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Ccg systems : HOW TO AVOID EXPENDITURE NON-COMPLIANCE

Ccg systems : HOW TO AVOID EXPENDITURE NON-COMPLIANCE. PRESENTED BY : Zeus Maboho Professional accountant (SA ). Overview. 5. 4. 3. 2. 1. Who We Are..?. WHO WE ARE. Established in the early 2000 : CCG Systems formerly known as Camelsa Consulting Group .

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Ccg systems : HOW TO AVOID EXPENDITURE NON-COMPLIANCE

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  1. Ccg systems :HOW TO AVOID EXPENDITURE NON-COMPLIANCE PRESENTED BY : Zeus MabohoProfessional accountant (SA)

  2. Overview 5 4 3 2 1

  3. Who We Are..?

  4. WHO WE ARE • Established in the early 2000 : CCG Systems formerly known as Camelsa Consulting Group. • Established by former CFOs, Directors, CA(SA), Auditors, SCM Managers. Identifying the prospect of Technology in Finance & Accounting, Business Management and the urgent prospect of The Fourth Industrial Revolution. • Key Business : Financial Accounting Auditing, Risk Management, Supply Chain and Contract Management and ERP System Implementation. • Leading implementers of National Treasury Standardized Chart of Accounts, Budgeting and Reporting for Local Government “Digitization and Systems Development to Achieve Procurement Excellence”

  5. WHERE ARE WE? Legend Local Municipalities District Municipalities Government Department Entity (Public) Water Board Sage VIP

  6. SOME OF OUR LIVE SITES 42 in Total

  7. EXPENDITURE NON-COMPLIANCE IN DEPTH…

  8. BACKGROUND • Background understanding • Local Government Institutions are one of the most regulated institutions in AFRICA, maybe the biggest reason why the focus can easily be compliance instead of application of legislative requirements. • The difference between the two approaches is that application of legislative requirements seeks to ensure all requirements are applied correctly and effectively in order for the results to be accurate, whereas compliance focus seeks to have legislative results without necessary applying legislation effectively. • The results is obviously as listed: • Fruitless and wasteful expenditure • Unauthorized expenditure • Irregular expenditure

  9. EXPENDITURE NON-COMPLIANCE EXPLAINED • Fruitless and wasteful expenditure refers to expenditure that was made in vain and could have been avoided had reasonable care been taken. Such expenditure includes interest, the payment of inflated prices, and the cost of litigation that could have been avoided • “In vain” is defined as: • A transaction, event or condition which was undertaken without value or substance and which did not yield any desired results or outcome. • “Reasonable care” is defined as: • Applying due diligence (careful application, attentiveness, caution) to ensure that the probability of a transaction, event or condition not being achieved as planned is being managed to an acceptable level. • Expenditure due to negligence • Interest on overdue accounts • Penalties

  10. EXPENDITURE NON-COMPLIANCE EXPLAINED • Unauthorized expenditure refers to expenditure that municipalities incurred without provision having been made for it in the budget approved by the council or which does not meet the conditions of a grant. • Spending not in line with the original approved purpose of the budget item; and • Expenditure incurred without the appropriate approval. • Examples • Budget overspends • Incorrect use of grants/funds used outside mandate (Conditional Grant for Roads but the grant use to pay salaries) • I.E. mSCOA segments with direct influence – Funding

  11. EXPENDITURE NON-COMPLIANCE EXPLAINED • Irregular expenditure refers to expenditure other than unauthorized expenditure, incurred in contravention of or that is not in accordance with a requirement of any applicable legislation. • It also includes expenditure in contravention of, or that is not in accordance with, a requirement of the supply chain management policy, or any applicable by-laws. • Examples • Competitive Bidding processes not followed • No deviations for not following proper SCM processes

  12. FRUITLESS AND WASTEFUL EXPENDITURE INDEPTH Contributing Factors Payment made to suppliers prohibited by National Treasury Non Payment of suppliers on time Non-removal of terminated employees from the system Payment of suppliers outside the system resulting in double payments

  13. OPERATIONAL SYSTEMS AND PROCESSES TO AVOID NON-COMPLIANCE • Annual performance and procurement planning process • Supply chain Delegation of Authority Framework • Financial delegation of authority • Fraud preventions plan • Legal and regulatory plan • Supply chain management policy • Supply management checklist • Inventory policy

  14. OPERATIONAL SYSTEMS AND PROCESSES TO AVOID NON-COMPLIANCE • All the policies and procedures approved by the Council must be strictly adhered to, as these have been designed to improve internal control and adherence to good Corporate Governance (as found in the PFMA, Treasury Regulations and King Reports), which in turn, underpins the prevention of irregular, fruitless and wasteful expenditure. • In order to satisfy the requirements of section 57 of the PFMA, directors must, within their individual areas of responsibility, ensure that: • They do not intentionally disregard their duties and responsibilities or carry them out negligently; • Due care and diligence is exercised in all their decisions. They must receive all relevant information and use common business sense; • They act rationally and reasonably in the best interest of local government • They are ethical; • Sound financial management principles are applied;

  15. OPERATIONAL SYSTEMS AND PROCESSES TO AVOID NON-COMPLIANCE • They are effective, efficient and economical at all times; • They act immediately to reduce losses and do not let matters slide; • Appropriate action (including disciplinary action) is taken where necessary; • The process of financial management and internal controls is carried out; • The assets are safeguarded; • The assets and liabilities are properly managed; • The financial and other resources are used effectively, efficiently, economically and transparently; • The provisions of the PFMA are complied with to the extent applicable to them, including any delegations made and instructions to exercise any powers or perform any duties; and • Effective and appropriate steps are taken to proactively prevent: • Irregular expenditure; • Fruitless and wasteful expenditure; and • Under-collection of revenues due.

  16. HOW DOES APPLICATION OF mSCOA PREVENT UIF&W

  17. THE IMPACT OF ERP SYSTEM ON UIF&W • Fruitless and wasteful expenditure • Detailed documentation allowing timely responsiveness to due and liable transaction • Detailed aged reports • Linkage between core plan (IDP), budget and transactions (SDBIP)(AFS) • Unauthorized expenditure • Systematic blocks to prohibit overspending • Constant reports on vote status • Application of virement policy rules • Application of adjustment policy • Irregular expenditure • Intentional (Political interference, pursue ambitions outside regulative authority, etc.) • Non-intentional (Pressure to complete AFS, failure to preform constant reviews, poor document management, etc.)

  18. SUPPLY CHAIN MANAGEMENT Advanced Procurement Module Contract Management Module

  19. ADVANCED PROCUREMENT MODULE The Advanced Procurement module allows you to manage and streamline your purchase order, requisition and tender processes. Advanced Procurement Module Contract Management Module

  20. PURCHASE ORDER Purchase Order Request for Approval

  21. REPORTING Requisition Reports: Archived RFQ Report Evaluate Quotation Report Notes Report Requisition Report RFQ Report Tender Reports: Recorded Tender Report Tender Report Authorization Reports Agent Incident Analysis Incident Escalation Incident Listing Incident Log Incident Time Analysis Incidents by Type

  22. CORE PLATFORM AND KEY MODULES Advanced Procurement Module Contract Management Module

  23. ADVANCED PROCUREMENT MODULE Advanced Procurement Module Contract Management Module

  24. ADVANCED PROCUREMENT MODULE Advanced Procurement Module Contract Management Module

  25. CONTRACT MANAGEMENT

  26. CONTRACT MANAGEMENT Advanced Procurement Module Contract Management Module

  27. CONTRACT MANAGEMENT LIFECYCLE Advanced Procurement Module Contract Management Module

  28. CONTRACT MANAGEMENT CONTRACT DASHBOARD Advanced Procurement Module Contract Management Module

  29. CONTRACT MANAGEMENT CONTRACT FORM Advanced Procurement Module Contract Management Module

  30. CONTRACT MANAGEMENT CONTRACT REGISTER Advanced Procurement Module Contract Management Module

  31. CONTRACT MANAGEMENT CONTRACT REGISTER - EXCEL Advanced Procurement Module Contract Management Module

  32. CONTACT MANAGEMENT

  33. CONTACT MANAGEMENT Contact Management is a tool that allows you to manage interaction between you, your community, your board, service providers and even your fellow members of staff. Municipal Employees Community Municipal/ Entity Service Providers Councilors/Board

  34. CONTACT MANAGEMENT Management of Municipal Interaction Interaction with Community; Councilors'; Municipal Staff and Service Providers Automation of Manual Processes Manual Processes Automated e.g. Movement of Council Minutes; Movement of Documents and Information between offices; Helpdesks; Query Management and Resolution Speed Cost Increases in Municipal Efficiency Less time Moving between Offices; More time on Critical Tasks; Elimination of Manual Processes. Growth Better Incident handling Incidents managed by Workflow; Incident escalation automated; Reporting on Incidents; Records of Incidents; Follow up on Incidents Skill

  35. CSD INTEGRATION

  36. Overview

  37. DATA INTEGRATION FLOW CHART

  38. SageCSD Integration How Does Sage CSD Work SageCSD is a search portal for registered users to find suppliers. Once a supplier has been identified by a user on SageCSD it is can then pushed down to Evolution as a prospective supplier in Advanced Procurement. The prospective supplier then needs to be approved in Evolution to become a supplier. Speed Sage CSD Implementation Once SageCSD has been implemented at a state-owned entity it becomes the source of new suppliers and updates existing suppliers in Evolution. At this point all suppliers without an MAAA number must be put on hold in Evolution. Security must be applied in Evolution to prevent new suppliers being added in Evolution. Cost Real Time Data Integration SageCSD automatically synchronises daily to Evolution with changes to supplier information from CSD.Compliance checks are completed in SageCSD and the results pushed down to Evolution. At this point security, must be implemented in Evolution preventing adding or editing suppliers and their on-hold status in Evolution. Growth Supplier Take on Instant Update SageCSD also provides for an existing supplier take on, from Evolution to SageCSD. The MAAA number is required in Evolution per supplier for the take on process Skill

  39. Login Screen

  40. Supplier Search and Synced Suppliers

  41. Add Suppliers - Roll down to Evolution

  42. Sage Evolution – Prospective Supplier

  43. THANK YOU. QUESTIONS & DISCUSSION ?? Contact : Zeus Maboho Designation : Regional Manager Email : Zeus.maboho@ccgsystems.co.za Tel : 011 805 1027

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