ACCTG. 322N NAME: Roselaine S. Manalao COURSE AND YEAR: BSA-3 INSTRUCTOR: MS. CHRISTVERLY CACERES SUBJECT: ACCTG. 322n – Accounting for Government and NPO TOPIC: Accounting for Disbursement and Related Transaction DATE: MARCH 10, 2022 SCHEDULE: TTh (1:00-2:30 PM) SEMESTER/AY: 2ND SEM 2021-2022 GENERAL INSTRUCTIONS: Refer to each task and do what is required. All answer must be included in this document, name the files as 2T_AS1. TASK 1. DEFINITION OF TERMS Define the following term, refer your answer to the definition provided in the GAM: A. Accounts Payable – refers to NGAs/OUs’ valid and legal obligations for which goods/services/projects have been delivered/rendered/completed and accepted, regardless of the year in which they were incurred. B. Advice to Debit Account – refers to the lowest section of the List of Due and Demandable Accounts Payable Advice to Debit Account, which contains an NGA/OU permission (LDDAP-ADA). It directs MDSGSBs to deduct a predetermined amount from their available NCA balance under the usual MDS subaccount for payment of creditors/payees under the Expanded Modified Direct Payment Scheme (ExMDPS). C. Agency – is an any national government department, bureau, or office, or any of its branches and instrumentalities, or any political subdivision, as well as any GOCCs, including their subsidiaries, or other government self-governing board or commission D. Authorized Card Holder – refers to a responsible official to whom a Purchase Card is issued for purposes of making official purchases within specific categories enumerated in Annex A of Joint Memorandum No. 2014-01 dated May 15, 2014. E. Billing Entity – refers to the accounting unit of the participating agency in charge of combining the billing statement from the Credit Card Company (CCC) with the billing agency's payment. F. Credit Card Company – refers to the authorized credit card service provider for the Cashless Purchase Card (CPC) System. G. Commercial Check – refers to a government agency's check that is charged to the agency's AGDBs checking account. These expenditures are covered by income/receipts allowed for deposit with AGDBs, as well as financing cheques received by Operating Units from Central/Regional/Division Offices. H. Direct Payment System – refers to the payment mechanism in which the MDS-GSB, upon receipt of NCA and LDDAP-ADA from DBM, pays the CCC via direct credit to the CCC current account within 24 hours but no later than 48 hours. I. Disbursements – refer to the payment of government payables and obligations with cash, check, or ADA. DV/Payroll/Petty Cash Voucher will take care of it (PCV). J. Expanded Modified Direct Payment Scheme- refers to the payment procedures whereby the MDS-GSB shall pay the creditors/payees listed in the LDDAP-ADA not later than 48 hours but not earlier than 24 hours upon receipt of the said document from the NGA/OU K. Implementing Agency – refers to the agency to which the funds are transferred for the purpose of prosecuting/implementing the project L. Inter-Agency Transferred Fund – refers to cash or money sent to an Implementing Agency (IA) by a Source Agency (SA) for the completion of a project for which the allotment was issued. M. Letter of Introduction – refers to a letter from the NGA/OU to its creditors/payees addressed to the MDSGSB for the purpose of opening an account or validating an existing account. N. List of Due and Demandable Accounts Payable-Advice to Debit Account – refers to an auditable form that combines the ADA with the LDDAP, which is a list of creditors/payees to be paid by the NGA/OU, as well as unpaid claims amounts. 1 ACCTG. 322N O. Merchants – refers to those authorized by the CCC to be the sellers/suppliers under the CPC System. P. Modified Disbursement System (MDS) Check – refers to a check issued by government agencies and charged to the Treasurer of the Philippines’ account, which is held in various MDS AGDBs. NCA covers MDS screenings. Q. Modified Disbursement System, Government Servicing Banks – are authorized government servicing banks to which DBM issues NCAs for crediting to NGAs’ MDS sub-accounts. R. Petty Cash Fund – refers to the amount granted to duly designated Petty Cash Fund Custodian for payment of authorized petty or miscellaneous expenses which cannot be conveniently paid through checks/LDDAP-ADA. S. Program Administrator – refers to the designated by the head of the agency who are tasked to implement and administer the Cashless Purchase Card System. T. Project – refers to any project, whether it’s a construction project, a research or training program, a computer engagement, or any other approved activity that an agency will pursue or carry out on behalf of another agency. U. Purchase Limit: 1. 2. 3. Cardholder Monthly Purchase Limit – This is the amount of money a cardholder can spend in a month, as set by the Program Administrator and approved by the Steering Committee. Cardholder Single Purchase Limit – refers to the maximum amount allowed the cardholder for each transaction. Maximum Purchase Card Limit – refers to the maximum amount that the unit/office is authorized to utilize as stated in the Purchase Card application. V. Regular Cash Advance – refers to the funds available to cashiers, disbursing officers, paymasters, and/or other accountable officers to pay expenses such as salaries, wages, commutable allowances, honoraria, and other similar payments to officials and employees. W. Steering Committee – refers to the advisory committee made up of DND and DBM officials that will provide direction on critical areas such as policies and objectives, control, processes, individual card limitations, individuals permitted to use the cards, changes, and large-scale expenditure choices. X. Special Cash Advance – refers to the amount granted on the express authority of the Head of the Agency only to duly designated disbursing officers or employees for other legally authorized purposes, such as payment of current operating expenditures of the agency field office, including salaries, wages and allowances, travel expenditures, and maintenance and other operating expenses, or for special purpose/time-bound undertaking of the agency when payment by check is impractical. Y. Source Agency – refers to the agency to which the allotment has been originally released and, in whose behalf, or benefit the project will be prosecuted/implemented. Z. Tax Remittance Advice – refers to a DBM-prescribed serially-numbered document that should be utilized by NGAs in the remittance of withheld taxes on DBM revenues. The BIR has issued this form to the NGAs to complete. AA. Withdrawal Application – is a written request from the borrower to the development partner to pay funds against to borrower’s loan account. TASK 2. SHORT ESSAY Explain the following concisely, you may use illustration or examples, if necessary. (maximum of 8 sentences) 1. What are NCA, NCAA, and NTA? How is disbursement paid thru these? ANSWER: DBM's power to pay operational expenses, procurement of supplies and materials, acquisition of PPE, accounts payable, and other approved disbursements to offices at the national, regional, and provincial levels, as well as operating units, is granted by the NCA, or Notice of Cash Allocation. This can be performed by using MDS checks, an Authority to Debit Account (ADA), or other distribution methods. 2 ACCTG. 322N For the time period specified, the NCA determines the maximum amount of withdrawals an entity can make from a government bank. The NCAA (Non-Cash Availment Authorization) is a DBM-issued authority that allows agencies to cover the liquidation of actual obligations undertaken against available allotments in order to acquire monies from loans/grants via supplier credit/constructive cash. Departments/Agencies/Operating Units requesting direct payment of foreign loan profits against availment allotment must submit a request for NCAA accompanied with a photocopy of the withdrawal application or analogous document containing the needed amount, etc. The NTA, or Notice of Transfer of Allocation, is the authority granted by the Central Office to its regional and operating units to pay their operating expenses, purchases of supplies and materials, PPE acquisition, accounts payable, and other authorized disbursements using MDS checks, ADAs, or other modes of disbursement using MDS checks, ADAs, or other modes of disbursement using MDS checks, ADAs, or other modes of disbursement. The NTA issued by the Central Office and credited to Ros/Special Ous's MDS accounts for payment of retirement gratuity and previous years' AP is valid for the period indicated in the existing rules and regulations. 2. What are the different modes of disbursement, describe each of them? ANSWER: a. By checks – A method of disbursement that involves the issuance of MDS or commercial checks. Checks must be drawn only on duly approved Disbursement Voucher (DV) or Payroll to be used for routine expenses that cannot be readily or realistically paid using the ADA or that are not authorized to be paid using the Petty Cash Fund or advances for operating expenses. b. By cash –out of cash advance granted to authorize Disbursing Officer. c. Advice to debit the account – refers to the accountable disbursement document that instructs the Modified Disbursement System – Government Servicing Bank (MDS- GSB) to debit the agency’s MDS sub-account for payment of accounts payable to external creditors, Retirement Gratuity (RG)/Terminal Leave (TL), and transfers to Local Government Units (LGUs). d. Tax Remittance Advice – A serially-numbered document that NGAs should use to remit withheld taxes on funds received from DBM. Every withholding tax return filed as payment for taxes withheld must include this form. e. Working Fund/CDC – an authority granted by the DBM to the DFA and DOLE to use the income collected/retained by their Foreign Service Posts (FSPs) to meet their operational costs, but not to exceed the post’s released allotment. f. Direct Payment Method – refers to the payment mechanism in which the MDS-GSB, upon receipt of NCA and LDDAP-ADA from DBM, pays the CCC via direct credit to the CCC current account within 24 hours but no later than 48 hours. 3. What are JEV and CDJ and DVs/payrolls/petty cash vouchers and explain their purpose? ANSWER: All government transactions, including cash receipts, cash/check disbursements, and non-cash transactions, require the Journal Entry Voucher (JEV). It will be built by the Accounting Unit using the transaction papers provided, and it will serve as the basis for documenting the transactions in the appropriate journals. The JEVs are derived from the RCD (Report of Collections and Deposits) given to the Accounting Section/Unit by the Collecting Officer. A Cash Disbursements Journal (CDJ) is a specific journal used by a company to log all cash withdrawals or any credit to cash transaction. This unique diary is used by the Accounting Section/Unit to record the disbursements made by the Disbursing Officer. It will be the responsibility of Fund Cluster to maintain it up to date. A Disbursement Voucher (DV) is a form that is used to request a check be written to pay an individual or an organization for goods or services sold. 3 ACCTG. 322N 4. Why do government personnel need to follow certain procedures in accounting for disbursement and related transactions? ANSWER: Government employees must follow specific rules in accounting for disbursement and related transactions in order for expenditures to be properly reported and accounted for. This is done to guarantee that cash is only spent with consent from management and for legitimate business needs, and that all expenditures are accurately recorded. This is also done to ensure that the payment authorization policies are followed. Following certain accounting standards for disbursement and related transactions would assist the government in locating and ensuring that money is properly accounted for and spent, hence assisting in the achievement of socio-economic goals. This could also help the government determine budget use efficiency, analyze agency performance, and lay the groundwork for reforms and improvements. TASK 3: RECORDING TRANSACTIONS RELATED TO DISBURSEMENT You are to record the following transactions through a journal entry, write your answer in paper and add the picture in here ( make your it is still visible). Explanation is required while RCA is not required. 4 ACCTG. 322N -NF- 5 ACCTG. 322N 6 ACCTG. 322N 7 ACCTG. 322N 8