Financial Planning

A clear, realistic budget is the foundation of financial planning. Tools like the IDP Foundation’s “Pathways to Excellence” (P2E) include budgeting components – for example, P2E has indicators and action steps for financial management, prompting school leaders to create annual budgets covering all income and expenses. Using a simple Excel budget template designed for schools can help organize this. The template should list expected revenues (fees, subsidies, any fundraising) and fixed costs (salaries, rent, utilities) as well as variable costs (instructional materials, minor repairs). One available resource is the Opportunity International EduFinance budgeting tool, which they provide to schools in their EduQuality program. It’s essentially a pre-formatted spreadsheet that also projects cash flow by month (so you can see which months you might be in deficit and need to save ahead). Even if you don’t have a computer, this template can be printed and used in ledger books. Ensure it’s updated annually (or per term) and compare actual spending monthly against it. Training the bursar or accounts clerk on this, if you have one, is key. If the IFL data showed, say, high pupil-teacher ratio but low salaries, maybe the budget needs to plan for hiring an extra teacher – the template can simulate if that’s feasible by adjusting expenses. Sample budget template

Many LFPS face irregular cash flows because fee payments are not timely or drop during certain terms. A cash flow projection sheet (which could be part of the budget tool) helps anticipate and navigate this. There are free tools from microfinance institutions that allow you to plot when fees are due vs. when expenses hit. Additionally, consider using mobile money (M-Pesa) for fee collection to improve accountability and ease for parents. Safaricom’s Lipa na M-Pesa or fintech solutions (like SchoolPay) can record payments digitally, send reminders to parents, and provide reports. Some charge small transaction fees, but they often increase collection rates by sending automatic SMS reminders. On the planning side, a basic practice is to separate accounts for different purposes – e.g., have a maintenance fund account where a portion of fees is deposited consistently to handle infrastructure repairs. Tools such as Financial Policy guidelines (some NGOs provide a template financial policy for schools, covering fee policies, procurement procedures, etc.) ensure there’s a system to the money management. Aligning these tools with IFL is important: for instance, if IFL will reduce your interest rate upon meeting learning targets, plan ahead where you will reinvest those savings (maybe into teacher training or learning materials). Good financial tools will make transparent how improvements (like increased enrollment from better results) translate into budget changes.

For slightly larger schools or those aiming to be very organized, adopting a simple accounting software might help. QuickBooks is common but costs money. However, there are free versions or simpler apps: Manager.io is a free offline accounting software that some small businesses use – it can handle basic school accounts. There’s also TaliPay or SchoolTool (region-specific apps) focusing on school fees and expenses. If software is too daunting, standardized ledger books (for income, expenses, payroll) available from stationery shops can be used. What matters is consistent record-keeping. The IFL assessment likely expects improved record-keeping as part of accountability. Using tools will help you generate needed reports for IFL too. For example, EdPartners Africa (a school financier) notes that schools with better financial record-keeping tend to grow and meet obligations. So implementing even a basic tool can be a selling point for future financing. Some open-source school management systems (like OpenEMIS or Fedena) have finance modules, but they might be overkill and technical. It may be more practical to stick to Excel or Google Sheets – which also allows sharing with the school owner or board easily.

Often, the school proprietor or headteacher may not have formal training in financial management. There are guides specifically aimed at demystifying this. For example, the IDP Foundation has shared lessons from their Rising Schools Program – they emphasize things like diversifying income (e.g. starting a small school farm or a bookstore to supplement fees) and controlling costs without compromising learning. Another example is the case study “Gyan Shala: Building a Financial Model for Scale in Affordable Schools” on the GSF website, which discusses strategies like efficient fee collection and cost-cutting measures. A school owner can learn from such examples: Gyan Shala, for instance, minimized admin overhead to direct more funds to instruction. Key topics to study include setting fees at the right level (affordable yet sufficient), managing credit (like ensuring any IFL loan is used for investments that generate returns or cost savings, not just consumptive use), and building reserves for emergencies (like a term of low enrollment). If available, attend workshops by organizations like Street Society or EduFinance who occasionally hold seminars on school financial sustainability.

Use your IFL academic data to guide financial planning – this is a bit of an internal tool/approach. For example, if EGRA scores are low, budget for more reading books or a part-time literacy coach; if attendance is an issue due to facility problems, allocate funds for that new water tank or toilets. Financial planning tools often overlook these linkages, but you can incorporate them. A School Improvement Plan (SIP) document (there are templates from MoE and others) is useful for this – it ties school goals with required actions and resources. Ensure your SIP has a financial column: how much each intervention will cost and where funding will come from. This way, your budget is not just numbers, but a plan to achieve the outcomes (like those measured by IFL). Tools like P2E mentioned earlier essentially serve as a self-diagnosis and planning guide, which is invaluable in linking data to budgeting. (Language: English; you can translate parts for school management committee if needed; cost: free to create SIP.)

This financial sustainability toolkit, while being more focused on ECD and childcare, but has many aspects that are transferable for FLN years as well. 

Connect with them for credit. 

LINK

Connect with them for credit. 
LINK