Where does all the money go?

2014-04-05

Himalayan News Service

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Nepal’s education budget increased by more than double in just four years reaching Rs 63.91 billion in fiscal year 2011/12 from Rs 27.06 billion in 2007/08.

Together with the huge budget increment, the education sector’s dependency on foreign aid, too, has increased. Foreign aid has crossed over Rs 14 billion at the present from Rs 688.8 million in 2007/08, an increase by around one percent compared to the last fiscal year. A large chunk of the budget, around 60 percent, goes to school level education and remaining 40 percent to elementary education.

According to the existing financing status of basic education in Nepal, the government is committed to provide basic education to all children in the country. The state allocates 3.4 percent of GDP (Gross Domestic Production) and 17 percent of the national budget to the education sector. This is, however, against the global standard of allocating at least 5 percent of GDP and 20 percent of the total budget.

In terms of allocation, primary education is receiving the largest share of the education budget. Despite this, the per child expenditure for ensuring quality primary education to all children in Nepal is among the lowest in the world, according to education experts.

The country’s investment in higher education, too, is pathetic. Only 9.92 percent of the total education budget has been allocated for higher education, and merely 7.85 percent for university education. “This shows the government’s negligence towards this sector,” said Tirtha Khaniya, education expert.

Investment in higher secondary education is even less—two percent of the total budget—despite having around one million enrollments. Surprisingly, there is not even a single permanent school or teacher for the entire higher secondary level.

By the same token, investment in technical education also shows the state’s apathy towards this sector with an allocation of just 1.65 percent of the total budget. Majority of the schools and students have not benefited by the gradual

increment of the budget allocated for the education sector every year, as a large amount of money is spent on salary and administrative expenses.  The 2011/12 fiscal year saw a 9.79 percent increment compared to the last year, but the additional budget was used up in paying salary by increasing up to 40 percent through the budget speech.

The budget flow mechanism at the Ministry of Education (MoE) shows there are over 30 tiers in the budget making and releasing process. While school level planning is executed in the lower level, funds for schools come from the top and the budget release process is therefore quite long and cumbersome.

The money goes through five offices—Department of Finance, Department of Education (DoE), District Treasury Controller Office, District Education Fund and District Education Office (DEO)—before it reaches schools. These superfluous steps in relation to the budget cycle have made the task more process-oriented rather than result-oriented.

DEOs release the total school budget on a trimester basis, while the University Grant Commission apportions university budget every month. Schools are responsible for providing trimester and annual progress reports to DEOs. They must meet other conditions such as public disclosure of funds, formation and functioning of school management committees and conducting social audits.

Most of the grant money, on the other hand, is provided to schools through the Education for All (EFA) programme and budget. The European Commission,

DANIDA, Finland, NORAD, World Bank, ADB, UNICEF, DFID and AusAid have made outstanding contributions for the successful implementation of the EFA. These donors contribute towards the EFA’s pool of funds.

Funding commitments are made  during the annual review meetings. The donor agencies invest substantial amounts in higher secondary, university level and technical education sectors.


Summary of Allocation for education


Fiscal Year    1980/81    2000/01    2009/10    2010/11    2011/12   

Total budget (in Rs million)    208    1,104.5    4,752.7     5,765    6,391   

Foreign Aid (in Rs million)    12.2    192.9    1,409    1,296    1,523   

Aid percent in total    8.20    19.38    29.6    22.49    23.84   

(Source: The Kathmandu Post)