UPDATES ON ACCOUNTING

1. UPDATES ON ACCOUNTING AGAP Technical Session Davao City October 17, 2008

2. AGAP Theme: “Achieving Financial Health: The Objective of Good Governance and Financial Reforms”

3. COA Vision Promotion of good governance with the attributes of honesty, transparency, accountability, credibility, efficiency and effectiveness to enhance trust in the government and foster a better quality of life for the Filipino people.

4. Mandated Accounting Functions of COA (Article IX-D 1987 Philippine Constitution) • Promulgate accounting rules and regulations; • Keep the general accounts of government; and

5. Mandated Accounting Functions of COA (Article IX-D 1987 Philippine Constitution) • Submit to the President and Congress an annual report on the financial condition and operation of the Government, its subdivisions, agencies, and instrumentalities, including government-owned or controlled corporations, and recommend measures necessary to improve their effectiveness and efficiency.

6. On AFR Preparation NATIONAL GOVERNMENT AGENCIES Trial Balances and Financial Statements CY 2007 No of Agencies - 328 Target No. of Reports - 436 Total Received - 433 or 99.3 % Received as of 2/14/08 - 66 or 15.1 % Received after 2/14/08 - 367 or 84.2 % Not Received - 3 or 0.7 %

7. On AFR Preparation LOCAL GOVERNMENT UNITS (Provinces, Cities and Municipalities) Trial Balances and Financial Statements CY 2007 Number of LGUs - 1,711 Target No. of Reports - 5,099 Total Received - 4,961 or 97% Received as of 2/14/08 - 301 or 6% Received after 2/14/08 - 4,660 or 91% Not Received - 138 or 3%

8. On AFR Preparation LOCAL GOVERNMENTS (Barangays) Trial Balances and Financial Statements CY 2007 Target No. of Reports - 41,995 Total Received - 21,568 or 51.4% OGAS Reports - 5,743 or 13.7% NGAS Reports - 15,825 or 37.7% Not Received - 20,427 or 48.6%

9. On AFR Preparation GOCCs 2007 Financial Statements Number of Agencies - Corporations - 147 Water Districts - 458 Target No. of Reports - 605 Total Received - 417 or 69% Received as of 2/14/08 - 18 or 3% Received after 2/14/08 - 399 or 66% Not Received - 188 or 31%

10. Annual Financial Reports

11. Highlights of the FY 2007 BALANCE SHEET

12. BALANCE SHEET National Government ASSETS - P2,632.70 B LIABILITIES - 4,055.68 B EQUITY - (1,422.98 B)

13. NG Assets, Liabilities and Equity (in billion pesos)

14. Local Government Units (Provinces, Cities and Municipalities) BALANCE SHEET ASSETS - P479.11 B LIABILITIES - 136.09 B EQUITY - 343.02 B

15. LGUs Comparative Assets, Liabilities and Equity (in billion pesos)

16. Local Governments (Barangays) BALANCE SHEET ASSETS - P25.33 B LIABILITIES - 1.58 B EQUITY - 23.75 B

17. BALANCE SHEET GOCCs ASSETS - P4,931.28 B LIABILITIES - 4,010.94 B EQUITY - 920.34 B

18. GOCCs Comparative Components of Balance Sheet (in billion pesos)

19. STATEMENT OF INCOME AND EXPENSES

20. Statement of Income and Expenses National Government REVENUE/INCOME - P1,159.98 B EXPENSES - 762.53 B NET SUBSIDY - (260.54 B) NET GAIN - 171.90 B NET INCOME - 308.81 B

21. Composition of Revenue/IncomeBy Source and By Collecting Agent Composition of Expenses by Class (in billion pesos)

22. Local Governments (Provinces, Cities and Municipalities) Statement of Income and Expenses REVENUE/INCOME - P234.81 B EXPENSES - 194.79 B NET INCOME - 40.02 B

23. Comparative Breakdown of Operating Income and Expenses by Unit (in billion pesos)

24. Local Governments (Barangays) Statement of Income and Expenses REVENUE/INCOME - P16.95 B EXPENSES - 14.83 B NET INCOME - 2.12 B

25. Statement of Income and Expenses GOCCs REVENUE/INCOME - P810.38 B SHARE OF NG - 11.29 B EXPENSES - 619.32 B SUBSIDIES - 13.61 B TAXES - 12.86 B NET INCOME - 180.53 B

26. CASH IN BANK BALANCES National Government Local Currency - P133.38B Foreign Currency - 19.48B Sub-total P152.86B Cash in BSP 52.24B Total P205.10B

27. CASH IN BANK BALANCES National Government - P205.10B Local Governments- 72.88B GOCCs - 77.64B Grand Total P355.62B

28. Cash Advances by Sector (in million pesos)

29. Accounts Payable and Inter-agency Payables, by Sector (in million pesos)

30. Accounts Payable and Inter-agency Payables, by Sector (in million pesos)

31. ISSUES AND CONCERNS 1. Non Reconciliation of Reciprocal Accounts

32. a. NGAs following a decentralized accounting procedures showed unreconciled reciprocal accounts as shown in these balances: Central Office Books Subsidy to ROs Subsidy to OUs Due from ROs Due from OUs RO/OU Books Subsidy from CO Subsidy from RO Due to CO Due to ROs

33. b. Three sectors have different balances for accounts subsisting between and among NGAs, LGUs, and GOCCs NGAs Subsidy to GOCCs GOCCs Subsidy from NGAs

34. b. Three sectors have different balances for accounts subsisting between and among NGAs, LGUs, and GOCCs NGAs Subsidy to LGUs LGUs Subsidy from NGAs

35. Reciprocal Accounts Due from NGAs - Due to NGAs Due from LGUs - Due to LGUs Due from - Due to GOCCs GOCCs

36. 2. Submission of required Financial Reports within deadline - TBs/FS/SCF/SGE/Reports - SAOB/SAAOB

37. - Quarterly Statement on Allotments, Obligations and Balances Annex A (Required per RA 7226 & GAA – Gen. Prov.) Target - 11,849 Total Received - 7,996 or 67.48% Received as of 3/31/08 - 5,747 or 48.50% Received after 3/31/08 - 2,249 or 18.98%

38. - Quarterly Statement on Obligations, Disbursements and Balances Annex B Target - 11,849 Total Received - 7,724 or 65.19% Received as of 3/31/08 - 5,492 or 46.35% Received after 3/31/08 - 2,232 or 18.84%

39. 3. Need for reconciliation of allotment releases between COA and Agencies

40. - Summary of Allotments by ABM/SARO - SAOB per agency and COA records

41. Accounting Developments • Harmonization of PGAS with International Public Sector Accounting Standards (IPSAS) - COA TWG to submit outputs by Feb. 2009

42. Accounting Developments • Revisit of NGAS Manuals • Enhancement of e-NGAS

43. Thank you and