Section 13 of the National Policy on Education entitled “Financing of Education” states that “the traditional sources or revenue for educational establishments include taxes, school fees, education levies, or rates and sometimes donation”. The bulk of the education revenue in Nigeria comes from the sale of liquid and solid natural mineral resources. The principal of which is the petroleum product. Other sources of funds for education in Nigerian include:
i) Pay-As-You Earn (PAYE) tax.
ii) Property tax.
iii) Rates General or specific.
iv) Registration fees and court fines.
v) Value Added Tax (VAT)
vi) School fess.
vii) Education rates such as Education Trust Fund.
viii) Tax on interest to savings account
ix) Education levies.
x) Donations during sports festivals, send forth ceremonies, foundation day celebrations, silver and golden jubilee celebrations and public spirited individuals make cash donations for the provision of certain services and goods to schools.
xi) Rentals – some staff quarters either built by the community effort or the state attract revenue through the rents paid by teachers but the amount derived from this source is usually insignificant. At the level of tertiary institutions such as the Universities, Polytechnics and Colleges of Education, such rentals also constitute internal revenue base.
xii) Alumni or old boys/girls associations – from time to time, association of graduates from a particular institution assist in the funding of their institution such as erection of school blocks, and provision of good and services, and
xiii) Duties – import and export duties as well as other sources accruable to the federal, state and local government as the case may be.
It is important to note that the supply of funds is mainly though taxation at the federal and state levels and by the federal grants to state and local governments.
i) Payment of Taxes for Community Schools
ii) Contribution by Local Governments
iii) Agricultural and other ventures ot be organized by Schools
iv) Endowments and Foundations
v) Communities and Individuals
vi) Foreign Aids
BASIC PROCEDURES OF MANAGING FUNDS IN SCHOOLS
You need to ask yourself how you mange your salary or the money you get. Do you keep any record or just spend your money the way you like? Do you spend you money the way you likes? Do you have a personal cash book? In managing funds in educational institutions, there are number of management functions which heads of the institution normally carry out to ensure that they manage funds effectively. The first is that they keep a record of all funds received, to be spent or spent in vote books. In vote books, finance officers record all items and amounts of money approved to be expended for every term, semester or year. The book is normally consulted before spending is undertaken. Before salaries are paid or before any payment of any jobs are done, relevant vouchers have to be prepared. A voucher explains the reasons and authority of the expenditure.
In managing funds also, heads of instructions use what is called Local Purchase Order (LPO). The local purchase order is used for identifying and authorizing local purchases voted for in the school. It si an agreement made between a school and a supplier certifying that the school is ready to purchase the item at an agreed price. Some examples of items for which an agreement could be made between a school and a supplier could be duplicating parers, foolscap sheets, stationeries, biro pens, ribbons, staplers, files and file tags, office pins paper clips, etc. there is also the cash books where all transaction are recorded each day.
Heads of institutions should also make use of cheque books. A cheque can be described as a written order directing a bank to pay money to one whose name appears.
Journals are very important for heads of educational institutions to record all financial transactions. The journal has to be written daily. It is the first step of the accounting circle in the school. Below is the sample of a journal entry.
Date
Purpose of Expenditure
Amount
N
4/2/2001
50 bags of cement
25,000.00
3/3/2001
Aluminum roofing sheets
200,000.00
15/5/2001
Stationeries
35,000.00
20/6/2001
Ceiling boards and nails
200,000.00
27/6/2001
Dusters and chalk
159,000.00
In every educational institution, heads use the cash book to record money which is disbursed for official purposes, while in the financial legers, they post information proved in the journals. Actually, the purpose of ledgers is to record the financial transaction of all education institution as they occur.
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