Government Accounting - Defined: Lecture Aid Nature and Scope of NGAS

MODULE 1
Lecture Aid
Nature and Scope of NGAS
Accounting is an effective tool of management in evaluating the performance of the different

agencies of government. The performance of the public managers would depend on the most,
on financial reports generated by the use of accounting systems.
Cognizant of this need, a new accounting system needs to be developed that would help the
different agencies to hit on financial targets, and at the same time be understood by all users
of financial reports.
With this new development, the Commission on Audit (COA), under the new 1987
Constitution, promulgated the New Government Accounting System in the Philippines (NGAs)
for use by all government agencies.
The shift to NGAs was made in response to the following need:
1. Adoption of an accounting system that is in conformity with the International Accounting

Standards.
2. Computerization of the accounting systems to generate reports that will be easy to

understand by the general public.
3. Preparation of regular and routinary financial reports.
4. The use of the generated financial reports as tools of management in decision making.
Government Accounting – Defined

Under Section 109, of the Presidential Decree (PD) no. 1445, defines Government
Accounting as one that encompasses the process of analyzing, classifying, summarizing and
communicating all transactions that are involved in the receipt and disbursement of all
government funds and properties, and interpreting the results thereof. In pursuant to this
definition, objectives were set to cover several areas in government operations.
Objectives of Government Accounting

 To produce relevant financial information about past and present transactions of
government.
 To serve as a basis for decision making for future operations
 To serve as the control mechanism for the receipt, disposition and utilization of
government funds and properties
 To come up with financial reports pertaining to the results of operations of various
government agencies that are for dissemination to the public.
On Accounting Responsibility
This fiscal responsibility emanates from the Constitution and its governing laws, rules and
promulgations. The mandate as prescribed under the said Constitution of the Philippines calls
for the keeping of the general accounts, as well as the promulgation and submission of
financial reports that would cover the operations of government.
The government officers that are mandated to discharge the above-stated Accounting
responsibilities are the Commission on Audit (COA), the Department of Budget and
Management (DBM) and the Bureau of Treasury (BTr) - to discharge the functions of
government in consonance with its commitment to all Filipinos.
Agencies tasked by the Constitution with Accounting

Responsibility
 Commission on Audit (COA) - as mandated by the 1987 Constitution, the COA shall
have the exclusive authority to - do audit and examination, establish audit techniques,
implement accounting rules and regulations, that includes disallowances on the use of
government funds and properties.
 Department of Budget and Management (DBM) – is the department responsible for
the planning and implementation of the National Budget for the sound utilization of
government funds in achieving the national government’s agenda on reform and growth.
The DBM is tasked to monitor all government allotments and appropriations through
maintenance of registries for better control and monitoring.
 Bureau of Treasury (BTs) - the department is the keeper of national funds and
disbursements. It is the lead agency in monitoring transactions affecting the national
government, agencies, and other instrumentalities. It maintains the registry on the
releases by the DBM, as well as the bank transfers between agencies.
 Government Agencies – would include government instrumentalities like bureaus,
Congress, Judiciary, constitutional bodies and self contained institutions, among others,
which are required to have an accounting division, which are of equal level with that of
other agencies that are tasked to do maintenance of accounts and submit financial
statements on a regular basis.
Accounting Method Used
The modified accrual basis of accounting shall be used where expenses are recognized when
incurred and income recognizes on an accrual basis unless other methods are required by
law. The old government system uses both cash and accrual basis.
 Source
Commission on Audit COA Chairperson Maria Gracia M. Pulido Tan

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MODULE 1

Nature and Scope of NGAS

Accounting is an effective tool of management in evaluating the performance of the different

The shift to NGAs was made in response to the following need:

1. Adoption of an accounting system that is in conformity with the International Accounting

2. Computerization of the accounting systems to generate reports that will be easy to

3. Preparation of regular and routinary financial reports.

Government Accounting – Defined

Objectives of Government Accounting

Agencies tasked by the Constitution with Accounting

Accounting Method Used

Commission on Audit COA Chairperson Maria Gracia M. Pulido Tan

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