Concept, Practices, and Issues in Fiscal Management in The Education Sector

Concept, Practices, and Issues in Fiscal Management in the Education Sector
A. Meaning, Scope, and Importance of Fiscal Management in General

Meaning:
 Fiscal management is the process of planning, directing and controlling financial
resources. The term is associated with management responsibilities for
expenditures working together with an accounting team that is under the Chief
Financial Officer of an organization.
 Fiscal management is the process of keeping an organization running efficiently
within its allotted budget. Though the word "fiscal" can be used interchangeably
with the word financial, in most cases, fiscal management refers to money
management within a government entity.
 Fiscal management deals with the question how the Government raises its
resources to meet its ever-rising expenditure.
 Fiscal management is the process of keeping an organization running efficiently
within its allotted budget.
 Fiscal management includes those operations designed to make funds available
to officials and to ensure their lawful and efficient use?
Scope:
The scope of fiscal management is not just to study the composition of public
revenue and public expenditure. It covers a full discussion of the influence of
government fiscal operations on the level of overall activity, employment, prices and
growth process of the economic system as a whole.
According to Musgrave, the scope of fiscal management embraces the following

three functions of the government’s budgetary policy confined to the fiscal
department:
(i) The Allocation Branch,
(ii) The Distribution Branch, and

(iii) The Stabilization Branch.
These refer to three objectives of budget policy, i. e., the use of fiscal instruments:
(i) To secure adjustments in the allocation of resources,
(ii) To secure adjustments in the distribution of income and wealth, and
(iii) To secure economic stabilisation.
Thus, the function of the allocation branch of the fiscal department is to determine
what adjustments in allocation are needed, who shall bear the cost, what revenue and
expenditure policies to be formulated to fulfill the desired objectives.
The function of the distribution branch is to determine what steps are needed to
bring about the desired or equitable state of distribution in the economy and the
stabilization branch shall confine itself to the decisions as to what should be done to
secure price stability and to maintain full employment level.
Importance:
The importance of fiscal management is vital to an organization. It is a pathway to

attain goals and objectives. The financial manager measures organizational efficiency
through proper allocation, acquisition, and management. The following noticeable
importance is found from fiscal management
 Exploring ways and means to generate resources to meet the ever-increasing

public expenditure.
 Provides guidance in financial planning.
 Assist in acquiring funds from different sources.
 Improve the way the department operates by properly planning, recording, and
performing procedures that relate to the budget..
 Became an instrument of 'modern governments for making "popular
sovereignty" a social reality.
 Enabled public administrators to play an active and dynamic role in the
formulation and implementation of development schemes and projects.
 Provide information through financial reporting.
B. Scope, Characteristics, and Importance of Fiscal Management in Education Sector
All schools are expected to have the finance policy which must cover certain aspects.
According to Van Rooyen the finance policy must consist of the following aspects: the
school’s vision and mission statements including organization structure for financial
management, issuing of receipts, petty cash, deposits, requisitioning for payment, approval
and authorization of expenditure, payment for an acquisition, record filing,
accountability/providing feedback and auditing.
School finance- why so important? It is because a high quality education is vitally
important for productive citizenship, and is a guaranteed right for all children in most state
constitutions and requires an adequate level of resources, levels not present in many places
—particularly low property wealth areas. Given limited levels of resources and the mission
to provide all children with high quality learning opportunities, making effective and
efficient use of resources is crucial to success.
Fiscal management practices should be implemented in ways that promote and
sustain the integrity of the school and the community, with schooling institutions earning
the trust of citizens, and citizens practicing civic responsibility. Crucial here is the
avoidance of conflicts of interest, and of the appearance of conflicts of interest.
A school fiscal management system should use available resources in ways that most
directly and effectively meet the educational needs of students. Resource allocations and
expenditures should be justifiable in terms of their expected impact on teaching and
learning.
Fiscal management practices should support the provision of high quality learning
environments, opportunities, and experiences that recognize the needs of individual
students and work toward the attainment of high levels of achievement for all students.
Fiscal management practices should ensure that all schools and programs are
provided with sufficient resources to provide a quality education to all students. Policies
and practices should also ensure the fair distribution of resources to students taking into
account the individual needs of students and the diverse and unique circumstances of
schools and school districts.
Parents and community members have a major stake in how schools and districts use
public resources to educate their students and support their communities. Accordingly,
fiscal management systems should offer and encourage opportunities for significant
involvement in the process of creating, implementing, and monitoring budgets.
School-based financial management activities include but are not limited to the
following:
 fiscal planning, budgeting
 cashiering and disbursement
 accounting and recording
 asset and liability management, and
 physical and financial reporting.
C. The Roles of School Head

School leaders take a huge amount of responsibilities. One of the most important
duties among those is financial management.
1. Fiscal Manager
The head of the school is the highest administrator. He is in charge of the
overall operation of the school. It is his responsibility to prepare the school
budget, a record of projected revenue and expenditure. A principal can delegate
the financial functions down but still has to know what is happening with the
finances.
2. Revenue Producer
It is the school’s head responsibility to account for the school's revenue
and how it is spent. Most schools use manages their finances using accounting
systems that are able to generate and compare required reports such as cash flow
statement quickly and correctly. Fundraising is a method that communities use to
support the growth of their schools, and the principal is often responsible for his
school’s fundraising activities. It is also his duty is to ensure that the school uses
the funds for the right purpose. Before conducting a fundraising effort, a principal
has to discuss the purpose with staff and students’ parents. When a school decides
to conduct a fundraising, the principal should consider the guidelines of public
education, if applicable, and comply with them.
3. Manager of Waste
Monthly and annual reporting is a key part of keeping your financial
systems secure and successful. It is the responsibility of the school head to
account whether there is an excess on their budget and to allocate it in accordance
to the school development plan.
4. Agent of Resource Productivity
Fundraising is a method that communities use to support the growth of
their schools, and the principal is often responsible for his school’s fundraising
activities. It is also his duty is to ensure that the school uses the funds for the right
purpose. Before conducting a fundraising effort, a principal has to discuss the
purpose with staff and students’ parents. When a school decides to conduct a
fundraising, the principal should consider the guidelines of public education, if
applicable, and comply with them.
5. Agent of Change
Principals are the primary agents of change in schools, and their
effectiveness as leaders plays a key role in improving student achievement. As the
leader of a school, the principal plays a vital role in setting expectations for
teachers and students.
"When you think about it, the principal is the pedagogical gatekeeper at
the school level. If we can fully engage the principal in understanding and really
owning the change needed to promote a learner-centered experience, then there is
a significantly greater probability that change will become infused into the school
culture." -Matt Doyle
The role of the principal in the era of school choice is to build trust and
engagement proactively with both internal and external stakeholder communities.
https://southernecho.org/s/wp-content/uploads/2009/09/jerry-johnson-best-fiscal-mgmnt-
practices-slides-2004.pdf
http://blogs.edweek.org/edweek/next_gen_learning/2018/01/the_school_principal_as_change_agent.h
tml
http://www.educationalleaders.govt.nz/Managing-your-school/Guides-for-managing-your-
school/Understanding-school-finances

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Concept, Practices, and Issues in Fiscal Management in the Education Sector

A. Meaning, Scope, and Importance of Fiscal Management in General

According to Musgrave, the scope of fiscal management embraces the following

(i) The Allocation Branch,

(ii) The Distribution Branch, and

(i) To secure adjustments in the allocation of resources,

(ii) To secure adjustments in the distribution of income and wealth, and

(iii) To secure economic stabilisation.

The importance of fiscal management is vital to an organization. It is a pathway to

 Exploring ways and means to generate resources to meet the ever-increasing

B. Scope, Characteristics, and Importance of Fiscal Management in Education Sector

C. The Roles of School Head

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