COLLEGE OF EDUCATION AND BEHAVIORAL STUDIES DEPARTME

NT OF EDUCATIONAL PLANNING AND MANAGEMENT

PRACTICES AND CHALLEGES OF SCHOOL FINANCIAL RESOURCE

MANAGEMENTOF SECONDARY SCHOOLS OF GAMO ZONE, SNNPR

BY:-

BERGENE BEKELE KAYKA

NOVEMBER, 2022

WOLAITA SODO, ETHIOPIA

PRACTICES AND CHALLEGES OF SCHOOL FINANCIAL RESOURCE

MANAGEMENTOF SECONDARY SCHOOLS OF GAMO ZONE, SNNPR

A THESIS PROPOSAL SUBMITTED TO THE DEPARTMENT OF EDUCATIONAL

PLANNING AND MANAGEMENT IN PARTIAL FULFILLMENT FOR THE
REQUIREMENTS OF DEGREE OF MASTER OF ARTS IN SCHOOL LEADERSHIP

BY:-

BERGENE BEKELE KAYKA

MAJOR ADVISOR: Endale .B (PhD)

NOVEMBER, 2022

WOLAITA SODO, ETHIOPIA

 APPROVAL SHEET

WOLAITA SODO UNIVERSITY

GRADUATE STUDIES DIRECTORATE

DEPARTMENTS OF EDUCATIONAL PLANNING AND MANAGEMENT

PRACTICES AND CHALLEGES OF SCHOOL FINANCIAL RESOURCE

MANAGEMENTOF SECONDARY SCHOOLS OF GAMO ZONE, SNNPR

Submitted by:

___________________ __________________ ________________

Name of Student Signature Date

Approved by:

___________________ __________________ ________________

Name of Advisor Signature Date

___________________ __________________ ________________

Name of Evaluator Signature Date

___________________ __________________ ________________

Head of department Signature Date

___________________ __________________ ________________

CEBS, Post coordinator Signature Date

___________________ __________________ ________________

Graduate studies Directorate Signature Date

 LIST OF ABBREVIATION

ESDP Education Sector Development Program

IJSRE International Journal of Scientific Research in Education
MoE Ministry of Education
PTSA Parent-Teacher- Student-Association
SNNPREB Southern Nation Nationalities and People Region Education Bureau
SPSS Statistical Package for Social Sciences
UNESCO United Nation Education, Science and Cultural Organization
USAID United States Agency for International Development

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 TABLE OF CONTENTS

Contents Pages

LIST OF ABBREVIATION_______________________________________________________i

TABLE OF CONTENTS_________________________________________________________ii

LIST OF TABLES/FIGURES_____________________________________________________v

LIST OF FIGURE______________________________________________________________v

CHAPTER ONE________________________________________________________________1

1. INTRODCUTION____________________________________________________________1

1.1. Background of the Study____________________________________________________1

1.2. Statement of the Problem____________________________________________________3

1.3. Basic Research Question____________________________________________________5

1.4. Objectives of the study______________________________________________________5

1.4.1.General objective of the study_____________________________________________5
1.4.2. Specific objective of the study____________________________________________5

1.5. Significance of the study____________________________________________________5

1.6. Delimitation of the study____________________________________________________6

1.7. Operational Definitions of Key Terms__________________________________________6

1.8. Organization of the Study___________________________________________________7

CHAPTER TWO_______________________________________________________________8

2. REVIEW OF RELATED LITERATURES_________________________________________8

2.1. The Concept and Significance of Education_____________________________________8

2.2. Concept of Financial Management____________________________________________9

2.3. School Based Financial Management_________________________________________10

2.4. Rationales for Educational Finance Management________________________________11

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2.5. Functions of Financial Management in Education_______________________________12

2.6. The Concept of Budgeting__________________________________________________13

2.6.1. The Purpose of Budgeting_______________________________________________14
2.6.2. Principles of Budgeting_________________________________________________14
2.6.3. The Process of Budgeting_______________________________________________15
2.6.4. Budgetary Control_____________________________________________________16

2.7. Financial Controlling and Auditing___________________________________________16

2.7.1 Definition of auditing___________________________________________________17
2.7.2 Scope of an Audit______________________________________________________18
2.7.3. The Objective of Auditing_______________________________________________18
2.7.4. Types of Audit________________________________________________________18
2.7.5. Principles of Audit_____________________________________________________19
2.7.6. Internal Financial Control_______________________________________________20

2.8. The Role of Stakeholders in School Financial Resource Management________________21

2.8.1 The Role of School Principals on School Financial Resource Management_________21
2.8.2 The Role of PTSA Members on School Financial Resource Management_________22

2.9. Monitoring and Evaluation in Managing Finance________________________________23

2.9.1. Accounting__________________________________________________________24
2.9.2. Reporting____________________________________________________________26

2.10. Sources of Finances in Ethiopian Schools_____________________________________26

2.10.1. Government Budget__________________________________________________27
2.10.2. Non Government Organizations Contribution______________________________28
2.10.3. Parent Contribution___________________________________________________28
2.10.4. Community Contribution______________________________________________29
2.10.5. Internal Income of Schools_____________________________________________30

2.11. Troubles of Financial Management in Secondary Schools________________________31

2.12. School Financial Management in Ethiopia____________________________________32

2.13. Educational Financial Resource Management in Ethiopia________________________33

2.14. Research on Educational Financial Resource Management in Ethiopia______________34

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 2.15. Conceptual frame work___________________________________________________35

CHAPTER THREE____________________________________________________________36

3. RESEARCH DESIGN AND METHODOLOGY___________________________________36

3.1. Introduction_____________________________________________________________36

3.1. Research Design__________________________________________________________36

3.3. Source of Data___________________________________________________________36

3.4. Target Population, Sample size and Sampling Techniques_________________________37

3.4.1. Target Population_____________________________________________________37
3.4.2. Samples and Sampling Techniques________________________________________38
3.4.3. Sample Size Determination______________________________________________38

3.5. Procedure of Data Collection________________________________________________39

3.6. Data Collection Instrument_________________________________________________40

3.6.1. Questionnaires________________________________________________________41
3.6.2. Interview____________________________________________________________41
3.6.3. Document Analysis____________________________________________________41

3.7. Validity and Reliability of the Instruments_____________________________________42

3.7.1. Validity of the instrument_______________________________________________42
3.7.2. Reliability of the Instruments____________________________________________42

3.8. Ethical Consideration______________________________________________________42

3.9. Procedures for Data Collection______________________________________________42

3.10. Method of Data Analysis__________________________________________________43

4. WORK PLAN_______________________________________________________________44

5. BUDGET PLAN_____________________________________________________________45

REFERENCES________________________________________________________________46

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 LIST OF TABLES/FIGURES

Table 1: List of Woreda, Target, Sample Population and Sampling Techniques..........................40

Table 2: Work Plan........................................................................................................................44
Table 3: Budget Plan.....................................................................................................................45

LIST OF FIGURE

Figure 1: Conceptual frame work

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 CHAPTER ONE

1. INTRODCUTION

This chapter deals with introduction of the study and includes the sub-topics such as background
of the study, statement of the problem, research questions, objectives of the study, significance of
the study, delimitation of the study, definition of the key operational terms, and organization of
the study.

1.1. Background of the Study

Financial Resources are assets that we can identify and effectively employ them for the purpose
of achieving clearly defined objectives. This is because financial resources alone cannot yield
additional wealth. They must be drawn upon and put to judicious use to enable them to increase
wealth or productivity. Thus, the prudent management of education funds involves decisions on
how to procure, expand, utilize and properly account for funds directed at the achievement of
education objectives in general or institutional goals in particular. Financial resources refer to the
efficient and effective management of money or funds in such a manner as to accomplish the
objectives of the organization. It is a specialized function directly associated with the top
management. Accordingly, financial management has been defined differently in different expert
in the field (Assefa, 2007).

Financial management is the use of financial information, skills and methods to make the best
use of organizations resources. Financial management means planning organizing directing,
monitoring and controlling the financial activities of an organization (Denis,2018). Resources are
the valuable engine and play pivotal role to run the effective performance of tasks and for the
growth and development of human organizations.

Financial input necessary to facilitate the whole instructional processes are available and
properly managed (Datta, 1998). In the same way, MoE (2002) stated that schools are inevitably
involved in the practice of financial resource management which is concerned with the efficient
flow of finance to, through and out of an organization for optimum use of resources to achieve
educational goals. If financial resource is not managed and utilized properly in the school, it
would affect teaching learning process and students’ academic performance (MoE, 2013). No

1
organization has ever succeeded without financial resources. As a component of development,
education is a fundamental instrument in the poverty reduction process of any country. Education
has the power to transform human life (UNESCO, 2013/4). It is the process of bringing out the
potentialities of an individual and developing the natural abilities and interests the citizens.

School financial resource management is a fundamental to preparing and equipping

schoolprincipals with financial skills and competencies that will enabled them to be
responsibleand accountable for funds that have been received for specific school objectives. It
willalso equip them with managerial skills and competencies that will enable them to
makecontribution towards the improvement of the overall productivity of the school
(Bisschoffand Mestry, 2003).On the other hand, Jack (2012) stated that financial resource
management helps to reduce costs and improves performances through the cost-effective
selection utilization, and standardization of products, equipments, educational technologies and
related processes, in maintaining or improving the quality of education provided to the students
the mean time Contrary to this improper financial resource management and poor physical
facilities make the activities of teaching-learning processes tend to be less successful. Therefore,
UNESCO (2013/14) notes that financial resource management influences and limits the activities
of the schools to achieve their preplanned objectives unless managed properly.

On the subject of school principals, Bisschoff (1997) expresses they should have basic
knowledge, skill, qualification, interest and experience of financial resource management.
Various forms of trainings were given for secondary school principals on financial resource
management (MoE, 2007). However, the trainings indicated that the accountability of schools’
principals are very high and it did not improve the financial resource management practices in
secondary schools as expected. Therefore, it needs hard working and commitment from schools’
managers to improve financial resource management in secondary schools. Additionally, MoE
(2002) states that school principals, finance personnel and Parent Teacher Associations (PTA)
have great responsibility to manage school financial resources. Besides, the expansion of
educational systems and provision of quality education in schools are greatly influenced by the
amount of finance allocated for education, and by the extent to which the allocated finance is
effectively and efficiently managed and utilized (Melaku, 2000).With regards to financing public
education in Ethiopia, the education and training policy suggest sufficient budget allocation and

2
proper utilization of the educational budget for the intended purpose. It remarked that the
financing of must be just, efficient and appropriate for equity and equality of education
(Berhanu, 2019). Therefore, financial resource management is a crucial issue for the
achievement of educational goals.

As Financial resource management is a crucial issue for the achievement of educational goals.
There is a problem in effective and efficient management and utilization of financial resource in
secondary schools of this study area furthermore a little attention is given by researchers to
conduct a study and forward solution to overcome the problem. This initiates the researcher to
conduct this study to assess the problems encountered in practicing school financial resource
management, and may try to forward the possible suggestions to improve the existing financial
resource management for the most part in Gamo Zone secondary schools level.

1.2. Statement of the Problem

Financial resource is one of the fundamental resources to get quality education. According to
(MoE, 2002), Ethiopian government budget a large amount of money for education since it plays
a major role in promoting economic development and improvement in the life standard of
society. However, allocating large amount of budget alone could not bring change in the quality
of education. Thus effective management of school financial resources is essential issue for the
provision of quality of education and the achievement of educational objectives. Lack of capacity
in financial management will lead to the absence of quality of education.

The major problem of public education financial budget usually seems the problem of
appropriate allocation, execution and control of limited financial resources. Moreover, the ability
and capacity to keep the balance between the budget and planned activities to be accomplished
seems also the other factor of the problem. On the other side financing education requires
schools to go through long processes to receive the budget, which often does not conform to their
work plans. That is, financing education is a process characterized by bureaucracy that requires
the schools management to pass through a sequence of formal rules and procedures to gain
bureaucratic approval. As a result, this process prevents them from performing tasks in line with
their strategic and action plans (MoE, 2002).

3
In many developing countries, the problems of financing secondary school and its management
are sensitive and participation of stakeholders’ rate remains low and not grew up in most of the
countries. Education costs in secondary school are often high and unsound if stakeholders don’t
participate consistent in school financial resource management practices as owner (MoE,
2002).According to Melaku (2010) finance assumes greater importance in education. Expansion
of educational systems and the provision of qualitative education are greatly influenced by
the amount of finance available to education, and by the extent to which the available
finance is effectively and efficiently managed. In addition to these different research findings
show similar facts. For instance; a study conducted by Sheberu(2015) on practices of financial
management in secondary and preparatory schools in Bishoftu administrative town also indicated
that weak management of educational finance resources.

Schools are centers for civilization and social development. Accordingly, their major functions
are instruction. Other functions of the school systems are designed to enhance efficiency and
effectiveness of the instructional process. And instruction involves some inputs, such as finance
and other material supplies. Referring to this very fact, UNESCO (2002) stated that “the school
is a social institution created to serve community. To run the school effectively, financial,
material and human resources are very important.

Hence, there is a strong need to create transparent system in schools that clearly indicates the
sources of finance as well as its allocation and utilization. Implementation capacity is key
instrument to guide the development process. However, little attention is given by researchers to
study on the area of financial resource management practices and its problems on planning,
accounting, auditing and reporting; effective and efficient management and utilization of
financial resource in secondary schools particularly in Gamo Zone. However, several problems
remain unsolved with regard to the budget preparation, execution, accounting and reporting and
controlling in schools of study area.

These are the gaps that the researcher may try to fill and initiated to conduct this study on this
specific area. As a result, purpose of this study is to assess the practices and challenges of

4
financial resource management in the secondary schools of Gamo zone and will try to ahead the
possible suggestion to alleviate the problems.

1.3. Basic Research Question

To achieve the aforementioned purposes, the study will focus on the following basic questions;
1. What are the major sources of school finance resource in secondary schools of the Gamo
Zone?
2. How are school financial resources managed in the government secondary schools of Gamo
Zone?
3. To what extent arethe school financial resources audited and monitored in the Gamo Zone?
4. What are the major problems that secondary schools encounter in managing their financial
resources in the Gamo Zone?

1.4. Objectives of the study

1.4.1.General objective of the study

The general objectives of this study will be to assess the practices and challenges of school
financial resource management in secondary schools of Gamo Zone?

1.4.2. Specific objective of the study

The specific objectives of the study will be:

1. To assess the major sources of school finance in Secondary schools of Gamo Zone.
2. To examine how the school financial resource is managed in the government secondary
schools of Gamo Zone.
3. To investigate whether appropriate auditing and monitoring system exist regarding on the
schools finance utilization and implementation in the study area.
4. To identify major factors, that affects school budget effective utilization in the study area.

1.5. Significance of the study

This study will have several significances. Though limited, the study may add literature to the
sparse body of knowledge on school financial management. It may also be seen as a starting
point for further study on school financial management in Gamo zone, thereby stimulating

5
further research to provide valuable insight for other researchers and academicians. Moreover,
based on the findings of this study, other researchers and practitioners may have a clear picture
on the school budget management of the secondary education level in the Woreda . The study
also is expected to help concerned bodies at regional, zonal, Woreda , and school levelto
understand the school financial management. Moreover, based on the findings of the study,
Gamo zone, may have a clear insight about the school financial resources management, and then
may take appropriate measures to improve school financial management. Finally this research
shows strength and weakens of financial resource management system in study area.

1.6. Delimitation of the study

The main focus of this study is practices and challenges of school financial resource management
in Gamo Zone Secondary school. In order to make the data manageable the study will be
geographically delimited to the selected schools of Gamo Zone. The scope of this study will
focus on school community members such as, teachers, principals, Vice-principals, supervisors
and Woreda education office experts. The selection of the study area as a setting for the study
based on the researcher experience as a supervisor, school principal and familiarity with
educational officials and teachers in the study site that helps to sense the problem more. The
student researcher delimited this study to government secondary schools of Gamo Zone. Those
schools are Boreda Secondary School, Mirab Abaya Secondary School, Kogota Secondary
School, Chencha City and Zuriya Secondary school. The sampling techniques of the study are
purposive, available and simple random techniques. The relevant data for the study will be
collected by using questionnaire and interview. Data will be analyzed by using both descriptive
and inferential statistics (frequency, percent, mean, standard deviation, correlation multiple linear
regressions).

1.7. Operational Definitions of Key Terms

For the purpose of this study, the following terms were contextually defined as follows:

Budget- A financial plan that set out anticipated revenues and/or estimated expenditure overa
forth coming period of time typically one year (Maitlamd, 1996)
Finance- The management of money; a science which concerns itself with levying and
applications of revenue in organization ( Simpson and Winer, 1989)

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Financial management- refers to the process of managing school funds according to the
regulations and guidelines provided by the education authorities and relevant
legislation(Mbama, 1992).

The school fund- refers to the money given to the school by the State and/or obtained by the
school from sources such as donors, sponsors or the parent (MoE, 2002).
School leaders: Refers to principal and vice principals who are in charge of preparatory and
school administration

1.8. Organization of the Study

This study encompasses five chapters. The first chapter is an introduction of the study. The
second chapter provided the review of literatures pertinent to the study. The third chapter
presented the research methodology while the fourth chapter studies about work plan and last
chapter deals about budget break down.

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 CHAPTER TWO

2. REVIEW OF RELATED LITERATURES

This chapter generally deals about the concept and significance of the education, concept of
financial management, school based financial management, rational for educational financial
management, function of financial management in education, the concept of budgeting, the
purpose of budgeting, principle of budgeting, financial controlling and auditing, the role
stakeholders in school financial resource management, monitoring and evaluation in managing
finance, sources of finances in Ethiopian schools, troubles of financial management in secondary
schools, school financial management in Ethiopia, educational financial resource management in
Ethiopia and conceptual frame work.

2.1. The Concept and Significance of Education

Many developing countries, including Ethiopia believe that education is an important tool for
poverty reduction and improved living standards (ESDP, 2002). There is a generally accepted
view that education is a means of promoting scientific and technological development.
Illustrating this as cited in Lirenso, 2006 writes the significance of education as “a potential
instrument for harnessing and developing all the natural and human resources for the overall
transformation of the economy.”Mbua summarizes the significance of education as follows:

Education is thought of as basic human right necessary for the achievement of all other rights/
freedom. Therefore society must insure that all members have access to education. However,
Melaku (2010) argues that in a free market economy education is not always available to the
poor.( P.78). In addition to this education is an instrument for over all development. Generally
countries of the world consider education as a powerful instrument for national progress and
development. In fact, education enhances social economical, cultural and political development
of a country. In line with this education is private and social investment. Education in almost all
countries is provided in both private and public sectors. Thus education is not purely a public
good that it might be best described as a quasi-public good. Education is universally accepted as
a form of investment in human being that is human capital which yields economic benefits

8
(returns) and contributes to countries‟ future development by increasing the productive capacity
of individuals/citizens. When individuals invest in themselves (educate privately) there are
private costs and private benefits involved in the process. In like manner, when government/
public undertake investment in education there are social costs and social benefits. Further,
education is an agent for economic growth. Economic growth is an increase in the productive
potential (capacity) of a country over a period of time that implies increased output over time.
The production of output in the sense of goods and services requires skilled/qualified labors and
obviously it is education as a sector that produces the type of labor that is required for economic
growth. From the above summarized significance of education as put by Mbua, it is logical to
conclude that there is a close relationship between education and economic growth for increased
investment in education accelerates economic growth.

2.2. Concept of Financial Management

According to Oliobi in (Ogbonnaya, 2000) financial management dealswith the source of funds,
their efficient uses and maximization of costs orlosses for greater profitability of the business,
and in ministerial department,post primary institutions for enhanced welfare of students and
staff. (Pandey, 1995) visualized financial management as “that management activity which
isconcerned with the planning and controlling of an organization‟school financialresources”
(Ebinna, 1995) sees financial management as administering fundsunder the guidance of a body
of knowledge and a disciplined way ofproceedings.The implication of all the definitions so far is
that financial managementis directly concerned with decision-making on the proper use of
availablefunds. In the educational sector, the head as the administrator performs thetasks of a
financial manager.

Financial management is a system which studies the varies sources of income, areas
ofexpenditure; it decide priorities, and meets expenditure on priority areas within theallotment
received; it ensures efficient use of financial resources for management of humanand material
resources for accomplishment of predetermined objectives (Dash and Nena,2008). Financial
management deals with the planning and controlling of financialactivities; and this also refers to
a process of efficient management of finance/ funds forachieving organizational goals (Kumar,
2005). Financial management processes, such asfinancial planning, budget evaluation,
controlling, accounting and costing are applicable infinancial management in education.

9
2.3. School Based Financial Management

According to Mestry (2006), School based management can be explained as an approachto the
management of public schools where in there is a significant and consistent decentralization to
the school level authority and responsibility to make decisions related tothe allocation of
resources, in a system of education having centrally determined goals,priorities and frameworks
for accountability Similarly, Marishane and Botha (2004), explained School based management
as amechanism aimed at improving schools by shifting decision making powers regarding the
budget from the central level to the schools. This study further argue that school based
management is the joint responsibility of both the school governing body and the school
management team, which together form the school based financial management structure.This
structure is accountable to the two main sources of school funding namely the stateand the
community and is responsible for monitoring and evaluating the financial management
performance of the school based management structure.According to Bisschoff and Mestry
(2003), financial management is the performance ofmanagement actions ( regulatory tasks)
connected with the financial aspects of schools,with the main aim of achieving effective
education, and carried out by a person in aposition of authority. Hence the scope of school
management is very wide. It includes the following elements: planning, budgeting, controlling,
coordinating, decision making,evaluating and directing (Dash and Nena, 2008).

Similarly, VanWyk (2004), stated that financial management will only be effective if
linemanagers are competent, committed, outcomes based budgeting is applied and accrual based
reporting is introduced into the public sector. This study further concluded that the financial
administration in the public sector is not attractive due to a lack of up-to-datetechnology
financial restraint, inadequate financial training and poor internal control systems. Good
governance further seeks to ensure that there is adequate control over the strategic, tactical and
operational planning of the school, especially the schools financesand resources, to enable it to
achieve its overall objectives. The school management teamon the one hand needs to
demonstrate and put into practice honesty, integrity,accountability, responsibility and
transparency and the PTAs on the other hand must applytests of fairness, accountability,
responsibility and transparency and be accountable to both the school and their community.

10
According to MoE (2002), Schools are based mainly on two sections: which gives parent-
teacher-association power to administer and control the school's property, buildings andschool
resources, gives parent-teacher-association extra allocated functions to control their own finance
and extra-curricular activities. This implies that the community plays an activerole in the life of
the school specifically in assisting of schools.

2.4. Rationales for Educational Finance Management

Effective management in public interest requires the wise expenditure of money for educational
purpose and the avoidance of any wastage. Education can benefit from greater managerial
attention to systematic financial planning and budgeting. (Stewart, 1984 cited in Alebachew,
2005) Financial planning enables school adnistration optimally to select, combine and direct
resources. In line with this, Lirenso (2006) asserts that “taking into account the scarcity of
financial resource available in education sector one should be able to understand the efficient and
quality management and utilization of finance makes a great difference.”(P.59)
Financial management in schools differs from that of business and other firms, yet the concept
may be similar. Funds are allocated among different uses, the flow of funds involved in the
operation is managed, benefits are returned to sources of financing in the form of returns,
repayment, or products and services. To this end as in any organization schools take inputs. In
schools inputs include equipment, supplies, educational materials and facilities, buildings, human
beings and money in different forms. The outputs are education and training services. As
mentioned above schools are concerned with the use of funds to produce services, the production
of an intangible cost. Schools are not very much concerned with financial returns or repayments
rather they are concerned with the effective and efficient use and raising of finance.

Pointing to this:

The need for equitable distribution of educational resources to correct urban and rural disparities,
to expand the educational opportunity to every school children, to maintain the quality of
education and to cope with rapidly increasing enrollments necessitates the optimal utilization of
educational finance so as to avoid wastage and under utilization of already scarce resource
(Mbua, 1992 cited in Hindeya,2002 P. 45).

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2.5. Functions of Financial Management in Education

The financial function comprises all the financial activity can be defined as the work /tasks/
performed (Mestry and Bisschoff, 2009). Similarly, financial management activities ineducation
institutions are encompassed in this area as in the case of financial managementactivities in
business organization. Management control is a internal financial managementfunction that deals
with controlling the proper flow of cashes to programmed /perdetermined/ cost unit and
activities. In the same way public organization have similarrequirements that are to plan for
activities, prepare budget to carry out activities andreporting to the stakeholders that account
systems are established on the use of publicfunds and audits are done. Financial management
particularly concerned with the planning,acquiring and efficient use of funds (Chadwick,
2002).The main concern and focus offinancial management in nonprofit institution like
education is ensuring the proper use offinancial resources through planning, budgeting and
controlling. That is, in publicinstitutions, the principal financial management is identified with
two principal functions.These are financial planning (budgeting) and financial control.
According to Crowther(2004), management accounting is concerned with the analysis and
reporting of financialinformation for managers within a business in order to assist them in the
performance oftheir jobs. Management accounting is essentially a part of management decision
making.It helps managers with decision making in the following areas: planning (what to
produceand how best to meet the objectives of the organization),control (to ensure that
theoutcomes correspond to those planned), decision making (to decide between
alternativecourses of action by evaluating the consequences), measuring performance or to
decide if itmatches the expectations set out in the plan and to take corrective action if not
(Bischoffand Mestry, 2003).

Management control is an internal financial management function that deals withcontrolling the
proper flow of cashes to programmed /per determined cost unit andactivities. In the same way
public organization have similar requirements that are to planfor activities, prepare budget to
carry out activities and reporting to the stakeholders thataccount systems are established on the
use of public funds and audits are done. The twoprincipal functions (financial planning and
financial control) comprise the followingspecific functions of financial management in education
institutions. These are planningand programming of activities to achieve the desired educational
goals. Financial reportingrelies on accurate and complete financial recording keeping. The

12
accounting system of theschool should be comprehensive, so that the preparation of annual
financial statements canbe used for financial analysis (Bischoff and Mestry, 2003). Financial
management dealswith the planning, and controlling of financial activities. Financial
management assists anorganization’s operationsmanagement to reach its financial resources. It
also assists in thereporting of financial results to the users of financial information.

2.6. The Concept of Budgeting

Budget is defined by different scholars in different ways. The following are some of
thedefinition given by different scholars. According to Chadwick (2002), budget is a
planexpressed in money. It is prepared and approved prior to the budget period and may
showincome, expenditure and capital to be employed. A budget is a financial or
quantitativestatement prepare in advance of a specified accounting period. The budget normally
givesthe income and/or the expenditure, including any capital expenditure, needed during
afinancial period to achieve the given objective (Jill and Roger, 1999).

According to Croft etal. (2002), budgets are forecasts that specify the financial resources which
have beenallowed to an organization’s activities or to the achievement of its objectives for a
givenperiod of time.A budget is a document that translates plans into money that will be needed
to bespent to get your planned activities done (expenditure) and money that will need to
begenerated to cover the costs of getting the work done or income. Abudget is a tool for both
planning and controling.

According to Prasanna (1999), budget is aninstrument for detailed operational planning and
control over a short period of time,usually one year. According to Stesis et al. (2001), budget is a
control mechanism to assureaccountability, financial integrity, and legal compliance; a
management tool to achieveoperating economies and performance efficiencies; and a planning
component to assess theoverall effectiveness of government programs in meeting public service
needs. Budget is aplan of management’s intentions of attaining specified objectives. According
to Pandy(1993), the basic features of a budget are the following. It is a comprehensive
andcoordinated plan. It is expressed in financial terms. It is a plan for the organizationoperations
and resources. It is a future plan for a specified period. Therefore, a budget is anagreed plan for
future action. It is quantitative expression of a plan of action prepared inadvance of the period to
which it relates.According to Ntseto(2009), School financial planning is the task of the principal
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who hasto see that the school’s purpose, mission, goal and methods of attaining these are
clearlyunderstood by all the stakeholders at the school. It is the functional elements of
theprinciple that predetermines what the school proposes to accomplish. It is the starting pointof
the financial management process and is the point around which all the school financialactivities
revolve.

2.6.1. The Purpose of Budgeting

According to Bisschoff (1997), Budget is one of the most popular devices used forplanning and
controlling institutions in the use of financial resources. Planning is thedecision on what should
be done how it should be done, and by what it should be done .Hence, budget is an integral part
of planning, summaries the purpose of a budgeting asassisting systematic planning; quantifying
objectives and identifying priorities;coordinating activities and communicating plans within the
organization;motivating andincreasing the accountability of middle management; authorizing
expenditure andactivities; controlling ,monitoring and analyzing expenditure; and evaluating
performance. The school’s budget is an important financial management tool. This budget is
drawn upusing the aims and objectives of the schools as apoint of reference, and should always
reflectthe policy of the School concerned.Another study by Condoli et al. (1984), indicated that
budgeting establishes a plan ofaction for the future. Further, It requires an appraisal of past
activities in relation to plannedactivities. It necessitates the establishment of work plan. It
requires orderly planning andcoordination throughout the organization. It establishes a system of
management control. Itserves as public information. Overall, budgeting should be seen as an
activity thatfacilitates the educational process.

2.6.2. Principles of Budgeting

According to Chadwick (2002), the effective principle of budgeting includes the followingpoints.
It should be a team effort. All these involved should work together in harmony andadopt a
common sense approach throughout the budgeting process. Attainable targets;from a
management point of view, it is most important that budget is accepted as being fairand
reasonable. If target are too difficult people may just give up trying to achieve them,and become
de-motivatedor leave. participation; the people involved may even bringto the attention of
management information that is vital to the success of the budgetingprocess, and stop them from

14
going ahead with a development that could have disastrousconsequences. overall, the preparation
process and meeting held to discuss the budgetdirect the attention of management to appreciate
the fact that budgets are interrelated, forexample there is a link between the income budget and
the expenditure budget. Identifytheir principal budget factor, that is limiting factor such as
demand, as this will constraintheir activities. Decide upon how they are going to share out the
scarce resources whichthey have at their disposal between the competing factions.

2.6.3. The Process of Budgeting

According to Mestry and Bisschoff (2009), the School’s vision and mission is embedded inthe
development plan and provides direction to the budgeting process. Further, a budget isnot a
balance sheet or simply a list of figures, which cannot be regarded as statement of theprevious
year’s spending and a prediction or projection of spending for the next year. Itshould be regarded
as a planning instrument, a decision model to assist the management ofthe schools during the
next financial period and beyond.

As a study by Prasanna(1999) stated that the process of budget determination involves agreat
deal of negotiation between the subordinate and his superior at various levels in theorganization.
budgeting then, forces the administrator and staff to plan together what needsto be done, how it
will be done, and who will do it.Budgeting in an organization is a systematic design for planning,
allocating, andcontrolling the use of resources( Koteen, 1989). The budget process provide a
frameworkfor making decisions about the size , allocation, and financing options appropriate
toachieve program and policy objectives (Stesis et al., 2001). Effective financialmanagement
calls for careful preparation of budget for each financial year. Themanager/principal should keep
in view the sources of income and the expected expenditureon various heads. It is healthy
practice to invite proposals from various sections, examinethem and consolidate all proposals in
the budget. A competent teacher should be remainingin charge of preparation of budget (Dash
and Nena, 2008). Budgeting is a forward-lookingprocess which should be guided by the school’s
vision for the future and a realisticassessment of the risks (Clarke, 2007).

According to UNESCO (2006), during budget preparation, tradeoffs and prioritizationamong

programs must be made to ensure that the budget fits government policies andpriorities. The
study further noticed that there are three main phases to budget procedures.The first one is

15
budget preparation that is the ministry of finance uses the information toestablish budgetary
guidelines, which are then taken into consideration by other ministriesas they draw up their own
budget. The second is budget adoption which is proposedbudgets are voted upon by government.
The third budget execution is the implementationof budgets is regulated by accounting
procedures that may vary from country to country.

MoE (2002), have reported that the school planning process links with Woreda budgeting.This
manual revealed that the school submits their plan to town/Woreda education office and WEO
or TEOconsolidate and submitted the proposal to TOFED or WOFED determines and analysis
sector proposalsbased on performance. Then TOFED or WOFED prepares the town or Woreda
consolidated budget and submits itto town cabinet.

2.6.4. Budgetary Control

According to Kumar (2005), the term budgetary control is applied to a system ofmanagement
and accounting control by which all operations and output are forecast as farahead as possible
and actual results , when known, are compared with the budgetestimates. Effective accounting,
record and procedures are understood and applied.It needs strong support and commitment of
senior managers to the system of budgetarycontrol. When the revision of the original budgets
where circumstances show thatamendments are required to make them appropriate and useful.
The recognition throughoutthe organization budgetary control is a management activities and not
an accountingexercise. An information system which is provides data for managers so that they
can makerealistic predictions. Correct integration of budgets and their effective communication
tomanagers. The setting budgets are reasonable and achievable. The participation of managerin
the budget control system. Educate and train of managers in the development,interpretation and
use of budgets.

2.7. Financial Controlling and Auditing

According to MoE (2002), the schools finance come from government income that is thebudget
of block grant, internal income of school and community contribution as well asNGO. The
finance obtained from the above sources, schools properly utilize according totheir budget plan.
In order to implement according to the plan, it needs well managing offinance and accounting.

16
The schools implement the budget according to plan and timelyreport for concerned body. The
way of reporting implement according to the followingways.

Schools prepared their report and present for evaluation by school PTA and thequarter report
present Woreda education office. Then the Woreda education office collectfrom schools and
present for Woreda education office and training board for evaluation andapproval.Then, the
final report of quarter within fifty days present for Woreda Council. Thenreport present for
region education bureau. The task of audit manipulate by Woreda financeeconomic and
development office within year twice at half year and the end of budget year.The financial
management of an institution depends upon how the principal maintainsthese accounts
systematically. The school budget, the annual report, the receipts andpayments statement made
by the head of the institutions indicate his abilities of financialmanagement

According to Chalam ( 2003), The head of the institute with the help of financial manageror
accountant has to maintain strict control over the items of expenditure and at the sametime
improve the sources of revenue for the institute such as fees, user charges, grants,donations and
other sources). According to Chadwick (2002), financial controls includeaudit, budgeting, and
cost control. Controls are necessary in order to ensure that plans andobjective are correctly
implemented.

2.7.1 Definition of auditing

The term audit in finance defines in different ways. For example as Chartterjee (1988)indicated
that auditing means a critical examination of the books of accounts to check theiraccuracy and
also detect and prevent errors and frauds. An audit is conducted objectively.Almost all
educational institutions whether private or government receive one kind fundfrom public or
government. Therefore, audit of the accounts is compulsory.Further, Audit is necessary to avoid
errors of commission, compensating errors, andfraudulent errors. Auditing is the verification of
the accuracy and completeness of thefinancial records of the organization and the appraisal of the
legality, efficiency, andeffectiveness of the financial management of the organization (Chalam,
2003).

Auditing could be defined as the examination of financial records toguard against fraud and
waste. According to Ogbonnaya (2000) auditing ineducation means the verification of records

17
kept in an accounting system of aneducational institution. Its importance lies in the fact that no
financialmanagement would be complete without audit. The primary objective ofauditing in
private organization is to verify the records kept in their accountsdepartments in order to
determine their gains and losses on the efficiency offinancial managers. That of educational
institution is to among other thingsdetect fraud and error in financial management of educational
institutions.

2.7.2 Scope of an Audit

According to (Shekhar and Lekshmy, 2003), a financial audit is an examination of thefinancial

planning and reporting process, the conduct of financial operations, the reliabilityand integrity of
financial records, and the preparation of financial statements. Such areview includes an appraisal
of the systems of internal controls related to financialfunctions. A properly conducted audit is
organized to cover adequately all aspects of the organizationas they are relevant to the financial
statements subject to examination. The auditor has toensure that information contained in the
underlying accounting data and other source datais reliable and sufficient as the basis for the
preparation of the financial statement.

2.7.3. The Objective of Auditing

The objectives of auditing according to Millichamp (2002), is to produce a report by theauditor

of his opinion of the truth and fairness of financial statements so that any personreading and
using them can have belief in them. Subsidiary, to detect errors and fraud, toprevent errors and
fraud by the deterrent and moral effect of the audit. To provide spin –off -effects. The auditor
enabled to assist his clients with accounting, systems, taxation,financial, risk management and
other problems. Auditing is a crucial instrument formonitoring and controlling of budget
implementation. It is the essential part of the systemof accountability and oversight in that it
ensures compliance of operations with regulations,rules and procedures.

2.7.4. Types of Audit

There are two types of auditing. These are internal audit and external audit. Internal audit isan
important component of financial controls. It is an independent, objective assurance
andconsulting activity designed to add value and improve an organization's operations. It helpsan

18
organization accomplish its objectives by bringing a systematic, disciplined approach toevaluate
and improve the effectiveness of risk management, control, and governanceprocess. Overall,
Internal audit system normally envisages a continuous audit carried onthroughout the year, as
opposed to the periodic audit carried on by the external auditors(Chartterjee, 1988).

According to Shekhar and Lekshmy (2003), auditing is an examination carried out by

theemployees specially appointed for the purpose by an organization. Further, it is defined asan
appraisal activity, independent of other activities, within an organization. This studyfurther
revealed that an external audit is the independent examination and expression ofopinion on the
financial statements of an entity. It covers only those operations that have acontribution at the
financial results and the performances of the organization .One may findgovernment and internal
revenue auditors. A government auditor is an auditor working forthe government who is
primarily responsible for auditing the accounts of governmentorganizations. In Ethiopia, Office
of the Auditor General represents government auditor.Their functions are similar to external
auditors except that they deal with governmentaccounts which will be presented to the
parliament.

2.7.5. Principles of Audit

According to Chartterjee (1988), the basic principles that govern the auditors are thefollowing:-
(a) Integrity, objectivity and independence: the auditor should bestraightforward, honest and
sincere in his approach to his professional work.(b)Confidentiality: the auditor should respect the
confidentiality of information acquired inthe course of his work and should not disclose any such
information to a third partywithout specific authority or unless there is a legal or professional
duty to disclose.(c) Skilland competence: the audit should be performed and the report prepared
with dueprofessional care by competence in auditing.(d) Documentation: the auditor
shoulddocument matters which are important in providing evidence that the audit was carried
outin accordance with basic principles. (e) Planning:- The auditor should plan his work inorder
to enable himself to conduct an effective audit in an efficient and timely manner. Planshould be
to cover among other things:-acquiring knowledge of the clients’ accountingsystem, policies and
internal control procedures; establishing the expected degree ofreliance on internal control;
determining and programming the nature, timing and extent ofthe audit procedures to be
performed; and coordinating the work to be performed. (f)Evidence: the auditor should obtain

19
sufficient and appropriate audit evidence through theperformance of compliance and substantive
procedures as to draw reasonable conclusionsthere from on which to base his opinion on the
information. (g) Conclusion and Reporting:the auditor should review and assess theconclusions
drawn from the audit evidenceobtained as the basis for the expression of his opinion on the
information.

2.7.6. Internal Financial Control

Harrison and Horngre (2008), stated that, an internal control is a system of methods
andprocedures designed to safe guard assets ensure reliable accounting records
promoteefficiency and encourage adherence to school policies internal controls can be grouped
into two categories. (a) Administrative controls and (b) Accounting controls.
Administrativecontrols: are designed to promote operational efficiency and adherence to school
policies.Accounting controls: are designed to save guard school assets and ensure accurate
andreliable accounting records. An effective system of internal control has four characteristics.

(1) Competent and reliable personal: Paying competitive salaries training thoroughly
andproviding adequate supervision help to promote competence.
(2) Assignment ofresponsibility: All school duties to be performed must be identified and
responsibility forthe performance of those duties must be assigned to appropriate people.
(3) Properauthorization: A school generally has a written set of rules that outlines
approvedprocedures. Proper authorization must be obtained for deviations from standard
policies.
(4) Separation of duties: Separation of school duties is designed to limit the possibility offraud or
theft in the handling of assets.
The school must:-Separate operation fromaccounting, Separate custody of assets from
accounting, Separate authorization oftransaction from the custody of related assets &Separate
duties with in the accountingfunction.

Auditors: are evaluating the system of internal control to estimate the reliability of theaccounting
system. Auditors also help to spot age as where improvement internal controlcan be made
Internal Auditors: are employees of the school and external auditors: areemployed by public
accounting schools. The positive effects of internal control are acomputer system is increased

20
reliability, speed and efficiency. The negative effects ofincludes lack of flexibility and possible
outsider access to confidential information. Thelimitation of an internal collusion and the
resources that school principal devotes to thesystem. Collusion between two or more people
working together to defraud the school maygo undetected by the system of internal control.

An accounting information system is the combination of people procedures and costrecords that
the school uses to meet its needs for financial information mostly now a daycomputer use the
school information system.Accounting information system has its designstage once the system
design is accepted a system installation proceeds installationincludes training employees Local
testing the system and modifying it when necessary(Harrison and Horngre, 2008).

2.8. The Role of Stakeholders in School Financial Resource Management

The parent teacher association is made up of parents of the learners at school, teachers andlocal
community. People from the community may be co-opted as parent-teacherassociation members.
For example, an expert on financial matters may be co-opted in thefinance or fund (MoE,
2002).This study further reported that principals are not free to usethe school finances as they
please and money donated to the school should be used foreducational purposes only.

2.8.1 The Role of School Principals on School Financial Resource Management

According to Leithwood and Stainback (1995), school principals have responsibilities and
dutiesof their positions; they often find it difficult to keep abreast of changing policies and
practices.Sagor and Barnett (1994) agree that policies and guidelines are essential, because they
help tomake or determine appropriate actions. These policies and guidelines become the working
normsof the school rather than formal board policies or statements of operating procedures.
Typically,they dictate what will not be tolerated in reaching the mission. Murphy and Louis
(1999) refer tothe popular trend of delegating the management of school funds to school
principals and PTAs asan increase in the allocation of decision-making, school-based
management and participativedecision-making.

According to Earley (1999) School principals and PTAs should be empoweredto understand and
supervise school resources. Earley maintains that school principals shouldwork with their PTAs
in the financial matters dealing with budgeting, purchasing and inmanaging school resources. In

21
addition to this, (Tsukudu and Taylor, 1995) stated that theadequate training for school personnel
was very essential to manage schools resourceseffectively.

According to Earley (1999), school principals need not necessarily be financial experts
oraccountants, but it is believed that they should be knowledgeable enough to keep on top of
theschool’s budget and accounting process and knowledgeable enough to speak and understand
therelevant language.One of the biggest changes that have taken place in educational
management since 1994 is thelocal management of the school fund, for example, by the school
governing body, financialcommittee and the school principal. This has given schools much more
freedom in managingtheir own affairs and opened the door to better ways of managing the
school fund (Dean, 2004).

There is a considerable delegation within the schools, with individuals being responsible for
thebudgets for their departments. Each department thus becomes a cost centre with its own
budgetand responsibility for spending (Berkhout, 1992; Herman, 1994 and Brock and
Grady,1995).This means that not only principals, but also the heads of departments and subject
headsmust become knowledgeable about the management of their school resources. It also
means thatthere must be clear systems for dealing with the school budget and which cover the
way moneyis allocated, the way that school accounts are kept and the way spending is
monitored. These systemsare not only needed by principals but by all the members of staff who
have a budget responsibility(Dean 1993). Principals should encourage discussion within
departments aboutbudget spending so that all members of the staff are aware of and have a say as
to how the schoolbudget is administered (Berkhout, 1992 and Zymelman, 1973)

2.8.2 The Role of PTSA Members on School Financial Resource Management

The first step in organizing school finances is to institute the school governing body, which
inturn appnts the school financial committee. Both bodies are prescribed by legislation
(MOE,2002).The parent teacher association is made up of parents of the learners at the
school,teachers and local community. People from the community may be co-opted as parent-
teacherassociation members. For example, an expert on financial matters may be co-opted in the
financeor fund (MOE, 2002).The parent-Teacher-Student-Association is an important element of
democratizationin education. Therefore it is essential that the parent-teacher-association work

22
closely withthe school principals as school financial managers.The parent teacher association
should assist principals in administering the school finances; withfund-raising projects; to
establish a school fund account; and to administer it in accordance withthe guidelines. They
prepare the school budget each year that shows the estimated income andexpenditure and is
presented to the general parent’s meeting for approval (Correia, Flynn, Ulianaand Wormald,
2003).

The Parent-Teacher-Student-Association should find ways of obtaining enoughmoney for the

school by approaching business people to sponsor school activities; asking parentsto contribute
as they want; and organizing fundraising projects for their schools, allows theParent-Teacher-
Association to use the school hall for fund-raising. The money raised by theschool is paid into
the school account. The school finances should be administered in terms ofthe rules drawn up by
(MOE, 2002).The guidelines on school financial management indicate that the school principals
and Parent-Teacher-Student-Association should open and maintain a single bank account in the
name of the schoolat a registered bank. Nobody is allowed to keep money or deposit it into a
bank account otherthan the one that exists in the name of the school. The Parent-Teacher-
Association should lookafter school property. Principals are not free to use the school finances as
they please and moneydonated to the school should be used for educational purposes only
(MOE, 2002).

2.9. Monitoring and Evaluation in Managing Finance

During the period of actual budget operation, records on the use of money or resourcesconsumed
(that is costs) and the actual outputs (achievement) are kept and evaluation ismade on efficiency
and effectiveness the of the school.As this, internal, external auditingprocedures and information
is necessary. Budgets must be coordinated, monitored andreviewed.Monitoring is the periodic
oversight of the implementation of an activity whichseeks to establish the extent to which input
deliveries, work schedules, other requiredactions and targeted outputs are proceeding according
to plan, so that timely action can betaken to corrected efficiencies detected. Evaluation is a
process which attempts todetermine as systematically and objectively as possible the relevance,
effectiveness,efficiency and impact of activities in the light of specified objectives
(Chadwick,2002).

23
Financial planning alone would not adequate to bring about desirable result, unless
moderntechniques of monitoring and evaluation are applied. As mentioned by Corbally (1997),
thethree important procedures which are helpful for assuring of the legality, accuracy
andefficiency of financial resources are accounting, auditing and reporting. Accountinginvolves
complete and accurate recording, classifying and summarizing of all the financialfacts or
transaction From this it is possible to understand that accounting help in a betteranalysis of
financial facts. The importance of accounting and its necessity is wellexpressed: Accounting is
essentially the maintenance of records of the receipt andexpenditure transactions of an enterprise
accounting creates a running record of the fiscalaffairs of an enterprise and should enable to
financial position to be ascertained at any time.

Auditing is a formal examination and verification of the accuracy of the accountsmaintained in

the accounting system of an enterprise (Corbally, 1997). In addition to this,the function of
auditing is to examine the fiscal efficiency. It also protects the system andthe personnel from
illegalities, losses or improper expenditures.

Nieman and Bennett (2002), reported that, in the case of financial management there aretwo
kinds of reporting. The first is internal reporting which is made for those responsiblebodies in the
office and the other is the report made for public or government to describethe financial status of
the system relating with the education objectives and it is the finalprocedure of accounting and
auditing.

2.9.1. Accounting

Accounting involves complete and accurate recording, classifying and summarizing of all
thefinancial facts or transaction (Colclough and Al-Samarrai, 2000) from this it is possible
tounderstand that accounting help in a better analysis of financial facts.

The expenditure process of finance should be examined while on activity or progress.The

administration of the budget must be carefully coordinated. The importance of accountingand its
necessity is well expressed by Corbally (1997) as: Accounting is essentially themaintenance of
records of the receipt and expenditure transactions of an enterprise accountingcreates a running
record of the fiscal affairs of an enterprise and should enable to financialposition to be
ascertained at any time. Similarly, the importance and the necessity of accountingin financial

24
management are stated by another writer as: Orderly fiscal administration is notfeasible without
adequate system of financial accounting. Second budgetary procedures cannotbe developed
without the aid of financial accounting.

On the other hand, financial accounting without the aid of a budget is not as much benefit
tomanagement Morphet (1987). It makes possible to ascertain whether funds have been
expandedfor or not in accordance with the plan for attaining the purposes which the funds were
provided.

The major functions of accounting in education are: for attaining accurate records of
significantdetails in business transactions, it provides a system of control to assure the
appropriate use ofresources, it provides a medium of reporting the financial condition of the
educational system; ithelps to set priorities by establishing analyzing and selecting alternatives.

Auditing focuses on investigation of financial records of the educational organization. It

isimportant in that it enables public confidence, safeguard money, property and employees of
theschool. It also gives unbiased statistics with respect to the educational system. Thus,
theexpenditure process should be examined through auditing. Without audit the account may
notreveal the true financial acts. Basically, auditing is a formal examination and verification of
theaccuracy of the accounts maintained in the accounting system of an enterprise Corbally
(1997).In addition to this, the function of auditing is to examine the fiscal efficiency. It also
protects thesystem and the personnel from illegalities, losses or improper expenditures.

The principal purposes of educational audit program in educational finance are therefore:

1. To furnish assurance to the public that school educational funds

2. To furnish objective, complete and accurate financial statistics on educational operations
3. To determines the adequacy of internal checks
4. To determine the adequacy of financial accounting procedures and records
5. To assist in developing improved business administration and financial accountingprocedures
and policies (Morphet, 1987). By providing the above purposes auditing has a greatcontribution
over the fiscal operation if it is done by skilled personnel of financial managementteam. A good
auditing team can also give the public assurance that school or educational officesare being
faithfully administered.Accounting can be internal and external. Internal auditing is the pre-

25
auditing done by employeesto minimize mistakes to avoid financial trouble, while external
auditing is a post auditing madeafter a year’s work has been completed. External auditing is done
by independent auditors andwhich are not employees of the office (Corbally, 1997).

2.9.2. Reporting

Reporting is the process of providing information. In the case of financial management, there
aretwo kinds of reporting. The first is internal reporting which is made for those responsible
bodiesin the office and the other is the report made for public or government to describe the
financialstatus of the system relating with the education objectives and it is the final procedure
ofaccounting and auditing (Nieman and Bennett, 2002).

The accurate financial information which provided by accounting and auditing is reached
tovarious agencies and individuals by reporting. The general financial condition should be
reportedto the government and the community. Reporting is the procedure, which is, permitted
clear andmeaningful communication between school administrators and the public with regard to
thefinancial affairs of the school district (Samoff, 1999).

2.10. Sources of Finances in Ethiopian Schools

Dash and Nena (2008) described that the sources of finance in school government grantsare
received from state and central government for different components. School mayreceive
assistance from other agencies such as UNICEF, World Bank and etc for certainschemes and
projects such as assistance is received through the state government. Schoolsreceive finance
from bodies such as municipalities. The schools may also receivecontribution or donation from
parents, community members and business houses fororganizing various programs, stipends,
purchase of equipment, construction of schoolbuilding or extension of building, and etc.
Endowments income includes assistance fromreligious and charitable agencies; school’s landed
properties, etc. Every school collectssome fees from students as per state rules.Such fees include
admissions fees, tuition fees,and fees for various activities. Schools may also have other sources
of income. Thesesources include income from sale of fruits and vegetables produced in the
school’s gardenand etc. In Ethiopia also the sources of finance for education are government,
internalincome of it school self, private investor, community participation and NGO (MoE,
2002).
26
2.10.1. Government Budget

The government budget consists of funds from treasury and external loans and assistances
thatdirectly flow through the ministry of Finance and Economic Development. The total
educationbudget for education from those sources has been increasing significantly. The total
educationbudget which was Birr 1.5 billion in 1997/98 increased to Birr 7.6 billon 2006/07.The
totaleducation budget, which was below Birr 2 billion for many years, increased to Birr 7.6
billion in2006/07 similarly, the share of total education budget out of total government budget,
which wasless than 15% before 1998/99 increased to 21.0% in 2004/05. In 2006/07, about one-
fourth(24.6%) of the government budget went to finance education.Out of the total education
budget the highest share comes from treasury. Between1997/98 - 2001/02, the average share of
treasury from total education budget was 84.9% (OxfamGB and BEA-E, 2006) on average, the
share of external loans and assistances from the totaleducation budget during the same period
was only 15.1 percent. Although lack of disaggregatedbudget data by source for recent years has
made it difficult to calculate the share of externalloans and assistance from the total education
budget, it share may not increase significantly after2002. The major share of education budget
goes to finance primary education though it may notbe at the desired level for most of the years.
During the period of ESDP-I (1997/98-2001/02), theshare of primary education out of the total
education budget was 49.0 percent (Oxfam GB andBEA-E, 2006). But the plan in ESDP-I was to
increase the share of primary education out of thetotal education budget to 60 percent (MOE,
1999) During ESDP-II (2002/03-2004/05) the shareof primary education went further down. The
plan in ESDP-II was to allocate 41.7 percent of thetotal education budget to primary education
Although this was the lowest share that primaryeducation had ever received, it was the highest
share out of the total ESDP-II allocationsfollowed by tertiary education (22.9 percent).But as the
Oxfam and BEA-E study indicated inESDP-II “Primary education was losing ground for
emerging sub-sectors like highereducation” (Oxfam GB and BEA-E, 2006). This had created
dissatisfaction by most of thedonors during the appraisal of program Action Plan of ESDP-II and
in variousdonor-government meetings thereafter. Moreover, the budget earmarked for primary
educationwas not increased at a pace the enrollment was growing. It could be due to these and
otherfactors that the government reconsidered the share of primary education in ESDP-III The
shareof Primary education in the PAP of ESDP-III (200/06-2009/10) have increased to 51.8
Percent.In connection to, MoE (2002), “Directive for Educational Management, Organization

27
and publicparticipation and Finance” Blue print”. Budget allocation was based on student’s
enrollment peryear. Which is: Grade (1-4) = 10.00Br. Grade (5-8) = 15.00Br. Grade (9-10)
=20Br.

2.10.2. Non Government Organizations Contribution

Non-government organizations finance education in two ways. Some non-government

organizations establish and run formal schools and alternative basic education centers. Others
provide assistance in different forms (cash, material, technical support, etc) to schools, ABECs
and education bureaus/offices. According to the definition of Ministry of Education(in its Annual
Statistical Abstract), non-government schools are defined as all types of schoolsthat are not run
by government. These schools include private, faith based organizations (mission, church and
mosque), community and public schools. Between 2002/03 and 2006/07,and only 5.0 percent of
formal primary school pupils and 3.7 percent of secondary students wereenrolled in non-
government schools. This includes private faith-based and public schools. The private schools
are for profit organization and the whole burden lies, including the profit, onparents. The faith-
based and public schools are either subsidized from other sources or areoperating on cost
recovery basis. In all the three cases, parents pay for the education of their children.

In addition to the formal schools run by non government entities, there are alternative
basiceducation centers that are run by non-government organizations. The NGOs gets the
fundingfrom donors directly or through international NGOs for establishing and running the
alternativebasic education centers. In 2006/07, non-government organizations enrolled 258,611
children,which are 44.4 percent of the total ABE enrollment in the country (MOE, 2008).Non-
government organizations also contribute to the financing of education through the supportthey
give to formal schools and government bureaus/offices. They support government schoolsin
different forms. The support includes construction of additional classrooms, libraries, etc. And
Provision of educational materials, textbooks, furniture, equipment, etc. However, it is difficultto
shows the type and magnitude of NGOs support to government schools and bureaus or offices.

2.10.3. Parent Contribution

Parents incur direct and indirect costs for the education of their children. The objective of
thissection is not to analyze those costs. It simply attempts to show the contribution of parentsin
28
financing government and non-government schools. As clearly indicated in the Ethiopian
Education and Training Policy, general education (grades 1-10) is free. No child will be
requiredto pay school fee in government schools for those grades. However, if parents prefer to
send their children to non government schools. They have to pay school fees. The school fee
variesnot only between the different types of schools but also within the same type of school
since itis determined on a school basis. However, it is true that the private schools charge higher
thanthe other schools since the fee has to include tax and profit. The total amount that parents
pay forthe education of children is not known since there is no system for tracking and recording
it. Butit is possible to estimate the overall contribution of parents in financing primary and
secondary education.

In the last five years on the average 5 percent of the total enrollment at primary level and
3.7percent of the total enrolment at secondary level enrolled in non-government schools. Those
schools are self-financing and the government is not required to provide financial support. The
government provides only supervision support. From this it is obvious that, in the last five
years,parents have financed 5 percent of primary and 3.7 percent of secondary education
Ethiopia. In fact, it is also important to note the contribution of non-government organizations in
faith based schools though it is difficult to give an estimate.

2.10.4. Community Contribution

The community has been supporting primary and secondary education for a long time. Although
the community supports all types of non-private schools, its support is mainly for
governmentschools. The parents are more involved in the support of the school rather than the
whole community.

According to the estimate of the 2006-Joint Review Mission, in 2005/06 the community
contribution in cash, labor and materials was estimated at Birr 57.5 million. Communities
contribute purchase of educational materials and equipment, and to run the day-to-day operation
of schools. In rural areas it is customary for the community to contribute local materials andlabor
during the construction new schools, and upgrading and expansion of existing schools. However,
these contributions were not made in a structured and regular manner. In order toaddress this
problem, in August 2002 the Ministry of Education developed the “Directive for Educational

29
Management, Organization and public participation and Finance” which is known asthe “Blue
Book” The Directive (Blue Book), which is currently under revision, has beenimplemented for
the last six years and resulted in increased and useful community participations.In those years,
with the contribution of communities new schools were constructed, existingschools were
upgraded and renovated, and schools were furnished. Moreover, schools wereprovided with cash
to support their running costs. The Directive goes beyond increasing thefinancial contribution of
the community. It envisages to promote a sense of ownership andthereby to raise the role of the
community in the management of schools.Although the contribution of communities has
increased after the Directive came out in 2002, the system still has problems in tracking and
recording the type and magnitude of the contribution of communities. However, it was possible
to make estimates based on the data that are available at Woreda education offices and regional
education bureaus. According to the estimate of the2006-Joint Review Mission, in 2005/06 the
community contribution in cash, labor and materialswas estimated at Birr 57.5 million.

The contribution of the community in financing education stands at a third level next to
externalloans and grants. According to ESDP-III the community contribution was identified as a
sourcefor financing about 10-11 percent of the program cost. The community contribution in
terms ofcash, materials and labor to finance ESDP-III was estimated at Birr 5.5 billion. ESDP-III
has been under implementation. However, due to lack of data on community contribution it has
become difficult to indicate what percent of this estimate the community contributed.

2.10.5. Internal Income of Schools

Prior to the 1994 Education and Training Policy, schools’ internal income was one of the
majorsources for financing education. Schools were charging students registration fee and other
contributions at the beginning of the school year. They were also generating income from sale of
services and products such as producers of hand crafts and school farms. After the Education and
Training Policy was launched in 1994, primary and general secondary schools were not allowed
to charge students any form of fee. As result schools’ incomes thatwere derived from student
payment were no more available. Moreover, the new financial regulation required all
government institutions including schools to report and transfer the amount they collected in a
given fiscal year to the finance office since the government is allocating budget for them
according to their plans. This discouraged schools since they felt that transferring the money to

30
finance office while the school has serious shortage of funds was inappropriate. Latter on the
regional education bureaus discussed the issue with their respective regional finance and
economic development bureaus and reached at an agreement, which allowed schools to retain
and use their internal income. Although there is no change in thefinancial regulation, schools are
using their internal income. Currently, schools are generatingincomes from different activities
(MoE, 2002). “Directive for Educational Management,Organization and public participation and
Finance” blue print.”The major sources for schools internal income were farmlands, Parent’s
contribution, school clubactivities, evening classes and rent of classrooms for different activities,
etc (Oxfam GB andBEA-E,2006). The location of schools determines the type of income. The
income fromfarmland is for rural schools while incomes from evening class and rent of
classrooms are forurban schools. The community contribution is for all schools regardless of the
location of the school. In analyzing schools’ internal income, however, it is important to exclude
the community contribution in order to avoid double counting.

2.11. Troubles of Financial Management in Secondary Schools

Barasa (2009) recognized that, efficient management of financial resources is animportanttask

for head teachers. Without adequate financial resources, institutions cannotcarry out their defined
tasks effectively. Money must be available to run the differentdepartments of the school. The
available funds will be used to purchase the requiredteaching and learning apparatus such as
chalks, textbooks, paying of the support staff andbuilding and improvement of infrastructures.

Financial management in education is concerned with the cost of education, sources ofincome to
meet the educational costs and the spending of the income in an objectivemanner in order to
achieve the educational objectives (Okumbe,2001). However,educational managers are being
challenged to justify their financial requests in terms of educational programs rather than the
costs, if education has to compete equitably for public funds. In the preparation of the budget, the
principal or head teacher must seek thecooperation of the parents, the teachers and other school
employees. By enlisting thecooperation of these people, the principal ensures a comprehensive
view of the budget anda feeling of partnership which contributes to the much needed spirit de
corps. Financial planning involves aspects of accounting which involves the overall process of
identifying, measuring, recording, interpreting and communicating the results of economic
activity; tracking business income and expenses and using these measurements to answer

31
specific questions about the financial and tax status of the business which is basically a system
that provides quantitative information about finances (Okumbe,2001).

There are multiple factors that constitute problems of financial management in secondary
schools. Some educational administrators and planners are not conversant with finance
terminologies, concepts and principles in order to practice as chief executive of institutions or
organizations. These terminologies include planning, budgeting system, cost benefit analysis,
financial accounting, taxation, virement, real resource cost and capital costs.

According to Ogbonnaya (2005), the knowledge of these financeterminologies will put

practitioners at a vantage point in dealing with issues asthey arise.It is speculated that financial
records in secondary schools ischaracterized with indiscriminate expenditure and displacement
of priority inissues of infrastructural provisions and employment. In view of this Ogbonnaya
(2005) opined that the knowledge of educational finance would help educational administrators
to know when to employ staff, disburse funds allocate equipment and refurbish dilapidated
equipment.Another factor militating against financial management in secondary schools is
inadequacy of funds.

Ochai (2005) stated that management problemsarise as a result of inadequacy of

funds.Ogbonnaya (2005) noted that some administrators do not involve theirsubordinates in
budget making and preparation. Rather, they prepare budgets single-handedly or as if it is their
own private affairs. Such administrators seebudget making as their own exclusive preserve.

Obi (2004) Identified certain problems in secondary school financial management practices.
They are: inadequate funding, ineffective methods ofdisbursing funds, mismanagement of funds,
inadequate statistical data, increased school enrollment, rise in cost of education, instability of
government policies, and corrupt practices in financial management.

2.12. School Financial Management in Ethiopia

As it was stated in education and training policy, educational management should bedemocratic,
professional, coordinated, efficient and effective. Educational managementwas decentralized to
create the necessary condition to expand, enrich and improve therelevance, quality, accessibility

32
and equity of education. It is also stated that the financingof education be just, efficient and
appropriate to promote equity and quality of education(MoE,1994).

The finance of school managed by the school governing body that is PTA andschool board and
under these umbrella principals, accountants, and casher manipulate theactivities of managing
finance and present timely report concerned body. The schools manage the finance of non-
salaries and capital budget. The WEO and TEO finance budget plan startsfrom schools. Schools
present their budget plan for WEO and TEO. The budget preparation involvesthree tasks. These
are the listing of plan of activities in unit cost, program review and work plan development.
Schools report finance issues after evaluating by school board to WEO and TEO monthly.

Schools also present report finance issues to staff and parent of student. The WEO and TEO
coordinating with WFEDO and TFEDO audit twice a year. In Ethiopia also the sources of
finance foreducation are government, internal income of it school self, private investor,
community participation and NGO. Community contribution is an important source of finance
for schools (MoE,2002).

2.13. Educational Financial Resource Management in Ethiopia

Decentralization of power and authority in the education system has resulted in the delegation of
power and authority from center to regional and the grass root levels are possible for
management of resources allocated (MoE, 2002). According to MoE (2007) education sector
development program attention was given for financing of education by raising public
expenditure and improving its management is current issue. Moreover, the MoE (2002) which
focused on educational finance stated as the necessary conditions will be created for education
and training institutions to generate their own income and to use it to strengthen the educational
process.
On top of this, in decentralization the function of ministry of education has been significantly
reduced and it is now dealing with matters pertaining to the setting of fundamental policies,
broad educational planning and programming, maintaining standards and setting procedures for
program implementation and providing technical assistance. While regional education bureaus,
towns and Woreda s education office are responsible for financing, planning and implementation
of educational activities. Accordingly, Gamo Zone Educational office area was countable for
management and administration of financial aspects in schools (MoE, 2002). The current
33
education office is more involved in the administration of recurrent budgets allocated for schools
accomplishment activities at Woreda s level. To this end the researcher will review how the
stakeholders participate in school financial resource management practically in Gamo Zone
government secondary schools.

2.14. Research on Educational Financial Resource Management in Ethiopia

This section contains the management of educational finance before 1991 and the management
of educational finance after 1991 of specific funds. During the Imperial and Derg Regimes of
Ethiopia the financing of education was exceedingly centralized. The roles played by the school
principals and the local communities in planning, managing and controlling financial resources
were not as such or unlikely. As opposed to this, however, educational planning, management
and controlling have been considerable devolved to the local level (MoE, 2013).
Basically, under decentralized system substantial governments responsibilities are commonly
evolved to the local levels. The role played by the school principals and the local communities
become significant. Under such system the sources of educational finance, the rights to allocate
and utilize them are mainly determined by the local level. This is what we call fiscal
centralization. It is also true for purchasing, allocating and proper utilization of physical
resources (MoE, 2002).
In connection to this government developed the management of educational finance for a number
of factors. For instance, as it indicated in MoE (2002) creating flexibility and thereby responding
to the local level needs, to build up the participation and involvement of the local communities
and to create efficiency of financial planning and its implementation are among the major ones.
In practice, however, this might be challenged because a number of factors. The following are
among the major and overwhelming challenges in managing financial resource eat the local
level. These factors include: inadequate budget, weak sources of finance, limited capacity and
insufficient experience in allocating, planning, accounting, auditing, reporting, utilizing and
controlling financial resources effectively and efficiently. These challenges become usually
broaden by unequal potential that the local levels consist in terms of mismanaging financial
resource as well as the level of corruption by the local level authorities. As a result, there was a
big gap between approved budget and expenditure as indicated in (Teshoma, 1997; Endale,
2011).

34
 2.15. Conceptual frame work

Weakness of school leader ship

practices

Less participation of
Parent Teachers
Association levies Skill gap of Principals
to manage Gove’t &
Non-gov;t Funds &
grants informs of aids,
Weak School financial Challenges of Financial recurrent and capital
Managements System grants
Resource Management
at school
Not having formal
Lack of attention in the side Accountants/Casher
of Stakeholders
(PTA& KETB)
Lack of Evaluation&
Sense of Corruption &
Monitoring culture
Nepotism

Figure 1: Description of Conceptual frame work

Source: Developed by the researcher,2022

35
 CHAPTER THREE

3. RESEARCH DESIGN AND METHODOLOGY

3.1. Introduction

This chapter study will be including the research design and methodology used by the researcher
in this study. The sub-topics depicted here are: - research design, Research methods, sources and
types of data, target of population, sample size determination and sampling techniques, data
collecting instrument, methods of data collection, validity and reliability, methods of data
analysis and presentation and ethical consideration.

3.1. Research Design

The research design of this study will be both quantitative and qualitative ones. Because the
mixed method is considered as a tool to triangulate the result of single approach through multiple
method (Johnston, 2010).A quantitative method is selected because it is viewed as an effective to
gather large data and comprehensive is sustain specified period of time (Ngwenya, 2010).

While the qualitative method will be selected based on the assumption that it enables the
researcher to generate meanings and phenomena within the real context to gather research
participants and to fill the gap left by the quantitative one (Kothari, 2004). To collect data from
teachers, principals, supervisors and education office experts with mixed research methods will
be employed in selected General and preparatory schools of Gamo Zone Woreda ’s. Mixed
approach since the data will be collected using questionnaire and interview. The collected data
analyzed both descriptive and inferential analysis. Therefore, the mixed method will be adapted
in order to make the study more reliable through triangulation.

This design will be selected for the reason that it enables the researcher to obtain current
information about the financial resources management practices in the selected secondary
schools.

3.3. Source of Data

The sources of data in this study will be both primary and secondary sources. The primary
sources of data will be obtained from teachers, principals, vice principals, supervisors and

36
education office experts selected from secondary schools of Gamo Zone Woreda ’s.These groups
are selected because of their position and responsible bodies who are at this time leading
teaching-learning in the school and they reflect practices challenges of school finance
management method and work commitment condition from their practical work experience
rather than other bodies. The secondary source of data were school record documents includes
school annual report and written documents. From these sources the researcher will get enough
information about practices of school finance management method and work commitment of
teachers in high schools. In case of primary source the researcher collects both quantitative and
qualitative data but qualitative data will be collected from secondary.

3.4. Target Population, Sample size and Sampling Techniques

3.4.1. Target Population

In order to make the sample population manageable, it is necessary to determine and identify
number of Woreda’s and schools that would be serving as representative sample to generalize the
finding of the study population. Accordingly, from these 4 Woreda namely Boreda, Mirab
Abaya, Kogota, Chencha Zuriya and 1 administrative city namely Chencha by using simple
random method. To identify the sample Woreda and in order to give equal chance to all target
population in the Woreda lottery method would be employed. In these selected Woreda s there
are 20 secondary schools. Out of these 8(40%) secondary schools would be selected by using
stratified sampling Technique. These schools include: Boreda secondary and preparatory,
Chileshe secondary, Menuka secondary, Wagifo secondary, Birbir secondary and preparatory,
Ezo preparatory, Dorze secondary and Chencha secondary and preparatory schools. In these
selected schools, there are 40 school accountants& other workers and 65 leaders including
principals, vice principals, department heads, school supervisors, PTSA representatives, WEO
heads and Audit. Out of these 40(31%) school accountants& other workers will be selected by
using availability Sampling Technique and stratified and 65(62%) of the leaders will be selected
by using random sampling and availability sampling.

37
3.4.2. Samples and Sampling Techniques

For this study, the researcher used a combination of purposive, available and simple random
sampling techniques to select samples. This helps to ensure that target groups within population
area adequately represented in the sample, purposive sampling will be used to select 8 high
schools. By using simple random sampling male and female teacher participants can be selected
from each selected schools. The sample size for the study by the researcher selected Eight
secondary schools due to their long years of the establishment of the schools, long year of
service, experienced teachers, large number of students and the schools were representative
sample and help to manage the work of the study in terms of time and the people give relevant
information for the purpose of the study.

Bryman and Bell, (2007) explain that with this sampling method, there was almost no
opportunity for human bias because the process was not dependent on the employee’s
availability. Therefore, teacher’s respondents were selected from each sample schools 195,
teachers, by simple random sampling by using Yemane, (1967) application of sample size
formula and samples of eight General secondary and Preparatory secondary schools which had
40 school accountants and other workers, 8 Principals, 18 vice principals 7 supervisors, and 4
Education Office experts, Department Heads 16, PTA 8,Auditor 4 .In general a total of 105,
participants. Woreda education experts could be selected by available sampling technique (see
table 1).

3.4.3. Sample Size Determination

Teachers sample size will be determined by using Yamane’s (1967) sample size calculation
formula. Accordingly, assuming the population (N) of selected schools of Gamo Zone Woreda ’s
105, the required sample size at 95% level of confidence and maximum error (e) of 5% of the
total population. The sample size was determined by using the Yamane’s formula.

N
n= Where
1+ N (e) 2

n= Sample size

N= Total population, e= Level of error (0.05)²

38
 Therefore, the sample size was determined as follows

n=N/1+N (e) ²

Accordingly, n=129 /1+129 (0.05)2

n= 129/ 1+ 129x0.0025

n= 129/ 1+0.3225

n= 129/1. 3225

n= 105

3.5. Procedure of Data Collection

After including all comments to survey questions, the researcher will pilot tested them.
Following getting permission from Gamo Zone education department to conduct study in
secondary schools, the researcher will follow the following procedures. First, the field work
activities will be carried out. During the field work activities, the researcher will make the first
contact with the Woreda education offices and school leaders in order to establish smooth
relationship with the individuals as well as to achieve the purpose of the study. The objectives of
the study will be explained to all of the respondents in the target schools. Before utilizing any of
the instruments, brief explanation will be provided to the respondents for ensuring transparency
and clarity. Next the prepared questionnaires will be distributed and decisions made regarding a
time for collecting questionnaires which will be done through mutual discussions between the
researcher and the respondents. Then the interview will be conducted with all selected
participants for interview in a conversational and friendly atmosphere using Amharic language,
so that it will be easy to communicate. By starting with a few outlined questions, intensive
interview will be held as further issues immerged in the process.

Moreover, the document analysis will be made to gain information that can’t be obtained through
questionnaires. The researcher, requests the school principals in order to gain the available and
necessary documents and critical observation will be made by using checklist and rough paper to
record what observed on the bases of the issues to be assessed. During document analysis the
unstructured interview will be made with school principals on the important issues observed.

39
Finally, the distributed questionnaires are collected carefully from respondents and data collected
through interview will be making ready for next process.

Table 1: List of Woreda, Target, Sample Population and Sampling Techniques

Respondents’ Target Name of Woreda ’s Sampling

category and Boreda Mirab- Kogota Chencha Techniques
Sample Abaya City& Total
population Zuriya

School Target 21 18 12 20 71 Simple random

Accountants& Sample 15 10 5 10 40 Sampling
other finance
worker
Vice Target 5 5 3 5 18 Census
principals Sample 5 5 3 5 18
Principals Target 3 2 1 2 8 Census
Sample 3 2 1 2 8
Cluster Target 2 2 1 2 7 Census
supervisors Sample 2) 2 1 2 7
WEO heads Target 1 1 1 1 4 Census
Sample 1 1 1 1 4
Department Target 15 10 5 10 40 Simple random
heads Sample 6 4 2 4 16 Sampling
PTA Target 3 3 1 2 8 Census
representative Sample 3 3 1 2 8
s
Auditor Target 1 1 1 1 4 Census
Sample 1 1 1 1 4
Tot Target 45 33 18 33 129 Simple random
al Sample 36 27 15 27 105 sampling
Source: Researcher own Survey, 2021
In this sample size determination sampling technique and Male 65, Female 40, total 105
respondents were selected from eight General secondary and Preparatory schools of Gamo Zone
Woreda ’s and given equal chances to all Woreda ’s school and to select the available number of
respondents from selected schools in each Woreda . The researcher gave equal chance to all
schools in the study based on the simple random.

3.6. Data Collection Instrument

Data will be gathered by the help of instruments that are questionnaires, interviews, document
analysis and checklists.

40
3.6.1. Questionnaires

This study will use questionnaires to collect data from 40 school accountants& other finance
workers, 8 principals and 18 vice principals, 7 cluster supervisors, and 16 department heads.
The questionnaire will be very much importance to collect useful data. That is, it will permit to
obtain a lot of data with less time and cost involved. The questionnaire will be developed by the
researcher himself with the advisement of and approval of my research advisor and co-advisor.
The questionnaires will included close ended items which are basically aimed at exploring the
practices and challenges of school financial resource management and close ended items will
be formulated in five point liker scale (very high =5, high =4, moderate=3, low=2 and very
low=1). The questionnaires will have two categories: the respondents’ personal characteristics
and items relevant to the issue under investigation.

3.6.2. Interview

Interview will give the needed information face to face. The need that interview will be used as
a data gathering instrument will be for the reason that it will be adaptable that I will follow up
with respondents answer and will enable me as to why they believed, felt or responded in a
particular way on issues related to the practices and challenges on school financial resource
management in the secondary schools of Gamo Zone. The interview questions will be prepared
in English and translated to Amharic language for more clarity of concept for respondents. The
interview will be conducted with 4 Woreda Education Office heads, 4Woreda finance and
economic development office auditors and 8 PTA chairpersons and the interview will be
conducted using Amharic and Gamogna language whenever necessary.

3.6.3. Document Analysis

Document analysis will be used to collect data for this study. In this regard, documents such as
the Woreda education office budget report, school budget plan and report, receipt, rules and
regulation guideline in the schools on financial issues, models and auditing reports will be
conducted during the analysis and interpretations of the collected data which will enable to get
reliable data

41
3.7. Validity and Reliability of the Instruments

3.7.1. Validity of the instrument

The instrument will face validated by my research advisor and co-advisor. They will be
requested to check the items and access the suitability of the language, the adequacy and
relevance of the items in addressing the research questions bearing in mind the purpose of
the study. Their corrections and comments will be used to modify the questionnaire.

3.7.2. Reliability of the Instruments

To ensure reliability of the instrument especially the internal consistency of the instrument, the
Cronbach Alpha procedure will be used. In this view the instrument will trial tested on one
preparatory and secondary school and its will be excluded from the actual sample of the study.
Ensuring their confidentiality and anonymity, the student researcher will ask the pilot study
participants to complete the questionnaires and to provide feedback thereafter. . Using the data
collected for the pilot study, the student researcher will check the reliability of the instruments by
using the Cronbach’s alpha procedure. According to Cohen et al. (2007), Cronbach's alpha
reliability coefficient of 0.70 or higher is acceptable in social science research.

3.8. Ethical Consideration

Taking the severity of the ethical considerations in mind, this study will be done with highest
importance placed on ethics, confidentiality, and anonymity. In this study, confidentiality and
anonymity of the respondents will be emphasized to protect their privacy and the dignity (Cohen
et al., 2007). Thus, on the cover page of the survey questionnaire the student researcher clearly
presented how to protect confidentiality and anonymity of the participants; informing them that
involvement in the study is voluntary; the involvement is free of any intended risk; and their
names and the names of their schools would be kept anonymous.

3.9. Procedures for Data Collection

After including all comments to the survey questions, the researcher will pilot tested them. Then,
after getting a permission letter from the Gamo zone Education department, to conduct a study in
schools of the Gamo Woreda , the student researcher will make contact with concerned

42
education officials at Woreda level to inform them about the purpose of the study and to get
their permission to distribute the questionnaires in selected secondary schools in the study
Woreda s. The student researcher will personally distribute the questionnaire for the respondents.
Finally, the completed questionnaires will be sent back to the student researcher through each
sample schools education office address. Regarding the qualitative data collection procedure, the
researcher personally will conduct all of the interview participants and will make interview in
their work place

3.10. Method of Data Analysis

After the necessary data collection, the data will be organized according to their homogeneity,
tallied, tabulated and analyzed to answer the basic research questions in a meaningful way. Both
quantitative and qualitative data analysis methods will be used in the study. Quantitative data
which will be collected through questionnaire from teachers and school managements will be
described in descriptive statistics such as percentages, frequency, mean and combined mean.
Moreover, inferential statistic t-test will be employed to identify whether there were statistical
significance differences between teachers and school managers on the questionnaires. The t-test
will be used at the level of significance difference α=0.05 levels to infer the significant
difference between the responses of teachers and school managers group. SPSS version 20.0 will
be used to process the quantitative data. The qualitative data that will be collected through
interview semi structured questions; focus group discussion through guiding points and
documents analysis information obtained will be narrated in words by triangulating the
information that obtained from questionnaires. Finally, the result of the interpretation will be
discussed and summarized.

4. WORK PLAN

Table 2: Work Plan

43
No Time schedules
Parameters Remar
Sep Oct Nov. Dec. Jan. Feb Mar Apr May Jun k
.
1 Preparation of 
thesis proposal

2 Submission of 
proposal draft.

3 Submission of 
final proposal

4 Approval of  
proposal and
clearance.

5 Data collection  

6 Data analysis  
and report
writing
7 Submission of 
first draft thesis
8 Submission and 
hand over of
final thesis

9 Thesis  Depend
Defenses s on
school
progra
m

5. BUDGET PLAN

Table 3: Budget Plan

44
 Estimated
No. Description (and Catalog No.) Quantity Unit Cost Total Cost
1. Stationary
1.1 Duplicating paper 2 ream 700 1400
1.2 Printing Paper 3 ream 700 2100
1.3 CD Disks 4 50 200
1.4 Flash Disk 2 500 1000
1.5 Pencils, Pen, erasers, Shapers Pieces 500 500
and Staples
1.6 Note Book 2 200 400
1.7 Internet download material print 1000
2 Data Collection & other services
2.1 Transport for researcher 20 days 200 4000
2.2 Data Clerk 20 days 200 4000
2.3 Computer service for writing research - - 2500
report
2.4 Photocopy 4 400 1600
2.5 Binding 4 500 2000
3. Contingency 10% 2070
Total 22,770

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