1. Updates on Accounting and Auditing Rules and Regulations
GOVERNMENT ASSOCIATION OF CPAs (GACPA)
SUSTAINING ETHICS AND EXCELLENCE
IN MANAGING GOVERNMENT RESOURCES
SEMINAR/WORKSHOP
Updates on Accounting and Auditing Rules and Regulations
Lourdes M. Castillo
Assistant Commissioner
Government Accountancy Sector
Commission on Audit
Delivered during the GACPA Seminar at
Prince Plaza Hotel, Baguio City
February 6-8, 2013

2. COA Circular No. 2012-001 dated June 14, 2012
“Prescribing the Revised Documentary Requirements for Common Government Transactions”

3. COA Circular No. 2012-004, dated November 28, 2012
“Demand for the Immediate Liquidation and Settlement of All Cash Advances Outstanding as of December 31, 2011”

4. COA Circular No. 2013-002, dated January 30, 2013
“Adoption of the Revised Chart of Accounts for National Government Agencies”

5. COA Resolution No. 2013-007, dated January 29, 2013
“Adoption of the Philippine Public Sector Standards of Auditing”

6. Permanent Committee (COA-DBM-DOF) Joint Circular No. 4-2012, dated Sept. 11, 2012
“Rules and Regulations Implementing Executive Order No. 431 dated August 30, 2005, Directing the Reversion of All Dormant Accounts, Unnecessary Special Trust Funds to the General Fund and For Other Purposes”

7. National Budget Circular No. 546, dated January 17, 2013
“Rules and Regulations on the Grant of Representation and Transportation Allowances”

8. COA Circular No. 2012-001, dated June 14, 2012
Prescribing the Revised Documentary Requirements for Common Government Transactions

9. OUTLINE Fundamental Principles – PD 1445
General Requirements for all Types of Disbursements
Specific Requirements for Each Type of Disbursement
Cash Advances
Fund Transfers to NGOs/Pos
Fund Transfers to Implementing Agencies/From Trust Fund to Gen Fund for Unspent Balance
Salary

10. OUTLINE Allowances, Honoraria and Other Forms of Compensations
Other Expenditures
Extraordinary and Miscellaneous Expenses
Prisoner’s Subsistence Allowance
Procurement
Cultural and Athletic Activities
Human Resource Development and Training Program
Financial Expenses
Road Right-of-Way (ROW)/Real Property

11. Fundamental Principles, Sec. 4, P.D. 1445
No money shall be paid except in pursuance of an appropriation law or other specific statutory authority
Use solely for public purpose
Trust funds only for the specific intended purpose
Fiscal responsibility shared by all those exercising authority over finance, transactions and operations
Disbursements or dispositions should bear approval of proper officials
Claims should be supported with complete documentation
Faithful adherence to all pertinent laws and regulations
Observance of GAAP and practices as well as sound management and fiscal administration, provided they do not contravene with existing laws and regulations

12. General Requirements for All Types of Disbursements
Certification of Availability of Fund by Chief Accountant
Lawful and sufficient allotment duly obligated as certified, except for GOCCs and GFIs
Legality of transaction and conformity with laws, rules and regulations
Approval of expenditure by Head of Office or authorized representative
Sufficient and relevant documents to establish validity of claim

13. 1.0 Cash Advances
General Guidelines –COA Circs , , Sec. 89 of PD 1445, pertinent GAA provisions
Specific Guidelines and Documents Required
Types of Cash Advances (Payroll Fund, PCF, Field/Activity COE, TA (local and foreign)
Granting of Cash Advance
General Guidelines
Documents Required Common to All CAs except for travel
Additional Documents per type of Cash Advance
Liquidation of Cash Advances

14. 2.0 Fund Transfers to NGOs/POs
General Guidelines – pertinent provision of the GAA for the year, Sec COA Circular and GPPB Res
Specific Guidelines and Documentary Requirements
Release of Funds
Implementation and Liquidation of Funds Released
Staggered Release of Funds to NGO/PO

15. 3.0 Fund Transfers
General Guidelines – COA Cirular , COA Memo
Specific Guidelines and Documents Required
Transfer to Implementing Agencies
Transfer
Implementation and Liquidation by Implementing Agency
Liquidation by Source Agency
From Trust Fund to General Fund for Unspent/Excess Amount

16. 4.0 Salary
General Guidelines- 35 FY2012 GAA or pertinent provision of the GAA for the year, RA 6758 as amended (Pres. Veto message, ,p. 1236, RA 9970)
Specific Guidelines and Documents Required -Sec.325, RA 7160 LGU Code, EO 292, CSC MC 14 s. 1999, CSC Res , COA Cir , DBM Local Budget Circular , DBM National Compensation Circular 67, s. 1992, CSC Circular 06, s.2005, etc.
Individual Claims
First Salary
Salary (if deleted from the payroll)
Salary of Casual/Contractual Personnel
Salary Differential due to Promotion and/or Step Increment
Last Salary
Salary due to heirs of deceased employee
Maternity Leave
General Claims through the ATM

17. 5.0 Allowances, Honoraria and other Forms of Compensation
General Guidelines
Specific Guidelines and Documents Required
Personnel Economic Relief Allowance
Representation and Transportation Allowance (for individual and general claims)
Clothing/Uniform Allowance (Individual and General claims
Subsistence, Laundry and Quarters Allowances
Productivity Incentive Allowance (individual and general claims)
Special Counsel Allowance
Honoraria
Personnel Involved in Government Procurement
Teaching Personnel (DepED, TESDA, SUCs and other educational institutions)
Governing Boards of Collegial Bodies
Lecturer/Coordinator
Special Projects
Science and Technological Activities

18. Other Expenditures
General Guidelines – Sec. 57, 2012 GAA or pertinent provision of the GAA for the year, Sec 43, Chapter 5 and 80, Chapter7, Book V1 EO 292, Sec 58, 2012 GAA, etc.
Specific Guidelines and Documents Required
Utility Expense
Telephone/Communication Services

19. Extraordinary and Miscellaneous Expenses
General Guidelines – Sec. 57, 2012 GAA or pertinent provision of the GAA for the year, Sec 43, Chapter 5 and 80, Chapter7, Book V1 EO 292, Sec 58, 2012 GAA, etc.
Specific Guidelines and Documents Required
Utility Expense
Telephone/Communication Services

20. Prisoner’s Subsistence Allowance
General Guidelines –Item 1 and 2, Special Provision for BJMP and Bu Cor, 2012 GAA or pertinent provisions for the year
Specific Guidelines and Documents Required
By administration thru cash advance
By catering contract

21. Procurement
General Guidelines ( RA 9184, Sec GAA or pertinent provisions of GAA for the year), Sec GAA or pertinent GAA provision for the year, Sec. 7 IRR of RA 9184, Sec 7, RA 9184, Rule XVI Revised IRR RA 1984, Sec. 13.1, RA 1984;
Specific Guidelin, es and Documents Required
Procurement thru Public Bidding – GAA for the year, Sec. 2-7, 9-10 and 12 of EO 182 s and Sec. 87 of GAA 2012, COA Circular ,
Infrastructure
Advance Payment
Variation Order/Change Order/Extra Work Order
Progress Payment
Final Payment
Release of Retention Money
Consulting Services – Annex E Revised IRR RA 9184, Annex D. COA Memo
Goods- RA 9184, Sec 5r Revised IRR, 2012 GAA Provisions, Sec. 20
Supplies, Materials, Equipment and Motor Vehicles
General Support Services (janitorial, security, maintenance, garbage collection and disposal and similar services)
Rental Contracts
Repair and Maintenance of Aircraft, Equipment and Motor Vehicles
Advertising Expenses
Procurement thru Alternative Modes – COA Cir , RA 9184 pertinent provisions
Requirements Common to all alternative modes
Specific requirements
Limited Source Bidding
Direct Contracting
Repeat Order
Shopping
Negotiated Procurement
Procurement thru Automatic Debit Arrangement or direct payment

22. Cultural and Athletic Activities
General Guidelines – Sec 25 of GAA 2012 or pertinent provision of GAA for the year
Documents Required
Budget estimates approved by the Head of Agency
Same requirements under procurement depending on the nature of expense and the mode of procurement adopted

23. Human Resource Development and Training Program
General Guidelines – CSC Guidelines Sec GAA and pertinent provisions of the GAA for the year
Documents Required
Budget estimates approved by the Head of Agency
Schedule of the training approved by the Head of the Agency
Same requirements under procurement depending on the nature of expense and the mode of procurement adopted

24. Financial Expenses
General Guideline – appropriate provision of the New Government Accounting System and other pertinent laws, rules and regulations
Documents Required
Loan Agreements/Memoranda of Agreement together with supporting documents
Statement of Accounts
Bank Debit Memos
Others necessary depending on the nature of the transactions

25. Road Right-of-Way/ Real Property
General Guidelines – RA 8974 and its IRR
Documents Required
Land – Sec.8 RA 8974 on Environment Clearance Certificate
Negotiated Purchase
If Registered land
If Unregistered land –EO on Claimant’s Surety/Indemnity Bond
For Payment by Court Decision
Structure/House
Improvements (trees, plants, growing fruits, etc.) – DENR rules and regulations

26. COA Circular No. 2012-004, dated November 28, 2012
“Demand for the Immediate Liquidation and Settlement of All Cash Advances Outstanding as of December 31, 2011”

27. Addressed to the following:
All Heads of National Government Departments, Bureaus and Agencies;
Provincial Governors, City/Municipal Mayors;
Managing Heads of Government-owned and/or Controlled Corporations;
All Treasurers, Finance Officers, Regular and Special Disbursing Officers, and Other Accountable Officials of the aforesaid Government Agencies;
COA Directors, Regional Directors, and Heads of Auditing Units, and All Others Concerned

28. Rationale
As a general rule, cash advances must be liquidated within the prescribed periods depending on the nature and purpose of the cash advance:
Salaries and wages
Petty and field operating expenses
Local travel and foreign travel
Honoraria and similar payments to officials and employees
Expenses for special projects/activities such as anniversary celebration
Cultural and athletic activities
The above cash advances must be liquidated within twenty (20) days from the accomplishment of the purpose.

29. Settlement and Liquidation of Cash Advance
A cash advance is settled and liquidated either by:
Returning the money advanced if unspent,
Or by the presentation of regularly accomplished vouchers, giving satisfactorily detail of the items thereon paid which must be in accordance with the purpose for which the cash advance was granted, and further supported by proper receipts and other evidence of payment, subject to the result of the post-audit thereof by the auditor concerned.

30. Primary responsibility of Heads of Agencies
Section 2 of Presidential Decree (P.D.) No. 1445, the Government Accounting Code of the Philippines, places the responsibility to faithfully take care that government funds and property be safeguarded from wastage directly with and primarily on the chief or head of the government agency concerned

31. Legal presumption against non-liquidation of cash advance
Article 217 of the Revised Penal Code states in unequivocal terms that:
“The failure of a public officer to have duly forthcoming any public funds or property with which he is chargeable, upon demand by any duly authorized officer, shall be prima facie evidence that he has put such missing funds or property to personal use.”

32. Final demand to settle unliquidated cash advance
Final notice and demand is hereby made to all concerned to settle and liquidate all outstanding cash advances as of December 31, 2011, on or before January 31, Provided, however, that those who have been issued by the Commission on Audit notice and demand, prior to the issuance of this Circular, to settle and liquidate their cash advances within a specified period, shall do so within the period specified in the said notice.

33. An accountable officer refers to:
A public officer or employee who, in the discharge of his office, receives money from the government which he is bound to later account for. Transfer, separation or retirement from the government does not operate to discharge the said person from coverage of the definition and corresponding duty to account for the unliquidated advances.

34. This Circular shall serve as the demand required under appropriate law, rules and regulations to settle the accountable officer’s unliquidated cash advance as well as all those who are already separated from the service or have transferred to other agency.

35. Duties of Agency officials:
On or before December 15, 2012, all heads of government agencies shall disseminate in writing this Circular to all Accountable officials and employees within their respective agencies and serve a written notice to and demand settlement of the outstanding cash advances as of December 31, 2011.
The Chief Accountant shall, within the same period, furnish the head of agency and the head of the auditing unit thereat a list of accountable officers with unliquidated and outstanding cash advances.

36. Duties of the Commission on Audit:
Ensure that the outstanding cash advances are liquidated within the specified periods
Shall Evaluate the cash advances of Accountable Officers to determine compliance with pertinent COA Rules and Regulations and to report violations thereof
Shall report on or before February 28, 2013 to the agency head and to the Director, FAIO, compliance with this Circular including the ageing of the cash advances showing the purpose and other information
Submit to the respective COA Directors the vouchers and all supporting documents relative to the grant of the cash advance, copy furnished the COA Chairperson

37. Consequences of failure to liquidate
Failure of an accountable officer to liquidate his outstanding cash advance on or before January 31, 2013 shall constitute cause for the filing of malversation charge under Article 217, failure to liquidate cash advance under Article 218, both of the Revised Penal Code or criminal prosecution under Section 128 of P.D
The suspension of salaries of the accountable officers shall be ordered by the auditor concerned to the propers agency official through the head of the Agency.
Appropriate administrative proceedings shall likewise be instituted.

38. COA Revised Chart of Accounts for National Agencies
Legal Basis:
COA Circular No Dated January 30, 2013
Effectivity:
January 01, 2014

39. Objectives:
To provide new accounts for the adoption of the Philippine Public Sector Accounting Standards (harmonized with IPSAS)
To provide uniform accounts for national government accounting and budget systems to facilitate the preparation of harmonized financial and budgetary accountability reports
To expand the account code from three (3) digits in the NGAS Chart of Accounts to eight (8) digits, to allow expansion or creation of new accounts as may be necessary to implement new standards or policies.

40. The COA Revised Chart of Accounts is integrated in the Unified Account Code Structure (UACS) under the Philippine Public Financial Management (PFM) Reform Program jointly undertaken by DBM, DOF and COA.

41. Major Changes
Coverage is limited only to all national government agencies
Expanded account code structure - from three (3) digits to eight (8) digits

42. Account Code Structure

43. Account Groups:
Codes are assigned to account groups to facilitate location of accounts in the general and subsidiary ledgers, to provide systematic arrangement and classification of accounts and facilitate preparation of the consolidated financial reports as follows:
Code Account Groups
1 Assets
2 Liabilities
3 Equity
4 Income
5 Expenses

44. Asset Without Contra Account
Ex. Cash, Collecting Officer

45. Asset Without Contra Account
Ex. Accounts Receivable

46. Major Changes
New Accounts were provided for the implementation of the Philippine Public Sector Accounting Standards

47. New Accounts
Example

48. Major Changes
Some accounts were deleted since these accounts are for use by local government units or government-owned and/or controlled corporations while other accounts are no longer applicable to national government agencies.

49. Deleted Accounts
Example

50. Major Changes
Some accounts were either expanded or compressed. For instance, expense accounts for repairs and maintenance and depreciation of property, plant and equipment which were previously presented per asset account were compressed based on the major account classification.

51. Compressed Accounts
Example

52. Expanded Account
Example

53. UNIFIED ACCOUNTS CODE STRUCTURE (UACS)
DRAFT
UNIFIED ACCOUNTS CODE STRUCTURE (UACS)
FUNDING SOURCE
6 Digits
ORGANIZATION
12 digits
LOCATION
9 digits
MFO/ PROGRAM, ACTIVITY and PROJECT
OBJECT CODE
10 digits
Financing
Source
1 digit
Authorization
2 digits
Fund Category
3 digits
Department
Agency
Operating Unit
7 digits
Region
Province
City, Municipality
Barangay
MFO/PAP Code
COA CoA* Object digits
Sub-Object 2 digits
Required
Optional
Unique for each Department/Agency
Uniform across Government
* Chart of Accounts

54. The Unified Account Code Structure (UACS)
Jointly developed by DBM, DOF and COA
It is a government-wide coding framework to provide a harmonized budgetary and accounting code classification that will facilitate reporting of actual revenues and collections and expenditures compared with programmed revenues and expenditures, starting fiscal year 2014

55. The UACS is to be adopted in identifying, aggregating, budgeting, accounting, auditing and reporting the financial transactions of the government.
Enhance the quality and timeliness of financial data for the generation of the required reports and analysis of the same.
Strengthen financial controls and accountability.

56. Key Elements of the UACS
Funding Source Codes: Six (6) digit code to reflect the Financing Source, Authorization and Funding Category
Organization Codes: Twelve (12) digit code to reflect the Department, Agency and Sub-Agency or Operating Unit/Revenue Collecting Unit

57. Location Codes: Nine (9) digit code to reflect the Region/Province/Municipality/Barangay following the Philippine Standard Geographic Code prescribed by the National Statistical Coordination Board
Major Final Output (MFO)/Program, Activity and Project (PAP) codes: Nine (9) digit code to reflect the MFO/PAP codes
Object codes: Assets, Liabilities, Equity, Revenues, and Expenses following the COA Chart of Accounts by object and sub-objects provided by BTr, BIR, DOF, BOC and DBM

58. Executive Order No. 55 dated September 6, 2011
GOVERNMENT ASSOCIATION OF CPAs (GACPA)
SUSTAINING ETHICS AND EXCELLENCE
IN MANAGING GOVERNMENT RESOURCES
SEMINAR/WORKSHOP
Executive Order No dated September 6, 2011
(Subject of COA Memorandum dated September 6, 2011)
Directing the Integration and Automation of Government Financial Management System

59. Rationale
It is the policy of the State to adopt and implement full public disclosure of all its transactions involving public interest and recognize the right of the people to information on matter of public concern as embodied under Section 28, Article II and Section 7, Article III of the 1987 Constitution

60. “The present administration subscribes to emerging global thrust towards open government and greater budget transparency and accords the highest priority to public sector initiatives that promote transparency, accountability and good governance as contained in the President’s Social Contract with the Filipino people.”

61. Objectives of Government Integrated Financial Information System (GIFMIS)
To facilitate the generation of vital information on any and all aspects of government financial transactions that can be made accessible to the public through I.T., subject to existing laws,
Greater participation of civil society organization in fiscal governance,
Effective and efficient delivery of public services.

62. Allow greater financial management and control at oversight and agency levels,
Ensure stricter compliance of the budget to appropriation laws and corresponding rules and regulations,
Significantly improve Treasury cash management, and
Facilitate keeping of general accounts of government and management reporting at various levels of government

63. The following agencies of the government signed a Memorandum of Agreement (MOA):
Commission on Audit (COA),
Department of Budget and Management (DBM),
Bureau of Treasury (BTr)/Department of Finance (DOF) which created the Steering Committee on Cooperation to Foster the Development of a GIFMIs and implement a Public Financial Management (PFM) Reforms Roadmap and operationalize a Treasury Single Account (TSA)

64. Philippine Public Financial Management
Accounting and Auditing Reforms (AAR) PIU Philippine Public Financial Management Status Report

65. Philippine Public Financial Management KEY ACCOMPLISHMENTS
Priority Area #1 - ACCOUNTING
Harmonize PGAS with IFRS and IPSAS
23 Philippine Public Sector Accounting Standards (PPSAS) which are intended for implementation in 2013 are being exposed to various COA sectors and concerned organizations like PICPA, GACPA, AGAP, PAGBA, EUC and PHALGA
On-going evaluation of eight comments received from agencies/organizations
Five of the 23 PPSASs, PPSAS 5, 13, 17, 29 and 31 were revised as result of the issuance of the 2012 IPSAS Handbook which contains the newly-issued IPSAS 32, Service Concession Arrangements: Grantor dated October 2011

66. Priority Area #2 - AUDITING
Develop Philippine Public Sector Standards on Auditing (PPSSA) COA resolutions to adopt/implement the following were signed by the COA Commission Proper (CP):
24 PPSSAs
COA’s Framework of Professional Standards
11 PPSSAs are being finalized and for submission to the CP for approval
18 ISAs/ISSAIs are on-going evaluation for adoption as PPSSAs

67. National Budget Circular No. 546 dated January 17, 2013
GOVERNMENT ASSOCIATION OF CPAs (GACPA)
SUSTAINING ETHICS AND EXCELLENCE
IN MANAGING GOVERNMENT RESOURCES
SEMINAR/WORKSHOP
National Budget Circular No dated January 17, 2013
“Rules and Regulations on the Grant of Representation and Transportation Allowances”

68. Salient Features Purpose: Coverage:
Issued to prescribe rationalized and updated rules and regulations on the grant of Representation Allowance (RA) and Transportation Allowances (TA)
Coverage:
Generally, those holding regular and contractual positions entitled to RATA under the pertinent general provisions of the annual GAA
Others as authorized and enumerated in the NBC

69. of Actual Work Performance
Authorized Monthly RATA Rates:
Highest rate is P14, for RA and P14, for TA
Lowest rate is P5, for RA and P5, for TA
Officials who are assigned or who use government vehicles are not entitled to TA
The grant of RATA shall be based on the actual work performance in a month on a pro-rata basis, exclusive of leaves of absence with pay as follows:
No. of Workdays
of Actual Work Performance
Actual RATA for a Month
1 to 6 workdays
25% of the monthly RATA
7 to 12 workdays
50% of the monthly RATA
13 to 18 workdays
75% of the monthly RATA
19 workdays or more
100% of the monthly RATA

70. For the issued government vehicle, but in some eventful cases were prevented to use it such as when the vehicle undergoes repair and no replacement is provided, the grant of TA maybe allowed on pro-rata bases.
RATA for OICs of positions entitled to those allowances maybe allowed but not to OICs of positions internally created organizational units whose staffing are not authorized by DBM
Monthly RATA while on concurrent capacity
Monthly RATA while on full-time detail or reassignment
Monthly RATA while on scholarship/study/training grant

71. Fund Sources: Effectivity: January 01, 2013
Charged against the agency budgets/appropriations for the purpose for NGAs
For GOCCs and GFIs, charged against the corporate operating budgets
The reimbursible RATA for those in detail to other government agencies shall be charged against the budgets of the parent agencies
Effectivity:
January 01, 2013

72. Thank you!