KARATINA UNIVERSITY

DEPARTMENT OF EDUCATION
Course Code: PAC 412
Course Title: EDUCATIONAL PLANNING AND ECONOMICS

LECTURE 8

FINANCING OF EDUCATION

Education financing refers to the various sectors from which money is

sourced to pay for educational services, materials and equipment. Education
finance involves ways through which revenue for public education at all
education levels is generated and also how the generated revenue is
distributed to all public schools and other institutions of learning.

Such revenue is spend on provision of the necessary infrastructure which

include tuition facilities, classrooms, laboratories, dormitories, dining halls,
sewage systems, electricity, water and tuition resourses.

Provision of such materials and services to implement and sustain the

education process is of paramount importance and has to be adequate and
of the desired quality in order to realize the national educational set goals.

Sources of School Financial Resources

School revenue means the amount of collected or received from various sources for
meeting the planned expenses of a school.

Sources of School Revenue Includes:

 Government grants eg fse/fpe funds, infrastructure funds economic stimulus funds etc
 School fees- boarding fee, activity fees,
 Bursary funds
 Harambee funds

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  Staff houses rent
 School buses
 School farm
 Constituency Development Funds
 Donations by NGOs eg World Vision Kenya
 Collections from parents eg. Activity fees
 Renting of school premises eg halls, dorms during holidays, grasins cattle in school fields
 Sale of old and obsolete equipment

Any type of education funding system is achieved it must meet the following
components

a) Equity

Equity is the quality of being fair and reasonable in a way that gives equal
treatment to everyone.

When applied in education equity refers to the degree of fairness in

distribution of education funding both human and materials.

Education costs and benefits of investment should be fairly distributed

among regions, between males and females and different societal groups.
In funding education the major participating stakeholders include the
taxpayers, parents, students and schools.

Payment of taxes to the government by the citizens of a county generates

much revenue which is used to fund development process and investments
in education and the other sectors of the economy.

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Taxation should be fair to all so as to avoid over or under taxation and
should be pegged is the individuals level of income.

Distribution in education should ensure access to basic education to

everybody especially the poor, disadvantaged and the discriminated who
depend solely on the government.

stakeholders in the education sector must ensure curriculum support

materials are fairly distributed to all schools. The existing disparities
regarding the distribution of teachers and physical facilities should also be
eliminated.

Educational planners should address the challenges facing equitable access

to education such challenges include;

 Levels of poverty among the very poor, discriminated and the

disadvantaged for example the special needs. The educational
planners need to chart ways of reducing such serious levels of poverty.
 Child labour- Many children are not sent to school instead they are
given manual work to do with little or without any pay. This issue
requires a policy to ensure persecution of those found subjecting
children to child labour
 Retrogressive cultural practices- Some communities still marry their
daughters (girls) at very tender age and carry out female genital
mutilation ( FGM) denying them the opportunity to get educated. Such
cultures should be eradicated

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  Failure of parents taking their children to school. All parents should
be encouraged to take their children to school.
 Disparity between boys and girls-Some parents in various
communities still believes in educating boys only and marrying off
their daughters early to get dowry. Education planners must see ways
of narrowing the disparity between boy and girl child so as to ensure
all get educated.
b) Cost effectiveness.

Cost effectiveness is another component of educational finance which

involves evaluating whether the educational goals are being met after the
funding and implementation of the curriculum. All plans and programmes
funded in education are geared towards achieving the goals of education.

Specific short term objectives which are measurable are prepared from the
national goals which help in evaluating level of achievement of the long term
national goals of education.

For example are the educational programmes being funded promoting

individual development and self-fulfillment? Are they promoting socio
economic, technological and industrial needs for national development?
Are thy fostering nationalism and patriotism to achieve nation unity among
the other national education goals?

Cost effectiveness is achieved only when all the funds are spend on activities
geared towards achievement of the national goals of education.

c) Efficiency

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Is the quality of being able to do a task successfully without wastage of time,
resourses or energy.

Efficiency is used to describe the relationship between inputs and outputs.

In education financing once funding has been done equitably and
educational goals achieved then it is necessary to come up with ways
through which the output (productivity) can be improved.

Inputs in productivity include teachers, learning resources, students

characteristics, stationeries etc.

Outputs are the graduates at all levels e.g. standard eight, form four,
university etc.

Efficiency may be achieved through assessing the extent to which society

accept the graduates in terms of values norms and if the society benefit or
enjoy from having educated citizens.

There is needed to assess the graduates and gauge if all those who enrolled
progressed from entry to departure, then come up with strategies of
improving transition and completion rates.

Any learner dropping out of school brings about inefficiency in the system
because all the resources used on the drop out goes to a waste. It is a
challenge to have 100% enrollment and 100% graduation.

Efficiency could be achieved by the government increasing budgetary

allocations to schools to purchase enough learning materials, improved
infrastructure etc

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It also involves designing proper curriculum to equip learners with
necessary skills to match the labour market to increase labour productivity.

Efficiency is also achieved by exposing teaching personnel to quality

training use of proper teaching methodologies.

d) Local control.

This involves allowing the local community to have a say over the
educational processes. The community members are the direct beneficiaries
of educational funds.

It is therefore important to get their views on the educational process

planned for them so that they can specify the most pressing educational
needs in order of their priorities.

On the other hand they shouldn’t be left to go overboard because they may
not be knowledgeable on the country’s immediate skilled human labour
needs. They may also have no idea of the cost implications of their proposals
to the education sector. Careful considerations should be made on the
community’s contribution to educational financing.

e) Adequacy

Adequacy is another component of educational financing. It is important to

consider the population of all the learners for which the government is
providing educational facilities and resources for.

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 This will help in establishing a correct ratio of classrooms, libraries,
dormitories, equipment, stationaries, teachers, educational personnel to the
number of learners available.

The correct ratio will ensure education quality is not compromised.

Adequacy should be considered in providing facilities and resources
equitably to all learners and efficiently.

PRINCIPLES OF EDUCATIONAL FINANCE.

Principles refer to particular rules and laws which have to be followed in

executing a certain theory or philosophy. In educational finance there are
various principles that guide the way through which educational funds are
allocated to cater for the various expenses. The following are the principles
of educational finance:-

I. All allocation of funds to education should be determined by the

educational budget.
This means that before any funds are allocated to education a detailed
budget should be made showing all the estimated monies to be spend in the
sector for specific activities such as provision of infrastructure ,purchase of
books , training of personnel. In the budget, there should be considerations
on which items need more priority and which ones can be funded later .

The areas to be priotized depend on the immediate needs of the society or

country and its interests within the education sector. For example according

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 to their interest there may be urgent need of a modern libraries in the county
compared to provision of computer technology or vice versa .

There could be urgent need of training doctors than engineers and therefore
more fund allocated to health education than engineering education.

II) Improvement of education should be made within the financial and

human resources available in the country. It is important to estimate the
financial or funds and human force available in the country so as to be
able to see how much it can effectively be used to improve the existing
education opportunities.
III) Education cannot be purchased like a commodity according to
individual’s desire who can afford.
The government must attempt to provide free education or subsidize it so
as to help the society to develop. This principle if implemented means that
education will be affordable to all.
IV) Education should be duly financed to provide equality of opportunity.
It should develop learner’s capacities and talents so that leaders can spring
up from all ranks and conditions of life.
This principle means we should give equal and fair opportunities to the rich,
poor, discriminated, challenged, young, and old and all the special needs.
Thay should pursue education along their spheres of interest, exploit their
talents and get into leadership without any hindrances.

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 Thus would also reduce gender parities and every citizen will get a chance
to realize their potential for the benefit of the society.
V) careful analysis of the trends in economy
Allocations should be made to important educational sectors in accordance
with the projected manpower requirements. So that maximum returns will
be ensured and the wastage of human and physical resources of the country
will be eliminated.

The manpower requirements in a country determine what professionals

should be produced in the education sector. A careful study on the
manpower requirements helps the education planners to know which
education sector require more funds and where they need to be reduced
probably due to overproduction of professionals who are not needed or are
already flooded in the job market.

VI) Special grants for physical activities, libraries and reading rooms, feeding
programme etc. should be provided.

Other than the government funding only the tuition blocks and the
boarding facilities, some funds should also be allocated to support facilities
such as libraries, extra rooms where learners can take private studies and
other support services like provision of lunch. This would help sustain and
even attract more learners to go to school and learn throughout the day.

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VII) A large number of scholarship, stipends and free education should be
provided to students so as to make use of available educational
opportunities to motivate learners.

The government should motivate learners through giving scholarship for

further studies especially to students pursuing studies in sectors where the
country has shortage of manpower.

Giving stipend to students would make them comfortable and enable them
to pursue their educational goals to the end because they are able to cater for
their basic needs.

VIII) The allocation of funds to education should be decided by the future

needs of skilled man power.

Educational funding should be based on current and the future needs of the
country’s skilled man power. There should be governments projections on
future human resourse needs such as need for doctors, engineers, teachers
etc. This projection should be used as guide to funding training and
provision of enough training institutions that are equipped.

It would also help to avoid crisis of shortages of some professionals which

may cost the government heavily in making efforts to import expatriates in
the specific fields.

XI).Attempts should be made to reduce the cost of equipment by

improvisation and teachers should be given incentives to do so.

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Equipment used in the education sector, could be improvised by using
locally available materials other than purchasing the actual expensive one.
As long as the workability and the education objective is achievable using
the improvised materials, then it is good to encourage and motivate teachers
to produce the improvised equipments.

For example improvised weather instruments such as rain gauge,

thermometers, barometers etc. which work on the same principle as the real
equipment. Improvitization of equipment principle would save the
government a lot of money which can be used to improve other educational
sub-sectors.

Conclusion

The principles of educational finance discussed here can help the

government in planning and provision of educational facilities and
resources. If they are all put in consideration they would go a long way in
helping achievement of the education for all (EFA) goal and at an affordable
cost. They would also allow scholars to specialize in their areas of interest
and be able to meet the society’s skilled man power demand

Challenges facing the government in Financing of education

1. Educational budgets and priorities are not made within the sphere of
education itself. This is because priorities are not given to deserving
sectors as the responsibilities is left to only to the ministry to decide

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 with much political interference with specific individuals interests
prioritized .
2. Government policies on education are not implemented as stipulated.
For example skilled man power needs in the future are not prioritized.
3. Limited funds are allocated to education sector compared to other
sectors. Education sector has not been given the importance it
deserves. The funds allocated are too limited to meet required needs.
4. Gender disparities, low consideration of the poor, and discrimination
of the challenged in the society has made it impossible to achieve
equity in education.
5. The education system has laid emphasis on training for white collar
jobs which are quite limited instead of vocational training
6. Embezzlement of education funds through corrupt government
officials has made it impossible to provide the necessary facilities in
educational institutions. This makes it impossible to give scholarships
and stipends to students. Available scholarships is given to
undeserving people due to corruption.

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