The Sunday Mail
Over the past two weeks, the education sector has been abuzz with news of the proposed dissolution of the School Development Association system and an audit that revealed that headmasters, bursars and other SDA officials were dipping into development levies.
The Sunday Mail invited Primary and Secondary Education Minister Dr Lazarus Dokora to write on the matter.
Read on as Dr Dokora gives the lowdown on management and auditing of school funds.
Internal auditing
Internal auditing is an independent, objective assurance and consulting activity designed to add value and improve an organisation’s operations.
It helps an organisation accomplish its objectives by bringing a systematic, rule-based approach to evaluate and improve the effectiveness of risk management, internal control, and governance processes.
Internal auditors are different to external auditors because they do not focus only on financial statements or financial risks. Much of their work is looking at reputational, operational or strategic risks.
They provide reasonable assurance that risks are appropriately mitigated. Internal auditors also review systems under development to ensure that good controls are built in, and may offer consultancy services or special reviews at the behest of management. Contrary to the common belief that internal auditors only look for mistakes, it is important to note that they identify potential problem areas and recommend ways of improving risk management, internal controls and governance processes.
In short, internal auditors are charged with monitoring organisational risks and ensuring that the internal controls in place are adequate to mitigate those risks.
They provide management with information about whether risks have been identified, and how well they are being managed.
It must always be borne in mind that the responsibility to manage risk always resides with management.
The school audits that have been conducted by Primary and Secondary Education Ministry auditors since 2015 focused on improving internal management systems.
School Development Plans
These are medium term plans prepared by heads of institutions and their stakeholders, which state the goals, objectives, outputs and outcomes to be achieved within five or one-year periods.
Each school should have a school development plan that must be approved at district level by the District Education Inspector.
This plan is designed to fulfill funding requirements necessary to foster school development as well as provide learners and teachers the requisite teaching and learning materials.
Schools are urged to strictly adhere to SDP guidelines when they have been provided with funding budgeted for on the strength of these SDPs.
SDPs are funded through school services funds, school development committee funds and school improvement grants.
School Services Fund
This is a Fund provided for in the Education Amendment Act (2006) and should be established at all registered schools where all money paid as fees and levies shall be deposited.
This follows that every school should have its own SSF account opened in its name.
School Development Committee Fund
School Development Committees that are properly constituted in terms of the Education Act (2006) as amended are to be established at every learning institution.
The committees shall assist – through their funds – in the operation and development of schools by providing material and financial support generated from own efforts for the benefit of present and future learners.
The SDC Fund is a funding tool for the School Development Plan.
School Improvement Grants
The purpose of the School Improvement Grant is to provide adequate and well-targeted levels of funding to finance schools to cover non-personnel at the school to enable it to meet optimal standards.
SIG is another funding tool in the implementation of SDPs.
Annual financial budgets
Every school is required to formulate a budget at the beginning of the year that outlines the expected cash inflows against the expected expenditure for the ensuing year.
Budgets will enable schools to properly plan their incomes and expenditure patterns, and they also guide the schools on their spending patterns.
The major thrust here is to benefit learners and develop schools in terms of providing conducive learning environments and acquisition of teaching and learning materials.
School financial records/Statements
Financial records must be in place at all schools. It is the responsibility of school heads to ensure that financial records such as cash-books and receipt books are in place so that they are verified by auditors.
These records should be updated regularly in conformity with the Public Finance Management Act.
Further, audited financial statements should be presented at the Annual General Meeting of the respective school.
Before communities rush to elect new committees, they should have the audited financial statements presented.
School information pack
The following financial accounting and administration manuals, Acts and circulars should be available at every learning institution to guide management of school funds:
Education Act Cap. 25:04
School Services Fund/School Development Committee Fund Constitution
Statutory Instrument
Public Finance Management Act Cap. 22:19
Treasury Instruction
Procurement Act
Accounting Officer’s Instructions
Finance and Administration Circular no 6 of 1994.
These instruments are available at every Government information outlet.
