Question NW2629 to the Minister of Finance

Reply:

The National Treasury provided various types of support to municipalities for the implementation of mSCOA. The following initiatives were undertaken in preparation of the affected environment, with a specific focus on the Gauteng province:

1. After promulgation of the mSCOA Regulations, the mSCOA chart was rigorously tested and refined by piloting in selected municipalities. Gauteng pilot municipalities were Cities of Johannesburg, Tshwane and Ekurhuleni.

2. A dedicated website was established to assist municipalities in understanding, educating and implementation of mSCOA, including information such as the project summary document, chart versions, Municipal SCOA circulars, presentations, etc:

http://mfma.treasury.gov.za/RegulationsandGazettes/MunicipalRegulationsOnAStandardChartOfAccountsFinal/Pages/default.aspx

3. The mSCOA Frequently Asked Questions (FAQ) Portal was established, an internet based database tool for logging and responding to mSCOA related queries in March 2015 and is available to all municipalities.

4. Ongoing technical guidance and support to municipalities in the form of Circulars:

• mSCOA Circulars No. 1 to 6 provided guidance on mSCOA implementation; and

• MFMA Circular No. 80 and its addendum set out the proposed minimum ICT and business process functionality to enable transacting against mSCOA with effect 1 July 2017.

5. All the circulars were extensively consulted and also published on the National Treasury website.

6. The Transversal Tender: Local Government Financial Management and Internal Control Systems (RT25-2016 in the Government Tender Bulletin of 4 March 2016) was issued to support all municipalities that decided to make any system change(s) and / or upgrade(s).

7. Support provided through various mSCOA National and provincial forums, including mSCOA work groups, vendor forum(s) / platforms and a National Integrated Communication Forum involving the Gauteng Provincial Treasury and Gauteng pilot municipalities. These sessions were duplicated by the Gauteng Provincial Treasury in mSCOA, CFO and other relevant provincial forums.

8. Provided training across the affected environment, which included:

• A one-day training initiative: ‘Demystifying mSCOA’, which was attended by 118 Gauteng officials on 8 December 2014;

• 2-day non-accredited mSCOA training sessions was rolled-out for piloting municipalities, system vendors, and provincial treasuries. Gauteng delegates participated on 5 and 6 May 2015, with concurrent metro specific sessions facilitated with the Cities of Ekurhuleni, Johannesburg and Tshwane;

• 3-day non-accredited sessions for all non-pilot municipalities was rolled-out to ensure that all non-pilot municipalities have a clear understanding of mSCOA and impact this will have on their respective municipalities. The training was attended by 71 officials in Gauteng comprising of 39 and 29 from municipalities and provincial treasury respectively.

• Drawing closer to phase 4 project-end, a strategic partnership was concluded resulting in the future outsourcing of all project related training (accredited and- non-accredited) through a strategic partnership with the Certified Institute of Government Finance Audit and Risk Officers (CIGFARO (previously IMFO)) in cooperation with SALGA with effect 01 December 2016.

• Dedicated support through the placement of a mSCOA Advisor as part of mSCOA project phase 4 (01 February 2016 to 31 March 2017) for project phase 5 (01 June 2017 to 31 March 2020) to the Gauteng Provincial Treasury to support municipalities in the province.

(a) & (b) The current status of implementation in Gauteng can be summarised as follows:

 (i) All Gauteng municipalities successfully submitted both their tabled and adopted budgets in the mSCOA data string to the Local Government Database hosted by the National Treasury;

(ii) 3 of the 11 Gauteng municipalities (City of Johanesburg, Ekurhuleni and Midvaal) successfully submitted MFMA section 71 reports in the mSCOA data strings;

(iii) 5 of the 11 Gauteng municipalities (City of Johannesburg, City of Tshwane, Emfuleni, Rand West City and Sedibeng) successfully submitted their integrated development plans in the mSCOA data string format;

(iv) The recent mSCOA transaction verification assessments conducted by the National Treasury and Gauteng Provincial Treasury on whether municipalities are transacting across selected test areas refers. Verification was completed for 7 municipalities, none of the verified municipalities in Gauteng is transacting across all the 8 selected test areas. The verified municipalities are partially transacting across some test areas. Each municipality not fully transacting across the 8 areas assessed, National Treasury and Gauteng Treasury are engaging all affected municipalities individually on their project plan to reach full transacting together with concurrent hands-on-support.