Funding sources: Government budgets comprise funds from different sources including domestic tax and non-tax revenues; foreign direct investments; and loans and grants from external sources such as development partners. External funding from partners through projects is generally classified as investment funds and EU budget support will be accounted for as a grant amongst budget revenues. Lower-income countries tend to rely more heavily on external grants. 

Funding and reporting flows: Financial management systems differ from country to country. Developing an overview of the funding and reporting flows is useful for assessing how, and how effectively, the system works. External technical assistance may be required to develop detailed analysis of the system. Other partners that also have high levels of engagement in sector financing issues may be able to support this process. These would include the IMF, the World Bank, development banks and, potentially, other partners that are engaged in budget-support programmes.

Public sector audit systems and processes: The objectives of public sector auditing are to promote the proper and effective use of public funds; the proper execution of administrative activities; the development of robust financial management systems; and the communication of information to public authorities and the general public through the publication of objective reports. Audits systems and processes can be divided into internal control processes, internal audit, and external audit

Transparency and communications around education finance: Given some of the capacity limitations surrounding internal audit and control systems, other complementary means of increasing financial transparency are important. One good example of this is the approach adopted in Uganda of publicising school-level financial data through painting this on school buildings. Other approaches focus on strengthening the capacity and role of community participation in school-level financial planning and budgeting. Ensuring that school-level financing systems (such as school funding formula) are kept as simple as possible can also assist in supporting communities being able to verify that funds received at the school level are compliant with official procedures and have not been diverted. These types of approach can incrementally strengthen communities in taking forward the role of ‘first-line-of-audit’. In addition, they can support greater levels of community engagement in supporting the school management process