Compiled from an official source version. Later amendments or repeals may not be reflected; the official text prevails. · Read the official text ↗
Definition.
SEC. 109. Definition. —Government accounting encompasses the processes of analyzing, recording, classifying, summarizing and communicating all transactions involving the receipt and disposition of government funds and property and interpreting the results thereof.
Objectives of government accounting.
SEC. 110. Objectives of government accounting. —Government accounting shall aim to (1) produce information concerning past operations and present conditions; (2) provide a basis for guidance for future operations; (3) provide for control of the acts of public bodies and officers in the receipt, disposition and utilization of funds and property; and (4) report on the financial position and the results of operations of government agencies for the information of all persons concerned.
Keeping of accounts.
SEC. 111. Keeping of accounts. —(1) The accounts of an agency shall be kept in such detail as is necessary to meet the needs of the agency and at the same time be adequate to furnish the information needed by fiscal or control agencies of the government. (2) The highest standards of honesty, objectivity and consistency shall be observed in the keeping of accounts to safeguard against inaccurate or misleading information.
Recording of financial transactions.
SEC. 112. Recording of financial transactions. —Each government agency shall record its financial transactions and operations conformably with generally accepted accounting principles and in accordance with pertinent laws and regulations.
Chart of accounts.
SEC. 113. Chart of accounts. —The chart of accounts for government agencies shall be prescribed by the Commission and shall be so designed as to permit agency heads to review their activities according to selected areas of responsibility: allow for a clearer definition of obligation accounting leading to more precise budgetary control; provide for a wider range of analytical information designed for use in management audit or legislative review; furnish information regarding the production of income and the investment in capital items which is of value in fiscal and economic planning; enable tighter accounting control to be exercised over agencies' financial relationship with the Treasury; permit a more simplified preparation of trial balances and a simpler and more orderly process of national consolidation; and facilitate the application of mechanized accounting procedures for more effective protection against error and irregularity and yielding economies in operation.
The general ledger.
SEC. 114. The general ledger. — (1) The government accounting system shall be on a double entry basis with a general ledger in which all financial transactions are recorded. (2) Subsidiary records shall be kept where necessary.
Terminology and classification.
SEC. 115. Terminology and classification. —A common terminology and classification shall be used consistently throughout the budget, the accounts and the financial reports.
Accounts classification.
SEC. 116. Accounts classification. —To permit effective budgetary control and to establish uniformity in financial reports, accounts shall be classified in balanced fund groups. The group for each fund shall include all accounts necessary to set forth its operations and condition. All financial statements shall follow this classification.
Budgetary control accounts.
SEC. 117. Budgetary control accounts. —The general accounting system shall include budgetary control accounts for revenues, expenditures and debt, as provided by P.D. No. 1177.
Accounting for unrealized revenues.
SEC. 118. Accounting for unrealized revenues. —Estimated revenues which remain unrealized at the close of the fiscal year shall not be booked or credited to the unappropriated surplus or any other account.
Accounting for obligations and expenditures.
SEC. 119. Accounting for obligations and expenditures. — All lawful expenditures and obligations incurred during the year shall be taken up in the accounts of that year.
Reporting requirements.
SEC. 120. Reporting requirements. —The Commission shall issue the pertinent accounting rules and regulations whenever the reporting requirements to be prescribed by the Budget Commission pursuant to the budget law affect accounting functions of the various agencies of the government.
Financial reports and statements.
SEC. 121. Financial reports and statements. —(1) The financial reports prepared by the agencies shall comply with the specific requirements of applicable laws regulations as to nature, accounting basis, content, frequency, and distribution as well as with all applicable restrictions pertaining to information that is classified for national security purposes. (2) The financial statements shall be based on official accounting records kept in accordance with law and the generally accepted accounting principles and standards.
Submission of reports.
SEC. 122. Submission of reports. —Whenever deemed necessary in the exigencies of the service, the Commission may under regulations issued by it require the agency heads, chief accountants, budget officers, cashiers, disbursing officers, administrative or personnel officers, and other Responsible officials of the various agencies to submit trial balances, physical inventory reports, current plantilla of personnel, and such other reports as may be necessary for the exercise of its functions. (2) Failure on the part of the officials concerned to submit the documents and reports mentioned herein shall automatically cause the suspension of payment of their salaries until they shall have complied with the requirements of the Commission. (3) No appropriation authorized in the General Appropriations Act shall be available to pay the salary of any official or employee who violates the provisions of this section, without prejudice to any disciplinary action that may be instituted against such official or employee.
Definition of Internal control.
SEC. 123. Definition of Internal control. —Internal control is the plan of organization and all the coordinate methods and measures adopted within an organization or agency to safeguard its assets, check the accuracy and reliability of its accounting data, and encourage adherence to prescribed managerial policies.
Installation.
SEC. 124. Installation. —It shall be the direct responsibility of the agency head to install, implement, and monitor a sound system of internal control.
Provisions on this page are reproduced verbatim from official open data. See the attribution line.
Source: Supreme Court E-Library, Republic of the Philippines. Philippine laws are public documents (works of the government).