Ngas Manual

MANUAL ON THE NEW brass ACCOUNTING SYSTEM For guinea pig Government Agencies ACCOUNTING POLICIES Volume I Chapter 1. Introduction Objectives of the Manual. The New Government bill carcass (NGAS) Manual presents the basal policies and procedures the sore coding system the report systems, books, registries, exhibits, forms, reports, and financial statements and illustrative news report entries to be adopted by every last(predicate) in wholly theme presidency agencies utile January 1, 2002. The objectives of the Manual atomic number 18 to prescribe the pursual . Uniform guidelines and procedures in money box none statement for regimen line of descents and property b. New coding structure and chart of cyphers c. score books, registries, records, forms, reports and financial statements and d. accountancy entries. Coverage. This Manual shall be affaird by all national government agencies. Legal Basis. This Manual is prescribed by the Commission on Audit pursuant t o Article IX-D, Section 2 par. (2) of the 1987 Constitution of the Republic of the Philippines which provides that The Commission on Audit shall have scoop shovel authority, subject to the limitations in this Article, to define the scope of its audit and examination, establish the techniques and methods demand therefor, and promulgate method of accounting system and auditing rules and regulations, including those for the prevention and dis provideance of irregular, unnecessary, excessive, extravagant, or unconscionable exp terminateitures, or uses of government pecuniary resource and properties. (underscoring supplied) Chapter 2. Basic Features and Policies Basic Features and Policies. The NGAS has the following basic features and policies, to wit a.Accrual business relationship. A modified accruement basis of accounting shall be utilize. Under this method, all expenditures shall be recognized when incurred and describe in the financial statements in the layover to which they relate. Income shall be on assemblage basis pull for proceeding where accrual basis is impractical or when some other(prenominal) methods ar required by law. b. One entrepot Concept. This system adopts the one fund concept. distract fund accounting shall be done altogether when particular(prenominal)ally required by law or by a donor authorization or when otherwise necessitated by circumstances subject to prior approval of the Commission. . map of Accounts and Account Codes. A new chart of accounts and coding structure with a three-digit account numbering system shall be adopted. (See Volume III, The Chart of Accounts) d. Books of Accounts. wholly national agencies shall maintain two sets of books, namely Regular situation (RA) Books. These shall be employ to record the receipt and utilization of zero(prenominal)ice of immediate payment allocation (NCA) and other income/receipts which the agencies argon authorized to use and to deposit with authorized Governmen t Depository Bank (AGDB) and the national Treasury.These shall brood of journals and ledgers, as follows ledgers property Receipts Journal (CRJ) currency Disbursements Journal (CDJ) Check Disbursements Journal (CkDJ) worldwide Journal (GJ) scripts worldwide Ledger (GL) Subsidiary Ledgers (SL) for ? hard gold ? Receivables ? Inventories ? Investments ? office, Plant and Equipment ? anatomical structure in Progress ? Liabilities ? Income ? Expenses bailiwick Government (NG) Books. These shall be employ to record income which the agencies ar not authorized to use and argon required to be remitted to the matter Treasury.These shall consist of bullion Journal (CJ) General Journal (GJ) General Ledger (GL) Subsidiary Ledger (SL) With the implementation of the computerized agency accounting system, only the General Journal shall be used together with the ledgers by both books. e. fiscal reports. The following statements shall be arrive atd Balance Sheet Statem ent of Government Equity Statement of Income and Expenses Statement of Cash Flows business lines to fiscal Statements shall inhere in the above tatements. f. Two-Money Column Trial Balance. The two money column political campaign equilibrize showing the account balances shall be used. g. tryst and stipulation. Obligation accounting is modified to simplify procedures in the incurrence and liquidation of liabilitys and the put down of the budgetary accounts (allotments and obligations incurred and liquidated). Sepa wander registries shall be retained to control the allotments and obligations for each of the four programes of allotments, namely funds register of Allotments and Obligations Capital Outlay (RAOCO) registry of Allotments and Obligations Maintenance and some other operational Expenses (RAOMO) bills register of Allotments and Obligations Personal Services (RAOPS) Registry of Allotments and Obligations- Financial Expenses (RAOFE). h. scar of Cash a p caboodleing (NCA). The receipt of NCA by the agency shall be recorded in the books as debit to account Cash-National Treasury, Modified Disbursement System (MDS) and suggestence book to account Subsidy Income from National Government. i. Financial Expenses.Financial expenses much(prenominal) as bank charges, interest expenses, commitment charges and other related expenses shall be separately sort out from Maintenance and early(a) Operating Expenses (MOOE). j. Perpetual Inventory of Supplies and Materials. Supplies and materials barter ford for instrument bearing shall be recorded using the perpetual inventory system. Regular purchases shall be coursed thru the inventory account and numbers thereof shall be recorded as they hold up place except those purchased out of junior Cash Fund which shall be aerated instanter to the detach expense accounts. k. Valuation of Inventory.Cost of ending inventory of supplies and materials shall be computed using the moving average met hod. l. Maintenance of Supplies and Property, Plant and Equipment Ledger Cards. For capture check and balance, the method of accounting building blocks of agencies, as well as the Property single-valued functions, shall maintain Supplies Ledger Cards/Stock Cards by memory number and Property, Plant and Equipment Ledger Cards/Property Cards by grade of property, plant and equipment, respectively. m. Construction of Assets. For assets under construction, the Construction Period guess shall be applied for costing purposes.Bonus paid to the contractor for completing the make water ahead of time shall be added to the hail cost of the project. Liquidated damages charged and paid for by the contractor shall be deducted from the total cost of the project. whatsoever related expenses incurred during the construction of the project, such as taxes, interest, license fees, permit fees, head fee, etc. shall be capitalized, and those incurred after the construction shall form part of run cost. n. Registry of reality Infrastructures/Registry of Reforestation Projects.For agencies that construct public infrastructures, such as roads, bridges, waterways, railways, plaza, monuments, etc. , and invest on reforestation projects, a Registry of human race Infrastructures (RPI)/Registry of Reforestation Projects (RRP) shall be hold for each category of infrastructures/reforestation projects. Examples ar Registry of Public Infrastructures Bridges (RPIB) Registry of Public Infrastructures Roads (RPIR) Registry of Public Infrastructures Parks (RPIP) Registry of Reforestation Projects (RRP)A totality-up of Public Infrastructures/Reforestation Projects shall be prepared and include in the watch overs to Financial Statements. o. Depreciation. The straight-line method of depreciation shall be used. Depreciation shall start on the secant month after purchase of the property, plant and equipment, and a residual note value equivalent to ten percent of the purchase cost shall be set-up. Public infrastructures/reforestation projects as well as serviceable assets that are no longer being used shall not be charged both depreciation. . Reclassification of Assets. Serviceable assets no longer being used shall be re classified advertisement to some other Assets account and shall not be subject to depreciation. q. adaption for Doubtful Accounts. An Allowance for Doubtful Accounts shall be set up for estimated uncollectible trade receivables to allow for their fair valuation. r. Elimination of Contingent Accounts. Contingent accounts shall no longer be used. All financial proceedings shall be recorded using the appropriate accounts.Cash shortages and disallowed payments, which become final and executory, shall be recorded under receivable accounts payable From dapplers and Employees or Receivables-Disallowances/ Charges, as the case may be. s. Recognition of Liability. Liability shall be recognized at the time goods and services are accepted or rendered and supplier/creditor bills are true. t. Interest Accrual. Whenever practical and appropriate, interest income and/or expense shall be accrued and recognized in the books of accounts. u. Accounting for Borrowings and Loans. All borrowings and loans incurred shall be recorded to the appropriate financial obligation accounts. . Elimination of corollary and negative journal entries. The use of corollary and negative journal entries shall be stopped. Acquisition/Disposition of assets shall be debited/credit to the appropriate asset accounts. If an error is committed, a correcting entry to adjust the trustworthy entry shall be prepared. w. Petty Cash Fund. The Petty Cash Fund shall be hold under the imprest system. As such, all replenishments shall be directly charged to the expense account and at all times, the Petty Cash Fund shall be equal to the total cash on mint and the unreplenished expenses.The Petty Cash Fund shall not be used to purchase regular inventory/items f or stock. x. Foreign Currency Adjustment. Cash deposits in opposed up-to-dateness and outstanding foreign loans shall be computed at the exchange rate prescribed by the Bangko Sentral ng Pilipinas at balance sheet date. The total cash deposits and foreign loans payable shall be set at the end of each month and any gain or loss on foreign exchange shall be recognized. The subsidiary ledger for foreign currency obligations shall reflect the appropriate foreign currency in which the loan is payable.The liability shall be expressed both in the foreign and local currency. Chapter 3. Accounting Systems General Accounting Plan. The General Accounting Plan (GAP) shows the overall accounting system of a government agency/unit. It includes the source memorandums, the flow of transactions and its accumulation in the books of accounts and finally their conversion into financial information/ info presented in the financial reports. Presented on next page is the General Accounting Plan for na tional government agencies. The following accounting systems are . budgetary Accounts System b. Receipts/Income and Deposit System c. Disbursement System and d. Financial newspapering System. 4 BUDGETARY ACCOUNTS reckonary Accounts System. The budgetary Accounts System encompasses the processes of preparing Agency work out Matrix (ABM), monitoring and written text of allotments sure by the agency from the DBM, releasing of Sub-Allotment Release Order (Sub-SARO) to regional authorisations (RO) by the Central Office (CO) issuance of Sub-SARO to Operating units (OU) by the RO and save and monitoring of obligations. reckonary Accounts. work outary accounts consist of the appropriations, allotments and obligations. Appropriations remark to authorizations made by law or other legislative enactment for payments to be made with funds of the government under specify conditions and/or for specified purposes. Appropriations shall be monitored and controlled through registries and co ntrol worksheets by the DBM and COA, respectively. figureary accounts allotments and obligations are discussed in the succeeding sections. INSERT GENERAL ACCOUNTING PLAN for National Government Agencies Agency work out Matrix (ABM). The ABM refers to a archive showing the disaggregation of agency expenditures into components like, among others, by source of appropriations, by allotment class and by need of clearance. Procedures for the training of the ABM arena of Seq. debt instrument No. operation Budget unit come to mental faculty 1 establish on the okay General Appropriations Act (GAA) and in coordination with the DBM, prepares the ABM by appropriations/financing sources to brook expenditures to be made during the course of instruction broken shine by allotment class/expenses. cross off 1 The ABM shall contain, among others, the following information The amount to be released categorized under Not Needing clearance column, and The amount that will be released through the issuance of Special Allotment Release Order (SARO) categorized under Needing Clearance column including inveterate appropriations base on the Statement of Allotments, Obligations and Balances (SAOB). 2 Initials under Prepared by portion of the ABM. brainiac, Budget social unit 3 Reviews and signs Prepared by portion of the ABM. Concerned ply 4 beforehand the ABM together with a transmittance letter for the DBM to the lead of the Agency for sig record/approval. brainpower of the Agency 5 Approves/Signs the ABM and the transmittal letter. Concerned mental faculty 6 characters in the logbook keep and submits the signed ABM to the DBM for approval. Allotment Release Order (ARO). The ARO is a testis document issued by the DBM to the head of the agency containing the authorization, conditions and amount of an agency allocation. The document may be the ABM, where the amount of allocation not ne eding clearance is indicated, or the Special Allotment Release Order (SARO), where the release of which is subject to ossification with specific laws or regulations or is subject to separate approval or clearance by competent authority. In the case of agencies with decentralized accounting procedures, Sub-ARO/Sub-SARO is issued/released. Recording of Allotments.Upon receipt of the okay ABM and ARO, the Budget Officer/ wit of the Budget unit/Designated Budget Officer shall record the allotment in the respective registries through the Allotment and Obligations nobble (ALOBS). Separate registries shall be maintained for the four allotment classes by Program/Project/Activity (P/P/A), to wit 1. Registry of Allotments and Obligations Capital Outlay (RAOCO) 2. Registry of Allotments and Obligations Maintenance and former(a) Operating Expenses (RAOMO) 3. Registry of Allotments and Obligations Personal Services (RAOPS) 4. Registry of Allotments and Obligations Financial Expenses (RAO FE) Procedures in the Monitoring and Recording of Allotments acquire from DBM Area of Seq. Responsibility No. Activity Budget social unit 1 Receives the approved ABM/SARO from the DBM. Records the Concerned mental faculty corresponding in the logbook and forwards the ABM/SARO to Budget Staff for cooking of an Allotment and Obligation Slip (ALOBS). Budget Staff 2 Prepares ALOBS in two copies, assigns number and initials the analogous. send on the ALOBS and ABM/SARO to the wellspring of the Budget unit for review and signature. tint 1 The numbering structure of the ALOBS shall be as follows PS 00 00 0000 Serial Number (One series for the whole year) Month course of instruction Allotment Class (PS, MOOE, CO and FE) shall be used only when obligations are recorded in the ALOBS tone of voice 2 The ALOBS shall be prepared in two copies and shall be distributed as follows archetype-Retain ed by the Budget whole to support recording in the registries written matter 2 -Accounting building block Head of the Budget Unit 3 Reviews, checks the mall box opposite the maestro portion in cut A of the ALOBS and affixes signature certifying receipt of allotment. Returns to the Budget Staff for recording in the appropriate Registry of Allotments and Obligations (RAOs). Budget Staff 4 Records the ALOBS in the appropriate RAOs. Files the ALOBS for reference. Note 3 The following RAOs shall be maintained by the Budget Unit Registry of Allotments and Obligations Personal Services (RAOPS) Registry of Allotments and Obligations -Maintenance and Other Operating Expenses (RAOMO) Registry of Allotments and Obligations -Capital Outlays (RAOCO) Registry of Allotments and Obligations Financial Expenses (RAOFE) 5 transport written matter 2 of the ALOBS to the Accounting Unit for reference. Procedures for the Recordin g of Sub-Allotment Release Order (Sub-ARO) by RO/ OU Area of Seq. Responsibility No. Activity Central Office/ Regional Office Budget Unit 1 establish on the approved ABM received from the DBM, prepares Budget Staff Sub-ARO for RO/OU. onwards the Sub-ARO to the Head of the Budget Unit CO/RO for review. Head of the Budget Unit 2 Reviews and signs Sub-ARO. Forwards the same to the Head of the CO/RO for approval. Head of Central 3 Approves the Sub-ARO. Office/Regional Office/ trustworthy Officer Budget Staff 4 Based on the approved Sub-ARO, prepares ALOBS in two copies. Assigns number and initials the ALOBS. Forwards the same with a copy of approved Sub-ARO to the Head of the Budget Unit for review and signature. Note 1 Distribution of ALOBS shall be as follows Original CO/RO Budget Unit Copy 2 CO/RO Accounting Unit Note 2 tinge to ALOBS numbering structures in Note 1 Sec. 12, Procedures in the Monitoring and Recording of Allotments Received from DBM Head of the Budget Unit 5 Reviews, checks the beautiful box opposite the Sub-allotted portion of street corner A of the ALOBS and affixes signature certifying as to the amount sub-allotted to RO/OU. Forwards the same with the approved Sub-ARO to Budget Staff for recording in the appropriate RAOs. Budget Staff 6 Records the ALOBS in the appropriate RAOs. Files the ALOBS and a copy of the Sub-ARO. Note 3 The ALOBS covering sub-allotment for the RO/OU shall be entered in the RAOs as negative entry in the Allotment column and shall be deducted from the allotment balance. Note 4 A copy of the ALOBS covering allotment of the RO/OU shall be furnished the Accounting Unit for reference. Concerned Staff 7 Records in the logbook the release of the Sub-ARO to RO/OU. Regional Offices/ Operating Units Budget Unit Concerned Staff 8 Receives the approved Sub-ARO from the CO/RO. Re cords the same in the logbook maintained. Forwards the Sub-ARO to the Budget Staff for the preparation of ALOBS. Budget Staff 9 Prepares ALOBS in two copies, assigns number and initials the same. Forwards the ALOBS and Sub-ARO to the Head of the Budget Unit for review and signature. Note 5 Refer to Notes 1 and 2 of Sec. 2, Procedures for the Monitoring and Recording of Allotments Received from the DBM. Head of the Budget Unit 10 Reviews the ALOBS based on the Sub-ARO. Checks the small box opposite the Received portion of Box A of the ALOBS and affixes signature certifying that the allotment was received. Forwards the ALOBS and Sub-ARO to the Budget Staff for recording in the appropriate RAOs. Note 6 Refer to Note 3, of Sec. 12, Procedures for the Monitoring and Recording of Allotments Received from the DBM. Budget Staff 11 Records the ALOBS in the RAOs. Files the Sub-ARO and original of the ALOBS. 12 Forward s copy 2 of the ALOBS to the Accounting Unit for reference. Accounting for Obligation. Obligation refers to a commitment by a government agency arising from an act of a duly authorized functionary which binds the government to the immediate or eventual payment of a sum of money. The agency is authorized to incur obligations only in the performance of activities which are in pursuits of its functions and programs authorized in appropriation acts/laws within the limit of the ARO. Obligations shall be taken up in the registries through the ALOBS prepared/processed by the Budget Unit.The Budget Officer/ Head of the Budget Unit/designated Budget Officer shall certify to the availability of allotment and such is duly stimulate by signing in the appropriate box of the ALOBS. On the other hand, the control/Head of the Accounting Unit shall certify to the correctness and severeness of obligations, and availability of funds. Both Budget and Accounting Units shall coordinate in the alt er up of the Status of the Obligation in their respective copies of the ALOBS Procedures for the Recording of Obligations Area of Seq. Responsibility No. Activity Budget Unit Concerned Staff 1 Receives the Disbursement Voucher/Payroll (DV/P), and supporting documents, Contract/ purchase Order (C/PO) from concerned offices/personnel. Verifies completeness of the documents. If incomplete, returns the documents to concerned offices for completion. If complete, records the same in the logbook maintained.Forwards the documents to Budget Staff for the preparation of the ALOBS. Budget Staff 2 Verifies availability of allotment based on the RAOs. If no allotment is procurable, returns the documents to the office/personnel concerned except as authorized by the DBM. 3 If there is an available balance of allotment to cover the obligations, prepares an ALOBS in three copies.Initials the ALOBS and forwards the same to the Head of the Budget U nit for review and signature. Note 1 Copy 3 of ALOBS shall be attached to the DV. Refer to Note 2, Sec. 12, Procedures for the Monitoring and Recording of Allotments Received from DBM for the distribution of the other copies of ALOBS. Head of the Budget Unit 4 Reviews, checks the small box opposite the Available and duly obligated portion of Box A of the ALOBS and affixes signature. Forwards the ALOBS and documents to the Budget Staff for recording in the appropriate RAOs. Budget Staff 5 Records the amount obligated under the Obligation column of the RAOs. Forwards all copies of the ALOBS and the documents to the Accounting Unit for processing and signature. Note 2 Obligations shall be post in the Obligation Incurred column of the RAOs to fall at the balance of allotment still available at a given period. 6 Receives original of ALOBS from the Accounting Unit. If there is no correction, files the same to suppo rt the RAOs. Otherwise, effects correction in the RAOs or prepares a new ALOBS, as the case may be. Note 3 For the succeeding activities, refer to Sec. 34, Procedures for Disbursements By Checks. Note 4 There is no need to prepare a new ALOBS for corrections/adjustments made by the Accounting Unit after the processing of the claims but before payment is made. Adjustment in the RAOs shall be effected thru a positive entry (if additional obligation is necessary) or a negative entry (if reduction) in the Obligation Incurred column. Note 5 Preparation of new ALOBS for the following adjustments of obligations as negative entries in the Obligation Incurred column shall be made refund of cash ascension granted during the year overpayment of expenses during the year disallowances/charges which become final and executory Certified copies of official receipts for the overpayments/refunds, copies of bills for overpay ments and Notice that the disallowances are final and executory shall be furnished the Budget Unit by the Accounting Unit for the preparation of new ALOBS taking up the adjustments. 16 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/ sights, 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 Subsidy Income from National Government 1. Subsidy from Central Office 2. Subsidy from Regional Office/Staff Bureaus 3. Income from Government Service s 4. Income from Government Business Operations 5. sales tax revenue 6. Rent Income 7. Insurance Income 8. Dividend Income 9. Interest Income 10. Sale of Confiscated Goods and Properties 11. Foreign permutation (FOREX) Gains 12. Miscellaneous Operating and Service Income 13. Fines and Penalties-Government Services and Business Operations 14. Income from Grants and DonationsThe 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 The descriptions of all the accounts and the instructions as to when these are to be debited and impute are provided in Volume III of the NGAS Manual. regularitys 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 b y 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 imputable 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 shut downlipped performance of their contract may be in the form of cash or certified checks or protection. Performance bond in cash or certified check shall be bedd by the issuance of official receipt and recorded in the book of accounts by the controller 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 insular 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 inbuilt all their collections, as well as collections turned ov er to them by sub-collectors/tellers, with AGDB day-after-day 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) in pact with the instructions provided in Volume II of the NGAS Manual for the 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 Area of Seq. Responsibility No. Activity Cash Unit Daily Designated Staff 1 Receives cash/check from payor representing collection based on the Order of remuneration (OP) prepared by the Accounting Unit. 2 Issues Official Receipt (OR) to acknowledge receipt of cash/check. Note 1 Funding Checks received by the Cashi er/ Collecting Officer of the RO/OU for its operational requirements shall be issued corresponding OR.. 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 3 Records collections in the Cash Receipts Record (CRR). Note 4 Separate CRR shall be maintained for collections under the RA and NG Books. 4 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 5 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 6 Based on the formalize DS from the AGDB and cop y 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 7 Reviews and signs the RCD. Forwards original of RCD, Copy 2 of the ORs and DS to the Designated Staff for compliancy to the Accounting Unit. Note 7 The RCD shall be distributed as follows Original Accounting Unit together with Copy No. of the ORs and DS to support the JEV Copy 2 Cash Unit file Designated Staff 8 Records the RCD in the logbook maintained and forwards the same with the ORs and DS to the Accounting Unit for recording in the books of accounts. Accounting Unit Accounting Staff 9 Receives original of RCD with Copy 2 of the ORs and DS from the Cash Unit. Records receipt in the logbook maintained for the purpose and forwards the same to the Bookkeeper for review a nd preparation of the JEV. Bookkeeper 10 Based on the RCD, prepares JEV in two copies and signs Prepared by portion of the JEV. Forwards the JEV and documents to the Head of the Accounting Unit for review and signature. Head of the Accounting Unit11 Reviews and signs Certified Correct by portion of the JEV. Forwards the JEV and documents to the Bookkeeper for recording in the Cash Receipt Journal (CRJ) and/or Cash Journal (CJ) as the case may be. Note 8 CRJ shall be used to record collection under the RA Books while the CJ shall be used to record collections under the NG Books. Note 9 For the succeeding activities, refer to Sec. 1, Preparation and ledger entry of Trial Balances and Other Reports. Procedures for Collections through Accredited agentive role Banks (AAB) Area of Seq. Responsibility No. Activity Accounting Unit Receiving/ let go Staff 1 Receives collection documents from the AAB/AGDB.Records receipt in t he logbook maintained for the purpose. Forwards the same to the Bookkeeper for preparation of the JEV. Bookkeeper 2 Based on the received collection documents, prepares JEV in two copies, Signs Prepared by portion of the JEV. Forwards the JEV and documents to the Head of the Accounting Unit for review and signature. Head of the Accounting Unit 3 Reviews and signs Certified Correct by portion of the JEV. Forwards the JEV and documents to the Bookkeeper for recording in the General Journal (GJ). Note 1 For the succeeding activities, refer to Sec. 71, Preparation and Submission of Trial Balances and Other Reports. Dishonored Checks. There are instances that checks received by Collecting Officers in payment of taxes, fees and other debt due(p) the government are shamed by the drawee banks. A check is said to be shamefaced by non-payment when, upon its being duly presented for payment, such payment is refused or cannot be obtained. (Sec. 8 3, RA No. 2031, Negotiable Instrument Law). It may similarly be defined as those checks paid to the agency, which were discredited by the AGDB due to Drawn Against Insufficient Fund (DAIF) or Drawn Against Uncleared Deposits (DAUD).Procedures in Recording Dishonored Checks Area of Seq. Responsibility No. Activity Cash Unit Designated Staff 1 Receives from AGDB the account memorandum (DM) and copies of disgraced checks. 2 Verifies the dishonored checks against the previous months RCDs maintained on file to ascertain that the checks were included in the previous months collections. If not included, verifies from AGDB the details of the dishonored checks. 3 If dishonored checks are included in the RCDs, prepares Notice of Dishonor to inform the breeches/indorsers/payors that the checks were dishonored by the AGDB. Note 1 The Notice of Dishonor shall be prepared in three copies and shall be distributed as follows Original drawer (To be delivered personally or thru registered mail) Copy 2 Accounting Unit file Copy 3 Cash Unit file 4 Retrieves from file copy of the OR covering the dishonored check and indicates in the OR the following notation Cancelled (date of Notice of Dishonor) per Bank Debit/Voucher No. _____ dated _________ 5 Retrieves CRR on file and records the dishonored checks with the ollowing notation To take up Banks Debit Memo No. ___ dated ____ covering Check No. ___ for P ____________ hold under OR No. _____ dated _______. 6 Prepares appoint of dishonored checks in two copies. Forwards Copy 2 of the list and the dishonored checks to the Accounting Unit for preparation of the JEV. Accounting Unit 7 Receives the list together with originals of dishonored Accounting Staff checks and the Debit Memo from the Cash Unit and records the same in the logbook maintained for the purpose. 8 Based on the list, prepares t he JEV in two copies. Signs Prepared by portion of the JEV and forwards the same to the Head of the Accounting Unit for review and signature. Head of the Accounting Unit 9 Reviews and signs Certified Correct by portion of the JEV.Forwards the JEV supported by the list, originals of dishonored checks and notice of dishonor to the Bookkeeper for recording in the books of accounts. Note 2 For the succeeding activities, refer to Sec. 71, Preparation and Submission of Trial Balances and Other Reports. 30 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 spendings made by national government agencies are as follows 1. humans of a lawful and sufficient allotment certified as available by the Budget Officer 2. Existence of a valid obligation certified by the mind 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.Nece ssary 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 haggard only on duly approved DV or PCV. These shall be reported and recorded in the books of accounts only when genuinely 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 style 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 in 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 listing of Unreleased Checks to be attached to the RCI. Procedures for Disbursements by Checks. Area of Seq. Responsibility