The South African Schools Act (“SASA”) is the governing legislation for public schools in South Africa. This Act details the requirements that need to be complied with by public schools regarding the preparation and the audit/examination of annual financial statements.
In terms of section 42, The governing body (SGB) of a public school must keep records of funds received and spent by the public school and of its assets, liabilities and financial transactions. The SGB is also responsible for drawing up annual financial statements in accordance with the guidelines determined by the Member of the Executive Council (MEC) within three months after the end of each financial year.
Furthermore in terms of section 43, The SGB 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 referred to in section 42, and submit a copy of the audited or examined annual financial statements to the department within six months after the end of each financial year.
The financial year of a public school commences on the first day of January and ends on the last day of December of each year (Section 44). This means that the SGB has until the end of March to draw up or prepare the annual financial statements, and until the end of June to complete the audit of such annual financial statements for submission to the department.
In practice, The SGB appoints a suitably qualified professional to carry out the function of bookkeeping and preparation of annual financial statements for the public school as they themselves are not normally in a position to perform this function. Some schools may not be familiar with the requirements of section 43 to appoint a registered accountant and auditor to perform the audit or examination of the financial statements, and thus, may expect that the bookkeeper performs both functions.
Separation of duties between a bookkeeper and the auditor/examiner of the financial statements
The act requires that there is a clear separation of duties between the bookkeeper or accountant who prepares the public school’s financial statements and the auditor or independent reviewer who audits or examines such financial statements. In terms of professional standards that accountants and auditors must uphold when rendering professional services, an audit or review may not be carried out by the same professional who was involved in the preparation of the financial statements.
To reduce the self-review threat that exists, bookkeepers and accountants engaged by the school to prepare the annual financial statements can help the school to find a registered audit firm to perform the audit or review of the financial statements.
A great opportunity to collaborate
Our firm is registered with the Independent Regulatory Board for Auditors (IRBA) and is able to perform external audit engagements. We have sufficient experience and resources to conduct school audits and one of our areas of specialisation is the education industry.
We invite all bookkeepers and accountants who are looking for a suitably qualified and experienced audit firm to work with on school audits or any other audit engagements to reach out to us using any of the details below.
Tel: 087 808 5219 | Mobile: 066 086 6065 | Email: info@firstplace.co.za | Instagram | Facebook | LinkedIn | YouTube | www.firstplace.co.za
