INCOME/COLLECTIONS

AND DEPOSITS
Receipts/Income Collections and
Deposits System
The Receipts/Income Collections and Deposits
System covers the processes of acknowledging and
reporting income/collections, deposits of collections
with Authorized Government Depository Bank (AGDB)
or through the AGDB for the account of Treasurer of the
Philippines, and recording of collections and deposits in
the books of accounts of the agency.
Sources of Income of the National
Government

The income of the National Government are

classified into general income accounts and specific
income accounts. The following comprise the general
income accounts, among others:
1. Subsidy Income from National Government
2. Subsidy from Central Office
3. Subsidy from Regional Office/Staff Bureaus
4. Income from Government Services
5. Income from Government Business Operations
6. Sales Revenue
7. Rent Income
8. Insurance Income
9. Dividend Income
10. Interest Income
11. Sale of Confiscated Goods and Properties
12. Foreign Exchange (FOREX) Gains
13. Miscellaneous Operating and Service Income
14. Fines and Penalties-Government Services and Business
Operations
15. Income from Grants and Donations
The specific income accounts of national government
agencies are classified as follows:

1. Income Taxes
2. Property Taxes
3. Taxes on Goods and Services
4. Taxes on International Trade and Transactions
5. Other Taxes
6. Fines and Penalties-Tax Revenue
7. Other Specific Income
Methods of Accounting for Income
National government agencies adopt the following accounting
methods of recording income:

1. Accrual Method - Accrual method of accounting shall be

used by national government agencies when income is
realized (earned) during the accounting period regardless
of cash receipt. Accounts receivable is set up and the
general or specific income accounts according to nature
and classification are credited.
2. Modified Accrual – Under the modified accrual basis,
income of an agency is recorded as “Deferred Credits to
Income” and the appropriate receivable account is debited.
The income account is recognized upon receipt of
collection and the “Deferred Credits to Income” account is
adjusted accordingly.

3. Cash Basis - Cash basis of accounting shall be used for all

other taxes, fees, charges and other revenues where accrual
method is impractical. The income account is credited
upon collection of the cash or its equivalent.
Fines and Penalties
Fines and penalties, either on tax revenues or
other specific income accounts, shall be recognized as
income of the year these were collected.
Other Receipts
Other receipts of national government agencies shall be
comprised of, but not limited to the following:

1. Refund of cash advances - When cash advances for

official travels are granted, the account “Due from
Officers and Employees” is debited and when
refunds are made, the same account is credited.
Cash advances for salaries and wages shall be
recorded as debits to the account “Cash-Disbursing
Officers” and any refunds thereof shall be credited to
the same account.
2. Receipts of performance/bidders/bail bonds - Performance
bond posted by contractor or supplier to guaranty full and
faithful performance of their contract may be in the form of
cash or certified checks or surety. Performance bond in cash or
certified check shall be acknowledged by the issuance of
official receipt and recorded in the book of accounts by the
Accountant thru a Journal Entry Voucher (JEV) for the
purpose. In case of surety bond, an acknowledgement receipt
shall be issued by the authorized official.

3. Refund for overpayment of expenses - Refunds as a result of

overpayment of expenses shall be recorded as a credit to the
appropriate expense account if paid in the same year or to Prior
Years’ Adjustments if paid in the ensuing year. This
transaction shall reduce the amount of expense previously
recorded.
4. Collections made on behalf of another agency or
private companies - Collections made on behalf of
other agencies which are later remitted to them are
recorded under accounts “Due to NGAs”, “Due to LGUs”
or “ Due to GOCCs” as the case maybe. Authorized
collections made on behalf of private entities, like shares
of proponents of Built-Operate-Transfer (BOT) Projects
are recorded as “Other Payables”.

5. Inter-agency transferred funds - Cash received from

another agency for the purpose of implementing
projects of that agency is recorded in the books as a
credit to account “Due to NGAs” or “Due to LGUs”, as the
case maybe.
Deposit of Collections
All Collecting Officers shall deposit intact all
their collections, as well as collections turned over to
them by sub-collectors/tellers, with AGDB daily or not
later than the next banking day. They shall record all
deposits made in the Cash Receipts Record.
Reporting of Collections and Deposits
At the close of each business day, the Collecting
Officers shall accomplish the Report of Collections and
Deposits (RCD). All collections shall be deposited with
AGDB for the account of the agency or the Treasurer of
the Philippines daily or not later than the next banking
day.
 Procedures for Collections and
Deposits Through the Collecting
Officer
Cash Unit
Designated Staff (Daily)
 Receives cash/check from payor representing collection
based on the Order of Payment (OP) prepared by the
Accounting Unit.
 Issues Official Receipt (OR) to acknowledge receipt of
cash/check.

Note 1 :
Funding Checks received by the Cashier/ Collecting Officer
of the RO/OU for its operational requirements shall be issued
corresponding OR..
 Designated Staff (Daily)

Note 2
Separate sets of ORs shall be used for the RA and NG Books.
 
Note 3
The OR shall be prepared in three copies and shall be
distributed as follows:

Original - Payor
Copy 2 - To be attached to the Report of Collections and
Deposits (RCD)
Copy 3 - Cash Unit file
Designated Staff (Daily)
 Records collections in the Cash Receipts Record (CRR).

Note 4
Separate CRR shall be maintained for collections under the
RA and NG Books.
 Prepares Deposit Slip (DS) in three copies.

Note 5
The DS shall be distributed as follows:
Original - AGDB
Copy 2 - To be attached to RCD
Copy 3 - Cash Unit file
Designated Staff (Daily)
 Deposits collections with AGDB.

Note 6
Collections pertaining to NG Books shall be deposited with
the AGDB for the account of the Treasurer of the Philippines

 Based on the validated DS from the AGDB and copy of

the ORs on file, prepares Report of Collections and
Deposits (RCD) in two copies. Initials on the RCD and
forwards the same together with Copy 2 of the ORs and
DS to the Head of the Cash Unit for review and
signature
Head of the Cash Unit
 Reviews and signs the RCD. Forwards original of RCD,
Copy 2 of the ORs and DS to the Designated Staff for
submission to the Accounting Unit.

Note 7
The RCD shall be distributed as follows:
Original - Accounting Unit together with Copy No. 2
of the ORs and DS - to support the JEV
Copy 2 - Cash Unit file
DISBURSEMENTS
Disbursements Defined
Disbursements constitute all cash paid out
during a given period either in currency (cash) or
by check. It may also mean the settlement of
government payables/obligations by cash or by
check. It shall be covered by Disbursement
Voucher (DV)/Petty Cash Voucher (PCV) or
payroll.
Basic Requirements for Disbursements
The basic requirements applicable to all types of disbursements made by national
government agencies are as follows:

1. Existence of a lawful and sufficient allotment

certified as available by the Budget Officer;
2. Existence of a valid obligation certified by the Chief
Accountant/Head of Accounting Unit;
3. Legality of transactions and conformity with laws,
rules and regulation;
4. Approval of the expense by the Chief of Office or by
his duly authorized representative; and
5. Submission of proper evidence to establish the claim.
Disbursements System
The Disbursements System involves the
preparation and processing of disbursement
voucher (DV); preparation and issuance of check;
payment by cash; granting, utilization, and
liquidation/replenishment of cash advances.
Certification on Disbursements
Disbursements from government funds 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 head of the department or office who has
administrative control of the fund concerned;
2. Necessary documents supporting the DV and payrolls
as certified and reviewed by the Accountant/Head of
Accounting Unit (Box B of DV); and
3. Certification that funds are available for the purpose
by the Accountant/Head of Accounting Unit (Box B
of DV).
Disbursements by Checks
Checks shall be drawn only on duly approved
DV or PCV. These shall be reported and recorded
in the books of accounts only when actually
released to the respective payees. Two types of
checks are being issued by government agencies as
follows:
1. Modified Disbursement System (MDS) Checks
– issued by government agencies chargeable against the
account of the Treasurer of the Philippines, which are
maintained with different MDS – Government Servicing
Banks (GSBs). These are covered by Notice of Cash
Allocation, an authorization issued by the DBM to
government agencies to withdraw cash from the
National Treasury through the issuance of MDS checks
or other authorized mode of disbursements.
2. Commercial Checks

- issued by government agencies chargeable against

the Agency Checking Account with GSBs. These are
covered by income/receipts authorized to be deposited
with AGDBs; and funding checks received by RO/OUs
from COs/ROs, respectively.
Recording of Check Disbursements
in the Check Disbursements Record
(CkDR)
All checks issued including cancelled checks shall
be recorded chronologically in the CkDR. The dates
checks were actually released shall be indicated in the
appropriate column provided for by the CkDR.
Reporting of Checks Issued/Released
All checks actually released to claimants shall be
included in the Report of Checks Issued (RCI) which
shall be prepared daily by the Cashier. The RCI shall be
submitted to the Accounting Unit for the preparation
of JEV. All unreleased checks as of the report date shall
be enumerated in a “List of Unreleased Checks” to be
attached to the RCI.
 Procedures for
Disbursements by Checks
Preparation and Approval
of Checks
 Cash Unit
Receiving/Releasing Staff
 Receives copies 1-3 of approved DV Copy 3 of OS and originals of
supporting documents. Records in the logbook the date of receipt,
DV number, payee, particulars and amount.

Designated Staff
 Verifies completeness of signatories on the DV. Prepares
check in three copies.
 Retrieves from the file the Check Disbursements Records
(CkDR) and records the date, reference or check number,
name of payee, nature of payment and amount of the DV and
extract the new balance of the NCA/bank account. Forwards
Copies 1-3 of check, Copies 1-3 of DV, Copy 3 of OS and
originals of supporting documents to Cashier for review and
signature.
Cashier
 Verifies completeness of signature on the DV. Reviews the amount
of the check against the DV and supporting documents. Signs the
check.

Authorized Official
 Countersigns check. Forwards Copies 1-3 of check, Copies 1-3 of DV,
Copy 3 of OS and supporting documents to the
Receiving/Releasing Staff for return to the Cashier.

Receiving/Releasing Staff
 Records in the logbook the date of release of Copies 1-3 of check,
Copies 1-3 of DV, Copy 3 of OS and supporting documents.

Cashier
 Releases the original check and Copy 3 of DV to the payee. Attaches
OR/Invoice on Copy 1 of DV. Files Copies 2-3 of check, Copies 1-2 of
Preparation of Report of
Checks Issued (RCI)
Cashier (Daily)
 With Copies 1-2 of DV, Copy 3 of OS, supporting
documents, Copies 2-3 of checks, prepares RCI in two
copies.
Note 1:
RCI shall include only those checks actually released to the
payee during the day.
Note 2:
The RCI shall be distributed as follows:
Original – Accounting Unit together with
the originals of the paid DVs/payroll and
supporting documents for JEV preparation
Copy 2 – Cash Unit file

 Initials in ‘Certification’ portion of the RCI.

Head of the Cash Unit
 Reviews RCI and signs in ‘Certification’ portion.

Designated Staff
 Forwards original of RCI together with Copy 2 of checks,
Copy 1 of DVs, Copy 3 of OS and supporting documents
to the Accounting Unit for the preparation of JEV.
Retains Copy 2 of RCI, Copy 3 of checks and Copy 2 of
DVs for file.

Note 3:
The “List of Unreleased and Cancelled Checks” shall be
attached to the RCI to be submitted to Accounting Unit for
reference.
Disbursements by Cash
Disbursements by cash shall be made by cash
advances drawn and maintained in accordance with
COA rules and regulations. Cash payments shall be
made based in duly approved payrolls/disbursements
vouchers
Cash Advances for Travel
Cash advances granted for travel shall be accounted
for as Due from Officers and Employees and these are
subject to liquidation upon travel completion. For
liquidation of travel where the amount of each 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 JEV preparation.
 The excess cash advance shall be refunded and an
OR shall be issued to acknowledge receipt thereof. In
case the amount of cash advance is less than the travel
expenses incurred, a Liquidation Report shall be
submitted to liquidate the cash advance previously
granted and a DV shall be prepared to claim
reimbursement of the deficiency in amount.
Procedures for Disbursements by
Cash – Payment for Payroll and
Other Expenses
 Cash Unit
Accountable/Disbursing Officer
 Receives the approved check from the Cashier. Records in the
Cash Disbursements Record (CDR) the date, reference, name
of payee, particulars and the amount of check in the debit
column.
 Encashes check in a GSB.
 Pays officials and employees/other payees.
Note 1:
Employees/payees shall sign on the received portion of the
payroll/DV to acknowledge receipt of payment.
Note 2:
If there are unclaimed salaries, refund the same within a reasonable
time. OR representing the refund shall be issued by the Cashier.
 Records payment including the refund for unclaimed salary
in the credit column of the CDR.
Accountable/Disbursing Officer
(At the End of the Month)
 Based on the paid payroll/DV and supporting
documents, prepares Report of Disbursements (RD) in
two copies. Signs the ‘Certification’ portion of the RD.

Note 3:
The RD shall serve as the liquidation report of the cash
advance granted to the Disbursing Officer.
Note 4:
The RD shall be distributed as follows:
Original – Accounting Unit together with the originals
of the paid DVs/Payrolls and supporting
documents for JEV preparation
Copy 2 – Cash Unit file
Disbursements Through
Bank – Payroll Payment
 Cash Unit

Cash Staff
 Receives the approved check, DV and Following Months’
Payroll (FMP), signs the logbook of the releasing office,
and forwards the documents to the Cashier.
 Deposits the check to the Bank Payroll Account together
with the original of the Summary of Employees Net
Earnings (SENE) received from Accounting Unit. Files
temporarily Copies 1-2 of FMP, Copy 2 of the check, and
Copies 1-3 of DV for the preparation of RCI.
Cash Staff

Note 1:
The payee of the check is the Servicing Bank whose
authorized representative shall acknowledge receipt of the
check by signing on the original of the DV.

Note 2:
Refer to slide 16

Note 3:
Payroll payment through bank shall also be recorded in the
IP maintained by the Accounting Unit
Disbursements Through 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 agency.
Disbursements from the fund shall be through the Petty
Cash Voucher (PCV) which shall be approved by
authorized officials and signed by the payee to
acknowledge the amount received. The official receipt or
its equivalent is attached to the PCV.
Procedures for Disbursements
Through
Petty Cash Fund
 Receipt of Check for the
Establishment/Replenishment of
Petty Cash Fund
Receipt of Check for the Establishment/
Replenishment of Petty Cash Fund
Various Unit
Petty Cash Custodian
 Receives check from Cashier for the establishment/
replenishment of petty cash fund. Retrieves Cash
Disbursement Record (CDR) and records the date,
reference and the amount of check in the
‘Disbursements’ column
 Encashes check in GSB and keeps the cash in a safety
vault.
Utilization of Petty Cash Fund
Requesting Personnel
 Accomplishes Box A ‘Requested by’ portion of the Petty
Cash Voucher (PCV)
Immediate Supervisor
 Signs Box A ‘Approved by’ portion of the PCV and returns
to Requesting Personnel.
Requesting Personnel
Submits to the Petty Cash Custodian for the release of
fund.
Petty Cash Custodian
 Receives from the Requesting Personnel the PCV duly
approved by concerned official.
 Upon granting of the petty cash advance and signs in Box
B ‘Paid by’ portion of the PCV.
Requesting Personnel
 Receives petty cash and signs in Box B ‘Cash Received by’
portion of the PCV.
Petty Cash Custodian
 Issues Copy 2 of the PCV to requesting personnel
 Retrieves CDR from file and records paid PCVs. Fills up
the following columns: date, reference, name of payee,
nature of payment, amount in credit column and cash
advance balance.
 Files the original of PCV awaiting liquidation.
Liquidation of Petty Cash Advance
Petty Cash Custodian
 Receives from Requesting Personnel Copy 2 of the PCV
together with supporting documents. Checks and
reviews completeness of documents such as the date,
amount and nature of expenses paid as shown in the
supporting documents.
 If incomplete, returns to Requesting Personnel for
completion of needed documents. If complete, retrieves
the original of PCV from file and fills up Box D
‘Liquidation Submitted’ portion of the original and Copy
2 of PCVs.
Petty Cash Custodian
 Checks the appropriate boxes for ‘Received Refund’ or
‘Reimbursement Paid’ portion and signs Box C of the
PCV.
 Checks the appropriate boxes for ‘Received Refund’ or
‘Reimbursement Paid’ portion and signs Box C of the
PCV.
Requesting Personnel
 Checks and fills up the appropriate boxes for
‘Liquidation Submitted’ and ‘Reimbursement Paid’ upon
submission of necessary supporting documents and
receipt or reimbursement of cash, if any, and signs the
PCV.
Petty Cash Fund Custodian
 Returns Copy 2 of the PCV to the Requesting Personnel.
 If the amount granted is equal to the amount paid as
shown in the liquidated PCV, proceeds to 4th bullet.
 If the amount is not equal to the amount paid, retrieves
from file the CDR and records the necessary
adjustments based on the liquidated PCV. Fills up the
following columns: date, reference, name of payee, and
nature of payment, amount in the appropriate debit,
credit and balance columns.
 Files the original of the PCV together with the
supporting documents awaiting replenishment.
Replenishment of Petty Cash Fund

Petty Cash Fund Custodian

 Retrieves from file the original of the PCV together with
the supporting documents. Checks the completeness of
all PCVs for replenishment.
 Prepares the Petty Cash Replenishment Report (PCRR)
in two copies based on PCVs in numerical sequence and
fills up the following columns: date, PCV No., particulars
and amount.
Petty Cash Fund Custodian
 Signs in the ‘Certified Corrected by’ portion of the PCRR.
 Based on the PCRR, prepares DV in three copies,
Forwards Copies 1-3 of the DV, original of the PCRR and
PCV, and supporting documents to Authorized Official
for review and signature.
Authorized Official
 Signs in Box A portion of the DV.
Petty Cash Fund Custodian
 Forwards Copies 1-3 of DV, originals of PCRR and PCVs
and supporting documents to Budget Division for
preparation of the OS.
REPORT OF COLLECTIONS AND DEPOSITS
REPORT OF CHECKS ISSUED
REPORT OF DISBURSEMENTS
 PETTY CASH
REPLENISHMENT
REPORT
LIQUIDATION
REPORT