State Accounting

What is state accounting in
the Philippines? Is it similar to

state auditing?
blogginghands Content Wrting, Education, Finance, Government, Philippines August 5, 2019 4
Minutes
Under Section 109, of the Presidential Decree (PD) no. 1445, defines
Government Accounting as one that encompasses the process of
analyzing, classifying, summarizing and communicating all transactions
that are involved in the receipt and disbursement of all government funds
and properties, and interpreting the results thereof. In pursuant to this
definition, objectives were set to cover several areas in government
operations.
State/Government Accounting produce relevant financial information

about past and present transactions of government. It also serves as
basis for decision making for future operations might as well act as the
control mechanism for the receipt, disposition and utilization of
government funds and properties.
In addition, it also come up with financial reports pertaining to the results

of operations of various government agencies that are for dissemination
to the public.
The need for timely preparation of financial reports in government is

necessary to evaluate the performance of the different agencies of
government. The result of the reports would indicate the areas that may
still need improvement, as well as come up with the budgetary
requirements for these agencies if deemed necessary.
Public officers are managers of funds that are entrusted to them by the
national government. The financial reports would clearly show if the
agencies are achieving what is mandated of them. These reports would
also show the extent in the use of agency assets and resources, as well
as the need for additional infusion of funds if required
The accounting data would show how the funds of government were
used. This would also reveal the inflow and outflow of funds and the
need for stiffer fund management and control, if necessary.
A state audit and a state accounting process share differences and

similarities, although many use the two interchangeably. The two words
involve separate processes that a country could use to prepare and
monitor its financial data. Relying on both processes to search out
questionable procedures builds public trust in a country’s financial
statements.
State accounting on the other hand involves handling of daily financial

transactions of the government. This includes very diverse functions
ranging from the incoming/revenue earnings to the outgoing
procurement. Some accounting functions include the expenditures or
payments sent to stakeholders. It also includes the cash, commodities,
services and electronic payments received from stakeholders by means
of foreign exchange; and monetary values written and received by the
government. Payroll and tax deductions, along with the reconciling of the
government’s books for the year, are all accounting processes.
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On the other hand, state auditing as we mentioned in the previous

question we answered involves the review of the accounting statements
of the government. An audit may be done through forensic accounting,
or conducted by the government itself. The audit process is an in-depth
examination of each financial transaction made by a government and
encompasses the total year-end accounts. Upon the completion of the
independent audit, all accounting procedures are verified as accurate.
Several differences exist between a government accounting and

government auditing. One important difference is that the audit checks
the accounting process to determine its validity. Another difference:
accounting is a daily process, whereas an audit is usually conducted
annually or quarterly. Another difference is that the accounting is
compiled by the agency assigned by the government which in our own
situation the COA [Commission on Audit].
The similarities between both government accounting and government
audit require a thorough knowledge of accounting procedures, both
processes aim to ensure the government’s records accurately reflect its
financial position.
It is important to note that government accounting is necessary for many

reasons:
First, to keep systematic, easily accessible accounting and documentary

records as evidence of past transactions and current financial status, so
that detailed transactions can be identified and traced and all aggregates
can be conveniently broken down into their constituent parts.
An example of this is the monitoring and evaluation of the government

on whether they will increase the proposed budget for the next fiscal
year in accordance with the requirements of the new financial status of
the government, likewise it will also help them evaluate whether they
shall pursue the project that is not cost-efficient so that they could
redirect their goals and priorities to other projects of the government in
line with the mandated tasks laid down by the President.
Second is the budgetary control, government accounting facilitates

budgetary control. No government institution can make expenditure
more than the allocated budget amount. In the Philippine Navy, the
Office of the Financial Management is the one who controls the budget
of the Philippine Navy and through this office all transactions regardless
it is included in the APB or not should pass through the scrutiny of the
office. Therefore, if BNS [Bonifacio Naval Station] will have an
emergency repair of its facilities, the latter office shall see to it that the
BNS is within its budget limit and recommends any financial advice if
deemed necessary.
Finally, government accounting helps with the profit and loss. The main
objective of the government is to maintain law and order in the country.
So, it does not reveal profit and loss but it reveals how public funds have
been used.
In my own observation, there are several government officials who post

or disseminate the expenditures on walls and tarpaulins attached to an
ongoing site or project of the government, It is a way to let the public
know where their taxes are going and how the government spent it. It
also helps the public to understand the efforts of the government in
providing transparency.
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What is state accounting in

the Philippines? Is it similar to

State/Government Accounting produce relevant financial information

In addition, it also come up with financial reports pertaining to the results

The need for timely preparation of financial reports in government is

A state audit and a state accounting process share differences and

State accounting on the other hand involves handling of daily financial

On the other hand, state auditing as we mentioned in the previous

Several differences exist between a government accounting and

It is important to note that government accounting is necessary for many

First, to keep systematic, easily accessible accounting and documentary

An example of this is the monitoring and evaluation of the government

Second is the budgetary control, government accounting facilitates

In my own observation, there are several government officials who post

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