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New Barangay Accounting System
Burn Celestialon 7 March 2013
Transcript of New Barangay Accounting System
Accounting System Accounting Method Basic Features and Policies God bless us all! THE END! :3 >Modified Accrual Accounting is adopted
>Income shall be recorded when earned except when the use of accrual basis is impractical or when other methods are required by law
>Expenses shall be recorded when incurred irrespective of time of payment
>Income and expenses shall be reported in the financial statements in the period they relate Recognition of Liability >Liabilities shall be taken up only for goods actually delivered and accepted or services rendered or upon receipt of bills from suppliers or creditors
>Cash received to guaranty faithful performance of an activity shall be recorded as liability
>Surety bonds shall not be recorded in books
>All borrowings & secured loans shall be recorded using appropriate liability account Purchase of Supplies and Materials and Small Items >It shall be recorded as Inventories upon acquisition and Expense upon issuance
>Other tangible assets shall be classified as Property, Plant and Equipment subject to depreciation Cash Advances >Cash advance for payment of personal services shall be accounted for as “Payroll fund”
>Cash advance granted for travel and other special-time bound undertaking shall be accounted for as “Advances to Officers and Employees” Audit Disallowances >Shall be recorded only when they become final and executory Barangay Accounts >Shall be kept within the framework of the New Government Accounting System chart of accounts Processing of Transaction and Recording
in the Books >Processing of transactions shall be done at the barangay level
>Recoding in the books through Journal entry voucher shall be done by the City/Municipal accountant
>The financial records of the barangay shall be kept in the office of the City/Municipal Accountant
>Recording in the barangay books shall be based on the reports submitted by the Barangay Treasurer/Barangay record keeper
>Reports and documents supporting entries in the reports shall remain with the Barangay Treasure/Barangay Record keeper and shall be made available on the Commission on Audit anytime for examination Certified Registers The following Cash registers shall be used:
>Cash Receipt Registers
>Cash on Hand and In Bank registers
>Cash Disbursement Registers
>Check Disbursement Registers
>Petty Cash Fund Registers Status of Appropriations, Commitments and Balances It shall be consolidated by the City or Municipal Budget Officer Trial Balance The two-money column trial balance shall be used Financial Statements Balance Sheet (Detailed and Condensed)
Statement of Income and Expenses (Detailed and Condensed)
Statement of Cash Flows (Direct Method)
Statement of Changes in Government Equity The City/Municipal accountant shall furnish the Sangguniang Barangay and the Auditor with the Financial Statements within 30 days after the close of each month. Schedules Supporting
the Financial Statements Schedule of Public Infrastructures and Reforestration Projects
Schedule of Accounts Payable
Schedule of Accounts Receivables E-NGAS Whenver possible the use of Electronic New Government Accounting System at the City/Municipality level is encourage to facilitate the recording of barangay transactions and to hasten the consolidation of all barangay financial statements and reports. Barangay Accounting System Plan >It shows the accounting flow of barangay transactions in the books maintained by the City/Municipal Accountant
>Presented in the Accounting System Plan are the following:
Receipts and Deposits
Disbursements (Cash or Checks)
Public Infrastructures and Reforestation projects
Registries of Public Infrastructures and Reforestation Projects Major Financial Transactions The NGAS for Barangays prescribes for the following major categories of financial transactions
Appropriations and Commitments
Receipts and Deposits
Supplies and Materials, Property, Plant and Equipment, Public Infrastructures and Reforestation projects To record approved appropriations in the respective Registry of Appropriations and Commitments To record approved appropriations in the respective Registry of Appropriations and Commitments To record approved appropriations in the respective Registry of Appropriations and Commitments To record approved appropriations in the respective Registry of Appropriations and Commitments To record approved appropriations in the respective Registry of Appropriations and Commitments To record approved appropriations in the respective Registry of Appropriations and Commitments To record approved appropriations in the respective Registry of Appropriations and Commitments Are amounts earmarked by the barangay, arising from an act of a duly authorized official, which binds the barangay to the immediate or eventual payment of a sum of money.
Charges against the appropriated funds shall be based on the commitments made by the Barangay. Commitments The KAGAWAD shall be responsible in monitoring the approved appropriations and the charges against the following funds:
20% Development fund
Sangguniang Kabataan fund
Gender and Development fund Appropriations Are amounts in the annual or supplemental budget that are authorized by the Sanggunian to be spent for the undertaking of a particular function, program, activity or project, for which services have been rendered or goods delivered. Appropriations Section 29, paragraph 1 of the Constitution
No money shall be paid out of the treasury except in pursuance of an appropriation made by law.
All disbursements of public funds, except those received for special purposes, shall be covered by an approved General Appropriation Ordinance (GAO) authorizing appropriation for the annual budget.
The expenditure items of which shall be in accordance with the Philippines Government Chart of Accounts under NGAS.
Commitments shall not exceed the approved appropriation unless authorized by the DBM. Appropriations and Commitments Illustration To record approved appropriations in the respective Registry of Appropriations and Commitments Status of Appropriations, Commitments and Balances Department of Budget and Management Government Accountancy and Financial Management Information System – COA City/Municipal Budget Officer Chairman of Committee of Appropriation Barangay Record Keeper To record approved appropriations in the respective Registry of Appropriations and Commitments To record approved appropriations in the respective Registry of Appropriations and Commitments To record approved appropriations in the respective Registry of Appropriations and Commitments To record approved appropriations in the respective Registry of Appropriations and Commitments To record approved appropriations in the respective Registry of Appropriations and Commitments To record approved appropriations in the respective Registry of Appropriations and Commitments To record approved appropriations in the respective Registry of Appropriations and Commitments To record commitments/charges incurred. Oprah Winfrey has six toes. Coca-Cola was originally green. Thomas Edison,
the inventor of light bulb is afraid of DARK. Illustration Property, Plant and Equipment,
Public Infrastructure/Reforestation Project The Barangay Jose Rizal contracted Tapal-tapal Construction Co. For the construction of its road that was started and completed in 2009. The contract price was P25,000. Upon completion of the project, Barangay Jose Rizal was billed and after inspection of the project, the contractor was paid, net of 10% withholding tax. Illustration In case the relief of accountability was granted by COA The following reports shall be prepared:
Inventory and Inspection report of Unserviceable Property
Report on the Physical Count of Property
Inspection and Acceptance Report Property, Plant and Equipment The following registers and records shall be maintained:
Property, Plant and Equipment Register
Creditor’s Card Property, Plant and Equipment Journal Entries: At the end of the year, the Barangay Jose Rizal recorded the following transactions: Illustration Unserviceable PPE
> shall be returned to the Barangay Treasurer for the cancelation of the Property Acknowledge Recipient
> reported in Inventory and Inspection Report of Unserviceable Property > recipient of the Property, Plant and Equipment shall be covered by the Property Acknowledge Recipient Property, Plant and Equipment Registry of Public Infrastructure – Roads, highways and bridges
Registry of Public Infrastructure – Parks, plazas, and monuments
Registry of Reforestation Projects >the cost of the projects and cumulative cost of repairs and maintenance shall be monitored using the appropriate registries >are for public use and not for the exclusive use of the barangay Infrastructures and reforestation Projects After inspection, the IT equipment was paid in full, net of 10% withholding tax. The Barangay Jose Rizal acquired the following property, plant and equipment: Illustration > charged against appropriation of capital outlay and recorded in Property, Plant and Equipment Registry for control and monitoring purposes >Inspection Committee – inspect every delivery
Head: Barangay Treasurer
Member: designated Kagawad >all procurement shall be in accordance with the requirements of RA 9184, with insured GSIS Property, Plant and Equipment Repairs and maintenance shall be charged to the appropriate Repairs and maintenance expense account of the specific project. All Public Infrastructures and reforestation Projects shall not be subject to depreciation. The total cost of each Public Infrastructures and reforestation Projects shall be disclosed in the Notes to Financial Statements. Upon completion, projects shall be transferred to the specific Public Infrastructures and reforestation Projects account. Completed Public Infrastructures and reforestation Projects during the year shall be transferred to the appropriate Registry of Public Infrastructures and reforestation Projects at the year-end, where its cost and cumulative costs of repairs and maintenance shall be monitored. All projects under construction shall be recorded under Construction in Progress - Infrastructures and reforestation Projects accounts. In accordance with the Construction Theory, all cost incurred during the construction of Public Infrastructure and Reforestation projects shall form part of the cost of the projects. Expenses incurred after the completion shall be charged to operation. Infrastructures and reforestation Projects To record depreciation To record disposal of unserviceable motor vehicle through sale Journal Entry To set up accountability of accountable officer for loss of IT Equipment To record loss of PPE through theft At the end of the year, during the physical count PPE ,it was discovered that an IT Equipment costing P22,500, with accumulated depreciation of P7,500 was stolen. Accordingly, the accountable officer requested for relief from accountability. Illustration Remittance of withholding tax to
BIR Payment of the purchase To record receipt of donations To record Purchase on Account Useful life Depreciation Cost Residual
Value Property, Plant and Equipment Prescribed by COA, which will be used in computing the depreciation Use straight line method 10% of the Cost Duties and Responsibilities of the City/Municipal Accountant and Budget Officer Financial Statements
*Statement Of Income and Expenses
*Statement of Cash Flows
*Statement of Changes in Government’s Equity
*Notes to Financial Statements Financial Statements and Supporting Schedules The trial balance is a list of all the accounts with balances in the General Ledger. TRIAL BALANCE TRIAL BALANCES AND ADJUSTING/CLOSING ENTRIES Consolidate the Statement of Appropriations, Commitments and Balances of each barangay for the five funds, such as: General Fund, 20% Development Fund, Calamity Fund, Sangguniag Barangay Fund, and Gender and Development Fund.
Submit the Consolidated Statement of Appropriations, Commitments and Balances of all barangays under the city/municipality to GAFMIS-COA through the auditor/audit team leader and to DBM. Budget Officer Maintain the General Journal, General Ledger, Subsidiary Ledgers, and Registries of Public Infrastructures/Reforestation Projects for each of the barangays under the city/municipality.
Prepare the Journal Entry Voucher.
Record and post the Journal Entry Vouchers.
Prepare the required monthly and year-end Trial Balances, Financial Statements and reports/schedules for each of the barangays.
Prepare and submit the Bank Reconciliation Statement to COA auditor/audit team leader concerned.
Consolidate the year-end trial balances and financial statements and reports/schedules of the barangays.
Submit monthly and year-end barangay individual financial reports to the Sangguniang Baranay, and the printed and digital copies of the consolidated year-end trial balances, FS and reports/schedules of the barangays together with those of the city/municipality to GAFMIS-COA and to the auditor/audit team leader concerned.
*GAFMIS – Governement Accounting and Financial Management Information System City/Municipal Accountant Prepared in 4 copies to be distributed as follows:
Original – Commission on Audit (COA)
2nd Copy – Sangguniang Barangay
3rd Copy – Punong Barangay/Barangay Record Keeper
4th Copy – City/Municipal Accountant
Shall be supported with the Statement of Management Responsibility Financial Statements shall be: Schedule of Public Infrastructures
Schedule of Reforestation Projects
Schedule of Accounts Receivable
Schedule of Accounts Payable Supporting Schedules These are the disclosures pertaining to additional information to enhance the value of financial data in the financial statements. Notes to Financial Statements Statement showing the result or changes in Government Equity account as of a given period. Statement of Changes in Government Equity Statement summarizing all cash transactions of the barangay. It shall be prepared using the Direct Method. Statement of Income and Expenses Formal statement showing the financial condition of the barangay as of a particular date. Balance Sheet Prepared to close the balances of all nominal/intermediate accounts at the end of the year prior to the preparation of the Post-Closing trial balance and generation of financial statements. Closing Journal Entries Prepared to recognize all revenues and expenses earned and incurred during the period but not yet recorded. Depreciation shall be taken up monthly. Adjusting Journal Entries Prepared in four (4) copies
Submitted within thirty (30) days after the close of each month.
*Year-end trial balances shall be submitted on or before February 14 of each year The trial balance shall be: It is prepared at year-end after all the closing journal entries have been recorded in the General Journal and the accounts are posted to the General Ledger. Post-Closing Trial Balance It is prepared after all the adjusting entries have been recorded in the General Journal and the accounts are posted to the General Ledger and respective Subsidiary Ledger. Pre-Closing Trial Balance Pre-Closing Trial Balance
Post-Closing Trial Balance Types of Trial Balance tadaaaa! RECEIPTS
MATERIALS DISBURSEMENTS On the first week of every month the Barangay Treasurer/ Barangay Record Keeper shall submit to the City/ Municipal accountant the certified registers and other reports to serve as basis in drawing Journal Entry Vouchers to record the transactions in the books. All original documents supporting the entries in the registers/ reports shall remain with the Barangay Treasurer/ Barangay Record Keeper and shall be made available to the COA representative for audit. b. Disbursement made by petty cash custodian out of his petty cash fund. The petty cash fund shall be maintained using the imprest system. The amount of petty cash fund shall be determined by the Sangguniang Barangay but not to exceed 20% of the funds available and to the credit of the Barangay Treasurer (Sec. 334 (b) RA 7160). The petty cash fund shall be replenished as soon as disbursements reach 75% or as needed. All paid petty cash vouchers shall be reported in the Summary of Paid Petty Cash Vouchers to be certified by the petty cash fund custodian. At year-end, any unreplenished expenses shall be reported to the Barangay Record Keeper for submission to the City/ Municipal accountant for recording in the books. The Barangay Treasurer shall be responsible in handling collections of income and other receipts of the Barangay and the deposit of the same with Authorized Government Depository Bank (AGDB), such as: Development Bank of the Philippines, Land Bank of the Philippines, and Veterans Bank of the Philippines. However, agencies, may seek authority from Monetary Board of the Bangko Sentral ng Pilipinas to designate other depository banks. DEPOSITS - represent money or its equivalent received by the bank for safekeeping and for credit to a checking, savings or time deposit account of an agency. RECEIPTS - represents all collections in form of cash and checks received by the Barangay for a given period such as: share in national taxes and revenues, Barangay taxes, other revenues and other sources. The LGU or the DBM making the direct remittance shall furnish the Barangay a copy of the advice for information and counterchecking with the credit memo received from the bank. Any interest earned on bank deposits shall be recorded at gross in the Cash on Hand and in Bank Register and in Cash Receipts and Deposits Register. All collections shall be acknowledged by the issuance of a pre-numbered Official Receipt or its equivalent like Real Property Tax Receipt and Community Tax Certificate subject to proper custody, accountability and audit, which shall be secured from the City/Municipal Treasurer. The Barangay Treasurer/ Accountable officers shall record their collections and deposits/ remittances in the Summary of Collections and Deposits, and Summary of Collections and Remittance and shall be recorded directly in the appropriate registries. Credit memo received from the bank for direct remittance made by Local Government Units (LGU) or the Department of Budget and Management for the Barangay share in real property tax or the internal revenue allotment, respectively, shall be recorded direct to the Cash on Hand and in Bank Register and in the Cash Receipts and Deposits register. All collections by the Barangay Treasurer for the Barangay shall be recorded in the Summary of Collection s and Deposits, and shall be deposited with AGDB daily or not later than the following banking day. a. Cash advance was given to Barangay Treasurer/ Accountable Officer and shall be used solely for payment of salaries, honoraria, and other allowance due the barangay officials and employees. The Barangay Record Keeper shall record the cash advance in the Cash Disbursement Register based on the Summary of Checks Issued submitted by Barangay Treasurer. The Barangay Treasurer/ Accountable Officer shall record all payments out of cash advances for payroll in the Summary of Cash Payments. The cash advance shall not be used for encashment of checks or for liquidation of previous cash advances. Succeeding cash advance shall be granted only after full liquidation of the previous cash advance. 1. By cash (through Barangay Treasurer/ Accountable Officer) Commercial checks for disbursement is covered by deposit with AGDB. The check shall be signed by the Barangay Treasurer and countersigned Punong Barangay. All checks issued, including cancelled ones, shall be recorded on daily basis by the Barangay Treasurer in correct numerical sequence in the Summary of Checks Issued and Cash on Hand and in Bank Register. The summary of Checks Issued shall be submitted to the Barangay Record Keeper weekly. 1. By check MODES OF DISBURSEMENTS may be classified into two, namely: To record receipt of credit memo. Journal entry: In January, the Barangay Jose Rizal received credit memo for the bank representing direct deposit of barangay share from Internal Revenue Allotment in the amount of P30,000 and Real Property Tax in the amount of P20,000. Illustrations: Garbage fee 10,000 Clearance and certificate fees 8,000 Permit fees 5,000 Community tax certificate
(as deputized by city treasurer) 2,000 During January, the Barangay Jose Rizal made the following collections and remitted/ deposited the same to city treasurer and AGDB, respectively. Illustrations: The recipient of small items with more than one year life shall be responsible for its unkeep during the estimated life of the item and shall be issued an Inventory Custodian Slip. Issuance of supplies and materials shall be covered by an approved Requisition and Issue Slip. Supplies, inspected by Inspection Committee, shall be accepted by Barangay Treasurer, who will act as the Property Officer of the barangay. Requisition, procurement, issuance, physical inventory and loss of supplies and materials are governed by existing government rules and regulation. The cost of supplies and materials acquired through purchase shall be based on the invoice cost. Procurement of supplies shall be charged directly to Maintenance and Other Operating Expenses and shall be recorded using the appropriate expense accounts. Except in emergency cases, all procurement shall be covered by Approved Procurement Program as required in RA 9184. To record refund of cash advance for travel. To record the grant of cash advance. Journal entry: The Barangay Jose Rizal granted cash advance for travel to Punong Barangay to follow up barangay matters at the regional office of Department of Interior and Local Government in the amount of P1,000. Actual travel expenses incurred amounted to P900 and the excess amount was appropriately refunded. Illustrations: To record remittance of withholding tax to BIR. To record payment of payroll. Journal entry: The Barangay Jose Rizal received a duly approved journal entry voucher from municipal accountant representing payroll of barangay officials for the period January 1-15, 2009. The amount of P10,000 including withholding tax of P1,000 was paid. Said payroll was previously recorded in the Registry of Appropriation and Commitments – Personal Services. Illustrations: To record deposit of collection to AGDB. To record remittance of collection to city treasurer. To record collections. Journal entry: To record receipt of supplies and materials. Journal entry: Medicines 5,000 Subsidy from office of the municipal mayor Office supplies 2,000 Medicines 10,000 Financial assistance from NGO: The Barangay Jose Rizal received the following supplies and materials: Illustrations: The following REGISTRIES shall be maintained for barangay disbursements: 4. Submission of documentary evidence to establish the validity of the expenses. 3. Approval of the expenses by the Punong Barangay. 2. Legality of the expenses and in conformity with rules and regulations. 1. Existence of appropriation sufficient to cover the expenses. 4. Cash on Hand and in Bank Register 3. Cash Disbursements Register 2. Petty Cash Fund Register 1. Check Disbursements Register BASIC REQUIREMENTS applicable to all classes of barangay disbursements are: Disbursements refer to all cash/ check paid out during a given period for settlement of government expenditures/ payables. It also represents the movement of cash from an AGDB or from the Barangay Treasurer/ authorized disbursing officer to the final recipient. Existing rules and regulations require that all disbursements of public funds be supported by documents necessary to prove their validity, propriety, and legality. To record motor vehicle received. To record financial assistance. Journal entry: Motor vehicle from the development assistance fund –
Congressman of Bataan 300,000 Financial assistance from the development assistance fund –
Congressman of Bataan 200,000 Financial assistance from office of the municipal mayor 20,000 In January, the Barangay Jose Rizal received the following from different sources: Illustrations: To record remittance of withholding tax to BIR. To record payment. To record purchase on account. Journal entry: After several days, the above purchase, which was covered by Inspection and Acceptance Report, was paid, net of 10% withholding tax. Medicines 3,000 Office Supplies 5,000 The Barangay Jose Rizal purchased on account the following: Illustrations: