In Luke 14:28-30, there are powerful words of Jesus of Nazareth perfectly capturing crux of budget, which is counting cost before acting. He sagely said, “For which of you, intending to build a tower, does not sit down first and count the cost, whether he has enough to finish it?
So, budgeting and counting of cost in Senior Schools is the nub of my 28th treatise on Competency-Based Education (CBE). As usual, I strictly adhere to raft of good Guidelines for Implementation of Senior School Education (2025).
To begin with, budgeting is the process of creating a financial plan. It outlines expected income and expenditure over a particular period of time. Typically, financial or fiscal year. Budgeting results in a budget statement, which is a formal document providing detailed overview of the Senior School’s budget for a specific span of time.
Ideally, the budget statement depicts the estimated revenue or income, expenditure, surplus or deficit, savings or reserves – as well as budget projection and necessary adjustments. Budgets essentially implement the annual work plans (AWPs) of the School Infrastructure Development Plans (SIDPs) and the lustrum or 5-year Strategic Plans (SPs).
When writing and reviewing SPs, as consultants, we do design a detailed budget projection plan (BPP) at the tail-end of SPs, which focuses on strategic action or project, cost estimates, year of action and possible sources of funds.
Therefore, powers-that-be in Senior Schools must ensure that there is proper financial management through effective allocation of resources, tracking of expenditure and planning for future financial needs.
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Broadly, budgets are essential for financial control, and tracking where money has been used. Budgets are key in financial prudence and goal-setting, which revolves around planning for future financial goals such as saving for an emergency fund, investments or large purchases. Budgets are also important in decision-making. For it provides a well-thought-out framework for making informed financial moves.
Dear reader, in Money Matters, Samuel Njuguna Kanja contends: it is important to outline estimated outcome and expenses for a specific period. Then, the best budget spells out priority areas. As well as spending timelines.
In a well-thought-out budget, we begin by determining income and expenses. Meaning, we categorise expenses, allocate income, prioritise expenses, reduce unnecessary expenses, set smart financial goals, make practical plans and adjust spending to fit the budget.
Budgeting Principles
Digging deeper, the following raft of principles govern Budgeting in Senior Schools. It is a key requirement that every school prepares an annual budget statement, which sets out estimated cash receipts from sources approved by the Ministry of Education officials. In budgeting, there is also the estimated expenditure on prioritised projects, which also features predominantly in school SPs; agreed and approved by the Board of Management (BoM).
Meaning, by balancing optimism with realism, school budgets must be practical, and aligned to the school’s SP; taking into account all the possible sources of funds such as fees, grants, donations and income-generating activities (IGAs). The budget is developed by the BoM where the Head of Institution (HoI) plays a pivotal role. Other key stakeholders such as parents must also be part and parcel of this important exercise.
Therefore, as an essential tool for financial control, the onus is on the HoI that an annual budget is prepared at the right time. The HoI should ensure that all transactions are classified in accordance with the approved Vote Heads or Chart of Accounts (CoA).
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The school’s budget should be discussed and approved by parents during the Annual General Meeting (AGM). Thereafter, the budget is adopted by the BoM and submitted to the County Education Board (CEB) for formal approval one month before the beginning of the financial year.
Budgeting Implementation
Ideally, the HoI should co-ordinate and control the implementation of the school budget by doing things in perfect agreement with set conventions. The HoI should ensure that school funds are used exclusively for their intended purposes: to benefit the school, staff and students. For instance, to buy teaching and learning materials, improve school infrastructure, support the students’ welfare programmes, and remission of emolument to the non-teaching staff (NTS).
Consequently, HoIs should strictly follow the Public Finance Management Act (2012), and any other financial legal documents focusing on wise use of funds received from different sources in schools. Likewise, HoIs should ensure there is timely and optimal procurement decisions as per Public Finance Management Act (2012) and Public Procurement and Asset Disposal Act (2015).
Then, HoIs should ensure that various activities take place as scheduled and within the approved financial limits. It is incumbent upon the HoI to determine the most appropriate action in addressing unfavourable variances. For any virement should strictly adhere to Public Finance Management Act (2012). Taking note: Virement shall not be allowed in tuition and infrastructure accounts.
Budgeting Control
Furthermore, there must be internal control systems for budget implementation. Internal control is a process, effected by the Senior Schools’ BoM, which is designed to provide reasonable assurance on achieving objectives related to: Effectiveness and efficiency of operations, reliability of financial reporting, compliance with applicable laws and regulations, and safeguarding of assets against unauthorised acquisition, use, or disposal.
Actually, Senior Schools must have a strong internal control mechanism so as to ward off brazen malfeasance, embezzlement and misuse of funds. There should be strict adherence to integrity, and ethical values: Demonstrated through strong leadership of the Head of Institution (HoI), Senior Management Team (SMT) and Board of Management (BoM).
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Ipso facto, in line with best management practices on internal control, Senior Schools should have some strong internal control systems to safeguard financial resources through: Separation of duties, which are responsibilities related to handling of funds, such as authorisation, recording and custody of assets, which should be separated among different staff members to prevent fraud. Likewise, duties related to financial transactions, asset management and procurement, should be divided among different individuals to reduce risk of fraud or errors.
For example, the person authorising purchases should not be the one responsible for processing payments or receiving goods. Then, on approval process, all payments should be subject to approval by the school’s administration, and where it can deem fit and appropriate. Additionally, bank accounts and cash balances must be regularly reconciled with financial records: to detect discrepancies at least every month. Advisedly, schools should establish audit committees that work in tandem with internal auditors: to review and monitor financial performance, and ensuring on-going compliance with all financial policies.
Finally, the head honchos should put in place effective financial management policies. On budgeting, procurement, expenditure, control and auditing: to prevent mismanagement and misappropriation of school funds. Senior Schools should assess both academic and operational risks like loss of assets, academic underperformance and regulatory non-compliance.
So as to implement risk-management strategies. Audits and financial reporting should be undertaken regularly. To check for any discrepancies or financial mal-practices. Senior Schools should recruit competent personnel and take them through a well-thought-out on-boarding programme: to assist in recording accounting transactions in a consistent manner. Then, HoIs in Senior Schools should ensure that they have put in place effective information and communication systems.
By Victor Ochieng’
Victor Ochieng’ assists schools to write new, or review existing Strategic Plans. He speaks in AGMs. vochieng.90@gmail.com. 0704420232
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