Preparing your Budget and Financial Accountability Reports (BFARs) is acceptably difficult, especially if your agency is receiving numerous funds from different sources. (Kudos to all Government Accountants and Budget Officers who do this!)
What’s more difficult is to check if all funds, obligations, and disbursements were all properly accounted for.
But do you know that it’s very easy to spot if your BFARS are erroneous by merely reconciling specific parts of the BFARs?
Below we give you shortcuts and simple techniques to check if your BFARs are correct and consistent with each other.
But before we proceed, let us enumerate first the different BFARS required to be submitted by national government agencies to the Department of Budget and Management (DBM) and the Commission on Audit on an annual, quarterly and monthly basis, namely:
To be submitted on a quarterly basis: (within 30 days after the end of each quarter)
FAR No. 1 – Statement of Appropriations, Allotments, Obligations, Disbursements, and Balances
FAR No. 1-A – Statement of Appropriations, Allotments, Obligations, Disbursements, and Balances by Object of Expenditures
FAR No. 1-B – List of Allotments and Sub-Allotments
[NEW!] FAR No. 1-C – Statement of Obligations, Disbursements, Liquidations, and Balances for Inter-Agency Fund Transfers
[Read: Updated Guidelines on the Preparation and Submission of BFARs Starting FY 2019]
FAR No. 2 – Statement of Approved Budget, Utilization, Disbursements, and Balances for Off-Budgetary Funds
FAR No. 2-A – Statement of Approved Budget, Utilization, Disbursements, and Balances by Object of Expenditures for Off-Budgetary Funds
FAR No. 5 – Quarterly Report of Revenue and Other Receipts
[NEW!] FAR No. 6 – Statement of Approved Budget, Utilization, Disbursements, and Balances for Off-Budgetary Funds for Trust Receipts
To be submitted on a monthly basis: (within 10 days after the end of each month)
FAR No. 4 – Monthly Report of Disbursements
To be submitted annually: (within 30 days after the end of each year)
5 Simple Techniques to Spot Errors in the BFARS:
Technique No. 1 — There are errors in FAR Nos. 1, 1-A, 2, and 2-A if the total amount of appropriations in FAR No. 1 and FAR No. 1-A are not equal. The same applies to FAR No. 2 and 2-A.
Note: FAR No. 1 and 2 are just summaries of FAR No. 1-A and FAR No. 2-A, respectively. Hence, the total amount of appropriations in FAR No. 1 and 2 should tally with the amount of appropriations in FAR No. 1-A and 2-A.
Tip: The difference between Total Appropriations and Total Allotments is the Unreleased Appropriations.
[Read: 10 Valuable Tips in Preparing your BFARs]
Technique No. 2 — There are errors in FAR Nos. 1 and 1-A if the total amount of allotments in FAR No. 1 and 1-A do not tally with the total amount of allotments and sub-allotments in FAR No. 1-B.
Note: FAR No. 1-B contains the lists of all allotments and sub-allotments (as the name of the report implies) received by the agency as of reporting period through Special Allotment Release Orders (SAROs). It also includes the budget of the agency (Agency Specific Budget) which was comprehensively released through the General Appropriations Act as an Allotment Order (GAAAO), including the agency budget for Retirement and Life Insurance Premium (RLIP) which was likewise comprehensively released m through the General Allotment Release Order (GARO).
[Download: GARO for FY 2019]
Technique No. 3 — There are errors in FAR Nos. 1-A or 2-A if the balance of each object of expenditures in FAR No. 1-A or FAR No. 2-A (unobligated allotments) does not reconcile with their respective balance in your registries (i.e., Registry of Appropriations, Allotments, Obligations, Disbursements, and Balances by Object of Expenditures)
Note: To ensure that your BFARs are correct, the balances of each object of expenditures (unobligated allotment) in the BFARs should reconcile with their respective balance in the registries.
[You Also Like: 7 Proven Ways to Improve the Presentation of your Financial Reports]
Technique No. 4 — There is an error in FAR No. 4 if it does not reconcile with your total disbursements in FAR Nos. 1 and 1-A.
Tips:
✅ The Total Disbursements under FAR No. 1 and 1-A include cash and non-cash disbursements (i.e., taxes withheld and remitted through Tax Remittance Advice). This shall include only disbursements under current year budget. It does not include disbursements for accounts payable for prior years’ budget. (This is a reconciling item for FAR Nos. 1 and 1-A, and FAR No. 4)
✅ The Total Disbursements under FAR No. 1 and 1-A should reconcile with the Total Disbursements under the Current Year Budget column of FAR No. 4.
✅ Total Cash Disbursements plus Taxes Withheld (TRAs) equals Total Obligations. Should there be any excess it is the effect of either Accounts Payable or Cash Advance or both.
Technique No. 5 — There are errors in FAR Nos. 1 and 1-A and FAR Nos. 2 and 2-A if the unpaid obligations appearing in the FARs do not tally.
Tips:
✅ The difference between Total Obligations and Total Disbursements is either Due and Demandable Obligations or Not Yet Due and Demandable Obligations. Both are called unpaid obligations.
✅ Due and Demandable Obligations pertain to the goods purchased which have already been delivered or services which have already been rendered. On the other hand, Not Yet Due and Demandable Obligations are contracts which the government entered into for which the goods have not been delivered or services have not been rendered.
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Do you know of other techniques to spot errors in the BFARs? Share to us in the comments section below.
