In line with the policy of inducing more transparency in public expenditure, Government of Nepal began the system of Public Expenditure Tracking Survey starting from fiscal year 2001/02. The objective of the survey was to determine where, why, how and to what extent the assets generated out of HMG/N investments were being utilised in addition to assessing the impact of such public sector investments. In the course of the survey, expenditure incurred out of grant in aid budget of primary education (budget sub-head no. 65-3-140), lower secondary and secondary education (budget sub-head no. 65-3-150) and student scholarship (budget sub-head no. 65-3-190) for the past three years were subjected to study.

For the purpose of the survey, 65 schools from 18 districts covering 13 zones were selected through purposive sampling method. A minimum of 2 schools and a maximum of 4 were selected from each district. While care was taken to ensure that the schools selected represented both urban and rural areas, primary and secondary schools were selected on a proportionate basis as far as possible.

Questionnaire and data collection forms were used to collect primary data from the field. While the data collection form was utilised to generate data relating to students, teachers and financial transactions, questionnaire was used among others to collect other information such as physical condition of school, school inspection, financial resources and academic activities.

On-the-field interviews were conducted with teachers, students, guardians, school inspectors and office bearers of school management committee (SMC) and district education officer of all the 18 districts. This report is prepared based on the analysis of responses received from the respondents through interview. In order to analyse the data, Statistical Package for Social Science (SPSS) software was used. The findings of the study are presented below.

1. Monitoring of Time taken to issue the Authority to Spend:

Rule 31 of Financial Administration Regulation 1999 has prescribed a time period of 15 days within which the process of issuing authority to spend must be completed by the secretary of the Ministry to the department chief and from the department chief to subordinate office chiefs from the date of receipt of such authority from the Ministry of Finance (MoF). The Rule also requires that the authority to spend should be accompanied by the budget statement by office and in the case of development budget, the approved program and source of funding should also accompany the authority. The attempt made in the study to ascertain whether the provision of the Regulation with regard to the issue of authority to spend was complied with or not revealed the following findings:

• The letter of authority pertaining to only two budget sub-heads (65-3-10 and 65-5-710) reached the department from the ministry within the time frame stipulated by the Financial Administration Regulation 1999.
• The authorisation in the case of 2 budget sub-heads (65-3-140 and 65-3-150) took more time (29/29 days) than the time stipulated in the Regulation.
• While the letters of authority relating to 3 budget sub-heads (65-3-140, 65-3-150 and 65-5-710) reached the DoE on the same day, the authority in respect of budget sub-head, 65-3-190 took 103 days to reach the DoE office at Sanothimi from MoE office at Keshar Mahal.
• DoE was found to have authorised DEOs within the time limit prescribed by the Financial Administration Regulation 1999.
• While it took one day for the authority from DoE to reach DEOs located within the Kathmandu valley, it took a minimum of 7 days and maximum of 24 days for the authority to reach DEOs outside the valley.

2. Monitoring of Time Taken for Budget Release:

At present, the DEOs are releasing grant in aid budget to schools on trimester basis after receiving the same from District Treasury and Controller Office (DTCO). The monitoring of time taken by DTCOs to release budget to DEOs and the time taken by DEOs to release fund to the schools after the receipt of request showed the following results.

• DTCO took an average of 4.58 days during FY 1999/2000, 4.61 days during FY 2000/01 and 3.96 days during 2001/02 to release budget on the request of DEOs.
• On a trimester basis, the average time taken by DTCOs during the last three years to release budget was 2.62 days for the 1st trimester, 6 days for the 2nd trimester and 6.2 days for the 3rd trimester.
• The average of last 3 years showed that the DTCOs had taken 4.38 days to release budget.
• The minimum average period taken by DTCOs to release budget was 1.23 days while the maximum was 7.33 days.
• DEOs took an average of 21.69 days during FY 1999/2000, 23.21 days during FY 2000/01 and 23 days during 2001/02 to release budget upon receipt of the request from the schools.
• On a trimester basis, the average time taken by DEOs during the last three years to release budget was 15.13 days for the 1st trimester, 21.4 days for the 2nd trimester and 31.37 days for the 3rd trimester.
• The average of last 3 years showed that the DEOs had taken 22.63 days to release budget.
• The minimum average period taken by DTCOs to release budget was 11.26 days while the maximum was 33.45 days.

3. Analysis of Total Expenditure in Education Sector

HMG/N has been making huge investment in the education sector. Analysis of the investment made by the government in the education sector for the past 3 years produced the following results.

• The expenditure of education sector as a percentage of total national expenditure constituted 14.4 percent, 13.95 percent and 16.41 percent respectively during fiscal year 1999/2000, 2000/01 and 2001/02.
• The aggregate amount spent in primary, lower secondary and secondary schools as a percentage of total outlay of education sector of the last 3 years came out to be 58.2, 60.64 and 61.65 respectively.
• The aggregate amount spent in primary, lower secondary and secondary schools as a percentage of total national outlay was 8.17, 8.46 and 10.11 respectively.

4. Analysis of School Budget Spent by MoE, DoE and DEOs:

The study was made to ascertain expenditures incurred in MoE, DoE and DEOs out of budget sub-head 65-3-140 (primary education) and sub-head 65-3-150 (lower secondary and secondary education) and the proportion of total budget, which actually reached the school level. The analysis of expenditure made during the past 3 fiscal years revealed the following position.

• Of the total expenditure made under primary education (budget sub-head 65-3-140), the DEOs spent 0.018 percent during fiscal year 1999/2000, 0.029 percent during 2000/01 and 0.034 percent during 2001/02.
• Of the total expenditure made under lower secondary and secondary education (budget sub-head 65-3-150), the DEOs spent 0.104 percent during fiscal year 1999/2000, 0.034 percent during 2000/01 and 0.038 percent during 2001/02.
• DoE did not spend any amount out of the grant in aid budget of primary education as well as lower secondary and secondary education.
• Of the total expenditure made under lower secondary and secondary education, MoE spent 0.107 percent during fiscal year 1999/2000, 0.029 percent during 2000/01 and 0.024 percent during 2001/02.
• It was found that the entire amount of primary education budget reached the district level during these fiscal years.
• During the last 3 fiscal years, the percentage of lower secondary and secondary school budget, which reached the district level was 99.893, 99.971 and 99.976 respectively.
• During the last 3 years, the percentage of primary school budget that reached the school level was 99.982, 99.971 and 99.966.
• During the same period, the percentage of lower secondary and secondary school budget that reached the school level was 99.789, 99.937 and 99.938 respectively.
• As regards the scholarship budget, the fund spent at the ministry was 88.69 percent, 91 percent and 91.32 percent of the budget whereas the fund spent at the district level came out to be 11.31, 9.00 and 8.68 percent respectively during the past 3 years.

5. Analysis of Income and Expenditure of Schools:

5.1 Analysis of Income of Schools:

While analysing the sources of income of schools, the income was categorised under grant in aid received from government, grant in aid received from other agencies, fees collected from students, own source of the school and income from other sources. The findings of the study are summarised below.

• Of the total inflow of funds into the schools, the share of government grant stood respectively at 63.7 percent, 72.78 percent and 71.13 percent during fiscal year 1999/2000, 2000/01 and 2001/02.
• The fees collected from students as a percentage of total school income constituted 15.86 during fiscal year 1999/2000, 15.02 during 2000/01 and 12.32 during 2001/02.
• On an average, the schools were found to have collected Rs 54.02 as fee per student per month.
• Similarly, on an average, the schools were found to have collected Rs 683.27 as other contributions per student per annum.
• The share of own source of schools as a percentage of total income of schools was 11.20 during 1999/2000, 5.45 during 2000/01 and 7.21 during 2001/02.
• The grant in aid received from other agencies constituted 1.42 percent during 1999/2000, 0.76 percent during 2000/01 and 2.34 percent during 2001/02 of the total income of the schools.
• The income of schools from other sources stood respectively at 8 percent, 6.5 percent and 6.99 percent of the total income during the past 3 years.

5.2 Analysis of Expenditure of Schools:

While analysing the sources of expenditure of schools, the expenditure was categorised under salary and allowance, development of physical infrastructure, academic activities, operating expenditure, student scholarship and others. The findings of the study are summarised below.

• Salary and allowance as a percentage of total expenditure of the schools stood at 80.41 percent during fiscal year 1999/2000, 82.47 percent during 2000/01 and 82.68 percent during 2001/02.
• Expenditure on physical infrastructure development as a percentage of total school expenditure was 6.45 percent during fiscal year 1999/2000, 5.22 percent during 2000/01 and 5.27 percent during 2001/02.
• Operating expenditure as a percentage of total school expenditure was 5.33, 1.8 and 1.73 respectively during the respective fiscal years.
• Expenditure on academic activities stood at 4.82 percent, 3.44 percent and 4.12 percent of total school expenditure during the respective fiscal years.
• Expenditure on student scholarship constituted 0.44 percent, 0.37 percent and 0.32 percent respectively of total school expenditure during the past 3 years.
• The share of other expenditure on the total expenditure of schools was 2.55 percent, 6.69 percent and 5.89 percent during the respective fiscal years.

5.3 School Audit:

Each school is required to get its financial transactions audited every year. It is believed that the audit helps to bring more transparency in the financial operations. Keeping this fact in mind, the survey attempted to analyse whether the audit of the school was carried out or not. Wherever the audits were not undertaken, the survey sought to ascertain the reasons thereof. The findings made in this regard are summarised below.

• Of all the secondary schools subjected to study, the schools representing16 districts were found to have got their accounts audited while the schools in 2 of the 18 districts were yet to get the accounts audited.
• Of the schools in 2 districts that were yet to get the accounts audited, the audit was outstanding in one district since 1999/2000 while it was outstanding since 2000/01 in the other district.
• While analysing the reason for failure to get the accounts audited, 66.7 percent attributed the failure primarily to the lack of funds while the remaining 33.3 percent cited various other reasons.

6 Physical Facilities in Schools:

The survey tried to find out whether the schools had necessary physical infrastructure including buildings, classrooms, blackboard, electricity, drinking water, furniture and playground among others. The quality of the facilities was not, however, subjected to study. The findings made by the study in this regard are summarised below.

• Of the 65 schools that were surveyed, 63 (96.9 percent) schools had their own school building.
• The schools with seepage problem in the classroom were 33.8 percent.
• The schools having blackboard in the classes were 99.25 percent.
• The schools having electricity facility in the classrooms were only 32.3 percent.
• The schools, which had sufficient furniture commensurate with the number of students, were 52.6 percent.
• Of the total schools, 78.4 percent schools had playground.
• The schools, which had the facility of science laboratory, constituted 37.70 percent.
• The schools having drinking water facility were 81.6 percent.
• The schools, which had water in the toilets, were 61.6 percent.
• There was provision of separate toilets for boys and girls in 64.6 percent of the schools.
• The schools having facility of primary health care (first aid) constituted 61.6 percent.
• The schools having their own land constituted 81.5 percent.
• The schools having building and classrooms sufficient as compared to the number of students were 57.5 percent.

7. System of School Inspection:

In order to make any program more effective, there is a need for regular monitoring and evaluation. Although DEO is the main agency responsible for the monitoring of academic activities in schools, office bearers of SMC, guardians, representatives of local bodies, non-government/social organisations also inspect the schools from time to time. The analysis done with a view to ascertain whether such inspection was being carried out on a regular basis produced the following findings.

• On an average, it was found that the school inspectors had inspected 63.1 percent of the schools from 1 to 5 times, 22.3 percent of the schools from 6 to 10 times, 3.9 percent of the schools from 11 to 15 times and 2.3 percent of the schools 16 or more times in one academic year.
• It was found that the members of SMC inspected 65.4 percent of the schools to observe the teaching and learning process in the school.
• It was found that the guardians visited 79.30 percent of the schools to observe the teaching and learning process as well as to make enquiry on the same.
• The local bodies were, however, found to have inspected only 16.9 percent of the schools regarding the academic activities carried out.
• It was found that the local non-governmental organisations (NGOs) and other social organisations inspected and made enquiry in only 25.2 percent of the schools.

8. Academic Activities of Schools:

The study also made attempts to analyse how the schools were carrying out their academic activities. The aspects like preparation of annual work plan (calendar) by schools, level of compliance of work plan, comparison of targeted number and actual number of school days, reasons for lower number of schools days than targeted, ratio of teachers to students, average attendance of teachers, development of teaching materials, pass percentage of students and evaluation done by the interviewees about the academic activities of the school were included in the analysis. The findings obtained from the study are presented below.

• The schools, which had prepared their annual academic calendar, amounted to 80.3 percent of the total.
• The schools, which implemented their annual academic calendar in full, were 34.8 percent.
• As compared to the targeted number of school days based on the academic calendar, the schools were found to have opened respectively for 97.9 percent, 97.4 percent and 96.4 percent of the days during academic year 1999/00, 2000/01 and 2001/02.
• The ratio of teachers to students was found to be 1:40 although the ratio recommended by the respondents was 1:29.
• The average attendance of teachers was found to be 88.17 percent.
• In 63.6 percent of the schools, the teachers were found regular in their attendance.
• During the survey, the attendance of teachers was found to be more than 90 percent.
• It was found that 16.2 percent schools had sufficient teaching materials.
• In 49.3 percent of the schools, the concerned subject teacher was found to have used the teaching materials prepared by him.
• The schools, which had the library facility, were found out to be 43.8 percent.
• The schools having sufficient quantity of chalk and duster amounted to 96.9 percent.
• The schools having provision of sports materials were 63.1 percent.
• The average pass percent of students at class 5, 8 and test examination for School Leaving Certificate (SLC) for the last 3 years stood at 81.79 percent, 74.68 percent and 76.43 percent respectively of the total students appearing in such examinations.
• The average percent of students passing class 1 to 10 during the last 3 years was found to be 77.63
• On an average, the percent of students passing SLC examination during the last 3 years was 40.89 percent, 33.6 percent and 36.43 percent respectively.
• It was found that most students who failed in SLC examination could not pass in the mathematics subject. Out of total failures, 59.2 percent were found to have failed in that subject.
• The second subject in which the students mostly failed was science, which accounted for 24.5 percent of the total failures.

9. Analysis of Record of Students:

In the study, the record of students was analysed taking into account the statistics in respect of enrolment of students, students who appeared in the final examination, students who passed the final examination, droppers in between the academic session and repeaters. The findings of this analysis are summarised below.

• Of the total students enrolled, the percentage of boy and girl students admitted stood at 52.7 and 47.3 respectively.
• Out of the total students admitted, 92.10 percent of the boy students and 92.18 percent of the girl students were found to have appeared in the final examination.
• The pass percentage of boy and girl students was respectively 76.16 and 75.84 out of the total students who appeared in the final examinations.
• The drop out rate of boy and girl students was 13.15 percent and 13.62 percent respectively.
• The repeaters' rate in the boy and girl students was 18.39 percent and 19.42 percent respectively out of the total enrolment.
• Out of the failures, 83.78 percent of the boy students and 87.21 percent of the girl student were found to have repeated in the same class of the school.

10. Position Vacancy and Recruitment of Teachers:

While analysing the situation of approved position of teachers, recruitment of teachers and proportion of male and female teachers, the study made following findings.

• The study showed that 0.78 percent, 0.61 percent and 1.35 percent of the total approved positions were vacant in the primary, lower secondary and secondary level schools respectively.
• Out of the total teachers working, there were 76.45 percent male and 23.55 percent female teachers in primary schools. The male and female teachers working at lower secondary level were 86.16 percent and 13.84 percent respectively. Similarly, the percentage of male and female teachers working in secondary schools stood respectively at 90.82 and 9.18.
• The highest percentage of female teachers was found in Kathmandu district (45.48 percent) whereas the lowest percentage was 10.11 percent in Dadeldhura district.

11. Student Scholarship:

The government has been providing scholarships on a limited extent to the poor and intelligent students. With a view to encourage girls' enrolment in the education, there is separate provision of girl's scholarship. Apart from the government, certain other organisations and individuals have also donated funds for the provision of scholarships. For instance, there are scholarships for the encouragement of girl students, scholarship for best boy student and freeship. The analysis of the scholarships provided from government and other sources revealed the following findings.

• The scholarships were available in 83.1 percent of the schools.
• The minimum and maximum number of students to whom the scholarship was provided by a school was found to be 1 and 45 respectively.
• On an average, the value of scholarship was Rs 605.00 per student per annum.
• It was found that 84.6 percent of the schools had already distributed the scholarship amount of the preceding year.

12. Seventh Amendment to the Education Act:

HMG/N has recently brought about 7th amendment in the Education Act 1971 and also brought into effect the Education Regulation 2002. The purpose of these amendments is to hand over total responsibility of school management to the SMC.

In the study, attempts were made to assess the effects of these amendments on the capability of SMC to handle additional responsibility entrusted, operation of schools, raising of quality of education, career development of teachers. In addition, the study also tried to assess the role of local bodies in the operation of schools. A single question covering each one of the above issues was put to headmasters, guardians, office bearers of SMC and district education officers. The findings made in each one of these issues are summarised below.

• Of the total respondents, 72.6 percent thought that the SMC would be able to effectively discharge the responsibility entrusted to it by 7th amendment of Education Act and the Education Regulation 2002.
• 62.1 percent felt that the existing provisions of the Education Act and Regulation would assist in the better management of the operation of schools.
• 69.5 percent were of the view that the quality of education would improve as a result of the changes brought about.
• 57.6 percent believed that there would be positive effect in the career development of teachers.
• 47.4 percent responded that, with the current provisions of the Act and the Regulation, the role of local agencies would become effective.

13. Involvement in Decision Making Process:

During the course of the study, a query was put before the headmasters, guardians, office bearers of SMC, school inspectors and district education officers as to who is playing and who should play the decisive role on specific areas of decision-making in the education sector.

The query contained 13 alternative answers. The answers received from each individual were first averaged. The responses received were first averaged and the answer securing the maximum percentage was then analysed. The findings of this analysis are presented in the following table.

The above figures clearly showed that responsibility for hiring, transferring and promoting teachers, taking disciplinary action against them and nominating teachers for in-service training were being carried out by DEOs at present.

The conclusion of the respondents was that the concerned subject teacher should play the decision role in the determination of the method of teaching whereas in all the remaining matters, the SMC should play such role.

14. Recommendations:

14.1 In the matter of issuing authority to sub-ordinate offices, the time limit prescribed by the Financial Administration Regulation 1999 was not found complied with by MoE.
It is therefore recommended that the time limit prescribed for issuing authority to spend must strictly be adhered to.

14.2 The data of the past 3 years revealed that the DTCOs have been taking, on an average, 4.38 days to release budget once the request for budget was made by the DEO. Similarly, the DEOs, on an average, were found to have taken 22.63 days to release the budget to schools after the receipt of request from the schools.

It is therefore recommended that the number of days within which the DTCO is required to release the budget should be brought down from the present 4.38 days to 2 days. Similarly, the number of days taken by DEO to release budget to schools should be brought down from the existing 22.63 days to 7 days.

14.3 The study found out that MoE and DEOs were spending from the school budget although the record of the past 3 years revealed that the amount spent at these locations were less than 1 percent of the total budget.

It is therefore recommended that the tendency to spend from school budget by these agencies must immediately be stopped.

14.4 The success rate of students of community schools at SLC examination is very low as compared to the institutional schools.

In order to bring about improvement in the situation, it is recommended that the subject teachers and trained teachers must be provided in adequate number. Furthermore, a system of punishing subject teachers in the case of failure of students above a predetermined percentage and providing encouragement to them in case the success rate of students crosses the pre-determined percentage should also be introduced.

14.5 It was found that, during the past 3 years, expenditure on salary and allowance was more than 80 percent whereas the expenditure on academic activities was less than 4 percent of total expenditure.

It is therefore recommended that expenditure on salary and allowance should be reduced and those on academic activities should be increased.

14.6 At present, there is no system of compiling "Consolidated Statement of Income and Expenditure of Schools" at the national level.

It is therefore recommended that the consolidated statement of expenditure of schools from grant in aid received from government as well as from own sources should be made public every year.

14.7 In the overall evaluation, the schools were found lacking even in the minimum physical facilities.

It is therefore recommended that the government should formulate a long-term plan for the extension of physical facilities of schools after undertaking a through study of the existing facilities available. It is further recommended that such a plan should be implemented through the fund support provided donor agency/ies.

14.8 Out of the schools subjected to study, some were not found to have prepared annual academic calendar. As regards the compliance of academic calendar, only 34.8 percent of the schools adhered to the calendar in full. The compliance of academic calendar in the rest of the schools varied in degrees.

It is therefore recommended that the schools should be made to comply with the annual academic calendar in full.

14.9 The inspection work carried out by the school inspector will have positive effect on the raising of standard of education.

It is therefore recommended that the school inspection activity should be made more effective.

14.10 The present study has shown that the changes brought about in the Education Act and Regulation would make the role of SMC more effective.

It is therefore recommended that the responsibilities of management of community schools be completely handed over to SMC in a phased manner.

14.11 The study concluded that the analysis of data collected through Academic Statistics Form could provide vital information to bring about improvement in the academic activities of schools. Certain deficiencies were noted in the process of filling up the forms by schools.

It is therefore recommended that academic statistic form should be collected from all the schools on a regular basis. It is further recommended that the school inspector should guide the schools to properly fill up the form.