What is the goal of financial resource management?
Financial Resource Management
Common Wealth (2000) reveals
that schools exist so that students can learn and the central activity of schools is instruction (teaching/learning).
The efficient and effective management of Fiscal resources can enhance instructional programmes.
Financial management is therefore, an integral part o f the responsibility as an educational manager because without good financial management practices, schools would find it difficult to achieve their goals.
Drake and Roal (1994) as revealed in (Common Wealth, 2000) confirms this point. The efficient and effective management of fiscal resources can enhance instructional program”.
Thus, financial management means seeing to it that he school has funds it requires to meet its goals and that such funds are used for the purpose for which they were meant.
Financial management includes activities such as obtaining funds, allocating them, monitoring their use for accountability, and generating financial reports for key stakeholders.
Effective management ensures that:
– All financial regulations and procedures are complied with
– All financial transactions are recorded accurately.
– Adequate controls are put in place to ensure that expenditures do not exceed income.
– Only authorized expenditures are incurred.
A budget is required to facilitate effective financial management.
The commonwealth secretariat (1998:27) as noted in (Common Wealth, 2000) defines a budget as
“A financial management planning tool which summaries the estimated income and expenditure for a specific period of time”.
It is therefore critical that educational management understand what a budget is and the benefits that can be derived from budgeting.
Several benefits accrue from drawing up a budget (Drake and Roe (1994) cited in (Common Wealth, 2000) listed these benefit;
– Establishing a plan of action over a specific period.
– Requiring an appraisal of past activities in relation to planned activities.
– Establishing work plans.
– Providing security for the administration by assuring the financing and approval of a plan of action.
– Foreseeing expenditure and estimating revenue.
– Establishing a system of management controls.
– Providing an orderly process of review and planning for both personnel and facilities needs and,
– Serving as a public information device.
It is therefore that schools under their management to ensure that schools under their charge formulate a budget that will address the needs of the school and facilitate the accomplishment of its goals.
This is done in accordance to what is required by the government.
Accounting for School Funds.
Common wealth (2000) notes that once school funds have been budgets and funds allocated to specify expenditure, it is important that a proper accounting system be implemented.
A number of staff members may be involved in the financial transactions and for this reason it is critical to observe the following principles:
Acknowledgement by receipts: Receipts are legal documents providing that money has been received by a person or institutions.
A receipt should be provided for all funds received and a copy should be kept for the school (duplicate).
Internal Audit using Certain Structures:Audits are one way of providing management with an objective assessment of whether the financial system and controls are working properly.
In other words, they report on the truth and fairness of the financial situation of the school.
An audit or detailed examination and analysis of a schools’ financial records should be conducted by a professional expert who is not normally linked to the school.
Monitoring of Disbursement of Funds:
Manager must ensure that expenditures are within actual income levels and that only authorized expenditure are incurred and prompt recording of all financial transactions.
Effective Accounting System:
As a manager, you need to establish controls that will help protect the school from financial risk by adhering to financial regulations and procedures.
For example, cheques, should not be issued unless 2 signatures appear on each cheque.
Advancement: in many cases, advances are not served and implies, or petty cash is not retired on time.
One should ensure that staff is strictly monitored and penalties are clearly understood by all who do not pay or retire their advances or cash on time.
Role of Educational Managers in Financial Management.
The ultimate accountability for the effective management of school finances lies with the office of the manager, As an education manager, he/she should:
– Allocate funds to various activities in accordance with the budget.
– Authorize the disbursement of school funds.
– Administer school funds both lawfully and morally of department, senior teachers and the board of governors and,
– Ensure that the school has the funds it needs and that those funds are used effectively and efficiently.
Reasons why Government Finances Education.
Government spending is generally justified on the basis of efficiency and equity considerations (Manasan, R.G, Cuenca, J.s and Villanueva-Ruiz, E.C,2008).
That is government spending should promote efficiency that is, correct failures and/or generate positive externalities and equity (that is improved the access of the poor to important services or distribution of economic welfare).
Cameroon being a developing country equally has an abiding faith in the effectiveness of education as a powerful tool/instrument for national progress and development.
It is of paramount importance for educational administrators to have a good understanding of these issues related to educational financing.
This is to enable them work towards the effective utilization of financial resources so as to make the educational process more efficient and effective (Mbua, 2003).
According to (Mbua, 2002) the reasons for financing education include the following:
· The right to education
In article 26 of the universal declaration of human rights adopted by the United Nations general assembly in December 1948 stated that “everyone has the rights to education”. That is why educational financing is being done by government and private bodies.
· Instrument for national development
· Education as private and social investment.
· An agent for economic growth.
· Eradication of illiteracy.
In addition, in Cameroon, law No 98/004 0f April 1998, laid down guidelines for education in the country, states in section 12 that education shall be financed by:
– Budgetary allocation from state
– Contribution from education partners.
– Budgetary appropriation from regional and local authorities.
– Donations and legacies.
– All other contributions shall be provided by the law.