1. THE DEVELOPMENT AND STRUCTURE OF INDICATORS FOR FINANCIAL REPORTING DASHBOARDS ] mSCOA Vendor Forum: 18 May Presenter: [B.W. Shepherd , mSCOA Advisor 1

2. Content Background Objective Methodology Structure of Dashboard
Implementation Phase
Reporting Basis
Financial Reporting Indicator
Management and alignment of indicators
Implementation Plan

3. Background to introducing Dashboards
The mSCOA Regulations refer to specific objectives , more relevant are :
The achievement of greater level of standardization
Improved transparency, accountability and governance through uniform recording of transactions at posting level detail
Enable deeper analysis and sector comparisons to improve financial performance.
Budget Reporting Regulations require municipalities to upload financial performance data on a monthly, quarterly and yearly basis in specific formats referred to section 71 and 72 reports.
mSCOA requires that these reports are uploaded onto the LG Database in the format of data strings
National Treasury requires Municipal Managers to sign off on the above reports prior to submission to the LG Database

4. Background to introducing Dashboards Conti :
The introduction of Financial Dashboards are to assist the Municipal Manager with uploading credible financial data from their financial system to the LG Database
The minimum indicators will reflect a trend or ratio of specific financial data in format to be agreed on which will be referred to as the Financial Reporting Dashboard
The proposed design of the dashboard will be on a multitier structure that will cater for the use by the Public ,Council, senior management and managers directly involved in service delivery

5. Objective :
The overall objective of the Financial Reporting Dashboard is to allow key stakeholders to visualize the Key Performance Indicators and other strategic data of the municipality at a glance .
The Primary objective in the introduction of Financial Reporting Dashboard is to assist the Municipal Manager to upload credible financial data in the prescribed format onto the LG Database .
The secondary objective is to ensure that senior management through financial and performance indicators take note of early warning signs as to the state of their financial and operational affairs .

6. Methodology
Municipalities function in terms of a specific reporting cycle, sometimes referred to as the MFMA cycle, which can be categorised into the; strategic and planning phase, the implementation phase, reporting and monitoring phase.
The process is to identify the minimum indicators that are relevant and aligned to specific MFMA reports
Identify the management level the indicator should apply.
Indicators will be based on past Trends and measured against current trends
Past trends will be based on the past 3 years the audited financial statements
The in-year reports will reflect the current financial data against the past 3 years
Indicators will be limited to maximum of 20 indicators with a minimum of 3 preschedule .
The Municipality may introduce additional indicators to improve accountability

7. Structure of the Dashboard
The layout and presentation of the indicator will not be prescribed in the development Phase
The design of the indicator will be based on trends and ratios between different financial years
The structure will be base on a multitier user basis
The minimum indicator will be prescribed on the horizontal level linked to different users on a vertical level.
Vertical level is based on the organisational structure .

8. Publication of minimum Indicators
Implementation Phase
The development of indicators will be phased in based on three main reporting categories :
IDP and Budgeting
Reporting Cycle
Performance Cycle
Publication of minimum Indicators
A Schedule
C Schedule
Service delivery
Consolidated Dashboard
SDBIP
B Schedule
Senior Management Performance
Service Delivery statistics
Break down of Revenue Categories

9. Reporting Basis Analysis based on trends and ratios.
Information to be downloaded from third party systems and may be held in a separate data file .
The file holding the data must be updated prior to the upload of mSCOA data strings to LG Database .
The financial system will contain the LG Database validation parameters before the required data is uploaded into the prescribed schedules for transportation to the LGD data base.
The information for uploading on to the data base will only be released once the Municipal Manger has viewed the minimum indicators linked to the prescribed schedules

10. Financial Reporting Indicator
Performance Indicator
A -Schedule
B-Schedule
C-Schedule
Other Reports
Comments
Asset Ratio
1. Impairment of Property, Plant and Equipment, Investment Property and Intangible assets (Carrying Value
2. Repairs and Maintenance as a % of Property, Plant and Equipment and Investment Property (Carrying Value)
3. Actual Capital Expenditure/ Total Capital Expenditure To date.

11. Financial Reporting Indicator
Debtors Ratio
1.Collection Ratio per Services and Property Rates:
Yearly;
Monthly
2. Net Debtor Days

12. Financial Reporting Indicator
Liquidity Ratio
1.Cost coverage Ratio
2.Current Ratio
Liability management
1.Total Borrowing/Operating Revenue

13. Financial Reporting Indicator
1.Total Borrowing/Operating Revenue
2. Actual Debt repayment /Budgeted Debt
Sustainability
1.Cash Backed Reserves
Efficiency
1.Net Surplus for Services
Revenue Management
1 Revenue Growth per Service
2.Total Revenue Growth (excluding all Grants )
3.Acrued Revenue for Rates and Services to date / Budgeted Revenue for Rates and Services

14. Financial Reporting Indicator
Expenditure
1.Creditors Payment Perion
2. Payment of Salary and wages /Budgeted
3.Contracted Services /Total Budget
4. Total maintenance /Total Operating Budget
5.Total maintenance expenditure to date /Total Maintenance Budget
Budget Implementation
1.Capital expenditure Indicator
2.Operating expenditure Indicator

15. Financial Reporting Indicator
Trend analysis of data over 3-year period displayed monthly.
Each year to be displayed separately. Current data to be measured against the past trends of the same periods
Bulk Purchases
A B &C
Trade Services; Sales
A, B&C

16. Implementation Phase
The implementation plan mainly relates to the process that will be undertaken to reach consensus on the time frame and structure of the financial reporting indicators .
Feedback from National Treasury : Internal Process
Vendor Engagement : two sessions 18 May and 31 May 2018.
Directive to Municipalities : mSCOA Circular by 15th June 2018.
Implementation Date : 10th working date in August 2018.

17. Examples of Indicators represented on Graphical Basis:

18. Examples of Indicators represented on Graphical Basis:

19. Examples of Indicators represented on Graphical Basis:

20. Examples of Indicators represented on Graphical Basis:

21. Examples of Indicators represented on Graphical Basis:
Employee Cost

22. Examples of Indicators represented on Graphical Basis:

23. Examples of Indicators represented on Graphical Basis:

24. Examples of Indicators represented on Graphical Basis:

25. Conclusion Deliverables :
Vendor to link a successful submission of a monthly C - Schedule from one municipality to the minimum Trend and Ratio indicators
The Vendor may represent the indicator based on his own idea .
The Vendor must illustrate that if the indicator is not viewed by the MM the data file will not be submitted to The LG Database
The Vendor must illustrate to Treasury that the financial system will contain the validation processes that are currently undertaken by the LG Data base .
The Vendor will on an individual basis illustrate the above to Treasury.

26. THANK YOU