In 2016, the nationwide rollout of the municipal Standard Chart of Accounts (mSCoA) saw the National Treasury's focus on budget and reporting reforms impact on municipality and public entity. The Treasury's goal is to improve financial reporting through governance, accountability, transparency and the adroit management of public funds. The system tackles the common challenges in financial reporting and system delivery, resolving them through more effective business process and the application of more efficient technology solution.
The mSCoA details the processes that must be followed on a municipal level to ensure that budgeting, cashflow, reporting and asset management follow more detailed and accurate routes. In addition, the legislation outlines the standards that need to be followed in maintaining financial records, managing resources and ensuring the economic sustainability of each municipality.
Universal adoption required
While the system provides municipal departments with more accurate reporting, reduced reconciliation times, improved oversight functionality and improved service delivery, it does place require that users and public entities undergo training to adapt to it. The mSCoA provides support for the departments by breaking down the framework into seven detailed segments, each with their own code, to make the processes more accessible and adherence completely universal. However, it demands that all municipalities make the move towards adhering to these standards and achieving complete compliance. This is no easy task.
To make sure that the regulations are followed down to the dot on the i, public entities must stick to very specific processes and tick some very specific boxes. In addition to this, systems will have to be integrated across the business and IT infrastructure, ensuring that they are capable of meeting the standards.
Smoothing the way
Of course, the first question that must be asked is - how can public entities make the process easier, cut down on the pain points and still comply with the new regulations? The answer is both simple and complex. A complex solution of rich functionalities and capabilities tailored to provide a simple interface with a low barrier to entry that supports municipalities in achieving their compliance goals.
Mandy Leonard, Business Development Director, EOH Intellient, says, "EOH's Oracle solution was designed to slip effortlessly into the mSCoA structure and comfortably ensures that not only the i is dotted, but that it is taken from the right set of data and that it is relevant to that specific department or concept. The solution has the ability to access detailed transactional reports and enquiries, secure data at the mSCoA level and includes Automotic Accounting Instructions which direct transactions to the correct accounts at the touch of a button."
To further support the business process changes which mSCoA introduces, EOH's offering incorporated an Enterprise Resource Planning (ERP) system that has advanced and customisable business process capabilities. For the more technical - the environment is GRAP/GAAP compliant. Leonard continues, "What makes this solution so interesting is not just its technical abilities, it is the expertise which EOH provides alongside the technology. It is all very well having a system so advanced it can tailor itself to shifting compliance standards, but without the relevant support network, it won't deliver completely on its premise.
"Highly qualified and experienced people populate the software implementations that EOH has created for municipal compliance with mSCoA. Finance graduates, municipal specialists and chartered accountants form the backbone of support. This is a vital part of the solution, as the experts who provide support and advice are fully aware of the challenges and languages that populate the finance and budgeting realm, and understand exactly how this level of technology can benefit it.
"In every sense, the mSCoA is a powerful and important step towards transparency and compliance for South African municipalities. Its implementation should be supported at every step and its goals upheld through every transaction," says Leonard.
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