DUCHARME PUBLIC SECTOR CAPACITY BUILDING SUPPORT HAVE YOU ATTENDED TO YEAR ONE MSCOA CHALLENGES?

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1 DUCHARME PUBLIC SECTOR CAPACITY BUILDING SUPPORT HAVE YOU ATTENDED TO YEAR ONE MSCOA CHALLENGES? Although all municipalities and their respective municipal entities now having implemented the Municipal Standard Chart of Accounts () as new classification framework for unified local government transactional information from 1 July 2017, there are still many practical year one implementation challenges facing local government. Following the numerous and integrated solutions required for a successful implementation, the CFO and finance teams will need to manage and oversee a diverse list of actions on the changes required to current accounting and financial management processes, policies and procedures needed to successfully implement. Due to being a multi-dimensional chart which affects all business processes and the IT infrastructure (such as systems, programmes, data), the implementation of any project is complex, requiring a comprehensive and clear project plan, diverse key skills & structures, steering committees & project management to ensure all milestones are achieved. Understanding where you are on the journey will help you to understand how far you still need to travel, what to expect and what your immediate priorities should be. Practical guidance: Year One We have developed a 1 day course which provides insight to the CFO and finance teams linked to Year-One adoption challenges. The course provides for sections on lessons learned, reporting (budget, S71 and AFS), an overview of the 15 businesses and considerations on the GRAP AFS of the municipality: lessons learned reporting 15 Business processes impact on GRAP AFS Overview and suggested solutions for the practical MSCOA implementation challenges faced by municipalities. This includes monthly reporting considerations and solutions, and overview of automation of MSCOA budgeting and Sec 71 Monthly reporting. Attending officials will receive free MSCOA Viewer. Overview of NT s 15 core business processes as impacted by the 7 MSCOA segments. This includes practical challenges faced by municipalities, such as with the Business Process on Financial Accounting and AFS. We will specifically discuss the MSCOA Considerations to AFS Compilations for 2017/18 and challenges in compiling MSCOA compliant AFS. This includes MSCOA Current Year vs. Comparatives; AFS Reclassifications and Adjustments to accommodate MSCOA; How MSCOA can assist in automating AFS (Primary AFS Statements and Budget Statement, Notes to AFS, Appendices, etc.) Ducharme Implementation manual As part of the course, we will also provide our Implementation manual which was designed to help you practically think through key foundational aspects you need to have in place (e.g. project governance and change management). This includes examples and templates. Overview & Structures Systems & Capacity Practical impact on 15 business processes Compendium of guidance Includes overview and key structures such as project steering committee, project management team & project governance This focusses on business transformation, change management, skills development & information technology needed. It deals with how MSCOA will affect the 15 business processes. For each business processes, a description of the process, accounting ramifications, impact of each of the segments and examples are provided We have also summarised and synthesised the guidance provided by National Treasury through the MSCOA circulars, Project Summary Documents, Transversal Tender RT- 25 as well as MFMA Circular 80.

2 Herewith the MSCOA manual s table of contents: CHAPTER 1 AN INTRODUCTION TO MSCOA 1.1 Why was developed 1.2 What is 1.3 Key Changes 1.4 What makes MSCOA exciting 1.5 Why the need for access to MSCOA information 1.6 Why is MSCOA good for municipalities CHAPTER 2 PROJECT STEERING COMMITTEE AND PROJECT MANAGEMENT TEAM CHAPTER 3 PROJECT GOVERNANCE 3.1 Risk Management of MSCOA implementation 3.2 Role of internal audit CHAPTER 4 BUSINESS TRANSFORMATION, CHANGE MANAGEMENT & SKILLS DEVELOPMENT 4.1 Business transformation & change management Appoint a change management team Perform change management 4.2 Skills Development CHAPTER 5 CHANGING BUSINESS PROCESSES AND ACCOUNTING CONTROLS TO EFFECT MSCOA 5.1 Accounting & Annual Financial Statements Clear Suspense accounts Journals Reclassify prior year figures in the AFS Degree of aggregation Expenditure Item Segment Chart Revenue - Item Segment Liabilities - Item Segment Assets - Item Segment Net Assets - Item Segment Gains and Losses - Item Segment Process to reclassify comparative figures Comparative restatements: Prior period error or Change in Accounting Policy Impractical restatement 5.2 Treasury and cash management MSCOA effect on accounting for cash transactions Introduction Impact of MSCOA Conclusion MSCOA effect on accounting for loans Introduction Accounting for new loans 5.3 Grant management Introduction Participation in the strategic planning process Implementing MSCOA and opening balances 5.4 Procurement: SCM, Contract, Expenditure, Creditors Effect of MSCOA on Demand Management SCM Participation in strategic planning Analysis of goods, works or services required Compilation of Procurement Plan Compilation of a bid register Governance, Risk and Compliance Management MSCOA Procurement Plan Example Impact on logistics & warehouse management Issuance of orders in MSCOA Treatment of unauthorised, irregular, fruitless and wasteful expenditure 5.5 Valuation Roll Management Considerations for valuation roll management Valuation roll management considerations Property rates taxes revenue management 5.6 Land use and building control management Status quo and aspects for refinement Cadastral data role in MSCOA implementation Best practice improvements Land use & building control management considerations 5.7 Real Estate and Resource Management Different types of resources Overall accounting considerations for real estate and resource management Changes to lease registers and accounting Linking of Lease Registers to other systems Costing requirement/solutions: fleet management Use of municipal motor fleet Use of a photocopier Key control considerations for costing Other maintenance

3 5.8 Asset Life Cycle & Maintenance Management Benefits of allocating MSCOA Segments to assets MSCOA Implementation Processes Change Management Account Alignment and Balance Allocation SCOA Asset Management Lifecycle and System Requirements 5.9 Customer Care, credit control&debt collection Elements of customer care, credit control and debt collection MSCOA segmental impact of customers Minimum requirements for customer care Debt collection considerations Summary of processes &procedures Detailed debtor s collection processes Managing indigent subsidies 5.10 Human Resources and Payroll Organisational Structure Review Effect on HR and managing the change Human resources role in MSCOA HR functionality improvement recomm Recommended improvements for the payrol 5.11 Revenue Cycle: Meter reading, billing and debtors Metering Introduction Administrative procedures Operating procedures Meter reading function Water loss management Billing Why is accurate billing essential? Customer information audit Critical elements of successful billing Billing integrity Billing processes Enquiries, appeals and service complaints Debtors management Revenue cycle billing considerations Revenue management module Specific minimum requirements Billing Reporting and Tariff Maintenance Revenue receipting Meter Management (credit and prepaid) Impact of MSCOA 5.12 Corporate Governance Overview of roles of responsibilities Changes to information for governance System and process impact changes 5.13 Budget, planning and financial modelling Benefits of MSCOA Segments on Budgeting Compiling an MSCOA Compliant Budget Budget Compilation Tool Obtain Operational and Capital Budgets Identify Funding Sources & allocate to Budgeted Expenditure Perform Costing of Expenditure Review Tariff Setting Populate National Treasury Budget Returns 5.14 Costing and reporting Introduction to cost accounting Departmental charges - Costing Processes involved in Costing The importance of accurate costing in determining accurate tariffs 5.15 Project accounting Introduction Effect of MSCOA on project accounting impact on project accounting Project accounting reporting benefits expected Project accounting considerations Project creation & planning considerations The Project Management Unit (PMU) Operational project accounting CHAPTER 6 ASSESSING THE INFORMATION TECHNOLOGY NEEDED FOR THE SUCCESSFUL IMPLEMENTATION OF MSCOA. CHAPTER 7 TEMPLATES / TERMS OF REFERENCE 7.1 ToR: Steering Committee 7.2 ToR: Project implementation team 7.3 Project sponsor appointment

4 Capacity building support training WHO SHOULD ATTEND? Key participants should include municipal CFOs, finance officials, budget & treasury officials, asset management, revenue managers, internal audit, Cost & dates: 1day workshop We will be hosting the 1 day capacity building support on at various venues across South Africa, at no charge for municipal officials. The session includes refreshments and manual. The venues and dates for this course: East London EASTERN CAPE Johannesburg GAUTENG Moorreesburg* Worcester 7 December December 2017 * Please note that the Moorreesburg Session is open to local municipalities within the West Coast District. Registration & information To register, please complete the attached registration form attached hereto. For more information on the training and capacity building support, please contact: Daniel Erasmus CA(SA) derasmus@ducharmeconsulting.co.za For practical support For more details as to our support, please also contact our team for discussion and practical considerations to implementation challenges your municipality is facing: Sean Collins CA(SA) scollins@ducharmeconsulting.co.za Anton Slabbert CA(SA) aslabbert@ ducharmeconsulting.co.za James Such jsuch@ducharmeconsulting.co.za Interested in such a session in your region? Should you be interested to host a regional session for your district and local municipalities, kindly let us know.

5 Terms & Conditions Course & Venue (please mark applicable venue with an X) lessons learned: Year One One Day Workshop East London EASTERN CAPE Johannesburg GAUTENG Moorreesburg* Worcester 7 December December 2017 DETAILS: No charge for municipal officials whom submitted registration form 10 days prior to event. A cancellation fee may be charged for a no-show as cost are incurred for this, which could have been utilised by another delegate. Please note groups are limited to 30 delegates each and as such registration is based on a first-come-first-served basis. REGISTRATION PROCESS: To register for the selected course above, please complete this form and send it to Alriette Swart via: aswart@ducharmeconsulting.co.za Tel: / Fax: Attendee details Title Full name Surname Tel (h) Cell ID Nr Fax (h) Employer / Organisation Department Tel (w) Job Title Fax (w) Dietary Requirements: (Please specify so that the necessary arrangements can be made*) Terms & Conditions Registration: Registration is confirmed upon receipt of the completed application form. By submitting an application form, you agree to abide by these terms and conditions. As there is only limited space available, we would recommend to place please book as soon as possible to reserve a place. The closing date for applications and registration is five (5) days prior to commencement of the applicable course. We reserve the right to deny an application submitted for registration. Payment: No charge to be levied to attending delegates. A cancellation fee may be charged for delegates who fail to attend whom have not provided written cancellation three (3) day working days prior to the start of the course. Course Confirmation: We reserve the right to postpone or cancel the event or change the venue. Substitution: We would be happy to welcome a colleague who would substitute your attendance, which should please be confirmed in writing.