A Simple Guide to Working with Finances in Education - Tanzania ...

2.2 What we can learn from a budgetStudying budgets can help to answer the following questions:• Adequacy – how much isbudgeted? Is it enough to cover thecost of carrying out the policy?• Priority – how does the budget foreducation compare to resourcesspent in other areas? A governmentcould make promises (policycommitments) towards a particularpolicy, but if this is not reflected inthe budget it is not keeping itspromises. Looking at what receivesthe most and the least amounts ofmoney in an overall budget showyou where the priorities really lie.When you are looking just at the amontrecorded in a budget in shillings or dollarsit is called “Nominal terms’. If you arelooking at a budget which comparesseveral years, it is important to know ifwhat you are looking at has been adjustedto take inflation into account. If it hasn’t,you might think that the numbers aregrowing up and up, but in fact what youcan buy with a certain amount of moneyhas gone down. If the numbers you arelooking at have taken inflation intoaccount they are acalled ‘Real terms’.• Progress – is the government’s response to meeting educationneeds improving? It is not always possible to make changehappen very fast, but by looking at this years budget incomparison with last years or the one from five years ago, youcan tell if changes are being made.• Equity – are resources being allocated fairly? For example,schooling in some parts of the country is much in advance ofprovision in other parts. Is funding being used to even up thesehistoric differences, or is it being allocated in a way whichmaintains these differences or even makes them worse?• Efficiency – is the money being spent efficiently. Is there a big difference betweenallocation and actual expenditure? - If so money is not being spent and put to gooduse. There are also different means of getting money down to district and schoollevel, such as block grants or tied grants. Block grants would give freedom to districtsto decide how to spend resources in order to meet local needs. Tied grants directexactly how money must be spent. Capitation and development grants at school levelare tied, as they come with strict directions about how money can be allocated.• Effectiveness – is the money being spent on the right things? For example, if theobjective is improved levels of education achievement, where do you allocatespending to have the biggest impact on learning achievements? Classrooms,teachers, teacher training…?To be able to answer these questions, though, it’s necessary to understand howbudgets should work.4