The major purpose of the study was to undertake on the practice and problem of school finance and physical resource in full cycle primary schools of south wollo zone legambo woreda. To realize this purpose 4 research questions regarding the school finance and physical resource. To address these questions descriptive survey method was employed and data were collected through instruments such as questionnaires, interview, observation and document analysis. 20 schools were selected as the study sites based on simple random sampling lottery method. 20 principals, 20 vice principals and 20 KETB were selected by comprehensive sampling technique. Data obtained through questionnaire were tabulated and analyzed by descriptive statistics, percentage and frequencies. The reliability of the items obtained through the pilot study was analyzed using Kuder Richardson (KR20) formula and the index was 0.810. Whereas the data obtained through interview and document analysis were analyzed qualitatively by developing generalization. The findings of the study, The SGBs did not participate in monitoring and evaluation of the school finance, Auditing was not regularly done in schools, The SGBs were not responsible to plan, coordinate and control the physical resources of the schools. In conclusion, it is confirmed that schools have different sources of finance and the main ones are government budget, community participation, schools’ internal revenues and non-governmental organizations. Although sources of finance have a great role in promoting school improvement to assure quality education, the degree of their contribution differs from one another and the government budget takes the lion’s share and from which the salary takes the great majority. In recommendation, Cashiers and purchasers who are qualified in accounting should be deployed to handle the finance wisely and according to the rules and regulations.