understanding the classification framework and implication on financial reform
DESCRIPTION
PROBLEM STATEMENT 1 ▪ REGULATIONS AND LEGISLATIVE MANDATES All municipalities must implement SCOA Effective 1 July 2017 local government accountability cycle‘ Recording and classification of municipal budget and financial information at a transaction level 7 Segments Record all financial transactions and data in the applicable segment. May not contain data which is mapped or extrapolatedTRANSCRIPT
Understanding the Classification Framework and implication on financial reform
Who is Invictus▪We are firm managed and owned by Chartered
Accountant.▪We are level 1 – BBBEE ▪We are based in the KwaZulu-Natal, however we work
throughout the country.▪We are experts on Municipal, Provincial and National
Standard Chart of Accounts.▪We have designed all the training material on SCOA
and mSCOA for the National Treasury▪We are an accredited training service provider with
FASSET and PSETA
PROBLEM STATEMENT 1
▪REGULATIONS AND LEGISLATIVE MANDATES
• All municipalities must implement SCOA• Effective 1 July 2017• local government accountability cycle‘• Recording and classification of municipal budget and
financial information at a transaction level• 7 Segments• Record all financial transactions and data in the
applicable segment.• May not contain data which is mapped or extrapolated
TIME IS RUNNING OUT
DAYS HOURS
1 July 2017
632 12
PROBLEM STATEMENT 2
▪Excel based Chart – Not easy to navigate
1 2 3 4 5 6 7 8 9 10 11 12 13
N/a PC 000 000 000 000 000 000 000 000 000 000 000 000 0 No No N/a All Capital usually applies to expenditure of a "long
Capital
N/a PC 001 000 000 000 000 000 000 000 000 000 000 000 0 No No N/a All Projects are classif ied in this category if complying
Infrastructure
N/a PC 001 001 000 000 000 000 000 000 000 000 000 000 0 No Yes Add Project
All Land acquired not part of an infrastructure project.
Land
N/a PC 001 002 000 000 000 000 000 000 000 000 000 000 0 No No N/a All This category is disaggregated into
Existing
N/a PC 001 002 001 000 000 000 000 000 000 000 000 000 0 No No N/a All Rehabilitation and Refurbishment specif ic to
Rehabilitation and Refurbishment
N/a PC 001 002 001 001 000 000 000 000 000 000 000 000 0 No Yes Add Project
All Capital expenditure on existing infrastructure
Airports
N/a PC 001 002 001 002 000 000 000 000 000 000 000 000 0 No No N/a NERSA Capital expenditure on existing infrastructure
Electricity
N/a PC 001 002 001 002 001 000 000 000 000 000 000 000 0 No Yes Add Project
NERSA Capital expenditure on existing infrastructure
Automated/Prepaid Meters
N/a PC 001 002 001 002 002 000 000 000 000 000 000 000 0 No Yes Add Project
NERSA Capital expenditure on existing infrastructure
Buildings, Fixtures and Improvements
N/a PC 001 002 001 002 003 000 000 000 000 000 000 000 0 No Yes Add Project
NERSA Capital expenditure on existing infrastructure
Conventional Meters
N/a PC 001 002 001 002 004 000 000 000 000 000 000 000 0 No Yes Add Project
NERSA Capital expenditure on existing infrastructure
Leasehold Improvements
N/a PC 001 002 001 002 005 000 000 000 000 000 000 000 0 No Yes Add Project
NERSA Capital expenditure on existing infrastructure
Leased Property on Customer Premises
N/a PC 001 002 001 002 006 000 000 000 000 000 000 000 0 No Yes Add Project
NERSA Capital expenditure on existing infrastructure
Other Installation on Customers Premises
N/a PC 001 002 001 002 007 000 000 000 000 000 000 000 0 No Yes Add Project
NERSA Capital expenditure on existing infrastructure
Overhead Conductors and Devices
N/a PC 001 002 001 002 008 000 000 000 000 000 000 000 0 No Yes Add Project
NERSA Capital expenditure on existing infrastructure
Poles, Tow ers and Fixtures
N/a PC 001 002 001 002 009 000 000 000 000 000 000 000 0 No Yes Add Project
NERSA Capital expenditure on existing infrastructure
Storage Battery and Equipment
N/a PC 001 002 001 002 010 000 000 000 000 000 000 000 0 No Yes Add Project
NERSA Capital expenditure on existing infrastructure
Street Lighting and Signal Systems
N/a PC 001 002 001 002 011 000 000 000 000 000 000 000 0 No Yes Add Project
NERSA Capital expenditure on existing infrastructure
System Communication and Control
N/a PC 001 002 001 002 012 000 000 000 000 000 000 000 0 No Yes Add Project
NERSA Capital expenditure on existing infrastructure
Transformer Station Equipment - Normally Primary above 132kv
N/a PC 001 002 001 002 013 000 000 000 000 000 000 000 0 No Yes Add Project
NERSA Capital expenditure on existing infrastructure
Transformer Station Equipment - Normally Primary below 132kv
mSCOA VERSION 5.3 [Released April 2015]
SEGMENT: PROJECTSTANDARD CHART OF ACCOUNTS
113 4 5 6Principle Applicability 8 9 10
REPORTING STRUCTURE
127Pos
VAT
StatCount
Posting Level
(Yes/No)
Breakdow n Allowed (Yes/No)
Code Structure Definitions1 2
1 2 3 4 5 6 7 8 9 10 11 12 13N/a IA 000 000 000 000 000 000 000 000 000 000 000 000 0 No No N/
aAll As
seAssets
N/a IA 001 000 000 000 000 000 000 000 000 000 000 000 0 No No N/a
All Curre
Current Assets
N/a IA 001 001 000 000 000 000 000 000 000 000 000 000 0 No No N/a
All Cash
Cash and Cash Equivalents
N/a IA 001 001 001 000 000 000 000 000 000 000 000 000 0 No No N/a
All This
Cash at Bank
N/a IA 001 001 001 001 000 000 000 000 000 000 000 000 0 No Yes
Add
All This
Bank Account
N/a IA 001 001 001 002 000 000 000 000 000 000 000 000 0 No Yes
Add
All This
Savings Account
N/a IA 001 001 002 000 000 000 000 000 000 000 000 000 0 No No N/a
All Inves
Call Deposits and Investments
N/a IA 001 001 002 001 000 000 000 000 000 000 000 000 0 No Yes
Add
All This
Special Deposit for the Payment of Interest
N/a IA 001 001 002 002 000 000 000 000 000 000 000 000 0 No Yes
Add
All This
Special Deposit for the Payment of Dividend
N/a IA 001 001 002 003 000 000 000 000 000 000 000 000 0 No Yes
Add
All Short-
Demand and Time Loans, Banker's Acceptance
N/a IA 001 001 002 004 000 000 000 000 000 000 000 000 0 No Yes
Add
All Tran
National Government Investment Securities
N/a IA 001 001 002 005 000 000 000 000 000 000 000 000 0 No Yes
Add
All Tran
Marketable Securities
N/a IA 001 001 003 000 000 000 000 000 000 000 000 000 0 No No N/a
All Cash
Cash on Hand
N/a IA 001 001 003 001 000 000 000 000 000 000 000 000 0 Yes
Yes
Add
All Asse
Cashier Floats
N/a IA 001 001 003 002 000 000 000 000 000 000 000 000 0 Yes
Yes
Add
All Cash
Cash in Transit
8 9 11 12104Applic
DEFINI
1 2 5
mSCOA VERSION 5.3 [Released April 2015]
SEGMENT: ITEM - ASSETSSTANDARD CHART OF ACCOUNTS REPORTING STRUCTURE
Posting Level
VAT Code Structure Count
Posting
Breakd
Princi
6 73
GFS 1 2 3 4 5 6 7 8 9 10 111 2 3 4 5 6 7 8 9 10 11 12
N/a
0000 FX 000 000 000 000 000 000 000 000 000 000 0 No No N/a N/a Function is the
Function
N/a
0000 FX 001 000 000 000 000 000 000 000 000 000 0 No No N/a N/a This group
Community and Social Services
N/a
0000FX
001 001 000 000 000 000 000 000 000 000 0 No No N/a N/a Core Functio
Core Function
Non-
0506FX
001 001 001 000 000 000 000 000 000 000 0 Yes Yes Add detail to the sub-
Local Municipality
Including old
Aged Care, Home Assistance and Transport Facilities
Non-
0507FX
001 001 002 000 000 000 000 000 000 000 0 Yes Yes Add detail to the sub-
Local Municipality
Facilities for
Animal Care and Diseases
Stan
0504FX
001 001 003 000 000 000 000 000 000 000 0 Yes Yes Add detail to the sub-
Local Municipality,
Includes all
Cemeteries, Funeral Parlours and Crematoriums
Non-
0505FX
001 001 004 000 000 000 000 000 000 000 0 Yes Yes Add detail to the sub-
Local Municipality
Child Care
Child Care Facilities
Stan
0503FX
001 001 005 000 000 000 000 000 000 000 0 Yes Yes Add detail to the sub-
Local Municipality
Exhibition halls
Community Halls and Facilities
Non-
0501FX
001 001 006 000 000 000 000 000 000 000 0 Yes Yes Add detail to the sub-
Local Municipality
Includes all
Libraries and Archives
Exe
0507FX
001 001 007 000 000 000 000 000 000 000 0 Yes Yes Add detail to the sub-
Local Municipality
Including
Literacy Programmes
Stan
0502FX
001 001 008 000 000 000 000 000 000 000 0 Yes Yes Add detail to the sub-
Local Municipality
Including
Museums and Art Galleries
Stan
0508FX
001 001 009 000 000 000 000 000 000 000 0 Yes Yes Add detail to the sub-
Local Municipality
This functio
Theatres
Stan
0508FX
001 001 010 000 000 000 000 000 000 000 0 Yes Yes Add detail to the sub-
Local Municipality
This functio
Zoo's
Principle Applicability REPORTING STRUCTURE - Version 5.2: COMMENTS UPDATEDDefinitions
STANDARD CHART OF ACCOUNTS
CODE STRUCTUREPostin
VAT In
Count
Posting Level (Yes/No)
Breakdown Allowed (Yes/No)
mSCOA VERSION 5.3 [Released April 2015]
SEGMENT: FUNCTION
1 2 3 4 5 6 7 8 9 10 11 12 13N/a
F 000 000 000 000 000 000 000 000 000 000 000 000 0 No No N/a All Fund
N/a
F 001 000 000 000 000 000 000 000 000 000 000 000 0 No No N/a All Revenue
N/a
F 001 001 000 000 000 000 000 000 000 000 000 000 0 No No N/a All General Revenue
N/a
F 001 001 001 000 000 000 000 000 000 000 000 000 0 Yes No N/a All Disposal of Property, Plant and Equipment
N/a
F 001 001 002 000 000 000 000 000 000 000 000 000 0 No No N/a All Equitable Share
N/a
F 001 001 002 001 000 000 000 000 000 000 000 000 0 Yes No N/a All Administration
N/a
F 001 001 002 002 000 000 000 000 000 000 000 000 0 Yes No N/a All Basic Services
N/a
F 001 001 002 003 000 000 000 000 000 000 000 000 0 Yes No N/a All Community Services
N/a
F 001 001 003 000 000 000 000 000 000 000 000 000 0 Yes No N/a All Fines, Penalties and Forfeits
N/a
F 001 001 004 000 000 000 000 000 000 000 000 000 0 No No N/a All Interest and Dividends
N/a
F 001 001 004 001 000 000 000 000 000 000 000 000 0 No No N/a All Interest
N/a
F 001 001 004 001 001 000 000 000 000 000 000 000 0 Yes No N/a All External Investment
N/a
F 001 001 004 001 002 000 000 000 000 000 000 000 0 Yes No N/a All Outstanding Debtors
N/a
F 001 001 004 002 000 000 000 000 000 000 000 000 0 Yes No N/a All Dividends Received
N/a
F 001 001 005 000 000 000 000 000 000 000 000 000 0 Yes No N/a All Licences and Permits
N/a
F 001 001 006 000 000 000 000 000 000 000 000 000 0 Yes No N/a All Rental of Facilities and Equipment
SEGMENT: FUNDING
8 9
STANDARD CHART OF ACCOUNTS
Account Number
VAT St
Postin
REPORTING STRUCTURE
2 3 4
SCOA FOR MUNICS: VERSION 5.2 [Released November 2014]
1 10 11 12Count
Posting Level
(Yes/No)
Breakdown Allowed (Yes/No)
Principle Application 5 6 7
1 2 3 4 5 6 7 8 9 10 11 12 13
N/a RX000
000
000
000
000
000
000
000
000
000
000
000 0 No No N/a All O/s Regional
N/a RX001
000
000
000
000
000
000
000
000
000
000
000 0 Yes No N/a All
This classifi No Regional Identifier
N/a RX002
000
000
000
000
000
000
000
000
000
000
000 0 No No N/a All
This classifi Regional Identifier
N/a RX002
001
000
000
000
000
000
000
000
000
000
000 0 No No N/a All
Whole country National Functions
N/a002
001
001
000
000
000
000
000
000
000
000
000 0 Yes No N/a All
Whole country Whole Country Domestic
N/a RX002
002
000
000
000
000
000
000
000
000
000
000 0 No No N/a All
Whole of the Provincial Functions
N/a RX002
002
001
000
000
000
000
000
000
000
000
000 0 Yes No N/a All
Whole of the Whole of the Province: Eastern Cape
N/a RX002
002
002
000
000
000
000
000
000
000
000
000 0 Yes No N/a All
Whole of the Whole of the Province: Free State
N/a RX002
002
003
000
000
000
000
000
000
000
000
000 0 Yes No N/a All
Whole of the Whole of the Province: Gauteng
N/a RX002
002
004
000
000
000
000
000
000
000
000
000 0 Yes No N/a All
Whole of the Whole of the Province: Kw azuluNatal
N/a RX002
002
005
000
000
000
000
000
000
000
000
000 0 Yes No N/a All
Whole of the Whole of the Province: Limpopo
N/a RX002
002
006
000
000
000
000
000
000
000
000
000 0 Yes No N/a All
Whole of the Whole of the Province: Mpumalanga
mSCOA VERSION 5.3 [Released April 2015]
SEGMENT: REGIONAL STANDARD CHART OF ACCOUNTS
DefinitionsPosting
LevelVAT
Status
Account NumberCount
Posting Level
(Yes/No)
Breakdown
Allowed (Yes/No)
Principle Applicability
REPORTING STRUCTURE
121 2 3 4 5 6 7 8 9 10 11
1 2 3 4 5 6 7 8 9 10 11 12 13
N/a C 000
000
000
000
000
000
000
000
000
000
000
000
0 No No N/a N/a N/a Costing
N/a C 001 000 000 000 000 000 000 000 000 000 000 000 0 No No Provide detail to
Minimum This group of
Departmental Charges:
N/a C 001 001 000 000 000 000 000 000 000 000 000 000 0 Yes Yes Breakdow n
Minimum Accounting
Accounting
N/a C 001 002 000 000 000 000 000 000 000 000 000 000 0 Yes Yes Breakdow n
Minimum Asset managem
Asset Management
N/a C 001 003 000 000 000 000 000 000 000 000 000 000 0 Yes Yes Breakdow n
Minimum Audit fees
Audit Fees
N/a C 001 004 000 000 000 000 000 000 000 000 000 000 0 Yes Yes Breakdow n
CoC Charges relating
Audits, Investigation and Risks
N/a C 001 005 000 000 000 000 000 000 000 000 000 000 0 Yes Yes Breakdow n
Minimum Budgeting overhead
Budgets
N/a C 001 006 000 000 000 000 000 000 000 000 000 000 0 Yes Yes Breakdow n
Minimum Cleaning services
Cleaning Services
N/a C 001 007 000 000 000 000 000 000 000 000 000 000 0 Yes Yes Breakdow n
CoC Charges for the
Communication, Information and External Relations
N/a C 001 008 000 000 000 000 000 000 000 000 000 000 0 No No Provide detail to
Minimum Charges relating to
Communication
N/a C 001 008 001 000 000 000 000 000 000 000 000 000 0 Yes Yes Breakdow n
Minimum Charges relating to
Information Technology System Application
N/a C 001 008 002 000 000 000 000 000 000 000 000 000 0 Yes Yes Breakdow n
Minimum Charges relating to
Information Technology Data Ware
N/a C 001 008 003 000 000 000 000 000 000 000 000 000 0 Yes Yes Breakdow n
Minimum Charges relating to
Information Technology Data Lines
N/a C 001 008 004 000 000 000 000 000 000 000 000 000 0 Yes Yes Breakdow n
Minimum Charges relating to
Information Technology Radio: Maintenance
N/a C 001 009 000 000 000 000 000 000 000 000 000 000 0 Yes Yes Breakdow n
CoC Contributions /
Cross Subsidisation
N/a C 001 010 000 000 000 000 000 000 000 000 000 000 0 Yes Yes Breakdow n
CoC Charges of the
Democratic Process
N/a C 001 011 000 000 000 000 000 000 000 000 000 000 0 Yes Yes Breakdow n
CoC Charges (e.g.
Directorate
N/a C 001 012 000 000 000 000 000 000 000 000 000 000 0 Yes Yes Breakdow n
Minimum Charges relating to
Employee Benefits
mSCOA VERSION 5.3 [Released April 2015]
SEGMENT: COSTING
Applicability
Definitions
Post
VAT St
Count
Posting Level
(Yes/No)
Breakdown
Allowed
Code StructureSTANDARD CHART OF ACCOUNTS
Principle 121
REPORTING STRUCTURE
7 8 9 10 112 3 4 5 6
What is your way forward▪ Create a mSCOA project steering committee▪ Appoint an mSCOA project champion▪ Understand the municipal current business
processes▪Attend the non accredited training developed by
National Treasury – 44 sessions planned throughout the country from 13 October 2015
▪Match your current chart to mSCOA chart▫ Ask your current vendors▫ Look for alternative products
▪ Do not wait for version releases to start planning and understanding the chart.
▪ Look to your provincial treasuries for guidance