Government Accounting Sector and BFRS Overview

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Questions and Answers

What is the primary purpose of the Budget and Financial Accountability Reports (BFRS)?

To create standardized financial statements.

To facilitate easier submission of financial accountability reports. (correct)

To regulate the collection of taxes.

To ensure agencies perform audits.

Which report is NOT included in the Budget and Financial Accountability Reports (BFRS)?

Statement of Approved Budget, Utilizations, Disbursements and Balances

Monthly Financial Performance (correct)

Statement of Appropriations, Allotments, Obligations, Disbursements and Balances

Quarterly Report of Revenue and other Receipts

How does the system facilitate users in learning how to use it?

Through manuals only.

By offering in-person workshops periodically.

Through classroom training sessions.

By providing e-learning modules and online video tutorials. (correct)

What type of accounting does the GA (Government Accounting) system employ?

Fund, obligation, and CDC accounting. Signup and view all the answers

What advantage does the central database provide concerning financial information?

It aggregates financial data for better analysis. Signup and view all the answers

Which of the following statements accurately describes the books of accounts for GA?

Two sets of books, including registries for budgetary accounts, are maintained. Signup and view all the answers

What enables the Government Accounting Sector (GAS) to conduct extensive analysis?

Comprehensive financial statements submitted by agencies. Signup and view all the answers

Which item is focused on monitoring the due and demandable obligations?

Aging of Due and Demandable Obligations Signup and view all the answers

What type of accounting basis is used in the preparation of financial statements?

Modified accrual basis accounting Signup and view all the answers

What does the 'One Fund Concept' entail in government accounting?

Using a single fund for all government transactions Signup and view all the answers

Which document specifies the mandatory coding structure for accounts?

Revised Chart of Accounts, COA C2020-001 Signup and view all the answers

Which of the following is NOT a component of the books of accounts and registries for NG entities?

Budgeting Reports Signup and view all the answers

When should expenses be recognized under the modified accrual basis of accounting?

When incurred Signup and view all the answers

What is the main purpose of the Manual discussed in the content?

To update accounting standards and procedures for government funds Signup and view all the answers

Which of the following types of registries is specifically mentioned?

Registry of Appropriations and Allotments Signup and view all the answers

In the context of financial reports, what should happen if the accrual basis is impractical?

Apply an alternative method required by law Signup and view all the answers

What does effectiveness measure in an agency?

The relationship between outputs and goals Signup and view all the answers

Which international standards influence the Philippine Public Sector Accounting Standards?

International Financial Reporting Standards (IFRS) Signup and view all the answers

What is the primary purpose of the Government Accounting Manual (GAM)?

To establish accounting and auditing rules and regulations Signup and view all the answers

What document gave rise to the adoption of the PPSAS by the Philippine Government?

COA Resolution No. 2014-003 Signup and view all the answers

Which of the following is NOT included in the coverage of the GAM?

National budget allocations Signup and view all the answers

Under which article of the 1987 Constitution does the Commission on Audit derive its authority to prescribe the GAM?

Article IX-D Signup and view all the answers

What is a key aspect of determining effectiveness within an agency?

Assessing whether desired results are achieved Signup and view all the answers

What does the acronym NGAS stand for in the context of government accounting?

New Government Accounting System Signup and view all the answers

What must an accountable officer (AO) do to avoid liability when acting under a superior officer's direction?

Notify the superior officer in writing of the illegality prior to the act Signup and view all the answers

What is the primary liability of an officer who directs an illegal payment?

The officer directing the illegal payment Signup and view all the answers

What is the time frame in which an accountable officer must notify the Commission after a loss occurs?

Within 30 days or as specified by the Commission Signup and view all the answers

What must an officer provide to receive credit for a loss of government funds?

An application for relief with supporting evidence Signup and view all the answers

What is one of the objectives of Generally Accepted Accounting Principles (GAAP)?

Ensure consistency and comparability among financial statements Signup and view all the answers

Which of the following is NOT a requirement for public officers regarding government resources?

Monitoring of public spending weekly Signup and view all the answers

What does substantial authoritative support signify for an accounting principle?

It indicates general consensus and acceptance among professionals Signup and view all the answers

Which of the following roles is NOT mentioned as being affected by standards of accountability?

Individual contractors Signup and view all the answers

What method is used to compute the cost of ending inventory of supplies and materials?

Moving average method Signup and view all the answers

What should be deducted from the total cost of a construction project?

Liquidated damages charged Signup and view all the answers

How should expenses incurred after the construction of a project be treated?

They should be reported as part of operating costs. Signup and view all the answers

What method of depreciation is required to be used?

Straight-line method Signup and view all the answers

What is the significance of the Registry of Public Infrastructures (RPI)?

It helps in recognizing costs and accumulated depreciation of public infrastructure. Signup and view all the answers

What change is made to the estimated residual value in the context of depreciation?

It is decreased to 5% of the cost. Signup and view all the answers

Which of the following statements is true regarding the Registry of Reforestation Projects (RRP)?

It is no longer required to be maintained. Signup and view all the answers

What should be included in the total cost of a construction project?

Bonus paid for early project completion. Signup and view all the answers

Study Notes

Government Accounting Sector (GAS)

Provides real-time financial information consolidation at the national level.
Offers e-learning modules and video tutorials for system training.

Budget and Financial Accountability Reports (BFRS)

Submitted to GAS, COA, and Agency’s COA Auditor in addition to financial statements and reports.
Includes:
- Statement of Appropriations, Allotments, Obligations, Disbursements and Balances (SAAODB)
- Statement of Appropriations, Allotments, Obligations, Disbursements and Balances by Object of expenditures (SAAODBOE)
- List of Allotments and Sub-Allotments (LASA)
- Statement of Approved Budget, Utilizations, Disbursements and Balances (SABUDB)
- Statement of Approved Budget, Utilizations, Disbursements and Balances by Object of Expenditures (SABUDBOE)
- Aging of Due and Demandable Obligations (ADDO)
- Monthly Report of Disbursements
- Quarterly Report of Revenue and other Receipts

Purpose of BFRS

Enables efficient submission of Financial Accountability Reports (FARs) required by COA.
Allows GAS to conduct extensive analysis and review of submitted FARs.
Facilitates COA monitoring of agency compliance with FAR submission requirements.
Creates a central database for tracking agency appropriations, allotments, obligations, and disbursements on a national, quarterly basis.
Aids in the consolidation of financial/budget information needed for the Annual Report on Appropriations, Allotment, Obligations and Disbursements (ARAAOD) preparation.

Control Mechanisms

CA: none
GA: Fund accounting, obligation accounting, and CDC accounting

Books of Accounts

CA: One set of books maintained.
GA: One set of books kept, including the Regular Agency (RA) Book and registries for budgetary accounts.

Accounts and Transactions

CA: Nominal and Real Accounts are used.
An Accounting Officer (AO) is not relieved of liability for illegal payments or dispositions of funds or property, even under a superior officer's direction, unless prior written notification of the illegality was provided to the superior officer.
The officer directing any illegal payment or disposition of funds or property is primarily liable for the loss, while the AO who fails to provide the required notice is secondarily liable.

Loss of Government Funds or Property

An accountable officer must immediately notify the Commission or the auditor concerned if government funds or property are lost in transit or due to fire, theft, or other casualty or force majeure.
An application for relief, with supporting evidence, must be submitted within 30 days (or longer if authorized).
Failure to comply with these requirements results in the officer's liability remaining and credit not being granted for any loss during account settlement.

Generally Accepted (State) Accounting Principles

Guide accountants in identifying, measuring, and communicating financial accounting information.
Ensure proper reporting and uniformity/comparability among financial statements of different government entities.
Provide auditors with a framework for judging financial statement fairness based on common standards.
A principle is generally accepted if it has substantial authoritative support.

Measuring Effectiveness

Assesses the relationship between agency outputs and goals.
Determines if desired results are achieved, objectives are met, and cost-effective alternatives have been considered.

Harmonization of Government Accounting Standards

Recent reforms and changes in accounting led to the harmonization of existing standards with international ones, particularly the International Public Sector Accounting Standards (IPSAS).
The IPSAS are based on the International Financial Reporting Standards (IFRS).
The Commission revised the New Government Accounting System (NGAS) Manual to address dynamic changes and modern technology.
The Philippine Government adopted the IPSAS through Philippine Public Sector Accounting Standards (PPSAS).
The PPSAS provisions are incorporated into the GAM for NGAs.

Government Accounting Manual (GAM)

Prescribed by COA under the 1987 Constitution.
Presents basic accounting policies and principles aligned with the PPSAS, pertinent laws, rules, and regulations.
Includes the Revised Chart of Accounts (RCA), accounting procedures, books, registries, records, forms, reports, and financial statements.
Used by all National Government Agencies (NGAs) for:
- Preparation of general purpose financial statements in accordance with PPSAS and other financial reports as mandated by laws, rules, and regulations.
- Reporting of budget, revenue, and expenditure in compliance with laws, rules, and regulations.

Objectives of the GAM

Update standards, policies, guidelines, and procedures for accounting of government funds and property.
Update coding structure and accounts.
Update accounting books, registries, records, forms, reports, and financial statements.

Basic Features and Policies of the GAM

Accrual Accounting: A modified accrual basis of accounting is used. Expenses are recognized when incurred and recorded in the period to which they relate. Income is on an accrual basis unless accrual is impractical or other methods are legally required.
One Fund Concept: This system adopts the one-fund concept. Separate fund accounting is only used when mandated by law, a donor agency, or when necessitated by circumstances with prior Commission approval.
Chart of Accounts and Accounts Codes: A new chart of accounts with an eight-digit coding structure is implemented.
Books of Accounts and Registries:
- Journals:
  - General Journal
  - Cash Receipts Journal
  - Cash Disbursements Journal
  - Check Disbursements Journal
- Ledgers:
  - General Ledgers
  - Subsidiary Ledgers
- Registries:
  - Registries of Revenue and Other Receipts
  - Registry of Appropriations and Allotments
  - Registries of Allotments, Obligations and Disbursements (for PS, MOOE, CO and FE)
  - Registries of Budget, Utilization and Disbursements
Financial Statements: The moving average method is used to calculate the cost of ending inventory of supplies and materials.
Maintenance of Supplies and Property, Plant and Equipment Ledger Cards: Accounting Units and Property Offices maintain Supplies Ledger Cards/Stock Cards by stock number and Property, Plant, and Equipment Ledger Cards/Property Cards by category.
Construction of Assets: The Construction Period Theory is applied for costing assets under construction. Bonuses for early completion are added, and liquidated damages are deducted from the project cost. Related expenses incurred during construction are capitalized, while those incurred after completion are operating costs.
Public Infrastructures/Registry of Reforestation Projects: Agencies constructing public infrastructures or investing in reforestation projects recognize the cost and related accumulated depreciation based on the Registry of Public Infrastructures. The Registry of Public Infrastructures and Registry of Reforestation Projects are no longer maintained.
Depreciation: The straight-line method is used for depreciation.
PPE controlled but not owned: The GAM includes provisions regarding PPE controlled but not owned by the entity.
Tangible Assets with Serviceable Life: The GAM applies the accounting policy for tangible assets with a serviceable life exceeding one year but small enough to be considered PPE. This revokes the P15,000 threshold for semi-expendable items.

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Description

This quiz covers the fundamentals of the Government Accounting Sector (GAS) and the Budget and Financial Accountability Reports (BFRS). It examines the various statements, reports, and financial documents required for accountability in government financial management. Test your knowledge on real-time financial information consolidation and the contents of BFRS submissions.