TEST 1. TRUE OR FALSE TRUE As a general rule, code 01 is assigned to a Lower-Level operating unit classified as Central Office. As an exception, the DOTC-Office of the Secretary (OSEC), which has three central offices, shall be assigned the following codes: DOTC-OSEC Central Office – 01, Land Transportation Office - Central Office – 19 and Land Transportation Franchising and Regulatory Board - Central Office – 20. Government Budget is the financial plan of a government for a given period, usually for a fiscal year, which shows what its resources are, and how they will be generated and used over the fiscal period. Revolving Funds are receipts derived from business-type activities of departments/agencies as authorized by law, and which are deposited in an authorized government depository bank. 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. CDC is an authority issued by DBM to Department of Foreign Affairs (DFA) and Department of Labor and Employment (DOLE) to utilize their income collected and retained by their Foreign Service posts to cover its operating requirements but not to exceed the released allotment for the purpose. The UACS Object Code (10 digits), which consists of the RCA Code (eight digits) and the UACS Sub-Object Code (two digits), is used in the recognition of transactions in the books of accounts and in the generation of financial reports which requires details by sub-object codes. Supplemental Budget is a budget which supplements or adjust a previous budget which is deemed inadequate for the purpose it is intended. It is the basis for a supplemental appropriation. The assignment of fund codes is based on representations by Agencies concerned that the creation of funds, i.e., Special Accounts in the General Fund, Trust Receipts, Revolving Funds, among others, as well as the use/s thereof are authorized by law. Physical & Financing Plan (PFP) This document serves as overall plan of the National Government Agencies encompassing the Physical and Financial aspects. 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. FALSE Budget Accountability is the last phase of budgeting process consists of periodic reporting by the government agencies of performances under their approved budget top management review of government activities and the fiscal policy implementations thereof; and the actions of Bureau of Treasury in assuring the fidelity of officials and employees by carrying out the intent of the legislative regarding the handling of receipts and expenditures. The objectives of special purpose financial statements are to provide information about the financial position, financial performance, and cash flows of an entity that is useful to a wide range of users in making and evaluating decisions about the allocation of resources The DBM shall keep the general accounts of the Government and, for such period as may be provided by law, preserve the vouchers and other supporting papers pertaining thereto, pursuant to Section 2, par. (1), Article IX-D of the 1987 Philippine Constitution. The responsibility for disaggregation and sub-coding of the following accounts Agency Responsible for Disaggregation: Personnel Services assigned to DBM; Maintenance and Other Operating Expenses assigned DBM/COA; Financial Expenses assigned BTr; and Capital Outlays assigned DBM. Government Accounting encompasses the processes of analyzing, recording, classifying, summarizing and communicating all transactions involving the receipt and disposition of government funds and property, and interpreting the results thereof. (Sec. 110, Presidential Decree (P.D.) No. 1445) General l Allotment Release Order (GARO) – 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. Performance Budget is a budget the basis of which are the objects of expenditures such as: salaries and wages, traveling expenses, freight, supplies and materials, equipment, etc. Each entity of the National Government (NG) maintains a complete set of accounting books by fund cluster which is reconciled with the records of cash transactions maintained by the DBM. Agency is organizational entities charged with carrying out specific substantive functions or with directly implementing programs/projects of a department, such as line bureaus and field units. The Government Accounting Manual aims to update the following: a. standards 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. d., policies and guidelines eliminate all the errors in accounting and reporting. Balance Deficit is a budget where the proposed expenditures are equal to or less than the estimated revenue. Special Account in the General Fund (SAGF) are lump-sum funds included in the GAA which are not within the approved appropriations of Departments/Agencies/Lower Level Operating Units, and which are available for allocation to any Department/Agency/Lower Level Operating Unit or Local Government Unit for a specific purpose, as may be duly approved in accordance with special provisions on the use of these funds. Modified Accrual basis means a basis of accounting under which transactions and other events are recognized when they occur (and not only when cash or its equivalent is received or paid). Legislative Authorization is the second phase of the budget process relative to the enactment of the General Appropriation Bills based on the budget of receipts and expenditures submitted by the President within 120 days from the opening of its regular session. The Commission on Audit (COA) Department of Budget and Management (DBM) Department of Finance (DOF) on Joint Circular No. 2013-1 dated August 6, 2014, prescribes the use of UACS, as amended/updated. RANTA This registry shall be maintained by the Budget Division to determine the amount of allotments not covered by NTA and monitor available NTA. Starting CY 2013 until further amended, however, all appropriations for Personnel Services (PS), MOOE and CO shall be valid only for two (2) fiscal year. TEST 2. MULTIPLE CHOICES QUESTIONS These are authorizations made annually or for some other period prescribed by law, by virtue of standing legislation, which do not require periodic action by the Congress. These are automatically and annually included in the National Expenditure Program of the National Government. Automatic Appropriations The major group account group code of Investments is: 02 These are 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 decreases in net assets/equity, other than those relating to distributions to owners. Expenses The fund cluster code of Special Account-Foreign Assisted/Foreign Grants Fund is ___. 04 What are the books of accounts in the government? books of COA, books of treasury and books of agency This shall be maintained by the Budget Division/ Unit of NGA to monitor the revenue and other receipts estimated/ budgeted, collected and remitted/deposited. Registry of Revenue and Other Receipts -- Summary (RRORS) What are the rules on the use of government funds? all of these -no allotment shall exceed appropriation, no liquidation shall exceed obligation, no obligations shall exceed allotment. Which is incorrect concerning government accounting? Government accounting adopts either cash or accrual basis of accounting. It is a statement of estimated receipts and estimated expenses of the government which serves as basis for a general appropriation bill. National government budget It denotes the responsibility to others that one or more persons have for their actions and behaviors. Accountability This is a sum of money or other government resources set aside for the purpose of carrying out specific activities or attaining certain objectives in accordance with specific regulations, restrictions, or limitations, and constitute an independent fiscal and accounting entity. Fund The Direct Labor as a RCA is classified as__. None of these options This an authorization made by law or other legislative enactment, directing payment of goods and services out of government fund under specific condition or for special purpose. Appropriation Reporting requirements that will be best served by the UACS includes the following, except: None of these options The following are the basic features and policies of the new government accounting systems, except: The use of corollary and negative journal entries shall be continued. These are funds available for any purpose that Congress may choose to apply, and is composed of all receipts or revenues that do not otherwise accrue to other funds. General Funds Who may contract or guarantee foreign loans on behalf of the Republic of the Philippines with the prior concurrence of the Monetary Board and subject to such limitations as may be provided by law? President of the Republic of the Philippines Provide the order of Budget Cycle: I. Budget Operation; II. Budget Accountability; III. Budget Preparation; IV. Budget Legislation III, IV, I, II The UACS Object Code structure consists of ten (10) mandatory digits include (indicate the order): I. UACS Sub-Object Code; II. Sub- Major Account Group; III. Major Account Group; IV. General Ledger Contra Account; V. General Ledger Account; VI. Account Group None of these options It is an amount committed to be paid by the government arising from an act of a duly authorized administrative officer and which binds the government to the immediate and eventual payment of money. Obligation Agency A, a government entity, wants to make disbursement. Arrange the following events in the correct sequence before Agency A can make a valid disbursement: I. Allotment; II. Disbursement authority; III. Appropriation; IV. Incurrence of obligation III, I, IV, II COA Circular No. 2013-002 dated January 30, 2013 prescribing the adoption of the RCA for National Government Agencies (NGAs) was effective on___. January 1, 2014 Which is responsible for the design, preparation and approval of accounting systems of government agencies? Department of Budget and Management The Manual presents the basic accounting policies and principles in accordance with the Philippine Public Sector Accounting Standards (PPSAS) adopted thru COA Resolution _____dated January 24, 2014, and other pertinent laws, rules and regulations. No. 2014-003 These are additional appropriations authorized by law to augment the original appropriations which proved to be insufficient for their intended purpose due to economic, political or social conditions supported by a Certification of Availability of Funds (CAF) from the BTr. Supplemental Appropriations This account is credited for the allocation of cost of watercrafts in accordance with the prescribed policy on depreciation. This account is debited upon derecognition of the asset and/or adjustments. Accumulated Depreciation-Watercrafts These are examples of Automatic Appropriations, except: Pension under R.A. No. 2087, as amended by P.D. No. 1625 and R.A. No. 5159 What statement is incorrect? COA Resolution No. 2014-003 dated January 24, 2014, prescribing the adoption of 24 Philippine Public Sector Accounting Standards (PPSAS); Which government body prepares the annual financial statements of the national government, local government agencies and government-owned or controlled corporations? Chief Accountant of each government agency The Government Accounting Manual (GAM) is prescribed by COA pursuant to ___. 1987 Constitution of the Republic of the Philippines The COA, through the Government Accountancy Sector (GAS) is responsible to, except: None of these option Which department prepares the national budget which serves as the basis of the general appropriation law? Legislative department It is the implementation of the national budget by the different departments and release of allotments. budget execution The Basic Government Accounting and Budget Reporting Principles. Each entity shall recognize and present its financial transactions and operations conformably to the following, except: single entry bookkeeping The key elements of the coding framework for UACS, except: Financing Source codes This further classifies the account within the major account group, e.g. for cash and cash equivalents: Cash on Hand, Cash in Bank-Local Currency, Cash in Bank-Foreign Currency. Sub-Major Account Group Which is not a fundamental principle of government fiscal operations? Fiscal responsibility shall, to a greater extent, be shared by all those exercising authority over financial affairs, transactions, and operations of the government agency. This registry shall be used to record the allotments received, obligations incurred and disbursements classified under PS. Registry of Allotments, Obligations and DisbursementsPersonnel Services (RAOD-PS) Fundamental Principles for Disbursement of Public Funds, 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, includes: I. No money shall be paid out of any public treasury or depository except in pursuance of an appropriation law or other specific statutory authority; II. Government funds or property shall be spent or used solely for public purposes; III. Trust funds shall be available and may be spent only for the specific purpose for which the trust was created or the funds received; IV. 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; V. Claims against government funds shall be supported with complete documentation. I, II, III, IV, V This shows the overall accounting system of a government agency/unit. It includes the source documents, the flow of transactions and its accumulation in the books of accounts and finally their conversion into financial information/data presented in the financial reports. GAP Identify which statement/s is/ are incorrect: I. Funding Source codes consist of 8 digits; II. Organization codes consist of 12 digits; III. Location codes consist of 10 digits; IV. MFO/Program, Activity and Project (PAP) codes consist of 9 digits; V. Object Codes for Assets, Liabilities, Equity, Income and Expense consist of 8 digits III, V What is not included as responsibility for UACS? None of these options This is a part, segment, unit or function of a government agency, headed by a manager, who is accountable for a specified set of activities. Except for some, which derive most of their income from collection of taxes and fees. Responsibility Center TEST 3. SHORT ESSAY Explain the Budget Process or Budget Cycle of the National Government of the Philippines. The Budget Process/Cycle: 1. Budget Preparation This covers estimation of government revenues, the determination of budgetary priorities and activities within the constraints imposed by available revenues and by borrowing limits, and the translation of approved priorities and activities into expenditure levels. Estimates are prepared by the various government agencies, reviewed and finalized by the President of the Philippines, and then submitted to the Legislative Department as basis for the preparation of the annual Appropriation Act. The budget preparation begins with the issuance of a “budget call” by the Department of Budget and Management. To ensure that the National Budget is enacted on time, the DBM, under the Aquino Administration, has established a new tradition of beginning the Budget Preparation phase earlier. Under the new Budget Preparation Calendar, the Budget Call is issued in December, unlike in the past where it was issued in April; and the submission of the President’s budget a day after the State of the Nation Address, in contrast to earlier practice where it is submitted to Congress within 30 days from the opening of every regular session. 2. Legislative Authorization It is the second phase of the budget process relative to the enactment of the General Appropriation Bills based on the budget of receipts and expenditures submitted by the President of the Philippines. This phase starts upon the receipt of the President’s Budget by the House Speaker and ends with the President’s enactment of the General Appropriation Act. The House of Representatives, in plenary, assigns the President’s Budget to the House Appropriations Committee, which conduct hearing and scrutinize their respective programs and projects. It then crafts the General Appropriation Bill (GAB). In plenary session, the GAB is sponsored, presented and defended by the Appropriations Committee and Sub-Committee Chairmen. Normally, after receiving the GAB from the House of Representatives, the Senate conducts its own committee hearings and plenary deliberations on the GAB. Once both Houses of Congress have finished their deliberations, they will each constitute a panel to the Bicameral Conference Committee. This committee will then discuss and harmonize the conflicting provisions of the House and Senate Versions of the GAB. The Harmonized or “Bicam” Version is then submitted to both Houses, which will then vote to ratify the final GAB for submission to the President. Once submitted to the President for his approval, the GAB is considered enrolled. The President and DBM then review the GAB and prepare a Veto Message, where budget items subjected to direct veto or conditional implementation are identified, and where general observations are made. Under the Constitution, the GAB is the only legislative measure where the President can impose a line-veto (in all other cases, a law is either approved or vetoed in full). Appropriations are approved by the legislative body in form of: (1) a General Appropriation Law which covers most of the expenditures of government; (2) Continuing Appropriations for various public works projects; (3) Supplemental Appropriations laws that are passed from time to time, to augment or correct an already existing appropriation; and (4) Certain automatic appropriations intended for fixed and specific purposes. 3. Budget Execution and Operation The third phase of the budget process covers the various operational aspects of budgeting. This phase of budget cycle begins with DBM’s issuance of guidelines on the release and utilization of funds. Agencies are required to submit their Budget Execution Documents (BEDs) at the start of budget execution. These documents outline agency plans and performance targets. The DBM set a limit for allotments issued to an agency and on the aggregate by preparing an Allotment Release Program (ARP). A Cash Release Program (CRP) is also formulated alongside to set a guide for disbursement levels for the year and for every month and quarter. In implementing programs, activities and projects, agencies incur liabilities on behalf of the government. Obligations are liabilities legally incurred, which the government will pay for. To authorize an agency to pay the obligations it incurs, DBM issues a disbursement authority. Most of the time, it takes the form of a Notice of Cash Allocation (NCA); and in special cases, the Non-Cash Availment Authority (NCAA) and Cash Disbursement Ceiling (CDC). 4. Budget Accountability The last phase of budget process consists of the following: (1) periodic reporting by the government agencies of performances under their approved budget; (2) top management review of government activities and the fiscal policy implementations thereof; and (3) the actions of Commission on Audit in assuring the fidelity of officials and employees by carrying out the intent of the National Assembly regarding the handling of receipts and expenditures. This phase happens alongside the Budget Execution phase. Through Budget Accountability, the DBM monitors the efficiency of fund utilization, assesses agency performance and provides a vital 80 80 basis for reforms and new policies. Agencies are held accountable not only for how these use public funds ethically, but also on how these attain performance targets and outcomes using available resources. Submitted by agencies on a monthly and quarterly basis, 1) Budget Accountability Reports (BARs) are required reports that show how agencies used their funds and identify their corresponding physical accomplishments. 2) An annual Budget Performance Assessment Review (BPAR) is conducted to determine each agency’s accomplishments and performance by the yearend. The DBM regularly reports results to the President. Auditing is not within the DBM’s jurisdiction, and is instead lodged under the Commission on Audit (COA). Nonetheless, auditing is critical in ensuring agency accountability in the use of public funds. The DBM uses COA’s audit reports in confirming agency performance, determining budgetary levels for agencies and addressing issues in fund usage.