MEM 5209: FINANCIAL

MANGEMENT IN EDUCATION
LESSON ONE AND TWO

LECTURER: DR. RUTH THINGURI

EMAIL: NTHINGURI@YAHOO.COM OR
SEMESTER: JANUARY, MAY, SEPTEMEBR.2016
VENUE: VIRTUAL CAMPUS
LESSON 1:1:KWL TEACHING STRATEGY

W
WHAT L
K
STUDENTS LEARNED
KNOWLEDGE WANTS /NEED INFORMATION
STUDENTS HAVE TO LEARN MORE ABOUT THE
ABOUT A GIVEN ABOUT THE TOPIC AFTER
TOPIC TOPIC STUDY
LESSON 1&2.1: DEFINITIONS

 Financial Management in education involve managing the

financial reports and doing the financial analysis for educational
institutions.
 It also calls for budgetary planning so that the organization can run
within the budget limits.
 Moreover, it involves the critical analysis of all long and short term
budgets for the revenue generation.
 Schools and universities are under increasing pressure to fund more
with less. For many academic organizations, revenue sources are
declining, but reporting requirements are increasing.
 Using disconnected payroll, grants management, tuition billing, and
other financial systems that require mastery of different tools and
applications can introduce unnecessary obstacles to effective
financial management in education.
LESSON 1&2.1:DEFINITIONS

 The Financial manager has to work and coordinate

with many other departments for the preparation of the
budget.
 They must have the knowledge about and be able to
interpret the technical and current trends used in finance
and should be very good in management skills.
 They also need to supervise the financial staff in the
organization.
 The financial manager is also involved in cost
management- concerned with the cost of education,
sources of income to meet the educational costs and the
spending of the income in an objective manner in order
to achieve the educational objectives.
LESSON 1&2:2:FINANCING EDUCATION
IN KENYA

 Sources of financing Education

 Kenya has adopted partnerships in delivering
education by financing education in Kenya. The
partnership is between the Government, local
communities, religious organisations, private
investors and donors.
 Recurrent Government spending on financing education
has been higher than any other social sector. According
to the Economic Survey, it was 73.8 per cent of the total
social sector expenditure. Though most of the funds go
towards salaries and wages, the development
expenditure for free primary education in Kenya and the
free tuition secondary education in Kenya has increased.
LESSON 1&2:2:FINANCING EDUCATION
IN KENYA

 Financing Education in Kenya – Secondary Education in

Kenya
 The government’s financing of secondary education has largely been
directed towards recurrent expenditure, mainly to meet teachers’
salaries and allowances, at the expense of development
expenditures, which would be essential to provide and improve the
physical and instructional facilities. This has resulted in poor quality
education as schools are inadequately provided with basic learning
resources.
 The cost-sharing strategy has had a negative impact on the poor and
vulnerable households. The latter either do not enroll their children
in secondary schools, or fail to sustain a continuous participation of
those enrolled due to inability to meet cost requirements. This
results in inadequate provision of learning facilities to the enrolled,
poor quality education, and high dropout rates.
LESSON 1&2:2:FINANCING EDUCATION
IN KENYA

 1.Government
 The Government encourages more private sector participation in the
provision and expansion by financing education in Kenya, especially at the
secondary, TIVET and university levels. The potential role of NG0s, the
private sector and religious organisations has to be exploited fully.
 There are plans to encourage universities to reduce their dependence on
Government, and to diversify their sources of income. Universities are also
expected to reduce wastage and ensure efficient and cost-effective use of
institutional resources. Plans are in the pipeline to develop a strategy on
working with partners to mobilise additional resources to finance training
and education in Kenya.
 Study results indicated that the patterns and trends of education financing
in Kenya incorporated a partnership between the state, households, and
communities long before the introduction of the cost-sharing policy. The
financing of secondary education has, however, become problematic, as
parents have to shoulder an increasingly large proportion of the cost.
LESSON 1&2:2: FINANCING EDUCATION
IN KENYA

 2.Bursary Scheme
 The operation of the Most bursary scheme is handicapped by
inadequate guidelines with regard to the amounts to be allocated per
student; poor criteria for selection of genuinely needy; inadequate
awareness creation about the scheme’s existence and operations; limited
funds hence limited coverage; poor co-ordination and delays in funds’
disbursement; and lack of monitoring mechanisms by the Most at the
school and higher levels. This has resulted in lack of transparency and
accountability, nepotism, among other aspects of mismanagement.
 A critical issue that requires redress is awarding of the bursaries to less
deserving, and sometimes completely undeserving, but well-connected
applicants, at the expense of the poor and vulnerable groups.
 Schools should work out ways to allow individual schools to evolve a ‘fees
waiver mechanism and income generating activities at the school level to
raise funds for
various purposes to benefit learning resources, quality improvement,
school projects, and, where possible, supplement student fees
requirements.
LESSON 1&2:2:FINANCING EDUCATION
IN KENYA

 3.Financing Education in Kenya – African Development

Bank (ADB)
 African Development Bank (ADB) supports staff development and
provision of equipment to KESI and rehabilitates primary teacher
training and technical college in Kenya.
 Other assistance includes provision of science equipment and
textbooks to secondary schools and procurement of vehicle for
KESI.
 4.Financing Education in Kenya – Danida
 The Danish International Development Agency – Danida has given
most of its support to special education for the disabled in Kenya. It
was instrumental in the establishment of of the KESI and the
development of the Education Assessment Resources Services
Centres in the districts. It has supported training of special
education teachers and other experts and provided equipment.
LESSON 1&2:2:FINANCING EDUCATION
IN KENYA

 5.Financing Education in Kenya – DfiD

 The British Government’s Department for International
Development – DfiD has supported primary, secondary,
technical and higher education in Kenya in the form of
physical facilities, provision of equipment and development of
human resource development.
 6.Financing Education in Kenya – JICA
 Japan, through the Japanese International Cooperation
Agency – JICA has been on the forefront of helping the
education sector in Kenya, especially in technical education.
JICA funded the establishment of Jomo Kenyatta College of
Agriculture and Technology (it has since become a university).
It has also supported the Strengthening of Mathematics and
Science in Secondary Education (SMASSE) project and
CEMASTEA.
LESSON 1&2:2:FINANCING EDUCATION
IN KENYA

 7.Financing Education in Kenya – UNICEF

 The United Nations Children’s Fund main interest is basic education and it
has provided massive support for the Free Primary Education programme
in Kenya. In the past, UNICEF supported pre-school education
programmes, girls in primary school, participation and retention, non-
formal education and education of children in difficult circumstances.
Other areas of support include assessment of education outcomes at the
primary level and HIV/Aids education.
 8.Financing Education in Kenya – UNESCO
 The United Nations Educational, Scientific and Cultural Organisation –
UNESCO has supported Kenya in diversification and expansion of
secondary and vocational education. Support has also been provided in
improving school effectiveness, management and monitoring of
achievement and outcomes at primary and secondary education levels.
Higher education has also benefited from training of administration staff.
LESSON 1&2:2:FINANCING EDUCATION
IN KENYA

 9.Financing Education in Kenya – World Bank

 The World Bank has over the years given Kenya grants and
loans to support education, Some of the key programmes
supported include the Kenya Education Sector support Project
whose objective is to improve basic education, Universities
Investment Project and Early Childhood Development
programme
 10.Financing Education in Kenya – World Food
Programme (WFP)
 World Food Programme (WFP) provides food to most primary
schools in ASAL areas and in the urban slums in Kenya. The
WFP School Feeding Programme has been crucial in
increasing access and retention in primary education.
LESSON 1&2:2:FINANCING EDUCATION
IN KENYA

 11.Financing Education in Kenya – NGOs

 For a long time, religious organisations in Kenya have been at the
forefront in supporting education in Kenya. During the colonial
days christian denominations partnered with the government and
after independence set up their own schools.
 Even after the Kenya Government took over of their schools,
churches — Catholics Anglicans, Presbyterians, Seventh Day
Adventists and Africa Inland — have continued to influence
education.
 Islamic schools, known as madrasa, are a main feature of Kenya’s
basic education system, especially at the Coast and North Eastern
provinces.
 International and local NGOs have also been partners with the
Government, local communities and religious organisation
education.
LESSON 1&2:3: PUBLIC INVESTMENT
AND EXPENDICTURE IN EDUCATION

 Education is both a consumption/expenditure and an

investment in human capital by individuals and society.
Educated people acquire benefits such as knowledge, skills
and attitudes which enable them to receive higher earnings
and also to play an active role in societal development.
 These are the indirect benefits of education, also known as
externalities or spillover benefits, are usually difficult to
measure in real terms. Such benefits include reduction in
crime ,social cohesion, technological innovations and
intergenerational benefits.
 Financial or cost management in education is
concerned with the cost of education, sources of
income to meet the educational costs and the
spending of the income in an objective manner in
order to achieve the educational objectives.
LESSON 1&2:3: PUBLIC INVESTMENT
AND EXPENDICTURE IN EDUCATION

 Education as an investment is divided into two distinct parts.

 These are the private and social investments. These benefits
are shared by the individuals, families, employers ,societies
and other bodies.
 The way in which educational investment is shared varies
from country to country.
 For prudent investment the financial manager is required to
conduct cost benefit analysis or cost effectiveness analysis
 Cost benefit analysis is used when benefits of an educational
programme are quantifiable into monetary units
 Cost- effectiveness, on the other hand, is used when the
benefits of an educational programme cannot be estimated in
monetary units.

LESSON 1&2.10 :PUBLIC SPENDING ON
EDUCATION

 Education Sector Expenditures

 Over time, financing of education has been a partnership
between the government, parents, communities and the
international community. The government has always
been responsible for financing teacher salaries and
offering limited development finance for specific projects
in public schools. However, at university level
government has continued to fund both the recurrent
and development budgets of the public universities.
Donors have been instrumental in funding capital
projects. An analysis of government funding reveals that
the education sector has over the years taken the largest
proportion of the government budget
LESSON 1&2.4 :PUBLIC SPENDING ON
EDUCATION

 Public spending on education includes direct expenditure on educational

institutions as well as educational-related public subsidies given to
households and administered by educational institutions.
 This indicator is shown as an index, base year 2000, as a percentage of
GDP and of total public spending, divided by primary and tertiary levels.
Public entities include ministries other than ministries of education, local
and regional governments, and other public agencies.
 Public spending includes expenditure on schools, universities and other
public and private institutions delivering or supporting educational
services.
 This indicator shows the priority given by governments to education
relative to other areas of investment, such as health care, social security,
defence and security.
 Education expenditure covers expenditure on schools, universities and
other public and private institutions delivering or supporting educational
services.
LESSON 1&2.4 :PUBLIC SPENDING ON
EDUCATION

 Government expenditure can be classified in several ways which

include: public, private, development, Expenditure on
Education, and Private Investment in Education
 Public expenditure on education :
 The share of total government expenditure taken up by education
for the years since 1990 has averaged 17.0 percent (Table 20),
although with considerable growth to more than one quarter during
the present decade.
 Public spending on education; total (% of government expenditure)
in Kenya was last measured at 17.21 in 2010, according to the World
Bank. Public expenditure on education consists of current and
capital public expenditure on education includes government
spending on educational institutions (both public and private),
education administration as well as subsidies for private entities
(students/households and other privates entities)
LESSON 1&2.4 :PUBLIC SPENDING ON
EDUCATION

 Public expenditure on education, as a percentage of total

public expenditure, indicates the extent to which governments
prioritise education in relation to other areas of investment, such as
health care, social security, defence and security.
 If the public benefits from a particular service are greater than the
private benefits, markets alone may fail to provide that service
adequately and governments may need to become involved.
 Education is one area in which all governments intervene to fund or
direct services. As there is no guarantee that markets will provide
equal access to education opportunities, government funding
ensures that education is not beyond the reach of some members of
society.
 Capital and recurrent expenditure are considered to be overall
expenditure, and account for all fees and net lending that is doled
out by governments
LESSON 1&2.4 :PUBLIC SPENDING ON
EDUCATION
 Recurrent expenditures are typically made more than once, and may
even be made on a scheduled basis. Some expenses, such as wages and
salaries made to employees by government, are made periodically on a
weekly or bi-weekly basis. Recurrent expenditures exclude payments for
capital assets, such as stock, bonds and property.
 Recurrent Government spending on financing education has been higher
than any other social sector. According to the Economic Survey, it was 73.8
per cent of the total social sector expenditure. Though most of the funds go
towards salaries and wages, the development expenditure for free primary
education in Kenya and the free tuition secondary education in Kenya has
increased.
 Recurrent expenditure refers to payments made by governments
or organizations for all purposes except capital costs. Recurrent
expenditure includes payments made on goods and services as well as
interest and subsidies

LESSON 1&2.4 :PUBLIC SPENDING ON
EDUCATION

 Development or capital expenditure is stand alone

expenditure: for example
 Construction of new schools and universities
 Establishment of the Computer Supply
Programme
 Establishment of Research centers for
Collaborations between Kenyan researchers and global
researchers provide good potential of scientific
advancement.
which would be essential to provide and improve the
physical and instructional facilities. This has resulted in
poor quality education as schools are inadequately
provided with basic learning resources.
LESSON 1&2.4:PUBLIC SPENDING ON
EDUCATION

 Private Expenditure on Education: Education administration

as well as subsidies for private entities (students/households and
other privates entities)
 Includes government spending on other ministries and devolved
counties that support education programmes in Kenya
 Private investment in education: Investment in construction
of private schools and universities is potential opportunity. In
addition, most facilities and equipment in Kenyan universities are of
low quality and require urgent upgrading.
 This posses an opportunity for investment in supply of equipment
and teaching facilities, and construction of infrastructure. In
addition, investors can set up manufacturing centres for training
equipment focusing in university education.
LESSON 1&2.4 :PUBLIC SPENDING ON
EDUCATION

 Private investment in education

 The growth of private higher education and private
schools in Kenya has been fueled by several factors,
including:
 General pressures: Global, economic and social change,
encouragement and support of world agencies, privatization seen as
an effort to reduce the inequalities in the current public schooling.
 Globalization linked with market liberalization, has both pressured
and encouraged governments to seek more efficient, more flexible
and more expansive education systems.
 Privatization has responded to all these changes since there is
greater international demand for both lower and higher education.
LESSON 1&2.4 :PUBLIC SPENDING ON
EDUCATION

 Private investment in education

 Supply side pressures:
 The limited opportunities available in public schools and universities-public
schools and universities have reached a capacity constraint with the rapid
population growth, public universities and schools are overcrowded and therefore
private universities and schools are needed;
 The constant closures of state-funded universities and schools
 The need to complement government- managed higher institutions and schools for
learning;
 The decline in quality of , and in some cases the reduction in funds available to fund
public education.
 Many parents feel that the public institution is inefficient in providing education of
the type that is most needed; this dissatisfaction can be seen across many nations.
 In some cases enrollments have expanded much faster than funding, resulting in
overcrowding, large classes, double or triple shifts for delivery of instructions.
 Therefore, part of the perceived decline in quality may be a consequence of a fall in
per-student funding.
LESSON 1&2.4 :PUBLIC SPENDING ON
EDUCATION

 Private investment in education

 Demand side pressures:
 Many parents wants privatization since education is viewed as an
important way to gain social and economic advancement; and if the
government cannot afford to provide and fund all education that
parents expect for their children, then those parents will seek
private schools and universities
 Some parents want more that just education, but accompanied with
moral religious component and the determination by some religious
organizations to open higher learning institutions largely funded on
their faith has come as a result of it.
 It is estimated that twenty percent of the total university and
schools student population attends private universities and schools
(Ngome, 2003).
LESSON 1&2.4 :PUBLIC SPENDING ON
EDUCATION

 Development expenditure on Education: development of

projects and programs that will enhance education such as:
 Establishment of TIVET Centers of Excellence
Centers of Excellence are aimed at making the technical training
institutions focus and specialize on specific technical courses for
training. Construction and equipping of laboratories
 Industrial business incubators in institutions of higher
learning
 Establishment of Science/Technology parks Science and
Technology Parks are a means of supporting a knowledge-
based economy, and fostering market-oriented
technological development.
 Construction and Rehabilitation of facilities for TIVET
LESSON 1&2:5: BENEFITS OF
EDUCATION

 private benefits of education

 1.Increased educational attainment boosts personal
earning power
 Individuals have strong financial incentives to earn college
degrees and certificates. Incomes tend to increase with higher
levels of educational attainment. Median annual earnings for
those with an associate degree are 33 percent higher than
those with a high school diploma in some countries
 The increase for those with a bachelor’s degree is even more
striking, with graduates earning 30 percent more annually
than those with an associate degree, and 73 percent more than
those with a high school diploma in most countries
LESSON 1&2:5: BENEFITS OF
EDUCATION

 2.Poverty levels decline as education levels rise

 The financial rewards that accompany higher levels of educational
attainment allow many college graduates to live well above the poverty
level.
 3. Education leads to more comprehensive employer benefits
 In addition to higher annual wages and increased job security, educational
attainment brings other financial benefits to workers and their families. For
example, employees with higher levels of education are more likely to work
in jobs that offer benefits packages such as paid vacation, sick leave, or
company retirement plans.
 Employers who need highly trained and educated workers tend to view
benefits packages as one way to gain an edge over competing employers. By
offering generous benefits packages, some employers also hope to reduce
turnover in positions that require trained or experienced staff.
LESSON 1&2:5: BENEFITS OF
EDUCATION

 4.Employer health insurance coverage

increases with educational attainment
Individuals with higher levels of postsecondary
education are more likely to have health insurance
coverage from sources other than public plans that
specifically are designed to provide health coverage
to low-income people. Health insurance for higher-
income persons typically is acquired through an
employer, union, military organization, or by self-
purchase.
LESSON 1&2:5: BENEFITS OF
EDUCATION

 5.Educated people report feeling healthier

 People who attain higher levels of education report they
feel healthier than people who do not. Nationally, at
every age and income level, individuals with higher
educational attainment report better health than those
with less postsecondary education.
 Evidence also suggests that more highly educated people
may be less likely to engage in health- damaging
behaviors. For example, studies suggest that college
graduates are more likely to heed widespread public
warnings about the serious health effects of smoking
than those with less education.
LESSON 1&2:5: BENEFITS OF
EDUCATION

 public benefits of education

 1.Higher education opens the door to more
jobs in today’s economy
 The number of jobs requiring higher levels of
education has increased substantially, both
nationally and internationally. While factors other
than education undoubtedly impact the number of
jobs a state may lose during a recession, evidence
suggests that states with more highly educated
populations tend to lose fewer jobs than those with
less-educated populations.
LESSON 1&2:5: BENEFITS OF
EDUCATION

 2.More highly educated workers face fewer

unemployment problems
 People who possess knowledge or skills that are
highly marketable in today’s economy tend to
experience a greater sense of security about future
employment prospects than those who do not. This
is especially true in difficult economic times. Jobs
that remain in high demand through good and bad
times often are those that require college degrees,
certificates or other forms of specialized education
after high school.
LESSON 1&2:5: BENEFITS OF
EDUCATION

 3.Increasing education reduces reliance on federal

and state social services
 The national recession has brought economic hardship to
many, including some college graduates who hoped their
investments in higher education would immediately lead to
rewarding careers in their fields. Today, even people with
more education may need some assistance to make ends meet.
 Nevertheless, it remains generally true that increasing levels
of education mean less need for federal or state social service
programs, such as food stamps or welfare. Reducing the cost
of social programs by enabling more families to remain
economically self-sufficient is another long-term benefit of
continued public investment in higher education.
LESSON 1&2:5: BENEFITS OF
EDUCATION

 4.Educated people report feeling healthier

 People who attain higher levels of education report
they feel healthier than people who do not.
Nationally, at every age and income level, individuals
with higher educational attainment report better
health than those with less postsecondary education.
 The relationship between educational achievement
and better health not only has implications for
individuals, but also for the broader social goals of
reducing health care costs and improving the overall
health of the population.
LESSON 1&2:5: BENEFITS OF
EDUCATION

 5.Education reduces propensity toward criminal

behavior
 Studies have long shown a relationship between levels of
educational attainment and crime. Research exploring
this relationship within Washington could not be found,
but national studies suggest that more highly educated
people tend to commit fewer criminal acts against their
neighbors than less-educated people. This also means
that individuals who have attained higher levels of
education tend to be less likely to enter the criminal
justice system and thus avoid attendant costs to the state.
LESSON 1&2:5: BENEFITS OF
EDUCATION

 6.Education influences voting behavior and

volunteerism
 Society benefits when citizens actively engage in the
democratic process and contribute time and
resources to improve their communities. Evidence
suggests that levels of educational attainment are
associated with increased voting behavior and
participation in charitable or public service activities.
LESSON 1&2:6RETURN ON INVESTMENT
ON HIGHER EDUCATION

 Higher education spending provides direct economic support to

communities
 1.Return on investment takes many forms such as private benefits, public
benefits and direct economic support to communities and the national at
large.
 2 Higher education institutions make direct contributions to the economies
and social fabric of communities across the country. Without a higher
education system, businesses would have to look to other sectors and
countries for the trained and educated workers they need, and more
Kenyans would miss opportunities for well-paying jobs in local
communities.
 3Higher education institutions are themselves major economic forces in the
communities they serve. They make up a large segment of the education
services industry, which has major supplier and purchasing linkages to
many other industries in the Kenyan economy. Faculty and staff spend a
portion of their salaries on groceries, autos, clothing, and other personal
and family needs that help drive consumption spending.
LESSON 1&2:6RETURN ON INVESTMENT
ON HIGHER EDUCATION

 4.Higher education investments yield taxpayer

dividends
 The flow of tax shillings for public higher education
moves in two directions. Studies show that for every
shilling of tax money allocated for higher education,
a greater amount of revenue is returned to state and
local governments through taxes on the economic
activities conducted by the higher education system.

LESSON 1&2:7:GROUP ACTIVITY

 Discuss the following

 1: The role of the principal and stakeholders in
financial management in school
 2: Challenges faced by principal and
stakeholders in their role as financial managers
 3: Solutions to the challenges of financial
management faced by principal and
stakeholders
LESSON 1&2:8: KEY AREAS IN FINANCIL
MANAGEMENT IN SCHOOL

 In summary
 Monitoring and evaluation financial records
 Preparation of financial records
 Understanding the sources and uses of finances and mobilizing for
finances
 Planning ,budget preparation and implementation: The principal
consult with all stakeholders on the financial management
 Reporting and disclosure of accounts results
 Ensuring legal policies on procurement and tendering are adhered to.
 Safeguarding school Assets from loss or unauthorized use. Ensure
school finances are administered correctly.
 Financial decision making and action: Analyzing Costs, Benefits and
Risks: Management must weigh the costs and risks before deciding to
significantly add, change, or eliminate activities. This analysis is to be
followed with a formal proposal

LESSON 1&2:8: THE ROLE OF THE EDUCATIONAL
PRINCIPAL AND STAKEHOLDERS IN FINANCIAL
MANAGEMENT
In summary
 Monitoring and evaluation , credit control and auditing of financial records –
Agent in charge-BOM,MOHC, principal, finance manager, school management
committees
 Preparation of financial records-Agent in charge-BOM,MOHC school bursar,
account department/principal, finance team, school management committees
 Understanding the sources and uses of finances and mobilizing for finances-
Agent in-charge-BOM,PTA , Parents, MOHC, principal, school management
committees
 Planning ,budget preparation and implementation: The principal consult with all
stakeholders on the financial management-BOM and Principal, bursar, Budget
Committee, school management committees
 Allocation of money- Budget Committee, school management committees
 Financial Reporting and disclosure of accounts results-Principal
 Ensuring legal policies on procurement and tendering are adhered to. Principal
and BOM, school management committees
 Safeguarding school Assets from loss or unauthorized use. Ensure school finances
are administered correctly. Principal and BOM, school management committees
 Financial decision making and action: Analyzing Costs, Benefits and Risks:
Management must weigh the costs and risks before deciding to significantly add,
change, or eliminate activities. This analysis is to be followed with a formal
proposal - Principal and BOM, school management committees
LESSON 1&2:9: CHALLENGES FACED BY
PRINCIPAL AND STAKEHOLDERS IN THEIR
ROLE AS FINANCIAL MANAGERS
 1.Lack of necessary skills and competencies will results to many heads being
overwhelmed by this enormous task .
 2.principals have hardly any formal managerial and leadership training
and most of them are appointed on the basis of their teaching record other than
their leadership potentials.
 3 Induction and support on financial matters after they were appointed
are usually limited and principals have to adopt a pragmatic approach of
leadership.
 4 Despite their poor managerial and leadership training, principals
often work in poorly equipped public schools with inadequately trained
subordinate staff in the finance department (Bursars/Accounts Clerks).
 5Inflation pressure
 6Delay in disbursement of FSE and FPE
 7Poor schools /parents in marginalized areas unable to raise funds
 8Political/ stakeholders interference
 9Debts from unpaid school fees
 10 Corruption
LESSON 1&2:10: SOLUTIONS TO THE
CHALLENGES FACED BY PRINCIPALS AND
STAKEHOLDERS IN THEIR ROLE AS FINANCIAL
MANAGERS
 The government through the Teachers Service Commission (TSC)
and/or Ministry of Education (MoE) should organize school
leadership training programs on financial management
for head teachers before they are promoted and/or soon
after having been appointed to headship positions.
 The government should work in conjunction with the TSC so
as to put in place proper induction programs on financial
management for the Deputy Head teachers (D/HT) and
Heads of Departments (HoD) soon after their appointment in
readiness for their future appointments to principalship.
 The TSc should ensure that the principals are well equipped
with the necessary financial skills needed to effectively
manage the financial resources entrusted to them in public
secondary schools before appointment.
 The principals should also hire trained subordinate staff in
the finance department (Bursars/Accounts Clerks).
LESSON 1&2:11: HISTORY OF FINANCING
EDUCATION IN KENYA

 1. Ominde Report, 1964) Report of the Kenya

Education Commission :This sifted the financing
of education from the colonial masters to the
government.
 2. (The Gachathi Report 1976): ‘Harambee’ or
community funded schools were started.
 3. (Mackay Report 1981): Report on the
Presidential Working Party on the 2nd University in
Kenya . Harambee or community funded schools and
government funding continued
LESSON 1&2:11: HISTORY OF FINANCING
EDUCATION IN KENYA

 4. (The Kamunge Report, 1988). Next Decade and

Beyond. The policy of cost sharing between
government, parents and communities was
introduced.
 5. (The Koech Report 2000): The Commission of
Enquiry into the Education system of Kenya. The
policy of cost sharing between government,
parents and communities was continued.
 6. Introduction of FPE and FSE by the Narc
(National Rainbow Coalition Regime).
Introduced the Free Primary Education and Free
Secondary Education.
LESSON 1&2:12: SELFTEST QUESTIONS

 As a school stakeholder what are some of the roles you play in financial
management.
 Discuss challenges faced by school stakeholders in their role as financial
management and how can they be resolved.
 Strategic analysis is one of the financial management style utilized by
school principals. Explain how it works citing specific examples from your
institution
 Provide a brief history of financing education in Kenya post independence
 Critique the various secondary financing procedures in Kenya
 Distinguish between the various forms of educational expenditure and
investment in Kenya