Home Accounting and Auditing Calling all accounting officers: your help is needed at SA’s 26,000 schools

Calling all accounting officers: your help is needed at SA’s 26,000 schools


This article is prepared with the assistance of Lettie Janse van Vuuren CA(SA) and the SAIBA Guide for Accounting Officers of Schools.

There are roughly 26,000 schools in SA in need of audits or examinations. In practical terms, given the financial constraints facing most schools in SA, the majority of this examination work should be done by accounting officers – not auditors.

There is good reason for business accountants to start getting out to these schools and assisting them in bringing financial order to their affairs.

The Corruption Watch Report titled, “Loss of Principle: New Schools Report” indicated that a total of 37% of corruption cases involved financial mismanagement. Some 20% of cases involved theft of funds and tender corruption made up 13%.

“Employment corruption, abuse of power and theft of goods made up the rest of the reports received with the bulk of reports coming from Gauteng, Free State, KwaZulu-Natal and Eastern Cape,” says the report.

Causes of mismanagement

Some of the root causes for mismanagement in schools were:

  • Insufficient documentation;
  • Inaccurate financial statements prepared and examined by Accounting Officers;
  • Theft of assets;
  • Collusion between Principals, School Governing Bodies and Auditors;
  • Poor internal controls for compliance with SASA;
  • No accounting manuals in place;
  • Lack of segregation of duties between bookkeepers and auditors; and
  • Changing of audit opinions
  • All School Governing Boards (SGBs) are required to appoint relevant accounting and auditing professionals and within three months of their yearend present financial statements.

The Department of Basic Education has issued Guidelines For Preparation Of Public School Financial Statements to assist auditors and accounting officers in the preparation of school financial statements and the standards of assurance required.

In terms of Section 42 of the South African Schools Act (SASA) the governing body of a public school must –

a) Keep records of funds received and spent by the public school and of its assets, liabilities, and financial transactions; and

b) as soon as practicable, but not later than three months after the end of each financial year, draw up annual financial statements in accordance with the guidelines determined by the Member of the Executive Council.”

The member of the Executive Council means the Member of the Executive Council of a province who is responsible for education in that province.

When an accounting officer is to be appointed rather than an auditor

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 to audit the records and financial statements in schools.

However, if an audit is not “reasonably practicable”, then the governing body may appoint an accounting officer. In practical terms, most of the accounting work at schools should be done by accounting officers due to the lower costs involved. Should a school opt for an audit then the accounting officer can still be involved. Auditors are required to be independent and are not allowed to do the books and prepare financial statements, and do the audit. Auditors can only do audits. The rest of the work should be done by accounting officers as part of their examination work. This can even mean that the accounting officers prepares the school for the audit by preparing working papers. This will greatly reduce the audit fee.  

This is therefore a huge business opportunity for auditors and accounting officers.

Difference between audit and examination

Accounting officers should have a clear understanding of the differences between assurance and non-assurance engagements. Accounting officers may incur both statutory and civil liability if they issue incorrect reports.

In an assurance engagement an auditor is required to issue an independent written report that provides assurance in the form of an opinion on financial statements. Users may rely on this opinion that the financial statements agree with a financial reporting framework.

In a non-assurance engagement an accounting officer issues a statement containing information that will assist users in forming their own opinion about the financial statements. In other words users of reports issued as part of non-assurance engagements are required to form their own opinion of whether the financial statements are fairly presented or whether controls can be relied on. Non-assurance engagement can also take the form of factual findings where the accounting officer reports on whether the school has certain policies or processes in place. An opinion is not given but facts are stated.

Though SASA does not provide a definition of what constitutes an “examination” of financial statements. It does however require an accounting officer to perform this examination. The duties of accounting officers are explicitly stated in various other statutes such as the Close Corporations Act, 1984 and these duties are always factual finding type engagements. However, in addition to these statutory duties, accounting officers have certain common law duties such as:

  • Performing engagements with professional competence and due professional care;
  • Planning and supervising the engagement performance; and
  • Obtaining sufficient relevant data to afford a reasonable basis for issuing an accounting officer report.

Going concern

When preparing financial statements, the governing body of a school using these guidelines must make an assessment of the school’s ability to continue as a going concern. The school is a going concern unless the governing body either intends to liquidate the school or to cease operations, or has no realistic alternative but to do so.

Challenges in public schools

According to the Department of Basic Education, principals, teachers and SGB members are perpetrators of various financial mismanagement activities related to financial mismanagement, due to:

  • Lack of knowledge of legislation and skills, poor monitoring and control of funds, unavailability of financial policies in schools, lack of honesty and openness.
  • Conflict of interest: SGBs serve for too long in their position and no segregation of duties between bookkeepers and auditors.
  • No accounting manuals in place, poor internal controls of compliance with SASA.
  • Insufficient documentation.


The message could not be clearer: if you are a Saiba member, get out there and market yourself to schools. They surely need you.

The SA Accounting Academy recently hosted a webinar for SAIBA on the difference between audits and accounting officer work for schools. SAIBA has also prepared extensive guidence for its members available here.


  1. I am an Accounting Officer: please advise what would be the best way to approach the schools, given the fact that if they are as described in ” Challenges in Public Schools” above, they would not be willing to appoint an Accounting Officer.

    • They are often unaware of the law. A good way to start would be to show them this article. Accounting officers will have to do a lot of educating of school officials, but this should not be a problem once they see the cost implications of going the auditor route versus accounting officer. I would send out letters to schools in your area saying you are available to discuss their accounting needs and attach a copy of the article.

    • See my previous post. Get out there and introduce yourself to schools. If you can show them ways to save money (which you can if they hire an accounting officer rather than an auditor) it should be relatively easy. Show them this article and educate the schools on what is required of them. Also contact SAIBA for more specific guidelines and download the Guide at the end of the article.

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