GOVERNMENT ACCOUNTING

ACCTG 013

Module 1
Organizational Structure
of the Philippine
Government
 PHILIPPINE GOVERNMENT STRUCTURE
(Function)
◼ Executive
❖ Office of the President
❖ Office of the Vice-President
❖ Office of the Cabinet Secretaries

❑ Legislative
❖ Congress
❖ Senate
❑ Judiciary
❖ Supreme Court
❖ Court of Appeals
❖ Regional Trial Courts
❖ Municipal Trial Courts
❖ Metropolitan Trial Courts
❖ Circuit Courts
❖ Court of Tax Appeals
❖ Sandigan Bayan
❖ Ombudsman
❑ Military
❖ PNP
❖ AFP
➢ Air Force
➢ Army
➢ Navy
❑ Local Government Offices
❖ Provincial Government
❖ City Government
❖ Municipal Government

❑ National Offices
❖ Departments
❖ Bureaus
❖ Commissions
❑ Government Owned and Controlled
Corporations
❖ GSIS/SSS
❖ HDMF
❖ Philhealth
❖ LBP/DBP
❖ BCDA
 ECONOMIC ENTITIES RELEVANT TO
THE GOVERNMENT ECONOMIC
PROCESS
Three (3) Types of Governmental
Organizational Units

❑ National Government Agencies(NGA’s)

Agencies that includes all Departments,

Bureaus, Offices, Boards, Commissions,
Councils, State Colleges and Universities
❑ Local Government Units (LGU’s)

- Political subdivisions of the Philippines

having substantial control over the local
affairs, consisting of :

❖ provinces,
❖ cities,
❖ municipalities and
❖ barangays.
❑ Government Owned and Controlled
Corporations. (GOCC’s)

➢ Agencies organized by law or pursuant to

law ,
➢ vested with functions relating to the public
needs whether government or proprietary in
nature,
➢ owned by the government directly or
through its instrumentalities either wholly
or, where applicable as in case of stock
corporation, to the extent of at least 51% of
its Capital stock.
GOVERNMENT ACCOUNTING
ACCTG 013

Module 1
Phil. Government Budgeting
and the
Accounting Process Flow
 Government Budgeting

◼ Allocation of public funds to attain

the economic and social goals of the
country.

◼ Management of government
expenditures to create the most
impact from the production and
delivery of goods and services.
 Philippine Budget Cycle
Major Processes

Budget
Preparation
(DBCC)
Budget Budget
Accountability Legislation
(COA) (Congress &
Senate)

Budget
Execution
(DBM & Bu.
of Treas.)
GOVERNMENT ACCOUNTING
ACCTG 013

Module 1
Government Fund Sources
◼ The Philippine Government will not
be able to function properly, unless it
has funds to work on which is called
a National Budget.
 General Characteristics of
Government Funds
◼ a sum of money or other resources
◼ set aside for the purpose of carrying
out specific activities
◼ in accordance with specific
regulations, restrictions and
limitations
 PURPOSE OF GOVERNMENT FUNDS

◼ To finance the various expenditures of

the government to attain its’ socio-
economic objectives.

❑ To finance the operations of

government offices
 Major Classification of Funds
(as to Purpose)
❑ General Fund
One which is generally available for all
functions of the government

❑ Special Fund
One which is by legislative action,
segregates specified revenues for limited
purposes.
Sources of Funds of the Government

A. Public Revenues

1. Tax Sources
❖ Income Tax
❖ Real Property Tax
❖ Taxes on domestic goods or services
❖ Taxes on International trade trans.
❖ Other tax sources
2. Non-Tax Sources
❖ Fines
❖ Penalties
❖ Collection of the government for Services
rendered
B. Borrowings
❖ Domestic – auction of Treasury Bills, and
Treasury Bonds to the public

❖ Foreign – funds obtained from other

countries

C. Withdrawal from the available Cash

Balance of the Government (Bureau of
Treasury)
GOVERNMENT ACCOUNTING
ACCTG 013

Module 1
Government
Expenditures
 CLASSIFICATION OF
GOVERNMENT EXPENDITURE

A. By Sector (SEDGD)

❖ Social Services expenditure

❖ Economic Services expenditure
❖ Defense Expenditure
❖ General Public Services
❖ Debt Burden
B. By Cost Structure (GaSoOraP)

C. By Expense Class (COE/CO)

D. By Major Recipient of Gov’t. (NLG)

E. By Regional Allocation (VRC)

F. By Type of Appropriation (GSCA)

GOVERNMENT ACCOUNTING
ACCTG 013

Module 1
Constitutional Policies
on the Budget
 Constitutional Provisions & Major Laws
affecting the Budget / Budget Preparation
◼ Constitutional Provisions

a) Sec. 24, Art. VI

all bills shall originate in the House of
Representative, but the Senate may propose or
concur with amendments

b) Sec. 25 (1), Art. VI

the Phil. Congress may not increase the
appropriations recommended by the President
as specified in the Budget.
❑ Sec. 25 (2), Art. VI
- no provisions or enactment shall be
embraced in the GAB unless it relates
specifically to some particular
appropriation therein.
◼ Sec. 25 (4), Art. VI
- special appropriations bills shall specify
the purpose for which it is intended and
supported by funds actually available or to
be raised by a corresponding revenue
proposal
◼ Sec. 25(5) Article VI
-no law shall be passed authorizing the transfer
of appropriations, but the President, Senate
President, Speaker of the House of
Representatives, Chief Justice of the Supreme
Court and Heads of Constitutional Commissions
may augment any item from the GAA for their
respective offices from savings in other items of
respective appropriations
◼ Sec. 25(7) Article VI
- if by the end of the fiscal year and the GAB is
not yet approved for the ensuing fiscal year, the
GAA for the preceding fiscal year will be re-
enacted and remain in-force until the new GAB
is approved.
◼ Sec. 22(4) Article VII
The President shall submit to Congress on the
SONA* the basis for the GAB

➢ Budget of Expenditures and Sources of

Financing (BESF)
➢ National Expenditure Program (NEP)
➢ President’s Budget Message
Major Laws affecting the Budget

◼ Administrative Code of 1987 –entitled

“National Government Budgeting”

◼ Budget Reform Decree of 1977 (PD 1177)

-Revising the Budget process

◼ Other applicable laws

GOVERNMENT ACCOUNTING
ACCTG 013

Module 1
The 3 E’s
in Measuring the Performance
of Government Entities
◼ ECONOMICAL

- Being able to perform functions and tasks

using the least amount of resources within a
specified time frame.
◼ EFFICIENT

- Doing the right things given the

available resources and within the
specified time frames

- Performing above standards as to

quantity, quality and time.
◼ EFFECTIVE

- Doing things right based on the

agencies, mandate and function.

- performing up to standards
GOVERNMENT ACCOUNTING
ACCTG 013

Module 1
Users of
Government Accounting
Information
◼ General Public

◼ Governing Oversight Committee

- President
- Cabinet
- COA
- Legislative bodies
◼ Managers/Administration of Government
Entities

◼ Students of Business

◼ Resource providers of the Government

-Donors
-Grantors
-Lenders/Suppliers
GOVERNMENT ACCOUNTING
ACCTG 013

Module 1
Budgetary Terms
◼ Current Operating Expenditures

refers to appropriations for the purchase of

goods and services for current consumption or
within the fiscal year including the acquisition of
furniture and equipment normally used in the
conduct of government operations.
◼ Capital Outlay or Capital Expenditures

refers to appropriations for the purchase of

goods and services the benefits of which
extend beyond the fiscal year and which add to
the assets of the government including
investments in the Capital of GOCC’s and
subsidiaries.
◼ Expected results

refers to services, products, or benefits that will

accrue to the public, estimated in terms of
performance measures or projects.

❑ Continuing appropriations

refers to appropriations available to support

obligations for a specified purpose or project,
even when these obligations are incurred
beyond the budget year. ( period of 2 years)
◼ Appropriation

refers to authorization under a legislative

enactment for payments to be made with funds
of the government, under specified conditions,
and or specific purposes

❑ Allotments

refers to authorization issued by the DBM to an

agency which allows it to incur obligations
within a specific amount that is within a
legislative appropriation (obligational authority)
◼ Obligations

refers to authorization made by a

legislative body to allocate funds for
purposes specified by the legislative or
similar authority
Note:
◼ Fiscal year
Usually refers to an accounting year that does
not begin in January and ends in December.

PD 777 dated Aug. 24 , 1975

-changing the original fiscal year of July 1 of
each calendar year to June 30 of the following
year to Jan 1 to Dec. 31 of the calendar year.
 END OF MODULE 1
THANK YOU!

Presented By:
Ferlin G. Gatan, CPA,MBA