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Financial Reporting for Public Schools: Our Guideline in preparing financial statements for Public Schools

The South African Schools Act 1996 (Act 84 of 1996) (SASA) requirements that govern financial reporting for schools, including the preparation of financial statements for public schools. This is our guideline for said preparation, based on our extensive experience in this area.

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If your school needs assistance with the preparation of requisite financial statements this end of year, get in touch with us right away. Email us at info@kettleconsulting.co.za or call our offices at 011 025 1446.

Over the last few years our firm has performed multiple audits for public schools across South Africa. This has allowed us to obtain valuable insights into the short comings into how treasurers and accountants have prepared their annual financial statements and why many of these schools have been qualified. In order to assist our client we have developed a set of guidelines for the accounting policies, form and minimum contents of the financial statements of a public school. While the act does not specifically prescribe these, we believe that we have outlined the fundamental principles, concept and requirements that should be complied with when preparing the financial statements of a public school.

The South African Schools Act 1996 (Act 84 of 1996) (SASA) requirements that govern financial reporting for schools, including the preparation of financial statements for public schools. This is our guideline for said preparation, based on our extensive experience in this area.

Let’s first go back to legislation. The South African Schools Act 1996 (Act 84 of 1996) (SASA) requirements that directly affect the financial statements of public schools are:

  • Section 15 which states that, “every public school is a juristic person, with legal capacity to perform its functions in terms of this Act.”
  • Section 42 of the South African Schools Act, 1996 (Act 84 of 1996) (SASA) states that the governing body of a Public school must –
    • Keep records of funds received and spent by the public school and of its assets, liabilities, and financial transactions; and
    • as soon as practicable, but not later than three months after the end of each financial year, draw up annual financial statements in accordance with the guidelines determined by the Member of the Executive Council.”
  • Section 44 states that, the financial year of a public school commences on the first day of January and ends on the last day of December of each year; and
  • Section 43(5) states that a governing body must submit to the Head of Department, within six months after the end of each financial year, a copy of the annual financial statements, audited or examined.

Unlike in the private sector which prescribes the use of International Financial Reporting Standards (IFRS) and the public sector which uses Generally Recognised Accounting Practice (GRAP), there is no prescribed practice for a school. The South African Institute of Chartered Accountants (SAICA) previously provided some guidelines which we have recommended, however this has not been rolled out by the Department of Education.

The minimum requirements that we believe that the financials should have are depicted as follows:

financial reporting for public schools financial statements for public schools.png

Financial reporting for public schools: Get help with 2022 Financial Statements for Public Schools.

The school should not just adopt this framework without consulting with national or provincial department. If there has not been any framework provided, then the SGB would be required to adopt a framework which suits best for your school.

It is important that management of the school and the school auditors agree on the approach adopted upfront in order to avoid the amount of qualifications currently being experienced in the market. This must be a partnership between both parties in order to ensure that the best possible outcome is achieved.

Get in touch with us today for assistance handling this time-sensitive obligation. You may email us at info@kettleconsulting.co.za or call 011 025 1446 (Johannesburg) and 021 003 8000 (Cape Town)

Insight by:

Justin Kettle

Managing Director

Kettle Consulting (PTY) Ltd

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