Local governments not using core financial systems, says Treasury

National Treasury has highlighted that the credibility of the information contained in the Municipal Standard Chart of Account (mSCOA) data strings is a concern, and a core problem includes the incorrect use of the mSCOA and municipal accounting practices by municipalities. "A large number of municipalities are not budgeting, transacting and reporting directly in and from their core financial systems. They prepare their budgets and reports on excel spreadsheet and then import the excel spreadsheets into the system. Often, this manipulation of data lead to unauthorised, irregular, fruitless and wasteful expenditure, and fraud and corruption, as the controls that are built into the core financial systems are not triggered and transactions go through that should not," Treasury said in its 2022/23 first-quarter report on local government revenue and expenditure for July 1 to September 30.