LEGAL FRAMEWORK OF MANAGING SCHOOL FINANCES

Definition of financial management:The planning, organizing, directing and controlling the financial activities; such as proccurement and utilization of funds of an enterprise. (Management Study Guide, n.d. Online)

LEGISLATION:

South African Schools Act of 1996b prescribes how schools should manage funds.
This act gives schools more authority and responsibility for decisions made regarding financial management.
Aims to improve quality of education for all learners.
(Mestry, 2006, 28)

Employment of Educators Act lays out provision of employment of educators by the State, regulations, conditions of service and matters relating to service.
(Government Gazette 346380, 2011)

Education Laws Amendment Act requires principal to prepare annual report of effective use of resources (Mestry & Bischoff, 2009, 35)
This act does not allow for schools to remunerate or give financial benefits to state employees. Any expenses for travel or subsistence for official activities to be allocated within school budget.
(Government Gazette 346289, 2011)

Basic Education Laws Amendment Bill proposes limiting School Governing Body (SGB) functions, schools' language policy and pupil admissions, as well as limiting post levels for which SGB may recommend candidates (Draft Bill, 2017)

Public Finance Act No 1 of 1999 creates financial accountability rather than based on assigning responsibility and performance management.
Objectives are to regulate financial management, ensure revenues, expenditures, assets and liabilities are managed effectively and efficiently and to provide responsibility for those trusted with financial management. Secures transparency, accountability and sound management of revenue, expenditure, assets and liabilities.
Responsibilities include preventing unauthorised/irregular/wasteful expenditure and safeguarding of assets and management of liabilities. (Mestry, et al. 2009: 38)

CIRCULARS AND MEMOS

Circular 13/2000: Lists the functions and responsibilities of the SGB and principal in terms of financial management.
SGB is to establish and administer school fund, establish a finance committee and appoint a bookkeeper; all records of funds received and spent must be kept. (Naptosa, 2000, Online)

Circular 79/2007: Allows for schools serving poorest communities to be "no fee schools".
Schools to report on usage of allocated funds.
Schools expected to adhere to stringent financial management. (Gauteng gov. 2007. Online)

NORMS AND STANDARDS FOR FUNDING OF SCHOOLS

According to the South African Schools Act (SASA), the Minister determines the norms and standards for funding of schools.
Provides an adequate benchmark level for funding per learner.
Requires annual publication of percentage of students that fall within national quintile to qualify for no fees. (Mestry, et al, 2009: 33)

FINANCIAL POLICY FRAMEWORK

SGB must ensure a sound financial policy, effective execution of this policy. There needs to be regular checks to avoid mismanagement or misappropriation of funds. Principal performs a consultative role and advises the SGB on financial matters. (Mestry, et al, 2009: 16)

Financial Policy: will be unique to each school. Outlines how all funds are to be managed. Provides clear understanding of responsibilities of the SGB. Should be drafted in consultation with legislation and government policies and circulars. (Mestry, et al. 2009: 39)

GOVERNANCE DEFINED BY FINANCIAL MANAGEMENT

Determines the policy and rules by which schools are organized, managed and controlled. Rules and policies must be carried out in terms of laws and budget of the school. (Mestry et al, 2009: 16)

The SGB should take reasonable measures to supplement resources provided by the state. (SASA)
All monies received must be paid into the school bank account, which is opened and maintained by SGB.
Records must be kept to draw up financial statements and regular audits must take place, providing full, transparent financial statements. (Mestry, et al, 2009: 16)

Finance committee is set up by the SGB and a member of the SGB must chair the committee.
The functions of the committee are to administer and control the property, buildings, grounds and to encourage voluntary service to the school.
They are responsible for the purchasing of textbooks, educational equipment and material and pay for services to the school.
They recommend the appointment of both educator and non-educator staff by the school.
(Mestry, et al, 2009: 27)

School is a juristic organization and therefor has the legal capacity to perform actions such as entering into legal contracts to make purchases for the school, carry out responsibilities and liabilities attached to this status. The SGB acts on behalf of the school and identifies key tasks for fund raising and allocation of funds. (Mestry, 2006: 28)

REFERENCES:

  1. Basic Education Laws Amendment Act. Government Gazette 30637. 31 December 2007. [Online]
    1. Basic Education Laws Amendment Bill. [Online] available url: https://juta.co.za/media/filestore/2017/10/Draft_Basic_Education_Laws_Amendment_Bill_2017.pdf
    2. Gauteng Dept of Education. 2000. Circular 13/2000. [Online] Available url: https://www.naptosagp.org.za/index.php/documents-02/general-documents/414-gde-circular-13-of-2000/file
    3. Gauteng Provincial Government. 2007. Circular 79/2007. [Online] . Available url: http://www.gauteng.gov.za/government/departments/education/Circulars%20Archives/2007/Circ.79.2007.pdf
    4. Management Study Guide. n.d. Financial Management - Meaning, Objectives and Functions. [Online] Available url: https://www.managementstudyguide.com/financial-management.htm
    5. Mestry, R. 2006. The functions of School Governing Bodies in managing school finances. South African Journal of Education Vol 26(1)27-38
    6. Mestry, R & Bischoff, T.C. 2009. Financial School Management Explained. 3rd Ed. Cape Town: Pearson
    7. South African Legal Information Institute. 1998. Employment of Educators Act. [Online] Available url: http://saflii.org/za/legis/num_act/eoea1998265.pdf