Unified Accounts Code Structure What are its benefits

Unified Accounts Code Structure: What are its benefits to Public Financial Manager? PAGBA Convention, Sarabia Manor Hotel, Iloilo City April 5, 2013

Content A. Introduction 1. What is Public Financial Management (PFM)? q PFM System Weaknesses q Overview of PFM Reform Roadmap B. Budget Reporting and Performance Standards Project q Key PFM Reform Projects q Meaning and Purpose of Unified Accounts Code Structure (UACS) q Key Elements of the UACs

What is PFM? Public Financial Management (PFM) is a system of rules, procedures and practices for government to manage public finances in the areas of: q budgeting q accounting q auditing q cash management q management of public debt q revenue generation q public reporting on public sector financial operations 3

PFM Gaps in the Budget Process messy traffic of documents lack of budget credibility budget not results based lack of funding predictability weak oversight of Congress and public lack of efficient cash management monitoring of contingent liabilities 4

Key PFM Gaps and Strategies GAP/WEAKNESS Lack of a common classification system for budgeting, accounting, auditing budgeting, accounting, and cash management auditing and cash management Harmonize budgetary and accounting classifications and reporting Codify PFM rules and complete PFM Rules Manual for capacity building Identify common reporting requirements of oversight agencies and line departments Consolidated FM reporting requirements based on harmonized classification of all accounts Revise New Government Accounting System (NGAS) Manual and chart of accounts Facilitate the development of GIFMIS Real-time reports, access to financial data and control of obligations and disbursements for more effective financial control and accountability 5

Financial Reporting This is now… In the long run, the Philippine PFM needs this kind of information system 6

PFM Reform Roadmap ® Master plan for modernizing the financial management system of the government ® Executive Order 55 (s. 2011) directing the integration and automation of PFM systems: § Government Integrated Financial Management Information System (GIFMIS) § Treasury Single Account (TSA) § Efficient Budget Release System § Systematic Financial and Physical Reporting and Auditing 7

Budget Reporting and Performance Standards Project Objectives • Harmonize and consolidate data structures and apply consistent set of budget and accounting rules for reporting • Generate real-time reports on budget utilization and financial performance through GIFMIS (long term) • Consolidated and agency level budget execution and budget utilization reports published in COA and DBM websites Key Activities • Formulation of Unified Accounts Code Structure to harmonize budgetary classifications and chart of accounts • Harmonized DBM and COA financial reporting forms • Formulation of performance standards initially with restructuring of programs/activities/projects (NBC 532) and issuance of OPIF Reference Guide • Glossary of PFM Terminologies

Auditing Mgmt (IRRBAS) Asset Management Government EIS (GEIS) Fiscal Simulation Business Intelligence UACS Budget Preparation Data Warehousing UACS Budget Management UACS Debt Mgmt (DMFAS) UACS Accounting & Fiscal Reporting User GIFMIS Portal Vendor/ Supplier Public Creditor Employee Budget Execution UACS Commitment Management UACS Payments Management Cash Management Procurement (Phil. GEPS) Receipts Management UACS Central Bank & Government Servicing Banks (TSA) Commercial Banks Securities Management Human Resources Management UACS Plantilla (GMIS) Payroll (NPS) UACS Revenue Management Internal Revenue (BIR) UACS Customs (BOC) 9

The Unified Accounts Code Structure (UACS) – “The Backbone of GIFMIS” 10

Unified Accounts Code Structure A government wide, harmonized budgetary and accounting code classification that will facilitate financial reporting 11

Purpose of the UACS q Enable reporting of actual revenue collections and expenditures against programmed revenues and expenditures q Enable the comparison of: § allotment releases vs. appropriations, § obligations vs. releases, and § actual disbursements vs. obligations for programs/projects/activities of spending agencies 12

UACS Manual Contains the accounts and codes to be adopted in: § identifying § aggregating § budgeting § accounting § auditing, and § reporting the financial transactions of the government 13

Reporting Requirements Supported by UACS q Financial reports as required by the Department of Budget and Management and the Commission on Audit; q Financial Statements as required by the Public Sector Accounting Standards Board of the Philippines; q Management reports as required by heads of departments/agencies; and q Economic Statistics consistent with the Government Finance Statistics Manual 2001 14

UACS Structure 15

UACS Structure 16

Funding Source Segments Funding Source 6 Digits Financing Source 1 digit 1 st Authorization 2 digits 2 nd & 3 rd Fund Category 3 digits 4 th to 6 th 17

Funding Source: Financing 18

Financing and Authorization Codes 19

Funding Source: Fund Category Particulars Specific Budgets of National Government Agencies Go. P Counterpart Funds and Loans/Grants from Multilateral and Bilateral Institutions Allocations to Local Government Units Budgetary Support to Government Corporations Financial Assistance to Metro Manila Development Authority Special Accounts in the General Fund Special Purpose Funds Unprogrammed Funds Retained Income/Funds Revolving Funds Trust Receipts Others (Specify) Codes Old 101 102/171 UACS 101 to 150 151 to 250 103 104 251 to 275 276 to 300 301 -320 105, 183, 401, 151 to 159 321 to 400 401 to 420 421 to 440 441 to 500 161 to 164 501 to 600 101 -184, 187 601 to 610 611 to 999 20

Combined Funding Source Code Funding Fund Particulars Financing Autho = Source Cat Code General Fund 1 New General Appropriation 01 Agency Specific Budget 101101 Misc. Personnel Ben Fund 406 101406 Automatic Appropriation 04 RLIP 102 104102 Special Account in the Gen. Fund DPWH-Special Road Support Fund 346 104346 21

UACS Structure 22

Organization Code Segments Department – the primary subdivision of the Executive Branch responsible for the overall management of a sector or a permanent national concern with nationwide or international impact – headed by a Secretary or an official with an equivalent position level § For purposes of the UACs, Constitutional Offices, the Judiciary and the Legislature are categorized as Department-level entities. Agency – refers to any of the various units of the Government, including an office, instrumentality, or GOCC, that may not approximate size of a Department but which nevertheless performs tasks that are important and whose area of concern is nationwide in scope 23

Organization Code Segments Lower-Level Operating Unit - organizational entities charged with carrying out specific substantive functions or with directly implementing programs/projects of a department or agency, such as line bureaus, field units 24

Organization Code Segments Organization Code 12 Digits DEPARTMENT 2 digits AGENCY 3 digits LOWER-LEVEL OPERATING UNIT 7 digits 25

Department Code DEPARTMENT Congress of The Philippines Office of The President Office of The Vice-President Department of Agrarian Reform Department of Agriculture Department of Budget and Management Department of Education State Universities and Colleges Department of Energy UACS 01 02 03 04 05 06 07 08 09 26

Department Code DEPARTMENT UACS Department of Environment and Natural Resources 10 11 12 13 14 15 16 35 36 Department of Finance Department of Foreign Affairs Department of Health Department of the Interior and Local Government Department of Justice Department of Labor and Employment Budgetary Support to Government Corporations Financial Assistance to Metropolitan Manila Development Authority 27

Agency Code DEPARTMENT/AGENCY Department of Budget and Management Office of the Secretary Government Procurement Policy Board-Technical Support Office UACS 06 0000000 06 001 0000000 06 002 0000000 28

Lower-Level Operating Unit DEPARTMENT/AGENCY/OPERATING UNIT Department of Budget and Management Office of the Secretary Central Office Regional Office – I Regional Office – NCR Regional Office – CAR Regional Office - III Government Procurement Policy Board. Technical Support Office UACS 06 0000000 06 001 0100000 06 001 0300001 06 001 0300013 06 001 0300014 06 001 0300002 06 001 0300003 06 002 0000000 29

Examples of Operating Units Classification LOWER-LEVEL OPERATING UNITS CLASSIFICATION Central Office Staff Bureaus Regional Offices/Centers for Health Development Sub-Agency Provincial Offices National Irrigation Administration Offices Schools Division/District Offices Secondary Schools Revenue Regional Offices District Engineering Offices and Sub District Engineering Offices UACS 01 02 03 04 05 06 08 09 11 18 30

Organization Code Segments Sample Organization Code 06 001 03 00000 12 Digits DEPARTMENT AGENCY OLD DBM OLD OSEC-DBM UACS 06 UACS 001 (2 digits) (3 digits) LOWER-LEVEL OPERATING UNIT OLD Central Office(Activity) UACS 03 00000 (7 digits) 31

Organization Code Segments DEPARTMENT From: Department of Education 07 To: Department of Trade and Industry 22 AGENCY LOWER LEVEL OPERATING UNIT UACS National Book Development Board (NBDB) 002 0000000 07 002 0000000 22 007 0000000 National Book Development Board 007 32

Organization Code Segments DEPARTMENT OF TRADE AND INDUSTRY 22 000 00 00000 Office of the Secretary 22 001 00 00000 Board of Investments 22 00 00000 Construction Industry Authority of the Philippines 22 003 00 00000 Construction Manpower Development Foundation 22 004 00 00000 Philippine Trade Training Center 22 005 00 00000 22 006 00 00000 22 007 00 00000 Product Development and Design Center of the Philippines National Book Development Board 33

UACS Structure 34

Location Code Segments Location Code 9 Digits Region 2 digits Province 2 digits City/ Municipality 2 digits Barangay 3 digits 35

Region Code REGION Region I – Ilocos Region II – Cagayan Valley Region III – Central Luzon Region IV-A – CALABARZON Region IV-B – MIMAROPA Region V – Bicol Region VI – Western Visayas Region VII – Central Visayas Region VIII – Eastern Visayas Region IX – Zamboanga Peninsula Region X – Northern Mindanao Region XI – Davao Region XII – SOCSKSARGEN Region XIII – CARAGA National Capital Region Cordillera Administrative Region Autonomous Region in Muslim Mindanao UACS 01 02 03 04 17 05 06 07 08 09 10 11 12 16 13 14 15 36

Province Code PROVINCE CAR - Cordillera Administrative Region Abra Apayao Benguet Ifugao Kalinga Mountain Province UACS 01 81 11 27 32 44 37

Municipality Code MUNICIPALITY CAR - Cordillera Administrative Region Abra Bangued UACS 140000000 140101000 38

Location Code 39

UACS Structure 40

MFO/PAP Code Segments MFO/PAP Code 9 Digits Program MFO Activity Code 1 st Level 2 nd Level 1 st digit 2 nd – and 3 rd digits 4 th - and 5 th digits 6 th – to 9 th digits Project Category Sub-Category Project Title 1 st digit 2 nd – and 3 rd digits 4 th - and 5 th digits 6 th – to 9 th digits Activity Code Purpose (SPF) 1 st digit 2 nd – and 3 rd digits 4 th - and 5 th digits 6 th – to 9 th digits 41

PAP Category Programs, Projects or Purpose General Administration and Support (GAS) Support to Operations (STO) Operations Locally-Funded Projects Foreign-Assisted Projects Purpose UACS 1 2 3 4 5 6 42

Project Category and Sub. Category Physical Infrastructure Projects Includes Buildings, Flood Control, Roads and Bridges, Other Transport Infrastructure, Water Management and Power and Communications Infrastructure Non Physical Infrastructure Projects Includes Economic Development, Education, Environmental Protection, Governance, Health, Recreation Sports and Culture, Research and Development and Social Protection 43

Project Category and Sub. Category Governance 1000 General Public Services 1001 Defense 1002 Public Order and Safety 1003 Systems Development 1004 Capacity Development 1005 Governance and Accountability Improvement 1006 44

DBM – Old PAP Structure 45

DBM – Old PAP Structure 46

MFO/PAP Coding Example 47

MFO/PAP coding example 48

MFO/PAP coding example 49

UACS Structure 50

Object Code Segments Object Code 10 Digits COA Chart of Accounts Object 8 digits Sub-Object 2 digits 51

Object Code q Substantially revised to consolidate some line items, add clarity to overall structure and to facilitate compliance with the Philippine Public Sector Accounting Standards (PPSAS) q Moved away from the 3 -digit coding framework (2003) to an 8 -digit framework (2012) 52

Object Code q Every item on the COA Co. A included q Sub codes added to meet DBM, BTr, Do. F, COA and GFS reporting requirements q Capital Outlay codes added in correspondence with relevant COA Co. A asset codes q Some Lump Sum codes added for use prior to transfer to Departments 53

Starting Point – COA Chart of Accounts 5 5 5 5 5 5 Expenses 01 Personnel Services 01 01 Salaries and Wages 01 01 010 Salaries and Wages - Regular 01 01 020 Salaries and Wages - Casual/Contractual 01 02 Other Compensation 01 02 010 Personal Economic Relief Allowance (PERA) 01 02 020 Representation Allowance 01 02 030 Transportation Allowance 01 02 040 Clothing/Uniform Allowance 01 02 050 Subsistence Allowance 01 02 060 Laundry Allowance 01 02 070 Quarters Allowance 01 02 080 Productivity Incentive Allowance 01 02 090 Overseas Allowance 01 02 100 Honoraria 01 02 110 Hazard Pay 01 01 01 02 02 02 120 130 140 150 990 Longevity Pay Overtime and Night Pay Year End Bonus Cash Gift Other Bonuses and Allowances 54

Sub-Object Codes EXPENSES 50000000 00 PERSONNEL SERVICES 50100000 00 Salaries and Wages 50101000 00 Salaries and Wages – Regular 50101010 00 Basic Salary – Civilian 50101010 01 Base Pay - Military/Uniformed Personnel 50101010 02 Salaries and Wages - Casual/Contractual 50101020 00 Other Personnel Benefits Pension Benefits 50104990 00 50104010 00 Pension Benefits - Civilian 50104010 01 Pension Benefits – Military/Uniformed Personnel 50104010 02 Other Personnel Benefits 50104990 00 Lump-sum for Creation of New Positions - Civilian Lump-sum for Creation of New Positions - Military/Uniformed Personnel 50104990 01 Lump-sum for Reclassification of Positions 50104990 03 50104990 02 55

New Codes for Capital Outlays CAPITAL OUTLAYS 50600000 00 50601010 00 Investment in Government - Owned/Controlled Corporations 50601010 01 Investment in Subsidiaries Outlay 50601010 02 50601020 00 Loans Outlay – GOCCs 50601020 01 Loans Outlay – Others 50601020 02 Investment Property Outlay 50601030 00 Investment Property – Land 50601030 01 Investment Property - Buildings 50601030 02 50602000 00 Land Outlay 50602010 00 Land Improvements Outlay 50602020 00 Land Improvements - Aquaculture Structures 50602020 01 Reforestation Projects Outlay 50602020 02 Other Land Improvements 50602020 03 Investment Outlay Investment in Corporations and Subsidiaries Outlay Loans Outlay Property, Plant and Equipment Outlay 56

Thank you! www. pfm. gov. ph 57

Objective GIFMIS Development Project Facilitate the physical development of a GIFMIS solution that can collect and organize financial information in a central database • GIFMIS is an integrated web-based application to enable agencies to generate real-time, reliable and accurate financial reports Key Activities • Development of the National Payroll System (NPS) and payroll-related Government Human Resource Information System (GHRIS) • Conceptual Design of GIFMIS • • • Development of the Online Submission of Budget Proposal Enhancement of the e. Budget Preparation Management System