1. INTRODUCTION TO THE ECONOMIC REPROTING FORMAT (ERF) AND SCOA
SESSION 1
INTRODUCTION TO THE ECONOMIC REPROTING FORMAT (ERF) AND SCOA
PRESENTED BY: NATIONAL TREASURY

2. WHAT IS ERF AND SCOA? Economic Reporting Format (ERF)
New budget reporting format
As prescribed in the guidelines (Blue Book)
Introduced this new budget format in 2004
Replaced old Standard Item Classification
In line with international best practice
Standard Chart of Accounts
New structure of government accounts
Setup of the general ledger of government
Translates the budget format to financial systems structure

3. WHY A NEW ERF? Old formats outdated
Standard items – Inappropriate management info
Items like Stores and livestock and general items like Administrative Expenditure
Not enough detail on use of resources
Part of Public Sector Budget Reform
Part of a process to modernize accounts
Process that started in 1999 with the PFMA
Providing detail on outputs produced
Improve accountability in the public sector
More detail provided on spending activities
Better information for day-to-day management
Standardization ensure comparability

4. WHY A NEW ERF? Better quality information to legislatures
Reinforce legislature’s oversight role
Single classification standard
Used throughout the government sector
Compliance to international reporting standards
Government Financial Statistics (GFS) classification
International Federation of Accountants (IFAC) standards – IPSAS
Special Data Dissemination Standard (SDDS)

5. DESIGN PRINCIPLES In line with Constitution
Treasury to prescribe classification
It is clear, user friendly and accessible
Terminology easy to understand
Standardised with clear definitions provided
Data accessible through MISystems
It is transparent and promotes accountability
Provides details on items purchased
Easier to calculate relevant economic variables
for e.g. GDP, Governments contribution to capital formation
GFS tables can be extracted easily
Ensuring international reporting compliance

6. WHAT IS THE SCOA? Standardised Chart of Accounts
New structure of general ledger accounts of government
Effectively a list of receipts, payments and balance sheet items
Accounts correspond to ERF requirements
Budget format mirrored in the financial system by SCOA
SCOA provides detailed breakdown of categories in the budget format

7. WHAT IS THE SCOA? Implemented within the financial systems
Mainly developed within the BAS environment
Mappings to LOGIS and PERSAL to assist in capturing transactions
Mappings to other systems like FMS2, Walker, etc.
Controlled by National Treasury
6 of the 7 segments standardised
Managed by NT via SCOA Committee
Departments control the lower levels

8. FINANCIAL SYSTEMS FOR ERF AND SCOA

9. DESIGN PRINCIPLES Good governance and financial practice
Aligned to legislative requirements
Provides managers with management information
Complies with economic and accounting standards (GFS,GRAP,ASB,IPSAS)
Satisfies reporting requirements of stakeholders
IYM reporting, Infrastructure, AFS, etc
Ensure that data is available for any type of reporting
Allows for cash and accrual accounting
Complies with current cash accounting requirements
Paves the way for a move to accrual accounting in the future

10. WHO USES SCOA? Budget office officials Internal in departments
Also national and provincial treasury officials
Accounting officers
Provided with a view of what is happening to departmental budget
Accounting clerks
Economic Analysts
Statisticians

11. MACRO-LEVEL BENEFITS Improved quality of information
Already dramatic improvement after 2004
Hoping to see further improvements after 2008
Increased efficiency in extracting information
Structures allow for standardised reports in BAS
Automated IYM, IRM, etc.
Positive public perception
Comparable financial information
Across departments, provinces, etc
Standardised financial information

12. MICRO-LEVEL BENEFITS Less duplication of accounts User-friendly system
Easier to audit
Better management information
Focus on expenditure management
Standardised process of transacting
Job satisfaction and transfer of skills

13. For any additional questions or issues for clarification, please contact the National Treasury SCOA Technical Committee at:
Call centre: (012)
Website: