Decision to close Bishop Bavin was painful says church

Weeks after announcing the closure of Bishop Bavin School, the Anglican Diocese of Johannesburg met with the NEWS and emphasised that the decision to close was made with a heavy heart.

“The bottom line is the school could not meet its financial obligations,” said spokesperson for the Anglican Diocese of Johannesburg Father Xolani Dlwathi.

“We are experiencing the same dismay, frustration and disappointment as all stakeholders. We feel the pain everyone is feeling.”

He said the school was a non-profit organisation (NPO) and a public benefit organisation (PBA) on its own and the church is a separate NPO.

“The school had a board of its own, which looked at operational matters. The church provided spiritual and pastoral support,” said Dlwathi.

He said the school, as a business, experienced challenges in recent years as it could not raise enough revenue to meet its obligations.

ALSO READ:

Former board chair adamant potential investors could have kept Bishop Bavin doors open

“It’s the only reason for the closing of the school,” said Dlwathi.

He explained about five years ago the school requested the Diocese for help and it responded by providing the school with financial assistance with conditions of a turnaround plan.

“To date the assistance from the church adds up to R15-million to transform the school to being self-efficient again. I don’t think anybody who does not care, would be willing to put that many resources into a school only to close it down. However, those strategies never worked.”

He said the closure of the school was the last resort following several interventions over the years.

As financial challenges intensified during last year, the business side of the school started to look at possible investors.

“It came down to three entities who showed the most interest. There were many negotiations, with no intent from the church to close the school.”

Dlwathi said the conditions of these negotiations were not favourable or beneficial to the school and church.

ALSO READ:

Our lives have been turned upside down – Bishop Bavin teachers

He said the first entity offered to provide capital to pay back the debt, but wanted to rent the premises for R2 500 per month for 99 years.

“The second entity seemed favourable, however, the investor pulled out due to the Covid-19 pandemic and uncertainty about the future of education.”

Dlwathi said the third entity requested the school to take a participation bond of R30-m, but would want the land and buildings as security if everything failed.

“The church would’ve been liable for the debt if it failed, as the board does not own the land, the church does. The church had already assisted with R15-m and in addition the board had approached the church stating they needed to make improvements to some property as part of the turnaround plan of the school and took out a loan of about R10-m.

“The loan was guaranteed by another entity who required the church to give surety to the loan. Throughout the process, there were non-favourable terms.”

He said the school had 520 learners in 2019, and 470 in 2020.

“With a drop of almost 100 learners, the school was told in order to break even it would need 600 more learners. The school never reached the minimal capacity to actually break even,” said Dlwathi.

Staff working at the school, according to Dlwathi, received a discount on fees for their children.

“Parents of learners owed the school R9-m in unpaid school fees, R5-m in 2020 and R4-m from previous years.”

He added that 186 parents honoured their commitment to paying fees.

ALSO READ:

Bishop Bavin Closure: Wrongs need to be made right says parent

“The money owed to the school which around 200 parents haven’t paid, could’ve helped some of the burdens. However, the economic state of the country with the addition of the pandemic worsened the matter.

“When the board disbanded, the situation was way worse than we expected and the only way we could see a way out was via an angel investor,” said Dlwathi.

“In May there was a meeting held stating the school had a bright future – we were unaware the school was in a dire financial crisis. It doesn’t matter which board was there, the school would’ve still gone down the same road. Staff members were not paid in full for the past few months and it did not make sense to invite staff back when there was no money in the school’s bank account. There was no point to reopen the school,” said Dlwathi.

He said before the announcement of the school’s closure they had already spoken to other schools to absorb learners, with a priority given to matriculants.

“Parents were required to do the registrations themselves. Learners who were on scholarships were given the option to speak to the board to find a solution. This impacted the parents who honoured their commitment with paying school fees the most.

“A further conversation will be held concerning prepaid fees. There is no credit with prepaid fees, all the money was used for the maintenance of the school. There is no money to give back, even though the money should go back to the parents. It saddens me that some parents have to suffer for those who were not faithful in payments,” said Dlwathi.

Dlwathi said the school provided assistance by identifying other schools as options for learners and ensuring administration requirements are waved with some schools stating they would take learners at the same fees.

Concerning the debt, Dlwathi said the short-term liability came to about R34-m with R15-m owed to the Diocese, R10-m due to the loan which the Diocese gave assurance to and R8.8-m to the development fund.

He added the school had accumulated a long-term loss of about R29.2-million to date.

“In 2016 we provided financial assistance and again in 2019.”

Commenting on concerns about live-in staff, he said it was negotiated for a three-month notice period.

“With special circumstances, staff needed to have a meeting with the board. The door was always open. There is no funds available for packages and severance pay and the school has to go through the legal liquidation process to see what comes out of it. UIF payouts will be initiated.”

The school had 141 staff members on its payroll.

“Overall communication was the responsibility of the board and not the church. The church was assured the previous board had been transparent about the finances over time.
“We have given staff and parents a voice, by engaging with them in meetings, where many have freely expressed themselves. We felt sending a letter would be impersonal, therefore the letter was sent after the meetings,” said Dlwathi.

“For now the school is closed.

“It will be debated by the relevant authority within the church on its future.”