Assessment of Financial Management in BALANGIGA

Central Elementary School

Chapter I

The Problem and it’s Background

Introduction

There are many principals and SGB members who lack the necessary financial

knowledge and skills and are placed under incredible pressure because they are

incapable to find practical solutions to practical problems. The management of school

finances can be one of the most challenging of principals‟ responsibilities, because for

many it is an area in which they have little or no training or expertise. It is also likely that

the elected members of the SGB may be equally ill equipped for the task (Clark, 2008:

278).

Every organization's success and failure depend on the how did the managers run its

financial resources, because as we all know finance is the blood life of any

organizations. When the financial managers are not equipped with the necessary skills,

the organization will not be successful for any of its goals and objectives. School Heads’

and Teacher are considered as the financial managers of the institution because they
also played the pivotal role in decision making for fund investments and other operating

expenses of the school.

There are also instances that the money allocated by the government to every public

school in the Philippines was not yet used to its purpose. Some of these funds are still

deposited in the banks and not being invested in the facilities and some school heads

consumed their funds immediately in the middle of the school year. The last ten years

have seen major changes in the nature of governance of schools. As a result of new

legislation in South Africa, such as the Schools Act, considerably more authority and

responsibility for decision-making has been devolved to the school level than was

previously the case. There is a move towards self-managing schools regarding authority

and responsibility to make decisions related to the allocation of resources, including

finances. Mestry (2006:27) states that, according to the Schools Act, the governance of

a public school is vested in the SGB that stands in a position of trust towards the school.

Education is a fundamental instrument to increase the productivity of people in all

developmental organizations of a country. According to MOE (1994:1), education

enables individuals and society to make all rounded participant in the development

process by acquiring knowledge, skills and attitudes. In other words, educations

promote sustainable economic growth and skilled manpower needed for development.

Moreover, it promotes social development and human relation besides ensuring

personal development towards individual’s fulfillment. Although it plays great role in

developing countries like Ethiopia, the practice is vas and multi-dimensional in its
nature. To achieve the broad goal, there is a need to support and improve the quality

and quantity of the system at large.

The practical meaning of the term financial management will vary in deferent

educational systems, depending on the degree of financial authority granted to the

education authority and by the educational authority to individual schools and colleges.

For instance, Financial Management in Philippines, was seen as primarily the process

by which funds are allocated or budgeted, transferred, expended, and evaluated or

audited, a prime focus being on the budgeting and transferring of federal funds to the

various states within the countries.

In education system throughout the world, financial management has become and

continues to becomes, of much increased importance, this is partly because of the

difficult financial constraints under which education system now have to operate, partly

because of trends in many countries towards delegating at least some degree of

financial controls to individual schools and colleges and partly, because of moves

towards increased accountability in all public service system.

Thus, this study aims to determine the assessment of Financial Management in

BALANGIGA Central Elementary School.

Statement of the Problem

The study aims to determine the Assessment of Financial Management in BALANGIGA

Central Elementary School.

Specifically, it seeks to answer the following questions:

1. What is the Demographic Profile of the Respondents in terms of:

a. Age

b. Sex

c. Position

d. Year in Service

2. What is the Financial Management System as perceived by the School Heads,

Teachers and PTA’s of BALANGIGA Central Elementary School as to;

a. budget preparation

b. disbursement

c. auditing

3. Is there a significant relationship among the Demographic Profile of respondents on

the Financial Management System of BALANGIGA Central Elementary School?

4. Is there a significant difference on the Financial Management System of BALANGIGA

Central Elementary School as to:

a. budget preparation
 b. disbursement

c. auditing

Theoretical Framework

This study was hinged on three theories. These are Piagets (1964) theory of cognitive

development, the Functionalism theory of learning and paths-goal leadership theory

whose modern development is attributed to Martin Evans and Robert House (1974). In

this study the three theories complement each other in investigating the factors

influencing effectiveness of financial management.

Piagnets theory (1964) of cognitive development emphasized that instructional media

translates abstract concepts into concrete facts and thus enhancing performance.

These media have financial implication in acquiring them which requires effectiveness

of financial management.

The Path goal leadership theory postulates that leaders can facilitate task performance

by showing subordinate how performance can be instrumental in achieving desired

rewards. Thus, it gives a frame work within which the effectiveness of financial

management influences performance. Head teachers should ensure that the child is
given the benefit of a learning stimulating environment. This will enable the child to

develop the correct meaning of concepts as used in the classroom by the teacher.

The Functional theory was used as a base for this study to find out the extent to which

head teachers finance instructional resources in an attempt to help learners in

visualizing, formation of imagery and conceptualization hence improve financial

management.

Conceptual Framework Financial Management

Demographic Profile of
System as perceived by the
Respondents
School Heads, Teachers and
 Age
PTA’s of BALANGIGA Central
 Sex
Elementary School
 Position
 budget preparation
 Year in Service
 disbursement
 auditing

Independent Variables

Dependent Variables

Figure 1
 Conceptual Model showing the IV and DV of the study: Assessment of Financial

Management in BALANGIGA Central Elementary School

Significance of the Study

The study has the following significance to the following entities:

Department of Education. As a department where the school leaders and the rest of

educators are connected, this study would serve as a basis for reference to know the

level of school managers’ financial management competence in the school where they

lead and to plan for the best intervention as regards to financial literacy.

School Head. As a school financial manager, this study would serve as a guide for

him/her to become a successful financial manager in various school resources. This

would help them become competent enough in the field of financial literacy and in

dealing with different financial resources given by the government and private sectors

for the benefits of the learners, teachers, stakeholders in the community, and the

department as well.

Teachers. As one of the significant members of the school system, this study would

serve as a source of information and motivation on how to manage efficiently and

effectively all financial resources in school, as they are considered as the wings of the

school head in all the implementation of programs and projects for the benefits of the

majority. It also suggests that financial management competence matters a lot for the
advancement of the school they serve, especially for the future of the learners they

build.

Pupils. As one of the primary clients of the learning environment, this study would serve

them as a reliable basis for the best output that may be bring through the efficient and

effective financial management competence of their school head. The competent school

head they have, the great chance to gain high school performance.

Researcher: the development of this research paper will help the researcher to gain

knowledge in their chosen field. The documentation of this study can serve as reference

for future researcher and developers who will conduct related studies.

Scope and Limitation of the Study

This study is specifically designed to Assess the Financial Management in BALANGIGA

Central Elementary School.

The work is also limited to teachers in BALANGIGA Central Elementary School, and

does not seek to present a general finding that applies universally. This will be

conducted to determine the Assessment of Financial Management in BALANGIGA

Central Elementary School.

Definition of Terms

For the purpose of understanding some terminologies used in the study were defined

operationally.

Financial management: financial management as, “… the management of capital

resources and use so as to attain a desire goal.

Financial Management Practices. It involves financial planning and budgeting,

financial accounting, financial analysis, financial decision making and action. Financial

management includes reviewing, forecasting and building of and budget control and

monitoring.

School based management: as a mechanism aimed at improving schools by shifting

decision making powers regarding the budget from the central level to the schools.
 Chapter II

Review of Related Literature and Studies

This chapter contains an in-depth discussion of the literature and studies. Furthermore,

this chapter provides a synthesis of the literatures and studies used and their

significance to the development of this study.

Related Literature

The Financial management refers to the efficient and effective management of money

or funds in such a manner as to accomplish the objectives of the organization. It is the

specialized function directly associated with the top management. The significance of

this function is not seen in the 'Line' but also in the capacity of 'Staff' in overall of a

company. It has been defined differently by different experts in the field. The term

typically applies to an organization or company's financial strategy (Miriam Webster

Dictionary).

Ingram and Media (2002) revealed that financial management is all about risk, and each

comes to the table with a different tolerance for risk. In an agency relationship, chances

are high that principals and agents have different risk tolerances, which can lead to

misunderstandings and a failure to agree on investing decisions. Even when agents act
toward principals' goals, their means of doing so may conflict with principals' risk

tolerances.

Rajah (2003), stressed that, a member of the school governing body shall not be liable

for any debt, damage or loss incurred by the school unless he or she acted without

authorization or with malicious intent, in which case he or she may be held responsible

for the debt, damage or loss.

According to Mestry (2004; 129), a view supported by Clarke (2008; 282) the governing

body of every public school must ensure that there are proper policies and procedures

in place for the effective, efficient and economic management of the school finances

and the school governing body must also have systems in place to monitor and

evaluate the correct implementation of the policies and procedures and to report

thereon.

Raywind in Marishane and Botha (2004) explains school-based management as a

mechanism aimed at improving schools by shifting decision making powers regarding

the budget from the central level to the schools. Marishane and Botha argue that

school-based management is the joint responsibility of both the school governing body

and the school management team, which together form a school based financial

management structure this structure is accountable to the two main sources of school

funding namely the state and the community and is responsible for monitoring and
evaluating the financial management performance of the school-based management

structure.

Caldwell and Spinks in Mestry (2006) explain school-based management as an

approach to the management of public schools where in there is a significant and

consistent decentralization to the school level authority and responsibility to make

decisions related to the allocation of resources, in a system of education having

centrally determined goals, priorities and frameworks for accountability.

Financial management in Schools often presents the broader frame of management

which is inclusive of all stakeholders as required by the Department of Education. Within

this frame, power at school level is not centralized around one person, (the principal),

but is shared as far as possible, should be inclusive of all relevant stakeholders. This

called for active participation of various stakeholders, including teachers in school

governance and decision-making processes such as finance related matters (Chaka

2008).

Clark (2008; 278) discussed that the management of school finances can be one of the

most challenging of principals’ responsibilities, because for many it is an area in which

they have little or no training or expertise. It is also likely that the elected members of

the (school) governing body may be equally ill equipped for the task. As a separate

subject of discipline, finance is still in its infancy. It was only the latter half of the
twentieth century that witnessed most of major developments in finance with scientific

rigor.

As budgeting is supported by the Philippine government, principals must then be

compelled to ably do financial management to ensure education for all in the context of

financial resources (Orcullo,2008).

Ajaegbo (2009) stressed out that financial management is a key factor in knowing how

the school is effectively managed or if it is able to realize its objectives.

Bradley (2009) emphasized that effective and efficient financial management is

manifested in the proper documentation of financial report.

The Department of Education sets forth the role of the principal relevant to financial

management in the school context as the Philippine government provides for the

budgetary needs of the Philippine public schools (Zarate, 2009).

Barasa (2009) recognized that efficient management of financial resources is an

important task for school principals. The educational reforms in the field of education

posed various challenges related to financial planning, financial reports and financial

controls.
Principals can plan, control and monitor the school finances throughout financial

management and in budgeting, accounting and monitoring effective implementation of

school budget (Wheelen and Hunger, 2010).

Moreover, learning achievement and engagement in all levels which is anchored on the

curriculum have been a top priority of schools and are key areas in strategic planning.

However, some areas including property, health, as well as safety-related costs were

funded even if it would affect the allocation for curriculum. Generally, schools need to

operate using a conservative approach considering the budget at hand (Theodotou,

2014).

Related Studies

Karia, et al (2000) studied the importance of training on financial literacy for continual

updating and improvement in Malaysia and found that one source of human motivation

at work was intrinsic motivation; desire to grow; learn and develop oneself. The findings

further noted that employees view general training as a gift, this leads to a sense of debt

to the company which the employee strive to repay (reciprocate) by increasing

commitment, exerting more effort and increasing productivity.

In the study of De Vaus (2002) on effective management shows and reveals its ideas

this way, effective management is the key to school improvement and development,

especially when schools now have experienced increasingly diverse change and

challenges. Managing change in education is inevitable and it is important to implement

it effectively. Successful schools do not just happen, they are successful because

people make them so and all such people have a stake in management.

Koonnaree (2009) revealed the findings that the experience of a principal is very

necessary in financial effectiveness of management and to a large extent the principals’

education level influences effectiveness of financial management the influence of

Principals’ financial management on school physical facilities. The study recommended

that School principals should be trained on financial management so that they can be

effective in their financial management. This can be done by holding regular capacity

building workshops and seminars which will keep them updated on any emerging

issues.

Tasic et al (2011) concluded that education is one of substantial factors of efficiency

and speed of economic development. It presents social value for itself, because

operations improvement and changing of social relations depend at the most of people’s

knowledge and education. Schooling qualifies a person to be an active agent of

economic changes. The management of the organizations of economical type is similar

as the management in school system. The management function is assigned to

managers, leaders respectively.

Fong (2011) conducted a study on teachers' perceptions of contemporary school

Principals' competencies, the essential elements that affect the overall quality of school

management and the continuous improvement and development of the schools. This
study examines Principal competencies from the individual and school perspective, with

a focus on the evaluation of contemporary principals. The information explored is to

develop principal competencies and improve school effectiveness.

Maronga et al (2013, p.97) in their investigation found out that underperformance of

principals in financial management may result from employing less qualified accounting

staff that maintain poor records and who fail to observe accounting procedures.

The aforementioned related literature and studies provided the theoretical framework of

the study.

Chapter III

Research Methodology

This chapter presents the description of the research methods to be use, the

respondents of the study, the instruments to be use, the procedures and sources of

data utilized in analyzing the data gathered.

Research Design

The descriptive research design is appropriate for the study since the aim is to know

Assessment of Financial Management in BALANGIGA Central Elementary School. This

study will also utilize a qualitative way of collecting, analyzing and interpreting data.
The purpose of this descriptive study was first is to determine the Assessment of

Financial Management in BALANGIGA Central Elementary School. In the qualitative

phase of the study, structured questionnaires are given to respondents, interviews will

also be conducted for better understanding of the qualitative results.

Population and Respondents of the Study

The target population of this study is fifty (50) respondents in BALANGIGA Central

Elementary School. The researchers went personally to the respondents to explain to

them the content of the questionnaire to enable them to understand and answer the

questions given.

Table 1. Population Sample

RESPONDENTS NO. OF RESPONDENTS

Male 30

Female 20

Total 50
Sampling Design

Simple random sampling technique was used to select the fifty (50) respondents in

BALANGIGA Central Elementary School. Purposive sampling was used to select the

students from the sampled school. The respondents of the study will be the selected

teachers in BALANGIGA Central Elementary School. The main objective of a purposive

sample is to produce a sample that can be logically assumed to be representative of the

population. The participant of this study will come from BALANGIGA Central Elementary

School.

Research Instrument

The researcher used the questionnaire tools to use an instrument that contains a series

of questions for the participants for the purpose of gathering information. The

questionnaire was the main instrument used in gathering of data. The questionnaire

was in form of checklist. In the formulation of questionnaire items, the researchers used

a simple and clear language to enable the respondents to understand and answer the

question adequately.

The respondents will be asked to rate each question using a five-point scale as follows:

Likert’s Scale
 Numerical Value Qualitative Interpretation Weighted mean

5 Strongly Agree 4.20-5.00

4 Moderately Agree 3.40-4.19

3 Agree 2.60-3.39

2 Moderately disagree 1.80-2.59

1 Strongly disagree 1.00-1.79

Validity and Reliability of the Research Instrument

In testing the validity of the instruments, the questionnaire-checklist was presented to

the research professor of the school, the head teacher and thesis adviser for the

content validation. The panel of experts was consulted in revised of the thesis for the

improvement of the studies. The content of the questionnaire-checklist will be done

through the help of the experts, panel members, thesis adviser, dean, concerned

authorities.

Any revision in the final copy of the questionnaire will be based on the comments,

suggestions and recommendations. The instrument will be pretested to selected

respondents.
Data Gathering Procedure

The researcher first designed the questionnaire and asked our research adviser for his

remarks on the questionnaire for validation. Afterwards, the researcher secured

permission from the principal of BALANGIGA Central Elementary School to allow the

researcher to administer the questionnaires among fifty (50) respondents.

Upon its approval, the researcher was referred to the adviser to give certain assistance

in delivering the questionnaires. The researcher was permitted to administer the

questionnaires only during the free period of the respective respondents. Before giving

the questionnaires to the students the researcher explained clearly the purpose of

running the questionnaires and likewise the instruction was given and told the students

that they are free to ask questions if there are any vague and not comprehensible ideas.

The retrieval was done after answering the questions. The researcher then analyzed

and interprets the data gathered. The analysis and interpretation led in the

determination of the Assessment of Financial Management in BALANGIGA Central

Elementary School.

Data Analysis
Analysis of data obtained from questionnaires was done through identifying common

themes and responses. The relevant information is broken into sentences or phrases

which reflect a single or specific thought. Questionnaires were used to gather

information. The similar and different opinions identified from the data are used to

develop an overall description as seen by the participants.

Statistical Treatment

There were fifty (50) respondents in the study. The statistic devices used in the study

are employed as follows:

Frequency Count = wherein the number of the respondents’ responses were

determined. It was done through simple sampling.

Percent = this was used in the computation of the percentage equivalent to the

frequency count and in computing percentage as a measure of portion using this

formula:

P=X/N X 100

Where:

P= Percentage

N= Total number of Respondents

 X= Number of Frequency

100= constant

Mean = this was used to describe a set of data as to what point the item values. A

single value appears typically all the scores.

Ranking = this was done by arranging the number of items according to the number of

frequencies. The item with the highest number of Frequency has the highest rank.

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