mSCOA Position Paper: Mapping and the use of
short codes, data extraction and mSCOA segment
coding / long code (string)
Presented by National Treasury: Chief Directorate Local Government Budget Analysis | 22 June 2015
Mapping
The Mayor is invited to attend a
SALGA workshop and books an
airplane ticket.
 This was not budgeted for
specifically but he has an
vote under Council and
General for S&T. (This is the
legacy vote number.)
 At month end this
transaction is put through a
program to allocate /
MAPPING …
extrapolate the transaction
to the mSCOA segments.
Based on the description and
certain pre configured
defaults.
 Also manual corrections is
done and virement to align
the budget is required
“Mapping of the mSCOA classification framework to the current general
ledger as informed by the master data table of a financial application does
not fulfil the requirements of the mSCOA Regulation. Municipalities that
adopt this approach in implementing the mSCOA Regulation will be deemed
to be non-compliant to the Regulation”
Item Expenditure:
Operational Cost: Travel and
subsistence: Domestic:
Travel with operator: Air
Transport
Function: Executive and
Council: Core function:
Mayor and Council
Funded: Revenue: Taxes:
Property Rates
Project : Default
Region: Whole of
Municipality
Translation table – Short Codes
The Mayor is invited to attend
a SALGA workshop and books
an airplane ticket.
 This was budgeted for
specifically and has an vote
under Council and General
for S&T / Air travel. (This is
one of thousands of new
vote numbers.)
 At reporting time the other
segments get written into
the Business intelligence
database
 This is a short code and has
a one on one relationship or
lookup table to the mSCOA
segments.
Item Expenditure:
Operational Cost: Travel and
subsistence: Domestic:
Travel with operator: Air
Transport
Short code
Translation …
“A short code is not considered to be a mapping exercise. Short code keys
relate to the specific system setup and consist of “two sets” pointing to
each other. Importantly, a short code key does not function independent of
the overall classification framework and has no value if separated and
there must exist a direct relationship to the long code.”
Function: Executive and
Council: Core function:
Mayor and Council
Funded: Revenue: Taxes:
Property Rates
Project : Default
Region: Whole of
Municipality
Project driven tree structure
The Mayor is invited to attend
a SALGA workshop and books
an airplane ticket.
 This was budgeted for
specifically and is assigned
to a Project.
 The item inside the project
is configured with all the
segments and transaction
is carrying all the segment
detail.
 Importantly the project
choice in not default as it
Vehicle
Municipal
Running
Cost:
Mayor
Office
Rental
Infrastructure
Admin
costs
Projects: Non
Infrastructure:
Operating
Costs:
Transfers
Mayoral
Campaigns
Typical
Work
stream
Functions
and
events
Strategic
Planning:
Workshops
and events
Investment
Properties
Project tree – Long Code or Guid
The Mayor is invited to
attend a SALGA workshop
and books an airplane
ticket.
 This was budgeted for
specifically using the
decision tree to arrive
at all segments and
has a Project.
 At transaction time the
other segments get
written into the
database based on the
configured project.
 Subsequently data and
reporting is effectively
directly accessible.
Item Expenditure:
Operational Cost: Travel and
subsistence: Domestic:
Travel with operator: Air
Transport
mSCOA
segments …
“Compliance to the mSCOA classification framework therefore requires that the
master data tables of all financial systems (applications) be informed by the detail
transactional classification as prescribed by the segments of the mSCOA
Regulation which in turn posts to the general ledger.”
Function: Executive and
Council: Core function:
Mayor and Council
Funded: Revenue: Taxes:
Property Rates
Project : Strategic Planning:
Workshops and events
Region: Whole of
Municipality
Other Considerations
• National Treasury, supported by the mSCOA Regulation requires that transactional detail be recorded by
selecting a classification from each of the seven (six if municipal standard classification is not used) regulated
segments of the mSCOA classification structure. The system may have functionality that drives the subsequent
selections based on parameters or attributes. This selection must inform the posting level within the traditional
general ledger.
• Compliance to the mSCOA classification framework therefore requires that the master data tables of all
financial systems (applications) be informed by the detail transactional classification as prescribed by the
segments of the mSCOA Regulation which in turn posts to the general ledger.
• It is the preference of National Treasury that the fixed account coding structure (long code) be applied
throughout all municipalities and municipal entities in ensuring consistency should the system application be
able to accommodate the account coding.
• The code structure has been developed to provide for sufficient fields and digits for future expansion of the
account codes. Provided this principle is maintained, the “account codes” could far exceed the current
requirements and subsequently could be substantially shortened.
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What does this mean in terms of compliancy to the segments?
Test the budgets allocation based on the chart and the description, If excessive
defaults have been used it will result in only partial compliance.
Mock virement and relocation journals would proof that the municipality is using
the financial year to obtain the full chart.
Transactional testing will entail the re-classification of sample transactions to see if
agreement on the classification on all segments can be achieved.
The outcome if extrapolated will be the probable compliance percentage indicator.
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System Integration – Integrated Systems
TOP SPHERE
Internal BI tools used to
achieve statutory
reporting.
LEFT SPHERE
 On consolidation level sent
transactions and Budgets to
GL.
 Detail group accounts in GL.
Components, GIS, Barcode
and technical drawings
contained here.
 Life cycle management on
assets.
 Individual Debtors get
consolidated to the ledger.
 Ledger consolidation must
be able to extract audit lists.
 360° drill down.
Must balance to control
account
LEFT & TOP
RIGHT & TOP
Investment
Properties rental
recoveries.
Municipal owned
properties valuations
Employee recovery
of service charges.
Note on the
outstanding balances
of councilors
GL
LEFT & RIGHT
Capitalized employee
cost. Activity based
costing to assets.
RIGHT SPHERE
 Consolidated transactions
and budget to GL.
 No control account.
 Has HR functions like leave
and conditions of
employment.
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System Integration – Core financial systems (including bespoke)
and 3rd party integration.
TOP SPHERE
 Individual Debtors get
consolidated to the ledger.
 Must balance to control
account
3rd party Solutions used
to submit statutory
reporting
LEFT SPHERE
 On consolidation level sent
transactions and Budgets to
GL.
 Detail group accounts in GL.
 Components, GIS, Barcode
and technical drawings
contained here.
 Life cycle management on
assets.
LEFT & TOP
RIGHT & TOP
Excel monitoring
(Investment
Properties rental
recoveries.
Municipal owned
properties
valuations)
GL
Exchange csv files to
achieve(Employee
recovery of service
charges.) Note on the
outstanding balances
of councilors manual
compiled in excel.
LEFT & RIGHT
Manual if considered
(Capitalized employee
cost. Activity based
costing to assets.)
RIGHT SPHERE
 Consolidated transactions
and budget to GL.
 Need a control account.
 Has HR functions like leave
and conditions of
employment.
8
What does this mean in terms of compliancy to integration?
If bespoke and 3rd party systems is used test integration on a data level no journals
allowed.
Ensure that the sub-systems also interact with each other.
Ensure that GL has ability to drill or query subsystems.
The outcome will result in final publication of minimum system specification.
10
Data Extraction
LGData
mSCOA GL
After a lot of manipulation
communication data get
loaded onto Cloud
Project
MSC
Traditional TB informing
Mapped IYR,AFS
supported by Excel
IYR
Portal
GRAP /
Traditional GL
Budgets
Function Item
Fund
Region Costing
AFS
Optional
Route via
BI TOOL
GL
Sub
Ledgers
“Data extraction should be done from the mSCOA general ledger. Alternatively business
intelligence engines would be required to extract from both traditional general ledger and subledgers or sub-systems a derived mSCOA general ledger extract.”
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Portal access
House keeping issues
•
The application of the long code for National Treasury purposes need only be until the last non-default portion of the code on
the posting level. The padded zeros may be omitted.
•
The Breakdown allowed should be added from level 10 to 12 as this will allow for expansion of the chart without the
expansion impacting on numbers used by systems.
•
The extraction report for items where breakdown is allowed should carry the short description of those posting levels in the
report extraction.
•
Where the account coding cannot be accommodated at a posting level within the financial systems master data tables
informing the general ledger, it’s an absolute requirement that the prescriptive account coding as contained in the various
mSCOA segments (long code) be embedded in the report extraction.
•
Municipalities are required to ensure that each transaction is budgeted against the mSCOA classification framework at a
posting level from the master data table. There would therefore be perfect alignment between the approved budget at a
posting level and the actual posting of transactions within the general ledger and sub-system or sub-ledgers.
•
The system developer (service provider) may use a methodology to convert the “long code” to a “short code” provided the
“account code (long code)” is retained for reporting purposes and posted while transacting.
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Upload manager system specification - way forward.
• The data extraction is loaded from a system password protected screen only accessible to the CFO’s user
name and password.
• The CFO certify that the submission is correct and ready for upload to the LG database.
• The accounting officer then approved the submission by accessing the system with his user name and
password.
• The data gets encrypted and loaded on the cloud based SQL server.
• Decryption keys get mailed to LGdata from the MM mailbox that then get extracted with the decryption it on
NT’s side.
• The encryption code is proof of sign-off by the accounting officer.
• The email should contain confirmation that this is the final and correct data for the period and that the
encryption code is his signature to this fact.
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Recommendations
The mSCOA Integrated Consultative Forum note:
• This position paper has extensively been work shopped with all role players and
stakeholders (internal to the National Treasury and external stakeholders);
• This position paper has been tabled and approved by both the mSCOA Technical
Working Committee and mSCOA Steering Committee;
• This position paper will be tabled and discussed as part of the formal agenda at the
mSCOA ICF to be hosted on Monday, 22 June 2015;
• That mSCOA ICF members note that they will be offered an opportunity to provide
final comments subsequent to the mSCOA ICF of the 22 June 2015 on the position
paper until the close of business on Monday, 29 June 2015; and
• That subsequent to the close of the comments period the position paper will be
finalised and distributed to all mSCOA ICF members and posted on the National
Treasury website.
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Questions
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