COA Updates
CY 2014
1
Adoption of the Philippine Public
Sector Accounting Standards (PPSAS)
COA Resolution No. 2014-003
dated January 24, 2014
Adoption of the Philippine Public Sector Accounting Standards (PPSAS)
COA Resolution No. 2014-003 dated January 24, 2014
COA Resolution No. No. 2008-012 dated October 10,
2008
•
created the Public Sector Accounting Standard Board
(PSAcSB) to assist the Commission in formulating and
implementing public sector accounting standards
•
the PSAcSB recommended the adoption of the International
Public Sector Accounting Standards (IPSAS) to be referred
to the Phillippine Public Sector Accounting Standards
(PPSAS)
Adoption of the Philippine Public Sector Accounting Standards (PPSAS)
COA Resolution No. 2014-003 dated January 24, 2014
There are 25 provisions of PPSAS adopted :
Vol. 1
PPSAS 1
Presentation of financial statements
PPSAS 2
Cash Flow Statements
PPSAS 3
Accounting Policies, Changes in Accounting Estimates and Errors
PPSAS 4
The Effects of changes in Foreign Exchange Rates
PPSAS 5
Borrowing Costs
PPSAS 6
Consolidated and Separate Financial Statements
PPSAS 8
Interest in Joint Ventures
PPSAS 9
Revenue from foreign exchange transactions
PPSAS 12
Inventories
PPSAS 13
Leases
Adoption of the Philippine Public Sector Accounting Standards (PPSAS)
COA Resolution No. 2014-003 dated January 24, 2014
There are 25 provisions of PPSAS adopted :
Vol. 2
PPSAS 14
Event after Reporting Date
PPSAS 16
Investment Property
PPSAS 17
Property, Plant and Equipment
PPSAS 19
Provisions, Contingent Liabilities and Contingent assets
PPSAS 20
Related Party Disclosures
PPSAS 21
Impairment of Non-Cash Generating Assets
PPSAS 23
Revenue from Non-exchange Transactions {Taxes and Transfers}
PPSAS 24
Presentation of Budget Information in Financial Statements
PPSAS 26
Impairment of Cash Generating Assets
PPSAS 27
Agriculture
Adoption of the Philippine Public Sector Accounting Standards (PPSAS)
COA Resolution No. 2014-003 dated January 24, 2014
There are 25 provisions of PPSAS adopted :
Vol. 3
PPSAS 28
Financial Instruments Presentation
PPSAS 29
Financial Instruments: Recognition and Measurements
PPSAS 30
Financial Instruments: Disclosures
PPSAS 31
Intangible Assets
PPSAS 32
Service Concession Arrangements: Grantor
IPSAS
International Public Sector Accounting Standards
•
International Public Sector Accounting Standards (IPSAS) are a
set of accounting standards issued by the IPSAS Board for use by
public sector entities around the world in the preparation of
financial statements. These standards are based on International
Financial Reporting Standards (IFRS) issued by the International
Accounting Standards Board (IASB).
•
IPSAS are accounting standards for application by national
governments, regional (e.g., state, provincial, territorial)
governments, local (e.g., city, town) governments and related
governmental entities (e.g., agencies, boards and commissions).
IPSAS standards are widely used by intergovernmental
organizations. IPSAS do not apply to government business
enterprises.
IPSAS
International Public Sector Accounting Standards
Features of IPSAS
• There are 31 standards on the accrual basis of accounting and one
standard on the cash basis of accounting (source: IPSAS Handbook
published March 2011).
• When the accrual basis of accounting underlies the preparation of the
financial statements, the financial statements will include:
–
–
–
–
–
the statement of financial position (IPSAS 1),
the statement of financial performance (IPSAS 1),
the cash flow statement (IPSAS 2),
the statement of changes in net assets/equity (IPSAS 1),
the note to the financial statements, or annex (IPSAS 1).
• When the cash basis of accounting underlies the preparation of the
financial statements, the primary financial statement is
– the statement of cash receipts and payments.
Adoption of the Philippine Public Sector Accounting Standards (PPSAS)
COA Resolution No. 2014-003 dated January 24, 2014
PPSAS 1
•
This Philippine Public Sector Accounting Standard (PPSAS) 1
consists of:
― International Public Sector Accounting Standard (IPSAS) 1,
“Presentation of Financial Statements”, and
― the Philippine Application Guidance (PAG) prepared to suit
the Philippine public sector situation.
• Generally, the Philippine Public Sector Accounting Standards is
on accrual basis except for transactions otherwise accounted
for as required by law.
Adoption of the Philippine Public Sector Accounting Standards (PPSAS)
COA Resolution No. 2014-003 dated January 24, 2014
PPSAS 1
• applicable to all public sector entities other than Government Business
Enterprises (GBEs).
• GBE is an entity that has all the following characteristics:
(a) Is an entity with the power to contract in its own name;
(b) Has been assigned the financial and operational authority to carry on a business;
(c) Sells goods and services, in the normal course of its business, to other entities at
a profit or full cost recovery;
(d) Is not reliant on continuing government funding to be a going concern (other
than purchases of outputs at arm’s length); and
(e) Is controlled by a public sector entity.
• shall be applied to all National Government Agencies (NGAs), Local
Government Units (LGUs) and Government-Owned and/or Controlled
Corporations (GOCCs) not considered as GBEs.
Adoption of the Philippine Public Sector Accounting Standards (PPSAS)
COA Resolution No. 2014-003 dated January 24, 2014
PPSAS 1
Components of Financial Statements
•
Paragraph 21 requires an entity that makes publicly available
its approved budget, to prepare a comparison of budget and
actual amounts either as a separate additional financial
statement or as a budget column in the financial statements.
•
A separate additional financial statement for comparison of
budget and actual amounts shall be prepared since the
financial statements and budget of NGAs, LGUs and GOCCs
not considered as GBEs are not on the same accounting basis.
Adoption of the Philippine Public Sector Accounting Standards (PPSAS)
COA Resolution No. 2014-003 dated January 24, 2014
PPSAS 1
IPSAS 1 provides for a complete set of financial statements:
•
•
•
•
•
•
Statement of Financial Position
Statement of Financial Performance
Statement of changes in net assets/equity
Cash Flow Statements
When the entity makes its approved budget publicly
available, a comparison of budget and accrual amounts
Notes, comprising a summary of significant accounting
policies and other explanatory notes
Adoption of the Philippine Public Sector Accounting Standards (PPSAS)
COA Resolution No. 2014-003 dated January 24, 2014
PPSAS 1
IPSAS 1 also provides:
• An entity whose financial statements comply with IPSAS
shall make an explicit and unreserved statement of such
compliance in the Notes.
• financial Statements shall not be describes as complying
with IPSAS unless they complied with all the
requirements of IPSASs.
Adoption of the Philippine Public Sector Accounting Standards (PPSAS)
COA Resolution No. 2014-003 dated January 24, 2014
PPSAS 24
PPSAS 24 ― Presentation of Budget Information in Financial\
Statements
IPSAS 24 prescribes
a. a comparison of budget amounts and the actual amounts arising
from execution of the budget to be included in the financial
statements of entities.
b. requires disclosure of an explanation of the reasons for material
differences between the budget and actual amounts.
The main issue in the implementation of this Standard is how the
comparison of budget and actual amounts shall be presented in the
financial statements.
Adoption of the Philippine Public Sector Accounting Standards (PPSAS)
COA Resolution No. 2014-003 dated January 24, 2014
PPSAS 2
PPSAS 2 ― Cash Flow Statements
Reporting Cash Flows from Operating Activities
– Paragraph 27 allows an entity to use either the direct
method or indirect method in reporting cash flows from
operating activities and Paragraph 28 encourages entities
to adopt the direct method.
– For uniformity, the direct method shall be adopted.
Adoption of the Philippine Public Sector Accounting Standards (PPSAS)
COA Resolution No. 2014-003 dated January 24, 2014
PPSAS 3
PPSAS 3 ― Accounting Policies, Changes in Accounting
Estimates and Errors
 IPSAS 3 prescribes the criteria for selecting and
changing accounting policies, together with the
accounting treatment and disclosure of changes in
accounting policies, changes in accounting
estimates, and the corrections of errors.
Adoption of the Philippine Public Sector Accounting Standards (PPSAS)
COA Resolution No. 2014-003 dated January 24, 2014
PPSAS 4
PPSAS 4 – The Effects of Changes in Foreign Exchange Rates
•
IPSAS 4 prescribes the standards in including foreign currency
transactions and foreign operations in the financial
statements, and translating financial statements into a
presentation currency.
•
Translation refers to the conversion of foreign currency
denominated financial statements into the presentation
currency (which is the Philippine peso) by using the rate at
which the currencies are exchanged.
Adoption of the Philippine Public Sector Accounting Standards (PPSAS)
COA Resolution No. 2014-003 dated January 24, 2014
PPSAS 6
PPSAS 6 ― Consolidated and Separate Financial Statements
• IPSAS 6 establishes the requirements for the preparation and
presentation of consolidated financial statements, and for
accounting for controlled entities, jointly controlled entities,
and associates in the separate financial statements of the
controlling entity, the venturer, and the investor.
Adoption of the Philippine Public Sector Accounting Standards (PPSAS)
COA Resolution No. 2014-003 dated January 24, 2014
PPSAS 9
PPSAS 9 ― Revenue from Exchange Transactions
•
IPSAS 9 prescribes the standards for identification,
measurement and disclosure of revenues of public sector
entities derived from exchange transactions.
•
An exchange transaction is one in which the entity receives
assets or services, or has liabilities extinguished, and directly
gives approximately equal value to the other party in exchange.
•
These transactions are rendering of services, sale of goods and
use by others of entity assets yielding interest, royalties, and
dividends.
Adoption of the Philippine Public Sector Accounting Standards (PPSAS)
COA Resolution No. 2014-003 dated January 24, 2014
PPSAS 12
PPSAS 12 ― Inventories
•
IPSAS 12 sets out the accounting treatment for inventories. A
primary issue in accounting for inventories is the amount of
cost to be recognized as an asset and carried forward until the
related revenues are recognized.
•
This Standard provides guidance on the determination of cost
and its subsequent recognition as an expense, including any
write down to net realizable value. It also provides guidance
on the cost formulas that are used to assign costs to
inventories.
Adoption of the Philippine Public Sector Accounting Standards (PPSAS)
COA Resolution No. 2014-003 dated January 24, 2014
PPSAS 12
Cost Formulas
 Paragraph 32 provides that the cost of inventories of items that are
not ordinarily interchangeable, and goods and services produced
and segregated for specific project, shall be assigned by using
specific identification of their individual costs.
 Paragraph 35, on the other hand, deals with the assignment of cost
of inventories using the First-in-first-out (FIFO) or weighted average
cost formulas items that are not specifically identifiable.
 For consistency and uniformity in costing inventories, the weighted
average shall be adopted for items that are not specifically
identifiable.
Adoption of the Philippine Public Sector Accounting Standards (PPSAS)
COA Resolution No. 2014-003 dated January 24, 2014
PPSAS 16
IPSAS 16 ― Investment Property
Investment Property – land or buildings held (whether by the owner or
under finance lease) to earn rentals or for capital appreciation or both, rather
than for:
• use in the production or supply of goods or services or for
•
•
administrative purposes;
sale in the ordinary course of operations
shall be recognized as an asset when, and only when:
‒ it is likely that the future economic benefits or service potential that
are associated with the investment property will flow to the entity
‒ the cost or fair value of the investment property can be measured
reliably
Adoption of the Philippine Public Sector Accounting Standards (PPSAS)
COA Resolution No. 2014-003 dated January 24, 2014
PPSAS 17
PPSAS 17 – Property, Plant and Equipment
•
prescribes the standards on the recognition, measurement at
recognition, measurement after recognition, depreciation,
impairment, derecognition and disclosure requirements
dealing with transactions and events affecting property, plant
and equipment of the Philippine public sector.
•
Property, Plant and Equipment are tangible assets that are
held for use in the production or supply of goods or services,
for rental to others or for administrative purposes and are
expected to be used during more than one reporting period.
Adoption of the Philippine Public Sector Accounting Standards (PPSAS)
COA Resolution No. 2014-003 dated January 24, 2014
PPSAS 17
Measurement after Recognition
•
Paragraph 42 provides that an entity shall choose either the
cost model or the revaluation model as its accounting policy,
and shall apply that policy to an entire class of property, plant,
and equipment.
•
For consistency and uniformity, the cost model shall be
adopted for all classes of PPE.
Adoption of the Philippine Public Sector Accounting Standards (PPSAS)
COA Resolution No. 2014-003 dated January 24, 2014
PPSAS 17
Depreciation
•
Paragraphs 59 to 78 deal with the recognition of depreciation,
methods of depreciation, determination of depreciable
amount, residual value and useful life of PPE.
•
For uniform accounting treatment for the depreciation of PPE
the following modifications shall be made:
Adoption of the Philippine Public Sector Accounting Standards (PPSAS)
COA Resolution No. 2014-003 dated January 24, 2014
PPSAS 17
Initial Recognition of Depreciation
•
Depreciation of an asset begins when it is available for use
such as when it is in the location and condition necessary for
it to be capable of operating in the manner intended by
management.
•
For simplicity and to avoid proportionate computation,
depreciation shall be for one month if the PPE is available for
use on or before the 15th of the month. However, if the PPE
is available for use after the 15th of the month, depreciation
shall be for the succeeding month.
Adoption of the Philippine Public Sector Accounting Standards (PPSAS)
COA Resolution No. 2014-003 dated January 24, 2014
PPSAS 17
Depreciation Method
• The straight line method of depreciation shall be adopted
unless another method is more appropriate for agency
operation.
Estimated Useful Life
• The estimation of the useful life of the asset is a matter of
judgment based on the experience of the agency with similar
assets.
• However, the agency shall use the Schedule on the Estimated
Useful Life of PPE by classification prepared by COA.
Adoption of the Philippine Public Sector Accounting Standards (PPSAS)
COA Resolution No. 2014-003 dated January 24, 2014
PPSAS 17
Residual Value
 A residual value equivalent to at least five percent (5%) of the
cost shall be adopted unless a more appropriate percentage is
determined by the agency based on their operation.
IPSAS 17 also provides:
• Items of property, plant and equipment shall be recognized as
assets if, and only if it is probable that the future economic
benefits or service potential associated with the item will
flow to the entity, and the cost or fair value of the item can be
measured reliably.
Adoption of the Philippine Public Sector Accounting Standards (PPSAS)
COA Resolution No. 2014-003 dated January 24, 2014
PPSAS 20
PPSAS 20 ― Related Party Disclosures
Under IPSAS 20:
Related parties – parties that control or have significant influence over the
reporting entity(including controlling entities, owners and their families, major
investors, and key management personnel) and parties that are controlled or
significantly influenced by the reporting entity (including controlled entities,
joint ventures, associates, and postemployment benefit plans).
Requires disclosures of:
• relationships involving control, even when there have been no transactions
in between;
• related party transactions
• management compensation (including an analysis by type of
compensation)
2
Revised guidelines in the Audit of
Gender and Development (GAD) Fund
and activities
COA circular No. 2014-001
dated March 18, 2014
Audit of GAD Funds
Audit of GAD Funds
•
refers to a comprehensive audit of a government
agency’s policies, funds programs, projects and
activities focusing on the area of gender and
development to determine economy, efficiency,
and effectiveness of interventions in addressing
gender issues (Section 7B Rule II, IRR, Magna Carta
on Women)
Audit of GAD Funds
Gender Audit
•
refers to a form of “social audit” or “Quality audit”
which determines whether the organization’s internal
practices and related support systems for gender
mainstreaming are effective and are reinforcing each
other and are being followed. This tool or process assists
organizations in establishing baseline, identifying critical
gaps and challenges, and recommending ways of
addressing them.(Section 7 G of Rule II of the IRR of RA
No. 9710. Magna Carta of Women)
Audit of GAD Funds
Gender Audit
•
Gender audit is an examination of the agency’s level of
gender mainstreaming or extent of gender responsiveness
of its policies, programs and projects, the level of gender
awareness and competence of its personnel and the
presence or absence of enabling mechanisms that support
gender mainstreaming. The result of the gender audit
could be a basis for implementing capacity development
programs that must be implemented and determining how
the agency’s policies, programs and projects could be made
more gender responsive. (Jt. Circular No. 2012-001 of the
PCW, NEDA and DBM)
Audit of GAD Funds
Gender and Development (GAD)
• Refers to a development perspective and process that
is participatory and empowering, equitable,
sustainable, free from violence, respectful of human
rights, and supportive of self-determination and
actualization of human potentials. It seeks to achieve
gender equality as a fundamental value that should be
reflected in development choices and contends that
women are active agents of development, not just
passive recipients of development.
Integrated Results and Risk-Based Audit (IRRBA)
1.
Identifying the risk in the strategic level and the
agency level
2.
Prioritizing the risk
3.
Determining the audit action to be employed
(financial and compliance, value for money audit,
fraud audit)
4.
Audit execution
5.
Report preparation
6.
Monitoring (Quality control system)
Integrated Results and Risk-Based Audit (IRRBA)
• follow the money trail audit
• top to bottom audit or vertical audit
• horizontal audit
Audit of GAD Funds and Activities
Areas often considered in audit:
1. GAD Focal Point (GFPs) - agency head, executive
committee and technical working group
2. GAD Budget
• integrated in the regular budget of the agency, no
separate budget
• at least 5% of the total agency or LGU appropriation;
could be from PS, MOOE, Capital or Equipment
Outlay
• in case of ODA funded projects 5% to 30% are in
support of gender responsive programs and projects
Audit of GAD Funds and Activities
Areas often considered in audit:
3. GAD Data Base - includes sex disaggregated data for
planning, programming and policy formulation
4. GAD Projects - which should be organization focused or
client focused; Harmonized Guidelines on GAD of PCW
and NEDA applies; should address gender issues in the
agency
5. Expenditures on GAD - should not be IIUEEU
Revised guidelines in the Audit of GAD Fund and activities
COA circular No. 2014-001 dated March 18, 2014
Funds for Gender and Development may be used for:
A. Programs and projects for which corresponding gender
issues have already been identified under the Philippine
Plan for Gender-Responsive Development 1995-2025 (EO
273) or for gender issues identified by the GAD Focal Point
in the course of conduct of gender audit or in the gender
analysis and review of sex disaggregated data of the
agency.
Revised guidelines in the Audit of GAD Fund and activities
COA circular No. 2014-001 dated March 18, 2014
Funds for Gender and Development may be used for:
B. Programs and projects identified or authorized in specific laws for
gender and development like:
(1) Republic Act No. 8425 (An act institutionalizing the Social Reform and
Poverty Alleviation Program x x x):
(2) RA 8505 (An act providing Assistance and Protection for Rape victims x x x);
(3) RA 8504 (An act Promulgating Policies and Prescribing measures for the
Prevention and Control of HIV/AIDS x x x);
(4) RA 6728 (Provision for Assistance to Students and Teachers);
(5) RA 9262 (The Anti Violence against Women and their Children act);
(6) RA 7877 (The Anti Sexual Harrassment Act of 1995);
(7) RA 10354 (the Reproductive Health Act);
(8) The Magna Carta on Women and the like.
Revised guidelines in the Audit of GAD Fund and activities
COA circular No. 2014-001 dated March 18, 2014
Funds for Gender and Development may be used for:
C. PAPs included in the PCW endorsed GAD Plan;
D. Personal Services such as salaries of agency personnel
assigned to plan, implement and monitor GAD PAPs on full
time and part time basis or as an additional duty, following
government rules on hiring and creating positions,
1. provided that in case of those rendering services on a part time
basis or as an additional duty, only the salary or wage
proportionate to the time devoted to GAD shall be considered
in the computation of the cost of the GAD activity
Revised guidelines in the Audit of GAD Fund and activities
COA circular No. 2014-001 dated March 18, 2014
Funds for Gender and Development may be used for:
D. Personal Services such as salaries of agency personnel
assigned to plan, implement and monitor GAD PAPs on full
time and part time basis or as an additional duty, following
government rules on hiring and creating positions,
2. provided that in case of those rendering services on a part time
basis or as an additional duty, only the salary or wage
proportionate to the time devoted to GAD shall be considered
in the computation of the cost of the GAD activity
Revised guidelines in the Audit of GAD Fund and activities
COA circular No. 2014-001 dated March 18, 2014
Funds for Gender and Development may be used for:
E. Maintenance and Operating expenses provided that:
1. Expenditures for supplies and materials shall pertain to
existing GAD Projects or programs which are organization
focused or client focused and which are among those
approved by the Philippine Commission on Women. Such
supplies shall be included in the annual procurement plan
and program of agencies.
Revised guidelines in the Audit of GAD Fund and activities
COA circular No. 2014-001 dated March 18, 2014
Funds for Gender and Development may be used for:
E. Maintenance and Operating expenses provided that:
2. Attendance to trainings abroad on GAD maybe allowed
provided there is a specific authority from appropriate
government oversight agencies, said trainings are not
offered in any of the local training institutions or
universities and provided that knowledge from such
training shall be cascaded to the employees of the
concerned agency, subject to availability of funds;
Revised guidelines in the Audit of GAD Fund and activities
COA circular No. 2014-001 dated March 18, 2014
Funds for Gender and Development may be used for:
E. Maintenance and Operating expenses provided that:
3. Capacity Building on GAD which shall include meals and
snacks, honoraria and transportation of lecturers, trainers
and resource persons, supplies and materials and
incidental expenses for GAD trainings and meetings, in
reasonable amount.
Revised guidelines in the Audit of GAD Fund and activities
COA circular No. 2014-001 dated March 18, 2014
Funds for Gender and Development may be used for:
F. Equipment or Capital Outlay provided that:
1. Procurement of equipment or capital outlay is in
response to an identified gender issue, the project of
which was approved by the PCW;
2. The equipment can be operated by a corresponding
technical employee or staff ;and
3. Prices are reasonable and quantity is not excessive.
Revised guidelines in the Audit of GAD Fund and activities
COA circular No. 2014-001 dated March 18, 2014
•
Absence of a GAD Plan and Budget prepared by the agency shall
not deter the auditor from verifying whether funds were used for
the implementation of projects on GAD. The Auditor shall verify
whether GAD activities were nevertheless conducted by the
Agency and whether compliance with existing laws and regulations
on GAD like the Magna Carta on Women were made.
Consequently, said activities shall also be assessed by the Audit
•
In the absence of a GAD Plan and Budget, information shall be
secured from the GAD Focal Point or the Chief accountant of the
agency on the sources of funds for GAD. Whether or not the funds
used for a specific project were integrated in the regular budget of
the agency should also be ascertained
Revised guidelines in the Audit of GAD Fund and activities
COA circular No. 2014-001 dated March 18, 2014
Audit of GAD Projects
In the audit of GAD projects, the following should be considered:
a. Whether GAD Funds were devoted/used for projects
which are within the context of the agency’s mandate;
and
b. approved/or recommended by the PCW and which shall
either be organization-focused or client-focused.
In particular, the audit shall include determination of whether or
not areas identified in the MCW and its IRR were given priority.
Revised guidelines in the Audit of GAD Fund and activities
COA circular No. 2014-001 dated March 18, 2014
Sample areas are :
•
•
the development of a GAD Code for LGUs
•
provision of legal aid, counseling and medical treatment of victims
of VAWs and sexual harassment in all LGUs, national government
agencies (NGAs), government-owned and controlled corporations
(GOCCs) and State Universities and Colleges (SUCs
•
Establishment of sex disaggregated data as well as capacity
building on GAD
establishment of a Violence Against Women’s (VAW) desk for
Barangays,
Revised guidelines in the Audit of GAD Fund and activities
COA circular No. 2014-001 dated March 18, 2014
Responsibility of the Audited Agency
•
The Audited agency shall submit a copy of the Annual GAD
Plan and Budget (GPB) to the COA Audit Team assigned to the
agency within five (5) days from the receipt of the approved
plan from the PCW or their mother or central offices, as the
case maybe. Likewise, a copy of the corresponding
Accomplishment Report shall be furnished the said Audit
Team within five (5) days from the end of January of the
preceding year.
3
Accounting and Reporting Guidelines for the
Local Disaster Risk Reduction and
Management Fund (LDRRMF) of Local
Government Units, National Disaster Risk
Reduction and Management Fund (NDRRMF)
given to LGUs and Receipts from Other
Sources
COA Circular No. 2012-002
dated September 12, 2012
Accounting and Reporting Guidelines for the LDRRMF of LGUs,
NDRRMF given to LGUs and Receipts from Other Sources
COA Circular No. 2012-002 dated September 12, 2012
Sources and allocation of LDRRMF
• Not less than 5% of the estimated revenues from regular
sources of the LGUs;
• The unexpended balance of the LDRRMF in the preceding
years within the five year validity period of the Special Trust
Fund;
• Funds transferred from the NDRRMF upon approval of the
President; and
• Funds received from other LGUs and other sources
4
Accounting and Reporting Guidelines on the
receipt and utilization of National Disaster
Risk Reduction and Management Fund
(NDRRMF), cash and in kind aids/donations
from local and foreign sources, and funds
allocated from the agency regular budget for
disaster Risk Reduction and Management
(DRRM) Program
COA Circular No. 2014-002 dated April 13, 2014
Accounting and Reporting Guidelines on the receipt and utilization of
NDRRMF, cash and in kind aids/donations from local and foreign sources,
and funds allocated from the agency regular budget for DRRM Program
COA Circular No. 2014-002 dated April 13, 2014
Sources of Funding for DRRM
1. Annual General Appropriations Act (GAA)
a. NDRRMF
b. Quick Response Fund (QRF)
c. Allocation from agency regular budget
2. Cash Donations from Local and Foreign Sources
Accounting and Reporting Guidelines on the receipt and utilization of
NDRRMF, cash and in kind aids/donations from local and foreign sources,
and funds allocated from the agency regular budget for DRRM Program
COA Circular No. 2014-002 dated April 13, 2014
A. Funds Sourced from GAA
1.
The DBM shall maintain a separate Registry of Appropriations and
Allotments (RAPAL) and Registry of Allotments and Notice of Cash
Allocation Issued (RANCAI) for each agency with appropriated NDRRMF
using the prescribed format.
2.
The agencies (a) that received Special Allotment Release Orders (SAROs)
from NDRRMF; (b) with QRF; and (c) those with DRRMF allocation
included in their respective budgets shall maintain a separate Registry of
Allotments and Obligations (RAOs) to be labelled as RAO-DRRM for
Maintenance and Other Operating Expenses (MOOE) and Capital Outlay
(CO) using the prescribed formats in Appendices 15 and 16, Volume II,
MNGAS
Accounting and Reporting Guidelines on the receipt and utilization of
NDRRMF, cash and in kind aids/donations from local and foreign sources,
and funds allocated from the agency regular budget for DRRM Program
COA Circular No. 2014-002 dated April 13, 2014
A. Funds Sourced from GAA
3.
The charges to NDRRMF, funds allocated for DRRM projects/program and
QRF shall be recorded in the respective RAOs based on the Obligation
Request (ObR).
4.
The amount obligated in the RAO-DRRM shall be adjusted accordingly
based on the duly approved Disbursement Voucher (DV).
5.
Supplies, materials, equipment and relief goods procured out of the fund
shall be taken up in the books under the appropriate Inventory and/or
Property, Plant and Equipment (PPE) account. Except for PPE, issuances
for distribution to end users/beneficiaries shall be supported with
Requisition Issue Slip (RIS) and taken up under the appropriate expense
account.
Accounting and Reporting Guidelines on the receipt and utilization of
NDRRMF, cash and in kind aids/donations from local and foreign sources,
and funds allocated from the agency regular budget for DRRM Program
COA Circular No. 2014-002 dated April 13, 2014
A. Funds Sourced from GAA
6. The Accounting Unit shall prepare and maintain PPE Ledger Cards
and Supplies Ledger Cards for all PPE and relief goods, respectively,
procured out of appropriations. For check and balance, the
Property and Supply Unit shall maintain Property Cards and Stock
Cards.
7. Small items purchased for disaster response and rescue activities,
which do not qualify under the equipment classification, shall also
be recorded under the appropriate Inventory account and the
issuances to be charged to appropriate expense account. Issuances
shall be supported with RIS.
Accounting and Reporting Guidelines on the receipt and utilization of
NDRRMF, cash and in kind aids/donations from local and foreign sources,
and funds allocated from the agency regular budget for DRRM Program
COA Circular No. 2014-002 dated April 13, 2014
A. Funds Sourced from GAA
8. The monthly Report of Supplies and Materials Issued (RSMI)
shall be prepared by the Property and Supply Unit based on the
RIS, using the formats in Appendices 59 and 50, respectively,
Volume II, MNGAS. The Report shall be submitted to the
Accounting Unit for recording in the books of accounts.
Accounting and Reporting Guidelines on the receipt and utilization of
NDRRMF, cash and in kind aids/donations from local and foreign sources,
and funds allocated from the agency regular budget for DRRM Program
COA Circular No. 2014-002 dated April 13, 2014
B. Cash Donations from Local and Foreign Sources
1. The cash donations shall be (a) acknowledged through the
issuance of Official Receipt; (b) deposited with an authorized
government depository bank (AGDB) under a separate bank
account for DRRM funds; and (c) entered in the Cash Receipts
Record by the designated Collecting Officer.
2. Amounts received in foreign currency shall be converted to local
currency using the current exchange rate at the date of receipt.
Accounting and Reporting Guidelines on the receipt and utilization of
NDRRMF, cash and in kind aids/donations from local and foreign sources,
and funds allocated from the agency regular budget for DRRM Program
COA Circular No. 2014-002 dated April 13, 2014
B. Cash Donations from Local and Foreign Sources
3. Separate Report of Collections and Deposits (RCD) for DRRM shall
be prepared daily by the designated Collecting Officer and
submitted to the Accounting Unit for recording in the Cash
Receipts Journal (CRJ) as “Trust Liabilities – DRRMF”.
4. The amount directly deposited by the donor to the agency bank
account, shall be taken up in the books by the Accounting Unit
based on the bank credit memo.
Accounting and Reporting Guidelines on the receipt and utilization of
NDRRMF, cash and in kind aids/donations from local and foreign sources,
and funds allocated from the agency regular budget for DRRM Program
COA Circular No. 2014-002 dated April 13, 2014
B. Cash Donations from Local and Foreign Sources
5. Charges to or utilization of the fund shall be based on Cash
Donation Utilization Request (CDUR) and payment shall be made
through the issuance of commercial checks based on duly
approved DVs.
6. The Budget Unit shall be furnished copies of the RCD, Journal Entry
Voucher (JEV) and credit memo as bases in the preparation of the
Registry of Cash Donation and Utilization (RCDU). The RCDU shall
be maintained per donor per purpose and updated regularly by
the Budget Unit.
Accounting and Reporting Guidelines on the receipt and utilization of
NDRRMF, cash and in kind aids/donations from local and foreign sources,
and funds allocated from the agency regular budget for DRRM Program
COA Circular No. 2014-002 dated April 13, 2014
B. Cash Donations from Local and Foreign Sources
7. The Accounting Unit shall prepare and maintain separate
subsidiary ledger (SL) for “Trust Liabilities-DRRMF)m for cash
donations received amounting to P100,000 and above per donor
per purpose while those below P100,000 shall be grouped and
posted in one SL labeled as “Various Donors” per purpose.
8. The First-In, First Out (FIFO) method shall be applied in charging to
or utilization of cash donations received from different donors for
the same purpose.
Accounting and Reporting Guidelines on the receipt and utilization of
NDRRMF, cash and in kind aids/donations from local and foreign sources,
and funds allocated from the agency regular budget for DRRM Program
COA Circular No. 2014-002 dated April 13, 2014
B. Cash Donations from Local and Foreign Sources
9. Supplies , materials, equipment and relief goods procured out of
cash donations shall be taken up in the books under the
a0ppropriate Inventory and/or PPE account. Issuances to the endusers/beneficiaries, except for PPE, shall be taken up under the
appropriate expense account.
10. Small Items purchased for disaster response and rescue activities,
which do not qualify under the equipment classification, shall also
be recorded under the appropriate inventory account and the
issuances to be charged to appropriate expense account
Accounting and Reporting Guidelines on the receipt and utilization of
NDRRMF, cash and in kind aids/donations from local and foreign sources,
and funds allocated from the agency regular budget for DRRM Program
COA Circular No. 2014-002 dated April 13, 2014
B. Cash Donations from Local and Foreign Sources
11. The Accounting unit shall prepare and maintain PPE ledger cards
and Supplies Ledger Cards for all PPE and relief goods procured
out of cash donations. The Property and Supply unit shall maintain
Property cards and stock cards.
12. The Monthly RSMI shall be prepared by the Property and Supply
Unit based on the RIS. The Report shall be submitted to the
Accounting Unit for recording in the books of accounts.
Accounting and Reporting Guidelines on the receipt and utilization of
NDRRMF, cash and in kind aids/donations from local and foreign sources,
and funds allocated from the agency regular budget for DRRM Program
COA Circular No. 2014-002 dated April 13, 2014
B. Cash Donations from Local and Foreign Sources
13. All unutilized cash donations after the purpose have been
served, shall be:
a.
Remitted to the Bureau of Treasury (BTr), if no condition to
return any unused amount to the donor, or
b. Return to the donor, if specified in the agreement.
The amount returned to the BTr and returned to the donor
shall be debited to Trust Liabilities-DRRMF
Accounting and Reporting Guidelines on the receipt and utilization of
NDRRMF, cash and in kind aids/donations from local and foreign sources,
and funds allocated from the agency regular budget for DRRM Program
COA Circular No. 2014-002 dated April 13, 2014
C. In-Kind donations From Local and Foreign Sources
1. Issuance of Acknowledgement Receipt by the Head of the
Agency or his authorized representatives
2. Issuance of relief goods for distribution to intended
beneficiaries/end users shall be supported with Issuance Form
for In-Kind donations-DRRM
Accounting and Reporting Guidelines on the receipt and utilization of
NDRRMF, cash and in kind aids/donations from local and foreign sources,
and funds allocated from the agency regular budget for DRRM Program
COA Circular No. 2014-002 dated April 13, 2014
C. In-Kind donations From Local and Foreign Sources
3. Donated PPE shall be :
• taken up in the books based on declared value in the Deed of
•
•
•
Donation or the bill of lading/airway bill/parcel notice and other
related documents
the fair market value/appraised value shall be used in the absence of
declared value
taken up in the appropriate asset account and credited to the
Government Equity account
donated PPE transferred to other government agencies shall be
approved by the head of transferring agency covered by Invoice
receipt and dropped from the books
Accounting and Reporting Guidelines on the receipt and utilization of
NDRRMF, cash and in kind aids/donations from local and foreign sources,
and funds allocated from the agency regular budget for DRRM Program
COA Circular No. 2014-002 dated April 13, 2014
C. In-Kind donations From Local and Foreign Sources
4. In-kind donations other than PPE shall not be recognized in the
books of accounts but shall be recorded in the Registry of
Donated Relief Goods for DRRM to be prepared and maintained
by the Property and Supply Unit for each kind of relief goods.
5. Donated Relief Goods shall be sorted, inventoried/counted and
recorded upon receipt and before repacking. Distribution shall
be made immediately, especially the perishable goods/items.
6. The inventories of donated items shall be considered in the
determination of relief goods to be purchased.
Accounting and Reporting Guidelines on the receipt and utilization of
NDRRMF, cash and in kind aids/donations from local and foreign sources,
and funds allocated from the agency regular budget for DRRM Program
COA Circular No. 2014-002 dated April 13, 2014
Reporting Guidelines – DRRMF sourced from GAA and Cash
donations
•
National agencies and LGUs with DRRMF allocations from the GAA
and/or cash donations shall prepare and submit to NDRRMC through
the Office of the Civil Defence the following:
a. Report on the Receipt and Utilization of the DRRMF sourced
from the GAA
b. Report and Utilization of Cash Donations
•
The OCD shall prepare monthly reports consolidating the above
named reports
•
DBM shall submit to OCD monthly status report on the releases of
NDRMF
Accounting and Reporting Guidelines on the receipt and utilization of
NDRRMF, cash and in kind aids/donations from local and foreign sources,
and funds allocated from the agency regular budget for DRRM Program
COA Circular No. 2014-002 dated April 13, 2014
Reporting Guidelines – In-kind Donations
• Donee Agency ― monthly reports on the receipt and
distribution/utilization/issuance of in-kind donations to the
OCD.
•
separate reports for relief goods and PPE based on the
Registry of Donated Relief Goods for DRRM and Property
cards
Accounting and Reporting Guidelines on the receipt and utilization of
NDRRMF, cash and in kind aids/donations from local and foreign sources,
and funds allocated from the agency regular budget for DRRM Program
COA Circular No. 2014-002 dated April 13, 2014
Inventory and Monitoring of Procured ad Donated Supplies and
Materials
•
Primary responsibility for safeguarding of all procured rest
with the Head of the Agency
•
Property Officer prepares and maintains inventory of all
procured and donated Items
• PPE issuances shall be covered by Acknowledgement Receipt
for Equipment (ARE) while for small items, by Inventory
Custodian Slip
Accounting and Reporting Guidelines on the receipt and utilization of
NDRRMF, cash and in kind aids/donations from local and foreign sources,
and funds allocated from the agency regular budget for DRRM Program
COA Circular No. 2014-002 dated April 13, 2014
Information pertaining to DRRM not evident on the face of
Financial Statements shall be disclosed in the Notes to
Financial Statement
a. Inventories
i. Total procurement, issuance and balance of inventory procured
from GAA and cash donations
ii. Quantity of received, issued and balance o donated relief
goods per category such as food items, medicines and medical
supplies
b. PPE shall include disclosure of :
i. Procurement of PPE out of GAA and cash Donations
ii. Receipt of donated PPE
iii. Disposal/Transfer
Accounting and Reporting Guidelines on the receipt and utilization of
NDRRMF, cash and in kind aids/donations from local and foreign sources,
and funds allocated from the agency regular budget for DRRM Program
COA Circular No. 2014-002 dated April 13, 2014
Trust Liabilities-DRRMF shall be presented as follows:
Beginning Balance
Add: Donations during the Year
Total
Less: Expenses
Ending Balance
P
P
x x x
x x x
x x x
x x x
x x x
5
Enhanced Monitoring of compliance with
recommendations in the Annual Audit
Report (AAR) through Action Plan and
Status of Implementation (AAPSI) Form
and Action Plan Monitoring Tool (APMT)
COA Memorandum No. 2014-002 Dated
March 18, 2014
Enhanced Monitoring of compliance with recommendations in the
Annual Audit Report (AAR) through Action Plan and Status of
Implementation (AAPSI) Form and Action Plan Monitoring Tool (APMT)
COA Memorandum No. 2014-002 Dated March 18, 2014
•
The letter transmitting the AAR to the head of agency and/or
those charged with governance shall contain a statement
requesting the agency to accomplish the AAPSI on the audit
observations and recommendations contained in the AAR.
The AAPSI form shall likewise be attached to the Transmittal
letter.
Agency Action Plan and Status of Implementation
(AAPSI)
Agency Action Plan
Ref
.
Audit
Observations
Audit
Recommendations
Action
Plan
Person/ Dept.
Responsible
Target
Implementation
Date
From
Status of
Implementation
Reason for
Partial/ Delay/
Non-Implementation,
if applicable
To
Agency sign-off:
______________________________
Name and Position of Agency Officer
___________
Date
Note: Status of Implementation may either be (a) Fully Implemented, (b) Ongoing,
(c ) Not Implemented, (d) Partially Implemented, or (e) Delayed
Action Taken/
Action to be
Taken
6
Supreme Court Decisions
Supreme Court Decision on the case of University of
the Philippines (UP) et al vs. Hon. Dizon, Stern Builders,
Inc, and De la Cruz, GR No. 171182
Issues:
a. Whether the funds of the UP are subject to
garnishment in order to satisfy the judgment award
b. Whether or not COA must adjudicate private
respondent's claim before execution should proceed
Supreme Court Decision on the case of University of
the Philippines (UP) et al vs. Hon. Dizon, Stern Builders,
Inc, and De la Cruz, GR No. 171182
SC ruled that:
a. Funds of UP are government funds that are public in
character as they include the income accruing from the
use of real property ceded to the UP that may be spent
only for the attainment of institutional objectives.
b. COA must adjudicate private respondent’s claim
before execution should follow. The settlement of the
monetary claim was still subject to the primary
jurisdiction of COA despite the final decision of the RTC
having already validated the claim.
Supreme Court Decision
Ramon Yap vs. COA - G.R. No. 158562 dated April 23, 2010
Allowances and Benefits
•
Disbursement of Public Funds, which includes
payment of salaries and benefits to government
officials and employees must be:
a. Authorized by law
b. Serve a public Purpose
Supreme Court Decision
Ramon Yap vs. COA - G.R. No. 158562 dated April 23, 2010
Allowances and Benefits
•
In view of this public purpose requirement, the disbursement
of public funds, salaries and benefits of government officers
and employees should be granted to compensate them for
public services rendered and the salaries or benefits paid to
such officers and employees must be commensurate with
services rendered.
• In the same vein, additional allowances and benefits must be
shown to be necessary or relevant to the fulfilment of official
duties and functions of government employees
Supreme Court Decision
Ramon Yap vs. COA - G.R. No. 158562 dated April 23, 2010
Allowances and Benefits
Meaning of Public Purpose or Public Use in relation to
disbursement of public funds
•
Traditionally it means any purpose or use directly
available to the public as a matter of right
•
Does not pertains only to those purposes that which are
traditionally viewed as essentially government functions
such as building of roads and delivery of basic services but
also includes those purposes designed to promote social
justice
•
Public use is now equated with public interest
Supreme Court Decision
Ramon Yap vs. COA - G.R. No. 158562 dated April 23, 2010
Allowances and Benefits
•
COA abandoned the ground of double compensation as a
basis for questioned disallowance and affirmed the same on
a new ground, that the disallowances did not meet the test
of public purpose requirement.
•
It was rules that COA in resolving cases brought before it on
appeal, is not required to limit its review only to the grounds
relied upon by a government agency’s auditor.
Supreme Court Decision
Ramon Yap vs. COA - G.R. No. 158562 dated April 23, 2010
Allowances and Benefits
•
COA is not merely legally permitted, but is also duty bound
to make its own assessment of the merits of the disallowed
disbursement and not simply restrict itself to reviewing the
validity of the ground relied upon by the Auditor of the
government agency concerned. To hold otherwise would
render COA’s vital constitutional power unduly limited and
thereby useless and ineffective.
THANK YOU !
COA Updates CY 2014