Practical Implementation

National Treasury Section 71 Reporting

November 28, 2019

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We have developed an excel based tool to assist municipalities to comply with the NT reporting requirements. Many municipalities are facing difficulty with this requirement due to many factors, e.g.

  1. Municipalities do not have the capacity in terms of time and manpower to prepare the listed In-Year reports.
  2. The financial systems used by Municipalities are not always able to produce the required reports on an automated basis.
  3. The Municipal Vote/ Standard Classifications required in order to complete the above-mentioned report does not correspond to the vote structures utilised by the Municipality.
  4. The Chart of Accounts used by the Municipalities is not always GRAP compliant and thus does not facilitate a smooth reporting process.
  5. The utilisation of suspense accounts for items such as loans and investments complicates monthly reporting if these suspense accounts are not cleared on a monthly basis.
  6. Insufficient and/or inadequate standard operating procedures describing monthly reporting processes.
  7. The necessary links between budgets, the SDBIP and the IDP do not always exist which makes monthly reporting difficult.
  8. Statistical information required by the monthly reports is not always available or easily accessible.
  9. Many municipalities do not account for assets on a monthly basis – instead, such assets are recorded in suspense accounts or even Work-In-Progress with the clearing of these accounts being done at year-end and correct depreciation being accounted for at year-end only. This complicates monthly capital, depreciation and related reporting (also affects SC 7 and SC 12).
  10. Councillor and Staff Benefit information is not always readily available in cases where municipalities’ income and expenditure accounts are not correctly set-up and in other cases the payment function has been outsourced to external parties with monthly journals not always being passed on time (all of these challenges affect the completion of SC8).
  11. Long term contract registers are not updated and the actual contracts are often missing which complicates the reporting on long term contracts.