mSCOA Version 5.4 and changes to the classification framework

Presented by National Treasury: Chief Directorate Local Government Budget Analysis | 22 June 2015

Costing SegmentChange Posting

Level and Breakdown

Principle/ Application

Definition Account

Split between “recoveries and charges” Yes Yes Add

Function SegmentChange Posting

Level and Breakdown

Principle/ Application

Definition Account

Change “applicability” Non-core – Community and Social Services for:•Libraries and Archives•Museums and Art Galleries

Yes District Municipalities

Yes Add

Consider changing:•Waste Management – Street Cleansing•Public Safety – Cleansing[Research needed]

Funding SegmentChange Posting

Level and Breakdown

Principle/ Application

Definition Account

Accounts changed for Equitable Share:•Basic Services•Institutional Component•Community Services•Revenue Adjustment•Correction and Stabilisation Factor

Yes Add

Research/Information needed:•Posting Level District Municipality and Provincial Government•DORA – Capital versus Operational

Item Segment – LiabilitiesChange Posting

Level and Breakdown

Principle/ Application

Definition Account

Current

Transfers and Subsidies –unspecified”

Breakdown Yes Added

Defined Benefit Obligations Added

Pending: VAT Accounts Expand?

Current and Non-current

Borrowing: "non-annuity loans” Deleted

Other Current Financial Liabilities: Concessionary Loans

Yes Added

Provision and Impairment:•Litigation•Trading Services•“Bonus” Yes

AddedDeletedDescription

Item Segment – Current AssetsChange Posting

Level and Breakdown

Principle/ Application

Definition Account

Current Portion of Non-current Receivables/Non-current Receivables:Staff Loans/Recoveries

Description

Receivables from Non-exchange:Monthly Billing changed to include: “interest”.

Added

Trade and Other Receivables from Exchange Transactions:•Trading and Customer Service Debtors•Intercompany/Parent Subsidiary Transactions – Impairment•Deposits•Transfers and Subsidies - Unspecified

Change

Added

Item Segment – Non-current AssetsChange Posting

Level and Breakdown

Principle/ Application

Definition Account

Investments: Listed/Unlisted Bonds and Securities

Description

Receivables from Non-exchange:Monthly Billing changed to include: “interest”.

Added

Trade and Other Receivables from Exchange Transactions:•Trading and Customer Service Debtors•Intercompany/Parent Subsidiary Transactions – Impairment•Deposits•Transfers and Subsidies - Unspecified

Change

Added

Item Segment – ExpenditureChange Posting

Level and Breakdown

Principle/ Application

Definition Account

Bulk Purchase: Green Electricity and Renewable

Description

Outside Services:•Accounting and Auditing•Transport Services

DescriptionAdded

Consultants and Professional Services: Accounting and Auditing Description

Contractors•Maintenance and Unspecified Assets•Electrical

Yes

Yes

•Depreciation and Amortisation: Infrastructure Electricity

Description

Item Segment – Expenditure (Continue)

Change Posting Level and Breakdown

Principle/ Application

Definition Account

Inventory:•Consumables•Agricultural

Added/Deleted

Operational Cost:•Cash Discount/Insurance Claims/Office Decorations•Indigent Relief/Hire Charges•Statutory Payments other than Income Taxes

Changed

AddedDescription

Transfers and Subsidies: Unspecified

Added

Item Segment – ProjectChange Posting

Level and Breakdown

Principle/ Application

Definition Account

Buildings changed to include “other structures”

Description

Operating Cost Changed

Item Segment – Revenue (Continue)Change Posting

Level and Breakdown

Principle/ Application

Definition Account

Fines, Penalties and Forfeits: Fines – Pound Fees

Changed

Licences or Permits:•Activities on Public Roads•Drivers Licence Application and Duplicate Licence•Learner Licence Application

Deleted/ Combined

•Transfers and Subsidies: Unspecified

Added

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MSCOA : Position Paper Status Report

Discussion Paper/Position Paper

Discussion Paper Position Paper

No Legal Status Part of the “Project Documents” Not replacing NT guidelines, circulars, practice notes or implementation guidelines Consolidate information for various

source Checklist for compliance to the

Standards of GRAP Recording revision of reporting Linking mSCOA Posting Level

accounts FAQ to date not concluded addressed Internal acceptance prior to

consultation with stakeholders End result may result in revision of NT

documents or incorporation in circulars

No Legal Status Part of the “Project Documents” Not replacing NT guidelines, circulars, practice notes or implementation guidelines Consolidate information for various

sources/opinions/views Defining terminology relating to the

subject matter FAQ to date not concluded addressed Document the position taken by

National Treasury on subject matter Internal acceptance prior to

consultation with stakeholders End result may result in revision of NT

documents or incorporation in circulars

Discussion Paper and Status

15

Subject Matter Status Timeline for Completion

Employee Related Cost Approval by Technical Work Group

September 2015

Provisions, Contingent Liabilities and Liabilities

To be drafted September 2015

Inventory To be drafted September 2015

Transfers and Subsidies To be drafted September 2015

Exchange versus non-exchange and related matters

To be drafted September 2015

Fixed and Intangible Assets To be drafted September 2015

Reserves and Funds To be drafted September 2015

Any matters not listed To be drafted September 2015

Reports To be drafted October 2015

Position Paper and Status

16

Subject Matter Status Timeline for Completion

Short Codes and Mapping Finalised ICF 22 June 2015

Reporting including:•General Ledger Detail•Materiality and Reporting•Comparatives and Restatements•Correction of Prior Periods•Municipal Entities•Month and Year-end Closure

Partially Drafted Additional sections to Technical Work Group

August 2015

NERSA October 2015

DWA including Water Balance Reporting

October 2015

VAT October 2015

Cost of Free Basic Services and Revenue Cost of Free Basic Services

Research taking place August 2015