mSCOA as an Enabler for Bespoke Decision-Making and Improved Service Delivery

Thank you to our Series Gold sponsors:
Ntiyiso Consulting Group
Business Engineering

Also read: "From Red Tape to Roadmap: How mSCOA Can Rescue Our Municipalities"by Miyelani Holeni, Group Chief Advisor at Ntiyiso Consulting Group

Webinar Overview:

The webinar focused on the Municipal Standard Chart of Accounts (mSCOA) reform in South Africa, specifically addressing the regulation of business processes to enhance municipal financial management and service delivery. The discussion emphasised mSCOA as a comprehensive business reform, not merely a financial or systems reform, aimed at standardising financial reporting, improving transparency, and enabling data-driven decision-making across municipalities. The panelists provided insights from national, provincial, municipal, and consulting perspectives, highlighting the reform's evolution, challenges, and practical applications.

Speaker Contributions:

1. Mr. Zolani SS Zonyane (Moderator, Editorial Director, The Municipal Edge):
• Role: Set the context and facilitated the discussion, emphasising the importance of mSCOA as a business reform and the need for change management to overcome implementation challenges.
• Key Points: Highlighted the misconception of mSCOA as solely a finance or systems reform, stressing the need for institutionalising the reform to improve service delivery. Noted the diverse audience (municipal officials, public representatives, private sector, academics) and encouraged participation in the ongoing regulatory process. Introduced a poll to identify barriers to strategic mSCOA use, with resistance to change and lack of staff capacity emerging as top issues. Announced a follow-up webinar on September 9 to address unanswered questions.
  
  
2. Ms. Thina Naki (mSCOA Technical Advisor, National Treasury):
• Role: Provided the national perspective on mSCOA's background, purpose, and regulatory progress.
• Key Points: Explained mSCOA's legal foundation (promulgated in 2014 under the MFMA) to standardise municipal financial classification, addressing issues like inconsistent reporting and poor data integrity. Emphasised that mSCOA is a business reform affecting all municipal units, not just finance, and outlined its benefits, including improved oversight, reduced reporting fatigue, and enhanced service delivery. Detailed the ongoing regulation of 14 business processes (down from 15), with a deadline for stakeholder comments on September 5, 2025. Encouraged municipalities to use mSCOA steering committees and roadmaps for compliance and to access resources on the MFMA webpage.
  
  
3. Ms. Zinzi Mphahlele (Manager: Budget & Reporting, City of Polokwane):
• Role: Shared practical insights from a municipal perspective, showcasing Polokwane's successful mSCOA implementation.
• Key Points: Described mSCOA as a transformative tool for transparency and accountability, enabling tracking of funds to specific wards and GPS coordinates. Highlighted how Polokwane uses mSCOA's seven segments (project, funding, function, item, region, costing) to enhance budgeting, monitoring, and decision-making. Noted benefits like splitting maintenance costs, ensuring cost-reflective tariffs, and reducing reporting fatigue through automated Section 71 reports. Advocated for embracing mSCOA as a governance reform, not just a compliance exercise, and credited success to active steering committees and training from the National School of Government.
  
  
4. Ms. Nombulelo Oliphant (Chief Director: Municipal Budget & Institutional Governance, Eastern Cape Provincial Treasury):
• Role: Provided a provincial perspective, detailing Eastern Cape's support for mSCOA implementation.
• Key Points: Emphasised mSCOA's role in standardising data collection, reducing duplication, and enabling comparable reporting. Described the province's structured approach, including a project team led by the Head of Department, district mSCOA champions, and monthly (later quarterly) meetings to monitor compliance. Highlighted vendor engagements to resolve system issues and capacity building through forums and an annual mSCOA day. Noted challenges with data credibility and urged municipalities to fully utilise existing systems to avoid wasteful expenditure. Encouraged commenting on the business process regulations to shape implementation.
  
  
5. Dr. Silma Koekemoer (Director: Ayema Xpertrix Consulting):
• Role: Shared insights from her long-term involvement in mSCOA since 2015, focusing on the regulation of business processes.
• Key Points: Detailed the use of MFMA Circular 80 (2016) as the foundation for regulating 14 business processes, covering strategic planning, budgeting, transacting, reporting, and non-financial areas like project and land use management. Highlighted detailed process manuals and system specifications on the MFMA webpage as training tools for both financial and non-financial staff. Addressed questions about compliance and autonomy, asserting that mSCOA is an enabling tool, not a restrictive measure, to improve governance and service delivery. Encouraged participation in Integrated Consultation Forums (ICFs) starting September 16, 2025, to engage non-financial stakeholders.
  
  
6. Mr. Miyelani Holeni (Group Chief Advisor, Ntiyiso Consulting Group):
• Role: Provided a consulting perspective, focusing on implementation challenges and solutions.
• Key Points: Stressed the need for organisation-wide ownership of mSCOA, involving political leadership and all departments, to move beyond viewing it as a financial compliance issue. Highlighted challenges like manual processes, fragmented IT systems, and data integration issues, advocating for automation and system integration to ensure data accuracy. Noted that the focus on 'mSCOA-compliant' systems sometimes overlooked existing system capabilities, suggesting municipalities leverage current systems and benchmark with successful cases like Polokwane. Encouraged treating mSCOA as a dedicated transformation project to foster a culture of data-driven decision-making.
• Also read:"From Red Tape to Roadmap: How mSCOA Can Rescue Our Municipalities"

Key Takeaways:

• mSCOA as a Business Reform: The webinar underscored mSCOA's role as a holistic reform requiring organisation-wide adoption, change management, and robust governance structures like steering committees.
• Practical Benefits: Polokwane's experience demonstrated mSCOA's ability to enhance transparency, accountability, and service delivery through precise tracking of funds and projects.
• Provincial Support: Eastern Cape's structured approach showed the importance of provincial coordination, vendor engagement, and capacity building in driving compliance.
• Regulatory Process: The ongoing regulation of business processes, with stakeholder input due by September 5, 2025, aims to standardise and streamline municipal operations.
• Challenges and Solutions: Resistance to change, lack of capacity, and fragmented IT systems were identified as barriers, with solutions including training, system utilisation, and treating mSCOA as a strategic enabler.
• Engagement Opportunities: Stakeholders were urged to participate in ICFs and comment on regulations to shape mSCOA's future.