with NGAS

e NGAS Piloted in COA in April September 2003 Started roll- out of eNGAS in three NGAs and two LGUs in October 2003 Manual NGAS implemented in GOCCs starting January 2005; some agencies implemented the e NGAS immediately instead of adopting the manual system first.

eNGAS Environment/ Technical Features

Runs on Microsoft SQL Server and on other multi platform database management system Multi- user operations Alpha search and look up system codes and transactions Online data entry and validation Online query and reporting facility Audit trail for system users Automatic recovery from hardware and system failures Systems installation fee is very minimal

Status of Implementation & Roll Out:

Over 400 government agencies have completed and are having ongoing roll out of eNGAS Target eNGAS roll out in all government agencies in 3 years time
All departments in 2007; departments to roll out in their regional offices and attached agencies next 2 years Accredit e NGAS trainers who will facilitate roll out

Support from legislators, government executives and other stakeholders

Beneficiaries: Agency management Agency accounting personnel Oversight and regulatory agencies General public Government executives and legislative officials

Basic Features:

User friendly screens

Basic Features: Accounting journal entry

templates for common transactions

Basic Features: Balanced debit and credit for

accounting journal entries

Basic Features:

Data validation

Basic Features: Electronic approval and posting of transactions to General Ledger and Subsidiary Ledger

Basic Features: Uses only the General

Journal

Basic Features: Standard Chart of Accounts

Basic Features:

Responsibility Accounting

Basic Features: Automatic computation of

RESPONSIBILITY CENTER CODING STRUCTURE - COA

inventory cost using weighted (moving) average method

11 304 01

06

01

755
Office Supplies Expense Office of the Asst. Comm.

National Government Sector Central Office Commission on Audit RA Books - General Fund

Basic Features: Information on re-order level

and number of days to consume inventory

Basic Features: Property, Plant and

Equipment Monitoring

Basic Features: Automatic Computation of

depreciation using StraightLine Method

Basic Features:
Subsidiary Ledger Maintenance
GENERAL LEDGER ACCOUNT
GENERAL LEDGER Province of Bulacan
Account Title: Performance/Bidders/Bail Bonds Payable Account Code: 427

SUBSIDIARY LEDGER ACCOUNT

SUBSIDIARY LEDGER Province of Bulacan
GL Account Title : Name of Creditor: Contact Person: Jo Castro Performance/Bidders/Bail Bonds Payable EFG Merchandising Position: Store Manager GL Account Code : SL Code: Telephone No.: 927-33-46 427

150 ABC Bldg., EDSA , Q.C. Date Particulars Ref. Debit 2003 Jan. 31 Bidder's bond for the purchase of office supplies with estimated cost of P160,000 June 30 Refund of bidders' bond RCD No. 2003-01-001 RCI No. 2003-06-025 7,500 7,500 7,500 Amount Credit Balance

Date

Particulars

Ref. Debit

Amount Credit Balance

2003 Jan. 31 Receipt of Bidders Bond Feb. 28 Receipt of Performance Bond June 30 Refund of Bidders Bond CRJ CRJ CkDJ 7,500 7,500 100,000 7,500 107,500 100,000

SUBSIDIARY LEDGER
Agency

GL Account Title : Name of Creditor:

AO 5-14-02

Performance/Bidders/Bail Bonds Payable E.C. Cruz Construction Alex M. Lopez Position: Manager

GL Account Code : SL Code: Telephone No.: 931-2991

427

Contact Person:

RDC Bldg. Sta. Cruz, Manila

Date Particulars Ref. Debit 2003 Feb. 28 Bond for the construction of slaughter house with total contract price of P1 million RCD No. 2003-01-002 100,000 100,000 Amount Credit Balance

Basic Features:

Project Accounting

Basic Features:Public Infrastructure / Reforestation Projects Monitoring

Direct Materials

Direct Labor

Overhead

Consultancy

Online Query Feature (with option to print):

Journal Entry Voucher Expense per Responsibility Center Income per Responsibility Center Summary of Income Summary of Expense Repair History of PPE Stocks Available

Online Query Feature (with option to print):

Stocks Due for Reorder/ Reorder Point Schedule/ Aging of Receivable Accounts Schedule/ Aging of Payable Accounts Inventory Schedule Property, Plant and Equipment Schedule Schedule of Account Balances Recorded Supporting Documents

Online Query Feature (with option to print): Schedule / Aging of Receivable Accounts

Financial Statements Generated

Statement of Income and Expenses (Condensed and Detailed) Balance Sheet (Condensed and Detailed) Statement of Cash Flows Statement of Government Equity Consolidated Statement of Income and Expenses (Condensed and Detailed) Consolidated Balance Sheet (Condensed and Detailed)

Financial Statements Generated Consolidated Balance Sheet - Condensed

Financial Statements Generated

Consolidated Statement of Income and ExpensesCondensed

Financial Reports Generated

Trial Balance (Unadjusted, Pre- Closing & Post- Closing) Consolidated Trial Balance (Merge & Unmerge) General Journal General Ledger Subsidiary Ledger Supplies Ledger Card Property, Plant and Equipment Ledger Card Construction in Progress Ledger Card Other Management Reports

Financial Reports Generated General Journal

Financial Reports Generated General Ledger

e-NGAS Conceptual Framework e-NGAS Accounting System

Budget Control JEV Preparation JEV Review And Approval Query Report Generation

End

Journal Entry Voucher (JEV) Preparation

Reference Document

Journal Entry Voucher (JEV) Review and Approval

Reference

Receives valid document

Document

Source Document

Selects type of transaction and fund

Source Document

Retrieves JEV REVIEW AND APPROVAL INBOX

Selects type of transaction / fund

e-NGAS database Validates / Saves JEV JEV

Selects template / accounting entries

e-NGAS database

Approves / Posts JEV to GL and SL

Validates / Reviews JEV

YES

Approved JEV

NO
Generates JEV Edit particulars of the template and enters reference document # Generates approved JEV
Home

Valid JEV ?

Edits / Saves JEV

Home

Query

Report Generation
e-NGAS database

Opens Menu for Query Identifies item in the Query list

Schedule of Receivable Accounts Schedule of Payable Accounts Repair History of PPE Income per Responsibility Center

Opens Menu for reports

Selects report to be generated

Financial Reports
e-NGAS database
Balance Sheet Statement of Cash Flows

Journal / Ledger
General Journal General Ledger Property, Plant and Equipment Ledger Card Subsidiary Ledger Supplies Ledger Card

Views / Prints Reports

Stocks Availability Due for Reorder

Selects Query criteria

Trial Balance

Journal Entry Voucher

Statement of Statement Government of Income and Expense Equity

Expenses per Responsibility Center

Views / Prints result of Query

Home

Construction-in Progress Ledger Card

Home

Rollout Strategies
Provide COA rollout teams to assist agencies Empower the agencies by allowing them (NGAs Central Offices) to rollout in their regional offices and attached agencies Mobilize COA Regional Offices and Auditors to support the nationwide roll out Provide eNGAS trainers for agencies Provide individual consultants to agencies on an on call basis Collaborate with umbrella organization of government agencies League of Local Government Executives Phil. Association of State Universities and Colleges Professional Organizations GACPA, PICPA, AGAP, etc. Cooperative grouping of LGUs

Lessons Learned from the Rollout

Success Factors Readiness of agency in terms of Hardware/ Software etc. Support of management and users Determination of management and users to finish the roll out in time Politics within the agency is crucial Rapport with agency ICT group is important Systematic response mechanism to user problems and issues Strategies should be devised from time to time to cover more rollout sites Opportunity for COA personnel to work as teams

Next Steps
Agency Level Integrated Financial Management Information System (IFMIS)
Related Operating Systems or ROS is a collection of web- enabled application software designed to support a full Financial Management Information System. It consists of four modules: Cash Receipt Operations Cash Disbursements Operations Non- Cash Operations Payroll and Personnel Information System

Next Steps
Agency Level IFMIS
Description: consists of modules which can be implemented independently capable of establishing linkages between modules system setup, transaction processing, and generation of queries and required reports modules can be linked to e-NGAS and the Budget System automated access of transaction details for the preparation of Journal Entry Vouchers and Obligation Slips capable of changing configuration to adapt to NGAs, LGUs, and GOCCs needs

Next Steps
Agency Level IFMIS
Objectives:
support government-wide and agency policy decisions collect accurate, timely, complete, reliable, consistent information standardize data classification for recording transactions implement common processes for similar transactions provide adequate management reporting apply internal controls over data entry, transaction processing, and reporting provide complete audit trail to facilitate audits

Next Steps
Agency Level IFMIS
Features: User- friendly interface Simplified entry of transactions and activities Ability to import transaction data directly to specified data format Some forms (i.e. Disbursement Voucher, Liquidation Report) can be prepared and sent by concerned employees through the web Queries and Reports can be viewed (with option to print) through the World Wide Web (www) Records are protected from unauthorized access through appropriate administrative, physical, and technical safeguards

Next Steps
Agency Level IFMIS
Reporting Features: Use of a Reporting Module that allows customization of ad-hoc reports including headers and footers, column and row totals, page breaks, font styles, sizes and colors. Performs currency conversion Some reports can be viewed in graphical formats. Runtime, dates, terminal source, and user name are included in all reports.

Next Steps
Agency - Level IFMIS Conceptual Framework

Next Steps
Inter agency IFMIS
Linking agency level IFMIS of critical agencies Monitor fiscal plans Budget preparation and enactment Budget execution including revenue- raising, expenditure, loans, etc. Transaction accounting activities such as recording and reporting Review and audit A long term project that requires harmonization among oversight agencies such as DOF, DBM, other oversight agencies and the Commission

Next Steps
Philippine Government Accounting Standards (PGAS)
13 PGAS have been issued Financial Statements Characteristics of Financial Information Cash Receivables Inventories Property, Plant and Equipment Public Infrastructures Other Assets Liabilities Deferred Credits Equity Income and Expenses

Conclusion
The government accounting system modernization saves funds for the government improves financial recording and reporting promotes transparency and accountability e-NGAS nationwide implementation is being recognized as one of the governments anti- corruption projects NGAS and e NGAS are continously and regularly reviewed, updated, enhanced and improved based on new developments, standards and best practices