Last week, the Regional Office of U-LEAD with Europe in the Vinnytsia Oblast held an info event on “Best Practices of Organising Financial Services for Educational Institutions in the Municipalities of the Vinnytsia Oblast”. Halyna Poiedynok, Head of the Financial Management Department of the Lypovets municipality; Maia Saliamon, Head of the Financial Management Department of the Murafa municipality; and Alla Mryshchuk, Head of the Education Department of the Nemyriv City Council, shared their experience with their colleagues.
“Each of the three municipalities has its own unique experience in organising the accounting of educational institutions,” said Inna Sviatna, Adviser on Municipal Finance and Management at the Regional Office of U-LEAD in the Vinnytsia Oblast and moderator of the event.
The Lypovets municipality established the Centre for Financial and Economic Services for Educational and Cultural Institutions for optimisation purposes. Schools and preschools have delegated accounting and reporting responsibilities to the Centre to cut down their own expenses.
“This approach enables optimising the accounting process if the network of institutions is extensive. The Education Department is the administrator of the highest level, while the educational institution is the administrator of the lower level; the principal of the school or kindergarten has the right of first signature, and the educational institution has a balance sheet and a separate account. This model is convenient at the transitional stage,” said Inna Sviatna.
According to Maia Saliamon, each educational institution in the Murafa municipality currently enjoys financial autonomy. However, they did not come to such a decision right away:
“We used to have district institutions. Then they switched to us but did not do it properly. Employees were not paid by the legal entities that employed them. At first, we tried to create a centralised accounting for all schools and preschools. But that model does not work out for us.”
Following the advice of U-LEAD experts, the Murafa municipality chose to give educational institutions full financial autonomy by introducing accountants’ rates.
“It worked. Each principal of an educational institution is aware of their capabilities and can manage finances independently. They are much more efficient in solving problems that arise in the course of the management of an educational institution, quickly making changes and amendments to documents. That is, this model made principals more responsible and interested in successful management,” said Maia Saliamon.
She added that an expert of the Regional Office had provided them with continuous support:
“We discussed with them which regulations were to be used, how to better launch these processes and how to effectively include lower-level administrators of funds in the network. We were always in touch and always received help.”
The experience of the Nemyriv municipality was also presented at the event. According to Alla Mryshchuk, financial autonomy provides an opportunity for the development of the institution.
“Sometimes financial autonomy is perceived as something new and optional. It is the duty of the head of this institution and its founder to ensure the accounting of the educational institution from the moment of its creation to the moment of its liquidation. The only question is the format: whether a standalone municipal institution or an in-house accountant is in charge of the accounting. The Vinnytsia Oblast is very actively implementing both, and the experience exchange event is designed to help those who have started on this path to go through it easily and without mistakes,” said Inna Sviatna.
Discussing the experience of colleagues, the participants came to the conclusion that financial autonomy turns the school principal into a top manager who is able to develop the institution, be a decision-maker and see the real state of affairs. Transparency and openness are prerequisites for the proper operation.
Despite all the advantages, the participants also mentioned the challenges: educational institutions being unprepared for self-management, the lack of qualified personnel, the likely weakening of financial discipline and the efficiency of the use of funds. They also talked about ways to overcome these.
Keep in mind that educational institutions have the right to financial, academic, organisational and staff autonomy (Article 23 of Section 3 of the Law of Ukraine “On Education”).