GOVERNMENT ACCOUNTING MANUAL (GAM) Pointers

A. Under Article IX-D Section 2 of the 1987 Constitution of the Republic of the Philippines, Commission on Audit:

 shall have the exclusive authority, subject to the limitations in this Article, to define the scope of its audit and
examination, establish the techniques and methods required therefore, 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.
 It shall also be responsible to keep the general accounts of the Government and, for such period as may be
provided by law, preserve the vouchers and other supporting papers pertaining thereto.

B. The Government Accounting Manual (prescribed by COA based on Philippine Public Sector Accounting
Standards/PPSAS) aims to update the following:
 (Volume 1) standards, policies, guidelines and procedures in accounting for government funds and property
 (Volume 2) accounting books, registries, records, forms, reports and financial statements.
 (Volume 3) coding structure and accounts

C. Budget Preparation refers to the step in the government budgetary process wherein the President, through the
assistance of the Department of Budget and Management, shall prepare and submit to the Congress a budget of
expenditures and sources of financing, including receipts from existing and proposed revenue measures.
-Budget Call
- Proposed Projects, Program and Activities

D. Budget Authorization refers to the step in the government budgetary process which involves the enactment by the
Congress of the General Appropriation Act (GAA) based on the budget submitted by the President which cannot be
increased by the Congress. The initiative for the enactment of the appropriation law shall come from the House of
Representatives.
-Budget Hearing in Congress
-Appropriation is the authorization to use the national fund based on approved budget

E. Budget Execution refers to the step in the government budgetary process which involves that implementation of the
general appropriation act which includes the release of revenue allotment under the supervision of Department of
Budget and Management.
-Allotment is the authorization to enter into contracts and incur a liability. Allotment must not exceed what was
appropriated.
-Notice of Cash Allocation is a document issued by DBM regarding the authority to withdraw funds deposited by
the Bureau of Treasury within specified period.

F. Budget Accountability refers to the step in the government budgetary process which involves the submission of
proper documentary reports by responsible officer, liquidation of expenditures and audit conducted by Commission
on Audit to ensure the public funds are spent in accordance with the appropriation act.

G. Under the Government Accounting Manual (GAM), the financial reporting system of the Philippine government
consists of accounting system on accrual basis and budget reporting system on budget basis under the statutory
responsibility of the National Government Agencies (NGAs), Bureau of the Treasury (BTr), Department of Budget
and Management (DBM), and the Commission on Audit (COA).

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H. Each entity of the National Government (NG) maintains complete set of accounting books by fund cluster which is
reconciled with the records of cash transactions maintained by the BTr.

I. The BTr accounts for the cash, public debt and related transactions of the NG.

J. Each entity maintains budget registries which are reconciled with the budget records maintained by the DBM and
the Government Accountancy Sector (GAS), COA.

K. The Government Accounting Manual enumerates the components of the General Purpose Financial Statements of
National Government Agencies:
 Statement of Financial Position
 Statement of Cash Flows
 Statement of Financial Performance
 Statement of Changes in Net Assets/Equity
 Notes to Financial Statements
 Statement of Comparison of Budget and Actual Amounts

L. The books of accounts of National Government Agencies under the GAM shall consist of the following:
 General Journal
 Cash Receipts/Disbursement Journal
 Check Disbursements Journal
 General Ledgers
 Subsidiary Ledgers

M. Registries of Revenue and Other Receipts (RROR) refers to the registry maintained by NGA unit to monitor the
revenue and other receipts estimated/budgeted, collected and remitted/deposited.

expect – collect – remit

N. Registries of Appropriations and Allotments (RAPAL) refers to registry maintained by NGA unit to show the original,
supplemental and final budget for the year and all allotments received charged against the corresponding
appropriation.

Approved budget – authorization to use – authorization to incur

O. Registries of Allotments, Obligations and Disbursements(RAOD) refers to registry maintained by NGA unit to show
the allotments received for the year, obligations incurred against the corresponding allotment and the actual
disbursements made.

Authorization to incur – commitment/signing of contract - payment

P. Registries of Budget, Utilization and Disbursements (RBUD) refers to registry maintained by NGA unit to record the
approved special budget and the corresponding utilizations and disbursements charged to retained income
authorized under the law and other retained income collection of a national government agency with similar
authority.

Approved special budget – related use - payment

Q. The following are the classifications of different object of expenditures:

 RAPAL/RAOD/RBUD – Personnel Services (salary, benefits, wages of government employees)
 RAPAL/RAOD/RBUD – Maintenance and Other Operating Expenses (supplies, utilities, rent, repairs)
 RAPAL/RAOD/RBUD – Financial Expenses (bank charges, interest expense, commission)
 RAPAL/RAOD/RBUD – Capital Outlays (land, building, furnitures, equipment)

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 R. The period of validity of Notice of Cash Allocations (NCAs):

 NCA issued and credited to the Regular MDS Sub-Accounts of agencies/OUs for their regular operations, shall
be valid until the last working day of the 3rd month of that quarter pursuant to DBM Circular Letter (CL) No.
2013-12.
 NCA issued and credited to the Special MDS Accounts of agencies specifically for payment of RGITL benefits
shall be valid until the last working day of the following month when the NCA was issued, except when issued in
December, pursuant to DBM Budget Circular No. 2013-1
 NCA issued to the BTr for working funds of agencies shall be valid until the last working day of the year.

ACCOUNTING NOT-FOR-PROFIT ORGANIZATION POINTERS

A. Types of Funds:

 Unrestricted – board designated ; purpose from within the organization

 Restricted – donor imposed ; external
Temporarily restricted – resticted as to purpose/time
Permanently restricted – held indefinitely or in perpetuity

B. Types of Donations/Contributions: (Contributions Revenue)

 Cash - presented in Statement of Financial Position/Statement of Activities/Cash Flows Statement

 Non-cash (at fair value) – presented in Statement of Financial Position and Statement of Activities
 Services (specialized skills/enhancing an asset ; quantifiable) – presented in Statement of Activities
 Usage (for rent ; rental fee) – presented in Statement of Activities
 Pledge (unconditional promise) – presented in Statement of Financial Position and Statement of activities

C. Endowment Fund:

 Regular or Pure (Permanently restricted) – Principal is non-expendable ; interest/dividends is expendable

 Term (Temporarily restricted) – Principal is non-expendable but may become expendable either through
expiration of time or use according to purpose ; interest/dividends is expendable.

D. Basic Financial Statements

 Statement of Financial Position

 Statement of Activities
-release of temporarily restricted to unrestricted classification
-expenses are to be deducted only from unrestricted revenue/net assets

 Notes to Financial Statements

 Statement of Cash Flows
- Unrestricted cash classified as operating inflow upon receipt
- Restricted cash classified as financing inflow upon receipt
- Investing activity only in classifying a subsequent transaction (proceeds from sale)

E. Voluntary Health and Welfare Organization

 Depends solely or primarily on donations and contributions

 Required to present an additional F/S – Statement of Functional Expenses
- Program Expenses – tree planting, feeding program, medical mission
- Supporting Expenses – fund raising, administrative, recruitment, financing

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 F. Not-for-profit private hospital patient revenue

Gross Patient Service Rendered less Charity Care = Gross Patient Service Revenue
Gross Patient Service Revenue less Contractual Adjustments/Philhealth less Courtesy Allowance/Staff
discounts = Net Patient Service Revenue

G. Not-for-profit private university revenue

Gross Tuition Revenue less Expenditure Student Aid = Net Tution Revenue

-end of reminders-

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