ACCOUNTING FOR

BUDGETARY ACCOUNTS
“NO MONEY SHALL BE PAID OUT OF THE
TREASURY EXCEPT IN PURSUANCE OF
AN APPROPRIATION BY LAW”
 ALL BUDGETARY ACCOUNTS
(APPROPRIATIONS, ALLOTMENTS AND
CASH ALLOCATIONS) ARE BASED ON
THE GENERAL APPROPRIATIONS ACT
(GAA)
• General Accounting Plan (GAP) – government’s accounting system
from source to documents to final report.

1. Budgetary Account Systems

2. Receipt/Income and Deposit System
3. Disbursement System
4. Financial Reporting System
THE NATIONAL BUDGET
 FUNDAMENTAL PRINCIPLES OF
GOVERNMENT TRANSACTIONS
1. No money shall be paid out of the Treasury without appropriation of law or
other specific authority
2. Government funds for public purpose
3. Trust funds for specific purpose for which it was created
4. Fiscal responsibility shared by all existing authority over financial affairs of
government
5. No disbursements from fund without approval
6. Complete documentation of claims against government funds
7. All laws and regulations be adhered to
8. GAAP and sound management should be observed
 KINDS OF BUDGET
1. As to nature 2. As to basis 3. As to
approach
a) Annual budget a) Performance
b) Supplemental budget
a) Zero-based
budget b) Line item budget budgeting
c) Special budget b) Incremental
approach
 QUESTIONS

1. It’s government’s accounting system from source to documents to

final report? General Accounting Plan (GAP)

2. In fundamentals principles of government transactions, one of their

principles is the no disbursements from fund with approval? (True/False)
True
3. A budget emphasizing the program or services conducted and based
on functions, activities, and projects , which focus attention upon the
general character and nature of work to be done, or upon the services
to be rendered? Performance Budget
THE BALANCED BUDGET
EXPENDITURES = / < REVENUES
 THE BUDGET PROCESS
1. PREPARATION 2. AUTHORIZATION (by
Congress)

* Budget Call (DBM) * GAA

* DBM Consolidates * Supplemental Appropriation
* Final Approval by President * Continuing Appropriation
* Forwarded to Congress * Automatic Appropriation
 THE BUDGET PROCESS
3. EXECUTION 4. ACCOUNTABILITY

- regulation of fund release

to insure that funds used - tracking, monitoring and
only public purpose evaluation
 BUDGETARY ACCOUNTS
1. Appropriation
- an authorization made by law or other legislative enactment, directing
payment of goods and services out of government funds under specific
conditions or for special purpose.
2. Allotment
- an authorization issued by the Department of Budget and Management to
the government agency which allows it to incur obligations, for specified
amounts, within the legislative appropriation.
3. Obligation
- a commitment by a government agency arising from an act of duly
authorized official which binds the government to the immediate or eventual
payment of a sum of money.
 BUDGETARY ACCOUNT SYSTEM
• encompasses the process of preparing the Agency Budget Matrix
(ABM), monitoring and recording of allotments received by the
agency from the Department of Budget and Management, releasing
of Sub Allotment Advices (SAAs) to Regional Offices (RO) by the
Central Office (CO) issuance of SAAs/LAAs to Operating Units (OU) by
the Regional Office and recording and monitoring of obligations.

• Allotment Release Order (ARO) is a formal document issued by the

department of budget and management to the agency containing
the authorization, conditions and amount of an agency allocation.
 REPORTING REQUIREMENTS
• The budget execution • The budgetary
documents include the accountability report
following: include the following:

1. Quarterly physical report of

1. Physical and Financial Plan operations
(PFP) 2. Quarterly financial report of
2. Monthly Cash Program operations
(MCP) 3. Quarterly report of actual
income
3. Estimate of monthly income
4. Statement of allotment,
4. List of not yet due and obligations and balances
demandable obligations 5. Monthly report of disbursements
 THE DBM APPLY THIS FOLLOWING PROCEDURES:
• First call up letter – signed by the DBM director concerned shall be
addressed to the head of the national government agency to remind them
for non-compliance.

• Second up letter – signed by the DBM Assistant Secretary/Undersecretary

shall be addressed to the official of equivalent rank of the Department
where the agency is attached citing the “non-action” to date despite the
first call up letter, which shall also be cited.

• Third call up letter – signed by the DBM Secretary shall be sent to the
Secretary of the department where the agency is attached citing the two
previous call up letters sent.

• In case of non-compliance – DBM shall strictly enforce the “no-report, no

release” policy
 QUESTIONS

1. A commitment by a government agency arising from an act of duly

authorized official which binds the government to the immediate or
eventual payment of a sum of money? Obligation

2. A formal document issued by the department of budget and

management to the agency containing the authorization, conditions
and amount of an agency allocation? Allotment Release Order (ARO)
3. In case of non-compliance – DBM shall strictly enforce the
“no-report, no release”
___________________________ policy?

4. ABM stands for? Agency Budget Matrix

 THE ALLOTMENT RELEASE PROGRAM (ARP), WHICH DETERMINES THE LEVEL
OF ALLOTMENT RELEASES FOR A GIVEN FISCAL YEAR, IS COMPOSED OF THE
FOLLOWING:
1) Obligations incurred
2) Obligations authorized as overdraft
3) Special Allotment Release Order (SAROs) issued from the beginning of current
fiscal year to the effectivity date of the current General Appropriation Act, and
4) Releases from the unprogrammed fund (UF). Allotment releases from the multi-user
Special Purpose Funds (SPFs) such as:
• Calamity Fund • Miscellaneous Personnel Benefit
Fund
• Contingent Fund
• National Unification Fund
• E-Government Fund
• Priority Development Fund
• International Commitment Fund
• Pension and Gravity Fund
 THE AGENCY BUDGET MATRIX
1. Needing clearance

• Confidential and Intelligence Fund

• Police Benefits of the National Police Commission
• Procurement of certain motor vehicle and motorized equipment which are subject to
prior recommendation by DBM and approval by the President o the Philippines
• Lump-sum appropriations or centrally managed items (CMIs) under the agency
approved budget
• Annually appropriated Special Account in the General Fund
• Budgetary support/assistance to LGUs
• Budgetary provisions for new items, programs and projects in the budgets of some
departments, bureaus, offices and agencies
• Budgetary items/provisions for conditional implementation under the President’s veto
message
2. Not Needing Clearance
- portion of ABM refers to budgetary items of agency budgets under the GAA
not included Needing Clearance portion and categorized as such in the
submitted financial plan of the agency

• Allotment for Personnel Services

• Allotment for Maintenance and Operating Expenses
• Allotment for Capital Outlay
 GUIDELINES ON THE RELEASE OF
DISBURSEMENT AUTHORITIES
1. Release of Notice of Cash Allocation (NCA)

• The amount of Personnel Services should fully provide for all filled positions inclusive
of fixed expenditures and must take into consideration the timing of the grant of
year-end benefits and other similar items of expenditures including pensions for
uniformed personnel and veterans.
• For seasonal periods or peak and slack times in the provision of Maintenance and
Other Operating Expenses adjustments should always be taken into consideration.
• Capital Outlay must likewise be programmed in accordance with scheduled work
targets. Initial construction activities will only entail fifteen percent (15%) mobilization
costs and the balance shall be in accordance with the work program. Likewise,
equipment will require payment only on the expected delivery date and not at the
bidding and procurement stage.
• For Foreign Assisted Projects, the release of the peso counterpart and loan proceeds
component shall be released only upon receipt of the Bureau of Treasury
certification regarding availability of loan proceeds from the foreign lending
institutions.
2. Release of Non-Cash Availment Authority (NCAA)

• Agencies availing of foreign loan proceeds through direct payment chargeable

against availment allotments, shall submit a request for the issuance of NCAA.
• Request of NCAA shall be use to cover the liquidation of actual obligations incurred
by the agency within their available allotments

3. Release of Cash Disbursement Ceiling (CDC)

• CDC is an authority issued by the DBM to Department of Foreign Affairs (DFA)and

Department of Labor and Employment (DOLE) to utilize their income collected and
retained by their Foreign Service posts to cover its operating requirements but not to
exceed the released allotment for the said post.
• Release of CDC shall be supported by the following accountability reports as
consolidated by DFA and DOLE home office: Monthly Report of Income and BTr
certification on actual income collected.
 CONDUCT OF THE AGENCY
PERFORMANCE REVIEW
Consistent with performance-based budgeting, a quarterly evaluation of the
agency performance shall be conducted by comparing agency plans and
targets per BEDs vis-à-vis actual accomplishment reflected in its BARs.
In case of delays in program’s project implementation, the agency shall
develop a detailed cat-up plan/remedial action to reflect the specific
measures to be implemented that will lessen the impact, if you not resolve, the
identified budget execution problem’s issues and to ensure attainment of their
physical and financial targets.
The action program can also include the identification of risk bottlenecks, the
timetable of the measures, and reflect the indicators that will show if the
agency is succeeding. The action programs shall be discussed with and
monitored by DBM.
 COMMON FUND SYSTEM
X DPWH
X DOH
X State universities
X DEPED
X CHED
ILLUSTRATIONS:
The Department and Budget Management upon approval and issuance of the
Agency Budget Matrix (ABM) and the Special Allotment Release Order (SARO)
released the following for Agency X, including Notice of Cash Allocations:

Released
General Appropriation Total Appropriation Allotments NCA
Personnel Services (PS) 200,000 50,000 30,000
Maintenance and Other 280,000 70,000 40,000
Operating Expenses
(MOOE)
Capital Outlay (CO) 100,000
400,000 80,000
Financial Expenses (FE) 8,000 2,000 1,000

Special Purpose Fund

Capital Outlay (CO) 80,000 20,000 15,000
BOOK OF THE DEPARTMENT
OF BUDGET AND
MANAGEMENT (DBM)
Appropriations and allotments are to be controlled and monitored by the
Department of Management the registries it maintains such as:

• Registry of Appropriations and Allotments (RAPAL)

• Registry of Special Purpose Fund Appropriation (RESPFA)

The DBM shall also maintain the:

• Registry of Allotments and Notice of Cash Allocations (RANCA)

• Notice of Cash Allocations (NCA)
 Department of Budget and Management
Registry of Appropriation and Allotments (RAPAL)
AGENCY X

Capital Outlay Maintenance & OE Financial Expenses Personnel Services

Appro Appro Appro Appro

Date Ref Allotments Allotments Allotments Allotments
priation priation priation priation
Balance Balance Balance Balance

400,000 280,000 8,000 200,000

100,000 300,000 70,000 210,000 2,000 6,000 50,000 150,000

 Department of Budget and Management
Registry of Allotments and NCA (RANCA)
AGENCY X

R E L E A S E S

Date Agency CO MOOE PS FE Total Balance

x 20,000 20,000
 Department of Budget and Management
Registry of Special Purpose Fund Appropriation (RESPFA)

A L L O T M E N T S

Date Ref CO MOOE PS FE Total NCA Unfunded

Allotment

120,000 70,000 50,000 2,000 242,000 160,000 76,000

BOOKS OF BUREAU OF
TREASURY
 Department of Budget and Management
Registry of NCA and Replenishment (RENREP)
AGENCY X

Date Ref NCA Replenishment Balance

166,000 166,000 0

The Registry of NCA and Replenishment shall be used by the Bureau of Treasury to
record the NCA releases and the bank replenishments made to cover MDS checks
issued by the agencies.
BOOKS OF THE AGENCY
• The government agency shall maintain different Registry of Allocations and
Obligations for the control and monitoring of the allotments it receives and the
obligations it incurs.

• The agency will not journalize the receipt of its appropriation and allotments but
instead simply post it in the respective registry.

The following are the registries in the books of the agency:

1. Registry of Allotments and Obligations – Personnel Services (RAOPS)

2. Registry of Allotments and Obligations – Maintenance and Other Operating
Expenses (RAOMO)
3. Registry of Allotments and Obligations – Capital Outlay(RAOCO)
4. Registry of Allotments and Obligations – Financial Expenses (RAOFE)
 REGISTRY OF ALLOTMENTS AND OBLIGATIONS
PERSONNEL SERVICES (RAOPS)
AGENCY X
Sheet No.

Date Ref P.P.A Account Allotment Obligations Balance

Code Received Incurred

50,000 50,000
 REGISTRY OF ALLOTMENTS AND OBLIGATIONS
MAINTENANCE AND OTHER OPERATING EXPENSES (RAOMO)
AGENCY X
Sheet No.

Date Ref P.P.A Account Allotment Obligations Balance

Code Received Incurred

70,000 70,000
 REGISTRY OF ALLOTMENTS AND OBLIGATIONS
CAPITAL OUTLAY (RAOCO)
AGENCY X
Sheet No.

Date Ref P.P.A Account Allotment Obligations Balance

Code Received Incurred

120,000 120,000
 REGISTRY OF ALLOTMENTS AND OBLIGATIONS
FINANCIAL EXPENSES (RAOFE)
AGENCY X
Sheet No.

Date Ref P.P.A Account Allotment Obligations Balance

Code Received Incurred

2,000 2,000
• As to Notice of Cash Allocations (NCA) upon notice, the agency shall
journalize it as:

Cash – Modified Disbursement Scheme, Regular xx

Subsidy from National Government xx

• The NCA may be used for the payment of the following types of transactions
1. Personnel Services
2. Maintenance and Other Operating Expenses
3. Financial Expenses
4. Purchase and/or Construction of Fixed Assets
5. Miscellaneous Transactions
 Regular Agency Books
Source
Documents
and Books of
Account Original Entry
Transactions Account Title Code Debit Credit
Cash Transactions
Cash-National Treasury, 166,000
1. Receipt of NCA MDS
Subsidy Income from 166,000 NCA/JEV/GJ
National Government

The Regular Agency Books shall be used to record the regular transactions of the
agency like the receipt and utilization of NCA, as well as, collections of income and
other receipts which the agency can use.
 ACCOUNTING FOR OBLIGATIONS
• Obligations is a commitment by a government agency arising from an act of
a duly authorized official, which binds the government to the immediate or
eventual payment of a sum of money
• Purchase Orders, Contracts, Travel Authorizations, Request for Installation or
Provision of Public Utilities are examples of actions and documents
• The government agency should also maintain four (4) registries: RAOPS,
RAOMO, RAOCO, RAOFE
• Only obligations/expenditures with an appropriate documents showing a
commitment made by the agency shall be recorded in registries by the use
of approved Obligation Slip (OS)
ILLUSTRATION:

General Appropriation Obligations Incurred

Personnel Services 20,000
Maintenance & OE 30,000
Capital Outlay 50,000
Financial Expenses 500

Special Purpose Fund

Capital Outlay 25,000
 REGISTRY OF ALLOTMENTS AND OBLIGATIONS
PERSONNEL SERVICES (RAOPS)
AGENCY X
Sheet No.

Date Ref P.P.A Account Allotment Obligations Balance

Code Received Incurred

50,000 50,000

20,000 30,000
 REGISTRY OF ALLOTMENTS AND OBLIGATIONS
MAINTENANCE AND OTHER OPERATING EXPENSES (RAOMO)
AGENCY X
Sheet No.

Date Ref P.P.A Account Allotment Obligations Balance

Code Received Incurred

70,000 70,000

30,000 40,000
 REGISTRY OF ALLOTMENTS AND OBLIGATIONS
CAPITAL OUTLAY (RAOCO)
AGENCY X
Sheet No.

Date Ref P.P.A Account Allotment Obligations Balance

Code Received Incurred

120,000 120,000

75,000 45,000
 REGISTRY OF ALLOTMENTS AND OBLIGATIONS
FINANCIAL EXPENSES (RAOFE)
AGENCY X
Sheet No.

Date Ref P.P.A Account Allotment Obligations Balance

Code Received Incurred

2,000 2,000

500 1,500
 TAX REMITTANCE ADVICE

Regular Agency Books

Account Title Account Debit Credit

Code

Salaries and Wages – Regular Pay 701 20,000

Due to BIR 412 2,000

Due to GSIS 413 1,000

Due to Officers and Employees 106 17,000
 Regular Agency Books

Account Title Account Debit Credit

Code

Due to BIR 412 2,000

Subsidy Income from National Government 651 2,000
 MULTIPLE CHOICE
1. It is the system of prescribing the procedures for recording appropriations, allotments and
obligations.
a. Fund accounting
b. Budgetary accounting
c. Obligation accounting
d. Government accounting

Answer: D

2. Its main concern is the availability and use of funds for public services
a. Commission on Audit
b. Department of Finance
c. Bureau of Treasury
d. National Budgetary System

Answer:
3. It is a statement of estimated receipts and estimated expenses of the government, which
serves as basis for General Appropriation Act.
a. Statement of financial position
b. Statement of operations
c. National government budget
d. Local government budget

Answer:
4. Which department prepares the national budget, which serve as the basis of the General
Appropriation Act?
a. Executive Department
b. Legislative Department
c. Judiciary Department
d. National Government Agencies/units

Answer: D
5. It is the legislative consideration, review and approval of the national budget.

a. Preparation
b. Authorization
c. Execution
d. Accountability
Answer: A

6. It is the implementation of the national budget by different department and release of

allotments.

a. Budget preparation
b. Budget authorization
c. Budget execution
d. Budget accountability

Answer: C
7. It denotes the responsibility to others that one or more persons have for the actions and
behavior.
a. Preparation
b. Accountability
c. Authorization
d. Execution
Answer: B

8. As specifically provided for in the New Constitution, no money shall be paid out of the National
Treasury EXCEPT in the pursuance of
a. Budget
b. President’s executive order
c. Fund
d. Appropriation

Answer: D
 9. It is the legislative authorization to make payments out of government funds under specified
conditions and specific purposes.
a. Appropriation
b. Allotment
c. Obligation
d. Budgeting
Answer: A

10. It is the authorization from the Department of Budget and Management agency to incur
obligation up to a specified amount that must be within the legislative appropriation.
a. Obligation
b. Appropriation
c. Allotment
d. Fund release
Answer: C
11. It is the amount committed to be paid by the government arising from an duly authorized
administrative officer and which binds the government immediate and eventual payment of
money
a. Obligation
b. Appropriation
c. Allotment
d. Commitment
Answer: A
12. It is the functions and activities necessary for the performance of a major purpose for which a
government entity is established.

a. Program
b. Project
c. Resources
d. Internal control

Answer: A
13. The journal entry to be made in the books of government agencies/units upon receipt of
Notice of Cash Allocation is

a. Cash – MDS, Regular

Subsidy from National Government
b. Cash in bank – Local Currency, Current Account
Subsidy from National Government
c. Cash in bank – Local Currency, Savings Account
Subsidy from National Government
d. Cash in bank – Local Currency, Time Deposit
Subsidy from National Government

Answer: A
 14. To control the allotments and obligations of the four classes of allotments, following registries
shall be maintained by government agencies/units.
a. RAOCO, RAOPS, RAOMO and RAOFE
b. RAOCO, RAOPS, RAOMO and RANCA
c. RAOCO, RAOPS, RAOMO, and RPI
d. RAOCO, RAOPS, RAOFE, and RPI
Answer: A

15. It is the formal document issued by the Department of Budget and Management to the head
of the agency containing the authorization, conditions and amount allocation.
a. Allotment Release Order
b. Allotment and Obligation Slip
c. Notice of Cash Allocation
d. Registry of Allotment and Obligation
Answer: A
 16. In government accounting, which of the following is a Personnel service?

a. Telephone charge
b. Rent
c. Meal allowance for overtime work
d. Salaries and wages
Answer: D

17. In government accounting, which of the following is a capital outlay?

a. Salaries and wages

b. Repairs and maintenance
c. Land improvement
d. Merchandise inventory
Answer: C
 18. It is the annual documents required at the onset of the budget execution phase, which
contain the agencies targets and plans for the current year.
a. Agency Budget Matrix (ABM)
b. Annual Cash Program (ACP)
c. Budget Execution Documents (BEDs)
d. Budget Accountability Report (BARs)
Answer: C

19. It is a budget execution document that serves as an overall plan of the government agency
encompassing the targeted outputs and estimate obligations broken down by quarter.
a. Physical and Financial Plan (PFP)
b. Monthly Cash Program (MCP)
c. Estimate of Monthly Income
d. Statements of allotments, obligations and balances
Answer: A
 20. It is component of Budget Accountability Reports (BARs) that should be reported on monthly
basis.
a. Monthly Cash Program
b. List not yet due and demandable obligations
c. Estimate of monthly income
d. Statement of allotments, obligations and balances
Answer: D

21. It is a disbursement authority representing Modified Disbursement Checks issued and direct
payments to external creditors per validated advice to debit account the list due and
demandable accounts payable.
a. Tax Remittance Advice (TRA)
b. Notice of Cash Allocation (NCA)
c. Non-Cash Availment Authority (NCAA)
d. Cash Disbursement Ceiling (CDC)
Answer: B
 22. Government agencies are required to submit to the Department of Budget and
Management their plans, programs and targets for the year using the Budget Execution
Document (BEDs) on or before
a. January 1
b. January 31
c. April 15
d. December 31
Answer: C

23. In order to provide agencies with sufficient time to implement projects/activities covered by
realignment, request for realignment of released allotments under the prior year budget shall be
requested until
a. January 1 of the current year
b. April 1 of the current year
c. June 30 of the current year
d. December 31 of the current year
Answer: C
24. Effective January 2009, the following modifications in the Notice of Cash Allocation (NCA)
release shall be adopted, EXCEPT
a. Notice of Cash Allocations to cover regular requirements of agencies shall be
comprehensively released with a breakdown of the monthly NCA requirements by
operating unit.
b. Additional NCAs shall be released corresponding to the SAROs to be issued to the operating
units on the basis of the separate Monthly Cash Program submitted by the operating units.
c. All NCAs programmed and credited for the month whether part of the comprehensive
release or constituting the additional NCA release, shall be valid only until the last working
day of the fiscal year.
d. Any unutilized NCA corresponding to the book balance, net of outstanding checks, shall
automatically lapse at the end of that month.

Answer: C
 25. All Special Allotment Release Order (SAROs) issued chargeable against General
Appropriation Act (GAA) of a Fiscal Year (FY) as re-enacted shall be valid for obligation while new
GAA is not yet in effect. What is the effective date of the new GAA?
a. Immediately after the approval by Congress
b. Immediately after the approval by the President of the Philippines
c. Fifteen days after the approval by Congress
d. Fifteen days after the approval by the President of the Philippines
Answer: D

26. A budget, the basis of which are the objects of expenditure.

a. Annual budget
b. Special budget
c. Line-item budget
d. Supplemental budget

Answer: C
 27. A budget of special nature and generally submitted in special forms on account that
itemizations are not adequately provided in the Appropriation Act or that the amount are not all
included in the Appropriation Act.
a. Annual budget
b. Special budget
c. Line-item budget
d. Supplemental budget
Answer: B

28. This document outlines the priority areas of government activity applicable to the budget
year.
a. Budget Message
b. Budget Proposal
c. Budget Call
d. Budget Calendar
Answer: C
29. In government accounting, which of the following is Maintenance and Other Operating
Expenses (MOOE):
a. Night Shift Differential
b. Janitor Services
c. Honorarium
d. Salaries and wages
Answer: C