Government Accounting Principles

Government Accounting

• Accounting systematically produces financial information expressed in monetary units.
• This includes transactions of economic entities and identifiable economic events.
• The goal is to help stakeholders make decisions about the entity.

Objectives of Accounting

• Accounting needs to have utility, reliability, timeliness, objectivity, verifiability, and be provisional.
• Maximize indispensable information for decision-making in areas like financial structure, results, and costs.
• Legal requirements are applied.
• Establish financial situations, balances, and accounts for the entire company or its divisions.
• Transactions are registered impartially.
• Data is interpreted.

Government Accounting Concept

• Government accounting is a branch of general accounting.
• It meets the requirements for registering, controlling, presenting, and evaluating financial, budgetary, and equity operations.
• Government accounting is developed by public sector institutions.

Legal Basis of the System

• The adoption of a uniform and integrated governmental accounting system relies on a Governmental Agreement.
• It aims to closely relate development plans with public management.
• The system seeks to satisfy the control and financial evaluation needs of the public sector.
• Double-entry accounting helps to analyze government accounting records to help manual and electronic processes.

Administrative Accounting

• This is oriented to serve the company internally and provides information from accounting records.

Controllable aspects of government accounting

• Integral governance accounting controls financial planning.
• It measures the use of human, material, and financial resources.
• Methods of control and evaluation for public finances correctly are provided.
• Each transaction is registered at a sub-account level.
• Accounting procedures are clear for reporting on budget execution.
• It allows for methodical accounting of each transaction phase.
• Public debt is recorded analytically, with principal, interest, and debt services information.
• The financial position of state institutions is expressed individually and collectively.
• The existing integrated system has a complete account catalog for problem-solving.
• The state of funds, increments, and reductions in capital accounts are demonstrated during the fiscal year.
• The standing inventory of utilized assets facilitates evaluating purchasing needs.

Financial Accounting

• It aims to provide company financial and economic information to stakeholders, investors, etc.
• Governmental accounting provides data on the property, rights, and obligations of state entities.
• Public sector debt levels are indicated internally and externally.
• The account catalog measures how operations are evaluated.
• Financial and economic resources related to needs are expressed.
• Government financial situations and economic effects related to the gross domestic product are exposed.
• Reports detail fiscal year funds for operation development.
• Surplus results are expressed regarding budget/equity execution.
• The acquisition and production of goods and services in response to quantified demands are measured.
• This process is influenced by the environment.
• The government officially adopting the Integrated and Uniform Accounting System has some advantages over older fiscal accounting methods.

System Advantages

• Uniform accounting is a tool for recording, controlling, measuring, evaluating, and presenting fiscal year results.
• Responsibilities are established for management of divisions.
• It facilitates auditing and evaluating the function administratively.
• Resources are used effectively and revenues are measured and managed per-budget.
• The account system should be designed to operate manually, mechanically/electronically per the needs of each institution.
• Assets acquired by the spending budget can be incorporated with the establishment of a permanent inventory.
• The determination of its costs as a measurement tool to determine the government's assets.
• The accounts provide useful financial data for economic and financial analysis by the Central Government and feeds national accounts.
• All movable property acquisitions should be recorded, regardless of their origin.

Budget Definition

• Budget generally means anticipating expenses and revenue to regulate them and achieve profit or loss.
• Formerly, budget came from the old French word "bougette."

The Budget Process

• England does not dictate budget laws.
• The government makes the Treasury present to the chambers, and has that presentation be the "SEANCE OF BUDGET."
• Companies began to realize the use of budgets after after WWI.
• Budgets are used as a key part of company administration among progressive-minded companies.
• A budget is an instrument used in directing a company for the determination of figures on statistical and evaluations.

Budget Concepts

• Budgets are anticipations of expenses and revenues in any business.
• Supposedly, it includes costs for a period of time, a corporation, a State, and an anticipated cost of work.
• A financial budget is a plan on presuming a series of factors and situations as a basis for future events and for monitoring them.
• The National Association of Accountants has indicated a budget is a plan that presents expected achievements.
• The Real Academia Española Dictionary, defines the budget as an anticipation of costs.

Accuracy of Budget

• Estimates tend to assume an anticipation of future events.
• Budget projections are presented in two ways, one real the other projected.
• There is a function to observe the net results.
• Deviations should be detectable via comparison.

Key Aspects of Budgets

• Budgets are operational plans.
• They are formulated in anticipation.
• They highlight goals that the management seeks to achieve.
• They act as standard measure for comparison to events.
• They help to investigate and correct root causes of variances.
• Efficiency during production is measured through the comparison of the estimated data to the actual data.

Good Budgeting

• Allows management to anticipate problems.
• It does not remove deviations; it is one of the primary roles undertaken by executive management.

Budget Principles

• Prevision, Sponsorship, Participation, Responsibility, Coordination, Period, Correlation, Realism, Approval, Feasibility, and Flexibility are all key budget principles.
• Implications should be foreseen, and quantified in context of the goals of the budget.
• Budgets should have complete admin endorsement.
• Chiefs must be consulted on execution.

Budget Design

• Responsibility should be understood.
• Programming should be established per activity.
• A defined period should be identified for the budget.
• Units of measurement ought to be uniform.
• Figures ought to be as realistic as possible.
• Advantages should be able to outweigh costs.
• There needs to be flexibility.

Budget Classifications

• Budgets can be made as needed by an admin.
• Short, medium, or long-term periods or schedule are possible.
• Primary summarization is possible.
• Sales, productions, costs, purchases, operation costs, and profit balances from an enterprise, for example.
• Analytically, a district can be costed, for example from sales.
• Budgets can be economic, operational, or financial by nature.
• Budgets can be fixed or flexible.
• Budgets can be maximum, minimum, or mixed.
• Units can be specified.
• Also, budgets can be in the public or private sectors.

Budget Duration

• Forecasts more than twelve months tend to be reviewed and re-estimated monthly, quarterly, or semiannually to keep them relevant.
• Projections can extend for three to ten years, which will become longer-term plans.

Budget Control

• Budgeted control watches over a company.
• Technique is designed for use by the use of resources and procedures to ensure that functions and operations produce the best returns with as small cost as possible.
• Budget control comprises an analysis of domain, functions, and operations of a company.
• In particular, some companies may neglect manufacturing when making expense and sales.
• These companies vigilantly monitor costs.

Phases of Budget Control

• Planning occurs mostly with the use of budgets.
• From this, the key administrators are appointed to oversee the accounting system all the way through implementation.
• The planning phase includes compiling data, its study, and also its arrangement, the coordination for which involves distinct departments and or supervisors.
• Partial budgets of each department are prepared analytically.
• An individual acting as a director or committee coordinates with the higher-ups, or department heads, verifiying and discussing modifications.
• Execution is for all personnel under management.

Hierarchy Aspects of Budgets

• A hierarchy must formulate guidelines that must be observed as well as specific manuals.
• Ordering the departmental goals methodically is assigned at a median level.
• Functions are aimed at observing budget execution.
• Objective management strives to discover behavior that would risk harming the budget or operations.
• Budgetary control relies on analysis to overcome those outcomes.

Procedures for Control

• One must connect with a budget after deciding on a term.
• The communications sent should aim to create a desire to be involved with those related to the budget by creating an optimistic outlook on the material.
• Efficient work relies on sync and coordination with all the departments in budget.
• Dates are to be set for which to work, and on which to have information available.
• The intent is to specify an annual plan within previously stated detail.
• References are made to the extent that has been reached for budget.

Evaluation Metrics

• Parallels may be drawn among reports and forecasts, or between systems with different integration.

Report Definition

• The extensive data requirement that an administration has is divided to include different document types.

Report Formats

• External reports are meant for government agencies.
• Banks, creditors, and insurers are to be addressed through general business.
• Internal reports are confidential, for company sole use.
• Their classification is comprised of special result reports.
• Statistics pertain to historical data of significance from operations.
• Specials are for problems.
• Regular reports are consistent and standardized.
• These are generally compared to plans, targets, and budgets.

Structure of Reports

• They shall be arranged to each member in the appropriate form. Then, sports are listed by hierarchic levels.
• Senior leaders establish goals and general policies, and may make key organizational actions.
• Second-level direction comprises four traditional actions.
• Third-level is responsible at the general direction level.
• Four-tier are sections that have functionaries.

Report Presentation

• The data in the general office should be concentrated to simplify literacy.
• The high amount of data can be overwhelming, therefore a financial summary of salient facts ought to be sent.
• The information sent to any authorities that will get it in-between should display results with yearly analyses, or within planned budget allocations, so that the correct course can be determined.
• Each bit of data is meant for use in an enterprise.
• Communications are for the measurement of project efficiency at any phase or department, for example the achievement of utility targets should be tracked from each measurement.
• The objective is to follow protocol for measuring if a protocol is being followed as planned.

Governmental Budget

• Government orders income and expends to keep control.

Public vs Private Budgets

• There is a disparity in public sector and private sector.
• The government gauges its spending and determines tax revenues or loans.
• The private measures both its spending and its profits to see its distribution.

Development Planning

• Planning economic development requires fiscal changes to better evaluate the public administration.

Programmed Budgets

• The intent is to move and enact political intent.
• Political operations are often done via a budget.
• Budgets for programs ought to provide tools for medium schemes.
• Medium and long-term schemes are implemented in the small and as such, they are part of the system and planning
• As such, the scheme should follow the scheme's ideas and techniques.

Budget Procedure

• The program is a function to form public programs as activities.
• Sources go through funding to lead from one goal to the other.
• They are approved or edited through Congress or Administration.

Contemporary Governments

• Governments exist in a service capacity to facilitate business.

Types of Government Programs

• Operation Programs
• Current Transfer Programs
• Direct Investment programs
• Indirect investment Programs
• Financial assistance Programs.
• Industrial or commercial operations Programs
• Public debt programs

Coordination

• The classification system helps organize and budget for planning programs.
• Sector programmed helps identify sector application with the institution.

Functional Program Key Aspects

• The intent is to aid the government.
• Transferring accounts correspond to all facets from transferring services internally.
• Direct investment pertains to services executed from a company, for example, construction.
• Transfers or funds is known as indirect Investment.
• Financial Assistance pertains to sectoral operations.
• Commercial Operations pertain to entities that conduct services.
• Public debt covers expenses or debts from other sectors.
• This requires a unified approach referred to as uniformed.

Objective Aspects of Budgets

• Objectives help for a purpose aligned with community requests.

Objectives vs. Numbers

• Objectives translate relative targets while quantities provide measurements.

Classifications of Finances

• In order of how they are classified, finances must be ordered.

The Breakdown of Numbers for Budgets

• Financial types and budgets should be ordered and implemented together, with analysis as part of it.
• The classes can be institutional, related to programs etc.
• The first letter of a name on what is being made can be added.

Budget Advantages

• Exact actions are to be delivered on on schedule.
• Functions and responsibility for that body must be assigned.
• An environment of innovation and structure can grow.

Budget Disadvantages

• Financial legalese is not designed for the present.
• Delays impact implementation of a budget.
• A lack of care can be a limiting process.
• Bureacracy is a chore for all involved.

Legal Framework

• Legality and control in finances must include constitutional intent, as well and mandatory contributions.
• Budgets must uphold principles to prevent confidentiality issues and to provide the opportunity for publicity.
• Budget review must happen as well.
• The ministry offers annual budgets, and each body with ties must have ties to other laws that touch on tobacco, value-added, fuels, taxes, etc.
• Rules shall allow different entities to follow the codes that make financial implementation.

Governmental Agreements

• All ministerial level rules are available online for transparency.
• Information on topics like fund management is available.

Government Terminology

• Grouping institutions is part of process across sectors, statistically and economically to benefit organizational operations.
• Sectors are based on definitions across organizations, and with a consistency to match statistical measures.

Public vs. Private Sector

• The Public Sector is comprised of the sum of general government units and public enterprises.
• These develop state operations and functions.

Terminology of Public Entities

• The word covers the legality and understanding that constitutes legal recognition.
• Bodies that make actions are to be included.
• Sectorization includes public sector government organizations.

Characteristics of Public Institutions

• The entity serves a key role to the population and that, by the state or law, is fundamental to the power of either a State, or the Nation.
• With entities acting as the government these are public departments that serve functions.
• Public departments oversee assets and liabilities, for example.
• Those offering goods directly are labeled Public Enterprises.
• Government operates, is a core activity for organizations and these may have oversight from the state.

Public Institution Types

• The State has a role to play on each aspect like legislative, judicial, and executive tasks.
• Central Management should then be given to appropriate entities whether this is to legal, political, or oversight oriented groups.
• Bodies that can then take action should that decision making is delegated.
• The authority transfers to an operator that will carry out the actions.
• There may need to be certain criteria to use the funds appropriately, though.

Government Divisions

• The central government has an important function to support all of its territories.
• This may use revenue or taxes for purposes to the territory as well as transfer between organizations.
• Organizations still may be able to function under guidance and power from central institutions.
• The goal is to shape state organizations.

Community Administration

• There should be reduced charges against the population.

Local Government

• The ability of power limits divisions of the territory.

State Enterprises

• These may produce goods or services for utilities.

Financial Operations of The State

• These are activities of financial means controlled by the state.
• This is meant to allow power as a matter of legislation or law.

The Mechanics of State Control

• Each may require the approval by the state to authorize policy.

Finance Enterprises

• This can apply to public operations if there are no non financial operations.

Money Regulations

• The state can set finance to function and operate as agencies.

Intermediation

• The public system may act as banks with low assets in place.

Mutual Affairs

• This comes from agreement across organizations for policies among projects or public works.