0.1 Literature review  (Page 19/19)

• details of old, redundant, damaged, obsolete, irreparable and unserviceable stock
• suggestions on how the above stock should be disposed of
• nature and reasons for shortages and/or surpluses

The findings are tabled to a sitting of the full school governing body for approval. Serious discrepancies will result in a Board of Enquiry.

Accountability and reporting

The Accounting Officers Guide (2000; 19) states that (financial) information has no intrinsic value: it must be used by managers to develop plans, evaluate alternative courses of action and where necessary institute corrective action. The production of information is not an end in itself, and when reports are not scrutinized and used by managers the quality of information will remain poor. Ideally management information should be:

• accurate (for meaningful decisions to be taken)
• economical (for its production to be justified)
• comparable (focus on performance against budget)
• timeous reports (monthly, quarterly and annual)

Section 43 [Audit of Financial Records and Statements] of the South African Schools Act, as amended, indicates the caliber of person who may audit schools’ financial statements:

43. (1) the governing body of a public school must appoint a person registered as an auditor, registered in terms of the Auditing Professions Act, to audit the records and financial statements

The Public Finance Management Act Section 60 describes the duties and powers of auditors as follows:

60 (2) In exercising the powers and performing the duties as auditor of a public entity, the auditor: (a) has access to the accounting records, including all books, vouchers and documents; (b) may require from the accounting authority of that public entity such information and explanations as are necessary for the purpose of the audit, and;(c) may investigate whether here are adequate measures and procedures for the proper application of sound efficient, effective and economic management

Section 61 [reports of auditors] elaborates further

61. (1) The report of the auditor must state separately in respect of each of the following matters whether in the auditor’s opinion: (a) the annual financial statements fairly present the financial position of the entity; (b) is fair in all material respects and is on a basis consistent with that of the preceding year.

The accounting authorities of public entities (schools) must submit the following reports:

Monthly reports – the school governing body must within seven days of month end submit to the Superintendent of Education:

• actual receipts (income) and payments (expenditure) for the current month
• a budget variance report (month in question and year to date)
• projections of anticipated revenue and expenditure for the remainder of the current financial year
• Bank Statement and Bank Reconciliation Statement for the current month

Quarterly reports – the PED needs to know that the school’s actual expenditure is going to plan and that funds are under control [DoE: Self-Managing Schools (2000; 46)]. As a minimum the quarterly report needs to show:

• actual expenditure for the quarter
• budgeted expenditure for the same quarter
• variances (differences between the actual expenditure and the budgeted expenditure)
• projections (anticipated expenditure for the remainder of the year)

Of specific concern to a PED is a Section 21 school’s compliance in respect of the states “ring fenced” budget allocation – is the school spending the states allocation for its intended purpose. Figure 5 below is an example of the quarterly reporting template which may be used by the Provincial Education Department for the purpose of monitoring and evaluating a school’s compliance with provincial policy in respect of the states norms and standards budget allocation.

Attached to the quarterly report:

(i) the quarterly statement of Receipts and Payments

(ii) Bank Statements and Reconciliations for the quarter under review.

Annual report – according to the Accounting Officers Guide (2000; 21) the accounting cycle is completed with the production and publication of an annual report, which reviews the schools performance and achievement against the schools plans and budget. The Act requires that the school publish an annual report that “fairly presents” that state of its affairs, its financial results and position at the end of the financial year. The school governing body must prepare an annual report each financial year consisting of the financial statements prepared in accordance with the standards of Generally Accepted Accounting Practices (GAAP) and the KZN Financial Regulations [Leo (2003; 20)]. The South African Schools Act Section 43 [Audit of Financial Records and Statements]states:

43 (5) a governing body must submit to the Head of Department within six months after the end of the financial year (before the end of June) a copy of its audited annual financial statements.

The annual financial statements shall comprise of, as a minimum, the following documents: Income Statement; Statement of Changes in Equity; Balance Sheet; Cash Flow Statement; Notes (to the above statements) and any other statements which may be prescribed by the Accounting Standards Board (ASB).

Section 21 schools must include, as a separate schedule, to their annual financial statements:

(i) Compliance Certificate in terms of section 38(1) (j) (k) of the Public Finance Management Act&Sections 37, 38 and 42 of the South African Schools Act

(ii) Written Assurance Certificate, confirming the implementation of financial management and internal control systems

(i) Transfer Payment Certificate in terms of treasury regulation 8.4.2