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.

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.

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;

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;

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;

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

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.

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.

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;

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

Excel tool to interrogate data

Excel tool to interrogate data – Project and Functions with Items

Excel tool to interrogate data –Function

Excel tool to interrogate data – Fund align to Function

Excel tool to interrogate data – Costing with Items

THANK YOU