Abstract
The South African government's substantive shift to decentralize school governance from a centralized state to local communities created several financial management challenges. Concerns for the appropriate utilization of funds, rigorous oversight, and adherence to established financial protocols underscore the fundamental financial stress points experienced in many historically disadvantaged schools. Since 1994, financial mismanagement of public schools is rife, and this is partly attributed to school governing bodies’ of rural and township schools who lack financial expertise. Utilizing a multiple case study design grounded in an interpretivist paradigm, this study examines the internal financial control to manage the finances of schools located in urban, townships, and rural areas. The perceptions and experiences of 18 participants of six schools were solicited. We applied the Accountability Theory which presupposes that financial control is the foundation to establish effective financial processes that hold financial managers accountable. Findings reveal that quintile 1 township and rural schools experience challenges to effectively manage school financial management through the implementation of well-constructed internal financial monitoring and control processes. The finance policy, an internal control mechanism, forms the bedrock to hold financial managers accountable to invariably manage school finances effectively.
Introduction and background to the problem
The South African Schools Act No. 84 of 1996 (Republic of South Africa (RSA, 1996)) initiated a significant shift by decentralizing financial authority of public schools to local communities, aiming to democratize education and enhancing the local control of school finances (Sayed et al., 2020). The South African Schools Act (hereafter, Schools Act) provides a comprehensive framework for financial management in public schools; however, the implementation of these financial protocols created significant challenges. For example, Section 20 of the Schools Act prescribes that school governing bodies (SGBs) 1 must manage school funds. In terms of section 21, 2 schools have the option to apply for additional financial functions that will enable them to be self-managed. If section 21 functions are granted, the state annually transfers subsidies for resources directly into the schools’ banking accounts. These schools are permitted to select and make direct payments to their own suppliers when procuring teaching and learning support materials (LTSMs). It is imperative that SGB members are financially literate to effectively self-manage public school finances. Schools without section 21 functions become reliant on education districts to manage their state subsidies. They are obliged to inform their education district office of their intention to procure LTSMs on their behalf. Education district officials will subsequently place orders with suppliers who are selected from provincial departments’ data base.
This shift in governance revealed that most affluent schools (quintiles 4 and 5) managed their financial responsibilities proficiently. Most parents serving on SGBs are financially literate to make good financial decisions. However, it was found that historically disadvantaged schools (quintiles 1, 2, and 3) also referred to as no-fee schools, experienced problems in managing school finances effectively and efficiently, mainly because SGB members lack financial knowledge and skills. They are unable to find practical solutions to diverse financial problems (Mestry, 2016; Rangongo et al., 2016). Since 1994, financial mismanagement in public schools has been rife and this threatens the integrity and functionality of the South African education system (Ncala, 2022). Frequent media reports reflect an increase in fraud, misappropriation, and maladministration of school funds, thus signaling an urgent call for robust internal financial control practices (Aina and Bipath, 2020; Myende et al., 2018; Ncala, 2022; Omondi, 2021). Corruption Watch (2022) reported that financial mismanagement accounts for at least 45% of corruption cases in schools. Bernstein (2023) highlights the systemic nature of these challenges, revealing the profound impact of corruption and mismanagement on effective school management, and negatively influencing student performances and standards of education. These challenges heighten the importance for schools to design and implement oversight measures to hold SGBs accountable for schools’ finances.
The research problem thus emerges from the intersection of legislative intent and practical limitations of financial governance. Although the Schools Act makes provision for SGBs to form sub-committees such as finance committees (Mestry and Naidoo, 2009), schools, especially in rural areas 3 and townships, 4 persistently grapple to manage finances effectively and efficiently (Naidoo and Mestry, 2017; Ncala, 2022). The complexities stem from SGB members’ lack of financial knowledge to design and implement internal financial control mechanisms (Aina and Bipath, 2020). Often, the burden of managing school finances fall on principals, who find themselves navigating intricate equilibria between governance responsibilities assigned to SGBs and their professional obligations, as stipulated in the Employment for Educators Act (RSA, 1998). This often breeds an environment conducive to financial incongruities, as evidenced by mismanagement and misappropriation of funds, and inadvertently undermines the educational integrity of school leaders.
The research problem, therefore, is concerned with the efficacy of internal control processes designated for managing school finances. We concur with Rangongo et al. (2016) that internal financial control processes are fundamental to effective financial management. They stress that SGBs need rigorous monitoring and control mechanisms, transparent reporting, and observance of strict financial protocols as postulated in legislation and policies. Ncala (2022) accentuates the importance of schools’ developing watertight financial procedures; immediate disclosure of financial fraud or mismanagement; and stringent external auditing processes. Reinforcing these aspects are essential to curtail the misuse of funds; to restore trust in the system; and to ensure that the allocation of resources aligns with a school's vision and mission.
The main research question for this study is thus encapsulated as follows:
What internal financial control processes has SGBs designed and implemented to manage schools’ finances?
To answer the main research question, the following sub-questions were formulated:
What valuable oversight (or internal financial control) measures can be designed and implemented to manage school finances effectively? What are the perceptions and experiences of principals, financial managers and SGB chairpersons about the internal control and monitoring mechanisms that are designed and implemented to manage their schools’ finances? How can SGBs strengthen the design and implementation of school finances to ensure that it is managed effectively?
Aim and objectives of the study
The aim of the study is to explore various internal financial processes that SGBs have designed and implemented to effectively manage school finances.
The objectives are formulated as follows:
To explore what valuable oversight (internal monitoring and controlling) mechanisms can be implemented to manage school finances effectively. To determine the perceptions and experiences of principals, financial managers and SGB chairpersons about the internal control and monitoring mechanisms that are designed and implemented to manage their schools’ finances. To provide recommendations on how SGBs can strengthen the design and implementation of internal financial processes to manage school finances effectively.
Research methodology
The qualitative research approach was used to investigate the internal financial control processes that SGBs applied to manage school finances. The qualitative approach aligns with Creswell and Poth's (2016) perspective, which accentuates the importance of understanding reality as a socially constructed phenomenon. It emphasizes the subjective lived experiences and perceptions of role-players within their natural settings (Yin, 2016).
Utilizing a multiple case study design within an interpretivist paradigm, we explored the perceptions and experiences of financial managers (principals, chairpersons of SGBs, and financial managers 5 ) about the internal financial control processes applied in their schools.
Dane and Carhart (2022) describe multiple case study as an in-depth exploration of programs, events, activities, and processes of SGBs involved in managing school finances. This research design permitted us to delve into the contemporary phenomenon within its real-life context, especially when the boundaries between phenomenon and context are complex or blurred (Yin, 2016). Employing the interpretivist paradigm helped us probe the importance of understanding the subjective meaning of human actions and the social context in which they occur (Yin, 2016). Interpretivists posit that reality is constructed by those involved in school finances based on their experiences, beliefs, and social interactions.
To collect rich date, we selected three key participants from each of six schools in the Gauteng province of South Africa who were directly involved with school finances selected. This choice of schools considered several factors such as geographic location (urban,. 6 rural or township), type of school (primary or secondary); schools granted section 21 functions, and fee-paying or no-fee schools. The sample consisted of four secondary and two primary schools that were geographically located in urban, rural, and townships. Three schools were classified quintile 5 (fee-paying) and three were quintile 1 (no-fee) schools. All six schools were granted additional functions according to section 21 of the Schools Act (See Table 1).
Profiles of sampled schools.
The principals and chairpersons of all six schools agreed to participate in the study. Ideally, treasurers provide rich data by virtue of them being chairpersons of finance committees. However, some no-fee school principals suggested that we include their finance officers or bursars since they had more financial insights than their treasurers. The sample thus comprised of six principals; six chairpersons of SGBs; and six financial managers. For convenience, we classified the two treasurers, three finance officers and one bursar as financial managers (See Table 2).
Codes assigned to the roles of participants involved in financial matters.
SGB: school governing body.
Semi-structured interviews, lasting for about 60 min, were conducted with participants outside school hours. The interviews provided key insights of how internal financial control processes were applied in the respective schools. Drawing on Tesch's method of data analysis, we coded transcriptions and systematically categorized the content into distinct themes and sub-themes (Creswell and Creswell, 2022). Such practices aligned with examining data through the lens of participants about pertinent financial issues, while ensuring that the research questions were addressed.
The study adhered to the constructs of trustworthiness which espoused rigor (Yin, 2016). Key to trustworthiness are pillars proposed by Lincoln and Guba (1985): credibility, transferability, dependability and confirmability. Prolonged immersion in the research field and member checking were employed to amplify credibility. Also, an ethos of reflexivity, as highlighted by Creswell and Creswell (2022), ensured an unbiased data analysis. In the case of transferability, we believe that researchers may generalize results of this study and transfer the same to their own situation (Stahl and King, 2020) and to enhance dependability, we engaged in regular discussions and debriefing sessions with peers and experts. These discussions allowed us to critically reflect on our methods, interpretations, and potential biases.
Khan (2016) emphasizes the importance of adhering to strict ethical imperatives such as maintaining participants’ anonymity and ensuring voluntary participation. While ethical clearance was obtained from the university's ethics committee, permission was granted by the Gauteng Department of Education (GDE). The participants consented in writing to contribute to this research.
Literature review
Internal processes of managing school finances
Internal financial control measures instituted in schools are fundamental to achieve school goals and maintain institutional integrity. These internal processes use a structured approach to oversee assets, income, expenditure and other financial operations. SGBs are expected to design and implement various mechanisms such as internal auditing, financial reporting, budget monitoring, cash flow, external auditing, and asset management to effectively manage finances. These measures are essential to maintain transparency, accountability, and operational efficiency within the financial management framework (Ahmed and Nganga, 2019; Mkhize et al., 2021). Internal financial control measures should align with schools’ strategic objectives (Mandlazi, 2021). Some control measures include effective means of collecting school fees, income generated from various sources, and stringent processes of procuring and maintaining teaching and learning support materials (LTSMs) and assets (Mestry and Bodalina, 2015).
The Internal Control Systems as conceptualized by Abbas and Iqbal (2012), and the Financial Management and Reporting Guidelines for Public Schools developed by the GDE (2020) are integral to establish effective internal financial processes. These guidelines emphasize legal and regulatory standards which are essential for the operational effectiveness of school finances (Abbas and Iqbal, 2012; GDE, 2020). It encompasses preventative measures to avert financial irregularities and discrepancies; and to detect serious mismanagement issues as they arise. These comprehensive approaches ensure that schools operate within a framework of financial prudence, transparency and accountability, crucial for effective financial management (Abbas and Iqbal, 2012; GDE, 2020). It is through regular financial reporting, internal and external auditing for SGBs to establish true reflections of their schools’ financial position. Financial reports as a control measure should specify the institution's income, expenditure, assets, and liabilities, which allows stakeholders to determine the schools’ financial performance. Invariably, audits, both internal and external, must safeguard the compliance with financial policies and legislation to represent accurate representation of schools’ financial affairs.
The following internal financial practices are briefly explained:
The process of budget monitoring and control is paramount to ensure financial discipline within schools. This essentially means that schools set specific financial goals and track its achievements. Examples of financial discipline include developing budgets and building up savings and emergency funds. This process entails the comparison of actual financial performance against budgets, allowing for the identification of variances, and the implementation of necessary adjustments. This aligns with the school's financial plans and objectives, prevents overspending and optimizes resource use (Mestry and Bisschoff, 2009). Effective cash management practices, including the handling of school fees, donations, and other sources of income, are essential to maintain liquidity and support daily operations. Schools must implement robust procedures for collecting, depositing, and recording cash transactions to confirm accuracy and prevention of financial discrepancies. Procurement of LTSMs and other expenditure are critical for ensuring payments are judiciously made, and is in accordance with budget allocations and procurement policies. These control mechanisms include obtaining multiple quotations, authorization or approval processes for expenditure, and regular review of procurement activities to confirm the value for money and the prevention of financial abuse.
In essence, these internal financial control mechanisms collectively ensure the effective and responsible management of school finances. By adhering to these practices, schools can achieve financial stability, support their educational objectives, and maintain the trust of stakeholders, thus fostering an environment conducive to learning and growth.
Financial accountability
This study is framed by the Accountability Theory which, in essence, explains how the perceived need to justify actions to others leads individuals to consider and feel accountable for their decisions and judgments. It emphasizes the importance of responsibility, transparency, and feedback in ensuring ethical and effective behavior (Lerner and Tetlock, 1999). Accountability theory posits that when individuals believe they will be held responsible for their actions, they are more likely to act in a responsible and ethical manner (Guo-Brennan, 2020).
Accountability is defined as “being answerable to someone for the performance of prescribed standards, fulfilling obligations, duties, expectations, and other charges” (Mac Donald et al., 2020: 27). Accountability is embedded within the very architecture of organizational systems and processes. This suggests that accountability is not merely an individual's responsibility but is also ingrained in structures (e.g. committees) that govern organizations. Dwangu and Mahlangu (2021) approach accountability from a practical standpoint, defining it as expectations that individuals should, when called upon, justify decisions or actions taken by them. Lindberg (2013: 208) describes accountability as “the act of discretionary governing, typically understood as the authoritative allocation of resources and exercising control and coordination.” This approach offers a more expansive view of accountability, describing it as not only being answerable for actions and decisions, but also involving a significant element of discretionary governance. It emphasizes the role of authority in the allocation of resources, underscoring that those in positions of power have the responsibility to manage and distribute resources effectively. Eckersley et al. (2024) avers that accountability is inherently linked to the concept of power and authority, particularly on how resources are allocated and managed. They stress that accountability is a mechanism through which power is both exercised and checked, encompassing the obligation to explain and justify one's actions to those affected by them.
Section 20 of the Schools Act gives SGBs the power to manage schools’ finances and section 30 makes provision for SGBs to set up finance committees to assist them in school financial management. It is thus become imperative for SGBs to enhance transparency and accountability that will foster a culture of trust and integrity within the school community (Mandlazi, 2021). Recognizing potential “red flags” in procurement processes and implementing a robust system of checks and balances are pivotal in preventing financial mismanagement. This ensures that all financial transactions are justified, meticulously recorded, and subjected to regular oversight (Gauteng Department of Education (GDE, 2020)). Since SGBs and principals are jointly accountable for the schools’ finances, it is imperative that effective internal control measures are put in place.
Schools can uphold accountability in their financial affairs by establishing clear lines of responsibilities, implementing effective financial management practices, and ensuring transparency in decision-making (Mac Donald et al., 2020). The presence of internal monitoring and control measures, such as budget reviews, financial recordkeeping, and payment authorization processes, help to enforce accountability within the school's financial management systems. Contextually, the Schools Act authorizes financial management decision-making and accountability to principals and SGBs. This means that a SGB is accountable to the school community as well as the DBE. As part of the SGB, the principal is thus jointly and severally accountable to the school community and DBE, not in his/her private capacity. The finance committee also oversee all financial matters of the school, thus making the finance committee accountable to the SGB.
It is thus crucial to examine section 16A of the Education Laws Amendment Act (RSA, 2007) to clearly understand who is accountable for schools’ finances. This section defines the dual role of a school principal: He/she represent a provincial Head of Department (HOD) as ex-officio in their official capacity and is a member of the SGB. The Schools Act emphasizes that principals should assist SGBs in the performance of their functions; however such assistance, or participation, may not conflict with any instruction of the HOD, legislation or policy, obligations that they have towards the HOD, the Member of the Executive Council (MEC) or the Minister of Education. This essentially imply that principals are invariably accountable to the HOD for ensuring the effective use of available resources, managing the use of LTSM, safekeeping of all school records, informing SGBs on policy and legislation, and implementing these accordingly, providing accurate information when requested by the HOD, and assisting the SGBs in the performance of their functions and responsibilities. In terms of the Schools Act, SGBs takes full responsibility for managing school finances. Principals, as members of SGBs, are required to carry out responsibilities delegated to them by SGBs.
Findings
The identified themes and sub-themes are discussed in-depth, drawing from pertinent quotations cited from interviews with participants. To streamline and clarify the discussion, specific codes have been attributed to the different actors. It also maintains anonymity of participants and schools.
The coding system designates P1 for Principal of School 1, C1 for Chairperson of the SGB, T1 for Treasurer of School 1, FO2 as Finance Officer of School 2, and B4 as Bursar of School 4, etc. We chose to specifically cite “financial managers” by their specific roles, namely, treasurers, finance officers, or bursars.
Theme 1: drafting, implementing, and reviewing the school's finance policy
The theme examines a nuanced understanding of the interplay between legislative compliance, and practical implementation. Two sub-themes emerged.
Drafting of the finance policy
This sub-theme combines insights from interviews with principals, financial managers and chairpersons of SGBs, and an extensive analysis of actual finance policies. Urban quintile 5 principals underscored the significance of SGBs adhering to legislation such as the Schools Act and specific sections of the PFMA relating to state subsidies when finance policies are developed. Compliance with policies, accounting principles and good practices are the foundation for effective financial management. P1 highlights how the Schools Act and other regulations support the application of the finance policy to ensure compliance:
Our policy is aligned with the Schools Act, ensuring compliance with national standards… it's driven, again by legislation. There are multiple regulations such as the school fee exemption policy that we consulted when the finance policy was drafted. This process was a time-consuming process, but I think we covered important aspects in the policy.
When we draft policies, we involve all stakeholders in the school. We involve teachers, parents, and peer staff, which are your clerks, administrative officers, and general assistants to draft policies, including the policy on finance. In this way, we consider various views about the interpretation of legislation. Everyone is involved in the decision making and we get a buy-in from all the stakeholders and the policy is more smoothly implemented.
The SGB is responsible for drafting the policy with the guidance of myself as the principal. However, frequently we might find that the level of education of some of our SGB members is not that good. We tend to debate on trivial matters for hours. What a waste of time!
In addition to legislation and regulations, it is essential to design mechanisms for internal control processes and accountability in a finance policy. The policy should, for example, be precise on the collection of school fees or procurement of LTSM. C5 explains:
In the finance policy that we drafted, we indicated clearly that when we purchase any item over R3 000, three quotations of the same product should be obtained. These quotations should be discussed, and decisions taken at formal SGB meeting. If there is any deviation of this practice, we will hold the principal and treasurer accountable.
Implementation and review of the finance policy
While finance policies provide detailed frameworks for fiscal management and auditing, the actual execution of these policies often reveal disparities, such as resource limitations and deviations from policy imperatives. The participants, in both quintiles 1 and 5 schools, offered insightful perspectives on the application of financial policies, frequently revealing the challenges encountered in everyday financial administration. For example, T1 (of an urban quintile 5 school) highlighted the difficulty of reconciling policy mandates with the school's immediate financial needs, stating: “Implementing the policy is sometimes challenging, especially when balancing between the policy guidelines and the immediate financial needs of the school.”
Most SGBs of township and rural quintile 1 schools experienced challenges in implementing the financial policy. T5 explains:
Remember now that a school is not like a corporate. In the corporate sector, you can implement the system of 100% separation of duties. We do not have the staff to do that. One of the important internal control measures of finance is the separation of duties where one person does not do everything. Ignoring this practice can lead to the mismanagement of funds.
Compliance with legislation is non-negotiable, and institutions undertake policy updates annually to ensure conformity with new or amended legislation. Nonetheless, the day-to-day reality of implementing policies confirm an ongoing divide between intent and practice. SGBs of township and rural quintile 1 schools encountered difficulty, such as implementing checks and balances or experiencing staff limitations, illustrate the friction between the idealistic structure of policy and the realistic capabilities of agency. This aligns with Dibete and Potokri's (2021) findings, which acknowledge the inconsistency in policy application despite the common pursuit of compliance. FO3 (of a rural quintile 1 school) emphasized the importance of reviewing the finance policy, at least on an annual basis:
Look, we can review the budget annually. We will scrutinise the policy. If it is still fine, we just continue. But in the main, when we get to the end of the year, I mean, three-year cycle, the lifetime of SGBs, that's when we seriously investigate all the policies. All policies, including finance policies. So, on a three-year basis, yes, we must seriously investigate. But if there is a need in-between, we pay attention to it.
Theme two financial functions of principals and SGBs
Two sub-themes shed light on the complex responsibilities of principals and SGBs for setting up internal financial control processes to manage school finances. They have authority over the schools’ finances, culminating in the essential day-to-day adherence of fiscal policies
The dual role of principals
The dual role of principals becomes a conundrum when financial decisions are made at SGB meetings. Although principals serve concurrently as members of SGBs and as ex-officio members of the DBE, they owe their first allegiance to their employers and provincial HODs (RSA, 2007). By virtue of their appointments, principals are legally bound to abide to all decisions, policies, and regulations set by their provincial HODs.
Although SGBs are responsible for managing school finances, principals must invariably ensure that the finances are managed effectively and efficiently. In some township and rural schools where SGBs lack financial knowledge, principals should assist them in drawing up annual budgets, procure physical resources, and generate income to supplement funds provided by government. Principals are also depicted as linchpins of financial oversight, embodying their crucial role as educational leaders and financial managers. P1 of a quintile 5 urban school underscores this responsibility, stating:
I am the chief accounting officer. If there's anything wrong, I’m going to be expected to explain. And I think that sums it up as all. I must know what is going on with the finances daily. If I do not have my fingers on the pulse, the finances could be mismanaged. That's the lifeblood of any school. Money's in, money's out, but I’ve got to check.
P2 (of a quintile 1 township school) reflects on the following:
The principal, being primarily an educator, is not necessarily equipped with financial knowledge but must ensure that the school's finances are efficiently undertaken because he is the accounting officer. With the approval of the SGB, we have co-opted a parent on the finance committee who undertakes the internal auditing monthly. He has no voting rights but voluntary checks all receipts against the Cash Book (Receipts and Payments Journal) and bank statements to ensure all monies received are deposited into the bank account and all payments are made in accordance with the Payment Authorisation Forms.
Remember, according to Section 16 A, the principal is an ex-officio member. Now the principal is the member of the SGB. He must always advise the SGB, because if the SGB is found wanting, the principal must answer to the HOD.
Basson and Mestry (2019) aver that principals have a complex role of navigating day-to-day financial tasks while adhering to professional matters. This intricate balancing act necessitates a thorough understanding of financial processes and underscores the importance of principals’ involvement in financial decision-making and oversight. This validates the SGBs central role in financial management. Thus, finance policies should entrust substantial financial oversight and decision-making to SGBs and not principals.
The tenets of the Accountability Theory imply that regular checks and counterchecks are necessary to avoid the mismanagement of funds. In practice, most SGB parent members have problems fulfilling their obligations of governance, which include their personal interests, time devoted to their own work commitments or simply have little knowledge to fulfil their financial functions. In this instance, principals as “accounting officers” should perform a consultative role to advise SGBs on financial matters.
SGB and the finance committee
The treasurer, by virtue of this executive position on the SGB, inevitably becomes the chairperson of the finance committee. All decisions taken by finance committees should be ratified by SGBs at formal meetings. This sub-theme examines key financial functions of SGBs and finance committees. In addition to managing day-to-day financial operations such collecting school fees, procuring LTSM and cleaning materials, SGBs have an oversight function to ensure that the finances are managed effectively. They are obliged to institute internal financial control processes for budgets, assets, and cash flow operations.
At interviews, we established that most of the selected schools had functional SGBs and finance committees in place. Chairpersons of SGBs confirmed that treasurers headed finance committees. We examined the oversight functions of how SGBs executed budgets and monitored and controlled cash flows. The role of SGBs in financial oversight is underscored by principals of Schools 1 and 5 who highlighted their financial responsibility to effectively manage school finances. P5 describes the diverse responsibilities of the SGB as follows:
The governing body established a subcommittee known as the finance committee, responsible for the preliminary groundwork. This committee includes key members such as the finance officer or cashier, the principal, the treasurer of the SGB – who leads the committee – and the chairperson. This committee is given the oversight role of school finances. For example, they are required to monitor and control our budget. They introduced the Variance Statement as a mechanism where on a monthly basis, they will prepare this Statement which reflects the various cost centres (e.g. stationery), the amounts budgeted for each cost centre, and the amount spent. The difference can be equal, or there can be underspending and overspending. If there is overspending or underspending, reasons for these should be provided.
Affluent schools (quintile 5) invest in state-of-the-art technology to help monitor and control school finances. We enquired from the treasurer of School 5 (T5) about Pastel, training of finance clerks and the funds to procure this software program.
This program is designed to do all the accounting functions as well as generating reports for monitoring and control purposes and it is purchased from school funds and not from the Department. We also pay for the training of our staff members. It is well worth it. If correct information is fed into the program, we get accurate information.
The finance committee plays a pivotal role in overseeing significant expenditure decisions and ensuring financial accountability. However, the SGBs of township and rural schools ensure that the finance committee does not operate autonomously but always remain aligned to the broader goals and regulations set forth by them. All decisions taken by the finance committee must be ratified by the SGB.
For instance, P2 (from a quintile 1 township school) articulates the decisive financial role of the SGB as follows:
The SGB has the final say on significant expenditures, ensuring financial responsibility and transparency… they’re not managing the finance per se. Remember, they are a committee. They usually get advice and adhere to the finance policy. However, the person who manages the finance at this school is the principal. And the principal is assisted by the treasurer.
Recognizing the responsibility that lies with SGB and finance committee members in managing school funds, it became clear that their work often presented structural and resource-related challenges. Their ability to overcome such obstacles hinged on their competencies, pointing to the necessity of empowering members to be financially literate and dedicated. This underscores the need for ongoing training and support systems to enhance the financial management capabilities of principals, and members of SGBs and finance committees.
Recommendations
To strengthen the internal processes of school finances, principals, and members of the SGB, the following is suggested:
It is crucial to extend the legal and financial expertise of principals, financial managers, and chairpersons of SGBs by providing them with structured, tailor-made training on school finances. These endeavors should span a wide array of competencies, including legislation, regulations, governance, budget oversight, digital literacy, and ethical standards, aimed at refining fiscal judgement and bolstering their accountability.
Schools, more especially township and rural quintile 1 schools should integrate robust Information and Communication Technology tools to manage and control school finances. DBA should subsidise these schools to procure sophisticated software and e-Governance Mobile Applications, to facilitate remote management and oversight of finances. By transitioning from manual systems to advanced technology, schools will bolster the management, transparency, and accountability of fiscal activities, and augmented decision-making capabilities.
Conclusion
This study investigated the role of SGBs in managing internal financial control processes in South African public schools. We determined how selected schools implemented internal processes to assure efficient financial management, highlighting the contributions and involvement of pivotal role-players such as principals, SGBs, finance committees, and financial managers. Using the Accountability Theory to frame this study, findings revealed that SGBs in quintile 5 schools designed and implemented effective internal control processes and structures to manage and control cash flow projection statements, budgets, and the procurement of LTSM and assets. However, in quintile 1 schools, SGBs grappled with drafting and implementing watertight financial policies. Financial accountability posed serious challenge for SGBs and principals in these schools. Although SGBs of quintile 1 and 5 schools had a good understanding of how to draft policies, the implementation of financial procedures posed serious challenges for them. To achieve its envisaged aims and objectives, this study illuminates the importance of role-players to set up internal processes with a range of improvement strategies, including enhancing financial literacy among role-players, integrating advanced technology, and fostering better collaboration and engagement.
A pertinent future research study is for scholars to explore how the DBE can provide ongoing intensive and profound financial training and development to newly elected SGBs of quintile 1 schools so that they are empowered to make sound decisions to practical problems. Although the Schools Act makes provision for DBE to train SGBs, this service is not readily available to them.
Footnotes
Declaration of conflicting interests
The authors declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
Funding
The authors received no financial support for the research, authorship, and/or publication of this article.
