Can we all move forward if the Pilots are still - PowerPoint Presentation

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Can we all move forward if the Pilots are still

Piloting?

CIGFARO/ IMFO WC SEMINAR - 6 JUNE 2017

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Content

Background

- mSCOA RegulationsNational Treasury Implementation StrategyInitial Pilot Process: Overstrand MunicipalityFactors impacting on mSCOA Implementation ProcessRisksReality CheckConsequence ManagementStrategy / Contingency PlansConclusionSlide3

Background -

mSCOA

RegulationsLocal government has an important role to play in strengthening the link between the citizens and government’s overall priorities and spending plans:The National Development Plan (NDP) sets out an integrated strategy for accelerating growth, eliminating poverty and reducing inequality by 2030;Local Government is required to incorporate the objectives of the NDP in its budgets;The goal should be to enhance service delivery aimed at improving the quality of life for all citizens.Slide4

Background -

mSCOA

RegulationsBudget & Reporting Regulations: The Municipal Budget and Reporting Regulations were published by the Minister of Finance, with the concurrence of the Minister of Provincial and Local Government in Government Gazette 32141 dated 17 April 2009 and took effect on 1 July 2009. Reforn Achievements prior to mSCOA:Consolidated MTREF budget information for all municipalitiesQuarterly Section 71 reportsState of Municipal Finances report – annuallyOver- and under expenditure report to ParliamentLocal Government Budgets and Expenditure ReviewReport on the Tabling of budgets to ParliamentSlide5

Background -

mSCOA

Regulations MUNICIPAL REGULATIONS ON A STANDARD CHART OF ACCOUNTS [SCOA for MUNICIPALITIES] - Project Summary Document Slide6

Background -

mSCOA

Regulations Next logical step - Development and implementation of a mSCOA for Local Government:Improve credibility and reliability of financial dataGeneral business processes and applicationsSlide7

Background -

mSCOA

Regulations7SCOA Regulation – PreambleChapter 1: Interpretation, Object and ApplicationChapter 2: SCOA for Municipalities and Municipal EntitiesChapter 3: Minimum Business Process and System RequirementsChapter 4: Technical Committee for SCOAChapter 5: Implementation of Standard Chart of AccountsChapter 6: GeneralSCHEDULE: Segments of SCOA For Municipalities and Municipal EntitiesSlide8

National Treasury Implementation StrategySlide9

National Treasury

Implementation StrategySlide10

Pilot

Process:

Overstrand MunicipalityOverstrand mSCOA RoadmapThe mSCOA implementation has taken place from July 2014 with Overstrand being fully compliant when Phase 4 ends in June 2017. The project has been split into 5 Phases in order to enable a smoother implementation that is the least disruptive. In collaboration with Bytes Universal Systems, Overstrand has taken a three-phased approach to the system development and piloting processes. Two further phases have been adopted in order to implement the mSCOA regulations by 01 July 2017. Slide11

Pilot Process:

Overstrand

MunicipalityOverstrand mSCOA RoadmapPhase 1 – Budgeting Module Phase 2 – Transactional Posting Levels Phase 3 – Reporting Modules Phase 4 – mSCOA Piloting Implementation Phase 5 – Full mSCOA Operational Compliance It was anticipated that the most difficult components, i.e. those requiring detailed business process changes or system transactions, will be implemented during Phase 4 as it will take longer to configure or design. Slide12

Pilot Process:

Overstrand

MunicipalitymSCOA Governance Steering CommitteeSlide13

Pilot Process:

Overstrand

MunicipalitymSCOA Working GroupSlide14

Pilot Process:

Overstrand

MunicipalitySlide15

Pilot Process:

Overstrand

MunicipalityHigh Level Scope - Project PlanSlide16

Pilot

Process:

Overstrand MunicipalityPilot Implementation 1 July 2015:Budget Workshops Change Management Information Sharing (Big Bang Event) on June 2015Slide17

Pilot Process:

Overstrand

MunicipalityPilot Implementation 1 July 2015: Slide18

Pilot Process:

Overstrand

MunicipalityOngoing mSCOA Implementation after 1 July 2015: Slide19

Pilot Process:

Overstrand

MunicipalityOngoing mSCOA Implementation after 1 July 2015: Slide20

Factors impacting on Pilot Implementation

Process

1. Advertising and Award - Transversal tender RT25 in 2016;2. Release of Circular 80 – March 2016;3. Release of mSCOA Circular 5 – July 2016 – requesting Local Government to conduct an extensive ICT Due Diligence Exercise assessing System / Applications minimum functionality;4. Release of Addendum to Circular 80 – October 2016;5. Subsequent Versions of the Chart, Final Lock-down of Version 6.1 - November 2016;6. mSCOA A1 Budget Schedules outstanding - December 2016;7. MFMA Circular 86 – Changes to Schedule A1 – March 2017Slide21

Factors impacting on Pilot Implementation

ProcessSlide22

Factors impacting on Pilot Implementation

Process

Slide23

Factors impacting on Pilot Implementation

ProcessSlide24

Factors impacting on Pilot Implementation

ProcessSlide25

Risks

Major

Risks - WC Government (mSCOA Project Management)Slide26

Risks

(

i):Slide27

Risks

(ii):Slide28

Risks

Risks

(iii):Slide29

Reality Check:

IDP/Budget

Process – Overstrand MunicipalitySlide30

Reality

Check:

NT - 9 March 2017Slide31

Reality Check

:

MFMA Circular 86 (NT - 9 March 2017)Slide32

Reality Check

:

MFMA Circular 86 (PT - 17 March 2017)Slide33

Reality Check:

MFMA Circular 86 (PT - 17 March 2017)Slide34

Reality Check:

(PT - 17 March 2017)Slide35

Consequence Management /

Accountability?

Failure of Service Rendering to Communities?Monthly Billing / Municipal Accounts?Payment Boycotts - Cash flows?Incorrect Payments (Creditors / Payroll)?Municipal Stores - Stock Levels? Procurement - Orders?Non-Compliance to MFMA?SCOA Regulations / Budget and Reporting Regulations;Submission of Annual Financial Statements;Data Corruption / Material Misstatements / Audit OutcomesSlide36

Strategies

/ Contingency Plans

Proactive strategies (Preparation and accountability) - Execution of a Project Implementation Plan ORReactive Strategies (Activities in response to an event) - Measures to contain consequences OR A COMBINATION OF BOTHSlide37

Strategies

/ Contingency Plans

Proactive strategies (Preparation and accountability)Project Implementation Plan (i):Keep proper record of all testing done as well as the outcome of any changes required during the process;Continuous communication between all stakeholders involved in order to keep everybody informed about the problems / solutions encountered;Important to establish dialogue between service provider and any third party vendor;Do not interpret communication between service provider and third party vendors, rather facilitate direct communication; Slide38

Strategies

/ Contingency Plans

Proactive strategies (Preparation and accountability)Project Implementation Plan (ii):Preferable to have a hotline to vendor for users as far as possible, while testing is done in order to assist with response time and understanding of practical environment;Ensure that ALL staff (financial and technical) are well versed with the requirements and workings of mSCOA to minimize incorrect input data and to ensure that budget is done correctly;Format and content of Management Information reports MUST be resolved upfront;Issues to be logged and tracked from initiation to closure in order to monitor progress in the weekly SCOA steering committee meetings; Slide39

Contingency

PlansSlide40

Contingency Plans

(Example)Slide41

Conclusion

The perceived readiness of municipalities to implement

mSCOA, should be regarded as one of the most serious challenges facing Local Government in decades;Local Government can be severely affected in terms of these issues as highlighted;Urgent consultation with Local Government regarded as prudent.Slide42

With

Acknowledgement

to - Overstrand Finance Directorate Staff, for working together tirelessly

and inspired as

a

team

towards

mSCOA

compliance.

National Treasury & Provincial Treasury, for statistics and other information included in this presentation.

Thank You