Introduction to Government Accounting Manual (AFAR 3) PDF

INTRODUCTION TO GOVERNMENT ACCOUNTING MANUAL CHAPTER 1: INTRODUCTION GAM Vol. 1: Chapter 1 GONZALES, ANDREA D. GOVERNMENT ACCOUNTING OBJECTIVES OF GOVERNMENT ACCOUNTING a) To produce information concerning past operations and present conditions; b) To provide a basis for guidance for future operations; c) To provide for control of the acts of public bodies and officers in the receipt, disposition and utilization of funds and property; and d) To report on the financial position and the results of operations of government agencies for the information of all persons concerned (P.D. No, 1445, Sec. 110) Government accounting places greater emphasis on the following: a. Sources and utilization of government funds; and b. Responsibility, accountability and liability of entities entrusted with government funds and properties. (P.D. No, 1445, Sec. 110) THREE TYPES OF GOVERNMENT ACCOUNTING SYSTEM a) for National Government Agencies b) for Local Government Units c) for Government-owned and/or Controlled Corporations (P.D. No, 1445, Sec. 110) BRIEF HISTORY OF THE PHILIPPINE GAS “OLD” GOVERNMENT ACCOUNTING SYSTEM NEW GOVERNMENT ACCOUNTING SYSTEM IN 2002 GOVERNMENT ACCOUNTING MANUAL FOR NGAs in 2016 WHY CHANGE THE EXISTING ACCOUNTING SYSTEM? The Commission on Audit has presented the following as the reasons for changing the existing accounting system (referred to as Old Government Accounting System, OGAS): a. The old system is about a half century old and designed for manual operation. b. It is no longer responsive to the current demands of government financial managers. c. The NGAs is more in conformity with International Accounting Standards. The New Government Accounting System (NGAS) was implemented in the Philippines in 2002 to modernize government accounting and improve financial management. However, the NGAS was eventually replaced by the Government Accounting Manual (GAM) for NGAS in 2016. Here's why: a. Alignment with International standards b. Updating and Modernizing c. Addressing Deficiencies The revision of the NGAS Manual was prompted by the implementation of the Philippine Public Financial Management Reform Roadmap, which includes the development of the Philippine Public Sector Accounting Standards (PPSAS) that are harmonized with the International Public Sector Accounting Standards (IPSAS). Volume I Accounting Policies, Guidelines and Procedures, and Illustrative Accounting Entries Volume Il - Accounting Books, Registries, Records, Forms and Reports Volume Ill - The Revised Chart of Accounts The GAM contains the accounting policies in accordance with the PPSAS as well as the guidelines and procedures to be adopted by the accountants, budget officers, cashiers, property officers, accountable officers and other finance personnel in recording and reporting government financial transactions. It will serve as guide in the preparation of the financial statements and other reports and the accomplishment and/or maintenance of various registries, records and forms. Illustrative accounting entries were also provided for reference of the accounting unit in recording transactions To help the accountants and other agency personnel, as well as COA auditors, in determining the particular provisions of the PPSAS applicable to the financial transactions of the agencies, the provisions under the IPSAS were lifted and incorporated in the Manual, as necessary. This GAM ensures uniformity, accuracy, reliability and timeliness in the preparation of financial statements and other reports in conformity with the requirements of the PPSAS and relevant accounting policies 01 LEGAL BASIS GAM Vol. 1: Chapter 1 - Section 1 Article IX-D, Section 2 par. (2) of the 1987 Constitution of the Republic of the Philippines 01 LEGAL BASIS GAM Vol. 1: Chapter 1 - Section 1 “The Commission on Audit shall have exclusive authority, subject to the limitations in this Article, to define the scope of its audit and examination, establish the techniques and methods required therefor, and promulgate accounting and auditing rules and regulations, including those for the prevention and disallowance of irregular, unnecessary, excessive, extravagant, or unconscionable expenditures, or uses of government funds and properties" (Article IX-D, Section 2 par. (2) of the 1987 Constitution of the Republic of the Philippines) 02 COVERAGE GAM Vol. 1: Chapter 1 - Section 2 The GAM for NGAs provides the basic concepts to be used in: a. Preparation of the general purpose financial statements in accordance with the PPSAS and other financial reports as may be required by laws, rules and regulations; and 02 COVERAGE GAM Vol. 1: Chapter 1 - Section 2 The GAM for NGAs provides the basic concepts to be used in: a. Preparation of the general purpose financial statements in accordance with the PPSAS and other financial reports as may be required by laws, rules and regulations; and Philippine Public Sector Accounting Standards 02 COVERAGE GAM Vol. 1: Chapter 1 - Section 2 The GAM for NGAs provides the basic concepts to be used in: a. Preparation of the general purpose financial statements in accordance with the PPSAS and other financial reports as may be required by laws, rules and regulations; and b. Reporting of budget, revenue and expenditure in accordance with laws, rules and regulations. 03 OBJECTIVE GAM Vol. 1: Chapter 1 - Section 3 The GAM for NGAs aims to update the following: a. Standards, policies, guidelines and procedures in accounting for government funds and property; b. coding structure and accounts; and c. accounting books, registries, records, forms, reports and financial statements. 03 OBJECTIVE GAM Vol. 1: Chapter 1 - Section 3 The GAM for NGAs aims to update the following: a. Standards, policies, guidelines and procedures in accounting for government funds and property; b. coding structure and accounts; and c. accounting books, registries, records, forms, reports and financial statements. 03 OBJECTIVE GAM Vol. 1: Chapter 1 - Section 3 The GAM for NGAs aims to update the following: a. Standards, policies, guidelines and procedures in accounting for government funds and property; b. coding structure and accounts; and c. accounting books, registries, records, forms, reports and financial statements. CHAPTER 2: GENERAL PROVISIONS, BASIC STANDARDS AND POLICIES GAM Vol. 1: Chapter 2 RESPONSIBILITY OVER GOVERNMENT FUNDS AND PROPERTY GAM Vol. 1: Chapter 2 - Section 3a GONZALES, ANDREA D. 01 Responsibility over Government Funds and Property GAM Vol. 1: Chapter 2 - Section 3a It is the declared policy of the State that all resources of the government shall be managed, expended or utilized in accordance with laws and regulations, and safeguarded against loss or wastage through illegal or improper disposition, with a view to ensuring efficiency, economy and effectiveness in the operations of government. (Sec. 2, P.D. No. 1445) 01 Responsibility over Government Funds and Property GAM Vol. 1: Chapter 2 - Section 3a The responsibility to take care that such policy is faithfully adhered to rests directly with the chief or head of the government agency concerned. (Sec. 2, P.D. No. 1445) 02 Responsibility over Government Funds and Property GAM Vol. 1: Chapter 2 - Section 3a Fiscal responsibility shall, to the greatest extent, be shared by all those exercising authority over the financial affairs, transactions, and operations of the government agency. (Sec. 4(4), P.D. No. 1445) 03 Responsibility over Government Funds and Property GAM Vol. 1: Chapter 2 - Section 3a The head of any agency of the government is immediately and primarily responsible for all government funds and property pertaining to his agency. Persons entrusted with the possession or custody of the funds or property under the agency head shall be immediately responsible to him, without prejudice to the liability of either party to the government. (Sec. 102, P.D. No. 1445) ACCOUNTABILITY OVER GOVERNMENT FUNDS AND PROPERTY GAM Vol. 1: Chapter 2 - Section 3b SEVIAL, KAIRA G. Accountability over 01 Government Funds and Property GAM Vol. 1: Chapter 2 - Section 3b Every officer of any government agency whose duties permit or require the possession or custody of government funds or property shall be accountable therefor and for the safekeeping thereof in conformity with law. Every accountable officer (AO) shall be properly bonded in accordance with law (Sec. 101, P.D. No. 1445; Section 50, Chapter 9, Subtitle B, Book V, Executive Order (E.O.) No. 292) Accountability over 01 Government Funds and Property GAM Vol. 1: Chapter 2 - Section 3b Accountable officers must obtain a fidelity bond. Every accountable officer (AO) shall be properly bonded in accordance with law (Sec. 101, P.D. No. 1445; Section 50, Chapter 9, Subtitle B, Book V, Executive Order (E.O.) No. 292) Accountability over 01 Government Funds and Property GAM Vol. 1: Chapter 2 - Section 3b Accountable officers must obtain a fidelity bond. Fidelity Bond is an insurance of bondable public officer under the Fidelity Fund to assure: faithfully perform all the duties imposed by law upon him; faithfully account all funds and public property coming into his possession, custody of control. Accountability over 02 Government Funds and Property GAM Vol. 1: Chapter 2 - Section 3b Transfer of government funds from one officer to another shall, except as allowed by law or regulation, be made only upon prior direction or authorization of the Commission or its representative. (Sec. 75, P.D. No. 1445) Accountability over 03 Government Funds and Property GAM Vol. 1: Chapter 2 - Section 3b When government funds or property are transferred from one AO to another, or from an outgoing officer to his successor, it shall be done upon properly itemized invoice and receipt which shall invariably support the clearance to be issued to the relieved or outgoing officer, subject to regulations of the Commission. (Sec. 77, P.D. No. 1445) LIABILITY OVER GOVERNMENT FUNDS AND PROPERTY GAM Vol. 1: Chapter 2 - Section 3c SEVIAL, KAIRA G. Liability over 01 Government Funds and Property GAM Vol. 1: Chapter 2 - Section 3c Expenditures of government funds or uses of government property in violation of law or regulations shall be a personal liability of the official or employee found to be directly responsible therefor. (Sec. 103, P.D. No. 1445) Liability over 02 Government Funds and Property GAM Vol. 1: Chapter 2 - Section 3c Every officer accountable for government funds shall be liable for all losses resulting from the unlawful deposit, use, or application thereof and for all losses attributable to negligence in the keeping of the funds. (Sec. 105(2), P.D. No. 1445) Liability over 03 Government Funds and Property GAM Vol. 1: Chapter 2 - Section 3c No AO shall be relieved from liability by reason of his having acted under the direction of a superior officer in paying out, applying, or disposing of the funds or property with which he is chargeable, unless prior to that act, he notified the superior officer in writing of the illegality of the payment, application, or disposition. The officer directing any illegal payment or disposition of the funds or property shall be primarily liable for the loss, while the AO who fails to serve the required notice shall be secondarily liable. (Sec. 106, P.D. No. 1445) Liability over 04 Government Funds and Property GAM Vol. 1: Chapter 2 - Section 3c When a loss of government funds or property occurs while they are in transit or the loss is caused by fire, theft, or other casualty or force majeure, the officer accountable therefor or having custody thereof shall immediately notify the Commission or the auditor concerned and, within 30 days or such longer period as the Commission or auditor may in the particular case allow, shall present his application for relief, with the available supporting evidence. Whenever warranted by the evidence, credit for the loss shall be allowed. An officer who fails to comply with this requirement shall not be relieved of liability or allowed credit for any loss in the settlement of his accounts. (Sec. 73, P.D. No. 1445) FUNDAMENTAL PRINCIPLES OF REVENUE GAM Vol. 1: Chapter 2 - Section 4 BALAOING, AIRA JULIENE R. Fundamental 01 Principles of Revenue GAM Vol. 1: Chapter 2 - Section 4 Unless otherwise specifically provided by law, all revenues accruing to an entity by virtue of the provisions of existing law, orders and regulations shall be deposited/remitted in the National Treasury (NT) or in any duly authorized government depository, and shall accrue to the General Fund (GF) of the NG. Sec. 65(1), P.D. No. 1445 Fundamental 02 Principles of Revenue GAM Vol. 1: Chapter 2 - Section 4 Except as may otherwise be specifically provided by law or competent authority, all moneys and property officially received by a public officer in any capacity or upon any occasion must be accounted for as government funds and government property. Sec. 42, Chapter 7, Title I(B), Book V, E.O. No. 292 Fundamental 03 Principles of Revenue GAM Vol. 1: Chapter 2 - Section 4 Amounts received in trust and from business-type activities of government may be separately recorded and disbursed in accordance with such rules and regulations as may be determined by a Permanent Committee composed of the Secretary of Finance as Chairman, and the Secretary of Budget and Management and the Chairman, COA, as members. Sec. 65 (2), P.D. No.1445 Fundamental 04 Principles of Revenue GAM Vol. 1: Chapter 2 - Section 4 Receipts shall be recorded as revenue of Special, Fiduciary or Trust Funds or Funds other than the GF, only when authorized by law as implemented by rules and regulations issued by the Permanent Committee Sec. 66 P.D. No. 1445 Fundamental 05 Principles of Revenue GAM Vol. 1: Chapter 2 - Section 4 No payment of any nature shall be received by a collecting officer without immediately issuing an official receipt in acknowledgement thereof. The receipt may be in the form of postage, internal revenue or documentary stamps and the like, officially numbered receipts, subject to proper custody, accountability, and audit. Sec. 68(1), P.D. No. 1445 Fundamental 06 Principles of Revenue GAM Vol. 1: Chapter 2 - Section 4 Where mechanical devices (e.g. electronic official receipt) are used to acknowledge cash receipts, the COA may approve, upon request, exemption from the use of accountable forms Sec. 68(2), P.D. No. 1445 Fundamental 07 Principles of Revenue GAM Vol. 1: Chapter 2 - Section 4 At no instance shall temporary receipts be issued to acknowledge the receipt of public funds Sec. 72, GAAM Volume 1 Fundamental 08 Principles of Revenue GAM Vol. 1: Chapter 2 - Section 4 Pre-numbered ORs shall be issued in strict numerical sequence. All copies of each receipt shall be exact copies or carbon reproduction in all respects of the original. Sec. 73, GAAM Volume 1 Fundamental 09 Principles of Revenue GAM Vol. 1: Chapter 2 - Section 4 An officer charged with the collection of revenue or the receiving of moneys payable to the government shall accept payment for taxes, dues or other indebtedness to the government in the form of checks issued in payment of government obligations, upon proper endorsement and identification of the payee or endorsee. At no instance should money in the hands of the CO be utilized for the purpose of cashing private checks Sec. 67 (1) and (3), P.D. No. 1445 Fundamental 10 Principles of Revenue GAM Vol. 1: Chapter 2 - Section 4 Under such rules and regulations as the COA and the Department of Finance (DOF) may prescribe, the Treasurer of the Philippines and all AGDB shall acknowledge receipt of all funds received by them, the acknowledgement bearing the date of actual remittance or deposit and indicating from whom and on what account it was received. Sec. 70, P.D. No. 1445 FUNDAMENTAL PRINCIPLES FOR DISBURSEMENT OF PUBLIC FUNDS GAM Vol. 1: Chapter 2 - Section 5 QUIAMBAO, KRISTINE CATE C. Fundamental Principles for Disbursement of Public Funds GAM Vol. 1: Chapter 2 - Section 5 Section 4 of P.D. No. 1445, the Government Auditing Code of the Philippines, provides that all financial transactions and operations of any government entity shall be governed by the following fundamental principles: 01 Fundamental Principles for Disbursement of Public Funds GAM Vol. 1: Chapter 2 - Section 5 No money shall be paid out of any public treasury or depository except in pursuance of an appropriation law or other specific statutory authority. 02 Fundamental Principles for Disbursement of Public Funds GAM Vol. 1: Chapter 2 - Section 5 Government funds or property shall be spent or used solely for public purposes. 03 Fundamental Principles for Disbursement of Public Funds GAM Vol. 1: Chapter 2 - Section 5 Trust funds shall be available and may be spent only for the specific purpose for which the trust was created or the funds received. 04 Fundamental Principles for Disbursement of Public Funds GAM Vol. 1: Chapter 2 - Section 5 Fiscal responsibility shall, to the greatest extent, be shared by all those exercising authority over the financial affairs, transactions, and operations of the government agency. 05 Fundamental Principles for Disbursement of Public Funds GAM Vol. 1: Chapter 2 - Section 5 Disbursement or disposition of government funds or property shall invariably bear the approval of the proper officials. 06 Fundamental Principles for Disbursement of Public Funds GAM Vol. 1: Chapter 2 - Section 5 Claims against government funds shall be supported with complete documentation. 07 Fundamental Principles for Disbursement of Public Funds GAM Vol. 1: Chapter 2 - Section 5 All laws and regulations applicable to financial transactions shall be faithfully adhered to. 08 Fundamental Principles for Disbursement of Public Funds GAM Vol. 1: Chapter 2 - Section 5 Generally accepted principles and practices of accounting as well as of sound management and fiscal administration shall be observed, provided that they do not contravene existing laws and regulations. CHAPTER 3: BUDGET EXECUTION, MONITORING AND REPORTING GAM Vol. 1: Chapter 3 FUND RELEASE DOCUMENTS: OBLIGATIONAL AUTHORITY OR ALLOTMENT GAM Vol. 1: Chapter 3 - Section 3a SEVIAL, KAIRA G. Fund Release Documents: 01 Obligational Authority or Allotment GAM Vol. 1: Chapter 3 - Section 3a the following are the documents which authorize the entity to incur obligations: General Appropriations Act Release Document (GAARD) Serves as the obligational authority for the comprehensive release of budgetary items appropriated in the GAA, categorized as For Comprehensive Release (FCR). Fund Release Documents: 02 Obligational Authority or Allotment GAM Vol. 1: Chapter 3 - Section 3a Special Allotment Release Order (SARO) Covers budgetary items under For Later Release (FLR) (negative list) in the entity submitted Budget Execution Documents (BEDs), subject to compliance of required documents/clearances. Releases of allotments for Special Purpose Funds (SPFs) (e.g., Calamity Fund, Contingent Fund, E-Government Fund, Feasibility Studies Fund, International Commitments Fund, Miscellaneous Personnel Benefits Fund and Pension and Gratuity Fund) are also covered by SAROs. Fund Release Documents: 03 Obligational Authority or Allotment GAM Vol. 1: Chapter 3 - Section 3a General Allotment Release Order (GARO) Is a comprehensive authority issued to all national government agencies, in general, to incur obligations not exceeding an authorized amount during a specified period for the purpose indicated therein. It covers automatically appropriated expenditures common to most, if not all, agencies without need of special clearance or approval from competent authority, i.e. Retirement and Life Insurance Premium. FUND RELEASE DOCUMENTS: DISBURSEMENT AUTHORITY GAM Vol. 1: Chapter 3 - Section 3b SEVIAL, KAIRA G. Fund Release Documents: 01 Disbursement Authority GAM Vol. 1: Chapter 3 - Section 3b the following documents authorize the entity to pay obligations and payables: Notice of Cash Allocation (NCA) authority issued by the DBM to central, regional and provincial The NCA specifies the maximum offices and operating units to amount of cash that can be cover the cash requirements of withdrawn from a government servicing bank in a certain period. the agencies; The NCA is based on the agency's submitted Monthly Cash Program Fund Release Documents: 02 Disbursement Authority GAM Vol. 1: Chapter 3 - Section 3b the following documents authorize the entity to pay obligations and payables: Non-Cash Availment Authority (NCAA) authority issued by the DBM to agencies to cover the liquidation Authority granted by DBM to of their actual obligations government agencies to account incurred against available for the cash equivalent of loan proceeds availed of through allotments for availment of supplier’s credit/constructive cash. proceeds from loans/grants through supplier’s credit/constructive cash; Fund Release Documents: 02 Disbursement Authority GAM Vol. 1: Chapter 3 - Section 3b The bank agrees to pay the contractors directly as work progresses, rather than transferring the funds to the Philippine government first. DPWH The DPWH will receive an NCAA from the DBM, authorizing it to record these direct payments as part of its budgetary spending. Even though DPWH does not handle the cash, the NCAA ensures that the payments are tracked and accounted for in the government’s financial records. Fund Release Documents: 03 Disbursement Authority GAM Vol. 1: Chapter 3 - Section 3b the following documents authorize the entity to pay obligations and payables: Cash Disbursement Ceiling (CDC) authority issued by DBM to the Department of Foreign Affairs (DFA) and Department of Labor and Employment (DOLE) to utilize their income collected/retained by their Foreign Service Posts (FSPs) to cover their operating requirements, but not to exceed the released allotment to the said post; and Fund Release Documents: 04 Disbursement Authority GAM Vol. 1: Chapter 3 - Section 3b the following documents authorize the entity to pay obligations and payables: Notice of Transfer of Allocation [NTA] authority issued by the Central Office to its regional and operating units to cover the latter’s cash requirements. Fund Release Documents: 04 Disbursement Authority GAM Vol. 1: Chapter 3 - Section 3b Notice of Transfer of Allocation [NTA] authority issued by the Central Office to its regional and operating units to cover the latter’s cash requirements. [sample] CLASSIFICATION OF EXPENDITURES GAM Vol. 1: Chapter 3 - Section 4 SEVIAL, KAIRA G. Classification 00 of Expenditures GAM Vol. 1: Chapter 3 - Section 4 Expenditures of NGAs shall be classified into categories as may be determined by the DBM including, but not limited to the following: a. Entity incurring the obligation; b. Program, Activity and Project (PAP); c. Object of expenditures, including personnel services (PS), maintenance and other operating expenditures (MOOE), financial expenses (FE), and capital outlays (CO); d. Region or locality of use; e. Economic or functional classification of the expenditures; f. Obligational authority and cash transactions arising from fund releases; g. Such other classifications as may be necessary for the budget process. MONITORING OF THE BUDGET GAM Vol. 1: Chapter 3 - Section 5 SEVIAL, KAIRA G. Monitoring 00 of the Budget GAM Vol. 1: Chapter 3 - Section 5 The budget shall be monitored by the Budget Division/Units of NGAs through the maintenance of registries for that purpose. REGISTRIES OF REVENUE AND OTHER RECEIPTS [RORR] GAM Vol. 1: Chapter 3 - Section 6 SEVIAL, KAIRA G. Registries of Revenue 00 and Other Receipts GAM Vol. 1: Chapter 3 - Section 6 The Registries of Revenue and Other Receipts (Appendices 7, 7A, 7B, 7C and 7D) shall be maintained by the Budget Division/Unit of NGAs to monitor the revenue and other receipts estimated/budgeted, collected and remitted/deposited. Registries of Revenue 00 and Other Receipts GAM Vol. 1: Chapter 3 - Section 6 PROCEDURES IN MONITORING AND RECOGNIZING REVENUE AND OTHER RECEIPTS GAM Vol. 1: Chapter 3 - Section 7 SEVIAL, KAIRA G. Procedures in Monitoring and 00 Recognizing Revenue and Other Receipts GAM Vol. 1: Chapter 3 - Section 7 a. Recognizing Estimated Revenue/Other Receipts Procedures in Monitoring and 00 Recognizing Revenue and Other Receipts GAM Vol. 1: Chapter 3 - Section 7 b. Recognizing Revenue/Other Receipts Collected and Deposited Procedures in Monitoring and 00 Recognizing Revenue and Other Receipts GAM Vol. 1: Chapter 3 - Section 7 b. Recognizing Revenue/Other Receipts Collected and Deposited REGISTRY OF APPROPRIATIONS AND ALLOTMENTS [RAPAL] GAM Vol. 1: Chapter 3 - Section 8 SEVIAL, KAIRA G. Registry of 00 Appropriations and Allotments GAM Vol. 1: Chapter 3 - Section 8 The Registry of Appropriations and Allotments (RAPAL) (Appendix 8) shall be maintained by NGAs to monitor appropriations and allotments charged thereto. It shall show the original, supplemental and final budget for the year and all allotments received charged against the corresponding appropriation. The balance is extracted every time an entry is made to prevent incurrence of overdraft in appropriations. Separate RAPAL shall be maintained by fund cluster and by Major Final Output (MFO)/PAP/Appropriation Acts. PROCEDURES IN RECORDING APPROPRIATIONS AND ALLOTMENTS GAM Vol. 1: Chapter 3 - Section 9 SEVIAL, KAIRA G. Procedures in Recording 00 Appropriations and Allotments GAM Vol. 1: Chapter 3 - Section 9 The procedures for recording appropriations and allotments are as follows: 00 QUESTION ON THE PRINCIPLE OF REVENUE Does TSU violates the Presidential Decree No. 1445 Sec. 68 if the only receipt that payor received was the confirmation receipt containing a phrase of success payment with reference no.? 00 QUESTION ON THE PRINCIPLE OF REVENUE Does TSU violates the Presidential Decree No. 1445 Sec. 68 if the only receipt that payor received was the confirmation notice containing a phrase of success payment with reference no.? YES 00 QUESTION ON THE PRINCIPLE OF REVENUE COA Circular 2021-014 Sec. 5.2.2 00 QUESTION ON THE PRINCIPLE OF REVENUE COA Circular 2021-014 Sec. 5.2.2 REGISTRIES OF ALLOTMENTS, OBLIGATIONS AND DISBURSEMENTS GAM Vol. 1: Chapter 3 - Section 10 BALAOING, AIRA JULIENE R. Registries of Allotments, Obligations and Disbursements GAM Vol. 1: Chapter 3 - Section 10 The Registries of Allotments, Obligations and Disbursements (RAOD) shall be maintained by the Budget Division/Unit of agencies to record allotments, obligations and disbursements. It shall show the allotments received for the year, obligations incurred against the corresponding allotment and the actual disbursements made. Registries of Allotments, Obligations and Disbursements GAM Vol. 1: Chapter 3 - Section 10 The RAODs shall be maintained by appropriation act, fund cluster, MFO/PAP, and allotment class. a. Registry of Allotments, Obligations and Disbursements-Personnel Services (RAOD-PS) Registries of Allotments, Obligations and Disbursements GAM Vol. 1: Chapter 3 - Section 10 b. Registry of Allotments, Obligations and Disbursements-Maintenance and Other Operating Expenses (RAOD-MOOE) Registries of Allotments, Obligations and Disbursements GAM Vol. 1: Chapter 3 - Section 10 c. Registry of Allotments, Obligations and Disbursements-Financial Expenses (RAOD-FE) Registries of Allotments, Obligations and Disbursements GAM Vol. 1: Chapter 3 - Section 10 d. Registry of Allotments, Obligations and Disbursements-Capital Outlays (RAOD-CO) OBLIGATION REQUEST AND STATUS GAM Vol. 1: Chapter 3 - Section 11 BALAOING, AIRA JULIENE R. Obligation Request and Status GAM Vol. 1: Chapter 3 - Section 11 The incurrence of obligations shall be made through the issuance of Obligation Request and Status (ORS). Prepared by the Requesting/Originating Office supported by valid claim documents like DVs, payrolls, purchase/job orders, itinerary of travel, etc. The Head of the Requesting/Originating Office or his/her authorized representative shall certify as to the necessity and legality of charges to the budget under his/her supervision, and validity The Head of the Budget Division/Unit shall certify to the availability of allotment Obligation Request and Status GAM Vol. 1: Chapter 3 - Section 11 Section B Section A Certified by the Head of Certified by the Head of Budget Division/ Unit Requesting/ Originating Office SUBSIDIARY RECORD FOR OBLIGATION GAM Vol. 1: Chapter 3 - Section 12 BALAOING, AIRA JULIENE R. Subsidiary Record for Obligation GAM Vol. 1: Chapter 3 - Section 12 A subsidiary record to monitor a particular obligation shall be maintained by the Budget Division/Unit in Section C of the ORS. It shall contain the original amount of obligation, payable (goods delivered and services rendered) and the actual amount paid. ADJUSTMENT OF OBLIGATION GAM Vol. 1: Chapter 3 - Section 13 BALAOING, AIRA JULIENE R. Adjustment of Obligation GAM Vol. 1: Chapter 3 - Section 13 Adjustment of obligation incurred after the processing of the claim by the Accounting Division/Unit shall be made through the use of Notice of Obligation Request and Status Adjustment (NORSA) (Appendix 12). The adjustment shall be effected through a positive entry (if additional obligation is necessary) or a negative entry (if reduction is necessary) in the ‘Obligation’ column of the ORS and RAOD. NOTICE OF OBLIGATION REQUEST AND STATUS ADJUSTMENT GAM Vol. 1: Chapter 3 - Section 14 BALAOING, AIRA JULIENE R. Notice of Obligation Request and Status GAM Vol. 1: Chapter 3 - Section 14 Adjustment. The NORSA shall be prepared by the Accounting Division/Unit after the processing of the claim which shall be used in adjusting the original amount obligated to the actual obligations incurred in the RAOD. It shall be forwarded by the Accounting Division/Unit to the Budget Division/Unit to take up the adjustments of obligation in the RAOD. Notice of Obligation Request and Status GAM Vol. 1: Chapter 3 - Section 14 Adjustment. Notice of Obligation Request and Status GAM Vol. 1: Chapter 3 - Section 14 Adjustment. The following transactions shall also need adjustments of obligations: Transactions Supporting Documents Refund of cash advance granted during Certified copies of official receipts and the year other SDs Over/Underpayment of expenditures Certified copies of official receipts and during the year bills and other SDs Disallowances pertaining to expenses Certified copies of official receipts and incurred during the validity period of the bills, notice that the disallowances are budget that became final and executory final and executory, and other SDs during the same period PROCEDURES IN RECORDING OBLIGATION GAM Vol. 1: Chapter 3 - Section 15 BALAOING, AIRA JULIENE R. Procedures in Recording Obligation GAM Vol. 1: Chapter 3 - Section 15 Obligation shall be recorded in the appropriate RAOD through ORS with the following procedures: Area of Activity Responsibility Budget Receives the ORS, duly signed by the Head of the Requesting Office, Division/ Unit including copies of DV/Payroll, Contract/Purchase Order (PO) and other SDs from office/personnel concerned. Verifies completeness of the documents. If complete, records the same in the logbook maintained for Staff the purpose and forwards the documents to the Budget Staff for Concerned processing. If incomplete, returns the documents to the Requesting Office for completion. Receives the ORS and its SDs from the Staff concerned. Verifies Budget Staff availability of allotment based on the appropriate RAOD. If allotment is not available, returns the documents to the office/personnel concerned. Procedures in Recording Obligation GAM Vol. 1: Chapter 3 - Section 15 Obligation shall be recorded in the appropriate RAOD through ORS with the following procedures: Area of Responsibility Activity If allotment is available, assigns number on the ORS based on the Control Logbook maintained for the purpose. Records the amount obligated based Budget Staff on the ORS in the ‘Obligation’ column of the RAOD. Initials in Section B of the ORS and forward all copies of the documents to the Head of the Budget Division/Unit for signature. Head of Budget Reviews the ORS and SDs. If in order, signs the certification in Section B of Division/Unit the ORS. Forwards the ORS and SDs to the Budget Staff. Forwards the ORS and SDs to the Accounting Division/Unit for processing Budget Staff of the claim. Retains original copy of the ORS for maintenance/monitoring of obligation status. RECORDING OF DISBURSEMENT IN THE RAOD GAM Vol. 1: Chapter 3 - Section 16 QUIAMBAO, KRISTINE CATE C. Recording of Disbursement in the RAOD GAM Vol. 1: Chapter 3 - Section 16 The disbursements shall be posted under the ‘Payment’ column of Section C of the ORS based on the Reports of Checks Issued (RCI)/Report of ADA Issued (RADAI)/TRA and JEV and recorded in the appropriate RAOD by the Budget Division/Unit. PROCEDURES FOR THE RECORDING OF DISBURSEMENTS AND ADJUSTMENT OF OBLIGATION GAM Vol. 1: Chapter 3 - Section 17 QUIAMBAO, KRISTINE CATE C. Procedures for the Recording of Disbursements and Adjustment of Obligation GAM Vol. 1: Chapter 3 - Section 17 STAFF CONCERNED BUDGET STAFF Receives copies of RCI, RADAI, TRA, JEV and NORSA from the Accounting Division/Unit Records in the Logbook Procedures for the Recording of Disbursements and Adjustment of Obligation GAM Vol. 1: Chapter 3 - Section 17 BUDGET STAFF Recording of Disbursements Posts the RCI/RADAI/TRA/JEV and In Section C of the ORS, pertinent Check/ADA/TRA numbers in determines the balance of Section C, ‘Payment’ column of the ORS unpaid obligations by and ‘Disbursements’ column of the subtracting the amount of RAOD disbursements from obligations Procedures for the Recording of Disbursements and Adjustment of Obligation GAM Vol. 1: Chapter 3 - Section 17 BUDGET STAFF Adjustment of Obligation Original Obligation < Actual Obligation= Posts the NORSA in the ‘Obligation’ positive entry column of Section C of the ORS. Original Obligation > Actual Obligation= negative entry *shall be recorded in RAOD* REGISTRIES OF BUDGET, UTILIZATION AND DISBURSEMENTS (RBUD) GAM Vol. 1: Chapter 3 - Section 18 QUIAMBAO, KRISTINE CATE C. Registries of Budget, Utilization and Disbursements (RBUD) GAM Vol. 1: Chapter 3 - Section 18 The RBUD shall be used to record the approved special budget and the corresponding utilizations and disbursements charged to retained income. The following separate RBUDs are maintained for each object of expenditure: RBUD-Personnel Services (Appendix 10A) RBUD-Maintenance and Other Operating Expenses (Appendix 10B) RBUD-Financial Expenses (Appendix 10C) RBUD-Capital Outlays (Appendix 10D) Adjustment of Budget Utilization GAM Vol. 1: Chapter 3 - Section 21 Appendix 10A BUDGET UTILIZATION REQUEST AND STATUS GAM Vol. 1: Chapter 3 - Section 19 QUIAMBAO, KRISTINE CATE C. Budget Utilization Request and Status GAM Vol. 1: Chapter 3 - Section 19 The incurrence of budget utilization shall be made through the issuance of Budget Utilization Request and Status (BURS) (Appendix 14). The BURS shall be prepared by the Requesting/Originating Office supported by valid claim documents like DV, payroll, purchase/job order, itinerary of travel, etc. The Head of Requesting/Originating Office or his/her authorized representative shall certify in Section A of the BURS. The Head of Budget Division/Unit shall sign in Section B of the BURS. Budget Utilization Request and Status GAM Vol. 1: Chapter 3 - Section 19 Appendix 14 SUBSIDIARY RECORD FOR BUDGET UTILIZATION GAM Vol. 1: Chapter 3 - Section 20 QUIAMBAO, KRISTINE CATE C. Subsidiary Record for Budget Utilization GAM Vol. 1: Chapter 3 - Section 20 The Section C of the BURS shall serve as the subsidiary record to monitor budget utilization to be maintained by the Budget Division/Unit. It shall contain the original amount of utilization, payable (goods delivered and services rendered) and the actual amount paid after the processing of the claim. Subsidiary Record for Budget Utilization GAM Vol. 1: Chapter 3 - Section 20 ADJUSTMENT OF BUDGET UTILIZATION GAM Vol. 1: Chapter 3 - Section 21 QUIAMBAO, KRISTINE CATE C. Adjustment of Budget Utilization GAM Vol. 1: Chapter 3 - Section 21 Adjustment of budget utilization shall be made through the use of Notice of Budget Utilization Request and Status Adjustment (NBURSA) (Appendix 15). The adjustment shall be effected thru a positive entry (if additional utilization is necessary) or a negative entry (if reduction is necessary) in the ‘Utilization’ column of the BURS and RBUD. NOTICE OF BUDGET UTILIZATION REQUEST AND STATUS ADJUSTMENT GAM Vol. 1: Chapter 3 - Section 22 QUIAMBAO, KRISTINE CATE C. Notice of Budget Utilization Request and Status Adjustment GAM Vol. 1: Chapter 3 - Section 22 The NBURSA shall be prepared by the Accounting Division/Unit after the processing of the claim which shall be used in adjusting the original amount utilized to the actual utilizations in the RBUD. It shall be forwarded to Budget Division/Unit to take up the adjustments of utilization in the RBUD. Adjustment of Budget Utilization GAM Vol. 1: Chapter 3 - Section 21 NOTICE OF BUDGET UTILIZATION REQUEST AND STATUS ADJUSTMENT Notice of Budget Utilization Request and Status Adjustment GAM Vol. 1: Chapter 3 - Section 22 The following transactions shall also need adjustments of budget utilizations: TRANSACTIONS SUPPORTING DOCUMENTS Refund of cash advance granted Certified copies of official receipts during the year and other SDs Over/Underpayment of expenditures Certified copies of official receipts during the year and bills and other SDs Disallowances pertaining to expenses Certified copies of official receipts incurred during the validity period of and bills, notice that the the budget that became final and disallowances are final and executory during the same period executory, and other SDs RECORDING OF DISBURSEMENT IN THE REGISTRY OF BUDGET UTILIZATION AND DISBURSEMENTS (RBUD). GAM Vol. 1: Chapter 3 - Section 23 MARTELINO, CHRISTIAN L. Recording of Disbursement in the Registry of Budget Utilization and Disbursements (RBUD). GAM Vol. 1: Chapter 3 - Section 23 The disbursement shall be posted in Section C of the Budget Utilization and Request Status (BURS) and recorded in the appropriate Registry of Budget Utilization and Disbursements (RBUD) based on the Reports of Checks Issued (RCI), Report of Advice to Debit Account Issued (RADAI), Tax Remittance Advice (TRA) and Journal Entry Voucher (JEV) furnished by the Cashier/Accounting Units to Budget Division/Unit. PROCEDURES IN MONITORING BUDGET, UTILIZATIONS, AND DISBURSEMENTS CHARGED TO RETAINED INCOME, REVOLVING FUNDS AND TRUST RECEIPTS/CUSTODIAL FUNDS. GAM Vol. 1: Chapter 3 - Section 24 MARTELINO, CHRISTIAN L. Procedures in Monitoring Budget, Utilizations, and Disbursements charged to Retained Income, Revolving Funds and Trust Receipts/Custodial Funds. GAM Vol. 1: Chapter 3 - Section 24 Area of Seq. No. Activity Responsibility Posting of Approved Budget Receives the approved budget (AB) from the Budget concerned entity official. Records the Division/Unit 1 same in the logbook and forwards the Receiving/Rele AB to the Staff Concerned for recording asing Staff in the appropriate Registry of Budget Utilization and Disbursements (RBUD.) Procedures in Monitoring Budget, Utilizations, and Disbursements charged to Retained Income, Revolving Funds and Trust Receipts/Custodial Funds. GAM Vol. 1: Chapter 3 - Section 24 Area of Seq. No. Activity Responsibility Records the AB in the ‘Budgeted Amount’ Staff column of the RBUD and forwards copies 2 Concerned of the budget documents to the Accounting Division/Unit for reference. Procedures in Monitoring Budget, Utilizations, and Disbursements charged to Retained Income, Revolving Funds and Trust Receipts/Custodial Funds. GAM Vol. 1: Chapter 3 - Section 24 Area of Seq. No. Activity Responsibility Posting of Utilization Receives the Budget Utilization and Request Status (BURS), duly signed by the head of the Requesting Office including copies of Disbursement Voucher (DV)/Payroll, Contract/Purchase Orders (PO) and other Supporting Documents (SDs) from concerned Receiving/Releasing office/personnel. Verifies completeness of the 3 Staff documents. If complete, records the same in the logbook maintained for the purpose and forwards the documents to Staff Concerned for recording of utilizations in the appropriate RBUD. If incomplete, returns the documents to Requesting Office for completion. Procedures in Monitoring Budget, Utilizations, and Disbursements charged to Retained Income, Revolving Funds and Trust Receipts/Custodial Funds. GAM Vol. 1: Chapter 3 - Section 24 Area of Seq. No. Activity Responsibility Receives the Budget Utilization and Request Status (BURS) and its Supporting Documents (SDs) from Staff 4 Receiving/Releasing Staff. Verifies Concerned availability of budget based on the appropriate Registry of Budget Utilization and Disbursements (RBUD). Procedures in Monitoring Budget, Utilizations, and Disbursements charged to Retained Income, Revolving Funds and Trust Receipts/Custodial Funds. GAM Vol. 1: Chapter 3 - Section 24 Area of Seq. No. Activity Responsibility If budget is available, assigns number on the Budget Utilization and Request Status (BURS) based on the Control Logbook maintained for the purpose. Records the amount utilized based on the BURS in the ‘Utilization’ column of the Registry of Budget Staff Concerned 5 Utilization and Disbursements (RBUD). Initials in Section B of the Budget Utilization and Request Status (BURS) and forward all copies of the documents to the Head of the Budget Division/Unit for signature. If budget is not available, returns the documents to the office/personnel concerned. Procedures in Monitoring Budget, Utilizations, and Disbursements charged to Retained Income, Revolving Funds and Trust Receipts/Custodial Funds. GAM Vol. 1: Chapter 3 - Section 24 Area of Seq. No. Activity Responsibility Reviews the Budget Utilization and Request Status (BURS) and Supporting Head of Budget 6 Documents (SDs). Signs the certification Division/Unit in Section B of the BURS. Forwards to the Staff Concerned the BURS and SDs. Procedures in Monitoring Budget, Utilizations, and Disbursements charged to Retained Income, Revolving Funds and Trust Receipts/Custodial Funds. GAM Vol. 1: Chapter 3 - Section 24 Area of Seq. No. Activity Responsibility Records in the logbook the release of the Budget Utilization and Request Status (BURS) and Supporting Documents (SDs)to the Accounting Division/Unit for Staff Concerned 7 processing of the claim. Retains original copy of the BURS for maintenance/monitoring of utilization status. Note – For the succeeding activities, refer to Chapter 6- Disbursements. Procedures in Monitoring Budget, Utilizations, and Disbursements charged to Retained Income, Revolving Funds and Trust Receipts/Custodial Funds. GAM Vol. 1: Chapter 3 - Section 24 Area of Seq. No. Activity Responsibility Posting of Disbursement Records in the logbook the receipt of the Reports of Checks Issued (RCI) and Report of Advice to Debit Account Issued (RADAI) from the Cash Receiving/Relea Unit, and Tax Remittance Advice (TRA), 8 sing Staff Journal Entry Voucher (JEV) and Notice of Budget Utilization Request and Status Adjustment (NBURSA) from the Accounting Division/Unit. Forwards the same to Staff Concerned. Procedures in Monitoring Budget, Utilizations, and Disbursements charged to Retained Income, Revolving Funds and Trust Receipts/Custodial Funds. GAM Vol. 1: Chapter 3 - Section 24 Area of Seq. No. Activity Responsibility Posts the Reports of Checks Issued (RCI)/Report of Advice to Debit Account Issued (RADAI)/Tax Remittance Advice (TRA)/Journal Entry Voucher (JEV) in Staff 9 Section C, Payment column of the Budget Concerned Utilization and Request Status (BURS) and to the Disbursement column of the Registry of Budget Utilization and Disbursements (RBUD). Procedures in Monitoring Budget, Utilizations, and Disbursements charged to Retained Income, Revolving Funds and Trust Receipts/Custodial Funds. GAM Vol. 1: Chapter 3 - Section 24 Area of Seq. No. Activity Responsibility In Section C of the Budget Utilization and Request Status (BURS), determines the balance of unpaid utilizations. Files the Staff Reports of Checks Issued (RCI), Report of 10 Concerned Advice to Debit Account Issued (RADAI), Tax Remittance Advice (TRA), Journal Entry Voucher (JEV) and other documents for reference. Procedures in Monitoring Budget, Utilizations, and Disbursements charged to Retained Income, Revolving Funds and Trust Receipts/Custodial Funds. GAM Vol. 1: Chapter 3 - Section 24 Area of Seq. No. Activity Responsibility Adjustment of UtilizationPosts the Notice of Budget Utilization Request and Status Adjustment (NBURSA) in the ‘Utilization’ column of Section C of the Budget Utilization and Request Status (BURS). For any excess of the actual budget utilization over the original amount, a positive entry Staff Concerned 11 corresponding to additional utilization shall be recorded in the Registry of Budget Utilization and Disbursements (RBUD) based on the NBURSA. If the original utilization is greater, a negative entry representing the excess shall be recorded in the RBUD. PRESENTATION OF BUDGET INFORMATION IN THE FINANCIAL STATEMENTS ON A COMPARABLE BASIS. GAM Vol. 1: Chapter 3 - Section 25 MARTELINO, CHRISTIAN L. Presentation of Budget Information in the Financial Statements on a Comparable Basis. GAM Vol. 1: Chapter 3 - Section 25 An entity shall prepare a comparison of the budget and actual amounts spent as a separate statement since the budget and the financial statements are not prepared on a comparable basis in accordance with Philippine Public Sector Accounting Standards (Par. 23, PPSAS 24). STATEMENT OF COMPARISON OF BUDGET AND ACTUAL AMOUNTS. GAM Vol. 1: Chapter 3 - Section 26 MARTELINO, CHRISTIAN L. Statement of Comparison of Budget and Actual Amounts. GAM Vol. 1: Chapter 3 - Section 26 This shall be prepared based on the various registries maintained by the Budget Division/Unit such as the RRORs, RAPAL, RAOD/RBUD and other SDs. The data on Actual Amounts shall be verified by the Accounting Division/Unit in the Statement of Cash Flows (SCF). Statement of Comparison of Budget and Actual Amounts. GAM Vol. 1: Chapter 3 - Section 26 The statement shall present the following: The original (approved appropriations, prior year’s not yet due and demandable obligations) and final budget (continuing appropriations, transfers, realignments and withdrawals) amounts; The actual amounts on a comparable basis; and By way of note disclosure, an explanation of the material differences between the budget and actual amounts, which are not included in the financial statements. Statement of Comparison of Budget and Actual Amounts. GAM Vol. 1: Chapter 3 - Section 26 CHANGES FROM ORIGINAL TO FINAL BUDGET. GAM Vol. 1: Chapter 3 - Section 27 MARTELINO, CHRISTIAN L. Changes from Original to Final Budget. GAM Vol. 1: Chapter 3 - Section 27 An entity shall present an explanation of whether the changes between the original and final budget are a consequence of reallocations within the budget by way of note disclosure in the FSs. RECONCILIATION OF ACTUAL AMOUNTS ON A COMPARABLE BASIS (BUDGET) AND ACTUAL AMOUNTS IN THE FINANCIAL STATEMENTS. GAM Vol. 1: Chapter 3 - Section 28 MARTELINO, CHRISTIAN L. Reconciliation of Actual Amounts on a Comparable Basis (Budget) and Actual Amounts in the Financial Statements. GAM Vol. 1: Chapter 3 - Section 28 The actual amounts presented on a comparable basis to the budget shall be reconciled with the actual amounts presented in the FSs identifying separately the differences classified as follows: Basis Differences, which occur when the approved budget is prepared on a basis other than the accounting basis; Timing Differences, which occur when the budget period differs from the reporting period reflected in the FSs; and Entity Differences, which occur when the budget omits program or entities that are part of the entity for which the FSs are prepared. The reconciliation shall be disclosed as part of the Notes to the FSs. DISCLOSURES OF BUDGETARY BASIS, PERIOD AND SCOPE GAM Vol. 1: Chapter 3 - Section 29 VILLAFAÑA, ALEXANDRA NICOLE A. DISCLOSURES OF BUDGETARY BASIS, PERIOD AND SCOPE GAM Vol. 1: Chapter 3 - Section 29 An entity shall explain in the notes to the FSs the budgetary basis (cash or accrual, or some modification thereof) used in the preparation and presentation of the budget and the accounting basis used in the financial statements. The period and the entities included in the approved budget shall also be identified in the notes to financial statements. PROCEDURES FOR THE PREPARATION OF THE STATEMENT OF COMPARISON OF BUDGET AND ACTUAL AMOUNTS GAM Vol. 1: Chapter 3 - Section 30 VILLAFAÑA, ALEXANDRA NICOLE A. PROCEDURES FOR THE PREPARATION OF THE STATEMENT OF COMPARISON OF BUDGET AND ACTUAL AMOUNTS GAM Vol. 1: Chapter 3 - Section 30 AREA OF SEQ. ACTIVITY RESPONSIBILITY NO. Based on the RRORs, RAPAL, RAODs/RBUDs and SDs, obtain the data on budgeted and actual revenue, appropriations, allotments, obligations/utilizations and disbursements and post these in the appropriate column of the SCBAA. Note 1 – The number in the ‘Notes’ column shall correspond to those shown in the Notes to FS prepared by the agency. Budget Note 2 – The Receipts portion of the statement shall contain the various revenue and other receipts of the agency showing the following: Division/Unit Staff 1 Concerned a. Budgeted Amount: Original – the approved estimated revenue of the entity per major account based on the RROR maintained by the agency Final – the approved estimated revenue of the entity after effecting the adjustments as reflected in the RROR. In cases where the estimated revenue was not reflected on the approved budget, the actual collections shall be considered as the estimated revenue (final). The same shall be disclosed in the notes to the FSs. PROCEDURES FOR THE PREPARATION OF THE STATEMENT OF COMPARISON OF BUDGET AND ACTUAL AMOUNTS GAM Vol. 1: Chapter 3 - Section 30 AREA OF SEQ. ACTIVITY RESPONSIBILITY NO. b. Actual Amounts on Comparable Basis – refer to collections received from revenue transaction based on the RCD, CRReg (for OU without complete set of books) and CM/Abstract of Deposit as posted in the RROR. The NCA received for funding requirements of the agency shall not be considered as receipts for the purpose of this statement. Note 3 – The Payments portion of the SCBAA shall contain the expenditures of the agency classified into PS, MOOE, CO, FE and Other Disbursements showing the following: Budget Division/Unit Staff 1 a. Budgeted Amount: Concerned Original – the approved appropriations of the agency as reflected in the GAA and other appropriations law. Final – the approved appropriations of the agency after effecting the adjustments (transfers, realignments and withdrawals) as reflected in the RAPAL. b. Actual Amounts on Comparable Basis – refer to actual payments/disbursements posted in the RAOD based on the RCI, RADAI, TRA and JEV for disbursements not recorded in the RCI and RADAI. For Operating Units without complete set of books, the source documents are the CBReg, CDReg and the JEV. PROCEDURES FOR THE PREPARATION OF THE STATEMENT OF COMPARISON OF BUDGET AND ACTUAL AMOUNTS GAM Vol. 1: Chapter 3 - Section 30 AREA OF SEQ. ACTIVITY RESPONSIBILITY NO. Note 4 – This statement shall be prepared by fund cluster based on the Budget UACS. Division/Unit Staff 1 Concerned Note 5 – In addition to Note 4, a consolidated/combined statement of all fund clusters shall be prepared. PROCEDURES FOR THE PREPARATION OF THE STATEMENT OF COMPARISON OF BUDGET AND ACTUAL AMOUNTS GAM Vol. 1: Chapter 3 - Section 30 AREA OF SEQ. ACTIVITY RESPONSIBILITY NO. Prepares the SCBAA in two (2) copies and forwards to the Accounting Division/Unit for verification of the actual amounts with the accounting records and the SCF. Budget Staff 2 Note 6 – The difference between the Final Budget and the Actual Amounts in the SCBAA shall be reconciled with the balances of unreleased appropriations/budget, unobligated allotments/ unutilized budget, and unpaid obligations/ utilizations reflected in the SAAODB/SABUDB. PROCEDURES FOR THE PREPARATION OF THE STATEMENT OF COMPARISON OF BUDGET AND ACTUAL AMOUNTS GAM Vol. 1: Chapter 3 - Section 30 AREA OF SEQ. ACTIVITY RESPONSIBILITY NO. Head of Budget Division/Unit/ 3 Signs the “Certified Correct” portion of the SCBAA. Budget Officer PROCEDURES FOR THE PREPARATION OF THE STATEMENT OF COMPARISON OF BUDGET AND ACTUAL AMOUNTS GAM Vol. 1: Chapter 3 - Section 30 AREA OF SEQ. ACTIVITY RESPONSIBILITY NO. Receives the 2 copies of the SCBAA from the Budget Division/Unit and retrieves the copy of the SCF. Verifies the Accounting receipts and payments on the Actual Amount columns of the Division/Unit Accounting Staff 4 SCBAA with the inflows and outflows in the SCF. Coordinate Concerned with the Budget Division/Unit discrepancy discovered, if any. Once verified, forwards the 2 copies of the SCBBA and SCF to the Head of Accounting Unit/Chief Accountant PROCEDURES FOR THE PREPARATION OF THE STATEMENT OF COMPARISON OF BUDGET AND ACTUAL AMOUNTS GAM Vol. 1: Chapter 3 - Section 30 AREA OF SEQ. ACTIVITY RESPONSIBILITY NO. Head of Accounting Division/Unit/Chief 5 Signs the Certified Correct portion of the SCBAA. Accountant PROCEDURES FOR THE PREPARATION OF THE STATEMENT OF COMPARISON OF BUDGET AND ACTUAL AMOUNTS GAM Vol. 1: Chapter 3 - Section 30 AREA OF SEQ. ACTIVITY RESPONSIBILITY NO. Submits the signed SCBAA to the Audit Team Leader, Concerned Accounting Staff 6 together with other FSs. Furnish one signed copy of the SCBAA to Budget Division/Unit for file. PREPARATION OF THE BUDGET REPORTS GAM Vol. 1: Chapter 3 - Section 31 VILLAFAÑA, ALEXANDRA NICOLE A. PREPARATION OF THE BUDGET REPORTS. GAM Vol. 1: Chapter 3 - Section 31 The following budget reports/documents as required by DBM and COA shall be submitted: a. Quarterly Physical Report of Operation (QPRO) – Budget Accountability Report (BAR) No. 1 (Appendix 16). This report shall reflect the Department’s/Agency’s actual physical accomplishments as at a given quarter, in terms of the performance measures indicated in its Physical Plan. b. Statement of Appropriations, Allotments, Obligations, Disbursements and Balances – Financial Accountability Report (FAR) No. 1 (SAAODB) (Appendix 17). This report shall reflect the authorized appropriations and adjustments, total allotments received including transfers, total obligations, total disbursements and the balances of unreleased appropriations, unobligated allotments, and unpaid obligations of a department/office/entity by source and by allotment class. It shall be presented by: 1. Fund Authorization; 2. Major Final Output; 3. Program/Activity/Project; and 4. Major Programs/Projects - identified by Key Result area (KRA) PREPARATION OF THE BUDGET REPORTS. GAM Vol. 1: Chapter 3 - Section 31 The following budget reports/documents as required by DBM and COA shall be submitted: c. Summary of Appropriations, Allotments, Obligations, Disbursements and Balances by Object of Expenditures This report shall be prepared by Funding Source Code (FSC) as clustered and shall reflect the summary of appropriations, allotments, obligations, disbursements and balances detailed by object of expenditures consistent with the COA Revised Chart of Accounts per COA Circular No. 2013-002 dated January 30, 2013 and the Adoption of the PPSAS per COA Resolution No. 2014- 003 dated January 24, 2014. d. List of Allotments and Sub-Allotments This report shall reflect the allotments released by the DBM and the sub-allotments issued by the Entity Central Office/RO, their corresponding numbers, date of issuance, and amounts by allotment class and FSC. The total allotments per this report should be equal to the total allotments appearing in the SAAODB (FAR No. 1). PREPARATION OF THE BUDGET REPORTS. GAM Vol. 1: Chapter 3 - Section 31 The following budget reports/documents as required by DBM and COA shall be submitted: e. List of Allotments and Sub-Allotments This report shall reflect the approved budget, the utilizations, disbursements and balance of the entity’s income authorized by law to use, such as OWWA/SUCs, duly approved by their Board of Trustee/Regents and shall be prepared by FSC as clustered. f. Summary of Approved Budget, Utilizations, Disbursements and Balances by Object of Expenditures This report shall reflect the details of the approved budget, utilizations, disbursements and balance of the entity’s income authorized by law to use presented by object of expenditures consistent with the COA Revised Chart of Accounts and shall be prepared by Funding Source Code as clustered. PREPARATION OF THE BUDGET REPORTS. GAM Vol. 1: Chapter 3 - Section 31 The following budget reports/documents as required by DBM and COA shall be submitted: g. Aging of Due and Demandable Obligations This report shall be prepared by FSC as clustered and shall reflect the balance of unpaid obligations as indicated in the Obligation Request (ObR) and the ADDOs as at yearend. PREPARATION OF THE BUDGET REPORTS. GAM Vol. 1: Chapter 3 - Section 31 The following budget reports/documents as required by DBM and COA shall be submitted: h. Monthly Report of Disbursements The report shall reflect the total disbursements made by department, office or entity and operating unit from the following disbursement authorities: 1. Notice of Cash Allocation; 2. NCA for Working Fund issued to BTr as an advance funding from loan/grant proceeds in favor of an entity; 3. Tax Remittance Advice issued; 4. CDC issued by departments with foreign-based agencies or units; 5. Non-Cash Availment Authority; and 6. Others, e.g. Customs, Duties and Taxes (CDT), BTr Documentary Stamps. i. Quarterly Report of Revenue and Other Receipts This report shall reflect the actual revenue and other receipts/collections from all sources remitted with the BTr and deposited in other AGDB for the current year presented by quarter, and by specific sources consistent with the COA Revised Chart of Accounts. SUBMISSION OF BUDGET AND FINANCIAL ACCOUNTABILITY REPORTS GAM Vol. 1: Chapter 3 - Section 32 VILLAFAÑA, ALEXANDRA NICOLE A. SUBMISSION OF BUDGET AND FINANCIAL ACCOUNTABILITY REPORTS. GAM Vol. 1: Chapter 3 - Section 32 All departments/agencies shall observe the following timelines in submitting the required FARs to COA-GAS and DBM: a. Within thirty (30) days after the end of each quarter: 1. SAAODB – FAR No. 1 2. SAAODBOE – FAR No. 1.A 3. List of Allotments/Sub-Allotments - FAR No. 1.B 4. SABUDB – FAR No. 2 5. SABUDBOE – FAR No. 2.A 6. QRROR – FAR No. 5 b. On or before 30th day following the end of the year – ADDO – FAR No. 3 c. On or before 30th day of the following month covered – MRD – FAR No. 4 d. On or before February 14 of the following calendar year – Consolidated Statement of Allotments, Obligations, and Balances per Summary of Appropriations under FCR under GAA, GARO, and SARO. CHAPTER 4: RESPONSIBILITY ACCOUNTING GAM Vol. 1: Chapter 19 OBJECTIVES OF RESPONSIBILITY ACCOUNTING GAM Vol. 1: Chapter 4 - Section 3 GONZALES, ANDREA D. OBJECTIVES OF RESPONSIBILITY ACCOUNTING GAM Vol. 1: Chapter 4 - Section 3 a) ensure that all costs and revenues are properly charged/credited to the correct responsibility center so that deviations from the budget can be readily attributed to managers accountable therefor; b) provide a basis for making decisions for future operations; and c) facilitate review activities, monitoring the performance of each responsibility center and evaluation of the effectiveness of agency’s operations. CONCEPTS OF RESPONSIBILITY ACCOUNTING GAM Vol. 1: Chapter 4 - Section 4 GONZALES, ANDREA D. CONCEPTS OF RESPONSIBILITY ACCOUNTING GAM Vol. 1: Chapter 4 - Section 4 a. Responsibility accounting involves accumulating and reporting data on revenues and costs on the basis of the manager’s action who has authority to make the day-to- day decisions about the items; b. Evaluation of a manager’s performance is based on the matters directly under his control; CONCEPTS OF RESPONSIBILITY ACCOUNTING GAM Vol. 1: Chapter 4 - Section 4 c. Responsibility accounting can be used at every level of management in which the following conditions exist: 1. Cost and revenues can be directly associated with the specific level of management responsibility; 2. Costs and revenues are controllable at the level of responsibility with which they are associated; and 3. Budget data can be developed for evaluating the manager’s effectiveness in controlling the costs and revenues. CONCEPTS OF RESPONSIBILITY ACCOUNTING GAM Vol. 1: Chapter 4 - Section 4 d. The reporting of costs and revenues under responsibility accounting differs from budgeting in two respects: 1. A distinction is made between controllable and non- controllable costs. 2. Performance reports either emphasize or include only items controllable by individual manager. CONCEPTS OF RESPONSIBILITY ACCOUNTING GAM Vol. 1: Chapter 4 - Section 4 1. i. A cost is considered controllable at a given level of managerial responsibility if the manager has the power to incur it within a given period of time. It follows that (1) all costs are controllable by top management because of the broad range of its activity; and (2) fewer costs are controllable as one move down to lower level of managerial responsibility because of the manager’s decreasing authority. 2. ii. Non-controllable costs are costs incurred indirectly and allocated to a responsibility level. CONCEPTS OF RESPONSIBILITY ACCOUNTING GAM Vol. 1: Chapter 4 - Section 4 e. A responsibility reporting system involves the preparation of a report for each level of responsibility. Responsibility reports usually compare actual costs with flexible budget data. The reports show only controllable costs and no distinction is made between variable and fixed costs. f. Evaluation of a manager’s performance for cost centers is based on his ability to meet budgeted goals for controllable costs. PRESENTATION OF REVENUE IN THE FINANCIAL STATEMENTS GAM Vol. 1: Chapter 4 - Section 5 LUMANLAN, RUSSELL JHAY S. PRESENTATION OF REVENUE IN THE FINANCIAL STATEMENTS GAM Vol. 1: Chapter 4 - Section 5 An agency shall present, in the notes of the SFPer the total revenue, classified by MFO/PAP and by major classification of the nature of income attributed to the major offices/organizational unit of the agency. PRESENTATION OF COSTS IN THE FINANCIAL STATEMENTS GAM Vol. 1: Chapter 4 - Section 6 LUMANLAN, RUSSELL JHAY S. PRESENTATION OF COSTS IN THE FINANCIAL STATEMENTS GAM Vol. 1: Chapter 4 - Section 6 An agency shall present, in the notes of the SFPer, an analysis of expenses using a classification based on the MFO/PAP and by major classification of the nature of income attributed to the major offices/organizational unit of the agency. RESPONSIBILITY CENTER CODE STRUCTURES GAM Vol. 1: Chapter 4 - Section 7 LUMANLAN, RUSSELL JHAY S. RESPONSIBILITY CENTER CODE STRUCTURES GAM Vol. 1: Chapter 4 - Section 7 Each NGA shall be assigned a responsibility center code defined as organization code in the UACS Manual. The organization code and the agency's major offices/departments' code shall consist of 15 digits as follows: CHAPTER 19: FINANCIAL REPORTING GAM Vol. 1: Chapter 19 PURPOSE OF FINANCIAL STATEMENTS GAM Vol. 1: Chapter 19 - Section 3 LUMANLAN, RUSSELL JHAY S. 01 Purpose of Financial Statements GAM Vol. 1: Chapter 19 - Section 3 Financial statements are a structured representation of the financial position and financial performance of an entity. Specifically, the objectives of general purpose financial reporting in the public sector should be to provide information useful for decision making, and to demonstrate the accountability of the entity for the resources entrusted to it, by: 01 Purpose of Financial Statements GAM Vol. 1: Chapter 19 - Section 3 1. providing information about the sources, allocation, and uses of financial resources; 2. providing information about how the entity financed its activities and met its cash requirements; 3. providing information that is useful in evaluating the entity’s ability to finance its activities and to meet its liabilities and commitments; 01 Purpose of Financial Statements GAM Vol. 1: Chapter 19 - Section 3 4. providing information about the financial condition of the entity and changes in it; 5. providing aggregate information useful in evaluating the entity’s performance in terms of service costs, efficiency and accomplishments; 02 Purpose of Financial Statements GAM Vol. 1: Chapter 19 - Section 3 General purpose financial statements can also have a predictive or prospective role. 02 Purpose of Financial Statements GAM Vol. 1: Chapter 19 - Section 3 Financial reporting may also provide users with information: 1. indicating whether resources were obtained and used in accordance with the legally adopted budget; and 2. indicating whether resources were obtained and used in accordance with legal and contractual requirements, including financial limits established by appropriate legislative authorities. 03 Purpose of Financial Statements GAM Vol. 1: Chapter 19 - Section 3 Financial statements provide information about an entity’s: 1. Assets; 5. Expenses; 2. Liabilities; 6. Other changes in net assets/equity; 3. Net assets/equity; 7. Cash flows; and 4. Revenue; 8. Comparison of budget and actual amounts. RESPONSIBILITY FOR FINANCIAL STATEMENTS GAM Vol. 1: Chapter 19 - Section 4 ESTRADA, Arvi P. 01 Responsibility for Financial Statements GAM Vol. 1: Chapter 19 - Section 4 Who is responsible for the fair presentation and reliability of financial statements? 01 Responsibility for Financial Statements GAM Vol. 1: Chapter 19 - Section 4 Who is responsible for the fair presentation and reliability of financial statements? "The management of the reporting firm." 01 Responsibility for Financial Statements GAM Vol. 1: Chapter 19 - Section 4 Who is responsible for the fair presentation and reliability of financial statements? "The management of the reporting firm." (... the head of finance/accounting office, and the head of entity or his authorized representative.) 02 Responsibility for Financial Statements GAM Vol. 1: Chapter 19 - Section 4 Statement of Management Responsibility for Financial Statements (Annex G) -- This shows the entity’s responsibility for the preparation and presentation of the financial statements. -- It shall serve as the covering letter in transmitting the entity financial statements to the COA, and other regulatory agencies and other entities. 02 Responsibility for Financial Statements GAM Vol. 1: Chapter 19 - Section 4 How do Statement of Management Responsibility for Financial Statements (Annex G) looks like? 02 Responsibility for Financial Statements GAM Vol. 1: Chapter 19 - Section 4 COMPONENTS OF FINANCIAL STATEMENTS GAM Vol. 1: Chapter 19 - Section 5 ESTRADA, Arvi P. 01 Components of Financial Statements GAM Vol. 1: Chapter 19 - Section 5 A complete set of financial statements (condensed and by fund cluster) to be submitted by an entity shall include the following: a. Statement of Financial Position (SFP) (Annex A); b. Statement of Financial Performance (SFPer) (Annex B); c. Statement of Changes in Net Assets/Equity (SCNA/E) (Annex C); d. Statement of Cash Flows (SCF) (Annex D); e. Statement of Comparison of Budget and Actual Amount (SCBAA) (nnex E); and f. Notes (Annex F), comprising a summary of significant accounting p policies and other explanatory notes. (Par. 21, PPSAS 1) 01 Components of Financial Statements GAM Vol. 1: Chapter 19 - Section 5 Section 15: Statement of Financial Position (SFP) (Annex A); Formal statement which shows the financial condition of the entity as at a certain date It shall be presented in comparative, detailed and condensed format 01 Components of Financial Statements GAM Vol. 1: Chapter 19 - Section 5 Section 15: Statement of Financial Position (SFP) (Annex A); Condensed Statement of Financial Position Presents only the major sub-classification of Statement of Financial Position acounts in the Revised Chart of Accounts. Its breakdown and other relevant information shall be disclosed in the Notes to Financial Statements. 01 Components of Financial Statements GAM Vol. 1: Chapter 19 - Section 5 Section 15: Statement of Financial Position (SFP) (Annex A); 01 Components of Financial Statements GAM Vol. 1: Chapter 19 - Section 5 Section 15: Statement of Financial Position (SFP) (Annex A); 01 Components of Financial Statements GAM Vol. 1: Chapter 19 - Section 5 Section 15: Statement of Financial Position (SFP) (Annex A); Detailed Statement of Financial Position Presents all asset, liabilities, and equity accounts in the Revised Chart of Accounts 01 Components of Financial Statements GAM Vol. 1: Chapter 19 - Section 5 Section 15: Statement of Financial Position (SFP) (Annex A); 01 Components of Financial Statements GAM Vol. 1: Chapter 19 - Section 5 Section 15: Statement of Financial Position (SFP) (Annex A); Elements of Statement of Financial Position Assets are resources controlled by an entity as a result of past events, and from which future economic benefits or service are expected to flow to the entity Liabilities are obligations of an entity arising from past events, the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits or service potential 01 Components of Financial Statements GAM Vol. 1: Chapter 19 - Section 5 Section 15: Statement of Financial Position (SFP) (Annex A); Elements of Statement of Financial Position The statement of financial position shall show distinction between current and non-current assets and liabilities. 01 Components of Financial Statements GAM Vol. 1: Chapter 19 - Section 5 Section 15: Statement of Financial Position (SFP) (Annex A); 01 Components of Financial Statements GAM Vol. 1: Chapter 19 - Section 5 Section 15: Statement of Financial Position (SFP) (Annex A); Elements of Statement of Financial Position Net Asset/ Net Equity the residual interest in the assets of an entity after deducting all its liabilities 01 Components of Financial Statements GAM Vol. 1: Chapter 19 - Section 5 Section 18: Statement of Financial Performance (SFPer) (Annex B) Shows the results of operation/performance of the entity at the end of a particular period. It shall be presented in comparative, detailed and condensed format. 01 Components of Financial Statements GAM Vol. 1: Chapter 19 - Section 5 Section 18: Statement of Financial Performance (SFPer) (Annex B) Elements of Statement of Financial Performance Revenue gross inflow of economic benefits or service potential during the reporting period when those inflows result in an increase in net asset/equity 01 Components of Financial Statements GAM Vol. 1: Chapter 19 - Section 5 Section 18: Statement of Financial Performance (SFPer) (Annex B) Elements of Statement of Financial Performance Expenses decreases in economic benefits or service potential during the reporting period in the form of outflows or consumption of assets or incurrence of liabilities that result in decrease in net asset/equity 01 Components of Financial Statements GAM Vol. 1: Chapter 19 - Section 5 Section 18: Statement of Financial Performance (SFPer) (Annex B) Generally, revenue and expenses are recognized in surplus or deficit, except for the following which are recognized directly in equity: Correction of prior period errors; Effect of changes in accounting policies; and Gains or losses on remeasuring available-for- sale financial assets. 01 Components of Financial Statements GAM Vol. 1: Chapter 19 - Section 5 Section 18: Statement of Financial Performance (SFPer) (Annex B) 01 Components of Financial Statements GAM Vol. 1: Chapter 19 - Section 5 Section 20: Statement of Changes in Net Assets/Equity (SCNA/E) (Annex C) It shows the increase or decrease in the entity’s net assets during the period resulting from the following: a. Surplus or deficit for the period; b. Items of revenue and expense that are recognized directly in equity; 01 Components of Financial Statements GAM Vol. 1: Chapter 19 - Section 5 Section 20: Statement of Changes in Net Assets/Equity (SCNA/E) (Annex C) It shows the increase or decrease in the entity’s net assets during the period resulting from the following: c. Effects of changes in accounting policies and corrections of errors; and (Under GAM for NGAs, correction of prior period errors and effects of changes in ccounting policies is recognized directly in equity) d. The balance of accumulated surpluses or deficits at the beginning of the period and at the reporting date, and the changes during the period. 01 Components of Financial Statements GAM Vol. 1: Chapter 19 - Section 5 Section 20: Statement of Changes in Net Assets/Equity (SCNA/E) (Annex C) 01 Components of Financial Statements GAM Vol. 1: Chapter 19 - Section 5 Section 21: Statement of Comparison of Budget and Actual Amount (SCBAA) (Annex E) It presents the original (the approved/continuing appropriations), final budget (appropriations including supplemental appropriations, transfers, realignments, and withdrawals); the actual amounts on comparable basis (actual disbursements made during the period); and an explanation of the material differences between budget and actual. 01 Components of Financial Statements GAM Vol. 1: Chapter 19 - Section 5 Section 21: Statement of Comparison of Budget and Actual Amount (SCBAA) (Annex E) Showing the differences, the entity shall present an explanation regarding the differences of budgeted and actual if it is caused by reallocations within the budget by way of note disclosure in the financial statement. In reconciliation of these, it shall identify separately the differences classified as basis differences, timing differences, and/or entity differences. 01 Components of Financial Statements GAM Vol. 1: Chapter 19 - Section 5 Section 21: Statement of Comparison of Budget and Actual Amount (SCBAA) (Annex E) Statement of Comparison of Budgeted and Actual amounts is prepared separately with the Financial Statement. Business entities are not required to prepare this statement for their external reporting, though they may prepare one for internal reporting. It is peculiar to government to enhance transparency of financial reporting of the government. 01 Components of Financial Statements GAM Vol. 1: Chapter 19 - Section 5 Section 21: Statement of Comparison of Budget and Actual Amount (SCBAA) (Annex E) 01 Components of Financial Statements GAM Vol. 1: Chapter 19 - Section 5 Section 22: Statement of Cash Flows (SCF) (Annex D) It is a statement summarizing all the cash activities of an agency. It shows the sources and utilizations of cash and cash equivalents during the period according to the following activities: 1. Operating activities – are derived from the principal cash- generating activities 2. Investing activities – involve the acquisition and disposal of non-current assets and other investments 3. Financing activities – are activities concerning buildup of equity capital or borrowings of the entity 01 Components of Financial Statements GAM Vol. 1: Chapter 19 - Section 5 Section 22: Statement of Cash Flows (SCF) (Annex D) Cash – comprises cash on hand, cash in bank and cash treasury accounts. Cash Equivalents – are short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. o 3 months rule o Highly liquid investments acquired 3 months before maturity 01 Components of Financial Statements GAM Vol. 1: Chapter 19 - Section 5 Section 22: Statement of Cash Flows (SCF) (Annex D) 01 Components of Financial Statements GAM Vol. 1: Chapter 19 - Section 5 Section 22: Statement of Cash Flows (SCF) (Annex D) 01 Components of Financial Statements GAM Vol. 1: Chapter 19 - Section 5 Section 22: Statement of Cash Flows (SCF) (Annex D) Examples of Financing Activities: 1. Cash proceeds from issuing debentures, loans, notes, bonds, mortgages and other short or long-term borrowings; 2. Cash repayments of amounts borrowed; and 3. Cash payments by a lessee for the reduction of the outstanding liability relating to a finance lease. 01 Components of Financial Statements GAM Vol. 1: Chapter 19 - Section 5 Section 22: Statement of Cash Flows (SCF) (Annex D) Cash flows from Operating, Investing and Financing Activities may be reported on a NET basis for: a) Receipts and payments made on behalf of customers, taxpayers or beneficiaries that reflect the activities of the other party rather than those of the entity; and b) Receipts and payments for items with quick turnover, large amounts, and short maturities 01 Components of Financial Statements GAM Vol. 1: Chapter 19 - Section 5 Section 22: Statement of Cash Flows (SCF) (Annex D) Effects of Foreign Exchange Rates  Cash flows denominated in a foreign currency are translated using the spot exchange rate at the date of the cash flow.  Spot exchange rate – the exchange rate for immediate delivery. 01 Components of Financial Statements GAM Vol. 1: Chapter 19 - Section 5 Section 22: Statement of Cash Flows (SCF) (Annex D) Exchange differences  are NOT cash flows but a reconciliation of the cash and cash equivalents at the beginning and end of the period.  are reported in the statement of cash flows separately from the operating, investing and financing activities. 01 Components of Financial Statements GAM Vol. 1: Chapter 19 - Section 5 Section 22: Statement of Cash Flows (SCF) (Annex D) 01 Components of Financial Statements GAM Vol. 1: Chapter 19 - Section 5 Section 22: Statement of Cash Flows (SCF) (Annex D) 01 Components of Financial Statements GAM Vol. 1: Chapter 19 - Section 5 Section 30: Notes to Financial Statements (Annex F) -- It provides additional information and help clarify the items presented in the financial statements. -- Used to cross-refer any information from FS. -- Notes, as far as practicable, be presented in a systematic manner. 01 Components of Financial Statements GAM Vol. 1: Chapter 19 - Section 5 Section 30: Notes to Financial Statements (Annex F) The notes shall:  -- present information about the basis of preparation of the financial statements and the specific accounting policies used, -- disclose the information required by IPSASs that is not presented on the face of the Statement of Financial Position, Statement of Financial Performance, Statement of Changes in Net/Equity, and Statement of Cashflows; and  -- provide additional information that is not presented on the face of the Statement of Financial Position, Statement of Financial Performance, Statement of Changes in Net Assets/equity, and Statement of Cash Flows, but that is relevant to an understanding of any of them. 01 Components of Financial Statements GAM Vol. 1: Chapter 19 - Section 5 Section 5. Components of Financial Statements For the purpose of preparing the Annual Financial Report, all national government agencies shall submit to the Government Accountancy Sector, COA detailed financial statements and trial balances by fund cluster. 01 Components of Financial Statements GAM Vol. 1: Chapter 19 - Section 5 A complete set of financial statements (condensed and by fund cluster) to be submitted by an entity shall include the following: a. Statement of Financial Position (SFP) (Annex A); b. Statement of Financial Performance (SFPer) (Annex B); c. Statement of Changes in Net Assets/Equity (SCNA/E) (Annex C); d. Statement of Cash Flows (SCF) (Annex D); e. Statement of Comparison of Budget and Actual Amount (SCBAA) (nnex E); and f. Notes (Annex F), comprising a summary of significant accounting p policies and other explanatory notes. (Par. 21, PPSAS 1) QUALITATIVE CHARACTERISTICS OF FINANCIAL REPORTING. GAM Vol. 1: Chapter 19 - Section 6 MARTELINO, CHRISTIAN L. 01 Understandability Information is understandable when users might reasonably be expected to comprehend its meaning. For this purpose, users are assumed to have a reasonable knowledge of the entity’s activities and the environment in which it operates, and to be willing to study t

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