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 2.1.4.1. Basic elements of the budget process a. Budget decision making takes place in the context of a budget cycle. That is, assembling a budget for the various levels of education is a recurring process, requiring the same steps to be repeated at regular intervals. 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. Prior to 1998, budget cycles for the national budget have followed a cycle, roughly as shown in Figure 8 below. As a result of the financial crisis, however, there have been modifications in the budget making process for education (and other ministries). The current process departs from this pas patter in important ways, and the Bureau of the Budget is introducing procedures to make the decision-making process more collaborative with the ministries. Figure 8 - Typical national budget cycle Steps in the Budget Cycle Oct. Nov Dec. Jan Feb Mar Apr May Jun Jul Aug Budget Bur. Informs Ministries of budget calendar x Ministries prepare policies for budget prep. xxxxxx Ministries prepare details of proposals xxxxxxxxxx Min. of Fin., Budget Bur. NESDB, BoT set ceilings xxxxxx Ministries submit Budget Proposals x Budget Bur. reviews proposal details xxxxxxxxxxxx Cabinet approves budget Ceilings x Cabinet approves budget details xx Ministries & Budget Bur. adjust proposals xx Budget Bur. approves final proposals xx Cabinet approves final proposals x Budget Bur. published draft Budget Act xxx Cabinet appoves draft and forwards to Parliament x Parlaimant reviews & approves Budget Act. xxxxxxx b. Under this revised process, the basic features of the process remain largely the same, but a number of significant details are new. At the beginning of the cycle the Bureau of the Budget (BOB) receives the basic framework (targets and ceilings) and any special expenditure controls for the new budget from the Prime Minister and other top Government officials. The BOB then works with Ministry to calculate what is referred to as a "fixed cost budget," which represents the base of contractual obligations and other commitments over which there is little discretionary control. It also includes what are considered basic operations, and the funds sufficient to maintain these operations. Special projects can be kept in the "fixed cost" category for 3-4 years. c. Fixed cost budget is used as base from which to set an overall budget ceiling for the coming fiscal year. The ceilings are then discussed with the Ministry at two levels: the Director of BOB working with Minister and Planning Office head, with 44
Final Report, Volume II/3 Anthony. Cresswell: Educational Finance UNESCO-PROAP TA 2996-THA Education Management and Finance Study July 1999 lower level staffs of the BOB and Ministry working in parallel on lower level detail. This interactive process works from the "fixed cost" base through requests for additional funds and programs, up to the eventual budget proposal. BOB is also attempting to initiate a program of working more closely with Ministries to hold hearings to set budget ceilings in a more open process. Previously, the ceiling were worked up within the BOB and then given to the Ministries. d. Allocations to the Ministry level are the main concern of the decision making process at this level. The allocation to the Ministry includes guidelines and standards for allocations below the Ministry level, but these standards are not intended to control all the lower level allocations. The guidelines and standards are set in a way that recognizes a certain amount of operational/political adjustment is necessary in allocations within Ministry programs and units. If 80% or more of the allocations are within guidelines, this is considered sufficient. Ministries therefore will have approximately 20% leeway to allocate resources within their domain, outside constraints and guidelines set by the BOB. e. Additional modifications to the process are planned for 1998. Beginning in Nov-Dec., the BOB officials will meet with ministries for a review of the budget situation. These meetings will include Ministers, Permanent Secretaries and the BOB Deputy Dir. Members of the BOB staff will work with Policy and Planning Bureau staff in the Ministries, and the Office of Under Secretary. Separate meetings are planned for the Ministries of Education, University Affairs, and Interior. National government subsidies for municipal schools (primary and lower secondary) are allocated through the Ministry of Interior, including the Bangkok Municipal Authority, though the bulk of the education budget is allocated through the Ministry of Education. The BOB will introduces any new policy constraints and targets at this early stage in the process. Once the fixed cost budget is set, the parties can negotiate new programs and adjustment to be added/removed. f. The allocations within the ministries to departments and provinces, within provinces, and within schools follow a similar general pattern. Much of the budget decision making can be described as a mix of top-down and bottom-up processes. Top-down processes are those in which decisions at higher levels determine outcomes at lower levels. One of the most common top-down processes is one in which a limit or budget ceiling is set for some categories of expenditure, thereby limiting the amounts available for those categories at subordinate levels. Similarly higher levels of government set formula or allocation rules which determine amounts to various categories. Bottom-up processes are those in which the lower level actions influence or determine decisions and actions above, for example when budget requests from the provincial levels influence the amounts allocated at the national level. Both processes were found at the school, provincial, and national levels, as well as within particular agencies. At the school level, school heads construct their budgets based on a mixture of limits imposed by allocations and revenue limits from above, combined with shifting and mobilizing other funds where possible to respond to the requests of staff and community as well as the administrator’s goals. The same basic process could be said to characterize budget decision making as described at the provincial and school levels as well. The resulting budget at each level is the product of adjustment to constraints and 45
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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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