mscoa theory old way vs new way nt kept the 2 old segments (department and item/account number) from...

1

USER MANUAL Munsoft 7.0.12 v1

MSCOA THEORY

2

CONTENTS

Introduction ............................................................................................................................................................ 3

Old way vs new way ............................................................................................................................................... 4

Background ............................................................................................................................................................. 5

GUID’s................................................................................................................................................................. 6

Posting levels ...................................................................................................................................................... 7

MSCOA simplified ................................................................................................................................................... 8

MSCOA 6 Prescibed segments of NT ...................................................................................................................... 9

The chart in Munsoft .......................................................................................................................................... 9

The Project segment ........................................................................................................................................ 12

Mandatory breakdown of the project segment ........................................................................... 14

The Function segment ...................................................................................................................................... 17

Internal breakdown of the function segment ............................................................................... 19

The Item segment ............................................................................................................................................ 23

The revenue item segment ........................................................................................................... 24

The gains and losses item segment .............................................................................................. 26

The expenditure item segment ..................................................................................................... 28

The assets and liabilities item segmentS ...................................................................................... 30

The Funding segment ....................................................................................................................................... 32

The Costing segment ........................................................................................................................................ 34

The Regional segment ...................................................................................................................................... 38

3

INTRODUCTION

mSCOA (Municipal Standard Chart of Accounts) is a reform process introduced by National Treasury for Local

Government. In 2014, the legislation changed stating that from 1 July 2017, all municipalities need to transact

on the new chart of accounts (financial structure).

The reasons it was introduced by National Treasury (NT):

• NT had no access to all the different financial systems at Local Government municipalities. Which meant

unreliable and unconsolidated reporting back to NT.

• There was no standard chart of accounts, which meant, inconsistent classification across all

municipalities. NT can’t make comparisons between municipalities’ expenditure. (Can’t compare apples

with apples).

• Multiyear budgeting is a relatively new concept for Local Government.

• Inability to use the information for decision making, due to the inconsistent classifications at Local

Government.

• Municipalities budgets produced, need to agree with the information published on the website, and

must be linked to their IDP, which in most cases is not the case.

• To monitor the management of grants.

• Municipalities can see where expenditure is going and make better decisions to improve service

delivery.

4

OLD WAY VS NEW WAY

NT kept the 2 old segments (department and item/account number) from the old chart and incorporated it into

the new chart. The department is now the function segment, and the account number is now the item segment.

In the past, an expenditure line item could have included multiple costs e.g. accommodation and transport and

conference fees etc. NT has now added extra segments/descriptions to a transaction to breakdown all these

individual costs.

Old way of transacting/reporting New way of transacting/reporting

2 segments which were used (department and account/vote number)

7 segments, 6 prescribed and the 7th being the Municipal Organogram reporting segment

Own descriptions Predefined Segment descriptions from NT

Own Vote structures Predefined standard chart of accounts, now called segments.

Munsoft does allow for the detailed breakdown of the function segment into the municipality's various sections

(departments), and then further allows them to be grouped according to the municipalities vote structure

(organogram).

5

BACKGROUND

National Treasury’s website hosts plenty of information regarding mSCOA. It also hosts the latest charts for

reference as well as detailed documents on each segment. Please note that when viewing these charts, to make

sure that you are viewing the latest chart/version. Which is 6.2.

For more detailed information on each segment, please visit: http://mfma.treasury.gov.za/RegulationsandGazettes/MunicipalRegulationsOnAStandardChartOfAccountsFinal/Documents/Forms/AllItems.aspx?RootFolder=http%3a%2f%2fmfma%2etreasury%2egov%2eza%2fRegulationsandGazettes%2fMunicipalRegulationsOnAStandardChartOfAccountsFinal%2fDocuments%2fPSD%20vs%206%2e1&FolderCTID=0x0120005960DD1F3397B24DB54AAC0C01712D47 To view and download the latest charts, please visit: http://mfma.treasury.gov.za/RegulationsandGazettes/MunicipalRegulationsOnAStandardChartOfAccountsFinal/Documents/Forms/AllItems.aspx?RootFolder=%2fRegulationsandGazettes%2fMunicipalRegulationsOnAStandardChartOfAccountsFinal%2fDocuments%2fmSCOA%20vs%206%2e2%2fExcel&FolderCTID=&View=%7bC96C9F53-8A90-4584-BDF6-E04838D2AF6B%7d

http://mfma.treasury.gov.za/RegulationsandGazettes/MunicipalRegulationsOnAStandardChartOfAccountsFinal/Documents/Forms/AllItems.aspx?RootFolder=http%3a%2f%2fmfma%2etreasury%2egov%2eza%2fRegulationsandGazettes%2fMunicipalRegulationsOnAStandardChartOfAccountsFinal%2fDocuments%2fPSD%20vs%206%2e1&FolderCTID=0x0120005960DD1F3397B24DB54AAC0C01712D47




http://mfma.treasury.gov.za/RegulationsandGazettes/MunicipalRegulationsOnAStandardChartOfAccountsFinal/Documents/Forms/AllItems.aspx?RootFolder=%2fRegulationsandGazettes%2fMunicipalRegulationsOnAStandardChartOfAccountsFinal%2fDocuments%2fmSCOA%20vs%206%2e2%2fExcel&FolderCTID=&View=%7bC96C9F53-8A90-4584-BDF6-E04838D2AF6B%7d




6

GUID’S

Each item in the chart has its own Global Unique Identifier (GUID), depending on the chart version. Each

transaction will consist of 6 GUIDs and a value at the end. When reporting back to NT, a text file containing these

strings and a value are sent to NT. NT then upload this file and matched it to their chart, and reports extracted

from this.

Possible upload rejections:

• The municipality is using the incorrect mSCOA version.

• There is a duplication of votes.

• The GUID strings are not posting levels.

• There are incorrect segment combinations.

It will be impossible to remember and captures all these codes when transacting. So Munsoft was designed so

that when transacting, you are able to search on the segment description/definitions.

7

POSTING LEVELS

The NT segments are grouped into various levels, sub levels and sub sub levels, also known as the reporting

structure. And different segments have different number of reporting levels.

Posting levels are the lowest level as prescribed by NT. Transacting and reporting can only occur at this level.

8

MSCOA SIMPLIFIED

Example A municipality is buying stationary/building a road etc.

You need to ask yourself the following 6 questions? 1. To which project category is the stationary or road related to? Operational or capital.

Project segment

2. Against which function (department) will the stationary or road be recorded? i.e. the department that

budgeted for the stationary or road?

Function segment

3. What is the nature of the transaction? Is the stationary or road classified as an asset, liability, gain, loss,

revenue or expenditure?

Item segment

4. Where is the money coming from to buy the stationary or to build the road? Service charges, equitable

share, grants etc.

Funding segment

5. What is the impact of the stationary or road on secondary cost drivers such as tariffs, and tariff formulation?

Which costing method is being used?

Costing segment

6. Which geographical area is benefitting from the stationary or road? Ward, whole of the municipality,

administrative or head office, etc.

Region segment

9

MSCOA 6 PRESCIBED SEGMENTS OF NT

The 6 prescribed mSCOA segments are:

• Project

• Function

• Item

• Funding

• Costing

• Region

THE CHART IN MUNSOFT

Munsoft has taken these segments and built them into the system. To view the chart, go to

GENERAL LEDGER > SCOA MENU > REFINE NT CHART > SCOA SELECTIONS

• Select the chart version.

• Select a segment from the drop down arrow.

10

• Expand the various levels by clicking on the (+) sign, until the lowest levels are displayed. Or click on the

“expand all” sub menu key, to open up all levels simultaneously.

11

• Right click on any segment level and select “view account details” to view that level’s definition, as per

NT’s chart.

AT Recon M

n

12

THE PROJECT SEGMENT

Projects are basically a list of tasks a municipality has complete. Projects must also be in line with a site’s IDP.

ALL expenditure must be allocated to either capital or operational projects.

All other items MAINLY get allocated to Default Transactions – including revenue, assets, liabilities and net

assets. The cost of free basic services and revenue foregone items, are also accommodated in the project

segment.

The segment definitions given on the chart gives enough detail on each item.

Expenditure used to create new assets, increase Capital 8c8367c5-17f1-4c4e-8449-c5687e8a0662

Default account for transaction not relating to Default Transactions 63348e37-464e-4ac0-a13a-e577838ff961

Operational projects refer to current and short Operational 793624ea-78f0-45c1-a45f-f5ff8fc7d273

# 125 6 7 8 9 #1 2 3 4Definitions

REPORTING STRUCTUREGUID

13

Capital projects:

• Long term in nature.

• Capitalised to the Property, Plant & Equipment (PPE) group of accounts.

• Further breakdown into infrastructure or non-infrastructure projects.

Operational projects:

• Current and short-term in nature.

• Cost immediately recognised as expense.

• Funded from operational budget.

• Further breakdown into maintenance, municipal running cost, typical work stream, infrastructure or

non-infrastructure projects.

Default transactions:

• Any other transaction not related to capital or operational expenditure.

Below is how the project segment looks like on NT’s portal. Breakdowns on the projects segment is mandatory.

14

MANDATORY BREAKDOWN OF THE PROJECT SEGMENT

Breakdown of the project segment is mandatory. Can break down into a municipality’s own project descriptions.

Below is how the project segment looks like in Munsoft.

• Expand the various levels until those levels with a (B) at the end of the description are shown. These

levels need to be broken down further.

15

• Right click on any one of the lowest levels, and select “maintain breakdown”.

• A selection screen will pop up where you can now add all the projects for this segment level. Merely

click on the “Add” sub menu key at the bottom of the screen.

• A unique sequence number will be allocated.

• Type in the name of the project.

16

• Budgeting and posting will happen at this level, as depicted by the (P) at the end of the descriptions.

Example:

What is being budgeted for?

Department

What is the nature of the budgeted item?

Where does it fit in the chart? GUID Description GUID Description GUID Description GUID Description

Project

63348e37-464e-

4ac0-a13a-

e577838ff961

Default

transactions

53d432c7-5d06-

4d53-a785-

f29995840060

Operational:

Municipal

Running Cost

3936e862-0085-

4bc8-85ab-

acd5136ba14e

Capital:

Infrastructure:

Existing:

Upgrading:

Sanitation

Infrastructure:

Reticulation

d0eb0e41-4c62-

4ba4-8db0-

80489d96e260

Operational:

Maintenance:

Non-

infrastructure:

Corrective

Maintenance:

Planned:

Transport Assets

Property Rates Revenue

Revenue

Residential property

Maintenance Vehicles

Contracted- Fire department

Operational Expenditure

Employee Cost: S&T

IDP Department

Operational Expenditure Capital Expenditure

Pipe Works

Upgrade Sanitation

Infrastructure

17

THE FUNCTION SEGMENT

This used to be old department. Every department in a municipality needs to be defined in one or more broad

functions (energy sources, road transport, waste management, waste water management, etc.). Functions are

then further classified into sub and sub-sub functions.

These main functions are then further separated into core and non-core functions, which are the internal

sections within a department.

➢ Core (funded mandates) functions – Providing a service to the community.

➢ Non-core (unfunded/underfunded) functions - Performing the function of other spheres of government

& bear cost out of own revenue sources.

A non-core function example: A local municipality does repairs on a national road. Normally, the government’s

roads department should do this, but local government is doing the work.

18

The segment definitions given on the chart gives enough detail on each item.

Below is how the function segment looks like on NT’s portal. Internal breakdown on the function segment is

Below is how the function segment looks like on NT’s portal. Internal breakdowns on the function segment is

allowed.

Function is the standardised vote structure Function 5de97fa5-cd70-4ccf-a0d7-b165508a6602

Community service is a service or activity Community and Social Servicesf76330f6-8ca7-4118-b6f7-b5f7a6c52f8dThis function covers both traditional Energy Sources 5ed59d8b-47f3-45be-a6f8-350f59f8c3c8Environmental Protection refers to the Environmental Protection 7f6ccebc-ca59-4318-9429-68f68652e500

Executives are the person(s) or group of Executive and Council 20cb5623-3e38-43d3-b0ee-4ae1909ccb53

All activities relates to the f inance function Finance and Administration 80c7484a-5113-435c-8a3d-9bc09dc97c08

This group of accounts includes all costs Health 1b1aba2d-b076-46a5-abe0-a5c1784bc3a0

All activities associated w ith the provision Housing 332c73c8-800e-4a6b-85a8-2114746176f3

This function provides for internal audit as Internal Audit c2698f2a-7b96-4892-8298-d43458d68d02

This function provides for "core and non- Other b87bbe49-6746-42e7-acbc-3b5a0d15cb7b

Planning operates w ithin a legal Planning and Development e504539b-2013-49ae-86c1-08b685c00f58

Public safety involves the prevention of Public Safety bc3710f3-3c29-437d-8b29-e6f737906a17

Road transport is transport on roads of Road Transport 60299550-10fb-4762-83d9-2f9c953441b7

The definition of sport usually includes a Sport and Recreation 058fb8b5-07e0-4085-bf31-0072bbcd8d6b

The collection, transportation, and disposal Waste Management c3ba77d9-36a4-4c4a-b248-3e9dba641aac

Waste w ater management encompasses a Waste Water Management 8ff90b64-116c-4f3a-8b4f-643cb841969e

Water resource management is the activity Water Management 22adc657-944f-44bd-a397-7cf4fe9b4c5b

9Definitions

R EPOR TIN G STR U C TU R E

GU ID121 2 3 4 5 6 7 8

19

INTERNAL BREAKDOWN OF THE FUNCTION SEGMENT

Internal breakdown of the function segment is allowed.

Below is how the function segment looks like in Munsoft.

20

• Expand the various levels until those levels with a (I) at the end of the description are shown. These

levels need to be broken down further.

• Right click on any one of the lowest levels, and select “maintain breakdown”.

21

• A selection screen will pop up where you can now add all the sub functions for this level. Merely click

on the “Add” sub menu key at the bottom of the screen.

• A unique sequence number will be allocated.

• Type in the name of the function. A good practice is to always add the old department number in

brackets at the end of the description.

• Budgeting and posting will happen at this level, as depicted by the (P) at the end of the descriptions.

• Reporting back to NT will not happen at this level, but at one level up.

22

Example:


Department



Project

63348e37-464e-

4ac0-a13a-

e577838ff961

Default

transactions

53d432c7-5d06-

4d53-a785-

f29995840060

Operational:

Municipal

Running Cost

3936e862-0085-

4bc8-85ab-

acd5136ba14e

Capital:

Infrastructure:

Existing:

Upgrading:

Sanitation

Infrastructure:

Reticulation

d0eb0e41-4c62-

4ba4-8db0-

80489d96e260

Operational:

Maintenance:

Non-

infrastructure:

Corrective

Maintenance:

Planned:

Transport Assets

Function

7bfc7c06-9b62-

4cad-816b-

78ab18ec23e3

Function:

Finance and

Administration:

Core Function:

Property

Services

883643f9-8ff9-

482c-9c37-

1e3cfdbb22ec

Function:

Planning and

Development:

Core Function:

Corporate Wide

Strategic

Planning

(IPD's,LED's)

c0faf3f7-55b6-

4ef6-b0e3-

76b190e04071

Function: Waste

Water

Management:

Core Function:

Sewerage

e786cb3f-4469-

4006-b4de-

43a60322eeaf

Function: Public

Safety: Core

Function: Fire

Fighting and

Protection

Property Rates Revenue

Revenue





Employee Cost: S&T

IDP Department


Pipe Works

Upgrade Sanitation

Infrastructure

23

THE ITEM SEGMENT

Most users are traditionally familiar with this segment, as this used to be the old vote. It describes the nature of

the transaction and whether it is in line with the nature of the project. The item function can further be

subdivided into:

➢ Revenue ➢ Gains and Losses ➢ Expenditure ➢ Assets, Liabilities and Net Assets

Business rules:

➢ Capital projects can only have assets and liability items.

➢ Operational projects can only have income and expenses items.

24

THE REVENUE ITEM SEGMENT

This relates to the gross inflow of economic benefits or service potential, resulting in an increase in net assets.

The revenue item is then further subdivided:

➢ Exchange transactions – 1 entity receives assets/services and directly gives approx. equal value to

another entity in exchange (municipality receives revenue from consumers, and in return, the

municipality provides some service). E.g. interest, rental from fixed asset, service charges etc).

➢ Non-exchange transactions - receives value from another entity without directly giving approx. equal

value in exchange, or gives value to another entity without directly receiving approximately equal value

in exchange (transfers and subsidies, fines and penalties, property rates).

➢ Defaults

➢ Discontinued operations

Below is how the item revenue segment looks like on NT’s portal

D EFIN IT ION S

The gross inflow of economic benefits or Revenue cc2cef6d-3ee7-4bde-a103-85f06f8235c6

An entry shall disclose a single amount on Discontinued Operations d8800c4f-143b-4857-8e26-b5775a634431

Exchange transactions are transactions in Exchange Revenue 447149f1-bb46-46b6-978d-b249867f6d59

In a non-exchange transaction, the Non-exchange Revenue 26051964-2306-495d-998b-9c8b6da93022

Default account to be used for allocating Default 05998f69-73ef-49ea-a226-59a3f94f35dc

5

R EPOR TIN G STR U C TU R EGU ID

1 2 3 4 126 7 8 9

25

• Below is how the Item revenue segment looks like in Munsoft.

• Posting levels can then be further added (as per Mandatory breakdown of the project segment/Internal

breakdown of the function segment).

26

THE GAINS AND LOSSES ITEM SEGMENT

Gains are described as an increase in economic benefits or service potential, and is no different in nature from

other revenue.

Losses are described as a decrease in economic benefits or service potential, and is no different in nature from

other expenses.

This segment can then be further subdivided into inventory, fair value adjustments, impairment loss, disposal of

fixed and intangible assets etc.

Below is how the item gains and losses segment looks like on NT’s portal.


1 2 3 4 5 6 7 8 9 12

Gains and losses are treated as a separate Gains and Losses 1f2cbc33-d269-4c44-b37b-bbcdd14676d7

The gain or loss recognised on the Discontinued Operations and Disposals of Non-current Assets6069c828-5ffc-4876-99c7-8e39801bcf19

The gain or loss arising from the Disposal of Fixed and Intangible Assets23946631-2859-45b9-ae59-180e3568853e

The loss arising from the change in the fair Fair Value Adjustment e677a06b-03d4-4b14-b3ef-b694dd9ef4bf

This item is for the recognition of gain/loss Foreign Exchange d312dd6e-b557-4709-858d-9b100fb1aeb0

Impairment is a decrease in the value of an Impairment Loss 5e16ed1e-eb84-40e2-9cab-119aacecaa7f

Reversal of impairment losses recognised Reversal of Impairment Loss 7c381123-4c5d-4354-8052-05ae15270de6

The amount of any w rite-dow n of Inventory 122c7a73-dae3-4015-acf7-ffd313583b88

Water losses are calculated as the Water Losses 01929127-a012-438e-a0da-9d7eb6663261

D EFIN IT ION S guid

27

• Below is how the Item gains and losses segment looks like in Munsoft.



28

THE EXPENDITURE ITEM SEGMENT

Expenses are decreases in economic benefits or service potential during the reporting period in the form of

outflows or consumption of assets or incurrence's of liabilities that result in decrease in net assets.

This segment includes bulk purchases, contracted services, employee related cost, inventory consumed,

operating cost, etc.

Below is how the item expenditure segment looks like on NT’s portal.

Expenses are decreases in economic Expenditure ba848e95-01c1-4448-bb00-ab4fe8c2371d

The irrecoverable debts that are w ritten off Bad Debts Written Off 1cf602dd-a304-41d5-ace0-b80c24672c74

Bulk purchases of electricity and w ater Bulk Purchases e42eaaef-3a8b-4874-8b16-0f65841f8f97

This group of accounts distinguish Contracted Services 0af6a506-a44b-4f83-a65b-03d7fd508c89

Depreciation is the systematic allocation of Depreciation and Amortisation 826f4ab3-8f42-4d1d-b2f1-1051f96bbdfe

This item includes all payments to Employee Related Cost b56d792d-8884-4286-8805-c7c5dd99164c

This item includes the total value of interest Interest, Dividends and Rent on Land 2e51769d-ac79-4f24-9924-f4bb6ee8d646

The amount of inventories recognised as Inventory Consumed eebead14-6096-41a7-b406-cb6ee2f06858

Remuneration as determined by the Remuneration of Councillors 3e15c687-769e-45d0-a58e-ffc0ab589c51

An operating lease is a lease other than a Operating Leases ec7355d3-4eaa-41c2-b800-230a68469687

An operating expense is a day-to-day Operational Cost a4721d03-69cb-46ef-af42-3463bf43d5b3

This category provides for of all unrequited Transfers and Subsidies 64233fb8-07fe-45b2-bdb8-90338ae441dd

NERSA [508] this account should record Statutory Payments other than Income Taxes 638da643-eb55-43e1-aaf1-ca24d4c1124b

South African normal income tax to be paid Income Tax 4d2d0c80-1594-46e7-af35-4244e8deeb9c

An entry shall disclose a single amount on Discontinued Operations e3e1676b-7a32-46be-a3d6-dfcbb70f1603

The municipality’s share of the surplus or Share of Surplus/Deficit attributable to Associate 57cf9039-f685-4596-8f1a-bbeaecabf36c

The consolidated statement of f inancial Share of Surplus/Deficit attributable to Joint Venture c453f20b-46c6-4a71-b714-d974bcaa85df

In accounting, minority interest (or non- Share of Surplus/Deficit attributable to Minorities 869ecac5-6f24-43c8-8638-92513a8264b1

Default account to be used for recording Default 361ad01a-e56a-4554-8484-b3e2f3808cb1

12

GU IDR EPOR TIN G STR U C TU R E

1 5 7D ef init ions

29

• Below is how the Item gains and losses segment looks like in Munsoft.



30

THE ASSETS AND LIABILITIES ITEM SEGMENTS

Assets are resources controlled by the municipality as a result of past events and from which future economic benefits or service potential are expected to flow to the municipality.

Assets are then further separated into:

• Current assets (includes cash at bank, investment, deposits, income tax receivable/payable, etc.).

• Non-current assets (includes heritage and biological assets, construction work-in-progress, infrastructure assets, etc.).

Below is how the item assets segment looks like on NT’s portal.

Liabilities are present obligations arising from past events, and which results in an outflow from the municipality.

Liabilities are then further separated into:

• Current liabilities (includes bank overdrafts, consumer deposits, income tax payable, output VAT, etc.).

• Non-current liabilities (all money owed by the municipality which is due more than one year after the reporting date. Includes deferred tax liabilities, deferred benefit obligations, etc.).

Below is how the item liabilities segment looks like on NT’s portal.

Net assets is the residual interest in the assets of the municipality after deducting all its liabilities and includes

equity, reserves and funds, accumulated surplus etc.

Below is how the item liabilities segment looks like on NT’s portal.

D ef init ions 1 5 7 12

Assets are resources controlled by the Assets 4baceb49-4bf8-4a31-bcf4-234adc0ae8bdCurrent assets refers to assets which would Current Assets 4994c30b-acb2-404a-9b8f-985c80b1e926Non-current assets refers to assets which Non-current Assets 964ef6f6-e28b-418f-ad7c-7b42176ac51c

R EPOR TIN G STR U C TU R E GU ID

D EFIN IT ION S 1 2

Liabilities are future sacrif ices of economic Liabilities 276debb4-61f5-4b40-8ec1-ff0f05ce346d

Current liabilities comprise of all money Current Liabilities 17c6163b-a5d7-4c46-b3fd-a1af448597ed

Non-current liabilities comprise of all money Non-current Liabilities c84b8161-b233-4790-aa8c-054de6dd73e3

31

• Below how the item assets and liabilities segment looks like in Munsoft.



Example:




Project

63348e37-464e-

4ac0-a13a-

e577838ff961

Default

transactions

53d432c7-5d06-

4d53-a785-

f29995840060

Operational:

Municipal

Running Cost

3936e862-0085-

4bc8-85ab-

acd5136ba14e

Capital:

Infrastructure:

Existing:

Upgrading:

Sanitation

Infrastructure:

Reticulation

d0eb0e41-4c62-

4ba4-8db0-

80489d96e260

Operational:

Maintenance:

Non-

infrastructure:

Corrective

Maintenance:

Planned:

Transport Assets

Function

7bfc7c06-9b62-

4cad-816b-

78ab18ec23e3

Function:

Finance and

Administration:

Core Function:

Property

Services

883643f9-8ff9-

482c-9c37-

1e3cfdbb22ec

Function:

Planning and

Development:

Core Function:

Corporate Wide

Strategic

Planning

(IPD's,LED's)

c0faf3f7-55b6-

4ef6-b0e3-

76b190e04071

Function: Waste

Water

Management:

Core Function:

Sewerage

e786cb3f-4469-

4006-b4de-

43a60322eeaf

Function: Public

Safety: Core

Function: Fire

Fighting and

Protection

Item

73b069b6-79db-

4389-8b98-

8d0b51bebe66

Revenue: Non-

exchange

revenue:

Property Rates:

Residential

Properties:

Developed

ef1d73f9-3638-

40ac-b710-

1831fbc14f9d

Expenditure:

Employee

related cost:

Municipal Staff:

Salaries, wages

and allowances:

Allowances:

Travel or motor

221bc30f-6f91-

48bb-9093-

534df5b6648e

Assets: Non-

current assets:

Property, Plant

and equipment:

Cost model:

Sanitation

infrastructure:

Cost:

8af603f4-1efc-

471f-8efb-

a4081255c8ee

Expenditure:

Contracted

Services:

Contractors:

Maintenance of

unspecified

assets

Pipe Works

Upgrade Sanitation

InfrastructureProperty Rates Revenue

Revenue





Employee Cost: S&T

IDP Department


32

THE FUNDING SEGMENT

Where is the money coming from to fund a project or municipal activities? Is it property rates, service charges,

equitable share or own revenue? Or did the municipality make use of external borrowings to finances capital

projects.

This segment is used to monitor expenditure (operational and capital) against the source of funding.

Further classified into:

• Operational funding – Funds for operational projects (includes revenue, transfers & subsidies,

borrowings, etc.)

• Capital revenue – Funds for capital applications (includes transfer from operational revenue, transfers

and subsidies.

• Non-funding transactions – Any other transactions not classified as operational or capital in nature (e.g.

transfer of funds from primary bank account to a “dedicated bank account” for the replacement of

capital assets).

Below is how the funding segment looks like on NT’s portal.

Funding sources available to the Fund 3b60c880-756e-42e6-b609-778569e8d219

Operational revenue provides for funds Operational cd3b0df1-2a96-416c-a711-10576b74cd94

Funds for capital application Capital 8ded34cc-8d7e-46dd-b79c-72a2f99efbe9

Recording of transactions not specific to Non-funding Transactions ac97d0b1-d32f-4077-947c-f147177f7bfb

3D ef init ions


1 2 4 5 6 7 8 9GU ID

12

33

• Below is how the funding segment looks like in Munsoft.



Example:




Project

63348e37-464e-

4ac0-a13a-

e577838ff961

Default

transactions

53d432c7-5d06-

4d53-a785-

f29995840060

Operational:

Municipal

Running Cost

3936e862-0085-

4bc8-85ab-

acd5136ba14e

Capital:

Infrastructure:

Existing:

Upgrading:

Sanitation

Infrastructure:

Reticulation

d0eb0e41-4c62-

4ba4-8db0-

80489d96e260

Operational:

Maintenance:

Non-

infrastructure:

Corrective

Maintenance:

Planned:

Transport Assets

Function

7bfc7c06-9b62-

4cad-816b-

78ab18ec23e3

Function:

Finance and

Administration:

Core Function:

Property

Services

883643f9-8ff9-

482c-9c37-

1e3cfdbb22ec

Function:

Planning and

Development:

Core Function:

Corporate Wide

Strategic

Planning

(IPD's,LED's)

c0faf3f7-55b6-

4ef6-b0e3-

76b190e04071

Function: Waste

Water

Management:

Core Function:

Sewerage

e786cb3f-4469-

4006-b4de-

43a60322eeaf

Function: Public

Safety: Core

Function: Fire

Fighting and

Protection

Item

73b069b6-79db-

4389-8b98-

8d0b51bebe66

Revenue: Non-

exchange

revenue:

Property Rates:

Residential

Properties:

Developed

ef1d73f9-3638-

40ac-b710-

1831fbc14f9d

Expenditure:

Employee

related cost:

Municipal Staff:

Salaries, wages

and allowances:

Allowances:

Travel or motor

221bc30f-6f91-

48bb-9093-

534df5b6648e

Assets: Non-

current assets:

Property, Plant

and equipment:

Cost model:

Sanitation

infrastructure:

Cost:

8af603f4-1efc-

471f-8efb-

a4081255c8ee

Expenditure:

Contracted

Services:

Contractors:

Maintenance of

unspecified

assets

Funding

5692f970-c29c-

4044-80d7-

1bcdbdd34348

Fund:

Operational:

Revenue:

General

Revenue: Taxes:

Property Rates:

Levies

b24ed953-03ae-

4467-ba3b-

3fc158896032

Fund:

Operational:

Revenue:

General

Revenue:

Equitable Share

9257bcbd-f49b-

4d57-8ec1-

5792780d80fd

Fund:

Operational:

Revenue:

General

Revenue:

Service Charges:

Waste Water

d97cec8e-a8f2-

40d0-824a-

fd2c2011b5ea

Fund:

Operational:

Revenue:

General

Revenue:

Operational

Revenue

Pipe Works

Upgrade Sanitation


Revenue





Employee Cost: S&T

IDP Department


34

THE COSTING SEGMENT

The costing segment is there to assist municipalities in identifying the cost of providing a service to their

customers, and hence, making decisions regarding municipal tariffs.

When accounting for cost, the following needs to be taken into account:

• Direct cost – Primary cost (salaries, stationary, telephones, etc.)

• Indirect cost – Secondary cost (labour, machines, HR, etc.)

• Hidden cost – Secondary cost (donations or free time received to render a service)

35

The distinction is made between charges to receiving departments and recoveries made by the sending

departments. The sending department provides goods/services to the receiving department based on the

municipal rates/tariffs determined.

Charges/Recoveries are further classified into:

• Activity based charges (fire brigade charges, training, training, labour, etc.)

• Departmental charges (asset management, budgets, indigent, legal services, meter readers, telephone,

etc.)

• Internal billing (bulk services, connection fees, sanitation charges, etc.)

Below is how the costing segment looks like on NT’s portal.

Providing for secondary cost allocation in Costing 1deb6fa3-b56a-4a06-a4bf-6a9fcf0900bd

Distinction is made at this level betw een "charges Charges 7aef13c1-b93e-44ec-ab43-b2776e0a8446

Distinction is made at this level betw een "charges Recoveries e2585e2e-949e-4cc8-8ede-1ddcb5438a7f

All transactions not relevant to the allocation of Default 47c7ba65-c270-4a7f-91ba-3842eb629ddf

Definitions

REPORTING STRUCTURE

GUID1 2 #3 # 124 5 6 7 8 9

36

• Below is how the costing segment looks like in Munsoft.



37

Example:




Project

63348e37-464e-

4ac0-a13a-

e577838ff961

Default

transactions

53d432c7-5d06-

4d53-a785-

f29995840060

Operational:

Municipal

Running Cost

3936e862-0085-

4bc8-85ab-

acd5136ba14e

Capital:

Infrastructure:

Existing:

Upgrading:

Sanitation

Infrastructure:

Reticulation

d0eb0e41-4c62-

4ba4-8db0-

80489d96e260

Operational:

Maintenance:

Non-

infrastructure:

Corrective

Maintenance:

Planned:

Transport Assets

Function

7bfc7c06-9b62-

4cad-816b-

78ab18ec23e3

Function:

Finance and

Administration:

Core Function:

Property

Services

883643f9-8ff9-

482c-9c37-

1e3cfdbb22ec

Function:

Planning and

Development:

Core Function:

Corporate Wide

Strategic

Planning

(IPD's,LED's)

c0faf3f7-55b6-

4ef6-b0e3-

76b190e04071

Function: Waste

Water

Management:

Core Function:

Sewerage

e786cb3f-4469-

4006-b4de-

43a60322eeaf

Function: Public

Safety: Core

Function: Fire

Fighting and

Protection

Item

73b069b6-79db-

4389-8b98-

8d0b51bebe66

Revenue: Non-

exchange

revenue:

Property Rates:

Residential

Properties:

Developed

ef1d73f9-3638-

40ac-b710-

1831fbc14f9d

Expenditure:

Employee

related cost:

Municipal Staff:

Salaries, wages

and allowances:

Allowances:

Travel or motor

221bc30f-6f91-

48bb-9093-

534df5b6648e

Assets: Non-

current assets:

Property, Plant

and equipment:

Cost model:

Sanitation

infrastructure:

Cost:

8af603f4-1efc-

471f-8efb-

a4081255c8ee

Expenditure:

Contracted

Services:

Contractors:

Maintenance of

unspecified

assets

Funding

5692f970-c29c-

4044-80d7-

1bcdbdd34348

Fund:

Operational:

Revenue:

General

Revenue: Taxes:

Property Rates:

Levies

b24ed953-03ae-

4467-ba3b-

3fc158896032

Fund:

Operational:

Revenue:

General

Revenue:

Equitable Share

9257bcbd-f49b-

4d57-8ec1-

5792780d80fd

Fund:

Operational:

Revenue:

General

Revenue:

Service Charges:

Waste Water

d97cec8e-a8f2-

40d0-824a-

fd2c2011b5ea

Fund:

Operational:

Revenue:

General

Revenue:

Operational

Revenue

Costing

47c7ba65-c270-

4a7f-91ba-

3842eb629ddf

Costing: Default

47c7ba65-c270-

4a7f-91ba-

3842eb629ddf

Costing: Default

47c7ba65-c270-

4a7f-91ba-

3842eb629ddf

Costing: Default

47c7ba65-c270-

4a7f-91ba-

3842eb629ddf

Costing: Default

Pipe Works

Upgrade Sanitation


Revenue





Employee Cost: S&T

IDP Department


38

THE REGIONAL SEGMENT

The regional segment facilitates in the planning and recording of municipal spending, revenue collection, capital

investments and wealth creation at the lowest relevant geographical level (ward). The lowest geographical

regional indicator refers to where the intended beneficiaries normally live or are located, and who will benefit

directly from the services or capital investment.

e.g. if payment is made by a municipality in the EC to a service provider in Gauteng for services rendered, then

the regional indicator will not be Gauteng (where the supplier is located), but the region or ward benefiting from

this service.

This information provides the following information on:

• Spending on capital and operational projects

• Contributions made by the community by paying municipal bills

• Projects providing indirect benefits to the community

This information will tell NT:

• Whether the services are being provided impartially, fairly, equitably and without bias.

• Whether progress is being made in providing social infrastructure and access to services.

• Whether government spending by different departments and municipalities are being properly

sequenced and coordinated.

• Whether actual spending by government is aligned to the relevant plans of the three spheres of

government;

• Assist municipal councillors and mayors to account to the communities for resources allocated and

actual spending of the municipality to communities and wards.

• Provide specific ward information to councillors to assist in decision-making.

39

The region segment is subdivided as follows:

• Default: May not be used anymore.

• Regional identifier: Broken down into provinces, districts, regions, municipalities, wards, whole of the

municipality, etc.

Below is how the region segment looks like on NT’s portal.

The purpose of the regional segment is to Regional 564ed09c-083d-48c6-9f53-c0f1b07dce1a

This classif ication is used for the recording Default 21404132-e919-47d8-8b5b-266c93fc68c4

This classif ication provides regional Regional Identif ier 427b0965-17fb-4d15-9e0f-3cb2f48784ce

GU ID

1 2 3 4

D ef init ions


11 125 6 7 8 9 10

40

• Below is how the regional segment looks like in Munsoft.



41

Example:




Project

63348e37-464e-

4ac0-a13a-

e577838ff961

Default

transactions

53d432c7-5d06-

4d53-a785-

f29995840060

Operational:

Municipal

Running Cost

3936e862-0085-

4bc8-85ab-

acd5136ba14e

Capital:

Infrastructure:

Existing:

Upgrading:

Sanitation

Infrastructure:

Reticulation

d0eb0e41-4c62-

4ba4-8db0-

80489d96e260

Operational:

Maintenance:

Non-

infrastructure:

Corrective

Maintenance:

Planned:

Transport Assets

Function

7bfc7c06-9b62-

4cad-816b-

78ab18ec23e3

Function:

Finance and

Administration:

Core Function:

Property

Services

883643f9-8ff9-

482c-9c37-

1e3cfdbb22ec

Function:

Planning and

Development:

Core Function:

Corporate Wide

Strategic

Planning

(IPD's,LED's)

c0faf3f7-55b6-

4ef6-b0e3-

76b190e04071

Function: Waste

Water

Management:

Core Function:

Sewerage

e786cb3f-4469-

4006-b4de-

43a60322eeaf

Function: Public

Safety: Core

Function: Fire

Fighting and

Protection

Item

73b069b6-79db-

4389-8b98-

8d0b51bebe66

Revenue: Non-

exchange

revenue:

Property Rates:

Residential

Properties:

Developed

ef1d73f9-3638-

40ac-b710-

1831fbc14f9d

Expenditure:

Employee

related cost:

Municipal Staff:

Salaries, wages

and allowances:

Allowances:

Travel or motor

221bc30f-6f91-

48bb-9093-

534df5b6648e

Assets: Non-

current assets:

Property, Plant

and equipment:

Cost model:

Sanitation

infrastructure:

Cost:

8af603f4-1efc-

471f-8efb-

a4081255c8ee

Expenditure:

Contracted

Services:

Contractors:

Maintenance of

unspecified

assets

Funding

5692f970-c29c-

4044-80d7-

1bcdbdd34348

Fund:

Operational:

Revenue:

General

Revenue: Taxes:

Property Rates:

Levies

b24ed953-03ae-

4467-ba3b-

3fc158896032

Fund:

Operational:

Revenue:

General

Revenue:

Equitable Share

9257bcbd-f49b-

4d57-8ec1-

5792780d80fd

Fund:

Operational:

Revenue:

General

Revenue:

Service Charges:

Waste Water

d97cec8e-a8f2-

40d0-824a-

fd2c2011b5ea

Fund:

Operational:

Revenue:

General

Revenue:

Operational

Revenue

Costing

47c7ba65-c270-

4a7f-91ba-

3842eb629ddf

Costing: Default

47c7ba65-c270-

4a7f-91ba-

3842eb629ddf

Costing: Default

47c7ba65-c270-

4a7f-91ba-

3842eb629ddf

Costing: Default

47c7ba65-c270-

4a7f-91ba-

3842eb629ddf

Costing: Default

Regional

5d2bc748-3a89-

4daa-bc4d-

06da3147ae70

Regional:

Regional

Identifier: Local

government by

province: Free

state: District

municipalities:

DC19 Thabo

5d2bc748-3a89-

4daa-bc4d-

06da3147ae70

Regional:

Regional

Identifier: Local

government by

province: Free

state: District

municipalities:

DC19 Thabo

5d2bc748-3a89-

4daa-bc4d-

06da3147ae70

Regional:

Regional

Identifier: Local

government by

province: Free

state: District

municipalities:

DC19 Thabo

5d2bc748-3a89-

4daa-bc4d-

06da3147ae70

Regional:

Regional

Identifier: Local

government by

province: Free

state: District

municipalities:

DC19 Thabo

Pipe Works

Upgrade Sanitation


Revenue





Employee Cost: S&T

IDP Department
