(1) Yes, reporting through the section 71 reports have been inconsistent in the last months. There have been cases of overstatement and sometimes understatements but the former more prevalent. The newly regulated (1 July 2017) Municipal Standard Chart of Account (mSCOA) requires that municipalities upload their budget and financial information in a data string format to the Local Government portal across the six mSCOA regulated segments. This is the first municipal financial year that the section 71 report is compiled by using the figures from the mSCOA data strings. Previously (prior to 01 July 2019) the National Treasury allowed parallel reporting and used data from return forms that was submitted to the Local Government Database to prepare the section 71 reports. The introduction of the mSCOA is intended to improve reporting to a substantially accurate level in the future, however, most municipalities are still getting used to the mSCOA requirement, therefore, inconsistencies in the current reporting are observed. Municipalities are making an effort to submit credible section 71 reports.
(2)(a) In as far as the submission of credible data is concerned, the defaulting municipalities differ from month-to-month.
(2)(b)(i) At the core (nature) of the problem is:
(2)(b)(ii) Before each quarterly Section 71 publication, the municipalities receive their submitted financial figures in the publication report format and are asked to verify the accuracy of the financial data. They are given 5 days to make any corrections. Publication reports are re-issued until the municipality is satisfied. The accuracy of section 71 information is then signed off by the respective Municipal Manager and Chief Financial Officer.
As the National Treasury has no access to municipal financial systems, inaccuracy of submissions compared to the figures carried within the financial systems cannot be determined. The signatures of the Municipal Manager and Chief Financial Officer indicate to the National Treasury that the municipality agrees with the representation of their figures in the Section 71 publication.
(3) The improvement of the credibility of the data strings is a priority for National and Provincial Treasuries and is analysed monthly upon successful submission of the data strings. The findings of the analysis are shared by the National and provincial treasuries with the respective municipalities. Municipalities are required to correct any errors in the data strings in the next month and non-compliance letters are send to those municipalities that are persistently not complying with the mSCOA Regulations. Technical assistance to correct errors and training are also provided to ensure that municipalities submit credible information.