Our interpretation is based primarily on the information contained within the document titled “Annexure B mSCOA Business Processes and System Specifications – 08 March 2016.pdf”, with specific reference to the Corporate Governance business process.
The following specific entries found under the “Period Control” Legislative or Business Requirement section:
- Year-end closures period 12 as at 30 June (of the current year) result in a transactional transfer of opening balance to period one in the following year.
- Finalisation and submission of annual financial statements (AFS) period 13 results in opening balance transactional transfer of only the transactions of period 13.
- Audit periods with allowed audit approved journals occur in period 14 and result in opening balance transactional transfer of only the transactions of period 14.
- Accommodate a period 15 for prior period errors (GRAP 3).
- Any corrections of prior period error(s) result in opening balance transactions in the subsequent years.
- Period closing, finalisation and audit period corrections are opening balance transactions in the current open period as well as normal transactions in the audit periods.
Given the above, it is our interpretation which we will implement in the following ways:
- There are no specific timeframes or natural alignment of the duration of period 13, i.e. period 13 is not bound to period 01, or period 01 & 02 of the subsequent financial year. As per point 2 above, period 13 allows for all transactions required after period 12 closure, and up to the submission of the annual financial statements (AFS).
- Likewise, period 14 caters for “audit approved journals” and makes no reference to any specific period.
- Additionally, period 15 should only cater for prior period errors.
Given the above and considering feedback and input from several of our clients on the matter, we are implementing the following functionality:
- Either one of period 13 (this is in reference to PAUD) or period 14 (this is in reference to AUDA) can be open for the year under audit.
- Period 15 (this is in reference to RAUD) is only open for the comparative year.
- Period 13 will only become open once period 12 has been closed off and the resulting opening balances have been transferred to period 01 of the subsequent year.
- It is the responsibility of the Accounting Officer, or a duly authorised user within the municipality to determine when all activities related to the preparation of their AFS are complete to officially close period 13 within the system. There is no specific date at which period 13 will automatically be closed.
- Only once period 13 has been closed will period 14 be opened.
- It will be the responsibility of the Accounting Officer, or similar duly authorised user to officially close period 14 within the system. There will be no natural point in time when period 14 will automatically be closed.
Regarding the required behaviour of transactions posted within periods 13, 14 and 15 our understanding are as follows:
- Period 13 and 14 transactions will reflect in the opening balance of the current financial year.
- Any transaction deemed to be applicable to 2017/18 period 13 will be validated against available budget. The Munsoft system caters for period 13/14 virements.
Regarding period 15 the below illustrates our understanding and implementation.
- Period 15 has no limitations on the length of time that it stays open.
- When a period 15 journal is passed, the comparative year’s closing balance is updated as well as the opening balance of the 2 subsequent years. Taking alignment into consideration.