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Financial Accounting System - Coggle Diagram
Financial Accounting System
Objectives
Produces relevant financial info about past & present transaction of govt
Serves as basis for decision making for future operation
Serves as control mechanism for receipts, disposition & utilization of govt funds & properties
Prepares financial reports of operation results of various govt agencies that are for dissemination to public
Creates public accountability
Features
Comply with constitution, statutory & other legal requirement
Clearly identify object & purpose for which funds received & expended
Classify expenses to budget classifications
Facilitate audit by external review authorities & readily furnish information needed for audit
Permit effective admin control of funds & operations, program management & internal audit & appraisal
Accounting Operations
Focus on operation of public money & public stores which have to be recorded & accounted for properly according to legal requirements
Govt accounting is required by law to keep the principal books
Detailed guidelines by TI & TC
Financial records requires double entry, must balanced monthly
E:g- record approved budget, record payment of salary, disbursed voucher record commitment of purchase & record expenses
Chart of accounts
Represent financial data structure of organization
Provides detailed data elements of info to assemble & presented in FS
Coded listing of accounts contained in general ledger to an organization
Objective coding system : improve transaction process
TC 5 (2004)- 5 digit number code for object of expenditure & receipts
4 level- Standard Object, Detail Object, Extension Group Object & Extension Object
TI 41- Expenditure codes only created upon permission by Treasury or State financial authority
Purpose of classification
To enable detailed info to be gathered for the purpose of revenue & expenditure analysis
To fulfill the needs of accounting system implemented by AG officer
To simplify the process of recording & preparation of periodical reporting
To fulfill the needs of department of statistics in preparation of complete national account
Accounting for receipts
Procedures for revenue collection- TI 60 - 69
TC & TC letter provide info on amendment, approve estimates & detailed guidelines of certain procedures
Account on cash basis
Each govt agencies that makes collection must follow procedures in TI
Receipts is an income received or earned by govt
Responsibility of Controlling Officer (TI 53)
To make proper collection to all public money's received & receivables
To safe custody money collected
To record in the accounts rendered
Accounting for cash receipts
Can be inform of cash, stamps, cheques, legal tender & foreign currency
Focus on receipt in form of cash
(4) Lodgement of collections
TI 79c- forwarding of the bank slip
TI 79b- recording in the cashbook
TI 79a- Bank in slip
TI 79d- attachment with the bank in slip
TI 78a & 78b- Approved amount to be lodged into the bank
TI 79f- 'Nil statement'
TI 85- the used of public money between the time of receipt and lodgement into bank
(1) Issuance of receipts
when cash received, collector issue receipt
TI 3- Collector is an officer responsible for collection of public moneys
TI 61- Collector will notify the payer
TI 60- official receipt mus be issued to acknowledge payer the money is received
TI 70- segregation of duties in preparing receipts
TI 91- Printed receipts
TI 62- Cancellation of receipts
TI 63- A carbon copy of receipts
(3) Recording of collections
TI 73- segregation of duties between cashier & other officer / Accountant general
TI 74- Difference in the record must be in form of writing
TI 72- recording of receipts
TI 75- Miscellaneous Receipts reported to Head of Department
(2) Custody in unused receipts
TI 65- responsibility on the safekeeping of unused receipts
TI 66a, 66b, 66c- receipt book
TI 68- book security looked up
Accounting for other form of receipts
TI 76- Revenue received in form of cheques
TI 77- Revenue received in the form of legal tender in foreign currency
TI 71- Revenue received by mail
Other issues
TI 80- Collector failed to account their collection
TI 81- Receipt of officer who are not a collector
TI 87 & 88- Refunds of revenue
TI 89- Returns of arrears of revenue
TI 90- Failure of Accounting Officers for sum receivable to be reported
TI 64- revenue collected in stamps
Accounting for petty cash
Recording must be separated from the main
cashbook
The adv; efficiency in job division & reduced
administration costs
PC used for specified purposes as approved by Head
of Dept
TI 111c – disbursement from petty cash fund
TI 111 – the establishment of petty cash system
Procedures for making payment from petty cash
Responsibility of Head of Dept to validate, authorised & ensure they are properly recorded (accurately & promptly)
TI113 –operation involves
1) Procedures for establishing petty cash fund
2) Procedures for making payment form petty cash
fund
3) Procedures for replenishing the petty cash fund (TI
113b)
Accounting for payment
Outflow of money such as acquiring F.A, payment for supplies & services & payment of emolument- expenditure/ payment
TI No.92- 110 govern the payment system of govt agencies, includes checking and recording of payment transaction, how & when payment can be made, & monitoring and controlling allocated fund
Objective of TI No.92- 110
To upgrade the quality of cash management
To improve central & branches government agencies
To improve government agencies payment system
TC 5(2004)- 5 types of payment: Emoluments, Service and Supplies, Asset, Gives and Fixed Charges and Other Expenditure
TI 54- Controlling Officer is expected to control the expenditure under his control
Standard codes are used to ensure the govt payment system is controlled and approved before the payment cold be made
Payment for Purchases (Services & Supplies)
TI No. 93 – accounting officer when receipt the report
should ensure that
1) Payment will not exceed the amount provided
2) Certifies by the authorised officer
3) Deduction for any repayment of advances or other
liabilities
Other issues
TI 100 (payment for travelling expenses)
TI 105 (payment for salaries)
When good is receipt, a report should be submitted to the
finance dept for payment
TI 98b – Inspection of payment register
‘Local Order’ is prepared by the purchasing dept to the
supplier
TI 99 – preparing the payment vouchers
TI 101 – delegation of duty of CO for certification of
vouchers
TI 102 – responsibility of the authorised officer
TI 107 – unvouched expenditure
TI 109 – approval for unvouched expenditure
TI 108 – lost of payment voucher
Ti 98a – preparation of payment register
TI 97 – method of payment; cheques, bank account, cash, petty cash, EFT and telegraphic transfer
Recording of payment transaction
Vote book - 3 part
Part 1 – vote information
Part 2 – increase/ decrease allocation
Part 3 – detail transactions
Reasons to maintain vote book; to control & ensure exp &
liabilities not exceed allocation, & to produce report
TI 95
1) to maintain vote book
2) to certify a voucher for payment or adjustment
3) to reconcile the vote book with Treasury
4) to carry forward outstanding liabilities
TI 94 – responsibility of Controlling Officer
Vote book- financial record that must be kept by the govt.
agencies in accordance with TI 95
Procedures for recording the Vote Book
Vote ‘T’ – charged expenditure
Vote ‘P’ – development expenditure. 11 types
of transaction to be recorded in the Vote Book
Vote ‘B’ – supply expenditure
Transaction in the Vote Book
Reduced allocation
Small/Sub allocation warrant
Additional allocation received
Transfer allocation
Allocation of warrant received
Incur liability
Cancellation of liabilities
Record expenditure
Credit expenditure
Adjustment entry
Closing entry
Liability brought forward
Reconciliation of Votebook
Detail report – prepare by AG Dept, shows a listing of all
payments & receipts of a particular agency
Transaction in the vote book are verified to ensure such
expenses are as per report
A process to ensure the accuracy & completeness of
transaction recorded in the vote book as compared to the detailed report
Any discrepancies –Officer charged should prepare the
reconciliation report . Prepared by CO or any officer who is authorised
Reason for Reconciliation
To detect error in posting transaction at AG Dept
level
To control the expenses & liabilities within the
authorised allocation
To detect any unauthorized payment
To ensure the report prepared are reliable, accurate &
complete
Procedures for reconciliation
Prepare a Reconciliation Statement
Recording the contra transaction to the
reconciliation of vote book
Review the detailed report with the vote book
i) Investigate the transaction
ii) Report any unauthorised payments
Government Financial & Management Accounting System (GFMAS)
Main Obejctive
To integrate all AGD accounting systems in order to provide accurate, quality & timely accounting data & info for effective & efficient decision making amongst govt manager
Objective
Enhancing financial transparency and
accountability in public sector
Assisting Federal Government in decision making
process
Function
Enhance skills and productivity by
incorporating industry’s best practices
Meet new challenges and demands as well as
future requirements
Provide accurate data and relevant information
for decision making process in the Federal govt
Enhance financial transparency and
accountability in public sector
Characteristics
Streamlining transactions towards accrual
processing
Data warehousing
Cash accounting with capability of accrual
accounting
Single point of entry
Distributed processing
Capabalities/ Advantages
Updated data information
Complete budget record
Improve security
Flexible for cash and accrual basis accounting
Data Mart
Adaptable to foreign system interface
Online single-point entry
14 Modules
Accounts Payable (AP)
Controlling (CO)
Accounts Receivable (AR)
Cash Management (CM)
General Ledger (GL)
Funds Management (FM)
Asset Management (AM)
Treasury Management (TR)
Human Resource & Payroll (HRlPAY)
Material Management (MM)
Government Loan Management Information System (G-LoMIS)
Government-Advance & Loans Monitoring System (G-ALMOS)
Government-Unclaimed Moneys Management Integrated System (G-UMIS)
Government-Securities Management Integrated System (G-SMIS)
Development & Implementation Process
5 Stages
1) Project Preparation
2) Business Bluprint
3) Realization
4) Final Preparation
5) Go Live & Support (Rollout)
Pilot (Jan- March 2006)
Developed using ASAP
Roll-out (May-Oct 2006)