Harmonization of Government
Accounting Standards with the
International Public Sector
Accounting Standards
(IPSAS)
Asst. Commissioner Lourdes Castillo
Government Accountancy Sector
Commission on Audit
Delivered during the AGAP Convention
L’Fisher Hotel, Bacolod City
October 14-17, 2013
ROAD MAP to HARMONIZATION
PROCESS
I.
II.
III.
AUTHORITY/LEGAL BASIS
CREATION OF THE PUBLIC SECTOR
ACCOUNTING STANDARDS BOARD (PSASB)
PREPARATION OF THE PHILIPPINE
PUBLIC SECTOR ACCOUNTING
STANDARDS (PPSAS)
• INTERNATIONAL PUBLIC SECTOR
ACCOUNTING STANDARDS (IPSAS)
• PHILIPPINE APPLICATION GUIDANCE
(PAG)
IV.
IMPLEMENTATION
AUTHORITY/LEGAL BASIS
 1987 Philippine Constitution,
Article IX D, 2(2) Section
“The Commission shall have exclusive
authority, subject to the limitations in this Article,
to … XXX ... 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.”
AUTHORITY/LEGAL BASIS
 Presidential Decree (PD) 1445, State
Audit Code of the Philippines,
Sec. 25 (4) “(4) To promulgate auditing and
accounting rules and regulations so
as to facilitate the keeping, and
enhance the information value, of the
accounts of the government.”
II. Creation of the
PUBLIC SECTOR
ACCOUNTING
STANDARDS BOARD
(PSASB)
PUBLIC SECTOR ACCOUNTING
STANDARDS BOARD (PSASB)
Creation
• 2008 Commission on Audit (COA)
Organizational Restructuring pursuant to the
1987 Philippine Constitution, Section 2(2)
Article IX-D.
• COA Office Order No. 2010-118 dated
February 19, 2010
PUBLIC SECTOR ACCOUNTING
STANDARDS BOARD (PSASB)
Function
Assist the COA Commission Proper in
formulating and implementing
accounting standards for the public
sector
PUBLIC SECTOR ACCOUNTING
STANDARDS BOARD (PSASB)
Function
Establish and maintain linkages with
international bodies, professional
organizations and academe on
accounting related fields on financial
management.
III. Preparation of the
PHILIPPINE PUBLIC
SECTOR ACCOUNTING
STANDARDS (PPSAS)
OVERVIEW
PPSAS
• BASIS
• OBJECTIVE
• SCOPE
• METHODOLOGY
• CONTENT
Philippine Public Sector Accounting Standards
Basis
• Pronouncements issued by IPSASB
(IPSASs), IASB, PICPA, International
Organization of Supreme Audit
Institutions and others.
• Relevant factors, including best
accounting practices, and
• Capacity of agencies to comply with
PPSAS
IPSAS
Overview
Philippine Public Sector Accounting Standards
Objective
• The PPSAS set out the recognition,
measurement, presentation and disclosure
requirements for financial reporting in the
Philippine Government.
• Transitional provisions shall be issued to
address specific concerns not yet covered
by the PPSAS.
• Supplemental guidelines shall be issued
when the need arises
Philippine Public Sector Accounting Standards
Scope
 PPSASs
set out requirements dealing
with transactions and other events in
general purpose financial reports.
 PPSASs
are designed to apply to the
general purpose financial reports of all
public sector entities other than
Government
Business
Enterprises
(GBEs).
IPSAS

Overview
Philippine Public Sector Accounting Standards
Scope
 applies to all NGAs, LGUs and
GOCCs
not
classified
as
Government
Business
Enterprises GBEs
Philippine Public Sector Accounting Standards
Methodology
I. Evaluation of IPSAS
 Study and detailed evaluation of each IPSAS
to determine applicability.
II. Development of PPSAS
 Provide the Philippine Application Guidance
(PAG) for IPSAS provisions which were
revised/modified or not to be adopted.
 Exposure Drafts
 Fundamental Issues (addressed by change in
policy or disclosure requirements )
 Focus Group Discussions
Philippine Public Sector Accounting Standards
Methodology
III. Preparation/Update of
Government Accounting Manual
 As PPSAS are being developed, provisions of the
Government Accounting Manual are being
studied and enhanced/modified, accordingly
IV. Revision of the Chart of Accounts
 Chart of accounts was revised to conform
with the PPSAS
 COA Circular 2013-002 dated Jan. 30, 2013
IPSAS
Overview
Philippine Public Sector Accounting Standards
Content
PPSAS
consist of …
 International Public Sector Accounting
Standards (IPSASs) (Accrual Based IPSAS
per 2012 Handbook) developed by
IPSASB
and
published
by
the
International Federation of Accountants
(IFAC), and
 Philippine Application Guidance (PAG)
IPSAS
Overview
Philippine Public Sector Accounting Standards
Philippine Application
Guidance (PAG)
• Provides supplementary guidance
of IPSASs.
• States the reason for not adopting
or modifying some paragraphs of
the IPSASs to suit the Philippine
public sector situation.
IPSAS
Overview
IV. Implementation of
PHILIPPINE PUBLIC
SECTOR ACCOUNTING
STANDARDS (PPSAS)
Philippine Public Sector Accounting Standards
Approach to Implementation
28 out of 32 IPSAS shall be implemented
Phased Implementation
•
Phase 1 (25 PPSAS for
implementation in 2014)
•
Phase 2 (3 PPSAS for
implementation in 2015)
Philippine Public Sector Accounting Standards
Phase 1 – For
implementation in 2014
1. PPSAS 1 – Presentation of Financial
Statements (IPSAS 1)
2. PPSAS 2 – Cash Flow Statements (IPSAS 2)
3. PPSAS 3 – Accounting Policies, Changes in
Accounting Estimates and Errors (IPSAS 3)
4. PPSAS 4 – The Effects of Changes in FOREX
rates (IPSAS 4)
Philippine Public Sector Accounting Standards
Phase 1 – for implementation in
2014
PPSAS 5 – Borrowing Costs (IPSAS 5)
PPSAS 6 – Consolidated and Separate
Financial Statements (IPSAS 6)
7.
PPSAS 8 – Interests in Joint Venture
(IPSAS 8)
8.
PPSAS 9 – Revenue from Exchange
Transactions (IPSAS 9)
9.
PPSAS 12 – Inventories (IPSAS 12)
10. PPSAS 13 – Leases (IPSAS 13)
5.
6.
Philippine Public Sector Accounting Standards
Phase 1 (con’t)
11. PPSAS 14 – Events after the
Reporting Date (IPSAS 14)
12. PPSAS 16 – Investment Property
(IPSAS 16)
13. PPSAS 17 – Property, Plant and
Equipment (IPSAS 17)
14. PPSAS 19 – Provisions, Contingent
Liabilities and Assets (IPSAS 19)
Philippine Public Sector Accounting Standards
Phase 1 (con’t)
15. PPSAS 20 – Related Party Disclosures
(IPSAS 20)
16. PPSAS 21 – Impairment of Non-Cash
Generating Assets (IPSAS 21)
17. PPSAS 23 - Revenue from NonExchange Transactions (Taxes and
Transfers) (IPSAS 23)
18. PPSAS 24 – Presentation of Budget
Information in Financial Statements
(IPSAS 24)
Philippine Public Sector Accounting Standards
Phase 1 (con’t)
19. PPSAS 26 – Impairment of Cash
Generating Assets (IPSAS 26)
20. PPSAS 27 – Agriculture (IPSAS 27)
21. PPSAS 28 – Financial Instruments:
Presentation (IPSAS 28)
22. PPSAS 29 – Financial Instruments:
Recognition and Measurement (IPSAS
29)
Philippine Public Sector Accounting Standards
Phase 1 (con’t)
23. PPSAS 30 - Financial Instruments
Disclosure (IPSAS 30)
24. PPSAS 31 – Intangible Assets (IPSAS
31)
25. PPSAS 32 - Service Concession
Arrangements: Grantor (IPSAS 32)
Philippine Public Sector Accounting Standards
Phase 2
– For
implementation in 2015
1. PPSAS 18 – Segment Reporting
2. PPSAS 22 – Disclosure of
Information About the General
Government Sector
3. PPSAS 25 – Employee Benefits
PPSAS SUMMARY
IPSAS
Overview
PPSAS 1 — Presentation of FS
Objective of the Standard
To set overall considerations for the:



IPSAS
Overview
Presentation
Structure
Minimum content of Financial
Statements
PPSAS 1 — Presentation of FS
Salient Features
 Accrual basis except for transactions
required by law to be on modified
accrual basis
 Comparative Information
- for all amounts reported in the FS
- for all relevant narrative and
descriptive information
IPSAS
Overview
PPSAS 1 — Presentation of FS
Complete set of Financial Statements
1. Statement of financial position
2. Statement of financial performance
3. Statement of changes in net assets/equity
4. Notes, comprising a summary of significant
accounting policies and other explanatory
notes
5. Separate additional financial
statement for comparison of budget
and actual amounts shall be prepared
and submitted.
IPSAS
Overview
PPSAS 2 — Cash Flows Statement
Objective of the Standard
 Provision of information about changes in
cash and cash equivalents by means of a
cash flow statement.
 Classifies cash flows during the period
from operating, investing, and financing
activities.
IPSAS
Overview
PPSAS 2 — Cash Flows Statement
Salient Features
 Cash flows for operating activities are
reported using the direct method.
 Cash flows exclude movements between
items that constitute cash or cash
equivalents,
 Investing and financing transactions that do
not require the use of cash shall be
excluded from the cash flow statement, but
they shall be separately disclosed.
IPSAS
Overview
PPSAS 3 - Accounting Policies,
Changes in Accounting Estimates
and Errors
Salient Features
CHANGE IN ACCOUNTING POLICY
 Follow transition requirements
 If the change is voluntary, apply the new
accounting policy retrospectively by
restating prior periods.
IPSAS
Overview
PPSAS 3 - Accounting Policies, Changes
in Accounting Estimates and Errors
Salient Features
Changes in Accounting Estimates
Effect of a change in estimate is accounted
for by including it in net income or
comprehensive income as appropriate in:
a. The period of change if the change
affects that period only
b. The period of change and future
periods if the change affects both
IPSAS
Overview
PPSAS 4 - The Effects of Changes
in Foreign Exchange Rates
Salient Features
Covers Foreign currency transactions
and Foreign operations
Translation should be done for foreign
currency items into functional currency
Initial recognition and measurement
record the spot exchange rate
IPSAS
Overview
PPSAS 5 - Borrowing Costs
Salient Features
 Borrowing costs shall be charged to expenses in
the period when they are incurred. (Benchmark
treatment)
 Borrowing costs directly attributable to the
acquisition, construction, or production of a
qualifying asset shall be capitalized as part of the
cost of that asset. (Allowed Alternative Treatment)
IPSAS
Overview
PPSAS 5 - Borrowing Costs
Salient Features
 For borrowing costs pertaining to loans
borrowed by the National Government (NG)
which are recorded by the Bureau of the
Treasury, the benchmark treatment shall be
used. However for loans borrowed directly by
the NGAs and LGUs, the allowed alternative
treatment shall be used.
IPSAS
Overview
PPSAS 6 - Consolidated and
Separate Financial Statement
Salient Features
 prescribes requirements for preparing and
presenting consolidated FS for an economic
entity under the accrual basis of accounting
 A controlled entity is an entity controlled by
another entity, known as the controlling
entity.
 Balances, transactions, revenue and
expenses between entities within the
economic entity are eliminated in full.
IPSAS
Overview
PPSAS 8 - Interests in Joint Ventures
Salient Features
 The key characteristic of a joint venture is a
binding arrangement whereby two or more
parties are committed to undertake an activity
that is subject to joint control.
 Joint ventures may be classified as jointly
controlled operations, jointly controlled assets
and jointly controlled entities. Different accounting
treatments apply for each type of joint venture.
IPSAS
Overview
PPSAS - 9 Revenue from Exchange
Transactions
Salient Features
Applies to revenue arising from the following
exchange transactions and events:
 The rendering of services;
 The sale of goods, and
 The use of others of entity assets
yielding interest, royalties and dividends.
Revenue shall be measured at the fair value
of the consideration received or receivable.
IPSAS
Overview
PPSAS 12 - Inventories
Salient Features
 Inventories are measured at the lower of cost
and net realizable value.
 If acquired through a non-exchange transaction,
their cost shall be measured as their fair value
as at the date of acquisition.
 Cost is determined on weighted average basis
 Write-downs to net realizable value are
recognized as an expense. Reversals arising
from an increase in net realizable value are
recognized as a reduction of the inventory
expense in the period in which they occur.
IPSAS
Overview
Salient Features
PPSAS 13 Leases
Lease is classified as a Finance lease if:
(a) The lease transfers ownership of the asset to
the lessee by the end of the lease term;
(b) The lessee has the option to purchase the
asset at a price that is expected to be
sufficiently lower than the fair value
(c) The lease term is for the major part of the
economic life of the asset
Operating lease does not transfer substantially all
the risks and rewards incidental to ownership of the
asset.
IPSAS
Overview
PPSAS 14 Events After the
Reporting Date
DEFINITIONS
Adjusting events after the reporting date – events
that provide evidence of conditions that existed at
the reporting date
Non-adjusting events after the reporting date those that are indicative of conditions that arose
after the reporting date
An entity shall disclose :
• the date its financial statements were authorized
for issue and
• who gave that authorization.
IPSAS
Overview
IPSAS 16 Investment Property
Salient Features
Investment property - is property (land or a building –
or part of a building – or both) held to earn rentals or
for capital appreciation, or both, rather than for:
a) Use in the production or supply of goods
or services, or for administrative
purposes; or
b) Sale in the ordinary course of operations.
Investment property shall be measured initially at cost.
If acquired through non-exchange transaction – Fair
value as at date of acquisition.
IPSAS
Overview
PPSAS 17 - Property, Plant and
Equipment
Salient Features
 Recognition of Heritage Assets
 Initial recognition is at cost. Where an asset is
acquired at no cost, or for a nominal cost, its cost
is its fair value as at the date of acquisition.
 Infrastructure assets are accounted as PPE
 The carrying amount of an item of property, plant,
and equipment shall be derecognized:
(a) On disposal; or
(b) When no future economic benefits or service
potential is expected from its use or disposal.
IPSAS
Overview
PPSAS 19 - Provisions, Contingent
Liabilities and Contingent Assets
Salient Features
Recognize a provision only when:
 a past event has created a present legal or
constructive obligation,
 an outflow of resources to settle the
obligation is probable, and
 there is a reliable estimate of the obligation
IPSAS
Overview
PPSAS 19 - Provisions, Contingent
Liabilities and Contingent Assets
Salient Features
Contingent liability arises when there is:
 possible obligation to be confirmed by a
future event that is outside the control of the
entity; or
 a present obligation may, but probably will
not, require an outflow of resources; or
 a reliable estimate cannot be made.
Contingent liabilities require disclosure only (no
recognition). If the possibility of outflow is remote, then
no disclosure.
IPSAS
Overview
PPSAS 20 - Related Party Disclosures
Salient Features
 Related parties are parties that control or have
significant influence over the reporting entity
and parties that are controlled or significantly
influenced by the reporting entity
 Requires disclosure of:
– relationships involving control, even when
there have been no transactions in between;
– related party transactions; and
– management compensation
IPSAS
Overview
PPSAS 21 - Impairment of NonCash-Generating Assets
Definition
Cash-generating assets - are assets held with the
primary objective of generating a commercial return.
Non-cash-generating assets - are assets other than
cash-generating assets
Impairment - a loss in the future economic benefits
or service potential of an asset, over and above the
systematic recognition of the loss of the asset’s
future economic benefits or service potential through
depreciation.
IPSAS
Overview
PPSAS 21 - Impairment of NonCash-Generating Assets
Salient Features
 A non-cash-generating asset is impaired when
the carrying amount of the asset exceeds its
recoverable service amount.
 An impairment loss shall be recognized
immediately in surplus or deficit.
 After the recognition of an impairment loss, the
depreciation charge for the asset shall be
adjusted in future periods
IPSAS
Overview
PPSAS 23 - Revenue from Non-Exchange
Transactions (Taxes and Transfers)
Non-exchange transactions
Examples:
(a) Taxes; and
(b) Transfers (whether cash or noncash)
 An asset acquired through a non exchange
transaction shall initially be measured at its fair
value as at the date of acquisition.
 An entity shall recognize an asset in respect of
taxes when the taxable event occurs and the
asset recognition criteria are met.
IPSAS
Overview
PPSAS 24 - Presentation of Budget Information
in Financial Statements
Salient Features
PPSAS 24 requires …
 Presentation of budget information in the
financial statements when the reporting entity
is publicly accountable for its budget.
 Disclosure of an explanation of the reasons for
material differences between the budget and
actual amounts.
IPSAS
Overview
To ensure that public sector entities discharge
their accountability obligations and enhance the
transparency of their financial statements
PPSAS 26 - Impairment of CashGenerating Assets
Definition
Cash-Generating Assets (CGA) – assets held
with the primary objective of generating a
commercial return.
Impairment - a loss in the future economic benefits
or service potential of an asset
An impairment loss of a cash-generating asset
is the amount by which the carrying amount of an
asset exceeds its recoverable amount.
IPSAS
Overview
PPSAS 27 - Agriculture
Salient Features

Prescribes the accounting treatment
and disclosures related to agricultural
activity

Agricultural activity - management by an
entity of the biological assets for sale, or
for distribution at no charge or for a
nominal charge or for conversion into
agricultural produce or into additional
biological assets.
IPSAS
Overview
PPSAS 28 - Financial Instruments:
Presentation
Prescribes principles for classifying and presenting financial
instruments as liabilities or net assets/equity, and for
offsetting financial assets and liabilities.
IPSAS 29 Financial Instruments:
Recognition and Measurement
Establishes principles for recognizing, derecognizing and
measuring financial assets and financial liabilities.
IPSAS 30 Financial Instruments:
Disclosure
Prescribe disclosures that enable financial statement users to
evaluate the significance of financial instruments to an entity, the
nature and extent of their risks, and how the entity manages
IPSAS
those risks.
Overview
PPSAS 31- Intangible Assets
Salient Features
 Intangible Asset is an identifiable non-monetary
asset without physical substance.
 An intangible asset, whether purchased or selfcreated, is recognized if:
 it is probable that the future economic
benefits or service potential that are
attributable to the asset will flow to the entity;
and
 the cost or fair value of the asset can be
measured reliably.
 All research costs are charged to expense when
IPSAS
Overview incurred.
PPSAS 32—SERVICE CONCESSION
ARRANGEMENTS: GRANTOR
• Grantor – public sector entity grants
service concession arrangements
• Operator – private sector which manages
the service concession asset
• Service concession arrangement – sets
performance standards, mechanisms for
adjusting prices, and arrangements for
arbitrating disputes.
• Service concession assets – turned over to
the grantor
IPSAS
Overview
PPSAS 32—SERVICE CONCESSION
ARRANGEMENTS: GRANTOR
• Recognize by the grantor if:
• It controls or regulates services (what, to
whom and at what price) and
• It controls any significant residual
interest at the end of the arrangement
• Initial recognition – fair value
• Measurement after recognition – cost (like
PPE or Intangible Assets)
IPSAS
Overview
PPSAS 32—SERVICE CONCESSION
ARRANGEMENTS: GRANTOR
• Recognize liability when the grantor
recognizes a service concession asset
• Financial liability
• Unearned income
• Initial measurement – same amount as the
asset adjusted by any consideration given
by the grantor or the operator or from the
operator to the grantor.
IPSAS
Overview
PPSAS 32—SERVICE CONCESSION
ARRANGEMENTS: GRANTOR
(b) The operator is compensated for its
services over the period of the service
concession arrangement.
IPSAS
Overview
Significant COA Issuances on
ACCOUNTING and AUDITING
RULES AND REGULATIONS
62
Significant COA ISSUANCES
1. COA Circular No. 2013-002
dated January 30, 2013
“Adoption of the Revised Chart of
Accounts for National Government
Agencies”
2. COA-DBM-DOF Joint Circular No. 2013-1
dated March 15, 2013
“Adoption of the Unified Accounts Code
Structure (UACS)”
63
Significant COA ISSUANCES
3. COA Circular No. 2013-003 dtd. Oct. 29, 2013
“Updated Guidelines on the Prevention and
Disallowance of Irregular, Unnecessary,
Excessive, Extravagant and Unconscionable
Expenses”
4. COA Circular No. 2013-007 dtd. Sept. 18, 2013
“Revised Guidelines on the Submission of
Quarterly Accountability Reports on
Appropriations, Allotments, Obligations and
Disbursements”
64
Significant COA ISSUANCES
5. COA Circular No. 2012-005 dtd. Dec. 7, 2012
“Revocation of COA Circular No. 2009-008
dtd. Nov. 9, 2009 and Prescribing the Use of
Punong Barangay’s Certification (PBC) and
COA Auditor’s Advice (CAA)”
6. eNGAS Rollout in the Local Government
Units
65
COA REVISED
CHART OF ACCOUNTS
COA Circular No. 2013-002
dated January 30, 2013
Effectivity date: January 01, 2014
66
OBJECTIVES
 To provide new accounts for the adoption
of the Philippine Public Sector Accounting
Standards (harmonized with IPSAS)
 To provide uniform accounts for national
government accounting and budget
systems to facilitate the preparation of
harmonized financial and budgetary
accountability reports
67
OBJECTIVES
 To expand the account code from three (3)
digits in the NGAS Chart of Accounts, to eight
(8) digits, to allow expansion or creation of new
accounts as may be necessary to implement
new standards or policies and provide up to four
levels of consolidation depending on the users’
information needs.
68
MAJOR CHANGES
a. Coverage is limited only to all national
government agencies and GOCCs
receiving funds constituted a SAGF
from the National Government
b. Expanded account code structure
from three (3) digits to eight (8) digits
69
MAJOR CHANGES
c. New accounts were provided for the
implementation of the Philippine Public
Sector Accounting Standards (PPSAS)
d. Some accounts were deleted since these
accounts are for use by local government
units or government-owned and/or
controlled corporations, while other
accounts are no longer applicable to
national government agencies.
70
MAJOR CHANGES
e. Some accounts were either
expanded or compressed. For instance,
expense accounts for repairs and
maintenance and depreciation of property,
plant and equipment which were previously
presented per asset account were
compressed based on the major account
classification
71
COA-DBM Joint Circular No. 2013-1
dated March 15, 2013
“Revised Guidelines on the Submission
of Quarterly Accountability Reports on
Appropriations, Allotments, Obligations
and Disbursements”
72
RATIONALE
 COA and DBM requirement for agencies
to submit BAR/FAR.
 DBM uses the reports to monitor agency
performance for policy making purposes.
 COA uses the report to prepare the AFR.
73
PURPOSES
1. To prescribe harmonized formats of the
financial accountability reports (FAR) on
appropriations, allotments, obligations,
disbursement authorities, disbursements
and balances; and
2. To prescribe guidelines on the preparation
and timely submissions of FARs by the
agencies to the DBM and the COA after
the end of each quarter.
74
COVERAGE
The Circular covers all departments,
bureaus, offices and agencies of the
national government and governmentowned and/or controlled corporations
maintaining Special Accounts in the
General Fund.
75
GUIDELINES
A. Head of Office to submit the following
reports to COA and DBM:
1. Statement of Appropriations, Allotments,
Obligations, Disbursements and
Balances (SAAODB))
2. List of Agency Budget Matrix (ABM) or
SAROs and Sub-AROs
76
GUIDELINES
3. Detailed Statement of Current Year’s
Obligations, Disbursements and Unpaid
Obligations (SODUO-CY)
4. Summary of Prior Year’s Obligations,
Disbursements and Unpaid Obligations
(SODUO-PY)
5. Summary of Report of Disbursements
77
GUIDELINES
A. The FARs prescribed in the Circular shall
replace the following DBM and COA reports
as follows:
1. DBM
 Statement of Allotments, Obligations and
Balances (SAOB) - BAR No. 4
 Financial Report of Operations - BAR No. 2)
 Financial Report of Operations - BAR No. 2)
78
GUIDELINES
2. COA





SAOB
Detailed Breakdown of Obligations
Detailed Breakdown of Disbursements
Regional Breakdown of Expenses
Statement of Cumulative Allotments, Obligations
Incurred and Unobligated Balances
 Detailed Statement of Cumulative Expenditures/
Obligations Incurred, Obligations
Liquidated/Disbursements and Unliquidated
Obligations
79
RESPONSIBILITIES
1. The FARs shall be prepared and certified correct
by the following officials:
 Budget Officer/Head of Budget Unit – for the
portion of the report pertaining to appropriations,
allotments, obligations, unobligated allotments and
unreleased appropriations
 Chief Accountant/Head of Accounting Unit – for
the portion of the report pertaining to disbursements
and unpaid obligations
 The FARs shall be signed by the Agency Head as the
approving official. He/she shall ensure the timely
submission of the accurate and reliable FARs.
80
DUE DATES OF SUBMISSION to
COA and DBM
 All Departments/Agencies – not later than
the 30th day after the end of each quarter
 The Lower Operating Units – within (5) days
after the end of each quarter for consolidation
 The Agency Regional Offices – to submit
the consolidated report to COA (GAS) and
DBM CO within (10) days after the end of
each quarter
81
COA Circular No. 2012-003
dated October 29, 2012
“Updated Guidelines for the Prevention of
Disallowance of Irregular, Unnecessary,
Excessive, Extravagant and Unconscionable
Expenses as enumerated under COA Circular
No. 85-55A dated Sept. 8, 1985”
82
LEGAL BASIS
 Section 2(2), Article IX-D of the 1987
Constitution
 Section 33 of P.D. 1445
83
DEFINITION
1. “Irregular” Expenditures
 Expenditures incurred without adhering to
established rules, regulations, procedural
guidelines, policies, principles or practices
that have gained recognition in laws
 Transactions conducted in a manner that
deviates or departs from, or which does not
comply with standards set
84
DEFINITION
2. “Unnecessary” Expenditures
 Expenditures which could not pass the test of prudence
or the diligence of a good father of a family, thereby
denoting non-responsiveness to the exigencies of the
service
 Not supportive of the implementation of the objectives
and mission of the agency relative to the nature of its
operation
 Not dictated by the demands of good government, and
those, the utility of which cannot be ascertained at a
specific time
 Not essential or that which can be dispensed with
without loss or damage to property
85
DEFINITION
3. “Excessive” Expenditures
 Signify unreasonable expense or expense
incurred at an immoderate quantity and
exorbitant price
 Include expenses which exceed what is
usual or proper, as well as expenses which
are unreasonably high and beyond just
measure or amount
86
DEFINITION
4. “Extravagant” Expenditures
 Signify those incurred without
restraint, judiciousness and economy
 Exceed the bounds of propriety
 Immoderate, prodigal, lavish,
luxurious, grossly excessive, and
injudicious
87
DEFINITION
5. “Unconscionable” Expenditures
 Pertain to expenditures which are
unreasonable and immoderate, and
which no man in his right sense
would make, nor a fair and honest
man would accept as reasonable,
and those incurred in violation of
ethical and moral standards
88
COA Circular No. 2013-007
dated September 18, 2013
“Guidelines for the Use of Electronic
Official Receipts (eORs) to
Acknowledge Collection of Income
and Other Receipts of Government”
89
LEGAL BASIS
 Section 7 of R.A. No. 8792, otherwise
known as the Electronic Commerce
Act of 2000
 COA Circular No. 2004-006 dated
Sept. 9, 2004, setting the guidelines
and principles on the acceptability of
evidences of receipt of payments
90
RATIONALE/SCOPE
 Electronic Collection System is an active online facility
provided by government agencies that enables debtors,
creditors and other clients to pay government dues and
charges through a computer or telephone.
 A system for receiving, sending, storing, generating, or
otherwise processing electronic data messages or
electronic documents pertaining to receipt and deposit of
government collections.
 A system for receiving, sending, storing, generating, or
otherwise processing electronic data messages or
electronic documents pertaining to receipt and deposit of
government collections.
91
SALIENT FEATURES
 The electronic document maintains its
integrity and reliability and can be
authenticated.
 For evidentiary purposes, an electronic
document shall be the functional
equivalent of a written document under
existing laws.
92
GENERAL GUIDELINES
1. All collections shall be acknowledged by the
government agency concerned through the
issuance of official receipts to establish that these
have been received.
2. Receipt of collections/revenue through electronic
means shall be acknowledged by an eOR.
3. The eORs shall have met the minimum data content.
4. Collections of NGAs shall be deposited to the
national Treasury while those f or LGUs and
GOCCs shall be deposited to their respective
accounts.
93
GENERAL GUIDELINES
5. All collections through electronic system shall be
recorded/accounted for in the books of the
concerned government agency.
6. The government agency concerned shall comply
with the Joint Administrative Order No. 02,
s.2006, “Guidelines Implementing R.A. No. 8792
on EPCS in Government”.
7. The government agency shall provide the Auditor
the read/view and print access rights in the
computerized system.
94
COA Circular No. 2012-005
dated December 7, 2012
“Revocation of COA Circular 2009-008
dated Nov. 9, 2009 and Prescribing the
Use of Punong Barangay’s Certification
(PBC) and COA Auditor’s Advice (CAA)”
95
SALIENT FEATURES
 The responsibility to initiate , process, approve
financial transactions and issue Punong
Barangay’s Certification (PBC) under oath rests
with the Barangay officials.

The PBC to be issued only under oath after the PB
has duly examined and been satisfied that:
 The DVs are duly certified and approved,
 The expenditure or disbursement is proper and
valid, and
 The supporting documents are complete.
96
SALIENT FEATURES
 The PB shall be primarily accountable for all
losses arising from issuance of the PBC.
 The Authorized Government Depository
Bank (AGDB) shall encash the checks
issued if the corresponding PBC is issued.
 Checks encashed without the corresponding
PBC or with falsified PBC shall be the
responsibility of the AGDB.
 The PBC shall be numbered sequentially by
year and by barangay and in (4) copies.
97
SALIENT FEATURES
 The PBC (4th) copy shall be submitted to the
accountant for recording within (10) days
after end of month and subsequently
submitted to the COA auditor for audit.
 Non-submission of PBCs within (15) days
after demand by the Auditor shall be a
ground for preparation of the COA Auditor’s
Advice (CAA) to the AGDB to hold further
payments of checks issued by the said
barangay.
98
eNGAS Rollout in the LGUs
 Will now resume with the assistance of the
eNGAS Users’ Circle (EUC), the lone
organization who signified interest in helping
COA with the rollout in the LGUs.
 Memorandum of Agreement (MOA) will be
made to embody the terms and conditions for
the rollout.
 This activity to be headed by the COA
Information Technology Office (ITO) and with the
active participation of the Government
Accountancy Sector (GAS).
99
“When the people become involved
in their government,
government becomes more accountable,
and our society is stronger,
more compassionate, and better prepared
for the challenges of the future.”
- Arnold Schwarzenegger
100
“We have a problem
when the same people
who make the law
get to decide whether or not
they themselves
have broken the law.”
- Michael Templet
101
“I am responsible.
Although I may not be able to prevent
the worst from happening,
I am responsible for my attitude toward the
inevitable misfortunes that darken life.”
-Walter Anderson
102
Thank You!