| 2. |
Included in the amendments is the insertion of the following definition of a "loan", in order to deal with financial contracts entered into by schools:
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"'loan' means any financial obligation based on agreement, which obligation
renders a school liable for making payment, in one or more instalments, in favour of
any person, but does not include the payment of staff appointed by the governing
body in terms of section 20 (4) or (5)." |
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| 3. |
This essentially means that all financial contracts or agreements that schools enter into which place financial obligations on the school to pay in instalments, are considered to be loans and require the approval of the Provincial Minister responsible for education in a province, in accordance with Section 36(2) of the Act. |
| 4. |
The above-mentioned amendment to the Act came into effect on 19 September 2011. Therefore, all financial contracts or agreements that schools entered into after that date, and which place financial obligations on the school to pay in instalments, require the approval of the Provincial Minister. All such contracts or agreements entered into before that date do not require the Provincial Minister’s approval. |
| 5. |
All schools are also required to maintain a register of all loans, overdrafts and any other financial contracts or agreements that schools entered into and which place financial obligations on the school to pay in instalments. The loan register, in the format provided below, must be submitted annually to the Deputy Director: Corporate Services of the relevant education district office by no later than 15 April, and must indicate the financial situation as at 31 March with regard to each loan, overdraft or other financial contract or agreement.
LOAN REGISTER
| Name of creditor/service provider |
Purpose of loan |
Original loan amount |
Date of loan |
Remaining period in months |
Amount paid to date |
Amount outstanding as at 31 March …. |
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| 6. |
The procedure to be followed by schools when applying for the Provincial Minister’s approval for any loans, overdrafts or any other financial contracts or agreements that a school intends entering into and which would place financial obligations on the school to pay in instalments, was issued in Budget Administration Minute: 0002/2005 and remains unchanged. |
| 7. |
Applications for approval of loans, overdrafts or any other financial contracts or agreements by the Provincial Minister, must be submitted to the Deputy Director: Corporate Services of the relevant education district office. Such applications must be made on the correct application form (attached to Budget Administration Minute: 0002/2005), signed by the principal and the chairperson of the school governing body, and accompanied by the documents referred to on the application form. |
| 8. |
For further enquiries in this regard, please contact Ms N Davids at tel. no. 021 467 2180 or fax no. 086 565 2713. |
SIGNED: L J ELY
CHIEF DIRECTOR: FINANCIAL MANAGEMENT
DATE: 2012:08:30
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