Introduction

Government uses taxes and other donations and grants to fund education in the country. A large
proportion of budgetary allocation goes into education. For this reason, educational
administrators, who facilitate the use of such monies, are accountable to the Government and all
other stakeholders of education. Several reports from the Public Accounts Committee (PAC) of
Parliament of Ghana reveal lots of misappropriation of funds by heads, accountants or bursars of
Second cycle institutions which affect learning and its outcome. It is thought that funds given to
the schools are not being controlled well for the intended purposes. It is important that the
schools fiscal and financial policies are implemented in the most effective and efficient manner
to achieve the purpose by which they were given. It is to this effect that it has become critical
that management of public institutions help institute enough financial controls to ensure that
resources of the institutions are safeguarded.
Farlex Financial Dictionary (2012) observes that financial control is any measure of how well a
company or department controls its costs, sometimes expressed as how far under or over budget
it is. Financial control is also defined as the procedures designed to protect assets and ensure that
all financial transactions are recorded to prevent and reduce errors and fraud, as asserted by
Block and Geoffrey, (as cited in Akyaa 2011).
For Ghorman and Amakye (2013), financial and accounting control deals with the methods and
means for administering and controlling funds in educational institutions as documented in
financial laws, regulations and instructions, and from generally accepted best practices in
accounting some of which were generated in the course of accounting and auditing practice (p.
114). From the Financial Administration Act 2003, internal control includes all the principles and
procedures planned and assumed by the management of the entity in order to assure that:

a) the entity achieves its objectives in an economical, efficient and effective manner.
b) the entity acts in accordance with the legal regulations, the internal acts and the management
guidelines.
c) material and data assets of the entity are protected.
d) errors and non-conformities are prevented and detected.
e) financial and management information is reliable and created in time,
From the Financial Administration Act 2003, these controls are done by applying internal control
practices such as issuing receipts, cash book, payment, relevant payment voucher, serial order
number of receipts, daily reconciliation and save keeping of payment vouchers and cash books in
a lock. Such controls are also enforced by applying external controls such as Auditors from Audit
Service and internal Auditors from Education Office to monitor the operations of the school.
Finally, some of the controls are in a form of adherence to procurement Act 2003, Financial
Administration Act 2003 and the Financial and Accounting Instructions for Secondary schools.
From the above, it may be affirmed that financial control is to provide an overall guiding
framework for a sound and efficient management resource in all institutions. The goal of having
a strong system of financial control is to promote the institutions ability to reach its objectives,
providing reliable financial data, safeguarding assets and records, evaluating operational
efficiency through budget, organizational control and encouraging adherence to prescribed
policies and regulations.
Three main areas can be distinguished within the financial control concerning the educational
entities.

a) Internal control in the educational institutions which is carried out by the school head and
accountant. The school head is obliged to define the written control procedures and the
accountant keeps the accounting books up to date.
b) Internal audit concerning the educational organization is carried out by the Auditor employed
by the Assembly.
c) External audit which is carried out by the Auditor Generals Office.
As stated by Bloch and Geoffrey (cited in Akyaa 2011), an institutions system of financial
control has a key role in the management of risks that are significant to the fulfillment of its
operational objectives. A sound system of financial control contributes to safeguarding the
stakeholders investment and the institutions assets.
It is an undeniable fact that financial control facilitates the effectiveness and efficiency of
operations which help to ensure the reliability of internal and external reporting and assists
compliance with laws and regulations. Effective financial controls including the maintenance of
proper accounting records are an important element of financial control. They help to ensure that
the institution is not unnecessarily exposed to avoidance financial risks and the financial
information used within the business. They also contribute to the safeguarding of assets,
including the prevention and detection of fraud.
Our Lady of Mt. Carmel Girls Senior High was established in September 2006 by the Catholic
Diocese of Sunyani as a private school. With the creation of Techiman diocese, it came under the
Techiman Diocese under the care of its Bishop. The school became government assisted in the
2012/2013 academic year. It was the best school in the West African Senior Secondary
Certificate Examinations (WASSCE) in the country in 2013. It is located in the Techiman
municipality. Since it is a new school, there is the need to put in place mechanisms that would

help the administration to achieve efficiency and effectiveness as far as financial management is
concerned.
Statement of the research problem
Over the past few years, the Public Accounts Committee of Parliament reports have revealed that
there have been several financial irregularities in the public senior high schools in Ghana. In their
recent sitting in May 2014 when they were probing the 2010-2011 accounts of second cycle
institutions in Kumasi, the Committee recovered over GHC190, 000 in lost revenue from second
cycle institutions in the Ashanti and Brong Ahafo Regions as reported by Ghana News Agency
(GNA) on May 6th 2014. According to Mr. Agyemang Manu, (Chairman of the Committee), as
reported by GNA, taxes which had been withheld amounted to 46,347 cedis;
unpaid rent amounted to 9,723 cedis only in Ashanti Region. Schools in Brong Ahafo also
suffered similar breaches with several thousands of monies recovered from the schools and given
back to the state. These irregularities were attributed largely to issues ranging from payment of
unearned salaries, purchase without document and breach of procurement acts in the various
institutions.
How these educational institutions control cash flow and what control mechanisms were put in
place to check such occurrences were not clearly stated during the exercise. This research is to
help find out what financial control practices are put in place at Our Lady of Mt. Carmel Girls
Senior High to avoid such irregularities in this new school.
Objectives of the paper
The objectives of the study were to:
1. Ascertain the uses of funds in the school
2. Examine the financial controls available for controlling funds and
3. Determine the financial management challenges facing school management.
The research design employed for this study was case study. For Yin (2009), the case study
approach is particularly useful to employ when there is a need to obtain an in-depth appreciation
of an issue, event or phenomenon of interest, in its natural real-life context. Gall, Gall and Borg

(as cited in Hinneh, 2012), a case study is an in-depth study of one or more instances of a
phenomenon in its real-life context that reflects the perspective of the participants involved in the
phenomenon. For Punch (as cited in Hinneh, 2012), the case study aims to understand the case
in-depth, and in its natural setting, recognizing its complexity and its context. It has a holistic
focus, aiming to preserve and understand the wholeness and unity of the case. It would be
affirmed that case study approach helps the researcher to gain a deeper understanding of a
phenomenon to generalize. Therefore, the case study approach was adopted for this paper.
The targeted population of the study consisted of the Headmistress, Assistant Head(s), Senior
Accountant, Accounting staff, and Heads of departments. Therefore, the sampling technique
employed is a purposive sampling. According to Wikipedia, purposive sampling, also known as
judgmental, selective or subjective sampling, is a type of non-probability sampling technique
which focuses on the units that are investigated based on the judgement of the researcher. The
main goal of purposive sampling is to focus on particular characteristics of a population that are
of interest, which will best enable you to answer your research questions. Creswell indicated
(cited in Hinneh 2012), that in purposive sampling, researchers intentionally select individuals
and sites to learn or understand the central phenomenon. The population for this study was
selected based on their competencies and positions.
The data collection instrument used is the questionnaire.

As indicated by Yin (2009), a

questionnaire is a research instrument consisting of a series of questions and other prompts for
the purpose of gathering information from respondents. The semi-structured questionnaire was
used. Semi-structured questionnaire as opined by Cohen et al ( as cited in Hinneh, 2012), is a
series of questions or items presented and the respondents is asked to answer, respond to or

comment on them in a way she or he thinks best. The questionnaire as an instrument was
employed to gather data in this paper due to the limit of time.
I sought permission from the Headmistress and the Senior Accountant before administering the
questionnaire as data collection procedure. All the respondents were assured of confidentiality as
far as their opinions were concerned before administering the questionnaire.
The Thematic analysis was used in analyzing the data. For Wikipedia, thematic analysis
emphasizes, pinpointing, examining, and recording patterns (or "themes") within data. Themes
are patterns across data sets that are important to the description of a phenomenon and are
associated to a specific research question. The themes become the categories for analysis. The
thematic areas for analysis are: sources of fund, financial or budget committees, ways of
collecting and disbursing money and measures to check misappropriation in the school.
Significance of the study
1. The study will unveil the financial control mechanisms in Our Lady of Mt. Carmel Girls
Senior High.
2. The study would also offer some suggestions to the challenges management face in managing
school finances
3. The findings would be published for the school and other schools to benefit from the study.

Emerging Issues
The findings are grouped under sources of fund, ways of collecting and disbursing money and
measures to check misappropriation. This would be done separately from the teachers (HODs),
Accounts staff and Headmistress and assistant. Teachers (HODs) - Sources of fund: None of the
Heads of Departments was involved in the collection of monies in the school. Ways of collecting
money and disbursement: All the HODs responded that school fees were paid through bankers
draft. They were all satisfied with how monies collected are used to benefit the school and
students. Measures to check misappropriation: None of the HODs was part of any financial or
budget committee in the school. The HODs were aware of the visits of external auditors from
Regional and Headquarters of Ghana Education Service (GES) as a control measure in checking
misappropriation in the school.
Accountants
Sources of fund: They receive cash revenue, issue receipts and deposit cash daily at the bank.
Ways of collecting money and disbursement: They all affirmed that school fees are paid through
bankers draft. Measures to check misappropriation: Two out of the three accountants stated the
school has a budget committee and that the school uses budgeting to control revenue. They all
stated that the accountant prepares the budget for the school and expenditure exceeds revenue.
They all stated that receipts were serially numbered and the school provides the receipts. They
also affirmed that the school Board approves the school budget before implementation and the
head exercises control over expenditure. They all stated that procurement procedures were
followed in the school. Two out of the three accountants stated that financial control in the school
was effective and the other said it was very effective. They all admitted that financial control in
the school could be improved through bank reconciliation at regular intervals and preparation of

financial statements. They also affirmed that they report errors in numbering or supplied goods
immediately and they were aware of the provisions in the Financial Administration Act (FAA)
2003.
Headmistress and Assistant
Sources of fund: The Head and the Assistant stated that the sources of fund to run the school
were school fees, grant from central government and donations from the Parents and Teachers
Association (PTA), and the Catholic Church.
Ways of collecting money and disbursement: They also admitted that school fees were collected
through bankers draft. Monies collected were disbursed on stationary, day to day running of the
school, repairs, school projects, feeding, fuel and vehicle maintenance, and practical materials.
For them, feeding takes a higher portion of the expenses of the amount collected.
Measures to check misappropriation: Both of them stated that there was no budget committee in
the school. They also mentioned that internal and external auditors come to the school from GES
to audit their accounts. They also stated that some of the control measures implemented to check
expenditure were, documents were serially measured, issuance of receipts, periodic audit of
accounts and preparation of budget for internally generated funds. For them the control measures
that exist to check mismanagement and embezzlement of funds in the school were, authorization
of transactions, recording of transaction and cross-checking bank payments against receipts.
They also affirmed that budget is prepared for the school but expenditure does not march
revenue. If it happens that there is a shortfall in revenue, the most essential needs are done first
according to the Head and her Assistant. They also admitted that the school Board approves the

budget but management does not seek approval for a supplementary budget. The school does not
have its own internal auditors and they only rely on GES and Headquarters for both internal and
external auditors. They said as part of the control measures, every payment is supported by
original voucher and receipts and other books are checked monthly and quarterly. They were all
aware of the provisions in the FAA. One challenge both agreed in implementing the budget was
inadequate funds and delay in the payment of subsidy from government.
Discussions
The issues that emerged from the data collected would be discussed under three thematic areas:
sources of funds, ways in collecting and disbursing funds and measures to check
misappropriation in the school.
Sources of funds: The respondents agreed that the sources of funding for the school are school
fees, grant from government, donations from PTA and the Catholic Church.
Ways in collecting and disbursing funds: All the respondents affirmed that school fees are
collected through bankers draft. The accounts deposit cash daily at the bank and issue receipts to
all monies received. The respondents were satisfied with the use of funds in the school.
Measures to check misappropriation: All of the respondents asserted that there is no budget
committee in the school. They also stated that budget is prepared by the accountant and approved
by the school board. However, management does not seek approval from the board in the case of
a supplementary budget. They also agreed that expenditure exceeds revenue and when it
happens, most essential items like feeding and crediting suppliers are looked first. They also
stated that the Headmistress controls expenditure and both internal and external auditors from

GES periodically visit the school. They admitted that receipts are serially numbered. The
measures in the school to check embezzlement are transactions are authorized, transactions are
recorded, and bank payments are cross-checked against receipts and procurement procedures are
followed. The Accountants and the Head and her Assistant are aware of the provisions in the
Financial Administration Act 2003.
Conclusion
From the above discussion, it would be realized that the collection of school fees is mainly done
through bankers draft. Parents, guardians and students sometimes find it very difficult in making
bankers draft in order to pay school fees. In the light of new arrangement of paying Valued
Added Tax (VAT) on such services like bankers draft, it would be appropriate for management
to make it possible for payment of school fees directly into the schools accounts. The students
would be expected to produce pay-in slip at the school as they do with the bankers draft.
It is also clear that inasmuch as the government and other benevolent and philanthropic
organizations try to fund education, it is still inadequate. Subsidies from government delay and
make school management very difficult. The Chapter Six of the 1992 Constitution makes the
policy to fund education clear to be implemented by government in the area of education.
Section 38 of this Chapter in the Constitution reads as follows: 38. (1) The State shall provide
educational facilities at all levels and in all the Regions of Ghana, and shall, to the greatest extent
feasible make those facilities available to all citizens. The government machinery responsible
for releasing subsidies for the provision of education at the secondary school level must help
managers of our schools by releasing such subventions on time.

It was clear that the school does not have a budget committee. There should be a budget
committee comprising the head of the school, the bursar and heads of the various departments.
Various persons are involved in the preparation of the budget. This include the head, assistant
head(s), the bursar, departmental heads, as well as some subject teacher(s) who usually make
requisitions of teaching materials so that proper estimates can be made for instruction. The
budget is then forwarded to the committee for consideration. The roles and objectives of the
budget committee include: Reconciling the differences of opinion between departmental
managers; Resolving disputes between managers; Giving advice to board of Governors;
Reviewing department budgets and making recommendations; Examining periodic reports
showing actual performance compared with the budget; Identifying significant variances and
making recommendation on actions to be taken; Developing and examining long term plans;
Identifying budget objectives; Creating a better understanding and awareness among managers
of the role of each others department; Coordinating of budgets or budgeting; Reviewing external
conditions such as economic conditions for the ensuing period; and Considering forecasts
compiled by departmental heads.
It was revealed that the budget is approved by the school board. However, in the case of
supplementary budget, management does not seek the approval of the board. There is the need to
always seek approval when additional money is needed to run the school. Among the work of the
Board of Governors are; the approval of annual budget, authorization of the strategic plan,
setting financial priorities through the school strategic plan, approval of best value statements
and authorization of non-budgeted expenditure and virements. According the Brong Ahafo
Regional Director of Education, Dr. George Adjei-Henneh, (as reported in the Daily Graphic on

10th June, 2014 page 45), among other things that necessitated some schools in the region to
appear before the Public Accounts Committee was operating without approved budget.
It also came to light that the school relies on auditors from the district assembly and GES
Headquarters to audit their accounts. This is in line with the financial regulations. However, the
school could have its own arrangements that internally audits the accounts before those
authorized come. Since auditing is part of the financial regulations in the school, it would be
good to have an audit implementation committee in every school. This will help limit the
numerous irregularities some schools experience.
Implication for theory and practice
The study gives much insight into how finance is controlled in Our Lady of Mt. Carmel Girls
Senior High and by extension to other Senior High Schools. One of the things that could inform
practice is the payment of school fees. Over the years, school fees have been paid through
bankers draft. Parents, guardians and students go through some difficulties in order to get
bankers draft coupled with the charges at the bank. School administrators could make their
account numbers available to students and parents so that fees could be paid directly into the
schools accounts. The students then show the pay-in slip to the accountant upon arrival just as it
is done in the tertiary institutions.
The delay in releasing subsidies to Senior High Schools in the country causes many problems in
the management of the schools in the country. Policy makers could meet to find a practical way
of dealing with this situation.
Many Senior High Schools do not have budget committees hence, some of them do operate
without a budget or an approved budget which contribute to impulse buying and overspending as

stated by the Regional Director of Education, Brong Ahafo, (cited in Daily Graphic 10 th June,
2014, page 45). Policy makers could make a budget committee a requirement in all Senior High
Schools to ameliorate the situation.
Last but not least is the establishment of audit report implementation committees (ARIC) in the
schools to complement the work of the district ARICs. A local ARIC would help the
administration to implement those recommendations in the audit report even before those from
the District, Regional or Headquarters would come in.

References