Question

What is the challenges confronting or affecting the teaching of both Financial and Management Accounting Education? Let us know 5 challenges for both Financial and Management Education .

Answer 1

Challenges of Financial and Management Education -

1. Budgetary control

Lack of planning affects the effectiveness of schools as it complicates reporting on achieved objectives and results. The planning process helps to develop objectives, key activities, milestones, Key Performance Indicators (KPIs), financial policies and procedures. Most schools struggle to effectively implement their budgets and this hinders or delays the schools to improve the quality of education. In most schools, budgets are not being effectively monitored to the extent that numerous budget amendments and adjustments are being done without the requisite authority’s approval. In any organization, budgets serve as guides or benchmarks to financial planning and projects management. In view of the poor financial policies and procedures, most school heads and bursars are being found wanting during the audit process. It is imperative that all budget amendments and adjustments should be authorized by the relevant authorities. In Zimbabwe the office of Provincial Education Director is responsible for the authorization of budgets amendments based on cash flows rather than on accrual basis. The school development plan should inform budget management and as such minimize deviations from set targets.

2. Deficit school accounts

Most schools’ books of accounts are running with deficit balances. Deficits interrupt or restrict operational activities. The deficit school accounts are mostly caused by lack of internal controls and as such increased misappropriation of funds and failure to adhere to financial policies and procedures when making payments.

3. Lack of budget reviews.

Financial control is a fundamental aspect of effective financial management. Budgets are not being reviewed after every end of School Terms hence there will be no budgets analysis being done. Budget reviews are part of financial controls to determine any variances between planned and actual results. The determination of variances is useful as a spur to immediate remedial action if actual performance is below expectation. Budget reviews help to enhance financial control, and this is a continuous process to ensure school’s resources are mobilized and distributed effectively. The process also enhances monitoring and evaluating the school’s financial progress and initiating corrective action.

4. Lack of accountability

There is a lack of leadership accountability in school financial management. This is exhibited through the seemingly pervasive abuse of offices by school heads (principals). School heads are regarded as the accounting officers of schools and as such they use their power to ‘force’ bursars to release funds or make other payments without following procedures. This emanates from improper and ineffective school management and lack of stringent accounting rules and procedures. Such practices exhibit a lack of values and Values-based leadership among those in positions of authority and decision-making. Internal control systems comprise a system of procedures and methods with the objective to assure compliance with the principles of legality, transparency, efficiency, effectiveness and management economy. A good leader should conscientiously manage and execute the organization’s budgeting activities among other diverse responsibilities. A competent school leader exhibits healthy human relations, trustworthy advice, commendable leadership and a two-way communication with staff. These qualities can be enhanced through Appreciative Leadership and engaging purposely in methods of enquiry.

5. Use of cash before banking

The Zimbabwean economy relies mainly on cash payments and as such most schools use receipted cash before banking, which is a chargeable offence in financial management. All cash received must be banked first before being used. The digitization of school fees payments should be a top priority in most schools as a method of enhancing the financial management function.

6. Collusive and corrupt conduct

There is a challenge of collusive and corrupt conduct during procurement process. This culminates as a violation of procurement procedures. Procurement is the process of purchasing goods and services. The procurement process is one major source of conflict of interest between principals and agents in an agency relationship. This is because collusion and corruption are rampant in procurement procedures. Procurement procedures, though clearly defined and communicate are not being followed in schools and this causes major financial problems for schools. The distortion of the procurement process via collusion and corrupt practices typically has a particular detrimental effect on schools. The resulting failure to achieve best value for money has a negative impact on the range and depth of services and infrastructure development within schools. An effective procurement policy promotes efficiency or the achievement of the “best value for money”. This is normally achieved through a competitive bidding process. It is critical that schools protect the integrity of the procurement process, so as to maximize the resulting benefits for society. Bid rigging is the typical mechanism of collusion which leads to the predetermination of the outcome of the procurement process by the participants rather than the competitive process. To protect the integrity of the procurement process, schools need to design and implement the procurement procedure. This requires values and the right attitude among those involved in the procurement process. A bigger picture consideration when engaging in procurement processes is essential rather than self-centeredness behaviors.

7. Mismanagement of school projects

School projects are another secondary source of funding for schools, if properly managed and integrated into the school financial management system. In most school projects, staff takes loans of items with the idea of paying on month end, but they do not own-up their obligations.

8. Poor records keeping and management

Schools also face the challenge of failing to account for expenses incurred as a result of the absence of supporting documents (receipts) to support the expenditures incurred. Poor records management leads to difficulties in administering, developing and supervising education systems. Record keeping is a vital financial management responsibility because of the indispensable role of records and information in the operational activities of the school system. Quality performance, task accomplishment, and measurable outcomes are important responsibilities which depend on the accessibility of usable records. Without records, it is virtually impossible to determine responsibilities for actions and hold individuals accountable.

9. Fraudulent activities

Reports show that some School Bursars are being caught of fraudulent activities such as under receipting of fees. This is mainly a result of poor internal monitoring of the school’s financial resources. Internal monitoring supervises the entire school financial management system. In most schools, the school heads oversee the budgeting, accounting and auditing functions of financial management. This multiplicity of roles performed by school heads is controversial and problematic, as the school heads can remarkably derail and decentralize governance structures by retaining control for themselves.

10. Economic challenges

The issue of ethics is highly compromised in schools’ financial management practices. It is essential that schools’ administration staff and the subordinate employees be educated with the knowledge of ethics and ethical practices. There seem to be rampant abuse of travelling and subsistence allowances by most staff in schools. Most staff abuses such benefit by always travelling in order to get allowances, that is, staff creates unnecessary journeys in order to get the allowance. There is also the challenge of discriminations between teaching and non-teaching staff. Some schools regard the teaching staff as the most important staff than other administrative staff. The issue of values and ethical practice should be ingrained in the schools’ corporate culture.

School heads, teachers and non-teaching staff must go for financial management training to enhance leadership skills and proper financial management in educational institutions. A financial dashboard system should be incorporated in school financial management as part of the Performance Management System. More effort should be directed at inculcating essential OD values and leadership traits that sustain the performance of schools.