Urgent Challenges of Education Finance in Ukraine: February 2015 By: Jan Herczyński SKL International Project Support to decentralization in Ukraine

2. Urgent Challenges of Education
Finance in Ukraine:
February 2015
Jan Herczyński
Institute of Educational Research,
Warsaw
Kiev, February 5, 2015

3. • Difficult financial situation of the country
• Lack of good data on the functioning of the
education system at all levels
• Financial data
• Statistical data
• Data on teachers and other staff
• Lack of strong analytical capacities at the central
level
• Decentralizazion process in Ukraine
Context of education reform in Ukraine

4. • Adoption of the strategy for decentralization
• Transfer of significant responsibilities to
democratically elected local governments
• Plans for radical consolidation of gromadas and
rayons
• Ammendments to the Budget Code of Ukraine
• Serious reform of local public finance system
• New financial instruments: grants for equalization,
for education and for health
Has the process begun?

5. • Reform of education needs to be designed to fit
decentralization reform
• This includes:
• The new framework law on education,
• Financing of education,
• Monitoring of the use of resources, including
financial resources
• Need for alignment of managerial and financial
responsibilities
What this means for education?

6. A. Design education reforms in harmony with
decentralization reforms
• Clarifications of responsibilties of all stakeholders
• Scheduling of reforms
B. Design the allocation formulas
C. Safeguard the operations of the school system
during the reform period
D. Manage the process of learning across the
sector
Main challenges for Ministry

7. • Education reforms must be harmonized with
decentralization process
• But many sectoral issues remain open:
• Degree of autonomy of schools,
• Procedures for the selection of school directors,
• Procedures for the determination of school budgets,
• Setting of wages in the sector
• Rationalization of school networks
• The scheduling of reforms is very sensitive and
must be carefully planned
A. Design of reforms

8. • The Concept for development of education
2015-2025 needs to be updated to reflect
decentralization reforms:
• To include strategy for decentralization of
education
• To include the decentralization schedule
• The strategy for decentralization of education
needs to be embedded in new framework law
on education
What needs to be done?

9. • As of 2016, MES will be responsible for design
of allocation formulas for education grants to
local governments
• Presently, MES has no experience of
monitoring the allocation of funds
• Design of the allocation formula will be
especially difficult in period of financial
constraints
B. Design of allocation formulas

10. • MES should develop a unit to analyze data, to
review different models and to design the
allocation formula,
• It is necessary to:
• Obtain from Treasury disaggregated expenditure data
• Collect statistical data (students, teachers),
• Link the data and do simulations of allocation scenarios.
• Draft allocation formulas should be discussed with
all stakeholders
What needs to be done?

11. • Decentralization reforms should be
introduced in phases
• The changes to financial allocation should be
gradual, not radical
• MES needs to monitor of the use of resources
• MES needs to prepare allocation of grant
reserves according to relative local needs
C. Safeguarding the operation of schools

12. • The allocation formulas should include buffers to
prevent radical decrease – or increase – of
allocation for any local government
• MES should establish good monitoring
procedures at national and oblast level
• Monitoring should be independent of the MES
• Allocation of grant reserve should be conducted
in dialogue with stakeholders
What needs to be done?

13. • Decentralization will be a learning process for
all concerned: MES, the cities, the school, the
school directors and teachers
• Constant dialogue with social partners is
necessary to minimize mistakes and to
correct them as soon as possible
• MES must provide information, guidance and
support during the reform process
D. Managing the learning process

14. • MES should establish institutions for dialogue to
understand concerns of stakeholders:
• Local governments
• Trade unions
• Professional associations
• MES should issue guidelines and methodological
materials
• A help desk should be established to address
urgent issues and questions
What needs to be done?