Objectives

The primary objective of this tender is to appoint a qualified service provider to fully implement the revised GRAP 104 (Expected Credit Loss - ECL) impairment model. The project aims to develop, design, and operationalize a compliant, reliable, and auditable ECL model that enhances the municipality’s financial reporting and credit risk assessment capabilities. Specific goals include ensuring accurate credit loss estimation, compliance with accounting standards, and supporting transparent financial disclosures.

Scope

The scope of work encompasses:

• Design, development, and implementation of an ECL impairment model aligned with revised GRAP 104 standards.
• Incorporation of probability-weighted credit loss outcomes, forward-looking economic data, and segmentation of receivables.
• Utilization of historical loss data, behavioral trends, and the consideration of the time value of money.
• Integration with existing financial systems (e.g., MUNSOFT) and ensuring compliance with all relevant disclosures and risk management practices.
• Provision of professional advisory and technical support throughout the project duration.
• Validation, testing, internal updates, and internal review of the model to ensure standards compliance.

Technical Requirements

The technical requirements include:

• Development of a comprehensive ECL model that accounts for:
• Probability-weighted credit loss outcomes
• Forward-looking economic and credit risk information
• Segmentation of receivables based on debtor profiles
• Historical loss data and behavioral trends analysis
• Measurement of lifetime expected credit losses
• Consideration of the time value of money
• Ensuring the model's robustness, reliability, and compliance with revised GRAP 104 standards.
• Integration with existing financial reporting systems and data sources.
• Provision of detailed documentation, audit support, and recommendations for ongoing updates.
• Validation and testing to meet audit and regulatory requirements prior to final submission.

Skills Requirements

The successful bidder must demonstrate expertise in:

• Implementation of GRAP 104 and IFRS 9 standards related to financial instruments impairment.
• Design and development of ECL models with high technical proficiency.
• Experience in actuarial science, statistical analysis, and credit risk modeling, preferably within the public sector.
• Chartered Accountant (CA(SA)) or equivalent professional qualification for project managers.
• Membership or certification in recognized actuarial or statistical bodies (e.g., ASSA, ASABA).
• Strong understanding of financial systems, data analysis, and compliance with audit standards.
• Ability to provide professional advisory, training, and support for internal review and updates.