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 institutions. This will require development of new assessment and support capacities which are not described in full detail in this report, But they are seen as a necessary component of an efficient and effective educational system. The budget for this program could be built from the existing Quality Improvement program and additional funds for the development of a national-level assessment and quality assurance capacity. Since a variety of assessment and evaluation activities are already underway in various components of the government, some consolidation of these activities into a single responsible agency (perhaps as part of the ONEC), would be desirable. e. The fourth role is in part a new one for the Government. There is already a Quality Improvement program in the budget structure. However, these funds are used in a mix of support of research and innovation, and for enhancements of existing programs and operations. The emphasis of this program should be shifted to emphasize research and innovation. The funds should be allocated on a competitive basis for projects and research activities that have high potential to improve the overall quality of the educational system. f. The fifth role is a recasting of the capital investment portions of the educational budget. The responsibility for infrastructure development and maintenance should be shared by the national and lower levels of the system. The national level responsibility should extend to a mix of major infrastructure projects with national importance (such as networking infrastructure for schools), and support for local and provincial investment. Local and provincial capital projects should be shifted from the current budget appropriations framework and be financed out of borrowing from the private sector. The legal authority and local revenue-raising capacity for borrowing should be enacted for the provincial, and if possible lower levels of administration. Similar authority has already been provided higher education institutions and appears to be working effectively. The national government should provide assistance to the less wealthy local authorities in the form of subsidies for debt service indexed to local wealth. The details and rational for this shift in capital expenditure are presented in section 3.2.2.4 below. 3.2.1 The basic educational support program a. The allocation of government resources to basic education in this new system would be based on concept of shared responsibility for providing financial support for the schools. This responsibility is to be shared among the central government, the provincial government, the local or school government, and the parents. Each would have the responsibility to provide financial support for the schools, under different mechanisms. There would be two mechanisms for the central government. One would be to provide a basic subsidy to all children enrolled in basic education. The second would be through an educational equity subsidy to the lower wealth provinces to supplement the funds available for school support (the mechanism for this subsidy is described on p. 98 below). Provincial support would consist of the allocation of the equity subsidy among schools enrolling disadvantaged students, and provision of additional subsidies from provincial revenues. The local government mechanism would be through locally raised revenue from various taxes and other sources. The level of parent support would 88
Final Report, Volume II/3 Anthony. Cresswell: Educational Finance UNESCO-PROAP TA 2996-THA Education Management and Finance Study July 1999 vary according to local taxation and family income such that contributions to the local schools would be greater for families with higher incomes or ability to pay. Each mechanism can be designed and adjusted to provide resources in an equitable manner and to encourage local effort in providing resources for schools. The finance system described here applies to government schools only. A separate section on private school finance follows. b. The subsidy from the central, and if called for, the provincial level, would be distributed as block amounts, rather than as detailed budgets. This will allow the local school authorities to decide how to allocate their resources for most efficient use. c. For the initial design of the finance system, the operation of the schools is assumed to be decentralized to the provincial, and local education levels 16 . That is, the operational and local financial responsibility for basic education would be devolved to the province, district, and municipality. In some sparsely settled rural areas, school administrative and financial operations may have to be located in some combination of sub-districts or other units, depending on local conditions. When local financial responsibility and decision making is referred to below, it refers to either the municipality or school as the main administrative unit. In general, this is referred to as the Local Education Authority (LEA). For this or any other sort of decentralized finance and administrative system to work effectively, there must be an adequately functioning local authority with jurisdiction over basic education. This discussion of finance presumes the existence of such an authority, with some local revenue raising power. d. The details of how such a unit would be formed are not an immediate financial issue, but are nonetheless an important part of the implementation process. For purposes of this discussion it is assumed that the province is the primary local authority. For implementing a decentralized finance system, the province would be charged with developing a plan for how sub-province units would be formed and operated, following guidelines from the Ministry of Education. Once approved by provincial authorities and the Ministry of Education, the plan would be the basis for creating and operating local education authorities. It would also be possible for the provincial government to maintain jurisdiction and forego sub units for school administration. Since this new system is a major departure from past practice, it would be useful to have a phase-in process of more gradual reorganization. Allowing provinces to develop their own plans for creating subunits can provide such a phase-in period during which provincial and local administrators can work out the approach best suited to their circumstances. e. The issue of how to treat the Bangkok Metropolitan Authority in this scheme is not taken up here. BMA could remain as an autonomous unit for the operation of its own schools, absorbing the existing government schools within its borders, or be subdivided into smaller operating units for a higher degree of decentralization. 16 The current legal definition of local education authorities does not specify the unit or level involved. This issue will be settled in part by further legislation. However a mechanism for designed lower level units is included in these recommendations. 89
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- Volume II/3 - Educational Finance
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Table of Contents A. Executive Summ
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Table of Tables Table 1 Adjustments
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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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