Module 5 Summary

Financial Aspects of Educational Planning

Lesson 1: Budgeting: Its Implications to Educational Planning

A widely used device for managerial control is the budget. Indeed, it has
sometimes been assumed that budgeting is the primary device or
accomplishing control. As will be noted, however, many non-budgetary
devices are also essential. Primarily because of the negative implications of
budgeting in the past, the more positive-sounding phrase, “profit planning”
is often used, and the budget is then known as the profit plan.
There are many definitions of budget. Some people have defined budget as a
total annual estimate of revenue and expenditure.
According to Musaazi (1982) budget is defined as a financial plan through
which educational objectives are implemented and translated into reality.
In a school, budget helps the principal and staff to develop plans for future
and staff to develop plans for future syllabus, instructional procedures,
guidance services and student activities as it helps in allocating expended
funds for labour, facilities and administration programmes, activities, and
projects.
The lack of articulation/correlation between educational plans and budgets
resulted in inequities in resources allocation, which led in turn to the
emergence of DDU schools, the poor implementation of plans due to lack of
financial support, and non-implementation of many good plans.
Inaccurate or unreasonable assumptions can quickly make a budget
unrealistic. Budgets can lead to inflexibility in decision-making. Budgets
need to be changed as circumstances change. The problems met by
educational planners/administrators in correlating budget with plan include
the following: 1. Less freedom to act and to innovate due to limited funds
available, second is costing and last is change in policy-in-between planning
and budgeting.
In costing, the tendency in planning is to use standard unit costs, worked
out on the basis of past trends. Actual costs are often grossly estimated. But
the budget must be based on the actual operational cist; hence, in-between
planning and budgeting, costing must be refined. In policy change, tis
requires adjusting all related activities and testing them for internal
efficiency.
There are two principal budget designs, and they are line-item budgeting
and performance budgeting wherein line-item budgeting referred to as
conventional or traditional budgeting and most widely used budget design. It
is also an expenditure-oriented, not goal-oriented while performance
budgeting measures actual or estimated results in terms of benefits
accruing to the public and their unit costs.
The order for the National Budget process are budget preparation, budget
authorization, budget execution, and budget accountability.

Lesson 2: PPBS and other Budgeting Innovations in the Philippines

PPBS is a budgetary mechanism which aims mainly at systematizing the
financial decision-making process and integrating into one comprehensive
operation the three significant functions of planning, programming, and
budgeting. PPBS has the following components, and they are planning,
programming, budgeting, evaluating, and system. PPBS may help
educational planners/administrators to determine the accountability of the
educational system and to make the decision geared towards systematically
integrating all aspects of the planning and implementation of educational
programs.
There are three established objectives of PPBS, namely: taxonomic,
analytical, and projective. The purpose of PPBS is to bring together the
objectives of a particular service and the resources devoted to them, and to
provide a framework within which costs and advantages of possible policy
choices are examined side by side. PPBS has also advantages for students,
teaching staff, for administrator/managers and their staff, for school boards
and for the community. In sum, PPBS has the following advantages. First, it
directs attention to final objectives, it suggests improved methods of
assessing the success of a program of expenditures. It provides a framework
for systematically assessing how resources are being used. It overcomes
institutional barriers and boundaries. PPBS has also limitations. It is not
always easy to define objectives and programs in terms of multipurpose
activities; besides the allocation of priorities in a wrongly defined system of
objectives and programs may lead to difficulties. Choice may be made only
among closely related alternatives.
There are following steps of PPBS. Step 1 a general survey on the area
concerned is conducted, and relevant objectives are identifies. Step 2,
existing activities are analyzed in order that their contribution to the
attainment of objectives identified. Step , specific outputs are identified and
their success or failure in attaining the specific objectives is accounted for.
Step 5, Inputs in terms of personnel, materials and money are allocated for
each program are defined in relation to its contribution to the achievement
of the goal of elementary education. Step 6, allocation of inputs for each
program, sub-program and program element is phased over the entire plan.
Step 7, the budget document is formulated in the proper form. The budget
contains policy choices. Step 8, machinery for reviewing objectives is
established, and analysis is conducted on continuing year-round basis.

Lesson 3: Costing of Educational Plans

The concept of cost, in general, comes into play in the production of goods
and services. The cost of education may consist of direct costs and indirect
costs. When the concept of cost is applied to education, three types of
difficulty are encountered; all of them are inherent in the very nature of
education as an activity. They are the definition of the production of
education, the identification of the economic transactors concerned with
education, and the fact that education is by nature a public service.
The education costs may be used as an instrument for an over-all analysis
of the financial aspects of education which is designed to defined the place
of education in the national economic context, and a parameter for
projecting the trend of the educational system through a detailed analysis of
total and unit costs by type and level of education as well as by purpose of
expenditure.

Prepared by:
Noel T. Piedad