0.1 Literature review

36. A governing body of a public school must take all reasonable measures within its means to supplement the resources supplied by the State in order to improve the quality of education provided by the school to all learners at the school.

Budgeting

Clarke (2008; 286) argues that preparing the annual budget is probably the biggest challenge of the school governing body. Mestry (2006; 28) states that the South African Schools Act gives the school governing body full responsibility for the managing of the schools finances including preparing the budget annually.

Section 38 [Annual Budget of Public Schools] of the South African Schools Act requires all public ordinary schools to prepare an annual budget for submission to the general parent body for approval either late in the third quarter or early in the forth quarter each year for the following academic year.

38. (1) a governing body of a public school must prepare a budget each year, according to guidelines determined by the Member of the Executive Council, which shows the estimated income and expenditure of the school for the following financial year.

38. (2) Before a budget referred to in subsection (1) 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.

A sub committee of the school governing body, the finance committee (FINCOM) is responsible for drawing up the budget, in consultation with all relevant stakeholders and role players. Before the budget is presented to the general parent body, as contemplated in Section 38 (2) of the South African Schools Act, it must be ratified by a sitting of the full school governing body.

According to Knight (1993; 126-136) the budget process is cyclical and consists of four main phases:

Phase 1: Preliminary Analysis – is part of the school’s strategic planning and takes place in the previous year. It involves prioritizing the school’s key activities and funding required bringing these activities to fruition.

Phase 2: Budget Construction – is part of the school’s operational planning and takes place in the previous year. It involves construction of a draft budget which will be presented to the general parent body for consideration and approval.

Phase 3: Budgetary Control: is part of the school’s operational planning and takes place during the current year. It forms part of the FINCOMs oversight function.

Phase 4: Evaluation of the Budget: is part of the school’s strategic planning and takes place in the following year. It forms the basis for the following years’ budgetary process.

“It is not surprising that schools find the budget process troublesome. Most seem to cope reasonably well with the operational aspects but less effectively with the strategic budget planning and final evaluation” (ibid, 126).

A budget is an estimate of the schools expected income and expenditure for the following academic year. A budget may also be seen as a financial management tool for planning, implementing and evaluating and may be defined as “a plan for the allocation of resources and expenditure to achieve the objectives of the school” (ibid; 128) – this implies two starting points: on the one hand the schools’ current objectives based on the school development plan (SDP) and school improvement plan (SIP) and on the other hand the levels of funding and financial commitments for the forthcoming financial year.