SGB Financial Management: Complete Guide for South African Schools

Understanding SGB financial management is essential for every School Governing Body (SGB) member, treasurer, and school administrator in South Africa. The South African Schools Act (SASA) assigns significant financial responsibilities to SGBs, requiring careful budgeting, transparent fee setting, compliant procurement, accurate reporting, and regular audits. Whether you’re a newly elected SGB member learning the ropes or an experienced treasurer ensuring compliance, this comprehensive guide covers everything you need to know about SGB financial duties under SASA Sections 36–43.

This pillar guide explains the complete SGB financial management framework: how to develop annual budgets, set school fees within legal limits, manage procurement processes, prepare financial reports, conduct internal audits, and maintain compliance with provincial education departments. We’ll break down the roles of the finance committee and treasurer, explain SASA requirements in plain language, and provide practical tables and examples to help your SGB manage school finances effectively.

What Is SGB Financial Management?

SGB financial management refers to the comprehensive system of planning, controlling, and reporting school finances that School Governing Bodies must implement under the South African Schools Act. SASA grants SGBs significant autonomy over school finances while imposing strict accountability requirements to ensure public funds are managed transparently and responsibly.

Key principles of SGB financial management:

Transparency: All financial decisions must be documented and accessible to parents, staff, and education officials
Accountability: SGBs are legally responsible for all financial decisions and must answer to the provincial education department
Compliance: Financial practices must align with SASA, provincial regulations, and National Treasury guidelines
Sustainability: Budgets must ensure the school can operate effectively while maintaining financial stability
Efficiency: Resources must be used effectively to support teaching and learning

SGBs manage two main types of funds:

State funding: Allocations from the provincial education department (personnel, infrastructure, learner support materials)
School-generated funds: School fees, fundraising, donations, and other income sources

Both types of funds require careful management, accurate record-keeping, and regular reporting to ensure compliance and transparency.

Legal Framework: SASA Sections 36–43

The South African Schools Act (Act 84 of 1996) establishes the legal foundation for SGB financial management. Understanding these sections is essential for compliance.

Section 36: Functions of Governing Bodies

Section 36 outlines the general functions of SGBs, including financial responsibilities. SGBs must:

Promote the best interests of the school: Financial decisions must prioritise learner education
Support the principal: Work collaboratively with school management on financial planning
Develop school policies: Create financial policies aligned with SASA requirements
Administer school property: Manage school assets and facilities responsibly
Control school finances: Exercise oversight over all income and expenditure

Section 37: Functions of Governing Bodies of Public Schools

Section 37 specifies additional functions for public school SGBs:

Recommend school fees: Propose annual school fees (subject to provincial approval)
Administer school funds: Manage all school-generated income and expenditure
Maintain school property: Budget for repairs, maintenance, and improvements
Submit financial statements: Provide annual financial reports to the provincial education department

Section 38: Functions of Governing Bodies of Independent Schools

Independent school SGBs have similar responsibilities but operate under different funding models, relying primarily on school fees and private funding.

Section 39: Liability of Governing Bodies

Section 39 establishes that SGB members are not personally liable for school debts unless they act negligently or fraudulently. However, SGBs must maintain proper financial controls to protect members and ensure responsible management.

Section 40: School Funds

Section 40 requires SGBs to:

Open a bank account: Maintain a separate bank account for school funds
Keep proper records: Maintain accurate financial records and documentation
Appoint a treasurer: Designate a qualified person to manage day-to-day finances
Prepare annual budgets: Develop and approve annual budgets before the start of each financial year

Section 41: Financial Records and Statements

Section 41 mandates that SGBs:

Keep financial records: Maintain detailed records of all income and expenditure
Prepare annual financial statements: Generate comprehensive financial reports
Submit statements to the department: Provide financial statements to the provincial education department annually
Make statements available: Allow parents and staff to access financial statements on request

Section 42: Auditing of Financial Statements

Section 42 requires that:

Annual audits: Financial statements must be audited annually by a registered auditor
Audit reports: Audit reports must be submitted to the provincial education department
Address audit findings: SGBs must respond to audit queries and implement recommendations

Section 43: School Fees

Section 43 governs school fee setting:

Fee determination: SGBs recommend school fees, subject to provincial approval
Fee exemptions: Schools must grant exemptions to qualifying parents (based on income thresholds)
Fee collection: Schools may take legal action to recover unpaid fees (with limitations)
Fee policy: Schools must develop clear fee policies and communicate them to parents

Understanding these sections helps SGBs navigate their financial responsibilities while maintaining compliance with national legislation.

The Role of the SGB Finance Committee

Most SGBs establish a finance committee to handle detailed financial planning and oversight. While not mandatory under SASA, finance committees are highly recommended for effective financial management.

Composition of the Finance Committee

Finance committees typically include:

SGB Treasurer: Usually chairs the committee
Principal: Provides operational context and budget input
SGB Chairperson: Ensures alignment with SGB decisions
One or two additional SGB members: Bring diverse perspectives
School Financial Administrator: Provides administrative support (if available)

Best practice: Include at least one member with financial expertise (accountant, bookkeeper, or business manager) to ensure professional oversight.

Functions of the Finance Committee

The finance committee performs several critical functions:

Budget Development: Drafts annual budgets for SGB approval
Financial Monitoring: Reviews monthly financial reports and identifies variances
Procurement Oversight: Reviews major purchases and ensures compliance with procurement policies
Fee Setting: Develops school fee proposals based on budget requirements
Audit Preparation: Coordinates annual audit processes and addresses queries
Policy Development: Drafts financial policies (procurement, fee exemption, fundraising)
Risk Management: Identifies financial risks and recommends controls

Finance Committee Meetings

Finance committees should meet:

Monthly: During the school year to review financial performance
Quarterly: For detailed budget reviews and variance analysis
Annually: For budget development and audit preparation

All finance committee meetings must be minuted, and recommendations must be presented to the full SGB for approval.

The Role of the SGB Treasurer

The SGB Treasurer is the key financial officer responsible for day-to-day financial management. This role requires financial literacy, attention to detail, and commitment to transparency.

Treasurer Responsibilities

The Treasurer’s responsibilities include:

Financial Record-Keeping: Maintains accurate records of all income and expenditure
Bank Account Management: Monitors bank accounts, reconciles statements, and authorises payments
Budget Preparation: Works with the finance committee to develop annual budgets
Financial Reporting: Prepares monthly financial reports for the SGB and finance committee
Cash Flow Management: Ensures the school has sufficient funds to meet obligations
Payment Authorisation: Reviews and authorises payments (within limits set by the SGB)
Audit Coordination: Works with auditors to provide documentation and address queries
Parent Communication: Explains financial matters to parents at SGB meetings

Treasurer Qualifications

While SASA doesn’t specify formal qualifications, effective treasurers typically have:

Financial literacy: Understanding of basic accounting principles
Attention to detail: Ability to spot errors and inconsistencies
Integrity: Commitment to transparent and ethical financial management
Time availability: Capacity to dedicate several hours per week to financial tasks
Communication skills: Ability to explain financial matters to non-financial stakeholders

Important: Treasurers should not have sole control over finances. SGBs must implement segregation of duties (e.g., different people authorise payments, record transactions, and reconcile bank statements) to prevent fraud and errors.

Supporting the Treasurer

SGBs should support treasurers by:

Providing training: Offer financial management training or access to resources
Allocating administrative support: Assign admin staff to handle routine data entry
Using financial software: Invest in school financial management software to automate record-keeping
Establishing clear policies: Create clear financial policies to guide decision-making
Regular reviews: Conduct regular reviews to ensure financial controls are effective

Annual Budgeting Process

Annual budgeting is the foundation of effective SGB financial management. A well-developed budget ensures the school can operate effectively while maintaining financial sustainability.

Budget Development Timeline

SGBs should follow this timeline for annual budget development:

Month	Activity
August	Review previous year’s budget performance and identify trends
September	Gather input from departments (academic, sports, maintenance)
October	Finance committee drafts preliminary budget
November	SGB reviews and approves budget
December	Submit budget to provincial education department (if required)
January	Implement budget for new financial year

Budget Components

A comprehensive school budget includes:

1. Income Projections

State funding:

Personnel allocations (salaries, benefits)
Infrastructure grants
Learner support materials allocations
Nutrition programme funding (if applicable)

School-generated income:

School fees (projected based on enrolment and collection rates)
Fundraising activities
Donations and sponsorships
Interest income
Other income (rental, events, etc.)

2. Expenditure Projections

Personnel costs:

Additional teaching posts (if school-funded)
Support staff salaries
Professional development
Staff benefits

Operational costs:

Utilities (electricity, water, refuse)
Maintenance and repairs
Cleaning and security
Insurance
Communication (telephone, internet)

Educational costs:

Learning materials and resources
Library books and resources
Sports equipment
Technology (computers, software, maintenance)
Extramural activities

Administrative costs:

Office supplies
Financial management (audit fees, software)
Legal and professional fees
Bank charges

Capital expenditure:

Infrastructure improvements
Equipment purchases
Technology upgrades

Budget Development Process

Step 1: Review Previous Year

Analyse the previous year’s actual income and expenditure to identify:

Trends (increasing costs, declining fee collection)
Variances (budgeted vs actual)
Areas requiring adjustment

Step 2: Gather Input

Consult with:

Principal: Operational priorities and needs
Heads of Department: Subject-specific requirements
Sports and cultural coordinators: Extramural activity budgets
Maintenance staff: Infrastructure and maintenance needs

Step 3: Project Income

Estimate income based on:

Enrolment projections: Expected learner numbers for the year
Fee collection rates: Historical collection percentages (typically 85–95%)
State funding: Provincial allocations (if known)
Fundraising capacity: Realistic targets based on previous years

Step 4: Allocate Expenditure

Prioritise expenditure based on:

Legal obligations: Must-pay items (utilities, salaries, insurance)
Educational priorities: Items directly supporting teaching and learning
Maintenance requirements: Essential repairs and upkeep
Strategic goals: Long-term improvements aligned with school development plan

Step 5: Balance the Budget

Ensure total projected income equals or exceeds total projected expenditure. If there’s a shortfall:

Increase income: Raise school fees (within legal limits), increase fundraising
Reduce expenditure: Cut non-essential items, defer capital projects
Seek additional funding: Apply for grants, seek sponsorships

Step 6: Present to SGB

Finance committee presents the draft budget to the full SGB with:

Summary of income and expenditure
Explanation of major items
Comparison to previous year
Assumptions and risks

Step 7: Approve and Submit

SGB approves the budget (may require parent consultation for fee increases). Submit to provincial education department if required by provincial regulations.

Budget Monitoring and Control

Once the budget is approved, SGBs must monitor performance regularly:

Monthly reviews:

Compare actual income and expenditure to budget
Identify significant variances
Adjust spending if necessary
Report to SGB on financial performance

Quarterly reviews:

Comprehensive variance analysis
Forecast year-end position
Identify trends requiring action
Update budget if circumstances change significantly

Year-end review:

Compare final results to budget
Analyse variances
Use insights to inform next year’s budget

School Fee Setting and Management

School fees are a critical source of income for most public schools. SGBs must set fees responsibly, ensure fair collection, and comply with exemption requirements.

Legal Framework for School Fees

SASA Section 43 and provincial regulations govern school fee setting:

Key requirements:

SGBs recommend school fees (subject to provincial approval in some provinces)
Fees must be reasonable and affordable
Schools must grant exemptions to qualifying parents
Fee policies must be transparent and communicated to parents

Fee Setting Process

Step 1: Calculate Required Income

Determine the income needed from school fees by:

Calculating total budgeted expenditure
Subtracting state funding and other income sources
Adding a contingency (typically 5–10%) for unexpected costs

Step 2: Project Enrolment

Estimate the number of fee-paying learners for the year:

Current enrolment (less learners leaving)
Expected new admissions
Consider historical trends

Step 3: Account for Exemptions

Estimate the number of learners likely to qualify for fee exemptions:

Review previous year’s exemption applications
Consider economic conditions in the school community
Apply exemption percentage to enrolment

Step 4: Calculate Fee Amount

Divide required income by the number of fee-paying learners (total enrolment less exempt learners):

Fee Amount = Required Income ÷ (Total Enrolment - Exempt Learners)

Example:

Required income: R2,000,000
Total enrolment: 800 learners
Expected exempt learners: 80 (10%)
Fee-paying learners: 720

Fee amount = R2,000,000 ÷ 720 = R2,778 per learner per year

Step 5: Consider Affordability

Ensure fees are affordable for the school community:

Compare to fees at similar schools
Consider local economic conditions
Provide payment plans for parents who cannot pay annually

Step 6: Present to Parents

Hold a parent meeting to:

Explain the budget and fee calculation
Present the proposed fee increase (if applicable)
Allow parents to ask questions and provide input
Vote on fee proposal (if required by provincial regulations)

Step 7: Submit for Approval

Submit fee proposal to provincial education department if required. Some provinces require approval for fee increases above certain thresholds.

School Fee Collection Strategies

Effective fee collection ensures schools receive the income needed to operate:

Collection methods:

Annual payment: Discount for upfront payment (e.g., 5% discount)
Termly payment: Payment in four instalments (one per term)
Monthly payment: Payment plans for parents who cannot pay termly
Debit orders: Automated monthly deductions (most reliable)

Collection best practices:

Clear communication: Send fee statements regularly (monthly or termly)
Early reminders: Remind parents before payment deadlines
Payment options: Offer multiple payment methods (EFT, cash, debit order)
Follow-up: Contact parents who miss payments promptly
Payment plans: Work with parents who cannot pay to establish affordable plans

Legal action:

Schools may take legal action to recover unpaid fees
However, SASA limits recovery actions (cannot deny admission, cannot withhold reports)
Consider cost-effectiveness before pursuing legal action
Always attempt negotiation before litigation

For detailed strategies on improving fee collection, see our guide on School Fee Collection Strategies.

Fee Exemption Policy

SASA requires schools to grant fee exemptions to parents who cannot afford fees. SGBs must develop clear exemption policies.

Exemption criteria:

Income thresholds: Parents earning below provincial thresholds qualify automatically
Financial hardship: Parents experiencing temporary financial difficulties may qualify
Multiple children: Families with multiple children at the school may receive discounts

Exemption process:

Application: Parents submit exemption applications with supporting documentation
Review: Finance committee or designated SGB members review applications
Decision: SGB approves or declines exemptions based on policy
Notification: Parents receive written notification of decisions
Appeal: Parents may appeal declined exemptions

Required documentation:

Proof of income (payslips, bank statements, affidavit if unemployed)
Proof of expenses (rent, utilities, medical costs)
ID documents for parents and learners
Any other relevant financial information

For comprehensive guidance on developing exemption policies, see our article on School Fee Exemption Policy.

Procurement and Purchasing

SGBs must manage procurement processes to ensure value for money, compliance with regulations, and transparency.

Procurement Principles

Value for money:

Obtain competitive quotes for major purchases
Consider total cost of ownership (not just purchase price)
Evaluate quality and durability

Transparency:

Document all procurement decisions
Maintain records of quotes and tenders
Report major purchases to SGB and parents

Compliance:

Follow provincial procurement regulations
Comply with SASA requirements
Adhere to National Treasury guidelines (for state-funded purchases)

Procurement Thresholds

SGBs should establish procurement thresholds requiring different approval levels:

Purchase Value	Approval Required	Process
Under R5,000	Principal or Treasurer	Single quote acceptable
R5,000 – R50,000	Finance Committee	Minimum 3 written quotes
R50,000 – R500,000	Full SGB	Formal tender process
Over R500,000	SGB + Provincial approval	Public tender process

Note: Thresholds vary by province. Check your provincial education department’s procurement guidelines.

Procurement Process

Step 1: Identify Need

Document the requirement:

What is needed and why
Specifications or requirements
Budget allocation
Timeline

Step 2: Obtain Quotes

Request quotes from multiple suppliers:

Minimum 3 quotes for purchases above threshold
Ensure quotes are comparable (same specifications)
Request quotes in writing
Set clear deadline for quote submission

Step 3: Evaluate Quotes

Compare quotes based on:

Price: Total cost including VAT, delivery, installation
Quality: Product specifications and durability
Service: Supplier reliability, warranty, after-sales support
Compliance: Meets specifications and regulatory requirements

Step 4: Approve Purchase

Obtain approval according to procurement thresholds:

Document approval decision
Record reasons for supplier selection
File all quotes and documentation

Step 5: Place Order

Issue purchase order or contract:

Include specifications, price, delivery terms
Set clear delivery timeline
Specify payment terms

Step 6: Receive and Verify

On delivery:

Verify goods/services meet specifications
Check quantities and quality
Sign delivery note or acceptance certificate
Report any defects or shortages immediately

Step 7: Process Payment

After verification:

Match invoice to purchase order and delivery note
Authorise payment according to approval limits
Process payment within agreed terms
File invoice and supporting documentation

Common Procurement Mistakes to Avoid

Skipping quotes: Always obtain multiple quotes for significant purchases
Poor documentation: Maintain complete records of all procurement decisions
Ignoring quality: Don’t choose the cheapest option if quality is inadequate
Missing approvals: Ensure purchases are approved according to thresholds
Inadequate specifications: Clearly define requirements to get accurate quotes

Financial Reporting Requirements

SGBs must prepare regular financial reports to ensure transparency and compliance. Reporting requirements vary by province but typically include monthly, quarterly, and annual reports.

Monthly Financial Reports

Monthly reports provide regular oversight of financial performance:

Income statement:

Actual income vs budget (by category)
Variance analysis
Collection rates (for school fees)

Expenditure statement:

Actual expenditure vs budget (by category)
Variance analysis
Major purchases

Bank reconciliation:

Opening balance
Income received
Payments made
Closing balance
Reconciliation to bank statement

Cash flow statement:

Cash position
Expected income (next 30 days)
Expected payments (next 30 days)
Projected cash balance

Monthly reports should be:

Prepared by the Treasurer
Reviewed by the Finance Committee
Presented to the SGB
Filed for audit purposes

Quarterly Financial Reports

Quarterly reports provide comprehensive financial analysis:

Comprehensive income and expenditure:

Year-to-date actuals vs budget
Detailed variance analysis
Trend analysis

Balance sheet:

Assets (bank balances, equipment, property)
Liabilities (creditors, loans)
Net assets

Forecast:

Projected year-end position
Identified risks and opportunities
Recommended actions

Quarterly reports should be:

More detailed than monthly reports
Include narrative explanations of variances
Forecast year-end position
Presented to parents at SGB meetings

Annual Financial Statements

Annual financial statements are comprehensive reports required by SASA Section 41:

Components:

Statement of Financial Position (Balance Sheet)
- Assets (current and non-current)
- Liabilities (current and non-current)
- Net assets/equity
Statement of Financial Performance (Income Statement)
- Income (by source)
- Expenditure (by category)
- Surplus or deficit
Cash Flow Statement
- Operating activities
- Investing activities
- Financing activities
Notes to Financial Statements
- Accounting policies
- Significant transactions
- Contingencies
- Related party transactions
Auditor’s Report
- Independent audit opinion
- Audit findings and recommendations

Annual financial statements must be:

Prepared according to Generally Recognised Accounting Practice (GRAP) or similar standards
Audited by a registered auditor
Submitted to the provincial education department
Made available to parents on request
Presented at the Annual General Meeting (AGM)

For a template and detailed guidance, see our SGB Annual Financial Report Template.

Financial Reporting Best Practices

Timeliness: Prepare reports promptly (monthly within 10 days of month-end)
Accuracy: Verify all figures and reconcile to source documents
Clarity: Use clear headings, tables, and explanations
Consistency: Use consistent formats and categories across reports
Transparency: Make reports accessible to stakeholders
Documentation: Maintain complete supporting documentation

Audit Requirements and Processes

SASA Section 42 requires annual audits of school financial statements. Understanding audit requirements helps SGBs prepare effectively and address findings promptly.

Audit Requirements

Who can audit:

Registered auditors (as defined in the Auditing Profession Act)
Some provinces allow accounting officers for smaller schools (check provincial regulations)

What is audited:

Annual financial statements
Financial records and supporting documentation
Compliance with SASA and provincial regulations
Internal controls and financial management systems

When audits occur:

Annually, after the end of the financial year
Typically within 6 months of year-end
Some provinces require interim audits (check provincial requirements)

Audit Process

Step 1: Select Auditor

SGBs should:

Obtain quotes from 2–3 registered auditors
Consider experience with school audits
Check references from other schools
Ensure independence (auditor should not have conflicts of interest)

Step 2: Prepare for Audit

Before the audit, prepare:

Complete financial records (income, expenditure, bank statements)
Supporting documentation (invoices, receipts, contracts)
Minutes of SGB and finance committee meetings
Budgets and financial reports
Asset registers
Fee exemption records

Step 3: Audit Fieldwork

During the audit:

Auditor reviews financial records and documentation
Auditor tests transactions and balances
Auditor evaluates internal controls
Auditor identifies issues and queries

Step 4: Management Representation

SGB responds to:

Audit queries and findings
Requests for additional documentation
Explanations of transactions or policies

Step 5: Audit Report

Auditor issues:

Audit opinion: Clean opinion, qualified opinion, or adverse opinion
Management letter: Findings and recommendations for improvement
Audited financial statements: Finalised statements with auditor’s signature

Step 6: Address Findings

SGB must:

Review audit findings with finance committee
Develop action plan to address issues
Implement recommendations
Report progress to provincial education department

Common Audit Findings

Poor record-keeping:

Missing invoices or receipts
Incomplete bank reconciliations
Unclear transaction descriptions

Internal control weaknesses:

Lack of segregation of duties
Missing authorisation for payments
Inadequate asset management

Compliance issues:

Non-compliance with procurement regulations
Incorrect fee exemption procedures
Missing financial policies

Financial reporting errors:

Incorrect classification of income/expenditure
Mathematical errors
Missing disclosures

Preparing for a Successful Audit

Maintain complete records: File all invoices, receipts, and supporting documents
Reconcile regularly: Complete bank reconciliations monthly
Document decisions: Maintain minutes of all financial decisions
Implement controls: Establish segregation of duties and authorisation limits
Review policies: Ensure financial policies are current and followed
Prepare early: Start audit preparation well before year-end

Compliance and Risk Management

SGBs must ensure compliance with SASA, provincial regulations, and financial management best practices to avoid penalties and protect school resources.

Key Compliance Areas

SASA compliance:

Proper financial record-keeping (Section 41)
Annual financial statements and audits (Section 42)
School fee setting and exemptions (Section 43)
Bank account management (Section 40)

Provincial regulations:

Procurement thresholds and processes
Financial reporting formats and deadlines
Fee approval requirements
Audit submission deadlines

Tax compliance:

VAT registration (if applicable)
PAYE for employees
Annual tax returns (if required)

Other requirements:

POPIA compliance (data protection)
Employment legislation (for school employees)
Health and safety regulations

Risk Management

SGBs should identify and manage financial risks:

Operational risks:

Declining fee collection: Develop collection strategies and payment plans
Unexpected expenses: Maintain contingency reserves
Budget variances: Monitor regularly and adjust spending

Compliance risks:

Audit findings: Address promptly and implement recommendations
Regulatory changes: Stay informed about legislative updates
Non-compliance penalties: Ensure policies and procedures are followed

Fraud risks:

Internal controls: Implement segregation of duties
Authorisation limits: Require multiple approvals for significant transactions
Regular reviews: Conduct periodic reviews of financial transactions

Financial risks:

Cash flow problems: Monitor cash flow and maintain reserves
Investment risks: Invest surplus funds conservatively
Currency risks: Manage foreign currency exposure (if applicable)

Internal Controls

Effective internal controls protect school resources and ensure compliance:

Segregation of duties:

Different people should: authorise payments, record transactions, reconcile bank statements
No single person should have complete control over finances

Authorisation limits:

Establish clear limits for payment authorisation
Require SGB approval for significant purchases
Document all authorisations

Regular reconciliations:

Bank reconciliations monthly
Asset register reconciliations annually
Fee collection reconciliations termly

Documentation:

Maintain complete records of all transactions
File invoices, receipts, and supporting documents
Document all financial decisions in minutes

Regular reviews:

Monthly financial reviews by finance committee
Quarterly reviews by full SGB
Annual internal audit (if resources allow)

Technology and Financial Management Software

Modern financial management software can significantly streamline SGB financial management, reducing administrative burden and improving accuracy.

Benefits of Financial Software

Efficiency:

Automated record-keeping reduces manual data entry
Automatic bank reconciliation saves time
Quick generation of financial reports

Accuracy:

Automated calculations reduce errors
Built-in validation prevents incorrect entries
Integration with bank accounts ensures accuracy

Compliance:

Built-in templates for financial statements
Automatic audit trail of all transactions
Compliance with accounting standards

Transparency:

Real-time financial reporting
Easy access to financial information
Clear documentation of all transactions

Features to Look For

When selecting financial management software, consider:

School-specific features: Designed for school financial management
SASA compliance: Supports SASA reporting requirements
Integration: Connects with school management systems
User-friendly: Easy for non-accountants to use
Support: Training and technical support available
Cost: Affordable for school budgets

Fundisa helps schools manage fees and financial reporting with integrated financial management tools. The system handles fee collection, generates financial reports, tracks income and expenditure, and ensures compliance with SASA requirements—making SGB financial management more efficient and transparent.

Best Practices for SGB Financial Management

Follow these best practices to ensure effective financial management:

Establish clear policies: Develop comprehensive financial policies (procurement, fee exemption, fundraising)
Maintain complete records: File all invoices, receipts, and supporting documentation
Regular monitoring: Review financial performance monthly and quarterly
Transparent reporting: Make financial information accessible to stakeholders
Professional support: Engage accountants or auditors for complex matters
Continuous improvement: Learn from audit findings and implement recommendations
Training: Ensure SGB members and staff understand financial responsibilities
Technology: Use financial software to streamline processes and reduce errors

Conclusion

SGB financial management is a complex but essential responsibility that requires careful planning, transparent processes, and diligent oversight. By understanding SASA requirements, developing comprehensive budgets, setting fees responsibly, managing procurement effectively, preparing accurate reports, and conducting regular audits, SGBs can ensure their schools operate financially sustainably while maintaining compliance and transparency.

Key takeaways:

SASA Sections 36–43 establish the legal framework for SGB financial management
Finance committees and treasurers play critical roles in day-to-day financial oversight
Annual budgeting ensures schools can operate effectively while maintaining sustainability
School fee setting must balance income needs with affordability and exemption requirements
Procurement processes must ensure value for money, transparency, and compliance
Financial reporting provides transparency and enables effective oversight
Annual audits ensure compliance and identify areas for improvement
Technology can streamline financial management and reduce administrative burden

Whether you’re a newly elected SGB member learning the ropes or an experienced treasurer ensuring compliance, this guide provides the foundation for effective SGB financial management. For schools seeking to streamline financial processes, Fundisa’s integrated financial management tools handle fee collection, reporting, and compliance—making SGB financial management more efficient and transparent.

Frequently Asked Questions

What are the main financial responsibilities of an SGB?

SGBs are responsible for: developing and approving annual budgets, setting school fees (subject to provincial approval), managing school-generated funds, ensuring proper financial record-keeping, preparing annual financial statements, conducting annual audits, managing procurement processes, and ensuring compliance with SASA and provincial regulations. The SGB Treasurer typically handles day-to-day financial management, while the finance committee provides oversight and the full SGB approves major financial decisions.

How often should SGBs review financial performance?

SGBs should review financial performance monthly through finance committee meetings and quarterly through full SGB meetings. Monthly reviews focus on comparing actual income and expenditure to budget, identifying variances, and ensuring cash flow is adequate. Quarterly reviews provide comprehensive analysis, forecast year-end position, and identify trends requiring action. Annual reviews occur during budget development and audit processes.

What happens if an SGB doesn’t comply with SASA financial requirements?

Non-compliance with SASA financial requirements can result in: provincial intervention (provincial education department may take over financial management), audit findings (qualified or adverse audit opinions), legal action (provincial department may take legal action against SGB members), funding restrictions (reduced or withheld funding allocations), and reputational damage (loss of parent and community trust). SGBs should prioritise compliance and address audit findings promptly to avoid these consequences.

Can SGB members be held personally liable for school debts?

Under SASA Section 39, SGB members are not personally liable for school debts unless they act negligently or fraudulently. However, SGBs must maintain proper financial controls and act responsibly to protect members. If SGB members breach their fiduciary duties (e.g., by acting negligently, fraudulently, or in conflict of interest), they may be held personally liable. SGBs should maintain proper insurance (Directors and Officers insurance) to protect members and ensure all financial decisions are documented and approved properly.