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What is the primary objective of the GoP's procurement policy?
What is the primary objective of the GoP's procurement policy?
The competitive bidding process is only optional for the GoP's procurement operations.
The competitive bidding process is only optional for the GoP's procurement operations.
False
What does R.A. 9184 refer to?
What does R.A. 9184 refer to?
Government Procurement Reform Act
Financial statements are structured financial representations of the financial policies and __________ undertaken by an enterprise.
Financial statements are structured financial representations of the financial policies and __________ undertaken by an enterprise.
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Match the following terms with their definitions:
Match the following terms with their definitions:
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Which of the following users of financial statements would be primarily interested in assessing the financial health of the enterprise?
Which of the following users of financial statements would be primarily interested in assessing the financial health of the enterprise?
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Financial statements are not useful in the decision-making process.
Financial statements are not useful in the decision-making process.
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Accounting justifies its importance as a __________ activity.
Accounting justifies its importance as a __________ activity.
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Which aspect of the business enterprise focuses on the ability to meet currently maturing obligations?
Which aspect of the business enterprise focuses on the ability to meet currently maturing obligations?
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Profitability measures the ability of a business to generate more profit.
Profitability measures the ability of a business to generate more profit.
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What does solvency refer to in the context of statement analysis?
What does solvency refer to in the context of statement analysis?
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The financial flexibility of the enterprise to use its available cash for unexpected requirements is known as _______.
The financial flexibility of the enterprise to use its available cash for unexpected requirements is known as _______.
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Match the following methods used in statement analysis with their descriptions:
Match the following methods used in statement analysis with their descriptions:
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What is the primary purpose of statement analysis?
What is the primary purpose of statement analysis?
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Financial Structure indicates the amount of directly owned equity capital vs. borrowed capital.
Financial Structure indicates the amount of directly owned equity capital vs. borrowed capital.
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What is a common use of ratio analysis in statement analysis?
What is a common use of ratio analysis in statement analysis?
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What does the current ratio indicate?
What does the current ratio indicate?
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The acid-test ratio includes inventories in its measurement.
The acid-test ratio includes inventories in its measurement.
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What does a high rate of inventory turnover indicate?
What does a high rate of inventory turnover indicate?
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The _____ ratio measures the efficiency in using a company's assets to earn profits.
The _____ ratio measures the efficiency in using a company's assets to earn profits.
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Match the following ratios with their descriptions:
Match the following ratios with their descriptions:
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What does the average collection period measure?
What does the average collection period measure?
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The gross profit ratio measures the profitability of a company’s product.
The gross profit ratio measures the profitability of a company’s product.
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Name one use of the debt to total assets ratio.
Name one use of the debt to total assets ratio.
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What does the Owners’ Equity to Total Assets Ratio indicate?
What does the Owners’ Equity to Total Assets Ratio indicate?
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Cash management is solely responsible for cash inflow in an organization.
Cash management is solely responsible for cash inflow in an organization.
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List one principle of cash management.
List one principle of cash management.
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In cash management, ________ means investing temporarily available cash to generate returns.
In cash management, ________ means investing temporarily available cash to generate returns.
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Match the cash management objectives with their descriptions:
Match the cash management objectives with their descriptions:
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Which of the following is NOT a principle of cash management?
Which of the following is NOT a principle of cash management?
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Effective cash management gives greater flexibility in managing financing needs.
Effective cash management gives greater flexibility in managing financing needs.
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What is the importance of managing risks in cash management?
What is the importance of managing risks in cash management?
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Who is included as a member of the Board?
Who is included as a member of the Board?
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All government agencies are mandated to use the Government Electronic Procurement System as their primary source of information on procurement.
All government agencies are mandated to use the Government Electronic Procurement System as their primary source of information on procurement.
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What does procurement generally refer to?
What does procurement generally refer to?
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The _____ is the primary portal for government procurement information.
The _____ is the primary portal for government procurement information.
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Match the following departments with their roles in the Board:
Match the following departments with their roles in the Board:
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Which of the following does not fall under the definition of procurement?
Which of the following does not fall under the definition of procurement?
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A procuring entity is defined as any branch, constitutional commission, agency, department, bureau, office, or instrumentality of the _____ (NGA) procuring goods.
A procuring entity is defined as any branch, constitutional commission, agency, department, bureau, office, or instrumentality of the _____ (NGA) procuring goods.
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Procuring entity does not include Local Government Units (LGUs).
Procuring entity does not include Local Government Units (LGUs).
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What is one of the primary benefits of the Treasury Single Account (TSA)?
What is one of the primary benefits of the Treasury Single Account (TSA)?
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The Bureau of Treasury updates the overall cash flow forecast on a daily basis.
The Bureau of Treasury updates the overall cash flow forecast on a daily basis.
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What is the purpose of the Treasury Single Account (TSA)?
What is the purpose of the Treasury Single Account (TSA)?
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The _____ produces a statement of expected daily cash flows using historical patterns.
The _____ produces a statement of expected daily cash flows using historical patterns.
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Match the following features of the Treasury Single Account (TSA) with their descriptions:
Match the following features of the Treasury Single Account (TSA) with their descriptions:
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What must all spending agencies submit regarding their expenditures?
What must all spending agencies submit regarding their expenditures?
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The Treasury Single Account allows individual government agencies to manage their own bank accounts freely.
The Treasury Single Account allows individual government agencies to manage their own bank accounts freely.
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What can help in reducing transaction costs according to the benefits of the Treasury Single Account?
What can help in reducing transaction costs according to the benefits of the Treasury Single Account?
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Study Notes
Public Procurement (RA 9184)
- Public procurement is the purchase of goods, services, and works by governments and state-owned entities.
- It's a significant portion of taxpayers' money, demanding efficiency and high conduct standards to ensure service quality and protect public interest.
- The procurement process starts with identifying the need for a purchase.
- The process ends when the product is used or sold, or the service contract is fulfilled, and payment is made.
Procurement Definition
- In modern business terms, "procurement" encompasses various concepts like logistics, inventory management, online transactions, outsourcing, supply chain management, and e-bidding.
- Good procurement practices prioritize value for money, ensuring the purchase fits its intended purpose while considering the overall cost.
- Efficiency is equally important to limit time and expenses for all involved parties.
Government Procurement Reform Act (RA 9184, 2003)
- This act has standardized and rationalized the Philippine procurement system, aligning it with international best practices.
- The Philippines spends hundreds of billions of pesos on goods and services annually for bureaucracy, projects, and citizen services.
Government Procurement Policy Board (GPPB)
- GPPB oversees all government procurement.
- It is headed by the Secretary of the Department of Budget and Management (DBM) as Chairman, with the Director General of the National Economic and Development Authority (NEDA) as Alternate Chairman.
- Members consist of secretaries or authorized representatives from various government departments (Public Works and Highways, Finance, Trade and Industry, Health, National Defense, Education, Interior, Technology, Transportation, Local Government, Science and Communication, and Energy).
- Also a representative from the private sector appointed by the President sits as a member.
- Representatives from the Commission on Audit and relevant government agencies and private-sector organizations are invited to serve as resource persons in GPPB meetings.
Government Electronic Procurement System (PhilGEPS)
- The Government Procurement Reform Act mandates all government agencies to utilize the PhilGEPS portal to procure goods and services.
- The PhilGEPS is the primary source of information on all government procurement (http://philgeps.gov.ph).
Procurement Entity
- Refers to any government branch, constitutional commission, bureau, office, agency, department, instrumentality of the GoP (NGA), including GOCC, GFI, SUC, and LGU involved in procuring goods, infrastructure projects, and consulting services.
Procurement:
- Refers to the acquisition of goods, consulting services, and contracting for infrastructure projects by the procuring entity.
- Mixed procurements (Goods, Infrastructure Projects, Consulting Services) are categorized based on the primary purpose of the contract.
- Leases of goods and real estate are covered by this definition.
- Land procurement is regulated by provisions of R.A. 10752 and related laws.
Section 2. Declaration of Policy.
- The Implementing Rules and Regulations (IRR) are in alignment with the Government of the Philippines' (GoP) commitment to promote good governance through transparency, accountability, equity, efficiency, and economy in its procurement process.
Procurement Methods
- Competitive Bidding: The method used for Infrastructure Projects, Consulting Services, and Goods, except under specific conditions outlined in Rule XVI.
- Limited Source Bidding: Involves direct invitations to pre-selected suppliers/consultants with proven capability. Justified in situations where only a few competent suppliers exist for highly specific goods or services.
- Direct Contracting: Suitable for procurement of goods with proprietary features (patents, trade secrets, copyrights) or unique components vital to a contract; exclusive dealerships without sub-dealers; and more advantageous prices for the GoP.
- Repeat Order: Replenishing goods previously procured. The unit prices must remain the same or lower, and the order shouldn't exceed 25% of the original contract's quantity.
Procurement Defined Terms
- Act (RA 9184): An Act Providing for the Modernization, Standardization, and Regulation of the Procurement Activities of the Government.
- Approved Budget for the Contract (ABC): The budget of a contract, duly approved by the HoPE, per General Appropriations Act (GAA).
- Bid: A proposal to undertake a contract.
- Bidder: A party submitting a bid.
- Bidding Documents: All documents supplied by the Procuring Entity to guide bidders.
- Bids and Awards Committee (BAC): The Committee handling bidding processes based on IRR rules.
- Common-Use Supplies and Equipment (CSE): Everyday goods/equipment used in government operations.
- Competitive Bidding: The main procurement method.
- Consulting Services: Professional services needed for infrastructure projects.
- Domestic Bidder: A party offering unmanufactured products mainly produced in the Philippines.
- Domestic Entity: Individual, partnership, corporation, or association whose businesses are located in the Philippines.
- Expendable Supplies: Items consumed within a year in operations.
- Foreign Bid: Offers for products not manufactured in the Philippines.
- Foreign-Funded Procurement: Procurement wholly or partially funded by foreign entities.
- Foreign Grants: Funds from foreign entities without repayment obligations.
- Foreign Loans: Funds from foreign entities with repayment obligations.
- Goods: Items used in governmental operations.
- Head of the Procuring Entity (HoPE): Usually heads of agencies or offices.
- Infrastructure Projects: Projects concerned with infrastructure improvements.
- International Agreement: Legal agreements between governments.
- Non-expendable Supplies: Items retained in their original shape.
- PhilGEPS: Government Electronic Procurement System.
- Philippine National: Citizen(s), partnership, corporation, or association that holds ownership of the business.
- Portal: A website that manages and centralizes information and interactions.
- Procurement: The acquisition of goods and services.
- Procuring Entity (PE): A government body, department, or agency.
- Procurement Reform Act: Another name for RA 9184.
- Ratio Analysis: Analysis that evaluates financial relationships of parts of the financial elements.
- Repeat Order: A procurement for additional items of goods or services.
- Shopping: A procurement method for commonly available products/equipment.
Financial Statement Analysis
- Component percentage: Used in vertical analysis to show proportion of items.
- Common size: Vertical analysis statement showing component percentage.
- Vertical analysis: Evaluates items within a specific timeframe/context in relation to the total.
Ratio Analysis
- Ratio Analysis: Is a method used to establish relationships between different parts of financial statements.
- Liquidity Ratios: Shows the ability of a company to meet its immediate obligations (Current Ratio, Acid-Test/Quick Ratio).
- Inventory ratios: Evaluate how well a company manages its inventory (Inventory Turnover, Number of Days Sales in Inventory).
- Receivables Ratios: Measures efficiency in collecting customer payments (Accounts Receivable Turnover, Average Collection Period).
- Profitability Ratios: Measures profitability (Return on Total Assets, Return on Sales, Gross Profit Ratio, Return on Investment).
- Solvency/Stability Ratios: Illustrates the claims of creditors (Debt to Total Assets Ratio, Owner's Equity to Total Assets Ratio).
Cash Management
- Cash Management: Government strategy to efficiently control short-term cash inflows and outflows.
- Principles: Speeding up collection of receivables. Timely payment of liabilities. Investing idle cash. Preparing cash forecasts.
- Importance: Ensures timely payments. Reduces idle cash risks. Improves financial flexibility.
- Objectives (National Level): Economizing cash within the government, managing short-term cash flows effectively, and aligning with monetary policies.
- Objectives (Agency Level): Establishing accurate cash flow forecasts for agencies, ensuring accurate monitoring templates, and facilitating coordination for accurate forecasting.
Cash Management Cycle
- The cash management cycle involves analyzing cash inflows (tax revenue, non-tax revenue, grants, sale of assets, borrowing) and outflows (salaries, goods/services, debt service).
Uses of Cash
- Personal services
- Maintenance
- Operating expenses
- Interest and loan principal payments.
Steps in Releasing Cash
- Approval of Agency National Expenditures Program.
- Agency prepares a monthly disbursement program.
Annual Expenditure Profile
- Government spending agencies provide monthly expenditure projections for the whole year for the Budget department's comprehensive analysis.
Bureau of Treasury Function
- BTr monitors expected daily cash flow projections based on prior trends and financial scenarios.
Treasury Single Account (TSA)
- TSA centralizes government cash balances, improving control and optimizing resource use.
Revenue Collection Flow
- Describes the flow of collected revenue from taxpayers to the Treasury Single Account.
Lesson 9: Cash Management Cycle
- Focuses on the cycle of cash inflows (e.g. taxes) and outflows (e.g. salaries).
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Description
Test your knowledge on the GoP's procurement policy and financial statements. This quiz covers key concepts such as R.A. 9184, profitability, solvency, and the importance of financial reporting. Ideal for students and professionals looking to enhance their understanding of financial management.
