mSCOA ICF – 22 June 2015 Opening remarks and setting the scene Presented by National Treasury: Chief Directorate Local Government Budget Analysis: Carl Stroud |– 22 June 2015

Agenda (1) National Treasury 22 June 2015 Agenda Item Time Topic Presenter mSCOA FAQ Database – Tool 10:30 – 10:50 Functional improvements NT mSCOA Project Team (Carl Stroud / André Bossert) mSCOA and the AGSA 10:50 – 11:20 AGSA mSCOA Position Auditor General 11:20 – 11:30 Discussion Data Extraction 11:30 – 11:45 Data extraction methodology NT mSCOA Project Team (André Bossert) 11:45 – 12:00 Reporting 12:00 – 12:30 Alignment of the LG Accountability Cycle NT mSCOA Project Team (Johanna Steyn / Carl Stroud) 12:30 – 12:45 12:45 to 13:30 Lunch National Treasury

Agenda (2) National Treasury Training Strategy 13:30 – 13:50 Training strategy and way forward NT mSCOA Project Team (Ajay Daya) 13:50 – 14:00 Discussion Change Management Strategy 14:00 – 14:20 Provincial treasuries and support of non- piloting municipalities NT mSCOA Project Team (Silma Koekemoer) Assessment of system functionality 14:20 – 14:50 NT position on system functionality in support of mSCOA classification framework and readiness for piloting (André Bossert) 14:50 – 15:00 15:00 to 15:20 Tea Break National Treasury

Agenda (3) National Treasury Migration to the mSCOA 15:20 – 15:40 Lessons learnt with the migration to the mSCOA classification framework Nkangala District Municipality (Alice Stander – CFO) Assets and the project segment 15:40 – 16:00 Project segment and importance of asset classification – Impact on classification and mSCOA i@consulting (Louis Boshoff – MD) 16:00 – 16:10 Discussion LG Database 16:10 – 16:20 Current functionality of the LG Database and statistical reporting NT mSCOA Project Team (Elsabé Rossouw) 16:20 – 16:30 mSCOA Version 5.3 16:30 – 16:50 Changes to the mSCOA classification framework – Segments NT mSCOA Project Team (Johanna Steyn / Carl Stroud) 16:50 – 17:00 mSCOA Project Phase 4 17:00 – 17:30 Critical path NT mSCOA Project Team (Carl Stroud) 17:30 – 17:45 Closure 17:45 to 18:00 National Treasury

mSCOA Roadmap…The road already travelled and the way forward: Recap

mSCOA Project Phases: The journey to the checkered flag… Kick off engagements with municipalities, vendors and other stakeholders Regulation issued and commissioning of mSCOA Project Phase 4: Change management and piloting including identification of pilots Piloting commencement with 9 pilot municipalities (local and districts) and 4 Metro’s (City of Cape Town, Ekuruleni, Mangaung and Buffalo City) – Phased over 2015/16 and 2016/17) 2010 2011 2014 Vendors were briefed as to development of mSCOA and initial evaluations of system functionality. 2015 Ensuring that piloting municipalities and system functionality is aligned to the compliance requirements of the Regulation will create an enabling environment for the roll out to non-piloting municipalities Remaining metro’s to implement (pilot) mSCOA and project initiation for the non-piloting municipalities 2017 2016 278 municipalities fully mSCOA compliant

mSCOA Misconceptions

Common misconceptions…and miscommunication by stakeholders GRAP versus mSCOA classification framework…mSCOA not GRAP compliant is a total misconception Materiality and the fact that mSCOA is prescriptive in this regard…each municipality is responsible for the determination and application of their own accounting policies Annual financial statements and the application of function versus nature…Function Segment covers disclosure of function and item covers disclosure of nature mSCOA has been designed to the requirements of a specific stakeholder i.e. metropolitan municipalities…mSCOA has been designed for all municipalities and the grid structure across the Segments provides for this differentiation The Project Segment is limited to Capital Projects…The Project Segment is the departure point for both operational and capital appropriations and directly informs the transactional environment Not all stakeholders are part and parcel of this Regulation i.e. OAG, AGSA, ASB etc…All stakeholders and decision makers are on board There is accredited training on mSCOA…there is no accredited training and no service provider has the right to provide such training National Treasury