Effective mSCOA Data Segmentation and Testing Guidelines

mSCOA SEGMENTATION and the TESTING OF YOUR DATA Presented by: National Treasury

Background Previously no validation was done with the use of Items to the various cost centres; Funding for transactions were not clearly defined and mainly combined into one source of funding; Budgeting on mSCOA should be at an advanced stage and in the FULL mSCOA segments. 2 2

What should we look for Project segment is directly aligned to the IDP Capital and Operating; Function segment implemented fully; Item segment correctly used, and correctly aligned to the other segments; Funding segment used at lowest level of the chart; Region segment utilised and not all done for whole of the municipality; Costing done at the municipality; General rules. 3 3

Rules Project Segment Both Capital and Operational projects must be used; Capital projects can only have Item: Assets; Operation projects can only have Item: Expenditure; Default projects are for Revenue and non-cash transactions; Default projects may NOT have Item: Expenditure and Assets; Municipal running cost is only for the items required for the organisation to function, and not for any services that the municipality renders; Typical work streams must be utilised fully in the municipality; Repairs and Maintenance must be broken down to lowest project; Travel subsistence must be broken down to individual trips/seminars/workshops; Revenue forgone and cost of revenue projects must be used; 4 4

Rules Function segment Function segment must be used to the full extend; Remuneration of Councillors can only be against Function: Mayor and Council; Items generally specific for one function can only be against that function: Bulk purchase electricity => Function: Electricity; 5 5

Rules Item segment(s) Salaries for management must be specified as per chart; Councillors remuneration must be specified as per chart; Revenue items must be against the relevant Function: Refuse Removal Fees => Function: Waste; Travel and Subsistence items must be broken down; Revenue forgone must have the correct segmentation; 6 6

Rules Fund segment Services should fund themselves Align Funding to the Function segment; Equitable share must be broken down per item on the posting level; Grant funding should balance; Non-funding transactions will be investigated and cannot be used as default 7 7

Rules Region segment Correct use of Region for the specific municipality; Use of head office and whole of municipality inline with actual expenditure; Revenue per ward; Capital projects per ward. 8 8

Rules Costing segment Costing segment must be used other than Default; Default Costing may NOT have default expenditure or revenue; Charges and Recoveries should balance. 9 9

Rules General Posting level; Use of all six segments; Projects must contain the GUID extensions; Trial balance must balance; BS and I&E must balance; Budgeting must be on BS accounts; 10 10

Excel tool to interrogate data - How Text file containing the mSCOA chart Text file submitted to the LG Upload Portal TABB or ORGB Create pivot tables to extract relevant information 11 11

Excel tool to interrogate data MUNICIPALITY: WC044 PERIOD: 2016 TYPE: M07 ? BALANCE SHEET ? THESE TWO GRAND TOTALS SHOULD BE THE SAME EXCEPT SIGN TB - MUST BE ZERO SMALL DIFFERENCE = ROUNDING STATEMENT OF FINANCIAL POSITION STATEMENT OF FINANCIAL PERFORMANCE TRIAL BALANCE There must NOT be any items called (blank). (blank) means that the wrong version of the chart is being used.Change the version and "Refresh All". Name Year Type (All) (All) (All) Name Year Type (All) (All) (All) Name Year Type (All) (All) (All) Row Labels Assets Current Assets Non-current Assets Liabilities Current Liabilities Non-current Liabilities Gains and Losses Disposal of Fixed and Intangible Assets Property Plant and Equipment Biological Assets Grand Total Sum of Amount Row Labels ITEM EXPENSE ITEM REVENUE Grand Total Sum of Amount 305,549,012 295,413,321 10,135,691 -279,117,884 -278,248,539 -869,345 106,902,889 -133,333,690 -26,430,801 Row Labels Assets Expenditure Gains and Losses Liabilities Revenue Grand Total Sum of Amount 305,549,012 106,902,889 -404 -404 -404 -350 -54 -279,117,884 -133,333,690 -77 26,430,724 12 12

Excel tool to interrogate data Project and Functions with Items Amount Row Labels Capital Default Transactions Operational Events and Organisations Mayor and Council Artists and Performers Gender Development Literacy Programmes Event Promoters Municipal Running Cost Pollution Control Laboratory Services Standard Rated Sport Development and Sponsorships (Internal) Youth Development Literacy Programmes Event Promoters Valuation Interns Compensation Social Development Programme (Welfare) Housing Projects Project Unplanned Ward Initiatives Budget and Treasury Office Child Programmes Pump Station Mechanical Works Drinking Water Quality Indigent and Cultural Management and Services Column Labels Assets Expenditure Gains and Losses Liabilities Revenue 11,202,647 294,346,365 905,362 -404 -279,117,884 -12,787,534 -120,546,156 105,997,527 37,008 37,008 37,008 15,663 15,663 15,663 93,452,059 42,765 42,765 42,765 -120,546,156 3,477 5,686 5,686 5,686 32,469 21,094 4,149 686,888 407,045 10,341,978 4,396 70,582 15,749 402,670 8,951 444,898 13 13

Excel tool to interrogate data Function Amount Row Labels Bad Debts Written Off Bulk Purchases Electricity Electricity Contra Accounts Contracted Services Current Assets Current Liabilities Default Depreciation and Amortisation Employee Related Cost Exchange Revenue Interest Dividends and Rent on Land Inventory Consumed Non-current Assets Non-current Liabilities Non-exchange Revenue Operating Leases Operational Cost Remuneration of Councillors Designation Mayor and Council Column Labels Assets Expenditure Gains and Losses Liabilities Revenue 513,669 28,202,302 12,054,232 23,149,122 294,912,419 -258,507,613 11,386,805 -3,429 31,937,120 -8,036,151 -116,623,706 545,554 3,817,100 8,760,377 -869,345 -20,727,828 249,690 3,853,106 1,882,428 14 14

Excel tool to interrogate data Fund align to Function Amount Row Labels Borrowing Cash Backed Reserves Revenue General Revenue Municipal Services Electricity Electricity Electricity Other (less material sources) Waste Waste Sewerage Solid Waste Disposal (Landfill Sites) Solid Waste Removal Street Cleaning Waste Water Column Labels Assets Expenditure Gains and Losses Liabilities Revenue 2,530,896 1,720,412 869,345 2,784,538 24,318 1,162,220 33,230,831 -72,822,921 33,230,831 -72,822,921 -4,458,918 -36,905 1,368,275 -26 17,323 266,178 1,084,800 6,127,350 -36,905 -7,583,963 15 15

Excel tool to interrogate data Costing with Items Amount Row Labels Charges Electricity Consumption Default Prepaid Operating Refuse Removal Sanitation Charges Water Consumption Recoveries Default Electricity Consumption Default Operating Refuse Removal Sanitation Charges Procurement Grand Total Column Labels Assets Expenditure Gains and Losses Liabilities Revenue 11,386,805 -42,508,446 1,504,167 -42,508,446 7,247,203 76,957 206,677 2,351,801 95,516,084 95,516,084 305,549,012 305,549,012 -404 -404 -279,117,884 -279,117,884 -90,825,244 -83,480,193 -5,500 -7,247,203 -36,905 -54,748 -695 305,549,012 106,902,889 -404 -279,117,884 -133,333,690 16 16

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