Overview of

Government Accounting
Objectives:

 Define government accounting

 Differentiate government accounting from the accounting for
business entities
 Identify government offices with accounting responsibilities
 Discuss application of qualitative characteristics of financial
reporting
Topics:
 Government accounting defined
 Responsibility over government funds and property
 Accountability over government funds
 Offices with accounting responsibility
 Financial reporting system
 Government Accounting Manual for National Government
Agencies
 Basic Accounting and Budget Reporting Principles
 Qualitative Characteristics of Financial Reporting
 Components of General Purpose Financial Statements
 Elements of the Financial Statements
Government Accounting

 Encompasses the process of analysing, recording,

classifying, summarizing and communicating all
transactions involving the receipt and disposition
of government funds and property, and
interpreting the results thereof
Objectives:
 To produce information concerning past operations and present
conditions
 To provide a basis for guidance for future operations
 To provide for control of the acts of public bodies and officers in the
receipt, disposition and utilization of funds and property
 To report on the financial position and the results of operations of
government agencies for the information of all persons concerned
Like the accounting for business
entities, government accounting is also
a process of producing information that
is useful in making economic decisions
Only with greater emphasis on:

 Sources and utilization of government funds

 Responsibility, accountability and liability of
entities entrusted with government funds and
properties
 Sources of government funds include receipts from taxes and
other borrowings
 Utilization
of government funds includes expenditures on
programs, projects, unanticipated losses from calamities
 Aside from providing information that is useful in
making economic decisions, government
accounting also aims to demonstrate the
accountability of the entity for the resources
entrusted to it
Government resources must be utilized efficiently and effectively in
accordance with the law. Government officials are responsible in
implementing this policy, and are accountable for the government
resources in their custody, and are liable for any loss.

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Responsibility over Government Funds and Property

 The head of the government agency is directly responsible

in implementing the policy which states that:
“government resources shall be utilized efficiently and
effectively in accordance with the law”
 All those who are exercising authority over a government
agency shall share fiscal responsibility

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Accountability over Government funds
and property
 A government officer entrusted with the possession of
government resources is responsible for the safekeeping
therefor in accordance with the law
 Should be properly bonded
Liability over Government Funds and
Property
 The unlawful use of government resources shall be the
personal liability of the employee found to be directly
responsible therefor
 Every accountable officer shall be liable for all losses
resulting from the unlawful use or negligence in the
safekeeping of government resources
Liability over Government Funds and
Property
 No accountable officer shall be relieved from liability
merely because he has acted under the direction of a
superior officer in unlawfully utilizing government
resources entrusted to him, unless before that act, he has
notified the superior officer in the writing that the
utilization is illegal. The superior officer shall be primarily
liable while the accountable officer who fails to serve the
required notice shall be secondarily liable
Liability over Government Funds and
Property
 An accountable officer shall immediately notify
the COA for any loss of government funds from
unforeseen events (force majeure) within 30 days.
Failure to do so will not relieve the officer of the
liability

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Offices with Accounting Responsibility

 Commission on Audit
 Department of Budget and Management
 Bureau of Treasury
 Government Agencies
Commission on audit

 Promulgates accounting and auditing rules and regulations

 Keeps the general accounts of the government, supporting
vouchers, and other documents
 Submits financial reports to the President and Congress
Department of Budget and Management

 Formulates and implements national budget with

the goal of attaining the nation’s socio-economic
objectives
Bureau of treasury
 Cash custodian of the government
 Functions under Department of Finance
 Authorized to:
 receive and keep national funds and manage and control
disbursements thereof
 Maintain accounts of financial transactions of all government
offices, agencies and instrumentalities
Government agencies (department, bureau or office) are
responsible in directly implementing the projects of, and
performing the functions delegated by, the government.

Each government agency shall maintain accounting books

and budget registries which are reconciled with the cash
records of the Bureau of Treasury and the budget records of
the COA and DBM.

They are required to have accounting

units/divisions/departments

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 Bureau of
Treasury

Each entity reconciles Each entity’s accounting

accounting books with books are subject to audit
cash record of BTr by COA
Each entity reconciles
Government budget registries with Commission
entities budget records of COA on Audit
Each entity submits
Each entity reconciles financial reports to COA
accounting books with for consolidation
budget record of DBM Consolidates financial
reports of government
Department of Budget agencies and submits it to
and Management the President and
Congress BACK
Government Accounting Manual for National
Government Agencies (GAM for NGAs)

 Promulgated primarily to harmonize the

government accounting standards with
international accounting standards
(International Public Sector Accounting
Standards)
Basic Accounting and Budget Reporting Principles

 Philippine Public Sector Accounting Standards and relevant laws,

rules and regulations
 Accrual basis of accounting
 Budget basis for presentation of budget information in the financial
statements
 Revised Chart of Accounts prescribed by COA
 Double entry bookkeeping
 Financial statements based on accounting and budgetary records
 Fund cluster accounting- books of accounts are maintained by fund
cluster, i.e., according to the types of funds being accounted for BACK
Components of General Purpose
Financial Statements
 Statement of Financial Position;
 Statement of Financial Performance;
 Statement of Changes in Net Asset/ Equity;
 Statement of Cash Flows;
 Statement of Comparison of Budget and Actual amounts;
and
 Notes to the Financial Statements, comprising a summary
of significant accounting policies and other explanatory
notes
Elements of the Financial Statements

 Assets
 Liabilities
 Equity
 Revenue
 Expenses
Qualitative Characteristics of Financial Reporting
 Understandability  Substance over form
 Relevance  Neutrality
 Materiality  Prudence
 Timeliness  Completeness
 Reliability  Comparability
 Faithful
representation