Scribd
Upload
3K views

Chapter 5 Disbursements

This document discusses government disbursements and payment methods. It defines disbursements as all cash payments, whether by cash, check, or cashless means. It outlines several types of disbursement authorities issued by different government bodies. Modes of disbursement include checks, cash, and cashless methods like advice to debit accounts, electronic modified disbursement systems, and cashless purchase cards. The document provides examples of accounting entries for various disbursement methods and notes that disallowances by the Commission on Audit are only recorded if they become final.

Uploaded by

Steffany Roque
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
3K views

Chapter 5 Disbursements

This document discusses government disbursements and payment methods. It defines disbursements as all cash payments, whether by cash, check, or cashless means. It outlines several types of disbursement authorities issued by different government bodies. Modes of disbursement include checks, cash, and cashless methods like advice to debit accounts, electronic modified disbursement systems, and cashless purchase cards. The document provides examples of accounting entries for various disbursement methods and notes that disallowances by the Commission on Audit are only recorded if they become final.

Uploaded by

Steffany Roque
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 5

MODULE ACCOUNTING FOR GOVERNMENT AND NON-PROFIT ORGANIZATIONS

CHAPTER 5 DISBURSEMENTS

Learning Objectives

State the main concept(s) in the


disbursement of government funds.
Account for the different modes of
disbursements.

Disbursements

- Constitute all payments in cash, in whatever


manner, i.e., cash, check or cashless
payment.

- Shall be supported by Disbursement


Vouchers (including Petty Cash Vouchers)
or Payroll.

Disbursement Authority

1. Notice of Cash Allocation (NCA)

 The NCA is an authority issued by the DBM to central, regional and provincial
offices and operating units to cover their cash requirements. The NCA specifies
the maximum amount of cash that can be withdrawn from a government
servicing bank in a certain period.

2. Notice of Transfer of Allocation (NTA)

 The NTA is an authority issued by an agency’s Central Office to its regional and
operating units to cover the latter’s cash requirements.

3. Tax Remittance Advice (TRA)

 The TRA is used to recognize:

(1) in the books of national government agencies, the constructive remittance to


BIR and BOC of taxes and customs’ duties withheld, and the constructive receipt
of NCA for those taxes and customs duties;

Page 1
MODULE ACCOUNTING FOR GOVERNMENT AND NON-PROFIT ORGANIZATIONS

(2) in the books of the BIR and BOC, the constructive receipt of tax revenue and
customs duties; and

(3) in the books of the BTr, the constructive receipt of the taxes and customs
duties remitted.

4. Non-Cash Availment Authority (NCAA)

 The NCAA is the authority issued by the DBM to agencies to cover the liquidation
of their actual obligations incurred against available allotments for availment of
proceeds from loans/grants through supplier’s credit/constructive cash.

5. Cash Disbursement Ceiling (CDC)

 The CDC is the disbursement authority issued by the DBM to agencies with
foreign operations allowing them to use the income collected by their Foreign
Service Posts to cover their operating requirements.

Basic Requirements & Certifications for Disbursements

 Budget Officer - certifies the availability of allotment.

 Chief Accountant - certifies the availability of funds and the completeness of the
supporting documents.

 Head of the Requesting Unit - certifies the necessity and legality of


disbursements.

 Head of Agency - approves all Disbursement Vouchers (DVs) and Payroll.

Modes of Disbursements

 Check

 Cash

 Cashless payments:

 Advice to Debit Account (ADA)

 Electronic Modified Disbursement System (eMDS)

 Cashless Purchase Card System (Credit Card)

 Non-Cash Availment Authority (NCAA)

Page 2
MODULE ACCOUNTING FOR GOVERNMENT AND NON-PROFIT ORGANIZATIONS

 Tax Remittance Advice (TRA)

Advances for/to… (Appropriate Account) xxx

Cash-Modified Disbursement

System (MDS), Regular xxx

To record the grant of cash advances

Expenses (Appropriate Account) xxx

Advances for/to… (Appropriate Account) xxx

To record the liquidation of cash advances

Disbursements through Check

Disbursements through Cash

Disbursements through Advice to Debit Account (ADA)

 The ADA is an accountable form used as an authorization issued by a


government agency to the MDS-GSB instructing the bank to debit a specified
amount from its available NCA to pay the creditors/payees listed in the LDDAP-
ADA.

Disbursements through electronic Modified Disbursement System (eMDS)

 The eMDS is like the ADA except that disbursements are made directly from the
accounts of the BTr that are maintained with the Land Bank of the Philippines
(LBP). Agencies subscribed under LBP’s eMDS can make online disbursements
for selected transactions.

Page 3
MODULE ACCOUNTING FOR GOVERNMENT AND NON-PROFIT ORGANIZATIONS

Disbursements through Cashless Purchase Card (CPC) System

 Disbursements under the CPC System are made through the use of an electronic
card (i.e., credit card).

Office Supplies Inventory xxx

Accounts Payable xxx

To recognize purchase of office supplies through CPC

Accounts Payable xxx

Cash – Modified Disbursement

System (MDS), Regular xxx

To recognize settlement of CPC billing statement

Disbursements through Non-Cash Availment Authority (NCAA)

Books of Entity A Books of BTr

Communication Equipment 1M

Accounts Payable 1M

To recognize receipt of PPE


procured through the direct payment
scheme

Accounts Payable 1M Subsidy to NGAs 1M

Subsidy from National Gov’t. 1M Loans Payable – Foreign 1M

To recognize receipt of NCAA and To recognize the replenishments


payment of payable made to AGSB negotiated MDS-checks
and payments on account of the NGA

Disbursements through Tax Remittance Advice (TRA)

Books of Entity A

Cash-Tax Remittance Advice 10,000

Subsidy from National Government 10,000


Page 4
MODULE ACCOUNTING FOR GOVERNMENT AND NON-PROFIT ORGANIZATIONS

To recognize the constructive receipt of NCA for TRA

Due to BIR 10,000

Cash-Tax Remittance Advice 10,000

To recognize constructive remittance of taxes withheld to the BIR through


TRA

Books of BIR Books of BTr

Cash-TRA ………...10,000 Subsidy to NGAs….10,000

Income Tax……………10,000 Cash-TRA……………...10,000

To recognize constructive To recognize constructive receipt of


receipt of taxes remitted by National remittance of taxes by NGAs through TRA
Government Agencies (NGAs)
through TRA

Disallowances

 Disallowances refer to expenditures made by an agency that are subsequently


invalidated or disallowed by the COA because they are found to be irregular,
unnecessary, excessive, extravagant or unconscionable. Disallowances are
recorded in the books of accounts only when they become final and executory.

To know more information about CHAPTER 5- DISBURSEMENT- PLEASE CLICK THE


LINK: https://www.youtube.com/watch?v=oVmp4aLsz-k

To know more information about CHAPTER 5- Modes of disbursement- PLEASE CLICK


THE LINK: https://www.youtube.com/watch?v=burBwhjLnDE

Reference:

Accounting for Government and Non-profit Organization by Zeus Vernon B.


Millan

Page 5

You might also like