Budget and expenditure monitoring

Transparent and participatory budget processes need to be in place to monitor how resources are being allocated and allow public scrutiny and control over the use of education resources. Regular internal and external audits must take place to detect and deter fraud and corruption. Preventive measures, such as procurement guidelines, as well as transparency and monitoring procedures to track the flow of funds are instrumental to ensure that resources reach their intended destination. While internal systems of auditing are necessary, procurements must be open and ordinary citizens need to have access to information on the budgets of the national and district governments as well as schools and universities to be empowered to demand accountability. It is not enough, however, to grant access to this information, it also needs to be widely disseminated to all stakeholders. In Uganda, dissemination of public expenditure information to the public helped to reduce leakages in the education sector dramatically; from 1991–95 an average only 13 per cent of allocated funds reached schools, while by 2001 this was around 80 per cent.[1]

Introducing a funding formula for education finance has also been promoted as a means to prevent corruption. Formula funding refers to “an agreed rule for allocating resources to schools that specifies the quantum of finance that each school can spend”.[2] When accompanied by the publication of allocations to each school – on websites and in hard copy – to make budgets accessible for public scrutiny, this is likely to enhance transparency and reduce opportunities for corruption. Yet, this approach is not without risks as the coefficients in the funding formulas can be manipulated by misrepresenting facts. A principle might, for example, report excessive numbers of certain groups of students in order to boost the schools budget. Therefore, it is essential to include transparency measures in budget planning, allocation and execution to minimise the risks of this approach.

Formula Funding, Decentralisation and Corruption

Formula funding of schools reduces the potential for corruption by increasing transparency because the amount each school should receive and the basis for this is public knowledge. Decentralised financial management replaces the opportunity for
large scale fraud by the few, which characterises a central system, by wider opportunities for smaller scale fraud by employees at school level,especially if schools have bank accounts. The potential for fraud in decentralised systems can be
contained by well designed financial regulations that are adhered to, monitoring of schools’ finances by a school council and the education authority, and independent and thorough audit of schools’ accounts.[3]



Iñaki Albisu Ardigó; Marie Chêne


Matthew Jenkins

Contributing experts:

Umrbek Allakulov (Water Integrity Network)

Shaazka Beyerle (US Institute of Peace)

Simone Bloem (Center for Applied Policy)

Claire Grandadam (Water Integrity Network)

Jacques Hallak (Jules Verne University – Amiens)

Mihaylo Milovanovitch (Centre For Applied Policy)

Muriel Poisson (International Institute for Educational Planning (IIEP-UNESCO)

Juanita Riano (Inter-American Development Bank)

Marc Y. Tassé (Canadian Centre of Excellence for Anti-Corruption)

Vítězslav Titl (University of Siegen)

Davide Torsello (Central European University Business School)

Patty Zakaria (Royal Roads University)



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