Overview of Education Budgeting And Resource Allocation Process In Sri Lanka

1. Overview of Education Budgeting And Resource Allocation Process In Sri Lanka Nisha Arunatilake Roshani de Silva Institute of Policy Studies

2. Presentation outline • Introduction to education finance in Sri Lanka • Education administration structure in Sri Lanka • The budgetary process • Budget implementation and monitoring • Non-public sources of funding

3. Presentation outline • Introduction to education finance in Sri Lanka • Education Administration Structure in Sri Lanka • The budgetary process • Budget Implementation and monitoring • Non-public sources of funding

4. Education Finance in Sri Lanka • Since 1949 –main source of funding has been government • 1992 govt. at different levels spent Rs. 36.54 billion on Education (== 2.3% of GDP; 9.1% of Govt. Expenditure) • Since 1990s government expenditure on education has declined over the years • Compared to other developing countries – govt. expenditure on education is low

5. Types of Expenditure • Public expenditure finances inputs to the supply and development of education: • Physical investment inputs – buildings,furniture • Human resource investments – teacher training, curriculum development • Recurrent inputs – teacher salaries

6. Total Expenditure Budget Social Development and Welfare Total Expenditure Budget Total Expenditure Budget Total Expenditure Budget Total Expenditure Budget Social Development and Welfare Social Development and Welfare Social Development and Welfare Social Development and Welfare General Public Service Public Order and Safety General Administration Health Health Health Health Health Housing Housing Housing Housing Housing Social Security Social Security Social Security Social Security Social Security Welfare Service Welfare Service Welfare Service Welfare Service Welfare Service Defence Community Based Programme Community Based Programme Community Based Programme Community Based Programme Community Based Programme Physical Planning Physical Planning Physical Planning Physical Planning Physical Planning Education Education Education Education Education Ministry of Education Ministry of Skills Development, Vocational and Technical Education Provincial Councils (8 Councils) Technical Colleges Education Publication Department Education Publication Department Examination Department Universities SOURCE: Budgatery Procedures for Education in Sri Lanka, mimeo

7. Presentation outline • Introduction to education finance in Sri Lanka • Education Administration Structure in Sri Lanka • The budgetary process • Budget Implementation and monitoring • Non-public sources of funding

8. Education administrative structure in Sri Lanka • Since 1987 education became a devolved subject • The present administrative structure with more powers to the provinces is a result of this change • At present there are five administrative tiers (as oppose to the earlier three): Ministry of Education, Prov.l Ministry/ Prov. Dpt. Of Edu., Zonal education offices. Divisional education Offices, Schools

9. Source: Present Education System and Management Structure http://www.moe.gov.lk

10. Education administrative structure - contd • Ministry of Education • Policy formulation, implementation and coordination; management of national and other special schools; regulation of private schools; development of of school curriculum; teacher training • Provincial Ministry/ Dpt. Of Education • Administration of provincial level education • Funded by provincial council through its ministry of education

11. Education administrative structure - contd • Zonal Education Offices • Administration of schools at the zone level, quality improvements in teaching and learning at this level • Divisional Education Offices • Supervision of schools, distribution of welfare items, data collection • Schools • 2002: 9,829 government schools; • Of these 9,509 provincial schools; 320 national schools • Private schools reg. Before 1960 – 66; assisted private schools – 33; English medium international schools -?

12. Presentation outline • Introduction to education finance in Sri Lanka • Education Administration Structure in Sri Lanka • The budgetary process • Budget Implementation and monitoring • Non-public sources of funding

13. Education Budgetary Process • Overall Budget • Program-wise: General administration; Primary education; Secondary education; Education development; Special education • Recurrent • Category wise: personal emoluments, traveling expenses, supplies, maintenance expenditure and contractual services, transfers, grants, subsidies, etc • Capital • Category wise: rehabilitation and improvement of capital assets, acquisition of fixed assets, capital transfers, other capital expenditure, operation cost of donor funded projects

14. MINISTRY OF FINANCE AND PLANNING BUDGET DIVISION (RECURRENT EXPENDITURE) DEPARTMENT OF NATIONAL PLANNING (CAPITAL EXPENDITURE) Capital budget allocated by Treasury Recurrent Expenditure for National Schools FINANCE COMMISSION Funds from foreign funded projects & local special Education projects as capital funds Capital funds from Finance Commission for province specific development priorities MINISTRY OF EDUCATION PROVINCIAL EDUCATION AUTHORITIES Capital Expenditure and Funding from donor-funded projects TYPES 1AB AND 1C SCHOOLS (OTHER THAN NATIONAL SCHOOLS) TYPE 2 AND TYPE 3 SCHOOLS NATIONAL SCHOOLS Source: NEC, 2003, p. 249. Note: The above diagram has been modified (as indicated by broken arrows)

15. Determination of Education Budget for Provincial Schools

16. *President submits to the Cabinet *After Cabinet members approve the budget, it is sent through the President and included in the National Budget National Budget Cabinet *Commission members approve budget and signing of financial report *Report is submitted to the President Finance Commission Members *Discussions with Treasury officials and Treasury arrives at a ceiling Treasury *The estimates are reviewed *Discussions with Provincial Education authorities Finance Commission *Chief Secretary, Provincial Council submits budget to the Finance Commission Provincial Council *The Provincial Department of Education reviews and consolidates the budget proposal made by the zone and prepares the provincial education budget proposal Provincial Department of Education Planning Branch *Divisional Offices assess the needs of the schools and provide information to the zonal offices. *Zonal offices discuss with divisional offices and schools, prioritize and submit to Provincial Department of Education Zonal and Divisional Offices

17. Determination of Education Budget for National Schools

18. National Budget *Initial discussions held with the Treasury *Budget ceilings are decided *Once ministry budget is agreed upon, it is put to National Budget Treasury *Subject Directors prepare budget plan for national schools *National Budget Committee prepares budget for national schools MOE *The Provincial Department of Education forwards the requests to MOE Provincial Department of Education *Zonal and Divisional Offices assess needs Zonal and Divisional Office

19. Determination of Special Budgetary Items • Recurrent Expenditure Items common to all schools: • Welfare items –e.g., uniforms, text books, meals and grade 5 scholarships • Quality Inputs

20. North and East • No direct provincial bodies • Requests are directly received from zonal directors of education and processed by the Finance Commission

21. Presentation outline • Introduction to education finance in Sri Lanka • Education Administration Structure in Sri Lanka • The budgetary process • Budget Implementation and monitoring • Non-public sources of funding

22. Budget Implementation and Monitoring • Implementation • Actual Education budget decided according to the ceiling given by the Treasury • Some flexibility to move funds between budget items • Monitoring • Reporting

23. Other Sources of Education Funding • Alumni associations • Fund raising activities • Special projects funded by foreign donors

24. Issues • Involvement of stakeholders is limited in deciding school level budgets • Complex several layer administrative structure. Although needs identified at the school level, budget allocations are prepared after discussion at higher levels • Budgets prepared due to historical trends rather than present needs – due to procedural shortcomings and budget limitations • Budgets prepared according to guidelines by the Finance Commission and the Treasury – little flexibility for needs outside these guidelines • Major portion of funds goes to essential recurrent items. Development related funding takes a back seat – e.g., teacher training

25. Issues – Contd. • Equal fund allocations does not lead to equal outcomes (e.g., quality inputs) • Privileged schools are better able to make use of available funds (better access to markets, better management, better and adequate teachers) • Teacher shortages in difficult areas. No incentives to make teacher serve in difficult areas • Not enough funds for maintaining schools. Underprivileged schools are less able to raise their own funds for maintenance etc.

26. Issues – Contd. • Limited Information • Information on budget allocation available. But not enough information on equity and efficiency of education finance. Also little information on efficient use of funds • Funds are allocated according to utilization capacity (of a ministry, or a school) • This makes the divide between the privileged and under-privileged schools wider