Education Finance Essay

1. 1Background to the Study The importance of grooming peculiarly in the 21st century to the lend outgrowth of an individual is more and more being over emphasized. This is due to the occurrence that an uneducated individual has lilliputian or nonhing to offer the nightspot in boundarys of acquired wisdom. It is indeed not surprising that most p atomic number 18nts argon now evolution sagacious interest about the genteelness of their minorren, a situation that leads them to want to jockey more as well as partake in what goes on within the educate system.In all countries of the world, go to sleepledge is recognized as the cornerstone of any structure for sustainable development of any nation. It is a fulcrum around which the quick development of stinting, political, sociological and human country revolves. In Nigeria, the demand for popular cultivation is so high be suffice t apieceing is not moreover an investment in human crown, but also pre-requisite as well as cor link for economic development (Adeyemo 2000). The belief that fosterage is an engine of growth rests on the quantity and quality of bringing upal activity in any country.In fact, the National Policy on cultivation (19816) states that gentility is the greatest investment that the nation sight solve for the quick development of its economic, political, sociological and human preferences. It further adds that grooming shall act to be super rated in the issue development plans because reading is the most important puppet of change and that any fundamental change in the intellectual and mixer outlook of any society has to be preceded by groomingal revolution.precept, from the pragmatics emplacement could be seen as the organization of experience into a holistic complaisant intelligence for dealing with future experiences. The idealists see genteelness as the stopping point of the desirable state of mind. Sociologically, it is seen as the dissemination of cultur e to the young generation. In former(a)wise words, facts of life is the manufacture by which the individual acquires the umpteen physiologic and societal capabilities demanded of him by the gathering into which he is born and within which he must function,(Ohikhokhai, 2002 154).A Similar definition by Fafanwa states It is the amass of all the processes by which a child or adult develops the abilities, attitudes and other molds of behaviour which ar of positive encourage to the society in which he lives, that is to say it is a process of disseminating knowledge either to ensure sociable control or to guarantee rational placeion of the society or both. (Fafanwa, 1972 8) T present is no gain utter the fact that Nigerias genteelnessal system at every level (Primary, Secondary and tertiary) has been experiencing a down turn in the last few eld.One of such(prenominal) reasons could be attributed to the under support of the statemental activityal sector. The triumph of a child in education dep arrests more often than not on what the child is taught in simple coach. In other words, pristine direct education is a foundation upon which all other levels of education ar built. Many researches pee revealed that good teaching particularly at the ancient level, lay a solid foundation for high studies and atomic number 50 make a lot of difference in scholarly persons learning and force to cope with other life challenges (Adepoju 2001).In parliamentary law words, since the rest of the education system is built upon autochthonic education, the chief(a) level is the key to the success or failure of the whole system. Apart from home as the first of all agent of socialization, basal develop is the first place that introduces prescribed education or literacy to the children. The National Policy on education 2004 checks Primary teaching method as the education given in psychiatric hospitals for children aged 6 to 11 plus for a duration of six years.This definition is also back up by the International Standard Classification of Education (ISCED) which states that, Primary Education (ISCED level 1) also known as elementary education, refer to the education programmes that are normally designed on a social unit or project introduction to give disciples a unspoilt basic education in reading, opus and mathematics, along with an elementary understanding of other antecedents such as history, geography, natural science, social science, art and music The goals of unproblematic education as stated in the National Policy on Education NPE, Section 3(16) is to i.Inculcate permanent literacy and numeracy, and the ability to communicate resultantively ii. mark a sound basis for scientific and reflective thinking iii. keep back citizenship education as a basis for effective participation in and contribution to the life of the society iv. Mound the character and develop sound attitude and morals in the child v. Develop i n the child the ability to adapt to his/her changing environment vi.Give the child opportunities for evolution manipulative skills that will enable him to function effectively in the society within the limits of his/her capacity vii. Provide the child with basic tools for further educational advancement including preparation for trades and crafts of the locality Inspite of establishments commitment to the render of basic education for all, dwindling pecuniary resources coupled with sectoral competition for resources whitethorn hinder its progress.According to Hallak (1990), successive waves of economic and educational crises affected the efforts of government and social demand for education so that education both the prevalent tensions in the development of education and the imbalances that had emerged in the previous two decades were aggravated. Neverthe little, inspite of the co acquittanceal financial commitment and the high priority given to education, experts and scholar s muted doubts the adequateness of the fund in dateing with the growing students register.In view of the foregoing, the government alone may not be able to meet the social demand for quality basic education. Therefore, clandestine sector participation in the ownership and control of domesticates is inevitable in that locationby complementing the efforts of government. The decade from 1990 witnessed an upsurge in the number of cloistered institutions of learning in Africa in general and Nigeria in particular. Before this decade, most Afri bay window Countries committed much of their wasting diseases on exoteric education, which served as an instrument for building the nation, following(a) independence.Today, there is pressure on Afri after part governments to shift from subsidization to privatization of their educational systems. Friedmans (1955) theories on the privatization of education were and continue to be supported by researches who contended that normal educationa l institutions overleap incentives to improve educational systems. Among others, Chubb and Moe (1990) and Coleman (1997) argued that allowing civilise choice, in the first place through the promotion of confidential schoolings, would improve educational markets. Many important educational purposes are related to termss of schooling.Information on approachs is necessary to monitor resource allocation over time, to diagnose the function status of the education system, and to guess the efficiency in resource utilization (Tsang 2002). Specifically, represent of education refers to the resources utilise in the production of education work. They hold not unaccompanied globe white plague on education, but also head-to-head resources invested in education (Tsang & Kidchanapanish, 1992) greets in this think over are utilize to signify hugger-mugger make up of education incurred by the individual disciples and their families, and institutional personify of education inc urred by the institution of learning.Tsang (1995), refers to clandestine terms of education as those resources offerd by place, individuals, and the community to support the production of educational services, which could be in form of Direct insular be Tuition Fees which is only included in this assume, semi individual(a) Contribution donations in the form of interchange/gifts and in compute personifys economic nourish of forgone opportunities of school Babalola 1995 defines institutional greets of education as represents borne by the institution of learning. They consist of repeated and nifty speak to.The perennial exist are mainly what we are bear on with in this canvass. An ideal make uping system congener to the enter-output will enhance quality ending and planning programme for schools. The precise knowledge of costing pattern will aid decision makers in the schools on the best alternative that may be considered in the guardianship of the schools syst em. An ideal costing system will also enable parents, families etc to particularise the cost effectiveness of enroling their children into private elementary schools. 1. 2Statement of the Problem.The problem of rising cost information fees in educating pupils in private primary schools in Akinyele Local politics which has become an issue of concern to parents, families, wards and stakeholders alike. There is the exact for private primary school administrators to pay serious attention to the causes and consequences of these rising cost which could around clock be as a result of high perennial be, with a view to controlling them while keeping pace with quality and productiveness in the private primary school system. In view of the to a higher(prenominal) place therefore, this landing field endeavours to provide answers to the following research questions 1.3Research Questions 1. What is the total enrolment of each of the quintette 5 selected private primary schools in Akiny ele Local Government realm from 2006-2010? 2. How much is the amount incurred by the schools in the five (5) years closure on recurrent cost? 3. How much is the amount borne by families, parents or wards with five (5) years consequence on station private cost per pupil tuition fees? 4. What is the correlation in the midst of direct private cost per pupil tuition fees and recurrent cost per pupil? 5. What are the sources of revenue enhancement enhancement available to the schools in sourcing for coin for the smooth foot race of the school? 1.4Purpose of the Study The main cultivate of this understand is to attempt to provide an digest of the total direct private cost tuition fees, total recurrent cost and sources of finance of private primary school system in Nigeria over the period of 5 years (2006-2010 academic years) with private primary schools in Akinyele Local Government as the case study. The study also attempt to highlight on the following a. To determine the tot al enrolment of the five (5) selected private primary schools in Akinyele Local Government Area from 2006-2010 b. To determine the recurrent cost per pupil incurred by the school for five (5) years. c.To determine the direct private cost tuition fees per pupil borne by pupils, parents families etc for five (5) years d. To determine the Correlation between direct private cost per pupil and recurrent cost per pupil incurred will be determined for the five years (2006-2010) e. To determine sources of revenue available to the schools from 2006-2010 1. 5Significance of the Study This study will be significant in the following ways Firstly, it would serve as a source of statistical data information to primary school administrators and stakeholders alike for effective and effectual planning and cost control in private primary schools.Secondly, the study will provide the basic x-ray of cost pattern in Nigerian private primary schools from which future judgement with respect to plans, polic ies and programmes can be made. To this end, primary school administrators will be able to slip forth against any future deviation from expected goals Thirdly, the study could also provide private primary school administrators knowledge on the best decision to make with regards to the issues of pupils enrolment, staff employment, maintenance and so on. Also, the study will bring on the amount of cash expended by the five (5) schools within the five (5) years period in recurrent cost.Furthermore, the study will disclose the direct private cost borne by pupils, families etc in the schools within the five years period. Lastly, the study will find the relationship between private direct cost per pupil and recurrent cost per pupil in the five (5) selected schools 1. 6Scope and Limitation of the Study This study focuses on the historical synopsis of recurrent costs, private direct costs tuition fees and revenue sources using private primary schools in Akinyele Local Government as a c ase study.The study is, however limited to 5 out of the 24 registered private primary schools in Akinyele Local Government Area of Oyo state as at 2006-2010. Owning to the fact that the recurrent education use increasingly accounts for greater function of the total capital and recurrent uses in Africa, this study concerns only the recurrent expenditure incurred by the schools, direct private costs borne by the pupils, families etc and sources of finance.This is in line with Coombs and Hallak (198755) and Mingat and Tan (198826) who rightly discovered that most analysis of unit costs focus on recurrent spend because capital costs typically are only small part (in Africa, less than 20 percent) of the cost of education. According to Mingat and Tan, unless the objective is to access the cost of building redundant school places (which is not the case in this study), the analysis of unit costs is usually directed at recurrent spending.Federal government primary schools and public pr imary schools are not included in this study because the study deals with only selected private primary schools 1. 7Operational Definition of Terms In put together to enhance better understanding of this research project, certain usable terms that were used are clearly defined to reflect the peculiar(prenominal) situation with which they are used. make up This refers to the actual or notional expenditure incurred on or attributes to, a specific thing or activity.It refers to what is given up in tack to educate an individual or group of individual. Although, total cost in education is a function of capital and recurrent cost, the cost referred to in this research work is specifically recurrent expenditure which constitutes about 80% of the total expenditure in the primary schools. Cost is used interchangeably with expenditure in this research institutional Cost This refers to what the institutions of learning (primary schools) have to give up in order to provide education or tra in the pupils.They are both capital and recurrent costs. However, institutional cost in this project excludes capital costs. surreptitious Cost These are borne by the individual pupils and their families. They relate to both direct and confirming costs of education which are borne through tuition fees, earning forgone, supererogatory living costs, books uniform and transport. However, private cost in this project includes only tuition fees direct private cost Recurrent Cost These are those costs for goods and services consumed in the line of descent of a budget year, and which must be on a regular basis replaced.Here, it include such write downs incurred on items such as staff salaries and allowances, maintenance, payments of electrical energy bills, procures of materials needs etc Recurrent cost is also known as the running cost of education Unit Cost This is the average cost incurred in providing academic service to the pupils. It is calculated by dividing the total expendit ure per session by the number of students enrolled. In its operational term, the unit cost here refers to the actual amount or expenditure incurred per pupil during the course of the teaching-learning process in the primary schools.Its determination here does not however include expenditure on Capital items. Finance Finance according to the place setting of this study is the act of raising or sourcing for funds for the running of the school. school day A school according to the context of this study refers to primary schools where formal teaching process takes place. CHAPTER TWO REVIEW OF RELATED LITERATURE In this chapter the literature review is made under the following headings 1. Concept of Cost 2. Cost of Education 3. Private Cost of Education 4. Direct Private Cost of Education Tuition Fees 5.Institutional Cost of Education 6. Recurrent Cost 7. Unit Cost of Education 8. Cost Determinants 9. Cost Control Strategies 10. Sources of revenue for Education 1. CONCEPT OF COST The definition of cost is very open, as it means a lot to different people. People tend to define or use it to say their purpose. To some cost is the price salaried for a commodity or for the consumption of goods and services. In economic term, the thought of cost if perceived as something which is given up in order to have another. In more a precise way, we can fiscal say that cost is alternative forgone.It may be the monetary expense on education. In its broad usage cost implies the resources money, materials and men used up for the operation of a business enterprise Lipsey, 1976 Aghenta, 1993 Babalola 1991 also gave credence to this presumption that cost is a measure of what is given up in order to elevate or consume a commodity. Adedeji 2002, see cost as a measure of what is given up in order to produce or consume a commodity, Agunbiade 1997 citing Pandit 1979 stated that expenditure is the total financial resources allocated to a specific economic activity for a given period usually a year.Unit cost analysis helps the understanding of the upcountry efficiency of the use of resources at the institutional level. Cost effectiveness analysis relates cost of inputs used up in the teaching-learning process with the output. This helps decision makers to make rational choices between various alternative courses of action. Unit cost helps planners to know the cost of keeping a student at school, operating a school etc. The unit cost required by a student in a year is referred to as input and educational planners have of recent named it the student year.Unit cost has been the basis for funding education in Nigeria, for example, when the Federal Government launched its Free Education Programme in 1977, it used unit cost in allocating funds to the scheme, that is forty naira per pupil (Daily Times of Nigeria, 4th January 1980, Editorial Comment). Longe (1988) maintained cost information is of import in decision making as it facilitates efforts to make the best b ut the least costly choice among alternatives.In the typesetters case of embarking on any programme without considering the cost such programme end up being a white elephant project which will only lead to wastage of heard earned resources. 2. COST OF EDUCATION Many scholars have tried to define cost of education over the ages. Akanbgou 1981 defines cost of education as being all the real resources used up in the production of human assets. He agreed with Pandit and Bourgeis who define cost as the real resources used up in the form of educated manpower.Obasi 1983 ascertained cost of education as the sum total of all the resources used up in the production of human capital asset in the form of educated manpower. Longe 1988 defines cost of education as the value of all the resources in terms of money and sacrifice used to action educational project. That is, to produce and educated person. This definition could imply not concerned with monetary outlay and expenses on education but a lso the income forgone on opportunity cost which represents the real charges resulting from the operation of the educational system.Babalola 1995 posited that education cost is a measure of what a student, an institution of learning or the public has to give up in order to educate an individual. period Adedeji 1994 quoted by Oladejo 2002 opines that educational cost represent the value of all the resources in term of money and sacrifice used to accomplish a given educational or project. This definition implies that the expenditure in an educational institution is the monetary expenses incurred by the institution to produce an educated person.In the view of Babalola 2000, he sees cost of education as the total resources devoted to education, this includes direct money outlays tuition fees, expenditures on additional living items, books, uniform and transport. They also include indirect financial burdens in form of opportunity cost measured as the loss of income incurred either by th e individual or by the society as a result of schooling. He stressed further by saying cost of education include non monetary cost which include such things as the burden of study and for some students, pain of being away from home.The loss of opportunity to earn wages or salaries in the ride market is the real cost of the individual student of his or her decision to enroll in a full-time or part-time course of education. The cost of education to a country consists of total public education expenditure, total direct private cost, total indirect private cost measured in terms of forgone fee, improperly betokend educational cost on government education expenditures. Expenditure on education overtime has been observed to be on the increase across different levels of education in most countries of the world and in Nigeria in particular.It should be noted however, that the cost of emphasizes is the recurrent cost which constitute a greater office dower of total expenditure in educa tion and direct private cost tuition fees According to Ojo 1986 quoted by Oladejo 2001, education has enjoyed a higher share of national budget over the years due to the increasing level of magnification brought about by a continue increase in education demand. Agunbiade 1997, observed that there was a staggering figure for educational expenditure during the third national development plan.This expenditure has continued to be on the increase over the years in most different institutions which of cause differ from one institution to the other. However, as an institutions enrolment increases, the tendency is that both the expenditure and revenue should increase equally. But, according to Agunbiade 1997, revenue do not correspond with the increase in enrolment. Psacharopulars and Woodhall 1997 posited that attitude towards educational expenditure began to change as predicted by Jallade 1973 partly due to the Brobdingnagian increases that has occurred during the period.According to th em there is increasing evidence of financial constraints in many developing countries as proportion of expenditure has began to decline. However, Zymelman 1982 cited Psacharopoulos and Woodhall 1997 explained that expenditure on education at all level in African nations including Nigeria has remained fairly constraint. Afolabi 2001 in his article asserted that the cost of education in recent times in Nigeria has become astronomical which according to him is attributed to increase in teachers salaries and allowances to meet with the hyper-inflation condition in the country.This statement is posited by Shehan 197316 where he explained that real expenditure per pupil has risen in many countries of the world. Real expenditure in this context means money expenditure deflated by stamp down price indices for the various inputs teachers, books, equipment etc which are used in the educational system. The higher level of education demand more expensive buildings and equipment and more wildn ess on high-cost research activities. Enrolment increases has been greatest at these high cost levels.The increase in enrolment at the high-cost end of the system continue to increase demand for more resources that is, financial resources which represents the expenditure to be incurred in the production process Institutions overtimes, have witnessed continue increase in the expenditure pattern. This continues expenditure increase as argued by Shehan 1983 have a weakening effect on institutions considering the overall level of finance available to them, hence the need for a comprehensive system of cost control private primary school system. 3. nonpublic COST OF EDUCATION.Concepts of cost from the viewpoint of economic analysis the proper definition of cost (real cost or economic cost) of an input to education is its opportunity cost, which is measured by the value of the input in its best alternative use. Applying this concept to the cost of an education system, the real cost of edu cation includes not only public expenditure on education but also private costs (Bowman, 1966). Private resources to education can be classified into three categories direct private costs of education, household contributions to school, and indirect private costs of education (Tsang and Kidchanapanish, 1992).Direct private costs of education are expenditures by parents on their childrens schooling, such as expenditures on school fees (tuition and other school fees), textbooks and supplementary study guides, writing supplies, uniform, school bag and transportation. Expenditures on school fees are part of the revenue for a school to be used to finance institutional costs they may be used to pay teachers in a private school or used to support non-personnel costs in a government school.Non-fee expenditures are additional financial resources to schooling not captured in institutional costs. For primary school pupils in some countries there are also embarkment costs. Household contributio ns to school are contributions, in cash or kind from families to school and/or school personnel (e. g. teachers). Contributions to school can be used in a variety of ways, for example, to purchase reading materials for a library, to purchase sports equipment, or to construct a school building. They are captured in the institutional costs of a school.In some countries, household contributions to teachers are the main source of income for rural primary teachers (Paulsen, 1981 military personnel Bank, 1991). Household contributions can be important in the financing of education in that they augment public resources to education and they can be managed by school personnel. Indirect private costs of education refer to the economic value of the opportunities foregone as a result of schooling. The opportunities foregone can be a childs labor in family production, in looking after younger siblings, and/or in performing other household chores.Such costs are usually difficult to estimate and assumptions have to be made about the economic value of a childs labour, nevertheless, they are still important to consider in that parents sometimes withhold their child from school because of the need for the childs labor, especially for parents in the rural areas (Psacharopoulos and Woodhall, 1985). In a recent study of India, Tilak (1985, p. 22) estimated that the indirect private cost in terms of foregone earnings accounted for about 40% of the real cost to education, based on 1977-78 data.For purposes of astir(p) education quality, there are at least four reasons for considering private resources to education. First, direct private costs and household contributions are direct private resources that augment public resources to education. Some of these direct private resources (such as school fees and household contributions) can be used by the school as intentions to raise quality. Second, how parents allocate their resources to schooling is also relevant. Parents may be adv ance to spend more on items (such as textbooks and other learning materials) today related to student learning.Third, differences in private resources to education among social groups may exacerbate educational inequalities among social groups. A good understanding of the variations in private resources to education will inform educational policies designed to palliate educational inequalities. And fourth, the omission of private resources can significantly underestimate the true costs of education and may lead to erroneous estimates of the costs of quality-improvement interventions.To date, there are very few studies of private resources to education in developing countries, and information on private resources to education in these countries is either abstracted or fragmentary (Tsang, 1988). However, the available evidence indicates that private resources to education are very substantial (Tilak, 1985 Tan, 1985 Paulsen, 1981) they also vary significantly among countries and type of school (Wolff, 1985 Schiefelbein, 1986). These preliminary findings indicate the potential of private resources to education as a policy option for educational decision makers for influencing educational quality.4. DIRECT PRIVATE COST OF EDUCATION TUITION FEES According to Tsang (1995), Direct private costs are defined as household educational expenditure related to a childs schooling, including tuition expenditure and non-tuition expenditure (such as spending on other school fees, textbooks and supplementary study guides, uniforms, writing supplies, school bag, transportation, and boarding). Thus, direct private costs are divided into two components, non-tuition costs and tuition costs.Non-tuition costs are put into two groups instruction-related costs (such as parental expenditures on textbooks, workbooks, and writing supplies) and non-instruction costs (such as parental expenditures on uniform, school bag, transportation, shoes and sportswear, and school fees on sport activit ies and other school events). However, private direct cost in this project includes only tuition fees. Wolff provided measures of the direct private costs for students in secondary schools in 9 eastern African countries (1985, pp.51-55). The ratio of total direct private cost to total cost per student varies according to the type of secondary schools and country. It ranged from 0% for day schools in Somalia for 1981-82 to 81% for assisted Harambee schools in Kenya for 1981-82. The ratio for boarding schools was consistently higher than that for day schools. On the average, direct private costs accounted for one third of the total cost per pupil. High direct private costs were also reported in Tans study of secondary schools in Tanzania (1985b).She found that even though state school students paid no fees, their school-related expenditure added up to US$139 per student in 1981. The direct private costs for students in private schools were even higher (US $439). Bray (1996) surveys e ducational cost studies in nine East Asiatic countries. He finds that direct private costs as a percentage of total costs in public primary schools range from less than 10% in Lao PDR to over 70% in Cambodia. close to hover around 20%. Carnoy and Tores (1994) finds that parents assume about 30% of the total cost of public primary education in Costa Rica.Carnoy and McEwan (1997) melt down out a similar study in Honduras. Restricting their attention to uniforms, school supplies, and matriculation fees, they find that direct costs account for 43. 5% of total costs under more conservative assumptions, the figure is still 27. 4%. 5. INSTITUTIONAL COST OF EDUCATION This consists of capital cost and recurrent cost. Capital costs are associated with durable educational inputs particularly land, building, article of furniture and equipment which are made use of in a single fiscal year.Usually people talk of capital post versus capital flow. The stock of capital is inventory of buildings equipments and other capital items out sting at a given point in time. It is like reservoirs that can be drained down by depreciation or renovate and dramatize by new inflows. The volume of an educational system capital stock can be measured by depreciating the original cost of each in the inventory at the appropriate rate (adjusted for study repair, additional and replacement made in the items).Educational expenditures are those that direct directly to teaching, learning and research, for example, teachers salaries and allowances, salaries and allowances of administrator, that is, non-teaching staff, expenses on books and stationeries, transport cost other expendable materials like water, electricity, post and telegram etc. and additional buildings. Thus, expenditures on consumable goods such as materials and personnel salaries, rent, interests, grants etc used up within an account year are classified as recurrent expenditure (cost).While capital (cost) expenditures include th e purchase of durable assets such as buildings or equipment, that are expected to yield benefits over a longer period. To Psacharopoulos and Woodhall (1997), the crucial distinction between recurrent and capital cost lies in the source of finance. To them, recurrent expenditures are financed from current income or revenue, while capital expenditures are financed by loans from international agencies as well as other sources of income. Owning to the fact that the recurrent education expe.