CFOS/Funding ODL/Exercise 10.1 - Sample Answers

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Exercise 10.1 - Some Possible Answers

Advantages of the normal budgeting processes might include:

• In order to be successful, this approach demands close liaison between managers in the ODL institution and officials in the ministry or higher education authority. While there are no guarantees that this will improve the financial position, it opens up the possibility of creating improved understanding of the unusual economic structure and benefits of ODL operations, as well as building support among ministry officials. As a result, ODL institutions are less likely to be marginalised in determining priorities for the sector.

• Where ministers, deputy ministers and other political appointees have a say in the allocation of funds, this approach enables ODL institutions to build public support and exercise political influence to secure their financial position.

Some of the Limitations or Drawbacks of normal budget negotiations are:

• ODL tends to be seen as the ‘poor relation’ of formal education and may lose out where funding is limited.

• Factors other than demonstrable need and reasoned argument may drive budget decisions. For example, even though you may be able to prove that increasing ODL places is more cost-effective than expanding formal education, building a new school in an office-holder’s constituency may well win out in a contest for funding. Examples of political influence in the allocation of government funds may be found not just in developing countries, but also in highly-developed economies.

• A significant advantage of most ODL systems is their capacity to accommodate students in excess of expected numbers, though this only applies for a particular range (see the discussion of Marginal Costs in Unit 6). However, where budget estimates are based on incremental increases for all departments, a rapid expansion in the number of people seeking to study with an ODL institution can pose particular challenges.

• Even though ODL institutions may live within the constraints of the funding provided by government, it is not uncommon for them to suffer the consequences of over-spending by other units within education ministries or by governments as a whole. When cutbacks are imposed, institutions dependent upon government funding must usually follow suit.

• Budgets are also used for financial management, and inflexibility in this system may constrain an ODL institution from making optimal and timely use of the funds available. Some aspects of open learning systems tend to require concentrated expenditure at particular times of the year. For example, where inputs are being provided primarily through text-based materials, the bulk of this printing takes place during certain months so that they can be packed and distributed to new students. However, most government financial management systems allow only a quarter of budgeted funds to be expended every three months.

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