The concept of government accounting is almost the same as financial accounting but there is some difference like communicating all transactions involving the receipt and disposition of the government funds and property. If we look into the objectives of government accounting, it produces relevant information concerning the past and present transactions in the government. It represents the basis for the decision-making of future operations. One of its uniqueness is the emphasis on accountability. They maintain tight control of the resources and also, divide activities into different funds to clarify how resources are directed to different programs.
Budget preparation is where the budget process starts by preparing the estimates for the revenues and expenditures. The Department of Budget and Management (DBM) will issue the budget calls for all the government agencies which contain the budget parameters. Agencies are required to submit a detailed budget proposal in the technical budget hearing to justify and defend it. The DBM consolidates the proposals and then submits them to the President and Cabinet members. The development budget coordination committee (DBCC) will prepare the finalized budget proposal and submit it to the President and Cabinet members for approval. Once the budget proposal is approved, the President will submit it to Congress.
Budget legislation after approving the proposed budget by the Senate, then the bicameral committee will conduct a meeting to resolve the differences. Then, the common version will be submitted to the president for what we call the line-item veto power if there’s an item he does not approve. Next, the president will sign it into law as General Appropriations Act (GAA).
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Budget execution contains the target and plans of the agencies for the financial year. This phase of the budget process would be the implementation of the GAA. This is where the issuance of allotments is released by the Bureau of Treasury based on the schedule that is included in the proposal that the agency submitted. It is also the stage where the agencies may submit their request for availing from the special purpose funds (SPF’s). They are often required to present additional reports to support their request.
Budget accountability is the final budget process, this is where the different agencies report the financial and physical performance through the budget financial accountability reports (BFARs). The Commission on Audit (COA) will assess the performance of the agency through audits that they conduct. After reviewing the transactions, if there’s considered excessive, illegal, and inappropriate it will not pass in the audit. COA still sets things right in the transactions if it’s still possible. The financial statement of the agencies will be submitted to the DBM and COA where it will show how the agencies used up to their cash allocations.
There is a lot of news about the alleged misuse of government funds. The recent one is about 15 billion pesos that were corrupted in Philippine Health Insurance Corporation or PhilHealth. The people went crazy talking about this corruption and it was also trending on Twitter, Facebook, and other social media platforms. Some of the citizens of the Philippines believe that it has gone missing, and it was allegedly pocketed by certain individuals within the agency.
The spokesperson of PhilHealth, Mr. Rey Baleña said that money was all accounted for by the hospitals for the COVID-19 response. He said that the money is not missing, and this was accepted by 711 health care facilities nationwide as part of the COVID response. Baleña added that the funds were being liquidated and 87% or 13.03 billion pesos had already been liquidated by hospitals. He also said that PhilHealth has participated in all investigations regarding the allegations of corruption in their agency.
As we discussed in module 1, those government offices that are handling and preparing the funds must be accounted for the responsibility? The budget and accounting departments must maintain and keep updating the accounting books and budget records in order that if these events happen, we can still track where did the budget go. If all the transactions are recorded it will be much easier to assess if the funds were used for what is allotted. I hope the government would invest in updating the system that is used to keep these records so it will be one click away to track the transactions. Corruptions are inevitable but we can prevent them to happen.
