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Financial Performance

Financial Performance. Education Sector Annual Review 2005. Overview. Expenditure in 2004 Budget allocation 2005 Key issues for financing of education sector Moving forward – the Education Reform. Expenditure Analysis 2004. GOG budget Allocation by Item ( ¢ millions)

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Financial Performance

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  1. Financial Performance Education Sector Annual Review 2005

  2. Overview • Expenditure in 2004 • Budget allocation 2005 • Key issues for financing of education sector • Moving forward – the Education Reform

  3. Expenditure Analysis 2004 GOG budget Allocation by Item(¢ millions) • Of the total GOG component, 91.7% was allocated for Personnel Emoluments, with the remaining 8.3% allocated for non-salary items • Of the total allocation, the Main Ministry received 6%, GES 78% and NCTE 16%

  4. Expenditure Analysis 2004 • Actual Expenditure 2004 (GOG) (¢ millions) • Actual GOG expenditures exceeded the budget allocation by approximately 19%. • Salary expenditure exceeded the budget allocation by approximately 23%, while non-salary expenditure was 80% of total allocation • Primary education accounted for 39% of total GOG expenditure, with tertiary accounting for 15%

  5. Expenditure Analysis 2004 • Total Resource Envelope • Donor funding (¢ millions) • Total On- and off-budget funding - ¢420,092 • Other sources of funding (¢ millions) include: • DACF ¢104,840 • HIPC ¢274,229 • IGF ¢528,278 • GETfund ¢548,050 • The total resource envelope (expenditure) for education is, therefore, ¢5,794 041 million, of which 68% is GOG funding, 7% donor, and 25% from other sources.

  6. Expenditure Analysis 2004 • Total recurrent expenditure by level of education • In the ESP, the target for recurrent expenditure on primary education as a % of total recurrent expenditure on education in 2004 is 37.6%, falling to 34.4% in 2015. • The actual % in 2004 for primary education was 34.5% • Total expenditure by level of education • When all sources of funding are included, total expenditure (recurrent and capital) on primary education fell to 32% of the resource envelope, while tertiary rose to 21% • Unit cost by level of education • In 2004, it cost over 10 times as much to educate a tertiary student as a primary student and approximately 4 times as much to educate a SSS or TVET student as a primary student

  7. Budget Allocation 2005 Budget Allocation • By Item • The GOG only budget allocation for the education sector is ¢3,895,415 million, with 85% allocated to PE, 12% to Administration, 3% to Service and 0.5% to Investment • By Budget Head • The allocation for Main Ministry is 5.1% of total GOG allocation, Tertiary is 15.4%, with GES accounting for 79.5% of total • By level of education • The GOG allocation for basic education accounts for 64.8% of total (Primary 39.4%), SSS, 10.8% and Tertiary 16.2%

  8. Budget Allocation 2005 Donor and other provision (¢ millions) • Donor funding for the education sector is ¢758,791, which is an increase of 55% from 2004 expenditure • However, the trend has been that actual expenditure is less than the total allocated at start of year Other • IGF ¢677,869 • DACF ¢160,000 • HIPC ¢236,000 • EFA ¢36,404 • GETfund ¢1,061,500

  9. Budget Allocation 2005 Total Resource envelope • By source • The total resource envelope for 2005 is projected to be ¢ 6.8 trillion • Of this amount, GOG will account for 57% of total, Donor funding, 11% and Other sources, 32% • By level of education • Of the total resource envelope, basic education accounts for 48.2% (primary 30.7%) , with tertiary 22.8% and SSS 20.3%.

  10. Key Issues • Influence of external sources of funding • There is a need to ensure that all contributors to education sector development are working in line with MOES and ESP priorities • At present, external funding is directed mainly at higher levels of education, which is undermining the progress of the primary sector, and, consequently, the development of the education sector • Reporting of all sources of funding • A coordinated approach to expenditure reporting is needed in order to improve the efficiency of the operation of the education sector • In addition, it is necessary to ensure that the total resource envelope is as comprehensive as possible – e.g. information on the expenditure by NGOs on the education sector should be collected

  11. Key Issues • Timely release of funds • In order that implementation of the ESP and the programme of work, as captured in the AESOP, can run on schedule,a more regular flow of funds to the sector will be necessary • Public expenditure on higher levels of education • Enrolment figures at SSS and Tertiary are much higher than those targeted in the ESP • The unit cost for students at these levels of education is much higher than that for primary • Increasing enrolment at these levels of education, without initiating cost-sharing activities, is reducing the proportion of the overall budget available for the primary sector.

  12. Key Issues • High proportion of budget used for salary expenditure • There is a need to ensure a clean payroll and identify actual teacher requirements, to justify the budget figures • This is of particular importance in view of the anticipated expansion in enrolment due to impending reforms • Legislative Reforms • The Ministry must review its existing accounting, procurement and internal audit procedures in the light of new laws that impact on financial management procedures

  13. Moving forward – Education Reform • General outcomes of proposals • 11 years of compulsory education • 4 year Senior High stream or apprenticeship programme • All students to attend Senior High or apprenticeship by 2020 • Resourcing implications • An increase in student numbers at all levels of education will lead to an overall increase in resource requirements • Priority must be given to the primary sector, in order to ensure that MDGs and other primary targets are met • Sources of external funding should be discovered and utilised for higher levels of education

  14. Questions • Key recommendations for Financing? • Key inputs into AESOP? • Key inputs into Budget?

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