mSCOA : Position Paper – Reporting
(Draft)
Presented by National Treasury: Chief Directorate Local Government Budget Analysis | 22 June 2015
Outline
 Background
 Reporting defined
 Design Principles
– Phase 1: Current Reporting Formats linked to mSCOA
– Phase 2: Revised/Updated/New Reporting Format linked to mSCOA
 What has been done to date, still need to be done
and way forward to finalise
 Still to be addressed:
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–
–
–
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Municipal Entities
Month and Year-end Closure Procedures
General Ledger detail versus “other modules/sub-ledgers”
Materiality and Reporting
Discussion notes on Phase 1 and 2 defined above
Background
 Principles defined in the mSCOA Design Framework:
 Central point of access for all local government information
 Improved data quality and integrity
 Uniform classification framework standardised by classification
framework
 Supported by a modernised system application
 Reporting addresses in the context of mSCOA:
 Day-to-day running of the municipality, e.g. management account,
distribution account, etc
 External reporting to National Treasury, Provincial Treasury, audit
purposes, etc AFS, BRF, IYM, NERSA, DWA
 In the context of mSCOA, limited to financial information.
Background (Continued)
 In the context of mSCOA, limited to financial information.
 End result: various reports in the accountability cycle redefined to support
“seamless alignment of financial information” based on mSCOA
 LG Database update from mSCOA
 Stakeholder consultation on Phase 1 and Phase 2
 Recent meetings with the mSCOA Project Team, interactions with the
Auditor-General of South Africa (AGSA), the Accounting Standards Boards
(ASB) and municipalities identified the need to define the National Treasury
position towards “reporting” in the broad context relevant to local
government.
What is considered to be included in reporting?
 Budget Reporting Formats 2015/16
 In-year Reporting Formats as at 31 March 2015
 Monthly Returns
 Illustrated Financial Statements – OAG Web 20 May 2015
 NERSA Reporting Tables – 2012
 DWA Reporting Tables – December 2013
 Internal reporting needs defined by the municipality
 Still to be addressed: Cities Infrastructure Delivery Management
Systems (CIDMS)
Design Principles: Phase 1: Current Reporting
Formats linked to mSCOA
1. Minimal changes in terminology, layout and presentations
2. Technical Work Group consent on alignment, potential inconsistencies and
“best fits”
3. Seamless alignment in reporting may not be achieved
4. Links to be presented in the mSCOA Tables Version
5. Reports to be tested during pilot site implementation.
6. Annual Financial Statements, Budget Reporting Tables may or may not be
extracted directly from the application.
7. Reporting to external stakeholders, for example NERSA and DWA, need be
linked and aligned in content, layout and format
Design Principles: Phase 1: Current Reporting
Formats linked to mSCOA
8. Reporting format not giving justice mSCOA detail
9. “Single point of access for LG information” - SARB, STATSA, COCTA, etc.
10.Definition of level of detail for the import file proposed to be at an
accumulation of transaction detail at the posting level for all segments in a
predefined reporting file.
11.Posting levels and breakdown allowed redefined [slide to follow] – informed
by detail to be retained in the LG Database.
12.Maintaining the LG Database does not remove governance responsibility
13.Period of Relevance
 Sufficient time lapsed for comparatives to be available without taking
unnecessary risk to make restatements in the annual financial
statements.
 1 July 2015 (pilot site implementation) – Redefining of reporting formats
to take place at a latter stage of the project lifecycle
.
Design Principles: Phase 2: Revised/Updated/New
Reporting Format linked to mSCOA
1. Seamless alignment in Accountability Cycle, NERSA and DWA reporting
2. Justice given to the level of “detail” defined in mSCOA.
3. The accumulated effect of monthly reporting upload with “final year end period”
become the official information hosted in the LGDB.
4. Management compile annual financial statements with the discretion, judgement
and consideration of materiality in the presentation of the annual financial
statements as guided by the Standards of GRAP and advocated by the ASB.
Applying the illustrated financial statements is the decision of management. The
information retained in the LGDB is considered to be “oversight and stakeholder
information” with seamless aligned as described above.
5. The annual financial statements prepared by management are considered to be a
distinctive process for general use by the municipalities’ annual report.
6. Achieving the above in reporting design principles will result in satisfying
compliance to the Standard of GRAP and retaining comparable, similar detail and
comprehensive yet flexible information in the LGDB.
Design Principles: Phase 2: Revised/Updated/New
Reporting Format linked to mSCOA
7. Annual Financial Statements (illustrates with notes), Budget Reporting Tables and
other reports preferably be extracted directly from the application.
8. NERSA and DWA to be linked and aligned in content, layout and format in
consultation with the stakeholder. Customised within the system application for
direct submission to the respective stakeholders.
9. Links to be presented in the mSCOA Tables Version 6 (update allowing some time for
piloting outcomes – November 2016?) to be used with filters to guide on the
appropriate disclosure line in the respective reports or SQL (still to be explored)
10. Report extraction from the application to be tested during pilot site implementation.
11. Period of Relevance:
 sufficient time lapsed for comparatives to be available without taking
unnecessary risk to make restatements in the annual financial statements.
 [1 July 2019 (all municipalities’ life – 2 years after regulated implementation
date)].
What has been done to date, Still need to be done
and way forward to finalise?
Activity
Version 5.4 (final for piloting)
1. BRF. IYM links to be updated.
2. Links for illustrated annual financial statements to
be included
Stakeholder
Involvement
30 June 2015
mSCOA Project Team
mSCOA Work Group
with specific inputs
from OAG
3. Notes made on the “linking of mSCOA” to the
existing reports to be presented and discussed at
the Technical Work Group. Links to be checked
and reviewed.
4. Consultation/Information sharing – comments?
Completion Date
ICF
ASB
AGSA
To be added? What has been done to date, Still
need to be done and way forward to finalise?
Activity
Version 6 (update mid-piloting for going live)
Stakeholder Involvement
1. Discussion documents to be completed
considering disclosure requirements
2. Preparation Work: Updates and suggestions on
revision of reports to achieve seamless alignment.
3. Consultation: Issue revised formats for comments, ICF
workshops, consultation and consent
PT’s and non-delegated
municipalities
NT Directorates and delegated
municipalities
ASB
4. Revision: Update changes proposed and re-issue
for comments
ICF
PT’s and non-delegated
municipalities
NT Directorates and delegated
municipalities
ASB
5. Testing of Reports
6. Submission for Approval to the mSCOA Technical
Committee
Pilot Municipalities
mSCOA Technical Committee
Completion Date
30 November 2016
Breakdown and Posting Level redefined Version 5.4
General Rules:
Rule 1: Accounts/information to be added for retaining in the LG
DB unique to each municipality. Detail maybe extracted from
other source provided all mSCOA segment detail captured per
transaction
•
•
Posting Level - No
Breakdown - Yes
Rule 2: Information for LG DB standardised – nothing to be
populated. Municipality to add detail at own discretion/use
•
•
Posting Level - Yes
Breakdown - No
These rules to be consistently applied through all segments.
Questions
13