Part 2: mSCOA as an Enabler for Bespoke Decision-Making and Improved Service Delivery
Future Cities Africa and the Municipal Edge present the 4th Annual "Local Government Conversations" Webinar Series 2025.
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The webinar, moderated by Mr. Zolani SS Zonyane from The Municipal Edge, focused on the ongoing implementation of the Municipal Standard Chart of Accounts (mSCOA) reform in South African municipalities. The panelists included representatives from Buffalo City Metropolitan Municipality, Western Cape Provincial Treasury, National Treasury, and private sector partners involved in mSCOA implementation. The discussion highlighted progress, challenges, and strategies for effective mSCOA adoption, emphasizing standardization, system integration, and organisational reform.
Key Points from Panelists
Key Themes and Takeaways
Call to Action
- Mr. Vuyo Majikijela (Buffalo City Metropolitan Municipality)
- Progress: Buffalo City was an early adopter of mSCOA in 2016, rolling out version 5.4. Implementation was divided into two phases:
- Phase 1: Integrated core modules (billing, budget, asset management, inventory, supply chain, payroll, revenue management) to the general ledger by July 2018.
- Phase 2: Focused on subsystems like treasury, grant management, costing, corporate governance, valuation roles, and traffic fines, with partial integration of some modules.
- Roadmap: Progress is reported quarterly to the finance portfolio committee and council, supported by monthly project meetings.
- Challenges: Issues include integrating subsystems (e.g., customer care module), manual processes in deeds office integration, and aligning balance sheet accounts for trading services.
- Innovations: Automated supply chain processes for tenders, introduced an Interactive Voice Response (IVR) system for customer relationship management, and implemented a smart metering app.
- Governance: Emphasized the importance of sustainable governance structures, with change agents in each department and a dedicated mSCOA task team to ensure cross-departmental integration.
- Progress: Buffalo City was an early adopter of mSCOA in 2016, rolling out version 5.4. Implementation was divided into two phases:
- Mr. Faez Salie (Western Cape Provincial Treasury)
- mSCOA Purpose: Introduced in 2014 to standardize municipal financial reporting, mSCOA aims to create a unified data language across South Africa's 257 municipalities, enabling comparability, oversight, and multidimensional data structuring.
- Evolution: The reform is shifting from a compliance-focused back-office tool to a strategic enabler for service delivery and decision-making.
- Rationale for Regulation:
- Reduces administrative burdens through data interoperability.
- Enables modern technology adoption for automation and analytics.
- Enhances data integrity, decision-making, accountability, and transparency.
- Facilitates monitoring of national and provincial priorities via conditional grants.
- Western Cape Perspective: The province supports municipalities through platforms like the MFMA Consistency Workshop, district engagements, and bespoke support tailored to municipal maturity levels.
- Best Practices:
- Leadership buy-in at the municipal manager level is critical; mSCOA is an organizational reform, not just an IT or finance project.
- Map workflows before system configuration to avoid automating inefficient processes.
- Invest in change management through training and communication.
- Collaborate proactively with system vendors to meet new regulatory requirements.
- Call to Action: Municipalities should establish project implementation committees, conduct gap analyses, formalize communication with provincial treasuries, and engage in readiness assessments for processes and system capabilities.
- Mr. Bongani Mdletshe (National Treasury)
- mSCOA Objectives: Standardizes municipal financial reporting to enable seamless data sharing across government spheres, reduce manual interventions, and promote automation.
- Regulatory Progress: National Treasury is moving from guidelines (MFMA Circular 80) to regulating minimum business processes and system requirements, ensuring standardized workflows and system functionalities.
- Consultative Process: Ongoing Integrated Consultative Forums (ICFs) allow stakeholders to provide feedback on system specifications and regulations.
- Change Management: Emphasized the need for continuous change management to onboard users, address fears, and ensure buy-in, citing examples of municipalities reverting to old systems due to poor user adoption.
- Benefits: mSCOA enables credible data, improved audit outcomes, and strategic decision-making through real-time, reliable reporting.
- Mr. Cornel Ebersohn (Business Engineering)
- System Integration: Highlighted the importance of integrating third-party systems (e.g., traffic management) with core financial systems to enhance efficiency and financial sustainability.
- Digitalization Benefits: Online platforms and digital procurement reduce costs and improve accessibility, particularly for geographically dispersed municipalities.
- Roadmap and Governance: A clear roadmap and governance structures are essential to align multiple systems and vendors, ensuring compliance with regulations.
- Municipal Context: No one-size-fits-all solution exists due to regional and geographical differences, but standardized SOPs guide municipalities toward compliance and efficiency.
- Engagement: Regular platforms like this webinar are crucial for feedback and collaboration across government spheres and vendors.
- Mr. Mike Steyn (triVector)
- Process-Driven Approach: The project team has developed detailed process models and system requirements to define minimum functionalities for mSCOA compliance, using generic terminology to apply across municipalities.
- Municipal Customization: Municipalities should customize these processes to specify roles and system functionalities, aiding implementation and change management.
- Master Data Management: Emphasized the need for consistent master data across systems to facilitate integration and ensure data integrity.
- Workflow Automation: Tools like workflow management systems enhance governance, enable parallel task execution, and improve efficiency.
- Single vs. Multiple Systems: No preference for a single integrated system versus multiple solutions; the focus is on meeting functional requirements. However, multiple systems increase integration complexity, while single systems may still face integration challenges due to their modular evolution.
- Benefits: Properly implemented processes and systems improve data quality, reporting, and decision-making, ultimately enhancing service delivery.
Key Themes and Takeaways
- mSCOA as an Organizational Reform: The reform extends beyond finance, requiring buy-in from all municipal departments and leadership to succeed.
- Governance and Change Management: Sustainable governance structures (e.g., steering committees, change agents) and continuous change management are critical to onboard users and align processes.
- System Integration and Automation: Seamless integration of core and third-party systems, supported by master data management and workflow automation, reduces manual processes and enhances efficiency.
- Standardization Benefits: Standardized processes and data enable comparability, transparency, accountability, and evidence-based decision-making across municipalities.
- Collaboration: Active engagement with National and Provincial Treasuries, system vendors, and stakeholders through platforms like ICFs is essential for shaping regulations and ensuring compliance.
- Strategic Opportunity: mSCOA enables predictive analytics, real-time dashboards, and cost-reflective tariffs, transforming municipalities into data-driven, service-oriented entities.
- Challenges: Manual processes, fragmented systems, and resistance to change remain hurdles, requiring robust change management and vendor collaboration.
Call to Action
- Municipalities: Establish and empower mSCOA steering committees, conduct gap analyses, and engage in readiness assessments for processes and systems.
- Leadership: Champion mSCOA as a strategic priority, ensuring organizational-wide awareness and buy-in.
- Vendors: Innovate to meet new regulatory requirements and align solutions with standardized processes.
- Stakeholders: Participate in consultative forums (e.g., ICFs on September 16, 2025) to provide feedback and access resources on the National Treasury's MFMA webpage.
- Provincial Treasuries: Continue facilitating support, training, and knowledge-sharing to bridge the gap between national policy and municipal implementation.
