LGU-NGAS Ch5-Special Funds Vol 1 PDF

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Chapter 5. SPECIAL FUNDSA. ACCOUNTING FOR SPECIAL EDUCATION FUNDSec. 81. Special Education Fund. – The Special EducationFund (SEF) consist of the proceeds of one percent (1%) tax on theassessed value of real property in addition to the basic real propertytax, which a province or city, or a municipal...

Description

Chapter 5. SPECIAL FUNDS

A. ACCOUNTING FOR SPECIAL EDUCATION FUND

Sec. 81. Special Education Fund. – The Special Education Fund (SEF) consist of the proceeds of one percent (1%) tax on the assessed value of real property in addition to the basic real property tax, which a province or city, or a municipality within the Metropolitan Manila Area, may levy and collect. Sec. 82. Application of Proceeds of the Additional One Percent (1%) Special Education Fund Tax. – (a) The proceeds of the additional one percent (1%) real property tax accruing to special education fund shall be automatically released to the local school boards. (b) In case of provinces, the proceeds of the special education fund shall be divided equally between the provincial and municipal school boards. (c) Said proceeds shall be allocated as determined and approved by the local school boards concerned only for the following purposes: 1. Operation and maintenance of public schools; 2. Construction and repair of school buildings, facilities and equipment; 3. Educational research; 4. Purchase of books and periodicals; and 5. Sports development. (Article 363 of the IRR of the Local Government Code) Sec. 83. Special Education Fund Budget. – The Local School Board shall determine in accordance with the criteria set by DECS, the annual supplementary budgetary needs for the operation and maintenance of public schools within the province, city, or municipality as the case maybe, and the supplementary local cost of meeting such needs, which shall be reflected in the form of an annual school board budget corresponding to its share of the proceeds of the special levy on real property constituting the special education fund 59

and such other sources of revenue as the Local Government Code and other laws or ordinances may provide. (Article 184(b)(1) of the IRR of the Local Government Code) The division superintendent, city superintendent, or district supervisor, as the case maybe, shall prepare the budget of the school board concerned. Such budget shall be supported by programs, projects and activities of the school board for the ensuing fiscal year. A majority of all the members shall be necessary to approve the budget. (Article 184(f) of the IRR of the Local Government Code) The annual school board shall give priority to the following: 1. Construction, repair and maintenance of school buildings and other facilities of public elementary and secondary schools; 2. Establishment and maintenance of extension classes when necessary; and 3. Holding of sports activities at the division, district, municipal, and barangay levels. Sec. 84. Basis of Recording Special Education Tax – Special Education Tax Receivables shall be established at the beginning of the year based on Real Property Tax Account Register/Taxpayer’s index card. At the beginning of the year, the Treasurer shall furnish the Chief Accountant with a duly certified list of the name of taxpayers and the amount due and collectible for the year. Based on the list, the Chief Accountant shall draw a Journal Entry Voucher (JEV) to record the Special Education Tax Receivables. Sec. 85. Delinquencies for Special Education Tax prior to CY 2002. – Payment of delinquencies for special education taxes prior to CY 2002 shall be recognized as a direct credit to Special Education Tax Income account. Sec. 86. Collection Procedures for the Special Education Tax. – The additional one percent (1%) tax on real property shall be collected simultaneously with the basic real property tax. A single official receipt shall be issued for both taxes, indicating therein the amount paid for the basic tax and the additional one percent tax. However, the collecting officer shall prepare separate reports of

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collections for the two taxes. Further, the proceeds of the additional one per cent tax shall be deposited in a separate depository account. Procedures for the turn over of collections, frequency of deposit of collection with the bank, preparation of report of collections, verification of collections and accountable forms, preparation of report of accountability for accountable forms as well as consolidation of reports of accountable forms shall be the same as that prescribed for collections in the General Fund. Sec. 87. Separate Cashbooks for Special Education Fund. – The Treasurer and/or the concerned accountable officers shall maintain separate cashbooks for the SEF which shall be in accordance with the prescribed format. Sec. 88. Separate Registries, Books of Accounts, and Financial Reports for Special Education Fund. – The Chief Accountant shall maintain separate registries for appropriation, allotment and obligations and books of accounts for SEF. He shall likewise prepare separate financial reports such as the Trial Balance, Balance Sheet, Statement of Income and Expenses, Statement of Cash Flows and supporting schedules, to be submitted within the prescribed timeframe. For disbursements, separate set of JEVs shall also be prepared which shall be numbered in accordance with the prescribed codes. Sec. 89. Preparation and Control of ALOBS for Special Education Fund. – The Allotment and Obligation Slips (ALOBS) pertaining to the fund shall be prepared and signed by authorized official of the requesting department or office. This shall be forwarded to the Budget Officer who, based on the approved school board budget, shall verify the existence of appropriation for the proposed expenditure. He shall certify the ALOBS to that effect and number the same in accordance with the prescribed codes. This shall then be forwarded to the Chief Accountant who shall certify as to obligations of allotments and shall record the same in the appropriate Registry of Appropriations, Allotments and Obligations (RAAO). The ALOBS shall form an integral part of the disbursement voucher/payroll and the certifications of the local budget officer and the accountant thereon shall serve as their certification of the disbursement as required by law. 61

Sec. 90. Certification as to Cash Availability. – The Treasurer shall certify as to cash availability for the fund in the Disbursement Voucher and Purchase Request. For infrastructure projects undertaken by contract, the Treasurer shall also certify as to cash availability in the contract. This certification shall serve as the required certification under the law. Sec. 91. Disbursement Procedures. – Disbursement procedures including the reports to be submitted by the accountable officer concerned are the same as those for the General Fund. However, disbursements shall be approved by the Local Chief Executive concerned as co-chairman of the local school board. The division/city superintendent of schools or the district supervisor concerned, as the case maybe, shall certify vouchers or payrolls as to validity, propriety, and legality of the claim involved. Sec. 92. Inventory Process. – The perpetual inventory method and the moving average method shall likewise be adopted in the accounting and costing of inventory. The general procedures, the forms and reports for the holding of inventory shall also be followed. However, separate perpetual inventory records and stock cards shall be maintained by the Accounting Unit and the General Services Officer or the Treasurer, as the case maybe. Likewise, separate weekly Summary for Supplies and Materials Issued pertaining to the fund shall be prepared. Sec. 93. Pro-forma Accounting Entries. – Pro-forma accounting entries for the fund, follows:

SPECIAL EDUCATION FUND (SEF) Particulars

Account Title

1. Set-up Special education Tax Receivable Total Receivables – P500,000 Provincial Share – P250,000

Special Education Tax Receivable Deferred Special Education Tax Income

2. Collection of Special Education Tax – P200,000.

Cash in Treasury Special Education Tax Receivable

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Acct. Code

Debit

125

500,000

449

101 125

Credit

500,000

200,000 200,000

Particulars Computation of Shares of LGUs in RPT – 50% of P200,000 for Provincial Share

Account Title Deferred Special Education Tax Income Special Education Tax

Acct. Code

449

Debit

200,000

Due to LGUs

713 431

3. Deposit of collections with authorized depository bank

Cash in Bank – LCCA Cash in Treasury

110 101

200,000

4. Remittance of share to Province ( Special Education Tax) – P100,000

Due to LGUs (Province) Cash in Bank – LCCA

431

100,000

5. Receipt of allotment for – Allotment Class: Personal Services P50,000 MOOE 20,000 Capital Outlay 30,000 Total P100,000

Memo entry in Registry of Appropriations , Allotments and Obligations (Personal Services– (RAAOPS, MOOE – RAAOMO, Capital Outlay – RAAOCO)

6. Obligation for PS – Salaries of teachers for extension class – P30,000

Memo entry in RAAOPS

7. Grant of cash advance for payroll

Cash Disbursing Officers Cash in Bank – LCCA

8. Payment of Salaries Salaries per Payroll P 30,000 Less: Deductions – (Personal Share) Life & Ret. P 2,850 Pag-ibig 600

Salaries and Wages – Regular Pay Cash – Disbursing Officers Withholding Taxes Payable

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Credit

100,000 100,000

200,000

110

100,000

107 110

25,000

801

30,000

25,000

107

25,000

410

1,050

Particulars PhilHealth 500 W/holding Tax 1,050 5,000 Net Pay per Payroll P25,000

9. Remittance of salary deductions

Account Title GSIS Payable PAG-IBIG Payable PHILHEALTH Payable

Withholding Taxes Payable GSIS Payable PAG-IBIG Payable PHILHEALTH Payable Cash in Bank – LCCA

10. Obligation for Government Share: Life & Ret. Ins. Contributions P2,850 Pag-ibig Contributions 600 PhilHealth Contributions 500 Total P3,950

Memo entry in RAAOPS

11. Payment of Government Share

Life & Retirement Insurance Contributions PAG-IBIG Contributions PHILHEALTH Contributions Cash in Bank – LCCA

12. Obligation of Traveling Expenses – P500

Memo entry in RAAOMO

13. Grant of cash advance

Due from Officers & Employees Cash in Bank – LCCA

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Acct. Code

Debit

Credit

411 412

2,850 600

413

500

410 411 412

1,050 2,850 600

413 110

500

817

2,850

818

500

819 110

600

128 110

500

5,000

3,950

500

Particulars 14. Liquidation of cash advance

Account Title Traveling Expenses – Local Due from Officers & Employees

Acct. Code

831

Debit

480

128

480

15. Adjustment of obligation of travel.

Memo entry in RAAOMO

16. Refund of cash advance

Cash in Treasury Due from Officers & Employees

101

Cash in Bank – LCCA Cash in Treasury

110 101

20

835 110

800

149

500

17. Deposit of cash refund

18. Obligation of bill received from MERALCO

Memo entry in RAAOMO

19. Payment of MERALCO bill – P800

Electricity Cash in Bank – LCCA

20. Obligation for the purchase of Office Supplies – P500

Memo entry in RAAOMO

21. Payment of office supplies

Office Supplies Inventory Withholding Taxes Payable Cash in Bank – LCCA

22. Obligation of Equipment per Purchase Order – P30,000

Memo entry in RAAOCO

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20

128

410 110

Credit

20

20

800

20 480

Acct. Code

Debit

Office Equipment Withholding Taxes Payable Cash in Bank – LCCA

222

30,000

Cash in Bank – LCCA Subsidy from Other Funds

110

Particulars

Account Title

23. Payment of equipment with Invoice/Delivery Receipt

24. Receipt of fund transfer from General Fund thru bank

410 110

Credit

3,000 27,000

5,000

605

5,000

Adjusting Entries: 1. Depreciation of Equipment using the Straight Line Method: Equipment : Life Amount 5 yrs. P6,000

Depreciation–Office Equipment Accumulated Depreciation – Office Equipment

922

6,000

322

6,000

Closing Entries : 1. Closing of Income Accounts

2. Closing of Expense Accounts

Special Education Tax

713

100,00 0

Subsidy from Other Funds Income and Expense Summary

605

5,000

Income and Expense Summary Salaries & Wages – Regular Pay Life & Retirement Insurance Contributions PAG-IBIG Contributions PHILHEALTH Contributions Traveling Expenses – Local Electricity Depreciation–Office Equipment

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532

532

105,000

41,230

801

30,000

817

2,850

818

600

819

500

831 835

480 800

922

6,000

Particulars 3. Closing of Income and Expense Summary

4. Closing of Retained Operating Surplus

Account Title

Acct. Code

Debit

532

63,770

Income and Expense Summary Retained Operating Surplus

534

Retained Operating Surplus Government Equity

534 501

Credit

63,770

63,770 63,770

B. TRUST FUND Sec. 94. Definition of Trust Fund. – Trust Fund shall consist of private and public monies which have officially come into the possession of the local government or of a local government official as trustee, agent or administrator, or which have been received as a guaranty for the fulfillment of some obligation. A trust fund shall only be used for the specific purpose for which it was created or for which it came into the possession of the local government unit. Sec. 95. Receipts Accruing to the Trust Fund. – Grants and donations coming from foreign funding institutions, other levels of government and private institutions/individuals for specific projects/purpose shall accrue to the Trust Fund. Equity of the LGU on projects under a trust agreement shall also accrue to the Trust Fund. These receipts shall be credited to the Project Equity account. Loans of LGUs for income generating projects from the Municipal Development Fund Office (MDFO) requiring counterpart funding from LGUs shall not be recorded in the Trust Fund but as a Special Account in the General Fund. Sec. 96. Collection Procedures for the Trust Fund. – Cash collections for the Trust Fund shall be acknowledged through the issuance of an official receipt. Procedures for the turn over of collections, frequency of deposit of collection with the bank, preparation of report of collections, verification of collections and accountable forms, preparation of report of accountability for accountable forms as well as consolidation of reports of accountable

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forms shall be the same as that prescribed for collections in the General Fund. In case of receipt of funds through the bank, the Accountant shall draw a JEV based on the bank credit memo. Sec. 97. Project Expenditures. – The construction period theory shall apply for expenditures on infrastructure projects of the Trust Fund. For other projects, expenditures shall be debited to the appropriate expenditure account. Expenditures shall be closed to Project Equity account at year-end or upon project completion, whichever comes first. Sec. 98. Separate Cashbooks for Trust Fund. – The Treasurer and/or the concerned accountable officers shall maintain separate cashbooks for the Trust Fund which shall be in accordance with the prescribed format. Sec. 99. Separate Books of Accounts and Financial Reports for Trust Fund. – The Chief Accountant shall maintain separate books of accounts for Trust Fund. He shall likewise prepare separate financial reports such as the Trial Balance, Balance Sheet, Statement of Cash Flows and supporting schedules, to be submitted within the prescribed timeframe. Sec. 100. Disbursements within Trust Agreement/Approved Budget. – Disbursements from trust funds shall be in accordance with the specific purpose stated in the trust agreement/approved budget between the trustor and trustee (LGU) as certified by the Chief Accountant. The certification on the DV as to existence of funds held in trust shall serve this purpose. Sec. 101. Certification and Approval of Disbursements from Trust Funds . – Disbursements from the Trust Fund shall require: a.

Certification and approval of vouchers and payrolls as to validity, propriety and legality of the claim involved by the department/ office head concerned; b. Certification as to existence of funds held in trust and completeness and propriety of supporting documents by the Accountant; 68

c.

Certification as to cash availability by the Treasurer; and d. Approval by the Administrator of the fund. Sec. 102. Disbursement Process. – Disbursements from the Trust Fund shall be as follows: a. Disbursement by check PROCESS

PERSON / UNIT RESPONSIBLE

1. Gather supporting documents, prepare DV/payroll and forward to Head of Department.

Concerned Office

2. Sign Box A of DV and submit to the Accounting Unit.

Supervisor/Head of Department

3. Check completeness of documents and verify existence of funds held in trust, assign number to DV/Payroll, sign Box B and forward to Treasurer.

Accounting Unit

4. Verify claim, certify cash availability (Box C) and forward to approving officer.

Treasurer

5. Approve transaction (Box D) and forward DV to Cashier.

Local Chief Executive/ Administrator of the Fund

6. Prepare and sign check and forward check with DV to countersigning officer.

Treasurer

7. Countersign check and forward to Accountant for preparation of the Accountant’s Advice.

Administrator

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PROCESS

PERSON / UNIT RESPONSIBLE

8. Prepare Accountant’s Advice of Local Check Disbursements and return DV, check and supporting documents to Cashier/Treasurer.

Accountant

9. Issue check to claimant. Record disbursement in Cashbook – Cash in Bank. Prepare Report of Checks Issued (RCI), forward RCI with DV and supporting documents to Accounting Unit.

Treasurer

10. Prepare the JEV based on individual checks/voucher; sign “Prepared By” portion (approved by Chief Accountant), and record JEV in the Check Disbursements Journal. Post monthly to the General Ledger/Subsidiary Ledgers

Accounting Unit

11. Forward RCI, DV, supporting documents and JEV to the Office of the Auditor for final custody and post audit.

Accountant

b. Payments through cash advances For payments through cash advances, procedures 1 to 5 for check disbursement shall be followed. The rest of the procedures shall be the same as that of the General Fun...