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Dir. Marietta M. Lorenzo Government Accountancy Sector OUTLINE OUTLINE LEGAL BASIS Mandate pursuant to the 1987 Philippine Constitution: Section 2 (1), Article IX-D The Commission on Audit shall keep the general accounts of the Government and preserve the vouchers and other supporting documents relative to such account. I. KEEPING THE GENERAL ACCOUNTS (KGA) OF THE GOVERNMENT CONTEMPORARY INTERPRETATION Takes into account challenges in the accounting profession which requires due regard for international principles and standards of accounting; Makes full use of advances in technology through computerized accounting and budget systems and shared data base to facilitate preparation of financial reports; KEEPING THE GENERAL ACCOUNTS (KGA) OF THE GOVERNMENT CONTEMPORARY INTERPRETATION Mindful of the constitutional mandate and the spirit of the law which vest in COA the authority and responsibility to account for government appropriations and expenditures and to present a consolidated financial report; KEEPING OF THE GENERAL ACCOUNTS FRAMEWORK ABM/SARO/NCA DBM FS/FR/TB/SAOB KGA COA NGAs KEEPING OF THE GENERAL ACCOUNTS EXPANDED FRAMEWORK ABM/SARO/ NCA DOF-BTr DBM FS/FR/TB/SAOB AGDB COA NGAs AGDB COA KGA OVERVIEW GAA & Sp. Laws RAPAL LEGEND: DBM – Department of Budget and Management NGAs – National Government Agencies FR – Financial Report FS- Financial Statements GJ – General Journal GL – General Ledger JAA – Journal of Appropriations and Allotments JEV – Journal Entry Voucher RAPAL – Registry of Appropriations and Allotments RASPF – Registry of Appropriations for Special Purpose Funds SAOB SBUB RASPF SAA ABM/ SARO SASPF JEV JEV GJ JAA GL SAAB (DBM) SAOB (NGAs) SAAOB ROI TB FR/FS ROI – Report of Income SAA – Summary of Appropriations and Allotments SAAB - Statement of Appropriations, Allotments and Balances SASPF – Summary of Appropriations for Special Purpose Funds SAOB – Statement of Allotments, Obligations and Balances SAAOB – Statement of Appropriations, Allotments, Obligations and Balances SBUB – Statement of Budget Utilization and Balances TB – Trial Balance II.a Joint Circular: COA,DBM and DOF 1.0 Rationale The Commission on Audit (COA) is mandated under Section 2 (1), Article IX (D) of the 1987 Philippine Constitution “to keep the general accounts of the Government”. This constitutional mandate vests in COA the authority and responsibility to account for total appropriations and expenditures. It is imperative for COA to monitor, account and verify the overall budget of the national government. Joint Circular: COA,DBM and DOF 1.0 Rationale The full use of advances in technology through computerized systems and shared databases will facilitate the timely preparation of a consolidated financial report for the national government showing how the budget was allocated, released and utilized. Joint Circular: COA,DBM and DOF 2.0 General Guidelines 2.1 Budgetary information/transactions shall be recorded in appropriate registries. 2.1.1 The Registry of Appropriations, Allotments and Balances (RAAB) (Annex A) shall be maintained by the Department of Budget and Management (DBM) to control and monitor appropriations and allotments. Joint Circular: COA,DBM and DOF 2.1.2 The Registry of Allotments and Obligations (RAO) shall continue to be maintained by the national government agencies (NGAs) to control and monitor allotments and obligations. For agencies authorized to use income, the Registry of Budget and Utilization (RBU) shall also be maintained. Joint Circular: COA,DBM and DOF 2.2 Budgetary reports shall be generated from the different registries as follows: 2.2.1 The Statement of Appropriations, Allotments and Balances (SAAB – Annex D) by department/agency from the RAAB; 2.2.2 The Statement of Allotments, Obligations and Balances (SAOB -Annex E) from the RAOs; Joint Circular: COA,DBM and DOF 2.2.3 The Statement of Budget, Utilization and Balances (SBUB – Annex F) from the RBU; and 2.2.4 The Statement of Appropriations, Allotments, Obligations and Balances (SAAOB -Annex G) from the RAPAL and RASPF combined with data from the SAOB. Joint Circular: COA,DBM and DOF 2.3 Books of accounts shall be kept by COA to record the appropriations, allotments and balances reflected in the RAPAL and RASPF. Data on actual income, obligations and related accounts shall also be recorded in the COA books based on financial reports from the agencies. Joint Circular: COA,DBM and DOF 3.0 Specific Responsibilities 3.1 The DBM shall: 3.1.1 Transmit to GAS, COA, complete and timely budget documents and reports as bases for recording in the books of accounts. a. Copies of GAA and other special appropriation laws; Joint Circular: COA,DBM and DOF b. Copies of ABMs, SAROs and other documents related to augmentation/ transfer/realignment of appropriations/allotments together with the Transmittal List (Annex H) issued by DBM central and regional offices immediately upon issuance to the agencies but not beyond ten days from end of the month; Joint Circular: COA,DBM and DOF 3.1.2 Maintain RAAB by department/ agency/region; 3.1.3 Prepare Statement of Appropriations, Allotments and Balances (SAAB) showing data by department/agency/region and submit to DBM Central Office for consolidation; Joint Circular: COA,DBM and DOF 3.1.4 Consolidate the central and regional offices SAAB and submit a Consolidated Statement of Appropriations, Allotments and Balances (CSAAB – Annex I) by department/agency to GAS, COA within 30 days after each quarter for reconciliation; 3.1.5 Effect appropriate adjustments based on the result of reconciliation of budget data with GAS, COA; Joint Circular: COA,DBM and DOF 3.1.6 Provide GAS, COA, access to the DBM e-Budget system to facilitate the monitoring and recording of budget/ appropriations and allotments; and 3.1.7 Ensure compliance with the cut-off date for the issuance of SAROs at yearend. Joint Circular: COA,DBM and DOF 3.2 Bureau of the Treasury (BTr) shall: 3.2.1 Prepare and submit to GAS, COA on or before February 14 of the ensuing year the following reports: a. Report of Current Year’s Receipts from Borrowings (Annex J); b. Analysis of Loans Payable – Foreign (Annex K-1), Analysis of Loans Payable – Domestic (Annex K-2), and Analysis of Bonds Joint Circular: COA,DBM and DOF Payable – Foreign (Annex K-3) and Analysis of Bonds Payable –Domestic (Annex K-4); and c. Report of Income (National Government and Regular Agency Books) Joint Circular: COA,DBM and DOF 3.3 National Government Agencies (NGAs): 3.3.1 The budget Unit shall: a. Continue to maintain the RAO and the RBU by allotment class and by program, activity and project; b. Provide the Chief Accountant access to the RAO/RBU any time for certification as to availability Joint Circular: COA,DBM and DOF of fund and correctness of SAOB, Statement of Budget, Utilization and Balances (SBUB), and other related reports. c. Prepare the following quarterly reports: 1. Statement of Allotments, Obligations and Balances; 2. Detailed Statement of Obligations, Disbursements and Balances (Annex L); Joint Circular: COA,DBM and DOF 3. List of Allotment Releases, by ABM and SAROs (Annex M); and 4. List of Not Yet Due and Demandable Obligations, Current Year and Prior Years (Annex N). Joint Circular: COA,DBM and DOF d. For agencies authorized to use income, prepare the following additional quarterly reports: 1. Statement of Budget, Utilization and Balances; and ; 2. Detailed Statement of Utilization, Disbursements and Balances (Annex O); Joint Circular: COA,DBM and DOF e. Submit the above financial reports in accordance with the following reporting deadlines, copy furnished the auditor: Office/Unit Consolidated by Quarterly Year-end Operating Units with books of accounts Regional Office 10 days after each quarter January 10 of each year DepEd Operating Units with books of accounts Division Office 10 days after each quarter January 10 of each year DepEd Division Offices Regional Office 15 days after each quarter January 20 of each year Regional Offices Central Offices 20 days after each quarter January 30 of each year Central Offices GAS, COA 30 days after each quarter February 14 of each year Joint Circular: COA,DBM and DOF 3.3.2 The Accounting Unit shall: a. Submit separate Report of Income for NG and RA books on a quarterly basis; and b. Sign the SAOB, DSODB, SBUB, DSUDB jointly prepared with the Budget Unit. Joint Circular: COA,DBM and DOF 3.4 COA – GAS shall: 3.4.1 Record in the RAPAL and RASPF (a) budget/appropriations and (b) allotment releases to agencies, based on GAA, Special Laws, ABMs and SAROs; 3.4.2 Record in the books of accounts (a) budget/appropriations, (b) allotment releases to agencies, and (c) unallotted appropriations Joint Circular: COA,DBM and DOF (d) expenditures/obligations incurred, and (e) unexpended allotments based on SAOB; (f) income not authorized for use based on the Report of Income of NGAs; and (g) prior years’ adjustments affecting the surplus of the government; Joint Circular: COA,DBM and DOF 3.4.3 Coordinate and reconcile pertinent data on appropriations and allotments with the DBM based on SAAB; 3.4.4 Analyze and reconcile allotments with agencies based on SAOB and coordinate discrepancies noted; Joint Circular: COA,DBM and DOF 3.4.5 Prepare a report on the results of the review of budget documents and control of budget/appropriations; 3.4.6 Prepare the trial balances and financial statements based on the COA books maintained, and Statement of Appropriations, Allotments, Obligations and Balances. Joint Circular: COA,DBM and DOF 3.5 COA Auditing Unit shall: 3.5.1 Verify the completeness of the budgetary documents recorded in the RAOs, coordinate with GAS, COA for discrepancies noted and inform the agency accordingly; and Joint Circular: COA,DBM and DOF 3.5.2 Verify the correctness and completeness of entries in the RAOs and data shown in the SAOB/SBUB and DSODB/ DSUDB submitted by NGAs to GAS, COA. Joint Circular: COA,DBM and DOF 4.0 Repealing Clause All circulars, memoranda and other issuances or parts thereof which are inconsistent with the provisions of this Circular are hereby repealed/modified accordingly. Joint Circular: COA,DBM and DOF 5.0 Effectivity This Circular shall take effect January 1, 2011. FLORENCIO B. ABAD Secretary Department of Budget and Management CESAR V. PURISIMA Secretary Department of Finance Reynaldo A. Villar Chairman Commission on Audit Subject: Guidelines on the Enhancement of Some Policies on the New Government Accounting System (NGAS) 1.0 Purpose: The constitutional mandate to promulgate accounting rules and regulation vests in COA authority to prescribe accounting policies and guidelines in the recording of government financial transactions and submission of financial statements and reports. 1.0 Purpose: In the implementation of NGAS by national government agencies (NGAs) starting January 1, 2002, some accounting issues and concerns were raised by accountants and budget officers. In view thereof, this Circular is issued to enhance some NGAS policies and procedures. COA Circular 2.0 General Guidelines 2.1 The “Statement of Income and Expenses” shall be modified and renamed “Statement of Subsidy/ Income and Expenses” (Annex A). COA Circular 2.2 The account “Subsidy Income from National Government” (Account 651) shall be renamed “Subsidy from National Government” and appropriate disclosure shall be included in the Notes to Financial Statements (FS) to show its analysis/breakdown. COA Circular 2.3 The lapsed Notice of Cash Allocation (NCA) shall be recorded in the General Journal thru the Journal Entry Voucher. Lapsed NCA – Regular & AP Accounts Dr. Cr. Subsidy from Nat’l. Govt. xx Cash – Nat’l Treas., MDS xx NCA for Trust Liabilities Due from Nat’l. Treas. xx Cash – Nat’l Treas., MDS xx COA Circular 2.4 The restoration of the amount of cash equivalent to the total unreleased MDS checks at yearend required in Section 2.3 of COA Government Accounting and FMIS Circular Letter No. 2002-001 dated December 16, 2002 shall be discontinued. The amount shall instead be disclosed in the Notes to Financial Statements. COA Circular 2.5 Transactions shall be accounted by fund and separate financial statements and reports shall be submitted; and COA Circular 2.6 The use of the Registry of Dormant Accounts (RDA) shall be discontinued. The amount of dormant accounts shall be restored in the books of accounts and disclosed in the Notes to FS. COA Circular 2.7 The transfer of assets acquired in prior years shall be recorded using the Government Equity account. HARMONIZAT ION ST RAT EGY/PLAN S tep 1 PPSAS AND P OLI C I E S S tep 2 GA S M anual S tep 3 E x p o s ur e & Finaliz atio n TIMING: March - August 2010 ACTIVITIES: 1. Capability Building and IPSAS Awareness Training 2. Evaluation/Study of IPSASs May 2010 - September 2010 1. Preparation of GAS Manual for NGAs 1. Conduct of focus discussion 2. Initial Review and Editing 2. Evaluation of gathered comments, integration in the draft PPSAS and GAS Manual and finalization 3. Preparation and Initial Review of PPSAS covering 19 IPSASs S tep 4 A p p r o val TIMING: February 2011 to March 2011 October 2010 - January 2011 S tep 5 P r inting / D is s eminatio n March to April 2011 ACTIVITIES: 1. Review of the PPSAS and GAS Manual by the PSAS Board 1. Printing of the approved circular covering the PPSAS and GAS Manual 2. Approval of the PPSAS and GAS Manual by the Commission Proper 2. Publication of the circular, PPSAS and GAS Manual in the COA Website 3. Publication of the Circular in official gazette group S tep 6 TRA IN IN G April to December 2011 1. Training for Trainors 2. Training for Users and Other Stakeholders Recommended for Implementation in CY 2012 IPSAS Topics 1. IPSAS 1 – Presentation of FS 2. IPSAS 2 – Cash Flow Statements 3. IPSAS 3 – Accounting Policies, Changes in Accounting Estimates and Errors 4. IPSAS 4 – The Effects of Changes in FOREX Rates 5. IPSAS 5 – Borrowing Costs 6. IPSAS 9 - Revenue from Exchange Transactions IPSAS Topics IPSAS 12 – Inventories 3.7.PPSAS (cont.) 8. IPSAS 13 – Leases 9. IPSAS 14 – Events after the Reporting Date 10. IPSAS 16 – Investment Property 11. IPSAS 17 – Property, Plant and Equipment 12. IPSAS 20 – Related Party Disclosures 13. IPSAS 23 – Revenue from Non-Exchange Transactions (Taxes and Transfers) IPSAS Topics 14. IPSAS 24 – Presentation of Budget Information in Financial Statements 15. IPSAS 27 – Agriculture 16. IPSAS 31 – Intangible Assets Compliance of NGAS/PGAS with the IPSAS SUMMARY Status Number of IPSASs 1. Compliant 2 2. Substantially Compliant 4 3. Partially Compliant 6 4. For Compliance 15 5. Not Applicable 3 Total 30 IV.A Accounting Issues/Concerns and Results of Review of CY 2009 Financial Statements and Reports ISSUES/CONCERNS RESOLUTION I. Financial Statements 1. Lack of signature 1.Comply with the on the “Certified requirement of Correct” portion of Section 71 of the Pre and Post the NGAS Closing Trial Manual for the Balances. NGAs. Accounting Issues/Concerns and Results of Review of CY 2009 Financial Statements and Reports II.Quarterly Reports on Cumulative Allotments,Obligations and Balances 1. Consolidate at 1.Consolidation of the regional level Quarterly Reports on Cumulative Allotments, the required quarterly reports Obligations and Balances (Annex A) and (ROs,DOs & IUs) to Detailed Statement of facilitate submission Cumulative Expenditures/ to GAS within the prescribed deadline. . Accounting Issues/Concerns and Results of Review of CY 2009 Financial Statements and Reports Obligations Incurred, Obligations Liquidated/ Disbursements and Unliquidated Obligations (Annex B), by Province/ by City. Accounting Issues/Concerns and Results of Review of CY 2009 Financial Statements and Reports 2. Use of quarterly report format not in accordance with in COA Circular No. 96-006 dated May 2, 1996 2. Strictly follow the report format prescribed in COA Circular No.96006. Accounting Issues/Concerns and Results of Review of CY 2009 Financial Statements and Reports 3.Non-submission of Quarterly List of ABMs and SAROs 3.Submit the List of ABMs and SAROs received thirty days after the end of every quarter. IV.B Analysis and Review of CY 2009 Financial Statements RESOLUTIONS ISSUES/CONCERNS 1.For ROs and OUs1.Huge Balances of ensure that Cash in Bank remittances of salary Local Currency Accounts (all funds) deductions per RPSU payrolls are within the Current Account P4,280,751,560.57 prescribed period for timely disbursement. Savings Account P6,614,240.55 Analysis and Review of CY 2009 Financial Statements Note: Per DepED Notes FS, 85.37% or P3,654,275,632.55 pertains to salary deductions for remittance to cover RPSU payrolls for December 2009. Analysis and Review of CY 2009 Financial Statements Breakdown of Cash, LCCA REGION 2009 I P168,844,774.68 II 184,414,385.46 III 235,912,433.67 IV-A 65,875,326.96 IV-B 40,361,331.76 V 169,201,784.16 VI 408,217,785.53 VII 388,457,509.84 VIII 509,122,519.30 IX P376,081,623.89 X 237,018,581.85 Analysis and Review of CY 2009 Financial Statements REGION 2009 XI 43,385,101.01 XII 268,876,340.68 XIII 126,966,196.67 NCR 23,297,687.23 CAR 408,242,249.86 R.O Desks 149,980,561.16 OSEC, Bureaus & Cntrs. FAPs Attached Agencies Total 96,316,118.74 376,328,308.74 3,850,939.38 P4,280,751,560.57 Analysis and Review of CY 2009 Financial Statements 2.Huge Balances of Outstanding Cash Advances 2. For heads of DepED - Closely supervise accountable officers and ensure Payroll Fund that their cash P1,291,286,563.32 advances are liquidated within the Due from Officers prescribed period and Employeesand previous cash P76,765,695.28 advances are Analysis and Review of CY 2009 Financial Statements Advances to Officers and EmployeesP1,537,683,900.04 liquidated before new cash advances are granted. At yearend all cash advances must be fully liquidated Analysis and Review of CY 2009 Financial Statements Breakdown of Outstanding Cash Advances Region Payroll Fund Due from Officers and Employees Advances to Officers and Employees TOTAL I P7,657,375.23 P1,179,937.05 P30,161,873.12 P38,999,185.40 II 1,640,255.11 47,082,518.85 23,378,622.22 72,101,396.18 III 100,413,777.24 717,695.95 41,675,675.62 142,807,148.80 IV-A 5,895,229.75 - 138,099,990.80 143,995,220.60 IV-B 3,783,219.80 - 38,911,686.63 42,694,906.43 V 36,037,489.54 - 46,530,614.99 825,681,104.53 VI 670,515,696.61 415,760,116.84 1,099,832,273 VII 94,955,913.38 28,574,443.11 123,530,356.50 13,556,460.01 - Analysis and Review of CY 2009 Financial Statements Region Payroll Fund Due from Officers and Employees Advances to Officers and Employees TOTAL VIII P18,961,702.3 0 - P113,764,975.61 P132,726,677.90 IX 189,857,567.24 - 95,536,645.91 285,394,213.10 X 2,144,831.37 - 54,536,462.50 56,681,293.87 XI 17,856,631.40 - 45,067,729.31 57,924,360.71 XII 24,006,876.57 - 74,093,773.51 98,100,650.08 CARAGA 53,998,111.11 P6,886.57 42,663,533.80 96,668,531.48 CAR 25,231,340.84 3,028,585.92 32,165,000.19 60,424,926.95 NCR 35,130,645.77 10,815,256.77 51,384,157.76 97,330,060.30 Analysis and Review of CY 2009 Financial Statements Region Payroll Fund Due from Officers and Employees Advances to Officers and Employees TOTAL RO Desks 0.00 - P248,306.74 P248,306.74 OSEC P2,788,660.63 - 238,419,388.04 241,208,048.60 FAPs 411,239.43 25,227,979.86 267,275,622.10 1,482,883.48 1,482,883.48 P1,537,683,900.04 P3,742,300,017.95 Attached Agencies TOTAL 0.00 P1,291,286,563.32 P378,354.16 - P76,765,695.28 Analysis and Review of CY 2009 Financial Statements 3.Huge balances of receivable accounts 3.The heads of DepED should demand prompt submission of reports Due from GOCCs – needed for the P 272,400,691.15 liquidation of funds entrusted to Due from NGOs/POs NGOs/POs. – 36,925,072.63 Implementation must be strictly performed. Analysis and Review of CY 2009 Financial Statements 4. Unreconciled Reciprocal Accounts Due from Central OfficeP 93,441,114.66 Due to Regional Offices/ Staff Bureaus613,627,961.56 Difference (P520,186,846.90) Analysis and Review of CY 2009 Financial Statements Due from Regional Offices/Staff Bureaus Due to Operating Units Difference P 926,319,754.91 48,769,441.85 P877,550,313.06 Analysis and Review of CY 2009 Financial Statements Due from Operating Units P 2,259,796,856.69 Due to Regional Offices/Staff Bureaus 613,627,961.56 Difference P 1,646,168,895.13 Analysis and Review of CY 2009 Financial Statements Subsidy from Central Office Subsidy from Regional Offices/Staff Bureaus Subsidy from Operating Units Total P200,708,240.39 61,946,867.76 150,367,808.02 P413,022,916.17 Analysis and Review of CY 2009 Financial Statements Subsidy to Regional Offices/Staff Bureaus P 5,561,918.73 Subsidy to Operating Units 2,166,046,357.76 Total P 2,171,608,276.49 Difference (P1,758,585,360.32) V. Monitoring of Quarterly Reports CY 2010 Annex A Annex B Target Receipt Percent 796 796 309 294 39 37 V. Monitoring of Quarterly Reports Breakdown REGION OSEC A B NCR A B CAR A B Region I A B Target 4 4 60 60 32 32 60 60 Receipt 0 0 9 9 16 16 41 40 Percent 0 0 15 15 50 50 68 67 V. Monitoring of Quarterly Reports Breakdown Region Region II A B Region III A B Region A IV-A B Region A IV-B B Target 32 32 72 72 60 60 32 32 Receipt 8 8 30 29 24 24 6 6 Percent 25 25 42 40 40 40 19 19 V. Monitoring of Quarterly Reports Breakdown Region Region V A B Region VI A B Region VII A B Target 56 56 72 72 64 64 Receipt 12 12 41 41 7 7 Percent 21 21 57 57 11 11 V. Monitoring of Quarterly Reports Breakdown Report Region VIII A B Region IX A B Region X A B Target 44 44 36 36 52 52 Receipt 23 23 19 19 39 30 Percent 52 52 53 53 75 58 V. Monitoring of Quarterly Reports Breakdown Region Region XI A B Region XII A B Region XIII A B As of January 21, 2011 Target 40 40 40 40 40 40 Receipt 12 12 12 9 10 9 Percent 30 30 30 23 25 23 V. Monitoring of ABMs/SAROs CY 2010 ABM SAROs Target 3,638 15,772 Receipt 3,638 14,040 Percent 100 89 V. Monitoring of ABMs/SAROs Breakdown Region OSEC ABM SARO NCR ABM SARO CAR ABM SARO Region I ABM SARO Target 25 76 302 1029 98 437 235 1,477 Receipt Percent 25 76 302 1029 98 437 235 1236 100 100 100 100 100 100 100 84 V. Monitoring of ABMs/SAROs Breakdown Region Region II ABM SARO Region III ABM SARO Region IV ABM SARO Target Receipt Percent 174 752 366 1,367 386 1,483 174 752 366 1367 386 1483 100 100 100 100 100 100 V. Monitoring of ABMs/SAROs Breakdown Region Region V ABM SARO Region VI ABM SARO Region VII ABM SARO Target Receipt Percent 236 1128 790 2,481 198 724 236 1128 790 1803 198 621 100 100 100 73 100 86 V. Monitoring of ABMs/SAROs Breakdown Region Region VIII ABM SARO Region IX ABM SARO Region X ABM SARO Target Receipt Percent 143 1,041 115 649 100 690 143 1021 115 551 100 452 100 98 100 85 100 65 V. Monitoring of ABMs/SAROs Breakdown Region Region XI ABM SARO Region XII ABM SARO Region XIII ABM SARO As of January 21, 2011 Target Receipt Percent 144 1027 100 540 226 877 144 842 100 540 226 702 100 82 100 100 100 80