EDUCATION FINANCE : Indonesian Experiences MINISTRY OF EDUCATION AND CULTURE Republic of Indonesia Bangkok, Thailand, 23 – 26 April 2012 1 OUTLINE A. EDUCATION DECENTRALIZATION IN INDONESIA B. FINANCE SITUATION FOR DECENTRALIZED EDUCATION C. RESULT OF FINANCE IN WEI QUESTIONNAIRE 2010 2 A EDUCATION DECENTRALIZATION IN INDONESIA 3 Overall Government Management Decentralization in Indonesia Central Government Authority: • • • • • • Foreign Politics, Defence & Security, Justice, Monetary & Fiscal, Religion National Planning, National Standardization Other Matters (including Education) • decentralized to district/municipality level 4 RULES AND REGULATIONS • LAW 32/2004 (Revision of Law 22/1999): LOCAL GOVERNMENT • LAW 33/2004 (Revision of Law 25/1999): BALANCED FUND BETWEEN CENTRAL AND LOCAL GOVERNMENT • GOVERNMENT REGULATION 38/2007 DISTRIBUTION OF RESPONSIBILITIES • GOVERNMENT REGULATION 48/2008 EDUCATION FUNDING 5 Rational for Decentralization in Indonesia 1. Geographical condition : Indonesia is an archipelago nations with more than 6,000 islands 2. Diversity in cultures : There are more than 200 ethnic groups and local languages 3. Population : Based on 2010 census, population of Indonesia is 237,641,326 4. Education Number of schools (>330 thousands incl madrasah 67 thousands), number of students (> 59 millions incl madrasah 8 millions), number of teachers (> 4 millions incl madrasah 900thousands) 6 General concept of Education Decentralization • Transfer of authority of educational policies from central government: delegate discretion of education policies & money needed to finance the responsibility • Shifting of various educational decisions from government to people It is the people who benefit from education being offered they should be in a better position to make decisions in their own behalf 7 Sharing of Responsibility Between Central Government and Local Government in Education • CENTRAL GOV: National standard (curriculum, examination, minimum service standard); Requirement for admission, transfer, certification; organization & development of higher education • PROV GOV: Equitable student selection and acceptance, provision of learning materials, assisting in Higer Education management • DISTRICT/MUNICIPALITY GOV: all other aspects. 8 ARRANGEMENT IN EDUCATION DECENTRALIZATION – Junior Secondary Schools and Senior Secondary Schools which were previously administered by Ministry of Education and Culture are now administered through the District Government along with Primary School – Funding for Basic Education (Primary and Junior Secondary) and Senior Secondary Education is shared by Central Government, Provincial Governments, District Governments, Parent , and Communities HOWEVER : Primary, Junior Secondary, and Senior Secondary Schools under Ministry of Religious Affairs remain unchanged (in term of administration and financing) One of the peculiarity in Education System in Indonesia 9 DISTRIBUTION OF MAJOR RESPONSIBILITY AMONG CENTRAL, PROVINCE, AND DISTRICT GOVERNMENTS BASED ON GOVERNMENT REGULATION N0. 38/2007 CENTRAL GOVT. Financing 1.Determination of guideline for education financing 2.Provision of financial aid for school implementation and quality assurance in line with its authority PROVINCE GOVT. DISTRICT GOVT Provision of financial aid for school organization and quality assurance in line with its authority Provision of financial aid for school organization and quality assurance in line with its authority 10 RESPONSIBILITY DISTRIBUTION BETWEEN CENTRAL AND LOCAL GOVERNMENT BASED ON GOVERNMENT REGULATION N0. 48/2007 No. I II III IV V VI Cost Type Investment cost for schools 1. Investment cost for land a. National Standard School b. International Standard School 2 Investment cost for infrastructure a. National Standard School b. International Standard School Investment cost for education organization and management 1. Investment cost for land 2. Other costs Operational cost with in schools 1. Personnel cost a. National Standard School b. International Standard School 2. Non-personnel cost a. National Standard School b. International Standard School Operational cost for education organization and management 1. Personnel cost 2. Non-personnel cost Aid for education cost and scholarship Education cost abroad Responsible government level Basic education Senior Sec and Higher Educ Central/Local government Central/Local government/Community/Foreign Aid Central/Local government Central/Local government/ community Central/Local government/Community/Foreign Aid Central/Local government Central/Local government Central/Local government Central/Local government/Community/Foreign Aid Central/Local government Central/Local government/ community Central/Local government/Community/Foreign Aid Central/Local government Central/Local government Central/Local government Central government 11 NEW APPROACH IN EDUCATION DECENTRALIZATION Given the diversity of Indonesian regions blanket approach is not suitable decentralization is a must Strategy for education decentralization: – More independent & autonomous management at school level – How to support school? strengthen school committee improve school finance & management system 12 SOME BENEFITS OF DECENTRALIZATION Improvement of school management with the implementation of SCHOOL BASED MANAGEMENT Increasing of community participation through the establishment of Education Board (at Province and District levels) and School Committees (at School level) Increasing of industry and bussiness community in education through their Corporate Social Responsibility (CSR) engagement 13 MAJOR ISSUES IN EDUCATION DECENTRALIZATION Lack of alignment between responsibilities and provision of finance served by Central Government, Provincial Government, and District Governments Insufficient capacity of education leadership and stafs in Province and District Education Offices, for example in understanding of Education National Standard Uncertain career development of education staffs in Province and District Education Offices due to the high frequency of personnel transfers between local government offices, according to the willingness of Governor or Head of District 14 B FINANCE SITUATION FOR DECENTRALISED EDUCATION 15 PLANNING AND BUDGETING REFORM • Unified budget: Integration of Routine Budget and Development Budget • Medium Term Expenditure Framework (MTEF): – Rolling Plan Budgeting for 3 – 5 years to come using baseline – Based on resources envelope to ensure the budget availability for priority programs and activities • Performance Based Budgeting (PBB): – Based on performance using definite outcomes and outputs – Accountability for each level of management • Gender Responsive Budgeting – Clear budget allocation based on gender 16 Political Will and Financial Support Constitution* • Every citizen is entitle to education • Every citizen should enroll in basic education and the government should finance it (art 31:2) Law 20/2003 on National Education System • Financing ed: shared responsibility of national gov, local gov, and community (art 46:1) • Ed. funds** are allocated at a minimum of 20% of national gov. budget 20% of local gov budget (art 49:1) * IVth amendment of the 1945 Constitution ** excluding salary of educators & service ed. expenditure 17 TREND IN EDUCATION FINANCE BY LOCAL GOVERNMENT IN DECENTRALIZATION ERA The percentage of budget for education from Provincial Government tends to decline The percentage of education budget from District Governments remain stagnant and even declining The majority of funds are used for teacher salary Budget for improvement of access and quality of education mostly coming from central government 18 BREAKTHROUGHS IN FUNDS DELIVERY TO SCHOOLS, STUDENTS, AND TEACHERS a. School Operational Assistance (Bantuan Operasional Sekolah - BOS). b. Operational Assistance for Quality Management (Biaya Operasional Manajemen Mutu – BOMM) c. Scholarship for Students from Poor Families d. Teacher Profesion Grant 19 POLICY INITIATIVES FOR 2011 1. Establishment of Education Committee chaired by Vice President of the Republic of Indonesia 2. Tranfers of responsibility of BOS delivery from Central to Provincial Governments 3. Completion of school rehabilitation (primary and junior secondary schools) 4. Acceleration of teacher certification 20 PRIORITY OF EDUCATION BUDGET ADMINISTERED BY MOEC FOR 2011 Increasing of access and quality of early childhood education Acceleration of the completion of nine years universal basic education Improvement of vocational education Acceleration and improvement of academic qualification of teachers, teacher certification, and development of special education for teacher Acceleration of percentage of university faculty with doctorate degree 21 C RESULT OF FINANCE WEI QUESTIONNAIRE 2010 22 BACKGROUND (1) Difficulty in having a comprehensive nation-wide data on education financing due to: 1. Multiple public expenditure service providers (20 ministries) 2. Highly decentralized system of educational services provision and absence of coherent accounting system between central and district government 3. Difficulty of tracking private spending and expenditures at private institutions BACKGROUND (2) 4. Limitation of data on public education expenditure by each of approximately 500 districts 5. The district government use a different accounting method from MOF because they use an accounting system that is designed by the MOHA which is not compatible with the accounting system of the MOF. 6. Since 2009, Bureau of Planning is responsible for collecting data on educational services provided by all ministries. AIM • To document data sources, estimations, assumptions, and compilation of finance education data and report to UIS using WEI (World Education Indicators) questionnaire • To provide the template data to enter national data and convert them into the WEI data format RESULT • Template Education Finance • Questionnaire WEI (World Education Indicator) can be fill in • Analysis of Education Expenditure MINISTRIES WHICH ARE HELD EDUCATION 1. 2. 3. Ministry of Education & Culture Ministry of Religious Affair Climatology Meteorology and Geophysics Board 4. National Land Board 5. Central Board of Statistics 6. National Nuclear Energy Board 7. Ministry of Home Affair 8. Ministry of Energy and Mineral Resources 9. Ministry of Law and Human Right 10. Ministry of Culture and Tourism 11. 12. 13. 14. 15. 16. 17. 18. Ministry of Health Ministry of Finance Ministry of Agriculture Ministry of Marine and Fishery Ministry of Industry Ministry of Transportation Ministry of Social Affair Ministry of Communication and Information 19. Institution of State Code 20. National Library DATA SOURCE 1. Ministry of Education and Culture: Bureau of Planning, MOEC 2. Office of Education at Province and District: Ministry of Finance 3. Ministry of Religious Affair: Bureau of Planning, MORA 4. Other Ministries: Bureau of Planning, MOEC 5. Foreign Aid: No data 6. Household: Survey of Central Board of Statistics Share of Education Expenditure of the Total Government Expenditure, 2010 Public education expenditure 17% Non-education public expenditure 83% Total Education Expenditure by Level of Education, 2010 Billion Rupiah 100,000 90,000 85,797 80,000 70,000 60,000 50,000 40,000 30,990 27,936 27,378 30,000 19,570 20,000 14,776 10,000 4,795 1,368 0 Pre-primary Primary J.Sec S.Sec S.Sec gen S.Sec.voc Tertiary Not allocated Breakdown of Educational Expenditure By Current and Capital, 2010 100% 90% 16% 11% 6% 9% 10% 3% 12% 13% 28% 80% 70% 60% 50% 40% 84% 89% 94% 91% 90% 97% 88% 87% 72% 30% 20% 10% 0% Pre-primary Primary J.Sec S.Sec S.Sec gen Current Capital S.Sec.voc Tertiary Not allocated Total Distribution of Educational Expenditure by Level of Education, 2010 Total 1% 44% Current 1% 45% Capital 1% 0% 14% 15% 41% 10% 20% 10% 8% 30% Pre-primary 40% Primary 10% 13% 8% 50% J.Sec 16% S.Sec 14% 16% 38% 60% 70% 80% Tertiary Not allocated 4% 90% 100% Breakdown of Current Expenditure (by Salary and Non-Salary) public schools, 2010 100% 90% 21% 30% 28% 80% 40% 40% 38% 39% 70% 60% 52% 60% 50% 40% 79% 70% 72% 30% 60% 60% 62% 61% 20% 40% 48% 10% 0% Pre-primary Primary J.Sec S.Sec Salary S.Sec gen S.Sec.voc Non-Salary Current Tertiary Not allocated Total Distribution of educational expenditure by levels of government, 2010 100% 0% 90% 32% 80% 70% 63% 61% 54% 52% 45% 47% 68% 4% 60% 50% 7% 40% 30% 8% 10% 7% 8% 63% 9% 20% 29% 31% Pre-primary Primary 39% 6% 100% 6% 41% 49% 46% 23% 0% J.Sec S.Sec Central S.Sec gen Province S.Sec.voc District Tertiary Not allocated Total Distribution of education expenditure by Ministries, 2010 100% 90% 4% 3% 5% 18% 18% 12% 12% 16% 80% 9% 35% 70% 60% 50% 97% 100% 95% 82% 40% 88% 84% 84% 73% 30% 60% 20% 10% 0% Pre-primary Primary J.Sec S.Sec MONE S.Sec gen MORA S.Sec.voc Other Ministries Tertiary Not allocated Total Contribution of resources by the government and household (share), 2010 100% 90% 30% 80% 54% 70% 60% 40% 44% 54% 62% 74% 75% 50% 40% 70% 30% 46% 20% 10% 60% 56% 46% 38% 26% 25% 0% Pre-primary Primary J.Sec S.Sec S.Sec gen Public Private S.Sec.voc Tertiary Not allocated Total Breakdown of household expenditures on education, 2010 100% 90% 80% 35% 35% 29% 42% 42% 42% 22% 22% 22% 39% 50% 70% 60% 50% 38% 38% 54% 33% 18% 40% 30% 20% 10% 36% 27% 36% 36% 27% 32% 28% 18% 0% Pre-primary Primary HH spending to schools J.Sec S.Sec S.Sec gen HH spending to school goods S.Sec.voc Tertiary Not allocated Total HH spending for non mandatory education goods Recurrent expenditure per student at public schools, 2010 Thousand Rupiah 14,000 11,751 12,000 10,000 8,052 8,000 6,000 4,278 4,000 2,710 4,695 3,370 3,192 2,000 0 Pre-primary Primary J.Sec S.Sec S.Sec gen S.Sec.voc Tertiary Expenditure per student at public schools salary and non-salary current expenditures, 2010 14,000 12,000 10,000 7,028 8,000 1,724 6,000 4,000 1,705 6,328 813 2,000 1,891 899 1,301 1,897 2,293 2,573 2,804 Primary J.Sec S.Sec S.Sec gen 4,723 2,069 0 Pre-primary Salary S.Sec.voc Tertiary Non-Salary Current 39 THANK YOU FOR YOUR ATTENTION
