1. UNIFIED ACCOUNTS CODE STRUCTURE What is it all about? A presentation to the Association of Government Accountants of the Philippines (AGAP), Inc. by: Luz M. Cantor Undersecretary, DBM October 23, 2015 Aziza Paradise Hotel Puerto Princesa City, Palawan

2. Video Presentation on UACS

3. Outline of Presentation PART I. The PFM Reform Roadmap and UACS 1. Background of PFM  PFM Cycle and Gaps  Financial Reporting 2. Executive Order No. 55  Deliverables 3. What is UACS? - Definition 4. Main Purpose of UACS 5. Main Objectives of the UACS 6. Benefits of the UACS 7. Impact of UACS to Budgeting, Treasury, Accounting and Auditing 8. Coverage PART II. UACS Structure or Key Elements 1. Funding Source Code 2. Organization Code 3. Location Code 4. MFO/PAP Code 5. Object Code PART III. Implementation of the UACS (Code Administration)

4. Part I The PFM Reform Roadmap and the UACS

5. budget not results-based lack of funding predictability weak budget oversight by Congress & public weak cash management system no common budgeting and accounting classification weak monitoring of contingent liabilities lack of budget credibility Budget Cycle and Gaps 2007 PEFA Assessment on the: AUTHORIZATION EXECUTION ACCOUNTABILITY PREPARATION

6. Financial Reporting Prior to 2014 PFM Goal Messy traffic = 50 financial reports Systematic flow of shared data Oversight Agencies Integrated FMIS Operating Agencies

7. Strengthening the Philippine PFM EO No. 55 (s. 2011) directs the implementation of FMIS and TSA

8. Deliverables required under EO 55 Real time online accounting Monitoring and control of obligations and disbursements Regular in-year reporting of budget execution Timely year-end audit reporting of agency financial and physical operations Comprehensive, timely, accurate and consolidated PFM System

9. What is UACS? What is UACS? a government-wide harmonized budgetary, treasury and accounting code classification framework to facilitate reporting of all financial transactions of agencies

10. Main Purpose of the UACS To serve as the foundation for the improvements of the Public Financial Management (PFM) Reforms 1.It serves as the backbone for recording, accounting, analyzing, and reporting government finances. 2.It enables the oversight agencies to take responsibilities for improving the way financial information is utilized. 3.It improves the existing coding structure to be harmonized between budget, accounting, and cash which previously are relatively independent from each other. 4.It enhances that Internal Control Structure to provide more complete and effective information.

11. Economic Statistics in accordance with the Gov’t Finance Statistics (GFS) Manual of 2001 Financial Reports required by DBM and COA Main Objective of UACS: To have one coding framework to enable timely and accurate preparation of reports/documents: Financial Statements required by the Public Sector Accounting Standards Board of the Phils. Management Reports required by the executive officials/heads of departments

12. Benefits of the UACS 1.To have one coding framework for whole Budget Process (Preparation, Legislation, Execution, and Accountability) and for reporting Appropriation, Allotment, Obligation, Disbursement in all systems 2.To enable reporting of – a.Allotments released against appropriation; b.Obligations against allotments; c.Disbursements against obligations; 3.To facilitate compliance with Performance Informed Budgeting (PIB) where the Performance Information is already in the budget of agencies in the GAA 4.UACS, the means of turning data into meaningful information

13. Facilitates linkage to budget information, i.e., appropriation details, outcomes, performance measurements, outputs, etc. One coding for the different IT systems of DBM: Budget Preparation o Online Submission of Budget Proposals System o Budget Preparation Management System o eAppropriation System Budget Execution and Accountability o eBudget System o Unified Reporting System (URS) Impact of UACS to Budgeting Harmonizes budget and accounting reporting formats

14. Efficiency of Process UACS compliant TSA system will facilitate efficient recording and accounting by Treasury Reliability of Information Revenue and expenditure data are verifiable from single source Informed Judgement Data on receipts and disbursements will provide Treasury with accurate/credible bases for cash, liquidity, payment, and liability management Impact of UACS to Treasury (TSA)

15. Updated COA Chart of Accounts: - integrates sub-codes for budgeting purposes - adds clarity to overall structure - facilitates compliance with International Public Sector Accounting Standards (IPSAS) Impact of UACS to Accounting/Auditing Harmonized classification of accounts (budgeting and accounting) as well as reporting formats

16. UACS Coverage All NGAs including Constitutional Commissions/Offices, SUCs and GOCCs receiving Budgetary Support from NG, including those maintaining special accounts in the general fund

17. Part II UACS Key Elements

18. UACS (5) Elements = 54 Codes Funding Source (8) Organization Code (12) Location Code (9) Object Code (10) MFO /PAP code (15)

19. Funding Source Code = 8 Digits Fund Cluster Financing Source Authorization Fund Category 2123 1 st Element 1 General Fund 01 New General Appropriation 101 Specific Budget of NGA 01 Regular Agency Fund Example: 01- 1- 01-101

20. CodeDescription 01Regular Agency Fund 02 Foreign Assisted Projects Fund 03 Special Accounts – Locally Funded/Domestic Grants Fund 04 Special Accounts – Foreign Assisted/Foreign Grants Fund 05Retained Income/Funds 06Business Related Funds 07Trust Receipts Funding Source: Fund Cluster Code

21. Funding Source: Financing ParticularsUACS General Fund1 Off-Budgetary Funds2 Custodial Funds3

22. ParticularsUACS New General Appropriations01 Continuing Appropriations02 Supplemental Appropriations03 Automatic Appropriation04 Unprogrammed Funds05 Retained Income/Funds06 Revolving Funds07 Trust Receipts08 Funding Source Segment: Authorization Code

23. Particulars Codes Existing NSACs Fund Code/s UACS Specific Budgets of NGAs101101 to 150 GoP Counterpart Funds and Loans/Grants from Development Partners 102/171151 to 250 Allocations to Local Government Units103251 to 275 Budgetary Support to Government Corporations 104276 to 300 Financial Assistance to MMDA 301-320 Special Accounts in the General Fund 105,183,401, 151 to 159 321 to 400 Special Purpose Funds401 to 420 Unprogrammed Funds421 to 440 Retained Income/Funds441 to 500 Revolving Funds161 to 164501 to 600 Trust Receipts101-184, 187601 to 610 Others (Specify)611 to 999 Funding Source Segment: Fund Category Code

24. Sample Funding Source Code Regular Agency Fund Fund Cluster Financing Source Authori zation Code Fund Category Description Full Funding Source Code 01Regular Agency Fund 1General Fund 01New General Appropriations 101Specific Budget of NGAs01101101 407Pension and Gratuity Fund 01101407 04Automatic Appropriations 102Retirement and Life Insurance Premiums 01104102

25. Sample Funding Source Code Foreign Assisted Projects Fund Fund Cluster Financing Source Authori zation Code Fund Category Description Full Funding Source Code 02Foreign Assisted Projects Fund 1General Fund 01New General Appropriations 151GOP Counterpart Funds02101151 156Canada02101156 163International Bank of Reconstruction and Development (IBRD) 02101163 167Japan02101167

26. Sample Funding Source Code Special Accounts – Locally Funded/Domestic Grants Fund Cluster Financing Source Authori zation Code Fund Category Description Full Funding Source Code 03Special Accounts – Locally Funded/Domestic Grants Fund 1General Fund 04Automatic Appropriations 368Commission on Filipinos Overseas (CFO-SAGF) 03104368 373Housing and Land Use Regulatory Board (HLURB-SAGF) – Service/Processing Fees. Fines, Penalties 03104373

27. Organization Code = 12 Digits DepartmentAgency Operating Unit Classification Lower level Operating Unit Classification 2325 2nd Element Example: 06 – 001 - 0300003 Dept. of Budget & Management Office of the Secretary Regional Office Lower Level Operating Unit

28. a) Department Code DEPARTMENTUACS Congress of the Philippines 01 Office of the President 02 Office of the Vice-President 03 Department of Agrarian Reform 04 Department of Agriculture 05 Department of Budget and Management 06 Department of Education 07 State Universities and Colleges 08 Department of Energy 09 Organization Code

29. b) Agency Code DEPARTMENT/AGENCYUACS Department of Budget and Management06 000 0000000 Office of the Secretary06 001 0000000 Government Procurement Policy Board- Technical Support Office 06 002 0000000 Organization Code

30. c) Operating Unit Classification Code OPERATING UNITS CLASSIFICATIONUACS Central Office01 Staff Bureaus02 Regional Offices/Centers for Health Development/ Regional Field Units 03 State Universities and Colleges - Campuses04 Provincial Offices05 National Irrigation Administration Offices06 Schools Division/District Offices08 Secondary Schools09 Collection Districts10 Revenue Regional Offices – BIR11 Revenue District Offices – BIR12 Organization Code

31. c) Operating Unit Classification Code OPERATING UNITS CLASSIFICATIONUACS Embassies/Consulates General/Manila and Regional Consular Offices - DFA 13 Special/Retained Hospitals – DOH 14 Treatment and Rehabilitation Centers – DOH 15 Technical/Vocational Schools - TESDA 16 Key Budgetary Units – DND 17 District Engineering Offices and Sub District Engineering Offices – DPWH 18 Land Transportation Offices – DOTC 19 Land Transportation Franchising and Regulatory Board - DOTC 20 Regional Development Councils – NEDA 21 Autonomous Region in Muslim Mindanao 22 Philippine National Railway23 BSGC – Subsidiary24 Organization Code

32. d) Lower-Level Operating Unit DEPARTMENT/AGENCY/OPERATING UNIT UACS Department of Budget and Management06 000 0000000 Office of the Secretary06 001 0000000 Central Office 06 001 0100000 Regional Office – I 06 001 0300001 Regional Office – NCR 06 001 0300013 Regional Office – CAR 06 001 0300014 Regional Office – II 06 001 0300002 Regional Office – III 06 001 0300003 Government Procurement Policy Board- Technical Support Office 06 002 0000000 Organization Code

33. Business Rules for Organization Code DEPARTMENTAGENCY LOWER LEVEL OPERATING UNIT UACS From: Department of Education 07 National Book Development Board (NBDB) 002 000000007 002 0000000 To: Department of Trade and Industry 22 National Book Development Board (NBDB) 007000000022 007 0000000 EXAMPLE:

34. Location Code = 9 Digits RegionProvince City/ Municipality Barangay 2223 3 rd Element Example: 13- 39- 05- 033 National Capital Region City of Manila, First District Sta. CruzBarangay 331

35. The complete list of Location Code can be obtained by visiting the website of Philippine Statistics Authority (PSA): http://www.nscb.gov.ph/activestats/psgc/list mun.asp Location Code

36. PAP /MFO Code = 15 Digits Sector Outcome Horizontal Program Program MFO Activity Code 1 st level2 nd level Project Project Category Project Sub Category Project Title 321225 4th Element Example: 103 00 4 01 03 01925 General Services Horizontal Prog. Locally- Funded Project Buildings and Other Structures Multi- Purpose Buildings Rehab of Multi-purpose Building, Palmera 2 Subdivision, Sta. Monica, Quezon City

37. Enhancements to the UACS Sector and Sub- Sector Outcome, Adoption of the Organization for Economic Cooperation and Development (OECD) international standard for Sector and Sub- Sector Outcome, which is the Classification of Functions of Government (COFOG). Horizontal Program Inclusion of the Horizontal Program codes as a segment of the MFO/PAP element.

38. What is COFOG ? The Classification of Functions of Government (COFOG) is a detailed classification of the functions, or socioeconomic objectives, that general government units aim to achieve through various kinds of expenditures.

39. Why adopt COFOG? Many users of data particularly the Public, want to know what government spent money on, rather than who spent it or who received it. People generally care about services.

40. Uses of COFOG An instrument for policy formulation, budget analysis, accountability and day-to-day administration of the budget. Allows reporting along international standards (like GFS) The functional classification organizes government activities according to their purposes. It is independent of the government organizational structure.

41. Adoption of COFOG Sector outcomes in UACS are intended to provide the means to capture information on government expenditures at an aggregated level Significantly improves the information needed for setting budget priorities and budget analysis It is already established and well documented in the GFS Manual. It facilitates international comparisons.

42. Function Classification Structure The functions of government are divided into ten (10) sectors (1st level): 1. General Public Services 6. Housing and Community Amenities 2. Defense 7. Health 3. Public Order and Safety 8. Recreation, Culture and Religion 4. Economic Affairs 9. Education 5. Environmental Protection 10. Social Protection

43. UACS MFO/PAP Element – Sector Outcome Code Values Code ValueDescriptionType 100General public servicesSector 120DefenseSector 140Public order and safetySector 160Economic affairsSector 180Environmental protectionSector 200Housing and community amenitiesSector 220HealthSector 240Recreation and cultureSector 260EducationSector 280Social protectionSector

44. UACS MFO/PAP Element – Sector Outcome Code Values for General Public Services Code ValueDescriptionType 100 General public servicesSector 101 Executive and legislative organs, financial and fiscal affairs, external affairs Sub-Sector 102Foreign economic aidSub-Sector 103General servicesSub-Sector 104Basic researchSub-Sector 105R&D General public servicesSub-Sector 106General public services n.e.c.Sub-Sector 107Public debt transactionsSub-Sector 108 Transfers of a general character between different levels of government Sub-Sector 109 Governance / Government Institutions and Regulatory Regime Sub-Sector 110 - 119Not yet assignedSub-Sector

45. Code ValueDescriptionType 120DefenseSector 121Military DefenseSub-Sector 122Civil DefenseSub-Sector 123Foreign military aidSub-Sector 124R&D DefenseSub-Sector 125Territorial integritySub-Sector 126Defense against cybercrimesSub-Sector 127 Defense n.e.c. (Not Elsewhere Classified) Sub-Sector 128-139Not yet assignedSub-Sector UACS MFO/PAP Element – Sector Outcome Code Values for Defense

46. Code ValueDescriptionType 140Public order and safetySector 141Police servicesSub-Sector 142Fire-protection servicesSub-Sector 143Law courtsSub-Sector 144PrisonsSub-Sector 145R&D Public order and safetySub-Sector 146Public order and safety n.e.c.Sub-Sector 147-159Not yet assignedSub-Sector UACS MFO/PAP Element – Sector Outcome Code Values for Public Order and Safety

47. PAP /MFO Code = 15 Digits Sector Outcome Horizontal Program Program MFO Activity Code 1 st level2 nd level Project Project Category Project Sub Category Project Title 321225 4th Element Example: 103 00 4 01 03 01925 General Services Horizontal Prog. Locally- Funded Project Buildings and Other Structures Multi- Purpose Buildings Rehab of Multi-purpose Building, Palmera 2 Subdivision, Sta. Monica, Quezon City

48. PAP Category Programs, Projects or PurposeUACS General Administration and Support (GAS) 1 Support to Operations (STO)2 Operations3 Locally-Funded Projects4 Foreign-Assisted Projects5 Purpose6

49. Project Category and Sub-Category Physical Infrastructure Projects  Buildings and Other Structures  Flood Control and Drainage  Roads and Bridges  Non-Road Transport Infrastructure  Power and Communications Infrastructure, and  Water Management Non Physical Infrastructure Projects  Economic Development  Education  Environmental Protection  Governance  Health  Recreation Sports and Culture  Research and Development, and  Social Protection

50. Project Category and Sub-Category Governance1000 General Public Services1001 Defense1002 Public Order and Safety1003 Systems Development1004 Capacity Development1005 Governance and Accountability Improvement1006

51. Example of MFO/PAP Coding DEPARTMENT OF BUDGET AND MANAGEMENT: Office of the Secretary PARTICULARSUACS General Administration and Support100 0000 General Administration and Support Services100010000 General Management and Supervision100010001 Support to Operations200 0000 Budget and Management Support Services200010000 Legal Services200010001 Information and Communications Technology Systems Services200010002 Training and Information Services200010003

52. Example of MFO/PAP Coding DEPARTMENT OF BUDGET AND MANAGEMENT: Office of the Secretary PARTICULARSUACS Operations 300 0000 MFO 1: Budget Policy Advisory Services 301000000 Fiscal policy research, budget planning and programming, including provision of technical secretariat services to the Development Budget Coordination Committee (DBCC) 301 0000 MFO 2: Budget Management Services 302000000 Planning, management and monitoring of the annual budget program 302010000 Evaluation, release and monitoring of funding requirements and organization, staffing and compensation proposals of National Government Agencies, including State Universities and Colleges, GOCCs and LGUs 302 0000

53. Example of MFO/PAP Coding PARTICULARSUACS MFO 3: Organizational Productivity Enhancement Services303000000 Policy formulation and standards-setting, and evaluation of agency proposals303010000 Internal control systems and procedures towards productivity improvement303010001 Major organization and staffing modification, compensation and position classification303010002 MFO 4: Performance Review and Evaluation Services304000000 Financial and physical performance review and evaluation304010000 DEPARTMENT OF BUDGET AND MANAGEMENT: Office of the Secretary CONTINUED

54. Example of MFO/PAP Coding DEPARTMENT OF BUDGET AND MANAGEMENT: Office of the Secretary CONTINUED PARTICULARSUACS Locally-Funded Projects400 0000 Governance410000000 Governance and Accountability Improvement410060000 Budget Improvement Project410060001 Philippine Government Electronic Procurement Systems - PhilGEPS410060002

55. 5 th Element Object Code = 10 Digits ObjectSub-Object 8 digits2 digits Example: 50604040-01 Expenses Capital Outlay Bldgs. & Structures Outlay Property, Plant & Equipt. Buildings

56. COA Revised Chart of Accounts (RCA) Has been substantially revised to consolidate some line items, add clarity to overall structure and to facilitate compliance with International Public Sector Accounting Standards Moved away from the 2003 3-digit coding framework to a 2012 8-digit framework

57. Object Code Every item on the COA’s Revised Chart of Accounts included Sub-Object codes added to meet DBM, BTr, DoF & COA reporting requirements Capital Outlay codes added in correspondence with relevant COA’s Revised Chart of Accounts Asset Codes Some Lump-Sum Codes added for use prior to transfer to Departments

58. Starting Point – COA’s Revised Chart of Accounts 5 Expenses 5 01Personnel Services 501 Salaries and Wages 501 010 Salaries and Wages - Regular 501 020 Salaries and Wages - Casual/Contractual 50102 Other Compensation 50102010 Personal Economic Relief Allowance (PERA) 50102020 Representation Allowance 50102030 Transportation Allowance 50102040 Clothing/Uniform Allowance 50102050 Subsistence Allowance 50102060 Laundry Allowance 50102070 Quarters Allowance

59. Starting Point – COA’s Revised Chart of Accounts 5 Expenses 50102080 Productivity Incentive Allowance 50102090 Overseas Allowance 50102100 Honoraria 50102110 Hazard Pay 50102120 Longevity Pay 50102130 Overtime and Night Pay 50102140 Year End Bonus 50102150 Cash Gift 50102990 Other Bonuses and Allowances

60. Sub-Object Codes Expenses5000000000 Personnel Services5010000000 Salaries and Wages5010100000 Salaries and Wages - Regular5010101000 Basic Salary - Civilian5010101001 Base Pay - Military/Uniformed Personnel5010101002 Salaries and Wages - Casual/Contractual5010102000 Other Compensation5010200000 Personnel Economic Relief Allowance (PERA)5010201000 PERA - Civilian5010201001 PERA - Military/Uniformed Personnel5010201002 Representation Allowance5010202000 Transportation Allowance5010203000 Transportation Allowance5010203001 RATA of Sectoral/Alternate Sectoral Representatives5010203002

61. New Codes for Capital Outlays Capital Outlays5060000000 Investment Outlay5060100000 Investment in Government-Owned and/or Controlled Corporations5060101000 Investment in Associates5060102000 Loans Receivable Accounts Outlay5060200000 Loans Receivable - Government-Owned and/or Controlled Corporations5060201000 Loans Receivable - Others5060299000 Investment Property Outlay5060300000 Land and Buildings Outlay5060301000 Investment Property – Land5060301001 Investment Property – Buildings5060301002 Property, Plant and Equipment Outlay5060400000 Land Outlay5060401000 Land5060401001

62. Asset Account Funding Source 6 Digits Organization 12 digits Location 9 digits Object Code 10 digits Financing 1 Authorizatio n 2 Fund Category 3 Department 2 digits Agency 3 digits Operating Unit 7 digits Region 2 digits Province 2 digits City Munici pality 2 digits Barangay 3 digits Chart of Accounts 8 Sub Object 2 General Fund DOFBIRCagayan Revenue Regional Office Cagayan Valley Cash – Collecting Officers 1011011100311 000030200 00010101010 00

63. Liability Account Funding Source 6 Digits Organization 12 digits Location 9 digits Object Code 10 digits Financing – 1 Authorization 2 Fund Category - 3 Department 2 digits Agency 3 digits Operating Unit 7 Digits Region 2 digits Province 2 digits City or Municipality 2 digits LGU 3 COA CoA* Object 8 digits Sub-Object 2 digits General Fund Department of Public Works and Highways Office of the Secretary Malabon- Navotas District Engineering Office National Capital Region Accounts Payable 101101 18 001 18 000021300 00020101010 00 Excludes Program MFO Activity Project Code element and Fund Source element

64. Revenue Account Excludes Program MFO Activity Project Code element Fund Source Organization Location 9 digits Object Code 6 Digits Department 2 digits Agency 2 digits Operating Unit 5 Digits Region 2 digits Province 2 digits City Municipality 2 digits Barangay 3 digits 10 digits General Fund DoFBIR Bacolod City Revenue Regional Office Western Visayas Income Tax Individuals 1011011100311 000120600 00040101010 01

65. 1.COA-DBM-DOF Joint Circular No. 2013-1 dated August 6, 2013 – Implementation of UACS for all government financial transactions effective January 2, 2014 Implementation of the UACS 2. COA-DBM Joint Circular No. 2014-1 Harmonized Budget and Financial Accountability Reports dated July 2, 2014 3. COA-DBM-DOF Joint Circular No. 2014-1 Enhancement of the UACS dated November 7, 2014 Part II

66. UACS Website (www.uacs.gov.ph)

67. Code Administration

68. Code Administration Business Rules 1. Assigned codes are never reused for a purpose other than that for which they were originally assigned 2. New codes are always to be assigned to: –new organizational entities –new fund sources –new major final outputs –new programs, new activities, new projects –new object code descriptors

69. Code Administrators/Agencies Responsible FUNDING SOURCE 8 digits ORGANIZATION 12 digits LOCATION 9 digits MFO/PROGRAM, ACTIVITY and PROJECT (PAP) 15 digits OBJECT CODE 8 digits SUB OBJECT 2 digits DBM Budget Technical Bureau DBM Budget Technical Bureau PSA (formerly NSCB) DBM Budget Management Bureaus and NGAs COA Revised Chart of Accounts DBM Budget Technical Bureau + COA Subsidiary Accounts Note: Consistency of account classification and coding standard with the Government Finance Statistics is the responsibility of DOF-Bureau of Treasury

70. UACS Manual The Manual and its Appendices are available at DBM website under Latest Issuances: http://www.dbm.gov.ph/ Joint Circular No. 2013-1 UACS Manual UACS Appendices

71. Approval of the COA Revised Chart of Accounts Issuance of the DBM-COA-DOF Joint Circular on the UACS Manual and its Appendices Adoption of UACS starting in 2014 Budget Preparation through OSBPS into BPMS What has been done so far?

72. Adoption of the GAA as a Budgetary Release Document Enhancement of eNGAS to comply with UACS What are the current initiatives affected by the UACS? Review of existing a) Release Document, b) Budget Execution Documents, and c)Financial Accountability Reports

73. “It is not because things are difficult that we do not dare; it is because we do not dare that they are difficult ~Seneca