Strengthen Budget Efficiency and Transparency

MoEYS is one of the pilot ministries for implementing the Government's Public Finance Management Reform Program. One of the major goals of the reform in the near future is to shift towards full program budgeting in 2015.

MoEYS has achieved sound progress in strengthening financial management systems over recent years. There is now a credible and reliable budget executed through a system and procedures operating at four successive levels, from the center to service delivery. This has enabled the ministry to become increasingly effective in the achievement of its ESP goals and to obtain better value for the

funds employed. Clearly, some challenges remain, such as improving the public procurement process, introducing computerized accounting system, and strengthening internal audit.

The introduction of School Operating Budget (SOB) has a profound impact on the education sector. Prior to the SOB system, schools relied on school fees to finance basic running costs, topping up resources received from the center, which did not always cover all their needs. SOB is aimed to abolish school fees, which is an access barrier to children from poor households, by providing sufficient funds to cover the running costs of schools. A key design feature of SOB is that they allow much more discretion than centralized allocations; schools receive a decentralized cash allocation, enabling them to address local needs in a more efficient manner.

In the SOB system, an annual school budget plan is developed by the school director in collaboration with community representatives on a formally established Local School Support Committee (LSSC), with oversight from the officials of District Office of Education (DOE). The school director, School Management Committee (SMC) and DEO officials are required to sign off on the annual budget plan and verify receipts of the appropriate level of funding. The system facilitates enhanced transparency of school management and strengthens accountability for improving school-based services. The SOB system is monitored by the District Training and Monitoring Team (DTMT), a team that comprises of district education officials, school principal and School Support Committee representatives. The responsibility of the team is to train and monitor school structures on school performance.

The Local School Support Committee (LSSC) has a primary responsibility to budget the SIG funds, as part of the School Development Plan (SDP) preparation process. Schools would plan their SIG activities by June each year, and submit their School Development Plans, to DoEYS to verify that the planned activities represent an effective and efficient use of the funds.

The process of planning and budgeting starts in May at the MoEYS central level. MoEYS issues a circular each year, with the allocations and setting out rules and documentation requirements in addition to those in the Technical and Financial Manual. MoEYS also publishes the allocations to individual schools on its website, and requires provincial, district and schools/institutions to publish the information locally. In addition, MoEYS provides the guideline on prices for standard categories of work, goods and services, to guide schools in planning and budgeting.

After the circular has been issued, PoEYS would call a meeting close to the end of the school year to inform schools of their allocation for the next year and discuss the circular with school directors. Schools would then undertake or complete their planning process. In this phase, DoEYS, the District Grant Management Committee (DGMC), the District Training and Monitoring Team (DTMT) and cluster or resource schools would provide support.

By end June, schools are required to submit their Budget together with the School Development Plan to DoEYS. The school director as Chair of the LSSC must sign off on the Plan. The DGMC reviews and certifies the plans and submit the plans to the PGMC for approval. The DGMC reverts to other schools to correct the issues highlighted in the review. At the PoEYS level, the PGMC requests a sample of plans from the DGMC to review, and bases their assessment on the validity of DGMC reviews.

The Plan and Budget must be displayed publicly at the school level, prior to being sent to the DGMC. The final approved Plan and Budget must also be displayed, recording expected revenue, activities and amounts allocated.

While SOB has been a positive intervention in the education system, four main factors detract from its effectiveness.

Firstly, the value of SOB has declined over time. Prakas 191 sets fixed amounts in Cambodian Riel per school and learner, differentiated by the level of education, with no allowance for inflation. At present, MoEYS and MEF have made adjustment to Prakas, which will be implemented in 2014.

Secondly, the Program Budget (PB) under which SOB is managed limits the discretion of schools significantly. It divides the available funds into activity categories as set out in Prakas 191, and schools are not allowed to shift funds across categories. For example, if a secondary school needs more science laboratory equipment and not textbooks, the SOB format does not allow the school to freely utilize its fund where necessary within that school year.

The inter-ministerial (MEF and MoEYS) Prakas 191 on expenditure for the MoEYS PB provides maximum ceilings for a number of interventions financed under the MoEYS PB, such as school operating budget (SOB), student remedial support, teacher technical meetings and in-service training. Following extensive discussions, MEF finally approved a new Prakas (508), which includes notably a significant increase in SOB and its expansion to all formal pre-schools.

The increase in the MoEYS PB, including the new Prakas 508 (a significant increase in teacher salaries is also expected), is seen as a necessary pre-condition to resource the anticipated wide-ranging reforms of ESP 2014-18 and reach target outputs and outcomes. This can have a major impact on equitable access and quality, and is also supportive of the decentralization process.

Thirdly, the Program Budget funds are released in four rounds from MEF to provincial treasuries, and from there to the Provincial Offices of Education, Youth and Sports (POE). Delays beyond the control of MoEYS can result in the late release of funds to schools, making it difficult for schools to expend funds in time, and limiting the impact of funds on the school year. Furthermore, because the funds are released over the course of the school year, schools are unable to undertake or have to delay interventions that require large amount of expenditure.

Fourthly, the capacity of the system to manage school grants is still limited. In

a survey undertaken by MoEYS, 71 percent of respondents from 150 schools identified lack of training in administration and management as a major difficulty that schools encounter. The proposal, therefore, allocates a significant part of the available budget to training, support and monitoring activities.

SOB will be a key mechanism in furthering the principles of Child-friendly Schools (CFS), a policy initiative of MoEYS in collaboration with UNICEF. The RGC Child Friendly School Policy is based on six dimensions, namely all children have access to schooling; effective learning; health, safety, and protection of children; gender responsiveness; the participation of children, families, and communities in the operation of their local school; and the National Education System supports and encourages schools to become more child friendly. The policy incorporates educational methodologies that are focused on child-centered learning and characterized by creative teaching and learning, participatory learning, research, critical thinking, problem solving, and encouragement of creative and divergent thinking.

2) Education Policy Documents

In this section, the education policy documents are described.