AN OVERVIEW OF

FINANCIAL SYSTEM IN
EDUCATION

DR MAT RAHIMI YUSOF

 OBJECTIVE(S) OF COURSE
• Students are expected to:
• understand the procedure of financial management
and school accounts’.
• understand the process of auditing.
• understand aspects in school physical management.
• apply effective school accounts and physical
management.
 INTRODUCTION

• Education is a key driver of growth in our economy.

The Malaysian Government has sustained high levels
of investment in education over the 58 years since
independence.
• This demonstrates the high level of Government
commitment to education as a national priority. The
education system has made tremendous progress
since 1957.
• In the current era of challenging economic condition,
the issue of education financing will remain important
and the management of education finance will always
be a great concern by any government.
• In order to cope with global education
transformation, education sector has persistently
been granted the highest allocation of the budget by
the Federal Government of Malaysia where
approximately 20% to 25% of government spending
goes toward the country’s Development Plan (INTAN,
2006).
 Parliament

Budget Dept,
Min of Finance

Financial Dept, Financial Dept,

Min of Edu Min of Edu

State Edu Dept State Edu Dept

Schools
• In 2011, the amount spent, at 3.8% of GDP or 16% of
total government spending, was not only higher than
the OECD average of 3.4% of GDP and 8.7% of total
public spending respectively, but also at par with or
more than top-performing systems such as Singapore,
Japan, and South Korea.
• In 2012, with an education budget of RM37 billion, the
Government has continued to devote the largest
proportion of its budget, 16%, to the Ministry.
• In 2015, with an education budget of
RM56 billion, the Government has
continued to devote the largest
proportion of its budget to the
Ministry inclusive of transformation
fund projects.
RM?????
• The operation expenditure allocated for the primary
and secondary education also formed an enormous
amount of nearly half the total education operation
expenditures as a whole (Kementerian Pelajaran
Malaysia, 2009).
• As the main provider of education funds for primary,
secondary and higher level of schooling, the federal
government of Malaysia through the Ministry of
Education and Ministry of Higher Education
contribute about 98% of the total financing
(Shahril@Charil Marzuki, 2008).
• It was only in recent years that the full
potential of private sectors was unleashed to
maximize the available resources in the
provision of quality education for all the
society.
• Thus, the responsibility to manage the school
resources effectively is currently widened to
many parties involved in the education sector
from both the public and the private sectors
(PEMANDU, 2010).
• The movement towards financial management
decentralization at the public school level in
Malaysia began in early 2000 following the
massive changes within the government sectors
since 1989.
• The government formally recognized selected
schools with guided financial autonomy known
as Pusat Tanggungjawab (PTj) or Responsibility
Center.
• It has become an initiative for increasing the
autonomy of the individual schools through
independent decision making authority on the
management of financial resources.
• It was expected that with greater authority and
accountability, school leaders and their
communities could channel the allocated money
to a more productive way thus enabling schools to
perform the best in their curriculum delivery and
the expected final educational outcomes.
• The critical aspects of school based financial
management (SBFM) mainly rely on the decisions
made by the school authorities in allocating the
financial resources for the preparation of the
curriculum delivery.
• In other words, the budget determination will allow
for the physical resources to be arranged so that they
will strengthen the teaching and learning process and
subsequently the intended educational outcome.
• The school principals should govern the
financial according to the guidance set
out in the Handbook for School
Finance, Treasury's instructions,
circulars issued by the Finance Division
of the Ministry of Education and the
State Education Department.
• The school is required to maintain
and keep proper accounts and
records properly and prepare and
submit a statement of accounts in the
financial previous year, to the audit no
later than March 31 of every year.
• Principal or headmaster is responsible to
ensure the financial aspects of the school at any
time are in order and to comply accordingly to
the rules set by the government.
• He is also responsible for ensuring that no
irregularities occurred in the financial
administration of the school.
• One of the factors of the financial
mismanagement is the lack of
involvement of top management in
matters of finance and accounts.
• In general, this leads to a lack of
supervision and inspection of the
officers and staff.
• Treasury Directive stipulates that do not know
(ignorance) the rules or instructions cannot be used
as an excuse for not performing their duties properly
(Samsudin Osman, 2001).
• While according to Sharil Marzuki (1994) principals
should not completely leave the financial affairs of the
school to the school administrative assistant or
teacher specially selected to manage the finances.
• Those involved with the management of the school
financial management need to understand the following
objectives:
• Hold the reins tighter on collection and expenditure
incurred by the school in an orderly manner to avoid
mistakes and losses.
• Facilitate the implementation of the principal or
headmaster of the school of accounting .
• Allows the actual position of accounting and finance
schools known at any time. (Zaidatol Akmaliah, 2001).
• Three financial aspects that need to be addressed by the
principal are:
• Level involvement in the affairs of financial
management.
• Skills to identify and correct some of the weaknesses
in the management and financial control.
• Skills and the ability to create multiple management
approaches and mechanisms for enhancing the
accountability of all the citizens of the school.
THE DUTY

• The principal or headmaster task in financial

management as defined by the Ministry of Education
covers the following list:
• Providing budgeting, school budgets every year.
• Manage claims payments per capita and other
provisions.
• Determine the fee collection and SUWA and
other sources of income.
• Manage all the expenses and payments
• Manage and enhance business payrolls.
• Manage and maintain cash book accounts of
government funds, accounts SUWA (Source Public
Funds) and account hostel (if any) and petty cash.
• Completed all preparations for the audit of school
accounts.
• Determine Books Stock maintained with the update.
• Determine the stock removal procedures are
properly made.
• Recommends all travel claims, examinations, overtime
and petty cash.
• Become tender and quotation management
committee of the school.
• The secretary to the board of finance and chairman of
the school board.
• To diversify the sources of school fund.
• Manage any funds available at the school include the
procedures and processes of collection of money,
purchases and payments.
• Maintenance of books of accounts.
• Maintenance and stocking procedures or
equipment for offices, laboratories, workshops
and others.
• Financial management in bookstores,
cooperative school cafeteria and tender.
• To prepare the requirements set by the auditor
of school accounts.
PROCEDURE FINANCIAL MANAGEMENT IN SCHOOL
• Establishment of the Financial Management and
Accounts Committee School
• Provides a list of tasks Financial and Account
Management Committee School
• Provide an organization chart of the Finance
Committee and the School Account.
• Implement P - O – D - C financial management
of the school.
 Pengerusi
Pengetua/Guru besar

Naib Pengetua
Penolong Kanan (Akademik

Setiausaha
Pembantu Tadbir

Penolong Kanan
Juru Audit Dalaman
(HEP)

Guru Kanan Mata

Ketua Bidang
Pelajaran