Session 4 - Disbursements

GOVERNMENT ACCOUNTING MANUAL
(For National Government Agencies)
GAM: Accounting
Session 4: Applying Accounting Policies on Disbursements
Slide 4 - 1
Session 4
APPLYING ACCOUNTING
POLICIES ON
DISBURSEMENTS
GAM: Accounting
Slide 4 - 2
Session Overview
Basic requirements applicable to all modes of
disbursements;
Accounting for different modes of disbursements;

Descriptions of forms, records, reports and books of
accounts applicable to disbursements; and
Accounting policies for Inter-agency transferred
funds (IATF).
GAM: Accounting
Slide 4 - 3
Learning Objective
At the end of the Session, you will be able to apply
the policies on the different modes, forms, records,
reports and books of accounts applicable to
disbursements and policies on inter-agency
transferred funds in accordance with the GAM.
GAM: Accounting
Slide 4 - 4
Constitute all cash paid out during a given period in currency

(cash) or by check/ADA. It may also mean the settlement of
government payables/obligations by cash, check or ADA. It
shall be covered by DV/Petty Cash Voucher (PCV)/Payroll.
a. Accounts Payable
b. Advice to Debit Accounts
c. Disbursements
GAM: Accounting
Slide 4 - 5
Definition of Terms
Authorization issued by the DBM to an agency to
withdraw cash from the BTr to cover payment of
operating expenses, purchases of supplies and
materials, acquisition of PPE, payment of payables,
and other authorized disbursements thru the issuance
of MDS checks, ADA or other modes of disbursements.
a. Special Allotment Release Order
b. Notice of Cash Allocation
c. Notice of Transfer of Allocation
GAM: Accounting
Slide 4 - 6
Definition of Terms
An authorization issued by the CO of the
department/agency to their ROs/OUs to withdraw cash
from the BTr to cover payment of operating expenses,
purchases of supplies and materials, acquisition of
property, plant and equipment, payment of payables,
and other authorized disbursements thru the issuance
of MDS checks or other modes of disbursements.
a. Special Allotment Release Order
b. Notice of Cash Allocation
c. Notice of Transfer of Allocation
GAM: Accounting
Slide 4 - 7
Definition of Terms
Valid and legal obligations of NGAs/OUs, for which,
goods/services/projects
have
been
delivered/rendered/completed
and
accepted,
regardless of the year when these obligations were
incurred.
a. Accounts Payable
c. Disbursements
GAM: Accounting
Slide 4 - 8
Definition of Terms
Authorization issued by the NGA/OU appearing in the
lower portion of the List of Due and Demandable
Accounts Payable (LDDAP). It serves as instruction to
the Modified Disbursement System, Government
Servicing Banks (MDS-GSBs) to debit a specified
amount from its available NCA balance under regular
MDS sub-account for payment of creditors/payees
through the Expanded Modified Disbursement Payment
Scheme(ExMDPS).
a. Accounts Payable
c. Disbursements
GAM: Accounting
Slide 4 - 9
Definition of Terms
A check issued by government agencies chargeable
against the account of the Treasurer of the
Philippines, which are maintained with different MDS
AGDBs. It is covered by NCA.
a. MDS Checks
b. Managers Checks
c. Commercial Checks
GAM: Accounting
Slide 4 - 10
Definition of Terms
A check issued by government agencies chargeable
against the agencys checking account with AGDBs.
These are covered by income/receipts authorized to
be deposited with AGDBs; and funding checks
received
by
Operating
Units
from
Central/Regional/Division Offices, respectively.
a. MDS Checks
b. Managers Checks
c. Commercial
Checks
GAM: Accounting
Slide 4 - 11
Definition of Terms
Payment procedures whereby the MDS-GSB shall pay the
creditors/payees listed in the LDDAP-ADA not later than 48
hours but not earlier than 24 hours upon receipt of the said
document from the NGA/OU:
a. Direct credit to the creditors current/savings/ATM account
(CA/SA/ATM) maintained with MDS-GSB; or
b. Bank transfer, if creditors account is maintained outside
the agencys MDS-GSB, where corresponding bank
charges shall be borne/paid by the creditor/payee
concerned.
GAM: Accounting
Slide 4 - 12
Definition of Terms
a. Modified Disbursement System, Government

Servicing Banks
b. Expanded Modified Direct Payment Scheme
c. Modified Direct Payment Scheme
GAM: Accounting
Slide 4 - 13
Definition of Terms
A letter addressed to the MDS-GSB, issued by the
NGA/OU to its creditors/payees for the purpose of
opening an account or validation of an existing
account.
a. Letter of Intent
b. Letter of Introduction
c. Letter of Application
GAM: Accounting
Slide 4 - 14
Definition of Terms
Accountable form integrating the Advice to Debit Account
(ADA) with the LDDAP-ADA, which is a list reflecting the
names of creditors/payees to be paid by the NGA/OU and
the corresponding amounts of the unpaid claims.
a. Advice to Debit Account (ADA)
b. List of Due and Demandable Accounts Payable
(LDDAP)
c. LDDAP-ADA
GAM: Accounting
Slide 4 - 15
Definition of Terms
The authorized government servicing banks, such as Land Bank of the
Philippines (LBP), Development Bank of the Philippines (DBP), and
Philippine Veterans Bank (PVB),to which DBM issues the NCAs for
crediting to the MDS sub-accounts of NGAs.
a. Modified Disbursement System, Government
Servicing Banks (MDS-GSB)
b. Authorized Government Depository Banks (AGDB)

c. Authorized Government Servicing Banks (AGSB)
GAM: Accounting
Slide 4 - 16
Basic Requirements for Disbursements and the

Required Certifications
GAM: Accounting
Slide 4 - 17
Basic Requirements for Disbursements and the Required

Certifications
Necessity and legality of charges to allotments

as well as the validity, propriety and legality of
supporting documents certified by the Head of
the Requesting Unit;
Availability
of
allotment/budget
for
obligation/utilization certified by the Budget
Officer/Head of Budget Unit;
GAM: Accounting
Slide 4 - 18

Certifications
Legality of the transactions and conformity with

existing rules and regulations by certified by the
requesting and approving officials;
Availability of cash and completeness of
supporting documents certified by the Chief
Accountant;
GAM: Accounting
Slide 4 - 19

Certifications
Approval of the disbursement by the Head of

Agency or by his duly authorized representative;
and
Availability of funds certified by the Chief
Accountant.
GAM: Accounting
Slide 4 - 20
GAM: Accounting
Slide 4 - 21
GAM: Accounting
Slide 4 - 22
Disbursement Authority
NCAA
NCA
NTA
TRA
CDC
Different Modes of Disbursements
1. Check
2. Cash
3. ADA
4. TRA
5. Working
Fund/CDC
6. Direct
Payment
Cash Advance
for Payroll
Cash Advance
for Operating
Expenses
GAM:
Cash Advance for

Specific Purpose/
Time - Bound
Undertaking
Accounting
Cash Advance
for Travel
Cash Advance for
Petty Operating
Expense
Slide 4 - 23
1. Modes of Disbursements - Check
drawn only on duly approved DV
used for payment of regular expenses which cannot

conveniently nor practically paid using ADA or not
authorized to be paid through PCV
Checks issued are recorded in the books of accounts
whether released or unreleased to the respective payees
GAM: Accounting
Slide 4 - 24
1. Modes of Disbursements - Check
Two Types of checks

MDS Checks
Commercial Checks
GAM: Accounting
Slide 4 - 25
2. Modes of Disbursements Cash

constitute cash payment out of cash advance
covered by duly approved DV/payrolls/PCV
may be granted to cashiers/DOs/officials and
employees
GAM: Accounting
Slide 4 - 26
COA Rules and Regulations and Other Pertinent

Issuances on Cash Advances
Only for a legally authorized specific purpose
Reported on and liquidated as soon as the purpose

has been served
No additional cash advance unless the previous cash
advance is first liquidated
GAM: Accounting
Slide 4 - 27
COA Rules and Regulations and Other

Pertinent Issuances on Cash Advances
Employee granted cash advance shall be properly
bonded
Only permanently appointed officials
designated as disbursing officers;
GAM: Accounting
shall
Slide 4 - 28
be
COA Rules and Regulations and Other

Pertinent Issuances on Cash Advances
Only duly appointed or designated disbursing officer
may perform disbursing functions;
Transfer of cash advance from one accountable
officer to another shall not be allowed; and
Shall be used solely for specific legal purpose for
which it was granted.
GAM: Accounting
Slide 4 - 29
Disbursement Authority
NCAA
NCA
NTA
TRA
CDC
Different Modes of Disbursements
1. Check
2. Cash
3. ADA
4. TRA
5. Working
Fund/CDC
6. Direct
Payment
Cash Advance
for Payroll
Cash Advance
for Operating
Expenses
GAM:
Cash Advance for

Specific Purpose/
Time - Bound
AccountingUndertaking
Cash Advance
for Travel
Cash Advance for
Petty Operating
Expense
Slide 4 - 30
2. Types of Cash Advances

2.1 Payroll
granted to RDOs for PS
equal to the net amount of the processed payroll
liquidation - within five (5) days after the end of the
pay period.
unclaimed salaries/allowances to be refunded and
issued OR to close the account.
Accounted in the books as Payroll Fund
GAM: Accounting
Slide 4 - 31
2.2 Operating Expenses

granted to government units without complete
set of books of accounts for PS and MOOE;
paid through processed DV/Payroll; and
Accounted in the books as Advances for

Operating Expenses
GAM: Accounting
Slide 4 - 32

2.3 Travel
Granted to officers and employees;
Covers only those urgent and extremely necessary,
involve minimum expenditure;
Foreign travel is allowed only in case of training, seminar
or conference when the officials or other personnel of the
foreign mission cannot represent the country;
Accounted as Advances to Officers and Employees
GAM: Accounting
Slide 4 - 33

2.4 Special Purpose/Time-bound Undertaking
granted to duly authorized AO/SDO;

Shall be liquidated within a specified period;
Accounted as Advances to Special Disbursing
Officer
GAM: Accounting
Slide 4 - 34

2.5 Petty Cash
sufficient for one month requirement

Imprest System
Replenishment made when disbursements reached 75%

may be granted to government units without complete BOA
Granted to duly designated disbursing officers
May be granted covering two months operating
requirements for authorized petty expenses and other
miscellaneous expenses
GAM: Accounting
Slide 4 - 35

Accounting Policies regarding Cash Advance for
PCF:
The fund shall be kept separately from the
regular cash advances/collections
Allowed only for amounts not exceeding
P15,000 for each transaction
All disbursements out of PCF shall be covered
by duly accomplished and approved PCV
GAM: Accounting
Slide 4 - 36

Accounting Policies regarding Cash Advance for
PCF:
unused balance of the PCF shall not be
closed/refunded at the end of the year
At the end of the year, the PCFC shall submit
to
the
Accounting
Division/Unit
all
unreplenished PCVs for recording in the books
of accounts.
GAM: Accounting
Slide 4 - 37
3. Modes of Disbursements ADA
prescribed under DBM CL No. 2013-16 dated

Jan. 23, 2013, amended by DBM CL Nos. 201316A and 2013-16B dated February 6, 2014 and
February 25, 2014, respectively for the
settlement of due and demandable
accounts payable
Cashless Purchase Card System
GAM: Accounting
Slide 4 - 38
3. Modes of Disbursements ADA
Excluded from ADA are payments for:

Terminal Leave and Retirement Gratuity (TL/RG)
benefits
Remittance of social insurance premium contributions
to government corporations;
Payment of Accounts Payable to utility companies; and
Other payables which cannot be conveniently nor
practicably paid using the ADA.
GAM: Accounting
Slide 4 - 39
Electronic MDS
Prescribed under JAO No. 2015-1 dated March 12, 2015 of
the DBM and DOF to:
facilitate an efficient and prompt reconciliation of
spending agencies disbursements vis--vis the accounts
of the BTr maintained at the LBP
perform selected MDS transactions online
monitor disbursements and generate MDS reports under

the Government's Modified Disbursement Scheme
Coverage all spending agencies using LBP as GSB

GAM: Accounting
Slide 4 - 40
4. Modes of Disbursements TRA

Implemented through the issuance of DOF, DBM and COA
JC 1-2000
Use to record constructive receipt of NCA
use to record tax collection and remittance
GAM: Accounting
Slide 4 - 41
5. Modes of Disbursements Working Fund/CDC

Authorization issued by the DBM to the DFA and
DOLE to utilize their income to cover operating
requirements (PS and MOOE).
Utilization should not exceed the released
allotment to the foreign service posts
All disbursements should

approved DV/Payrolls
GAM: Accounting
be
covered
Slide 4 - 42
by
6. Modes of Disbursements Direct Payment Method
NCAA issued by DBM

JEV
GAM: Accounting
Slide 4 - 43
ACCOUNTING FORMS/
RECORDS/REPORTS/
BOOKS OF ACCOUNTS
FOR
DISBURSEMENTS
Accounting
Forms
GAM: Accounting
Slide 4 - 44
Mode of Disbursements
Check
Source Documents/Basis
of Recording by the
Accountable Officer
DV/P/Ck/
SDs
Record by the Cashier

/
AO
Reports/Summarizing
Documents for
Recording
DV/Ck/PCV/
SDs
Basis of Recording in
the Books of Accounts
GAM: Accounting
DV/P/CK/
SDs
Petty Cash
JEV
Special Journal s/Books

of Original Entry
Cash Advancefor
Payroll
JEV
ADADV/ADA/
SDs
?
?
JEV
JEV
?
Slide 4 - 45
Mode of Disbursements
Check
Source Documents/Basis
of Recording by the
Accountable Officer
DV/P/Ck/
SDs
Cash Advancefor
Payroll
DV/P/CK/
SDs
Petty Cash
DV/Ck/PCV/
SDs
ADADV/ADA/
SDs
SDs
Record by the Cashier

/
AO
Reports/Summarizing
Documents for
Recording
CkADADRec
CDRec
PCFR
RCI
RCDisb
RPPCV
RADAI
JEV
JEV
JEV
JEV
CkDJ
CDJ
CDJ
Basis of Recording in
the Books of Accounts
Special Journal s/Books
of Original Entry
GAM: Accounting
CkADADRec
ADADJ
Slide 4 - 46
Forms:
DV -Disbursement Voucher or Payroll
LDDAP-ADA
Petty Cash Voucher
JEV Journal Entry Voucher
GAM: Accounting
Slide 4 - 47
GAM: Accounting
Slide 4 - 48
GAM: Accounting
Slide 4 - 49
GAM: Accounting
Slide 4 - 50
GAM: Accounting
Slide 4 - 51
Records:
RANCA/RANTA - Registry of Allotment and Notice of
Cash Allocations/Registry of
Allotment and Notice of Transfer
of Allocations
CkADADRec Checks and Advice to Debit Account
Disbursements Record
CDRec
Cash Disbursements Record
PCFR
Petty Cash Fund Record
GAM: Accounting
Slide 4 - 52
GAM: Accounting
Slide 4 - 53
GAM: Accounting
Slide 4 - 54
GAM: Accounting
Slide 4 - 55
GAM: Accounting
Slide 4 - 56
GAM: Accounting
Slide 4 - 57
Reports:
RCI - Report of Checks Issued
RADAI - Report of ADA Issued
SLIIAE Summary of List of Due and Demandable
Accounts Payable Issued and Invalidated Entries
RCDisb - Report of Cash Disbursements
LR Liquidation Report
RPPCV Report on Paid Petty Cash Voucher
GAM: Accounting
Slide 4 - 58
GAM: Accounting
Slide 4 - 59
GAM: Accounting
Slide 4 - 60
GAM: Accounting
Slide 4 - 61
GAM: Accounting
Slide 4 - 62
Registers to be maintained by Government Units

Without Complete Set of Books of Accounts
Registers:
CBReg Cash in Bank Register
CDReg Cash Disbursements Register
PCFReg Petty Cash Fund Register
GAM: Accounting
Slide 4 - 65
GAM: Accounting
Slide 4 - 66
GAM: Accounting
Slide 4 - 67
GAM: Accounting
Slide 4 - 68
Books of Accounts:
CkDJ Check Disbursements Journal
CDJ Cash Disbursements Journal
ADADJ ADA Disbursements Journal
GJ General Journal
GAM: Accounting
Slide 4 - 69
GAM: Accounting
Slide 4 - 70
GAM: Accounting
Slide 4 - 71
GAM: Accounting
Slide 4 - 72
GAM: Accounting
Slide 4 - 73
Disbursement for InterAgency Transferred Funds

(IATF)
GAM: Accounting
Slide 4 - 74
Disbursement for Inter-Agency Transferred

Funds (IATF)
a. A MOA shall be entered into by the SA and the IA
b.
Amount of FT sufficient to: 3 months or total

project cost as may be determined by the
Heads of the two agencies in either case
GAM: Accounting
Slide 4 - 75

Funds (IATF)
c. The check shall be issued in the name of the IA

for deposit to its trust account in its authorized
government depository bank. The IA shall issue
its official receipt in acknowledgment.
GAM: Accounting
Slide 4 - 76

Funds (IATF)
d. Depending on the MOA:

if with condition and any excess to be
returned to the SA
IA recognize the receipt of FT as asset
at FV with corresponding liability
SA recognize receivable
GAM: Accounting
Slide 4 - 77

Funds (IATF)
if provides stipulation or no condition
IA recognize the receipt of FT as asset
at FV with corresponding revenue
SA recognize expense
GAM: Accounting
Slide 4 - 78

Funds (IATF)
e. A separate subsidiary record for each account

shall be maintained by the IA whether or not a
separate bank account is opened.
f. Liquidation of IA
g. Return the unused balance if stipulated in
the MOA
GAM: Accounting
Slide 4 - 79

Funds (IATF)
h. The SA shall draw a JEV to take up the reports.

i.
The IA Auditor shall audit the disbursements out

of the trust accounts in accordance with existing
COA Regulations
GAM: Accounting
Slide 4 - 80

Funds (IATF)
j.
The Chief Accountant record disallowance as

receivable
GAM: Accounting
Slide 4 - 81
Thank you and

God Bless us.
GAM: Accounting
Slide 4 - 82

Session 4 - Disbursements

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Session 4 - Disbursements

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GOVERNMENT ACCOUNTING MANUAL

(For National Government Agencies)

Session 4: Applying Accounting Policies on Disbursements

Session 4: Applying Accounting Policies on Disbursements

Accounting for different modes of disbursements;

Session 4: Applying Accounting Policies on Disbursements

Session 4: Applying Accounting Policies on Disbursements

Constitute all cash paid out during a given period in currency

Session 4: Applying Accounting Policies on Disbursements

Session 4: Applying Accounting Policies on Disbursements

Session 4: Applying Accounting Policies on Disbursements

Session 4: Applying Accounting Policies on Disbursements

Session 4: Applying Accounting Policies on Disbursements

Session 4: Applying Accounting Policies on Disbursements

Session 4: Applying Accounting Policies on Disbursements

a. Modified Disbursement System, Government

Session 4: Applying Accounting Policies on Disbursements

Session 4: Applying Accounting Policies on Disbursements

Session 4: Applying Accounting Policies on Disbursements

b. Authorized Government Depository Banks (AGDB)

Session 4: Applying Accounting Policies on Disbursements

Basic Requirements for Disbursements and the

Session 4: Applying Accounting Policies on Disbursements

Basic Requirements for Disbursements and the Required

Necessity and legality of charges to allotments

Session 4: Applying Accounting Policies on Disbursements

Basic Requirements for Disbursements and the Required

Legality of the transactions and conformity with

Session 4: Applying Accounting Policies on Disbursements

Basic Requirements for Disbursements and the Required

Approval of the disbursement by the Head of

Session 4: Applying Accounting Policies on Disbursements

Session 4: Applying Accounting Policies on Disbursements

Session 4: Applying Accounting Policies on Disbursements

Different Modes of Disbursements

Cash Advance for

Session 4: Applying Accounting Policies on Disbursements

1. Modes of Disbursements - Check

drawn only on duly approved DV

used for payment of regular expenses which cannot

Session 4: Applying Accounting Policies on Disbursements

1. Modes of Disbursements - Check

Two Types of checks

Session 4: Applying Accounting Policies on Disbursements

2. Modes of Disbursements Cash

Session 4: Applying Accounting Policies on Disbursements

COA Rules and Regulations and Other Pertinent

Reported on and liquidated as soon as the purpose

Session 4: Applying Accounting Policies on Disbursements

COA Rules and Regulations and Other

Session 4: Applying Accounting Policies on Disbursements

COA Rules and Regulations and Other

Session 4: Applying Accounting Policies on Disbursements

Different Modes of Disbursements

Cash Advance for

Session 4: Applying Accounting Policies on Disbursements

2. Types of Cash Advances

Session 4: Applying Accounting Policies on Disbursements

2. Modes of Disbursements Cash

2.2 Operating Expenses

Accounted in the books as Advances for

Session 4: Applying Accounting Policies on Disbursements