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In this chapter, the theoretical framework school based financial management is discussed. Financial roles and responsibilities of the School Governing Bodies (SGBs) as mandated by the MEC through SASA and other legal frameworks relating to schools are unpacked. The quality of the financial skills and expertise the SGBs bring on board to match the roles and responsibilities they are entrusted with are also evaluated for relevancy and efficiency. In addition, the chapter will also focus on the gap between the levels of competencies required for financial management in schools possessed by the SGBs and the actual skills and expertise they have. The chapter further focuses on measures put in place for the pre-mediated gap between expected skills and actual skills availed by SGBs for school financial management in the form of capacity building training for the SGBs. The current capacity building model for SGBs is closely put under scrutiny in this chapter in an attempt to measure its effectiveness, identify gaps and possible areas for improvements. Successful school based financial management models of developed countries such as the United Kingdom and Australia are put into perspective to examine good practices that are implemented by these countries.

The previous chapter has indicated how a huge amount of South Africa’s Gross Domestic Income (GDI) is allocated to education (SARB, 2013) in its object to make education equitably accessible to all citizens. In its quest to ensure equitable provisioning of education, the State had to decentralise some of its responsibilities to bodies at institutions level to effectively and efficiently govern those institutions. The chapter also indicates how SGBs are empowered to act on behalf of schools as legal entities (RSA, 1996b) on the premise that they have the necessary skills and expertise. Their fiduciary duties involve being custodians of funds allocated to their schools for which they must fully account to all their stakeholders, namely, the state, learners, parents and business. It has, however, been found that the responsibilities allocated to SGBs are enormous and extensive (Marishane, 2010; Xaba, 2011). For this reason, studies (Maluleke, 2008; Mestry, 2006) have discovered that many SGBs find it difficult to cope with financial management, ascribing this to lack of capacity and experience. The

31 researcher believes that the normal practice is to ascertain the carrying capacity of the vehicle and loading it according to recommended carrying capacity for its efficiency. The practice in this regard is however skewed in that millions of rand are put in the custody of people with scant or no financial management knowledge. These people are then made to learn their roles while in the process of financial management. Capacity building workshops are provided to SGBs (Graaf, 2016) though considered inadequate (Xaba, 2010) and needs review to be on target. Concurring with Xaba (2010) the researcher considers the process to be characterised by two main flaws, first, the gap between the expected competencies of the SGBs and the actual competencies they possess, second, the expected outcomes of the capacity building training and the actual inadequate and off-target nature of the current capacity building training. Inconsistencies between objectives and outcomes of the capacity building programmes led to the insertion of Section 145C of SASA which provides for the school governing body association responsible for the further training of SGBs on governance issues they grapple with (RSA, 2012). This chapter, therefore, focuses on the ideal capacity building for SGBs which would probably match the enormity of the SGBs’ responsibilities.

Decentralisation of power to school governing bodies in education is a relatively new concept globally. The main reason for decentralisation is to empower ordinary citizens and provide equitable infrastructure and social services like education to the people (Sharma, 2014). Decentralised governance structures such as SGBs for schools came into existence. In countries like South Africa, decentralisation is partly exercised as there are selected responsibilities which still remain with the government. The payment of teacher salaries and the erection of school buildings are beyond the SGBs competencies. The SGBs are however empowered through decentralisation to act on behalf of juristic persons being schools. SGBs are mandated to act in the best interest of the school thereby foregoing their own interests as fiduciaries (RSA, 1996b). As fiduciaries, they are jointly accountable to stakeholders and their constituencies. Powers cascaded to SGBs include among other, planning the school finances through budgeting, acquisition of school requisites by following proper procurement policies and guidelines, financing the school through fundraising and taking care of schools’ assets (RSA, 1996b). The researcher considers allocation of these powers to the SGBs as premature looking at the demanding nature of these powers and the scant skills among SGBs. The saying that “judging a fish by its ability to climb a tree” holds true in this regard as accountability is compromised by the obscured by the poor financial knowledge of most SGB members involved in school financial management. Notwithstanding these responsibilities, the grounds for

32 holding SGBs legally liable for defaulting their responsibilities are not explicitly articulated in many school legislations, however, any act by SGBs that contains an element of an offence would be followed through criminal procedures and the SGB member duly prosecuted (RSA, 1996b). The researcher perceives the practice to also create a possible cloak behind which SGBs hide and commit flaws as they are generally presumed to be inadequately equipped for their roles.

Contrary to school based financial management in developed countries where the school governors are people versed in all governance responsibilities, South Africa has a complicated context of varied levels of financial management skills possessed by SGBs depicted by Figure 1 below. The figure depicts an uneven level of competency of SGBs from urban school, township school and rural schools which ranges from good, average and bad respectively.

Figure 1: Decentralization Impact: The Context and the Outcome

Nature of South African demographics in terms of settlements

Urban schools Semi-urban and Township Rural school

Top-down decentralisation

Effective delivery of local public education

Average delivery of public education

Poor delivery of public education

This figure depicts the ills of decentralisation in terms of varied education levels of governance structures like SGBs. Corroborating this statement, Bloch (2006) states that in one 2001 study, where 65% of children in model C (ex-white) schools saw appropriate scores at 6th grade level, the figure for ex-DET (black) schools was only 0,1%. Van Wyk (2004) further points out that The

context

The outcome

33 many SGBs, particularly in less advantaged areas, lacks necessary skills and expertise to execute their responsibilities. Sharma (2014) argues therefore that decentralized governance structure by itself is no guarantee of more effective or responsive government. In fact, successful decentralization outcomes require a set of conditions in absence of which decentralization may be no more responsive to community needs and desires than a centralized authority.

2.2 VALUE FOR MONEY AND ITS IMPLICATIONS FOR SCHOOL GOVERNING