ASSESSMENT OF FINANCIAL REFORM IN GENERAL EDUCATION

1. ASSESSMENT OF FINANCIAL REFORM IN GENERAL EDUCATION

2. State Control Office. SIZE OF THE SPECIAL TARGETED GRANT FOR FUNDING “STUDENT’S BASKET” IN 2002 2002 special target grant for student’s basket funding1,047.4 mln LTL Special target grant assigned for local governments State budget appropriation _________________________________________________________________________________________________________________________ASSESSMENT OF THE FINANCIAL REFORM IN GENERAL EDUCATION

3. State Control Office__________________________________________________________________________________________. Structure of Student’s Basket Teachers’ salaries LTL 1,063.9 • For 2002 the size of student’s basket was set as LTL 1,521 • For 2003 the size of student’s basket was set as LTL 1,538 • For 2004 the size of student’s basket is planned as LTL 1,555 For school management, pedagogical, social, and psychological support, school library LTL 439.8 Textbooks LTL 31.5 Teachers’ training LTL 13.5 Training facilities LTL 6.3 Student’s basket size = LTL 1, 555 _________________________________________________________________________________________________________________________ASSESSMENT OF THE FINANCIAL REFORM IN GENERAL EDUCATION

4. State Control Office__________________________________________________________________________________________ RATIO: TOTAL FUNDS FOR STUDENT’S BASKET PLANNED BY THE MINISTRY AND ESTIMATED BY LOCAL GOVERNMENTS FOLLOWING THE CALCULATION METHODOLOGY 2003 2002 / 000 LTL / 000 LTL _________________________________________________________________________________________________________________________ASSESSMENT OF THE FINANCIAL REFORM IN GENERAL EDUCATION

5. State Control Office__________________________________________________________________________________________. IN 2002 LOCAL GOVERNMENTS HAVE ALLOCATED THE FOLLOWING FUNDS FOR STUDENT’S BASKET OF A REFERENCE STUDENT Student’s basket size approved by legislation Alytus municipality Kėdainiai municipality _________________________________________________________________________________________________________________________ASSESSMENT OF THE FINANCIAL REFORM IN GENERAL EDUCATION

6. State Control Office__________________________________________________________________________________________ GENERAL CONCLUSIONS: • Ministry of Education and Science: • When preparing students basket funding projects for municipalities the Ministry have envisaged to allocate more funding than it was calculated by municipalities and more than it had to be allocated according to the Methodology for Calculating students Basket Funding and students Units; • Have not ensured equal conditions for funding and competition of state and municipality general education schools. • Legal acts do not clearly define criteria for redistribution of students basket funding. This provides for unequal schools funding conditions: separate schools were allocated by their founders up to 55 % less students basket funding than they had to get according to the Methodology for Calculating students Basket Funding and students Units. _________________________________________________________________________________________________________________________ASSESSMENT OF THE FINANCIAL REFORM IN GENERAL EDUCATION

7. State Control Office__________________________________________________________________________________________. GENERAL CONCLUSIONS: • As a result of implementation of the new procedure for funding general education schools municipalities were allotted more funds for education in municipalities general education schools: in 2002 - 64,7 million Litas more than in 2001, in 2003 – 2,0 million Litas more than in 2002. However this haven’t ensured greater effectiveness of general education schools funding: • Legal acts provide the founders and head teachers of general education schools with possibilities to use the funds that were allocated for education for environment and other educational needs. Student’s basket funding in municipalities in 2002 was used for funding environment and other educational needs in the situation when general education plans approved by the Minister have not been implemented. In average in the country in 2002-2003 school year 18 % of complementary education hours were not used; • Municipality Councils allotted 47,4 million Litas less student’s basket funding in 2002 than it was approved by the 2002 Law on State Budget and Municipality Budgets Indicators. Municipal general education schools used 49,9 million Litas of student’s basket funding for funding of environment and other educational needs. • As a result of saving student’s basket funding certain schools in 2002 and 2003 made larger classes in some cases exceeding the maximum allowable number of students in a class. _________________________________________________________________________________________________________________________ASSESSMENT OF THE FINANCIAL REFORM IN GENERAL EDUCATION

8. State Control Office__________________________________________________________________________________________. STUDENT’S BASKET FUNDS ALLOCATED AND USED IN 2002 In 2002 Special Target Grant for student’s basket funding LTL 1,047.4 mln Unused student’s basket funds returned to the budget Transfer to local governments Ministry of Education and Science shall monitor whether education plans are fulfilled in case funds are used for other purposes LTL 0.1 mln LTL 1,047.4 mln Funds for education approved by municipalities Municipalities have allocated for educa-tional environment and other education needs LTL 1,000 mln LTL47.4 mln Schools have used for education General education plans were not met. 18 % of complemen-tary education hours were not used Schools have used for educational environment and other education needs LTL 997.4 mln LTL 49.9 mln _________________________________________________________________________________________________________________________ASSESSMENT OF THE FINANCIAL REFORM IN GENERAL EDUCATION

9. State Control Office__________________________________________________________________________________________. STUDENT’S BASKET FUNDS: PLANNED, ALLOCATED, AND USED BY THE LOCAL GOVERNMENT OF JONAVA REGION IN 2002 PLANNING ALLOCATION USE 1. Student’s basket funds estimated according to the Methodology.2. Student’s basket funds wrongly calculated according to the Methodology when incorrect factors were applied.3. Drafted needs for Student’s basket funding submitted by the Ministry of Education and Science to the Ministry of Finance.4. Special Target Grant assigned to Jonava region for student’s basket funding. All allocated funds have been received.5. Part of Special Target Grant that has been actually used for students’ education.6. Part of Special Target Grant that has been actually used for covering debts of educational institutions.7. Part of Special Target Grant that has been actually used for education environment and other needs funding (salaries of supporting staff, acquisition of fixed assets, other educational needs). _________________________________________________________________________________________________________________________ASSESSMENT OF THE FINANCIAL REFORM IN GENERAL EDUCATION

10. State Control Office__________________________________________________________________________________________ AVERAGE AMOUNT OF FUNDS USED FOR EDUCATION OF A REFERENCE STUDENT IN 2002 LTL Funds allocated for education of 1 student Funds used for education of 1 student Funds allocated for education of 1 reference student Funds used for education of 1 reference student _________________________________________________________________________________________________________________________ASSESSMENT OF THE FINANCIAL REFORM IN GENERAL EDUCATION

11. State Control Office__________________________________________________________________________________________. GENERAL CONCLUSIONS • The funding principle „funding follows student“ is not being fully implemented: settlement between municipalities in 2002 was not carried out in time and not in all the cases of transfer of students from one municipality to another as well as between the schools within one municipality. • The Methodology for Calculating students Basket Funding and students Units does not in all the cases provide for equal funding conditions for the schools with similar number of students. In our opinion there is a risk that reform objectives might not be fully achieved. _________________________________________________________________________________________________________________________ASSESSMENT OF THE FINANCIAL REFORM IN GENERAL EDUCATION

12. State Control Office__________________________________________________________________________________________ STUDENT’S BASKET FUNDS CALCULATED ACCORDING TO THE METHODOLOGY FOR VILLAGE AND TOWN SCHOOLS OF THE SAME SIZE Kaunas reg. Šilenava school (village) Kazlu Ruda school “Elma” (regional centre) Student’s basket calculated according to the Methodology (Student’s basket size LTL 1538) Municipality plan for 2003 _________________________________________________________________________________________________________________________ASSESSMENT OF THE FINANCIAL REFORM IN GENERAL EDUCATION

13. State Control Office__________________________________________________________________________________________ RATIO FOR A VILLAGE SCHOOL: STUDENT’S BASKET SIZE / NUMBER OF STUDENTS (student’s basket size = 1 555 LTL) Student’s basket funds (LTL) Number of pupils in a village primary school Number of pupils in a village primary school _________________________________________________________________________________________________________________________ASSESSMENT OF THE FINANCIAL REFORM IN GENERAL EDUCATION

14. State Control Office__________________________________________________________________________________________. PROPOSALS FOR THE MINISTRY OF EDUCATION AND SCHIENCE HIGH PRIORITY: 1.Identify clear stages of general education schools funding reform, determine period for the implementation of the aims of reform as well as objectives to achieve the established aims and criteria for evaluation of their implementation. 2.Initiate amendments to legal acts to define use of unused special targeted grant funding for other educational needs when planning and implementing budget only in the case of full implementation of general education plans. _________________________________________________________________________________________________________________________ASSESSMENT OF THE FINANCIAL REFORM IN GENERAL EDUCATION

15. State Control Office__________________________________________________________________________________________. PROPOSALS FOR THE MINISTRY OF EDUCATION AND SCHIENCE HIGH PRIORITY: 3. Having considered possibilities and necessity submit proposal to the Government concerning development of general education schools funding programme that would be implemented by the Ministry itself. Allocate general education schools students basket funding via this programme. 4.Ensure that calculations of student’s basket funding allocated to municipalities from special targeted grant in the project that is submitted to the Ministry of Finance were carried out following the Methodology for Calculation of students Basket Funding and Units of students. Ensure control of calculations of the number of students units and students basket funding in municipalities. Use students database to carry out calculations of students basket funding. _________________________________________________________________________________________________________________________ASSESSMENT OF THE FINANCIAL REFORM IN GENERAL EDUCATION

16. State Control Office__________________________________________________________________________________________. PROPOSALS FOR THE MINISTRY OF EDUCATION AND SCHIENCE OTHER: 1. Analyse use of student’s basket funding by municipalities as well as the implementation of general education plans to ensure effective and efficient use of student’s basket funding. 2. Achieve establishment of the uniform funding procedure for all the general education schools. 3. Initiate amendments of legislation establishing clear criteria to be followed by founders of general education schools in redistribution of student’s basket funding among schools. 4. Work out a procedure for recalculation of student’s basket funding in the beginning of the school year. 5. Initiate and together with the Ministry of Finance develop procedures of mutual clearing between local governments and municipal schools in case of student’s transfer to another school. 6. Prepare amendments to the Methodology for Calculation of Student’s Basket Funding and Units of students to provide equal funding conditions to schools with the same or similar number of students. _________________________________________________________________________________________________________________________ASSESSMENT OF THE FINANCIAL REFORM IN GENERAL EDUCATION