1. mSCOA SEGMENTATION and the TESTING OF YOUR DATA
Presented by: National Treasury

2. Background
Previously no validation was done with the use of Items to the various cost centres;
Funding for transactions were not clearly defined and mainly combined into one source of funding;
Budgeting on mSCOA should be at an advanced stage and in the FULL mSCOA segments.

3. What should we look for
Project segment is directly aligned to the IDP – Capital and Operating;
Function segment implemented fully;
Item segment correctly used, and correctly aligned to the other segments;
Funding segment used at lowest level of the chart;
Region segment utilised and not all done for whole of the municipality;
Costing done at the municipality;
General rules.

4. Rules – Project Segment
Both Capital and Operational projects must be used;
Capital projects can only have Item: Assets;
Operation projects can only have Item: Expenditure;
Default projects are for Revenue and non-cash transactions;
Default projects may NOT have Item: Expenditure and Assets;
Municipal running cost is only for the items required for the organisation to function, and not for any services that the municipality renders;
Typical work streams must be utilised fully in the municipality;
Repairs and Maintenance must be broken down to lowest project;
Travel subsistence must be broken down to individual trips/seminars/workshops;
Revenue forgone and cost of revenue projects must be used;

5. Rules – Function segment
Function segment must be used to the full extend;
Remuneration of Councillors can only be against Function: Mayor and Council;
Items generally specific for one function can only be against that function:
Bulk purchase electricity => Function: Electricity;

6. Rules – Item segment(s)
Salaries for management must be specified as per chart;
Councillors remuneration must be specified as per chart;
Revenue items must be against the relevant Function:
Refuse Removal Fees => Function: Waste;
Travel and Subsistence items must be broken down;
Revenue forgone must have the correct segmentation;

7. Rules – Fund segment Services should fund themselves –
Align Funding to the Function segment;
Equitable share must be broken down per item on the posting level;
Grant funding should balance;
Non-funding transactions will be investigated and cannot be used as default

8. Rules – Region segment
Correct use of Region for the specific municipality;
Use of head office and whole of municipality inline with actual expenditure;
Revenue per ward;
Capital projects per ward.

9. Rules – Costing segment
Costing segment must be used – other than Default;
Default Costing may NOT have default expenditure or revenue;
Charges and Recoveries should balance.

10. Rules – General Posting level; Use of all six segments;
Projects must contain the GUID extensions;
Trial balance must balance;
BS and I&E must balance;
Budgeting must be on BS accounts;

11. Excel tool to interrogate data - How
Text file containing the mSCOA chart
Text file submitted to the LG Upload Portal – TABB or ORGB
Create pivot tables to extract relevant information

12. Excel tool to interrogate data

13. Excel tool to interrogate data – Project and Functions with Items

14. Excel tool to interrogate data –Function

15. Excel tool to interrogate data – Fund align to Function

16. Excel tool to interrogate data – Costing with Items

17. THANK YOU