Ngas Manual

MANUAL ON THE rising GOVERNMENT ACCOUNTING SYSTEM For National G everyplacenment Agencies ACCOUNTING POLICIES ledger I Chapter 1. Introduction Objectives of the manual of arms. The New Government looking arrangement (NGAS) Manual presents the basic policies and procedures the in the buff coding system the handbilling systems, books, registries, books, systems, reports, and financial statements and exemplifying identifying entries to be adopted by all national regimen agencies effective January 1, 2002. The objectives of the Manual argon to prescribe the following . Uniform guidelines and procedures in accounting for politics bullion and property b. New coding body coordinate and chart of accounts c. story books, registries, records, forms, reports and financial statements and d. accountancy entries. Coverage. This Manual shall be utilize by all national government agencies. Legal Basis. This Manual is dictate by the Commission on Audit pursuant to Article IX-D, c onstituent 2 par. (2) of the 1987 Constitution of the Re world of the Philippines which provides that The Commission on Audit shall hurl exclusive authority, upshot to the marginations in this Article, to define the scope of its audit and examination, name the techniques and methods undeniable 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. ( on a lower floorscoring supplied) Chapter 2. Basic Features and Policies Basic Features and Policies. The NGAS has the following basic features and policies, to nous a.collection history. A modify accrual basis of accounting shall be employ. beneath 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 proceedi ng where accrual basis is impractical or when new(prenominal) methods atomic digit 18 undeniable by law. b. One investment trust Concept. This system adopts the one fund concept. make out fund accounting shall be done plainly when specifically demand by law or by a donor result or when former(a)wise necessitated by circumstances subject to prior cheers of the Commission. . chart of government notes and Account Codes. A new chart of accounts and coding structure with a ternion-digit account numbering system shall be adopted. (See Volume III, The Chart of Accounts) d. Books of Accounts. either national agencies shall maintain dickens sets of books, videlicet fixing room (RA) Books. These shall be employ to record the receipt and utilization of nonice of gold in allocation (NCA) and other income/receipts which the agencies be original to use and to set with Authorized Government fixory blaspheme (AGDB) and the National Treasury.These shall consist of diarys and ledgers, as follows ledgers money knows journal (CRJ) bills expenditures Journal (CDJ) mark off Disbursements Journal (CkDJ) superior general Journal (GJ) Ledgers General Ledger (GL) Subsidiary Ledgers (SL) for ? exchange ? Receivables ? Inventories ? Investments ? pro dower, nominate and Equipment ? Construction in Progress ? Liabilities ? Income ? Expenses National Government (NG) Books. These shall be used to record income which the agencies ar not reliable to use and ar required to be remitted to the National Treasury.These shall consist of coin Journal (CJ) General Journal (GJ) General Ledger (GL) Subsidiary Ledger (SL) With the implementation of the computerized bureau accounting system, only the General Journal shall be used together with the ledgers by both books. e. monetary Statements. The following statements shall be fain Balance shred Statement of Government Equity Statement of Income and Expenses Statement of Cash Flows zero(prenomi nal)es to pecuniary Statements shall accompany the above tatements. f. devil-Money Column Trial Balance. The two money towboat trial balance showing the account balances shall be used. g. whollyotment and responsibility. duty accounting is modified to simplify procedures in the incurrence and liquidation of obligations and the record of the budgetary accounts ( assignations and obligations incurred and liquidated). clear registries shall be retained to control the parcelings and obligations for for each one of the four classes of storage allocations, namely silver register of Allotments and Obligations Capital Outlay (RAOCO) registry of Allotments and Obligations care and another(prenominal) operational Expenses (RAOMO) Registry of Allotments and Obligations Personal Services (RAOPS) Registry of Allotments and Obligations- Financial Expenses (RAOFE). h. Notice of Cash Allocation (NCA). The receipt of NCA by the agency shall be put down in the books as debit t o account Cash-National Treasury, Modified Disbursement governance (MDS) and acknowledgment to account uphold Income from National Government. i. Financial Expenses.Financial expenses such as bank charges, interest expenses, commitment charges and other related expenses shall be individually classified from Maintenance and early(a) Operating Expenses (MOOE). j. Perpetual Inventory of Supplies and Materials. Supplies and materials purchased for lineage purpose shall be recorded exploitation the perpetual inventory system. Regular purchases shall be coursed thru the inventory account and issuances therefore shall be recorded as they take place except those purchased out of superficial Cash Fund which shall be supercharged directly to the appropriate expense accounts. k. Valuation of Inventory.Cost of ratiocination inventory of supplies and materials shall be computed using the moving average method. l. Maintenance of Supplies and Property, show and Equipment Ledger tease . For appropriate witness and balance, the accounting building blocks of agencies, as well as the Property divisions, shall maintain Supplies Ledger Cards/Stock Cards by stock number and Property, Plant and Equipment Ledger Cards/Property Cards by category of property, plant and equipment, respectively. m. Construction of Assets. For assets chthonian construction, the Construction rate of feed in Theory shall be applied for approaching purposes.Bonus paid to the contractor for complemental the work ahead of time shall be added to the total cost of the project. Liquidated return charged and paid for by the contractor shall be deducted from the total cost of the project. Any related expenses incurred during the construction of the project, such as measurees, interest, license fees, stand fees, headway fee, etc. shall be capitalized, and those incurred after the construction shall form spark off of operating cost. n. Registry of Public Infrastructures/Registry of reforesta tion Projects.For agencies that construct public infrastructures, such as roads, bridges, waterways, railways, plaza, monuments, etc. , and invest on reforestation projects, a Registry of Public Infrastructures (RPI)/Registry of Reforestation Projects (RRP) shall be maintained for each category of infrastructures/reforestation projects. Examples are Registry of Public Infrastructures Bridges (RPIB) Registry of Public Infrastructures Roads (RPIR) Registry of Public Infrastructures Parks (RPIP) Registry of Reforestation Projects (RRP)A Summary of Public Infrastructures/Reforestation Projects shall be disposed(p) and included in the utterances to Financial Statements. o. Depreciation. The straight-line method of depreciation shall be used. Depreciation shall start on the second month after purchase of the property, plant and equipment, and a equaliser 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 long-lasting being used shall not be charged any depreciation. . Reclassification of Assets. Serviceable assets no longer being used shall be reclassified to Other Assets account and shall not be subject to depreciation. q. Allowance for obscure Accounts. An Allowance for Doubtful Accounts shall be set up for estimated uncollectible job payables to allow for their fair valuation. r. Elimination of Contingent Accounts. Contingent accounts shall no longer be used. All financial transactions shall be recorded using the appropriate accounts.Cash shortages and disallowed allowances, which become final and executory, shall be recorded under receivable accounts delinquent From officers and Employees or Receivables-Disallowances/ Charges, as the fountain whitethorn be. s. Recognition of indebtedness. Liability shall be recognized at the time goods and services are sure or rendered and supplier/creditor bills are get. t. Interest Accrual. Whenever p ractical and appropriate, interest income and/or expense shall be accrued and recognized in the books of accounts. u. chronicle for Borrowings and Loans. All borrowings and bestows incurred shall be recorded to the appropriate liability accounts. . Elimination of corollary and proscribe journal entries. The use of corollary and negative journal entries shall be stopped. Acquisition/Disposition of assets shall be debited/credited to the appropriate asset accounts. If an error is committed, a correcting entranceway to castigate the original entry shall be prepared. w. Petty Cash Fund. The Petty Cash Fund shall be maintained 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 capital on hand and the unreplenished expenses.The Petty Cash Fund shall not be used to purchase regular inventory/items for stock. x. strange Currency alteration. Cash sets in inappropriat e currency and outstanding foreign loans shall be computed at the flip-flop rate prescribed by the Bangko Sentral ng Pilipinas at balance shroud date. The total exchange deposits and foreign loans payable shall be adjusted at the end of each month and any gain or pass 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 anesthetic currency. Chapter 3. accountancy Systems General Accounting Plan. The General Accounting Plan (GAP) shows the general accounting system of a government agency/unit. It includes the source documents, the flow of transactions and its accumulation in the books of accounts and finally their conversion into financial instruction/data presented in the financial reports. Presented on next page is the General Accounting Plan for national government agencies. The following accoun ting systems are . budgetary Accounts System b. Receipts/Income and Deposit System c. Disbursement System and d. Financial describe System. 4 BUDGETARY ACCOUNTS cypherary Accounts System. The budgetary Accounts System encompasses the processes of preparing theatrical calculate Matrix (antibal inclineic missile), monitoring and recording of allotments veritable by the agency from the DBM, releasing of Sub-Allotment Release browse (Sub-SARO) to regional Offices (RO) by the substitution Office (CO) issuance of Sub-SARO to Operating building blocks (OU) by the RO and recording and monitoring of obligations. cipherary Accounts. figureary accounts consist of the appropriations, allotments and obligations. Appropriations lift to authorizations made by law or other legislative enactment for payments to be made with funds of the government under specified conditions and/or for specified purposes. Appropriations shall be monitored and controlled through registries and control worksh eets by the DBM and COA, respectively.Budgetary accounts allotments and obligations are discussed in the come through sections. INSERT GENERAL ACCOUNTING political platform for National Government Agencies Agency Budget Matrix (antibal magnetic dipic missile). The ABM refers to a document showing the disaggregation of agency expenditures into components like, among others, by source of appropriations, by allotment class and by motive of clearance. Procedures for the Preparation of the ABM scope of Seq. responsibility No. application Budget social unit touch on faculty 1 ground on the sanctioned General Appropriations Act (GAA) and in coordination with the DBM, prepares the ABM by appropriations/financing sources to support expenditures to be made during the social class upset down by allotment class/expenses. spot 1 The ABM shall contain, among others, the following averation The amount to be released categorized under Not Needing Cl earance tug, and The amount that will be released through the issuance of modified Allotment Release format (SARO) categorized under Needing Clearance tower including continuing appropriations based on the Statement of Allotments, Obligations and Balances (SAOB). 2 Initials under nimble by helping of the ABM. lead, Budget unit of measurement 3 Reviews and signs Prepared by factor of the ABM. touch module 4 out front the ABM together with a transmittal letter for the DBM to the clearance of the Agency for signature/ benediction. top of the Agency 5 Approves/Signs the ABM and the transmittal letter. Concerned provide 6 Records in the logbook maintained and submits the signed ABM to the DBM for approval. Allotment Release Order (ARO). The ARO is a formal 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 a llocation not needing clearance is indicated, or the Special Allotment Release Order (SARO), where the release of which is subject to compliance 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 approved ABM and ARO, the Budget Officer/Head of the Budget whole/Designated Budget Officer shall record the allotment in the respective registries through the Allotment and Obligations Slip (ALOBS). Separate registries shall be maintained for the four allotment classes by Program/Project/ employment (P/P/A), to wit 1. Registry of Allotments and Obligations Capital Outlay (RAOCO) 2. Registry of Allotments and Obligations Maintenance and Other Operating Expenses (RAOMO) 3. Registry of Allotments and Obligations Personal Services (RAOPS) 4. Registry of Allotments and Obligations Financial Expenses (RAOFE) Procedures in the Monitoring and enter of Allotments Received from DBM Area of Seq. righteousness No. Activity Budget whole 1 Receives the approved ABM/SARO from the DBM. Records the Concerned lag like in the logbook and forwards the ABM/SARO to Budget cater for forwardness of an Allotment and Obligation Slip (ALOBS). Budget provide 2 Prepares ALOBS in two copies, assigns number and initials the comparable. send the ALOBS and ABM/SARO to the Head of the Budget unit of measurement for review and signature. Note 1 The numbering structure of the ALOBS shall be as follows PS 00 00 0000 Serial Number (One series for the whole year) month Year Allotment Class (PS, MOOE, CO and FE) shall be used only when obligations are recorded in the ALOBS Note 2 The ALOBS shall be prepared in two copies and shall be distri merelyed as follows buffer-Retained by the Budget Unit to sup port recording in the registries assume 2 -Accounting Unit Head of the Budget Unit 3 Reviews, checks the mall box turnaround the Received fate in Box 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 forward copy 2 of the ALOBS to the Accounting Unit for reference. Procedures for the Recording of Sub-Allotment Release Order (Sub-ARO) by RO/ OU Area of Seq. Responsibility No. Activity Central Office/ regional Office Budget Unit 1 Based on the approved ABM received from the DBM, prepares Budget Staff Sub-ARO for RO/OU. forrader 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. forrader the comparable to the Head of the CO/RO for approval. Head of Central 3 Approves the Sub-ARO. Office/Regional Office/ Authorized 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 pilot burner CO/RO Budget Unit Copy 2 CO/RO Accounting Unit Note 2 tie in to ALOBS numbering structures in Note 1 Sec. 12, Procedures in the Monitoring and Recording of Allotments Received from DBM H ead of the Budget Unit 5 Reviews, checks the small box opposite the Sub-allotted region of Box 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 furnish 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. Records 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 Forwards copy 2 of the ALOBS to the Accounting Unit for reference. Accou nting for Obligation. Obligation refers to a commitment by a government agency arising from an act of a duly authorized ordained 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 executing 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/ touch on 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 obligated by signing in the appropriate box of the ALOBS. On the other hand, the Accountant/Head of the Accounting Unit shall certify to the rightness and legality of obligations, and availability of funds. Both Budget and Accounting Units shall coordinate in the filling up of the Status of the Obligation in their respective copies of the A LOBS Procedures for the Recording of Obligations Area of Seq. Responsibility No. Activity Budget Unit Concerned Staff 1 Receives the Disbursement verifier/Payroll (DV/P), and reenforcement documents, cut down/ Purchase Order (C/PO) from interested 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 getable, 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 Unit for review and signature. Note 1 Copy 3 of ALOBS shall be link 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 impact and signature. Note 2 Obligations shall be posted in the Obligation Incurred column of the RAOs to arrive 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, points the same to support the RAOs. Otherwise, effects correction in the RAOs or prepares a new ALOBS, as the case may be. Note 3 For the come through 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 treat of the claims but before payment is made. Adjustment in the RAOs shall be effected thru a positive entry (if supernumerary 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 advance granted during the year overpayment of expenses during the year disallowances/charges which become final and executory qualified copies of official receipts for the overpayments/refunds, copies of bills for overpayments and Notice that the disallowances are final and executory s hall 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 reportage income/collections, 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 Services 4. Income from Government Business trading operations 5. Sales Re venue 6. Rent Income 7. Insurance Income 8. Dividend Income 9. Interest Income 10. Sale of Confiscated Goods and Properties 11. Foreign Exchange (FOREX) Gains 12. Miscellaneous Operating and Service Income 13. Fines and Penalties-Government Services and Business trading 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 credited are provided in Volume III of the NGAS Manual. Methods 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 by 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 match 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. return of ca sh advances When cash advances for official travels are granted, the account Due 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 baffles Performance bond posted by contractor or supplier to guaranty unspoilt and faithful performance of their contract may be in the form of cash or certified checks or surety. Performance bond in cash or certified check shall be acknowledged by the issuance of official receipt and recorded in the book of accounts by the Accountant 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 ap propriate expense account if paid in the same year or to Prior Years Adjustments if paid in the prove year. This transaction shall reduce the amount of expense previously recorded. 4.Collections made on behalf of another agency or private 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 intact all their collections, as well as collections turned over to them by sub-collectors/tellers, with AGDB daily or not later than the n ext 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 accordance 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 Payment (OP) prepared by the Accounting Unit. 2 Issues Official Receipt (OR) to acknowledge receipt of cash/check. Note 1 Funding Checks received by the Cashier/ Collecting Officer of the RO/OU for its operational requirements shall be iss ued jibe 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 filing cabinet 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 validated DS from the AGDB and copy of the ORs on file, prepares Report of Collections and Deposits (RCD) in two c opies. 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 submission 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 and preparation of the JEV. Bookkeeper 10 Based on the RCD, prepares JEV in two cop ies 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 Submission of Trial Balances and Other Reports. Procedures for Collections through authentic Agent Banks (AAB) Area of Seq. Responsibility No. Activity Accounting Unit Receiving/ Releasing Staff 1 Receives collection documents from the AAB/AGDB.Records receipt in the 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. abaseed Checks. There are instances that checks received by Collecting Officers in payment of taxes, fees and other debt due the government are disgrace by the drawee banks. A check is verbalize to be dishonored by non-payment when, upon its being duly presented for payment, such payment is refused or cannot be obtained. (Sec. 83, RA No. 2031, Negotiable Instrument Law). It may also be defined as those checks paid to th e agency, which were dishonored by the AGDB due to Drawn Against Insufficient Fund (DAIF) or Drawn Against wooded Deposits (DAUD).Procedures in Recording Dishonored Checks Area of Seq. Responsibility No. Activity Cash Unit Designated Staff 1 Receives from AGDB the calculate memorandum (DM) and copies of dishonored checks. 2 Verifies the dishonored checks against the previous months RCDs maintained on file to make up ones mind 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 drawers/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 fi le 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 ____________ acknowledged under OR No. _____ dated _______. 6 Prepares list 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 the JEV in two copies. Signs Prepared by portion of the JEV and forwards the same to th e 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 back up 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 disbursements made by national government agencies are as follows 1. Existence of a lawful and sufficient allotment certified as available by the Budget Officer 2. Existence of a valid obligation certified by the Chief 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 substitute 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 incision or office who has administrative control of the fund concerned 2.Necessary documents supporting the DV and payrolls as certified and reviewed by the Accountant/H ead 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 drawn only on duly approved DV or PCV. These shall be reported and recorded in the books of accounts only when actually 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 mode 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 patronage 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 List of Unreleased Checks to be attached to the RCI. Procedures for Disbursements by Checks. Area of Seq. Responsibility