The need to transform education from its apartheid past resulted in the introduction of school governing bodies (SGBs). SGBs are democratic structures that allow for stakeholder participation in school matters in line with the demands of the Constitution of the Republic of South Africa. Section 21 of the South African Schools Act (SASA) (84 of 1996) stipulates specific functions for SGBs. These functions are allocated only on the basis of significant growth in the performance of an SGB. SGBs must apply to be allocated these functions, after satisfying themselves first that they can self–manage their school, and after the MEC has certified the said performance. Schools in the Mpumalanga province were all allocated these functions simultaneously without applying for them. One of the functions that SGBs perform is the establishment and administration of school funds. Because schools are state institutions, SGBs are expected by law to be accountable for the funds they manage. They must account to all stakeholders who contribute to the school fund. To be able to administer the funds, as well as to give proper accountability thereof, SGBs need to have particular financial management and accounting skills. The aim of this study was to investigate the extent to which SGBs are able to account to stakeholders for the school funds they manage. The study further investigated whether the kind of accountability given to parents and the state is “hard” or “soft”. A case study involving three schools: a rural school, a semi-urban school and an urban school, was conducted. SGB members of these schools and officials from the department of education were interviewed for information and also to solicit their opinion on current financial accountability processes. An analysis of official SGB documents was also conducted to strengthen the information gathered through interviews. It has emerged from the findings of the study that some SGBs in Mpumalanga are still experiencing difficulties in following the correct procedures in giving a financial account to parents and the state. There is an indication from the study that capacity to handle finances is still a big challenge for schools that are not in the rich quintile. / Dissertation (MEd (Education Management))--University of Pretoria, 2007. / Education Management and Policy Studies / MEd / unrestricted