Finance in Education

Department of External FinanceMinistry of Finance

Issues• Perspectives on the development of

education and training

• Finance in education

• New methods to attract donors in education

Perspectives on Education

According to CPRGS, the aims are to build more equal and higher quality education for all:

- Renovated educational objectives, curricula and content in the direction of standardization and being closer to the regional levels; teaching staff development; renovated education management and facilitated school autonomy and ownership

- Encouraged socialization in education development- Focused equity and facilitated access by the

disadvantaged to education, especially at basic level- Increased financing for education, and mobilization of

resources from public, private and external sectors

Financial Objectives in Education Development

• Share of State spending on education reached 6% of GDP in 2005 and will be 7% of GDP by 2010

• Share of education spending out of total State budget spending reached 18% in 2005 and will be 20% by 2010

• Focused investment into general education and education for ethnic minority and disadvantaged areas; ensured learning opportunities for children from low-income families.

Implementation Progress

Targets 2001 2002 2003 2004 2005

GDP (billion VND) 484,000 539,000 611,000 700,000 825,000

Total State budget spending (billion VND)

129,773 147,309 167,720 186,670 220,000

State budget spending on education

17,628 21,590 26,810 34,421 41,600

Share of education and training spending out of

GDP (%)

3.01 3.67 4.38 4.9 5.04

Share of education and training spending out of

total State budget spending

15.5 15.6 16.2 17.1 18

Implementation Progress (Cont.)

• In 2006: The approved State budget spending on education and training is 18.6% (equivalent to approximately 5.21%/GDP).

• In 2007: According to the Instruction No.19 issued by the Prime Minister on the estimated budget for 2007, it must be ensured that the State budget spending on education and training will reach 20% of total budget.

• The above percentage will be maintained until 2010.

Structure of State Budget Spending on Education

• Recurrent expenditure: 77%

• Investment expenditure: 17%

• National Targeted Programs: 6%

• From Central budget: 27%

• From local budget: 63%

Division of Expenditure Responsibilities

• Central budget:

- Training (colleges, universities)

- National Targeted Programs

• Local budget:

- General education

New Policies on FinanceIt is planned to increase the ownership of non-

administrative units in education sector with a view to increasing the service quality

• Decree No. 43/2006/ND-CP dated 25 April 2006 on the ownership and accountability of public non-administrative units in relation to organization structure, staffing and finance

• Decree No.130/2005/ND-CP dated 17 October 2005 on the assigned autonomy of State administrative units in relation to staffing and administration expenditures

New Policies on Finance• Encouraged investment and mobilization of

resources from all socio-economic components for the development of education and training. Encouraged establishment of non-public education, training and vocational training institutions; training cooperation and linkages with high quality foreign institution; establishment of high quality training institutions with 100% of foreign capital.

• Renovated tuition fee structure in the direction of ensured compensation of recurrent expenditures and accumulated expenditures for investment and development.

Management of ODA Capital for Education and Training

• Improved management and efficient use of ODA capital for education and training

• Gradual shift from project-based funding to budget support through the national targeted programs for education and training

E.g: The Targeted Budget Support (TBS) Program for Education

Thank you