Transcript Script Presentations - Session 1

SESSION 1
INTRODUCTION TO THE
ECONOMIC REPROTING
FORMAT (ERF) AND SCOA
PRESENTED BY: NATIONAL TREASURY
WHAT IS ERF AND SCOA?
• Economic Reporting Format (ERF)
• New budget reporting format
• As prescribed in the guidelines (Blue Book)
• Introduced this new budget format in 2004
• Replaced old Standard Item Classification
• In line with international best practice
• Standard Chart of Accounts
• New structure of government accounts
• Setup of the general ledger of government
• Translates the budget format to financial systems
structure
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WHY A NEW ERF?
• Old formats outdated
• Standard items – Inappropriate management info
• Items like Stores and livestock and general items
like Administrative Expenditure
• Not enough detail on use of resources
• Part of Public Sector Budget Reform
• Part of a process to modernize accounts
• Process that started in 1999 with the PFMA
• Providing detail on outputs produced
• Improve accountability in the public sector
• More detail provided on spending activities
• Better information for day-to-day management
• Standardization ensure comparability
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WHY A NEW ERF?
• Better quality information to legislatures
• Reinforce legislature’s oversight role
• Single classification standard
• Used throughout the government sector
• Compliance to international reporting standards
• Government Financial Statistics (GFS)
classification
• International Federation of Accountants (IFAC)
standards – IPSAS
• Special Data Dissemination Standard (SDDS)
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DESIGN PRINCIPLES
• In line with Constitution
• Treasury to prescribe classification
• It is clear, user friendly and accessible
• Terminology easy to understand
• Standardised with clear definitions provided
• Data accessible through MISystems
• It is transparent and promotes accountability
• Provides details on items purchased
• Easier to calculate relevant economic variables
• for e.g. GDP, Governments contribution to capital
formation
• GFS tables can be extracted easily
• Ensuring international reporting compliance
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WHAT IS THE SCOA?
• Standardised Chart of Accounts
• New structure of general ledger accounts
of government
• Effectively a list of receipts, payments and
balance sheet items
• Accounts correspond to ERF requirements
• Budget format mirrored in the financial
system by SCOA
• SCOA provides detailed breakdown of
categories in the budget format
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WHAT IS THE SCOA?
• Implemented within the financial systems
• Mainly developed within the BAS
environment
• Mappings to LOGIS and PERSAL to
assist in capturing transactions
• Mappings to other systems like FMS2,
Walker, etc.
• Controlled by National Treasury
• 6 of the 7 segments standardised
• Managed by NT via SCOA Committee
• Departments control the lower levels
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FINANCIAL SYSTEMS FOR ERF AND
SCOA
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DESIGN PRINCIPLES
• Good governance and financial practice
• Aligned to legislative requirements
• Provides managers with management information
• Complies with economic and accounting standards
(GFS,GRAP,ASB,IPSAS)
• Satisfies reporting requirements of stakeholders
• IYM reporting, Infrastructure, AFS, etc
• Ensure that data is available for any type of
reporting
• Allows for cash and accrual accounting
• Complies with current cash accounting
requirements
• Paves the way for a move to accrual accounting in
the future
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WHO USES SCOA?
• Budget office officials
• Internal in departments
• Also national and provincial treasury
officials
• Accounting officers
• Provided with a view of what is happening
to departmental budget
• Accounting clerks
• Economic Analysts
• Statisticians
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MACRO-LEVEL BENEFITS
• Improved quality of information
• Already dramatic improvement after 2004
• Hoping to see further improvements after 2008
• Increased efficiency in extracting information
• Structures allow for standardised reports in BAS
• Automated IYM, IRM, etc.
• Positive public perception
• Comparable financial information
• Across departments, provinces, etc
• Standardised financial information
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MICRO-LEVEL BENEFITS
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Less duplication of accounts
User-friendly system
Easier to audit
Better management information
Focus on expenditure management
Standardised process of transacting
Job satisfaction and transfer of skills
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For any additional questions or issues for
clarification, please contact the National Treasury
SCOA Technical Committee at:
• Call centre: (012) 315 5311
• E-mail: [email protected]
• Website: http://scoa.treasury.gov.za
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