Education Finance Essay

1. 1Background to the view The importance of nurture discussion sectionicularly in the 21st century to the keep down development of an man-to-man is increasingly organism over emphasized. This is due to the fact that an un ameliorate individual has little or nothing to conjure the participation in terms of acquired wisdom. It is therefore not surprising that close p arents are now underdeveloped keen interest ab off the precept of their electric razorren, a situation that leads them to want to know more as well as partake in what goes on in spite of appearance the preparehouse system.In all countries of the world, teaching is recognized as the cornerst whiz of whatsoever structure for sustainable development of any nation. It is a fulcrum somewhat which the quick development of scotch, political, sociological and piece country revolves. In Nigeria, the strike for popular knowledge is so high because reproduction is not only an investment in forgiving roof, bu t as well pre-requisite as well as correlated for economic development (Adeyemo 2000). The belief that bringing up is an engine of growth rests on the quantity and quality of procreation in any country.In fact, the National insurance on culture (19816) states that education is the sterling(prenominal) investment that the nation can nock for the quick development of its economic, political, sociological and human resources. It further adds that education shall bide to be highly rated in the national development plans because education is the most of import instrument of change and that any fundamental change in the intellectual and social observation post of any society has to be preceded by educational revolution.Education, from the pragmatics perspective could be seen as the organization of throw into a holistic social intelligence for dealing with future experiences. The idealists see education as the horticulture of the desirable state of mind. Sociologically, it is se en as the dissemination of culture to the young generation. In an other(prenominal) words, education is the mathematical process by which the individual acquires the many physical and social capabilities demanded of him by the group into which he is born and within which he must function,(Ohikhokhai, 2002 154).A Similar definition by Fafanwa states It is the aggregate of all the processes by which a kid or adult develops the abilities, attitudes and other forms of behaviour which are of positive revalue to the society in which he lives, that is to say it is a process of disseminating noesis any to ensure social curb or to guarantee rational goion of the society or some(prenominal). (Fafanwa, 1972 8) There is no gainsaying the fact that Nigerias educational system at every take (Primary, Secondary and tertiary) has been experiencing a down turn in the last few years.One of much(prenominal) reasons could be attributed to the under financing of the educational sector. The su ccess of a child in education depends largely on what the child is taught in prime(a) cultivate. In other words, original declare education is a ground upon which all other levels of education are built. many an(prenominal) researches have revealed that good teaching particularly at the primary level, lay a solid foundation for higher studies and can make a lot of difference in students learning and ability to take with other intent challenges (Adepoju 2001).In order words, since the rest of the education system is built upon primary education, the primary level is the key to the success or failure of the whole system. Apart from home as the low gear agent of socialization, primary school is the first place that introduces formal education or literacy to the children. The National Policy on Education 2004 watchs Primary Education as the education given in institutions for children aged 6 to 11 plus for a duration of six years.This definition is also chokeed by the ext ernal Standard Classification of Education (ISCED) which states that, Primary Education (ISCED level 1) also known as basal education, refer to the education programmes that are normally designed on a unit or device basis to give schoolchilds a sound basic education in reading, writing and mathematics, along with an elementary understanding of other sources such as history, geography, natural science, social science, art and music The goals of primary education as stated in the National Policy on Education NPE, Section 3(16) is to i.Inculcate eonian literacy and numeracy, and the ability to communicate impressively ii. Lay a sound basis for scientific and shineive mentation iii. Give 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. surface in the child the ability to adapt to his/her changing environment vi.Give the child opportunities for developing 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 governments inscription to the proviso of basic education for all, dwindling financial resources coupled with sectoral competition for resources may hinder its progress.According to Hallak (1990), ordered waves of economic and educational crises affected the efforts of government and social demand for education so that education both the general tensions in the development of education and the imbalances that had emerged in the previous two decades were aggravated. Nevertheless, inspite of the huge financial commitment and the high priority given to education, experts and scholars still doubts the adequacy of the fund in meeting with the growing students enrolment.In view of the foregoing, the government alo ne may not be able to meet the social demand for quality basic education. Therefore, cloak-and-dagger sector participation in the ownership and control of schools is inevitable thereby complementing the efforts of government. The decade from 1990 witnessed an upsurge in the number of personal institutions of learning in Africa in general and Nigeria in particular. Before this decade, most African Countries committed much of their use of goods and servicess on human race education, which dish outd as an instrument for expression the nation, hobby independence.Today, there is pressure on African governments to shift from subsidization to privatization of their educational systems. Friedmans (1955) theories on the privatization of education were and touch to be tined by researches who contended that unrestricted educational institutions lack incentives to improve educational systems. Among others, Chubb and Moe (1990) and Coleman (1997) argued that allowing school choice, mai nly through the promotion of mysterious schools, would improve educational markets. umpteen important educational conclusions are related to apostrophize of schooling.Information on appeal is necessary to monitor resource allocation over time, to diagnose the function status of the education system, and to evaluate the efficiency in resource use of goods and services (Tsang 2002). Specifically, equal of education refers to the resources utilize in the production of education services. They include not only public consumption on education, but also snobbish resources invested in education (Tsang & Kidchanapanish, 1992) make ups in this get word are used to signify private speak to of education incurred by the individual schoolchilds and their families, and institutional prices of education incurred by the institution of learning.Tsang (1995), refers to private terms of education as those resources bidd by household, individuals, and the community to support the produc tion of educational services, which could be in form of Direct Private bells Tuition Fees which is only include in this subject, Private Contribution donations in the form of cash/gifts and indirect bells economic value of forgone opportunities of school Babalola 1995 defines institutional cost of education as be borne by the institution of learning. They consist of repeated and gravid cost.The continual be are mainly what we are concerned with in this study. An ideal costing system carnal knowledge to the input-output will enhance quality decision and planning programme for schools. The accurate knowledge of costing strain will aid decision makers in the schools on the best alternative that may be considered in the management of the schools system. An ideal costing system will also enable parents, families etc to determine the cost strength of enroling their children into private primary schools. 1. 2Statement of the Problem.The problem of rising cost tuition fees in ed ucating pupils in private primary schools in Akinyele Local presidency which has become an issue of concern to parents, families, wards and stakeholders a wish well. There is the need for private primary school administrators to pay serious attention to the causes and consequences of these rising be which could sometimes be as a issuanceant of high continual costs, with a view to controlling them while keeping pace with quality and productiveness in the private primary school system. In view of the above therefore, this study endeavours to provide answers to the following research questions 1.3Research Questions 1. What is the broad(a) enrolment of each of the v 5 selected private primary schools in Akinyele Local political relation Area from 2006-2010? 2. How much is the amount incurred by the schools in the five (5) years period on perennial cost? 3. How much is the amount borne by families, parents or wards with five (5) years period on direct private cost per pupil tuit ion fees? 4. What is the correlation between direct private cost per pupil tuition fees and continual cost per pupil? 5. What are the sources of gross available to the schools in sourcing for funds for the smooth hurry of the school? 1.4Purpose of the Study The main aim of this study is to attempt to provide an analysis of the entireness direct private cost tuition fees, heart and soul 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 political relation as the case study. The study also attempt to highlight on the following a. To determine the total 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 fi ve (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 efficient 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 judgment with respect to plans, policies and programmes can be made. To this end, primary school administrators will be able to guide 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 enrolmen t, staff employment, maintenance and so on. Also, the study will issue the amount of gold expended by the five (5) schools within the five (5) years period in recurrent costs.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 guidancees on the historic analysis of recurrent costs, private direct costs tuition fees and revenue sources using private primary schools in Akinyele Local Government as a case 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 expenditure increasingly accounts for greater percentage of the total not bad(p) and recurrent expenditures 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 observed that most analysis of unit costs focus on recurrent outgo because jacket crown 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 additional school places (which is not the case in this study), the analysis of unit costs is ordinarily directed at recurrent spending.Federal government primary schools and public primary schools are not included in this study because the study deals with only selected private primary schools 1. 7Operational Definition of Terms In order to enhance come apart understanding of this research object, certain operational terms that were used are clearly defined to refl ect the specific situation with which they are used. Cost 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 order to condition 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 train the pupils.They are both capital and recurrent costs. However, institutional cost in this project excludes capital costs. Private Cost These are borne by the individual pupils and their families. They relate to both direct and indirect costs of education which are borne through tuition fees, earni ng forgone, additional life-time 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 range of a budget year, and which must be regularly replaced.Here, it include such get downs incurred on items such as staff salaries and allowances, maintenance, payments of electricity bills, purchases 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 figure by dividing the total expenditure 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. pay Finance correspond to the context of this study is the act of raising or sourcing for funds for the running of the school. School A school according to the context of this study refers to primary schools where formal teaching process takes place. CHAPTER TWO criticism 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 promise Strategies 10. Sources of Revenue for Education 1. CONCEPT OF equal 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 paid for a commodity or for the consumption of goods and services. In economic term, the concept of cost if perceived as something which is given up in order to have another. In more a precise way, we can monetary 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 calling enterprise Lipsey, 1976 Aghenta, 1993 Babalola 1991 also gave credence to this assertion that cost is a rhythm of what is given up in order to produce or consume a commodity. Adedeji 2002, see cost as a bank bill 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 internal 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 youthful 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 cardinal naira per pupil (Daily Times of Nigeria, 4th January 1980, Editorial Comment). Longe (1988) maintained cost information is crucial in decision making as it facilitates efforts to make the best but the least costly choice among alternatives.In the outlet 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 edu cation 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 observed 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 accomplish educational project. That is, to produce and educated person. This definition could imply not concerned with monetary outlay and expenses on education but also 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. small-arm Adedeji 1994 quoted by Oladejo 2002 opines that educatio nal 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 deviation of income incurred either by the 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 labour market is the rightful(a) cost of the individual student o f 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 earnings, improperly estimated educational cost on government education expenditures. Expenditure on education overtime has been observed to be on the adjoin 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 percentage share of total expenditure in education 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 elaboration brought about by a continue increase in education demand. Agunbiade 1997, observed that there was a staggering figure for educational expend iture 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 huge increases that has occurred during the period.According to them there is increasing present 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 asserte d 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 move in many countries of the world. Real expenditure in this context means money expenditure deflate by appropriate 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 emphasis 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 conti nue increase in the expenditure pattern. This continues expenditure increase as argued by Shehan 1983 have a change effect on institutions considering the overall level of finance available to them, hence the need for a panoptic system of cost control private primary school system. 3. PRIVATE COST OF EDUCATION.Concepts of cost from the sales booth 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 education 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 b y 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- effect 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. theatre contributions 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 count ries, household contributions to teachers are the main source of income for rural primary teachers (Paulsen, 1981 World Bank, 1991). home 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, specially for parents in the rural areas (Psacharopoulos and Woodhall, 1985). In a recent study of India, Tilak (1985, p. 22) estimated that the indirect pr ivate cost in terms of foregone earnings accounted for about 40% of the real cost to education, based on 1977-78 data.For purposes of better 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 encouraged to spend more on items (such as textbooks and other learning materials) directly related to student learning.Third, differences in private resources to education among social groups may infuriate educational inequalities among social groups. A good understanding of the variations in private resources to education will inform educational policies designed to mitigate education al 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 lacking or fragmentary (Tsang, 1988). However, the available evidence indicates that private resources to education are very important (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 schoo ling, 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, situation and sportswear, and school fees on sport activities 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 nine easterly 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 fr om 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 educational cost studies in nine East Asian 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 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) ca rry out a similar study in Honduras. curtail 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, furniture and equipment which are made use of in a single fiscal year.Usually people talk of capital stock 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 enlarge 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 major repair, additional and replacement made in the items).educati onal expenditures are those that contribute 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 consumable 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 accounting year are classified as recurrent expenditure (cost).While capital (cost) expenditures include the purchase of durable assets such as buildings or equipment, that are expected to reelect 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 foreign agencies as w ell as other sources of income. Owning to the fact that the recurrent education expe.