LYCEUM-NORTHWESTERN UNIVERSITY

INSTITUTE OF GRADUATE AND PROFESSIONAL STUDIES

DAGUPAN CITY
2 SEM 2023-2024
ND

School Finance Man-

agement in the
Philippine
March 09. 2024

Reporter: PEARL JOY M. GRADO ABRAHAM C. SORIANO, Ed.D

Professor
 BATAS PAMBANSA BILANG 232
AN ACT PROVIDING FOR THE ESTABLISH-
MENT AND MAINTENANCE OF AN
INTEGRATED SYSTEM OF EDUCATION.

CHAPTER 5
School Finance and Assis-
tance
Section 33. Declaration of Policy - It is hereby de-
clared to be the policy of the State that the national
government shall contribute to the financial support of
educational programs pursuant to goals of education
as declared in the Constitution. Towards this end, the
government shall:
1. Adopt measures to broaden access to education
through financial assistance and other forms of in-
centives to schools, teachers, pupils and students;
and
2. Encourage and stimulate private support to edu-
cation through, inter alia, fiscal and other assis-
tance measures.
A. FUNDING OF REPUBLIC SCHOOLS
Section 34. National Funds - Public school
shall continue to be funded from national
funds: Provided, That local governments
shall be encouraged to assume operation of
local public schools on the basis of national
fund participation and adequate
revenue sources which may be assigned by
the national government for the pur-
pose.
Section 35. Financial Aid Assistance to
Public Secondary Schools - The national
government shall extend financial aid and
assistance to public secondary schools
established and maintained by local gov-
ernments, including barangay high
schools.
Section 36. Share of Local Government -
Provinces, cities and municipalities and
barangays shall appropriate funds in their
annual budgets for the operation and
maintenance of public secondary schools
on the basis of national fund participation.
Section 37. Special Education Fund -
The proceeds of the Special Education Fund
accruing to local governments shall be used ex-
clusively for the purposes enumerated in Section
1 of Republic Act No. 5447, and in accordance
with rules and regulations issued by the Ministry
of Education, Culture and Sports and the
Ministry of the Budget. Said proceeds shall be
considered a local fund and shall be
subject to Presidential Decrees No. 477, Presi-
dential Decree No. 1375 and other applica-
ble local budget laws and regulations.
Sec. 38. Tuition and other School Fees
Secondary and post-secondary schools may
charge tuition and other school fees, in
order to improve facilities or to
accommodate more students.
B. FUNDING OF PRIVATE SCHOOLS
Section 40. Funding of Private Schools -
Private schools may be funded from their
capital investment or equity contribu-
tions, tuition fees and other school
charges,
grants, loans, subsidies, passive
investment income and income from
other sources.
Sec. 41. Government Assistance. — The
government, in recognition of their
complementary role in the educational
system, may provide aid to the
programs of private schools in the form of
grants or scholarships, or loans
from government financial institu-
tions: Provided, That such programs
meet certain defined educational require-
ments and standards and contribute to the
attainment of national development goals.
Sec. 42. Tuition and Other Fees. —
Each private school shall determine its
rate of tuition and other school fees or
charges. The rates and charges adopted
by schools pursuant to this provision shall
be collectible, and their application or use
authorized, subject to rules and
regulations promulgated by the Ministry of
Education, Culture and Sports.
Section 43. Income from Other Sources -
Any private school duly recognized by the
government, may receive any grant and
legacy, donation, gift, bequest or devise from
any individual, institution, corporation,
foundation, trust of philanthropic organiza-
tion, or research institution or orga-
nization as may be authorized by law.
Furthermore, private schools are authorized
to engage in any auxiliary enterprise to
generate income primarily to finance their
educational operations and/or to reduce the
need to increase students' fees.
Section 44. Institutional Funds - The
proceeds from tuition fees and other
school charges, as well as other income of
schools, shall be treated as institutional
funds. Schools may pool their institutional
funds, in whole or in part, under joint
management for the purpose of generat-
ing additional financial resources.
 Procedures followed in Financing Education by
the Municipal, City, Provincial, and National
Governments
• There is no special education tax fixed by law in the
Philippines.
• Municipalities, municipal elementary education by
virtue of Commonwealth Act No. 586 which placed
the responsibility of support for elementary educa-
tion on the National Government.
• Local entities may set aside sums from their gen-
eral fund income if they can afford, but it is op-
tional.
 Procedures followed in Financing Education by
the Municipal, City, Provincial, and National
Governments

• The National Government has assumed the greater

burden of support for:
– Elementary schools in the whole country
– Regional normal schools, vocational schools,
specials schools and partially even pro-
vincial secondary schools.
– Chartered colleges and universities
• The construction and repair and improvement of
school buildings remain the
legal responsibilities of provinces, municipalities and
cities
 Financial Aspects of Educational Planning

Running schools and improving them cannot take

place without the proper resources, and it all
starts with money.

Finance is the lifeblood of any education system,

making it possible to build schools, hire and train
teachers, and equip classrooms with learning
materials and technology.
Financial Management Objective

This FMOM (Financial Management Objective)serves as

a reference material for Officials, Employees, and other
interested public and private stakeholders of the DepEd.
This is a big leap towards the eventual integration and
automation of government financial systems.

DEPARTMENT OF EDUCATION
Financial Management Objective
A. Support for process effectiveness and efficiency

Maintaining a solid and operative Public Financial

Management system requires support for its continued
effectiveness and efficiency. DepEd has embarked on
creating this FMOM as a guide for their officers, employees,
particularly its financial managers and staff, and other inter-
ested parties.

DEPARTMENT OF EDUCATION
Financial Management Objective
B. A tool for good governance

Good governance entails proper fiscal discipline.

There is an increasing realization that PFM, as a measure
for the government's overall fiscal discipline, should ensure
that the allocation of resources to priority needs is optimal.

The FMOM clearly defines the appropriate financial

systems and procedures, ensuring sound control mecha-
nisms are in place.

DEPARTMENT OF EDUCATION
Financial Management Objective
C. An Instrument for Transparency and Accountability

The quality of decisions made for the use of public

funds must adhere to the precepts of Transparency and
Accountability that are interdependent variables in quality
decision-making.

The FMOM is DepEd's leverage in its commitment

for transparency and accountability to ensure the effective
use of public internal and external resources.

DEPARTMENT OF EDUCATION
 Financial Management Objective
DepEd's Organizational structure based on RA
9155(Governance of Basic Education Act of 2001) and re-
vised by EO 366 (Rationalization Plan of 2004)

To operationalize decentralization as provided under RA

9155, the hierarchical structure and functions of DepEd across
all services and covering all levels is distinctly defined. The
structure depicts the line of authority and span of control that
identifies the responsibilities of its personnel. It provides
guidance and clarity on the deployment and utilization of
education resources. As specified in the law, it also "defines the
roles and responsibilities of and provides resources to the field
offices which shall implement educational programs, projects
and services in communities they serve

DEPARTMENT OF EDUCATION
A review of the operations and organizational structure
of government brought about the 'Rationalization Plan'
as directed in E.O. No. 366 s. 2004. To give more
alignment throughout the organization, further review
and revision of DepEd's Rationalization Plan was con-
tinued in CY 2011 until its approval on 15 November
2013 by DBM. DepEd Order No. 52 s. 2015 dated Oc-
tober 30, 2015 prescribed the new organizational
structures of the DepEd Central, Regional, and
Schools Division offices.

DEPARTMENT OF EDUCATION
Central Office

DEPARTMENT OF EDUCATION
Regional Office

DEPARTMENT OF EDUCATION
Division Office

DEPARTMENT OF EDUCATION
Financial Management Structure

Division Office Accounting Unit

DEPARTMENT OF EDUCATION
Financial Management Structure

The Secretary exercises overall supervision and

control over the entire department. Notwithstanding the
primary authority of the Secretary over all financial
transactions, delegation of financial signing authority
down to the lowest unit of the organization is properly
laid down in DepEd Order No. 67, 2016.

DEPARTMENT OF EDUCATION
DepEd reports increased budget utilization, closes gap
of underspending in education

A three-year comparison of DepEd’s budget

utilization shows a massive decline in un-
derspending—from 12% in 2015, to 10% in
2016, and finally, to only 3% in 2017.

Year Allotment Unutilized Al- Underspending

lotment Rate
2015 351,113,569,961 42,977,602,361 12%

2016 412,434,829,282 42,999,708,837 10%

2017 471,982,544,896 15,734,573,153 3%

Source: COA-AOM dated April 24, 2018

Transparency is the state in which all relevant informa-
tion is fully and freely available to the public. It is
the responsibility of all agency heads to make
sure that the general public is well informed espe-
cially when it comes to financial matters.

“ An informed citizenry will help strengthen our

democratic life, but an uninformed citizenry will
break our freedom”
 References:
http://www.gov.ph/the-philippine-constitutions/the-1987-constitution-of-the-re-
public-of-the-philippines/”b. Book VI, Executive Order No. 292 series 1987 enti-
tled National Government Budgeting
http://www.gov.ph/1987/07/25/executive-order-no-292/
https://prezi.com/ocejherccx2m/source-of-funds-in-philippine-education/
https://www.dbm.gov.ph/wp-content/uploads/Executive%20Summary/2016/
Budget%20Cycle.pdf
https://www.dbm.gov.ph/wp-content/uploads/2012/03/PGB-B2.pdf
file:///C:/Users/SummerWinter/Downloads/budgetarysystembudgetprocessoft-
hephilippinegovernment-170515164049.pdf
https://hrepreflibrarian.wordpress.com/2013/03/07/the-budget-process-the-
philippine-congress/
http://www.oecd.org/economy/growth/45529800.pdf
http://www.deped.gov.ph/wp-content/uploads/2018/09/DO_s2018_035-1.pdf
https://www.lawphil.net/statutes/bataspam/bp1982/bp_232_1982.html
https://www.slideshare.net/ruelmanzano/administration-of-school-financing