www.manaraa.com VOLUME NO. 11 (2020), ISSUE NO. 06 (JUNE) ISSN 0976-2183 INTERNATIONAL JOURNAL OF RESEARCH IN COMMERCE & MANAGEMENT A Monthly Double-Blind Peer Reviewed (Refereed/Juried) Open Access International e-Journal - Included in the International Serial Directories http://ijrcm.org.in/ 24 AN INVESTIGATION OF THE FACTORS IMPACTING ON FINANCIAL PLANNING AND MANAGEMENT IN SECTION 21 SCHOOLS IN THE SAYIDI CIRCUIT, KWA-ZULU NATAL BHAVASHNI KANHAI ALUMNA MANCOSA GRADUATE SCHOOL OF BUSINESS (GSB) MANAGEMENT COLLEGE OF SOUTHERN AFRICA HONORIS UNITED UNIVERSITIES DURBAN Dr. HERRISON MATSONGONI SENIOR LECTURER DEPARTMENT OF ACCOUNTING AND FINANCE FACULTY OF COMMERCE UNIVERSITY OF ESWATINI ESWATINI ABSTRACT School finances are a critical cornerstone for realizing planned objectives and delivering quality education. Adequate funding for a school’s day-to-day activities and the fulfillment of set objectives rely on sound financial operations. This necessitates a paradigmatic shift by the School Governing Body (SGB) and principals to carefully manage school resources and exercise greater control over school expenditures. A unique set of skills and expert knowledge to understand and execute key fiscal processes and information is a major factor governing successful financial planning and management systems. However, there are a number of other factors that impact the efficient and economic management of school finances. A qualitative research approach, exemplified by in-depth interviews with purpose- fully selected school principals, created the platform to grasp the dynamics of Section 21 schools fiscal operations and to explore the factors that impact on financial planning and management. The findings revealed that the standards of financial management training offered to principals and School Governing Bodies by the Department of Education is poor and that many governing body members lack specialist knowledge and skills necessary for effective financial management. Results also indicated that poor school fees collections and inadequate state funding to quintile four and five schools is a critical element affecting the running of the school and its execution of key educational activities. KEYWORDS financial management, financial planning, school-based management, school funding, school fees. JEL CODES A29, I20, I21, I22, I24, I28. INTRODUCTION ince 1994, the significant political change and government democratisation in South Africa has been inaugurated by public education system reform dynamism. Such education reform is essentially characterised by international trends towards school-based management (Cheng, Ko & Lee, 2016; Sihono & Yusof, 2012; Hansraj, 2007). Following many countries worldwide, school-based management introduces a paradigm shift towards a more decentralised portal invoking key elements of participatory management and devolves key responsibilities and decision-making autonomy, including increased accountability for financial governance functions to schools (Theodorou & Pashiardis, 2016:73; Rangongo, 2011:13). This, according to Naidoo (2005:18), effectively places self- managed schools at the forefront to become progressively more responsible for managing quality education and for the planning and management of school finances. A school, given its capacity to manage itself efficiently, qualifies for additional powers, under Section 21 of South African Schools Act (SASA) No. 84 of 1996 (RSA, 1996b), to expand the scope of control over matters of school governance. The school governing body (SGB) and principals are mandated, by virtue of the self- management and financial responsibilities assigned in Section 21 of the SASA, to take control of and manage school financial resources efficiently (Bisschoff & Mestry, 2009:12; Hansraj, 2007:20). The principal must further ensure the efficient, economical and transparent use of school funds through proper prioritization, planning and budgetary provisions and must maintain accuracy of financial records so as to prevent irregular and wasteful expenditure of financial resources (KZN DoE, 2014:31-32). Greater decision- making and financial management powers thus, demand a bouquet of expertise, knowledge and skills to effectively satisfy the mandated responsibilities bequest to self-managed schools (Mestry, 2016:2). The devolutionary financial management functions and powers of responsibilities to principals and SGBs of Section 21 schools are however, not without liabilities (DeBruin, 2014:7; Uwizeyimana & Moabelo, 2013:119; Makrwede, 2012:15 and Ntseto, 2009:38). Current research into school financial management in South Africa and in developing countries reveals that many schools encounter numerous challenges in fulfilling their financial planning and management obligations (Manamela, 2014; Mestry, 2013; Mokoena, 2013; Rangongo, Mohlakwana & Beckmann, 2016; Munge, Kimani & Ngugi, 2016 and Xaba, 2011). Skills deficit, lack of financial expertise and policies coupled with poor financial management training are some of the factors that have dire implications for effective management of school finances. REVIEW OF LITERATURE LEGISLATIVE AND POLICY FRAMEWORKS It is necessary for sound fiscal decision-making to take place responsibly and within the realm of relevant policy frameworks so as to achieve value for money and meet strategic outcomes in respect to rendering high quality education (KZN DoE, 2014:9). Efficient administration of school funds thus requires a level of profes- sional financial management as legislated by the government (Maronga, Weda & Kengere, 2013:97). To guide and strengthen the effective use of limited public resources, a series of legislative policies were developed to enforce and promote effective systems for South African public school financial management opera- tions. Prescribed financial regulations contained in the Public Finance Management Act 1, 1999 (PFMA), South African Schools Act, 84 of 1996 (SASA) and National Norms and Standards for School Funding (NNSSF) policy, 1998 as amended, inform school financial management so that financial practices bear the mark of efficiency, S