SCOA INTEGRATED CONSULTATIVE FORUM MUNICIPAL REGULATIONS ON SCOA PHASE IV CHANGE MANAGEMENT AND PILOTING Frequently Asked Question Presented by National Treasury: Chief Directorate Local Government Budget Analysis – 2 December 2014 1
• Frequently Asked Question: Summary to Date Number of Queries Status 3 FAQ O/s 316 ICF 3 79 ICF 3 - Function 28 Information O/s 35 O/s Research 47 Resolved 508 Total Queries Since Regulation 2
• Frequently Asked Question: Received From • Knysna Municipality • SAMRAS • Sebata • Buffalo City Municipality • PASTEL • Elias Motsoaledi Municipality • Munsoft • Hesseque Municipality • Ethos • Msunduzi Municipality • Invictus • Senqu Municipality • Mabesko Africa • Sol Plaatjie Municipality • Nkangala District Municipality • Witzenberg • Sarah Baartman District Municipality • City of Johannesburg • Tlokwe District Municipality • City of Cape Town • Ugu District Municipality • Department of Finance: Mpumalanga • City of Tshwane • Provincial Treasury: Western Cape • Nelson Mandela Bay Metros • Provincial Treasury: Kwazulu-Natal • 3
• Frequently Asked Question Number Matter Response 7 Assistance to the Poor Position Paper pending • Cost of Free basic Services Some aspects out of the scope • Revenue Foregone Change Management: • Capacity 2 FMIP II will make support available to Provincial Treasuries • Circular 57 Discussed: Introduction to Day 1 of ICF 3 1 • Use of Consultants At the discretion of the Municipality/Vendor 1 • Funding 7 Discussed: Introduction to Day 1 of ICF 3 • GRAP vs SCOA 1 GRAP one of many consideration. Reporting Requirement informed by SCOA Classification • Project Steering Committee Accounting Services, Local Government Budget Analysis and 1 Public Finance – any other Units on Invitation Supported by: SCOA Technical Work Group [NT Internal] • Risk Management 2 Discussed: Risk Matrix Statistics to Date Day 1 of ICF 3 • SCOA Technical Committee Ensconced in the SCOA Regulation. [Not constituted as yet] 1 • System Readiness 8 Risk overseen by National Treasury – Functional compliance 4 • Timelines 1 Unrealistic – only if preparation work are not done in advance
• Frequently Asked Question Number Matter Response Change Management (Continue...) • Training 6 Demystifying SCOA 3-day session by mid 2015 code to be defined by system developers – if need to 3 Code Structure X Vote structure – consisting of “string made up of selections from segments” not supported in the context of a flat structure Selection based on descriptions 10 Control, Interface and Detail provided added if appropriate or linked to existing accounts Clearing Accounts Principle: See General Ledger Detail Position Paper [ICF4] Need: Definition, Explanation and Typical Transactions See Costing Segment for internal charges, departmental 5 Costing charges and activity based recoveries. Current Assets • Property Rates - Impairment See for example: Current Assets: Receivables from Non- 2 exchange Transactions - Property Rates: Communal Land - Business and Commercial: Impairment [Added Version 5.2] 5 • Receivables from Non- 1 Added Version 5.2: Fines and Penalties, for example traffic exchange Transactions fines • • • – – • •
• Frequently Asked Question Number Matter Response Expenditure • Operating Grant Expenditure Project and Item Segment Detail 6 • General Expenditure 2 X No General/Other/Sundry/Miscellaneous Specific • Recoveries of Cost 1 Set-off against expenditure • Depreciation and X Community Assets = by Function 1 Amortisation • Expenditure vs Project 1 For example: Training, Operational Projects, • Bulk Purchase 1 Water – See Inventory [Water Balance Reporting – see MFMA Circular 70 and Position Paper to be developed] • Consumables Inventory [direct purchased included] 1 Contracted Services: • Travel Agency Fees Operational Cost 1 • Prepaid Water 1 Added Version 5.2 • Grave Building 1 Outsourced Services: Burial Services • Council Remuneration Structure to be “replicated” 1 6
• Frequently Asked Question Number Matter Response Expenditure • Employee Related Cost Structure to be “replicated” 2 • Contribution to Provisions: Expenditure: Operational Cost - Contribution to Provisions: 1 Decommissioning Cost Rehabilitation of Landfill Sites" • Travel and Subsistence 1 Councillor vs Staff – function to make this distinction Fixed and Intangible Assets • Community Assets 1 Applied “nature” rather than “function” • Machinery and Equipment 1 More detail? • Transport Assets See Version 5.2 update to PSD for detail table [Jan 2015] Funding Segment Added Version 5.2 – unbundling – see summary Equitable Share 1 Various matter raised and opinions provided 62 General Ledger (1 Vendor) Position Paper to follow – detail remain! Employee Benefits Questions dealt with in Position Paper 20 Transfers and Subsidies Detail checked/added in Version 5.2 27 7
• Frequently Asked Question Number Matter Response • Definitions 11 SCOA Tables • Descriptions changes • Code Changes • Structure - limited Account to be added: Expenditure: Interest, Dividends and 1 Expenditure: Interest, Rent on Land - Unamortised Discount Dividends and Rent on Land 5 Reserves and Funds Various request – Position Paper – Changes Version 5.3 Non-current Liabilities/Current Liabilities 1 Provision Alien Vegetation Add Version 5.3 1 Non-piloting Project Plan Discussion included in Training Material 15 Project Detail – Project and Item Segment Maintenance and Repair In-house – Costing Segment [Cost Allocation] Principle accepted for piloting phase Temporary Project Various request for Project Provided – no changes made Regional Identifier Wards based – flexible to provide for regions/service areas 8 6 Provide detail – National Treasury to add
• Frequently Asked Question Number Matter Response Revenue Add Insurance Claims [Version 5.3] • Other Interest Exchange Revenue: Interest, Dividend and Rent on Land 5 - Interest: Receivables - Merchandising, Jobbing and Contracts • Exchange vs non-exchange 10 Various comments received – check with preparation of reporting tables • Sundries/General/Other 2 Need to be specific • Clarification 8 Various request for linking accounts • Serviced Charges: 1 Added Version 5.2 Water/Waste Water - Connection/Reconnection Provide for alternative 1 NERSA - Detail Ridiculous NERSA to get municipalities to comply Detail for DORA updated – see Fund and Item 33 Transfers and Subsidies 7 Water Balance Reporting MFMA Circular 70 Position Paper to be developed 9
• Frequently Asked Question Thank you for the requests See Table to be placed on Web for detail 10
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