Making BOS effective under decentralization

Making BOS Effective Under Decentralization Policy Brief December 2010 KEMENTERIAN PENDIDIKAN NASIONAL 58622 Government's largest education program; in 2009, BOS accounted for 8.9% of the total national education expenditure (Table 1). Table 1: BOS Key Features3 Category Status in 2009 Coverage of 207,826 schools3; 41.3 million students schools and students (MONE+MORA) Annual allocation Rp. 397,567 (approx US$44) per student (Primary) Annual allocation Rp. 570,945 (approx US$63) per student (Junior Secondary) Photo by World Bank Team BOS allocation per Primary: US $7,832; (178 students) school/annum on Junior secondary: US $17,640; (280 students) I. BOS and access to basic education average BOS share of total 8.9% (22% of the central government) The Government of Indonesia (GoI) continues to make significant education budget investments to meet its constitutional obligation of ensuring basic education1 for all children, including the poor or those Fund flow Direct transfer to schools in quarterly otherwise disadvantaged. Progress in terms of improving access mechanism installments. to basic education, particularly at the primary level has been Approval and By the school committee (principal and commendable. However, the significant increase in the cost of implementation parents); the chair of the school committee education as well as the opportunity cost as children progress of budget at the co-signs the budget plan and expenditure from primary to junior secondary school is a key challenge for poor school level. report. households and government alike. Another factor which affects Reporting Transfers to schools recorded by the Ministry decisions on how long children stay in school, is the quality and of Finance; quarterly reporting on BOS fund relevance of education offered, especially to children "at risk" of allocations and expenditures by schools to dropping out or not continuing to the next level, because of poor districts. learning. In addition, where parental involvement or oversight Audit Clean audit for 2008 and 2009 by BPKP of schools is low, it tends to make schools less accountable and responsive to student needs. BOS (Bantuan Operasional Sekolah or School Operational II. BOS and School Based Management Assistance) seeks to improve access to basic education for The BOS program, initiated in 2005, is not only Indonesia's most every child in Indonesia. It disburses block grants based on an significant policy reform in education financing, it is also leading easily understood per student funding formulae, directly to the Government's transformation of the education sector from a public, private or religious schools, thereby lowering school centralized system to one supporting School Based Management fees2 that traditionally financed school operations. It is also the (SBM) see Figure 1. Recent international evidence44, based on rigorous impact 1 Basic education in Indonesia consists of primary (grades 1 - 6) and junior secondary (grades 7-9). evaluation of SBM found that SBM changed the dynamics in the 2 These include: (i) entrance fee for new students; (ii) registration fee for old students; (iii) uniform fee; (iv) tuition fee; (v) book fee; (vi) student worksheet; (vii) 3 MONE(2009). Indonesia Educational Statistics in Brief 2008/09. Pg 116 and pg 142. computer fee; (viii) cooperative fee; (ix) extracurricular courses/lessons; (x) scout 4 World Bank (2008). What Do We Know About School Based Management? World fee; (xi) student farewell fees; (xii) study tour; and (xiii) others. Bank. Washington.DC. Making BOS Effective Under Decentralization Figure 1: How School-Based Management influences learning outcomes SELF-EVALUATION