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Pedragosa, Jericho B. July 21, 2016 AC 501 Government Accounting

The document summarizes key elements of the Unified Accounts Code Structure (UACS) used by the Philippine government for financial reporting, including the Funding Source code, Organization code, Location code, Major Final Output codes, and Object codes. It explains that the purpose of UACS is to establish a standardized coding framework to enable accurate and timely reporting of revenues and expenditures against budgets. Reporting requirements that are best served by UACS include financial reports for oversight agencies, financial statements, management reports, and economic statistics. The sources of codes include the Commission on Audit's Chart of Accounts along with additional codes for cash-based budgeting and accounting. A Municipality Identifier is defined as a four-digit code that identifies a specific municipality within a

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453 views

Pedragosa, Jericho B. July 21, 2016 AC 501 Government Accounting

The document summarizes key elements of the Unified Accounts Code Structure (UACS) used by the Philippine government for financial reporting, including the Funding Source code, Organization code, Location code, Major Final Output codes, and Object codes. It explains that the purpose of UACS is to establish a standardized coding framework to enable accurate and timely reporting of revenues and expenditures against budgets. Reporting requirements that are best served by UACS include financial reports for oversight agencies, financial statements, management reports, and economic statistics. The sources of codes include the Commission on Audit's Chart of Accounts along with additional codes for cash-based budgeting and accounting. A Municipality Identifier is defined as a four-digit code that identifies a specific municipality within a

Uploaded by

Jericho Pedragosa
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Pedragosa, Jericho B.

AC 501

July 21, 2016


Government Accounting

1. What are the key elements of the Unified Accounts Code Structure (UACS)? Explain each
element briefly.
2. Explain the purpose of UACS.
3. Enumerate the reporting requirements that will be best served by UACS.
4. What are the sources of account descriptions and codes in the UACS object coding
elements?
5. What is a municipality identifier?
6. Explain the transitory measure to allow government agencies/operating units sufficient
time in the familiarization of the UACS codes.
Answer:
1. The key elements of UACS are the following:
a. Funding Source code
Six digits are available for the Funding Source code. The Funding Source code is
composed of the Financing Source, Authorization and Fund Category codes. The first digit
is for the Funding Source, the next two digits are for the Authorization code and the last
three digits are for the Fund Category code.
Financing Source Code indicates the basis of funds to which the expenditures shall
be charged, identifying whether the source is within or outside the General Fund. The
Authorization Code provides the legal basis of the appropriation or funds. The Fund
Category Code identifies specific funds maintained by the agency for accounting purposes,
as well as for recording and reporting budget, treasury and accounting transactions.
b. Organization Code
Twelve digits are available for the Organization Code. It is structured into three
segments Department, Agency and Lower Level Operating Unit/Revenue Collecting Unit.
The first two digits represent the Department Code. Constitutional Offices, the
Judiciary and the Legislature are categorized as department-level entities. The next three
digits are for the Agency Code and the next seven digits are for Operating Unit
Classification Code. An agency is an entity under a department whose budget is directly
released to the latter, and may include the summation of all budgets of sub-agencies
listed under it, if any. The first two digits of Operating Unit Codes will be used to indicate
the classification of an operating unit while the next five digits refer to the assigned code
for the individual lower level operating units. Operating units are organizational units
under a Department or an Agency which may be directly receiving budgets from DBM,
including SUCs, recipients of fund transfers from higher level OUs, and/or authorized to
collect revenues.
c. Location Code
Location code is a nine digit code composed of Region, Province, City/Municipality
and Barangay. The first two digit represents the Region code which identifies a specific
region. The next two digits are for Province code that identifies the province. The next two
digits are for Municipality code that generally defines the relative alphabetical sequence of
municipalities within the province. And last three digits are for Barangay code which
generally defines the relative alphabetical sequence of the barangay within the
municipality.
d. Major Final Output (MFO)/Program, Activity and Project (PAP) Codes
The first Code Segment shall indicate Program (General Administration and Support
[GAS], Support to Operations [STO], and Operations [O]), Project Type (Locally Funded or
Foreign Assisted) and
Purpose in the case of Special Purpose Funds.

For Programs, the second segment of two digits shall be used for the first level of
activities under GAS and STO and Major Final Outputs (MFOs) under Operations. The third
segment is composed of six digits, the first two digits of which shall refer to the second
level of activities for GAS and STO. Meanwhile, under Operations, the next level of two
digits shall refer to the first level of activities under an MFO. The last four digits shall refer
to the last level of activities (third level of activities under GAS and STO, and second level
for those under Operations/MFOs).
For Projects, the second segment of two digits shall be used for Project Category,
the next two digits for the Projects Sub-Category and the remaining four digits shall
indicate the name of the project or the project title.
In the case of Special Purpose Funds, the next segment refers to three levels of
activities, Main activity 2 digits, Sub-activity 2 digits and Last level of activities 4
digits.
e. Object Codes
It is a ten digit code composed of the first eight digits are for COA Chart of Accounts
Object, and the next two digits are for the Sub Object. The Object codes provides
information on the object code classification for Assets, Liabilities, Equity, Income and
Expense accounts. The object classification covers all financial transactions of the
government such as, but not limited to, goods or services acquired, transfer payments
made, the source of revenue or the cause of increases or decreases in assets and
liabilities.
2. The objective of the government-wide Unified Accounts Code Structure (UACS) is to
establish the accounts and codes needed in reporting the financial transactions of the
National Government of the Republic of the Philippines. The UACS provides a framework
for identifying, aggregating and reporting financial transactions in budget preparation,
execution, accounting and auditing. The key purpose of the UACS is to enable the timely
and accurate reporting of actual revenue collections and expenditures against budgeted
programmed revenues and expenditures. As a coding framework for financial transactions,
the UACS ensures that all processes, from budgeting and cash management to accounting
and audit, will follow a single classification system. The new codes facilitate the gathering,
aggregation, consolidation and reporting of financial transactions within an agency and
across government agencies.
3. Reporting requirements that will be best served by the UACS include:
a. Financial reports as required by the Department of Budget and Management (DBM)
and the Commission on Audit (COA),
b. Financial Statements as required by the Public Sector Accounting Standards Board
of the Philippines,
c. Management reports as required by the executive officials/heads of departments
and agencies, and
d. Economic statistics consistent with the Government Finance Statistics (GFS) Manual
2001.
4. The source of account descriptions and codes in the UACS object coding elements includes
the following:
a. The codes from the COA Revised Chart of Accounts prepared for accrual basis
financial reporting,
b. The addition of some sub-object codes, and
c. Additional expenditure accounts designed for cash basis budgeting, such as those
for capital outlays.
5. Municipality Identifier is the core of the national standard geographic classification system.
This is composed of the Province Code, followed by the Municipality Code. The Municipality
Identifier is a four-digit number that defines the identity of the municipality.

Pedragosa, Jericho B.
AC 501
6.

July 21, 2016


Government Accounting

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