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MECHANISM FOR DISTRIBUTION AND DISBURSEMENT OF SECONDARY/BTVET CAPITATION GRANTS UNDER THE UPPET PROGRAM VOTE 013, MINISTRY OF EDUCATION AND SPORTS – FY 2006/07 1.0
Introduction (a) In November 2005, the President of the Republic of Uganda H.E. Yoweri Kaguta Museveni announced Government’s declaration to introduce Universal Post-Primary Education and Training (UPPET), beginning with academic year 2007. UPPET constitutes: Secondary Education (‘‘O’’ Level) and Primary Seven graduates taking Vocational and Technical Education and Training courses. UPPET for the start will apply to only Year One in the academic year 2007. (b)
UPPET has
four purposes: (i)
Increasing
equitable access to secondary education and primary seven enrolling BTVET
institutions; (ii)
Assuring
achievement of the MDG of Gender parity by 2015; (iii)
Enhancing
sustainability of UPE; and (iv)
Reducing the
high costs of secondary education and BTVET. (c) Provision of capitation grants (tuition fees) is one of the major cost centers of the UPPET program. Other cost centers are: the wage bill; instructional materials; physical infrastructure, science equipment and apparatus, chemical reagents and the curriculum review. (d) Provision of capitation grants in particular is aimed at assuring universal access and ensuring quality PPET delivery. 2.0 Distribution
of the UPPET capitation grant – Shs. 22.83bn
The UPPET capitation grant covers a
variable grant, a fixed grant and a bursary.
The definition and distribution of these three types of the UPPET
capitation grant is given in sections 2.1 and 2.2 below.
2.1 Distribution
of UPPET fixed and variable grants
(a) The Ministry of Education and Sports (MoES) will provide capitation grants in two forms i.e. as a fixed grant and variable grant in the FY 2006/07 within the available budget of Shs. 22.83bn. (b) A threshold of Ug. Shs. 7m/= will be provided as a fixed grant to every deserving Government Secondary School and P7 graduate-enrolling BTVET institution per academic term regardless of the size and location. The rationale is intended not to disadvantage schools with low enrollment because regardless of the size of the school, there are certain costs that are fixed and do not therefore depend on enrolment. Annex 1 provides a breakdown of this fixed grant. Due to budget constraint, the Ministry will not provide fixed grants to schools and BTVET institutions in second and third term. (c) A variable cost of Ug. Shs. 29,420/= will be paid as part of tuition fees for every S1 student enrolled in academic year 2007 per term. For BTVET, a variable grant of Ug. Shs. 68,720/= will be provided per trainee per academic term. Annex 2 provides a breakdown of this variable grant. (d) The allocation of Shs. 22.83bn to the deserving government secondary schools and BTVET institutions is to be done as indicated in Annex 3 below. A total of 695 Government schools and 46 BTVET institutions will benefit. 2.2 Distribution of bursaries to students
in 271 sub-counties without Government schools
MoES will release Shs. 47,000/= per student per term in selected willing private schools in the 271 sub-counties that do not have Government secondary schools. These bursaries shall be released directly by Bank of Uganda bank accounts of the selected willing private secondary schools after authorization by the Permanent Secretary, Ministry of Education and Sports (PS/ES). Annex 4 provides a list of willing selected beneficiary private secondary schools. 3.0 Disbursement of Capitation Grant
3.1 Current
disbursement mechanism of capitation grants
Presently Government releases secondary capitation grants to schools through their respective districts. Ministry of Education and Sports advises Ministry of Finance, Planning and Economic Development (MFPED) on the amounts to be released to every school per academic term. MFPED releases the required funds to the Chief Administrative Officers (CAOs) and Town Clerks who in turn release the funds to respective schools. Schools account for the funds received through the CAOs or Town Clerks to the MoES. 3.2 Proposed
disbursement mechanism under the UPPET program
3.2.1 Opening special UPPET school bank accounts (adopted from the Kenyan model) (a) The Permanent Secretary MoES (PS/ES) will advise the Director Banking, Bank of Uganda to release both the fixed and variable capitation grants directly to the respective secondary school bank accounts. The same will apply to the 46 BTVET institutions enrolling P7 completers. This arrangement will apply to both funds mobilized from Government own sources and the development partners. Required funds will be mobilized and be managed through a SWAP i.e. funds from both Government and development partners will be pooled in one basket and disbursed directly to deserving secondary schools and 46 BTVET institutions. (b) PS/ES will advise/require each school Head teacher to open a School Account and communicate it to PS/ES. The School Account to be opened with one bank that will have offered countrywide services. (c) The Treasury will print one cheque in favor of Bank of Uganda for the total amount of money to be transferred to Post Primary Education and Training Institutions. (d) Bank of Uganda will use RTGS to remit all monies to the different Commercial Banks within the country paying the different PPET institutions. (e) PS/ES will release funds to schools once every quarter (every 1st month of the term) to pay students’ capitation fees. (f) The secondary schools and BTVET institutions have Bursars with the capacity to manage the funds through their school accounts and account appropriately. (g) A database of commercial bank accounts of the secondary schools and 46 BTVET institutions will be created at MoES headquarters. The Commissioner Education Planning (C/EP) will review and verify these bank accounts with the schools to avoid delays and risk of loss of funds through transfers to wrong accounts. To facilitate this, the Commissioner Secondary Education (C/SE) shall provide to the C/EP a list of all the deserving secondary schools (Government and private) and P7-enrolling BTVET institutions, clearly indicating their respective districts and school bank account details on a monthly basis. C/EP will check the list against the database and make reconciliation’s as appropriate. (h) A database of secondary schools and BTVET institutions will be created and kept updated to facilitate efficient and effective transfer to UPPET funds to the beneficiary schools and BTVET institutions. Head teachers and Head instructors will be responsible for ensuring that the MoES HQ database is kept updated. The Head teachers shall immediately communicate changes in Bank Account numbers to MoES headquarters. (i) Considering the large amount of funds expected to flow through the UPPET school account and the risk of loss or delay in transfer of funds, MoES shall make negotiations and agree with the Bank of Uganda to: (i) Develop a Special Serial Numbering System strictly for the accounts of the deserving secondary schools and the 46 BTVET institutions to facilitate ease in identification of the accounts. (ii) Have direct access to the school accounts to enhance efficiency in verification of information and monthly reconciliations, and delays in reporting. (iii) Reject those changes in the school bank accounts holding UPPET funds that are not approved by BoGs and PTAs. (f) The Head teachers shall obtain approval to change school bank accounts from the BoG & PTA who will communicate the new account number to MoES HQ immediately. This will mitigate risk of loss of funds due to transfer to wrong/personal accounts. 3.2.2 Keeping capitation cashbooks Every school or BTVET institutions shall have a cashbook containing approved budget items (Vote heads). This cashbook may be improved to accommodate any additional budget items. Financial data will be summarized in the normal quarterly School Receipts and Expenditure Report and forwarded to the MoES HQ (attached as Annex 5). This report, together with Simple School Activity Progress and Procurement Tracking Reports (attached as Annex 6) will be used by the MoES headquarters ((i.e. C/EP) to prepare a quarterly consolidated Financial Monitoring Reports (FMRs – attached as Annex 7) to be submitted to MFPED. The FMRs will be designed in formats that address GoU reporting requirements. 3.2.3 Capitation grants’ flow chart The UPPET capitation grants will flow from the Treasury to secondary schools and 46 BTVET institutions as indicated below in the chart:
Treasury releases funds to MoES/UPPET Holding Account at the Central
Bank (BoU) Commercial Bank Headquarters
release funds to schools’ accounts.
PS/ES shall publish Funds Release Schedules in New Vision &
Monitor News Papers. 3.2.3 Reporting chart Financial reporting on funds disbursed to secondary schools and BTVET institutions will be as indicated in the chart below:
MoES submits to MFPED quarterly
FMRs and makes requests for funds for next academic term
School
Head teachers submit financial reports to MoES Headquarters
Schools display financial reports
to PTAs, BoGs & the public at large 4.0 Publication and display of funds
released (transparency) (a) The MoES will publish in the New Vision and Monitors News Papers the amounts of capitation grants released to every school and BTVET institutions on a quarterly basis. The publication will indicate the commercial bank accounts to which the funds have been transferred and intended purpose (budget lines). MoES will publish funds released to every district and school. (b) Schools display funds released on the notice boards. Schools shall display on the notice boards of schools, churches or in trading centres funds received and their intended use. Subsequently, the schools shall display the receipts and expenditure reports to account for the funds. A sample of the proposed display is provided in Annex 8. (c) This effort will continue to enhance transparency, from the MoES HQ to the secondary schools and BTVET institutions to strengthen the UPPET monitoring tasks. 5.0 Internal and budgetary controls for
UPPET (a) The MoES financial management procedures have in-built internal control mechanisms that will ensure that capitation grants are utilized and accounted for as intended. (b) Officers have been identified in Secondary Education Department, BTVET department, Education Planning Department and Accounts to work together with and harmonize positions. (c) Beneficiary secondary schools and BTVET institutions will be listed in the financial management instructions (Handbook) to be prepared by MoES prior to commencement of the UPPET program. This handbook will be published for all secondary schools and BTVET institutions. (d) The Handbook shall cover key financial management aspects including: (i) Institution’s resources management responsibility (ii) Accounting policies and Audit requirements (iii) Receipt and recording of funds (iv) Cheque payments (v) Petty cash limits, payments and replenishments (vi) Imprest processing and accounting (vii) Operating bank accounts and bank reconciliation statements (viii) Stores control and physical verification procedures (ix) Physical verification of stores and fixed assets (x) Annual financial reporting (xi) School plan and budget (d) A sample of detailed explanation of records maintained and formats is provided in Annex 9. 6.0 Procurement Secondary schools and BTVET institutions will use the GoU/PPDA Procurement Procedures and Regulations. 7.0 Capacity building The UPPET Implementation Committee will ensure that responsible officers in beneficiary secondary schools and BTVET institutions are provided with proper training of UPPET accounting and reporting requirements. 8.0 Anticipated challenges/risks The following are the anticipated challenges/risks that are likely be encountered: (a) Inadequate accounting and reporting capacity at the school level. (b) Unreported changes of bank accounts and unreported new school bank accounts. (c) Failure to operate current accounts that allow payment by cheques. (d) Funds unaccompanied by circulars to show the intended use (e) Head teachers’ non-compliance with accounting and reporting requirements. 9.0 Areas of departure that may require
policy review (a)
Vote control. Releases will be made from vote 013 controlled by PS/ES not
Chief Administrative Officers (CAOs) and Town Clerks, as has been the case
before. (b) Releases procedure. Releases will be made directly from MoES Holding Account in Bank of Uganda to school accounts and not through CAOs and Town Clerks.
(c) Accountability. Head teachers will submit accountabilities directly to PS/ES and not through CAOs or Town Clerks.
(d) Responsibility centers.
Annexes Annex 1: Breakdown of the UPPET variable grant Annex 2: Breakdown of the UPPET fixed grant Annex 3: Deserving government secondary schools and 46 BTVET institutions Annex 4: Willing selected private secondary schools Annex 5: Quarterly school receipts and expenditure report Annex 6: Quarterly school activity progress and procurement tracking report Annex 7: Consolidated quarterly financial monitoring report (FMR) Annex 8: Sample of a detailed explanation of records maintained by schools and format
Annex 1:
Breakdown of fixed capitation grant per school per term
Annex 2: Breakdown of variable grant per student per term
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