What schools need from accountants

Experts gave attendees of CIBA’s Practice Management Conference in Maropeng an education in what the independent schools sector needs from accountants. 

“The bursar role has changed. They used to just collect fees, manage expenses and handle the petty cash. Now it’s much more complex,” Lebogang Montjane, the executive director of the Independent Schools Association of South Africa (ISASA), told the audience. 

The bursar is also increasingly performing an HR function for non-academic staff, ensuring health and safety management, and managing supplier contracts. 

Johan Heydenrych, the director of tax services at Kreston, pointed out that schools often deal with substantial amounts of money and that parents regard education as a spending priority. “My first money goes to my children.”

However, both panellists also pointed out that the sector is nuanced and complex in terms of compliance. 

The accounting challenges for schools 

One of the biggest accounting conundrums in the sector concerns VAT explained Montjane. “Some of the VAT consequences are so complex,” says Heydenrych. He pointed out that if you provide education services, it may be exempt. However, it’s more complex if the school has a bookshop or clothes shop. 

Montjane also raised the issue of the tax treatment of staff housing and if allowing discounts for the children of staff members would have tax consequences. 

Heydenrych pointed out that these kinds of questions and the complex business model of schools is part of what makes an accountant’s job exciting. “Accounting and tax are boring, but business is so exciting. Every time we have an opportunity to do work for a client, it’s an exciting opportunity to learn.”

When operating in the education sector, Heydenrych stressed the importance of preparation. “You have to not only know the accounting but also the governing legislation in the industry.” In this instance, the Schools Act.

Opportunities in the sector. 

In his presentation, Montjane emphasised the importance of policies and procedures in the sector, listing the idea of having a standard accounting manual for the sector. 

He also pointed out an opportunity for software providers, “There is a desperate need for a standard accounting package for schools.”

ISASA represents over 900 schools. Some of them are state subsidised and have additional reporting requirements. Although many of the larger schools have full-time bursars, Montjane told the audience, “Many of our lower fees schools don’t have full-time bursars that you can sell your services to.”