Shak Bahadur Budhathoki

In Nepal, significant proportion of education budget is transferred to schools following different layers of administrative units. To manage school funds, head teacher, accountant and SMC (school management committee) assume key responsibility. They enjoy discretionary power for the funds generated locally on their own whereas they have no such authority especially for the conditional grants transferred from the federal government.
In this context, policy has provisions for making school stakeholders account for their financial performance. They have to do this in two ways annually: first, they have to undertake social auditing through a gathering of stakeholders; and second they have to do financial auditing from the certified authorities as appointed by the local government. Nonetheless, existing accountability mechanism often suffers from bottlenecks in schools.

Policy & Practice
The current policy provision envisages that a five-member committee formed under the leadership of PTA (Parents Teacher Association) chair assesses overall school performance of the year, which includes teaching and learning aspects, school operation, availability and use of teaching materials, income and expenditure, management of physical infrastructure, community participation, etc. Then after a report will be prepared accordingly, which has to be publicised through a parents' gathering to collect feedback and suggestions with the purpose of incorporating them.
However, the quality of this activity is questionable in most cases except in a few good schools. The reason for this is that stakeholders little understand the concept and process of social auditing even after a decade of its introduction and implementation. For instance, I attended a social auditing process in a school of Kailali district this year, and they little differentiated between financial and social auditing. In particular, they perceived that social auditing to be also financial auditing because social auditing involved some aspects of income and expenditure as well. In fact, this instance shows lack of understanding in school stakeholders about two different types of auditing that should take place annually in schools.
Therefore, social auditing becomes a kind of ritual in schools for a variety of reasons. In general, very few parents participate in the social auditing process, and perceive that they are unable to raise question on school activities as per the existing power dynamics among school stakeholders, limiting the scope of meaningful participation. And those who participate barely ask any questions on the issues presented and discussed. In the social auditing of a school I attended this year, there were about 20/25 parents; some of them left the room after few minutes because they had to cook for their children to send them school as most of them were female parents. In the whole process, none of them raised a single question while the head teacher read continuously what he had prepared relating income and expenditure of school that year.
In a way, social auditing is a good mechanism to maintain financial transparency and accountability in schools. However, the point is whether it takes place meaningfully or not in reality. Even if it is difficult for schools to do it properly, it is their obligation to comply by the policy provisions. In case they miss doing this, they will face hurdles in terms of timely release of school funds. Thus, they are compelled to do it anyway. In the meantime, the question is also to what extent it has been relevant in curbing potential malpractices in schools.
Similarly, financial audit, which is aimed at assessing financial aspect of school, should be conducted in schools every year as per the policy provision. The auditors, appointed by the local government, undertakes this, but it hardly takes place in a transparent manner. In most cases, it takes place hastily as auditors get certain amount of money by doing this work; it is often conducted secretly between head teacher and the auditor. The popular media news often points towards ill-nexus among the auditors and the authority who appoint them. Thus, the school accountability mechanisms seem to be working poorly as opposed to what it was envisaged for.
One of the reasons why school accountability mechanism works so poorly in Nepal is lack of human resource in terms of record keeping, mostly so at the basic level schools. In most schools, there is no accountant to do the job, so the head teacher has to undertake the responsibility of account keeping – something additional to their regular duties. In this context, many schools have no separate office for the purpose of record keeping. And those who work as accountants, they are poorly trained in many cases, limiting the quality of their work.

Way Out
In any way, school stakeholders have no choice, but they have to strengthen legal system as envisaged in schools. It is observed in many contexts that school administrator assumes primary responsibility for creating positive vive among the stakeholders. In case head teacher is transparent and accountable, other stakeholders will join hands together in improving the overall context of schools. Therefore, cultivating the leadership skills in head teachers and strengthening this position introducing required policy provisions would be the potential way out for better management of financial aspects in schools in the future.

(Budhathoki wis an education coordinator at Mercy Corps Nepal)