THE NEW GOVERNMENT ACCOUNTING SYSTEM MANUAL For Local Government Units
Chapter 1. INTRODUCTION
Sec. 01. Objectives of the Manual. – The New Government Accounting System Manual presents the basic policies and procedures; the new coding system and chart of accounts; the accounting books, reports/forms and financial statements, and illustrative accounting entries to be adopted by all local government units effective January 1, 2002. The objectives of the Manual are to prescribe the following:
a) Uniform guidelines and procedures in accounting for government funds and property;
b) New coding structure and new chart of accounts; and
c) New accounting books, reports/forms, financial statements and accounting entries.
Sec. 02. Coverage. – This Manual shall be used by all local government units (LGUs).
Sec. 03. Legal Basis. – This Manual is prescribed by the Commission on Audit pursuant to Article IX-D, Section 2 par. (2) of the 1987 Constitution of the Republic of the Philippines which provides that:
"The Commission on Audit shall have exclusive authority, subject to the limitations in this Article, to define the scope of its audit and examination, establish the techniques and methods required therefor, and promulgate accounting and auditing rules and regulations, including those for the prevention and disallowance of irregular, unnecessary, excessive, extravagant, or unconscionable expenditures, or uses of government funds and properties". (underscoring supplied)
Chapter 2. BASIC FEATURES AND POLICIES
Sec. 04. Basic Features and Policies. – The new government accounting system has the following basic features and policies, to wit:
1. Accrual Accounting. A modified accrual basis of accounting is used. Under this method, all expenses shall be recognized when incurred. Income shall be on accrual basis (e.g. Share from Internal Revenue Collections) except for transactions where accrual basis is impractical (e.g. Market Fees) or when other methods may be required by law.
2. One Fund Concept. This system adopts the one fund concept. Separate fund accounting shall be done only when specifically required by law or by a donor agency or when otherwise necessitated by circumstances subject to prior approval of the Commission. As required under Sections 308, 309 and 310 of the Local Government Code, separate books shall be maintained for the General Fund, Special Education Fund and Trust Fund.
3. Special Accounts in the General Fund. Special accounts in the General Fund complete with subsidiary ledgers, shall be maintained for the following:
• Public utilities and other economic enterprises;
• Loans, interests, bonds issued, and other contributions for specific purposes;
• Development projects funded from the Share in the Internal Revenue Collections; and
• Such other special accounts which may be created by law or ordinance.
4. Chart of Accounts and Account Codes. A new coding structure and a new chart of accounts with a three-digit account numbering system shall be adopted.
5. Books of Accounts. The Books of Accounts are as follows: 6. Journals
• Cash Receipts Journal (CRJ) • Cash Disbursements Journal (CDJ) • Check Disbursements Journal (CKDJ) • General Journal (GJ)
7. Ledgers
• General Ledger (GL)
• Subsidiary Ledgers, where applicable for:
• Cash
• Receivables • Inventories • Investments
• Property, Plant and Equipment • Liabilities
• Income
• Expenses
8. All the above records shall be maintained by the accounting unit of the LGUs. However, treasurers and disbursing officers shall also maintain their respective cash records such as:
• Cashbook – Cash in Treasury • Cashbook – Cash in Bank • Cashbook – Cash Advances
9. The Treasurers/Collectors shall prepare the Report of Collections and Deposits (RCD) daily and the Report of Accountability for Accountable Forms (RAAF) monthly.
10. Financial Statements. The following statements shall be prepared: • Balance Sheet
• Statement of Income and Expenses • Statement of Cash Flows
11. Notes to Financial Statements shall accompany the above statements. 12. Trial Balance. The two money-column trial balance shall be used.
13. Appropriations, Allotments and Obligations. Journal entry shall no longer be prepared to record the appropriations, receipt of allotments and incurrence of obligations. In lieu of this, separate registries shall be maintained by the Accounting Unit to control the appropriations, allotments and obligations for each of the four classes of expenditures, namely:
• Registry of Appropriations, Allotments and Obligations – Capital Outlay (RAAOCO)
• Registry of Appropriations, Allotments and Obligations – Maintenance and Other Operating Expenses (RAAOMO) • Registry of Appropriations, Allotments and Obligations –
Personal Services (RAAOPS)
• Registry of Appropriations, Allotments and Obligations – Financial Expenses (RAAOFE).
14. Financial Expenses. Financial expenses such as bank charges, interest expenses, commitment fees and other related expenses shall be separately classified from Maintenance and Other Operating Expenses (MOOE). 15. Perpetual Inventory of Supplies and Materials. Supplies and materials
purchased for inventory purpose shall be recorded using the perpetual inventory system. Regular purchases shall be coursed thru the inventory account and issuances thereof shall be recorded as they take place except those purchased out of petty cash fund which shall be for immediate use and not for stock. Such case shall be charged immediately to the appropriate expense accounts.
16. Valuation of Inventory. Cost of ending inventory of supplies and materials shall be computed using the moving average method.
17. Maintenance of Supplies and Property, Plant and Equipment Ledger Cards. The Accounting Unit shall maintain Supplies Ledger Cards by stock number and Property, Plant and Equipment Ledger Cards by category of assets. 18. Construction of Assets. For assets under construction, the Construction Period Theory shall be applied for costing purposes. Bonus paid to the contractor for completing the work ahead of time shall be added to the total cost of the project. Liquidated damages charged and paid for by the contractor shall be deducted from the total cost of the asset. Any related expenses incurred during the construction of the project, such as, license fees, permit fees, clearance fees, etc. shall be capitalized.
19. Public Infrastructures. Public infrastructures are assets for use of the general public, such as roads, bridges, waterways, railways, plazas, monuments, etc. A Registry of Public Infrastructures (RPI) shall be
maintained according to classification to record all infrastructures for use of the general public. The following are the Registries to be maintained, classified by category of property, plant and equipment:
• Registry of Public Infrastructure – Bridges (RPIB) • Registry of Public Infrastructure – Roads (RPIR)
• Registry of Public Infrastructure – Plazas, Monuments, etc. (RPIP)
20. During construction these infrastructures shall be recorded in the books under the account “Construction in Progress”. Upon completion, the completed asset shall be transferred to the account “Public Infrastructure”. At the end of the year, completed assets under “Public Infrastructure” shall be transferred to the respective registry.
21. Completed public infrastructures funded out of a loan shall, however, be retained in the books of accounts until the loan is fully paid.
22. A Summary of all Public Infrastructures (based on the different registries) shall be prepared annually and included in the Notes to Financial
Statements.
23. Depreciation. The straight-line method of depreciation shall be used. A residual value equivalent to ten percent (10%) of the cost shall be set-up and depreciation shall start on the second month after
purchase/completion of the property, plant and equipment. Public infrastructures shall not be charged any depreciation.
24. Reclassification of Obsolete and Unserviceable Assets, as well as Assets No Longer Used by the Agency to “Other Assets” Account. Assets declared by proper authorities as obsolete and unserviceable, including assets of the agency no longer used, shall be reclassified to “Other Assets” account from the corresponding inventory and property, plant and equipment accounts. 25. Allowance for Doubtful Accounts. An Allowance for Doubtful Accounts shall
be set up for estimated uncollectible receivables. This will allow for a fair valuation of receivables. Allowance for Doubtful Accounts shall be provided only for trade receivables.
26. Elimination of Contingent Accounts. Contingent accounts shall no longer be used. All financial transactions shall be recorded using the appropriate accounts. Cash shortages and disallowed payments shall be recorded under receivable accounts “Due From Officers and Employees” and
“Receivables– Disallowances/Charges”, as the case may be.
27. Recognition of Liability. Liability shall be recognized at the time goods and services are accepted or rendered and supplier/creditor bills are received. 28. Interest Accrual. Whenever applicable and appropriate, interest income
and/or expense shall be accrued and recognized in the books of accounts. 29. Accounting for Borrowings and Loans. All borrowings and loans incurred
shall be recorded direct to the appropriate liability accounts.
30. Elimination of corollary and negative entries. The use of corollary and negative entries shall be stopped. Acquisition/Disposition of assets shall be debited/credited direct to the appropriate asset accounts. If an error is committed, a correcting entry shall be prepared to adjust the original entry.
Chapter 3. ACCOUNTING SYSTEM
A. GENERAL ACCOUNTING PLAN
Sec. 05. General Accounting Plan. – The General Accounting Plan shows the overall accounting cycle in the Local Government Unit. Transactions shall emanate from the different offices/departments of the local government units (LGUs). These offices/departments will provide/produce the source documents and other
accounting forms leading to the perfection of the transaction, whether it be budgetary, collections or disbursements. The source documents and accounting forms shall be the basis for the preparation of reports by the Office of the Treasurer. The Office of the Accountant shall record the transactions to the registries or to the corresponding books of original entry. Posting to the books of final entry and
preparation of the financial reports shall also be undertaken by the Office of the Accountant.
The General Accounting Plan (Table 1) is presented as to the following type of transactions:
1) Appropriations, Allotments and Obligations 2) Collections and Deposits
3) Disbursements – a) By cash b) By check
4) Miscellaneous and Other transactions
B. BUDGETARY ACCOUNTS
Sec. 06. Budgetary Accounts. – Budgetary accounts are composed of appropriations, allotments and obligations.
Sec. 07. Accounting for Appropriations. – Appropriation refers to an
authorization made by ordinance, directing the payment of goods and services from local government funds under specified conditions or for specific purposes.
The local sanggunian approves the annual budget thru the issuance of appropriation ordinance. On the first business day of the fiscal year, the entire annual budget of the local government unit shall be recorded in the Registry of Appropriations, Allotments and Obligations (RAAO). The appropriations, in the amounts approved by the legislative body and confirmed by the reviewing authorities, are recorded in the registries maintained by the accountant where they may be compared with the actual developments of the period.
Budgetary reserves which are stand by appropriations ready for release in case of calamities, as well as supplemental budget are similarly recorded in the RAAO. In case the LGU is operating on a re-enacted budget, said re-enacted budget shall likewise be recorded in the registry. Once current budget is approved, the necessary adjustments shall be made in the registry.
Separate registries shall be maintained for the four classes of expenditures per responsibility center, to wit:
1. Registry of Appropriations, Allotments and Obligations - Capital Outlays (RAAOCO)
2. Registry of Appropriations, Allotments and Obligations - Maintenance and Other Operating Expenses (RAAOMO)
3. Registry of Appropriations, Allotments and Obligations - Personal Services (RAAOPS)
4. Registry of Appropriations, Allotments and Obligations - Financial Expenses (RAAOFE)
Sec. 08. Accounting for Allotments. – Allotment is the authorization issued by the Local Chief Executive (LCE) to a department/office of the LGU, which allows it to incur obligations, for specified amounts, within the appropriation ordinance.
Allotments are released quarterly based on the Work and Financial Plan and Request for Release of Allotment. The Accountant, upon receipt of the Advice of Allotment, shall enter the allotment in the RAAOs.
Sec. 09. Accounting for Obligations. – Obligations refer to the amounts committed to be paid by the LGU for any lawful act made by an accountable officer for and in behalf of the local government unit concerned.
Obligations shall be taken up in the registries as they are incurred. For each obligation, the requesting department/office shall prepare the Allotment and Obligation Slip (ALOBS) signed by the department or office head as requesting official and forward this, together with the supporting documents, to the Budget Officer.
The Budget Officer shall certify to the existence of appropriation that has been legally made for the purpose by signing the appropriate box in the ALOBS and assign the ALOBS number thereto. The Accountant shall review the ALOBS and certify as to obligation of the allotment by signing the appropriate box in the ALOBS. He shall also fill up the Status of Obligation. The Accountant shall record the amount of obligation in the RAAOs.
Sec. 10. Adjustment of Obligations. – The Chief Accountant shall record paid disbursement vouchers in the Status of Obligation portion (Payments) of the ALOBS. Any balance appearing in the ALOBS after full payment of obligations shall form part of unobligated allotment. The Chief Accountant shall adjust accordingly the amount of recorded obligations in the RAAO using the same ALOBS number as reference. At the end of each month, the Chief Accountant and the Budget Officer shall reconcile their records on allotments available for obligation.
Sec. 11. Accounting Procedures for Budgetary Accounts. – Summarized hereunder is the process in accounting for budgetary accounts:
P R O C E S S PERSON / UNIT
RESPONSIBLE a) Records in the appropriate RAAOs
the approved appropriation per Appropriation Ordinance.
Office of the Accountant
b) Forwards the advice of allotments to the Office of the Accountant and returns the work plan to the concerned
departments/ offices.
Office of the Budget Officer
c) Enters the allotments in the RAAOs. Office of the Accountant d) Prepares ALOBS based on
disbursement vouchers/purchase requests and/or supporting documents. Signs the appropriate box for requesting office. Forwards the same to the Office of the Budget Officer.
Heads of
departments/offices
e) Certifies the ALOBS as to the existence of appropriations based on the appropriation ordinance. Assigns ALOBS number and forwards the same to the Office of the Accountant.
Budget Officer
f) Certifies the ALOBS as to the obligations of allotments. Records the obligation in the appropriate column of the RAAOs and in the Status of Obligation portion (Obligation) of the ALOBS.
Chief Accountant
g) Records paid disbursement vouchers in the Status of Obligation portion (Payments) of the ALOBS. Any balance appearing in the ALOBS after full payment of obligations shall form part of
unobligated allotment. Adjust accordingly the amount of recorded obligations in the RAAOs.
Office of the Accountant
h) At the end of each month, reconcile records on allotments available for obligation.
Budget Officer and Chief Accountant
Sec. 12. Terminology and Classification. – A common terminology and
classification shall be used consistently throughout the budget, the accounts and the financial reports.
For this purpose, the following specific expenditures shall be recorded in the appropriate RAAOs:
a. RAAOCO –
• Investments outlay (e.g. stocks, bonds)
• Land, Land Improvements and Leasehold Improvements outlay
• Buildings and Other Structures outlay (e.g. school buildings, markets and slaughterhouses, hospital and health centers, etc.)
• Public Infrastructures outlay (e.g. parks, plaza, monuments, bridges etc.)
• Furniture and Fixtures outlay
• Work Animals outlay
• Breeding stocks
• Machineries and Equipment outlay (e.g. dump trucks, construction equipment, industrial machineries, technical and scientific equipment, etc.)
• Aircrafts, Trains and Motor Vehicles outlay (e.g. motorcycles, cars, vans, etc.)
• Artesian Wells, Reservoirs, Pumping Stations and Conduits outlay
• Books outlay
• Ordnance outlay
• IT Equipment and Software outlay
• Other Property, Plant and Equipment outlay
• Reforestation Projects
• Arts, Archeological Specimen and Other Exhibits b. RAAOPS –
• Salaries and Wages (e.g. regular pay, part-time pay, overtime and night pay, holiday pay, etc.)
• Allowances (e.g. PERA, hazard pay, RATA, etc.)
• Benefits (e.g. bonus, cash gifts, productivity, pension, etc.)
• Government Shares on Employees’ Contributions c. RAAOMO –
• Subsidies (e.g. Subsidy to LGUs, Subsidy to Other Funds, etc.)
• Livestock (e.g. swine, hogs, chicken, goats, etc.)
• Crops
• Supplies (e.g. office, medical, dental and laboratories, spare parts, gasoline and oil, etc.)
• Repairs and Maintenance
• Printing and Binding
• Travel
• Consultancy
• Light, Water and Gas
• Communication (e.g. telephone, telegraph, internet, postage, etc.)
• Auditing Services
• Other Services (e.g. janitorial, security, hauling, etc.)
• Extraordinary and Miscellaneous Expenses
•
All other expenditures in the Chart of Accounts for MOOE, except depreciation, obsolescence, bad debts, loss on sale of assets, loss of assets, discount on Real Property Tax and Special Education Tax.d. RAAOFE –
• Bank Charges
• Interest Expenses
• Commitment Charges
• Other Financial Charges (e.g. underwriting fees, guarantee fees)
• Loan Amortization
C. INCOME/COLLECTIONS AND DEPOSITS
Sec. 13. Separation of Books and Depository Accounts. – Local accountants and treasurers shall maintain separate books and depository accounts, respectively, for each fund in their custody or administration.
Sec. 14. Depository Accounts. – Local treasurer shall maintain depository accounts in the name of their respective local government units with banks, preferably government-owned, located in or nearest to their respective areas of jurisdiction. Earnings of its depository accounts shall accrue exclusively thereto. Sec. 15. Remittance of Government Monies to the Local Treasury. – Officers of the local government authorized to receive and collect monies arising from taxes, revenue, or receipts of any kind shall remit the full amount received and collected to the treasury of such local government unit which shall be credited to the particular account or accounts to which the monies in question properly belong.
Sec. 16. Sources of Income of LGUs. – The main sources of income of LGUs are as follows:
a. Tax revenues, fees and charges
b. Share from Internal Revenue Collections c. Share from National Wealth
The sources of income are further classified into general income accounts and specific income accounts.
Sec. 17. General Income Accounts. – The following shall comprise the General Income Accounts applicable to LGUs:
a. Subsidy from Other LGUs b. Subsidy from Other Funds c. Subsidy from Special Accounts d. Sales Revenue
e. Dividend Income f. Interest Income
g. Gain on Sale of Securities h. Gain on Sale of Assets
i. Sale of Confiscated Goods and Properties j. Foreign Exchange (FOREX) Gains
k. Miscellaneous Operating and Service Income
l. Fines and Penalties – Government Services and Business Operations
m. Income from Grants and Donations
Sec. 18. Specific Income Accounts. – The following major classification comprise the specific income accounts for LGUs:
2. Taxes on Goods and Services 3. Other Taxes
4. Other Specific Income
Sec. 19. Methods of Accounting for Income. – The following accounting methods shall be adopted in recording income:
a.
Accrual Method – Accrual method of accounting shall be used to record Share from Internal Revenue Collections in the books of accounts. Upon receipt of the Notice of Funding Check Issued from Department of Budget andManagement (DBM), Share from Internal Revenue Collections shall be taken up as Due from NGAs and credited to Share from Internal Revenue Collections. However, Cash in Bank shall be debited upon receipt of Bank Credit Advice as to receipt of the Share from Internal Revenue Collections regardless of whether or not the Notice of Funding Check Issued has been received from DBM.
b.
Modified Accrual – Modified accrual method of accounting shall be used for real property taxes. At the beginning of the year, Real Property Tax Receivable and Special Education Tax Receivable shall be established. This is in view of the need to record in the books not mere income estimates from real property taxes but actual receivables from said taxes.However, to avoid appropriating uncollected revenues which might result to huge cash overdraft, the same shall be credited to Deferred Real Property Taxes Income/Deferred Special Education Tax Income. Real Property Tax Income/Special Education Tax Income shall be recognized upon receipt of collection.
c.
Cash Basis – Cash basis of accounting shall be used for all other taxes, fees, charges and other revenues. Sec. 20. Basis of Recording Real Property Tax/Special Education Tax. – Real Property Tax Receivables/Special Education Tax Receivables shall be established at the beginning of the year based on Real Property Tax Account Register/Taxpayer’s index card. At the beginning of the year, the Treasurer shall furnish the Chief Accountant of a duly certified list showing the name of taxpayers and the amount due and collectible for the year. Based on the list, the Chief Accountant shall draw a Journal Entry Voucher (JEV) to record the debit to Real Property TaxReceivable/Special Education Tax Receivable and crediting to Deferred Real Property Tax Income/Deferred Special Education Tax Income.
Upon collection of Real Property Taxes from taxpayers, the account Deferred Real Property Tax Income/Deferred Special Education Tax Income shall be debited while the Real Property Tax Income due to the municipality is recognized/credited. The share of the Province and Barangay shall also be credited to Due to LGUs. Every end of the week, thereafter the Municipal Accountant shall furnish the Provincial Accountant with a summary of the JEVs showing the breakdown of the amounts Due to LGUs. The summary, which shall be supported with copies of the JEVs, shall be the basis of the Provincial Accountant to draw the JEV taking up the RPT Income. The account Due from LGU shall be debited and Real Property Tax Income credited.
At the end of the month, the Municipal Accountant shall likewise prepare the Abstract of Real Property Tax to facilitate the distribution of real property tax collection. A copy of the abstract shall be furnished the Provincial Accountant, for purposes of reconciliation with the weekly summary of JEVs.
Sec. 21. Delinquencies for Real Property Tax/Special Education Tax Prior to CY 2002. – Payment of delinquencies for real property taxes/special education taxes prior to CY 2002 shall be recognized as a direct credit to Real Property Tax Income/Special Education Tax Income account.
Sec. 22. Discount on Real Property Tax/Special Education Tax. – Discounts for advance and prompt payment of Real Property Tax and the additional one percent (1%) tax accruing to the Special Education Fun shall be recognized in the year the taxes are due. Said discounts shall be apportioned to the concerned LGUs in accordance with the sharing prescribed for real property tax and additional one percent (1%) tax under the Local Government Code.
Sec. 23. Fines and Penalties. – Fines and Penalties, either from tax revenue or other specific income, shall be recognized as income of the year it was collected. Fines and Penalties arising from real property taxes shall be distributed to concerned LGUs in accordance with the sharing prescribed under the Local
Government Code for Real Property Tax and the additional one percent (1%) tax for the Special Education Fund.
Sec. 24. Other Receipts. – Other receipts of the local government units shall be comprised of, but not limited to, the following:
a. Borrowings
b. Sale of Property, Plant and Equipment c. Refund of Cash Advances
d. Receipt of Performance/Bidders’ Bonds
Sec. 25. Borrowings. – Borrowings are proceeds of repayable obligations, generally with interest from the bank, national agency, another local government unit, and private sector. All borrowings incurred shall be recorded direct to the appropriate liability accounts. Upon receipt of the advice from the bank or lending agency informing the release of the proceeds, the Accountant shall draw a Journal of Entry Voucher taking up the transaction.
Sec. 26. Sale of Property, Plant and Equipment. – Sale of property, plant and equipment refers to the proceeds from the sale of land, buildings, equipment, furniture and other similar property which are recorded in the books as Property, Plant and Equipment. The appropriate Property, Plant and Equipment account shall be credited upon transfer of ownership.
Sec. 27. Refund of Cash Advances. – Cash advances for official travel shall be taken up as a receivable from the concerned official or employee. Refunds made shall be credited to the receivable account previously set up. Cash advances for salaries and wages shall be recorded as debits to the account Cash – Disbursing Officer. Any refund made shall be credited to this account.
Sec. 28. Receipt of Performance Bonds. – Performance bond posted by contractor or supplier to guaranty full and faithful performance of the their work may be in the form of cash, certified check or surety. Performance bond in cash or certified check shall be acknowledged by the issuance of official receipt and recorded in the books by the Accountant drawing a JEV for the purpose. In case of surety bond, an acknowledgment receipt shall be issued by the authorized official.
Sec. 29. Reporting for Collections and Deposits. – Collectors/tellers shall issue a receipt to acknowledge collections made. The receipt maybe in the form of pre-numbered Official Receipts, or cash tickets and the like. At the close of each business day, these collectors/tellers shall accomplish the Report of Collections and Deposits (RCD) in four copies. The original and two copies, together with the duplicates of the official receipts issued, shall be submitted to the treasurer/cashier to whom the cash collected shall be turned over. The fourth copy of the RCD shall be retained by the collector/teller concerned. Barangay Treasurers deputized to collect taxes imposed by provinces, cities and municipalities shall follow the same procedures in turning over their collections to the treasurer/cashier concerned.
In the case of collectors assigned to the field, where travel time from their places of assignment to the Treasurer’s Office is more than one day, turnover of collections shall be made at least once a week or as soon as the collections reach P5,000.00.
Sec. 30. Verification of Collections and Accountable Forms. – The Treasurer/Cashier shall verify the Report of Collections and Deposits; check the statement of accountable forms as to initial balances on hand, receipts, issues and the ending balances on hand; make a physical count of the accountable forms remaining in the custody of the collector/teller and check the same against the new balances on hand column. He shall indicate his verification by affixing his signature at the back of the triplicate copy of the last official receipt issued. He shall count the money turned over to him and sign the certification and receipt portion of all copies of RCD.
Sec. 31. Designation of Liquidating Officers. – The Treasurer may designate liquidating officers from among the collectors/tellers whenever necessary.
a. Collector
s/tellers shall turn over their collections to their designated liquidating officer. The RCD shall however be prepared in five copies, four copies to be submitted to the liquidating officer, the fifth copy to be retained by the collector/teller.
b. The
liquidating officer shall perform the procedures for the receipt and verification of collections turned over to him. He shall also accomplish the RCD in four copies to summarize the collections turned over to him by the collectors/tellers as well as his own collections.
c. The
liquidating officer shall turn over intact the cash collections to the Treasurer/Cashier together with the originals and two copies of the RCDs of collectors/tellers and the duplicates of the official receipts issued. The Treasurer/Cashier shall acknowledge receipt of the cash and all accompanying documents by signing all copies of the RCD of liquidating officer on the certification and receipt portion of the form. The fourth copy of the RCD of the liquidating officer and RCDs of collectors/tellers shall be retained by the liquidating officer.
Sec. 32. Deposit of Collections. – The Treasurer/Cashier shall deposit intact all his collections as well as all collections turned over to him by the collectors/tellers with the authorized depository bank daily or not later than the next banking day. He shall record all deposits made in the cashbook and prepare the RCD.
The barangay treasurer shall deposit all collections intact with the city/municipal treasurer, or in a depository bank account maintained in the name of the barangay, within five (5) days from receipt thereof.
Sec. 33. Deposit of Field Collections. – Collections by field collectors shall be remitted to the Cashier or designated liquidating officer of the field office of the LGU. When travel distance of the field office to the local treasury may expose government funds to the risk of loss while in transit, the Cashier or designated liquidating officer, upon authorization by the Treasurer, may deposit the collections in the authorized depository bank near the field office of the LGU. The procedures in reporting collections and deposits prescribed in this Chapter shall be observed.
Sec. 34. Accounting for Collections and Deposits. – The Accountant shall determine the account classification of the collections covered by the RCD and the supporting papers submitted by the Treasurer/Cashier and shall accomplish the Journal Entry Voucher. The accountant shall also maintain the Abstract of Real Property Tax Collections to facilitate the distribution and remittance of the shares of the different government units concerned in the real property tax collections. Sec. 35. Receipts and Collection Process. – The following is a summary of the receipt and collection process in the LGU:
P R O C E S S PERSON / UNIT
RESPONSIBLE Receive payment from taxpayers/ creditors
and issue Official Receipt (OR). Prepare Report of Collections and Deposits. Remit to the Liquidating Officer (if one is designated) or Treasurer.
Collector/Teller
Check remittances and verifies accountable forms of collectors/tellers. Consolidates collections and remits to the
Treasurer/Cashier. Prepares RCD.
Liquidating Officer
Receive remitted collections, consolidates the same and prepares RCD. Records in the Cashbook – Cash in Treasury.
Treasurer
Deposit collections in the appropriate bank account per authorized depository bank. Records deposit in the Cashbook – Cash in Bank.
Treasurer
Forward RCD to Accounting Unit with copies of
ORs and validated deposit slips. Treasurer
Prepare Journal of Entry Voucher and record in
the Cash Receipt Journal. Accountant
Sec. 36. Pro–forma Accounting Entries. – The following are pro-forma accounting entries for income, collection and deposit:
Particulars Account Title Acct. Cod e Debit Credi t I N C O M E
1. Real Property Tax – Basic
A. Books of the Municipality
a. Setting-up of RPT
Receivable Real Property Tax Receivable 124 1,000 RPT = P1,000 Deferred Real
RPT Sharing: Municipal
- 40% Property Tax Income 448 1,000 Province - 35%
Barangay - 25%
b. Receipt of Cash in Treasury 101 100
Payment Real Property Tax
Receivable 124 100
c. Distribution of Collection RPT Sharing:
Deferred Real Property Tax Income
Real Property Tax 448711 100 40
Municipal - 40% Due to LGUs 431 60
Province - 35% Barangay - 25% d. Deposit of
Collections Cash in Bank – LCCA Cash in Treasury 110101 100 100 e. Remittance of
Share (Province) Due to LGUsCash in Bank – LCCA 431110 35 35 f. Remittance of Share
(Barangay) Due to LGUsCash in Bank – LCCA 431110 25 25
B. Books of the Province
a. Upon receipt of the Summary of the JEV from the Municipal Accountant
Due from LGUs
Real Property Tax 131711 35 35
b. Upon receipt of
share Cash in Bank – LCCADue from LGUs 110131 35 35
2. Operating and Service Income
a. Receipt of Income Cash in Treasury 101 100
Particulars Account Title Acct.
Cod e Debit Credi t Receipts from Markets Garbage Fees 783 772 9010 b. Deposit of
Collections Cash in Bank – LCCACash in Treasury 110101 100 100
3. Share from Internal Revenue Collections
a. Receipt of Notice of Funding Check Issued from the DBM and credit memo from
Cash in Bank –LCCA Share from Internal Revenue Collections
110 746
1,000
1,000 the bank for Share
from Internal Revenue Collections b. Receipt of Notice of
Funding Check Issued Due from NGAsShare from Internal 130 1,000 from the DBM for
Share from Internal Revenue Collections
Revenue Collections 746 1,000
4. Grants and Donations
a. Receipt of grants and donations in cash (Donations in kind shall be booked-up using the appropriate asset account)
Cash in Treasury Income from Grants and Donations 101 651 100 100 b. Receipt of grants and donations in kind -Motor Vehicle:
Motor Vehicles
Invested Equity 218537 800 800 Original Cost
P1,000
Less: Acc. Depn. 200
(At the end of Year)
Invested Equity 537 800
Book Value P
800 Government Equity 501 800
5. BORROWINGS a. Receipt of borrowed funds from bank Principal - P1,000
Cash in Bank –LCCA Loans Payable – Current, Domestic 110 403 1,000 1,000 Bank Charges Interest Expenses 951952 1012
Particulars Account Title Acct. Cod e Debit Credi t Bank Charges - 10 Interest Expense- 12
Cash in Bank –LCCA 110 22
b. Receipt of borrowed funds from other agency -Cash in Treasury Loans Payable – Current, domestic 101 403 1,000 1,000 Principal - P1,000 Interest Expenses 952 6 Interest Expense -
6 Cash in Bank – LCCA 110 6
c. Payment of loan
amortization Loans Payable – Current, Domestic 403 200
Cash in Bank - LCCA 110 200
6. SUBSIDIES
a. Subsidy from Other Funds (General Fund to Special Education Fund)
GENERAL FUND BOOKS Transfer of subsidy to Special Education Fund (Aid to SEF to finance its projects)
Subsidy to Other Funds
Cash in Bank – LCCA 897
110 500 500
SPECIAL EDUCATION FUND BOOKS Receipt of subsidy
funds from Other funds Cash in Treasury Subsidy from Other 101 500
Funds 605 500
b. Special Accounts (subsidy from General Fund proper to Operation of Public Market)
BOOKS OF GENERAL FUND PROPER Transfer of subsidy to
Special Account Subsidy to Special Accounts 898 500
Cash in Bank – LCCA 110 500
BOOKS OF SPECIAL ACCOUNT (OPERATION OF PUBLIC MARKET)
Particulars Account Title Acct.
Cod e Debit Credi t Receipt of subsidy from
General Fund Proper
Cash in Bank – LCCA
Subsidy from Special 110 500
Accounts 606 500
7. REFUND OF CASH ADVANCES
a. Cash Advance by an Officer for Local Travel
a. To take up the cash
advance Due from Officers & Employees 128 10
Cash in Bank – LCCA 110 10 b. To take up refund of
cash advance Cash in TreasuryDue from Officers & Employees
101 128
10
10
b. Cash Advance by a Disbursing Officer for Salaries and Wages
a. To take up the cash
advance Cash – Disbursing Officers 107 10
Cash in Bank – LCCA 110 10
b. To take up refund of
cash advance Cash in TreasuryCash – Disbursing Officers
101 107
10
10
8. RECEIPT OF CASH BONDS a. To take up receipt of performance bond in cash
Cash in Treasury Performance/ Bidders/ Bail Bonds Payable 101 414 50 50 b. To take up deposit
of performance bond Cash in Bank – LCCACash in Treasury 110101 50 50 c. To take up refund of
performance bond Performance/ Bidders/ Bail Bonds
Payable 414 50
Cash in Bank – LCCA 110 50
D. DISBURSEMENTS
Sec. 37. Disbursements. – Disbursements refer to the settlement of government payables/obligations by cash or by check.
Typical transactions for which disbursements are made are as follows: 1. Personal Services
2. Maintenance and Other Operating Expenses 3. Capital Outlay
4. Financial Expenses
Disbursements shall be covered by Disbursement Vouchers (DV) or payrolls and paid either by check or in cash. The Allotment and Obligation Slip (ALOBS) shall be an integral part of the DV.
Sec. 38. Certification on Disbursements. – Disbursements from the general fund shall require the following certifications on the DV:
1. Certification and approval of vouchers and payrolls as to validity, propriety and legality of the claim (Box A of DV) by the head of the department or office who has administrative control of the fund concerned. In case of temporary absence or incapacity of the department head or chief of office, the officer next-in-rank shall automatically perform his function and shall be fully responsible therefor.
2. Necessary documents supporting the disbursement vouchers and payrolls as certified to and reviewed by the Accountant. (Box B of DV)
3. Certification that funds are available for the purpose by the Local Treasurer. (Box C of DV)
Sec. 39. Approval of Disbursements. – Approval of disbursements by the Local Chief Executive (LCE) himself shall be required whenever local funds are disbursed, except for regularly recurring administrative expenses such as: payrolls for regular or permanent employees, expenses for light, water, telephone and telegraph services, remittances to government creditor agencies such as GSIS, BIR, PHILHEALTH, LBP, DBP, NPO, PS of the DBM and others, where the authority to approve may be delegated. Disbursement vouchers for expenditures appropriated for the operation of the Sanggunian shall be approved by the provincial Vice Governor, the city Vice Mayor or the municipal Vice Mayor, as the case may be. Sec. 40. Payments by Check. – Checks shall be drawn only on duly approved disbursement vouchers. It shall be drawn by the local Treasurer and countersigned by the local Administrator. In case of temporary absence or incapacity of the aforesaid officials, these duties shall devolve upon their immediate assistants. In the case of municipalities where no Administrator has been appointed, checks shall be countersigned by the municipal Mayor. In case, however, of expenditures appropriated for the operation of the Sanggunian, checks drawn shall be
countersigned by the provincial Vice Governor, the city Vice Mayor, or the municipal Vice Mayor, as the case may be.
Sec. 41. Recording Check Disbursements in the Cashbooks. – All checks issued including cancelled checks shall be recorded chronologically in the Cashbook – Cash in Bank.
Sec. 42. Release of Checks. – The Treasurer shall release the check only to the payee or his duly authorized representative. For purposes of releasing checks, the Treasurer shall maintain a Check Register where all checks issued shall be recorded chronologically and where the claimants shall be required to acknowledge receipt thereof.
Sec. 43. Reporting of Checks Issued. – The checks released to claimants shall be reported in the Report of Checks Issued (RCI) which shall be prepared daily by the Treasurer for each fund. It shall be submitted to the Accountant for preparation of Journal of Entry Voucher based on individual checks issued and recording in the Check Disbursements Journal.
Sec. 44. Check Disbursement Process. – The steps in disbursements through issuance of check is shown below:
P R O C E S S PERSON / UNIT
RESPONSIBLE a. Gather supporting
documents, and approved ALOBS, prepare DV and forward to Head of Department.
Concerned Office
b. Sign Box A of DV and
submit to the Accounting Unit. Supervisor/Head of Department c. Check completeness of
documents, assign number to DV, sign Box B and forward to Treasurer.
Accounting Unit
d. Verify claim, certify cash availability (Box C) and forward to approving officer.
Treasurer
Note: If funds are not available,
return to Accountant for recording in the books as Accounts Payable (AP). For AP, JEV shall be prepared by Accounting Unit and JEV number reflected in the DV. JEV for AP is recorded in General Journal. Accountant retains copy of DV and forwards to Treasurer. e. Approve transaction (Box D) and forward DV to Cashier.
Local Chief Executive or authorized approving officer f. Prepare, sign check
and forward check with DV to countersigning officer.
Treasurer
g. Countersign check and forward to Accountant for preparation of the
Accountant’s Advice of Local Check Disbursements.
Administrator/ Vice-Mayor
for the Local Sanggunian Disbursements h. Prepare Accountant’s
Advice of Local Check Disbursements and submit to
P R O C E S S PERSON / UNIT RESPONSIBLE bank. Return DV, check and
supporting documents to Cashier/Treasurer.
i. Record check in the Check Register and release check to claimant. Record disbursement in Cashbook – Cash in Bank. Prepare Report of Checks Issued. Forward RCI with DV and supporting documents to Accounting Unit.
Treasurer
j. Prepare the JEV based on individual checks/voucher; sign “Prepared By” portion (approved by Chief
Accountant), and record JEV in the Check Disbursements Journal. Post monthly to the General Ledger/Subsidiary Ledgers.
Accounting Unit
k. Forward RCI, DV, supporting documents and JEV to the Office of the Auditor.
Accountant
Sec. 45. Payments in Cash. – Disbursements by cash shall be made from a cash advance drawn and maintained in accordance with COA rules and regulations. Cash payments shall be made only on duly approved payrolls/disbursement vouchers. Cash advances, by regular and special disbursing officers shall be recorded through a debit to Cash – Disbursing Officers and a credit to Cash in Bank – Local Currency, Current Account (LCCA).
Sec. 46. Reporting of Cash Disbursements. – To account for cash
disbursements, from regular and special cash advances, the Accountable/Disbursing Officer shall prepare the Report of Disbursements and submit the original and duplicate copy with vouchers/payrolls/petty cash vouchers to the Accountant. He shall ensure that receipt of the report and supporting documents, are properly acknowledged by the Accountant. The Accountant shall verify the report including the completeness of the supporting documents, prepare the Journal of Entry Voucher (JEV) and record the transaction in the Cash Disbursements Journal. Sec. 47. Cash Advances for Travel. – Cash advances for travel shall be recorded as debit to the account Due from Officers and Employees and a credit to Cash in Bank – Local Currency, Current Account.
For liquidation of travel where the amount of cash advance is equal to or more than the travel expenses incurred, the Liquidation Report form shall be prepared by the officers/employees concerned and submitted to the accounting unit as basis for preparation of the JEV to record liquidation. In case the amount of cash advance is less than the travel expenses incurred, a Disbursement Voucher shall be prepared to liquidate the previous cash advance and serve as a claim for reimbursement of the deficiency in amount.
Sec. 48. Payments out of the Petty Cash Fund. – Petty cash fund shall be maintained under the imprest system. The fund shall be sufficient for the non-recurring, emergency and petty expenses of the LGU for one month. Disbursements from the fund shall be through the Petty Cash Voucher (PCV) which shall be signed by the payee to acknowledge the amount received. The official receipt shall be attached to the PCV.
Petty cash fund shall be set up at the beginning of the year. An ALOBS shall be prepared for the fund, recorded in the RAAO and obligated as Other Expenses. Payments out of the fund shall be made through the use of PCVs duly supported by official receipts and other required documents. Each PCV shall not exceed
Php1,000.00.
A Disbursement Voucher shall be prepared for replenishments of the petty cash fund during the year duly supported by a list/summary of PCVs, the PCVs and its
supporting documents. ALOBS shall be prepared for each replenishment and recorded in the RAAO based on actual expenses incurred.
At the end of the year, the petty cash fund shall be fully liquidated by preparing a Report of Disbursement supported by the list/summary of PCVs, the PCVs and its supporting documents. The ALOBS setting up the fund at the beginning of the year shall be cancelled. Another ALOBS shall be prepared taking up the liquidation and recorded in the RAAO based on the actual expenses incurred. Unused cash shall be returned to the Treasurer who shall issue an Official Receipt to acknowledge the amount returned. A new Cash Advance for Petty Cash Fund shall be set up in the ensuing year.
Sec. 49. Cash Disbursement Process. – Disbursement process for payment of salaries and wages out of cash advances is as follows:
P R O C E S S PERSON / UNIT
RESPONSIBLE a) Processing of Payrolls to be paid
by cash is the same as that of steps (a) to (e) for check disbursements.
Concerned offices
b) Gather duly certified and approved payrolls to be paid out of cash advance. Prepare DV for cash advance corresponding to the net amount of payroll/s. Sign Box A of DV and submit to the Accounting Unit.
Office of the Treasurer
c) Check completeness of
documents/ previous cash advance liquidated, assign number to DV, sign Box B and forward to Approving Officer.
Accounting Unit
d) Approves DV and forward to Treasurer for preparation of checks.
P R O C E S S PERSON / UNIT RESPONSIBLE e) Prepare and sign check, and
forward check with DV to countersigning officer.
Treasurer
f) Countersign check and forward to Accountant for preparation of Advice.
Administrator
g) Prepare Accountant’s Advice of Local Check Disbursements and return DV, check and supporting documents to Cashier/Treasurer.
Accountant
h) Encash check and pay claimants. Record disbursement in Cashbook – Cash Advances.
Treasurer/ Disbursing Officer
i) Return unused cash to the Treasurer/ Cashier. An official receipt (OR) shall be issued by the Treasurer/Cashier to acknowledge the return of unused cash and indicate check no. of cash advance granted on the face of OR. Record the refund as credit to cash advance and attach OR to the Cashbook – Cash Advances.
Disbursing Officer
j) Prepare Report of Disbursement, attach paid payrolls/ supporting documents and copy of OR for unused cash advance returned to Treasurer/Cashier. Sign "Certified Correct” portion of Report of Disbursement and submit to Accounting Unit.
Disbursing Officer
k) Prepare JEV to record the liquidation of cash advance. Record JEV in the Cash
Disbursements Journal (CDJ). Post monthly to the General Ledger/ Subsidiary Ledger.
Accountant
l) Forward Report of Disbursement and supporting documents including JEV to the Office of the Auditor.
Accountant
Sec. 50. Purchase or Construction of Property, Plant and Equipment. – Property, plant and equipment include land and land improvements, buildings, equipment, motor vehicles, books, machineries, ordnance, etc. and public infrastructure. These are charged against appropriations/allotments for capital outlay when obligated.
Property, plant and equipment acquired through purchase shall include all costs incurred to bring it to the location necessary for its intended use, like transportation, freight, installation costs, etc. In the books of accounts, the purchase is immediately recorded as asset.
Property, plant and equipment to be constructed may be classified as agency assets and public infrastructures. Agency assets are those to be used by the LGU
concerned, like buildings, while public infrastructures are those to be used by the general public. The construction period theory shall be used in recording both types of assets. This means that expenses such as license fees and bonus paid to
contractor for completing the work ahead of schedule, etc. during the construction period shall be added to the total cost of the project. However, liquidated damages charged to the contractor for delayed completion should be deducted from the total cost.
During the construction period, agency assets and public infrastructures shall be taken up in the books as "Construction in Progress” with the appropriate asset classification. As soon as the project is completed, the Construction in Progress for agency asset is closed to the appropriate asset account.
For public infrastructures funded out of regular income, the Construction in Progress account is transferred to the Public Infrastructures account upon completion. At the end of the year, the latter account is closed to the Government Equity and the asset is recorded in the Registry of Public Infrastructures (RPI). However, completed public infrastructures funded out of a loan shall be closed to the Government Equity account only upon full payment of the loan. A disclosure of public infrastructures completed funded from loans shall be made in the Notes to Financial Statements. Sec. 51. Purchase of Supplies. – Purchase of supplies and materials for stock regardless of whether or not they are consumed within the accounting period shall be recorded as assets using the Inventory account following the Perpetual Inventory Method (refer to Chapter 7 – Supplies or Property). However, supplies and materials purchased out of the Petty Cash Fund for immediate use or for emergency shall be taken up as expenses.
Sec. 52. Pro-forma Accounting Entries. – Pro-forma accounting entries for disbursement transactions are shown below:
Particulars Account Title
Acct . Cod
e Debit Credit
1. Payment through Cash Advances
a. Cash advance for personal services
Enter obligation in RAAOPS for P18,000 Salaries and Wages, P5,000 Additional Compensation, and P3,000 Personnel Economic Relief Allowance (PERA).
1. Grant of cash
advance for payroll Cash – Disbursing Officers
Cash in Bank – LCCA 107110 21,000 21,000
Particulars Account Title
Acct . Cod
e Debit Credit
advance for payroll – Regular Pay
P E R A 801804 18,0003,000 Additional Compensation 805 5,000 Withholding Taxes Payable 410 2,000 GSIS Payable 411 1,500 PAG-IBIG Payable 412 1,500 Cash – Disbursing Officers 107 21,000
Enter obligation in RAAOPS for P1,500 Life and Retirement Insurance Contributions and P1,500 PAG-IBIG Contributions.
3. Government share for life and retirement insurance and PAG-IBIG Contributions
Life and Retirement Insurance Contributions PAG-IBIG Contributions 817 818 1,500 1,500 GSIS Payable 411 1,500 PAG-IBIG Payable 412 1,500
b. Petty Cash Fund
For establishment of fund, Enter obligation in RAAOMO as Other Expenses for P6,000
1. Release of cash advance for petty cash fund miscellaneous expenses
Petty Cash Fund
Cash in Bank – LCCA 105110 6,000 6,000
Enter obligation in RAAOMO for Office Supplies P2,500, Travelling Expenses P500, Office Equipment Maintenance P1,000 and Other Expenses of P800. 2. Replenishment of
petty cash fund during the year Traveling Expenses – Local Office Supplies Expenses 831 849 500 2,500 Office Equipment Maintenance 882 1,000 Other Expenses 950 800
Cash in Bank – LCCA 110 4,800
Enter obligation in RAAOMO for Office Supplies P4,000 and Traveling Expenses of P1,000.
3. Liquidation at year
end Traveling Expenses – Local 831 1,000
Particulars Account Title
Acct . Cod e Debit Credit Office Supplies Expenses 849 4,000
Petty Cash Fund 105 5,000
Cancel RAAOMO for setting up of petty cash fund at the start of the year and refund for a total of P6,000.
4. Return of unused
Petty Cash Fund. Cash in TreasuryPetty Cash Fund 101105 1,000 1,000
c. Cash advance for travel
Enter obligation in RAAOMO for Travel of P1,000 1. Grant of cash
advance Due from Officers and Employees 128 1,000
Cash in Bank – LCCA 110 1,000 2. Liquidation of cash
advance during the current year
(assuming only P900 was utilized and P100 was refunded)
Traveling Expenses – Local
Due from Officers and Employees
831 128
900
900
Adjust RAAOMO for refund of cash advance of P100 3. For amount
refunded where official receipt was issued
Cash in Bank – LCCA Due from Officers and Employees 110 128 100 100 2. Payment by Check
a. Maintenance and Other Operating Expenses
Enter obligation in RAAOMO for rent P3,000
1. Payment of rent Rent Expense 841 3,000
Cash in Bank – LCCA 110 3,000
Enter obligation in RAAOMO for electricity of P1,500 and telephone/internet of P2,000
2. Payment of utilities
(MERALCO and PLDT) ElectricityTelephone/Telegrap h and Internet Cash in Bank – LCCA
835 837 110 1,500 2,000 3,500
Particulars Account Title
Acct . Cod
e Debit Credit
Enter obligation in RAAOMO for training and seminar expenses of P1,000 3. Payment of
seminar fee Training and Seminar Expenses 833 1,000
Cash in Bank – LCCA 110 1,000
b. Financial Expenses
Enter obligation in RAAOFE for bank charges of P300 1. Bank charges upon
receipt of bank statement
Bank Charges
Cash in Bank – LCCA 951110 300 300
Enter obligation in RAAOFE for interest expense of P400 2. Interest Expense Interest Expenses 952 400
Cash in Bank – LCCA 110 400
c. Office Equipment – Enter obligation in RAAOCO for P6,000 for purchase of equipment
1. Issuance of PO to
dealer No entry
2. Receipt of office
equipment Office EquipmentCash in Bank – LCCA 222110 6,000 6,000
d. Construction of Roads by Contract – Enter obligation in RAAOCO for P800,000 for construction of road.
1. Payment of first billing for 50% accomplishment Construction in Progress – Roads, Highways and Bridges 232 400,00 0 Withholding Taxes Payable 410 40,000
Cash in Bank – LCCA 110 360,000 2. Payment of second billing 100% accomplishment Construction in Progress – Roads, Highways and Bridges 232 400,00 0 Withholding Taxes Payable 410 40,000
Particulars Account Title
Acct . Cod
e Debit Credit
Cash in Bank – LCCA 110 360,000 3. Remittance of
taxes withheld Withholding Taxes Payable
Cash in Bank – LCCA 410110 80,000 80,000
If funded from regular agency income –
4. To take up roads
completed Public InfrastructureConstruction in 243 800,000 Progress – Roads, Highways and Bridges 232 800,000 5. To transfer completed roads to Registry of Public Infra- structures at the end of the year
Government Equity Public
Infrastructures
501
243 800,000 800,000
Note: Using the JEV for the above transactions, the public infrastructures
shall be recorded in the Registry of Public Infrastructures.
If funded from a loan –
6 To record
completed Public Infrastructures 243 800,000
roads Construction in
Progress – Roads, Highways and
Bridges 232 800,000
At year end,upon full payment of laon – Government Equity Public Infrastructures 501 243 800,000 800,000
e. General Repair/Construction of Building by Administration
1. Approval of the
project P1M No entry
Particulars Account Title Acct . Cod e Debit Credit 2. Issue PO for building materials: Lumber, nails, cement, sand and gravel, paints, etc. = P600,000 No Entry 3. Payment for construction materials received Construction Materials Inventory Withholding Taxes Payable
Cash in Bank – LCCA 156 410 110 600,00 0 60,000 540,000 4. Issuance of
materials P590,000 Construction in Progress – Agency
Assets 230 590,00
0 Construction
Materials Inventory 156 590,000
Enter obligation in RAAOCO for P380,000 for labor 5. Cash advance
granted to Disbursing Officer for payroll
Cash – Disbursing Officers
Cash in Bank – LCCA 107110 350,000 350,000 6. Liquidation by Disbursing Officer of paid payroll Construction in Progress – Agency Assets 230 380,00 0 Withholding Taxes Payable 410 30,000 Cash – Disbursing Officers 107 350,000 7. Remittance of
withholding tax Withholding Taxes Payable Cash in Bank – LCCA
410 110 30,000 30,000 8. Accomplishment Report approved by the LCE Buildings Construction in Progress – Agency Assets 204 230 970,00 0 970,000 f. Acquisition of Land
Enter obligation in RAAOCO for P2million for purchase of land 1. Payment made for
land purchased LandWithholding Taxes 201 2M
Particulars Account Title
Acct . Cod
e Debit Credit
Payable 410 200,000
Cash in Bank – LCCA 110 1.8M
2. Remittance of
withholding tax Withholding taxes Payable 410 200,00 0
Cash in Bank – LCCA 110 200,000
g. Land and Building
Enter obligation in RAAOCO for P600,000 for land and P400,000 for building
1. Payment of the land and building (assessed value of land is P600,000) for P1,000,000 Land Building Withholding Taxes Payable
Cash in Bank – LCCA 201 204 410 110 600,00 0 400,00 0 100,000 900,000 2. Remittance of
withholding tax Withholding Taxes Payable
Cash in Bank – LCCA 410110 100,000 100,000
h. Purchase of Inventories
Enter obligation in RAAOMO for purchase of P2,500 worth of spare arts 1. Payment of
delivered spare parts Spare Parts Inventory Withholding Taxes Payable 155 410 2,500 250 Cash in Bank – LCCA 110 2,250
i. Enter obligation in RAAOMO for purchase of office supplies 1. Payment of office
supplies delivered Office Supplies Inventory Withholding Taxes Payable 149 410 3,000 300 Cash in Bank – LCCA 110 2,700
j. Fund Transfers
Particulars Account Title Acct . Cod e Debit Credit 1. Cash assistance to
LGU –XYZ Subsidy to Local Government Units 895 30,000
Cash in Bank – LCCA 110 30,000
k. Enter obligation in RAAOMO for subsidy to SEF 1. Cash transfer to
SEF as subsidy Subsidy to Other Funds
Cash in Bank – LCCA 897110 10,000 10,000
l. Enter obligation in RAAOMO for grants and donation to Trust Fund 1. Cash transfer to Trust Fund as counterpart LGU funds. Grants and Donations
Cash in Bank – LCCA 889
110 500,000 500,000
E. MISCELLANEOUS TRANSACTIONS
Sec. 53. Miscellaneous Transactions. – Miscellaneous transactions refer to transactions that are unique and not recurring in the ordinary course of operations of the government. These transaction types seldom take place or ideally should not happen at all. The following maybe considered miscellaneous transactions:
1. Loss of Cash and Property Accountability 2. Cash Overage
3. Dishonored Check
4. Lost/Destroyed/Stale/Obsolete and Fraudulently Encashed Check 5. Settlement of Suspensions/Disallowances/Charges
6. Refund of Overpayments
Sec. 54. Loss of Cash and Property. – Loss of cash and property may be due to malversation, theft, robbery or other causes.
Cash shortage discovered during cash examination conducted by auditors is reported through the Report of Cash Examination within ten (10) working days from the completion of examination pursuant to COA Memorandum No. 84-373A. The auditor issues an audit report in case of shortage in property accountability. As soon as a shortage is definitely established, the Auditor shall issue a memorandum pertaining thereto and the Accountant shall draw a Journal of Entry Voucher to take up the shortage as a receivable from the accountable officer concerned.
In case of loss of property due to other causes (theft, force majeure, fire, etc.), a report thereon shall be prepared by the accountable officer concerned for purposes of requesting relief from accountability. No accounting entry shall be made but the loss shall be disclosed in the notes to financial statements pending result of request for relief from accountability.
Sec. 55. Grant of Relief from Accountability. – When a request for relief for shortages or loss of funds is granted, a copy of the decision shall be forwarded to the Chief Accountant who shall draw a JEV to record the transaction. The loss shall be debited to the Loss of Assets account and credited to the appropriate receivable account. In case the request for relief is denied, immediate payment of the shortage shall be demanded from the accountable officer. Restitution shall be acknowledged by the issuance of an official receipt.
In case the request for relief from accountability for loss of property caused by fire, theft, force majeure or other causes is granted, a copy of the decision shall likewise be forwarded to the Chief Accountant for the preparation of the JEV. The loss shall be debited to the Loss of Assets account and credited to the appropriate asset account. If request for relief from accountability is denied, the loss shall be taken up as a receivable from the accountable officer/persons liable and shall be credited to the appropriate asset account.
Sec. 56. Cash Overage. – In case the cash examination disclosed cash overage, as determined by the auditor, the amount shall be forfeited in favor of the
government and an official receipt shall be issued by the collector/teller. The cash overage shall be taken up as Other Specific Income.
Sec. 57. Dishonored Checks. – A check is said to be dishonored when upon its being duly presented for payment, such payment is refused or cannot be obtained. Upon receipt of the debit memo and the dishonored check(s) from the bank, constructive cancellation of the official receipt covering the dishonored check shall be immediately effected by the Treasurer on the copy in his possession. The Treasurer shall immediately photocopy the dishonored checks and record as credit in the Cashbook–Cash in Bank and cancel payment in the taxpayer’s index card. He shall also notify the collector/teller of the dishonor and the cancellation of the official receipt. The collector/teller shall note the cancellation in the triplicate copies of the receipt. The Treasurer shall then inform the Auditor who shall effect the cancellation in the duplicate copy of official receipt, in case the same has already been
submitted for audit.
The Treasurer shall forward the debit memo and the photocopy of the dishonored checks to the Accountant. The Accountant shall cancel the official receipt if still in his possession. He shall prepare the Journal of Entry Voucher (JEV) taking up the dishonored check by crediting the Cash in Bank account and debiting the appropriate income account. In case of dishonor of check payments for Real Property Tax (RPT) or Special Education Tax (SET), the RPT/SET Receivables and corresponding Deferred RPT/SET Income shall be restored. The accounts Due to LGUs, RPT Income, Cash in Bank and RPT Discount shall be adjusted accordingly. He shall furnish the Treasurer with a copy of the duly approved JEV. The Treasurer shall record the JEV number in the Cashbook-Cash in Bank as reference in the entry effecting the cancellation of the dishonored check.
Sec. 58. Cancellation of Lost Check Issued. – A check is considered lost when it is misplaced, waylaid or left behind inadvertently/negligently by the payee or holder in due course or by the custodian/carrier thereof and after diligent search cannot be found or located; or when it is lost due to fortuitous event, theft or robbery.
Upon submission of sworn statement from the payee that a check issued by the LGU is lost, the treasurer shall immediately notify the bank concerned for the stoppage of payment. He shall forward the sworn statement to the accountant who shall prepare the JEV to cancel the payment made. Copy of the JEV shall be furnished the treasurer as basis for him to debit the amount in the Cashbook – Cash in Bank.
Sec. 59. Spoiled and Stale Checks. – Checks may be cancelled when they become spoiled or stale. A check is considered spoil when, it is torn, mutilated, defaced or with erasures/errors affecting the genuineness of any material information contained therein.
It is stale, if it has been outstanding for over six months from date of issue or as prescribed by the depository bank. At least one month before a check becomes stale, the Treasurer shall send a written notice to the payee of the existence of the check.
A spoiled or stale check shall be marked cancelled on its face and reported as follows:
1.
For spoiled checks which are immediately cancelled and for which the Report of Checks Issued (RCI) has not yet been prepared, the cancelled check shall be attached to the RCI and reported chronologically with the other checks issued and the word “Cancelled” shall be indicated on the report.2. For stale checks which have been unclaimed and thus, the original DV and supporting documents are still with the Treasurer, the cancelled check shall be presented in the RCI after the last check issued for the period indicated in the report. The original DV and supporting documents shall be returned to the Accountant who shall prepare a JEV to record the transaction as Accounts Payable. 3. For checks which became spoiled or stale in the hands of the payee and which require replacement, a new check may be issued upon submission of the spoiled or stale check to the Treasurer. A certified copy of the DV shall be requested from the Auditor for presentation to the Administrator/Local Chief Executive who shall countersign the check. The cancelled check shall be reported and attached to the RCI prepared at the period of cancellation. The replacement check shall also be reported chronologically in the RCI. Sec. 60. Suspensions, Disallowances and Charges. – Disallowances and charges shall be taken up in the books of accounts only when they become final and executory. The Accountant shall prepare the Journal of Entry Voucher (JEV) to take up the Receivable – Disallowances and Charges and credit the appropriate expense account for the current year or prior years’ adjustment if pertaining to expenses of previous years.
Cash settlement of disallowances shall be recorded thru the JEV by debiting Cash in Treasury and crediting the Receivable – Disallowances and Charges account. Suspensions in audit and settlement thereof shall not be recorded in the books of accounts.
Sec. 61. Pro-forma Accounting Entries. – The following the are pro-forma accounting entries for miscellaneous transactions:
Particulars Account Title
Acct . Cod
e Debit Credit 1. Cash Shortage
a. Cash shortage of the of the Disbursing Officer
To take up cash
shortage Due from Officers and Employees 128 50 Cash – Disbursing
Officers 107 50
b. Cash Shortage of the Treasurer
To take up cash
shortage Due from Officers and Employees 128 50
Cash in Treasury 101 50
2. Grant of Relief from Accountability for Loss of Government Funds
To record the loss of fund by a Disbursing Officer (allegedly thru theft ) = P50
Due from Officers and Employees Cash – Disbursing Officers 128 107 50 50 To take up relief from
accountability Loss of Assets (current year) or Prior Years’ adjustments (prior
years) 948 50
Due from Officers
and Employees 128 50
3. Cash Settlement in case of denial of Request for Relief from Accountability
To take up
payment/settlement Cash in TreasuryDue from Officers and Employees 101 128 50 50 4. Cash Overage To take up cash overage discovered during cash examination Cash in Treasury Other Specific Income of LGU 101 792 50 50 5. Dishonored Checks