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New Government Accounting System in the

Philippines (NGAs)
By Consolacion S. Miravite

15th President of the Republic of the Philippines, Benigno Simeon Aquino I

Source: http://www.president.gov.ph/biography/

Accounting is an effective tool of management in evaluating the performance of the different
agencies of government. The performance of the public managers would depend on the most, on
financial reports generated by the use of accounting systems.

Cognizant of this need, a new accounting system needs to be developed that would help the
different agencies to hit on financial targets, and at the same time be understood by all users of
financial reports.

With this new development, the Commission on Audit (COA), under the new 1987 Constitution,
promulgated the New Government Accounting System in the Philippines (NGAs) for use by all
government agencies.

The shift to NGAs was made in response to the following need:

1. Adoption of an accounting system that is in conformity with the International Accounting


2. Computerization of the accounting systems to generate reports that will be easy to understand
by the general public.
3. Preparation of regular and routinary financial reports.

4. The use of the generated financial reports as tools of management in decision making.

Commission on Audit COA Chairperson Maria Gracia M.

Pulido Tan

Source: http://www.coa.gov.ph/

Government Accounting Defined

Under Section 109, of the Presidential Decree (PD) no. 1445, defines Government Accounting as
one that encompasses the process of analyzing, classifying, summarizing and communicating all
transactions that are involved in the receipt and disbursement of all government funds and
properties, and interpreting the results thereof. In pursuant to this definition, objectives were set
to cover several areas in government operations.

Objectives of Government Accounting

To produce relevant financial information about past and present transactions of
To serve as a basis for decision making for future operations

To serve as the control mechanism for the receipt, disposition and utilization of
government funds and properties

To come up with financial reports pertaining to the results of operations of various

government agencies that are for dissemination to the public.

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On Accounting Responsibility
This fiscal responsibility emanates from the Constitution and its governing laws, rules and
promulgations. The mandate as prescribed under the said Constitution of the Philippines calls for
the keeping of the general accounts, as well as the promulgation and submission of financial
reports that would cover the operations of government.

The government officers that are mandated to discharge the above-stated Accounting
responsibilities are the Commission on Audit (COA), the Department of Budget and
Management (DBM) and the Bureau of Treasury (BTr) - to discharge the functions of
government in consonance with its commitment to all Filipinos.

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Agencies tasked by the Constitution with Accounting
Commission on Audit (COA) - as mandated by the 1987 Constitution, the COA shall have
the exclusive authority to - do audit and examination, establish audit techniques,
implement accounting rules and regulations, that includes disallowances on the use of
government funds and properties.

Department of Budget and Management (DBM) is the department responsible for the
planning and implementation of the National Budget for the sound utilization of
government funds in achieving the national governments agenda on reform and growth.
The DBM is tasked to monitor all government allotments and appropriations through
maintenance of registries for better control and monitoring.

Bureau of Treasury (BTs) - the department is the keeper of national funds and
disbursements. It is the lead agency in monitoring transactions affecting the national
government, agencies, and other instrumentalities. It maintains the registry on the
releases by the DBM, as well as the bank transfers between agencies.

Government Agencies would include government instrumentalities like bureaus,

Congress, Judiciary, constitutional bodies and self contained institutions, among others,
which are required to have an accounting division, which are of equal level with that of
other agencies that are tasked to do maintenance of accounts and submit financial
statements on a regular basis.

Accounting Method Used

The modified accrual basis of accounting shall be used where expenses are recognized when
incurred and income recognizes on an accrual basis unless other methods are required by law.
The old government system uses both cash and accrual basis.

The need for timely preparation of financial reports in government is necessary to evaluate the
performance of the different agencies of government. The result of the reports would indicate the
areas that may still need improvement, as well as come up with the budgetary requirements for
these agencies if needed.

Public officers are managers of funds, that are entrusted to them by the national government. The
financial reports would clearly show if the agencies are achieving what is mandated by them.
These reports would also show the extent in the use of agency assets and resources, as well as the
need for an additional infusion of funds if required.

The accounting data would show how the funds of government were used. This would also
reveal the inflow and outflow of funds and the need for stiffer fund management and control,
when necessary.

Other Related Articles from Author:

The New Government Accounting System of the Philippines (NGAS): On
Barangay Accounting System of the Philippines (Part I)


Manuals on NGAS, LGU's, Baranggay issued by COA

Circulars issued by COA and the IAS
Procedural and Comprehensive Approach in Government Accounting by Punzalan and