Corruption in the education sector
Formula funding: Good practice example from Ecuador
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| Project title | Programme Modernisation and Decentralisation, Ecuador |
| Responsible | GTZ (Germany) |
| Project number | 2003.205.1 |
| Partners | Instituto Educatorio de Cooperación Internacional, INECI |
| Implementer | Ministry of Economic Affairs and Finance, Consejo Nacional de Modernización (CONAM), associations of cities and provinces and wards, relevant CSOs, such as the Association of the Indigenous People; oversight body for universities and curriculum development |
| Period | 2004-2007 |
| Amount: | EUR 7 642 000 |
Background information
Ecuador is currently undergoing a decentralisation and modernisation reform process that is aimed at devolving tasks, responsibilities and resources to subnational units. Within this context, GTZ is carrying out the “Modernisation and Decentralisation Programme” PROMODE, working with state institutions such as the Ministry of Economic Affairs and the Ministry of Education to improve financial management and the provision of public goods and services such as education.
Previously, there have been no objective criteria for the construction of the national education budget. The Ministry of Economic Affairs allocates resources to the 22 Provincial Management Offices, who then allocate resources to the 219 “cantons” or municipalities without taking into consideration the educational needs of the schools, especially in rural areas. This practice not only impacts on equity in education, it also provides manifold opportunities for corruption and fraud.
Formula for creating equitable budgets
To improve equity and enhance transparency, PROMODE initiated a pilot project together with the Ministry of Education aimed at establishing objective criteria for the allocation of education budget item 53 “consumer goods and services” (running costs and teaching materials), representing 5% of the education budget.
For the year 2004, the Ministry of Economic Affairs increased allocations in item 53 by 20%. However, as Provincial Management Offices have discretion over the use of their resources, there was a risk that the increase could benefit the education administration in the provincial cities rather than the needy rural schools. To prevent this from happening, a simple mathematical formula was built to create equitable budgets for each municipality. The formula was based on three factors: number of children of school age, level of poverty, and enrolment in each municipality.
In addition to setting the overall amount for each municipality, the use of the allocated resources was specified, i.e. educational supplies, administrative services etc. Thus, provincial education budgets could be constructed in a less arbitrary way (through the formula) and in a more specific and transparent way, thereby reducing opportunities for fraud and corruption.
Civil society involvement
The new budgets were disseminated with the help of the civic movement “Contrato Social por la Educación” (“Social Contract for Education”), both through the internet and as printed brochures. The occasion of municipal elections was used to table education budgets in local political debates. Increased levels of citizens’ awareness and knowledge have contributed to significantly improving the quality of political debate, and can be considered a key outcome of this project.
Unfortunately, the official education budget 2004 did not reflect the municipal budgets, but again only provincial budgets. Thus, official documents did not allow the flow of resources to be traced. Nor was the formula itself used in the construction of the 2005 budget.
Further reading - methodology
Document in Spanish with executive summary in English:
La Asignación de Presupuestos en el Sector de la Educación
Metodología usada para el grupo de gasto 53 "Bienes y Servicios de Consumo" de las unidades ejecutoras Direcciones Provinciales Hispanas. Año 2004.
English title:
The Application of Budgets in the Education Sector
Applied methodology for item 53 "Consumer Goods and Services" in the educational system's Provincial Management Offices (excluding bilingual entities). Year 2004.
by Rafael Donoso Naranjo, GTZ.
The methodology in this document is based on a financial study restricted to budget construction in Ecuador's education sector. The purpose of the methodology is to equitably meet the needs of each educational territory equitably through quality of spending. The analysis contained in this report looks at the budgetary situation of the country's schools and shows how the arbitrary nature by which resources are assigned limits the educational system. A methodology was developed based on the general idea of using a clear, mathematical formula to guarantee objectivity in budget development and improve the situation of the nation's schoolchildren.
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Donors’ Contributions to Anti-Corruption in the Education Sector| RECOMMENDED READING |
 Transparency International (2009) This report presents a regional overview of accountability and transparency in primary education management in seven African countries. It focuses on the effects of decentralisation policies on corruption levels and increased oversight and accountability, based on the presumption that bringing the management of the sector closer to the user leads to increased monitoring and control and decreased graft and corruption. The findings and recommendations are interesting for those working to implement decentralisation in poor countries. Maximizing the performance of education systems: The case of teacher absenteeism Patrinos, H and Kagia, R (2007) Teachers correspond to the most important feature of the education system, not only because their salaries account for most of expenditures in such sector but also because they are the gatekeepers of education service.Teachers’ absenteeism is associated with a reduction of pupils' achievement, overall denigration of school’s performance as well as the provision of negative models to students. Therefore, losses associated with it pose a threat to the country’s growth potential. This paper presents various findings and and studies, as well as strategies and examples on how to combat absenteeism Guidelines for the design and effective use of teacher codes of conducts Poisson, M (2009) To increase the professionalization of teacher, several countries have developed codes of conduct in the education sector. But even when such codes exist, their impact is sometimes questionable due to a variety of reasons. UNESCO has developed comprehensive guidelines not only to guide countries willing to design (or review) their code but also to implement and monitor how the code is used at all levels in the sector, including its integration into teachers’ education and professional development. |
| RESOURCES FROM CIHE |
The Higher Education Corruption Monitor Academic Corruption in The News:
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