1. In terms of the South African Schools Act, 1996 (Act 84/1996) as amended (SASA), the governing body of a public school must
1.1 keep records of funds received and spent and of its assets and liabilities
1.2 within three months of the end of each financial year draw up annual financial statements in accordance with the guidelines determined by the Member of the Executive Council, and
1.3 within six months of the end of each financial year submit an audited copy of the annual financial statements to the Head of the Department.

2. As the preparation of audited financial statements is a time-consuming process, you are advised to make timeous arrangements for the statements for the financial year ending on 31 December 2003. These statements must be submitted to the EMDC concerned.

3. Circular 27/2001 and Chapter I of the Manual: Basic Financial System for Schools stipulate the requirements for the appointment of an auditor as well as the guidelines for the financial statements.
3.1 The following documents (examples available on request from EMDCs) must be included with the audited financial statements:

  • Income and Expenditure Statement for 1 January - 31 December

  • Balance Sheet as at 31 December

  • Bank Reconciliation Statement as at 31 December

  • Statement of Investments

  • Asset Verification Control Certificate

  • Statement of Outstanding Debts

  • Certificate in terms of Section 38(1)(j) of the Public Finance Management Act

  • Auditor’s report
3.2 The following items must be specified separately:

Every WCED- contribution as income, e.g.

  • Norms and Standards Allocation

  • Safe Schools

  • Maintenance

  • Municipal Services

Other income

  • School fees received

Expenses

  • Maintenance

  • Textbooks

  • Other LSM

  • Safe Schools

  • Municipal Services
3.3 A separate Balance Sheet and Income Statement must be drawn up for a hostel.

4. Auditor
4.1

In terms of Section 43 of SASA the governing body of a public school must appoint a person registered as an accountant and auditor in terms of the Public Accountants' and Auditors' Act, 1991 (Act 80/1991).  If the governing body is not reasonably able to do so, it must appoint a person who is qualified to act as an accounting officer of Close Corporations.  If this is also not possible, the governing body must appoint a competent person, but the approval of the Member of the Executive Council (Provincial Minister) is needed for such an appointment.  Applications for approval (prescribed application form attached) must be sent to The Director: Budget Management, Western Cape Education Department, Room 7-20, Private Bag X9114, Cape Town, 8000.  The requirement that the person may not have any financial interest in matters pertaining to the school is still valid.
4.2 The auditor's report must include the following:

  • Declaration of auditor's qualifications in terms of Section 43 of SASA

  • Declaration that he or she is acting in an independent capacity and has no financial interest in matters pertaining to the school

  • Declaration that the financial statements give a reasonable account of the financial affairs of the school as at 31 December and of the school’s financial activities for the period 1 January to 31 December

  • Comments on the following aspects:

  • Management of funds

  • Essential irregularities

  • Internal control measures
5. Please contact the School-based Management Team at your EMDC if you need support with regard to the audited financial statements.

6. Your co-operation will be appreciated.


SIGNED: A.J. VAN NIEKERK
HEAD: EDUCATION
DATE: 2003:10:20

Application for approval of appointment of Auditor  (size: 9 KB)