SGBs receive wake-up call on school fraud
Durban - School governing bodies have been urged to become more vigilant with their finances, with calls for schools to set up audit committees to improve oversight and root out possible theft of funds.
The wake-up calls come from governing body and parent association umbrella bodies in the wake of allegations that former Glenwood High School headmaster, Trevor Kershaw, received fraudulent payments of R5 million from January 2007 to December 2012.
He resigned in February and appeared in the Durban Commercial Crime Court on Friday on a charge of fraud relating to 1 577 payments. He is due back in court in June and has not yet pleaded.
The heads of the Federation of Governing Bodies of South African Schools (Fedsas) and the Governing Body Foundation (GBF) made the call in interviews with the Daily News on Monday.
The KwaZulu-Natal Parents Association stressed the need for SGBs to take more responsibility and to do their duty as laid out in the law.
All were commenting generally and not specifically on the case involving Kershaw.
Fedsas chief executive, Paul Colditz, said governing bodies were ultimately accountable for the school finances and urged school governing bodies to co-opt parents with financial and accounting expertise to help the SGB treasurer in an oversight role.
“A finance committee can be established under the leadership of the SGB treasurer to oversee the financial affairs of the school and assist the SGB with, or the treasurer should be ideally someone with accounting and finance skills.”
Fedsas and the GBF have, in line with the Kings Three report - on corporate governance - recommended schools establish audit and risk committees as oversight for the finance committees.
“This can assist in identifying risks to the school as the SGB is accountable for the school’s funds, so it is important that schools must conduct audits annually,” said Colditz. He said firms were willing to do this free of charge for schools through their corporate social investment programmes, but stressed schools had their own internal audits - conducted by skilled parents - who would not seek remuneration.
Tim Gordon, GBF chief executive, said although any system was bound to have weaknesses and loopholes, it was important that SGB members took their task seriously.
“If the SGB has put sound protocol and policy in place it is difficult for fraud to take place, unless there is some sort of collusion. In my experience you need two signatories for authorisation of payments, surely the school must have had that policy in place,” he said.
He said any corruption was “unacceptable” at schools and it was wrong for individuals to enrich themselves at the expense of school finances, paid largely by parents.
“It is bad for education; it gives schools and education a bad name. That money is collected from parents to advance the interests of education of our learners at the schools, it is not to enrich any individual,” he said.
Fedsas and GBF insisted that corruption at schools was not rife, contrary to a report by Corruption Watch earlier this year that flagged up embezzlement at schools, including in KwaZulu-Natal.
They said SGBs were generally responsible and said there were odd cases of financial irregularity.
Vee Gani, the South Durban chairman of the KZN Parents Association, said school finances were the responsibility of the SGB, as outlined in the South African Schools Act.
“A principal should not be able to defraud a school; how would they manage that when payments have to be authorised?”
Not only were checks and balances part of sound financial management, but a department requirement, and because of the legislation, a legal requirement, said Gani.
“School finances have to be audited every year and the reports presented to the department. This shows how the school is functioning and if they are abiding by the financial policies and law.”
An SGB which has “things under control” should be able to account for all school money and abide by sound accounting principles. “They should know exactly what they are paying for and why,” he said.
“When parents pay they expect that the governing body is responsible for how and on what that money is spent.
“There will always be temptation, especially where money is involved, but parents put their trust in the governing body to manage funds, if not, they are failing in their duties and cannot be absolved if there is fraud.”
Professor Labby Ramrathan, an education expert at the University of KwaZulu-Natal, said the SGB should reflect on themselves.
“Financial mismanagement means the school’s governing body is not doing its job efficiently.”
Ramrathan said the financial policies were there and putting in more measures to curb fraud would not help.
What was needed was implementation and since mismanagement of school funds seemed to be going on in spite of these, it was clear that there was a lack of implementation of these policies.