Introduction
Without financial resources a school cannot survive; indeed
unless a certain minimum level of financial provision is reached
the effective operation of a school in terms of the quality
of education offered is threatened. Note therefore, that the
title of this unit is 'Finding Financial Resources', since it
is quite likely that no school can exist just on what the funding
authority provides, but will have to find and create additional
funds.
Funds are needed to:
• facilitate the implementation of school policies and
programmes
• enable activities such as educational tours and excursions
to take place
• involve pupils in co-curricular activities such as
music and sports
• develop schools as educational establishments.
In this unit we consider ways in which additional financial
resources may be obtained. You should also study Unit
3 'Mobilising financial resources' in Module 5 Financial
management.
Note: Before working through this unit you should check
current regulations which govern the raising and management
of additional financial resources in your situation.
Individual study time: 3 hours
Learning outcomes
By the end of this unit you should be able to:
• distinguish between capital (or development) funding
and recurrent funding
• describe the limitations of governments in providing
financial resources
• explain the need for careful management and control
of the school budget
• describe the areas in which expenditure should be incurred
• identify ways in which government provision can be
supplemented
• encourage parents, pupils and teachers actively to
participate in fund raising activities
• use financial resources to promote learning and teaching
in schools
• clarify the purpose of fund raising so as to stimulate
support for fund raising efforts.
Principles and constraints of financing schools
Activity 8.1
(1) Describe the main principles which govern the financing
of schools.
(2) Identify the main constraints you face as a school head
in finding and managing additional financial resources for your
school.
Comments
The main principles governing the financing of schools include:
1 All finances both from government and other sources must
be properly recorded and controlled.
2 In the school the head, and the head only, is responsible
and finally accountable for all financial management.
3 All financial provision should be marshalled for the benefit
of the pupils.
Constraints
There are many constraints which school heads have to face
in finding and managing additional financial resources. They
include the following:
1 Government regulations may place unrealistic restrictions
on the extent to which schools may raise funds.
2 Inadequate government provision of funds can undermine educational
initiatives.
3 The low economic level of the local community may result
in an overdependence on outside funding.
4 In urban areas a lack of sense of community may make it
more difficult to develop a sense of commitment to the local
school.
5 Boarding schools often have no local community.
6 The level of training, honesty and job proficiency of the
bursar, or the treasurer and clerical staff may be inadequate.
7 The initiative, confidence, honesty and financial knowledge
of the school head may be inadequate.
8 Audits of the accounts of a school may be based on financial
rather than educational expertise.
9 The academic year is often not the same as the fiscal year.
10 The head and the staff may lack skills necessary for the
organisation of fund raising activities.
Government financial provisions
In all countries government is the main source of funding
for schools. Usually there are two main categories of such
funding, namely, capital (development) funding and recurrent
funding.
Capital funding should be a concern of the head of school
directly but often decisions are made at higher levels without
consultation. This is because it is money provided for the
growth and development of the school, for example, the provision
of additional facilities, planned and provided for centrally,
to conform to a national plan of educational development which
operates over a number of years. Recurrent funding is the
provision of money to run the school for a particular financial
year and is managed by the school head.
The head has to be aware of the limitations of government
to cover all expenditures, particularly in innovative activities
which often help to distinguish one school from the rest.
In such areas additional funding from non-governmental sources
will be needed. It is, however, unfortunately true that the
ability of governments to pay for even basic capital and recurrent
expenditures is limited, so that additional funds from alternative
sources are required by many schools both for capital projects
and for supplementing recurrent funds.
Activity 8.2
Indicate whether the items in Fig 19 are likely to be funded
through capital or recurrent funding, or through neither.
Fig 19 Sources of funding
| |
From government |
Funding from alternative
source |
| Capital |
Recurrent |
Capital |
Recurrent |
1 The provision of additional classrooms
2 Teachers' salaries
3 Teaching resources
4 Computers
5 Food for pupils
6 Travelling costs
7 Building the school
kitchen
8 The purchase of sports
equipment
9 The provision of a
computer room
10 20th Anniversary
celebrations
11 Software for the
computers
12 Student textbooks
13 Purchase of a school
vehicle
14 Prizes for Prize-giving |
|
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|
|
Comments
The nature of your answers will depend very much on how much
money your government makes available to spend on education.
Where funds are fairly freely available most of the funds,
whether capital or recurrent, will come from the government.
But where the opposite is true, where funding is severely
limited, then maybe most of the items on this list will be
funded from alternative sources, except, perhaps, teachers'
salaries.
Planning for recurrent funding
It is probable that your school is dependent on government
recurrent funding and that this is the only regular source
of finance available. Recurrent funds are based on the head's
estimate of the money needed for the school to operate properly
during the next financial year. In the initial stage the money
requested in the different areas of school management is entirely
dependent on the head's awareness and knowledge of what is
needed and what may be obtained. The head's submission to
the funding authority is the principle source of information
used to allocate funds.
Activity 8.3
Which of the items in Fig 20 should the head use when making
out recurrent estimates for the school? Can you add any more
items to the list?
Fig 20 Items for preparing recurrent estimates
1 Last year's recurrent estimates
2 Last year's electricity/telephone/water bills
3 Estimated costs for a new classroom
4 Present school staffing establishment
5 School vehicle's log book
6 Ministry menu for pupil meals
7 Ministry required textbook list
8 Bursar's financial records for the previous year
9 Pupils' files
10 Present stock of sports equipment
11 Previous year's commitment ledger
12 Consumable stock register
13 The state of the school playing field
14 The distance of the school from the Ministry
15 The current rate of inflation
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Yes/No
Yes/No
Yes/No
Yes/No
Yes/No
Yes/No
Yes/No
Yes/No
Yes/No
Yes/No
Yes/No
Yes/No
Yes/No
Yes/No
Yes/No |
Comments
The range of items on this list demonstrates the diversity
of information which has to be gathered in order to prepare
the annual school estimates.
Managing funds
The amount of money allocated by the government to meet recurrent
costs will inevitably be less that the sum for which the head
bid. The head is informed of the money available to him or
her at the beginning of the fiscal year.
Activity 8.4
How does the head control this money? Choose the option in Fig
21 which seems most appropriate to your circumstances. For each
of the sections A to E tick one or more of the boxes.
Fig 21 Checklist
| A Allocation of funds to subject departments
In the school warrant for recurrent funds provision
is made for teaching resources for the school as a whole
for the entire financial year.
Which of the following options would you follow in dispensing
this money? |
| |
1 By allocating all the money
available to the different
subject departments.
|
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| |
2 By allocating some of the money available
to the different
subject departments and keeping a reserve to be used at
the head's discretion. |
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| |
3 By allocating money to meet specific requests
when they
are made |
|
B Petty cash account
Most schools maintain a petty cash account. The head is
responsible for this money. He/she has several possible
ways of controlling the bursar. Which option is preferable? |
| |
1 By checking the petty cash
daily.
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| |
2 By checking the petty cash
weekly. |
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| |
3 By making random checks on
the petty cash. |
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C Payment of accounts
Suppliers have to be paid. Which method should the school
head follow? |
| |
1 All payments should be made
promptly as soon as the invoice is received to take advantage
of discount offers for prompt payment.
|
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| |
2 Payment should be made after 30 days to
take advantage of bank interest rates. |
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| |
3 Payment should be delayed
until the supplier threatens to sue. |
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D How to prevent overexpenditure
If there is overexpenditure in a school it is possible
that the head may be surcharged by the government. In
order to prevent this which option should be chosen? |
| |
1 Insist that all financial
transactions are personally approved by the head before
being actioned.
|
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| |
2 Delegate responsibility to the deputy
head as part of his/her on-the-job training. |
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3 Do not reveal the true amount of money
available; always state that it is less than it actually
is. |
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4 Make staff aware of the financial constraints
and hope teachers will budget accordingly. |
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E Underexpenditure
Government provides the head with a certain amount of
money on the assumption that it is needed to run the school
properly. Full expenditure is expected.
Underexpenditure could lead the Ministry to believe funding
has been too generous in the past and therefore cuts should
be made for the future. In order to prevent this which
option should be chosen? |
| |
1 Check regularly that all monies
are being used effectively.
For example, check that the full food ration is in operation;
adequate stationery is being issued to staff; practical
courses in Science, Agriculture, Home Economics, D &
T are being followed.
|
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2 Wait until the end of the fiscal year
and then have a spending spree. |
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3 Spend at the beginning of the year to
prevent inflation reducing the value of the money available. |
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Comments
It may be that more than one option is possible. On the whole,
in each case it is better to err on the side of caution and
to keep funds back, to personally check account books regularly,
and to approve all expenditure. In time, as you develop an
understanding about the accounting system and the possible
sources of error or dishonesty, you should be able to delegate
more. But as school head, you will always be the person held
responsible for the management and accuracy of the accounts.
Finding financial resources
As was suggested at the start of this unit the emphasis here
is on the word 'finding'.
All school heads must look for ways of augmenting their school's
financial resources. Community involvement in this venture
may increase community interest in the school; so the first
source of extra finances should be your local community.
Activity 8.5
(1) Which of the following money raising activities are likely
to succeed in your community?
• sponsored events e.g.
walk, swim, spell, run
• dinner dance
• raffles
• film shows using school hall and projector
•
jumble sale
• fete
• cake sale
•
beauty contests
• street collections
• fancy
dress competitions
• discos
• concerts
• the sale of produce e.g. vegetables grown in school garden
• operating a school shop
(2) Can you think of any others?
Activity 8.6
A regular source of income may come from imposing a levy on
each child entering the school, provided this is acceptable
to the authorities. In this way a regular amount of additional
money can be anticipated each year.
(1) Choose the action you would take if a parent of a child
refused to pay the levy from the following list. Would you:
- make a home visit in the case of a non-paying parent?
- suspend the child from school until the levy is paid?
- allow the child to attend school but instruct teachers not
to issue the child any materials or equipment?
- meet with the parents to persuade them?
- inform the PTA so that social pressures can be exerted?
- publish names of pupils whose parents default?
- report the child to the local social worker?
- make allowance for a proportion of poorer parents not to pay?
(2) Can you think of any other appropriate action which might
be effective?
Comments
It is important to involve both community and school in all
stages of fund raising, planning, implementation and assessment
of results. Some activities are ongoing with money being raised
on a regular basis, for example, through the school shop;
others are single occasions aimed at raising fairly large
sums. A school should organise a 'mix' of these activities.
The ability of a school to raise funds through levies will
depend on such factors as the amounts already being required,
the income levels of parents, and the demand for places in
the school. If too many parents refuse to pay then the scheme
will be discredited and collapse. A distinction should be
drawn, if possible, between parents who are reluctant to pay
and those with genuine difficulties.
The need for supplementary fund raising
When a fund raising activity is promoted the first task is
to decide which educational need of the school will be satisfied
by the money raised. The amount of money to be raised and
the way in which the money will be spent must then be communicated
to the community so that there is full support for the activity.
Activity 8.7
(1) How do you identify the educational need? Answer 'Yes' or
'No' in Fig 22 and then rank the items in order of priority.
(2) Can you add to this list?
(3) Considering the list of activities given in Fig 23, which
might qualify for fund raising support based on the situation
in your school? Place the items in order of priority.
(4) Consider at what point the government is likely to absolve
itself from funding responsibility.
Fig 22 Identifying educational needs
• Consultation with
PTA
• Consultation with teachers
• Consultation with student representatives
• Visiting other schools
• Personally
noting deficiencies in physical plant
•
Reports from social workers on destitute pupils
• Subject enrichment plans - e.g. educational
tours
• By listening to appeals from parents
• Through reading educational literature
• Professional conversation with colleagues
• By observing the school in operation
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Yes/No Yes/No
Yes/No
Yes/No
Yes/No
Yes/No
Yes/No
Yes/No
Yes/No
Yes/No
Yes/No |
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Order of
Priority |
| |
Fig 23 Activities for fund raising support
• Order of priority
• Car for the
school head
• School magazine
•
School newsletter
• Educational wild life
tour
• Staff party
• Additional
sports equipment
• Attendance at a music
competition
• Purchase of reference books
for teachers
• Completers' party
•
Purchase of First Aid kit for the sports teams
• Finance of a school based workshop
•
Video camera for the Geography department
•
Laser printer for computer studies
• Teaching
aids to supplement those supplied by the education
authority
• Uniform for teachers
•
Sport competitions |
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| |
Comments
Despite some limitations placed by some governments on the
raising of additional funds by schools, there is no school
that doesn't need to raise funds somehow for maintaining and
developing the quality of all aspects of school facilities
and life.
As school head you must take a pro-active approach to this
by regularly consulting with the pupils, staff, parents and
the community, as well as your line managers, to find ways
of raising funds and identifying areas where the greatest
benefit would be derived through some additional expenditure.
Summary
Every school has two types of funding: recurrent and capital
(or developmental). In order to secure adequate recurrent
funding the school head must know how to prepare an annual
budget for his school. He/she must also be able to motivate
the PTA, other school bodies and the community, in fund raising
activities to supplement the educational offerings of the
school. All monies received by the school must be managed
effectively by the head and staff to ensure that pupils are
given the best possible education. |
