STANDARD CHART OF ACCOUNTS (SCOA) WORKSHOP Changes to be implemented – 1 April 2012 SCOA ROADSHOWS – NATIONAL AND PROVINCES Presenter: SCOA Technical Committee | National Treasury| March 2012

OVERVIEW Changes to the SCOA – Why? Inconsistencies Changes – 1 April 2012 Capturing of Budgets Capturing of budgets on the Financial System (BAS) Summary: Important issues to remember 2

Changes to the SCOA 1 April

INTRODUCTION OF CATEGORY LINKS Departments not recording own account project spending – projects mainly outsourced, mainly purchase of Stand Alone items Compensation of Employees – Stand alone current Goods and Services – Stand alone current Transfers and Subsidies – Transfer project items Payments for Capital Assets – Stand alone capital Business as usual, just use new BAS codes 4

INTRODUCTION OF CATEGORY LINKS – CONT. Departments recording Own Account construction of Capital Assets (Public Works, Road and Transport, Agriculture, etc.) Use the same set of accounts as other departments for recording Stand alone items In addition the new chart provides for project items in the Item segment that can be linked to projects in the Project segment (PRJ Prefix) Consultation between “Own Account Departments” and SCOA Committee on access to items Such departments can still have inconsistencies 5

CATEGORY LINKS Additional Category links for the following: No Projects Stand Alone o Minor Assets to No Project Stand Alone Current o Major Assets to No Project Stand Alone Capital Finance Leases moved to Purchases of Capital Assets o To be linked to No Project Stand Alone Capital Outsourced projects o Outsourced provided in Item segment – Linked to outsourced in Project 6

OWN ACCOUNT vs. OUTSOURCED PROJECTS Outsourced Projects – Definition: Capital projects refer to when the department engages the services of a contractor to complete the entire asset construction project. The contractor will purchase all the inputs required to construct the asset. Invoice for payment will only be received from the contractor and such payments will be allocated to “Payments for Capital Assets”. The Immediate and ultimate use is the same. Own Account Projects – Definition: Capital projects refer to activities undertaken by the department in purchases of all inputs e.g. salaries, contractors, material, etc. (Immediate use, recorded in the item segment). The end of the goal is a capital asset (Ultimate use, recorded in the project segment). Inputs items are capitalised as part of the cost of capital assets. Projects Existing Infrastructure Assets  Maintenance and repairs  Upgrades and Additions  Rehabilitations and Refurbishments New Infrastructure Assets  New Infrastructure Assets Detailed definitions in Maintenance Circular 7

OWN ACCOUNT vs. OUTSOURCED 8

OTHER ITEM SEGMENT CHANGES Restriction of Transfer Payments Only entities that receive transfers from the specific department, not the full list of entities Reporting on Information and Communication Technology (ICT) Spending DPSA reporting requirement in terms of Cabinet directive Mostly existing items broken into more detail 9

GOODS AND SERVICES Changes to Goods and Services Category: Reduction of the posting levels on the Chart –Posting level 9 – 11 has been moved to level 8 –Removed Tangible (426) under assets <5000 to align with assets –Removed other Machinery under assets<5000 which was duplicated twice –Moved some of the detailed levels of assets<5000 –Moved T&S Public Transport items up 10

ASSET AND PROJECT SEGMENT Changes to the Asset and Project segments –Aligned to the Infrastructure reporting model on Assets –Groupings of some sector specific assets (Education, Health, etc.) –Removed “No Project Listed” option on the Chart Current StructureNew Structure 11

SUGGESTED PROJECT NAMES 12

ASSETS SEGMENT CHANGES 13

FUND SEGMENT Changes to the Fund Segment: –Conditional Grants Gen Account for individual grants –Donor Funds National Treasury to control creation of Donor Projects Removed non-posting levels Gen Account for individual donors Distinctions between local and foreign donors 14

CURRENT STRUCTURE 15

CHANGES 1 APRIL

DONOR FUNDING PROJECTS 17

THE END Changes – 1 April 2012 Questions? 18

Capturing of Budgets 19

CAPTURING OF BUDGETS 20

CAPTURING OF BUDGETS 21

Summary: Important notes to remember 22

SUMMARY: IMPORTANT TO REMEMBER Category links have been introduced to eliminate inconsistencies Item names have not changed, however BAS codes have changed 2011/12 Items will be deactivated in April, do not capture budget against these items Outsourced projects captured to OUTS items in both Item and Project segments Own account projects captured to PRJ items in Item and Project segment – Access to these limited, must agree with SCOA Committee Tool available to map old BAS codes to new codes 23

THE END Thank You Questions? SCOA Contact Details: Helpdesk: Website: 24