PROCEDURE IN RESPECT OF ACCOUNTING MONTHS ON FMS

1.         BACKGROUND

The Department of State Expenditure issued an instruction to provinces to close accounting months on FMS before the 10th of the following month (this instruction accords with the Public Finance Management Act).

2.         DISCUSSION OF ISSUES

2.1      FMS REPORTS

Departmental Accountants have access to FMS and can decide when to request FMS reports for follow-up and clearance.

The Department of Finance will in future only submit reports to Departmental Accountants after the closing of a particular month, together with a status report which will indicate transactions that were not cleared in time for month closing.

2.2      FMS TRANSACTIONS

Except for rectifications for the previous month (which are allowed up the 5th day of the following month) FMS transactions must be recorded for the specific month in which the FMS document is completed.

2.3       INTERFACE TAPES

PMG INTERFACE

This interface takes place twice each week, which means that by the 5th of the following month all transactions in respect of the bank account will be interfaced until the end of the previous month. A letter will be sent to ABSA to confirm this arrangement.

TELEPHONE INTERFACE

The telephone expenditure interfaces on a monthly basis and normally not later than the 20th of that month.

MEDPAS INTERFACE

The Medpas interface normally takes place not later than the 15th of the following month.

GG TRANSPORT INTERFACE

The Public Works, Roads and Transport Departmental Accountant must ensure that the interface takes place before the 15th of the month and that transactions are recorded in that specific month.

PERSAL INTERFACE

All Persal Interfaces are done before the 5th of the following month.

2.4       RECONCILIATION AND CLEARANCE OF INTERFACES PROCEDURE

            PMG

As the province has one PMG account, the interface together with the relevant report 0044 will be handed over to the Accounting Controller (Finance), for reconciliation, control and clearance of the PMG adjustment account. This action must be finalized before the 8th of the following month.

TELEPHONE

Arrangements will be made with the Department of State Expenditure to programmatically print report 0044 with each telephone interface. The interface together with the report 0044 will be handed over to the Accounting Controller (Finance) for reconciliation and control. Within 1 day, the Accounting Controller must provide the Departmental Accountants with a copy of the unallocated objective report, and this is to be cleared within 1 week. The Accounting Controller him/herself must ensure that the interface is reconciled and all transactions are correctly recorded before month end.

MEDPAS

The interface report as well as the report 0044 is handed over to the Departmental Accountant of Health immediately after receipt. Departmental Accountants must ensure that the reconciliation is completed and all unallocated expenditure is cleared before month end as well as that all calculated costs are allocated.

GG TRANSPORT

The interface report as well as the report 0044 is handed over to the Departmental Accountant of Public Works, Roads and Transport immediately after receipt. The Departmental Accountant must finalize within 1 week: the reconciliation; Issuing of claims where applicable; Calculation and recording of depreciation; Recording of calculated costs.

The Accounting Controller (Finance) will request the FMS Reports in respect of unallocated expenditure and provide it to all the Departmental Accountants for clearance before month-end.

Persal

The following arrangements will be made with the Department of State expenditure:

Standard Stock

The manager of the Standard Stock Depot must ensure that journals in respect of all stock issues are captured before the 20th of the month.

Road Cost

The Public Works, Roads and Transport Departmental Accountant must ensure that all journals in respect of the Road Cost System are captured by the 20th of the month.

2.5  Ledger Accounts

The following ledger accounts need to be cleared to a zero balance each month:

Advance Accounts

Petty Cash

The balance for each office must reconcile with the approval for petty cash.

Standing Advances

Departmental Accountants must ensure that all officials indicated on the account still qualify for standing advances. If not the amount must be disallowed and recovered from the specific official.

Advances to Departments/Institutions

This account must reflect a debit balance, approval must exist for the payment of the advance and the department/institution must still deliver a service to the specific department.

Advances from Departments/Institutions

This account must reflect a credit balance and must reconcile with the records of that specific department/institution.

Deposit Account (ABSA)

This account may not reflect any credit transactions, and all debits must be money in transit.

Orders Payable

This account is the responsibility of the Department of Finance except for Social Security payouts. This account may not reflect any debit balances.

General Suspense Account

Every transaction on this account needs to be evaluated to determine if the amount is recoverable or still be allocated to the vote, and the necessary steps taken.

Transport and subsistence debt

This account must be evaluated monthly to ensure that Transport and Subsistence claims are submitted and outstanding amounts in respect of advances owed to the Government are recovered.

Losses accountability not determined

A transaction reflected on this account indicates that a loss has not been finalized: this should happen within one financial year.

General Deposit Account

This account may only reflect credit transaction balances and must be regularly evaluated to ensure that allocations are correct or, if applicable, that amounts are paid back to institutions.

Unauthorised expenditure account

All transactions on this account must be evaluated monthly. All issues reflected in Financial Control reports which have been rectified must also be rectified on this account. If any Ex Post Facto approvals are granted in respect of previous year’s transactions, it is important to determine the original transaction to ensure that rectifications are done correctly. Please note that all transactions are not allocated to objective codes in the vote due to the fact that some transactions are reflected on the Exchequer Ledger Account.

Funds

The following accounts are centralized and the Accounting Controller must ensure that the monthly funds requisition as well as the actual funds received in respect of all votes are recorded correctly:

Trust Funds

The Provincial Department of Finance will ensure that deposit and investment accounts are reconciled monthly. All interest received must be recorded and all money received must be invested.

Trial Balances

Revenue

No debit balances are to be reflected against revenue items in the trial balance. Furthermore revenue items must be evaluated to identify any possible incorrect allocation of money received.

Expenditure

No credit balances are to be reflected against expenditure items in the trial balance, and no expenditure may be reflected against any deleted FMS codes. Each Departmental Accountant must also verify that no expenses in respect of another vote is paid against their vote.

Debtors System

All Departmental Accountants have to ensure that their accounts on the Debtors Subsystem of FMS are requested before the 5th of a month in respect of the previous month. All receipts/salary deductions must be allocated correctly before accounts can be requested.

2.6  Ojbective codes

Unallocated objectives

All expenditure against unallocated objective codes must be cleared monthly to ensure that zero balances are reflect before the 5th of the following month.

Theft and losses

All objective and items in respect of thefts and losses must be evaluated and reconciled with the actual write-off of losses.

2.7  Report 0012

The Accounting Controller will provide report 0012 on a monthly basis to Departmental Accountants on the 15th and all authorization form code 1011 must be submitted to the Department of Finance not later than the 25th of the month to ensure that control and capture are completed.

2.8 Capture of FMS Documents

It is important to note that all FMS documents must be handed to the data capturers at least 3 days before the different due dates to ensure that all information is captured and processed.