Needs for Implementing Effective School-Based Financial Management

Among the earliest aspect being researched was on the needs or requirement essentials for a successful financial devolution or financial management at the school-site. In the paper presented by Knight (1992), twelve key questions have been raised to be considered by all school managers to ensure a successful school-based financial management implementation through well-equipped strategies and plans. The primary

concern listed by Knight (1992) is on the aim intended to be achieved by the school whether it is managerial efficiency, participation, market economy, privatisation or diversification. Then, other necessary factor included in the list are the scope of the school based finance scheme, the school-level information base, methods on how to distribute fund allocations, the degree of school spending decision, and the link between financial management and school developmental plan and priorities.

Furthermore, Knight (1992) also proposed all schools with the site-based financial management to thoroughly re-examine the members’ roles and responsibilities. In addition, the school manager should arrange for an adequate clerical support and information technology to ensure a smooth management of financial technical tasks. Then, the implication of the financial devolution towards the central administration should also be rethought whether full delegation has been transferred to the school site as what has been intended. The next consideration is on adequate training that should be introduced to support financial devolution. The training has to consider all the related stakeholders such as the head teachers/principals, deputies/senior staff, members of governing bodies and not to be left is the knowledge of the clerical staff involved directly in the school finance and accounting. Then, the other two last factors that should be concerned by the school managers are whether sufficient care and time have been devoted toward implementation of the scheme and also on the adequate arrangements for the monitoring and evaluation of the whole financial management process.

Generally, this work is actually presented as a form of proposal to all related parties involved in the site-based financial management being discussed and planned but not yet translated into real implementation. It was set in the form of questions to enable school managers to look at it as checklist before they were really capable to manage their school fund successfully. Besides that, another work presented by Murphy

(1994) was also based on the conceptual discussion on the five conditions necessary to facilitate school-based management. This work covered the important element that should be cultivated in the heart of all schools implementing the school-site management which include the budgeting tasks and financial management. Nevertheless, both of these studies appeared as a plan of scheme to the practitioners without being backed by the relevant empirical studies in order to strengthen the contents being highlighted in the paper.

In his study, Murphy (1994) has brought up five necessary conditions that the school manager and the relevant stakeholders should consider in order to facilitate the school restructuring initiatives such as the school-based financial management. The five conditions are readiness, time, professional development, adequate material resources and finally, the support from all educational stakeholders. Readiness has been described by three important antecedents that could foster a successful implementation of school site management. Schools were suggested to develop trust among staff members, communicate the school directions and further committing themselves to take risks and the right to fail. Then, the second condition is time needed by the school as a start-up process to get the school-based financial management initiatives underway. This is followed by professional development for all staff and the relevant stakeholders that include capacity building activities such as communication skill, group process planning and decision making skills. Another two necessary conditions that could assist in this process are adequate material resources and support from all educational stakeholders.

The importance of skills and professional development has been described in many previous studies as a key variable formula to adapt to the new changing context of school-based management (Al-Taneiji & McLeod, 2008; Bandur, 2009; Ho, 2010; Hussein Ahmad, 2010; Maszuria Adam et al., 2008). The principal, teachers and the supporting staff require special training and preparations to help them handle the

additional administrative tasks integrated in this local reform agenda. Ho (2010) did find that in order to form a sound school-based budget, the relevant school members have to be equipped with practical knowledge in school financial management and accounting, interpersonal and communication skills, knowledge of relevant laws and regulations and further capable in collecting and distributing relevant information among the school members. Even more, the local government was recommended to provide relevant materials on school-based management in the form of research and public seminars or workshop to advocate more for the technical practices thus enhancing the school members’ understanding of their tasks and responsibilities (Bandur, 2009).

Furthermore, studies have been performed to design the school-based finance reform based on the accumulation and critical evaluation of previous studies. The elements necessary in the systemic reform of the school-site financial management has been summarized and concluded to be the essential actions that should be prepared by schools to ensure effective financial management at the school site. Odden (1994) has designed a systemic reform of school-based finance in which the incorporated elements have been drawn from the studies of effective management in the private sector and tentative findings about factors essential for effective school-based management. The design has no direct empirical support but carefully adopted from the studies on the needs of an effective school-based financial management reform.

Taken as a whole, the study has listed nine essential elements of an effective school-based financial management, namely (a) policy on the school-based finance structure, (b) devolving budget authority at the school level, (c) school authority over personnel, (d) school-based information system, (e) investment in knowledge development activities, (f) redesigning teacher reward and compensation system, (g) school choice over education achievement targets, (h) substantial regulatory relief and

finally, (i) opportunities for school finance equity. Then, in 2000, this study was revised following advances reported in the literature and findings of several large scale and small scale studies (Odden & Picus, 2000)

Another prominent study on the school-based financial management context has been carried out by Wohlstetter and Mohrman (1994) which was also based on extensive studies on the previous experiences undergone by many schools in the United States. They have come up with model that explains how school-based management can be implemented by considering a few important matters that should be prepared at the school site. This includes four necessary elements of power, knowledge, information and rewards. Furthermore, this study has developed through out several years and in 2003, the study highlighted several more essential actions at the school site (Briggs & Wohlstetter). It was concluded that schools with the devolved autonomy have to engage with eight elements of school-based management strategies in order to reach success. This includes additional matters that are active school vision, meaningful decision making authorities, shared leadership and school effort in cultivating resources.

Another prominent view related to this matter was given by Caldwell (2008). In his recent paper on reconceptualizing the self-managing schools as a contemporary school movement, he concluded that four resources need to be prepared by schools. These capitals have to be aligned by schools adopting school-based management with their unique mix of needs, interests, aptitudes and aspirations of their own school members for success. The four capitals are intellectual capital, social capital, spiritual capital and financial capital. All of these resources must be accompanied by outstanding leadership and governance to secure strong alignment and go beyond the initial conceptualization.

In Malaysia, a study has been done on the issues arising following implementation of school-based financial management since 2000 through the

formation of responsibility centre schools or generally known as PTj school (Shahril@Charil Marzuki & Marzita Abu Bakar, 2005). From the several issues identified, nine challenges have been listed which indirectly portrayed the essential elements that need to be considered by all schools granted financial autonomy in Malaysia. This study suggested strategies on the matters such as identification of clear school vision, mission and concept, cultivation of skilled and knowledgeable school administrator, adequate resources to support implementation, professional training for the executors, identification of the devolved power, entrepreneurship at the school level, formation of assessment on school financial management efficiency and effectiveness, accessibility to school information and finally to ensure the stability of the country’s social, economic and political condition. In addition, Hussein (2010) also discussed the three strategies required at school level as pre-requisites for decentralization in Malaysian public schools. The first is the strategy to strengthen the principal’s leadership. The next strategy is to have participatory decision making authority and the final strategy is people empowerment and development of teacher professionalism.

From all the studies discussed so far, few similarities have been identified with regard to the essential strategies that should be prepared in managing the finance at the school site. Among them are the necessity for skills development and professional training for the school administrators, the establishment of clear segregation of power and also the accessibility to information among the school stakeholders. In addition, a few studies have supported the necessity of school to have good school-based performance awards (Al-Taneiji & McLeod, 2008; Kelley, Odden, Milanowski, & Heneman, 2000). It was essential in the sense that the existence of compensation at the school level could increase the motivation level among the school staff and further improve the quality of their performance. Besides that, from the paper presented on the issues of public sector financial management in Malaysia, integrity has been highlighted

as the most essential component that should be cultivated in the heart of all public servants (Ahmad Zaki Husin, 2001; Zulkurnain Awang & Xavier, 2001). Integrity is important in order to avoid any mismanagement, corruption and dishonesty in managing public money and could facilitate the aim of reaching an effective level of financial