DRAFT MUNICIPAL REGULATION ON A
STANDARD CHART OF ACCOUNTS (SCOA)
Formal Consultation: Provincial Treasurers,
Municipalities and Stakeholders
Presented by National Treasury: Chief Directorate Local Government Budget Analysis – September to December 2013
1
Programme Outline
1. SCOA
Regulation
• The Local Government budget and financial management reform agenda
• Background to the project initiative for a SCOA for Municipalities
• The Municipal Regulation on a Standard Chart of Accounts (SCOA)
2. Conceptualising
SCOA
• Illustrating some basic transactions to conceptualise segments within a
transaction environment
3. SCOA Segments
• Understanding the classification framework and segment detail for Item,
Function, Fund, Regional Indicator, Costing and Project
4. Practical
Example
5. SCOA
Implementation
• Typical examples to apply within the SCOA Classification Framework
• Activities preparing for implementation
• Comment process informing Version 5 and final SCOA Regulation
2
1.
SCOA Regulation
Outline:



The Local Government budget and financial management reform agenda
Background to the project initiative for a SCOA for Municipalities
The Municipal Regulation on a Standard Chart of Accounts (SCOA)
3
Local government financial management reform
roadmap…LGBA’s core business
Champion the Local
Government Budget Reform
Agenda
• Initiate, facilitate and oversee all municipal budget reforms with
emphasis on the Municipal Budget and Reporting Regulations, inyear reporting and grant monitoring frameworks
Support the development of
credible, funded and
sustainable LG budgets
• Support and advise municipalities on budget issues
• Prepare annual budget circulars to guide budget preparation
• NT assess budgets prior to implementation (17 non-delegated) and
PT’s deal with 261 delegated municipalities
Monitor the implementation of
LG budgets and conditional
grants – publish information
Ensure compliance and
oversight with conditions of
DoRA (annual)
Support the Implementation of
the MFMA and MBRR
• Monitor, oversee and report on municipal budget implementation
• Collect, analyse and consolidate municipal information
• Publish budget implementation information on a quarterly basis in
terms of S71 of the MFMA
• Monitor implementation of the intergovernmental grant system
• Ensure the recovery of unspent and uncommitted conditional grants
• Monitor compliance with budget related prescriptions in the MFMA
• Assist in identifying municipalities in financial distress
Achievements to date…
• We have developed a budgeting system for local government including
the promulgation of the Municipal Budget and Reporting Regulations –
standardized formats for the compilation of municipal budgets including a
sophisticated funding assessment tool;
• We have developed a reporting system for local government including a
Local Government Database - Institutionalised a culture of monthly
reporting in terms of S71 of the MFMA by all municipalities and
publishing the results on a regular basis;
• We have developed a grant monitoring system to ensure compliance
to the legislative framework (DoRA), tracking of grant performance,
providing certainty to municipalities as it relates to grant receipt, and
publishing quarterly grant performance.
5
Resulting in the routine publication of LG budget
and performance information…
• Consolidated MTREF budget information for all
municipalities
• Quarterly Section 71 reports
• State of Municipal Finances report – annually
• Over and under expenditure report to Parliament
• Local Government Budgets and Expenditure
Review
• Report on the Tabling of budgets to Parliament
6
But challenges still exist in the LG accountability
cycle…
Data challenges:
• 278 different municipal ‘charts of accounts’ (COA) - aggregation of
budget and performance information extremely difficult owing to inconsistent
classification across the entire LG accountability cycle
• Quality of municipal information is compromised due to lack of uniform
classifications of revenue and expenditure items
• Lack of consistent information across the IDP, Budget, SDBIP, IYM and
AFS
• Compromises monitoring and oversight by Councils, DCoG, treasuries
and legislatures
• Compromises government’s ability to formulate coherent policies
affecting local government, and its ability to use the budget as a
redistribution tool to address poverty and inequality
• Municipalities continuously change and amend detail COA – No
consistency year-on-year
• Impedes transparency, accountability and overall governance in the daily,
monthly and yearly activities of municipalities
Lessons learnt from the National and Provincial
reform process…
National and Provincial Budget Reform experience
Collecting of budget information at a high-level problematic
Financial information needs to be recorded in detail in the financial
system
Can only be achieved through a standard chart of accounts
Accuracy of information embedded in the principles underlying SCOA
Widespread Capacity Shortages
SCOA to be centrally coordinated by National Treasury
Practitioners limited to selecting from the “CORE” but not changing
Conceptually SCOA is the detailed data elements
Summarised to produce budgets or financial reports
Reduce variances
Implementation Challenges
Diverse system environment
Responsibilities
Capacity
Taking the LG reform agenda forward…
Next logical step develop and implement a SCOA for
Local Government:
Improve credibility and reliability of financial data
General business processes and applications
NB: an area requiring urgent attention if sustainable service
delivery and improvements are to be achieved through the
systematic allocation and monitoring of the utilisation of
financial resources!
9
Linkage and role of SCOA within the overall
Municipal Accountability Cycle…
5 year Strategy
IDP
Three year Budget
Focus of MBRR
Budget
Annual Plan to Implement
SDBIP
Next Project
In-year
Reporting
Focus of MBRR
Monitoring
Annual
Financial
Statements
Oversight
Reports
Annual
Report
Standard Chart of Accounts (SCOA)
10
Benefits to be derived from SCOA include,
among others…
SCOA design provides for alignment of spending and revenue collection based on classifications
consistent with national/provincial departments within the uniqueness of local government
Framework provides for coding of transactions for classifying budgeting and financial reporting
labels for revenue, expenditure, assets, liabilities and net assets
Ensuring proper alignment between the budget, reporting and accountability informing financial
sustainability & evidence based financial management
Benefits from standardising:
Transparency – reporting and comparative analytical purposes
Reporting flexibility – extraction of information populating various reporting systems
Comparability – Benchmarking, standards and measures
Uniform transaction process – improved mobility of practioners
Report automation – customised reporting within financial application
System Design – provides certainty to industry
XBRL – set the basis for further standardisation following global best practices
Consolidation – meaningful consolidation and extraction at different levels of detail
Single version of the truth – various systems have the same basis for classification
ensuring consistency in financial information disseminated into the public domain
11
Background to the project initiative for a SCOA
for Municipalities
Design Principles: Overall
1. Constitution and MFMA
2. Transparency and Accountability
3. Clear/simple account labels incorporating all transaction
types
4. Whole of local government and whole of government
reporting
5. GRAP and budget format alignment
6. Data comparability from an analytical perspective
7. International standards and guidelines
8. Identified stakeholders consulted to relief reporting
burden
Standardisation of data provides for standard business operating
processes and procedures contributing to improved transparency,
accountability and overall governance
12
Background to the project initiative for a SCOA
for Municipalities
Stakeholder Consultation
 Departmental SCOA confirmed importance of stakeholder involvement
 Municipal SCOA is critical part of broader financial reform process
 Initiative is collective effort led by IGR, OAG and BO (Project Steering
Committee)
 Progress on SCOA reported to TCF (Technical Committee for Finance)
 External Stakeholder Groups
A. Selected Municipalities
B. Provinces and Municipalities
C. System Vendors
D. National Departments and Entities
E. Professional Bodies
F. Regulators
G. Advisors and Consultants
13
Background to the project initiative for a
SCOA for Municipalities
Phase 1
Phase 2
• SCOA VERSION 1 - INTITIAL RESEARCH
• Studied/identified potential changes between the SCOA for Departments/National
Treasury Annual Financial Statement Template for Municipalities
• Studied/identified potential changes between the SCOA for Departments/Municipal
Budget and Reporting Regulations and Return Forms
• Selected information from 5 Pilot Municipalities
• Requested clarification of information from the selected Pilot Municipalities
• Formulate Version 1 of the SCOA, agreed on the segments collectively being the
SCOA for Municipalities and the Overall Design Principles
•
•
•
•
•
SCOA VERSION 2 - STAKEHOLDER INVOLVEMENT
First external stakeholder information sessions
Meeting with Pilot Municipalities selected in Phase 1
More potential municipalities involved for piloting of the SCOA
First interactions with identified system vendors
14
Background to the project initiative for a
SCOA for Municipalities
VERSION 3 - INTERACTION WITH SPECIFIC STAKEHOLDERS
• Engagements with System Developers
• User Group Meetings
• Identified and interacted with more potential pilot municipalities
• NERSA Meetings and provision in SCOA
• National Department Interactions: Water Affairs, Trade and Industry and
Human Settlements
• Set-up of SQL Database and Illustration
• Road shows and Workgroups
• Internal National Treasury consultation with stakeholders
•
Phase
3
• VERSION 4 - PRE-SCOA REGULATION
• Align Budget Reporting Format and Annual Financial Statement Template
• Complete detail accounts for SCOA classification tables
• Define all levels and labels
• Add "posting levels" and "account numbers"
• Standard Terminology List
• Further develop SQL Database for testing the classification framework
• Identify potential tests for building illustrations in SQL Database
• Draft Regulation for "formal consultation" process for finalising the SCOA
Regulation
15
Background to the project initiative for a SCOA
for Municipalities
Legal Framework
Guided by Constitution and MFMA
Section 215(1) of the Constitution states that: “national , provincial and
municipal budgets and budgetary processes must promote transparency,
accountability and effective financial management of the economy, debt and the
public sector”
Section 216(1) of the Constitution states that: “national legislation must
establish a national treasury and prescribe measures to ensure both
transparency and expenditure control in each sphere of government by
introducing:
i. GRAP
ii. Uniform expenditure classification – SCOA/General Ledger
iii. Uniform treasury norms and standards
16
Background to the project initiative for a SCOA
for Municipalities
Legal Framework (Continue...)
Section 168 of the MFMA states that: “the Minister of Finance, acting with
the concurrence of the cabinet member responsible for local government, may
make regulations for, among other things – (p) any other matter that may
facilitate the enforcement and administration of the Act”
Project give effect to Section 216(1) of the Constitution
SCOA to be prescribed ito section 168 of the MFMA to ensure compliance by
ALL MUNICIPALITIES and MUNICIPAL ENTITIES
17
Background to the project initiative for a SCOA
for Municipalities
Risks Associated with the Implementation of the SCOA road map
 Various systems and multiple vendors vs transversal application for
provincial/national departments
 May 2013:

Financial applications: 13 system vendors
 8 major vendors covering 259 municipalities
 5 minor vendors covering 14 municipalities
 5 In-house developments
 Concurrently runned special projects relating to business processes and systems to
mitigate eventualities associated with SCOA implementation. Primary objective to
identify financial systems in operation
 No mapping of SCOA as an implementation option – Must be coded in the system
 SCOA dimensions assessed against system functionality to determine ability to
facilitate the implementation of SCOA – Vendors indicated multi-dimensional chart
could be accommodated; possible reconfiguration and refinements required
 Costs and funding limitations
 Change management
 Full municipal compliance – 1 July 2016 (2016/17 MTREF)
18
Background to the project initiative for a SCOA
for Municipalities
SCOA is:





In-house developed
Consideration given to alignment to national/provincial departments
Accommodating GRAP requirements
Designed with the input from all stakeholders – not limited to NT
Uniqueness of Municipalities
Extensively tested with sample data from municipalities
19
The publication of the SCOA Regulation for
comment…
LOCAL GOVERNMENT: MUNICIPAL FINANCE MANAGEMENT ACT, 2003:
PUBLICATION OF DRAFT MUNICIPAL REGULATIONS ON STANDARD CHART
OF ACCOUNTS FOR PUBLIC COMMENT
 Published for comment by the Minister ito MFMA 2003 (Act No. 56 of 2003)
 Comment to be submitted by:email:
jan.hattingh@treasury.gov.za
fax:
(012) 395-6553
post:
The Director-General
National Treasury
Private Bag X115
Pretoria, 0001
hand:
Room HB-03.05
40 Church Square
Pretoria
 The draft regulations are also available at www.treasury.gov.za under
http://mfma.treasury.gov.za/RegulationsandGazettes or Mr Jan Hattingh can be
contacted for a copy.
20
The SCOA Regulation
CONTENT [Pages 1-15]
PREAMBLE
CHAPTER 1: INTERPRETATION, OBJECT AND APPLICATION
1. Definitions
2. Object of the Regulations
3. Application of these Regulations
CHAPTER 2: SCOA FOR MUNICIPALITIES AND MUNICIPAL ENTITIES
4. Segments and classification framework for SCOA
5. Implementation requirements
CHAPTER 3: MINUMUM BUSINESS PROCESS AND SYSTEM REQUIREMENTS
6. Minimum business process requirements
7. Minimum system requirements
21
The SCOA Regulation
CHAPTER 4: TECHNICAL COMMITTEE FOR SCOA
8. Establishment of Technical Committee for SCOA
9. Composition of SCOA Technical Committee
10. Functions of SCOA Technical Committee
11. Meeting of SCOA Technical Committee
CHAPTER 5: IMPLEMENTATION OF STANDARD CHART OF ACCOUNTS
12. Responsibilities of municipal councils and boards of directors
13. Responsibilities of accounting officers
CHAPTER 6: GENERAL
14. Access by National Treasury
15. Postponement of implementation and exemption
16. Short title and commencement
SCHEDULE: SEGMENTS OF SCOA FOR MUNICIPALITIES AND MUNICIPAL ENTITIES
22
The SCOA Regulation – Definitions (1)
“Act” means the Local Government: Municipal Finance Management Act, 2003 (Act No.
56 of 2003);
“board of directors”, in relation to a municipal entity, has the meaning assigned to it in
section 1 of the Local Government: Municipal Systems Act, 2000 (Act No. 32 of 2000);
“business processes” means the set of activities taking place from the initiation of a
process within a municipality or municipal entity to the completion thereof;
“classification framework” means the classification framework provided for in the
standard chart of accounts;
“Director-General” means the Director-General of the National Treasury;
“general ledger” means the central depository of accounting data transferred from all
sub-ledgers;
“minimum business process requirements” means the set of minimum components
of all business processes determined in terms of regulation 6;
23
The SCOA Regulation – Definitions (2)
“minimum system requirements” means those specifications for an integrated
software solution, incorporating an enterprise resource management system determined
in terms of regulation 7;
“municipal entity” has the meaning assigned to it in section 1 of the Local
Government: Municipal Systems Act, 2000;
“municipal council” has the meaning assigned to it in section 1 of the Local
Government: Municipal Structures Act, 1998 (Act No. 117 of 1998);
“municipality” has the meaning assigned to it in section 1 of the Local Government:
Municipal Systems Act, 2000;
“SCOA Committee” means the Technical Committee for the Standard Chart of
Accounts for municipalities and municipal entities established by regulation 8;
“standard chart of accounts” means a multi-dimensional classification framework
providing the method and format for recording and classifying financial transaction
information in the general ledger forming part of the books of account containing a
standard list of all available accounts.
24
The SCOA Regulation – Chapter 1
Object of these Regulations
2.
The object of these Regulations is to provide for a national standard for the
uniform recording and classification of municipal budget and financial
information at a transaction level by prescribing a standard chart of accounts for
municipalities and municipal entities which—
(a)
is aligned to the budget formats and accounting standards prescribed for
municipalities and municipal entities and with the standard charts of accounts
for national and provincial government; and
(b)
enables uniform information sets recorded in terms of national norms and
standards across the whole of government for the purposes of national policy
coordination and reporting, benchmarking and performance measurement in
the local government sphere.
Application of these Regulations
3.
These Regulations apply to all municipalities and municipal entities.
25
The SCOA Regulation – Chapter 2
CHAPTER 2 ((Continue...)..) - STANDARD CHART OF ACCOUNTS FOR
MUNICIPALITIES AND MUNICIPAL ENTITIES
(2)
(a)
(b)
(c)
(3)
The financial and business applications or systems used by a municipality or
municipal entity must—
provide for the hosting of the general ledger structured in accordance with
the classification framework determined in terms of regulation 4(2);
be capable of accommodating and operating the standard chart of
accounts;
provide a portal allowing for free access, for information purposes, to the
general ledger of the municipality or municipal entity, by any person authorised
by the Director-General or the Accounting officer of the municipality.
Each municipality and municipal entity must have, or have access to, computer
hardware with sufficient capacity to run the software which complies with the
requirements in sub-regulation (2).
26
The SCOA Regulation – Chapter 3
CHAPTER 3 - MINIMUM BUSINESS PROCESS AND SYSTEM REQUIREMENTS
Minimum business process requirements
6. (1)
The Minister may, by notice in the Gazette, determine minimum business
process requirements for municipalities and municipal entities to enable
implementation of regulations 4 and 5.
(2)
Each municipality and municipal entity must implement the minimum business
process requirements by the date determined in the notice referred to in subregulation (1).
Minimum system requirements
7.(1)
The Minister may, by notice in the Gazette, determine the minimum system
requirements for municipalities and municipal entities to enable implementation
of regulations 4 and 5.
(2)
Each municipality and municipal entity must implement the minimum system
requirements by the date determined in the notice referred to in sub-regulation
1.
27
The SCOA Regulation – Chapter 4 (1)
CHAPTER 4 - TECHNICAL COMMITTEE FOR STANDARD CHART OF ACCOUNTS
Establishment of Technical Committee for Standard Chart of Accounts
8.
A committee known as the Technical Committee for the Standard Chart of Accounts
is hereby established as a structure of the National Treasury.
Composition of SCOA Committee
9.(1) The SCOA Committee must consist of—
(a)
a chairperson;
(b)
a deputy chairperson;
(c)
five other members, each representing the functional areas of public finance,
intergovernmental relations, accounting, budget office and supply chain
management; and
(d)
such further members as the Director-General considers necessary;
(2) The Director-General must designate employees of the National Treasury as
members of the SCOA Committee in the respective capacities for a term of three
years.
28
The SCOA Regulation – Chapter 4 (2)
CHAPTER 4 - TECHNICAL COMMITTEE FOR SCOA (Continue...)
Composition of SCOA Committee ((Continue...).)
(3)
A member referred to in sub-regulation (1)(c) or (d) may nominate an alternate
to act in that member’s stead if unavailable.
(4)
The deputy chairperson of the SCOA Committee must act in the place of the
chairperson of the Committee if unavailable.
(5)
The Director General must take all reasonable steps to ensure that the SCOA
Committee is provided with the technical, administrative, financial and
logistical resources to enable it to fulfil its function and must determine its
procedures.
Functions of SCOA Committee
10. The SCOA Committee must—
(a)
oversee and administer the implementation of these Regulations;
(b)
conduct pilot projects in different types of municipalities and municipal entities
in order to develop, test and improve the standard chart of accounts and
mechanisms for its implementation;
(c)
develop guidelines for the implementation of these Regulations;
29
The SCOA Regulation – Chapter 4 (3)
CHAPTER 4 - TECHNICAL COMMITTEE FOR SCOA (Continue...)
Functions of SCOA Committee (Continue Section 10)
(d)
develop and provide training courses for municipal financial officials and
conduct implementation workshops on the implementation of these Regulations;
(e)
regularly assess the capacity of municipalities and municipal entities to
implement these Regulations and provide appropriate support and assistance;
(f)
regularly request comments and recommendations from municipalities and
municipal entities on the implementation of these Regulations;
(g)
review the implementation of the standard chart of accounts in government as
a whole to ensure the alignment of the SCOA provided for in these Regulations
and the SCOA applicable in national and provincial government;
(h)
review the effectiveness of these Regulations and its alignment with other
relevant regulatory measures;
(i)
undertake such other functions relating to the implementation of these
Regulations as the Minister may direct;
30
The SCOA Regulation – Chapter 4 (4)
CHAPTER 4 - TECHNICAL COMMITTEE FOR STANDARD CHART OF ACCOUNTS
Functions of SCOA Committee (Continue Section 10)
(j)
make recommendations to the Director-General and the Minister on any matter
referred to in paragraphs (a) to (i); and
(k)
undertake any functions necessarily ancillary to any matter referred to in
paragraphs (a) to (j).
Meetings of SCOA Committee
11.
The chairperson of the SCOA Technical Committee or the Director-General may,
as required, convene meetings of the Committee, but the Committee must
convene at least once a year.
31
The SCOA Regulation – Chapter 5
CHAPTER 5 - RESPONSIBILITIES OF MUNICIPAL FUNCTIONARIES
Responsibilities of municipal councils and boards of directors
12. The municipal council of a municipalities and the board of directors of a municipal entity must
take the necessary steps to ensure that these Regulations are implemented by the
adoption of any resolutions, policies and budgetary provisions necessary for the
implementation of these Regulations.
Responsibilities of accounting officers
13. The accounting officer of a municipality or municipal entity must take all necessary steps to
ensure that these Regulations are implemented by at least:
(a)
delegating the necessary powers and duties to the appropriate officials;
(b)
ensuring that the responsible officials have the necessary capacity by providing for training
and ensuring that they attend training or workshops provided by the National Treasury;
(c)
ensuring that the financial and business applications of the municipality or municipal
entity have the capacity to accommodate the implementation of these Regulations and
that the required modifications or upgrades are implemented; and
(d)
submitting reports and recommendations to the municipal council or the board of directors,
as the case may be, that provide for the adoption of any resolutions, policies and budgetary
32
provisions necessary for the implementation of these Regulations.
The SCOA Regulation – Chapter 6 (1)
CHAPTER 6 - GENERAL
Access by National Treasury
14.(1) All municipalities and municipal entities must ensure that—
(a)
(b)
the business and financial applications used by them incorporate a portal allowing for free
access to their general ledgers for information purposes to any person authorised by the
Director-General ; and
such access is provided.
(2) The accounting officer of a municipality and a municipal entity must ensure that its
system providers cooperate with the National Treasury to implement the necessary
programme amendments to provide the standard of access required by the National
Treasury.
(3) The National Treasury may use any of the information to which it has access in terms
of this regulation for the purposes of—
(a)
(b)
(c)
(d)
(e)
preparing national accounts for the whole of government;
development of consolidated accounts for the local government sphere;
verifying the correctness of municipal financial and business information;
assessment of municipal financial performance and benchmarking; and
fulfilling any obligations in terms of legislation.
33
The SCOA Regulation – Chapter 6 (2)
CHAPTER 6 - GENERAL
Postponement of implementation and exemption
15.(1) The Minister may, by notice in the Gazette on good cause shown by a
municipality or municipal entity and after considering any recommendations of
the SCOA Committee, exempt such municipality or municipal entity from the
application of a provision of these Regulations, for the period and on the
conditions determined in the notice.
(2)
A postponement or exemption in terms of sub-regulation (1) may:
(a)
apply to – (i) municipalities generally; or (ii) municipal entities generally; or
(b)
be limited in its application to a particular – (i) municipality; (ii) category of
municipalities, which may be defined either in relation to a type or budgetary
size of municipality or in any other manner; (iii) municipal entity; or (iv) a
category of municipal entities , which may either in relation to a type or
budgetary size of municipal entity or in any other manner.
34
The SCOA Regulation – Chapter 6 (3)
CHAPTER 6 - GENERAL
Short title and commencement
16. These Regulations are called the Standard Chart of Accounts for Local
Government Regulations, 2013, and take effect on 1 July 2016.
35
2.
Conceptualising SCOA
Outline:

Illustrating some basic transactions to conceptualise segments within a
transaction environment
36
Conceptualising SCOA
Understanding SCOA, the Tables and Project Summary
 Standard list of all available accounts [GRID]

Indication on use, e.g. district, municipality or municipal entity

Definitions for the use of accounts

Posting level accounts defined

Reporting “links” provided in the tables

Project Summary explaining the segments in detail

Account numbers included for reference purposes
 Character counts added to standardise “long and short” text
 VAT Indicators driven by Function and Item
37
Conceptualising SCOA
Illustration
A. Internet Link
B. Excel Model
C. Presentation SNAP SHOT
38
3.
SCOA Segments
Outline:








Item: Revenue
Item: Expenditure
Item: Assets, Liabilities and Net Assets
Fund
Function
Project
Regional Indicator
Costing
Item Segment
39
SCOA Segments
Standard
Classifica
tion
Function
Reporting
Regional
Indicator
Costing
Project
Item
40
Design Principles – All Segments
1. SCOA – Master select from grid
2. Municipal Entities and Agencies – applicable
3. Internal Billings, Departmental Charges and Activity Based Recovers – provides for primary
cost only
4. Legislative and Regulatory Requirements – See Table in Project Summary
5. Linking transactions by Business Process to SCOA – See illustration
6. Category links and programming rules – see Table in Project Summary
7. SCOA Detail Accounts – Labels and Accounts defined by group linked to reporting
8. SCOA Definitions – Definitions to assist practitioners
9. AFS and BRF – Alignment detail and by groups of accounts
10. Standards of GRAP – Accounting framework
11. ERF – Define categories for transfers
12. Secondary Costing – Costing Segment & Primary Costing in Item Segment
13. Allocations In-kind – GRAP 23
14. Transfers and Subsidies National – DORA annual update
15. District Municipalities and Provincial – Functional Classification
16. Transfers to “All other Entities” – subjected to inputs from municipalities
17. Specific accounts relating to Municipal Entities
41
Segment: Item
Revenue
Expenditure
Assets
Reporting
Liability
Net Assets
Item
42
Segment: Item - Revenue
Reporting
Item
Outline:
Design Principles Specific to the Revenue Section of the
Item
Segment Snapshot
Segment Detail Discussion
43
Item - Revenue: Design Principles
[See Section 7 of the Project Summary]
Reporting
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
Special Rating Areas
Item
Equitable Share
Allocations In-kind – GRAP 23
Transfers and Subsidies National – DORA annual update
Transfers and Subsidies Provincial Departments/District Municipalities – ‘functions’
Transfers and Subsidies Departmental Agencies/Foreign Government and International
Organisation/Households/Non-profit Institutions/Private Enterprises, Public Corporations and
Universities and Technicons – input from municipalities
Transfers and Subsidies – added “national revenue fund”
Exchange versus Non-exchange Revenue
Agency Services
Interest, Dividends and Rent on Land
Operational Revenue
Rental of Property, Plant and Equipment
Sale of Goods and Rendering of Services
Service Charges
Fines, Penalties and Forfeits
Licences or Permits
Property Rates and Revenue Foregone
Gains and Losses
44
Item: Revenue – Segment Snapshot
Reporting
Item
Revenue
Exchange Revenue
Agency
Services
Interest,
Dividend &
Rent on
Land
Operational
Revenue
Rental of
PPE
Non-exchange Revenue
Sales of
Goods and
Services
Rendered
Service
Charges
Fines,
Penalties &
Forfeits
Licences or
Permits
Property
Rates
Transfers &
Subsidies
45
Item: Revenue – Exchange Revenue: Agency
Services
Reporting
Item
Agency Service
District
Municipalities
Provincial
National
46
Item: Revenue – Exchange Revenue:
Interest, Dividend and Rent on Land
Reporting
Item
Rent of Land
Interest
Receivables
Affiliates, Related
Parties/Associated
Companies / Electricity /
Housing
Housing Land Sales /
Housing Selling Schemes
/ Merchandising, Jobbing
and Contracts / Property
Rates / Property Rental
Debtors / Service Charges
/ Sporting & Other Bodies
/ Staff / Waste
Management / Waste
Water Management /
Water
Current and
Non-current
Bank Accounts
Investment
Short Term
Investments and Call
Accounts
Deemed
Interest
Land
Grazing Fees
Undeveloped Land
Prospecting,
Mining and
Royalties
Royalties
Surface Rental
47
Item: Revenue – Exchange Revenue:
Administrative Fees
Reporting
Item
Administrative Fees
Registration
Fees
Request for
Information
Inflammable Material
Accident Reports
Landing Fees
Access to Information
Act
Road and Transport
Motor Vehicle
Registration
Private Testing Station
Road Ordinance
Road Worthy Certificate
Application
Duplicate IRP 5
Certificate
Municipal Information
and Statistics
NATIS, Plan Printing and
Duplicates
Inspection
Fees
Abattoir
Agricultural Activities
Animal Housing
Facilities
Statutory Services
Quarantine Inspection
Various:
Administrative Handling
Fees
Bad Debts Recovered
Breakage Recovered
Collection Charges
Commission
Discounts and Early
Settlements
Incidental Cash Surplus
Replacement of Security
Cards
Taxi Association Fees
48
Item: Revenue – Exchange Revenue: Rental of
Property, Plant and Equipment
Reporting
Rental of Property, Plant and Equipment
Market Related
Item
Non-market Related
Straight-lined
Operating
Straight-lined
Operating
Contingent
Contingent
Sublease
Payment
Sublease
Payment
49
Item: Revenue – Exchange Revenue: Sale of
Goods and Rendering of Services
Academic Services
Immunisation Fees
Advertisements
Laboratory Services
Cemetery and Burial Fees
Legal Fees
Cleaning Fees
Library Fees
Computer Services
Management Fees
Escort Fees
Membership Fees
Exempted Parking
Objections and Appeals
Fire Services
Parking Fees
Health Services
Photocopies and Faxes
Housing (Boarding Services)
Planning and Development
Reporting
Item
50
Item: Revenue – Exchange Revenue: Sale of
Goods and Rendering of Services (Continue…)
Sale of Goods:
Agricultural Products
Transport Fees
Valuation Services
Promotions/Corporate
Gifts
Publications
Valuation Rolls
Voters Rolls
Scrap Waste and Other
Goods
Reporting
Streets/Street Markets
Squatter Re-allocation
Item
51
Item: Revenue – Exchange Revenue: Service
Charges
Reporting
Electricity
Waste Water
Waste
Management
Item
Water
52
Item: Revenue – Exchange Revenue: Service
Charges (Continue…)
Electricity
Reporting

Electricity Distribution Revenue for Services
 Network Charges
 Ancillary Charges
 Losses
 Electricity Services Incidental to Electricity Sales
 Appliance Maintenance
 Connection/Reconnection
 Change Circuit Breaker
 Connections New:
• Government Housing
• Non-government Housing
• Disconnection/Re-connection
• Temporary Connection Fee
Item
53
Item: Revenue – Exchange Revenue: Service
Charges (Continue…)
Electricity (Continue...).






Reporting
Item
Joint Pole Usage
Meter Compliance Testing
Meter Reading Fees
Notice Revenue
Temporary Service Plant
Sales:
 Agricultural/Rural/Farm Dwellings Tariffs
 Commercial Conventional (Single Phase)
 Commercial Conventional (3-Phase)
 Commercial Prepaid
 Domestic Low (Home Light 1 20A / Home Light 1 60A / Home Light 2
20A / Home Light 2 60A)
54
Item: Revenue – Exchange Revenue: Service
Charges (Continue…)
Electricity (Continue...).







Domestic High:
 Home Power 1
 Home Power 2
 Home Power 3
 Home Power 4
 Home Power Bulk
Industrial (400 Volts) (Low Voltage)
Industrial (11 000 Volts) (High Voltage)
Miscellaneous Service Revenue – Affiliates and Inter Affiliates
Own Use/Interdepartmental Energy Sales
Revenue Adjustment
Special Negotiated Tariffs
Reporting
Item
55
Item: Revenue – Exchange Revenue: Service
Charges (Continue…)
Electricity (Continue...).




Sports Grounds/Churches/Holiday/Old-age Homes
Street Lighting
Water Pumps
Electricity Distribution Revenue for Services:
 Network Charges
 Ancillary Charges
 Losses
 Electricity Services Incidental to Energy Sales
Reporting
Item
56
Item: Revenue – Exchange Revenue: Service
Charges (Continue…)
Waste Management
Reporting
Item
Carrier Bags
Landfill Revenue
Refuse Bags
Refuse Removal
57
Item: Revenue – Exchange Revenue: Service
Charges (Continue…)
Waste Water
Reporting
Item
Industrial Effluent
Treatment Effluent
Sanitation Charges
58
Item: Revenue – Exchange Revenue: Service
Charges (Continue…)
Reporting
Water
Item
Connection/Reconnection
Meter Reading Fees
Sales:
Conventional
Prepaid
59
Item: Revenue – Non-exchange: Fines,
Penalties and Forfeits
Reporting
Item
Fines
Fines,
Penalties and
Forfeits
Building, Illegal Connections, Law
Enforcement, Overdue Books Fine,
Pound Fees, Traffic, etc.
Penalties
Collections, Disconnection Fees,
Motor Vehicle Licence, etc.
Forfeits
Deposits, Retentions, Unclaimed
Money
60
Item: Revenue – Non-exchange: Licences and
Permits
Angling/Fishing
Road and Transport
Boat
Abnormal Loads
Dog
Activities on Public Roads Fees
Fauna and Flora
Filming Fees
Item
Drivers Licence Application Fees
Drivers Licence Conversion
Duplicate Drivers Licences
Game
Flammable
Threatened and Protected Species
Instructor Certificate
Health Certificates
Learner Licence Application Fees
Hiking Trails
Learners Certificate
Hoarding (Collection/Storing)
Trading
Reporting
Licence Inspectors
Licence Test Officers
Motor Vehicle
Operators
61
Item: Revenue – Non-exchange: Property Rates
Business and Commercial Properties National Monument Properties
Communal Land
Business and Commercial
Privately Owned Towns Serviced by
the Owner
Farm Properties
Protected Areas
Residential
Public Benefit Organisations
Small Holdings
Public Service Infrastructure
Farm Properties
Residential Properties
Agricultural Purposes
Developed
Business and Commercial
Undeveloped
Industrial Purposes
Restitution and Redistribution
Properties
Residential Properties
Other purpose
Communial Property Association Act
Formal and Informal Settlements
Land and Assistance Act/Restitution of
Land Rights Act
Industrial Properties
Municipal Properties
Reporting
Item
62
Item: Revenue – Non-exchange: Property Rates
(Continue...)
Small Holdings
Reporting
Agricultural Purposes
Business and Commercial Purposes
Item
Industrial Purposes
Purposes other than the above (specify)
Residential Properties
Special Rating Areas
Name and Purpose
State-owned Properties
State Trust Land
63
Item: Revenue – Non-exchange Revenue:
Transfers and Subsidies
Monetary
Capital
In-kind
Transfers and
Subsidies
Monetary
Operational
In-kind
Reporting
Item
64
Item: Revenue – Non-exchange Revenue:
Transfers and Subsidies (Continue...)
DEPARTMENTAL AGENCIES AND ACCOUNTS
DISTRICT MUNICIPALITIES
Reporting
Item
FOREIGN GOVERNMENT AND INTERNATIONAL ORGANISATIONS
HOUSEHOLDS
NATIONAL GOVERNMENT
NON-PROFIT INSTITUTIONS
PRIVATE ENTERPRISES
PROVINCIAL GOVERNMENT
PUBLIC CORPORATIONS
UNIVERSITIES AND TECHNICONS
65
Item: Revenue – Non-exchange Revenue:
Transfers and Subsidies (Continue...)

Entities included in Departmental Agencies,
Foreign Government and International
Organisation, Non-profit Institutions, Private
Enterprises, Public Corporations and
Universities and Technicons to be checked to
municipal information and comments given

Content of Households to be considered for
specific comments

Provincial Government based on “function
classification” with detail to be added by the
municipalities for comparison over time

District Municipalities same as for Provincial
Government

National Government – Annual DORA
Reporting
Item
66
Segment: Item –
Expenditure
Reporting
Item
Outline:
Design Principles Specific to the Expenditure Section of
the Item
Segment Snapshot
Segment Detail Discussion
67
Item - Expenditure: Design Principles
[See Section 7 of the Project Summary]
Reporting
Item
1. Bad Debts Written-off – face of statement of financial performance not set-off against
provision
2. Bulk Purchases – Electricity & Water
3. Contracted Services – Agency and Support/Outsourced Services, Contractors and
Professional and Special Services
4. Depreciation and Amortisation – High-level PPE categories
5. Employee Related Cost – Senior Manager (by Designation) and Other Staff
6. Interest, Dividends and Rent of Land – defined by ERF
7. Inventory Consumed – Opening + Purchases - Closing
8. Remuneration of Councillors – Remuneration of the Public Office Bearers Act
9. Operational Cost – Any other items not specifically provided
10. Transfers and Subsidies – GRAP 23
11. Cost of Free Basic Services – Actual cost incurred for providing free basic services as
classified under “revenue foregone”. In principle this would require reducing “expenditure”
allocated specifically and charged “cost of free basic services”. See Contra-account in
Revenue
12. Revenue Cost of Free Basic Services – This is the contra-account for “revenue cost of
free basic services” provided for in the Revenue component of the Item Segment
68
Item: Expenditure – Segment Snap Shot
Reporting
BAD DEBT WRITTEN-OFF
Item
BULK PURCHASED
CORRECTIONAL SERVICES
DEPRECIATION AND AMORTISATION
EMPLOYEE RELATED COST
INTEREST, DIVIDENDS AND RENT ON LAND
INVENTORY CONSUMED
REMUNERATION OF COUNCILLORS
OPERATIONAL COST
TRANSFERS AND SUBSIDIES
69
Item: Expenditure – Bad Debts Written-off
Reporting
Item
Electricity
Waste
Management
Less Material
Services
Rendered
Property
Rates
Water
Waste Water
Management
70
Item: Expenditure – Bulk Purchases
Water (Raw or Potable)
Water Losses
Reporting
Item
71
Item: Expenditure – Bulk Purchases (Continue...)
ESCOM
Reporting
Independent Power Producers
Item
Green
Charges
Rights and Certificates
Renewable, Cogen, etc
Self Generation
Losses
Technical
Non-technical
72
Item: Expenditure – Contracted Services
Reporting
Item
Agency and
Support/Outsourced
Services
Consultants and
Professional
Services
Contractors
73
Item: Expenditure – Contracted Services:
Agency and Support/Outsourced Services
Reporting
Agency and Support/Outsourced
Services refers to “services” the
municipality should have the
capacity and expertise to carry out
certain services, but for some
reasons not utilising their own staff.
The reasons might include
temporary incapacity or the
outsourcing of services to save
costs, for example cleaning,
security and recruitment. In
evaluating the classification of
agency/outsourced services it
should be established whether the
services being procured could have
been provided by the municipality
itself. It could also be that the
municipality ordinarily has the
expertise to provide the service but
temporarily could not do so or to
save costs.
Item
74
Item: Expenditure – Contracted Services: Agency
and Support/Outsourced Services (Continue…)
Administrative and Support Staff
Alien Vegetation Control
Animal Care
Burials Services
Catering Services
Call Centre
Cleaning Services offices
Clearing and Grass Cutting Services
Fire Services
Hygiene Serives
Internal Auditors
Illegal Dumping
Litter Picking and Street Cleaning
Medical Waste Removal
Meter Management
Medical Services
Mini Dumping Sites
Organic and Building Refuse
Post Mortem
Professional Staff
Reconnection, Disconnection and
New Connections for
Electricity/Restricted Water Flow/Water
Refuse Removal
Researcher
Security Services
Solid Waste
Swimming Supervision’
Translators and Interpreters
Veterinary Services
Reporting
75
Item
Item: Expenditure – Contracted Services:
Consultants and Professional Services
Reporting
Consulting services refer to specialist
services and skills provided that are required
for the achievement of a specific objective,
with the aim of providing expert and
professional advice on a time and material
basis. It is unnecessary to maintain these
skills in-house, since they are required on a
once-off or temporary basis. Therefore a
consultant is a professional person appointed
by the municipality to provide technical and
specialist advice or to assist with the design
and implementation of specific
projects/programs. The legal status of this
person can be an individual a partnership or a
corporation. The fact that a consultant is
defined as a professional person implies that
the consultant is professionally qualified. The
provision of advice or service is in line with a
contractual arrangement. Remuneration is
usually based on an hourly fee or a fixed fee
for a product/deliverable. This category
consists of groups for "business and advisory
services", "infrastructure and planning",
"laboratory" and "legal service".
Item
76
Item: Expenditure – Contracted Services:
Consultants and Professional Services (Continue…)
Reporting
Item
77
Item: Expenditure – Contracted Services:
Consultants and Professional Services (Continue…)
Business and Advisory
Accountants and Auditors
Air Pollution
Audit Committee
Board Member
Business and Financial Management
Commissions and Committees
Communications
Human Resources
Medical Examinations
Occupational Health and Safety
Organisational
Project Management
Research and Advisory
Qualification Verification
Quality Control
Valuer
Reporting
Item
78
Item: Expenditure – Contracted Services:
Consultants and Professional Services (Continue…)
Infrastructure and Planning
Architectural
Agriculture
Ecological
Engineering:
Aeronautical
Agricultural
Chemical
Civil
Electrical
Industrial
Mechanical
Metallurgical
Mining
Structural
Geodetic, Control and Surveys
Geoinformatic Services
Geologist
Land and Quantity Surveyors
Landscape Designer
Town Planner
Reporting
Item
79
Item: Expenditure – Contracted Services:
Consultants and Professional Services (Continue…)
Laboratory Services
Reporting
Agriculture
Medical
Roads
Water
Item
80
Item: Expenditure – Contracted Services:
Consultants and Professional Services (Continue…)
Legal
 Legal Advice and Litigation
 Issue of Summons
Reporting
Item
 Collection
81
Item: Expenditure – Contracted Services:
Contractors
Reporting
Contractors are required to
provide services that are not the
core business of the municipality.
It is normally not cost effective to
maintain these skills within the
department. Contractors include
costs associated with the use of
contracted individuals or
businesses on projects or tasks.
This does not include amounts
payable to contractors in respect
of provision of services such as
cleaning and security even if a
staff element can be identified.
Note also that it is common
practitioners that the said
contractor provides all the
materials required for the project
- he/she tenders for the whole
project, materials included.
Item
82
Item: Expenditure – Contracted Services:
Contractors (Continue…)
 Bottling and Packaging
Building Contractors
Chipping
Distribution of Electricity by
Others
Electrical
Employee Wellness
Event Promoters
Fire Services
Graphic Designers
Grading of Sport Fields
Haulage
Interior Decorator
Inspection Fees
Maintenance of Building and
Facilities
Maintenance of Equipment
Maintenance of Unspecified
Assets
Management of Informal
Transmission of Electricity by
Settlements
Other
Medical Services
Transportation Contractor
Mint of Decorations
Sewerage Services
Pest Control
Sports and Recreation
Photographer
Stage and Sound Crew
Plants, Flowers and Other
Upgrade and Additions
Decorations
Prepaid Electricity Vendors
Preservation/ Restoration/
Dismantling/Cleaning Services
Reconnection/Disconnection
and New Connections
Relief Drivers
Refurbishment and
Item
Rehabilitation
Rehabilitation of Landfill Sites
Removal of Structures/Signs
Tracing Agents/Debt Collectors
83
Traffic and Street Lights
Reporting
Item: Expenditure – Depreciation and
Amortisation
Biological
/Cultivated
Assets
Buildings
Computer
Equipment
Furniture and
Office
Equipment
Heritage
Assets
Infrastructure:
Airports
Infrastructure:
Cemeteries
Infrastructure:
Electricity
Infrastructure:
Roads
Infrastructure:
Solid Waste
Disposal
Infrastructure:
Transportation
Infrastructure:
Water
Intangible
Assets
Investment
Properties
Machinery and
Equipment
Transport
Assets 84
Item: Expenditure – Depreciation and
Amortisation: Buildings (Continue…)
Reporting
Item
Other Excluding Distribution
and General Plant
Electricity Distribution (Owned,
Revalued and Leased)
Electricity General Plant
(Owned, Revalued and Leased)
85
Item: Expenditure – Depreciation and
Amortisation (Continue…)
Computer Equipment
Furniture and Office Equipment
Machinery and Equipment
Transport Assets
Other Excluding Electricity Distribution
and General Plant
Reporting
Item
Electricity General Plant (Owned,
Revalued and Leased)
86
Electric Plant held for Future Use
• Normally Primary Above
132 kva / Below 132 kva
• System Communication
& Control
• Storage Battery &
Equipment
• Poles, Towers &
Fixtures
• Overhead Conductors &
Devices
• Underground Conduit
• Underground
Conductors Devices
• Conventional Meters
• Automated/Prepaid
Meters
• Other Installations on
Customer Premises
• Street Lighting and
Signal System
Plant Leased to Others
Electricity
Item: Expenditure – Depreciation and
Amortisation: Infrastructure – Electricity (Continue…)
Reporting
Item
87
Item: Expenditure – Depreciation and
Amortisation: Intangible Assets (Continue…)
Reporting
Other excluding Distribution
and General Plant
Electricity Distribution Plant
Item
•
•
•
•
•
Incorporation and Organisational Start-up
Franchises and Consents
Non-specified
Computer Software Application
Load Settlement Software Application
88
Item: Expenditure – Employee Related Cost
Key
Management
Municipal
Staff
Social
Contributions:
Key
Management
Social
Contributions:
Other
Municipal
Staff
• Annual Remuneration, Performance Based Bonus, Travel, Motor
Vehicle, Accommodation, Subsistence Allowance, Service Related
Bonus, etc
• Salaries, Wages and Allowances, Performance Based Bonus,
Travel, Motor Vehicle, Accommodation, Subsistence Allowance,
Service Related Benefits
• Group Life Insurance, Medical, Pensions Fund and UIF,
etc
• Bargaining Council, Group Life Insurance, Medical,
Pension Funds and UIF
89
Item: Expenditure – Interest, Dividend and Rent
on Land
Interest
•
•
•
•
•
Arrear Salaries
Bank Overdraft
Borrowings
Finance Leases
Interest Costs
Non-current
Provisions
• Overdue Accounts
• Overpayments of
Interest due to
Queries Resolved
• Rental Deposit
Dividend
• Dividends Paid
Rent
• Rent on Land
Reporting
Item
90
Item: Expenditure – Inventory Consumed
Opening
Inventory
Purchases
Consumable Stores
Standard Rated
Zero Rated
Finished Goods
Maintenance Materials
Other Goods held for Resale
Raw Materials
Spare Parts
Water
Work-in-Progress
Closing
Inventory
Inventory
Consumed
Reporting
Item
91
Item: Expenditure – Remuneration of
Councillors
Remuneration of
Councillors
Salary
Allowance
Officer-bearer,
Travel, Housing,
Cell Phone, Out of
Pocket Expenses
Pension Fund
Contributions
Medical Aid
Benefits
Reporting
Item
92
Item: Expenditure – Operational Cost
Achievements and Awards
Advertising, Publicity and Marketing
Auctions
Bursaries (Non-employees)
Corporate and Municipal Activities
Customer/Client Information
Gifts and Promotional Items
Municipal Newsletters
Signs
Staff Recruitment
Tenders
Assets less than Capitalisation Threshold
Audit Cost: External
Bank Charges, Facility and Card Fees
Current Accounts
Fleet and Other Credit/Debit Cards
Investments
Lease Payments
Long/Short Term Loans and Borrowings
Bargaining Council
Cleaning Services
Laundry Services
Car Valet and Washing Services
Commission
Cellular Contract (Subscriptions and Calls)
Licences (Radio and Television)
Postage/Stamps/Franking Machine
Radio and TV Transmissions
Rent Private Bag and Postal Box
Satellite Signals
SMS Bulk Message Service
Telephone, Fax, Telegraph and Telex
Telemetric Systems
Telephone Installations
Reporting
Item
93
Item: Expenditure – Operational Cost
(Continue...)
Contribution to Provisions:
Alien Vegetation
Decommission Cost
Rehabilitation of Landfill Sites
Copyrights
Licences and Permits
Dumping Fees
Eskom Connection Fees
Entertainment
Mayor
Councillors
Senior Management
External Computer Services
Data Lines
GPS Licence Fees
Information Services
Internet Charge
Mainframe Time
Network Extension
Specialised Computer Services
System Adviser
System Development
Wireless Network
94
Item: Expenditure – Operational Cost
(Continue...)
Freight Services
Firearm Handling Fees
Full Time Union Representative
Honoraria (Voluntary Workers)
Insurance Underwriting:
Insurance Aggregation
Claims paid to Third Parties
Insurance Brokers Fees
Insurance Claims
Excess Payments
Risk Management Programs
Premiums
Land Alienation Costs
Learner and Internships
Levies WRC
Licences:
Licence Agency Fees
Motor Vehicle Licence Registration
Performing Arts
Event
National
International
System Access and Information Fees
Travel Agency Fees
Office Decoration
Operating Leases:
Biological/Cultivated Assets
Buildings
Computer Equipment
Furniture and Office Equipment
Heritage Assets
Infrastructure [Airports, Cemeteries,
Electricity, Roads, Solid Waste Disposal,
Transportation & Water]
Intangible Assets
Investment Properties
Machinery and Equipment
Transport Assets
Reporting
95
Item
Item: Expenditure – Operational Cost
(Continue...)
Printing and Publications
Professional Bodies, Membership and
Registration
Property Payments:
Cleaning Services
Deeds
Electricity Compliance Certificate
Fire Protection
First Aid
Fumigation Service
Gardening Service
Gas
Laundry Services
Management Dee
Property Maintenance
Municipal Services
Pest Control
Safeguard and Security
Remuneration to Ward Committees
Resettlement Cost
Rewards Incentives
Road Worthy Test
Skills Development Fund Levy
Search Fees
Servitudes and Land Surveys
Signage
Storage of Files (Archiving)
Storage of Assets and Goods
Small Differences Tolerance
Taking Over Contractual Obligations
Toll Gate Fees
Transport provided as part of Functions
Events
Funerals
Patients and Corps
Reporting
Item
96
Item: Expenditure – Operational Cost (Continue...)
Travel and Subsistence
Reporting
Domestic
Transport without Operator
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t
Car Rental
Foreign (see Next Slide)
Item
Transport with Operator
Own Transport Provided
Public Transport
Own Transport
Air Transport
Railway Transport
Road Transport
Water Transport
97
Item: Expenditure – Transfers and Subsidies
Departmental Agencies
and Accounts
Foreign Government
Allocations
In-kind
and International
Organisations
Capital
Monetary
Value
Transfers and
Subsidies
Operational
Households
Local Government
District Municipalities
Non-profit Institutions
Operational
Monetary
Value
Private Enterprises
Public Corporations
Reporting
Universities and
Item
Technicons
98
Contra Accounts, Gains and
Losses and Surplus/Deficit
99
Contra Accounts
Reporting
Item
Cost of Free
Basic Services
Rendered
Electricity/Other
Energy
(50kw)/household
Water
(6kl/household)
Sanitation
Refuse
100
Contra Accounts
Revenue Cost of Free Basic Services
Property
Rates
Electricity
Municipal
Housing
Sanitation
Solid Waste
Water
Bona Fide Farmers Rebate/Exemption
General Residential (R15000)
Indigent Owners
Pensioners/Social Grants
Temporary Relief Rebates
Reporting
Item
101
Gains and Losses
IMPAIRMENT LOSS/REVERSAL OF IMPAIRMENT LOSS PROPERTY, PLANT AND EQUIPMENT:
Biological/Cultivated Assets
Buildings
Computer Equipment
Furniture and Office Equipment
Heritage Assets
Infrastructure:
Airports
Cemeteries
Electricity Roads
Solid Waste Disposal
Transportation
Water
Intangible Assets
Investment Properties
Machinery and Equipment
Transport Assets
INVENTORIS REVERSAL OF WRITE-DOWN/WRITE DOWN TO NET REALISABLE VALUE (OR
CURRENT REPLACEMENT COST
Reporting
102
Item
Surplus/Deficit
Reporting
Deficit Attributable to Associate
Item
Deficit Attributable to Joint Venture using Equity Method
Deficit Attributable to Minorities
103
Segment: Item – Assets,
Liabilities and Net Assets
Reporting
Item
Outline:
Design Principles Specific to this Section of the Item
Segment
Segment Snapshot
Segment Detail Discussion
104
Item: Assets, Liabilities and Net Assets- Current
Assets
Cash and Cash Equivalents
Reporting
Construction Contracts & Receivables
Item
Current Portion Non-current Receivables
Receivables from Non-exchange Transactions
Current Assets
Financial Assets not Separately Specified
Inventory
Agricultural Assets
Investments
Prepayments and Advance
Trade and Other Receivables from Exchange Transactions
105
Item: Assets, Liabilities and Net Assets –
Current Assets
Reporting
Item
Cash and Cash
Equivalents
Cash at
Bank
Bank
Accounts
Cash on
Hand
Savings
Accounts
Call
Deposits
and
Investments
Cashier
Floats
Payment of
Interest/Divi
dend
Demand and
Time Loans,
Banker’s
Acceptance
National
Government
Investment
Securities
Cash in
Transit
Petty Cash
106
Item: Assets, Liabilities and Net Assets- Current
Assets (Continue…)
Current Portion
Non-current
Receivables
• Car
• Computer and
Electronic
Equipment
• Housing Selling
Schemes
• Housing
• Housing Land
Sales
• Sporting and Other
Bodies
• Staff
Receivables from
Non-exchange
Transactions
Inventory
• Insurance
Claims
• Property Rates
• Transfers and
Subsidies
• Unauthorised
Expenditure
Reporting
• Agricultural
Assets
• Consumable
Stores
• Finished Goods
• Maintenance
Materials
• Other Goods
held for Sale
• Raw Materials
• Spare Parts
• Water
• Work-inprogress
Item
107
Item: Assets, Liabilities and Net Assets- Current
Assets (Continue…)
Other Current
Financial Assets
Income Tax
receivable
Inventory
• Contractual Rights
• Derivative
Financial
Instruments
• Unamortised
Discount
• Agricultural
Assets
• Consumable
Stores
• Finished Goods
• Maintenance
Materials
• Other Goods
held for Sale
• Raw Materials
• Spare Parts
• Water
• Work-inprogress
Reporting
Item
108
Item: Assets, Liabilities and Net Assets –
Current Assets (Continue…)
Reporting
Item
Investments
• Deposits
• Call
Investments
Non-current
Assets held for
Sale
• Property, Plant
and Equipment
• Investment
Property
Prepayments and
Advance
Vat Receivable
• Interest
Prepayments
• Rent
Prepayments
• Salary
Advances
• Subsistence
and Travel
Advances
• Taxes and
Levies other
then Income
Tax
109
Item: Assets, Liabilities and Net Assets – Current
Assets: Trade and Other Receivables from Exchange Transactions
Reporting
Affiliate/Related Parties/Associated
Companies
Electricity
Merchandising, Jobbing and
Contracts
Property Rental Debtors
Service Charges
Waste Water Management
Waste Management
Water Management
Item
•
•
•
•
•
•
Opening Balance
Monthly Billing
Prior Period Corrections and Errors
Collections
Debt Write-off
Closing Balance
110
Item: Assets, Liabilities and Net Assets –
Non-current Assets
Non-current Assets
Biological
Assets
Defined
Benefit
Assets
Defined
Tax
Assets
Heritage
Assets
Intangible
Assets
Investment
in
Associate/
Joint
Venture/
Subsidiary
Investment
Property
Investments
Non
Current
Receivables from
Nonexchange
Transactions
Property,
Plant and
Equipment
Other
Noncurrent
Financial
Assets
Reporting
Item
111
Item: Assets, Liabilities and Net Assets – Noncurrent Assets (Continue…)
Biological Assets
Dairy Cattle
Feathered Animals
Forests and Plantations
Fruit Trees
Game Animals
Animals for Reproduction
Animals for Wool
Dogs / Horses
Vines
Plants (Seed and Production)
• Opening Balance
• Acquisitions
• Change in Accounting
Policy/Correction of Error
• Fair Value Gains and Losses
• Sales/Disposals
• Transfers Made/Received
• Closing Balance
Reporting
Item
112
Item: Assets, Liabilities and Net Assets – Noncurrent Assets (Continue…)
Reporting
Item
Defined
Benefit
Assets
Deferred
Tax Assets
113
Item: Assets, Liabilities and Net Assets – Noncurrent Assets (Continue…)
Heritage Assets
Cost/Revaluation
Accumulated
Depreciation
• Archives
• Areas of Land of Historic
Specific Significance
• Antiques and Collections
• Cultural Significant Buildings
• Municipal Jewellery
• National Monuments
• National Parks
• Paintings
• Sculptures
• Works of Art
Reporting
Item
114
Item: Assets, Liabilities and Net Assets – Noncurrent Assets (Continue…)
Cost
Revaluation
Accumulated
Depreciation
Capital Development
Cost
Computer Software
Franchise and Consents
Incorporation and
Organisational Cost
Mastheads and
Publishing Titles
Patents, Licences,
Copyrights, Brand
Names and Trademarks
Service Operating and
Land Rights [Distribution
or General Plant
Intangible
Assets
Reporting
Item
All Functions
excluding
Electricity
Electricity
Distribution and
General Plant
Owned and Inuse
Held for Future
Use
Finance Leased
Leased to
Others
115
Item: Assets, Liabilities and Net Assets – Noncurrent Assets (Continue…)
Investment in
Associate/Joint
Venture/Subsidiary
Reporting
Item
Investments
Bankers Acceptance
Certificate
Bank Deposits
Bank Repurchase
Agreements
Derivative Financial
Assets
Listed Corporate Bonds
and Stock
Municipal Bonds
National Government
Securities
Negotiable Certificates
Investment
Property
Housing Development
Cost/Accumulated
Depreciation/Impairment
116
Item: Assets, Liabilities and Net Assets – Noncurrent Assets (Continue…)
Non-current
Receivables
• Car
• Computer and
Electronic
Equipment
• Housing Selling
Schemes
• Housing
• Housing Land
Sales
• Sporting and Other
Bodies
• Staff
Trade and Other
Receivables from
Exchange Transactions
• Electricity
• Property Rental
Debtors
• Waste Water
Management
• Service Charges
• Waste Management
• Water
Other Non-current
Financial Assets
• Unamortised Debt
Expense
• Unamortised
Preference Share
Expense
Reporting
Item
117
Item: Assets, Liabilities and Net Assets – Noncurrent Assets: PPE
Reporting
Property, Plant and Equipment
Item
Leased
Owned
Cost Model
PPE Categories (See
Categories)
PPE Categories (See
Categories)
Cost/Accumulated
Depreciation
Revaluation Model
PPE Categories (See
Categories)
Agency and Support
Services
Consultants and Professional
Services
Contractors
Cost/Accumulated
Depreciation
Cost/Accumulated
Depreciation
Construction
Work-in-progress
Employee Related Cost
Inventory Consumed
118
Operational Cost
Item: Assets, Liabilities and Net
Assets: PPE (Continue…)
Assets – Non-current
Assets
PPE Categories
Reporting
Item
•Buildings
•Transport Assets
•Infrastructure:
•Electricity
•Water
•Sanitation
•Solid Waste Disposal
•Transportation
•Railways
•Gas Supply System
•Cemeteries
•Roads, Pavement, Bridges
•and Storm Water
•Airports
•Machinery and Equipment
•Furniture and Office Equipment
•Computer Equipment
119
Item: Assets, Liabilities and Net Assets – Noncurrents Assets (Continue…)
Assets – Non-current
Assets Electricity – Distribution Plant
Infrastructures:
Reporting
Item
Poles, Towers and Fixtures
Automated/Prepaid Meters
Conventional Meters
Storage Battery Equipment
Transformer Station Equipment – Normally Primarily above 132 kva
Transformer Station Equipment – Normally Primarily below 132 kva
Underground Conduit
Underground Conductor Devices
System Communication and Control
Street Lighting and Signal System
Other Installations on Customer Premises
Experimental Electric Plan Unclassified
Owned and In-use Leased to Others and Future Use
120
Item: Assets, Liabilities and Net Assets – Noncurrent Assets: PPE (Continue…)
Assets – Non-current Assets
All Functions
Electricity
Computer
Equipment
Electricity
Function
Owned and
In-use
Leased to
Others
Future Use
Reporting
Item
121
Item: Assets, Liabilities and Net Assets
PPE Detail Classification for “Owned – Cost Model”
Assets – Non-current Assets
Cost
Opening/
Closing
Balance
Acquisitions
Disposal of Cost
Decommission,
Restoration and
Similar Liabilities
Impairment/Reversal
of Impairment
Correction of Error
Transfers' Received
Cost
Change in
Accounting Policy
Transfers Made Cost
Classification
Depreciation for the
Period
Accumulated
Depreciation
Opening/
Closing
Balance
Accumulated
Depreciation on
Disposals/Transfers
Reporting
Item
122
Item: Assets, Liabilities and Net Assets
Liabilities
Current Liabilities
Bank Overdraft
Consumer Deposit
Finance Lease
Provisions
Transfers and Subsidies
Trade and Other Payables
VAT Payable
Borrowings
Financial Liabilities
Non-current Liabilities
Borrowings
Transfers and Subsidies
Other Financial Liabilities
Provisions
Defined Benefit Plan Obligations
Reporting
Item
123
Item: Assets, Liabilities and Net Assets –
Current/Non-current Liabilities
Accrued Leave
Long Service Awards
Performance Bonus
Staff Parity
Reporting
Item
Insurance Claims
Current and Noncurrent Provisions
Impairment:
Insurance Claims
Property Rates
Transfers and Subsidies
Unauthorised Expenditure
Impairment:
Electricity
Merchandising, Jobbing and Contracts
Service Charges
Waste Management
Waste Water Management
Water
Landfill Sites
124
Item: Assets, Liabilities and Net Assets – Net
Assets
Reporting
Net Assets
Item
Funds
Minority
Equity
and
Interest
(Entities?) Reserves (Entities?)
125
Segment: Fund
Source?
Funding
Reporting
Outline:
Design Principles Specific to the Fund Segment
Segment Snapshot
Segment Detail Discussion
126
Fund: Design Principles
Funding
Reporting
1.
Legislative Framework:
–
MFMA Section 18 and 19: funding of capital and operational spending
–
DORA: specific reporting requirements
2.
Budget Reporting Format: supplement to budget funding mechanism
3.
ERF: determine categories for transfers and subsidies
4.
General: operational expenditure from operational revenue AND capital
expenditure from capital revenue sources
5.
LGPRA: accounting - special rating areas
6.
Equitable Share: cost vs. value of funding
7.
Internal Service Charges: reporting information
8.
Allocation in-kind: GRAP 23 principles re “goods and services in-kind”
9.
Transfers and Subsidies: annual review of content and update
10. District Municipalities: functional classification
11. Other Transfers and Subsidies: limited information
127
Fund: Segment Outline
Funding
Reporting
• General
• Equitable Share
• Special Rating
Areas
Revenue
•Abattoirs, City
Parks, Reserves,
Gardens, Fresh
Produce Markets,
Urban Transport,
Property Agencies,
Tourism, Zoo’s and
Museums, etc?
• Capital
• Allocations In-kind
• Monetary Allocations
• Operational
• Allocations In-kind
• Monetary Allocations
Transfers &
Subsidies
Commercial
• Annuity Loans, Bankers
Acceptance Certificate,
Finance Leases, Local
Registered Stock,
Marketable Bonds, Nonannuity Loans, Nonmarketable Bonds, PPP
Liabilities, Securities, etc.
Borrowing:
Current
• Not accumulated
surplus as per AFS
(book entry; actual
cash and cash
equivalents on hand
of which purpose is
the funding of cash
backed reserves
Cash Backed
Reserves
• Annuity Loans, Bankers
Acceptance Certificate,
Finance Leases, Local
Registered Stock,
Marketable Bonds, Nonannuity Loans, Nonmarketable Bonds, PPP
Liabilities, Securities, etc.
Borrowing:
Non-current
• NT Currently piloting
management accounting
framework (such as
departmental charges,
distribution accounting
etc) – Outcome will
inform SCOA
• GRAP posting level
such as deemed
interest,
depreciation, bad
debt write off etc.
Costing
Non-funding
Transactions
128
Segment: Function
Vote?
Purpose?
Standard
Classification
Function
Reporting
Outline:
Design Principles Specific to the Fund Segment
Segment Snapshot
Segment Detail Discussion
129
Function: Design Principles
Standard
Classificati
on
Function
Reporting
1. Legislative Framework: Budget Reporting Regulations and MFMA
Circular 12
2. General: Add detail as required
3. Municipal Entities and Agencies: Follow principles
4. NERSA: Specific detail added to extract NERSA Regulatory Reporting
Requirements
5. Core versus Non-core Function: Core refers to the matters ito
section 156(1) of the Constitution and Part B of Schedules 4 and 5.
Non-core refers to section 156(4) of the Constitution – constitutionally
assigned to local government
130
Function: Segment Outline
Standard
Classificati
on
Function
Reporting
Community
and Public
Service
Core
Noncore
Economic and
Environmental
Service
Core
Noncore
Municipal
Governance
and
Administration
Core
Noncore
Trading
Service
Core
Noncore
Other
Core
Noncore
131
Function: Segment Outline
Community
and Social
Services
Aged Care, Home Assistance and / Transport Facilities / Cemeteries and
Crematoriums / Child Care Facilities / Community Halls and Facilities / Libraries and
Archives / Museums and Art Galleries / Animal Care / Literacy Programmes /
Theatres and Zoo’s
Agricultural / Animal Controls and Diseases / Archives / Cultural Matters / Consumer
Protection / Disaster Management / Education / Indigenous and Customary Law
Ambulance / Clinics / Health Inspections
Health
Ambulance / Health Services
Communi
ty and
Public
Service
Core
Housing
Non-core
Public Safety
Civil Defence / Fire Fighting and Protection / Control of Public Nuisance / Cleaning
/ Disaster Management / Fencing and Fences / Licensing and Control of Animals /
Police Forces, Traffic and Street Parking Control
Non-core
Sport and
Recreation
Beaches and Jetties, Bill Boards and Amusement /
Camping Sites / Community Parks / Lakes, Dams and
Stadiums / Swimming Pools
Casinos. Racing, Gambling and Amenities / Provincial
Recreation and Amenities / Provincial Sport
Standard
Classificati
on
Function
Reporting
132
Function: Segment Outline
Standard
Classificatio
n
Function
Reporting
Environmental
Protection
Economic and
Environmental
Service
Planning and
Development
Road Transport
Biodiversity and
Landscape / Coastal
Protection / Pollution
Control
Corporate Wide
Strategic Planning /
Economic
Development
Planning / Licensing
and Regulations /
Town Planning,
Building Regulations
and Enforcement
(City Engineer
Parking Garages /
Public Buses / Roads /
Pounds / Taxi Ranks
Indigenous Forests / Nature
Conservation / Pollution
Control / Soil Conservation
Liquor Licensing / Provincial
Planning / Regional Planning
and Development / Urban
and Rural Development
Provincial Roads and
Traffic / Public
Transport / Road
Traffic Regulation /
Vehicle Licensing and
Testing
133
Function: Segment Outline
Standard
Classificati
on
Function
Reporting
Municipal
Governance and
Administration
Budget and
Treasury Office
Budget Officer
Chief Financial Officer
Creditors
Property Rates
Revenue Management
Treasury and Cash Management
Corporate
Services
Human Resources
Information Technology
Property Services
Asset Management
Fleet Management
Internal Audit Services
Legal Services
Marketing, Publicity and Media
Coordination
Public Works
Risk Management
Security Services
Supply Chain Management
Trading Regulations
Executive and
Council
Mayor and Council
Municipal Manager
134
Standard
Classificatio
n
Function
Reporting
Trading Service
Electricity
Waste
Management
Waste Water
Management
Core: Distribution
Recycling/Disposa
l /Removal/Street
Cleaning
Sewerage/Storm
Water
Management/
Public Toilets
Non-core:
Generation
Non-core:
Non-core
Water
Distribution
Storage
Non-core
135
Standard
Classificatio
n
Function
Reporting
Other
Abattoirs
Air
Transport
Forestry
Markets
Tourism
Core
Non-core
Core
Non-core
Core
Non-core
Core
Non-core
Core
Non-core
136
Segment: Project
Operational or Capital Spending?
Reporting
Outline:
Design Principles Specific to the Fund Segment
Segment Snapshot
Segment Detail Discussion
Project
137
Project: Design Principles
Reporting
Project
1.
IDP: Provide for projects as determined by problems and challenges with
defined strategies!
2.
IRM: Specific requirements provided for reporting
3.
Terminology: Standardisation specific to “upgrade and additions” and
“rehabilitation and refurbishment”
4.
SCOA: Provide for detail to be added
Comment
?
5.
Naming Convention: Specific project to determine.
6.
Classification: PPE categories added
7.
NERSA: Detail added to extract Regulatory Reporting Requirements
8.
Accrual Accounting Principles: Prospective balance until completed if capital
and operation projects annual total
9.
Legislative Framework: MFMA Section 19 Approval of Capital Projects
10. Repairs and Maintenance versus Operating Expenditure: Classifications
added!
138
Project: Segment Outline
Reporting
Projects
Project
Capital
Infrastructure
Operational
Noninfrastructure
Default
Transactions
Existing
Own
Maintenance
and Repair
New
Transfers
Operating
Expenses
Transfers
Typical Work
Streams
139
Project: Capital - Infrastructure
Reporting
Project
Existing
Infrastructure
New
Rehabilitation
and
Refurbishment
PPE Categories
Project (Add)
Upgrade and
Additions
PPE Categories
Project (Add)
PPE Categories
Project (Add)
Rehabilitation
and
Refurbishment
PPE Categories
Project (Add)
Upgrade and
Additions
PPE Categories
Project (Add)
Transfers
140
Project: Capital – Non-infrastructure
(Continue…)
Reporting
Project
Own
Rehabilitation
and
Refurbishment
PPE Categories
Project (Add)
Upgrade and
Additions
PPE Categories
Project (Add)
Rehabilitation
and
Refurbishment
PPE Categories
Project (Add)
Upgrade and
Additions
PPE Categories
Project (Add)
Noninfrastructure
Transfers
141
Project: Operational
Reporting
Project
Default Transactions
Infrastructure
PPE Categories
Infrastructure Transfers
PPE Categories
Non-infrastructure
PPE Categories
Non-infrastructure
Transfers
PPE Categories
Infrastructure
PPE Categories
Infrastructure Transfers
PPE Categories
Non-infrastructure
PPE Categories
Non-infrastructure
Transfers
PPE Categories
Maintenance and Repair
Operational
Operating Expenses
Typical Work Streams
142
Project: Operational (Continue…)
Reporting
Typical Work Streams
•
•
•
•
•
•
•
•
•
•
•
Agricultural
AIDS/HIV, Tuberculoses and Cancer•
Asset Protection
•
Capacity Building, Training and
Development
•
City Cleanliness and Clean-up
•
Projects
•
Communication and Public
•
Participation
•
Community Development
•
Dam Safety
•
District Initiatives and Assistance to •
Municipalities
Drinking Water Quality
Efficient and Effective Public Service
Project
Elections
Emergency and Disaster
Management
Environmental
Expanded Public works Programme
Functions and Events
GIAMA Implementation
Health and Wellness
Human Resources and Capital
Indigent Management
Junior Council
143
Project: Operational (Continue…)
Reporting
Typical Work Streams (Continue)
• Local Economic Development
• Meter Conversion and/or
Replacement
• Music, Arts and Culture
• Occupational Health and Safety
• Performance Management
• Property Rates Act Implementation
• Protecting the Poor
• Public Protection and Security
• Research and Development
• Service Connections
• Shared Services Centre Cost
• Spatial Planning
• Special Projects
Project
• Sport Development
• Strategic Management and
Governance
• Thefts and Losses through Criminal
Conduct
• Tourism
• Ward Committees
• Website Development and
Maintenance
144
Segment: Regional Indicator
Beneficiary?
Outline:
Reporting
Regional
Indicator
Design Principles Specific to the Fund Segment
Segment Snapshot
Segment Detail Discussion
145
Regional Indicator: Design Principles
Regional
Indicator
Reporti
ng
Information?
1. ERF: principles determined for national/provincial departments
2. SCOA Posting Levels:
–
provide for indicators for administration of the municipality
–
district municipalities and local municipalities
Information?
3. Ward: classification depend on municipal service delivery model
4. SCOA: detail to be populated as required by ALL municipalities
5. Municipal Entities and Agency: equally applicable
6. Information: geographical service delivery vs. revenue collection
with future expansion possibilities
146
Regional Indicator: Segment Outline
Regional
Indicator
Reportin
g
Regional
Indicator
National
Functions
Admin/
Satellite
Office
Provincial
Functions
Metro /
Munic.
No
Regional
Indicator
Areas
Whole of
the Munic.
Admin/
Head
Office
Ward
Whole of
the Area
District
Munic.
Admin/
Head
Office
Local
Munic.
Whole of
the District
Ward
147
Segment: Costing Indicator
Beneficiary?
Reporting
Costing
Outline:
148
Introduction
• The introduction of financial modeling targets all costing activities with
particular focus on tariff determination.
• Financial modeling is fundamental to improving the quality of municipal
MTREF submissions
and thereby positively influencing financial
sustainability and service delivery
• Currently most municipalities utilise job costing as a methodology of
tracking their costs.
• This fits the needs of the engineering services predominantly, and does
not act as a decision support tool as it only tracks costs as they are
incurred, and does not inform the budget process, resulting in tariffs not
being cost reflective.
• These secondary/ indirect costs can be between 10-15% for metros and
between 18 – 25 % for smaller municipalities.
149
Tariff determination
• Tariff modelling that ensures cost recovery requires a structured process
whereby cost accounting (management accounting) is applied; this will
enable municipalities to determine the real cost of municipal services
provided and in turn the financial ‘burden’ or affordability to households
can be factored into the process.
• Effective costing of municipal services will also provide a more accurate
indicator of what municipalities are spending in terms of providing ‘free’
basic services to disadvantaged communities.
• Effective costing of municipal services will ensure a consistent approach
to tariff determination processes across municipalities.
150
Segment: Costing
At the highest level the costing structure
distinguishes between:
• Departmental charges (Support services)
• Internal billings
• Activity based recoveries
151
Segment: Costing
• Department Charges (Support Services)
– Finance [Accounting / Asset Management / Audit Fees /
Budgets / Expenditure / Insurance Fees / Meter Readers /
Payroll / Procurement / Revenue Management
– Corporate Services [Training and Development /
Employee Benefits / Resource and Planning / Labour
Relations / Human Resource Recruitment / Legal Serive /
Postal Services / Office Rentals / Telephone / Telephone
Maintenance
– Cleaning Services
– Security [Services / System Maintenance
152
Segment: Costing
• Department Charges (Support Services) Continue
– Communication [IT System Ware / IT Data Ware / Data
Lines / Radio Maintenance]
– Other [Municipal Manager / Internal Laboratory Fees /
Project Management]
153
Segment: Costing
• Internal Billing (Consumption and Service Charges)
– Connection Fees / Electricity Consumption / Electricity
Pump Stations – Water Services / Electricity Streetlights
/Electricity Traffic Lights / Rates Charges / Refuse
Removal / Sanitation Charges / Water Consumption
154
Segment: Costing
• Activity Based Recoveries
– Transport Costs, e.g. Light p/km, Medium p/km, Heavy p/km
– Plant and Equipment, e.g. Articulated p/h, Backactor p/h
– Quarries, e.g. Concrete mix per ton, Aggregate per ton
– Labour, e.g. Worker, Henchman, Operator
– Printing Service, e.g. Black and White, Colour
155
Conclusion
•
•
Costs, cost management and a costing methodology should not be informed by a
specific approach i.e. ABC, absorption costing etc., but should rather be a hybrid
solution aimed at the specific requirement of LG in a South African context.
The time, effort and cost should always be justified by the outcome.
156
4.
Practical Example
Outline:

Typical examples to apply within the SCOA Classification Framework
157
Practical Examples
Illustration: Using Workbook with Information and
Workgroups
A. Internet Link
B. Excel Model
C. Presentation SNAP SHOT
Discussion of Selections
158
5.
SCOA Implementation
Outline:


Activities Preparing for Implementation
Comment Process informing Version 5 and final SCOA Regulation
159
SCOA Roadmap - Timelines
Budget Cycle: 2016/17
Two year window period
Implementation
January 2014
Regulation
Post
Regulation
•
•
•
•
Piloting & lessons learned
•
Change Management & Training •
Preparation & readiness for full
Implementation (Munics)
•
SCOA Business process links
System readiness & Refinements•
Upgrade of Local Government •
Data Base
•
SCOA Website
•
•SCOA Tables
•BRF Revised
•
•AFS Template
•
3 September 2013
• Updated PSD
•
•SQL Database
Publication
•System Specification
•
•Draft Regulations & Tables
SCOA
•Consultation
•Project Summary Document &Standard Terminology
•Minimum Business Process Requirements
•Evaluation of Financial Systems
Change management
SCOA Business process links
System Enhancements &
Updates
Monitoring, Evaluation and
Oversight
Identify shortcomings
Support and Assistance
Maintenance of SCOA
Training
Technical Committee
160
SCOA Publication - Consultation Framework
Informing SCOA Version 5 and final Regulations
• 26 September 2013 – Provincial treasuries, interested national
departments and TCF Working Committee (This committee is also
welcome)
• 3 October 2013 – Consultants, advisors, and professional bodies
• 4 October 2013 – System Vendors
• 7 October 2013 – Metropolitan municipalities
• 8 October to 5 November 2013 – District wide engagements including
all local municipalities (44 engagements)
• 6 to 13 November 2013 – Follow up engagements with the respective
system vendors (one on one sessions with the vendors and respective
identified pilot municipalities
• 2 December 2013 – Conclusion of 90 day comments period
• 4 to 31 December 2013 – Consideration of comments
• JANUARY 2014 – PROMULGATION OF SCOA REGULATIONS
• 1 July 2016 (2016/17) – Implementation date by all municipalities
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Preparation for Piloting: Work in Progress
•
SCOA Business Process Link
–
•
Develop System Specification
–
•
•
SCOA Business Process Link and SQL Database to be used to develop a “system specification” for the
System Implementation
Vendor Evaluation
–
•
To indicate typical transactions (by business process) and how these transactions need to be standards
for classification in the segments
Develop evaluation model to evaluate vendors in meeting “minimum system requirements” and the
“specification for SCOA Implementation
Pilot Site Assistance to Municipality and Developer
–
14 potential pilot sites – all vendors covered with at least “official pilot site” including mapping of
accounts to SCOA. Piloting dependent on specification evaluation
–
Assistance to Developers in the implementation of SCOA and linking to Business Processes and
Modules
Update/Revision to SCOA
162
Identified Potential Pilots
LIST OF POTENTIAL PILOT SITES
Municipality
City of Cape Town
Drakenstein
Ekurhuleni
Nkangala DM
Kareeberg
Kgetlengrivier
Khara Hais
Knysna
uMgungundlovu DM
Overstrand
uMhlathuze
Victor Khanyene
Umvoti
Richmond
Province
Western Cape
Western Cape
Gauteng
Mpumalanga
Northern Cape
North West
Northern Cape
Western Cape
Kwazulu Natal
Western Cape
Kwazulu Natal
Mpumalanga
Kwazulu Natal
Kwazulu Natal
Type
Metro
B1
Metro
C1
B3
B3
B2
B2
C2
B2
B1
B3
B3
B4
Vendor
SAP
BCX
BCX
CICS
None
Vesta
Quill
R Data
Pastel
Bytes
Fijutsu
Sebata
Umfuzela
Fijutsu
System
Own solution
Solar
Venus
Munsoft
Manual/Excel
Phoenix
BIQ
Promun
Pastel Evolution
SAMRAS
Promis
Sebata FMS
Dolphin
Abacus
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Comment Process – What do we require?
•
Submit comments on the Regulations and Tables per email, internet link, post or
hand delivery
•
Sufficient detail, definitions and explanations need to be provided for adding
accounts
•
Do a comparison to the chart of accounts currently used by the municipality and
ensure that accounts are available for all existing postings
•
Provide inputs on matters requiring clarification not sufficiently addressed in the
existing project documents - suggestions/inputs to clarify/refine the definitions
•
Comments required by 2 December 2013 on the prescribed formats
•
DO NOT HESITATE TO FORWARD EMAILS TO CLARIFY MATTERS IF THE
MUNICIPALITY ENGAGED IN A COMPARISON EXERCISE
164
Conclusion
Questions & Answers
165