Chapter 6



6.2.1Legislation and Policy Framework


  • The South African Schools Act, No. 84 of 1996 [SASA]
    • Section 38
      • A Governing Body of a public school must prepare a budget each year, according to guidelines determined by the Member of the Executive Council (the provincial Minister of Education), which shows the estimated income and expenditure of the school for the following financial year.
      • Before this budget (referred to above) is approved by the Governing Body, it must be presented to a general meeting of parents convened on at least 30 days’ notice, for consideration and approval by a majority of parents present and voting.
    • Section 39
      • Subject to the Act, school fees may be determined and charged at a public school only if a resolution to do so has been adopted by a majority of parents attending the meeting referred to in Section 38 (2).
      • This resolution (referred to above) must provide for:
        • the amount of fees to be charged ;and
        • equitable criteria and procedures for the total, partial or conditional exemption of parents who are unable to pay school fees.
      • The Governing Body must implement a resolution adopted at the meeting contemplated above.



  • NC Monitoring Tool For Draft Budget Process [Reference B7 NC BP]
  • NC Preparations For The Annual Budget Of Public Schools [Reference B7 NC PREP B]

6.2.2Framework for the Development of School Policy on Budgeting

  1. Defining the School Budget, Tunica (1995, p. 90) in his book, Leading the Way, states that “The school budget is an expression of the school plan in fiscal terms.” Phrased differently, the budget is there to support the school plan; it links the plans to the resources and serves as a mechanism for organising the resources.  (See Fig 6.2.1 below)
    In Figure 6.2.1 it will be noticed that strategic planning feeds into operational or action plans that are directly linked to the budget.  Activating the budget makes it possible to implement the action plans, which must be monitored and controlled.  Regular evaluation of the progress made with the implementation of the action plans will lead to mid-stream revision of budgetary targets, and revised action plans to meet emerging contingencies and emergencies.  These revised targets and plans will be monitored and evaluated on a regular basis.  End-of-year evaluation and reporting will feed into the strategic planning and will inform the goals and objectives set for the new financial year.
    It is clear from the above the importance of an annual strategic planning session that precedes the budget planning process.

    Fig 6.2.1 Overall Planning and Control of an Institution

    A diagrammatical representation of the financial management within the school is illustrated in Fig. 6.2.2  It is clear that the budget is central to the financial management system.  A budget can be regarded as a plan, and there is basically no better description than to say that it is primarily a planning and control system.  It estimates in advance the expenditure (planning) allocated to a project, expressed in terms of expenditure items.  The controlling characteristic entails a continuous comparison of real expenditure to the expected expenditure anticipated in the budget.  The final controlling action requires a comparison between the total estimated cost and the real cost of completing the project.

    Fig 6.2.2 Financial Management of an Institution


  2. The Phases of the Budgeting Process
    • Based on the Medium Term Expenditure Framework (MTEF) and the National Norms and Standards for School Funding, the Provincial Education Department will inform each school every year about the amount which will be provided by the State. This amount will be calculated in terms of the school’s rating on the provincial poverty index.
    • Based on the school’s shared vision and mission statement, the SGB will decide how extensively the school will supplement the State’s provision.
    • After consultation within the school, and based on planned activities, the principal and SMT will provide budgetary requirements for:
      • academic activities;
      • extra-curricular activities;
      • administrative activities;
      • maintenance;
      • personnel costs;
      • health and safety etc.
    • Based on all budgetary requirements provided, the SGB will prepare a budget to present to the parents’ meeting and calculate the amount of the school fees. The parents will vote to formally approve the budget and pass a resolution on the amount of the school fees to be charged and also equitable criteria and procedures for the total, partial or conditional exemption of parents who are unable to pay school fees.
  3. Reporting on the Financial Status of the School
    • The finance committee must, at least on scheduled dates of SGB meetings, report back on the income and expenditure of the school fund.
    • The finance committee must check all the school fund account books and documents to verify details of the report.
    • To keep parents and other stakeholders informed about the financial position of the school, it is accepted as a general rule that the SGB should send a summary of the school’s financial position to the parents at least once a term.
  4. Auditing Books
    • In Terms of Section 43 (1) of the South African Schools Act, the SGB must appoint a person registered as an accountant and auditor to audit the records and financial statements of the school.
    • If such an audit is not possible, then the SGB can appoint a person qualified to perform the duties of an accounting officer.
    • This appointment must be approved by the MEC for Education in the province.
    • No person with a financial interest in the affairs of the school may be appointed for this duty.
    • The SGB must submit to the HOD of the province within six months after the end of the financial year a copy of the annual statements, audited or examined as described above.


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