Educational Finance in Thailand - UNESCO Bangkok

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Final Report, Volume II/3 Anthony. Cresswell: Educational Finance UNESCO-PROAP TA 2996-THA Education Management and Finance Study July 1999 not an effective strategy for longer-term savings, since the costs of “catching up” with deferred maintenance and development of staff and programs can rise exponentially with longer delays. But as a strategy it does indicate both a commitment to protecting basic services and an optimistic expectation of a relatively short time for economic recovery. This may minimize the possibility of serious immediate damage to basic programs and direct services to students. But it misses an opportunity to re-examine the finance arrangements and create reforms responsive both to immediate needs and problems of longer standing. 3.2. Social sector program loan (and ADB conditionalities) The goals for the social sector program loan (SSPL) combine a concern for alleviating the more immediate effects of the financial crisis as well as addressing some of the more fundamental reform goals for the educational system. All of the conditionalities in the SSPL have some budget implications, but they vary considerably in their relevance to this review. Five of the items involve delegation of financial decision-making authority to the local school or campus, and thus will change the budget process in fundamental ways. This is a shared concern of this review and the decentralization component, and so will be discussed in both reports. 4. Educational reform initiatives 4.1 Major educational reform initiatives are underway in Thailand, not all of which are directly results of the financial crisis. As this review began, the Government was drafting a new Education Bill, with important changes in financial, administrative, and pedagogical policies, all of which have significant implications for this review. 1 . The reform initiatives relevant to this analysis are: a. Free Basic Education - the extension of free basic education to include the upper secondary level (grades 10-12). b. Elimination of entrance examinations - control of entrance to the public schools through examinations may no longer be permissible. c. Student Count Driven Allocation System - this distribution system would provide subsidies based on attendance or enrollment and open up possibilities for attendance at both Government and private schools with Government support. d. Decentralization - provisions for increasing budget or administrative autonomy in schools and higher education institutions. e. Teacher Reform – Proposals for local hiring and remuneration, and improved equity in allocation of teachers as key educational resources. f. Efficiency and Equity Initiatives - Initiatives to improve monitoring, performance based management systems, and overall budget autonomy. 1 The provisions of the Education Bill discussed here are taken from the most recent draft available at the time of this initial drafting (Oct. 12, 1998). However, the Bill was not in final form and was under review when this report was prepared. Therefore there may be major differences between the provisions in the current version of the Bill and the material presented here. Appropriate revisions will be made as more recent translations of the Education Bill become available. 2
Final Report, Volume II/3 Anthony. Cresswell: Educational Finance UNESCO-PROAP TA 2996-THA Education Management and Finance Study July 1999 g. The Role of the Private Sector – Provisions to enhance the mobilization of greater local and private support for education. 5. Education in the national budget: structure, process, and allocations Education comprises the largest share of the national budget by a substantial margin (22% in FY 1997), exceeding the social service sector by almost 60 billion Baht. Trends in the size of the education share have been continuously upward. The rate of growth in the education sector has averaged over 17% per year over the past decade, a rate exceeded by the economic development and the public health sectors at about 23%. The reductions in the 1998 budget brought a halt to the rapid growth rates. But the past period of large investment in education does provide a base of development that can be sustained through a period of cut backs through increases in efficiency and better financial management. 5.1 Structure of the education budget a. The budget information is linked to the goals of the government, for education or any other area, through two kinds of budget structure: programs and functions. To provide more detailed information, each sector is divided into sub-sectors and specific programs. The education program structure includes seven sub-sectors, and a total of 27 separate programs (see Appendix 8). There is no systematic relationship, however, between the sub-sectors or program categories and the organization of Government agencies. To complicate the matter even further, the Government has also adopted an alternative category structure to reflect the various goals of activities, the categories used by the United Nations. b. Thus to examine how actual operations and expenditure of funds map onto programs and goals, it is necessary to establish linkages across many layers of information and organizational boundaries. The existing government accounting structure provides the conceptual basis and raw information for potentially answering most of the analysis and management questions referred to above. However, there do not appear to be adequate organizational capacity or arrangements at the national level to employ this information as effectively as possible. As a result there is a plethora of inconsistent formats and budget reports, and considerable difficulty in obtaining financial or other management-related information in a form useful for many kinds of management or policy analyses. 5.2. The education budget process a. Because the education system is rather highly vertically centralized at present, much of the decision making takes place at the national level. But there does exist important financial decision making discretion at the provincial levels, and at local schools and higher education institutions. The participants in the budget cycle at the national level are the ministries and agencies, the main finance policy organizations: Bureau of the Budget, Bank of Thailand (BoT), National Economic and Social Development Board (NESDB), and the cabinet. As a result of the financial crisis, there have been modifications in the budget making process for education (and other ministries). 3
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mission and operations. The term
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The information requirements for fi
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Table 1: Continued Dept. Flow of Re
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Table 1: Continued Dept. Flow of Re
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Description and assessment of compu
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Table 3: Existing computer systems
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Table 3: Continued Current existing
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Description of flows of financial i
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(teachers, facilities, etc) if data
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Table 4: Continued. Content of curr
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Table 5: Assessment of information
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An assessment of information system
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general administration, these syste
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Recommendation for IS Most involved
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6. The nation wide implementation.
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References Office of the permanent
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Office of private education commiss
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Interviews 10 September 1998, 9:00-
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Appendix 2 Projections of Costs of
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Projected Cost Increases for Expand
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Identification of Schools for Sampl
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8. Please place an X in a box below
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enrollment as a whole growing at an
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Figure 1: Thailand’s Development
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Table 5: Crude transition rates of
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and level of education, 1993 and 19
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2.31 Questionable quality of educat
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income inequality between agricultu
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4.1.4. The percentages calculated f
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Table 11: Public and Private sector
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4.3.8. As would be expected, unempl
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5.7 The dilemma is to balance the s
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Table 14: Unemployment and Underemp
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there any activities that would be
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References Chalongphob Sussangkarn
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Appendix 6 BMA Voucher Policy A. Lo
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Appendix 7 Finance Allocation Metho
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Appendix 8 Program Structure of the
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Not all possible flows are show, si
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Appendix 11 Results of Regression A
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Educational Finance in Thailand - UNESCO Bangkok

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