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COA Updates CY 2014. Adoption of the Philippine Public Sector Accounting Standards (PPSAS) COA Resolution No. 2014-003 dated January 24, 2014 1.

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Presentation on theme: "COA Updates CY 2014. Adoption of the Philippine Public Sector Accounting Standards (PPSAS) COA Resolution No. 2014-003 dated January 24, 2014 1."— Presentation transcript:

1 COA Updates CY 2014

2 Adoption of the Philippine Public Sector Accounting Standards (PPSAS) COA Resolution No dated January 24,

3 Adoption of the Philippine Public Sector Accounting Standards (PPSAS) COA Resolution No dated January 24, 2014 COA Resolution No. No 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 )

4 There are 25 provisions of PPSAS adopted : Vol. 1 PPSAS 1Presentation of financial statements PPSAS 2Cash Flow Statements PPSAS 3Accounting Policies, Changes in Accounting Estimates and Errors PPSAS 4The Effects of changes in Foreign Exchange Rates PPSAS 5Borrowing Costs PPSAS 6Consolidated and Separate Financial Statements PPSAS 8Interest in Joint Ventures PPSAS 9Revenue from foreign exchange transactions PPSAS 12Inventories PPSAS 13Leases Adoption of the Philippine Public Sector Accounting Standards (PPSAS) COA Resolution No dated January 24, 2014

5 There are 25 provisions of PPSAS adopted : Vol. 2 PPSAS 14Event after Reporting Date PPSAS 16Investment Property PPSAS 17Property, Plant and Equipment PPSAS 19Provisions, Contingent Liabilities and Contingent assets PPSAS 20Related Party Disclosures PPSAS 21Impairment of Non-Cash Generating Assets PPSAS 23Revenue from Non-exchange Transactions {Taxes and Transfers} PPSAS 24Presentation of Budget Information in Financial Statements PPSAS 26Impairment of Cash Generating Assets PPSAS 27Agriculture Adoption of the Philippine Public Sector Accounting Standards (PPSAS) COA Resolution No dated January 24, 2014

6 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 Adoption of the Philippine Public Sector Accounting Standards (PPSAS) COA Resolution No dated January 24, 2014

7 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.

8 IPSAS 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. International Public Sector Accounting Standards

9 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 dated January 24, 2014 PPSAS 1

10 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 dated January 24, 2014 PPSAS 1

11 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 dated January 24, 2014 PPSAS 1

12 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 dated January 24, 2014 PPSAS 1

13 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 dated January 24, 2014 PPSAS 1

14 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 dated January 24, 2014 PPSAS 24

15 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 dated January 24, 2014 PPSAS 2

16 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 dated January 24, 2014 PPSAS 3

17 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 dated January 24, 2014 PPSAS 4

18 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 dated January 24, 2014 PPSAS 6

19 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 dated January 24, 2014 PPSAS 9

20 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 dated January 24, 2014 PPSAS 12

21 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 dated January 24, 2014 PPSAS 12

22 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 dated January 24, 2014 PPSAS 16

23 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 dated January 24, 2014 PPSAS 17

24 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 dated January 24, 2014 PPSAS 17

25 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 dated January 24, 2014 PPSAS 17

26 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 dated January 24, 2014 PPSAS 17

27 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 dated January 24, 2014 PPSAS 17

28 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 dated January 24, 2014 PPSAS 17

29 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) Adoption of the Philippine Public Sector Accounting Standards (PPSAS) COA Resolution No dated January 24, 2014 PPSAS 20

30 Revised guidelines in the Audit of Gender and Development (GAD) Fund and activities COA circular No dated March 18,

31 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

32 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 Magna Carta of Women) Audit of GAD Funds

33 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 of the PCW, NEDA and DBM) Audit of GAD Funds

34 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. Audit of GAD Funds

35 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)

36 follow the money trail audit top to bottom audit or vertical audit horizontal audit Integrated Results and Risk-Based Audit (IRRBA)

37 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

38 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 Audit of GAD Funds and Activities

39 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 (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 dated March 18, 2014

40 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 (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 (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 dated March 18, 2014

41 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 dated March 18, 2014

42 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 dated March 18, 2014

43 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 dated March 18, 2014

44 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 dated March 18, 2014

45 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 dated March 18, 2014

46 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 dated March 18, 2014

47 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 dated March 18, 2014

48 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 dated March 18, 2014

49 Sample areas are : the development of a GAD Code for LGUs establishment of a Violence Against Women’s (VAW) desk for Barangays, 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 Revised guidelines in the Audit of GAD Fund and activities COA circular No dated March 18, 2014

50 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. Revised guidelines in the Audit of GAD Fund and activities COA circular No dated March 18, 2014

51 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 dated September 12,

52 Accounting and Reporting Guidelines for the LDRRMF of LGUs, NDRRMF given to LGUs and Receipts from Other Sources COA Circular No 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

53 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 dated April 13,

54 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 dated April 13, 2014

55 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 dated April 13, 2014

56 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 dated April 13, 2014

57 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 dated April 13, 2014

58 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 dated April 13, 2014

59 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 dated April 13, 2014

60 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 dated April 13, 2014

61 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 dated April 13, 2014

62 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 dated April 13, 2014

63 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 end- users/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 dated April 13, 2014

64 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 dated April 13, 2014

65 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 dated April 13, 2014

66 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 dated April 13, 2014

67 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 dated April 13, 2014

68 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 dated April 13, 2014

69 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 dated April 13, 2014

70 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 dated April 13, 2014

71 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 dated April 13, 2014

72 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 dated April 13, 2014

73 Trust Liabilities-DRRMF shall be presented as follows: Beginning Balance P x x x Add: Donations during the Year x x x Total P x x x Less: Expenses x x x Ending Balance x x x 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 dated April 13, 2014

74 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 Dated March 18,

75 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 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.

76 Agency Action Plan and Status of Implementation (AAPSI) Ref. Audit Observations Audit Recommendations Agency Action Plan Status of Implementation Reason for Partial/ Delay/ Non-Implementation, if applicable Action Taken/ Action to be Taken Action Plan Person/ Dept. Responsible Target Implementation Date FromTo 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

77 Supreme Court Decisions 6

78 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 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

79 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 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.

80 Supreme Court Decision Ramon Yap vs. COA - G.R. No 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

81 Supreme Court Decision Ramon Yap vs. COA - G.R. No 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

82 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 dated April 23, 2010 Allowances and Benefits

83 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 dated April 23, 2010 Allowances and Benefits

84 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. Supreme Court Decision Ramon Yap vs. COA - G.R. No dated April 23, 2010 Allowances and Benefits

85 COA Updates CY 2014 THANK YOU !


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