EDUCATION FINANCE GROUP

1. EDUCATION FINANCE GROUP Education Sector Annual Review 2008 19th June 2008

2. KEY ISSUES FOR DISCUSSION • 2007 Expenditure Reviews • Planning and Budgeting • Financial Management/ Funding Flows/Accountability • Financing of the Education Reforms for various levels of education

3. 2007 Expenditure Reviews ISSUES • The Expenditure for DACF and CSOs have not been captured even though they contribute massively towards education delivery at the district level • Analysis appear a bit mixed up and do not give total contributions by Government and Donors • There are concerns about the level of IGF contributions to education expenditures

4. RECOMMENDATION • Include DACF and CSO’s expenditures in the performance report for completeness. – FINANCE/PBME • Present expenditure detailing sub sources (eg. EFA-FTI under donors, GETFund under GoG).- FINANCE/PBME • Verify and Confirm IGF declared by all levels eg. Tertiary- FINANCE/PBME

5. PLANNING AND BUDGETING ISSUES • There appears to be lack of data covering the totality of the sector. Target setting at the districts not in tandem with centre. • the budget is not driven by a well laid out planning process leading to major priorities of the sector not well catered for in the budget. • Inadequacy of budgetary allocation for the implementation of activities to achieve set targets.

6. RECOMMENDATION • Strengthen sector wide planning to include tertiary - PBME • Tackle the issues of district disaggregated population projection to improve accuracy of key indicators – EMIS/PBME • Revisit the calendar of events and adhere to the timelines - PBME

7. Better link the planning and the budgeting process (link national and district planning processes) -PBME • Improve M&E at all levels to feedback into the planning and budgeting process - PBME • Improve internal dialogue during budget preparation within the Ministry - PBME

8. Improve dialogue between MoFEP and MoESS specially before budget guidelines are issued with ceilings which are fixed-PBME • Budget estimate should be supported with detailed analytical work.-PBME • The Ministry to engage cabinet in discussions for the approval of the utilisation of the efficiency savings in the sector.

9. FINANCIAL MANAGEMENT/ FUNDING FLOWS/ACCOUNTABILITY ISSUES • The capitation grant policy needs review. • There is a fragmentation of funds, especially at the district level. • There is lack of competencies in financial management especially in the deprived districts. • The performance report did not link funds utilisation with

10. There is not adequate information flow on allocation of resources to the numerous cost centres • The various structures set up to ensure accountability and transparency – are they adequate and functional? • There is a lot of room for strengthening financial management in the sector to ensure efficient use of resources.

11. RECOMMENDATION • Institute a stakeholder review to look at the restoration of the value of capitation grant and the formulae for allocation in time to inform the 2009 budget. MOESS/MLGRD/MOFEP/DONORS/CSO • Develop a coherent programme of funding for districts to implement ADEOP and also ensure accountability i.e. pooling of funds (GoG, IDA, DFID and EFA-FTI). – DG/GES • Redeployment of teachers with accounting and procurement qualifications to improve financial management in district and regional offices, as and when required.- DG/GES

12. Future performance report to include more comprehensive analyses of education costs and financing based on agreed criteria and guidelines.- PBME • Improve information flow about the total resource envelope allocated to various cost-centres and related expenditures. - PBME • Monitor the functionality of Budget and Procurement committees and Audit Report Implementation Committees at all levels.-MINISTRY

13. A consolidated financial statement of MOESS has for the first time been issued. In future the performance report should include information from the consolidated financial statement.- MINISTRY • Re-visit earlier recommendations on improving the financial management system for the sector. - MINISTRY

14. FINANCING THE EDUCATION REFORMS ISSUES • The harmonization of the Reforms with the ESP not yet completed. • What is the cost of the Reforms and what are sources of funding the Reforms? • There is the need to identify cost savings that can be made to ensure that more can be done with not too much more resources.

15. RECOMMENDATIONS • Last year, the need to harmonize the education reform with the ESP was recognized, this needs to be completed in the coming year before the annual review. • Reform should not be necessarily seen as an additional agenda but reforming the existing programmes. It is the incremental cost of the changes that requires additional funding (eg. TVET under the ESP has been expanded to include apprenticeship) • Implementation of the reform should be carefully sequenced in the light of investment plans and long term recurrent cost implications.

16. the funding of the reforms may come from the ff. sources; • reallocation of existing resources • using efficiency savings. Eg. Trainee allowances, study leave etc • Additional funding from other sources (external, IGF’s etc) • improving resource mobilization from the private sector (TVET) • reinforcement of cost sharing measures in the tertiary level