“Toning” of the SCOA

Provincial and National Roadshows

February & March 2008

Presented by: SCOA Committee

National Treasury

Aim of the project

• To improve the ability to extract meaningful

data for monitoring Government expenditure

• How?

– Adjustments to BAS to modify specific areas

in the Standard Chart of Accounts (SCOA)

SCOA review focus areas

1. Improved reporting on infrastructure expenditure

2. Alignment of programme structures between budget

documentation and BAS

3. Recording of the economic classification in an

appropriate segment in the chart

4. Classification and categorisation of Goods & Services

item structure

5. Improvement of the functional classification

6. Monitoring Science and Technology Activities

Infrastructure spending

• Substantial increase in infrastructure budgets

• Reporting on Infrastructure spending difficult

– Must be in a position to extract IRM data from BAS

– SCOA Project segment data is not standardised

• Agreed proposal

– Standardise structure in the BAS project segment

– New segment to be implemented on 1 April 2008

– Provincial treasuries’ to assist during

implementation

Alignment of programme structures

• Budget programme structures misaligned to

the structures in the financial system

• Duplication of programmes on the system

• Programme structures from previous financial

years active - can be posted against

• Unable to use functionality in IYM model to

upload actual spending data directly

27 Active Programmes on BAS4 Programmes in BudgetNumerous duplications

BAS BudgetPr1: Administration(5/6) Administration

Pr1:Administration (1)(7/8) Agriculture

Pr1:Management(3/4) Conservation

Pr2: Professional Services(5/6) Environment

Pr2:Agriculture (2) (7/8)  

Pr2:Agriculture(3/4)  

Pr3: Agriculture(5/6)  

Pr3:Conservation (3)(7/8)  

Pr3:Veterinary Services(3/4)  

Pr4: Enviroment (4)(7/8)  

Pr4: Veterinary Service(5/6)  

Pr4:Natural Resourc Mngm(3/4)  

Pr5: Natural Resource Mngm(5/6)  

Pr5:Conservation(3/4)  

Pr6: Conservation(5/6)  

Pr6:Enviro Plan&Imp Ass(3/4)  

Pr7: Enviro Plan&Impac Asses(5)  

Pr7:Waste Mngm&Pop Abat(3/4)  

Pr8: Waste&Pollution Abatm(5/6)  

Pr10:Legal Services(3/4)  

Pr11:Enforcem&Compliance(3/4)  

Pr12:Mngm Info Systems(3/4)  

Pr13:Commun & Awareness(3/4)  

Pr14:Hr Management(3/4)  

Pr15:Hr Development(3/4)  

Pr16:Facilities Managemt(3/4)  

Pr17:Dir Fin Management(3/4)  

Alignment of programme structures

• From 1 April 2008 NT will lock the highest levels

of objective in BAS

• Complete alignment with programme structures

in the budget will be ensured

Process followed:

• Dec 2007 – Programme structures to BAS team to create database

• Jan 2008 – Structures loaded on BAS

• Feb 2008 – Departments create substructures & PERSAL codes

• End Feb 2008 – Structures verified with appropriation bills and

budget documentation and signed-off by provincial treasuries

Good & Services item classification

• Detailed analysis of existing Goods & Services

items indicates a review is required

• 80% of spending occurs on 10 high level items

• Inventory & Consultants largest spending items,

with limited sub level details available

• Meaningful data for policy analysis requires

detail

• Streamlining of SCOA item list commenced via

CFO forums

Recording economic classification

• Misconception that SCOA Item list correspond to

Economic Reporting Format (ERF)

• ERF recorded across different segments of BAS

• Classification conflicts exist within the structure,

i.e. Objective vs. Item

• Item list often only source of data for completing

reports and budget submissions

• Economic classification creates duplication in

objective

Functional classification

• Govt expenditure measured according to

internationally recognised functional categories

• Functional classification a subset of BAS

objective structure

• To improve quality of classification, redundant

activities must be cleared from objective segment

• Functions will be assigned to the lowest level of

each objective at the beginning of each financial

year by National Treasury

Monitoring Science & Technology

• Cabinet approved S&T framework requires

annual expenditure plan

• NT to provide platform for data capture within

budget process and financial system

• Most S&T spending via projects, therefore the

intention to identify these projects during budget

• Monitor project implementation through

indicators in BAS

Benefits

• Improved data flow and data quality

– Annual Financial Statements, IYM, Infrastructure Reporting, etc.

• Clean up of the system

– Redundant items and objectives, Suspense accounts, BAS User

review, Suppliers database

• Improved economic classification

• Improved systems performance

• Recording of own account transactions

Impact

• Current database not affected– No impact on 2007/08 financials

• BAS re-implementation required

• Two new segments added

• Six of seven segments standardised

• Departments must provide lower level

details

Change management

• Training

– Road shows and training in Jan - March, including Auditors

– Review of SCOA definitions and training manuals and process

• Updated classification guides and circulars

• Call centre and classification committee to

provide rules and classification support

• Assistance with systems changes

Assistance with systems changes

• BAS, LOGIS, PERSAL systems interface

updated centrally

• Debt accounts converted

– including debt type and regional parameters

• Entities converted, suppliers and PERSAL

• Suspense and control accounts converted

• All systems parameters to be converted

– Only departmental parameters to be captured by

departments, in accordance with a detailed BAS

implementation checklist (website:BAS.pwv.gov.za)

BAS Systems Controller

• Create sub structures in Objective and the Responsibility structure

• Link personnel to BAS– New function 6/10/23 (BAS Notice 265) will assist in making this

an easy process

• Create user ID’s• Create sub structures for Project, Asset and Region• Provide for interface with sub systems not controlled by

National Treasury• Activate relevant accounts• Process can start once database is distributed

– First week in February– Monitored by Systems Team

Summary

• Implementation date – 1 April 2008

• BAS re-implementation required – process can start early February

• Numerous conversions done by systems team

• Impact mainly on departmental BAS Systems Controller

• Systems road shows January

• Further 1 day workshops in March, 3 day SCOA training from May

• Task Team looking at comments and proposals

• Project updates will be communicated via the TCF, CFO Forums and the BAS User Forum

Questions

Segment Discussion

Highlights of the changes to the different segments

Systems Structure (BAS)

Asset Category

ProjectSegment

ResponsibilitySegment

ObjectiveSegment

Fund Segment

Regional Segment

ItemSegment

TRANSACTION

Fund Segment

• What source of funding will be used for the

transaction?

• Main sources:

– Voted funds

– Earmarked allocations

– Conditional Grants

• Inter Departmental Services

– New balance sheet accounts to keep track of

inter departmental service and advances

Objective Segment

• Against which programme / activity should the

transaction be recorded?

• Programme budget of department

• Centrally locked Objective Structure aligned to

budget document

– Departments to capture lower levels

– Departments to link personnel

– Need to verify sub-programme details

• Trading Entities

– Departments to create sub structures

Responsibility Segment

• Identify cost centres

• To which cost centre should the

transaction be allocated?

• Link to organisational structure

• Not standardised – Treasuries can

structure at own discretion

Item Segment

• What is the item that is being bought?

• Review based on history data

• Changes

– More detail on Consultants and Inventory

– Remove duplication of asset categories and

minor assets

– Removed all unused items

– Restructured the levels to provide better

summaries

Asset Category Segment

• Does the transaction relate to an asset and

if so, which category of asset?

• Provide for details of assets

• Eliminates duplication in Item Segment

• Allows for capturing of own account

transactions

• Alignment with the Asset Management

Guide

Project Segment

• Does the transaction relate to a specific

project, and if so what type of project?

• Economic classification

• Project vs. Stand alone

• Projects – Infrastructure, Infrastructure

transfers, non-infrastructure

• Identify maintenance, upgrade,

refurbishment and new

Regional Segment

• In which region does the service get delivered?

• GIS of Government Spending

• Look at service delivery perspective

• Broken down by Municipality

• Provide for general spending not related to a specific Municipality

• Provide for general categories at provincial and district level

Questions