Ngas Manual

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MANUAL ON THE
NEW GOVERNMENT ACCOUNTING SYSTEM
For National Government Agencies

ACCOUNTING POLICIES

Volume I

Chapter 1. Introduction

Objectives of the Manual. The New Government Accounting System (NGAS) Manual presents the basic policies and procedures; the new coding system; the accounting systems, books, registries, records, forms, reports, and financial statements; and illustrative accounting entries to be adopted by all national government agencies effective January 1, 2002. The objectives of the Manual are to prescribe the following:

a. Uniform guidelines and procedures in accounting for government funds and property; b. New coding structure and chart of accounts;
c. Accounting books, registries, records, forms, reports and financial statements; and d. Accounting entries.

Coverage. This Manual shall be used by all national government agencies.

Legal Basis. This Manual is prescribed by the Commission on Audit pursuant to 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 exclusive authority, subject to the limitations in this Article, to define the scope of its audit and examination, establish the techniques and methods required therefor, and promulgate accounting and auditing rules and regulations, including those for the prevention and disallowance of irregular, unnecessary, excessive, extravagant, or unconscionable expenditures, or uses of government funds 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 Accounting. A modified accrual basis of accounting shall be used. Under this method, all expenses shall be recognized when incurred and reported in the financial statements in the period to which they relate. Income shall be on accrual basis except for transactions where accrual basis is impractical or when other methods are required by law.

b. One Fund Concept. This system adopts the one fund concept. Separate fund accounting shall be done only when specifically required by law or by a donor agency or when otherwise necessitated by circumstances subject to prior approval of the Commission.

c. Chart 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. All national agencies shall maintain two sets of books, namely:

Regular Agency (RA) Books. These shall be used to record the receipt and utilization of Notice of Cash Allocation (NCA) and other income/receipts which the agencies are authorized to use and to deposit with Authorized Government Depository Bank (AGDB) and the National Treasury. These shall consist of journals and ledgers, as follows:

Journals
• Cash Receipts Journal (CRJ)
• Cash Disbursements Journal (CDJ)
• Check Disbursements Journal (CkDJ)
• General Journal (GJ)
Ledgers
• General Ledger (GL)
• Subsidiary Ledgers (SL) for:
❖ Cash
❖ Receivables
❖ Inventories
❖ Investments
❖ Property, Plant and Equipment
❖ Construction in Progress
❖ Liabilities
❖ Income
❖ Expenses

National Government (NG) Books. These shall be used to record income which the agencies are not authorized to use and are required to be remitted to the National Treasury. These shall consist of:

• Cash Journal (CJ)
• General Journal (GJ)
• General Ledger (GL)
• Subsidiary Ledger (SL)

With the implementation of the...
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