The introduction of the Municipal Standard Chart of Accounts (mSCOA) by the National Treasury has altered the municipal operating environment.
Every municipality and municipal entity has a chart of accounts that lists all accounts used in the general ledger. This ledger is leveraged by municipal accounting software to aggregate information into financial statements. mSCOA targets municipal operations by enforcing a standardisation of municipal account numbers and descriptions in their charts.
mSCOA will benefit municipalities by:
mSCOA was designed to modernise financial management through updated systems and technology. It ensures credible, reliable and timely database of municipal information a very detailed level. Municipalities have the responsibility of making sure that all citizens are provided with services to meet their basic needs. These services have a direct and immediate impact on the quality of life of communities but the delivery of quality services remains one of the biggest challenges that government faces.
It is set to improve governance, accountability, transparency and the management of public funds. All municipalities are required to capture and submit their financial transactions against a predefined classification framework, which will result in the uniformity of information in terms of revenue, expenditure, assets and liabilities.
The standardised approach literally gives National Treasury the ability to determine municipal performance at the clock of a button. The City of Ekurhuleni is well on its way to mSCOA compliance.