The Basic Educational Financial Management Procedures and their Significance in Educational Institution

Financial Management –Refers to the efficient and effective management of money [Fund] in such a manner as to accomplish the objectives of the organization. It is the specialized function directly associated with the top management

Financial management involves planning, organizing, controlling and monitoring financial resource in order to achieve organizational objective. You can only achieve effective financial management if you have a sound organizational plan.

Organization management- Is the process of organizing, planning, leading and controlling resources within an entity with the overall aim of achieving its objectives. The organizational management of a business needs to be able to make decisions and resolve issues in order to be both effective and beneficial. Retrieved from www.businessdictionary.com/definition/organizational-management.html.

It is the managerial activity which is concern with the process of planning, controlling and utilization of an organization resource in an efficient and effective manner.

Financial management in Education – Is concerned with the cost of education, sources of income to meet the educational costs and the spending of the income in an objective manner in order to achieve the educational objectives.

Financial management refers to all the process that governs the recording and use of fund, including allocation processes, crediting and debiting of accounts, controls that restrict use and accounting and periodic financial reporting system. According to class discussion may 2016.

Underpinning all financial management system is a series of financial policies and procedures which guide operation and lay out your organization uses and managed its money. A financial procedures manual brings all these together in one.

It helps to establish financial controls within the organization that ensure accuracy, time lines and completeness of financial data. The manual is generally used by finance staff, but it can also act as a reference for trustees, managers and other staff.

Financial procedures for school/organization/institution

• Delegation and overall control of the budget.

Comprehensive financial management consists of main function financial planning and financial control in order to achieve the overall financial objectives of the school. The general financial objectives are defined in the scheme for financing schools. The governing body will;

Establishing proper financial management arrangements and accounting procedures and maintain a sound system of internal control, including safeguards against frond and error.

• Ensure the delegated budget is used for the purposes intended.

Ensure that the financial returns required under the terms of the scheme for financing schools are made to the governing body. (Alwck Rob and Mackenna 2012).

The school should have a clearly defined organizational structure with identified lines of reporting for all operation. The finance committee would then become responsible for ensuring that the school sets financial objectives, prepares a financial plan and initiates and maintains the necessary systems of internal controls.

Headmaster/teacher has responsibility for;

• The management of the school’s financial position at a strategic and operational level.

• The management of effective systems of internal control.

• The management of other financial issues.

The headmaster /teacher is the person with overall responsibility to the governing body for the financial management of the school will ensure that the governing body is provided with financial advice, that proper and adequate financial system and control are in place and that accounts are prepared and maintained as required by the governing body.

The Headmaster may delegate much of the financial management to the administrator or Finance Manager, while retaining ultimate responsibility for it. The governing body and school staff have a responsibility to avoid any potential conflict between their own business and personal interests and the affair staff parents and interests of the school. This will be freely available for inspection by governors, staff parents/guardians and auditors.

Governors the head master/teacher or any member of stuff should treat hospitality and gifts with extreme caution. The offer receipt of all such items must be declared in a register maintained by the school.

Financial Planning (Zeithrand & Beteman (1990) management Financial and Strategy).

    School budgets are to be spent in the best educational interests of the pupils. Should regard to the need to provide a broad and balance education for the pupil to the benefit of the mind that appropriate actions may need to be taken during the years to deal with narrations between actual and budgeted income and expeditor. It should therefore be based on a hierarchy of assumptions and priorities aiding swift changes of plan in reaction to changes of/circumstances.

   The process of setting the school budget will involve the balancing of expenditure against income. Financial planning in the school should involve each department, school board committee member of the staff. This will enable the budget to suit all needs of the schools in each department. The head master and the school bursar should be well accountable for general planning. Should estimate the cost of each element in the overall plan, over a year (one) year period. Identify serving in the expenditure or allocation of any surplus identified to areas of need highlighted in the strategic plan.

    After the budget to be approved by financial budget at the district level, then retch it to the school level and inform those members of staff with financial responsibilities what their budgets are, together with any constraint imposed. Inform all school staff of the financial aims of the school. The steps involved in arriving at an approved budget may require a number of attempts to balance income and expenditure. 

     Financial control and monitoring

    In the school the financial (fund) we use, it can be categorized into the following categories: 

• The government grant (Capitalism). 
• b)   Fee collection from the students. 
• c)    Loan/aids from donors and stakeholders. 
• d)   Contribution from the community (development) 
• e)    School self-reliance

It is the headmaster’s responsibility to ensure that any request for submission from the local authority as detailed in the scheme for financing schools are returned promptly where a school operates a local cheque book account strict adherence to the applicable procedure manual must be applied. The spending of all public money will be accounted for through the alternative funding (public fund) include all monies which are made available to the government body by the local authority and all income which is generated by the use of school budget share.

Financial control and monitoring of funds in the school are the responsible of the head master/teacher, he/she is only the accountable for it day to day. The cash which are in hand (in the school) and the money are deposited in the bank.

Ordering receipts of goods and certification of invoices

A register of staff authorized to raise orders and certify invoices for payment will be kept in school and maintained by the administrator/bursar. The finance committee is responsible for ensuring that all the leasing agreements are entered into through the Borough Treasurer and the purchase represents value for money to the school. All deliveries will be checked on receipt, against the copy order and delivery not for quality and quantity. The delivery/dispatch note must then be signed and dated by someone other than that who has signed the order or who will be signing the invoice. This person does not have to be an authorized signatory.

This ensures segregation of duties. The delivery/dispatch note will then be field with any relevant questions, the copy order and copy of subsequent invoice.

When a person certifies an invoice they are assuring that they have checked that:

• Price invoice has not previously been passed checked. 
• The invoice has not previously been passed for payment. 
• The invoice has been arithmetically being checked. 
• Invoices have been checked to the order and this documents are mark to indicate the payment has been made.

    Goods or services have been satisfactory delivered and confirmed by an officer responsible (delivery note if possible).

·       For copy invoices that the invoice has previously been passed for payment.

    Expenditure is coded to the correct account code and within approved budget provision.

·       Expenditures is within approved delegated authority limits laid down by the government body.

·     The account is properly payable by the school (Brighan F. Eugen (1995). Fundamentals of financial management).

Petty cash and cash handling

Payment from imprest/petty cash will only be made on presentation of valid receipts/voucher (VAT receipts must be obtained wherever possible to enable full recovery) payment such as staff travel and subsistence must be processed through the pay all system and not reimbursed from petty cash. For payments signatures of receipts must also be obtained.

Cash and cheque books will be kept in a locked safe at all times and all keys to the safe taken off-site when the school is closed. Patty cash accounts should be recorder at regular interests, monthly reconciliations are strongly addressed.

Banking and reporting (Gitman J. Lawrance (1995). Foundations of Financial management).

The school main banking facilities authorized by the financing committees and approved by the Borough Treasurer or by internal auditor and external auditor. The school fund is held with insert name of bank.

Deposit should be properly completed and the amount should be balanced with that in the receipt cashbook. The head teacher or the treasurer is responsible for depositing all the money. Arrangements for depositing the money must be varied to reduce the rate of robbery as a result of making your movements predictable. All deposits should indirectly have recorded in the cash book. All cash received by a school must be deposited in to the school bank account before it is used, so that it is reflected in the bank statement. The head master should report the received and spent fund to the school board, committee and to the parents’ committee.

Security and asserts control

A chief of each inventory will be made by insert job title on an annual basis and will be signed and dated. Maintenance of the asset register is overseen by the headmaster/head teacher. The inventory holder shall maintain a record of the location make model and serial numbers as appropriate. Records will be kept to demonstrate that any sale proceeds represent the best possible price having been obtained. All financial data on the balance sheet/trial balance will be backed up at the end of each month. All invoice books statements, check stubs and paying in books will be filed and control in school all over the time. It is better to change the route of going bank away to be done by those three administrators like Headmaster, second master and the bursar in spite of done by headmaster every day. He can get the problem from the chief or robbery (through cramming him every day)

Audit

The school bursar/borough treasurer shall be responsible for materials. The schools’ bursar/borough treasurer shall be responsible for maintaining independent continues audit of the financial records the operations and systems of control with regards internal audit practice. For that purpose, the Borough treasurer or authorized representative shall have the authority.

To enter the premises under the control of the school without poor notification to examine all records, documents and correspondence. To require and receive such explanations as deemed necessary in order to satisfy her/himself on any matter under consideration. To acquire the production of any information or items demanded necessary for the efficient and effective conduct of the audit. In auditing there are two types of auditing. The internal auditing. The headmaster and board chairman is the internal auditing of the school and the external auditing from the head quotes in the district or from the region level.

Significance if the financial management at the education institution

• Enable the school to control and to use the resources available properly in order to meet the educational costs as the way to achieve the educational objectives. 
• To enable the school bursar, headmaster, member of the staff to plan and to control the fund in order to work properly without the year by using the fund also to parent, stakeholders, donors and government grant, this should be allies to the school in the fight to improve quality. 
• Enable the head teacher/master in the raising of funds and ensuring that the funds so mobilized are utilized in the most effective and efficient manners. 
• Enable the headmaster to get more aid and sponsors if the fund is used well and encourage the parents and other stakeholders to contribute due to the accountability and transparency of the headmaster. This goes together with honest which built trust and promotes partnership.

Conclusion

Financial management in managing schools find it require high capability and moral ethical in using the public funds. Also it requires the one who it creates in order to find the fund for mining the school by participating the number of the staff parents, donors from outside and inside the country NGOs. To use school self-reliance sometimes as the source of income which will help to run the school. As education officers and planners it is better to use effective our resources and funds from the government (grand), community contribution to run our school effectively with high transparency and accountability for development of our school and national in general.

REFERENCES

alcock, R. & Mckenna, M. (2012). Financial Procedures for school retrieved by the governing body: Knowsly©ycolonia.

Betema, S. T. & Zeithaml, P. C. (1990). Financial Management and strategy: The University of North Carolina at Chapel Hill.

Brigham, F. E. (1995). Fundamental of Financial Management (7^th Ed) University of Florida.

Financial Management Retrieved from https://en.wikipedia/wiki/financia _management retrieved on 2016-6-6 11:09 am.

Gitman, J. L. (1995). Fundamentals of Managerial Finance (4^th Ed) San Diego State University.

James, C. V. & Wachowicz, M. J. (1992). Fundamentals of Financial Management (8^th Ed). United         States of America.

Madura, J. (1995). International Financial Management (4^th Ed) Florida Atlantic University: West Publishing Company.

Organizational Management retrieved from www.businessdictionary.com /definition/organizational_management.html

Strategic Financial Management Retrieved from www.investopedia.com /terms/s/strategocfinancial_management.asp 2016-6-6>12:21 pm.

Weston, F. J., Basely, S. & Brigham, F. E. (1992). Essentials of management Finance (11^th Ed) the Dryden Press Harcourt Brace College Publisher.