Fiscal Management in the Context of School Based Management (SBM) System

As cited in the Office of Research Education Consumer Guide school-based management

(SBM) is a strategy to improve education by transferring significant decision-making authority
from state and district offices to individual schools. SBM provides principals, teachers, students,
and parents greater control over the education process by giving them responsibility for decisions
about the budget, personnel, and the curriculum. Through the involvement of teachers, parents,
and other community members in these key decisions, SBM can create more effective learning
environments for children.
In the Philippines, SBM was officially implemented as a governance framework of
DepEd with the passage of RA 9155 in 2001 as legal cover. The DepEd implemented three pilot
projects TEEP, SEDIP and BEAM to support the SBM as an effective mechanism in improve the
quality of education in the basic level. Then SBM was cascaded in all public schools in the
Philippines.
To be able to achieve the Education for All (EFA) objectives by 2015, the Department of
Education is pursuing policy reforms under the Basic Education Sector Reform Agenda
(BESRA). Key Reform Thrust 1 (KRT1) of BESRA is School-Based Management (SBM). SBM
underscores the empowerment of key stakeholders in school communities to enable them to
actively participate in the continuous improvement of schools towards the attainment of higher
pupil/student learning outcomes. Its main goal is to improve school performance and students
achievement. The objectives of SBM are to empower school heads to lead their teachers and
students through reforms that leads to higher learning outcomes; bring resources including funds,
down to the control of schools to spur change in line with decentralization; Strengthens
partnership with communities as well as local government units to invest time, money and effort
in making the school a better place to learn; and integrate School management and instructional
reformation for the school effective.
SBM is a strategy to decentralize decision-making authority to the individual school site
of which devolution of authority is the fundamental concept. It is a recent trend in education
reform that stresses decision making on the school level. In the past, school policies were set by
the state and the districts. Now the trend is for individual schools to make their own decisions
and policies.
The advantages of SBM are as follows: Allow competent individuals in the schools to
make decisions that will improve learning; Give the entire school community a voice in key
decisions; focus accountability for decisions; lead to greater creativity in the design of programs;
redirect resources to support the goals developed in each school; lead to realistic budgeting as
parents and teachers become more aware of the school’s financial status, spending limitations,
and the cost of its programs; and, improve morale of teachers and nurture new leadership at all
levels.
Since one of its objectives is bring resource including funds, down to the control of
schools i n most SBM systems, each school is given a “lump sum” that the school can spend as it
sees fit. As outlined by JoAnn Spear (1983), the district office determines the total funds needed
by the whole district, determines the district wide costs (such as the cost of central administration
and transportation), and allocates the remaining funds to the individual schools. The allocation to
each school is determined by a formula that takes into account the number and type of students at
that school.
Each school determines how to spend the lump sum allocated by the district in such areas
as personnel, equipment, supplies, and maintenance. In some districts, surplus funds can be
carried over to the next year or be shifted to a program that needs more funds; in this way, long-
range planning and efficiency are encouraged.
The resources invested in education must be efficiently and effectively deployed in the
most efficient way possible, maximizing the utilization of available resources to achieve
organization goals.
Such resources may include tangible resources such as facilities, equipment, financial
resources, information technology (IT) and labor (human resources). It can also include ideas
assigned task that add value. These include functional and non- functional ideas.
This new trend in school management, -knowledge based with empowerment re its
internal process to maximize its resources for operation and continuous development in
management, teaching & learning within the new changing 21st century.
 Its added value are managing and transforming resources, materials, parts or knowledge
to products that customers (students & parents) want and are willing to pay for; doing it right the
first time all the time, utilizing the least resources within.
Since School-based management (SBM) is the decentralization of decision-making
authority from state and district (central, regional, division) levels down to the school level.
Responsibility and school operations are transferred to principals, teachers, parents,
sometimes students, and other school community members with the intent to unite. The school,
however, have to conform to, or operate, within a set of guidelines.
School creates management councils at each school that includes the principal,
representatives of parents and teachers, and, in some cases, other citizens, support staff, and--at
the secondary level--students. The council conducts a needs assessment and develops a plan of
action that includes statements of goals and measurable objectives, consistent with school board
policies.
In some schools, the management council makes most school-level decisions. In other
districts, the council advises the principal, who then makes the decisions. In both cases, the
principal has a large role in the decision-making process, either as part of a team or as the final
decision maker.
Here in the Philippines each school is given funds (Maintenance and Other Operating
Expenses, MOOE). The allocated amount is entrusted to the school head being the fiscal
manager.
Department of Education knows that the school budget is one of the most powerful tools
to promote and strengthen the school based management and accountability. This is why apart
from curricular reforms and capacity building programs, DepEd continues to make more
resources available to schools to support them in enabling students to perform better. It adopted
new school MOOE which started 2013 with the passage of Republic Act No. 10533 or the
Enhanced Basic Education Act of 2013. Through the passage of this law DepEd moves closer to
rationalizing the programming of school budgets. Previously, the school MOOE budget was
computed solely based on enrollment given a per capita cost. With the new formula, other factors
affecting school operations are considered, such as the number of teachers and classrooms
managed by the school, the number of graduating or completing students, and a fixed amount
corresponding to basic needs of a school. In addition to this, starting 2016, financial assistance
previously released separately for special programs or activities are now incorporated in the
budget for the operations of schools. The funds that will no longer be downloaded from the
Central Office and are now part of the regular school MOOE budget include: a) financial
assistance to support special curricular programs in Science (Special Science Elementary
Schools, Regional Science High Schools, Science, Technology and Engineering Program in High
Schools), Sports (High Schools with Special Programs in Sports), Arts (High Schools with
Special Programs in Arts) and Special Education; b) DepEd Internet Connectivity Program; c)
Gulayan sa Paaralan; and d) School Based Management Grants. The Department continues to
develop and institute policies and reforms that would deepen the decentralization of education
management.
The release of allotments is being made by the DBM Offices concerned direct to the
Implementing Units (IUs) through the General Appropriations Act as Allotment Order
(GAAAO) for those budget items categorized as For Comprehensive Release (FCR), and Special
Allotment Release Orders (SAROs) for budget items withheld For Later Release (FLR).
The cash allocations corresponding to the allotments released are issued by the DBM
Offices concerned direct to the Modified Disbursement Scheme (MDS) Sub-Accounts being
maintained by the respective IUs.
The School Heads (SH) of Elementary and Secondary Schools without financial staff
who are designated as Special Disbursing Officers (SDO), through the authority of Schools
Division Superintendent, shall:
1. Apply for bonding with the Fidelity Bond Division of the Bureau of
Treasury;
2. Draw cash advance from their respective supervising/directing SDO for their
MOOE requirements;
3. Submit to the SDO on or before the 5th day of the following month the
original copy of the Cash Disbursement Register (CDR), the paid
Disbursement Vouchers (DVs) and all supporting documents which shall
serve as liquidation or replenishment of the cash advance granted. Subsequent
cash advances shall be granted only upon receipt of the CDR equivalent to at
least 75% of the previous cash advance. It is reiterated, however, that any
 remaining cash advance at the end of the year must be liquidated in full and
the unexpended balances be refunded;
4. Disburse funds in accordance with the existing budgeting, accounting,
procurement, and auditing rules and regulations; and
5. Comply with the reporting requirements.

The school head should declare all sources of funding of the school, which include school
MOOE allocation, private donations, grants from development partners, funding support from
local government units (i.e. Special Education Fund) and other government agencies, funding
support from local stakeholders such as School Governing Councils (SGC), Parent-Teacher
Associations (PTA), civil society organizations (CSO), alumni associations, revenue from school
canteen operations, and other income generated from the disposal of assets, rent, or collection of
fees as per applicable provisions of the General Appropriations Act. The report on sources and
uses of school funds shall include not only the amounts of funding received by the school but
also details on quantity and description, if such donations are received in kind.
He then need to outline the intended utilization of the abovementioned funds and ensure
that all the procurement using the school funds conform to the provisions of Republic Act No.
9184. He also needs to post information on the sources, intended use and actual utilization of
school funds in the Transparency Board that must be publicly accessible and must be updated
every three (3) months.
Transparency is still a major challenge in most schools as delegation of financial
responsibilities is not done and finance committees are not functional. Some SGB members have
no clue of the school’s income or balance in the bank account. Monies raised are not disclosed to
staff or parents. But it is a necessity to show good governance in the side of the school head.
The quality of governance, and the differences between governance and management in
education, can be assessed by looking at three types of relationships. The first is the
responsiveness of government to the needs and demands of citizens, especially the parents of
young children. The second is the capacity of the system to deliver the services that satisfies
those needs and demands. And the third is accountability by schools to the parents and citizens
they serve.