TOPICeolstoragewe.blob.core.windows.net/wm-5… · PPT file · Web view · 2018-03-05The three...

CIGFARO Women In Public Sector Seminar

Governance Structures and How they Relate to/With mSCOA

Date: 01 March 2018

CONTENTo Recap on mSCOA?

o mSCOA Implementation in Local

Government

o mSCOA Segments

o mSCOA Budgeting Process

mSCOA PRESENTATION OVERVIEW

mSCOA Project

ProvidesStructure of

Govt Accounts

Affect all Departments

within the Municipality

Standard Financial

Classification Framework

Budgets and Reports (using 7 mSCOA

Segments)

Go-Live Date

1 July 2017

Business Transformati

on Project

What is mSCOA?

mSCOA Implementation:

mSCOA a Business Reform Project

mSCOA is not a finance reform project it involves

everyone in the municipality

• mSCOA is an organizational transformation project that has a

fundamental impact on all operations of the municipality in the areas of:

Planning - Linking of Projects to IDP, MTREF and SDBIP

Business Processes – Business processes must be supported in the

financial management system which is mSCOA aligned. The link

between systems, standard operating procedures (SOPs) and internal

controls is very crucial with the business processes.

Financial Management & Reporting – will the system successfully be

able to run the transactions using seven (7) mSCOA segments and

able to produce the relevant reports

mSCOA Implementation


mSCOA Implementation Responsibility

The responsibility for implementation of mSCOA

project rest with the Management of the municipality

and not the systems service provider.

National Treasury / Provincial Treasury

Successful Implementation of mSCOA Project at the Municipality

Service Provider: mSCOA Implementation Team

SP: mSCOA SpecialistsSP: System Expert Support

SP Project Management Office

Municipal mSCOA Project Implementation Team

Municipal Project ExpertsmSCOA Workstream Leads

Municipal mSCOA Project Governance Structure


mSCOA PSC

mSCOA Project Manager

Municipal mSCOA Project

Implementation Team

mSCOA Project

Implementation Plan

CCG Systems Project

Implementation Leads

Enable Environment for Successful



Team

Establish & Implement Work Stream Charters

Establish & Implement Business

Processes Implementation Plan

mSCOA Change

Management & Transition Team

Establish & Implement Change

Management & Transition Plan

Municipal mSCOA Change

Management Team


Change Management

Change Management is the key to smooth and successful

implementation of mSCOA project

o Creating awareness for change

o Ensure positive participation by all municipal officials

o Acquiring of knowledge and skill on mSCOA

o Application of knowledge and skills acquired from training

o Sustaining mSCOA as Business-As-Usual (BAU) Process

o Awareness campaigns

o Buy-in

o Training

o Practice

o Embedment

Change Management: Factors that Brings Successful Change

o Information to be shared with employees wrt the

necessity of change within the organization and the

expected result thereof

o Actions and directions to be taken by leadership to

realize the desired change

o Addresses the knowledge and skills gap of employees

realized during change process

o Communication plan

o Operational plan

o Training plan

Change Management Strategy

o Leadership engaging with employees for direction

and support during change process.

o Captures approaches to proactively and reactively

respond to threats of resistance when it occurs

during change. (e.g. What kind of resistance are

we likely to experience? Where is the resistance

likely to come from? Etc.)

o Coaching plan

o Resistance management plan

•

Change Management Strategy

Four (4) Phases of Change Management


mSCOA Work Streams & Business Processes

mSCOA work streams are the foundation and provide structure iro

the implementation of mSCOA project

Corporate Governance Municipal

Budgeting

Financial Accounting

Costing & Reporting

Project Accounting

Cash Manageme

nt

Procurement Cycle

Grant Manageme

nt

Assets Life Cycle

Management

Real Estate & Resource Manageme

nt

HR & Payroll

Customer Care, Credit

Control

Valuation Roll

Management

Land Use Manageme

nt

Revenue Cycle

mSCOAImplementation

Governance Structure IT

Infrastructure &

Networks

Conversion of Current Votes to mSCOA

Segments

Planning

Data Cleansing

Document Manageme

nt

HR&

Payroll

Core System &

Subsystems

Real Estate, Land Use &

Grant Manageme

nt

Business Processes

Work Streams

•Recommended as the 1st workstream to be activated as it starts the municipal accountability cycle iro:

• Strategic Planning (IDP)• Budget (MTREF)• Operational Plans (SDBIP)• In-Year Monitoring• Review of IDP and budget policies

Planning

mSCOA Workstreams

AnnualFinancialStatements

IDP

Budget

SDBIP

In-year reporting

Annual report

Five-year strategy

Three-year budget

Annual implementation plan

• Organisational structure aligned to basic services• Sound municipal policies, processes and procedures • Standard chart of accounts for municipalities

Implementation monitoring

Accountability reporting

Oversight report

Accuracy of information depends on:

Municipal Planning & Accountability Cycle

• PSC should consist of MM & HODs• Provide a strategic direction to the project• Project ownership, sponsorship & oversight• Ensure that the entire organization

understands mSCOA regulations and activate project implementation plans

• Reporting and consulting with internal & external stakeholders

• Ensure that the deadline of 1 July 2017 is met

• Convene PSC meetings at least once a month

Project Governance Structure

mSCOA Workstreams

• mSCOA regulations dictates that there should be a centralized entry point for transactions and web enabled environment

• Strong network to run the latest technologies used by the Municipality

• WS responsible for assessment of IT infrastructure

• Upgrading of IT infrastructure and networks

• Compile and/or updating of the IT policy• Monitor IT policies, manage user access

controls and IT infratructure

IT Infrastructure & Networks

mSCOA Workstreams

• Physical verification of current line items with those provided for by National Treasury using mSCOA Version 6.1 segments

Conversion of Current Votes to

mSCOA Segments

mSCOA Workstreams

• Municipality must fully comply with and maintain HR & Payroll Elements (e.g. Org Structure, Job Description, Job Evaluation, Leave Management, Wage Agreements, etc.)

• This work stream contains data that has valuable information for budgeting & long term financial modelling of the municipality

• Compile and/or update the all HR & Payroll policies and the monitoring thereof

• All policies must be updated and data cleansing completed prior to the implementation of HR & Payroll module

HR & Payroll

mSCOA Workstreams

• Data must be valid, accurate and complete prior to being migrated to the mSCOA database

• Data in Supplier Database, HR Records, Valuation Roll, Assets Data, Debtors Data, Property Zoning, Clearing of Suspense Accounts

• Work in this work stream is of a continuous in nature

• Municipality must have standard operating procedures that deals with continuous data cleansing in all its departments.

Data Cleansing

mSCOA Workstreams

• Responsible for the ICT Due Dillingence exercise

• Core System & Sub-Systems must allow for the capturing and collection of data using 7 mSCOA segments

• PSC need to scrutinize the technology and processes as the mSCOA database from payroll, billing, inventory, supply chain & assets are locked down in this work stream

• Implementation of recommendations from the ICT Due Diligence should be implemented in the current financial year

Core Systems & Sub-Systems

mSCOA Workstreams

• Ensures that spatial and urban policy usage are considered using the Spatial Planning & Land Use Management Act (SPLUMA)

• Grant Reporting & Management of grant related projects are core to this work stream

• Ensure that all tariffs types are identified• All properties must be aligned to Regional

Segments and are legally identifiable• Policies are developed and/or revised and

data cleansing is executed

Real Estate, Land Management &

Grant Management

mSCOA Workstreams

• Involves the centralization of all documents in the Municipality using the document management system

• Involves clustering of electronic information to a work area or workflow

• Source a suitable document management system

• Compile and/or update policies pertaining document management

Document Management

mSCOA Workstreams

• The municipality should appoint personnel who are

knowledgeable on the subject matter to lead and implement

mSCOA work streams.

• A charter must be developed for each mSCOA work stream

and the responsibilities contained in the charter must be

incorporated in the work plans/performance agreements of

the persons responsible for its implementation

mSCOA Workstreams


mSCOA Segments

Municipality must use ALL seven (7) mSCOA segments

to create an account

Example: Procurement of Chemicals

Account: Water / Materials & Supplies / Water Management/ Operational

Revenue / Default / Whole of Municipality / Technical Services

BudgetingTransactingReporting

Project

Item

Function

FundingRegional Indentifier

Costing

MSC

mSCOA Segments

Budgeting TransactingReporting

Project

Function

Municipal Standard

Classification

ItemFund

Regional

Costing

Project segmentAll expenses need to be allocated to an appropriate project depending on the nature and objective of the expenditure.

There are 3 main categories for projects being:

• Capital• Operational • Default

The Project Segments

At the highest level, capital projects distinguish between infrastructure and non-infrastructure projects.

Both infrastructure and non-infrastructure projects cater for new and existing capital assets.

Existing assets could either be renewed or upgraded.

Capital Projects

The Project Segment Overview

UPGRADINGThe replacement of an

asset or addition/replacement of

an asset component, which materially improves

the original service potential of the asset

RENEWALRenewal implies that the

asset is restored to its original condition,

enhancing the capacity and value of an existing asset that has become inoperative due to the

deterioration of the asset

VS


Operational projects refers to current and short-term projects for which the cost is “immediately recognised as an expense and funded from the municipality’s operational budget”.At the highest-level, a distinction is made between

• Maintenance• Municipal running costs• Typical work streams• Infrastructure and • Non infrastructure projects

Operational


PreventativeInterval:

Maintenance carried out at regular

intervals

Conditional: Maintenance carried out based on certain conditional criteria

CorrectivePlanned:

Maintenance that was budgeted and

planned for

Emergency: Unplanned

expenditure to restore the function

of an asset

Maintenance Projects


The default classification is used to classify transactions

that are not related to expenditure (with the exception

of current assets). Default projects include:

• revenue

• current assets (excluding capitalised expenditure)

• gains and losses

• liabilities and

• net assets

Default


Item Segment

Classifying municipal budgets and daily transactions is currently done using an “item”, which directly relates to the item segment in mSCOA.


Project

Function

Municipal Standard

Classification

ItemFund

Regional

Costing

The Item Segment

• Item Assets

• Item Liabilities

• Item Revenue

• Item Expenditure

• Item Gains and Losses

• Item Net Assets

Item

The Item Segment Overview

Function segment

The “Function Segment” relates to the objective of the spend and not who spent the money.


Project

Function

Municipal Standard

Classification

ItemFund

Regional

Costing

The Function Segment

Core Functions

These are functions performed by local government and constitutionally assigned to local government in terms of sections 156 (1) of the Constitution, Part B of Schedule 4 and Part B of Schedule 5.

Function

Core Non-core

Non-core Functions

Functions performed by local government that are constitutionally assigned to provincial government in terms of section 156(4) of the Constitution. Local Government are compensated for delivering these functions on behalf of provincial government and typically receive a management fee from the provincial department.

The Function Segment Overview

Funding segmentThe funding segment was introduced to reflect the source of funding for both revenue and expenditure and facilitates cash flow.

It is important that municipalities budget for the accurate spending of their revenue and other funding as well as accurately identify the source of their revenue.

The Funding Segment


Project

Function

Municipal Standard

Classification

ItemFund

Regional

Costing

The subcategories of “Capital Fund” are

• Revenue• Transfers and Subsidies• Borrowing

CAPI

TAL

FUN

DIN

G


The subcategories of “Operational Fund” are

• Transfer from Operational Revenue• Transfers and Subsidies• Borrowing• Cash Backed Reserves

OPE

RATI

ON

AL F

UN

DIN

G


This sub-category relates to any transaction that

does not have a specific funding implication, such

as the accounting for depreciation, impairments

etc.DEFA

ULT


Regional Identifier Segment

The purpose of the region segment is

to identify which geographical area the

funds are coming from and which

geographical area the funds are being

spent in.

Which region is benefiting from the expenditure?


Project

Function

Municipal Standard

Classification

ItemFund

Regional

Costing

The Regional Identifier Segment

Costing segment

The costing segment is used for secondary transactions, for the reallocation of expenditure between functions.

The three costing methods• Activity Based Costing• Internal Billing• Departmental Charges


Project

Function

Municipal Standard

Classification

ItemFund

Regional

Costing

The Costing Segment

Charges are debited to the receiving

department or the department that is getting the benefit of the expenditure (e.g. Audit Fees)

Recoveries are

credited to the

sending

department that

carried the full

primary cost before

allocating or costing

out the expense

All primary

transactions are

allocated to default

The Costing Segment Overview

Departmental

Allocation of overheads from a cost pool used by multiple functions. (e.g. IT Services)


Internal Billing

This refers to departmental use of internal services such as electricity, water, waste water management and waste management.


Activity Based

Actual allocation of resources (usage or benefit method) used by various departments.


Primary Transaction

A direct cost (primary transactions) is one that can be specifically

related to a particular service, function or activity based on actual

consumption.

Secondary Transaction

Indirect costs (secondary transactions) are those which are not

directly attributable to the output and are often referred to as

overheads.



mSCOA Training

No Training Intervention

1 mSCOA & Budgets

2 Performance Management

3 Basic Accounting

4 Audit & Risk

5 MPRA

6 Reporting & Comparatives

7 Mass Appraisal Techniques

8 Supply Chain Management

9 GIS Property Management

10 Revenue Management

11 Assets Management

CIGFARO mSCOA Training

mSCOA Budgeting Process

Municipal Systems Act, 2000

Adoption of IDPs

25. (1) Each municipal council must, within a prescribed period after the start of its

elected term, adopt a single, inclusive and strategic plan for the development of the

municipality which:

(a) links, integrates and co-ordinates plans and takes into account proposals for the

development of the municipality;

(b) aligns the resources and capacity of the municipality with the implementation of the

plan;

(c) forms the policy framework and general basis on which annual budgets must be

based;”

,

Legislative framework that enable financial management

MFMA, 2003

Budget preparation process

21. (1) The mayor of a municipality must –

(a) co-ordinate the processes for preparing the annual budget and for reviewing the

municipality’s integrated development plan and budget-related policies to ensure that

the tabled budget and any revisions of the integrated development plan and budget-

related policies are mutually consistent and credible;”


Municipal Regulations on a Standard Chart of Accounts, 2014

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) are 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) enable 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.”


Capital & Operational

Projects

Unpack the IDP

Review Medium Term

Budget (Typical

Workstream Projects)

Identify Projects in Trial Balance

(MRC & Maintenance

Projects)

Identifying Projects

Project No/Period/Ref No

Key Performance Area

Service Delivery Objective

Key Performance Indicator

Project Description/NamemSCOA Project

Segment

mSCOA Item Segment

mSCOA Function

mSCOA Funding Segment

mSCOA Regional Identifier

mSCOA Costing Segment

mSCOA MSC Segment

mSCOA Planning &

Budgeting Tool

IDP

mSCOA Segments

Medium Term Budget

Project Total Cost

Budget Year

1

Budget Year

2

Budget Year

3

58

CONCLUSION• TOGETHER WE CAN DO IT FOR OUR BEAUTIFUL COUNTRY…

TOPICeolstoragewe.blob.core.windows.net/wm-5… · PPT file · Web view · 2018-03-05The three...

Documents

Transcript of TOPICeolstoragewe.blob.core.windows.net/wm-5… · PPT file · Web view · 2018-03-05The three...