What is a block grant?Definition:A block grant is a non-discretionary budget allocation to a specific school determined by formula based on objective parameters such as number of students, type of school, etc.
Why Introducing Block Grants?• Fiscal equity: block grant is a mechanism that ensure equity in the allocation of budget to schools, districts and provinces;• Social equity: reduction and elimination of school fees, possible modulation in relation to targeted population;• Transparency: the block grant system combined with budget norms and budget transfer formulae will ensure complete transparency in the allocation of funds:• Efficiency: more efficient use of funds reflecting local preferences and needs;• Flexibility: elimination of line item budgeting, direct linkage with program budgeting,• Improved government services: block grants ensure that schools receive sufficient funding for operational expenditures such as cleaning, maintenance, textbooks, pedagogic materials, etc.
Education Policy Objectives• The ultimate goal is the elimination of formal registration and instructional fees for primary and lower secondary education offset by a phased and incremental scheme of school block grants, school operational budgets and school development plans.• ESDF targets the gradual abolition of school registration and instructional fees in Grades 1-5 nationwide from 2010 onwards and Grades 6-9 from 2012 onwards with a public information campaign from 2010. (ESDF, p26)
Type of Block Grants• Community Block Grant (not based on the number of student)• General Block Grant or School Block Grant• Conditional / Development Block Grant targeting poverty, vulnerable populations, minorities, etc.
Types of General Block Grant• Block Grant for kindergarten• Block Grant for primary schools• Block Grant for secondary schools• Block Grant for TVET, TEIs and higher education institutions
School Block Grant• Will ensure that the funding through the Provincial Education Allocation (PEA) is allocated to school on a fair and equitable basis.• Will be available for financing line-item expenditures of chapter 12 and 16 plus line- item 13.03.01.• Will pave the way for the complete relinquishment of user fees.
Expenditure Financed by Block GrantNon-wage expenditures such as:• Operating expenditure• Procurement of textbooks• School improvement toward effectiveness
Operating Expenditures• Premises maintenance and cleaning• Utilities (water, electricity)• Learning material other than textbooks• Stationary• clothing for the students (pants for the boys and pa sinh for the girls; shirt, shoes socks and hat (conditioned on approval by district/provincial authorities)• Transportation
School Improvement toward EffectivenessThe block grant may be used to fund the following school improvement activities based on school planning for school improvement and effectiveness:• Income generating activities• Extra-curricular activities• Drop out interventions• School uniforms• School feeding• Advocacy to increase school participation, etc.• School readiness programs• Skills improvement, e.g. on reading and comprehension, etc.
School Plan• The allocation of the block grant depend on the submission by the school of a ‘School Plan’;• School Directors are responsible for developing the school plan in consultation with Village Education Development Committees;• Village Education Development Committees should formally approve the School Plan;• The School Plan must be kept as simple as possible and use a template.
Content of the School PlanThe School Plan template must include the following information grouped in sections:• Physical parameters of the school: school type (rural/urban, etc.), building type (building types should be limited to two or three) availability of utilities, availability of latrines, number of classes, other buildings;• Number of grades, number of teachers, administrative staff, maintenance staff, number of students by grade and by gender• School indicators: repetition rate, dropping rate, gender ratio• Budget of the school for non-wage expenditure• Investment required if necessary (still under discussion)
Fiscal Envelope for School Block Grantsand calculation of the notional amounts• The Fiscal Envelope available for each block grant type will be determined through a reiterative consultative process that will use both the national MTEF and the sector MTEF.• The size of the fiscal envelope will determine all notional amounts used in the formulae such as ‘fix amount per student’ or ‘minimum fix amount for small village schools’.• MoE, in consultation with MoF, is responsible for calculating the notional amounts.• Notional amounts should be included in the budget submitted to the Parliament.
Objectives of Development Block Grants• Poverty Reduction: 47-poorest districts receive school block grants as a priority. 70 poor districts brought on stream through a phased, incremental, time-bound and benchmarked process. (ESDF, p26);• Increasing school attendance through meals provided to students and through student grants;• Increasing attendance of young girls through student grants
Block Grant Management and Capacity Building Needs• A general capacity building plan part of the Capacity Development Framework, will have to be put in place, including selection of trainers and training of trainers;• The strategy includes strengthening central Ministry of Education strategic management through well defined capacity development plan.• Aligned to this is a strategy for improving the provincial and district-levels of education management in line with national policies.• With the introduction of school block grants revised budget formats and procedures will be required which will eventually involve an enhanced role for VEDCs. School numbers that reflect performance based on set education priority targets.• Seminars for schools directors and provincial authorities will have to be organized nation-wide
Part 2Pilot Project for Conditional Block Grants
The World Bank EDP II Experience• Block grant type: community block grant• The fund facility provided 3M Kips per year per school in 400 villages in 19 districts and 6 provinces (Huaphan, Phongsali, Odumxay, Luang Namtha, Xekong and Attapeu);• Expenditure covered: learning material, blackboard, stationary, school bags, school uniforms, food;• The experiences and lessons learned in the implementation of the Community Block Grant will be used in the formulation of the guidelines in the implementation of the School Block Grant under the Fast Track Initiatives to be funded by WB, AusAID, UNICEF and the World Food Program (WFP).
Education Development Grant Program (EDGP) of the BESDP• Targets lower secondary schools;• Total funding for the EDGP amounts to USD144,800 which is targeted for distribution to 96 lower secondary schools in rural areas of 13 poorer provinces• Grant implementation started in SY 2009-2010 and will end in 2012.• Three types of expenditure are eligible: (1)Procurement of consumable items for teaching and learning, (2) Procurement of items for minor repairs and maintenance, (3) Extra-curricular activities and income-generating activities for the schools.
Distinguishing types of schoolsThe calculation of block grants might use different parameters such as:• Rural schools / urban schools• Schools with/without electricity and water• Building type (bamboo, concreate, thatch roof, cimented /non-cimented floor (for cleaning needs)• Size of the school (number of students)• Presence of vulnerable populations• Poverty Index• Education Development Index
Grants integration• Should school grants, development grants and student grants be fully integrated?• MoF see no reason for dissociating Operating Expenses Block Grant and Block Grant for School Improvement towards Effectiveness as there are significant overlap between the two, especially if we include textbooks and teaching materials in the school block grant.• For political reasons it appears better to use different formulae, or variations on the same formulae to address different situation, rather than different block grants;• Concept notes prepared by MOF and the Education Sector Profile and Need Assessment show that increasing operational budget in schools with a low Education Development Index has brought no improvement. Additional funding could be made available for new policies, if a pilot phase demonstrate their effectiveness.
Measuring the Efficiency of Block Grants• School Plan must include indicators that allow
Introduction Policy• MoF proposes to have a phased introduction of school block grants giving priority of primary schools• Introduction of other block grants will depend on the materialization of additional fiscal space as determined by the National Medium Term Expenditure Framework and in relation to the education sector MTEF when completed.• The approach for reducing a school’s reliance on parental contributions will be based on a MoE/MoF agreed phased, incremental and time-bound model beginning with Lao PDR’s 47-poorest districts.
Who to target for student grants?• Students in poor districts (but how to verufy how the student qualify?)• Minorities• Girls (but is it appropriate to distinguish between students on a gender basis?)
Formula 1Two options: (1) School ≤ 50 student Fix amount per school (2) School ≥ 50 Student G = grant A = fix amount per school S = fix amount per student s = number of student above 50 Formula: G = A + (S x s)