NEW GOVERNMENT

ACCOUNTING SYSTEM (NGAS)

MR. ANTONIO P.
RETRATO,CPA
Chief Accountant
ODC, PNP
NEW GOVERNMENT ACCOUNTING SYSTEM

Pursuant to the Commission on Audit Circular No.

2001-004 dated October 30, 2001, all
government agencies were prescribed to use the
New Government Accounting System (NGAS)
effective January 1, 2002. The NGAs is a simplified
set of accounting concepts, guidelines and
procedures designed to ensure correct, complete
and timely recording of government financial
transactions, and productions of accurate and
relevant financial reports.
 GOVERNMENT ACCOUNTING
-encompasses the process of
analyzing, recording, classifying,
summarizing and communicating all
transactions involving the receipt and
disposition of government funds and
property, and interpreting the results
thereof. (Sec.109, PD 1445)
OBJECTIVES OF GOVERNMENT ACCOUNTING

(Sec. 110, PD 1445)

1. produce information concerning past operations and present
conditions;

2. provide a basis for guidance for future operations;

3. provide for control of acts of public bodies and officers in the

receipt, disposition and utilization of funds and property; and

4. report on the financial position and the results of operation of

government agencies for the information of all persons
concerned.
GENERALLY ACCEPTED GOVERNMENT
ACCOUNTING PRICIPLES
Accounts
(Sec. 112, PD of an agency shall be kept in such detail as
1445)
in necessary to meet the needs of the agency and at
the same time be adequate to furnish the information
needed
Highest standards of honesty, objectivity and
consistency shall be observed.
The government accounting system shall be on a
double entry basis with the general ledger in which all
financial transactions are recorded.
The chart of accounts for government agencies shall
be prescribe by COA.
GENERALLY ACCEPTED GOVERNMENT
ACCOUNTING PRICIPLES
To permit effective budgetary control and to establish uniformity
(Sec. 112, PD 1445)
in financial reports, accounts shall be classified in balanced fund
groups. The group for each fund shall include all accounts
necessary to set forth its operation and condition. All financial
statements shall follow this classification

Common terminology and classification shall be used

consistently throughout the budget, the accounts and the
financial reports.

The general accounting system shall include the budgetary

control accounts for revenues,expenditures, and debt, as
provided by PD 1177
BUDGETARY AND ACCOUNTING SYSTEMS

Allotment Release Order (ARO) - This is a formal

document issued by the Department of Budget and
Management to the head of the agency containing
the authorization, conditions and amount of an
agency allocation.

This maybe in the form of:

a. Agency Budget Matrix
b. Special Allotment Release Order
 RECORDING OF ALLOTMENTS
Upon receipt of the approved ABM and ARO, the designated
Officer shall record the allotment in the respective registries
through the Allotment and Obligations Slips (ALOBS). Separate
registries shall be maintained for the four allotment classes by
Program/Project/Activity (P/P/A), to wit:

1. Registry of Allotment and Obligations Personal Services

(RAOPS)
2. Registry of Allotment and Obligations Maintenance and Other
Operating Expenses (RAOMO)
3. Registry of Allotment and Obligations - Capital Outlay (RAOCO)
4. Registry of Allotment and Obligations Financial Expenses
(RAOFE)
 REGISTRY OF ALLOTMENTS AND OBLIGATIONS
PERSONAL SERVICES (RAOPS)
_________________
Agency
PPA : ________
Sheet No. : _________

Date Reference Account Allotment Obligation Balance

Code Received Incurred
 REGISTRY OF ALLOTMENTS AND OBLIGATIONS
MAINTENANCE AND OTHER OPERATING EXPENSES (RAOMO)
_________________
Agency
PPA : ________
Sheet No. :
_________
Date Reference Account Allotment Obligation Balance
Code Received Incurred
 REGISTRY OF ALLOTMENTS AND OBLIGATIONS
CAPITAL OUTLAY (RAOCO)
_________________
Agency
PPA : ________
Sheet No. : _________

Date Reference Account Allotment Obligation Balance

Code Received Incurred
 REGISTRY OF ALLOTMENTS AND OBLIGATIONS
FINANCIAL EXPENSES (RAOFE)
_________________
Agency
PPA : ________
Sheet No. : _________
Date Reference Account Allotment Obligation Balance
Code Received Incurred
ACCOUNTING FOR OBLIGATION
Obligation Defined refers to a commitment by a
government agency arising from an act of a duly
authorized official which binds the government to the
immediate or eventual payment of a sum of money. The
agency is authorized to incur obligations only in the
performance of activities which are in pursuits of its
functions and programs authorized in appropriation
acts/laws within the limit of the ARO. (Sec. 14, Vol. I,
NGAS)

Obligations shall be taken up in the Registries through

the Allotment and Obligations Slip (ALOBS).
DISBURSEMENT
Disbursement Defined Disbursements constitute all cash
paid out during a given period either in currency (cash) or
by check. It may also mean the settlement of government
payables/obligations by cash or by check. It shall be
covered by Disbursement Voucher (DV)/Petty Cash
Voucher (PVC) or payroll. (Sec. 27, Vol. 1, NGAS Manual)

Disbursement System The Disbursement System

involves the preparation and processing of disbursement
voucher (DV); preparation and issuance of check;
payment by cash; granting, utilization, and
liquidation/replenishment of cash advances.
BASIC REQUIREMENTS FOR DISBURSEMENTS
(Sec. 28, Vol. 1, NGAS Manual)
Existence of lawful and sufficient allotment certified as available
by the Budget Officer;

Existence of a valid obligation certified by the Chief Accountant/Head

of Accounting Unit;

Legality of transactions and conformity with laws, rules and

regulation;

Approval of the expense by the Chief of Office or by his duly

authorized representative; and

Submission of proper evidence to establish the claim.

CLASSIFICATION OF EXPENDITURES

a. Current Operating Expenditures refer to appropriations for the purchase

of goods and services for current consumption or for benefits expected to
terminate within the fiscal year.

Current Operating Expenses are classified into:

1. Personal Services
2. Maintenance and Other Operating Expenses

b. Capital Outlays refer to appropriations for the purchase of goods and

services, the benefits of which extend beyond the fiscal year and which add to
the assets of government, including investments in the capital of government-
owned and controlled corporations and their subsidiaries as well as
investments in public utilities such as public markets and slaughter houses.
CLASSIFICATION OF EXPENSES

a. Personal Services (PS) include basic pay, all authorized allowances,

bonus, cash gifts, incentives and other personnel benefits of officials
and employees of the government.

b. Maintenance and Other Operating Expenses (MOOE) these accounts

include expenses necessary for the regular operations of an agency
like, among others traveling expenses, training and seminar expenses,
water, electricity, supplies expense, maintenance of property, plant and
equipment, and other maintenance and operating expenses.

c. Financial Expenses (FE) these accounts include bank charges,

interest expense, commitment charges, documentary stamp expense
and other financial charges. It also includes losses incurred relative to
foreign exchange transactions and debt service subsidy to GOCCs.
 Pay & Allowances Claims
Unit DPRM FS/14th DC Fiscal DC Acctg DC Mgt DC Budget COA
Div Div Div Div
1. a. Submission of Supporting
Documents 2 days
b. Preparation of DV &
review of supporting
documents 1 2
c. Preparation of Memo for
DPRM 2-3 days
2. Examination/processing of
DV 3 4 MOL 3 days
3. Review necessary
requirements & request of 1/2 day
fund release to DC
1 day 1 day
4. Issuance of NFA 5 1/2 day
5. Preparation of
ALOBS/funding of DV
6 7 8
1 day
6. Certifies the ALOBS for
Obligation 1 day 9
7. Pre-Audit
8. Issuance of NCA 10
9. Journalization/certifies the 1/2 day
correctness of charges
10. Preparation/issuance of 11
check 1 hour
11. Counter-signing of check of
Ex-O/DDC/DC 12
12. Signing & release of check
13. Review/recording of abstract 13 14
14. Post Audit
DOCUMENTARY REQUIREMENTS

First Salary
Appointment duly approved by appointing authority
Oath of Office
Statement of Assets and Liabilities
Certificated of service or daily time record
Certificate of assumption

Promotions and Salary Differentials

Approved appointment or notice of salary adjustment
Certificate of service or daily time record
Certificate of assumption/duty status
Payslip
Terminal Leave

Approved application for leave

Complete service record
Clearance from money, property and legal
accountability
Copy of last appointment
Commutation order and certification of
exigency of service
Lump-sum/Retirement Pay
Retirement Order
Service Record
Certificate of last payment
Money/property clearance
Non-pending case clearance from IAS/RIAS;
Napolcom; Ombudsman
Statement of assets and liabilities
Latest salary adjustment/promotion order
Certification of deletion of CFC from Finance
Center
Replacement Clothing Allowance

Unit Endorsement
Order of Entitlement
Certificate of Clothing Settlement
Statement of Service
Absorption /Appointment Order
Certificate of Duty Status
Reimbursement of Hospitalization
Unit Indorsement
Approved Report of Adjudication Board
Certificate of Duty Status from PAIS
Certificate of Non-payment signed by the Chairman Regional Adjudication Board (pers assigned
with PROs)
Official Receipt (for Medicines)
Photocopy of PNP ID
Letter Request from Claimant
CS Verification

Other Collaterals Allowances

Unit Endorsement
Order of Entitlement
Certificate of Duty Status
Roster of Personnel (in case of Cash Advances
 MOOE
End User AD, DC FD, DC MD, DC FS/14th BD, DC
1. PO/WO
2. Certifies availability
of funds/signature of 1 2
C, AD 1 day

3. Preparation of ALOBS
4. Certification of 3 4 1 day
ALOBS 1 day

5. Pre-Audit (ICIS)
6 5 1 to 2 days
6. Request for inspection 1 day
for the delivery 1 to 2 days

7. Inspection 7
8. Processing of DV
9. Pre-Audit of DV 9 8
(CES) 10 min/claim

10. N C A
11 10
11. Journalization Exam
1 day
of DV Final Exam
12. Issuance of checks 12
DC countersign
D,FS sign
Releasing
Travel Domestic
Travel order
Approved Itinerary of Travel
Certificate of Appearance
Certificated of Travel Completed
Tickets
Note: For Foreign travels, the requirements are the same as
enumerated above except that the travel authority would come
from the SILG or Office of the President.

Training and Seminar Expenses

Memorandum/Directive of Seminar
Contract
Original Invoice
Delivery Receipt
List of Participants
PNP Accreditation/Phil GePS
Certificate of Business
Water/Electricity/Telephone Expenses

Original Statement of Account

Rent Expense
Contract
Statement of accounts
Certificate of Liability from the End-user
Official Receipt in case of reimbursements
Purchases or Printing of Forms
Requisition and Issue Slip (RIS)
Supply Availability Inquiry (SAI)
Purchase Request (PR)
Reasonableness of Price
Certificate of Inspection and Acceptance Report
Management Inspection Report
Original Invoice
Original Delivery Receipt
Purchase Order
PNP Accreditation/Phil GePS
Certificate of Business Name
PURCHASE OF SUPPLIES

Requisition and Issue Slip (RIS)

Supply Availability Inquiry (SAI)
Purchase Request (PR)
Reasonableness of Price
Certificate of Inspection and Acceptance Report
Management Inspection Report
Original Invoice
Original Delivery Receipt
Purchase Order
PNP Accreditation/Phil GePS
Certificate of Business Name
EMERGENCY PURCHASE

Canvass papers
At least 3 price quotations from bonafide dealers
Certificate of emergency purchase

PURCHASE THRU EXCLUSIVE DISTRIBUTIORS

Certificate of exclusive distributorship

Certificate that there are no sub-dealers selling at lower prices
and that no suitable substitute are available

PUBLIC BIDDING

Abstract of bids supported by winning bidders offer and bid

tenders of other participants
Letter of award/acceptance
Performance bond of winning bidder
Repair of Equipment/Vehicle
Notice to Proceed
Certificate of Completion
Original Invoice
Original Delivery Receipt
Guaranty of the Repairman
Certificate that damage is due to fair wear & tear and not to negligence
Work Order
Report of Waste Material
Management Inspection Report
Inspection & Acceptance Report
PNP Accreditation/Phil GePS
Certificate of Business Name
Repair of Equipment/Vehicles
Notice to Proceed
Certificate of Completion
Original Invoice
Original Delivery Receipt
Guaranty of the Repairman
Certificate that damage is due to fair wear & tear and not to negligence
Work Order
Report of Waste Material
Management Inspection Report
Inspection & Acceptance Report
PNP Accreditation/Phil GePS
Certificate of Business Name
Repair of Buildings/Facilities
Notice to Proceed
Certificate of Completion
Original Invoice/Billing
Contract
Certificate of Final Inspection & Acceptance
Estimate Cost/ Bill of Materials
Pre & Post Repair Inspection/Management Inspection Report
Inspection & Acceptance Report
PNP Accreditation/Phil GePS
Certificate of Business
BUILDING
Contract
Notice to Proceed
Certificate of Completion
Billing/Invoice
Estimate Cost/Bill of Materials
Plans and Specification
Progress Report
Pre and Post Repair Inspection
PNP Accreditation/Phil GePS
Certificate of Business Name

SUCCEEDING PAYMENTS
All requirements mentioned above
Management Inspection Report

FINAL PAYMENT
All requirements mentioned above
Management Inspection Report
Certificate of Final Inspection & Acceptance
Contractors Affidavit Re-payment of Laborers
EQUIPMENT/MOTOR VEHICLE

Requisition and Issue Slip (RIS)

Supply Availability Inquiry (SAI)
Purchase Request (PR)
Reasonableness of Price
Certificate of Inspection and Acceptance Report
Management Inspection Report
Original Invoice
Original Delivery Receipt
Purchase Order
PNP Accreditation/Phil GePS
Certificate of Business Name
Acknowledgement Receipt for Equipment
PREPARATION OF THE TRIAL BALANCE AND OTHER
FINANCIAL STATEMENTS

In preparing the Trial Balance and other Financial Statements,

these Basic Features and Polices of the New Government
Accounting System are observed (Sec. 4, NGAS Manual):

a. Accrual Accounting a modified accrual basis of accounting

shall be used. Under this method, all expenses will be
recognized when incurred and reported in the financial
statements in the period to which they relate. Income shall be
on accrual basis except for transactions where accrual basis is
impractical or when other method is required by law.
 One Fund Concept this system adopts the one fund concept. Separate
fund accounting shall be done only when specifically required by law or by
donor agency or when otherwise necessitated by circumstances subject
prior approval of the Commission.

Chart of Accounts and Account Codes a new chart of accounts and

coding structure with a three-digit account numbering system shall be
adopted.

Books of Accounts all national agencies shall maintain two set of books,
namely:

Regular Agency (RA Books) books used to record the receipt and
utilization of Notice of Cash Allocation (NCA) and other income/receipts
which the agencies are authorized to use and to deposit with Authorized
Government Depository Bank (AGDB) and the National Treasury.

National Government (NG) Books these shall be used to record

income which the agencies are not authorized to use and are required to be
remitted to the National Trasury.
 The following statements shall be prepared:

Balance Sheet
Statement of Government Equity
Statement of Income and Expenses
Statement of Cash Flow

Two-Money Column Trial Balance

Trial Balance - The Trial Balance shows the equality of debit and credit balances of all general
ledger accounts as of a given period. It is prepared and submitted monthly, quarterly and annually
at the end of the fiscal year, the pre-closing and post-closing trial balances shall be prepared.

These reports are submitted to the following offices:

- COA
- Accountancy Office
- DBM
- Senate and Congress for Budget hearing
Purposes of the Trial Balance

Prove the mathematical equality of the

debits and credits after posting;

Uncover errors in journalizing and posting;

Serve as basis of the preparation of the

financial statements.
Books of Accounts

Books of Original Entry

1. Checks Disbursement Journal (CDJ)

CDJ - MDS
This journal is used to record/check disbursements based on the
report of checks issued for payment of expenditures and/or prior
year accounts payable prepared by the Disbursing Officers
(Finance) and submitted to the Accounting Division.

CDJ - CFC
This journal is used to record monthly Pay and Allowances,
monthly Initial Pension, Regular Pension, Mid-Year Bonus and
Christmas Bonus printed by Computer Service.
2. Report of Disbursements by Disbursing Officers

This journal is used to record disbursements out of

Cash Advance based on the Report of Disbursement with
the vouchers/payrolls and supporting documents submitted
by the Disbursing Officers.

3. Cash Receipt Journal (CRJ)

This journal is used to record all collections and

deposits based on the Reports of Collections together with
the duplicate copies of official receipts, remittance advices
and deposit slips submitted by the collecting officers.
4. General Journal

This is used to record transactions that cannot be recorded in any

of the special journals.

Books of Final Entry

1. General Ledger - This is used to record transactions from

different journals.

2. Subsidiary Ledger - This contains the details or breakdown of the

balances of the controlling accounts appearing in the General Ledger.
Financial Statements

1. Balance Sheet - is a formal statement which shows the

financial condition of the agency as of a certain date. It includes
information on the three elements financial position assets,
liabilities and government equity. It shall be prepared from
information taken directly from the year-end post-closing trial
balance.

2. Statement of Income and Expenses - It shows the results

of operation/performance of the agency at the end of a
particular period. This statement shall be prepared from
information taken directly from pre-closing trial balance.
3. Statement of Government Equity - shows the financial
transactions which resulted to the change in Government Equity
account at the end of the year.

4. Statement of Cash Flows - is a statement summarizing all

the cash activities of an agency. The primary purpose of the
statement of cash flows is to give relevant information on the
agencys over all cash position, liquidity and solvency. Using
the statement of Cash Flows, managers, investors, and
creditors could easily assess if the agency could meet its
obligation in operating, investing and financing activities.
 Statement of Management Responsibility for
Financial Statements.
Shall serve as the covering letter in transmitting the
agencies financial statements to the COA, DBM, other
oversight agencies and other parties.
Shows the agencys responsibility for the preparation and
presentation of the financial statements.
Shall be signed by the Director of Finance and
Management Office or Comptrollership Office, or the Chief
of Office who has direct supervision and control over the
agencys accounting and financial transactions, and the
Head of Agency or his authorized representative.
THANK YOU
AND
GOOD DAY!!!