Empowerment, accountability and redress are prime objectives of school funding in the new South Africa. This is facilitated through the National Norms and Standards for School Funding. The application of the norms has led to the development of a "no-fee school" policy aimed at exempting poor parents from payment of school fees. The implementation of the policy, however, presents school governing bodies (SGBs) with challenges in managing state-allocated funds. This study was undertaken to establish the extent to which SGBs are empowered to spend and supplement their school allocations, how they account for their decisions on such spending and to determine, on the basis of the findings, implications for future policy adjustment. Given the nature of the research questions and the study context, a qualitative research design was applied. Data were collected by means of a combination of in-depth interviews and a study of documents for triangulation. The study found that though the "no-fee school" policy has relieved poor parents of the pressure to pay school fees and thus enhanced children's access to schooling, it has reduced the decision-making powers of the governing bodies over the use of the decentralised funding.