A proper budget is a balancing act at the best of times. However, when the economy is under pressure this act is performed without safety nets. Public schools are no exception and especially schools that charge school fees struggle to balance the books.

“Increases in the cost of municipal services and the monthly changes to the fuel price complicate matters for schools that are tied to annual budgets,” says Mr Riaan van der Bergh, Deputy CEO of FEDSAS and Manager of the FEDSAS Centre for Finances and Risk Management. FEDSAS recently introduced the Pocket Guide to School Budgets to assist school governing bodies. 

Van der Bergh says it is difficult for schools to increase school fees with more than the published inflation rate (CPI). At the same time, other costs increase at a higher rate, which means schools are forced to cut expenditure in other areas. Defaults on school fees, bad debt and an increase in the number of applications for exemption from school fees complicate school finances even further. “A flash survey among FEDSAS member schools indicated that there is an increase of around 15% in unpaid school fees compared to last year. At many schools up to 20% of school fees cannot be recovered due to exemptions.”

The FEDSAS budget guide is based on good principles for the budgeting process. Van der Bergh says the guide includes valuable expenditure norms. “These benchmarks are based on expenditure information from more than 120 schools. This enables SGBs to compare their school to similar schools when making financial decisions.”

One of the biggest challenges remain the determination of school fees. “There is a fine balance between affordable school fees and value for money. Every cent counts in decisions on how available funds will be spent.”

The budget guide also includes best practices and the ratio between the important expense categories. The guide distinguishes between schools of different sizes as well as primary schools, high schools, combined schools and schools with hostels. 

Van der Bergh says the FEDSAS Centre for Finances runs several projects aimed at equipping SGBs, finance officers and treasurers. “FinFriends is a learning community with the latest information on school finances. Then there is the Sim4Schools project that enables schools to raise funds in an innovative way. The more income streams, the better.”

It is also important for schools to monitor and adapt their expense patterns. “Needs change. An example is the inclusion of Robotics and Coding in the curriculum for next year. This is important for preparing learners for the challenges of the 21^st century but it comes with expenses that might not have been considered before.”