Chapter 2 – Unified Accounts Code Structure

(UACS)
Questions & Answers

1. What are the key elements of the Unified

Accounts Code Structure (UACS)? Explain each
element briefly.

Answer: The key elements of UACS are as

follows:
1. Funding Source Codes
It is a six-digit code to reflect the
Financing Source, Authorization, and
Fund Category. However, per Joint
Circular No. 2014-1 dated November 7,
2014, the 6-digit Funding Source Code
was enhanced by adding another two
 digits code for the Fund Cluster for
purposes of accounting, banking, and
reporting; thus, it becomes eight digits.
2. Organization Codes
It is a twelve-digit code to reflect the
Department, Agency and Sub-Agency
or Operating Unit/Revenue Collecting
Unit. The first two digits (1 st and 2nd)
represent the Department Code. The
next three digits (3rd to 5th) are for the
Agency Code. The next seven digits (6 th
to 12th) are for Operating Unit
Classification Code.
3. Location Codes
Location code is a nine-digit code
composed of Region, Province,
City/Municipality, and Barangay.
Region code is a two-digit code (1 st and
2nd) that identifies a specific region.
Province code is a two-digit code (3rd
and 4th) that identifies the province.
Municipality code is a two-digit code
(5th and 6th) that
generally defines the relative
alphabetical sequence of municipalities

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 within the province. Barangay code is a
three-digit code (7th to 9th).

4. Major Final Output (MFO)/Program,

Activity and Project (PAP) Codes
As provided by Joint Circular No. 2013-1
dated August 6, 2013, it is a nine-digit
code comprised of Program, MFO, 1st
Level Activity, and 2nd Level Activity. The
first digit is for Program. The next two
digits (2nd and 3rd) are for the MFO. The
next two digits (4th and 5th) are for 1st
Level Activity. And, the next four digits
(6th to 9th) are for the 2nd Level Activity.

However, this was enhanced by Joint

Circular No. 2014-1 dated November 7,
2014 by including a three-digit code
for Sector Outcomes and a two-digit
code for Horizontal Outcomes as prefix.
Also included is another digit for the
last category of MFO/PAP to ensure
that there is sufficient number of code
values bringing this to five digits (from
5-digit code). In total, this key element
is now composed of 15 digits.

5. Object Codes
It is a ten-digit code composed of the
first eight digits (1st to 8th) are for COA
Chart of Accounts Object, and the next
two digits (9th and 10th) are for Sub-
Object. If disaggregation is necessary,
sub-object codes shall be used to show
the breakdown of selected assets,
 income and expenses. Otherwise, two
zeros will be used.
2. Explain the purpose of UACS.

Answer: The objective or purpose of UACS is to

establish the accounts and codes needed in
reporting the financial transactions of the
National Government Agencies. It 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.

3. Enumerate the reporting requirements that

will be best served by UACS.
Answer: Reporting requirements that will be
best served by the UACS include:
1. Financial reports as required by the DBM
and COA.
2. Financial statements as required by the
Public Sector Accounting Standards Board of
the Philippines.
3. Management reports as required by the
executive officials/heads of departments and
agencies; and
4. Economic statistics consistent with the
Government Finance Statistics (GFS) Manual
2001.

4. What are the sources of account descriptions

and codes in the UACS object coding elements?

Answer: The sources of account descriptions

and codes in the UACS object coding elements
includes the following:
1. The codes from the COA Revised Chart of
Accounts prepared for accrual basis financial
reporting.
2. The addition of some sub-object codes;
and

3. Additional expenditure accounts designed

for cash basis budgeting, such as those of
capital outlays.
5. Enumerate descriptions and codes of Fund
Cluster as provided by Joint Circular No. 2014-1
dated November 7, 2014.

Answer: The Fund Cluster Code Values, as

provided by Joint Circular No. 2014-1, were as
follows:

Fund
Cluster Fund Cluster Description
Code
01 Regular Agency Fund
02 Foreign Assisted Project
Fund
03 Special Accounts – Locally
Funded/Domestic Grants
Fund
04 Special Accounts – Foreign
Assisted/Foreign Grants
Fund
05 Internally Generated Funds
06 Business Related Funds
 0 Trust Receipts
7

6. Discuss the significance of the enhancement

of Sector and Horizontal Outcomes as provided
by Joint Circular No. 2014-1 dated November 7,
2014.

Answer: As provided by Joint Circular No. 2014-1,

dated November 7, 2014, MFO/PAP Codes is now
a 15-digit code due to enhancement. The
significance of this enhancement is to provide
the ability to track budgets to the sector
outcomes, thus, a 3-digit code for the Sector
Outcomes was added as a prefix of the MFO/PAP
Codes. And to provide the tagging of the
horizontal outcomes, another 2-digit code was
added, for Horizontal Outcomes, next to Sector
Outcomes,

7. What is a municipality identifier?

Answer: The Municipality Identifier is a four-digit

number that defines the identity of the
municipality. It is the core of the national
standard geographic system, and is composed of
the Province Code, followed by Municipality
Code; therefore, the municipality identifier not
only identifies the municipality but also the
province

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to which it belongs. An added feature of the municipality
identifier is its independence from the Region Code.
Regardless of the region, the municipality identifier for a
certain town remains the same as long as it is part of that
province.
8. Explain the transitory measure to allow government
agencies/operating units sufficient time in the familiarization
of the UACS codes.

Answer: According to the National Budget Circular No.

554, “Conversion of Codes to Conform to the UACS,” as a
transition measure to allow Government
Agencies/Operating Units sufficient time in the
familiarization of the UACS codes, the DBM shall still
reflect the previous codes alongside the UACS codes in the
release documents. However, all National Government
Agencies and Operating Units are authorized to make the
necessary conversion of the appropriate codes,
particularly on the funding source and organization codes,
to conform to the prescribed UACS codes. In case of any
discrepancy noted in the indicated UACS codes per
SARO/NCA vis-à-vis the UACS Manual, the codes per UACS
Manual shall be adopted by the agency concern.