Transcript Slide 1

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The Manual on the New Government
Accounting System replaces the Government
Accounting and Auditing Manual (GAAM),
Volume II, prescribed under COA Circular No.
91-368, dated December 19, 1991.
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On October 30, 2001, based on the authority
granted under Sec. 2 (2), Art. IX-D of the 1987
Constitution, COA Circular No. 2001-005
prescribed the use by local government units of
the New Government Accounting System
(NGAS) effective January 1, 2002 which
provide that:
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“The Commission on Audit shall have
exclusive authority, subject to the limitations in
this Article, to define the scope of its audit
examination, establish the techniques and
methods required therefor, and promulgate
accounting and auditing rules and regulation,
including those for the prevention and
disallowance of irregular, unnecessary,
excessive, extravagant, or unconscionable
expenditures, or uses of government funds and
properties”.
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General Accounting Plan - shows the overall
accounting cycle in the Local Government Unit.
Transactions shall emanate from the different
offices / departments of the of the Local
Government Units (LGUs).
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These offices/ departments will provide/
produce the source documents and other
accounting forms leading to the perfection of
the transaction whether it be budgetary,
collections or disbursements. These source
documents and accounting forms shall be the
basis for the recording and the preparation of
the Financial Statements.
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Appropriations – refers to an authorization
made by ordinance, directing the payment of
goods and services from local government
funds under specified conditions or for specific
purposes. The local sanggunian approves the
annual budget thru the issuance of
appropriation ordinance.
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Allotments – is the authorization issued by
the Local Chief Executive (LCE) to a
department /office of the LGU, which allows it
to incur obligations, for specified amounts,
within the appropriation ordinance. Allotments
are released quarterly based on the Work and
Financial Plan and Request for Release of
Allotment.
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Obligations – refer to the amounts
committed to be paid by the LGU for any lawful
act made by an accountable officer for and in
behalf of the local government unit concerned.
For each obligation, the requesting department
/office shall prepare the Allotment and
Obligation Slip (ALOBS) signed by the
department or office head as requesting official
and forward this together with supporting
documents , to the Budget Officer. Per COA
Circular No. 2006-02 dated January 31, 2006
ALOBS is now called OBR – Obligation Request.
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Accrual Accounting – A modified accrual
basis of accounting is used, wherein, all
expenses and Income (except where accrual
basis is impractical) shall be recognized when
incurred.
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One fund Concept – As required under
Sections 308, 309 and 310 of the Local
Government Code, separate books shall be
maintained for the General Fund, Special
Education Fund and Trust Fund.
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Special Accounts in the General Fund
Special Accounts, complete with subsidiary
ledgers shall also be maintained for the
following :
1. Public Utilities and other economic enterprises:
2. Loans , interests, bond issued, and other contributions
for specific purposes;
3. Development Projects funded from the Share in the
Internal Revenue Collections;
4. Such other special accounts which may be created by
law or ordinance.
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Chart of Accounts and Account Codes – A
three- digit account numbering system is
adopted.
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Financial Statements – the following
statements is prepared monthly, quarterly and
annually.
 Balance Sheet – shows the financial condition of the
Agency at a specific date.
 Statement of Income and Expenses – shows the
income and expenses of the agency at the end of a
particular period.
 Statement of Cash Flows – shows the agency’s cash
activites.
* Notes to Financial Statement shall accompany year-end
reports.
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Trial Balance – The two money- column trial
balance is used.
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Appropriations, Allotments and
Obligations - Journal Entry shall no longer be
prepared to record the appropriations, receipt
of allotments and incurrence of obligations. In
lieu of this, separate registries shall be
maintained by the Accounting Unit to control
the appropriations, allotments and obligations
for each classes of expenditures, namely:
1. Registry of Appropriations, Allotments, and
Obligations – Capital Outlay ( RAAOCO)
2. Registry of Appropriations, Allotments, and
Obligations – Maintenance and Other Operating
Expenses (RAAOMO)
3. Registry of Appropriations, Allotments, and
Obligations – Personal Services (RAAOPS)
4. Registry of Appropriations, Allotments, and
Obligations – Financial Expenses (RAAOFE)
COA Accounting Circular Letter No. 2007-002 dated
January 19, 2007, these registries shall be maintained by
the City Budget Office.
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Now that the importance of technology has
been recognized as a tool for industrial and
economic development, the Commission on
Audit (COA) developed e-NGAS – the
computerization of NGAS which encompasses
the various accounting processes from
recording, to classifying, summarizing and
communicating all the financial results. As
such, the e-NGAs provides an accurate, on time
and standardized financial reports. The
Electronic New Government Accounting
System complies with the basic policies and
procedures of the New Government
Accounting System (NGAS).
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Automated recording of accounting entries to
the general journal, posting to the subsidiary
ledger and the general ledger through JEV
PREPARATION where accounting entries are
created for all types of government transactions
and which are generally grouped into cash
receipt, cash disbursement and non cash
transactions.
There is an automatic checking of balances between debits
and credits. Once these JEVs are approved by authorized
approving officer, it gets posted to the General Ledger
and Subsidiary Ledger.
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Adequate security control mechanisms for data
integrity and accuracy.
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Up-to-date generation of government standard reports
necessary for management and auditing purposes
Real- time query of interim reports and documents
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User-friendly screen
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Simplified entry of financial transactions and
activities, using transaction templates
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Use of responsibility accounting for a more
detailed financial reporting and analysis
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It also provides an on-line inquiry of the
following:
- Journal Entry Voucher
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Expense per Responsibility Center
Income per Responsibility Center
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Repair History of PPE.
Schedule of payable/ receivable accounts inventory
schedule.
PPE schedule
Schedule of Balance Sheet Accounts
Registry of Public Infrastructure
Recorded supporting documents
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It also has a facility to generate the following
reports and records:
Trial Balance
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Statement of Income and Expenses
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Balance Sheet
Statement of Government Equity
Statement of Cash Flows
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Manual on the New Government Accounting
System (For Local Government Units) (Volume I, II and III).
e-NGAS Functional Training Manual.