implications of implementing central database for...

Institute of Municipal Finance Officers & Related Professions

IMPLICATIONS OF IMPLEMENTING

CENTRAL DATABASE FOR SUPPLIERS


• A uniform SCM system for government is essential to optimize the

efficiency of service delivery

• Suppliers currently registered on the database of any organ of state

will be automatically transferred to the CSD by March 2016.

• New suppliers can use the self-registration portal from 1 September

2015

• There will be an interface with SARS to enable tax clearance

verification

• Also interface with Companies and Intellectual Property Commission

(CIPC) for vetting business registrations and ownership

NATIONAL TREASURY CENTRAL SUPPLIER

DATABASE


• Single source of supplier information - thus no multiple registrations

• Reduce and eliminate duplication of supplier registration effort

• Available to National, Provincial and Local governments

• Automated distribution of supplier information

• Standardised vetting of supplier:

- tax clearance status

- business registration and ownership

- bank account and account holder

- citizen identity number

- BBBEE

- government employee verification

- blacklisting - register for tender defaulters and database of restricted suppliers

NATIONAL TREASURY CSD: INTENDED BENEFITS


• Accordingly, will result in lower costs – reduced procurement

processes, compliance requirements, payment processes, audit

processes, and maintenance of registration information

• Greater efficiency – single, electronic system

• Greater value-for-money – better prices can be negotiated –

economies of scale

• Benchmarking of prices

• Specialisation – tenders pooled

• Category management

• No need for blacklisting in municipalities

NATIONAL TREASURY CSD: INTENDED BENEFITS


• Who will take accountability for the accreditation of suppliers?

• What reliance will the Auditor-General place on information on the

CSD? On whose audit report will issues relating to the CSD be

included? Will it be a municipality finding or National Treasury issue?

• What will happen to existing municipal databases?

• The IT cost implications of implementing – hardware and software

• Compatibility to existing databases. Can the CDS interface with all the

disparate GL systems and Accounts Payable systems of municipalities

across the country.

• Whose banking details will be used?

NATIONAL TREASURY CSD: ISSUES



• Downtime of databases when updating company details, especially

CIDB. Responsiveness of the system and system failure will have

consequences on local government and awarding of contracts

• How will the process be managed?

• What will the impact of opening new district offices (as per the

proposal) be?

• Incorrect capture of company information may delay tenders

• Conflict of interest issues – how will the CSD system interface with

the disparate HR systems of municipalities across the country

• SCOA issues – will the CSD be SCOA compliant to be able to interface

with municipal GL systems?



• SCM Regulation 14 requires municipalities to maintain a list of

accredited prospective service providers. We are bound by this. What

is the timeframe to amend the Regulations and rollout of the CSD?

• The timeframe for the project has already been changed. It was

announced that CSD would commence on 1 April 2015, but the date

then changed to 1 September 2015.

• There was a lack of consultation with municipalities on the system

specifications. For example, municipalities should have been taken

through the system to better understand the benefits, challenges,

timeframes, and impacts before any announcements were made.



• Several municipalities have their own electronic quote management

systems. What impact does the CSD have on this? What are the

transitional arrangements?

• A major concern is the potential negative impact on SMME’s who

may only be able or want to work within their local areas. This also

has a negative impact on local economic development (LED)


• Had three different address books: Corporate, Accounts Payable and

Water

• Resulted in duplication of orders, payments, etc

• Lack of efficiency, effectiveness and value-for-money

• Consolidated all three into one address book

• Matching – parent-child approach used

• When new creditor created no child record created

• FP Lite and Ellipse used – currently preparing for move to JDE

(financial & GL system) Address Book

ETHEKWINI : CONSOLIDATION OF ADDRESS BOOKS


• Helped avoid duplication of orders

• Helped avoid duplication of payments

• Easier accessibility of the system for suppliers

• Work flow not delayed

• Reduced queries

• Improved service delivery

• Allows for rotation of suppliers

• Payment terms in line with policy

• Developmental objectives

• Use of ward based suppliers

ETHEKWINI : BENEFITS – CONSOLIDATED ADDRESS

BOOK


• At the outset, it is desirable to have a single, centralized supplier

database for the country that adds value in terms of:

- benchmarking of prices

- blacklisting

- better prices – economies of scale

• However, there are 278 municipalities in South Africa, each with their

own disparate systems

• To have a CSD, you need systems that can interface with regard to:

- e-procurement

- accounts payable

- accreditation of suppliers

CONCLUSION


CONCLUSION

• Other key issues include:

- accountability for accreditation and audit issues

- cost implications

- system downtime

• Accordingly, we need to carefully look at the impact of moving

towards a CSD and proceed with caution

• We must ensure that we do hamper the progress already made by

municipalities with regard to centralization of their supplier database

• In view of the aforegoing, a phased approach is suggested. In the first

phase, municipalities should consolidate their own supplier address

books.

Thank You!


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