Taking municipal finance to a new level


In an ideal world, every cent that is pumped into the national and local government by the taxpayer will be put to good use. Everything will work as it should in the areas we live in and everyone will benefit as a result—that is the whole point of paying tax after all, isn't it?

Sadly, we do not live in the aforementioned ideal world and the misappropriation of government funds at all levels is a real issue. Every year, we hear stories of money going 'missing' from the government coffers, local government employees losing their jobs for having their hands in the cookie jar and service delivery levels dropping to new lows.

The more that is lost to misappropriation, the more the man on the street suffers.

That is the reality. What we need now is a solution.

That solution, as a matter of fact, has actually been around for quite some time, 40 years to be exact—Bytes Technology Group's South African Municipal Resource Administration System (SAMRAS).

SAMRAS uses Enterprise Resource Planning (ERP) software to ensure that local governments and municipalities across South Africa are run properly and efficiently. Essentially, they ensure that the people are given the governance they deserve.

Cherina Smith from Bytes Technology Group explains the basics of the system's software: "It’s really about running the full financials, the supply chain, and the municipality being able to manage the full asset lifecycle, billing etc. Payrolls as well as in terms of people’s salaries and what they need to be paid—it really focuses on being able to run the municipality efficiently and using proper governance and controls. Our focus is to run the full financials of the municipality, including anything that impacts their store control, their inventory etc. It can make a big difference with efficiency in the local governments."

The results speak for themselves—and then some.

SAMRAS' ERP is currently in use within 25 municipalities across South Africa, with the George Municipality in the Western Cape having used the system from the beginning.

A feather in the cap for SAMRAS is that 81% of the municipalities using the system come away with clean audits or unqualified audits with findings. Those municipalities also form a large chunk of the top ten best run municipalities in the country, so the success rate cannot be underestimated.

But why are clean audits so imperative? Smith clearly outlines the reason: "I believe the clean audits are so important purely because you can impact the local government area that you’re in, in such a positive way. By spending the money in the right focus areas, you can actually uplift the social injustices that they have gone through in the past."

One of the issues that arise due to only 25 municipalities on SAMRAS and the rest on other systems is that there is no uniformity in terms of results produced. One system may use different variables to another, meaning there is room for differing results. This can, predictably, create confusion and difficulty in addressing problem areas.

Smith says that the National Treasury is looking at shaking up the system vendors to ensure that uniformity in reporting is implemented in future.

"Last year, we went through a National Treasury reform process, it’s called mSCOA, which is Municipal Standard Chart of Accounts, and what they’re trying to do is to create one set of accounts across all the municipalities, irrespective of system, so at least they can start to monitor for legislative compliance, focused spending and reduce corruption," she continues.

Some of SAMRAS' biggest competitors include international systems from SAP and Oracle. While those are fine systems, Smith believes that what South Africa has to offer is a better fit, but not everyone truly believes that 'local can be lekker' in this instance—a perception which she wants to change.

She says: "In South Africa, we have this general tendency to sometimes think that overseas software is better, so a lot of our Metros go for external companies, not necessarily for our solutions.

"I think with the focus on what the National Treasury is doing now in terms of local government and trying to manage the lifting of service delivery levels, the idea of compliance and checking the data that the systems are producing puts us in a very, very good position because our track record is good.

All our customers have submitted a first and second status of compliance and so going to forward, I’m sure we will have more success across the country."

This tendency to look abroad first when it comes to systems and software is not how we should operate in South Africa, Smith adds.

She feels that there is more than enough talent in this country to produce world-class systems, which will not only provide a bright future for the country at a government level but also at a citizen level too.

"There should be a focus in South Africa on stimulating the IT environment because the number of jobs that it can provide is incredible. I mean, our youngsters today are living on their phones and the future will all be about digitalisation. If you think where they’re coming from, it doesn’t matter whether they live in a community that doesn’t have much money, by investing in those kinds of skills, we can actually uplift a lot more people, instead of sending money out to the world," she says.

"Put an investment in locally and you will be able to make the difference, especially because if we look at the systems that we’re building, we’re building them specifically for the local government. We’re taking care of legislation, whereas if we go for external companies, we are taking that money and we are customising a system outside of South Africa.

"I had feedback recently from somebody who’d been overseas in one of the European countries and they said they’re really good at running their municipalities but their systems are not as good as ours in South Africa. I thought that was a very interesting statement because I know in the banking industry, our systems in South Africa are ahead, so it’s nice to get that feedback about the running of our municipalities on local systems," she explains.

Whether or not local governments begin to implement SAMRAS or other locally-produced systems in the future remains to be seen, but the reality is that local systems are the ones which work and they are systems which work for the people—those who deserve to be served properly.

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This edition

Issue 68