An evaluation of the impact of school-based resource management and formula funding of schools on the efficiency and equity of resource allocation in Sri Lanka
Issues of school financing and school-based resource management (SBRM) in Sri Lanka were discussed during the past two decades, and actions were taken to minimize resource allocation disparities; nonetheless the unequal distribution of resources to schools was still evident. Since 2000, the government of Sri Lanka, with the financial assistance of the World Bank, has employed a norm-based unit cost resource allocation mechanism (NBUCRAM) as a new policy for the formula funding of schools (FFS), notably for ensuring equity in the provision of learning resources. The government implemented two types of SBRM programme: 'strengthened basic' SBRM, and the 'extension' of SBRM, to improve efficiency. Strengthened basic SBRM was for all public schools to receive cash allocated by formula for spending on learning materials, consisting of consumables and perishables (excluding chemicals). The extension of SBRM was piloted to enable schools to also decide on the purchase of inexpensive equipment (capital expenditure) to support teaching and learning. This thesis attempts to evaluate the impact of SBRM and FFS on the efficiency and equity of resource allocation in Sri Lanka. The required data were gathered using questionnaires, semi-structured interviews and documentary analysis. Longitudinal and c ross-sectional d ata reveal t hat b efore the introduction oft he new mechanism, there were vast disparities in school funding for learning resources. At present, schools have adopted a rational and transparent mechanism of allocation, to ensure procedural and distributional equity. Qualitative interpretative data show that since 2000 this has contributed to minimizing the gaps among and within the schools. Evidence shows a substantial improvement in real per-pupil expenditure on learning resources, compared to the previous three years. Legal support for resourcing disadvantaged schools is another principal impact of NBUCRAM. The evidence of school revenues highlights socio-economic factors as challenges to equity. Constitutionally, education is free for all children, although it is still expensive for low-income families. The system has established a national policy for funding schools, although more consideration of adequacy criteria is needed. The present formula funding system does not fully address some essential issues (i.e. pupils with special educational needs, lack of identification of disadvantaged children and schools, and of adequacy criteria) in relation to resourcing schools. It is impossible to achieve a perfect solution, since equity is a subjective issue; but it is essential to reduce the disparities in resourcing schools. Moreover, it is crucial to apply procedural and distributional (including horizontal and vertical) equity principles, as well as adequacy criteria. Longitudinal and cross-sectional data further suggest that strengthened basic SBRM is a preliminary step in the delegation of power and decision-making authority to schools to purchase consumable learning materials (recurrent expenditure) compared to basic SBRM and non-SBRM regimes. The extension of SBRM is the way to delegate extensive power and decision-making authority to schools, beyond strengthened basic SBRM to purchase inexpensive capital learning resources (capital expenditure). Longitudinal, quasi-experimental and cross-sectional data suggest that both programmes have led to increasing participation in decision-making and to improvement in the process of acquisition of learning resources. Expenditure per pupil for learning resources, both materials and equipment, considerably improved under these two programmes, a result of efficiency incentives. In the extension of SBRM, pilot schools get more expenditure per pupil for inexpensive capital learning equipment than non-pilot schools. Non-pilot schools still depend upon centralized provisions. While these two programmes show some successes, some weaknesses are also evident. Both SBRM policies do not identify the relationships between educational inputs and outputs, access to local market, institutional capacities, and regional imbalances. NBUCRAM and the two SBRM practices are intervention policies meant to improve equity and efficiency significantly, although at present the improvement seems to be insufficient.