The paper examines the extent to which sub-national public officials are efficient in delivering basic education services and argues that technical inefficiencies, especially in the management of public funds for education, could potentially contribute to poor education service delivery in South Africa. A conceptual framework is proposed to show the underlying mechanisms by which these technical inefficiencies can adversely affect education outcomes. The analysis is based on two micro-level surveys that were applied at 175 public primary schools and 13 district education offices (DEOs) in two provinces in South Africa: the North-West Province and Gauteng. The analysis reveals that South Africa has a well-planned decentralised structure to administer education. However, districts have significant human resource constraints. Capacity is often lacking and record-keeping, particularly of financial information, is very poor. Lack of technical efficiency has resulted in misappropriation of funds (leakage) and extensive delays in remitting funds to schools. The paper concludes that these inefficiencies potentially affect education outcomes and therefore should be given due consideration when designing and implementing education policy reforms.