The New Government Accounting System (NGAs) was introduced in January 1, 2002 to simplify the recording of government transactions and generate financial statements that are reflective of the government’s true state of affairs.
The old system was done manually and was prone to material errors in recording and journalizing. In addition, the manual system was ineffective in providing financial information in a timely manner, and therefore more difficult to use for decision making.
With computerization, and the adoption of NGAs, recording of transactions became easier and updates to financial reports, faster. What comes out are relevant financial statements that are easy to understand and more reflective of the agency’s operation.
Budget Authorization and Allocation
Under the 1987 Constitution, it was indicated that, “No money shall be paid out of the National Treasury except in pursuant of an appropriation mandated by law”. What this means is that, no government fund will be spent if there is no law authorizing it or a purpose that indicate the manner that it shall be used.
The accounting for budgetary funds starts at the commencement of the General Appropriation Act. The act gives the legal authorization to fund the government projects and to finance government activities for a certain time frame. A detailed run down of expenses and revenues accruing each and every agency is prepared stating the character, purpose, and the detailed cost for each program of government and the expenses needed to run all government organizations.
The budget serves as a framework to allocate funds for each project; hence, a proper accounting of all sources of income and expenses should be reflected in the financial statements to support t...
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...nt shall be observed unless contrary to existing laws and regulations.
Types of Budget
As to Nature
Consists of three types of budget: Annual – covers the budget for one year; Supplemental – adjustment to previous budgets, and; Special – budget that is not included in the Appropriations Act.
As to Basis
Consists of two types of budget: Performance – emphasis is on the program or services of government, and; Line-Item - are routine expenses like salaries, freight, equipment, supplies.,etc.
What is a Balanced Budget?
It is a situation wherein the budget is equal or less than expected revenues. At present, the Philippine National government operates on a deficiency. The optimal situation would be policies of government that would increase revenues and decrease expenses. Funding of government deficit is done presently through local and foreign borrowings.
Federal spending is necessary for the economy and is essential to the accomplishment of national goals and advancement. This is why a budget is needed, however, there is no actual process mentioned in the Constitution that explains how Congress should do this. The Constitution states:
What a government borrows to ensure it can finance all its planned expenditure (and plug its budget deficits). If a government is running a budget surplus, it should not in principle need to increase its debt. A government will normally borrow by issuing bonds and other securities. (Ft. 2015)
“After World War I, such arguments succeeded in rationalizing the budget process under the president’s authority: the 1921 Budget and Accounting Act gave presidents responsibility for overseeing individual agencies budget requires and unified; coordinated executive budget. A new organization, the Bureau of the Budget (BoB), was created within the Treasury Department to serve as the administration’s staff arm in endeavor” (Rudalevige,
The budget is a method in which to reign-in discretionary spending, and will likely show variances between what costs have been anticipated and what costs are actually incurred. The Budget Process Budgetary planning may differ between organizations. Single-period budgets and rolling budgets have methodologies that provide advantages and disadvantages that may make one budget time frame better than another. A single period may require less time in planning during a fiscal year, but is less accurate than a rolling budget that is continuously planned on a repetitive basis. In either case, budgets are planned in advance in order for a company to operate profitably, and less so to have "actual results equal budgeted results."
Some people might wonder where all this trillions and trillions of dollars go? Well there are mandatory spending and discretionary spending. It is split up into three classifications, the mandatory, the discretionary, and
...ng plays a big role in management accounting in future (Daum & Hope, 2003). For big organization it is not easy to switch from traditional technique so easily they can implement this technique in phases. Traditional techniques are absolute and they are not working in current environment this article support this argument.
Every government entity has a primary goal, which is to be as efficient and effective as possible while expending the smallest amount of resources. In addition, the resources expended cannot be more than the resources received as revenues. The budgeting process is a tool that assists government entities in being both efficient and effective. Before a budget can be adequately prepared, you must first understand the budgeting concept and secondly be knowledgeable of budget types.
Government entities (tax authorities) need financial statements to ascertain the propriety and accuracy of taxes and other duties declared and paid by a company.
The purpose of this document is to describe the nature, purpose and scope of accounting and it deliberately explains the details of each category in accounting. Accounting involves in preparing financial documents of an entity by analyzing, verifying, and reporting this records. It emphasizes its major characteristic role in field of banking and finance, with a mixture of supportive sub topics.
The following essay aims to analyse in depth a computerised accounting system and its aspects such as its history, what technologies is based on, and how it has developed since its beginning. Other aspects such as the current state of the system and the interactions with other systems and the future of the system will also be covered in this paper.
Accountants are able to make better decisions and direct business owners better on how to grow their businesses. Individuals have also benefited from the technology; one can easily access to their bank information and keep track of their expenses. Technology helped accountants eliminate papers, pens, calculations, errors and time. Today, with the help of computers, printers everything is being done faster and with very little mistakes. As technology grew, accountants have been introduced to new equipments, software, Internet based communication systems and better security systems. Most of the accountants have computers, printers, and fax machines in the offices. Everything is being calculated, stored, and organized in the computerized programs. Time is very valuable for everybody; with these inventions accountants accomplish their job responsibilities much better and faster. One does not need to travel long distances to provide finance reports; instead they can easily connect to each other via Internet and provide their results online. Beside Internet, accountants also can fax over the document to the firms they
Fiscal Affairs Department of IMF in 2009 declared that a statement of the main central government tax expenditures should be required as part of the budget or related fiscal documentation, indicating the public policy purpose of each provision, its duration, and the intended beneficiaries. In addition, there is an area of the budget that routinely escapes rigorous inspection. This is the large allocation of state resources through the use of tax expenditures which reduce the taxes that might otherwise be collected. The tax expenditure report supplements the annual or biennial budget document (Benker, 1986).
It requires an adequate and sound organizational structure, that is, there must be a definite assignment of responsibility for each function of the enterprise. Budgeting compels all the members of management, from the top to bottom to participate in the establishment of goals and plans. Budgeting compels departmental managers to make plans in harmony with the other departments and of the entire enterprise. Budgeting helps the management to put down in figures what is necessary for a satisfactory performance. Budgeting helps the management to plan for the most economical use of labor, material and capital. Budgeting tends to remove the cloud of uncertainty that exists in many organizations, especially among lower levels of management, relative to basic policies and objectives. Budgeting promotes an understanding among members of management of their co-workers' problems. Budgeting force management to give adequate attention to the effects of general business conditions. Budgeting aids in obtaining bank credit as banks commonly require a projection of future operations and cash flows to support
Performance budgeting encompasses the causal relationship among program funding and the probable results of that program and uses this information as a means to develop an actual budget. A major focal point of performance budgeting is accountability; this type of budgeting is often utilized by administrators to obtain cost efficiency and establish useful budget forecasting.
Modern information system is now popular all over the world, it also change the accounting area. Instead of the old manual analysis, many companies making effort in developing a fitted accounting information system for themselves, as they realize the advantages that the new technology brings in - more efficient and accurate in processing, integrated data, detailed record etc. However, even though there are so many benefits, the functional system also brings challenges, making new requirements to the accountants and auditors. This paper will discuss the impact of technology to the accounting information system, as well as the necessary capability ethics that the accountants should learn in this 21th century.