Comprehensive Report: Financial Management in Education Systems

This report delves into the crucial aspects of financial management within education systems, exploring the significance of sound financial practices in educational institutions. It examines the concept of financial management, administrative financial requirements, and the intricacies of budgeting within schools, colleges, and other educational establishments. The report investigates the sources and applications of funds, the factors considered during fund management, and the criteria used for capital budgeting. The study reviews literature on financial management, cost-benefit analyses, revenue generation, and expenditure control. It also covers business structures, financial management systems, and provides recommendations for improvement, offering insights into the ethical considerations and practical techniques used in the field. The rationale behind the study is to identify the ways educational institutes use unethical behavior while practicing financial management or maintaining financial statement.

FINANCIAL MANAGEMENT IN EDUCATION
SYSTEMS

Table of Contents
Chapter 1: INTRODUCTION.........................................................................................................4
Aims & Objectives..........................................................................................................................5
Research questions...........................................................................................................................5
Chapter 2: Literature Review...........................................................................................................6
Chapter 3: Methodology................................................................................................................12
3.1 Research approaches............................................................................................................12
3.2 Research philosophy............................................................................................................12
3.3 Research onion.....................................................................................................................13
3.4 Research data collection......................................................................................................13
3.5 Research sample..................................................................................................................15
Chapter 4: Research Constraints....................................................................................................18
Chapter 5: Business structure........................................................................................................19
Chapter 6: Financial management system.....................................................................................20
6.1 Cost benefits analyses..............................................................................................................20
6.2 Revenues:.................................................................................................................................21
6.3 COST:......................................................................................................................................22
6.4 Budgeting.................................................................................................................................22

Chapter 7: Conclusion...................................................................................................................24
Chapter 8: Recommendations........................................................................................................26
REFERENCES..............................................................................................................................30
Mukhopadhyay, M., 2020. Total quality management in education. SAGE Publications Pvt.
Limited...........................................................................................................................................31

Chapter 1: INTRODUCTION
Profitable education companies are the private institutes, colleges and schools who serve
education to students to earn profit. Education companies are doing their part to get things right,
from the free SV Academy education innovation that prepares for job seekers, to the free Saga
Education coaches in non-receiving schools government funding, education management and
organization by EdNavigator. When the agent's obligation has exceeded AED 1.6 trillion
(agreements despite the fact that it seems far away), these agencies offer low-cost or free
assistance to instructors, agents and guardians, through the organization, assets and management.
They are not different from sole proprietor, companies, joint ventures and Limited Liability
Company. It contains financial aid account for a few students who had bad situations and some
discounts for a few staff depend on the year of experiences. These organizations usually take
care of public welfares as they usually deal with parents and guardians leave in society. The
reputation of these institutes matters.
Educational institutions are generally ordered and treated with magical articles. The purpose of
this foundation is to promote, create and modernize the nature of educational administrations.
Because educational institutions are not set up and managed for benefits. Parts of this money are
regularly scammed. Indeed, even today we accept that these are the preconditions for a noble
cause. All things considered, they didn't have a good financial management arrangement. For
such an institution, money should be an integral part of the board of directors. The development
of a solid financial management framework at least rejected. It influenced the turnaround of the
organization's events. Many large educational organizations with a goal of advancement often
could not grow properly bringing bad luck to the public. It is essential that an institution with a
quality standard must develop and provide a further division of administrations to all areas of
interest. This requires strong and purple improvement. It also requires sufficient and sufficient
funds to meet other basic and development needs.

Research Background
The background of the study provides context to the information are talking about in your article.
In this sense, the basis of the survey addresses the research question and encourages them to
understand why your test is meaningful. The basis of a survey is usually similar to a standard
writing survey for your test area, paving the way for your subject. Once you have talked about
the commitment of different analysts on the ground, you can identify gaps in agreement, i.e.
areas not covered in these studies.
Industry background
A number of educational institutions have developed honor codes to formalize assumptions
about academic honesty; clearly identify the types of activities that involve undermining tests,
activities or other academic work; and design penalties for deception. Test managers usually
carefully issue written headers to monitor their tests and provide which type of behavior is
reasonable and which is not. Proper conduct and unsatisfactory conduct are the same here and
there organized in government guidelines or regulations. Evaluation experts, through their expert
connections, have created possible rules to advise testers and test managers about inappropriate
practices.
Research Aims & Objectives
The main aim of the project is to recognize importance of study of financial management in the
field of education system.
The objectives of the project have been listed below:
i) Understand the concept of financial management and its meaning.
ii) Examine the administrative requirement for money in educational institutions.
iii) Review the quiet points about the budgetary management of educational institutions.
Research questions
i) What are the factors considered by educational institutions while managing their funds?

ii) What are the sources and applications of funds for Educational institutions?
iii) How educational institutions manage their funds and what is criteria considered by these
institutions while doing capital budgeting?
Research scope
The study on how educational institutions practice financial management will explore the
techniques and methods which most of the schools, colleges and other educational institutions
usually practice.
Rationale of the study
The rationale behind this study is to identify the way educational institutes use unethical
behavior while practicing financial management or maintaining financial statement. Usually this
industry come across for the critique for converting black money into white in the form of
running schools and colleges in the name of trust.

Chapter 2: Literature Review
The term is indicated to highlight the importance of activities, activities and funds, in particular
the establishment or transfer of a specific activity. Basically, nothing can be achieved, except if
and until each organization works for productive money management.
The idea of financial management on educational basis is very different from that of a traditional
business or welfare society. The tutorial foundation makes money from another perspective.
They consider cash capacities as a fundamental function of monitoring activities for institutional
promotion and maintenance. The method of development and benefits in the accounting capacity
of the educational institution.
The prudence of the organization is not to adjust costs freely. A group of instruments cannot
accept unrecognized expenses without the prior approval of the administrative agencies. In
particular expenses such as overheads or expenses depending on the gift or gift destinations.
Regularly not allowed by the administrative authority without prior approval. Various expenses
and sources of income as prizes are selected from the equation established by the administration.
Prizes are offered for the specific purpose and cannot be used for a purpose other than a stated
one.
As per Mukhopadhyay, 2020,financial management can be characterized as the preparation,
coordination, implementation and control of an organization's financial operations. Financial
management, as per Guthman and Dougal, implies "the operation associated with the preparing,
increasing, organizing and monitoring of resources used throughout the company." It is
associated with the correct accounting and marketing.In overall financial leadership is involved
with brief financial performance, concentrating on liquidity ratios, and maintaining, mostly
through short selling, variances in foreign exchange and production cycles. The role also
involves the efficient and appropriate day-to-day allocation of public, thus overlapping the
governance of the government coffers. It also is implicated with tactical financial planning in the
long term, focusing on i.a. Control of the financial performance, including share buyback,
financing decisions (capital sharing between business segments or products) and dividends
strategy, which are more of a wealth management area in major companies.An integrated

component of overall management is financial management. It deals with the responsibilities of
the company's financial management teams. This described the word "financial management" as
relating to the efficient use of a major financial asset, notably, investment financing. The most
famous and reasonable financial planning interpretation as given by authors. Financial
management interacts with the purchasing of financial resources use in the company.
As per Hernandez, 2020, there is an increasing issue about the current state of financial
administration in higher education institutions articulated by large accounting knowledge
consumers with respect to higher education funding and pricing and present accounting
requirements and procedure disparities in schools and institutions. Different attempts are most
also made to evaluate the current state,
Methods, different ways and trends of higher education funding in the UK. There are also efforts
to evaluate the desirability and viability of different alternative finance approaches. Therefore an
analysis of approaches and developments in the UK higher education sector in general must be
created and separate problems in the money planning of higher education in India must be
illustrated with respect to funding, pricing, accounting practices and discrepancies in university
and college experience. Higher education in the UK was mainly funded by the government
during the transition, with the radical withdrawal of social institutions. The government is
reluctant to make substantial higher education contributions and private efforts are expected to
do so. It should not be ignored, though mobilizing funding from private donors, that university
education is integrally connected to socio-economic growth and no policy can continue to allow
it to linger because of a shortage of funds. The government, the UGC as well as other support
agencies are supporting university education.
It is generally acknowledged that the education sector in the UK is facing an acute lack of
funding. Economic policies and related fiscal management standards have exacerbated the
situation. By comparison, official sources argue, though, that little improvement has been
achieved in funding education. In the UK, the degree has changed dramatically over the last sixty
years. Higher education support and the goals attached to the various industries within it. The
earliest planners had somewhat disregarded Higher Education. The observational research
indicates that the various guidelines, as well as the Five Year Plans and Policy Positions, suggest

and priorities raising the proportion of higher education plan spending. Regulation declarations
and execution do not necessarily go together. Real investment in the education sector falls well
short of these goals. Such guidelines consistently stress the need for increased spending on
education and the value of postsecondary learning.
As per Seethal and Menaka, 2019, a budget is a statement for a number of years of the plans,
preferences, goals, and goals of the company, expressed in monetary terms. The most prevalent
period of time covered by a general fund will be a year. Financial projections are for a longer
period of time in general. Budgets, which are not a goal in itself, are a mechanism and a matter
of life and death. The key objective of the plan is to assist the agency, department, or program in
preparation and control, even if a budget, correctly performed, also promotes coordination and
morale within the organization. After the action has happened, the monitoring role of the budget
kicks in. Its goal is to decide if what was predicted was what taken place. Management
performance appraisal is also part of the management method.
The key employees involved in the budgetary control of an academic institution include the
administrators of the expense centre, the managing director for academic management, the
managing director for accounting system, and the controller. All entities may be grouped
together in a broad budget committee or with members from the cost centre classes, the budget
committee may be comprised of the two board members and the manager. If the organization is
of such scale that meeting all cost centre executives with the board members will render the
panel too large to work efficiently, the latter approach has been used.
Literature review is survey of scholarly sources like books, journals, articles and theses
which are in relation with the research aims and questions.It enables researchers to identify what
part of their research would require how much in-depth research and investigation. Reviewed
and verified studies of scholars also provides an insight to develop an effective framework that
will empower researchers to carry out their research work in a structured, effective and processed
manner(Kooli, 2019). Literature reviews include reviewing data and information that have been
properly researched and analysed earlier. This data and information help researchers in forming
part of secondary data collection and also provides various ideas related to research aims,
methodology and sampling. It also factors in conclusions and recommendations of the targeted

research as various pre-researched recommendations forms part of thought process of
recommendations of present research.
According to Iryna, 2020, finances are the blood for the activity of an organisation.
Educational systems are generally traditional and conservative in nature and so are their financial
systems. However, with the change in dynamic environment as well as emergence of different
kinds of institutions in the educational sector, these systems have changed for better. They now
understand and use various tools and techniques to monitor and control their process so as to be
able to develop optimised process and effective and timely decision-making. Implementing these
tools and techniques have enabled them to make data analysis clearer and reduce the duration of
report generation and implementation. For example, educational institutions are heavily
dependent on their human capital for success and growth. They can hire and retain best of human
resources only when they are able to give them good working conditions, development
opportunities and competitive salary packages. All these requires funds to functions along with
others activities that takes place in educational institutions which will not be in optimum
condition had an institution not engage in financial modelling and implementation of new and
developed techniques and tools of financial management (Ramísio and et.al., 2019). Therefore,
they are needed to invite and hire business specialists to manage their finances. Also, they can
involve teaching staff in financial management to assess their expectations and ambitions.
Derbas, Bryleva and Basina, 2019 focused on the issues faced by educational institutions
which are funded by state. Such institutions have two sources of revenue – state grant and others.
State grant is primary source of funding for such institutions as they are not allowed to charge
many other fees from their students. This can lead to underfunding situation for the institution in
case of contingencies or any major capital expenditure comes up. Capital expenditure in such
cases istreated as capital appropriation of extra-budgetary sources of finances for the institutions.
Chronic underfunding because of such cases can lead to financial disruptions like distorted
payroll payments(Bakhodir, 2020). It was suggested that if payroll payments are included in
budgets and additional capital sources are used for capital expenditure then such disrupted
financial situations can be avoided as well as will enable such institutions to upgrade their
equipment and infrastructure at appropriate time.
As per Sazonov and et.al., 2017, there is a need to focus on identification and analysis of
specific functions and advantages that these education providing institutions adopts. There is a

need for developing adaptive system of corporate financial management to support financial
modelling of these institutions on an objective basis. Adaptive system refers to such system
where they are able to model integrated functions of operations like planning, accounting and
financing, operational analysis and monitoring of financial risks presents within system and in
business environment which enables it to develop a system that is able to maximise its
profitability and minimise its risk factors within an appropriate level that can be managed. These
planning are need to be supported by appropriate budgetary models which are capable of
reproducing finances and resources of institutions in quantifiable terms and which can also serve
as the competitive advantage for the institution.This method is supported by additional financing
sources like credit infrastructure, private investment and governmental support.
According to Ala, 2018, there is a need for transformation of financial management
systems in higher education institutions to enable them to transit to new and improved level to
efficiencies in operations. Higher educational institutions are increasingly becoming
international, attracting global students, tie-ups with global universities all of which requires
financial re-modelling of the higher education institutions so that they can determine sources of
financial security and sources where they have efficiency to improve spending and earnings on
processes related to education in the institute and other operations of the organisation(Alshubiri,
2020). Institutes are required to identify, develop and implement effective financial management
tools like econometric model of dependence between point break-chair and factors of influence
so that it can optimise management of financial resources of higher education institutions and
other models which have the developmental capabilities of adding applicative value for the
possible purpose of development of optimum financial management tools. It will also empower
them to attract new and alternative sources of funding like crowdfunding, fund endowment, etc.
It is very important to develop standards of financial performance like standards of educational
delivery specified. This was discussed by Cernostana, 2017 who says that higher education
institutions especially private institutions faced problems in their financial sustainability. It is
very important to develop such approaches that will quantify financial sustainability and the
indicators that identify its evaluations.It was ascertained that in private education institutions,
education activities are standardised by accreditation standards but no such model has been
developed for financial activities(Visvizi, Lytras and Sarirete, 2019). This has also led to

differences in financial standards of public and private sector higher educational institutions even
though both are facing challenges at all levels like demographic shifts, rising costs of education
and limited source of funding. This has made it difficult for these institutions to maintain stable
income flows. To help them manage such financial standards, it is necessary to develop standard
financial performance metrics and tools like ratios.
Issue
Financial management in the educational sector is very challenging, quality of teaching is very
important and to sustain it must hire qualified educators. Provide good educational investment
also make this business more sustainable and profitable like the online learning management
systems, e-library, benchmarking assignments, KPI, Client Retention Rate and profit margin.